MARK 201 Mid-term Study Guide PDF

MARK 201 Chapter 1, 3, 4, 5,6 - **Closed-Book, In-Person Exam**: The exam will take place during the Week 6 session (October 10th). - **Review slides/quiz: pay attention to the class exercises and business examples (how do they relate to the marketing concepts)** - **Prepare for ap...

MARK 201 Chapter 1, 3, 4, 5,6 - **Closed-Book, In-Person Exam**: The exam will take place during the Week 6 session (October 10th). - **Review slides/quiz: pay attention to the class exercises and business examples (how do they relate to the marketing concepts)** - **Prepare for application-based questions:** understand why each business example was used. - **Focus on key points:** understand benefits and disadvantages of various approaches - **Laptop Required**: You will need a laptop to access Moodle. - **Coverage**: Content from Weeks 1 to 5, with a slightly greater focus on Weeks 4 and 5. - **Exam Format**: - 50% Multiple Choice - 25 - 30% Case Analysis based on provided criteria - 20 -- 25% Short Open-Ended Questions **Week1: chapter 1** 1. **Define marketing and outline the steps in the marketing process** 1. Dairy farmers of Canada and blue cow logo 2. Haagen-Dazs announced that they will release Spoon Vege series. **What is marketing?**\ When companies engage with consumers, build strong consumer relationships, and create consumer value in order to capture value from consumers in return. **What are some marketing activities?** Advertisement, market studies, research, product development **What do successful companies have in common today?** They are focused on the consumer experience and its relationship to successful marketing. **The Marketing process (5 step process)** Une image contenant texte, Police, capture d'écran Description générée automatiquement **Step1: Consumer needs and wants** **Needs:** What we need as people to survive (food/water/clothing/warmth/safety) **Wants:** Desires shaped by society and individual personality (cocktails, juice) **The consumers' wants depends on the environment and personality. Fulfilling our needs and wants is the motivation behind all human behaviour.** Consumers' needs and wants are fulfilled through market offerings. Some combination of products, services, information, or experiences offered to a market to satisfy a need or a want. Market offerings are not limited to physical products. They include services-activities or benefits offered for sale that are essentially intangible. **Market**\ A market is the set of all actual and potential consumers of a product or service. Consumers share a particular need or want that can be satisfied through these exchange relationships. Defining your market is the essential [1^st^ step in market segmentation] and developing a target market. Why do you want to define your market? - - - - - 2. Explain the importance of understanding the marketplace and consumers and identify the five core marketplace concepts. The marketing manager's aim is to engage, keep, and grow relationships with target consumers by creating, delivering, and communicating superior value. **Key elements of a successful marketing strategy** - - Ex: Pantagonia\ more than just a brand that sells outdoor clothing and gear. It advocates for environmental causes. They use their platform to raise awareness about pressing environmental issues **Selecting consumers to serve** Being highly relevant to a specific group of people is much more impactful for a company than being sort of relevant to a lot of people. For example: a Chanel lipstick- their target market is women with a higher income. **1.3 Discuss customer relationship management and identify strategies for creating value for consumers and capturing value from consumers in return.** Develop strategies that will engage consumers and build profitable relationships  **Developing marketing strategies** A company's marketing strategy outlines which consumers it will serve and how it will create value for those consumers. Next, marketing strategists develop integrated marketing plans to deliver the intended value to the target market. That plan = building and nurturing consumer relationships by bringing the marketing strategy to life. It consists of the company's marketing mix. The four P's. **The 4 p's of marketing**\ Product, price, promotion, place 4. **Describe the major trends and forces that are changing the current marketing landscape in this age of relationships.** **Customer-perceived value**: Customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those competing offers. (It will depend on individuals -- experience and environment will affect the perceived value) **Customer satisfaction:** The extent to which a product's perceived performance matches a buyer's expectations. (marketers need to meet the expectations of consumers) **Customer relationship management** is the overall process of building and nurturing profitable customer relationships by delivering superior value and satisfaction. It deals with all aspects of acquiring, engaging, growing, and listening to consumers. **Examples of brand creating value for their customers** 1. Walt Disney 2. Heinz -- their advertising played a pivotal role in reinvigorating the Heinz brand. The importance of simplicity and leveraging the audience's affection for the brand. It made the company grow. **Consumer Engagement in the digital age** Today's consumers are better informed, more connected, and more empowered than ever. Companies can no longer rely on marketing by intrusion. They must practise marketing by *attraction-* creating dialogue that engages consumers rather than interrupts them. In many cases, social media management is no longer an add-on to a marketing plan, but in many cases is the marketing plan. Ex: Many luxury brands are using social commerce and social media Mobile shopping helps companies personalize advertisements. Also, all brands use at least two social media platforms. **Consumer generated marketing/user-generated content (UGC)** Brand exchanges created by consumers themselves-both invited and uninvited- by which consumers are playing an increasing role in shaping their own brand experiences and those of consumers. Ex: Reddit It can be time-consuming and costly. Sometimes, it is difficult to mine even a little gold from all the content submitted. EX: The brand Oreo and their \#MyOreoCreation- they asked fans to come up with new flavor ideas **Capturing Value from consumers** I. Creating customer loyalty and retention (customer lifetime value) II. Growing share of consumer III. Building consumer equity (consumer equity is the total combined consumers lifetime values of all of the company's current and potential consumers **Consumer relationship groups**  **Week 2: chapter 3** **VHS -\> Streaming devices** **Case Study of Blockbuster vs Netflix** 1. **Blockbuster's Failure** - Blockbuster dominated the video rental industry in the early 2000s with over 9,000 stores and \$6 billion in revenue. - Its failure to adopt new technology (e.g., streaming) and anticipate consumer shifts led to its bankruptcy by 2010. They underestimated their competition, particularly Netflix. They also focused too much on their stores. Their effort was outdated. (time-consuming visits, late fees, no catalogues, no recommendations, expensive VCR machine) 2. **Netflix's Success** - Netflix began as a DVD rental-by-mail service but launched streaming services in 2007 as high-speed internet became more widespread. - They used data analytics and AI algorithms to personalize content recommendations, helping them grow to over 200 million subscribers globally. - They quickly adapted to technology. Why? They needed to find ways to survive. They were able to meet customer's need-they had way more options. (instant access form home, smart recommendation system, only subscription fees and unlimited rentals, available on any smart devices) 1. **Describe the environmental forces that affect the company's ability to develop meaningful relationships with consumers** 2. **Explain how changes in the demographic and economic environments affect marketing decisions** 3. **Identify the major trends in the firm's natural and technological environments** 4. **Explain the key changes in the political and cultural environment** 5. **Discuss how companies can react to the marketing environment** The marketing environment: inside and outside forces that affect the marketing management's ability to build and maintain successful relationships with target consumers. **The microenvironment** 6 players -close to the company and affect its ability to serve 1. The company Internal departments work together to deliver value to customers. Shared responsibility to understand the customer needs and create customer value. 2. The supplier\ Companies depend on suppliers for the resources needed to produce goods. Supply shortages, delays, or labor strikes can significantly impact production and marketing. Prices can be affected by shortages. 3. The marketing intermediaries These include resellers, distribution firms, marketing agencies, and financial intermediaries. They help companies promote, sell, and distribute products to consumers. They make smooth transitions. 4. Competitors\ Companies must analyze their competitors to gain strategic advantages. This includes positioning themselves uniquely and differentiating their products or services. Find the forces and weaknesses, the target market. You want to have an outstanding element to differentiate your brand (value or product) 5. Publics\ Groups that have an interest in or impact on the organization's ability to achieve its goals. These include the media, government, citizen action groups, and local communities. 7 types of publics: financial publics, media publics, government, citizen action (e.g. groups against animal testing), local publics, general, internal (e.g. internal employees) 6. Customers\ Different types of customer markets (5): - **Consumer markets:** Individuals buying for personal use. - **Business markets:** Organizations purchasing for further processing or use in production. - **Reseller markets:** Businesses buying to resell at a profit. - **Government markets:** Government agencies purchasing goods or services for public use. - **International markets:** Buyers in other countries. **The Macroenvironment**  **Some forces are unforeseeable and uncontrollable. Some can be predicted and handled through skillful management. Companies that understand and adapt well to their environments can thrive** **Environmental Forces and Consumer Relationships** Businesses must adapt to their environments to remain competitive and build meaningful relationships with consumers. Environmental forces include: - Internal company dynamics. - External factors like technology, political shifts, and cultural trends. **Demographic** - **Demographic trends** such as aging populations, diverse generations, and household compositions affect marketing decisions. - **Different generational groups: baby boomers, generation X, Millenials, and generation Z** - **Generational marketing:** marketers need to form more precise age-specific segments within each group. Defining people by their birth rate may be less effective than segmenting them by lifestyle, life stage or the common values they share. **Economic Influences** - **Economic factors** like inflation, unemployment, and consumer confidence also shape how companies market their products. - Example: As the population ages, companies may focus on products catering to older generations, such as healthcare and retirement services. **Technological** - **Technological advancements** offer new opportunities for marketing, such as AI-driven recommendations, automation, and social media engagement. They are innovations/inventions that stem from scientific or engineering research. - **Ex: mobile orders, Walt Disney and their bracelet** **Natural Forces** - Companies must also be aware of **natural forces** like resource shortages, climate change, and natural disasters, which can disrupt supply chains and alter consumer demand. Companies can't prevent, but they should prepare. **Political** - Political factors such as new laws, regulations, or trade restrictions may limit or provide opportunities for marketing strategies. **Cultural Shifts** - Cultural forces like changing social attitudes and values must be monitored, as they influence consumer behavior (e.g., rising demand for sustainable and eco-friendly products). Tend to be gradual and sometimes subtle. - Ex: Halal restaurants in Montreal, vegan ice cream (to adapt to new consumer preferences) **Case Study: Tim Horton's** The company is a subsidiary of RBI. There is a Tim's on every single block. The market has been saturated but there's a limited number of customers. So now, there are many Tim's around the world **Week 3: chapter 4** 4.1 Explain the importance of information in gaining insights about the marketplace and customers Marketing information and today's Big Data Today, there's too much data. We must know how to use data more effectively. **What is Big Data?**\ huge and complex data sets generated by today's advanced technologies for data generation, collection, storage, and analysis. It comes with big opportunities and challenges. Ex: Coca-Cola and Apple monitor online discussions about its brand in Tweets, blogs, social media posts, and other sources. **Developing Customer Insights** What are they?\ Deep understandings about consumer behaviors, preferences, needs, and motivations. They are the basis for creating customer value, engagement, and relationships. Marketers collect insight from a wide variety of sources from traditional marketing to monitoring online conversations. **4.2 Define the marketing information system and discuss its parts** **The Marketing Information System** (creating customer value creates stronger relationships)\ It consists of people and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers use the information to generate and validate actionable customer and market insights. Effective marketing information systems give managers the right information, in the right form, at the right time. This information is then used to create customer value, engagement, and stronger customer relationships. Une image contenant texte, capture d'écran, Police, ligne Description générée automatiquement MIS begins and ends with information users First-interacts with information users to assess information needs. Then, it interacts with the marketing environment to develop needed information through internal company databases, marketing intelligence activities, and marketing research. Finally, the MIS helps users to analyze and use the information to develop customer insights, make marketing decisions, and manage customer engagement and relationships. **A good marketing information system balances...** - The information users would like to have - What they really need - What is feasible Obtaining, analyzing, storing, and delivering information is costly. Firms must decide whether the value of the insight is worth the cost. Ex: Walmart's retail like system gives key suppliers access to information on everything from customers' buying patterns and store inventory levels to how many items they've sold in which stores in the past 24hrs. **Where can marketers obtain the needed information?** - **Internal databases** (collections of consumer and market info obtained from data sources within the company network) Advantages: quick and cheaper than other information Disadvantages: may be incomplete or in the wrong form, data ages quickly, managing and mining the info requires highly sophisticated equipment and techniques. - **Competitive marketing intelligence** (goal is to improve strategic decision making by understanding the consumer environment, assessing and tracking competitors' actions, and providing early warnings of opportunities and threats) It can help marketers gain insights into how consumers talk about and engage with their brands. How ? Observing consumers first-hand, Quizzing the company's own employees, Benchmarking competitors' products, conducting online research, Monitoring social media buzz It also helps firms to protect their own information and raises ethical issues *EX: Ikea and the ''Balenciaga designer bag'.* - **Marketing research** **4.3** Outline the role of marketing research and the steps in the marketing research process **1. Defining the problem and research objectives**-objectives, specific, measurable goals the decision maker seeks to achieve 3\. Implementing the research plan-collecting and analyzing the data 4\. Interpreting and reporting the findings. **4.4** Explain how companies analyze and use marketing information **\ ** \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ **Week 4: chapter 5- understanding consumer and business buyer behaviour** **5.1 Understand** the **consumer market** and the major factors influencing consumer buyer behavior Consumer buyer behavior refers to-*buying behavior of final consumers (individuals and households that buy goods and services for personal consumption).* Consumers vary in age, income, and education level, and tastes. They buy a variety of goods and services. Why do large companies research consumer buying decisions?\ To answer questions about what consumers buy, where they buy, how and how much The study of consumer behavior starts and ends with the individual. It's an ongoing process  **What are the factors that affect consumer behavior?** Cultural, social, personal, psychological factors (marketers cannot control them, but they must take them into account 1. **Cultural -subculture** -foundational source of a person\'s wants and behaviour. Marketers try to spot cultural shifts to discover new consumer needs and wants. Ex: there's a cultural shift toward wellness. A culture will contain smaller **subcultures** (based on common life experiences, situations, or interests) -3 founding groups of Canada: indigenous peoples, English and french 2. **Social** -groups will influence a person's behaviour (social networks, family, social roles and status) Membership groups: direct influence Reference groups: direct/indirect pts of comparison or reference in forming a person's attitudes or behaviour Aspirational group: one which individual wishes to belong \*Marketers of brands subject to strong group influence must figure out how to reach *opinion leaders.* \*word-of-mouth influence and influencer marketing can be impactful for a brand. Online social networks shape influence (reddit, yelp, google reviews) Family: can strongly influence buyer behaviour Roles and perceptions: people usually choose products that align with their roles and self-perception. (ex: at work, they play a role of brand manager, therefore, they will buy the kind of clothing that reflects their role in the company) 3. **Personal** *-Occupation, age and life stage, economic situation, lifestyle, and personality and self concept.* [Occupation:] affects the goods and services bought [Age and life stage:] people change the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture and recreation are often age-related [Economic situation:] economic situation will affect their store and product choices [Lifestyle:] it's a person' pattern of living as expressed in their psychographics. Involves measuring consumer's major AIO dimensions (activities, interests, opinions). It helps marketers understand changing consumer values and how they affect buyer behaviour [Personality and self-concept:] personality influences people\'s buying behaviour. It refers to the unique psychological characteristics that distinguish a person/group. 4. **Psychological** ***4 major psychological factors: motivation, perception, learning, and beliefs and attitudes*** **[Motivation:] a motive is a need that is sufficiently pressing to direct the person to seek satisfaction** Une image contenant texte, ligne, Police, capture d'écran Description générée automatiquement **[Perception:] a motivated person is ready to act. How the person acts is influenced by their own perception of the situation. Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world** **[Learning:] most human behaviour is learned** **[Beliefs and attitudes:] Through doing and learning, people acquire beliefs and attitudes. These influence their buying behaviour. Marketers are interested in people's beliefs about specific products and services- they make up product and brand images that affect buying behaviour.** **Attitudes are difficult to change. A company should try to fit its products into existing attitude patterns.** **5.2 Identify and discuss the stages in the buyer decision process** **5 stages to the buyer decision process**  **Consumers pass through all five stages of the buyer decision process, some may skip steps or reverse some of the stages. It depends on the nature of the buyer, the product, and the buying situation.** **[1. Need recognition]\ *A person recognizes a problem or need*** **The need can be triggered by *internal stimuli* when one of the person's normal needs---for example, hunger or thirst---rises to a level high enough to become a drive** **The need can also be triggered by *external stimuli*. For example, marketing communications or a chat with a friend might get you thinking about buying a new car (Social media)** **[2. Information search]** **With the shift to consumer-driven and digitized marketing communications, it can be challenging for brands to control, manage, and influence this stage** **Commercial sources normally inform the buyer, but personal sources legitimize or evaluate products for the buyer.** **[3. Evaluation of alternatives]** **Several evaluation processes are at work for consumers. It all depends on the individual consumer and the specific buying situation. Some consumers buy on impulses and rely on intuition. Marketers should study buyers to find out how they evaluate brand alternatives. If marketers know what evaluative processes go on, they can take steps to influence the buyer's decision.** **[4. purchase decisions]** **At this stage, consumer ranks brands and forms purchase decisions. Two factors can come between the purchase *intention and decision.* First: attitudes of others. Second: unexpected factors** **[5.post purchase behaviour]** **Marketer's job does not end when the product is bought. After the consumer bought the product, they will either be satisfied or dissatisfied and then will engage in postpurchase behaviour of interest to the marketer.** **What determines whether the buyer is satisfied or dissatisfied?** **Consumer's expectations: meets expectations = consumer satisfied** **Product's perceived performance** **Almost all major purchases result in cognitive dissonance** **Why is it important to satisfy the customer?\ Customer satisfaction is a key to building profitable relationships with consumers- to keeping and growing consumers and reaping their customer lifetime value.** **Studying the overall buyer decision process, marketers may be able to find ways to help consumers move through it. (EX: if consumers are not buying a new product because they do not perceive a need for it, marketers might launch advertising messages in order to trigger the need and show how the product solves customers' problems)** **5.3 Describe new product adoption and the diffusion process** **What is the adoption process?\ the mental process through which an individual passes from first learning about an innovation to final adoption.** **Stages in the adoption process** **1. Awareness: The consumer becomes aware of the new product but lacks information about it.\ 2. Interest: The consumer seeks information about the new product.\ 3. Evaluation: The consumer considers whether trying the new product makes sense.\ 4. Trial: The consumer tries the new product on a small scale to improve their estimate of its value.\ 5. Adoption: The consumer decides to make full and regular use of the new product.** **This model suggests that marketers should think about how to help consumers move through these stages.** **Individual differences in innovativeness** **People differ greatly in their readiness to try new products** Une image contenant texte, capture d'écran, ligne, diagramme Description générée automatiquement **The five adopter groups** 1. **Innovators-venturesome** 2. **Early adopters- adopt new ideas early but carefully** 3. **Early mainstream- rarely leaders, but adopt before the average person** 4. **Late mainstream- skeptical, they adopt after most people have tried it** 5. **Lagging adopters- tradition bound, suspicious of changes and adopt innovation only when it has become something of a tradition itself.** **5.4 Define the business market and identify the major factors influencing business buyer behavior** **Business buyer behavior refers to the buying behavior of organizations that buy goods and services for use in producing other products and services that are sold, rented, or supplied to others. Also includes behavior of retailing and wholesaling firms that acquire goods to resell or rent to others at a profit.** **B2B marketers must do their best to understand business markets and business buyer behavior. They must engage business customers and build profitable relationships with them by creating superior customer value.** **Business markets: similar to consumer markets but there are differences -- market structure and demand, nature of the buying unit and the types of decisions and the decision process involved.** **1.market structure and demand** **Business marketer deals with fewer but larger buyers** **Many business markets have inelastic and more fluctuating demand.** **Business demand is derived demand. It derives from the demand for consumer goods.** **2. nature of the buying unit** **A business purchase usually involves more decision participants and a more professional purchasing effort. The more complex the purchase, the more likely it is that several people will participate in the decision-making process.** **Companies must have well-trained marketers and salespeople to deal with these well-trained buyers.** **3. types of decisions and the decision process** **Business buyers face more complex buying decisions than consumer buyers.\ Why? Decisions often involve large sums of money, complex technical and economic considerations, and interactions among people at many levels of the buyer's organization.** **The buying process also tends to be longer and more formalized.** **The buyer and seller are more dependent on each other**  **In this model, marketing and other stimuli affect the buying organization and produce certain buyer responses. Marketers must understand what happens within the organization to turn stimuli into purchases response.** **Buying centre consists of all the individuals and units that play a role in the purchase decision-making process** - **Actual users of the product or service** - **People who make the buying decision** - **People and units influencing the buying decision** - **People who do the actual buying** - **Individuals and units controlling the buying information** - **buying centre is not a fixed and formally identified unit within the buying organization** **Buying decision process** **There are three major types of *buying situations:* straight rebuy, modified rebuy, and a new task situation.** **In a straight rebuy, the buyer reorders something without any modifications. It is usually handled on a routine basis by the purchasing department. In a modified rebuy, the buyer wants to modify product specifications, prices, terms, or suppliers.** **A company buying a product or service for the first time faces a new task situation. The marketer not only tries to reach as many key buying influences as possible, but also provides help and information. The buyer makes the fewest decisions in the straight rebuy and the most in the new task situation.** **Systems selling (or solutions selling) refers to buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation.** Une image contenant texte, Police, capture d'écran, nombre Description générée automatiquement 5. **List and define the steps in the business buyer decision process**  **There are 8 stages** **Buyers who face a new task buying situation usually go through all stages. Buyers making modified or straight rebuys may skip some of the stages** **[1. problem recognition:] results from internal or external stimuli** **[2. general need description:] buyer prepares a general need description that describes the characteristics and quantity of the needed item** **[3. product specification:] buying organization develops the items technical specifications often with the help of a value analysis engineering team.** **[4. Supplier search:] buyer conducts a suppliers search to find the best vendors** **[5. proposal solicitation:] buyer invites qualified suppliers to submit proposals. When the item is complex or expensive, the buyer will usually require a detailed written proposal or formal presentation from each potential supplier.** **6. supplier selection: buying center reviews proposals and select a supplier or suppliers. Buyers may attempt to negotiate with preferred suppliers for better prices and terms before making the final selections.** **7. Order-routine specification: buyer prepares an order-routine specification. It includes the final order with the chosen supplier or suppliers and lists items such as technical specifications, quantity needed, expected delivery time, return policies, and warranties.** **8. performance review: buyer reviews supplier performance. Buyer may contact users and ask them to rate their satisfaction.** **5.6 Discuss how online, mobile, and social media have changed business-to-business marketing** **Purchasing through electronic connections between buyers and sellers---usually online** **E-procurement occurs through** - **Reverse auctions** - **Online trading exchanges** - **Company buying sites** - **Extranet links with key suppliers** **Business-to-business e-procurement yields many benefits. First, it shaves transaction costs and results in more efficient purchasing for both buyers and suppliers. E-procurement reduces the time between order and delivery, and eliminates the paperwork associated with traditional requisition and ordering procedures. It helps an organization keep better track of all purchases. Finally, e-procurement frees purchasing people from a lot of drudgery and paperwork.** **However, the rapidly expanding use of e-procurement also presents some problems. At the same time that the internet makes it possible for suppliers and customers to share business data and even collaborate on product design, it can also erode decades-old customer-supplier relationships. Buyers now use the power of the internet to pit suppliers against one another and search out better deals, products, and turnaround times on a purchase-by-purchase basis.** Une image contenant texte, capture d'écran, Police Description générée automatiquement **B-to-B marketers are now using a wide range of digital and social media marketing approaches.** **Compared with traditional media and sales approaches, digital and social media can create greater customer engagement and interaction.**  Une image contenant texte, Police, capture d'écran, papier Description générée automatiquement  Une image contenant texte, Police, capture d'écran, document Description générée automatiquement **Week 5: chapter 6** **This chapter focuses on key customer value-driven marketing strategy decisions.** **Segmentation: dividing markets into meaningful customer groups** **Targeting: choosing which customer groups to serve** **Differentiation: creating market offerings that best serve targeted customers** **Positioning: positioning the offerings in the minds of consumers** **6.1** Define the major steps in designing a customer value--driven marketing strategy: **market segmentation, targeting, differentiation, and positioning**.  Marketers must first select customers to serve and then decide on a value proposition **6.2** List and discuss the major bases for segmenting consumer and business markets. Buyers in any market differ in needs, wants, motivation, resources, locations, buying attitudes, and buying practices. By dividing diverse markets into smaller groups, it will be easier and more efficient to reach customers. Here, we will discuss segmenting consumer markets, business markets, and international markets as well as the requirements for effective segmentation. **Segmenting consumer markets: Geographic segmentation** - Dividing the market into different geographical areas. **Segmenting Consumer Markets: Demographic Segmentation** - Dividing the market into segments based on variables such as age, life-cycle stage, gender, occupation, education, religion, ethnicity, and generation. 'most common base.' Why? Consumer needs, wants, and usage rate often vary closely with demographic variables. **Segmenting Consumer Markets: Psychographic Segmentation** - Dividing buyers into different segments based on lifestyle or personality characteristics. People in the same demographic group can have very different psychographic characteristics. Marketers often base their marketing strategies by consumer lifestyles EX: Panera caters to a lifestyle segment of people who want more than just good-tasting food, they want food that's good for them. Marketers use personality variables to segment markets. EX: Loews (a luxury boutique hotel chain) segments its market by lifestyle and has created specific 'personas' for each segment. Then, they create personalized offers, messages, and media plans for each segment. **Segmenting Consumer Markets: Behavioural Segmentation** - Dividing buyers into segments based on their knowledge, attitudes, uses, or responses to a product. Many believe that behaviour variables are the best starting point for building market segments. Occasions: group buyers according to occasions when they get the idea to buy, actually make their purchases, or use the purchased items. It can help firms increase their product usage. EX: Starbucks and the pumpkin spice latte Benefits Sought: grouping buyers according to different benefits that they seek from a product. It requires finding major benefits people look for in a product, the kinds of people who look for each benefit, and the major brands that deliver each benefit. EX: Fitbit-there's a fitbit for everyone User Status: nonusers, ex-users, first-time users, and regular users of a product. Usage Rate: light, medium, and heavy users Loyalty status: divided into groups depending on their degree of loyalty. **Segmenting Consumer Markets: Using multiple segmentation bases** - Companies will often employ multiple segmentation bases to identify smaller, more precisely defined target groups. - Segmentation bases help companies to - Identify smaller, better-defined target groups - Identify and understand key customer segments - Reach customers more efficiently by tailoring market offerings and messages to customers' specific needs **Segmenting business markets** - Consumer and business markets use many of the **same variables** for segmentation Additional variables used by business marketers for segmentation include - Operating characteristics: based on operating processes, technology use, or production method. - Purchasing approaches: how businesses make their purchasing decisions like buying policies, centralization of purchasing, or the decision-making process. - Situational factors: company's purchasing needs based on specific situations like urgency or special orders. **Example: A logistics company could segment businesses based on whether they have urgent delivery needs (e.g., time-sensitive shipments) and offer premium express services for those segments**. - Personal characteristics: personal traits of the decision-makes within a company, such as their risk tolerance, business philosophy, or personal preferences. **Segmenting International Markets** - Companies can segment international markets using **one or a combination of several variables** like geographic location, economic factors, political and legal factors, and cultural factors. Intermarket (cross-market) segmentation: grouping consumers with similar needs and buying behaviours irrespective of their location **Requirements for Effective Segmentation** 1. Measurable: Do you know how big your market is? 2. Accessible: Can you reach your market? 3. Substantial: Is your market large enough to be profitable? 4. Differentiable: Are segments conceptually distinguishable and respond differently to different marketing programs? 5. Actionable: Can you serve this segment with your product or service) There are many ways to segment a market, but not all segmentations are effective **6.3 Explain how companies identify attractive market segments and choose a market-targeting strategy.** **Evaluating market segments** First, marketers will segment the market. Then, it will choose which segment to target based on: 1. Segment size and growth potential 2. Segment structural attractiveness (like competitors, market entry) 3. Company objectives and resources The chosen segment becomes the **target market.** The set of buyers sharing common needs or characteristics that the company decides to serve. Une image contenant texte, capture d'écran, Police, ligne Description générée automatiquement **Selecting Target Market Segments:** Undifferentiated (mass) marketing - Refers to a market-coverage strategy where a firm decides to ignore market segment differences and go after the entire market with one offer. - By offering product and marketing variations to segments, companies hope for higher sales and a stronger position within each market segment. Developing a stronger position within several segments creates more total sales than undifferentiated marketing across all segments. Thanks to its differentiated approach, P&G is really cleaning up in the U.S. laundry detergent market. Differentiated (segmented) Marketing - Refers to a market-coverage strategy where a firm targets several market segments and designs separate offers for each. EX: P&G markets multiple laundry detergent brands and then further segments each brand to service even narrower niches. Disadvantages: increases the costs of doing business. It requires extra marketing research, forecasting, sales analysis, promotion planning Concentrated (niche) marketing - Refers to a market-coverage strategy in which a firm goes after a large share of one or a few segments or niches EX: Ben & Jerry's dog treats. In 2021, it introduces a line of frozen dog treats to target U.S households with pets. Micromarketing - Tailoring products and marketing programs to the needs and wants of specific **individuals and local** segments. EX: The Rolls-Royce Bespoke design team works closely with individual customers to help them create their own unique Rolls-Royce. **Selecting Target Market Segments: choosing a targeting strategy** There are factors to consider: - Company resources - Product variability - Product's life-cycle stage - Market variability - Competitors' marketing strategies When the firm's resources are limited, **concentrated marketing** makes the most sense. The best strategy also depends on the degree of product variability. The product's life-cycle stage also must be considered. When a firm introduces a new product, it may be practical to launch one version only, and **undifferentiated marketing or concentrated marketing** may make the most sense. In the mature stage of the product life cycle, however, **differentiated marketing** can be useful. Another factor is market variability. If most buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts, undifferentiated marketing is appropriate. Finally, competitors' marketing strategies are important. When competitors use differentiated or concentrated marketing, undifferentiated marketing can be suicidal. **6.4 Discuss how companies differentiate and position their products for maximum competitive advantage.**  The perceptual positioning maps show consumer perceptions of their brands versus those of competing products on important buying dimensions to plan their differentiation and positioning strategies. **Choosing the right Competitive Advantages** - An advantage over competitors gained by offering greater customer value either by having lower prices or by providing more benefits that justify higher prices. - A company can differentiate itself or their offerings along the lines of product, services, channels, people, or image (ex: logos). - Every brand difference can result in both costs for the company and benefits for the customers. Not all differentiation is meaningful - A difference is worth pursuing if it meets the following criteria: **Selecting an Overall Positioning Strategy** The full positioning of a brand is called the brand's value proposition - It refers to the full mix of benefits on which a brand is differentiated and positioned - It is the answer to the customer's question: 'why should I buy your brand?'  More for More example: Hearts on Fire diamonds have created a more-for-more niche as "The World's Most Perfectly Cut Diamond---for those who expect more and give more in return." Developing a positioning statement What's a positioning statement? It summarizes company or brand positioning **Format:** For \[target market\] who \[target market\'s **need**\], our \[product or service\] offers \[key benefit\]. Unlike \[competitor\], our product \[competitive advantage; point of difference\]. Examples of positioning statements - For entertainment seekers who want access to a wide variety of shows and movies anytime, anywhere, our Netflix service offers unlimited streaming of diverse content across genres. Unlike traditional TV services, our product provides on-demand viewing without commercials, personalized recommendations, and global accessibility. - For active individuals who want comfortable and durable sports gear, our Nike products offer performance and style. Unlike other brands, our product provides innovative design trusted by top athletes. - For tech-savvy individuals who want seamless and intuitive devices, our Apple products offer high-quality performance and user-friendly design. Unlike other brands, our product provides a unique ecosystem that integrates all your devices effortlessly. - For coffee lovers who want affordable and convenient beverages, our Tim Hortons products offer fresh coffee and delicious snacks quickly and reliably. Unlike other coffee chains, our product combines quality with a sense of community and Canadian tradition. - For active individuals who want high-quality, comfortable, and stylish athletic wear, our Lululemon products offer premium fabrics designed for performance and everyday wear. Unlike other athletic brands, our product combines functionality with a focus on mindfulness and community.