Marketing 310 Test #2

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_____ ______: Defined as the process of collecting and analyzing information in order to recommend actions
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marketing research
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What is marketing research defined as?
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the process of collecting and analyzing information in order to recommend actions
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Although imperfect, marketers conduct ______ ______ to reduce the risk of, and thereby improve marketing actions
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marketing research
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What are the 5 steps to the marketing research process?
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1. Define a problem 2. Develop a research plan 3. Collect relevant information 4. Develop findings 5. Take marketing actions
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Although imperfect, why do marketers conduct marketing research?
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to reduce the risk of, and thereby improve marketing actions
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______ ______: The total sales of a product that a firm expects to sell during a specified time period under specified conditions.
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Sales Forecast
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What is a sales forecast?
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The total sales of a product that a firm expects to sell during a specified time period under specified conditions.
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______ _______: Involves estimating the value to be forecast without any intervening steps
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Direct Forecast
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What is a direct forecast?
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Involves estimating the value to be forecast without any intervening steps
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_____-_____ _______: Involves starting with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making the final forecast
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lost-horse forecast
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What is a lost-horse forecast?
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Involves starting with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making the final forecast
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_____ ____ ______ ______ _____: Asking prospective customers if they are likely to buy the product during some future time period.
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Survey of buyers’ intentions forecast
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What is a survey of buyers’ intentions forecast?
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Asking prospective customers if they are likely to buy the product during some future time period.
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______ _______ _______: Asking the firm’s salespeople to estimate sales during a coming period. This is logical because these people are in contact with customers and are likely to know what customers like and dislike.
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Salesforce survey forecast
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What is a salesforce survey forecast?
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Asking the firm’s salespeople to estimate sales during a coming period. This is logical because these people are in contact with customers and are likely to know what customers like and dislike.
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______ ______: Extending a pattern observed in past data into the future. When the pattern is described with a straight line, it is linear extrapolation.
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Trend extrapolation
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What is trend extrapolation?
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Extending a pattern observed in past data into the future. When the pattern is described with a straight line, it is linear extrapolation.
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What are research objectives?
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specific, measurable goals the decision maker seeks to achieve in conducting the marketing research
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Different research outcomes – based on the _____ ___ ______ – lead to different marketing actions.
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measures of success
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The first step of marketing research is: Defining the Problem What are the two parts of this step?
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1)Setting research objectives 2) Identifying marketing actions
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The second step of marketing research is: Developing the research plan What are the 3 parts of this step?
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1) Specify constraints 2) Identify data needed needed for marketing actions 3) Determine how to collect data
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The third step of marketing research is: Collecting relevant information What are the 2 parts of this step?
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1) Obtain secondary data 2) Obtain primary data
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To find out about a new customer reaction to a potential new product, marketing researchers frequently develop a ____ _____ _____
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new product concept
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Simple methods vital to marketing are: (1) ______ and (2) ______ _______
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sampling ; statistical inference
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What is secondary data?
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the facts and figures that have already been recorded prior to the project at hand.
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What are the 2 types of secondary data?
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internal and external
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What are the 2 types of internal secondary data?
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marketing inputs and marketing outcomes
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What is external secondary data?
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This is published data that comes from outside the organization
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Many of the reports put out by the US census bureau are examples of ______ _______ ______
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external secondary data
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Several market research companies pay households and businesses to record all their purchases. This is called _____ _____ _____
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syndicated panel data
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What are the pros and cons of external secondary data?
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PROS i. The tremendous time savings ii. The low cost, such as free or inexpensive Census reports iii. The greater level of detail available. CONS i. May be out of date ii. The definitions or categories might not be quite right for a researcher’s project iii. Because the data have been collected for another purpose, they might not be specific enough for the project.
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What is primary data?
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This is defined as facts and figures that are newly collected for the project.
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What are the main disadvantages of primary data?
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Main disadvantages are that primary data are usually far more costly and time-consuming to collect than secondary data.
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Observational data is a type of ______ data. What are the 3 ways that it can be collected?
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Primary ; Mechanical, Personal, Neuromarketing
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TV ratings collected by a “people meter” are an example of _____ _____ _____. Is this primary or secondary data?
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mechanical observational data ; primary
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Mystery shoppers are an examples of _____ _____ ____. Is this primary or secondary data?
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personal observational data ; primary
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______ _______: A specialized observational approach in which trained observers seek to discover subtle behavioral and emotional reactions as consumers encounter products in their “natural use environment.”
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Ethnographic research
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Personal observational data can be _____ & _____ but also _____ & ______. Also, while it can reveal _____ people do, it cannot really determine _____ they do it. (this is the principle reason for using neuromarketing)
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useful and effective ; costly and unreliable ; what ; why
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Martin Lindstrom believes that most traditional marketing research – like focus groups and surveys – is wasted because consumers’ feelings towards products and brands reside deep within the subconscious parts of their brains. He wrote the book called “______.”
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Buyology
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There are 2 general ways of collecting primary data. What are they?
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Observational Data Asking people
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Asking people is a way of collecting _____ _____
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primary data
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The 2 subsets of “asking people” when collecting primary data are :
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1) Idea generation 2) Idea evaluation
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When collecting primary data, you can either gather observational data or you can ask people. When asking people, you can use idea generation or idea evaluation. What are the 3 idea generation methods?
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1. individual interview 2. depth interview 3. focus groups
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What are is the upside and the downside to individual interviews?
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i. Pro: ability to probe for additional ideas using follow-up questions ii. Con: very expensive
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_____ ______: Researchers ask lengthy, free-flow questions to probe for underlying ideas and feelings
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Depth interviews
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What are focus groups?
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These are informal sessions of 6 to 10 past, present, or prospective customers in which a discussion leader, or moderator, asks their opinions about the firm’s and its competitors’ products, how they use these products, and special needs they have that these products don’t address. (they are often recorded and conducted in room with one-way mirror)
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The informality and peer support in an effective _____ _____ help to uncover ideas that are often difficult to obtain with individual interviews.
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focus group
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Using _____ _____ _____ the marketing researcher tries to test ideas discovered earlier to help the marketing manager recommend marketing actions.
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idea evaluation methods
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Idea evaluation methods often involve ______ ______ using personal, mail, phone, fax, and online surveys of a large sample of past, present, or prospective customers.
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conventional questionnaires
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_____ ______ are usually biased because those most likely to respond have had especially positive or negative experiences.
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Mail surveys
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____ ______ allow flexibility, but unhappy respondents may hang up on the interviewer.
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Telephone interviews
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A lot of marketing researchers have begun to use online surveys because …
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most consumers have an internet connection and an e-mail.
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In choosing among them, the marketing researcher balances the _____ of the particular method against the expected _____ of the info and _____ with which it can be obtained.
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cost ; quality ; speed
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Each survey method results in valuable _____ _____ – Facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors
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questionnaire data
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Mail surveys, telephone interviews, and online surveys are all examples of _____ _____ methods, which are a way to collect _____ data.
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idea evaluation ; primary
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Social media, panels and experiments, using information technology, and data mining are all forms of obtaining ______ data.
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primary
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Carmex uses several _____ _____ metrics, including conversation velocity, share of voice, and sentiment.
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social media
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______: A sample of consumers or stores from which researchers take a series of measures
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Panel
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In marketing experiments, the independent variables of interest – sometimes called the marketing drivers are often one or more of the …
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marketing mix elements, such as a product’s features, price, or promotion (like ad messages or coupons).
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The ideal dependent variable usually is a change in the ______ of individuals, households, or organizations.
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purchases
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_____ ______ involves operating computer networks that can store and process data. Marketers use _____ _____ that consists of computers linked together through sophisticated communication networks. These data sources are stored, organized, and managed in databases. Collectively these databases form a _____ _____.
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information technology x2 data warehouse
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iWhen querying a database, marketers can use sensitivity analysis to ask “____ ___” questions to determine how hypothetical changes in product or brand drivers can affect sales.
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what if
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_____ _____ is the extraction of hidden information from large databases to find statistical links between consumer purchasing patterns and marketing actions.
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Data mining
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The fourth step of marketing research is to: Develop findings What are the 2 parts of this step?
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1) Analyze the data 2) Present the findings
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The fifth step of marketing research is to: Take marketing actions What are the 3 parts of this step?
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1) MAKE action recommendations 2) IMPLEMENT action recomendations 3) EVALUATE results (the decision itself and the decision process used)
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______ _______: Aggregates potential buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action.
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Market segmentation
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What is market segmentation?
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Aggregates potential buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action.
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Effective market segmentation results in development of specific _____ _____ actions, and the formation of _______ _______.
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marketing mix ; meaningful groupings
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______ _______: The relatively homogeneous groups of prospective buyers that result from the market segmentation process (each market segment consists of people who are relatively similar to each other in terms of their consumption behavior.
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Market segments
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What are market segments?
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The relatively homogeneous groups of prospective buyers that result from the market segmentation process (each market segment consists of people who are relatively similar to each other in terms of their consumption behavior.
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________ ________: The strategy of using different marketing mix activities (such as product features and advertising) to help consumers perceive a product as being different and better that competing products.
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Product differentiation
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What is product differentiation?
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The strategy of using different marketing mix activities (such as product features and advertising) to help consumers perceive a product as being different and better that competing products. (The perceived differences may involve physical features, such as size or color, or nonphysical ones, such as image or price.)
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–Market segmentation first stresses the importance of grouping people or organizations in a market according to the similarity of their _____ and the _____ they are looking for in making a purchase. –Second, …
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needs ; benefits ~such needs and benefits must be related to specific marketing actions that the organization can take, such as a new product or special promotion.
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Segmentation and targeting are the link between …
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buyers’ needs and the organization’s marketing program.
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The Zappos.com target customer segment originally consisted of people who wanted to (3 things)
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(1) have a wide selection of shoes, (2) shop online in the convenience of their own homes, and (3) receive quick delivery and free returns.
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_____ _____ ______: A framework to relate the market segments of potential buyers to products offered or potential marketing actions
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Market product grid
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What is a market product grid?
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A framework to relate the market segments of potential buyers to products offered or potential marketing actions
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When expenses are greater than the potentially increased sales from segmentation, a firm …
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should not attempt to segment its market.
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One size fits all marketing – like that for Tide laundry detergent 40 years ago – ___ ___ ____
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no longer exists
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When an organization produces only a single product or service and attempts to sell it to two or more market segments, it avoids the extra costs of developing and producing additional versions of the product. This market segmentation strategy is called …
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one product and multiple market segments
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What does the “one product and multiple market segments” market segmentation strategy entail?
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When an organization produces only a single product or service and attempts to sell it to two or more market segments, it avoids the extra costs of developing and producing additional versions of the product.
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What are the incremental costs involved with in the “one product and multiple market segments” market segmentation strategy?
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In this case, the incremental costs of taking the product into new market segments are typically those of: a separate promotional campaign or a new channel of distribution.
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Ex. How the Sporting News Baseball Yearbook used 16 different covers featuring a baseball star from each of its regions in the U.S. instead of producing multiple versions of magazines for several different market segments. The Harry Potter series is another example. These are examples of …
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the “one product and multiple market segments” market segmentation strategy
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Ford’s different lines of cars, SUVs, and pickup trucks are each targeted at a different type of customer – examples of …
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multiple products aimed at multiple market segments.
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The perceived differences between products may involve physical features, such as ____ or _____, or nonphysical ones, such as ____ or ____.)
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size or color ; image or price
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Segmentation is linking ______ to ______
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needs ; actions
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The market segmentation strategy of “multiple products and multiple market segments” is effective if..
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it meets customers’ needs better, doesn’t reduce quality or increase price, and adds to Ford’s sales revenues and profits.
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Each customer has unique needs and wants and desires special tender loving care. –This is characteristic of what type of market segmentation strategy?
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Segments of one: Mass Communication
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Today’s internet ordering and flexible manufacturing and marketing processes have made _____ ______ possible, which means tailoring goods or services to the tastes of individual customers on a high-volume scale.
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mass communication
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Mass communication is the next step beyond ____-____-____: Manufacturing a product only when there is an order from a customer. (even this system falls a bit short of total mass communication because customers do not have an unlimited number of features from which to choose)
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build-to-order (BTO)
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The Segmentation Trade-Off: ______ versus _____
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Synergies ; Cannibalization
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The key to successful product differentiation and marketing segmentation strategies is finding the ideal balance between satisfying a customer’s individual wants and achieving ______ _______, the increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently.
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organizational synergy
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The “_____ _____ _____” can take many forms: more products, improved quality of existing products, lower prices, easier access to products through improved distribution, etc.
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increased customer value
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Ultimate criterion for an organization’s marketing success is that customers should be better off as a result of the _______ _______.
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increased synergies
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When the increased customer value involves adding new products or a new chain of stores, we must take into account – Are the new products or the new chain simply stealing customers and sales form the older, existing ones? This is known as _____________.
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cannibalization
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Marketers increasingly emphasize a two-tier, “______/______” strategy
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Tiffany/Walmart
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What are the 5 steps in segmenting markets?
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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 the size of the markets 4) Select target markets 5) Take marketing actions to reach target markets
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What are the criteria to use in forming the segments? 1._____ and ____-_____ of assigning potential buyers to segments 2. Potential for _____ _____ 3. Similarity of _____ of potential buyers within a segment: (ex. Product features sought or advertising media used) 4. Difference of ______ of buyers among segments: If the ____ of the various segments aren’t very different, combine them into fewer segments. If increased sales don’t offset extra costs, combine segments and reduce the number of marketing actions. 5. Potential of a marketing action to _____ ___ _____
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Simplicity ; cost-effectiveness ; increased profit ; needs ; needs ; reach a segment
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______ segmentation: Based on where prospective customers live or work.
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Geographic
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Grouping segments by region is an example of _______ segmentation
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geographic
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_______ segmentation: Based on some objective physical (gender, race), measureable (age, income), or other classification attribute (birth era, occupation) of prospective customers
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Demographic
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Household size is an example of _____ segmentation
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demographic
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________ segmentation: Based on some subjective mental or emotional attributes (personality), aspirations (lifestyle), or needs of prospective customers
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Psychographic
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_______ segmentation: Based on some observable actions or attitudes by prospective customers – such as where the buy, what benefits they seek, how frequently they buy, and why they buy.
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Behavioral
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Using product features and usage rate as criteria for segmentation is using _______ segmentation
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behavioral
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Airlines have developed frequent-flier programs to encourage passengers to use the same airline repeatedly to create loyal customers → “Frequency marketing” This is using _____ segmentation
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behavioral
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Usage rate is sometimes referred to in terms of the ______ rule, a concept that suggests …
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80/20 ; 80 percent of a firm’s sales are obtained from 20 percent of its customers.
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~Ways to Segment Organizational (Business) Markets •_______ segmentation: Statistical area •_______ segmentation: NAICS code •_______ segmentation: Number of employees •_______ segmentation: Usage Rate
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Geographic ; Demographic ; Demographic ; Behavioral
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In a complete market-product grid analysis, each cell in the grid can show the estimated ______ ______ of a given product sold to a specific market segment.
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market size
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Product: A _____, ______, or ______ consisting of _____ and ______ features that satisfies consumers’ needs and is received in exchange for ______ or something else of value
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good ; service ; idea ; tangible ; intangible ; money
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A ______ (has tangible attributes that a consumer’s 5 senses can perceive; can be divided into _____ goods, which is one that lasts over many uses such as a car or an iPad and generally emphasize personal selling, and ______ goods, which are consumed in one or few uses, such as food or fuel and rely heavily on consumer advertising)
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good ; durable ; nondurable
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Food and fuel are ______ goods
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nondurable
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Cars and iPads are ______ goods
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durable
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services make up over ___% of the U.S.’s GDP
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40
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What is a service?
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Service: Intangible activities or benefits that an organization provides to satisfy consumers’ needs in exchange for money or something of value
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A “_______” may be the breakfast cereal that you eat, whereas a “______” may be a tax return an accountant fills out for you
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product ; service
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______ ______: products purchased by the ultimate consumer.
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Consumer products
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What are the 4 types of consumer products?
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1. Convenience 2. Shopping 3. Specialty 4. Unsought
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______ product: items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort.
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Convenience
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What is a convenience product?
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items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort.
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______ product: items for which the consumer compares several alternatives on criteria such as price, quality, or style.
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Shopping
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What is a shopping product?
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items for which the consumer compares several alternatives on criteria such as price, quality, or style.
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_____ product: items that the consumer makes a special effort to search out and buy.
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Specialty
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What is a specialty product?
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items that the consumer makes a special effort to search out and buy.
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_______ product: items that the consumer does not know about or knows about but does not initially want
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Unsought
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What is an unsought product?
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items that the consumer does not know about or knows about but does not initially want
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The 4 types of consumer products differ in terms of (3 things)
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1) The effort the consumer spends on the decision 2) The attributes used in making the purchase decision 3) The frequency of purchase
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_______ products: products organizations buy that assist directly or indirectly in providing other products for resale
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Business
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A major characteristic of business products is that their sales are often the result of ______ _____; that is, sales of business products frequently result from the sale of _______ _______.
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derived demand ; consumer products
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Business products may be classified as either _______ or ______ _______
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components ; support products
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______: items that become part of the final product (these include _____ _____ such as lumber and assemblies such as a ford car engine)
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Components ; raw materials
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_____ ______: items used to assist in producing other products and services.
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Support products
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Installations, such as buildings and fixed equipment ; Accessory equipment, such as tools and office equipment ;Supplies, such as stationery, paper clips, and brooms ; Industrial services, such as maintenance, repair, and legal services. These are all examples of …
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support products
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Some products can be both _______ and _______ _______, such as an Apple iMac.
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consumer ; business products
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Services can be classified according to whether they are delivered by (3 things)
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(1) People or equipment (2) Business firms or nonprofit organizations (3) Government agencies
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______ ______ professional services include those offered by advertising agencies or medical doctors.
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People based
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_______-________ services do not have the marketing concern of inconsistent quality because employees don’t have direct contact when providing the service to consumers. They receive the services without interacting with any service employees.
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Equipment-based
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______ ______ firms must make profits to survive, while _______ organizations seek to satisfy clients and be efficient. The kinds of services each offers affect their marketing activities
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Privately owned ; nonprofit
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4 unique elements distinguish services from goods:
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-Intangibility -Inconsistency -Inseparability -Inventory
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Services tend to be a performance rather than an object, which makes them much more difficult for customers to evaluate. This is the concept of …
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intangibility
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Services depend on the people who provide them. More of a problem in services than it is with tangible goods. This is the concept of …
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inconsistency
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The consumer cannot distinguish the service provider from the service itself. This is the concept of …
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inseparability
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Many goods have inventory handling costs that relate to their storage, perishability, and movement. With services, these costs are more subjective and are related to _____ ______ ______ which is when …
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idle production capacity ; the service provider is available but there is no demand for the service.
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For a service, ______ ______ involves paying the service provider along with any needed equipment.
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inventory cost
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Once a consumer tries a service, they primarily evaluate it by …
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comparing expectations about a service offering to the actual experience a consumer has with the service.
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Difference between the consumers’ expectations and his or her actual experiences are identified through _____ ______, which asks consumers to assess their expectations and experiences on dimensions of service quality
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gap analysis
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What are the 5 dimensions of service quality?
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1. Reliability 2. Tangibility 3. Responsiveness 4. Assurance 5. Empathy
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_______: Ability to perform the promised service dependably and accurately
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Reliability
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_______: Appearance of physical facilities, equipment, personnel, and communication materials
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Tangibility
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________: Willingness to help customers and provide prompt service.
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Responsiveness
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_________: Knowledge and courtesy of employees and their ability to convey trust and confidence
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Assurance
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_______: Caring, individualized attention provided to customers
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Empathy
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______ ______: a specific product that has a unique brand, size, or price. (ex: Ultra Downy comes in several different sizes, each of which is a separate _____ _____ _____)
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Product item ; stock keeping unit (SKU)
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_______ _______: A group of products that are closely related because they are similar in terms of consumer needs and uses, market segments, sales outlets, or prices. Each product line has its own marketing strategy.
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Product line
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What is a product line?
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A group of products that are closely related because they are similar in terms of consumer needs and uses, market segments, sales outlets, or prices. Each product line has its own marketing strategy.
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______ _______: All the product lines offered by a company.
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Product mix
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What is a product mix?
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All the product lines offered by a company.
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What makes a product “new”?
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If a product is functionally different from existing products, it can be defined as new.
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_______ _________: consumers don’t need to learn new behaviors.
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Continuous innovation
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_______ _______ ________: Only minor changes in behavior are required.
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Dynamically continuous innovation
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_______ _______: involves making the consumer learn entirely new consumption patterns to use the product.
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Discontinuous innovation
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Marketing efforts for ______ _______ usually involve not only gaining initial consumer awareness but also educating consumers on both the benefits and proper use of the innovative product
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discontinuous innovations
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The FTC advises that the term new be limited to use with a product up to ____ months after it enters regular distribution.
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six
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Successful organizations view newness at what three levels?
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1. Product line extension (risk of cannibalization) 2. A significant jump in innovation or technology OR a brand extension involving putting an established brand name on a new product in an unfamiliar market. 3. A radical invention → Highest level of innovation
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New products need a precise protocol that identifies (3 things)
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(1) a well-defined target market, (2) specific customers’ needs, wants, and preferences, and (3) what the product will be and do to satisfy customers.
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-Marketing Reasons for New-Product Failures: 1) Insignificant _____ ___ ______ – The single most important factor for a new product to defeat competitive ones 2) No economical ______ to buyers 3) Incomplete _____ and product ______ before product development starts 4) Not satisfying customer ____ on critical factors 5) Bad ______ 6) Poor product ______ 7) Too little _______ _______ 8) Poor execution of the ______ _______
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points of difference ; access ; market ; protocol ; needs ; timing ; quality ; market attractiveness ; market mix (brand name, package, price, promotion, distribution)
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-Organizational Problems in New Product Failures 1. Not really listening to the “_____ ____ _____ ____” 2. Skipping ______ in the new-product process 3. Pushing a _____ ______ product into the market to generate quick revenue 4. Encountering “______” in task force and committee meetings 5. Not learning from critical takeaway lessons from _____ ______. 6. Avoiding the “_____ ______”
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voice of the consumer ; stages ; poorly conceived ; groupthink ; past failures ; NIH problem (“not invented here”)
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The stage of the new product process that defines the role for a new product in terms of the firm’s overall objectives
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New Product Strategy Development
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In the New Product Strategy Development stage, a firm uses both _____ _____ and _____ _____ to assess its strengths and weaknesses relative to the trends it identifies as opportunities or threats.
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SWOT analysis ; environmental scanning
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Why is the New Product Strategy Development stage often difficult in services?
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~Often difficult in services (such as buying a stock or airline ticket) because services are intangible and performance-oriented
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What does the idea generation stage of new product development involve?
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Involves developing a pool of concepts to serve as candidates for new products, building upon the previous stage’s results
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______ ________ is where an organization finds and executes new-product ideas by developing strategic relationships with outside individuals and organizations. This helps organizations overcome the _____ _______
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Open innovation ; NIH barriers
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What does the screening and evaluation stage of the new product process involve?
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Internally and externally evaluates new-product ideas to eliminate those that warrant no further effort
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What are the 2 aspects of the screening and evaluation stage of the new product process?
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internal and external evaluation
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_____ _______: A firm’s employees evaluate the technical feasibility of a proposed new-product idea to determine whether it means the objectives defined in the new-product strategy development stage.
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Internal approach
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______ _______ ______: The process of managing the entire customer experience within the organization.
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Customer experience management
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______ ______: Firms use concept tests, external evaluations with consumers that consist of preliminary testing of a new-product idea rather than an actual product
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External approach
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_____ ______ specifies the features of the product and the marketing strategy needed to bring it to market and make financial projections.
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Business Analysis
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What does business analysis do?
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specifies the features of the product and the marketing strategy needed to bring it to market and make financial projections.
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_____ _____ is the last checkpoint before significant resources are invested to create a ________
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Business analysis ; prototype
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This process requires not only detailed financial projections, but also assessments of the marketing and product synergies related to the co’s existing operations.
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Business analysis
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For services, business analysis involves using ______ _______ to find ways to match the availability of the service offering to when it is needed.
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capacity management
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_______ is the stage of the new-product process that turns the idea on paper into a prototype.
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Development
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______ _______ is a stage of the new-product process that involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy.
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Market testing
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What are the 3 main types of market testing?
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1. Standard 2. Controlled 3. Simulated
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_______ _____ ______ – a company develops a product and then attempts to sell it through normal distribution channels in a number of test-market cities.
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Standard market testing
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What is standard market testing?
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a company develops a product and then attempts to sell it through normal distribution channels in a number of test-market cities.
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______ _______ ______ – involves contracting the entire test program to an outside service.
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Controlled market testing
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______ ________ ________ – a technique that saves time and money, and that somewhat replicates a full-scale test market.
answer

Simulated market testing
question

Company might use a ______ ______ _____ because market tests are expensive and time consuming, and may alert competitors to a firm’s plans
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simulated test market
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Not all products can use ______ ______. For these products, reactions of potential buyers to mockups or one-of-a-kind prototypes are all that is feasible.
answer

test markets
question

________ is the stage of the new-product process that positions and launches a new product in full-scale production and sales.
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Commercialization
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This is the most expensive stage for most new products.
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Commercialization
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Burger King’s “improved French fries” are an example of what can go wrong at the _________ stage.
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commercialization
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Commercializing grocery products can require a _____ _____ and failure fee
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slotting fee
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______ _______: a new product idea rather than the actual product is presented to actual consumers, often in written form, to obtain their reactions.
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Concept testing
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Test marketing involves offering a product for sale on a _____ _____ in a ______ ______.
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limited basis ; defined area
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Introduction stage: When a product is introduced to its intended target market. During this period, sales grow _____, and profit is ______. Marketing objective of this stage is to create consumer _______ and stimulate ______. A lot of money is often spent in this stage on ______ & ______.
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slowly ; minimal ; awareness ; trial ; advertising and promotion
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GROWTH STAGE Characterized by rapid _____ in sales. _____ usually peaks during this stage. Advertising shifts emphasis to _____ demand. Changes appear to help ______ a company’s brand from competitors. Important to ______ ______ for the product in this stage. Smart phones and e-book readers are in this stage of the product life cycle.
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increases ; Profit ; selective ; differentiate ; broaden distribution
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MATURITY STAGE .Characterized by a _____ of total industry sales or product class revenue. _____ competitors begin to leave the market. Profit declines due to fierce ____ ____ and the cost of gaining new buyers at this stage rises. Marketing attention is directed towards holding _____ _____ through further product differentiation and finding new buyers. Still a major consideration in a company’s strategy in this stage is to control overall marketing cost by improving promotional and distribution ______.
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slowing ; Marginal ; price competition ; market share ; efficiency
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Carbonated soft drinks and DVD players are at this stage of their product life cycle today.
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Maturity
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As a rule, _______ products have shorter life cycles than ______ products
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consumer ; business
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The availability of ______ ______ vehicles informs consumers quickly and shortens life cycles.
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mass communication
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_____ ______ tends to shorten product life cycles as new-product innovation replaces existing products
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Technological change
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_____-_____ ______: one for which significant customer education is required and there is an extended introductory period.
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High-learning product
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_____-______ ______: Sales for these begin immediately because little learning is required by the consumer and the benefits are readily understood. Competitors can easily imitate this product, so the marketing strategy is to broaden distribution quickly. (Ex. Gillette’s fusion razor)
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Low-learning product
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_______ ________: A style of the times. Life cycles for these products frequently appear in women’s and men’s apparel.
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Fashion product
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_____: Experienced rapid sales on introduction and then an equally rapid decline. These products are typically novelties and have a short life cycle.
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Fad
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Common reasons for resisting a product in the intro stage are ______ barriers (the product is not compatible with existing habits), ______ barriers (the product provides no incentive to change), ____ barriers (physical, economic, or social), and ______ barriers (cultural differences or image).
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usage ; value ; risk ; psychological
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-5 categories of product adopters. 1) _______: Venturesome; highly educated; use multiple information sources 2) _____ ______: Leaders in social setting; slightly above average education 3) _____ _____: Deliberate; many informal social contacts 4) _____ _____: Skeptical; below-average social status 5) ______: Fear of debt; neighbors and friends are information sources
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Innovators ; Early adopters ; Early majority ; Late majority ; Laggards
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The ______ _______ style of marketing organization is used by consumer products or firms.
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product manager
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All ______ ______ are responsible for managing existing products through the stages of the life cycle.
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product managers
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Managers often supplement their data with what two measures?
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(1) a category development index (CDI) and (2) a brand development index (BDI). These indexes help to identify strong and weak market segments
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______ _______ involves altering one or more of a product’s characteristics such as its quality, performance, or appearance, to increase the product’s value
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Product modification
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With ______ _______ strategies, a company tries to find new customers, increase a product’s use among existing customers, or create new use situations.
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market modification
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What are 3 ways to modify the market?
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1. Finding New Customers 2. Increasing a Product’s Use 3. Creating a New Use Situation
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For example, produce companies have started marketing prunes as dried plums to attract younger buyers, and Harley-davidson has started marketing to women
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Finding New Customers (market modification)
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For example, Campbell has started advertising during the warm months too so that people don’t just think of soup as a cold-weather food.
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Increasing a Product’s Use (market modification)
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Finding new uses for an existing product has been the strategy behind Dockers, who not promoted different looks for different usage situations.
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Creating a New Use Situation (market modification)
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______ _______ changes the place a product occupies in a consumer’s mind relative to competitive products. This can be done by ….
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Product repositioning ; changing one or more of the 4 marketing mix elements.
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What 4 factors trigger the need for a repositioning action?
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1) Reacting to a Competitor’s Position 2) Reaching a new market 3) Catching a rising trend 4) Changing the value offered
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If a competitor’s entrenched position is adversely affecting sales and market share. (ex. New balance focuses on fit, durability and comfort rather than competing head-on with Nike and Adidas on fashion and pro sports, and networks with podiatrists, not sports celebrities)
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Reacting to a Competitor’s Position (1 of the 4 factors that triggers the need for a repositioning action)
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(ex. Iced tea did not do well when introduced into Britain, so they carbonated it and marketed it as a cold soft drink and sales improved)
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Reaching a new market (1 of the 4 factors that triggers the need for a repositioning action)
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_____ ____ involves adding value to the product (or line) through additional features of higher-quality materials; ______ ______ involves reducing the number of features, quality, or price These are aspects of …
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Trading up ; Trading down ; Changing the value offered (1 of the 4 factors that triggers the need for a repositioning action)
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_______: An organization’s use of a name, phrase, design, symbol, or combination of these to identify and distinguish its products.
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Branding
question

______ _____: Any word, device (design, shape, sound, or color), or combination of these used to distinguish a seller’s goods or services.
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Brand name
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______ ______: A set of human characteristics associated with a brand name.
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Brand Personality
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Brand name importance to a company has led to a concept called _____ ____.
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brand equity
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______ ______ : The added value a brand name gives to a product beyond the functional benefits provided.
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Brand equity
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What are the 2 advantages to brand equity?
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2 advantages: Provides competitive advantage and consumers are willing to pay a higher price for a product with brand equity
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Brand equity resides in the _______ of the consumers
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minds
question

What are the 4 steps for creating brand equity? 1) Develop positive ______ ______ 2) Establish a brand’s ______ in the minds of consumers. 3) Elicit the proper ______ ______ to a brand’s identity and meaning. 4) Create a _____-______ connection evident in an intense, active loyalty relationship between consumers and the brand.
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brand awareness ; meaning ; consumer responses ; consumer-brand
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Lucrative ______ ______ opportunities arise from brand equity. _______ _______ is a contractual agreement where one company allows its brand name to be used with products or services offered by another company for a royalty or fee.
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brand licensing ; brand licensing
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________ _________: A branding strategy in which a company uses one name for all its products in a product class. (ex. Microsoft, GE, Samsung, Sony, and Gerber – the company’s trade name and brand name are identical)
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Multiproduct branding
question

Multiproduct branding -Advantages: *Capitalizing on _____ _____, consumers who have a good experience with the product will transfer this favorable attitude to other items in the product class with the same name. *Makes ______ _____ ______ possible, and can result in lower ad and promotion costs because the same name is used on all products. A risk of extension is the possibility of cannibalization. *Allows for ______: which combines a corporate or family brand with a new brand (ex. Gatorade introduced Gatorade G2) *A strong brand equity allows for _____ _____: the practice of using current brand name to enter a different product class.
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brand equity ; product line extensions ; subbranding ; brand extension
question

________: A branding strategy that involved giving each product a distinct name (ex. Black & Decker uses the DeWalt name for its professional tool line)
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Multibranding
question

Compared with the multi product strategy, advertising and promotion costs tend to be higher with ___________.
answer

multibranding
question

_____ ______ Strategy -This is when a company manufactures products but sells them under the brand name of a wholesaler or retailer.
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Private Branding
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This is popular because it typically produces high profits for manufacturers and resellers.
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Private Branding
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1 of every __ items purchased at US supermarkets, drug stores, and mass merchandisers bears a private brand label.
answer

5
question

_____ ______ Strategy -Where a firm markets products under its own name(s) and that of a reseller because the segment attracted to the reseller is different from its own market.
answer

Mixed Branding
question

The ________ component of a product refers to any container in which it is offered for sale and on which label information is displayed.
answer

packaging
question

A _______ is an integral part of the package and typically identifies the product or brand, who made it, where and when it was made, how it is used, and package contents and ingredients
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label
question

Packaging and labeling account for about ___cents of ever dollar spend by consumers for products
answer

15
question

A major benefit of packaging is the _____ ____ on it conveyed to the consumer.
answer

label information
question

Packaging often plays a _______ role, such as storage, convenience, protection or product quality.
answer

functional
question

What are the 7 P’s of services marketing?
answer

Product, price, place, promotion, people, physical environment, process
question

_____: The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service.
answer

Price
question

Some sellers use “_____ _____” and “_______” because buyers are more willing to pay extra fees than a higher list price.
answer

special fees ; surcharges
question

What is the price equation?
answer

Price = List Price – Incentives and allowances + extra fees
question

From a consumers’ standpoint, price is often used to indicate value when it is compared with the ______ _______ such as quality, durability, etc.
answer

perceived benefits
question

______: The ratio of perceived benefits to price
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Value
question

What is the value equation?
answer

Value = Perceived benefits/Price
question

What is the profit equation?
answer

Profit = Total revenue – Total cost = (Unit price x Quantity sold) – (Fixed Cost + Variable Cost)
question

This type of pricing approach weighs factors underlying expected customer tastes and preferences more heavily than such factors as cost, profit, and competition when selecting a price level.
answer

Demand-oriented
question

A firm introducing a new or innovative product can use this type of pricing to set the highest initial price that customers really desiring the product are willing to pay. These customers are not very price sensitive.
answer

Skimming
question

This is an effective strategy when (1) enough prospective customers are willing to buy the product immediately at the high initial price to make these sales profitable, (2) the high initial price will not attract competitors, (3) lowering the price has only a minor effect on increasing the sales volume and reducing the unit costs, and (4) customers interpret the high price as a signal of high quality.
answer

Skimming
question

These 4 conditions are most likely to exist when the new product is protected by ______ or ______ or its uniqueness is understood and valued by customers.
answer

patents ; copyrights
question

Setting a low initial price on a product to appeal immediately to the mass market. This is the exact opposite of skimming pricing.
answer

Penetration pricing
question

The conditions favoring _______ are (1) many segments of the market are price sensitive, (2) a low initial price discourages competitors from entering the market, and (3) unit production and marketing costs fall dramatically as production volume increases
answer

penetration
question

A firm using _______ pricing may (1) maintain the initial price for a time to gain profit lost from its low introductory level or (2) lower the price further, counting on the new volume to generate the necessary profit.
answer

penetration
question

This involves setting a high pride so that quality- or status-conscious consumers will be attracted to the product and buy it
answer

Prestige Pricing
question

This involves setting prices a few dollars or cents under an even number
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Odd-Even Pricing
question

Manufacturers deliberately adjust the composition and features of a product to achieve the target price to consumers.
answer

Target Pricing
question

The marketing of two or more products in a single package price. Based on the idea that consumers value the package more than the individual items
answer

Bundle Pricing
question

The charging of different prices to maximize revenue for a set amount of capacity at any given time.
answer

Yield Management Pricing
question

With this type of demand-oriented pricing practice, a price setter stresses the cost side of the pricing problem, not the demand side. Price is set by looking at the production and marketing costs and then adding enough to cover direct expenses, overhead, and profit.
answer

Cost-oriented
question

This entails adding a fixed percentage to the cost of all items in a specific product class.
answer

Standard Markup Pricing
question

High-volume products usually have _____ markups than do low-volume products
answer

smaller
question

This involves summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price.
answer

Cost-Plus pricing
question

This is the most commonly used method to set prices for business products.
answer

Cost-Plus pricing
question

A price setter may choose to balance both revenues and costs to set price using profit-oriented approaches. These might either involve a target of a specific dollar volume of profit or express this target profit as a percentage of sales or investment.
answer

Profit-oriented
question

When a firm sets an annual target of a specific dollar volume of profit. This pricing method depends on an accurate estimate of demand.
answer

Target Profit Pricing
question

Generally, a _____ _____ pricing strategy is best for firms offering new or unique products, without a lot of competition.
answer

target profit
question

Used to set prices that will give them a profit that is a specified percentage of the sales volume.
answer

Target Return-on-Sales Pricing
question

This price method is often used because of the difficulty in establishing a benchmark of sales or investment to show how much of a firm’s effort is needed to achieve the target.
answer

Target Return-on-Sales Pricing
question

Used to set prices to achieve a ROI target such as a percentage that is mandated by its board of directors or regulators.
answer

Target Return-on-Investment Pricing
question

Rather than emphasize demand, cost, or profit factors, a price setter can stress what competitors or “the market” is doing.
answer

Competition-oriented
question

For some products where tradition, a standardized channel or distribution, or other competitive forces dictate the price, this is used.
answer

Customary Pricing
question

Using the “market price” benchmark for a product, marketing managers use this strategy.
answer

Above-, At-, or Below-Market Pricing
question

Companies use a “_____ ______” to assess whether their products and brands are above, at, or below the market.
answer

price premium
question

For a special promotion retail stores deliberately sell a product below its customary price to attract attention to it.
answer

Loss-Leader Pricing
question

The purpose of this is not to increase sales but to attract customers in hopes that they will buy other products as well, particularly the discretionary items with large markups.
answer

Loss-Leader Pricing
question

_____ _____ ____ ______: The percentage change in the quantity demanded relative to a percentage change in price.
answer

Price elasticity of demand
question

Price elasticity of demand =
answer

% change in Q demanded/% change in price
question

This measures how sensitive consumer demand and the firm’s revenues are to changes in the product’s price
answer

Price elasticity of demand
question

A product with ______ demand is one in which a slight decrease in price results in a relatively large increase in demand.
answer

elastic
question

A product with _______ demand means that slight increases or decreases in price will not significantly affect the demand. (products and services considered as necessities usually have this type demand)
answer

inelastic
question

_____ _____: This is the total money received from the sale of a product; the unit price of a product multiplied by the quantity sold.
answer

Total revenue
question

While _______ are the moneys received by the firm form selling its products or services to customers, ______ or ______ are the monies the firm pays out to its employees and suppliers.
answer

revenues ; costs ; expenses
question

_____ ______: The total expenses incurred by a firm in producing and marketing a product; the sum of the fixed costs and the variable costs.
answer

Total cost
question

____-______ _______: A technique that examines the relationship between total revenue and total cost to determine profitability at different levels of output.
answer

Break-even analysis
question

The _____-_____ ______ is the quantity at which total revenue and total cost are equal.
answer

break-even point
question

Break-Even Analysis ~Most frequently used to study the impact on _____ of changes in price, fixed cost, and variable cost.
answer

profit
question

While pricing ______ frequently reflect corporate goals, pricing ______ often relate to conditions existing in the market place
answer

objectives ; constraints
question

____ ____: Expectations that specify the role of price in an organization’s marketing and strategic plans
answer

Pricing objectives
question

___ ____ ___ ___: A company gives up immediate profit by developing quality products to penetrate competitive markets over the long term. Products are priced relatively low compared to their cost to develop, but the firm expects to make greater profits later because of its high market share.
answer

Managing for long-run profits
question

_____ _____ _____: Target profit is set for a quarter or year for instance, and performance can be measured quickly.
answer

Maximizing current profit
question

______ ______: A firm sets a profit goal (such as 20% for ROI), usually determined by its board of directors.
answer

Target return
question

The ratio of the firm’s sales revenues or unit sales to those of the industry. -This type of objective is often pursued when industry sales are relatively flat or declining.
answer

Market share Ex. Boeing cut prices dramatically in the 1990s to try to maintain 60% market share and encountered huge losses.
question

Many firms use _____ _____, the quantity produced or sold, as a pricing objective
answer

unit volume
question

Firms using this pricing objective often sell multiple products at very different prices and need to match unit volume demand by customers with price and production capacity.
answer

unit volume
question

This pricing objective helped keep Frontier alive
answer

Survival
question

A firm may forgo higher profit on sales and follow a pricing objective that recognizes its obligations to customers and to society in general. -Ex. Gerber supplying a special formula to lactose intolerant babies
answer

Social responsibility

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