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A set of buyers sharing common needs or characteristics that a firm chooses to serve.
Target Market Stategy
Three Steps of Target Market Strategy
- 1. Segmentation - dividing a large market
- 2. Selecting -choose which segment to make customers
- 3. Positioning - placing a product or brand in consumers mind
Segmenting Variables Specific
- Demographics - age, income, education, ethnicity
- Psychographic - AIOs: Activities, Interests, Opinions
- Behaviors - Brand loyalty, purchase parttern, usage occasions
Dividing the total market into different segments based on customer characteristics, selecting one or more segments, and develeoping products to meet those segments' needs.
The process of dividing a larger market into smaller pieces based on one or more meaningful shared characteristics
dimensions that divide the total market into fairly homogeneous groups, each with different needs and preferances.
ie. gender and hobbies
Marketers evaluate the attractiveness of each potential segment and decide in/(select) which they will invest resources try to turn them into constomers
Two Activites in Targeting
Three Evaluation Criteria
- Homogeneous within & Heterogenous Between
- Substantial - big enough in size
- Meaningfully Defined - People you can get to
describes a profile or description of the "typical" customer in a segment
is to place a product or brand in the consumers' mind on important attributes in comparison to the competition
re-develop positioning of a product/brand to respond to marketplace changes
to bring back a once popular brand
How we change the position of the position of the company.
Marlboro from womern to men
is a distinctive image that captures the brand's character and benefits. Their image. ie. Disney = fun, kids
How do you develop a market position?
Developing a marketing strategy that aims at influencing how a particular market segmen percieves product/brand in comparison to the competition.
Major steps in developing Market position strategy
- Analyze Competitors
- Offer a good service with different benefits
- Match elements of marketing mix to the selected segment
- Evaluate target market's responses and modify strategies if needed.
Competing markets and consumer perception.
Walmart and Kmart vs Nordstrom and Neuman Marcus
- Why and how people buy?
- Involvment and problem solving
- The decision making process
Internal, situational, and social influences
Internal vs. External Information Source
- Internal - own experience
- External - reviews, family/friends experiences
Marketing Control vs. Noncontrol
- Control - what the company puts out themselves (bias)
- Noncontrol - Customer ratings (non bias)
relative importance of percieved consequences and risks of a decision
-higher the cost the higher involvmen
- Consumer recognizes a need
- Marketing Objective - help consumers recognize an imbalance between their present status and preffered state.
Evaluative Criteria and Alternatives
Criteria - product characteristics consumers use to compare competing alternatives
Market Ob. - Determine which characteristic/attribute is the most influential on consumers and make that one most superior and prominent
- 1. Purchase Inention - decision to buy mose preferred brand
- 2a. Brand Loyalty Heuristic
- 2b. Country of Origin Heurisic
- 3. Purchase Deciision
Heuristic - mental rule of thumb for a speedy decision
Post Purchase Evaluation
- 1. Consumers Expectations
- 2. Actual Quality/Performance of Product
- 3a. Satisfied
- 3b. Unsatisfied
Consumer Decision Influences
Internal Influence on Decision
Situational Influence on Decision
- Physical Environment - instore displays, surroundings, arousal
- Time - is their time to make a decision
Social Influence on Decision
Culture and Values - Languages, Laws, Customs and Norms
People that have significant effect on individual's evaluation, aspirations or behavior
Person who influences others' attitudes or behaviors
person changes as reaction to real or imagined group pressure
strongest conformaty effects come from gender roles
Business to Business
Marketing of goods and services that businesses and other organizations buy for purposes other than personal consumption
Three Types of Business Customers and Uses
- Produce goods and Services - Manufacturers
- For resale - Wholesalers/retailers/rentals
- To support operations - other organizations
Four Basic Characteristics of B2B
- Multiple Buyers
- Small Numer of Customers
- Geographic Concentration
- Large Size of Purchases
Four Types of Demand B2B
- Derived Demand
- Inelastic Demand
- Fluctuating Demand
- Joint Demand
- Deman for business products is cause by/derived from demand for consumer good or services
- -B2B marketers must be alert to changes in consumer trends
- Demand of produce does not change because of increases/decreases in price
- -price increases in partshas little effect
Demand in busienss market flucuates more than consumer markets.
ie. John Deer - such a big purchase that will only be needed to make once every 5 years
Demand for 2 or more goods used tog together to create a product
ie. Computer - monitor, keyboard, mouse, computer
Three Buying Situations
Identifies how much information will need to be collected for purchase decision
- Straight Rebuy
- Modified Rebuy
- New-task Buy
Routine purchases that require minimal decision making - toilet paper
Previous purchases that require some change and limitd decision making
ie. printer - need one but updated one
New and complex or risky purchases that require extensive decision making
ie. new car
Two Buying Methods
Professional Buyer - Trained professionals typically carry out buying in B2B markets.
Buying Center - Group of people who influence and participate in purchasing decisions.
- Iniator Influencer
- User Buying Center Decider
- Gate Keeper Buyer
Business Buying Decision Process
- Problem Recognition
- Infomration Search
- Evaluation of Alternatives
- Product and Supplier Selection
- Post Purchase Evaluation
Process of collecting, analyzing, and interpreting data about consumers, competitors, and the business environment in order to improve marketing effectiveness
Data collected on regular babsis and available to multiple firms
Data collected for a particular firm to answer a specific question.
Primary data vs. Secondary data
Primary Data is information collected directly from respondents to specifically address the question at hand
Seconday Data has been collected for some purposes other than the problem at hand.
Exploratory (Qualitative) Research
- Customer Interviews
- Focus Groups
- Case Study - examination of firm
- Ethnography - learn how products are used from participants
- Productive Techniques - explore peoples underlying feelings
Descriptive (Quantitative) Research
- Base on large numbers of observations
- Results typically expressed in quantitative terms (averages, percentages, stats)
Cross Sectioinal Design - Questionnaires at one point in time
Logitudinal Design - tracks the responses of the same sample of respondents over time
A technique to understand cause and effect relationships: a change in one thing causes a change in something else.
What is a product?
- Goods, services, ideas that satisfies customer needs.
- -tangible products; services; ideas;people; places
- - everything a customer receives in an exchange
- Productive Value proposition
- -benefits the consumer will recieve if she buys the product
What is a Service?
Intangible products (acs, efforts, or performances) exhanged from producer to user without ownership rights.
Four Characteristics of Service
- Intangibility - customers cant see, touch, or smell, service
- Inserperability - can't seperate production from consumption
- Perishability - cant store a service for later sale or consumption
- Variability - cant standardize the same service performed by the same individual
Three Layers of Product Concept
- Core Product - Basic Benefits ie Car:transporation
- Actual Product - Brand, Features, Appearance. ie. mazda, silver,
- Augmented Product - Warranty, Instalation, Deliver, Customer Support Services.
Business to Business Products
- Raw Material
- Special Services
- Component Parts
- Maintenance, Repair, Operating products
Consumer Product Classifications
- Durable Goods (long term)
- Nondurable Goods (short term)
How Consumer Shop for Products
- Convenience Products
- Shopping Products
- Unsought Products
- Specialty Products
nondurable, frequently purchased, minimum effort, low priced, widely available.
- -staple products (bottled water)
- -impulse products (candy bars)
- -ermergency products (tampons)
purchased infrequently with significant effort in comparing the various offerings, some brand loyalty
- -attributes based shoppin products (cell phone)
- -price based shoppin products (cars)
little awarness/interest until need arises; often with new product/innovation; require much advertising and personal selling
unique characteristics that are important to buyers; often involves considerable effort; often use status appeal & limited distribution to maintain status
FTC says The Process of Innovation
A product must be entirely new or changed significantly to be called new, and a product may be called new for only six months.
Marketers say The Process of Innovation
Innovation; anything that customers percieve as new and different
Three Types of Innovation
- Discontinuous Innovations
- Dynamically Continuous Innovations
- Continuous Innovations
Totally new product to the world; Requires a great amount of learning. e.g. television, computer, automobile
Dynamically Continuous Innovations
Significant change to an existing product; requires some learning
Modification to an existing product to set it apart from competitors; requires little learning
Developing a New Product
New product development can be creating totally new products or making an existing product better
process by which a consumer or business customer begins to buy and use a new good, service, or idea
process by which the use of a product spreads throughout a population
Stages in Consumer Adoption of a New Product