51 terms

MKT Exam 2

STUDY
PLAY

Terms in this set (...)

Concept of STP
S- Segmentation: A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.

T- Target: A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.

P- Place
4 characteristics of the market
1. People or organizations

2. Wants and needs

3. Ability to buy = Purchasing power

4. Willingness to exchange resources
Characteristics of good segmentation
...
4 criteria for segmentation
1. Substantiality: Segment must be large enough to warrant a special marketing mix

2. Identifiability: Segments must be identifiable and their size measurable

3. Accessibility: Members of targeted segments must be reachable with marketing mix

4. Responsiveness: Unless segment responds to a marketing mix differently, no separate treatment is needed
5 categories of segmentation bases (in great detail)
1. Geography:

2. Demographics:

3. Psychographics:

4. Benefits Sought:

5. Usage Rate:
5 steps in segmenting a market
1. Select a market for study

2. Choose bases for segmentation

3. Select descriptors

4. Profile and analyze segments

5. Select segments
Whataburger Breakfast
• Market (Industry): Fast Food Breakfast Market

• Segmentation bases:
Demographics and benefits sought

• Descriptors:
- Demographics (age): Teenagers, Adults
- Benefits sought: Taste, Quickness
3 targeting strategies (Characteristics, advantage/disadvantages
1. Undifferentiated Targeting
Characteristics
•one big market
•one marketing mix
•mass market philosophy
Advantage/Disadvantage
(+) save production/marketing cost
(-) unappealing products
(-) susceptible to competition

2. Concentrated Targeting
Characteristics
•target niche
•highly specialized marketing mix
Advantage/disadvantage
(+) concentration of resources
(+) strong positioning
(+) small firms can compete
(-) segment too small or changing
(-) large competitor's entry to the market

3. Multisegment Targeting
Characteristics
•multiple well-defined segments
•mostly big firms
Advantage/disadvantage
(+) greater financial success / large market share
(+) economies of scale
(-) high costs
(-) cannibalization
How to preform effective positioning
Positioning- Developing a specific marketing mix to influence potential customers' overall perception or a brand, product line, or organization in general.

1. Assess the positions occupied by competing products

2. Determine the dimensions underlying these positions

3. Choose a market position where marketing efforts will have the greatest impact
Perceptual mapping
A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers' minds.
Positioning bases
1. Attribute: e.g., MPG, Hard drive (GB)

2. Price and Quality

3. Use or Application: e.g., occasion, frequency, breadth of use

4. Product User: e.g., personality, lifestyle, benefits sought

5. Product Class: e.g., product domain, particular characteristics

6. Competitor: e.g., how big, how interdependent, how dynamic

7. Emotion: e.g., guilt, happiness, fear, feeling of safety
Nalpas Inc., an apparel company, manufactures clothes for men, women, and children. It further divides its core customers on the basis of demographic variables such as income, ethnic background, and family life cycle These divisions are known as ______. (Ch. 8)

a. positioning bases
b. market segments
c. perceptual maps
d. market positions
b. market segments
Wine Tasters Inc. is a magazine that targets people who appereciate wine and good food. Its major customer base include people who enjoy wine-tasting events and visit different restaurants. Given this information, Wine Tasters most likely relies on which of the following variables to identify its target market? (Ch. 8)

a. Usage-rate segmentation
b. Demographic segmentation
c. Psychographic segmentation
d. Benefit segmentation
c. Psychographic segmentation
Which of the following is true of a concentrated targeting strategy? (Ch. 8)

a. It allows a firm to serve 2 or more well-defined market segments simultaneously
b. It is often adopted by small firms to compete effectively with much larger firms
c. It follows a mass-market philosophy by viewing the market as one big market without any individual segments
d. It often results in cannibalization, which occurs when sales of a new product cuts into sales of an existing product
b. It is often adopted by small firms to compete effectively with much larger firms
Concept of product
...
Product Item
A specific version of a product
Product Line
A group of closely-related product items (e.g. doughnuts)
Product Mix
All products that an organization sells.
Benefits of product line
1. Advertising Economies: Economies of Scale

2. Package Uniformity: Easily identify products
(consumer & firm)

3. Standardized Components: Reduce manufacturing/ inventory costs

4. Efficient Sales and Distribution: full range of choices better retail coverage

5. Equivalent Quality: easy to memorize simplify decision
3 strategies for product adjustment (in detail)
1. Product Modification:
•Quality: Change in a product's dependability or durability

•Functional: Change in a product's versatility, effectiveness, convenience, or safety

•Style:
•Aesthetic product change
•E.g., clothing, auto

2. Product Repositioning:
Why?
• Changing demographics
• Declining sales
• Changes in social environment

• Some products are
built to be replaced
• The practice of modifying products so those that have already been sold become obsolete before they actually need replacement.

3. Product Line Extension or Contraction: Adding additional products to an existing product line in order to compete more broadly in the industry.

Symptoms of Overextension
• Some products have low sales or cannibalize sales of other items
• Resources are disproportionately allocated to slow-moving products
•Items have become
obsolete because of new product entries
Concept/purpose of branding
• A main tool marketers use to distinguish their products from those of the competition
• A name, term, symbol, design, or combination
• Product identification
-Brand equity: The value of the brand name
• Repeat sales-Brand loyalty
• New-product sales
Brand Quality
The value of the brand name
Branding Strategies
Brand

- Manufacturer's Brand
• Individual Brand
• Family Brand
• Combination

- Private Brand
• Individual Brand
• Family Brand
• Combination
Advantage/disadvantages of manufacturer's brand vs. private brand
...
3 types of co-branding
Placing two or more brand names on a
product or its package

Types:
-Ingredient
• Identifies the brand of a part that makes up the product

-Cooperative
• Two or more brands participate in joint advertising or promotional campaigns.

-Complementary
• Two or more brands advertise themselves as fitting naturally with each other.
Functions of packaging
1. Contain and Protect

2. Promote

3. Facilitate Storage, Use, and Convenience

4. Facilitate Recycling
Labeling
Persuasive
• Focuses on promotional theme or logo (e.g., "new")
• Consumer information is secondary

Informational
• Helps make proper selections
• Lowers cognitive dissonance
_______ refers to the number of product lines an organization offers (Ch. 10)

a. Product line assortment
b. Product equity
c. Product mix width
d. Product line depth
c. Product mix width
A difference between information labeling and persuasive labeling is that informational labeling (Ch. 10):

a. focuses on a promotional theme or logo rather than consumer information
b. Increases a consumer's cognitive dissonance after the purchase
c. helps a consumer make proper product selections
d. gives the impression of environmental friendliness to a product
c. helps a consumer make proper product selections
Which of the following is a difference between individual branding and family branding? (Ch. 10)

a. Individual branding uses different brand names for different products, while family branding markets several different products under the same brand name
b. Individual branding is used when products do not vary in use or performance, while family branding is used when products very greatly in use or performance
c. Individual branding identifies the brand of a part that makes up the product, while family branding identifies the entire product
d. Individual branding is used when 2 brands receive equal treatment, while family branding is used when 2 brands borrow from each other's brand equity
a. Individual branding uses different brand names for different products, while family branding markets several different products under the same brand name
Categories of new product
1. New-to-the-World: create new market, smallest category of new products, discontinuous innovation

2. New Product Lines: enter an established market

3. Product Line Additions: new products that supplement a firm's established product line

4. Improvements or Revisions: significantly or only slightly change

5. Repositioned Products: targeted at new markets or market segments

6. Lower-Priced Products: performance similar to competing brands at a lower price
Why new products fail
Common reasons for failing:
- Not offering any unique (discernible)benefit compared to existing products
- Poor match between
product and customer needs
- Inadequate marketing strategy (at any given point of marketing plan)
: overestimation of market size
: incorrect targeting or positioning
: too high or low price
: inadequate distribution
: poor promotion
: inferior product
New product development process (in detail)
1. New-Product Strategy

2. Idea Generation

3. Screening

4. Business Analysis

5. Development

6. Test Marketing

7. Commercialization
Concept of diffusion
Diffusion: the process by which the adoption of an innovation spreads

Innovation: a product perceived as new by a potential adopter
Diffusion of innovation model (in great detail)
Product life cycle (in great detail)
PLC traces the stages of a product's acceptance from its introduction (birth) to its decline (death).
Product Characteristics
- Complexity
- Compatibility
- Relative Advantage
- Observability
- Trialability
(BONUS QUESTION!) Discuss the relation b/ diffusion of innovation model, and when/why they diverge from each other
...
A high failure rate, little competition, frequent product modification, and limited distribution typify the ______ stage of the product life cycle. (Ch. 11)

a. introduction
b. growth
c. maturity
d. decline
a. introduction
A difference between early majority and early adopters is that early majority are (Ch. 11):

a. more likely to be opinion leaders
b. more eager to try new products and ideas, almost as an obsession
c. likely to collect more information and evaluate more brands
d. less likely to extend the adoption process
c. likely to collect more information and evaluate more brands
Daily Farm is a manufacturer of consumer goods such as foods, beverages, cleaning agents, and personal care products. It is expected to introduce more than 10 new products in the next 2 years. One of the products is a spicier variant of its tomato ketchup aimed at the baby boomer market. Which of the following categories of new products will the spicier ketchup represent? (Ch. 11)

a. Repositioned product
b. Revision of existing product
c. New product line
d. Addition to existing product line
d. Addition to existing product line
Concept of SC/SCM
Supply Chain: The connected chain of all of the business entities, both internal and external to the company, that performs or supports the logistics function.

Supply Chain Management (SCM): A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption.
Benefits of SCM
Supply chain oriented companies commonly report:

• Lower inventory, transportation, warehousing, and packaging costs
• Greater supply chain flexibility
• Improved customer service
• Higher revenues
• Increased performance and profitability
SCM Integration
• Occurs when multiple firms and their functional areas coordinate business processes to seamlessly link to one another
• A systems approach where the overall performance of the chain is greater than the sum of its parts.
• When 1 + 1+ 1 > 3

- Relationship Integration: Sets of rules, policies, and procedures

- Measurement Integration: Performance assessments transparent and measurable across companies

- Technology and Planning
Integration: Creation
and maintenance of information technology systems

- Material and Service
Supplier Integration: Link seamlessly to those outsiders that provide goods and services to them

- Customer Integration: Offer distinctive, value-added offerings to those customers who represent the greatest value to the firm or supply chain.
Trends in SCM
DutiLog is a firm that specializes in providing warehousing, order processing, and transporting solutions to a diverse group of firms. Firms contract DutiLog to manage a part or most of their order fulfillment process

.- Outsourcing Logistics Functions

- Supply Chain Risk, Security, and Resilience

- Electronic distribution
Through the use of computer-generated shipping notices AllCare Hardware successfully removes unnecessary coats in its supply chain. According to its vice president of inventory for the retailer, "Information that had to gathered through 3 to 4 phone calls before is now just one click away." This is an example of the use of __________. (Ch. 13)

a. measurement and feedback integration
b. relationship integration
c. customer integration
d. technology and planning integration
d. technology and planning integration
Concept of Marketing Channel
• A business structure of interdependent organizations that reaches from the point of production to the consumer and facilitates the downstream physical movement of goods
through the supply chain.

• Focuses on distribution aspect of the supply chain
Marketing channel functions
- Specialization and division of labor: create utilities for customers

- Overcoming discrepancies

- Providing contact efficiency: reduce number of transactions

• Retailer: Firms in the channel that sell directly to customers
Roubov Inc. is a chain of American department stores that sells clothing, furniture, home appliances, and toys. It buys its goods in large quantities directly from the manufacturer. Based on this information , Roubov In. most likely makes use of a(n)_________. (Ch.13)

a. retailer channel
b. wholesaler channel
c. agent channel
d. direct channel
a. retailer channel
Channel Intermediaries
- Retailers: Firms in the channel that sell directly to customers

- Wholesaler: An institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them.

- Agents & Brokers: Wholesaling intermediaries who facilitate the sale of a product by representing channel members.
Do not take title to goods.
Channel Structure