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Marketing Exam 1 pt2
Intro to Marketing Exam 1
| Term | Definition |
|---|---|
| The five Cs of pricing | Company objectives, customers, costs, competition, channel members |
| Company objectives-based pricing | Can be oriented toward profit, sales, competitors, customers--generally there isn't just one |
| Customer-based pricing | Price v. demand curves, price elasticity, complements v. substitutes, change in income |
| Price elasticity | Change in demand / change in price--elastic if price change of 1% impacts demand more than 1% |
| Cost-based pricing | Determining a price by figuring out the cost per unit and applying a certain markup |
| Competition | Monopoly, oligopoly, monopolistic competition (chip brands), pure competition (commodities) |
| Everyday low pricing | Providing a perception of value by advertising your prices as low all the time--sometimes you can sneakily make something more expensive though. e.g. Walmart, Costco |
| High/Low pricing | When there are often sales, can sometimes be used in combination with everyday low pricing, often hard to switch from this (JCPenney) |
| Pricing strategies for new products | Market penetration = low pricing so you can sell a lot as quickly as possible Price skimming = when you wish you could hold an auction, starting high before dropping price |
| Common pricing tactics | Markdowns, quantity discounts, seasonal discounts, coupons, rebates, bundling, leader pricing (low-priced turkeys at Thanksgiving gets people in the door), price lining (offer many price points and people pick the middle) |
| House prices | Round numbers seem more expensive yet cause lower offers--perception of accuracy |
| Dynamic pricing | Pricing based on time of day, demand, etc. |
| Personalized pricing | Pricing based on behavioral or other characteristics of the consumers--taken too far? |
| Step 1 of STP: Segmentation: establish objectives | Identifying a market segment and what you want to accomplish (often you already know a segment exists) |
| Step 2 of STP: Segmentation: uses segmentation methods | Geographic, demographic, psychographic (related to lifestyle/personality), behavioral (related to the purchase, otherwise psychographic--can be based on occasion, loyalty, etc.), the benefits different consumers get from the product |
| Step 3 of STP: Targeting: evaluating the segments | Is a segment worth pursuing? Must be identifiable/distinct, substantial, reachable, responsive, and profitable |
| Step 4 of STP: Targeting: select a target market | Mass/undifferentiated marketing , differentiated marketing (one firm, several target markets), concentrated targeting strategy (focusing all efforts on a single market), micromarketing (tailoring a marketing approach to a consumer's behavior) |
| Step 5 of STP: Positioning: identify and develop positioning strategy | Research what consumers think of you v. your competitors, identify what position your competitors have taken, figure out what positioning space is still available, determine advertising to push that position |
| Positioning methods | Value proposition, salient attributes (AKA characteristics that are important to consumers), symbols, competition (differentiation) |
| Why do marketing research? | It answers questions, lets you prove you're right, adds value to all departments, avoids disasters, helps you get ahead of competition |
| Examples of times when marketing research was important | Coors sparkling water, Rolls Royce Silver Mist/Shadow |
| Marketing research process | Define a problem/question, develop a plan, collect data, analyze data, make recommendations |
| Marketing research step 1: define a question | Be as specific as possible, check with all relevant parties that it's the RIGHT question, can it be answered with available resources?, do exploratory research and then descriptive research |
| Marketing research step 2: develop a plan | What are the time/money/feasibility constraints? Who will be involved (on the marketer side and the consumer side)? What research has already been done (literature review, internal data)? |
| Marketing research step 3: collect data | Primary data = collected specifically for the project (surveys, focus groups, individual interviews, observations) Secondary data = already existed prior to project |
| Internal secondary data | Sales by region/store type/demographics, customer complaint or satisfaction records, returns/use of warranties, data collected from mailing lists/etc. |
| External secondary data | Government data (census), journal data, trade associations, etc. |
| Survey | Basically any time you're collecting data from people not in a focus group--long or short, structured or unstructured questions |
| Garbage in, garbage out | If you don't survey the right people or ask questions properly, your data will be useless |
| Defining your survey sample | Who do you want information from? Where do they live and work? Where do they spend their time? What's the best way to reach them? |
| Advertising your surveys | Do you want to identify the content? The sponsor? Offer incentives? |
| Sampling error | There is always going to be some degree of error, and it's impossible to get a totally unbiased sample, so make sure it's biased in a way that you're okay with |
| Response error | Non-response error, people who can't be reached v. refusals, voluntary response effects, different willingness to respond based on time of day/incentive/contact method/etc. |
| Lying | People will lie to get into a study/get an incentive, to look better, to not expose personal information |
| Incorrect answers that aren't on purpose | Impacted by environment/previous questions/time of day, questions that are too difficult to answer, optimistic bias |
| Social desirability bias | No one wants to be seen as poor, stupid, lazy, uneducated, naive, etc. |
| Demand effects | When a survey-taker tells you what they think you want to hear |
| Impact of wording | How questions are framed and the connotations of the words used can change people's answers |
| Impact of question order | If you ask people "how satisfied are you with your relationship" before asking them "how satisfied are you with your life," you get more polarized responses to the second question |
| Types of products | Specialty (willing to spend lots of search effort), shopping (willing to spend some search effort, e.g. clothes), convenience (willing to spend almost no search effort), unsought (no effort because the consumer doesn't know about them) |
| The product mix | All the products/services offered by a firm--consists of product lines (groups of similarly-branded products made or sold by one company) |
| Breadth | Number of product lines--to much breadth becomes costly to maintain, and too many lines can cannibalize each other |
| Depth | Number of products in a line |
| Family brands | When several products are sold under one name (e.g. Kraft food) |
| Individual brands | When each product has its own name (e.g. Philadelphia cream cheese, A1 steak sauce) |
| Brand extension | Creating a new kind of product--e.g. a yogurt company starting to sell go-gurt. Can lead to brand dilution (when the new product doesn't do as well as you hoped and it harms consumers' perceptions of you) |
| Line extension | Creating a new version of the same type of product--e.g. a new flavor of yogurt. Less risky, but can over extend. |
| Primary v. secondary packaging | Primary = used by consumer, secondary = what it's shipped/sold in |
| What is a new product? | Technically only new for 6 months after release |
| Continuous innovation | Don't need to learn new behaviors (e.g. iPhone 5 to 6) |
| Dynamically continuous innovation | Requires minor change in behavior (e.g. iPhone 8 to X) |
| Discontinuous innovation | Required learning entirely new behaviors (e.g. flip phone to iPhone) |
| Why create new products? | Changing customer needs, market saturation, risk management, fashion cycles, improving business relationships |
| Reasons for new product failure | Insignificant point of difference (product doesn't stand out), incomplete market/product protocol (jumping in before you're ready), not satisfying customer needs on critical factors |
| Adoption times | Innovators, early adopters, early majority, late majority, laggards |
| New product forecasting | For regular consumer goods: awareness x availability x trial rate x repeat purchases |
Created by:
ejrasmus
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