M300 Quiz 2

Ford's example of undifferentiated marketing

"They can have any color they want, as long as it is black"

Pro & Cons for undifferentiated/mass marketing?

+ - broader customer/audience, marketing research and cost low, economies of scale - - does not provide direction via customer feedback, creates vulnerability to more focuses/differentiated competitors

Pros & Cons of concentrated (niche marketing)?

+ - customer insight, less competition, brand loyalty, savings on marketing, potential high profits - - limits growth in niche, customer requirements may require high R&D, high margins invite competition

Pros & Cons of micromarketing?

+ - meets customer needs exactly, production on demand, dynamically monitors changes in consumer behavior, creates possibility for brand communities, customer involvement in product creation - - high start-up cost, requires specialized skills in social marketing, customer support expensive, volume requirements high, product complexity stress systems

Pros & Cons for differentiated/segmented/multisegment marketing?

+ - recognizes all potential segments, builds brand loyalty, tailor product to market needs, maximize market potential, econ scale & scope, customer "migration" - - high investment in R&D, ops, marketing, distribution, can be highly competitive, focused marketers can cherry-pick profitable lines, rapid changes can occur, challenge to maintain product distinctiveness

Segmentation can help increase the effectiveness of

-Promotion: such as media advertising, to avoid wasting money on unprofitable segments -Product development: for example. P&G has identified nine laundry detergent segments and has developed products to meet each segment's needs. -Pricing: for example, USAir charges business travelers $571 to fly to Newark, NJ, and vacationers $189. Why is there such a difference in airfares across customers? Timing and availability.

some potential positioning communication focus components?

-attributes and consumer benefits, competition/competitive set, targeted product consumer/user, product use or experience, brand character

Effectiveness: A market segment should be:

-measurable -substantial -accessible -responsive

what are the 3 C's of brand positioning?

1) Consumer Analysis - Relevant, Resonant, Realistic 2) Competitive Analysis - Distinctive, Defensible, Durable 3) Company Analysis - Feasible, Favorable, Faithful

choosing the "best" target-marketing strategy requires consideration of what four things?

1) company resources 2) degree of customer variability 3) product's life-cycle stage 4) competitors' marketing strategies

what is the 4 step marketing research process?

1) defining the problem and research objectives 2) developing the research plan for collecting info 3) implementation - collecting and analyzing data 4) interpreting and reporting finding

what are the 7 steps in the positioning process?

1) identify relevant set of competitive offerings serving target market 2) identify the most important points that define the "competitive framework" your current offerings are located at 3) collect info from customers and potential customers about perceptions of each product on most important attributes 4) determine current positioning in product space 5) determine customers' most preferred combo of most preferred attributes 6) examine the fit b/w preferences of market segments & current positioning 7) write positioning statement to guide development/implementation of marketing strategy and consumer communications

what are the 7 position statement components?

1) targeted users 2) specific need 3) brand name 4) competitive frame work 5) points of differentiation (POD) - functional, experimential, etc 6) state reason why 7) brand character

4 target market strategies from targeting broad to narrow

1) undifferentiated (mass) marketing 2) differentiated (segmented) marketing 3) concentrated (niche) marketing 4) micromarketing (local/individual marketing)

what are the segmentation variable bases?

1. geography 2. demographics 3. psychographics and lifestyle 4. usage 5. needs or benefits

step 3 (segmentation steps): how do you select segments to target?

Apply each criteria to the select segments to be targeted (produce high unit sales, build market share, enhance profit, keep a competitor out of the market)

what is survey research?

BEST suited for descriptive research. Gather primary data by asking people questions about their knowledge, attitudes, preferences, buying behavior

What is observational research?

BEST suited for exploratory research -gathering primary data by observing relevant people, actions, and situations

what is experimental research?

BEST suited for gathering casual info. Gathering primary data by selecting matched groups of subjects, give different treatments, control factors, check differences in response.

what does it mean to segment the market?

Break up the market into separate parts so that you can analyze each part. Separate based on attracting a certain group to a product rather than something else.

how is a brand's position co-determined?

Company communicates it aspirations/desired brand positioning, Consumer reacts (co-creation), Company responds with an adjusted brand positioning

In the 3 C's, how do you position yourself in a marketing strategy?

Create distinct and valued differences between your product and your competitors as perceived by consumers. Positioning is the primary driver of selecting elements of the marketing mix, especially commmunication strategy & promo tactics

step 1 of 4 step marketing research process

Define the problem & research objectives - often most difficult step. -exploratory research (gather preliminary info to help define problem and suggest hypothesis) -descriptive (describe marketing problems, situations, or markets, could include market potential for the product or info about consumers that will buy product)

step 2 of 4 step marketing research process

Developing the research plan for collecting info - research plan outlines everything researcher will use to gather new data, research objectives translated into specific info needs. (can call for secondary data, primary data, or both)

step 2 (segmentation steps): how do needs divide the population?

Divide a population into groups based on the ability of the product or service to satisfy their needs Example: some online shoppers seek convenience while others seek the best prices. Some car buyers seek safety while others seek performance and styling.

step 2 (segmentation steps): how do psychographics divide the population?

Divide the population into homogeneous groups based on behavioral and lifestyle profiles developed by analyzing consumer activities, interests, and opinions (AIO) and values, attitudes, and lifestyles (VALS) through surveys.

what is market segmentation?

Identifying and analyzing different segments of the market. Seeing who you will and will not target.

step 3 of 4 step marketing research process

Implementation - collecting and analyzing data - when you put the marketing research plan into action (collect data, process data, analyze data).

why is market segmentation important?

Important because if we can understand them better we can determine what they want in the product. Also important because it helps us allocate our resources by focusing on target segments.

step 2 (segmentation steps): what is an example of how geography divides the overall market into groups?

In case of Geico, Insurance rates are regulated by state so they can market differently in each state.

the increase of segmentation effectiveness of promotion, product development, and pricing strategies increase what?

Increases market share and profits

What is primary data?

Information collected for the specific purpose at hand - research approaches, contact methods, sampling plan, research instruments

step 4 of 4 step marketing research process

Interpreting and reporting the findings - marketing manager (knows more about proble and actual process, can be biased) , researcher (keeps manager honest, knows what claims can and cannot be made, may not fully understand problem or challenge) // report the findings - researcher should present important findings useful in major decisions to the manager, don't overwhelm management team!

what is micromarketing?

Marketing customized at the individual level, business attempts to customize the product/service to the unique needs of a specific customer/subset (ie - kroger, amazon prime, michael jordan)

what are the 4 segmentation steps?

Step 1: define the relevant market Step 2: use variables to divide the market into segments Step 3: select segments to target Step 4: develop a marketing mix for each selected segments

step 2 (segmentation steps): what is an example of how demographics divide consumers?

Target focuses on affordable prices, stylish products, and socially correct values. One ad features two college roommates dancing and decorating their room with target products..."happy together, design together, save together).

step 2 (segmentation steps): how is usage different from the other bases?

The usage segmentation base employs actual behavior of customers to segment the market in which is different from other bases which describe characteristics of various customers in the marketplace.

step 4 (segmentation steps): how do you develop a marketing mix strategy for EACH segment?

Use the 4 P's - Price, Place, Product, Promotion to deliver the competitive advantage the firm has laid out. Advantage is emphasized through advertising and promotion + value

what is undifferentiated or mass marketing?

a firm that typically ignores individual segment differences and targets the whole market with mainly ONE offering. Can be sold to the broadest number of buyers through mass distribution/communication. Appropriate for consumers with same preferences and market has no natural segments. (ie - first ford motorcar)

what is a sample?

a segment of the population selected for marketing research to represent the population as a whole (sampling unit, size, procedure)

what is differentiated/segmented/multisegment marketing?

business attempts to appeal to two or more clearly defined market segments with specific products and unique marketing strategy (ie - toyota has large assortment of cars)

what are intrusions on consumer privacy?

companies face the challenge of unearthing valuable but potentially sensitive consumer data while maintaining consumer trust (ie - Target pregnant teen example)

what is a positioning statement?

describes why specific customers should use one product over another and why it matters (ie - joey's bakery's organic multigrain breads vs. mass produced bread in grocery store)

what are internal databases??

electronic collections of consumer and market info obtained from data sources within the company network (customer characteristics, sales, website visits)

what is a marketing information system?

internal or external / people and procedures dedicated to assessing info needs, developing needed info, and use the info to generate and validate ACTIONABLE customer and market insights

what is customer relationship management (crm)?

managing detailed info about individual customers and carefully manage customer touch points to maximize customer loyalty, provides a 360 view of each customer relationship

define measurable:

market segments are usually measured in terms of sales value or volume (i.e., the number of customers within the segment).

how does better info help marketers in today's society?

marketing info (cusomters' needs & wants) creates customer insights which is the MOST VALUABLE link this chain, which then creates a competitive advantage

what are some ways for effective positioning?

meaningful to targeted consumer needs, identifies competitive frame work, credible/believable, unique to your brand (P.O.D., desirable, deliverable), durable over time, reason why

What is ethnographic research?

observational research that sends observers to watch/interact with consumer in "natural environments"

what is concentrated (niche marketing)?

subset of the market where a specific product is focused. Market niche is when the product features aimed at satisfies very specific market needs. (ie - oshkosh severe duty trucks)

what is marketing research comprised of?

systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization. more FOCUSED studies to gain customer insights relating to specific marketing decisions.

define responsive:

the market segment must have practical value--its characteristics must provide supporting data for a marketing or sales approach, and this in turn must have outcomes that are easily quantified.

what is competitive marketing intelligence?

the systematic collection and analysis of publicly available info about consumers, competitors , and developments in the marketing environment

define substantial:

there would be no point in wasting marketing budget on a market segment that is insufficiently large to generate profits. a market segment should be internally similar (i.e., all customers within the segment have similar preferences and characteristics), but collectively dissimilar. Different between market segments should be clearly defined, so that the campaigns, products and marketing tools applied to them can be implemented without overlap.

what are research instruments?

two main instruments - questionnaires (most common) & mechanical devices (people meters record watched programs on TV, neuromarketing measures brain activity to learn hwo consumers feel and respond)

define accessible:

when demarcating a market segment, it is important to consider how the group might be accessed. Different segments might respond better to outdoor advertising, social media campaigns, television infomercials, or any number of other approaches.