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Marketing 301
| Question | Answer |
|---|---|
| What is Marketing Segmentation? | involves aggregating people into groups that have common needs and will respond similarly to a marketing action |
| Name the Four Ways to Segment Markets! | 1. Geographic: based on where people live or work (region, city size) 2. Demographic: based on some objective (gender, race, age, income) 3. Psychographic: subjective, mental, emotional attributes (personality, aspirations, needs) 4. Behavioral |
| What is the 80/20 Rule? | concept that 80% of a firm's sales are obtained from 20% of its customers |
| Steps of Segmentation: | 1. Group potential buyers into segments 2. Group products to be sold into categories 3. Develop a market product grid and estimate the size of markets 4. Select target markets 5. Take marketing actions to reach target markets |
| What is a Market Product Grid? | A framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization |
| What goes on the Y-axis of the MPG? | the Products |
| What goes on the X-asix of the MPG? | the Market Segments |
| What goes in the boxes between the axes? | The estimated market size |
| What are the 5 Criterias for picking market segments? | 1. Market size 2. Expected Growth 3. Competitive Position: the less competitve, the more attractive 4. Cost of Reaching the Segment 5. Compatibility w/ Organization's Resources & Objectives |
| What is product positioning? | refers to the place a product occupies in consumer's minds on important attributes relative to competitive products |
| What is product repositioning? | changing the place a product occupies in a consumer's mind relative to competitive products |
| What are the two approaches for product positioning? | Head to Head: competing directly with competitors on similar product attributes in the same target market Differentiation: seeking a less competitive smaller market niche in which to locate a brand |
| How to create perceptual maps: | 1. Identify the important attributes for a product/brand class 2. Discover how target customers rates competing products or brands w/ these attributes 3. Discover where the company's product is on the minds of potential customers 4. Reposition the prod |
| What is a product? | A good, service, idea consisting of a bundle of tangible and intangible attributes that satisfies consumers needs and is received in exchange for money/something of value |
| What are the levels of new products on a Organizational Perspective? | Lowest Level: least risk, product line extension, incremental Second Level: jump in innovation or technology Third Level: true innovation |
| New Products via Consumer Persepective? | Continuous Innovation Dynamically Continuous Innovation Discontinuous Innovation |
| What is continuous innovation? | consumers don't need to learn new behaviors effective marketing depends on generating awareness ex: new/improved detergent |
| What is Dynamically Continuous Innovation? | - disrupts consumers normal routine but does not require totally new learning - advertise points of difference and benefits to consumers ex: electric toothbrush |
| What is Discontinuous Innovation? | - requires new learning and consumption patterns by consumers - educate consumers through product trial/personal selling ex: VCR/ digital recorder |
| Why do new products fail? | 1. Insignificant Points of Difference 2. Not satisfying consumers needs on critical factors 3. Bad timing 4. Too little market attractiveness 5. Poor execution of marketing mix 6. Poor product quality 7. No economical access to buyers |
| How to consumers classify products? | 1. Convenience 2. Shopping 3. Specialty 4. Unsought |
| What are convenience products? | items that the consumer purchases frequently, conveniently, and with minimum shopping effort |
| What are shopping products? | items which consumer compares several alternatives on criterias such as price, quality, or style |
| What are specialty products? | itesm that consumers make a special effort to search out and buy |
| What are unsought products? | items consumer does not know about; or knows about but does not initially want |
| What are the steps in the new product development process? | 1. New product strategy development 2. Idea Generation 3. Screening & Evaluation 4. Business Analysis 5. Development 6. Market Testing 7. Commercialization |
| What occurs in the new product strategy development step? | defines the role for a new product in terms of the firm's overall objectives |
| What happens in idea generation? | develops a pool of concepts as candidates for new products, building upon the previous stage's results |
| What happens in screening and evaluation? | internally and externally evaluate new product ideas |
| What happens in business analysis? | specifies the features of the product and the marketing strategy neeed to bring it to the market and make financial projections; it is the last checkpoint before significant resources are used to make a prototype |
| What happens in market testing? | exposing actual products to prospective consumers under realistic conditions to see if they would buy |
| What is test marketing? | offering a product for sale on a limited basis in a defined area ex: wichita Falls, TX requires cable to deliver ads and a tracking system to measure sales |
| What occurs in commercialization? | positions and launches anew product in full scale production and sales |
| When is new product acceptance highest? | 1. consumers see a relative advantage to swtiching 2. trialability is high 3. observability is important to others 4. the product is not complex 5. interconnected social networks exist |
| What are the steps in the product life cycle? | 1. Introduction stage 2. Growth Stage 3. Maturity Stage 4. Decline Stage |
| What is the goal in the introduction stage? | To gain awareness! |
| What happens to sales and profit in the introduction stage? | sales grow slowly, profit is minimal |
| What is the marketing objective in the intro. stage? | create customer awareness and stimulate trial |
| What is primary demand? | advertising and promotion expenditure stimulate the desire for the product class rather than for a specific brand |
| What is selective demand? | the preference for a specific brand |
| What is a skimming strategy? | a high initial price to help company's recover the costs of development and capitalize on price insensitivity of early buyers |
| What is penetration pricing? | a low pricing to build unit volume |
| What is the goal in the growth stage? | Stress differentiation |
| What happens to sales and profit? | rapid increase in sales and profits peak due to competitors and aggressive pricing |
| In which stage does changes appear? | The growth stage in order to help differentiate the companys brand from competitors |
| What is the goal in the Maturity stage? | maintain brand loyalty |
| What happens to sales and profits in the maturity stage? | Slowing of total industry sales or product revenue, sales increase at a decreasing rate; profit declines due to fierce price competition |
| Where does the marketing attention go during the maturity stage? | Product differentiation |
| What is the main goal in the decline stage? | To decide on deletion or harvesting |
| What happens to profit and sales in the maturity stage? | product sales drop, and it tends to consume a disproportionate share of management and financial resources |
| What is deletion? | dropping the product from the company's product line |
| What is harvesting? | company retains the product but reduces marketing cost |
| How does a product manager extend a products life? | Modifying the product Modifying the market |
| What is product modification? | altering a product's characteristic, such as quality, performance, or appearance to increase value and sales |
| What is product bundling? | the sale of two or more seperate products in one package |
| What is market modification? | company tries to find new customers, increase a product's use among existing customers, or create new use situations |
| What is a marketing dashboard? | answers "Where are sales for my product category and brand strongest and weakest?" |
| Category Development Index | % of a product category's total US sales in a market segment / % of the total US population in a market segment x 100 |
| Brand Development Index | % of Brand's Total US Sales in a Market Segment / % of the Total US Population in a Market Segment x 100 |
| Three ways of product repositioning | Reacting to a competitor's position Reaching a new market Catching a rising trend |
| What is brand equity? | the added value a brand name gives to a product beyond the fuctional benefits provided it provides competitive advantage and consumers are willing to pay a higher price |
| Stages of brand development: | 1. identity: who are you? 2. Meaning: what are you? 3. Response: What about you? 4. Relationship: What about you and me? |
| Branding objective at each stage | 1. deep, broad, brand awareness 2. Points of parity & difference 3. Psoitive accessible reactions 4. Intense, active loyalty |
| What is brand resonance? | the extent to which customers feel that they are in synch with the brand |
| What are the two characteristics of brand resonance? | - intensity/depth of the psychological bond that customers have with the brand - levels of activity engendered by this loyalty |
| What are points of parity | Shared bran values Necessaries required to compete Ex: Hyundai Genesis has high quality, luxury, and reliability |
| What are points of difference? | unique brand values desirable and deliverable Ex: Hyundai Genesis is priced significantly lower than the competition |
| Market segmentation involves aggregating prospective buyers into groups that have common needs and will | respond similarly to a marketing action |
| KFC has modified its products to satisfy different market segments. In holland, the mashed potatoes are replaced with a potation and onion. These examples best illustrate: | product differentiation |
| The ideal balance between satisfying a customer's indivdual wants and achieveing _________, the increased customer value achieved through performing organization functions like marketing or manufacturing more efficiently | synergy |
| A key question to ask before using a ______ strategy is, " are the new products cannibalizing sales from existing ones? | product differentiation-market segmentation |
| The first step in segmenting and targeting markets is to | group potential buyers into segments |
| Potential buyers within a segment should be | similar in terms of responding to a marketing action |
| Which of the following is a criterion used in forming market segments? | the simplicity and cost of assigning potential buyers to segments |
| Education is an example of a consumer _______ variable | demographic |
| The 14% of adult Americans who do not go to fast food restaurants would be referred to as: | nonprospects |
| U.S. organizational markets use three main segmentation bases: | demographic, geographic, and behavioral |
| On a traditional market-product grid; the horizontal axis represents____ and the verical axis represents_____ | market segments; product groupings |
| Which of the following is a criterion used to select a target market segment? | the market size |
| The purpose of developing a market product grid is to | trigger marketing actions to increase sales and profits |
| Which type of product positioning would most likely be used to minimize cannibalization? | differentiation positioning |
| A large kitchen appliance is a _____ good. | durable |
| Consumer products are defined as | products purchased by the ultimate consumer |
| Consumer product classifications are based upon three variables 1. Frequency of purchase 2. Attributes used in making the purchase decision and 3. ___? | effort the consumer spends on the decision |
| Items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort are referred to as | convenience products |
| Sales frequently result from the sale of consumer products is | derived demand |
| Items such as lumber or grain that become part of the final product are referred to as | components |
| A specific product that has a unique brand, size, or price, is referred to as | a product item |
| Effective marketing for a product that is considered to be a continuous innovation depends on | generating awareness of the product |
| A benefit of performing a SWOT analysis and an environmental scan during the new-product strategy development process is that | it can help identify the strategic role the new product might serve in the firm's portfolio |
| Which of the following is a characteristic of the growth stage of the product life cycle? | profit margins stabilize or even decline as competitors enter the market |
| The marketing objective of a firm whose product is in the maturity stage of the product life cycle is to | hold market share through product differentiation |
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