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33 Cards in this Set
- Front
- Back
What Is The Marketing Mix?
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The choices the firm offers to its targeted market
Product attributes Distribution strategy Communication strategy Pricing strategy |
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What Is Market Segmentation?
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identifying distinct groups of consumers whose purchasing behavior differs from others in important ways
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Markets can be segmented by
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geography
demography socio-cultural factors psychological factors |
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Two key market segmentation issues
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The differences between countries in the structure of market segments
The existence of segments that transcend national borders when segments transcend national borders, a global strategy is possible |
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How Do Product Attributes Influence Marketing Strategy?
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A product is like a bundle of attributes
Products sell well when their attributes match consumer needs |
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consumer needs depend on
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Culture
Level of economic development Product and technical standards |
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Distribution strategy
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the means the firm chooses for delivering the product to the consumer
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How a product is delivered depends on the firm’s market entry strategy
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firms that manufacturer the product locally can sell directly to the consumer, to the retailer, or to the wholesaler
firms that manufacture outside the country have the same options plus the option of selling to an import agent |
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There are four main differences in distribution systems
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Retail concentration
Channel length Channel exclusivity Channel quality |
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Retail concentration
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concentrated or fragmented
in a concentrated retail system, a few retailers supply most of the market – common in developed countries in a fragmented retail system there are many retailers, no one of which has a major share of the market – common in developing countries |
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Channel length
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the number of intermediaries between the producer and the consumer
short channel - when the producer sells directly to the consumer – common with concentrated systems long channel - when the producer sells through an import agent, a wholesaler, and a retailer – common with fragmented retail systems |
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Channel exclusivity
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how difficult it is for outsiders to access
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Channel quality
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the expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products of international businesses
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Which Distribution Strategy Should A Firm Choose?
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The optimal strategy depends on the relative costs and benefits of each alternative
When price is important, a shorter channel is better each intermediary in a channel adds its own markup to the products When the retail sector is very fragmented, a long channel can be beneficial economizes on selling costs can offer access to exclusive channels |
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Why Is Communication Strategy Important?
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Communicating product attributes to prospective customers is a critical element in the marketing mix
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What Are The Barriers to International Communication?
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Cultural barriers
Source and country of origin effects Noise levels |
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Cultural barriers
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it can be difficult to communicate messages across cultures
a message that means one thing in one country may mean something quite different in another |
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Source and country of origin effects
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Source effects occur when the receiver of the message evaluates the message on the basis of status or image of the sender
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Noise levels
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the amount of other messages competing for a potential consumer’s attention
in highly developed countries, noise is very high in developing countries, noise levels tend to be lower |
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Firms have to choose between two types of communication strategies
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Push strategy - emphasizes personnel selling
Pull strategy - emphasizes mass media advertising |
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Which Is Better – Push Versus Pull?
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The choice between strategies depends on product type and consumer sophistication
a pull strategy works well for firms in consumer goods selling to a large market segment a pull strategy works better with longer distribution channels Media availability a pull strategy relies on access to advertising media a push strategy works well for industrial products Channel length a push strategy may be better when media is not easily available |
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What Is The Optimal Mix?
In general, a push strategy is better |
for industrial products and/or complex new products
when distribution channels are short when few print or electronic media are available |
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A pull strategy is better for..
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consumer goods products
when distribution channels are long when sufficient print and electronic media are available to carry the marketing message |
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Should A Firm Use Standardized Advertising?
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makes sense when it has significant economic advantages
creative talent is scarce and one large effort to develop a campaign will be more successful than numerous smaller efforts |
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In regard to pricing strategy firms need to consider 3 key points..
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Price discrimination
Strategic pricing Regulations that affect pricing decisions |
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Price discrimination
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occurs when firms charge consumers in different countries different prices for the same product
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For price discrimination to work
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must be able to keep national markets separate
countries must have different price elasticities of demand - measure of the responsiveness of demand for a product to changes in price demand is elastic when a small change in price produces a large change in demand demand is inelastic when a large change in price produces only a small change in demand Typically, price elasticities are greater in countries with lower income levels and larger numbers of competitors |
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Strategic pricing has three aspects
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Predatory pricing
Multi-point pricing Experience curve pricing |
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Predatory pricing
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use profit gained in one market to support aggressive pricing designed to drive competitors out in another market
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Multi-point pricing
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a firm’s pricing strategy in one market may have an impact on a rival’s pricing strategy in another market
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Experience curve pricing
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price low worldwide in an attempt to build global sales volume as rapidly as possible, even if this means taking large losses initially
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A firm’s ability to set its own prices may be limited by
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Antidumping regulations –
Competition policy – regulations designed to promote competition and restrict monopoly practices |
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Where Should R&D Be Located?
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New product ideas come from the interactions of scientific research, demand conditions, and competitive conditions
The rate of new product development is greater in countries where more money is spent on basic and applied research and development demand is strong consumers are affluent competition is intense |