Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/48

Click to flip

48 Cards in this Set

  • Front
  • Back
List the 2 steps of market segmentation
1. Identify segmentation variables and segment the market

2. Develop profiles of resulting segments
List the 2 steps of Market Targeting
1. Evaluate attractiveness of each segment

2. Select the target segments
List the 2 steps of Market Positioning
1. Identify possible positioning concepts for each target segment

2. Select, develop and communicate the chosen positioning concept
What is market segmentation?

Why is it necessary?
1. It is the process of dividing the total market for a good or service into several smaller, internally homogenous groups.

2. It is needed because customers in a market have:
a. Differences in buying habits
b. Differences in the way the good or service is used
c. Different motives for buying
What does market segmentation allow managers to do?

When should it be used?
1. It allows them to:
a. Visualize their prospective customers in designing a marketing mix. (who you are and are not going to target.)

b. Concentrate their resources on only one or a few market segments

You should always segment the market!
Describe the segmentation process:
1. Identify current and potential needs/ wants within a market.
- Involves knowledge of consumer behavior and marketing research

2. Identify distinguishing characteristics among segments.
- How are those with a particular want distinguished from others?

3. Determine the potential for the segments and how well they are being satisfied.
- Forecast demand and estimate potential market share
List the types of market segmentation and describe them.
Demographic: age, gender, income, education, occupation, family type and marital status

Geographic: Nation, region, climate

Psychographic: Attitudes, lifestyles

Purchase behavior:
a. Usage - light, medium or heavy users
b. loyalty status - brand loyal or variety seekers
c. User status - users vs. nonusers, former users

Benefit: importance of a particular product benefit
List a few guidelines to segmenting the market.
1. Buying behavior of a segment is rarely traceable to a single characteristic.

2. The first segmentation characteristic chosen should be the one that provides the clearest and most distinctive division of the market.

3. The marketer should be aware of the interrelationships among segmentation characteristics.

4. There are no rules for the number and range of categories used for most characteristics.
List the target marketing approaches
1. Mass marketing
- one product for all customers

2. Niche marketing
- One product for one segment

3. Differentiated marketing
- Multiple products for multiple segments

4. Individualized Marketing
- Customizing product/ service for individual
Describe categories in Competitive based positioning
Categories:
- Hierarchial order of categories
- Lowest to highest

Category Membership:
- Statement of membership important
- For new products
- To show that brand belongs
Points of difference
You must show how your brand is superior to others.

- Benefits selected
- Strongest positions where brand has point of difference on main benefit.
- Small brands find niches

- Stress one benefit in promotion
- Correlational inferences
Goal positioning
- Brand essence
- Abstracted benefits that relate to consumer goal
- Laddering up
- Personality dimensions
- Laddering down
- Show reason to believe a benefit in order to enhance competitive based positioning.
Estimating future demand
- Market factor analysis
- Survey of buyer's intentions
- Past sales analysis
- Composite of sales force option
- Expert opinion
- Market test method
Market demand methods
- Market factor analysis
- Demand for a product is assumed to be related to the behavior of certain sales activity.

- Survey of buyer intentions
- A sample of current or potential customers are asked how much of a particular product they would buy at a given price during a specified future time period.

- Past sales and trend analysis
- A flat percentage increase is applied to the volume achieved last year or to the average volume of the past few years

- Sales force composite
- A bottom up method consisting of collecting estimates of sales for the future of period from all salespeople

- Executive judgement
- Obtaining opinions regarding future sales volume from one or more executives

- Test marketing
- A firm markets its product in a limited geographic area, measures sales, and then projects the company's sales over a larger area
Market research includes:
- Syndicated research services
- Marketing information systems
- Marketing intelligence systems
- Or decision support systems
- Non Recurring research projects
What does a marketing information system consist of?
People, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely and accurate information to marketing decision makers
What is a marketing intelligence system?
A set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment
Databases come in many forms:
- Las vegas casinos electronically monitor the slot machine usage of slot club members.

- Product registration information

- People who mail in coupons

- American express can trace every purchase made with its cards since 1991 to individual card holders.
List the marketing research process:
1. Defining the problem and research objectives

2. Developing the research plan

3. Collect the information

4. Analyze the information

5. Present the findings
Non recurring MR process using primary data
Exploratory research - shed light on problem - suggest solutions or new ideas

Descriptive research - Ascertain magnitudes

Casual research - Test cause and effect relationships. Test hypothesis about cause and effect relationships.
Research approaches - Primary data
Data you collect yourself

Observational
Focus group
Survey
Behavioral
Experimental
Secondary data sources
Internal sources
Government publications
Periodicals and books
Commercial data
Online
- Associations
- Business information
Good marketing research
Is scientific
Is creative
uses multiple methods
Realizes the interdependence of models and data
Maintains healthy skepticism
Is ethical
Estimating current demand
Total market potential
Area market potential
Industry sales
Market share
- Individual product sales/ industry sales
- Expressed in $ or units
Demand forecasting
Sales forecast
- Based on a specific marketing plan
- Expressed in $ and units
- Prepared after market potential and sales potential have been estimated
- Typically covers a one year period
Sales and Profit Life cycles =
Aggregate demand / Time
Product life cycle and diffusion
- Introduction (first stage)
- Innovation/ New product offered
- New product class
- Sales/ profits are low
- Marketing effort-
- Stimulate demand for product type
- Target innovators (risk takers who buy new products first)
Life cycle stage - growth
- Sales/ Profits grow
- Competition expands
- Marketing effort
- Differentiate product
- Stimulate demand for brand
- Target early adopters
Life cycle stage - Maturity
- Sales plateau/ product is familiar
- Competition intense
- New product class competitors
- Marketing effort:
- Differentiation continues
- Promotion increases while price declines
- Try to remove risk/ skepticism or new uses for new segments
Life cycle stage - Decline
- Sales/ Profits decline
- Competition
- Increases outside product class
- Decreases within product class
- Marketing effort:
- Find new uses
- Target laggards
- Low budget/ costs
Adopter categories
Innovators = 2.5%
Early adopters = 13.5%
Early majority = 34%
Late majority = 34%
Laggards = 16%
Innovators description
2.5% of population
Venturesome
Very eager to try new ideas
Acceptable if risk is large
More cosmopolite social relationships
Communicates with other innovators
Early adopters description
13.5% of pop
Respected
More integrated into the local social system
The persons to check with before adopting a new idea
Category contains greatest number of opinion leaders
Are role models
Early Majority description
34% of pop
Deliberate
Adopt new ideas just prior to the average time
Seldom hold leadership positions
Deliberate for some time before adopting
Late majority description
34% of pop
Skeptical
Adopt new ideas just after the average time
Adopting may be both an economic necessity and a reaction to peer pressure
Innovations approached cautiously
Laggards descroption
16% of pop
Traditional
The last people to adopt an innovation
Most "localite" in outlook
Oriented to the past
Suspicious of the new
Stages of the adaption process
1. Awareness: Consumer is first exposed to product
2. Intertest: Consumer is interested in the product and searches for additional information
3. Evaluation: Consumer decides whether or not to believe that this product will satisfy their needs
4. Trial: Consumer uses the product on a limited basis.
5. Adoption (rejection): If trial is favorable, they adopt it. If not, they reject.
What is a new product?
New to the world products:
- Polaroid camera, inline skates, kevlar

New category entries:
- HP PCs, Hallmark gifts, discover card

Additions to product lines:
- Line extensions or flankers

Product improvements:
- frozen yogurt, miller lite, windows 98

Repositioning:
- Arm and Hammer baking soda
The basic new product phases
1. Opportunity Identification/ selection
2. Concept generation
3. Concept/ project evaluation
4. Development
5. Launch
Why does a firm need a new products strategy?
- To chart the group's/team's direction
- To set the group's goals and objectives
- To tell the group how it will play the game
What is the product innovation charter? (PIC)
- It is the new product team's strategy
- It is for products/ services (not processes)
- It is for innovation (think of the definition of new product)
- It is a charter
Contents of a PIC
1. Background: Key ideas from situation analysis
2. Focus: A clear technology dimension that match and have good potential
3. Goals/ objectives: what the project will accomplish
4. Guidelines: Rules, requirements, time/quality/ cost, etc
Technology drivers:
1. Materials
2. Processes
3. People
4. Facilities
5. Other
Market drivers
- Customer group or resellers
- End users
- End use
- Others
Nine methods for new product success
1. Take something out of your product
2. Put something in product
3. Answer to consumer gripes
4. Visible difference
5. Make the task easier
6. Use products in new way
7. Product substitutability
8. Don't be literal, be creative
9. Look overseas
Planned Obselesence
A strategy intended to make an existing product out of date and thus to increase the market for replacement products.
Technological Obselesence
A form of planned Obselesence in which significant technogical improvements result in a more effective product
Style/ Fashion Obselesence
Form of planned obsolescence in which superficial characteristics of a product are altered so that the new model is easily differentiated from the old one and people become dissatisfied with the old one