mktg test 2 ch 7

the use of psychological, sociological, and anthropological factors to construct market segments

psychographics

the customer group or groups the firm selects to try to turn them into customers are the firms' ___?

target market

a marketing rule of thumb that ___ percent of purchases account for ____ percent of a product's sales

20; 80 = 80/20 rule

a systematic tracking of customers' preferences and behaviors over time in order to tailor the value proposition as closely as possible to each individual's unique needs and wants

CRM - customer relationship management

***what is an example of concentrated targeting strategy?

Lamborghini; niche market

what is one largely used demographic system?

PRIZM; classifies US population into 66 segments based on various socioeconomic data

***what is an example of differentiated targeting?

Toyota (Lexus vs Prius)

a psychographic system that divides the entire US population into eight segments

VALS

2nd step in targeting: develop segment profiles: what is a segment profile

a description of the "typical" customer in a segment

what is the long-tail concept

a new approach to segmentation based on the idea that companies can make money by selling small amounts of items that only a few people want IF they sell enough different items

what are 6 ways to measure demographics (PAIGE F)

age, gender, family life cycle, income/social class, ethnicity, place of residence geography)

what are two examples of the long tail concept?

amazon carrying 3.7 million books compared to barnes and noble carrying 100,000. Netflix delivering older/ obscure titles that won't be found in blockbuster

what are the 4 steps in positioning?

analyze competitors' positions, offer g/s w/ competitive adv, finalize marketing mix, evaluate responses and modify as needed

***what are 3 characteristics of undifferentiated targeting strategy?

appeals to broad spectrum of people, efficient due to economies of scale, effective when most customers have similar needs

a technique that divides consumers into segments on the basis of how they act toward, feel about, or use a g/s

behavioral segmentation

A distinctive image that captures the brand's character and benefits

brand personality

what brings a brand's image to life, and can be expressed via advertising and logos

brand personality

***targeting strategy: offering one or more products to a single segment

concentrated targeting strategy

***what strategy is useful for smaller firms that do not have the resources to serve all markets?

concentrated targeting strategy

***an approach that tailors specific products and the messages about them to individual customers

custom marketing strategy

characteristic of CRM; the financial value of a customer relationship throughout the lifetime of the relationship

customer equity

one of the variables; statistics that measure observable aspects of a population

demographics

segment profiles might include what?

demographics, location, lifestyle info, description of how frequently customer buys product

what are three ways (variables) to segment consumer markets?

demographics, psychographics, and behavior

***what are some characteristics of differentiated strategy?

developing one or more products for each of several customer groups

***what targeting strategy? appropriate when consumers are choosing among well-known brands with distinctive images & possible to identify one or more segments with distinct needs for different types of products

differentiated strategy

what are the 3 steps in targeting?

evaluate market segments, develop segment profiles, and choose targeting strategy

what are 5 examples of organizational demographics?

firm size, number of facilities, domestic or multinational, type of business, production technology utilized

characteristic of CRM; what does customer prioritization mean?

focus on high value customers

***what is an example of mass customization?

furniture, jewelry

customizing web advertising so that people who log on in different places will see ad banners for local businesses

geocoding

"birds of a feather flock together" people who live near one another share similar characteristics

geodemography

a segmetation technique that combines geography with demographics

geodemography

what are three ways to classify current customers under bahvioral segmentation?

heavy, moderate, and light users

what 3 primary consumer motivations are key to the VALS system?

ideals, achievement, and self-expression

1st step in targeting: evaluating market segments; a viable target segment should satisfy what 3 requirements?

identifiable? measurable? large enough? reachable with marketing communications? practical; can the marketer serve their needs?

what are the 4 steps in one on one marketing?

identify customers, differentiate, interact, customize

what are the 8 groups VALS divides adults into?

innovators, thinkers & believers (ideals), achievers & strivers (achievement), experiences and makers (self-expression), survivors

what does the 80/20 rule try to tell us?

it often makes more sense to focus on the smaller number of people who are really into a product rather than on the larger number who are casual users

characteristic of CRM; the potential profit a single customer's purchase of a firm's products generates over the customer's lifetime

lifetime value of a customer

people's diverse interests and backgrounds divide them into numerous groups with distinct needs and wants

market fragmentation

*** an approach that modifies a basic good or service to meet the needs of an individual

mass customization

what is another name for crm?

one-on-one marketing?

a technique to visually describe where brands are "located" in consumers' minds relative to competing brands

perceptual map

***what is an example of custom marketing strategy?

personal and professional services; doctors, lawyers, hair cuts

3rd stage in developing a target marketing strategy?

positioning

developing a marketing strategy to influence how a particular market segment perceives a good/service in comparison to the competition

positioning

dvelop a marketing mix that will create a competitive advantage in the minds of selected target market; third step

positioning

segments consumers in terms of psychological and behavioral similarities such as shared AIOs - activities, interests, and opinions

psychographics

VALS is based on what?

psychological traits that correlate with consumer behavior

redoing a product's position to respond to marketplace changes

repositioning

a once popular brand that has been revived to experience a popularity comeback; often by riding a wave of nostalgia

retro brand

identify and describe market segments; first step

segmentation

dimensions that divide the total market into fairly homogenous groups, each with different needs and preferences

segmentation variables

what are the 3 steps in target marketing strategy?

segmenting, targeting, and positioning

characteristic of CRM; the percentage of an individual customer's purchase of a product that is a single brand

share of customer

what are the 4 characteristics of CRM?

share of customer, lifetime value of customer, customer equity, customer prioritization

dividing the total market into different segments based on customer characteristics, select one or more segments, and develop products to meet the needs of those specific segments

target marketing strategy

evaluate segments and decide which to go after; second step

targeting

when marketers evaluate the attractiveness of each potential segment and decide which groups they will invest resources to try to turn them into customers

targeting

what are the 4 types of targeting strategies?

undifferentiated, differentiated, concentrated, and customized

an indicator used in behavioral market segmentation based on when consumers use a product most

usage occasions

what does VALS stand for?

values and life styles

***what is an example of undifferentiated targeting strategy

wal mart