Principles of Marketing – Quiz 2 – Flashcards
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market segmentation
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dividing a market into smaller segments with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes
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market targeting
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the process of evaluating each market segment's attractiveness and selecting one or more segments to enter
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differentiation
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actually differentiating the market offering to create superior customer value
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positioning
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arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target customers
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geographic segmentation
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dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods
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demographic segmentation
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dividing the market into segments based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality
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age and life-cycle segmentation
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dividing a market into different age and life-cycle groups
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gender segmentation
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dividing a market into segments based on gender
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income segmentation
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dividing a market into different income segments
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psychographic segmentation
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dividing a market into different segments based on social class, lifestyle, or personality characteristics
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behavioral segmentation
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dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product
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occasion segmentation
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dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item
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benefit segmentation
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dividing the market into segments according to the different benefits that consumers seek from the product
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intermarket segmentation (cross-market segmentation)
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forming segments of consumers who have similar needs and buying behaviors event though they are located in different countries
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target market
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a set of buyers sharing common needs or characteristics that the company decides to serve
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undifferentiated (mass) marketing
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a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer
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differentiated (segmented) marketing
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a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each
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concentrated (niche) marketing
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a market-coverage strategy in which a firm goes after a large share of one or a few segments or niches
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micromarketing
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tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments it includes local marketing and individual marketing
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local marketing
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tailoring brands and promotions to the needs and wants of local customer segments - cities, neighborhoods, and even specific stores
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individual marketing
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tailoring products and marketing programs to the needs and preferences of individual customers also called one-to-one marketing, customized marketing, and markets-of-one marketing
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product position
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the way the product is defined by consumers on important attributes - the place the product occupies in consumers' minds relative to competing products
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competitive advantage
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an advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices
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value proposition
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the full positioning of a brand - the full mix of benefits on which it is positioned
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positioning statement
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a statement that summarizes company or brand positioning: To (target segment and need) our (brand) is (concept) that (point of difference).
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product
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anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need
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service
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an activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything
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consumer product
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a product bought by final consumers for personal consumption
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convenience product
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a consumer product that customers usually buy frequently, immediately, and with minimal comparison and buying effort
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shopping product
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a consumer product that the customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, and style
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specialty product
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a consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
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unsought product
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a consumer product that the consumer either does not know about or knows about but does not normally consider buying
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industrial product
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a product brought by individuals and organizations for further processing or for use in conducting a business
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social marketing
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the use of commercial marketing concepts and tools in programs designed to influence individuals' behavior to improve their well-being and that of soceity
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product quality
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the characteristics of a product or service that bear on its ability to satisfy stated or implied
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brand
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a name, term, sign, symbol, design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors
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packaging
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the activities of designing and producing the container or wrapper for a product
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product line
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a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within give price ranges
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product mix (or product portfolio)
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the set of all product lines and items that a particular seller offers for sale
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service intangibility
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services cannot be seen, tasted, felt, heard, or smelled before they are bought
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service inseparability
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services are produced and consumed at the same time and cannot be separated from their providers
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service variability
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the quality of services may vary greatly depending on who provides them and when, where, and how
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service perishability
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services cannot be stored for later sale or use
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service profit chain
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the chain that links service firm profits with employee and customer satisfaction
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internal marketing
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orienting and motivating customer-contact employees and supporting service people to work as a team to provide customer satisfaction
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interactive marketing
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training service employees in the fine art of interacting with customers to satisfy their needs
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brand equity
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the differential effect that knowing the brand name has on customer response to the product or its marketing
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store brand (or private brand)
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a brand created and owned by a reseller of a product or service
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co-branding
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the practice of using the established brand names of two different companies on the same product
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line extension
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extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category
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brand extension
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extending an existing brand name to new product categories
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new-product development
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the development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts
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idea generation
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the systematic search for new-product ideas
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crowdsourcing
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inviting broad communities of people - customers, employees, independent scientists and researchers, and even the public at large - into the new-product innovation process
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idea screening
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screening new-product ideas to spot good ideas and drop poor ones as soon as possible
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product concept
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a detailed version of the new-product idea stated in meaningful consumer terms
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concept testing
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testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal
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marketing strategy development
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designing an initial marketing strategy for a new product based on the product concept
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business analysis
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a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives
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product development
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developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering
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test marketing
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the stage of new-product development in which the product and its proposed marketing program are tested in realistic market settings
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commercialization
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introducing a new product into the market
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customer-centered new-product development
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new-product development that focuses on finding new ways to solve customer problems and create more customer-satisying experiences
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team-based new-product development
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an approach to developing new products in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness
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product life cycle
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the course of a product's sales and profits over its lifetime; it involves five distinct stages: product development, introduction, growth, maturity, and decline
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style
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a basic and distinctive mode of expression
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fashion
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a currently accepted or popular style in a given field
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fad
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a temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
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introduction stage
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the PLC stage in which a new product is first distributed and made available for purchase
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growth stage
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the PLC stage in which a product's sales start climbing quickly
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maturity stage
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the PLC stage in which a product's sales growth slows or levels off
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decline stage
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the PLC stage in which a product's sales decline
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price
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the amount of money charged for a product or service; the sum of the values that customers exchange for the benefits of having or using the product or service
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customer value-based pricing
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setting price based on buyers' perceptions of value rather than on the seller's cost
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cost-based pricing
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setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk
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fixed costs (overhead)
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costs that do not vary with production or sales levels
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variable costs
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costs that vary directly with the level of production
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total costs
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the sum of the fixed and variable costs for any given level of production
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experience curve (learning curve)
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the drop in the average per-unit production cost that comes with accumulated production experience
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cost-plus pricing (markup pricing)
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adding a standard markup to the cost of the product
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break-even pricing (target return pricing)
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setting price to break even on the costs of making and marketing a product or setting price to make a target return
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competition-based pricing
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setting prices based on competitors' strategies, prices, costs, and market offerings
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target costing
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pricing that starts with an ideal selling price and then targets costs that will ensure that the price is met
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demand curve
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a curve that shows the number of units the market will buy in a given time period at different prices that might be charged
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price elasticity
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a measure of the sensitivity of demand to changes in price
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good-value pricing
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offering the right combination of quality and good service at a fair price
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value-added pricing
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attaching value-added features and services to differentiate a company's offers and charging higher prices
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value delivery network
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a network composed of the company, suppliers, distributors, and, ultimately, customers who "partner" with each other to improve the performance of the entire system in delivering customer value
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marketing channel (distribution channel)
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a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user
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channel level
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a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
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direct marketing channel
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a marketing channel that has no intermediary levels
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indirect marketing channel
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channel containing one or more intermediary levels
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channel conflict
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disagreement among marketing channel members on goals, roles, and rewards - who should do what and for what rewards
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conventional distribution channel
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a channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, even at the expense of profits for the system as a whole
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vertical marketing system (VMS)
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a distribution channel structure in which producers, wholesalers, and retailers act as a unified system; one channel member owns the others, has contracts with them, or has so much power that they all cooperate
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corporate VMS
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a vertical marketing system that combines successive stages of production and distribution under single ownership - channel leadership is established through common ownership
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contractual VMS
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a vertical marketing system in which independent firms at different levels of production and distribution join together through contracts
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franchise organization
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a contractual vertical marketing system in which a channel member, called a franchisor, links several stages in the production-distribution process
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administered VMS
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a vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties
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horizontal marketing system
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a channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity
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multichannel distribution system
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a distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments
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disintermediation
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the cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries
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marketing channel design
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designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives
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intensive distribution
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stocking the product in as many outlets as possible
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exclusive distribution
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giving a limited number of dealers the exclusive right to distribute the company's products in their territories
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selective distribution
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the use of more than one but fewer than all the intermediaries who are willing to carry the company's products
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marketing channel management
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selecting, managing, and motivating individual channel members and evaluating their performance over time
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marketing logistics (physical distribution)
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planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit
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supply chain management
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managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers
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distribution center
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a large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible
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intermodal transportation
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combining two or more modes of transportation
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integrated logistics management
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the logistics concept that emphasizes teamwork - both inside the company and among all the marketing channel organizations - to maximize the performance of the entire distribution system
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third-party logistics provider
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an independent logistics provider that performs any or all of the functions required to get a client's product to market
