question

(Ch.6) Steps in designing a customer value-driven marketing strategy

answer

Segmentation, Targeting, Differentiation, Positioning (all create value for targeted customers)

question

Segmentation

answer

divide the total market into smaller segments

question

Targeting

answer

select the segment or segments to enter

question

Differentiation

answer

differentiate the market offering to create superior customer value

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Positioning

answer

position the market offering in the minds of target customers

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***Segmentation Variable for Consumer Market

answer

Geographic, Demographic, Psychographic, Behavioral

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Geographic Examples

answer

Nations, regions, states, counties, cities, neighborhoods, climate

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Demographic Examples

answer

Age, life-cycle, gender, income, occupations, education, religion, ethnicity, generation

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Psychographic Examples

answer

Social class, lifestyle, personality

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Behavioral Examples

answer

Occasions, benefits, user status, usage rate, loyalty status

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**Geographic Segmentation

answer

Diving a market into different geographical units (i.e. nations, states, regions, counties, cities, neighborhoods)

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**Demographic Segmentation

answer

Dividing a market into segments based on variables (i.e. age, life cycle stage, gender, income, occupation, education, religion, ethnicity, and generation)

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**Psychographic Segmentation

answer

Marketers segment their markets using variables like these: social class, lifestyle, personality characteristics *the products people buy reflect their lifestyles

question

**Two Types of Behavioral Segmentation

answer

Occasion segmentation and Benefit segmentation

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**Occasion Segmentation

answer

segments divided according to occasions when the buyers 1. get the idea to buy 2. make their purchase 3. use the purchased item

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**Benefit Segmentation

answer

segments divided according to the different benefits that consumers seek from the product

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**Behavioral Segmentation

answer

*User Status: markets can be segmented into nonusers, ex-users, potential users, first time users, and regular users *Usage rate: Markets can be segmented into light, medium, and heavy product users. *Loyalty status: Consumers can be loyal to brands, stores, and companies

question

Multiple segmentation bases

answer

these help companies to 1. Identify smaller, better-defined target groups 2. Identify and understand key customer segments 3. Reach customers more efficiently by tailoring market offerings and messages to customers' specific needs *Segmentation systems help marketers segment people and locations into marketable groups of like-minded consumers.

question

Segmenting Business Markets

answer

*Variables used by business marketers: 1. Operating characteristics 2. Purchasing approaches 3. Situational factors 4. Personal characteristics

question

Segmenting International Markets

answer

Variables include 1. Geographic location 2. Economic factors 3. Political and legal factors 4. Cultural factors

question

Intermarket (cross-market) segmentation

answer

grouping consumers with similar needs and buying behaviors irrespective of their location

question

***Requirements for Effective Segmentation

answer

1. measurable 2. accessible 3. substantial 4. differentiable 5. actionable

question

**Why Market Targeting??

answer

evaluates 1. segments size and growth 2. segment structural attractiveness 3. company objectives and resources

question

***Market Targeting Strategies

answer

Undifferentiated marketing --> Differentiated marketing --> Concentrated marketing --> Micromarketing

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**Choosing a Targeting Strategy

answer

Factors to consider >Company resources >Product variability >Product's life-cycle stage >Market variability >Competitors' marketing strategies

question

Social Responsible Target Marketing

answer

done to serve both the interests of the company and the interests of those targeted

question

Controversy/concern of target marketing

answer

Vulnerable or disadvantaged consumers are targeted with controversial or potentially harmful products.

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Differentiation and Positioning

answer

Firms must decide which segments to target and on the value proposition

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Product position

answer

the way a product is defined by consumers on important attributes.

question

Choosing a Differentiation and Positioning Strategy

answer

Identifying a set of differentiating competitive advantages --> Choosing the right competitive advantages --> Selecting an overall positioning strategy

question

Competitive advantage

answer

an advantage over competitors gained by offering greater customer value either by: 1. Having lower prices, or 2. Providing more benefits that justify higher prices

question

Choosing the right competitive advantages

answer

1. Developing a unique selling proposition (USP) for each brand and sticking to it 2. Positioning on more than one differentiator

question

Which Differences to Promote

answer

1. Important 2. Distinctive 3. Superior 4. Communicable 5. Preemptive 6. Affordable 7. Profitable

question

Winning Value Propositions

answer

* More for more * More for the same * More for less * The same for less * Less for much less

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"More for more"

answer

provides the most upscale product or service

question

"More for the same"

answer

High quality at lower prices

question

"More for less"

answer

BEST WINNING PROPOSITION

question

"The same for less"

answer

gives a good deal

question

"Less for much less"

answer

Meeting consumers' lower performance or quality requirements at a lower price

question

Developing a Positioning Statement

answer

Format: To (target segment and need) our (brand) is (concept) that (point of difference)

question

Positioning Statement

answer

summarizes company or brand positioning

question

Communicating and Delivering the Chosen Position

answer

All the company's marketing mix efforts must support the positioning strategy. Maintain the position obtained through consistent performance and communication. The product's position should be monitored and adapted over time.

question

(ch.7) **What is a product?

answer

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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**What is a service?

answer

an activity, benefit, or satisfaction offered for sale; it is intangible and does not result in ownership of anything.

question

Products, Services, and Experiences

answer

*Market offerings include both tangible goods and services. *Companies create and manage customer experiences with their brands or companies. >To differentiate their offers from that of the competitors

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**Three levels of Products

answer

1. Augmented Product 2. Actual Product 3. Core Product

question

**Augmented Product

answer

is the non-physical part of the product. It usually consists of lots of added value, for which you may or may not pay a premium. So when you buy a car, part of the augmented product would be the warranty, the customer service support offered by the car's manufacturer and any after-sales service. The augmented product is an important way to tailor the core or actual product to the needs of an individual customer. The features of augmented products can be converted in to benefits for individuals.

question

**Actual Product

answer

is the tangible, physical product.

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*Product and Service Classifications

answer

1. Consumer Products 2. Industrial Products

question

Consumer Product

answer

bought by final consumers for personal consumption.

question

**Industrial Product

answer

bought by individuals and organizations for further processing or for use in conducting a business.

question

Marketing Considerations

answer

1. customer buying behavior 2. price 3. distribution 4. promotion

question

Other Market Offerings

answer

1. Organizations 2. Persons 3. Places 4. Ideas

question

**Product and Service Decisions

answer

1. Individual Product Decisions 2. Product Line Decisions 3. Product Mix Decisions

question

Individual Product and Service Decision

answer

Product attributes --> branding --> packaging --> labeling --> product support services

question

**Product Line

answer

closely related products that have similar functions and customer groups, and are sold through similar outlets or fall within given price ranges

question

**Product Line Length

answer

is the number of items in the product line (product line filling, product line stretching)

question

**Product Mix Decisions

answer

Width Length Depth Consistency

question

**Width

answer

number of different product lines the company carries

question

**Length

answer

total number of items a company carries within its product lines

question

**Depth

answer

number of versions offered for each product in the line

question

**Consistency

answer

relativity of the various product lines in end use, production requirements, distribution channels, or some other aspect

question

Service Characteristics

answer

1. Intangibility 2. Variability 3. Inseparability 4. Perishability

question

Service Profit Chain

answer

Chain consists of 5 links: 1. Internal service quality 2. Satisfied and productive service employees 3. Greater service value 4. Satisfied and loyal customers 5. Healthy service profits and growth

question

**Three Types of Services Marketing

answer

Interactive marketing External marketing Internal marketing

question

Marketing Tasks for Service Companies

answer

1. Managing service differentiation 2. Managing service quality 3. Managing Service Productivity

question

**Managing Service Differentiation

answer

Developing a differentiated offer, delivery, and image

question

**Managing Service Quality

answer

Delivering consistently higher quality than the competitors

question

**Managing Service Productivity

answer

*Training current employees or hiring new ones *Increasing the quantity of service by giving up some quality *Harnessing the power of technology

question

**Brand Equity

answer

The differential effect that knowing the brand name has on customer response to the product or its marketing

question

Consumer Perception Dimensions

answer

Differentiation Relevance Knowledge Esteem

question

Brand Value

answer

total financial value of a brand

question

Customer Equity

answer

value of customer relationships that the brand creates

question

Major Brand Strategy Decisions

answer

1. Brand positioning 2. Brand name selection 3. Brand sponsorship 4. Brand development

question

Brand positioning

answer

attributes, benefits, belief and values

question

Brand name selection

answer

selection, protection

question

Brand Sponsorship

answer

Manufacturer's brand Private brand Licensing Co-branding

question

Brand Development

answer

Line extensions Brand extensions Multibrands New brands

question

Brand name selection

answer

Desirable qualities for a brand name should be: *Based on the product's benefits and qualities *Easy to pronounce, recognize, and remember *Distinctive and extendable *Easily translated into foreign languages *Capable of registration and legal protection

question

Brand positioning

answer

Marketers should establish a mission and vision for the brand when positioning it.

question

Brand Sponsorship

answer

National Brand Store Brands Licensing Co-Branding

question

National Brands

answer

Marketed under the manufacturer's own name

question

Store Brands

answer

created and owned by reseller of a product or service

question

Licensing

answer

use names and symbols created by other companies or well-known movie characters or celebrities for a fee

question

Co-branding

answer

use the established brand names of two different companies on the same product

question

Brand Development Strategies

answer

Line extension Brand extension Multibrands New brands

question

How to manage brands

answer

Communicate the brand's positioning Manage all brand touch points Train employees to be customer centered Audit the brand's strengths and weaknesses

question

(Ch. 8) **How to create successful new products

answer

>Understanding consumers, markets, and competitors >Developing products that deliver superior value to customers

question

**How do you develop new products?

answer

through the firm's own research and development efforts

question

**Steps in New Product Development

answer

Idea generation -->idea screening --> concept development and testing --> marketing strategy development -->business analysis -->product development-->test marking --> commercialization

question

Internal Idea sources

answer

*Social networks *intrapreneurial programs

question

external idea sources

answer

*distributers and suppliers *competitors *customers

question

**crowdsourcing

answer

inviting broad communities of people into the new product innovation process

question

Idea screening

answer

Screening new product ideas to spot good ones and drop poor ones as soon as possible

question

How do you screen new ideas?

answer

>New idea write-up reviewed by a committee >R-W-W framework-Real, win, worth doing

question

Product idea

answer

an idea for a possible product that the company can see itself offering to the market.

question

product concept

answer

a detailed version of the new product idea stated in meaningful consumer terms.

question

Product image

answer

the way consumers perceive an actual or potential product.

question

Concept development

answer

Developing a new product into alternative product concepts by finding out how attractive each concept is to customers and choosing the best one

question

Concept testing

answer

Testing new product concepts with groups of target consumers

question

concept testing methods

answer

>Presenting the concepts to consumers symbolically or physically >Asking customers to respond by answering questions about their reactions to the concepts

question

Marketing Strategy Development

answer

initial marketing strategy of a product

question

Three parts of marketing strategy statement

answer

Describes the target market, planned value proposition, sales, market-share, and profit goals Determines product's planned price, distribution, and marketing budget Develops long-run sales, profit goals, and marketing mix strategy

question

Business Analysis

answer

A review of the sales, costs, and profit projections for a new product (To find out whether these factors satisfy the company's objectives)

question

**Product Development

answer

Developing the product concept into a physical product (To ensure that the product idea can be turned into a workable market offering)

question

**test marketing

answer

introduces product and its proposed marketing program into realistic marketing settings, testing takes time and costs can be high, tests product and its marketing program

question

Alternatives to standard test markets

answer

-Controlled test markets -Simulated test markets

question

Reasons for using alternative test markets

answer

-reducing the costs -speeding up the process

question

Commercialization

answer

introducing a new product into the market

question

**Things to consider for launching a new product

answer

When to launch Where to launch

question

**Customer-centered new product development

answer

focuses on finding new ways to solve customer problems and create more customer-satisfying experiences.

question

**2 different types of product development

answer

-Team-based new product development -Systematic new product development

question

**Team-based new product development

answer

Various company departments work together, overlapping the steps in the product development process

question

**Systematic new product development

answer

Innovation management systems collect, review, evaluate, and manage new product ideas

question

Product Decisions and Social Responsibility

answer

Considerations for companies -Public policy issues -Regulations regarding acquiring or dropping products -Patent protection -Product quality and safety -Product warranties

question

Challenges facing international marketers

answer

-Finding what products and services to introduce and in which countries -Deciding on how much to standardize or adapt the products and services for world markets

question

(Ch. 9) What is price??

answer

>Amount of money charged for a product or service >Determines a firm's market share and profitability >Produces revenue

question

Customer value based pricing vs

answer

*Based on buyers' perceptions of value rather than on the seller's cost *Price is considered before the marketing program is set. *Types of value-based pricing: >Good-value pricing >Value-added pricing

question

Value based pricing steps

answer

assess customer needs and value perceptions --> set target price to match customer perceived value --> determine costs that can be incurred --> design product to deliver desired value at target price

question

Cost based pricing

answer

Based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk Types of costs: 1.Fixed costs (overhead) 2.Variable costs 3. Total costs

question

Types of Cost-based pricing

answer

1. Cost-plus pricing (markup pricing) = adding a standard markup to the cost of the product 2. Break-even pricing (target return pricing) =setting price to break even on the costs of making and marketing a product, or setting price to make a target return

question

Cost based pricing steps

answer

design a good product -->determine product costs--> set price based on cost -->convince buyers of products value

question

Considerations affecting price decisions

answer

1. Internal factors >Overall marketing strategy, objectives, and mix >Organizational considerations 2.External factors >Market and demand >Economy >Impact on other parties in its environment

question

organization considerations affecting price decisions

answer

1. Management decides who should set prices. 2.Varies depending on the size and type of company

question

who sets the price for small and large companies?

answer

Small companies - Top management Large companies - Divisional or product managers

question

Types of markets

answer

1. pure competition 2. monopolistic competition 3. oligopolistic competition 4. pure monopoly

question

Price elasticity of demand

answer

Measure of the sensitivity of demand to changes in price

question

Marketing Skimming vs.

answer

is a product pricing strategy by which a firm charges the highest initial price that customers will pay. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment.

question

Market Penetration

answer

involves focusing on selling your existing products or services into your existing markets to gain a higher market share

question

Competition based pricing

answer

Setting prices based on competitors' strategies, costs, prices, and market offerings

question

Company should ask several questions to assess competitors' pricing strategies

answer

How does the company's market offering compare in terms of customer value? How strong are current competitors? What are their current pricing strategies?

question

Discount vs

answer

a straight reduction in price on purchases during a stated period of time or of larger quantities EX: Cash, quantity, functional, and seasonal discounts

question

Allowance

answer

promotional money paid to retailers for an agreement to feature the manufacturer's products in some way EX: Trade-in and promotional allowances

question

Segmented pricing

answer

Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs

question

Forms of segmented pricing

answer

1. Customer-segment pricing 2. Product form pricing 3. Location-based pricing 4. Time-based pricing

question

psychological pricing

answer

Considers the psychology of prices and not simply the economics (The price says something about the product.)

question

Reference prices

answer

Prices that buyers carry in their minds and refer to when looking at a given product

question

promotional pricing

answer

Temporarily pricing products below the list price to increase short-run sales

question

Forms of Promotional Pricing

answer

1. Discounts and special-event pricing 2. Limited-time offers and cash rebates 3. Low-interest financing and longer warranties 4. Free maintenance

question

geographic pricing

answer

the practice of modifying a basic list price based on the geographical location of the buyer. It is intended to reflect the costs of shipping to different locations.

question

Forms of Geographical Pricing

answer

1. FOB-origin pricing 2. uniform-delivered pricing 3. zone pricing 4. basing-point pricing 5. freight-absorption pricing

question

dynamic pricing

answer

Adjusting prices continually to meet the characteristics and needs of individual customers and situations

question

(Ch. 10) Supply Chain: Upstream partners

answer

Upstream partners supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service.

question

Supply Chain: Downstream partners

answer

Downstream partners serve as distribution channels that link the firm and its customers

question

What is marketing channels (distribution channels)?

answer

Interdependent organizations that help make a product or service available for use or consumption

question

How does a channel add value?

answer

Intermediaries create greater efficiency in making goods available to target markets. Marketing intermediaries transform the assortments of products made by producers into the assortments wanted by consumers. Intermediaries bridge the major time, place, and possession gaps that separate goods and services from users.

question

Various functions performed by the channel:

answer

1. help to complete transactions 2. help to fulfill the completed transactions

question

What is the value delivery network?

answer

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

question

Number of channel levels

answer

A layer of intermediaries that performs work in bringing the product and its ownership closer to the final buyer 1. Direct marketing channel: No intermediary levels 2. Indirect marketing channels: One or more intermediary levels

question

Types of flows that connect institutions in the channel

answer

1. Physical flow of products 2. Flow of ownership 3. Payment flow 4. Information flow 5. Promotion flow

question

Channel behavior

answer

Channel conflict: Disagreements among marketing channel members on goals, roles, and rewards >Horizontal conflict occurs among firms at the same level of the channel. >Vertical conflict occurs between different levels of the same channel.

question

Channel decisions

answer

1. Affect every other marketing decision 2. Can lead to competitive advantage 3. May involve long-term commitments to other firms

question

vertical marketing systems

answer

(VMS) consists of producers, wholesalers, and retailers acting as a unified system.

question

types of vertical marketing systems

answer

1. corporate 2. contractual 3. administered

question

horizontal marketing systems

answer

Two or more companies at one level join together to follow a new marketing opportunity.

question

multichannel distribution systems

answer

A single firm sets up two or more marketing channels to reach customer segments.

question

Advantages of multichannel distribution systems

answer

1. Expansion of sales and marketing coverage 2. Tailor-made products and services for the specific needs of customer segments

question

Disadvantages of multichannel distribution systems

answer

1. harder to control 2. generates conflict

question

disintermediation

answer

Occurs when product or service producers cut out marketing channel intermediaries or when radically new types of channel intermediaries displace traditional ones

question

channel design decisions

answer

Marketing channel design involves designing effective marketing channels by: 1. Analyzing customer needs 2. Setting channel objectives 3. Identifying major channel alternatives 4. Evaluating the alternatives

question

Marketing Channel Management Responsibilities

answer

1. Selecting channel members 2. Managing and motivating channel members 3. Evaluating channel members

question

Goals of marketing logistics

answer

to deliver a targeted level of customer service at the least cost

question

Logistic functions

answer

warehousing inventory managements transportation logistics information management

question

what are marketing channels?

answer

a set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process.

question

how channels add value

answer

Gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange.

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