Marketing Chapters 7-10 – Flashcards
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Segmentation
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The process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics
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Demographics
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Statistics that measure observable aspects of a population, including size, age, gender, ethnic group, income, education, occupation, and family structure.
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Generational Marketing
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Marketing to members of a generation, who tend to share the same outlook, values, and priorities
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Generation Z
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Group of consumers born after 1994. Most diverse generation. Accustomed to blurred gender roles. They are also digital natives, who spend a lot of time online.
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Generation Y, or Millennials
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Group of consumers born between 1979 and 1994. First generation to grow up online. Approximately 27% of population and spend a lot of money. Hard to reach through traditional media.
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Generation X
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Group of consumers born between 1965 and 1978. Have a cynical attitude towards toward marketing.
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Baby Boomers
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Segment of people born between 1947 and 1964. Many of them have a lot of money.
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Buying Power
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Based on an understanding of what discretionary and non-discretionary income of customers and what they can afford to buy.
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Content Marketing
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Strategy of establishing thought leadership in the form of bylines, blogs, commenting opportunities, videos, sharable social images, and infographics
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VALS
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Pyschographic segmentation system that divides US adults into 8 groups according to what drives them psychologically as well as by their economic resources
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Gamer segment
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A consumer segment that combines a psychographic/lifestyle component with a heavy dose of generation marketing. Segmented towards those who play video games
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80/20 rule
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Marketing rule of thumb that 20% of purchases account for 80% of a product's sales
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Long Tail
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idea that companies can make money by selling small amounts of items that only a few people want, provided they sell enough different items
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Targeting
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Evaluating the attractiveness of each potential segment and decide which of these groups they will invest resources to try to turn them into customers.
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Positioning
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Developing a marketing strategy to influence how a particular market segment perceives a good or service in comparison to the competition
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Retro Brands
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A once-popular brand that has been revived to experience a popularity comeback, often by riding a wave of nostalgia
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Brand anthropomorphism
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The assignment of human characteristics and qualities to a brand
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Attributes
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Features, functions, benefits, and uses of a product. Includes packaging, brand name, and supporting features
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Core product
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All the benefits the product will provide for consumers or business customers
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Actual Product
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The physical good or the delivered service that supplies the desired benefit
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Augmented Product
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Actual product plus other supporting features such as warranty, credit, delivery, installation
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Convenience product
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A consumer good or service that is usually low priced, widely available, and purchased frequently with a minimum of comparison and effort.
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Staple Product
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Basic or necessary items that are available almost everywhere
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Consumer packaged good
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Low cost good that is consumed quickly and replaced frequently
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Shopping Products
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Goods or services where customers spend considerable time and effort gathering information and evaluating alternatives before making a purchase
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Maintenance, repair, and operating (MRO)
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Goods that a business customer consumes in a relatively short time
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Continuous Innovation
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Modification to an existing product
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Dynamically continuous innovation
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Change in an existing product that requires a moderate amount or learning or behavior change
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Discontinuous innovation
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Totally new product that creates major changes in the way we live
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Phases in New Product Development
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1. Idea Generation 2. Product Concept Development and Screening 3. Marketing Strategy Development 4. Business Analysis 5. Technical Development 6. Test Marketing 7. Commercialization
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Technical Success
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Indicates if product concept is feasible from the standpoint of whether or not it is possible to physically develop it
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Commercial Success
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Indicates if the product concept is feasible from the standpoint of whether or not there will sufficient customer demand for the product
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Business Analysis
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Step in the product development process in which markets assess a product's commercial viability
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Simulated Market Test
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Application of special computer software the simulates the product launching
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Product adoption
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Process by which a consumer or business customer begins to buy and use a new good, service, or idea
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Diffusion
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Process how a product spreads through a population
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Tipping Point
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In the context of product diffusion, the point when a product's sales spike from a slow climb to an unprecedented new level
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Media Blitz
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Massive advertising campaign that occurs over a relatively short time
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Observability
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How visible a new product and its benefits are to others who might adopt it
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Product Line
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A firm's total product offering designed to satisfy a single need or desire of target customers
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Product Line Length
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Determined by the number of separate items within the same category
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Stock Keeping Unit
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Unique identifier for each distinct product
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Cannibalization
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Loss of sales of an existing brand when a new item in a product line or product family is introduced
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Product mix
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Total set of all products a firm offers for sale
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Product mix width
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Number of different product lines the firm produces
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Product Quality
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Overall ability of the product to satisfy customer expectations
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Total Quality Management
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Management philosophy that focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement
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Internal customers
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Coworkers that interact who harbor the attitude and belief that all activities ultimately impact external customers
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Internal customer mind-set
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An organizational culture in which all organization members treat each other as valued customers
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ISO 9000
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Criteria developed by the International Organization for Standardization to regulate product quality in Europe
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Six Sigma Method
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Process whereby films work to limit product defects to 3.4 million or fewer
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Product Life Cycle
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Introduction Growth Maturity Decline
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Brand Equity
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Value of a brand to an organization
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Brand Meaning
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The beliefs and associations that a consumer has about the brand
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Sub-branding
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Creating a secondary brand within a main brand, that can help differentiate a product line to a desire target group
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Ingredient Branding
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Type of branding in which branded materials become "component parts" of other branded products
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Universal Product Code (UPC)
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Bar codes on items that correspond to a unique 10 digit number
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Price elasticity of demand
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The percentage change in unit sales that results from a percentage change in price
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Elastic Demand
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Demand in which changes in price have large effects on the amount demanded, inelastic is opposite
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Cross elasticity of demand
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When changes in the price of one product affect the demand for another item
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Variable costs
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Costs of production (raw and processed materials, parts, and labor) that are tired to and vary, depending on the number of units produced
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Break-even point
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Point which total revenue and total costs are equal
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Contribution per unit
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The difference between the price the firm charges for a product and the variable costs
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Gross Margin
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The markup amount added to the cost of a product to cover the fixed costs of the retailer or wholesaler and leave an amount for a profit
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MSRP (manufactured suggested retail price)
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The price the manufacturer sets as the appropriate price for the end consumer to pay
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Vertical Integration
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The combining of manufacturing operations with channels of distribution under a single ownership to reduce costs and increase profits
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Shopping for control
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Consumers buying products for safety and control, such as installing smart home technology, or moving to gated communities
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Keystoning
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Retail pricing strategy in which the retailer doubles the cost of the item
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Yield Management Pricing
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Practice of charging different prices to different customers to manage capacity while maximizing revenues
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Price leadership
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A pricing strategy in which one firm first sets its price and other firms in the industry follow with same or similar prices
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High/low pricing
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Retail pricing strategy in which the retailer prices merchandise at list price, but runs frequent promotions that heavily discount some products
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Skimming Price
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Very high premium price that a firm charges for its new, highly desirable product
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Penetration Pricing
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Introduce new products at a very low price to encourage more customers to purchase it
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Price Segmentation
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Practice of charging different prices to different market segments for the same product
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Peak-load pricing
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Pricing plan that sets prices higher during periods with higher demand
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Surge pricing
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Pricing plan that raises prices of a product as demand goes up and lowers it as demand slides
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Payment pricing
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Pricing tactic that breaks up the total price into smaller amounts payable over time
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Price bundling
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Selling two or more goods or services as a single package for one price
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Captive pricing
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Pricing tactic for two items that must be used together. One item is priced very low, but the firm makes the profit on the other item that is priced very high.
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F.O.B. Factory Pricing
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Price of shipping is dependent on the location of the customer and the cost is the responsibility of the customer
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Freight absorption pricing
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Pricing tactic in which the seller absorbs the total cost of transportation
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Trade discount
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Discounts off list price of products to members of the channel of distribution who perform various marketing decisions
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Dynamic Pricing
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Price can be easily adjusted to meet changes in the marketplace.
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Freemium
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Product is free, but an upgraded full version has a price
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Internal Reference Price
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Set price or price range in consumer's minds that they refer to in evaluating a product's price
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Unfair Sales Acts
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State laws that prohibit suppliers from selling products below cost to protect small businesses from larger competitions
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Predatory Pricing
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Illegal pricing strategy where a company sets a very low price for the purpose of driving competitors out of business.
