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Lecture 2
Empirical Marketing
| Question | Answer |
|---|---|
| What is the evolution of approaches for managing customer Heterogeneity? | Mass marketing era niche marketing era 1-1 marketing era |
| What are the segmenting steps? | 1. identify and refine potential customers 2. collect data from random assortment of potential customer needs to purchase decision 3. use needs to segment the market into homogenous groups 4. name segments |
| What are bases and descriptor variables? | Bases: desired product features or pricing requirements, to provide to foundation for segmenting customers according to their differences Descriptors: demographic and geographic information served to pro le and eventually target the derived segment |
| How does cluster analysis work? | 1. Segmentation step: identify subsamples of customers that are homogenous in their bases 2. Describing step: use descriptor variables to explain how the subsamples differ and can derive the efficient targeting strategies tailored to each subsample |
| What are the targeting criteria? | 1. customer needs 2. different than other segments 3. differences match firms competences 4. sustainable 5. customers are identifiable 6. financially valuable |
| Describe positioning | Process of improving you relative advantage in the minds of your targeted customers -use all 3 c's -use 4p's (place, promo, product, price) |
| What is factor analysis? | data reduction technique that can be used to identify a small number of latent factors that can explain the variation in a large number of observed variables |
| What is factor loading? | The strength of association between a measure variable and its factor |
| How does factor analysis work? | Algorithm synthesizes large set of variables into smaller set of latent factors. the factors that have a value larger than 1, when a factor loading in higher than 0.3 associated with a factor. We categories the variable where it has the highest loading. |
| What an customer heterogeneity stem from? | - legal contraints - economic constraints - technological constraints - innovative constraints |
| Describe industry segmentation | describes industry segments and includes for each segment, salient purchase preferences , demographic variables and potential demand |
| Describe target segmentation | moves from the overall market segment to the specific segment of interest , extends first output by providing a very detailed description of each target segment |
| Describe positioning statements | Encapsulates 3 questions into 1 statement firms use o direct marketing activities: 1. who should the firm target 2. what needs and benefits are being fulfilled 3. Why does this offering provide relative advantage |
| When do you use cluster analysis? | - to demystify customer heterogeneity by understanding preference commonalities across subsets of customers - to discover how consumers naturally differ and cater to unique needs of chosen target customer segments |
| Which tool is used to select target segments? | The GE matrix |
| When do you use factor analysis? | - to condense large pool of potential customer needs, wants and preferences into short set of similar characteristics - to reduce correlation among predictors |
| What are other empirical approaches? | user generated content to derive perceptual maps and brand positioning - cheaper data - faster collection of data |
| What are the 5 sources of customer heterogeneity? | 1. life experience 2. individual differences 3. self-identity/image 4. functional needs 5. marketing activities |
| What are the types of factor analysis? | Exploratory analysis: Finding a structure within the data Confirmatory analysis: confirm a theorized structure |
| Describe cluster analysis | data- driven technique that can be used to identify and classify a large set of heterogeneous consumers or companies into smaller sets of homogenous groups |
| Describe the STP approach | Segmenting: Dividing market into smaller groups of similar customers Targeting: Select best customer groups Positioning: Improve your relative advantage in the minds of your targeted customers |
| What is repositioning? What tool is used in positioning decisions? | - shifting your target market - perceptual maps |
| What is the process of managing customer heterogeneity? | 1. segmenting: identifying key purchase attributes 2. Targeting: which segments the firm wants to sell to 3. Positioning 4. Building customer centricity |
| What is latent customer heterogeneity? | potential differences in desires and needs in customers that are unobserved and have not become manifest in purchase preferences or behaviors yet |
Created by:
janasultan
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