Marketing Part 2

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Ch 7-14

Market Fragmentation

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

Market Segmentation

Process of dividing a larger market into smaller pieces. Usually based off of demographics, psychographics, brand loyalty, and usage.

-They evaluate for potential of success as a target market before they are chosen.
-From there, the firm may choose undifferentiated, differentiated, concentrated, or a custom strategy based on company characteristics & market.

Target Marketing Strategy

Dividing the total market into different segments on the basis of customer characteristics; choose one of more segments and make those products to those specific needs.

Generation Y

Consumers b/t 1979-1994.

Generational Marketing

Marketing to members of a generation who share the same outlook ect.

Cultural Diversity

Management practice that actively seeks to include people of all kinds for their company

Geodemography

Combining geography with demographics

Psychographics

Segmenting consumers based on physiological, sociological and anthropological factors (Values, lifestyles)

VALs Framework

8 segments:

Innovators: high resources, high innovation
Thinkers & Believers: Ideals
Achievers & Strivers: Achievement
Experiencers & Makers: Self Expression
Survivors; low resources, low innovation

Undifferentiated Vs. Differentiated Strategy

Appeals to a broad spectrum of people, VS. develops one of more products for each of the customer groups with different needs.

Concentrated Vs. Custom Strategy

Firm focuses on offering one or more products to a single segment Vs. Tailoring specific products and messages about them to individual customers.

Positioning Strategy & How is it used?

To influence how a particular market segment sees a good or service in comparison to the competition.

Used by developing a brand personality against its competitors to show the advantage offered by their product.

CRM (Customer Relationship Management)

Used to establish relationships and differentiate their behavior toward individual customers on a one to one basis through dialogue and feedback.

Success is often measured through the share of customer (individuals purchase of a single brand product) life time value ( the profit the company makes over their lifetime, and customer equity (financial value of a customer). Customers are prioritized based on the above.

Behavioral Segmenting

Segments based on how they act toward, feel about, or use a product.

80/20 Rule

A marketing rule of thumb that 20 percent of purchasers account for 80% of the product's sales. Makes more sense to focus on small group of customers not casual users.

Long Tail

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, provided they sell enough different items.

Usage Occasions

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

Targeting

A strategy in which marketers evaluate the attractiveness of each potential segment and decide in which of these groups they will invest resources to try to turn into customers.

Target Market

The market segments on which an organization focuses its marketing plan and toward which it directs its marketing efforts.

Segment Profile

A description of the "typical" customer in a segment.

Custom Marketing Strategy

A manufacturer works with one of a few large clients and develops products that only these clients will use.

Mass Communication

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

Positioning

Develop a marketing strategy to influence how a particular market segment perceives a good or service in comparison to the competition.

Repositoning

Redoing a product's position to respond to marketplace changes.

Retro Brand

A once-popular brand that has been revived to experience a popularity comeback, often by riding a wave of nostalgia.

Brand Personality

A distinctive image that captures a good's service's character and benefits.

Perceptual Map

A technique to visually describe where brands are "located" in consumers minds relative to competing brands.

Touchpoint

Any point of direct interface between customers and a company.

Lifetime Value of a Customer

The potential profit a single customers purchase of a film's products generates over the customer's lifetime.

Customer Equity

The financial value of a customer relationship throughout the lifetime of the relationship.

Customer Experience Management

The concept of holistically aligning a firm's people, processes, systems, and strategies to maximize the customer's experience with all aspects of your firm and its brands.

Core Product

All the benefits the product will provide for consumers or business customers.

Actual Product

The physical good or the delivered service that supplies the desired benefit.

Augmented Product

The actual product other supporting features such as warranty, credit, delivery, installation, and repair service after the sale.

Durable Goods

Consumer products that provide benefits over a long period of time, such as cars, furniture and appliances.

Nondurable Goods

Consumer products that provide benefits for a short time because they are consumed and no longer useful.

Convenience Products

A consumer good or service that is usually low-priced, widely available, and purchased frequently with a minimum of comparison and effort.

Staples

Basic or necessary items that are available almost everywhere.

Impulse Product

A product people often buy on the spur of the moment.

Emergency Products

Products we purchase when we're in dire need.

Fast- Moving Consumer Goods

Products that exhibit consistently high velocity of sales in the consumer marketplace.

Shopping Product

A good or service for which consumers spend considerable time and effort gathering information and comparing alternatives before making a purchase.

Intelligent Agents

Computer programs that find sites selling a particular product.

Specialty Product

A good or service that has unique characteristics and is important to the buyer and for which she will devote significant effort to acquire.

Unsought Products

Goods or services for which a consumer has little awareness or interest until the product or a need for the product is brought to their attention.

Equipment

Expensive goods that an organization uses in its daily operations that last for a long time.

Raw Materials

Products of the fishing, lumber, agricultural, and mining industries that organizational customers purchase to use in their finished products.

Processed Materials

Products created when firms transform raw materials from their original state.

Component Parts

Manufactured goods or subassemblies of finished items that organizations need to complete their own products.

Innovation

A product that consumers perceive to be new and different from existing products.

Continuous Innovation

A modification of an existing product that sets one brand apart from its competitors.

Knockoff

A new product that copies, with slight modification, the design of an original product.

Dynamically Continuous Innovation

A change in an existing product that requires a moderate amount of learning or behavior change.

Convergence

The coming together of two or more technologies to create a new system with greater benefits than its separate parts.

Discontinuous Innovation

A totally new product that creates major changes in the way we live.

Idea Generation

The first step of product development in which marketers brainstorm for products that provide customer benefits and are compatible with the company mission.

Product Concept Development and Screening

The second step of product development in which marketers test product ideas for technical and commercial success.

Green Marketing

The development of marketing strategies that support environmental stewardship by creating an environmentally-founded differential benefit in the minds of consumers.

Business Analysis

The step in the product development process in which marketers access a product's commercial viability.

Test Marketing

Testing the complete marketing plan in a small geographic area that is similar to the larger market the firm hopes to enter.

Commercialization

The final step in the product development process in which a new product is launched to the market.

Product Adoption

The process by which a consumer begins to buy and use a new good, service or idea.

Diffusion

The process by which the use of a product spreads through out a population.

Tipping Point

In the context of product diffusion, the point when a product's sales spike from a slow climb to an unprecedented new level, often accompanied by a steep price decline.

Media Blitz

Massive advertising campaign that occurs over a short time frame.

Innovators

The first segment of a population

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