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MARK exam 2

Terms in this set (99)

When is Mass Marketing Appropriate or effective?
Goods are a commodity
Goods are equivalent, little regard to who produced them
Consumers have (virtually) the same needs
Little to no competition
What is targeted marketing?
An alternative to mass marketing
what 3 steps do targeted marketing include
- Segmenting the market ("S")
- Choosing the target segment(s) that are right for you ("T")
- Positioning the product for a chosen target segment ("P")
1 Segmenting the market
The act of dividing a mkt into distinct groups of buyers who might require separate products and/or mktg mixes
2 Market targetting
The act of developing measures of segment attractiveness & selecting one or more segments to center
3 Product positioning
The act of establishing a viable competitive positioning of the firm & its offer in each target mkt.
Benefits of STP to the firm
•Identification of valuable customer segment(s)
•Efficiency in marketing communications
•Higher customer lifetime value
increased profit
Benefits of STP to the customer
•Products & services that better fit preferences
•Relevant promotions
•Personalized and efficient interactions with firm
market segmentation
the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups
market segment
• a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs
5 ways to segment
geographic
demographic
psychographic
benefits
usage
geographic segmentation
Nations, states, regions, cities, urban-rural, other
Consumers organized on the basis of where they live
(mcdonalds sells different food Inside out movie different sports)
demographic segmentation
Age, Gender, family size, income, education
making products for different age groups
(happy meal)
psychographic segmentation
Consumers based on values, interests Social class, lifestyle, personality. a WORKAHOLIC no time to get something: oh henry!
benefit segmentation
•the process of grouping customers into market segments according to the benefits they seek from the product
different drinks offer different benefits
usage segmentation
•dividing a market by the amount of product bought or consumed
frequency of product usage
$20 toll tag.
frequency/loyalty program for the heavy users
Categories of usage rates vary with the product, but they are likely to include some combination of former users, potential users, first-time users, light or irregular users, medium users, and heavy users.
segmentation effectiveness
Q: likelihood of buying frozen dinner.
ineffective survey Q: higher vs lower education
effecting survey Q: who does vs does not own a microwave.
4 types of targeting strategies
mas marketing, multisegment, concentrated, one-to-one
multisegment
making 2 products tailoring to 2 diff segments
concentrated
the unserved group you ignore them. The product is for the other group
mass marketing
Undifferentiated marketing. This is a strategy that ignores targeting individual market segments
one - to - one
each customer receives a different product
common targeting errors and ideal
Sniper: you target exactly who actually buy your product
Broad: you advertise to too many people and you waste a lot of money targeting ppl who aren't buying the product
Oversegmentation: your too specific and missing some of your audience
Misaligned: you completely miss the mark
profitability calculation
Which segment is most profitable?
(segment size X segment adoption% X Purchase behavior X profit margin%) - fixed costs
5 guidelines for an ideal target segment
substantial: special marketing mix, stable, growing group
identifiable: can define the segment concisely
accessible: reachable within marketing mixes
responsive: should align with company's competitive advantage, more than generic
profitable: low competitive intensity high WTP
perceptual mapping
a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers' minds
positioning vs position
•Process of creating a distinct image in the customer's mind
• View of how our offering is perceived and remembered by customers relative to competitors
possible positioning bases/dimensions
•Attribute: A product is associated with an attribute, product feature, or customer benefit.
•Price and quality: This positioning base may stress high price as a signal of quality or emphasize low price as an indication of value.
•Use or application: Stressing uses or applications for the product
which positioning bases are important?
it depends on who your target market is
1 way to re-position a brand
1.Shift perception of your brand toward ideal point
•Modify product or service attributes
•Create new communication messaging
2 way to reposition brand
1.Shift ideal point toward your brand
•Highlight new positioning base or change relative importance of existing positioning base
3 way to reposition brand
1.Shift perception of competitor away from ideal point
•(e.g., negative political advertising)
which of the 3 ways did Canadian club use?
Created new communication messaging

•16-year sales decline reversed within 4 months with 4.4% rise, through building awareness and asking for brand by name.
benefits of having a strong brand
...
branding vs brand
•Branding is the main tool marketers use to distinguish their products from those of the competition.
•a name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitors' products
brand influences are not only choice, but
the actual experience with the product
key element s of a brand
•Name
•Logos and symbols
•Slogans
•Characters
•Jingles/Sounds
brand benefits to consumers
provides information about quality, allows for self expression, imparts a good feeling, and creates fluency/accessibility (makes life easier)
Brand benefits to firms
price premium over unbranded alternatives, creates barriers (hard for other brands to enter a category that's already established) to entry, leverage in distribution channel (it'll be in the store at eye level, and ability to extend brand to other products
how to build a strong brand
name it right (easy to pronounce, tough abrev, sound good)
manage brand associations (mcdonalds: cheap, unhealthy, kids etc)
(cvs 3m)
trends in logo designs
simplicity is better
characteristics of a good brand name
(1) Be distinctive & sound good
(2) Be pronounceable & memorable
(3) Suggest something about the product's qualities or benefits
(4) Be legally available & legally protectable
(5) Have no undesirable meanings (in English or other languages)
preemptive vs reactive
•Create very strong associations
•Use good business practices

•Strengthen/create other associations
•Alleviating cause of negative associations
co-branding
•placing two or more brand names on a product or its package
•Leverage/share the associations of another brand (crest/scope)
to create value for your consumers (uber spotify)
brand extension
Use an established brand to introduce a new product in a different category
(dove deodrant-shampoo-body wash)
(Bic disposable lighters)
where to extend your brand
Know your strengths
Where does your category sit in stores? See whats around it for potential extensions
2 brand associations
individual branding
family branding
individual branding
- using different brand names for different products
(
family branding
marketing several different products under the same brand name
(brandless brand)
brandless case: 1)What are the main differences between standard CPG, i.e., national brands and Brandless?
The business model Brandless takes advantage of new environment, less expensive
Brandless case: 2)The case refers to a "brand tax" as "all the costs related to the traditional consumer packaged goods distribution mode". Can you identify some of these costs?
40 % less
Brand tax: brand names built up over building it over time. People will buy it based on brand more than what it is. Intemediary
3)How does Brandless add value for the consumer?
3) Economic value, provides info about the quality. Creates fluency and accessibility. It's easier to shopLess expensive, highlights more details in products
4)What do you think is the target market of Brandless?
Younger consumers: ore on trend with simplicity aesthetic, herban geographic, psychgraphic. ?those who rely on economic value. Those more price and content sensitive to products
5)Brandless seems to not care about its products having a brand or logo.
Why is that? Is Brandless really "brandless"? Is Brandless a good brand name? Motivate your answer.
Name slogan, kind of logo, so despite their claims, they are a brand
They want to appeal more to the customer that there isn't just one product that is going to solve everything. They want to give consumers the option to choose something else, by not creating someone so eye catching. I think brandless is a brand. Its a very flexible one tht is open to a wider range of people, rather than being so specific.
product
•(marketing mix 4 p's) everything, both favorable and unfavorable, that a consumer receives in an exchange with the firm
•Can be tangible or intangible, such as a service or idea
product item
- a specific version of a product that can be designated as a distinct offering among an organization's products
product line
- a group of closely related product items
product mix
all products that an organization sells
what makes a product successful?`
consumers can derive a bundle of benefits from the product
why do products fail?
•Wrong estimates of market size
•Design/functioning problems
•Wrong positioning, price and communication
•Launch despite poor feedback from market research
•Increasing production or maintenance costs/Inability to face growing demand (Moviepass)
what's PLC?
Product Life Cycle:
introduction
growth
maturity
decline
PLC introductory stage
•Full-scale launch of a new product into the marketplace
•Typified by high failure rates, frequent product modifications, and limited distribution (you haven't convinced all stored to sell your product
PLC growth stage
•sales typically grow at an increasing rate
•many competitors enter the market
•large companies may start to acquire small pioneering firms
•profits are healthy
PLC Maturity stage
•Sales increase at a slower rate
•Typically the longest stage of PLC sustained through heavy consumer promotion
•Product lines lengthened to appeal to additional market segments
PLC decline stage
•A long-run drop in sales
•Rate of decline depends on how rapidly consumer tastes change or substitute products are adopted
PLC shapes can
vary (fidget spinners, hoverboards, heelies...)
Firm's Product Portfolio: BCG Matrix
stars, ???, $$ cows, dogs
•Considers a firm's products independent of one another
•Often used to determine how much cash (if any) a product/business unit should receive
•Naming convention reflects how much cash the product/business unit generates for the firm
types of ppl introduction
??? things will pick up in the future. modify product
types of people in the growth phase
stars. It's doing well, and future looks good. heavily invest
ppl in maturity phase
cash cow
the future isn't looking so good invest not as much
ppl in decline phase
dogs divest
diffusion of innovation
•innovation- a product perceived as new by a potential adopter
•New products are essential to sustaining growth, increasing revenues and profits, and replacing obsolete items. diffusion: the process by which the adoption of an innovation spreads
categories of adopters and position in Product Life Cycle
Innovators
early adopters
early majority
late majority
laggards
innovators
•The first ~2.5 percent of all those who adopt the product
•Eager, if not obsessed, to try new ideas and products
early adopters
•Influencers
The next ~13.5 percent to adopt the product
•Rely much more on group norms and values
•More likely than innovators to be opinion leaders because of their closer affiliation with groups
•Many social media influencers fall into this category
early majority
•The next ~34 percent to adopt the product
•Weigh the pros and cons through information gathering and evaluation
late majority
•The next ~34 percent to adopt the product
•Adopt new products after most of their friends have already adopted them and they feel a pressure to conform
•More skeptical
laggards
•Final ~16 percent to adopt
•Do not rely on group norms
•By the time laggards adopt an innovation, it may already be outmoded and replaced by something else
services
intangible offering; the result of applying human or mechanical efforts to people or objects
how do services differ from products
intangibility
inseparability
heterogeneity
perishability
intangibility
•the inability of services to be touched, seen, tasted, heard, or felt in the same manner that goods can be sensed
intangibility requires
cues/signals to convey value (atmosphere and images)/benefits/quality
inseparability
•Inability of the production and consumption of a service to be separated
person giving you the hair cut and you receiving the haircut is simultaneous
with inseparabiity there's little opportunity to
test before use.
Lower risk by offering guarantees/warranties (airplane wifi refund)
heterogeneity
•Variability of the inputs and outputs of services, which causes services to tend to be less standardized and uniform than goods
•Quality of service depends on quality of employees
with heterogeneity, consumers had
different service experiences
both reviews from same restaurant
addressing heterogeneity
automation: routine services help decrease it
standardization and training help increae consistency and reliability
advantage: customization is easier to offer for services than products
Perishability
•Inability of services to be stored, warehoused, or inventoried
services dissappear. creates problem of being able to refix
restaurants turn ppl way at peak times and empty at peak times
addressing perishability
offering discounts during non-peak times to prevent services going to waste
happy hour
matinee
customer evaluation of service quality (5)chart
reliability
responsiveness
tangibles
empathy
assurance
reliability
•ability to perform a service dependably, accurately, and consistently
(hotel rooms ready at check in time)
responsiveness
ability to provide prompt service
(bathroom dirty, apologize/take action)
assurance
employees are knowledgeable and are trustworthy
(concierge knows best spots around town)
empathy
caring, individualized attention to customers
(address guests by name)
tangibles
•physical appearance of a service, including the physical facilities and tools used to provide the service
(rooms updated with latest tech)
zone of tolerance
•Range of acceptable outcomes for each aspect of service quality
The gaps model
knowledge, standards, delivery, communication
service recovery
1.Listen to the customer
•You need to know what is the problem to solve it!
2.Provide a fair solution
•E.g., problem with hotel room -> change (or even upgrade) customer room
3.Do it quickly!
•The longer it takes to resolve service failure the more irritated the customers
service recovery paradox
high customer satisfaction after fixed a service problem.
increased assurance and confidence
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