CLEP Principles of Marketing Study Notes

Product differentiation involves knowing that theres

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Product differentiation - involves knowing that there's a difference between products, not attaching any loyalty or preference to that difference. Marketing Myopia - short-sighted marketing strategy--instead of focusing on customer wants and needs, which change over time, the company blindly focuses on its product. A company loses sight of the Marketing Concept, which states that a firm should focus on fulfilling customer wants and needs as its goal, not pumping out a product. PART II Measurable characteristics should be used when segmenting markets into target markets: 1. (Personal) Demographic - are identifiable characteristics of individuals and groups of people including age, sex, ethnicity, income, education, occupation, family size, religion, social class, etc. One of the types of characteristics used by marketers in market segmentation because they are often closely linked to customers' product needs and purchasing behavior and because they can be readily measured . 2. Geographic Demographics - identifiable characteristics of towns, cities, states, regions, and countries, and include characteristics such as climate, terrain, natural resources, population density, etc. . 3. Psychographic - refers to the mental profiles of consumers; it allows the marketer to define consumer lifestyles in measurable terms. To define consumer lifestyles , marketers examine consumer activities, interests and opinions (AIOs). Types of characteristics used to identify target markets, and includes things which affect consumers' patterns of living such as personality characteristics, motives, and lifetyles. For example, certain products are made to appeal to people with specific lifestyles . 4. Behavioral - identify target markets, and involve characteristics of behavior towards a specific product, such as user status , user rate, brand loyalty, etc. Such as whether a group of people use the product or not (user status) and how often they use it (user rate). Frequent flier miles benefits used by airlines are an example of market segmentation based on behavioral variables. Income - Consumer's ability to buy, which consists of gross, disposable and discretionary income. Gross Income - total amount of money made in a year by an individual, household or family. Disposable income - money a consumer has for paying for necessities such as food, shelter, clothing and transportation. What a consumer has left after taxes . Discretionary income - money that is left over after paying for taxes and necessities (disposable income) . Used for luxury items , such as vacations. To calculate discretionary income use the following formula: Gross Income – (Taxes + Necessities) = Discretionary income. Heterogenous
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Product differentiation involves knowing that theres a...

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