67 terms

marketing test 2

ch 8 9 10 11 12
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Terms in this set (...)

Explain what market segmentation is and when to use it.
Market segmentation involves aggregating prospective buyers into groups that (a) have common needs and (b) will respond similarly to a marketing action. Organizations go to the expense of segmenting their markets when it increases their sales, profits, and ability to serve customers better.
Identify the five steps involved in segmenting and targeting markets.
Step 1 is to group potential buyers into segments.
-Buyers within a segment should have similar characteristics to each other and respond similarly to marketing actions like a new product or a lower price.
Step 2 involves putting related products to be sold into meaningful groups.
Step 3, organizations develop a market-product grid with estimated sizes of markets in each of the market-product cells of the resulting table.
Step 4 involves selecting the target market segments on which the organization should focus.
Step 5 involves taking marketing mix actions —often in the form of a marketing program—to reach the target market segments.
Recognize the bases used to segment consumer and organizational markets.
Bases used to segment consumer markets include geographic, demographic, psychographic, and behavioral ones. Organizational markets use the same bases
except for psychographic ones.
-Behavioral customer characteristics
Benefits sought: product features
Usage/patronage: quantity consumed during a specific period
Frequency marketing
80/20 Rule
Develop a market-product grid to identify a target market and recommend resulting actions.
Organizations use five key criteria to segment markets, whose groupings appear in the rows of the market-product grid. Groups of related products appear in the columns. After estimating the size of market in each cell in the grid, they select the target market segments on which to focus. They then identify marketing mix actions—often in a marketing program—to reach the target market most efficiently.
Explain how marketing managers position products in the marketplace.
Marketing managers often locate competing products on two-dimensional perceptual maps to visualize the products in the minds of consumers. They then try to position new products or reposition existing products in this space to attain the maximum sales and profits.
five criteria to be used in forming segments include
(1) potential for increased profit; (2) similarity of needs of potential buyers within a segment; (3) difference of needs of buyers among segments; (4) potential of a marketing action to reach a segment; and (5) simplicity and cost of assigning potential buyers to segments.
Psychographic segmentation includes
the lifestyle segmentation variable, which determines how consumers like to spend their time and how they want to live—an active, outdoor lifestyle that meshes with REI's offerings
On a traditional market-product grid, the horizontal axis represents __________ and the vertical axis represents __________.
market segments; product groupings
five criteria used for selecting a target segment:
market size, expected growth, competitive position, cost of reaching the segment, and compatibility with the organization's objectives and resources. There are also five criteria to use in forming market segments, which are often confused with those used to select segments (see p. 226).
behavioral segmentation
-Understanding what features are important to different customers
-useful way to segment markets because it can lead directly to specific marketing actions, such as a new product, an ad campaign, or a distribution system. Magnavox uses behavioral segmentation to determine the types of TVs it sells since different consumers have different features and benefits they seek in a TV set.
Because of the existence of different market segments
companies use product differentiation
Use different marketing mix activities such as product features and advertising to help consumers perceive the product as being different & better than competing products
segmentation strategies
1.one prod, multiple mkt segments
2. multiple prods, multiple mkt segments
3. segments of one-mass customization
step 5-

Market-Product Synergies
Marketing synergies: opportunity for efficiency in terms of a market segment

Product synergies: opportunity for efficiency in R&D and production
Product positioning
refers to the place an offering occupies in consumers' minds on important attributes relative to competitive products
Perceptual Map
A means of displaying or graphing the "location"
of a product in consumers' minds
Approaches to positioning
Head-to-head positioning: competing directly with competitors on similar product attributes in the same target market

Differentiation positioning involves seeking a less-competitive, smaller market niche in which to locate a brand
Product repositioning
Changing the place a product occupies in a consumer's mind relative to competitive products
Product
good, service or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something of value
Good
has tangible attributes that a consumers' five senses can perceive
Durable and nondurable goods
Service
intangible activities or benefits
classifying products
Type of User

Consumer goods
Business goods
Consumer Products differ in terms of:
Effort the consumer spends on decision
Attributes used in making purchase decision
Frequency of purchase
types of consumer prods
Convenience goods
Shopping goods
Specialty goods
Unsought goods
business prods
come from derived demand
two types of business prods
Components: used in the manufacturing process that becomes part of the final product
Support products: assist in producing other goods and services
exs of support- Installations
Accessory equipment
Supplies
Industrial services
product mix
the number of product lines offered by a company or a strategic business unit.
product line
a group of products that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlets, or fall within a given price range.
product/item
a specific product that has a unique brand, size or price.
sku/stock keeping unit
a unique version of the product item (the lowest level of the hierarchy).
marketing reasons for failure
Insignificant point of difference
Incomplete market and product protocol before development
Not satisfying customer needs on critical factors
Bad timing
Too little market attractiveness
Poor product quality
Poor execution of the marketing mix
No economical access to buyers
organization reasons for failure
Not listening to "voice of the consumer"
Skipping steps in new product process
Pushing a poorly conceived product for quick revenue
"Groupthink"
Not learning from past failures
what is new prod process?
7 steps
1. new prod strategy dev
2. idea generation
3. screening and analysis
4. business analysis
5. development
6. market testing
7. commercialization
new prod strategy dev
Identify markets
SWOT and environmental scan
Cross-functional team
idea generation
Customer and supplier suggestions
Employee and co-worker suggestions
R&D Laboratories
Competitive products
Universities, inventors, and smaller nontraditional firms
screening and evaluation
Internal approach
External approach (concept test)
business analysis
Financial projections
Marketing support
development
Manufacturing
Lab and consumer tests
market testing
Test marketing
Simulated test markets
commercialization
Positioning
Launching- regional rollouts
Different stages the product goes through in the marketplace
Introduction
Growth
Maturity
Decline
introduction stage
Occurs when product is first introduced
Sales grow slowly, minimal profit
Create Consumer awareness
TRIAL
Primary and Selective Demand
Skimming vs penetration pricing
growth stage
Rapid increases in sales
Competitors appear
More aggressive pricing profit usually peaks
Product sales grow as a result of new people using the product and repeat users
Increase distribution
during the growth stage
A company differentiates its brand during this time in order to separate from competition
maturity stage
Slowing of total industry sales
Marginal competitors exit the market
Most consumers have tried and are either repeat users or abandoned the product
Profit declines
Marketing strategy is to hold market share
decline stage
Sales decline
Often occurs due to environmental factors
deletion and harvest
Product Deletion
Drop the product from the product line

Harvesting
Company retains the product but reduces the costs of marketing
dimensions of product cycle
Length
Shape of sales curve
How they vary with different levels of products
Rate at which consumers adopt products
factors affecting production adoption
Usage Barriers
Existing habits
Value Barriers
No reason to change
Risk Barriers
Physical, economic,
social
Psychological Barriers
Cultural differences or image
managing product life cycle
Role of Product (Brand) Manager
Manages the marketing efforts through the product life cycle
Modifying the Product
Changing product characteristics to increase the product's value
modifying the market
Finding new users
Increasing a product's use
Creating a new use situation
repositioning the product
Reacting to a Competitor's position

Reaching a new market

Catching a rising trend

Changing the value offered
Trading down
Trading up
branding and brand management
Branding
When an organization uses signals to identify its products and distinguish them from those of competitors (e.g. name, phrase, design, symbol)
Brand name, trade name, and trademark
brand personality
Human characteristics associated with the brand
brand equity and benefits
The added value a brand name gives to a product BEYOND the functional benefits provided
Similar to "goodwill"

Benefits of Brand Equity
Competitive advantage
Higher $$$
4 steps to brand equity
Step 1: Develop positive brand awareness
Step 2: Establish the meaning in consumers' minds
Step 3: Elicit proper consumer response to brand's identity and meaning
Step 4: Create consumer-brand connection evident in loyal behavior
brand licensing
: contractual agreement whereby one company (licensor) allows its brand name or trademark to be used with products or services offered by another company for a royalty or fee.
picking a good brand name
Product Benefits
Memorable, Distinctive, Positive
Fit the company
No legal restrictions
Simple and emotional
branding strategies
Multiproduct Branding
Multibranding
Private Branding
Mixed Brnading
what is multiproduct branding
(also called family branding or corporate branding)
Uses one name for all its products in a product class
four types of multiprod branding
Line extensions
Subbranding
Brand extension
Co-branding
advantages and disadvs of multiprod branding
Advantages
If customer has 1 positive experience, transfer of positive attitude to other products

Disadvantages
Brand confusion or dilution
One bad experience can ALSO bleed over to all other brands
multibranding
each product has distinct name
multibranding advantages and disadvs
Advantages
Each brand is unique and no risk that one failure would affect another products
Products don't all have to "work together"

Disadvantages
Company has to generate marketing and consumer recognition of each brand individually
private branding
also called private labeling or reseller branding)
Manufacturers sells the brand under the brand name of a wholesaler or retailer
ex-walmart-sams,etc
mixed branding
The firm markets products under own name and that of the reseller
packaging and labeling
Communicate with the Customer
Functional Benefits
(e.g. stacking, storing, protecting)
Perceptual Benefits
(e.g. consumer perception of product)
trends in packages- challenges
Connecting with customers

Environmental Sensitivity
Disposal and breakdown of packaging is a growing concern

Health, safety and security

Cost reduction