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