question

Aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action

answer

Market Segmentation (Chapter 9)

question

To help a business respond more effectively to the wants of groups of potential buyers and thus increase sales and profits

answer

Purpose of market segmentation (Chapter 9)

question

Using different marketing mix activities (eg. product features and advertising) to help consumers perceive the product as being different and better than competing products

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Product differentiation (Chapter 9)

question

A framework to relate the market segments of potential buyers to products offered or potential marketing actions

answer

Market-product grid (Chapter 9)

question

Firm produces one product/service and sells it to multiple market segments by using different promotional campaigns or distribution channels

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One Product and Multiple Market Segments (Chapter 9)

question

More expensive, but very effective if it meets customers' needs better, doesn't reduce quality or increase price, and adds to sales revenues and products

answer

Multiple Products and Multiple Market Segments (Chapter 9)

question

manufacturing a product only when there is an order placed by a customer

answer

Build-to-order (Chapter 9)

question

Increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently

answer

Organizational Synergy (Chapter 9)

question

When new products or new chains simply steal customers and sales from the older, existing ones

answer

Cannibalization (Chapter 9)

question

1. Group potential buyers into segments 2. Group products to be sold into categories 3. Develop a market-product grid an estimate size of markets 4. Select target markets 5. Take marketing actions to reach target markets

answer

5 Steps in Segmentation Process (Chapter 9)

question

- Simplicity and cost-effectiveness of assigning potential buyers to segments - Potential for increased profit - Similarity of needs of potential buyers within a segment - Difference of needs of potential buyers within a segment - Potential of a marketing action to reach a segment

answer

Criteria to use in forming segments (5) (Chapter 9)

question

Based on where prospective customers live or work Eg. region, city size, density (urban, rural, suburban, etc)

answer

Geographic Segmentation - definition and example variables (Chapter 9)

question

Based on some objective physical, measurable, or other classification attribute of prospective customers Eg. Gender, race, age, income, birth era, occupation, life stage, household size, marital status, education

answer

Demographic Segmentation - definition and example variables (Chapter 9)

question

Based on some subjective mental or emotional attributes, aspirations, or needs of prospective customers Eg. Personality, lifestyle, values, needs

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Psychographic Segmentation - definition and example variables (Chapter 9)

question

Based on some observable actions or attitudes by prospective buyers Eg. Where they buy, what benefits they seek, how frequently they buy, why they buy, product features

answer

Behavioral Segmentation - definition and example variables (Chapter 9)

question

80% of a firm's sales are obtained from 20% of its customers

answer

80/20 Rule (Chapter 9)

question

-Market size -Expected growth -Competitive position -Cost of reaching the segment -Compatibility with the organization's objectives and resources

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Criteria to use in selecting target markets/segments (5) (Chapter 9)

question

Focus mainly on single target segment that is biggest and highlight only the products they'd need to worry about developing

answer

Marketing Synergies (Chapter 9)

question

Simplify production, focus on product wanted by most customer segments

answer

Product Synergies (Chapter 9)

question

The place a product occupies in consumers' minds on important attributes relative to competitive products

answer

Product Positioning (Chapter 9)

question

Competing directly with competitors on similar product attributes in the same target market

answer

Head-to-head positioning (Chapter 9)

question

Seeking a less competitive, smaller market niche in which to locate a brand

answer

Differentiation positioning (Chapter 9)

question

Used both internally within marketing department and for others outside like R&D engineers or ad agencies to focus marketing strategy

answer

Positioning Statement (Chapter 9)

question

A means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers

answer

Perceptual map (Chapter 9)

question

Products purchased by ultimate consumers - Convenience products - items purchased frequently, conveniently, with minimal effort - Shopping products - consumer compares several alternatives based on price, quality, style - Specialty products - items consumer makes special efforts to find and buy - Unsought products - items the consumer doesn't know about or doesn't initially want

answer

Consumer products - definition and types (4) (Chapter 10)

question

Products organizations buy that assist in providing other products or resale - Components - items that become part of the final product - support products - used to assist in producing the other goods and services

answer

Business products - definition and types (2) (Chapter 10)

question

Product item = specific product with unique brand, size or price Product line = group of products or services closely related bc they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through same outlets, or fall within given price range Product mix = all product lines offered by an organization

answer

Product Item vs. Product Line vs. Product mix (Chapter 10)

question

If a product is functionally different from existing products

answer

Newness compared to existing products (Chapter 10)

question

The way it affects consumption - Continuous innovation - don't need to learn new behavior, eg. toothpaste that whitens teeth - Dynamically continuous innovation - minor changes in behavior required - Discontinuous innovation - making consumer learn entirely new consumption patterns to use the product

answer

Newness from consumer's perspective (Chapter 10)

question

Up to 6 months after a product enters regular distribution

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Newness in legal terms (Chapter 10)

question

- Product line extension - incremental improvement of existing product line - Significant jump in innovation or technology or brand extension involving putting established brand name on a new product in an unfamiliar market - Radical invention

answer

Newness from organization's perspective (3 levels) (Chapter 10)

question

A statement that, before product development begins, identifies: 1. A well defined target market 2. specific customers' needs, wants and preferences 3. What the product will be and do to satisfy consumers

answer

Protocol (Chapter 10)

question

1. Insignificant points of difference 2. No economical access to buyers 3. Incomplete market and product protocol 4. Not satisfying customer needs on critical factors 5. Bad timing 6. Poor product quality 7. Too little market attractiveness 8. Poor execution of the marketing mix - brand name, package, price, promotion, distribution

answer

Marketing Reasons for new product failures (8) (Chapter 10)

question

1. Not really listening to the voice of the consumer 2. Skipping stages in the new product process 3. Pushing a poorly conceived product into the market to generate quick revenue 4. Encountering "groupthink" in task force and committee meetings 5. Not learning critical takeaway lessons from past failures 6. Avoiding the "NIH problem"

answer

Organizational Problems in new product failures (6) (Chapter 10)

question

Defines the role for a new product in terms of the firm's overall objectives - SWOT analysis and environmental scanning

answer

Stage 1: New-product strategy development (Chapter 10)

question

Developing a pool of concepts to serve as candidates for the new products Sources: Employee/coworker suggestions, customer/supplier suggestions, R&D labs, competitive products, smaller firms, universities, individual inventors

answer

Stage 2: Idea Generation - definition + sources (Chapter 10)

question

Generating insights leading to actions based on massive numbers of people's ideas

answer

Crowdsourcing (p. 255) (Chapter 10)

question

Internally and externally evaluating new product ideas to eliminate those that warrant no further effort

answer

Stage 3: Screening and evaluation (Chapter 10)

question

Specifying the features of a product and the marketing strategy needed to bring it to market and make financial projections

answer

Stage 4: Business analysis (Chapter 10)

question

Turning the idea on paper into a prototype

answer

Stage 5: Development (Chapter 10)

question

Exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy - Standard test markets - develop product and try to sell it through normal distribution channels in several test-market cities - Controlled test markets - contract entire test program to outside service - Simulated test markets - replicate full scale test market to limited degree, often run in shopping malls, saves time and money

answer

Stage 6: Market Testing - definition and 3 types (Chapter 10)

question

Positioning and launching new product in full-scale production and sales - Regional rollout is one method

answer

Stage 7: Commercialization (Chapter 10)

question

1. Slotting fee - payment made by manufacturer to place new item on retailer's shelf 2. Failure fee - penalty payment made by manufacturer to compensate retailer for devoting valuable shelf space to a product that failed to sell

answer

Key risks in commercializing grocery products (2) (Chapter 10)

question

The stages a new product goes through in the marketplace: introduction, growth, maturity, decline

answer

Product Life Cycle - Definition and 4 Stages (Chapter 11)

question

Sales grow slowly, profit is minimal, goal = create consumer awareness and stimulate trial of product; spend heavily on advertising and promotion, stimulate primary demand

answer

What happens at Intro stage? (Chapter 11)

question

Primary demand is the desire for the product class rather than for a specific brand; Selective demand is the preference for a specific brand

answer

Primary Demand vs. Selective demand (Chapter 11)

question

Skimming strategy = high initial price to help company recover from high production cost and capitalize on price insensitivity of early buyers; Penetration pricing = low initial price to discourage competitive entry and build unit volume

answer

Skimming strategy vs. Penetration pricing (Chapter 11)

question

Rapid increase in sales, profit peaks; competitors appear, stimulate selective demand; goal = gain market share, repeat purchasers

answer

What does Growth Stage look like? (Chapter 11)

question

Slowing of total industry sales/product class revenue; competitors start to leave market, profit declines; key goal is holding market share thru product differentiation

answer

What does Maturity Stage look like? (Chapter 11)

question

Sales drop, often occurs due to environmental changes, not bc of poor strategies Options: 1. Deletion - drop product from company's product line 2. Harvesting - retain product but reduce marketing costs, only offer product to maintain ability to meet consumer requests

answer

What does Decline stage look like? What options do companies have at this point? (Chapter 11)

question

1. Length of product life cycle - shorter for consumer products, and can be shortened by technological change 2. Shape of product life cycle - depends on whether product is high-learning, low-learning, fashion product, or fad 3. Product level - class (entire product category/industry) and form (variations within product class) 4. Consumers: Innovators -> Early adapters -> Early majority -> Late majority -> laggards

answer

4 Key aspects of product life cycle (Chapter 11)

question

1. High-learning product - requires significant customer education -> extended introductory period 2. Low-learning product - sales begin immediately, normal lifecycle curve 3. Fashion product - Introduced, decline, and then return; cycles could last very long 4. Fad - rapid sales in introduction and then rapid decline

answer

4 Types of products resulting in differently shaped lifecycle curves (Chapter 11)

question

- Usage barrier (product is incompatible with existing habits) - Value barrier (product provides no incentive to change) - Risk barriers - Psychological barriers (cultural differences or image)

answer

Barriers for resisting a product in introduction stage (Chapter 11)

question

Manages the marketing efforts for existing products through all stages of the product life cycle, including data analysis

answer

Product/brand manager (Chapter 11)

question

CDI = percent of a product CATEGORY's total US sales in a market segment (DIVIDED BY) Percent of total US population in a market segment BDI = percent of BRAND's total US sales in a market segment (DIVIDED BY) Percent of total US population in a market segment

answer

Category Development Index (CDI) vs. Brand Development Index (BDI)

question

Altering one or more of a product's characteristics such as quality, performance, or appearance, to increase the product's value to customers and increase sales

answer

Product modification (Chapter 11)

question

When a company tries to find new customers, increase a product's use among existing customers, or create new use situations

answer

Market Modification (Chapter 11)

question

Changes the place a product occupies in a consumer's mind relative to competitive products

answer

Product repositioning (Chapter 11)

question

Trading up = adding value to product by adding features or higher-quality materials; Trading down = reducing number of features, quality, or price

answer

Trading up vs. Trading down (Chapter 11)

question

Organization uses a name, phrase, design, symbols to identify its products and distinguish them from competitor products

answer

Branding (Chapter 11)

question

Identifies that a firm has legally registered its brand name so it has its exclusive use

answer

Trademark (Chapter 11)

question

A set of human characteristics associated with a brand name; consumers assign personality traits to products, choose brands that are consistent with their own or desired self-image

answer

Brand Personality (Chapter 11)

question

The added value a brand name gives to a product beyond the functional benefits provided, including competitive advantage, consumer willingness to pay higher prices, and actual market value in terms of buying and selling a brand

answer

Brand Equity (Chapter 11)

question

1. Should suggest the product benefits 2. Should be memorable, distinctive and positive 3. Should fit the company or product image 4. Should have no legal or regulatory restrictions 5. Should be simple and emotional

answer

Choosing a good brand name (5 key criteria) (Chapter 11)

question

When a company uses one name for all its products in a product class - Subbranding - combines a overall brand with new brand to distinguish part of product line from others, eg. Gatorade G2 - Brand Extension - using a current brand name to enter a different product class, eg. Honda extended its established name to lawn mowers, snowblowers, snowmobiles, etc. - Co-branding - pairing 2 brand names on single product, eg. Hershey partnered with General Mills to offer Reese's Peanut Butter Puffs cereal

answer

Multiproduct branding strategy - definition and variations (3) (Chapter 11)

question

Multibranding - giving each product a distinct name - Price-quality segments, eg. Marriott EDITION hotels vs. Marriott and Renaissance vs. Courtyard Mariott and Fairfield Inn - Fighting brands - brands with chief purpose being to combat competitor brands, eg. Frito-Lay brought in Santitas tortilla chips to combat regional tortilla chips taking away sales from Doritos and Tostitos

answer

Multibranding Strategy - definition and variations (Chapter 11)

question

When a firm manufactures productsbut sells them under brand name of a wholesaler or retailer

answer

Private Branding strategy (Chapter 11)

question

When a firm markets products under its own name and that of a reseller because the segment attracted to reseller is different from its own market

answer

Mixed Branding Strategy (Chapter 11)

question

Customer's first exposure to a product is package and label, creates first impression

answer

Importance of Packaging and Labeling (Chapter 11)

question

Label information conveyed to consumer, eg. directions on how/where/when to use product, source/composition of product (legally required)

answer

Communication benefits of packaging (Chapter 11)

question

Storage, convenience, protection, product quality

answer

Functional benefits of packaging (Chapter 11)

question

Perception created in consumer's mind - label shape, color, and graphics distinguish one brand from another, convey brand's positioning, and build brand equity and brand recognition

answer

Perceptual benefits of packaging (Chapter 11)

question

Warranty = statement indicating liability of manufacturer for product deficiencies - Express warranties - written statements of liabilities - Limited-coverage warranty - specifically states bounds of coverage and areas of noncoverage - Full warranty - has no limits on coverage - Implied warranty - assigns responsibility for product deficiencies to manufacturer

answer

Warranty - definition and different types (4) (Chapter 11)

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