Chapter 9-14 marketing – Flashcards
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market segmentation
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aggregates potential buyers into groups that have common needs and will respond similarly to a marketing action
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market segments
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the homogeneous group of potential buyers that result from market segmentation
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organizational synergy
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the increased customer value achieved through performing organizational functions like marketing or manufacturing more efficiently
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5 steps to segmentation
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1)group potential buyers into segments 2)group products to be sold into categories 3)develop a market product grid and estimate size of markets 4)select target markets 5)take marketing actions to reach target markets
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4 bases of segmentation
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geographic(region), demographic(household size), psychographic(lifestyle), behavioral:product features/usage rate
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usage rate
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the quantity consumed or number of store visits during a specific period (frequency marketing does this)
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market product grid/ purpose
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framework relating the segments of a market (y axis) to products or marketing actions of the firm (x axis) Purpose: trigger marketing actions to increase sales and profits
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5 criteria to select target segmentation
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market size, expected growth, competitive position, cost of reaching the segment, compatibility with the organizations objectives/resources
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product positioning (and two types)
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the place a product occupies in consumers minds 1)head to head: compete directly against competitors 2)differentiation: less competitive, appeals to small market
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perceptual map
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means of showing the position of products in consumers minds
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4 steps of product positioning
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1)identify the important attributes for the product 2)discover how target customers rate competing products 3)discover where the companies own product is rated 4) re-position the product in consumers mind
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consumer products (4 types)
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1)convenience 2)shopping (compared with price/quality/style) 3)specialty(consumer makes special effort to search out and buy) 4)unsought (consumer doesnt know about or want initially)
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business products (2 types)
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1) components (items that become part of final product) 2)support (items used to assist the production of other goods or serious)
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product mix
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consists of all the product lines offered by an organization
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3 ways to classify services
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1) delivery by people or equipment 2)delivery by business firms 3)delivery by government agencies
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4 I's of services
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intangibility, inconsistency, inseparability, inventory
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idle production capacity
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when the service provider is available but there is no demand for the service
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what is a new product
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newer than existing product, only been out for less than 6 months, is a product line extension
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marketing reasons for new product failure
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no points of difference, incomplete product definition before production, no market attractiveness, bad marketing mix, poor quality, bad timing, doesnt satisfy customers, no economical access to buyers
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new product process
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7 stages an organization goes through to identify business opportunities and convert them to a salable good or service (strategy development, idea generation, screening and evaluation, business analysis, development, market testing, commercialization)
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primary demand
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desire for the product class rather than a specific brand
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selective demand
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preference for a specific brand
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harvesting
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company keeps product, but reduces marketing costs
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4 types of product
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high learning (longer intro), low learning (short intro), fashion (can go through twice), fad (quick into and decline)
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3 ways for product manager to change product life cycle
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modify product characteristic, modify market (find new customers), re position the product
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brand personality
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set of human characteristics associated with a brand name
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brand equity
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the added value a brand name gives a product
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brand licensing
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contract where one company allows its brand name to be used with products offered by another company for a fee
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private branding strategy
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manufactures products but sells them under the brand name of a wholesaler (sears, radio shack)
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packaging
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functional(storage) and perceptual benefits(color/graphics)
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capacity management
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integrating the service component of the marketing mix with efforts to influence consumer demand
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final price (equation)
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=list price-(incentives+allowances)+extra fees
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value (equation)
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perceived benefits/ price
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profit (equation)
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Total rev- Total cost
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demand oriented pricing
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skimming(highest those who really want product are willing to pay), penetration(low initial to appeal to mass market), prestige(high to attract quality seekers), odd even, target(adjust features of product to make price what consumers want), bundle(2 or more products in a single price), yield management (charge different prices to max revenue at certain capacity)
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cost oriented pricing
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standard markup(add a fixed % to all items in specific class), cost plus(add specific amount to arrive at price, used in business products)
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profit oriented pricing
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target profit pricing(annual target of profit),target ROS, target ROI
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competition oriented pricing
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customary(ie candy bars in a vending machine), above at or below market pricing, loss leader(special promotion to hopefully buy other products)
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4 factors influencing demand
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price, consumer tastes, availability of similar products, consumer income
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break even point (equation)
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BEP=fixed cost/(unit price-unit variable cost)
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flexible price policy
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setting different prices for products and services depending on individual buyers and demand
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3 steps to set a final price
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select and approximate price level, set the list price, make special adjustments(discounts, allowances, geographical)
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3 functions of intermediaries
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transactional(buy goods), logistical(transport), facilitating(make transaction easier for buyers)
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direct marketing
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consumers buy products without any face to face interaction with salesperson (catalog)
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multichannel marketing
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blending of communication and delivery channels
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strategic channel alliance
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one firms marketing channel used to sell another firms products (kraft distributing starbucks)
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4 ways to satisfy buyer requirements
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information, convenience, variety, pre/post sale services
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channel conflict
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when one channel member believes another is engaged in behavior that prevents them from achieving their goals
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disintermediation
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when a channel member bypasses another and sells or buys products direct (example of vertical conflict)
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4 influences of channel captain
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economic, expertise, franchises, identification with a certain channel member
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supply chains differ from marketing channels because
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supply chains include raw material suppliers
