Marketing Principles 3-4

nguyp035's version from 2016-05-11 18:06

Section 1

Question Answer
What is the target marketing strategy?STP Approach
The market is fragmented into...different needs and wants.
There needs to be a balance between...mass marketing (ineffective) and offering individual product/service (high cost)
Dividing the market into smaller sub markets with consumers of similar needs and wants is known as?Segmentation
Choosing the specific segments we wish to aim our product at is...Targeting
Designing and implementing strategies and actions to target them is.. Positioning (decision for marketing mix is required to be developed)

Section 2

Question Answer
How do we segment markets?We use segmentation variables such as age, income, etc.
Why use segmentation variables? (criterias)Those within a segmentation variable are likely to have similar needs and wants - share similar background
Identify demographic variables...age, gender, family structure (family bucket), income, social class, ethinicity, residence
What are psychographic variables?segmenting customers in terms of shared activities, interests, opinions (AIO) such as hobbies or political attitudes
it is usually linked to demographic variables and related to life style. - VALS Framework

Section 3

Question Answer
Psychographic - VALS consists of...values, attitudes and lifestyle
It looks at....attitudes, demographics / two dimensions resources and innovation
Innovatorshigh income. high innovation, chooses finer things in life
Survivorslow income, low innovation, elderly people, loyal
Thinkers (ideals)high income, motivated by ideals, open to change of world, rational
Believers (ideals)low income, motivated by ideals, conservative, loyal to brands
Achievers (achievements)high income, motivated by achievement, show off to peers, big brands
Strivers (achievements)low income, motivated by achievement, show off, style/emulate
Experiencers (self-expression)high income, motivated by self-expression, young, social
Makers (self-expression)low income, motivated by self-expression, like functional/practical products
(-) Disadvantages of VALS framework's not perfect - needs to be adjusted according to each specific case - boundary of each may not be clear - overtime people and culture change
+ Advantages of the framework...assumes each 'type' represents people with a lifestyle which links to their needs and wants

Section 4

Question Answer
What are behavioral variables?1) variables that look from the perspective of customers e.g. how frequent customers purchases are, their user status of a product (non user/potential), the benefit they seek
2) variables that look at usage occasion: browse history, 'check-out' analysis

Section 5

Question Answer
Multiple-dimensional segments are...when a company targets more than one segment e.g. young/male (demo), first time buyer (behavioural), strivers (psychographic)
Analogy of segmentation:Whole market = cube whilst each square inside cube = market divided into segments

Section 6

Question Answer
An EFFECTIVE SEGMENT is defined as....(D)on't (m)iss (s)uzie (a)t (a)irport
Differentiable customers have distinct needs & wants
Measurableable to measure size of segment
Substantialit is profitable (20.80 rule)
Accessiblewe know them and can communicate to them
Actionableproduct/service can serve them
Other things we could also consider...4PS, Competition....

Section 7

Question Answer
Targetinglooks at which segment we should focus on..
Pareto Rule is..20/80 (20% of purchases account for 80% of sales revenue)

Section 8

Question Answer
Undifferentiated marketing (mass) - broadone product offered, no segmentation/targeting, homogeneous market, low marketing cost, susceptible to competitors, few left e.g. tesco serve everyone in same way, unbranded table salt
Differentiated marketing targeting several segments, targeting advertising and promo, costly research and planning, meet need of each segment e.g. Arcadia - top shop, dorothy perkins
Concentrated marketingfocus on single segment (limited by resource) e.g. insurance over 50
Custom marketing (niche) - specific (micro marketing) - narrowserves a small number of customers to meet specific needs e.g. Savile row
Selecting a strategy...depends.. are we limited by capacity?

Section 9

Question Answer
Positioning is the process of...taking actions to satisfy needs and wants of customers within targeted segment.
marketing strategy is developed to influence how customers in a market segment perceive our products in comparison to competition - 'position' used as we talk about both us and competitors.

Section 10

Question Answer
Steps to Positioning
Understand competitors position by...identifying who direct/indirect competitors are, what their product feature/quality is, price, reputation, brand image, position in market.
In order to understand how consumers perceive us compared to competitors we use a...Perceptual mapping (survey) - this illustrates the locations of all of the products in our customers' minds
Looks at how we may be perceived compared to competitors
Which variables?e.g. exclusivity (easy to get or hard?), prestige price (exp, low price) - gucci/hermes - may have to rank them first e.g. from -10 to 10 - quality/price?
How do we know which is important?Choose variables that are important to customers in the segment
Analysing the map...the difference between two brands are represented by the distance of their locations - if one area of map has lots of brands = intense comp - little/no brand = gap in market

Section 11

Question Answer
Differentiation refers to...distinguishing our products from others, to make it more attractive to a particular market. - it can lead to sub monopoly/ competitive advantage if position is favourable - away from other brands!!!
How to be differentiated?Ensure that we differentiate the marketing mix to move away from competitors on the map.. (e.g. Aldi works on price, M&S quality, Intel performance)
Lots of brands and intense competition suggests need to build brand and have distinctive positioning.
Marketing mix (4P) should match needs of customers in targeted segment
Business class airline - price or place?Place.
Can perceptual map go beyond two dimensions?Yes.. e.g. airlines (convenience, reputation, punctuality)
What are the challenges of positioning?Identifying the criterias, deciding weights, too many dimensions
What to do if we face challenges?Evaluate the response from customers and re-position - does it work? are there changes e.g. competitors? - may go back to S/T stages.
Bringing the strategy together to create value =Segment, differentiate (create value), target, position

Section 12

Question Answer
Market research consists of...generating info for aid in making marketing decisions.
Market research helps to...provide management with info to reduce RISKS of business decision making e.g. perceptual mapping
Primary datainfo collected to solve a current problem (e.g. survey,experiment)
Secondary dataInfo previously collected or published (e.g. internet, national stats, internal reports)
An example of collecting data is...the Tesco clubcard, using big data to analyse trends in behavior - an example of demographic variables + understanding segments