PSU Marketing 301 Exam 2 (Winterich) – Flashcards
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Strategic Planning
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Internal: Organization's goals and capabilities Strategy: An "ongoing process" External: Marketing Opportunities
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Steps in Strategic Planning
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1. Define the company mission 2. Setting company objectives and goals 3. Design the business portfolio 4. Planning marketing and other functional strategies
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mission statement
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a statement of the organization's process ex. Nike: "To bring inspiration and innovation to athletes around the world
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business portfolio
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a combination of businesses that has the potential of reaching objectives (What businesses to enter/exit, how much to invest)
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Strategic Business Units (SBU's)
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different divisions, markets, product lines (businesses) that a company has ex. Proctor & Gamble owning 100's of brands
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BCG Growth- Share Matrix
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used for a company w/ many different product offerings Question Mark- Low market share, high market growth rate (good potential) Star- High market share, high market growth rate Cash Cow- High market share, low market growth rate Dog- Low market share, low market growth rate
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Market penetration
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company growth by increasing sales with current products in current markets
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Market development
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bringing current products to new markets
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Product development
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bringing new products to current markets
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Diversification
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company growth by creating new products in new markets
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SWOT analysis
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Strengths, Weaknesses, Opportunities, Threats
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Internal Positives
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Strengths
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Internal Negatives
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Weaknesses
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External Positives
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Opportunities
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External Negatives
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Threats
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Marketing Strategy (parts)
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Segmenting, Targeting, Positioning (STP)
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Steps in STP
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1. Strategy or objectives (segmentation) 2. Describe segments (segmentation) 3. Evaluate segment attractiveness (targeting) 4. Select target market (targeting) 5. Identify and develop positioning strategy (positioning)
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Market
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a group of consumers or potential customers
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4 requirements of a "Market"
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-must be a need -must be an ability to purchase the product -must be willing to use this purchasing product -must have the authority to make the purchase
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Segmentation
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the process of dividing a market into smaller, more manageable customer groups that share common characteristics
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Segments must be:
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-measurable -accessible: have to be able to reach through communication/distribution -differentiable: each segment should respond differently to our marketing efforts -substantial:large enough to be profitable -actionable: we must have the resources
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undifferentiated (mass) marketing
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firm ignores strategies altogether, and focus on positioning strategies to appeal to a large number of people ex. walmart
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differentiated (segmented) marketing
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targets several market segments and designs, separate positioning strategies for each ex. capital grille, olive garden, bahama breeze: all owned by same company trying to appeal to different segments
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concentrated (nich) marketing
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targets a large share of one or a few small segments or niches ex. coca- colas different products reaching different segments
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micro- marketing
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tailoring products and marketing programs to suit the tastes of specific locales and or individuals ex. customization, local marketing
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4 basic elements to segment consumers
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1. geographics 2. demographics 3. psychographics 4. behaviorgraphics
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geographic segmentation
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dividing market into geographic units
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demographic segmentation
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dividing a market based on demographic variables (gender, income, race, family size) ex. Gillete fusion (mens) vs. venus (womens)
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psychographic segmentation
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dividing a market based on personality, lifestyle, and social class ex. Hollister: California lifestyle Mountain Dew: extreme lifestyle
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behavioral segmentation
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based on behaviors such as: -usage occasion -benefits sought -user status (light users, medium users, heavy users) -usage rate -loyalty status
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Intermarket segmentation
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segments of consumers who have similar needs and buying behavior even though they are located in different countries ex. mercedes, coca-cola, ikea
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Evaluating market segments
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internal: does the segment fit with our objectives and resources external: how big is the segment? what is its growth potential? are there alot of substitutes? How much power do suppliers and customers hold?
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sales estimates
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-market potential -company sales potential
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competitive assessment (segments)
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who, how many, how large, how strong
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cost estimates
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-the expense of developing a marketing mix -costs of reaching segment relative to competitors costs
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targeting
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choosing the segment that is most attractive to your organization
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positioning
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the place the product occupies in the consumer's mind relative to competing products
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a good positioning strategy will incorporate at least one...
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competitive advantage
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competitive advantage
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differentiate your brand based on: -product (jersey mike's) -services (chick-fil-a) -channels (esurance) -people (southwest) -image (nike)
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what helps a company understand what their positioning should be?
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-market research -perceptual maps
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the product positioning map
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Quad 1: high price, high quality Quad 2: low price, high quality Quad 3: low price, low quality Quad 4: high price, low quality
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Why use perceptual maps?
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-see what people think of us -make decisions about how a product should be positioned -find out what the most important product attributes are -see who our competition is
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Integrated Marketing Campaign (IMC)
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a positioning strategy in which all 4 P's work together to give consumers a clear, defined definition of what a brand means, or to reinforce what consumers believe about a product
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3 levels of product (the product concept)
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1. core benefit 2. Actual product 3. augmented product
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core benefit
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benefit or service that the consumer seeks from the product
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Actual product
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product planners turn the core benefit into an actual product
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Augmented Product
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built around the core benefit and actual product by offering additional consumer services and benefits ex. warranty, instillation
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types of consumer products
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-convenience -shopping -speciality -unsought
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convenience product
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product bought easily and frequently Buying Behavior: frequent, little planning/ comparison Price: low Distribution: wide spread Promotion: mass promotion ex. laundry detergent, soap, milk
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Shopping product
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products not bought as frequently that consumers spend a little more time evaluating Buying Behavior: less frequent, more comparison, more effort Price: higher Distribution: Selective Promotion: advertising and personal selling ex. cell phones, clothing brands
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speciality product
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A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort Buying Behavior: special purchase, effort, low price sensitivity Price: high Distribution: exclusive Promotion: carefully targeted ex. luxury items, designer cars/clothes
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unsought product
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products people dont really care about or pay attention to Buying Behavior: low product awareness Price: varies Distribution: varies Promotion: aggressive advertising, personal selling ex. quick and loans, progressive
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Industrial products
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product bought by individuals and organizations for further processing or for use in conducting a business
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Organizations "other products"
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for profit and non profit schools, churches etc.
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People (persons) "other products"
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politicians, entertainers, pro athletes, doctors
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Places "other products"
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tourism, immigration
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3 levels of product decisions
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-individual -product line decisions -product mix decisions
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factors in the individual level
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-product attributes: quality, features, style, design -branding: a name, term, symbol, design or combination -packaging: un-boxing, transportation -Labeling:identifies the product/brand, adds personality to the brand -product support services: keeping the customer happy after the sale
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Product line length
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the number of items in a product line
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How is product line length adjusted?
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-stretching: upward- BMW making 9 series (expensive) downward- BMW making 1 series (cheaper) -filling: BMW making the x3 to go between the x1 and x5
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Product mix decisions
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all of the product lines and items that a particular seller offers
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Product mix dimensions
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-width: # of product lines -Length: # of items within product line -Depth: ex. different flavors of V8 juice -Consistency
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What is a brand?
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-a marker of identification for a product -a promise to the consumer -a representation of what perceptions and feelings consumers have toward a product offering
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Brand Equity
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the positive effect that knowing the brand has on customer response to the product; a financial evaluation of how much a brand is worth
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High brand equity provides...
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-consumer willingness to buy over competitors and/or willingness to pay a premium for the brand -basis for strong, profitable customer relationships -greater awareness and loyalty
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Brand Positioning
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based on product attributes, benefits, beliefs/values
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How do brands select their name?
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-easy to pronounce, recognize, remember -distinctive -translates into foreign language -suggests products benefits/qualities -extendable (not limited to one particular product) -capable of being registered and legally protected
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How do brands protect their names?
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-trademark - genericization voids trademarks legal protection
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National Brands vs. Store Brands
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coca-cola vs. great value cola
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co- branding
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2 companies coming together also know as co-partnership ex. go- pro and redbull "stratus", bonne belle and dr.pepper making dr. pepper flavored lip balm
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licensing
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entering foreign markets through developing an agreement with a licensee in the foreign market ex. star wars: toys with the stars wars name are made by hasbro
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line extension
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introduction of additional items within the current product category under the same brand name ex. coke zero, budlight lime, Iphone 5c
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Cannibilization
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a risk associated with line extension in which people begin buying the line extension (coke zero) more than the normal product (coke)
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Brand Extension
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use a successful brand name to launch a product in a new category ex. clorox extending the brand from bleach to dish detergent
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Multibranding
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multiple brands by the same company in the same product category ex. pepsico owns pepsi, sierra mist, mug, etc.
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New Brands
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used when existing brand names are either unsuitable for brand extension or the company doesn't want to dilute them ex. toyota creating lexus as their luxury brand
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4 service characteristics
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-intangibility -variability -inseparability -perishability
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intangibility
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services cannot be seen, tasted, felt, heard, or smelled before purchase
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variability
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quality of services depends on who provides them and when, where, and how
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inseparability
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services cannot be separated from their providers
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perishability
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services cannot be stored for later sale or use
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internal marketing
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between company and employees
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interactive marketing
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between employees and customers
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external marketing
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between company and customers
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Why do we want new products?
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New products are crucial for the health of the enterprise
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NPD
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New Product Development
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NPD Process
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-Idea Generating -Idea Screening -Concept development/testing -marketing strategy development -Business Analysis -Product Development -Test Marketing -Commercialization
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Idea Generation
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the systematic search for new products -Internal sources: company employees at all levels -External sources: customers, competitors, distributers, suppliers, outsourcing partners
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Idea Screening
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screening process to reduce # of ideas by spotting good ones and dropping poor ones
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Concept development/testing
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-development: where the product is described in a way so that the consumer can begin to understand it -testing: using things like focus groups to test the product
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Marketing Strategy/development
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initial marketing strategy 1. Target market/objectives 2. launch tactics: making the product available on a large scale 3. long term objectives
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Business Analysis
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does the idea make business sense? -review of sales, costs, and profit projections to see if it matches objectives -Assess risk -If results are positive move on
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Product Development
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Develop physical/actual product -investment increases considerably
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Test marketing
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release product to limited geographic area to test sales
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What percent of products fail?
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90%
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What percent of products are truly successful?
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less than 2%
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commercialization
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"launch"; must decide where and when to initially introduce the product -must develop a roll out plan
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Customer Centered NPD
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focus on finding ways to solve customer problems and create more customer satisfying experiences
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Team-based NPD
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cross-functional teams work through overlapping steps to save time and increase effectiveness
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Introduction stage
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-product is first launched -costs are high and sales are usually slow -profits are usually negative
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What is the objective of the introduction stage?
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create product awareness and get consumers to try the product
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Growth stage
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-if the product gains traction, sales start growing rapidly -higher unit sales lead to lower avg. costs per unit, letting profitability be achieved
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What is the objective of the growth stage?
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maximize market shares, build customer loyalty
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Maturity stage
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-sales level off -many people already have the product ; some are re-buying or upgrading -costs are low, so with a high market share can still make good profits
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What is the objective of the maturity stage?
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defending our market share through gradually reducing the price
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How do you grow during the maturity stage?
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-modify the market: target new segments or increase usage among current customers -modify the product: deliver an improved product to get new or repeat customers -modify the rest of the marketing mix: add services, cut prices, change distribution, change promotion
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decline stage
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-sales fall as people don't need the product anymore -unit sales and prices fall, hard to remain profitable despite low production costs -some niche products may do well
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What is the objective of the decline stage?
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reduce cost as much as possible to stay profitable
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Product Life cycle (PLC) model
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Introduction stage--> Growth stage--> maturity stage-->decline stage
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What is the problem with the PLC model?
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reality is never as clean as it makes it out to be
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Consistency
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How closely related product lines are
