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130 Cards in this Set
- Front
- Back
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Target Market
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*a specific group of customers on whom an organization focuses its marketing efforts
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Market Research
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*the systematic design, collection, interpretation, and reporting of information to help marketers solves specific marketing problems or take advantage of marketing opportunities
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Marketing Mix
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*Choices about product attributes, distribution strategy, communication strategy, and pricing strategy that a firm offers its targeted markets
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Benefits of Marketing Research
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-Helps firm stay in touch with customers’ changing attitudes and purchase patterns
-Aids in the development of marketing mixes that match the needs of customers -Assists in better understanding of market opportunities -Determine the feasibility of a particular marketing strategy -Improves marketer’s ability to make decisions |
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The Five Steps of the Marketing Research Process
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1. Locating and defining issues or problems
2. Designing the research project 3. Collecting data 4. Interpreting research findings 5. Reporting research findings |
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Explanatory Research
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*research conducted to gather more information about a problem or to make a tentative hypothesis more specific
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Conclusive Research
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*research designed to verify insights through objective procedures and to help marketers in making decisions
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Descriptive Research
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*research conducted to clarify the characteristics of certain phenomena to solve a particular problem
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Experimental Research
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*research that allows marketers to make causal inferences about relationships
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Types of Research
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-Explanatory Research
-Conclusive Research -Descriptive Research -Experimental Research |
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Reliability
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*a condition existing when a research technique produces almost identical results in repeated trials
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Validity
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*a condition exiting when a research method measures what it is supposed to measure
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1. Locating and Defining Issues or Problems
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*Focusing on uncovering the nature and boundaries of a situation or question related to marketing strategy or implementation
-Departures from normal or expected marketing results -Biases in marketing information that distort its meaning -Evidence of possible or potential market opportunities |
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Research Design
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*an overall plan for obtaining the information needed to address a research problem or issue
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Hypothesis
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*an informed guess or assumption about a certain problem or set of circumstances
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2. Designing the research project
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*Research Design
-Hypothesis -Accepted as conclusions for the research effort |
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Primary Data
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*data observed and recorded or collected directly from respondents
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Population
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*all the elements, units, or individuals of interest to researchers for specific study
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Sample
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*a limited number of units chosen to represent the characteristics of a total population
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Types of Sampling
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-Probability
-Random -Stratified -Non-probability -Quota |
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Probability
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*each element has an known chance for study
-KNOWN |
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Random
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*each element has an equal chance for study
-EQUAL |
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Stratified
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*study population divided into like groups
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Non-probability
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*element’s likelihood of study is unknown
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Quota
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*population is grouped and elements are arbitrarily chosen
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Survey Methods
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-Mail Survey
-Telephone Survey -Online Survey -Personal Interview Survey |
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Types of Personal Interview Survey's
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-In-home (door-to-door) interview
-Focus-group interview -Customer advisory boards -Telephone depth interview -Shopping mall intercept interviews |
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Mail Survey
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*Method of administering a survey that involves mailing questionnaires to participants
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Telephone Survey
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*A research method for collecting information by interviewing people over the telephone
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Online Survey
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*Survey conducted on the Internet, typically by having participants fill out a Web-based questionnaire
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Personal Interview Survey
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*Method of administering a questionnaire that involves face-to-face interaction with the participant
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In-home (door-to-door) interview
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*survey where the interviews are conducted in pre-selected areas involving knocking on the doors of homes to find qualified respondents
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Focus-group interview
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*A research method that brings together a small group of consumers to discuss the product or advertising, under the guidance of a trained interviewer
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Customer advisory boards
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*is a representative group of customers that meets periodically to offer advice on the product and company direction
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Secondary Data
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*data complied both inside and outside the organization for some purpose other than the current investigation
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Internal Sources of Secondary Data
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-Sales data, which may be broken down by geographic area, product type, or even type of customer
-Accounting information, such as costs, prices, and profits, by product category -Competitive information gather by the sales force |
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External Sources of Secondary Data
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-Government Sources
-Trade Associations and Shows -Magazines, Newspapers, Video, Audio News Programming -Corporate Information |
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Government Sources
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examples- economic census, STAT-USA, National Technical Information Services
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Trade Associations and Shows
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examples- American Society of Association Executives, Directory of Associations, Tradeshow Week
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Magazines, Newspapers, Video, Audio News Programming
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examples- Blinkx, FindArticles.com, Google Video Search, Yahoo! Video Search
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Corporate Information
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example- Annual Report Service, Hoover’s Online, PR Newswire-press releases
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Observation Methods for Data Collection
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-Direct contact with subject is avoided to reduce possible awareness of observation process.
-Physical conditions, subject actions and demographics are noted -Observations may be combined with same subject interviews -Data gathered may be influenced by observer bias |
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4. Interpreting Research Findings
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*Statistical Interpretation
-Analysis of survey data to determine what is typical or what deviates from the average that indicates: --How widely the responses vary --How the responses are distributed --Which hypotheses are supported --Which hypotheses are rejected --Whether construction errors have invalidated the survey’s results |
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5. Reporting Research Findings
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-Take an objective look at survey findings
--Report faults and reasons for faults -Prepare a formal, written document --Summary and recommendations ---Short, clear and simply expressed for executives --Technical Report ---Contains more detailed information about research methods and procedures and important data gathered |
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Requirements of a Market
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-Must need or desire a particular product
-Must have the ability to purchase the product -Must be willing to use their buying power to purchase the product -Must have the authority to buy the product |
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Target Market Selection Process
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1. Identify the appropriate targeting strategy
2. Determine which segmentation variables to use 3. Develop market segment profiles 4. Evaluate relevant market segments 5. Select specific target markets |
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Types of Markets
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-Consumer Markets
-Business Markets |
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Consumer Markets
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-Purchasers and individuals in households
-Purchases are for personal consumption, not profit |
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Business Markets
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-Individuals and groups that purchase products for resale, direct use to produce other products, or use in daily business operations
-Purchasers can be categorized as producers, resellers, government, and institutional markets |
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Undifferentiated Target Strategy
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*defining an entire (homogeneous) market for a particular product as the target market
-Designing a single marketing mix for, and directing it at the total market |
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Concentrated Target Strategy
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*segmenting (dividing) the total market into groups with similar products needs (heterogeneous markets) to design marketing mixes that match those needs
-Focusing on a single market segment using one marketing mix |
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Differentiated Target Strategy
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*targeting two or more segments by developing a marketing mix for each
-Aiming marketing mixes at more people may yield a competitive advantage |
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Segmentation Variables
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*characteristics of individuals, groups, or organizations used to divide a market into segments
-Demographic Variables -Geographic Variables -Geo-demographic Segmentation -Micromarketing |
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Geo-demographic Segmentation
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*marketing segmentation that clusters people in zip code areas and smaller neighborhood units based on lifestyle and demographic information
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Demographic Variables
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*population characteristics- such as age, gender, race, ethnicity, income, education-that influence purchasing behavior
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Geographic Variables
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*customer product needs are influenced by climate, terrain, city, size, population density, and urban/rural areas
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Market Density
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*the number of potential customers within a unit of land area
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Micromarketing
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*an approach to market segmentation in which organizations focus precise marketing efforts on very small geographic markets
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Psychographic Variables
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-Personality Characteristics
-Motives -Lifestyles |
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Personality Characteristics
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*marketers appeal to positive/ favorable personal characteristics to influence the purchase decision
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Motives
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*Marketers use individuals’ differing purchase motives to segment a product market
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Lifestyles
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*Marketers segment markets according to how individuals choose to spend their time in various activities, their income, their interest and opinions, and their education
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Variables for Segmenting Business Markets
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-Geographic Location
--Location affects the level of product demand -Type of Organization --Variations in firms’ characteristics leads to segmentation by type -Customer Size --Larger customers strongly influence how they are treated in the marketplace -Product Use --Firms use basic inputs in ways different from one another |
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Market Segment Profile
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*describes the similarities among potential customers within a segment
-Covers demographic characteristics, geographic factors, benefits sought, lifestyles, brand preferences, and usage rates |
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Evaluate Relevant Market Segments: Market and Sales Potential
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-Sales Estimates
--Market potential --Company sales potential -Measuring Sales Potential --Breakdown approach: top-down analysis --Build-Up approach: bottom-up analysis -Competitive Assessment --Who, how many, how large, and how strong? -Cost Estimates --The expense of developing a marketing mix --Costs of reaching segment relative to competitors cost |
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Benefit Segmentation
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*the division of a market according to benefits that customers want from the product
-Individuals purchase and use products that provide them with benefits that meet their needs |
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Effective segmentation by behavior requires
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-Benefits sought must be identifiable
-Market must be divisible into recognizable segments using the benefits -One or more segments must be accessible to the marketing effort |
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Sales Forecast
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*the amount of a product a company expects to sell during a specific period at a specified level of marketing activities
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Executive Judgment
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*based on the intuition of the firm’s manager
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Issues in Selecting a Target Market
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-Do customers’ needs differ enough to warrant the use of market segmentation?
-In which market segment(s) should the firm participate? -Does the firm have the resources and skills to compete effectively in the target market? |
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Line Extension
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*development of a product that is closely related to existing products in the line but meets different customer needs
-Is la less expensive, low risk alternative -May focus on the same or a new segment -Can be used to counter competing products -Many “new products” are really line extensions |
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Product Modification
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*a change in one or more characteristics of the product and the elimination of the original product from the product line
-Product must be modifiable -Customer must be able to perceive modification has been made -Modified product more closely satisfies customers’ needs |
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Quality Modifications
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-changes in material or production processes related to a product’s dependability and durability
-Reducing quality to offer a lower price to customers (think Wal-Mart) -Increasing quality to gain a competitive advantage (Whole Foods) |
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Functional Modifications
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*changes affecting a products versatility, effectiveness, convenience, or safety; usually requiring redesign of the product
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Aesthetic Modifications
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*changes to sensory appeal of a product such as altering taste, texture, sound, smell, or appearance
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Product Mix
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*the set of all products and items that a particular seller offers for sale to buyers
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Product
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*a good, a service, or an idea received in an exchange
-It can be tangible (a good) or intangible (a service or an idea) or a combination of both -It can include functional, social, and psychological utilities or benefits -It includes the core product itself, its supplemental features, and its symbolic or experimental value |
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Consumer Product
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*products pruchased to satisfy personal and family needs
Example: Old Spice Deodorant |
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Convience Products
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*relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort?
Characteristics -Marketed through many retail outlets -Relatively low per-unit gross margins -Little promotional effort at the retail level -Packaging is important marketing mix element Example: Hot Pocket |
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Shopping Products
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*items for which buyers are willing to expend considerable effort in planning and making purchases
Characteristics -Expected to last a long time; less frequently -Do not have brand loyalty appeal -Require fewer retail outlets -Inventory turnover is lower -Gross Margins are higher -More amendable to personal selling -Supported (servicing and promting the product) by both the producer and channel members Example: Office Furniture |
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Specialty Products
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*items with unique characteristics that buyers are willing to expend considerable effort to obtain
Characteristics -Are preselected by the consumer -Have no close substitutes or alternatives -Are available in a limited number of retail outlets -Purchased infrequently and represent a significant and expensive investment -Have high gross margins and low inventory turnover Example: Expensive Car |
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Unsought products
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*products purchased to solve a sudden problem, products of which the customers are unaware, and products that people do not necessarily think about buying
Characteristics -Speed and problem resolution of the utmost importance -Price and other features not considered -No consideration of substitutes or alternatives -Purchased infrequently Example: Preparation H |
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Business Products
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*products bought to use in an organization’s operations, to resell, or to make other products (raw materials and components)
-Raw Materials -Component Parts -Process Materials -Business Services |
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Raw Materials
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*basic natural materials that become part of a physical product such as ores, water, lumber, grains and eggs
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Component Parts
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*items that become part of the physical product
-Finished items ready for assembly -Items needing little processing before assembly -Computer chips, engine blocks, girders, and paints |
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Process Materials
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*materials that are not readily identifiable when used directly in the production of other products such as screws, knobs, and handles
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Business Services
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*the intangible products that many organizations use in their operations such as cleaning, legal, consulting, and repair service
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Product Item
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*a specific version of a product that can be designated as a distinct offering among a firm’s products
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Product Line
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*a group of closely related product items views as a unit because of marketing, technical, or end-use considerations
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Product Mix
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*total group of products that an organization makes available to customers
-Width of Product Mix: the number of product lines a company offers -Depth (Length) of Product Mix: the average number of different products in each product line |
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Product Life Cycle
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*the progression of a product through four stages: introduction, growth, maturity, and decline
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Introduction
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*the initial stage of a product’s life cycle—its first appearance in the marketplace—when sales start at zero and profits are negative
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Growth
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*the stage of a product’s life cycle when sales rise rapidly and profits reach a peak and then start to decline
-More competitors enter the market -Product pricing is aggressive -Brand loyalty becomes important -Gaps in market coverage are filled -Promotion expenditures moderate -Production efficiencies lower costs |
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Maturity
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*the stage of a product’s life cycle when the sales cure peaks and starts to decline and profits continue to fall
-Intense competition -Emphasis on improvements and difference in competitors’ products -Weaker competitors lose interest and exit the market -Advertising and dealer-oriented promotions predominate -Distribution sometimes expands to global market -Strategic Objectives for Maturity Stage --Generate Cash Flow --Maintain Market Share --Increase Share of Customer |
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Decline
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*the stage of a product’s life cycle when sales fall rapidly
-Pruning items from the product line -Cutting promotion expenditures -Eliminating marginal distributors -Planning to phase out the product |
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Production Adoption Process
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*the stages buyers go through in accepting a product
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Categories of Product Adopters
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Innovators: first adopters of new products
Early adopters: careful choosers of new products Early majority: those adopting new products just before the average person Late Majority: skeptics who adopt new products when they feel it is necessary Laggards: the last adopters, who distrust new products |
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Innovators
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first adopters of new products
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Early adopters
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careful choosers of new products
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Early majority
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those adopting new products just before the average person
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Late Majority
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*skeptics who adopt new products when they feel it is necessary
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Laggards
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*the last adopters, who distrust new products
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Brand
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*a name, term design, symbol, or any other feature that identifies one marketer’s product as distinct from those of other marketers
-One item, family of items, or all items of a seller --Corvette, Chevrolet, General Motors |
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Brand Name
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*the part of a brand that can be spoken
-Words, letters, numbers --Union 76, NBA, 49’ers |
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Brand Mark
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*the part of a brand not made up of words
-Symbols or designs --Nike Swoosh, Mercedes Star, McDonald’s Arches |
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Trademark
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*a legal design of exclusive use of a brand
-Coca-Cola ®, Hewlett-Packard ® |
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Trade Name
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*full legal name of an organization
-American Telephone and Telegraph Corporation (AT&T) |
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Brand Equity
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*the marketing and financial value associated with a brand’s strength in a market
-Brand Loyalty -Brand Recognition -Brand Preference -Brand Insistence |
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Brand Loyalty
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*a customer’s favorable attitude toward a specific brand
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Brand Recognition
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*a customer’s awareness that a brand exists and is an alternative purchase
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Brand Preference
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*the degree of brand loyalty in which a customer prefers on brand over competitive offerings
-Axe Bodywash |
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Brand Insistence
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*the degree of brand loyalty in which a customer strongly prefers a specific brand and will accept no substitute
-Abercrombie for me |
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Product Differentiation
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*creating and designing products so that customers perceive them as different from competing products
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Product Quality
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*the overall characteristics of a product that allow it to perform as expected in satisfying customer needs
-Level of quality is the relative amount of quality a product possesses -Consistency of quality is the degree to which a product has the same level of quality over time |
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Product Design
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*how a product is conceived, planned, and produced
-Good design provides a strong competitive advantage -Customers typically desire products with good designs and that function well |
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Customer Services
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*human or mechanical efforts or activities that add value to a product
-Delivery and installation, financing, customer training, warranties and guarantees, repairs, online product information -A competitive advantage when all other products features are equally matched by competitors |
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Product Positioning
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*creating and maintaining a certain concept of a product in customers’ mind
-A product’s position results from customers’ perceptions of a product’s attributes relative to those of competing products -Marketers emphasize characteristics most desired by the target market in advertising |
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Perceptual Mapping
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*bases for positioning; show marketers how closely products are conceptually positioned by consumers to “ideal points” to their own products, and to competitors’ products
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Repositioning a Product
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*adjusting a product’s present position can strengthen/increase its market share and profitability
-Repositioning is accomplished by changing the product’s features, price, distribution, or image -Adding new products to the line may neccessitate the repositioning of older products |
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Product Deletion
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*the process of eliminating a product from the product mix
Reasons to remove a product: -Slow sales create higher unit-prouction costs, inventory costs, and distribution costs -To prevent negative feelings from affecting the company’s other products |
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Service
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*an intangible product involving a deed, performance, or effort that cannot be physically possessed
-Application of human and/or mechanical efforts directed at people or objects |
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New Product Development
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1. Idea Generation
2. Screening 3. Concept Testing 4. Business Analysis 5. Product Development 6. Test Marketing 7. Commercialization |
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Idea Generation
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*seeking product ideas to achieve objectives
-Internal sources: marketing managers, researchers, sales personnel, and engineers -External sources: customers, competitors, advertising agencies, consultants, and new-product alliances |
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Screening
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*(Idea) Screening: choosing the most promising ideas for further review
-Concerns about cannibalization of existing products -Company capabilities to produce and market the product -Nature and wants of buyers |
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Concept Testing
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*seeking potential buyers’ responses to a product idea
-Low cost determination for initial reaction to product idea -Identification of important product attributes and benefits |
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Business Analysis
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*assessing the potential of a product idea for firm’s sales, costs, and profits
-Does product fit in with existing product mix? -Is demand strong enough to enter the market? -How will introducing the product change the market? -Is the firm capable of developing the product? -What are the costs for developing and marketing? |
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Prototype
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*A replica of a product as it will be manufactured, which may include such details as color, graphics, packaging and instructions
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Product Development
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*determining if producing a product is feasible and cost effective
-Construction of a prototype, or working model -Testing of the prototype’s overall functionality -Determining the level of product quality -Branding, packaging, labeling, pricing, and promotion decision |
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Test Marketing
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*introducing a product on a limited basis to measure the extent to which potential customers will actually buy it
-Sample launch of entire marketing mix -Lessens risk of larger market failure -Is expensive; simulated test marketing is an alternative |
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Commercialization
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*deciding on full-scale manufacturing and marketing plans and preparing budgets
-Modifications indicated by the test marketing are incorporated into the production design. -Marketing, distribution, and servicing plans are finalized -Product roll-out occurs in stages to lessen the risk of introducing the new product |
