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154 Cards in this Set
- Front
- Back
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What are the components of a Country Market Assessment? |
1. Economic analysis using metrics 2. Infrastructure and technology 3. Sociocultural analysis 4. Government actions |
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Trade Deficit |
Country imports more goods than it exports |
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Trade Surplus |
Country exports more goods than it imports |
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Gross Domestic Product (GDP) |
Defined as the market value of the goods and services produced by a country in a year |
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Gross National Income (GNI) |
Consists of GDP plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy) |
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Purchasing Power Parity (PPP) |
A theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other, if expressed in the same currency |
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Infrastructure |
The basic facilities, services, and installations needed for a community or society to function, such as transportation and communications systems, water and power lines, and public institutions such as schools, post offices, and prisons. |
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Tariff |
Also called a duty, is a tax levied on a good imported into a country. |
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Quota |
Designates minimum or maximum quantity of a product that may be brought into a country during a specified time period |
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Exchange Control |
Refers to the regulation of a country's currency exchange rate |
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Exchange Rate |
The measure of how much one currency is worth in relation to another |
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Trade Agreement |
Interngovernmental agreement designed to manage and promote trade activities for a specific region |
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Trading Bloc |
Consists of those countries that have signed the particular trade agreement |
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What are Hofstede's cultural dimensions? |
1. Power Distance 2. Uncertainty Avoidance 3. Individualism 4. Masculinity 5. Time Orientation 6. Time Indulgence |
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What are the strengths of Brazil? |
7th largest economy -economic growth aided by large, literate population and impositions of social programs that made middle class larger |
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What are the strengths of Russia? |
>Strong demand for U.S. products and brands >Russian internet users are increasing quickly >Europe's largest market >Negotiating to enter WTO to improve trade relations |
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What are the strengths of India? |
>One of the world's fastest-growing markets >Has one of the youngest populations in the world >Well-educated, modern generation largely fluent in English >Potential to significantly modernize retail landscape |
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What are the strengths of China? |
>Second largest economy >Third-largest market for U.S. export |
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What are the weaknesses of the BRIC countries? |
>Aging population and low birthrates (Russia, China) >Lack of modern supply chain management facilities and systems (India) >Unequal economic distribution and low-paying, part-time jobs (China) |
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Exporting |
Producing goods in one country and selling them in another |
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Franchising |
Contractual agreement between a firm (franchisor) and another firm or individual (franchisee) |
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Strategic Alliance |
Collaborative relationship between independent firms, though partnering firms do not create an equity partnership (they don't invest in each other) |
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Joint Venture |
Formed when a firm entering a market pools its resources with those of a local firm >ownership, control, and profits are shared |
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Direct Investment |
Requires firm to maintain 100% ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly-owned subsidiaries. |
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How does Global STP differ from Domestic STP? |
1. Cultural Nuances 2. Subcultures within Country 3. Products may be viewed differently from country to country |
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What are the three potential global product strategies? |
Selling...of home country to host country 1. Same products or services2. Same products or services with minor adaptions 3. Totally new products or services |
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Reverse Innovation |
Companies initially develop products for niche or underdeveloped markets and then expand them into their original or home markets |
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Glocalization |
Some firms standardize their products globally but use different promotional campaigns to sell them |
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What is the major challenge in developing a global communication strategy? |
Identifying the elements that need to be adapted to be effective in the global marketplace |
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What are the steps in the STP Process? |
1. Establish strategy or objectives 2. Use segmentation methods 3. Evaluate segment attractiveness 4. Select target market 5. Identify and develop positioning strategy |
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Geographic Segmentation |
Organizes customers into groups on the basis of where they live |
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Demographic Segmentation |
Groups consumers according to easily measured, objective characteristics such as age, gender, income, and education |
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Psychographics |
Delves into how consumers actually describe themselves |
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Self-Values |
Goals for life; overriding desires that drive how a person lives their life |
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Self-Concept |
Self-Image; image people generally have of themselves |
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Lifestyles |
Third component of people's psychographic makeup; the way we live |
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Value and Lifestyle Survey (VALS) |
>Most widely used tool to support psychographic segmentation >Classified into 8 segments >Identify target segments and their underlying motivations >Correlation b/t psychology and lifestyle choices |
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Benefit Segmentation |
Groups consumers on the basis of the benefits they derive from products or services |
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Behavioral Segmentation |
Divides customers into groups on the basis of how they use the product or service |
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Occasion Segmentation |
Behavior segmentation based on when a product or service is purchased or consumed |
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Loyalty Segmentation |
Investing in retention and loyalty initiatives to retain their most profitable customers |
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Geodemographic Segmentation |
Uses a combination of geographic, demographic, and lifestyle characteristics to classify consumers |
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What are the five criteria of segment attractiveness? |
1. Identifiable 2. Substantial 3. Reachable 4. Responsive 5. Profitable |
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Undifferentiated Targeting Strategy |
>Used when everyone might be considered a potential user >Focuses on the similarities in needs of the customers as opposed to the differences >Little need to develop separate strategies for different groups |
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Differentiated Targeting Strategy |
>Target several market segments with a different offering for each >Likely more costly for firm |
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Concentrated Targeting Strategy |
Organization selects single, primary target market and focuses all its energies on providing a product to fit that market's needs >Entrepreneurial start-up ventures often benefit from this; allows more efficient employment of limited resources |
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Micromarketing |
A.K.A. One-To-One Marketing >When firm tailors product or service to suit an individual customer's wants or needs |
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Market Positioning |
Involves a process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products |
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Value Proposition |
Communicates the customer benefits to be received from a product or service and thereby provides reasons for wanting to purchase it |
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Space 1 |
Customer needs are effectively met by the benefits that the firm provides but not by the benefits provided by competitors >No overlap between competitors |
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Space 2 |
Customer needs are unmet >represents important marketing opportunity in that the firm could create new products or augment existing services to satisfy these needs better |
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Space 3 |
Customers express little need or desire for benefits >Educate customers of importance and benefits >Reengineer approach to stop providing unwanted benefits, which may lead to saving money |
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Space 4 |
Customer needs are met by firm and competitors >Each firm works competitively with different features |
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Space 5 |
Customer needs are met by only competitors, not firm >Should monitor developments carefully and match some benefits if possible |
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Space 6 |
Customer needs are somehow not meeting with firm and competitor's benefits >Expending significant efforts to educate customers of benefits also benefits competitors; therefore is lower on priority list |
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Space 7 |
Some competitor benefits are either undesired or unnecessary among customers >Competitor could inves money to educate customers about importance and benefits = moving to Space 5 |
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What are the main value proposition components? |
1. Target Market 2. Offering Name or Brand 3. Product/Service Category or Concept 4. Unique Point of Difference/Benefits |
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Value |
Popular positioning method because relationship of price to quality is among the most important considerations for consumers when they make a purchase decision |
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Perceptual Map |
Displays position of products or brands in consumer's mind |
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Ideal Points |
Where a particular market segment's ideal product would lie on a perceptual map |
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Product |
Anything of value |
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Core Customer Value |
The basic problem-solving benefits that consumers are seeking |
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Actual Product |
Attributes such as brand name, features/design, quality level, and packaging
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Associated Service |
A.K.A. Augmented Product Nonphysical aspects of products (i.e. product warranties, financing, product support, after-sale service) |
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Consumer Products |
Products and services used by people for their personal use |
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Specialty Products/Services |
Those for which customers express such strong preference that they will expend considerable effort to search for the best suppliers |
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Shopping Products/Services |
Products or services for which consumers will spend a fair amount of time comparing alternatives |
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Convenience Products/Services |
Products or services that consumer is not willing to expend any effort to evaluate prior to purchase |
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Unsought Products/Services |
Products or services that consumers either do not normally think of buying or do not know about >requires a lot of marketing effort and various forms of promotion |
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Product Mix |
The complete set of all products and services offered by a firm |
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Product Lines |
Groups of associated items that consumers tend to use together or think of as part of a group of similar products or services |
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Breadth
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Count of the number of product lines offered |
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Depth |
Count of the number products within a product line |
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What are the differences in reason for increasing depth versus breadth? |
Depth: address changing consumer preferences or to preempt competitors while boosting sales Breadth: capture new or evolving markets and increase sales |
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What are the values of Branding? |
1. Facilitates purchases 2. Establishes loyalty 3. Protects from competition and price competition 4. Is an asset 5. Affects market value |
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Brand Equity |
Set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service |
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What are the Four Aspects of a Brand? |
1. Brand Awareness 2. Perceived Value 3. Brand Associations 4. Brand Loyalty |
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Brand Awareness |
Measures how many consumers in a market are familiar with the brand and what it stands for and have an opinion about it |
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Perceived Value |
Relationship between product's or service's benefits and its costs |
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Brand Associations |
Reflect mental and emotional links that consumers make between brand and its key product attributes, such as logo, color, slogan, or famous personality |
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Brand Loyalty |
Occurs when consumer buys same brand's product or services repeatedly over time rather than buying from multiple suppliers within the same category |
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Manufacturer Brands |
A.K.A. National Brands Owned and managed by manufacturer |
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Retailer/Store Brands |
A.K.A Private-Label Brands Developed by retailers |
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What is the difference between family brand and individual brand?
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Family: when all products are sold under one brand >individual brands benefit from overall brand awareness associated with family name Individual: names for each products >may keep individual identities not readily seen as being under family brand's umbrella |
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Brand Extension |
Refers to the use of the same brand name in a different product line |
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Line Extension |
The use of the same brand name within the same product line and represents an increase in a product line's depth |
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What are some advantages to brand extension? |
1. Firm can spend less in developing consumer brand awareness and brand associations for new products, because brand name is already well established 2. If original brand or brand extension has strong consumer acceptance, the perception will carry over other products 3. When brand extensions are used for complementary products, a synergy exists between the two products that can increase overall sales |
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Brand Dilution |
Occurs when brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold |
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Co-Branding |
The practice of marketing two or more brands together on the same package, promotion, or store |
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What is the benefit of Co-Branding? |
Can enhance consumers' perceptions of product quality by signaling unobservable product quality through links between the firm's brand and a well-known quality brand |
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What is the risk of Co-Branding? |
The customers of each of the brands are too different Failure can also be due to disputes or conflicts of interest between the co-brands |
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Brand Licensing |
A contractual agreement between firms whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee |
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Brand Repositioning |
A.K.A. Rebranding Strategy in which marketers change brand's focus to target new markets or realign brand's core emphasis with changing market preferences |
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Primary Packaging |
The packaging the consumer uses |
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Secondary Packaging |
The packaging that contains the primary package |
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Innovation |
The process by which ideas are transformed into new offerings, including products, services, processes, and branding concepts that will help firms grow |
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Market Saturation |
The longer a product exists in the market place, the more likely it is that the market will become saturated. The value of the firm will ultimately decline without new products or services |
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Diffusion of Innovation |
The process by which the use of an innovation spreads through a market group, over time, and across various categories of adopters |
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Pioneers |
A.K.A. Breakthroughs New products that establish a completely new market or radically change both the rules of competition and consumer preferences in market. First Movers: The first to create market or product category |
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What are the benefits of being First Movers? |
>become readily recognizable to consumers and thus establish a commanding and early market share lead >can command greater market share over a longer time period than later entrants can |
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What are the risks of being First Movers? |
>Imitators can capitalize on the weaknesses of pioneers and subsequently gain advantage in the market >Imitators can spend less marketing effort on creating demand than pioneering products and brands >First product often has a less sophisticated design and may be priced relatively higher, leaving room for better and lower-priced competitive products |
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Innovators |
Buyers who want to be the first on the block to have the new product or service >enjoy taking risk and are regarded as highly knowledgeable |
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Early Adopters |
Wait and purchase product after careful review |
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Early Majority |
Represents approximately 34% of population Few new products and services can be profitable until this large group buys them. If group isn't large enough, product or service usually fails |
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Late Majority |
34% of population Enters when product has achieved its full market potential At this point, sales tend to level off or may be in decline |
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Laggards |
16% of population Like to avoid change and rely on traditional products until they are no longer available In some cases, laggards may never adopt a certain product or service |
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Diffusion of Innovation Theory |
Can predict which types of customers will buy their new products or service immediately after its introduction as well as later as the product is more and more accepted by the market |
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What are the criteria of Diffusion of Innovation Theory? |
1. Relative Advantage
2. Compatibility 3. Observability 4. Complexity and Trialability |
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Relative Advantage |
If product or service is perceived to be better than substitutes, then diffusion will be relatively quick |
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Compatibility |
Diffusion process may be faster or slower, depending on various consumer features, including international cultural differences |
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Observability |
When products are easily observed, their benefits or uses are easily communicated to others, which enhances the diffusion process. |
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Complexity and Trialability |
Products that are relatively less complex are also relatively easy to try. These products will generally diffuse more quickly and lead to greater/faster adoption than those that are not so easy to try |
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What does Idea Generation include? |
Internal Research and Development R&D Consortia Licensing Brainstorming Outsourcing Competitors' Products Customer Input |
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Reverse Engineering |
Involves taking apart a product, analyzing it, and creating an improved product that does not infringe on the competitor's patents, if any exists. |
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Concepts |
Brief written descriptions of the product; its technology, working principles, and forms; and what customer needs it would satisfy Might include visual images of what the product would look like |
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Concept Testing |
The process in which a concept statement is presented to potential buyers or users to obtain their reactions |
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Product Development |
A.K.A. Product Design Process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and features or a service's features |
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Prototype |
The first physical form or service description of a new product, still in the rough or tentative form. |
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What is the difference between prototypes and new products? |
Prototypes have the same properties as a new product but is produced through different manufacturing processes - sometimes even crafted individually |
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Alpha Testing |
The firm attempts to determine whether the product will perform according to its design and whether it satisfies the need for which it was intended |
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Beta Testing |
Uses potential customers, who examine the product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use |
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Premarket Tests |
Nielsen BASES: Potential customers are exposed to the marketing mix variables, such as advertising, then surveyed and given a sample of the product to try Surveyed later about whether they would buy/use the product again |
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Test Marketing |
Introduces the offering to a limited geographical area (usually a few cities) prior to a national launch. More accurate than Premarket Tests but more expensive and time-consuming |
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Trade Promotions |
Promotions to wholesalers or retailers to get them to purchase the new products, often combine introductory price promotions, special events, and personal selling. |
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Introductory Price Promotions |
Limited-duration, lower-than-normal prices designed to provide retailers with an incentive to try the products |
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Trade Show |
Temporary concentration of manufacturers that provides retailers the opportunity to view what is available and new in the marketplace |
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Manufacturer's Suggested Retail Price (MSRP) |
Manufacturers often encourage retailers to sell at this specified price |
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Slotting Allowance |
A fee paid simply to get new products into stores or to gain more or better shelf space for their products |
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Product Life Cycle |
Defines the stages that products move through as they enter, get established in, and ultimately leave the marketplace Offers marketers starting point for strategy planning |
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What are the stages of the Product Life Cycle? |
1. Introduction Stage
2. Growth Stage 3. Maturity Stage 4. Decline Stage |
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Introduction Stage |
When product category first launches |
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Growth Stage |
Product gains acceptance, demand, and sales increase, and more competitors emerge in the product category |
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Maturity Stage |
Industry sales reach peak, so firms try to rejuvenate their products by adding new features or repositioning them |
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Decline Stage |
If firm fails to achieve new life for product, it goes to decline and eventually exits out the market |
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Service |
Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed |
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Customer Service |
Specifically refers to human or mechanical activities firms undertake to help satisfy their customer's needs and wants Good customer service = added value to product |
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Intangible |
Cannot be touched, tasted, or seen |
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Inseparable |
Service and consumption must come together |
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Heterogeneity |
Variability in the service's quality The more humans needed to provide service, the more likely there is a difference in quality |
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Perishable |
Cannot be stored for future uses |
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Knowledge Gap |
The difference between what customers expect and what firms perceive of the customers' expectations
Firms should understand what customers expect and should have good communication between managers and employees |
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Standards Gap |
The difference between what the firm perceives of customers' expectations and the service standards it sets Should train employees to meet and exceed standards and measuring service performances |
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Delivery Gap |
The difference between the firm's service standards and the actual service it provides to customers Can be reduced by encouraging employees to spontaneously act on the problems |
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Communications Gap |
The difference between the actual service provided to customers and the service that the firm's promotion program promises Can be reduced by promising only what can be offered |
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Service Quality |
Customers' perceptions of how well a service meets or exceeds their expectations Often difficult to evaluate |
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Voice-Of-Customer (VOC) Program |
Collects customer inputs and integrates them into managerial decisions |
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Zone of Tolerance |
The area between customers' expectations regarding their desired service and the minimum level of acceptable service |
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Empowerment |
Allowing employees to make decisions about how service is provided to customers |
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Emotional Support |
Should be provided to service providers by demonstrating a concern for their well-being and standing behind their decisions |
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Instrumental Support |
The systems and equipment to deliver the service properly |
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Service Quality and Customer Satisfaction leads to _____. |
Loyalty |
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What is crucial during Service Recovery? |
Listening to the customers and involving them in the process |
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Distributive Fairness |
Pertains to a customer's perception of the benefits he or she received compared with the costs (inconvenience or loss) Deals with compensation |
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Procedural Fairness |
Perceived fairness of the process used to solve them
Customers will believe they've been treated fairly if service providers follow specific company guidelines |
