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65 Cards in this Set
- Front
- Back
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What are the 5 steps in segmenting and targeting markets?
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1) group potential buyers into segments :Variables: demographic, geographic, psychgraphic and behavioral
2)Group products to be sold into categories ex: meals at wendy's 3)Develop a Market-Prod Grid and estimate the size of market. A market prod grid is a framework to relate mkt segments of buyers into products offered 4) Select Target Markets: Market Size and growth rate, cost of reaching segment, competition position 5) Take mktg actions to rach tgt markets |
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What are the 4 types of segmentation variables?
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Demographic - gender, age, income, religion, race, family life cycle
Geographic - nation, region, city state, zip code , "geomarketing Psychographic - personality, VALS values and lifestyeles Behavioral - product features ex mini fridges & usage rates |
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What are the 3 criteria for target market selection?
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1) market size and growth rate - worth it?
2) cost of reaching segment - don't waste $ 3) competitive position - less competition more attractive mkt |
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4 stages in product life cycle
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1) intro - high costs and low or no profit, build customer awareness
2) growth - reduced costs, profit increases, more product versions, focuses on differentiation 3) maturity - high competition, sales reach peak level, profit declines 4) decline - sales and profit drop, competition lessens, harvesting, deleting product |
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What are the 4 reasons for new product failure?
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1 - insignificant point of difference
2 - incomplete market and product definition before development starts 3 - poor execution of mktg mix 4 - bad timing |
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What are the 5 types of adopters in a product diffusion cycle?
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Innovators - venturesome, higher educated, use multiple info sources
Early Adoptors - leaders in social setting Early Majority - many informal social contacts Late MAjority - below social status Laggards - neighbors and friends are info sources |
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What are the 4 product planning options?
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Market penetration - existing product, existing segments
Product Development - New Product, Existing segments Market Development - Existing product, new segments Diversification - new product, new segments |
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What are the 4 criteria for selecting good brand name?
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1 - describe product benefits
2 - be memorable, distinctive and postivie 3 - fit the company or product image 4 - have no legal restrictions |
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What are the 3 cost and profit oriented approaches to setting a price?
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Standard Markup - retailers
Cost-Plus - unique prod Target ROI - price is determined by adding desired Roi to total costs |
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What are the 6 steps in setting price?
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1 - identify pricing objs and constraints
2 - estimate demand and revenue 3 - determine cost, volume and profit relationships 4 - select an approximate price level 5 - set the list or quoted price 6- make special adjustments to the list price |
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Market segmentation
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involves aggregating prospective buyers into groups or segments that 1) have common needs and 2) will respond similarly to a market action
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Benefit vs Cost analysis
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Used to segment markets. When expenses of segmentation and targeting are greater than the potentially increased sales from segmentation, a firm should not segment. Don't think about # of people, think about profit margin
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Prizm Ne
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classifies every household in the US into 66 categories
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VALS
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Innovators
Thinkers, Achievers, Experiencers Believers Strivers and makers Survivors |
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Cluster analysis
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a method to group potential customers into homogenous groups that are large enough to be profitably cultivated. Multiple variables are used to identify natural groupings of customers Ex : income, personality, buying habits
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3 Target marketing strategies
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Undifferentiated - multiple markets, 1 marketing approach
Differentiated - multiple markets, different marketing approach for each mkt segment Concentrated - single market , one merketing approach |
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Product Postitioning
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refers to the place an offering occupies in consumers minds or imporatnt attributes relative to competitive products
HEad to head and differentiation positioning |
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Head to Head positioning
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competing directly w/ competitors on siilar product attributes in the same target market
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Differentiation Positioning
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Seeking a less competitive, smaller market niche in which to locate brand
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Perceptual Map
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means of displaying or graphing in 2 dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing procuts or brands relative to its own and then taking marketing actions
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Product positioning using perceptual maps
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1- identification of important attributes for a product
2 - judgements of existing products or brands with respect to these attribues 3 - ratings of an "ideal" products or a brands attributes |
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New Product Development
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from the consumers persepctive, new products have low to high degree of customer learning need. Continuous innovation ( not that different), dnamically continuous innovation, and discontinuous innovation ( extremely different)
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Product Planning options
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Look at segments from the perspective of company not consumer
Market penetration Product Development MArket Development Diversification |
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7 stages of new product development
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1) new product strategy development - identify markets and strategic roles new products might serve
2)idea generation - potential sources for new product ideas 3) screening and evaluation - identify the new prod idea w/ the most potential to succeed 4) Business analysis - profit projections - estimating the number of units expected to be sold and the costs of r and d, production and marketing. marketing strategy review - evaluate whether new products will help or hurt sales of existing products and whether it can be sold thru existing outlets or new outlets will be needed 5) product development - producing a finished product or protoype in a labe and perform lab and consumer tests - learn from failure 6 - market testing - small geo area with char similar to total martket - goal is to eval and adjeust the strategy 7 - commercialization - firm commits to introducing product into marketplace |
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Six Sigma
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a means to "delight the customer" by achieving quality thru a highly diciplined process to focus on developing and delivering near perfect products and services : the philosophy of product development
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core product
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the physical item
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Branded product
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core prod plus the characteristics that allow customers to differentiate it fro similar products
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Augmented product
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has characters (services) that enhance value beyond that of the core and brand products
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limitations of the product life cycle
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length - it is difficult to predict the exact time a product takes to move thru its life cycle
Shape of prod life cycle - not al products go thru lifecycle in the same way. |
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Brand
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identify one sellers good as distinct from other sellers
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Trademark
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legal term for brand
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multiproduct branding strategy or family branding
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company uses one name for all its products in a product class
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Multibranding
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gives each product a disttinct name - each brand is intended for a different market segment
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private branding strategy
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manufactures products but sells thm under the brand name of a wholesaler or retailer
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mixed branding
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a firm markets products under its own name and that of a resleler because the segment attracted to the reseller is differnt from its own market
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value
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perceived benefits / price
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elastic
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more price sensitive. reduce prices in increase revenue
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inelastic
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why bother. increase prices to increase total revenue. necessity products
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unique demand curve
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prestige products have a unique demand curee- they need to find the point where price is neither too high or too low
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price elasticity of demand
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a measure of consumers price sensitivity
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break even analysis
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a technique that analyzes the relationship between total rev and total cost to determine profitability at various levels of output
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wht are the 4 approaches for selecting an approximate price level?
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1-demand oriented (skimming, penetration, odd-even)
2 - cost oriented (standard markup, cost plus, experience curve) 3 - profit oriented - target ROI 4 - competition oreinted - customary, loss leader |
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customary pricing
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setting a price that is dictatted bytrdition, a standardized channel of distance or other competitive factors
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loss leader pricing
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involves deliberately selling a product below customary price not to increase sales but to attract customers attention in hopes they will buy other products as well
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bundle pricing
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several products are sold together at a single price
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yield mgmt pricing
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the charging of difference prices for different time periods in order to mazimize revs for a set amount of capacity at a given time ex: airline
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skimming
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high initial price, they interpret ^ price as ^ qual
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pentration pricing
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low initial price - many segments of the mkt price sensitive, expect intense competition
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dynamic pricing
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setting different prices for products and servies depending on individual buyers and purchase situations
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discounts
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quntity, seasonal, trade
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allowances
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trade in allowances promotional allowances
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horizontal price fixing
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customers don't have bargain power
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vertical price fixing or resale price maintenance
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manufacturer can not require dealers to charge price
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price discrimination
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charging different prices to different buyers for goods of like grade and quality. reduce competition and create monopoly
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deceptive pricing
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you can only claim an item on sale if sold at originial price before
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predatory
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low price to driving out of business then raising price
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Marketing channels of distribution
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the combination of individual and firms involved in the process of making a prod or service available for use or consumption by consumers or industrial users
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transactional functions
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buying, selling, risk taking
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logistical functions
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assorting, storing, sorting, transporting
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facilitating functions
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financing, grading, marketing information / research
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disinermediation
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a channel conflict that arises when a channel member bypasses another member and eslls or bus products direct
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Vertical marketing systems
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manage channels of distribution. channels in which members are more dependent on one another and develop long term relationships in order to imporve efficiency and effectiveness
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administered systems
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coordination is achieved thru size and influence of 1 channel member vs ownershi
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contractual systems
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relationships government by contracts to perform specific functions
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corportate systems
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single owndership of 2 or more levesl of a channel
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