Customer and Market Insights
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Questions and Answers

Which segmentation method focuses on the psychological aspects of consumer behavior?

  • Market segmentation
  • Psychographic segmentation (correct)
  • Behavioral segmentation
  • Demographic segmentation

What does Serviceable Obtainable Market (SOM) represent?

  • The portion of the market that can be realistically acquired
  • The potential total market demand for a product
  • The maximum revenue a business can generate from the entire market
  • The fraction of customers expected to purchase based on competitive landscape (correct)

Which of the following statements about Total Addressable Market (TAM) is true?

  • It focuses on the specific limitations a business might face.
  • It indicates the maximum revenue generation for a product or service. (correct)
  • It is the market share already captured by a business.
  • It represents only a fraction of the potential customer base.

Why are TAM, SAM, and SOM critical to business strategy?

<p>They outline growth opportunities at every stage of business. (C)</p> Signup and view all the answers

Behavioral segmentation typically divides markets based on which of the following?

<p>Customer behaviors and decision-making patterns (B)</p> Signup and view all the answers

Which pricing strategy involves charging a high initial price and then reducing it over time?

<p>Skimming (C)</p> Signup and view all the answers

What is the primary purpose of psychological pricing?

<p>To influence consumer perception of price (A)</p> Signup and view all the answers

In market segmentation, which of the following is NOT a type of demographic segmentation?

<p>Geographic location (C)</p> Signup and view all the answers

What is the main goal of penetration pricing?

<p>To increase market share quickly (C)</p> Signup and view all the answers

Which pricing strategy involves bundling two or more products at a reduced price?

<p>Bundling (C)</p> Signup and view all the answers

What characterizes a target market?

<p>Customers with shared demographics and interests (A)</p> Signup and view all the answers

Which pricing approach bases the price solely on the cost of sales with the addition of a markup?

<p>Cost-based pricing (C)</p> Signup and view all the answers

What does geographic segmentation help businesses determine?

<p>Where to sell, advertise, and expand their business (D)</p> Signup and view all the answers

What best defines an existing market?

<p>A market where competitors exist, and customers desire better performance. (B)</p> Signup and view all the answers

Which type of market involves adapting a foreign business model to local conditions?

<p>Clone Market (B)</p> Signup and view all the answers

What is the primary purpose of conducting a competitor analysis?

<p>To examine similar brands in the industry for insights. (A)</p> Signup and view all the answers

Which of the following is NOT a type of competitor?

<p>Substitute Competitor (B)</p> Signup and view all the answers

What characterizes a re-segmented/niche market?

<p>It involves a segment derived from an existing market. (A)</p> Signup and view all the answers

What is a direct competitor?

<p>A company that offers the same products within the same category. (B)</p> Signup and view all the answers

Which of the following best describes indirect competitors?

<p>Businesses offering similar products that act as substitutes. (D)</p> Signup and view all the answers

What is the primary outcome of competitor analysis?

<p>To identify strengths, weaknesses, and opportunities in the market. (B)</p> Signup and view all the answers

What is the main difference between a customer and a consumer?

<p>A customer is not usually the end-user of the product, while a consumer always is. (D)</p> Signup and view all the answers

Which type of buying decision behavior is characterized by a high level of involvement and a thorough evaluation process?

<p>Complex Buying Behavior (D)</p> Signup and view all the answers

In marketing, what do the four Ps refer to?

<p>Product, Promotion, Place, Price (D)</p> Signup and view all the answers

What is market segmentation?

<p>The practice of dividing a target market into approachable groups. (C)</p> Signup and view all the answers

What does TAM, SAM, and SOM stand for in business strategy?

<p>Total Addressable Market, Serviceable Available Market, Serviceable Obtainable Market (B)</p> Signup and view all the answers

What does a competitor analysis typically involve?

<p>Analyzing similar brands in the industry for insights. (D)</p> Signup and view all the answers

Which type of competitor is considered a direct rival?

<p>Direct Competitor (A)</p> Signup and view all the answers

What is a common characteristic of 'Laggards' in the customer adoption process?

<p>They only purchase products when absolutely necessary. (B)</p> Signup and view all the answers

What does the term 'Place' refer to in the marketing mix?

<p>The medium of transaction and distribution logistics (C)</p> Signup and view all the answers

Which pricing strategy is designed to attract a large customer base by setting prices low relative to perceived value?

<p>Penetration Pricing (A)</p> Signup and view all the answers

What is the primary goal of Skim Pricing?

<p>To capture high margins from price-insensitive customers (D)</p> Signup and view all the answers

Promotional Pricing is primarily aimed at which of the following?

<p>Clearing out stock or increasing accessibility for price-sensitive groups (D)</p> Signup and view all the answers

Discriminatory Pricing primarily involves which of the following?

<p>Charging different prices to different customer segments (B)</p> Signup and view all the answers

What does Neutral Pricing minimize in a marketing strategy?

<p>The use of price as a marketing tool (C)</p> Signup and view all the answers

Psychological Pricing is aimed at achieving what kind of impact?

<p>To create a favorable psychological perception (C)</p> Signup and view all the answers

What is a common strategy associated with Promotional Pricing?

<p>Using discount coupons and limited-time offers (B)</p> Signup and view all the answers

What do 'gain creators' in a marketing context refer to?

<p>Elements that enhance customer satisfaction and benefits (B)</p> Signup and view all the answers

Which of the following is NOT a component of the marketing mix as traditionally defined?

<p>Process (A)</p> Signup and view all the answers

What is the primary purpose of identifying 'pains' in customer relations?

<p>To tailor solutions that alleviate customer problems (B)</p> Signup and view all the answers

According to Philip Kotler, what is the definition of a market?

<p>A collection of consumers willing to trade based on shared needs (C)</p> Signup and view all the answers

Which of the following actions would best demonstrate the concept of 'fit' in a marketing strategy?

<p>Aligning product features with customer needs and desires (B)</p> Signup and view all the answers

What does marketing primarily involve?

<p>Activities to promote buying and selling (D)</p> Signup and view all the answers

In addition to the original four Ps, which of the following is considered a key addition to the marketing mix?

<p>Physical Evidence (D)</p> Signup and view all the answers

What is meant by 'pain killers' in a marketing context?

<p>Features that specifically relieve customer frustrations (D)</p> Signup and view all the answers

Flashcards

Marketing

Activities a company undertakes to promote buying or selling of its products or services.

Market

All possible consumers with a shared need or desire who are ready and able to participate in trade to fulfill that need.

Marketing Mix

A set of actions a company takes to promote its products and services including advertising and sales efforts.

Pain Killers

The features or benefits of a product or service that satisfy customers' needs.

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Pains

Obstacles or challenges that customers face before using your product or service.

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Gains

Desired outcomes or benefits that customers hope to achieve by using your product or service.

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Gain Creators

Positive features or benefits that customers value when using your product or service.

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Product/Service Fit

An ideal alignment between a company's offerings and the needs, desires, and problems of its target market.

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Skimming Pricing

Setting a high price to maximize initial profits, even if it limits sales volume. This approach works best when a product is unique or in high demand.

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Penetration Pricing

Setting a low price to attract a large customer base quickly. It aims for market dominance by sacrificing initial profit margins.

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Neutral Pricing

A strategy that avoids using price as a main marketing tool. It relies on other aspects to drive sales, such as quality, features, or brand image.

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Promotional Pricing

Temporarily lowering prices to boost sales, often during promotions or to clear inventory. This is targeted towards price-sensitive customers.

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Discriminatory Pricing

Charging different prices to different customer groups for the same product. This is based on factors like demographics, location, or buying power.

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Psychological Pricing

Using psychological principles to influence customer perceptions of price. This involves shaping their expectations and creating an emotional connection.

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Target Market

A group of customers with shared characteristics (age, income, lifestyle) who are most likely to buy a product.

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Competitive Pricing

Matching your prices to competitors to stay competitive.

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Market Segmentation

Dividing your target market into smaller groups with similar characteristics.

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Geographic Segmentation

This strategy categorizes customers by where they live, such as city, region, or country.

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Demographic Segmentation

This strategy categorizes customers by age, income, education, or gender.

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Psychographic Segmentation

This strategy categorizes customers by their needs and wants.

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Behavioral Segmentation

Dividing a market based on customer behaviors like purchase history, consumption patterns, and usage frequency.

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Total Addressable Market (TAM)

The total market demand for a product or service. It represents the maximum potential revenue a business can generate.

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Serviceable Addressable Market (SAM)

The portion of TAM that a business can realistically reach, considering factors like geographic reach, marketing budget, and target audience.

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Serviceable Obtainable Market (SOM)

The realistic number of customers within SAM who are likely to purchase the product, considering competition and market share.

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TAM (Total Addressable Market)

This refers to the total addressable market, which represents the entire market potential for a product or service.

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SAM (Serviceable Addressable Market)

This represents the portion of the TAM that your company can realistically capture.

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SOM (Serviceable Obtainable Market)

This represents the portion of the SAM that your company can realistically capture in a given period of time.

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Competitor Analysis

A comparison of your brand to similar companies in your industry to learn about their strengths, weaknesses, and strategies.

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Competitor

Any company or individual seeking to fulfill the same customer needs as your business.

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A competitor directly competing with your business by offering similar products or services.

Direct Competitor

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Existing Market

A market where existing competitors offer similar products or services, and customers demand better performance. Technological advancements often drive this type of market.

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New Market

A market where customers and their preferences are unknown, and direct competitors are absent. This type of market represents a new opportunity for innovation.

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Re-segmented/Niche Market

A market that combines elements of a new and an existing market. It's a small, specific segment carved out from an established market, offering a new or specialized product or service.

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Clone Market

A market where you directly copy an existing successful business model, adapting it to a local context. Customers are known because they are familiar with the original market.

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Direct Competitor

A direct competitor offers the same products or services within the same category as you, competing for the same customers. Example: McDonald's and Jollibee

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Indirect Competitor

An indirect competitor sells products or services in the same category but are different enough to act as a substitute for your product or service. Example: McDonald's and Subway

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Replacement Competitor

A competitor offers a product or service that's different in category and type but competes for your customers' money. Example: McDonald's and a grocery store selling ready-made meals.

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Study Notes

Customer and Market

  • A customer is a person or group of people who purchase products and services from a business. Without customers, a business fails.
  • A consumer is the end-user of goods or services. They purchase for their own needs, unlike the customer.
  • Customer types include Innovators, Early Adopters, Early Majority, Late Majority, and Laggards. Innovators eagerly seek new products, while Laggards are resistant to change.

Types of Customers

  • Innovators are eager to buy innovative products.
  • Early Adopters appreciate new innovations and are quick to try them.
  • Early Majority and Late Majority rely on analysis of factors like price, quality, and needs.
  • Laggards are last to adopt innovations and hesitant towards change.

Consumer Behavior

  • Consumer behavior involves the decisions and actions individuals take when evaluating, buying, using, or disposing of goods and services.
  • Four types of buying behaviors exist: Dissonance Reducing, Complex, Variety Seeking, and Habitual.

Value Proposition Canvas

  • The Value Proposition Canvas illustrates how a product or service creates value for the customer.
  • It consists of a Value Map detailing features of specific products and services.
  • A Customer Profile describes a specific customer segment.

Marketing Mix

  • Marketing Mix comprises elements that focus on a comprehensive marketing plan.
  • Traditionally grouped as the four Ps: Product, Place, Promotion, and Price;
  • Additional elements are People, Process, and Physical evidence to reinforce customer focus.

Pricing Strategy

  • Skimming prices are initially high then lowered to a wider market.
  • Penetration Pricing keeps prices low to attract a large customer base.
  • Neutral Pricing avoids using price to gain market share.
  • Promotional Pricing involves temporary price reductions to boost sales or clear inventory.
  • Discriminatory Pricing charges different prices to different customer segments.
  • Psychological Pricing crafts pricing to have a positive impact on customers (e.g., 99 instead of 100).

Market

  • Market is a group of consumers with a need or desire for a product or service.

Market Segmentation

  • Dividing a target market into approachable groups (e.g., demographic, geographic, psychographic, or behavioral). These groups share common characteristics.
  • Demographic segmentation divides markets by age, gender, occupation, income, education, nationality, and family size.
  • Geographic segmentation groups based on location, density, or climate.
  • Psychographic segmentation considers aspects like lifestyle, personality, values, opinions, and interests.
  • Behavioral segmentation categorizes by purchase behavior, consumption patterns, usage, and decision-making patterns.

Market Size Estimation

  • Total Addressable Market (TAM): Represents the total market demand for a product/service.
  • Serviceable Addressable Market (SAM): Estimates the portion of TAM a business realistically serves.
  • Serviceable Obtainable Market (SOM): Determines the actual market that a business can realistically capture.

TAMSAMSOM

  • TAM, SAM, and SOM help calculate revenue potential and determine if a business should enter a certain market.

Types of Market

  • Existing Market: existing competitors are important factors.
  • New Market: customers and their preferences are unknown; no direct competition.
  • Re-segmented/Niche Market: hybrids between new and existing markets.
  • Clone Market: new market that adapts a foreign business model to a local context.

Competitor Analysis

  • Competitor analysis helps identify a company's rivals to understand their offerings.
  • It examines competitors' product, branding, marketing approaches, and more to understand strengths and weaknesses.
  • Competitor analysis helps businesses develop strategic advantages compared to their competitors.
  • Types of competitors include Direct, Indirect, and Replacement competitors. Direct competitors offer similar products and services within the same category. Indirect competitors offer a substitute product. Replacement competitors offer other options that might be a choice for customers instead.

Summary

  • The summary section encapsulates the key points of each topic.

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Description

This quiz explores essential concepts related to customers, consumers, and their behaviors within the market. Learn about different customer types and the factors influencing consumer behavior. Test your understanding of these foundational marketing principles.

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