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MKT 316 Test 1
Terms in this set (46)
A temporary period of optimal fit between the key requirements of a market and the particular capabilities of a firm competing in that market
Unique capabilities of a company which make a contribution to competitive advantage and helps a company serve a wide-variety of markets
A combination of circumstances and timing that an organization can take action on to reach a specific market
A system of exchange between individuals, organizations, and other marketplace actors with needs and wants, the resources to spend satisfying those needs and wants, and the authority to acquire these means of satisfaction.
focus on current customers and products
considers future markets and potential customers
Who are are customers?
What is our core competency?
What are our values?
What do we stand for?
Three key benefits to a Broad Market Definition:
1. Reveals new opportunities in light of a broader set of customer needs 2. Enables management to recognize potential substitutes and competitive threats
3. Provides management with a thorough understanding of fundamental customer needs
Top-Down Market Sizing
Bottom-Up Market Sizing
Top-Down is most prevalent
is the maximum number of units that can be consumed by any defined market at any point in time
is the total amount currently being consumed by any defined market at any point in time
Unit-Based Market Potential:
MP = N x Q
Revenue-Based Market Potential:
MP = N x Q x P
5 forces contributing to untapped market potential:
1. Lack of Awareness
2. Lack of Availability
3. Unable to Use
4. Lacks proper benefits
5. Not affordable
Market Development Index (MDI)
is a ratio of current market demand to market potential allowing us to determine how much room a market can grow before reaching saturation
Current Market/ Demand Market Potential
allows us to ideally determine where we want to be, and what niches within the market are open
Two basic things:
1. Which competitors you will compete with in a given market
2. Your competitive position relative to these competitors in attracting and
satisfying customers in this market
Competitive frame of reference
a competitive analysis that focuses on the other brands that your company competes with in trying to gain share of market
Point of differentiation
what makes us distinct from the competition?
Point of parity
what attributes or associations are shared with other category members?
The percentage of current market demand commanded by an individual business
Market Share Formula
Company sales revenue/total market sales revenue x 100%
Relative Market Share
Company units sold/leading competitor units sold
1. Market share growth opportunity
2. Overall growth potential 3. Growth with market development
4. Limited growth opportunity
Main two: growth in products and markets (Ansoff Matrix)
A relative advantage one business has over another that is sustainable and translates into a benefit that is important to target customers
Three general competitive advantage
1. Cost Advantage
3. Marketing Advantage
The process of dividing a market into distinct groups of customers with separate wants and needs, requiring separate products, and/or separate marketing mixes to meet these needs and wants
Multiple Segment Market
Heterogeneous Market with different needs and benefits sought. mix for each segment
Heterogeneous needs using a single marketing mix
Full Market Coverage
Homogenous Market all customers have similar needs and benefits, offerring single marketing mix to entire market
Price, Quality, Service
Global environmental factors
Marketing Mix is the 4P's
Price, Product, Promotion, Place
Six Industry Forces to Consider
1. Barriers to entry
2. Barriers to exit
3. Bargaining power of suppliers
4. Bargaining power of buyers
5. Intensity of rivalry among existing competitors
6. Threat of substitute products
Market life cycle
Maturity is where we find the greatest competition
As the marketing manager for an organization, you set a goal to increase sales by 10% over the next quarter, and market share by 5% during the same time frame. These are examples of marketing objectives related to _____.
Red Bull focuses specifically on the production of a variety of energy drinks to meet the needs of their customers. They are said to be following a _____ market definition, which utilizes a _____ strategy.
broad, breadth of market
The _____ of an organization defines what customers they are going to target, what their core competencies are, and the values that drive the organization.
As the marketing manager for a company offering multiple products, you recognize that one of your products has low share in a highly developed market. What would be your recommended course of action for allocating resources to that product, based on class discussion?
Withdraw resources from the product based on lack of profitability opportunities
You are interested in introducing a new loan service to a market within a specific geographic region, which has a general population of 250,000. You are targeting low-income consumers with bad credit who might have difficulty securing a loan through traditional means. In this market, you determine that 17.6 percent of individuals live below standard means, and you obtain figures showing 26.4 percent of individuals have a credit score below 600, and are listed as risky lienors. Using a top-down approach, provide a general estimate for the size of the loan market.
Your research into the market shows that the MDI value for offering loans to risky lienors resides at 24.50%. What is your most likely recommendation to your business partner about whether you should enter the market?
There is room for growth in the market. We should do it.
A change in the market for loans to risky lienors resulting from an increase in average income would most likely be considered a change in which of the macroenvironmental forces discussed in class?
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