Managing Heterogeneity
Which Principle does "all customers differ" belong to?
Marketing Principle #1
Explain the difference between Targeting and Positioning
Targeting = choosing which customer segment you want to serve
Positioning = defining how you want to be perceived by that segment compared to competitors
What is the customer-centric alignment?
company-wide philosophy that places customers’ needs at the center of the organization’s strategic process
--> it requires top-down, enduring commitment from senior leaders to institute a customer-centric philosophy across the firm’s entire organization
What is latent customer heterogeneity
Differences in desires that are unobserved or have not yet appeared in purchase preferences
In which way is the STP approach biased?
based on managers beliefs, focuses on existing customers rather than untapped ones, weighted towards past customer preferences
What are the 3C´s of situation analysis
Customers, Competitors, Company
--> needs, demographics and SWOT analysis
If a firm ignores customer heterogeneity and provides offerings that fail to match customers’ varying needs, when will they loose customers? (name at least 1)
(1) the market grows large enough, (2) legal or technical barriers break down, or (3) an innovative competitor provides a better fit
Which 2 analysis are being used in the segmentation process and explain them
Factor analysis: reduce the number of variables being investigated in the research study
Cluster analysis: classifies a large set of heterogeneous customers into fewer, more homogeneous segments
Explain the evolution of managing heterogeneity (the 3 Eras)
1. Mass Marketing Era
2. Niche Marketing Era
3. One-to-one Marketing Era
classifying respondents into appropriate segments, using demographic characteristics as predictors is called....
Multiple discriminant analysis (MDA)
Why do firms focus on a subsample of the overall market with mostly homogeneous customers in one-to-one marketing?
So firms can better anticipate future needs and detect emerging trends, to then respond with well-targeted solutions before their competitors do
What are the key questions be addressed in a positioning statement:
1. Who are the customers?
2. What is the set of needs that the product or service fulfills?
3. Why is this product/service the best option to satisfy customer needs