Term
|
Definition
| Aggregates potential buyers into groups that have common needs and will respond similarly to a marketing action |
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Term
|
Definition
| The relatively homogenous groups of prospective buyers that result from the market segmentation process |
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Term
|
Definition
| The strategy of using different marketing mix activities to help consumers perceive a product as being different and better than competing products |
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|
Term
| Effective Market Segmentation Does Two Things |
|
Definition
1) Forms meaningful groupings
2) Develops specific marketing mix actions |
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|
Term
| Two-teir Marketing Strategy |
|
Definition
Some call "Tiffany/Walmart Strategies"
Offer different variations of the same basic offering to high-end and low-end segments |
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Term
|
Definition
| The increased customer value achived through performing organizational functions such as marketing or manufacturing more efficiently |
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Term
|
Definition
| New products or new chain stealing customers and sales from the older, existing ones |
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|
Term
| Five Steps Of Segmenting the Market |
|
Definition
1) Group potential buyers into segments
2) Group products to be sold into categories
3) Develop a marekt-product grid and estimate the size of the market
4) Select target markets
5) Take marketing actions to reach target markets |
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|
Term
| Criteria to use in forming the segments |
|
Definition
- Simplicity and cost-effectiveness of assigning potential buyers to segments
- Potential for increased profit
- Similarity of needs of potential buyers within a segment
- Difference of needs of buyers among segments
- Potential of a marketing action to reach a segment
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|
Term
| Ways to Segment Consumer Market |
|
Definition
1) Geographic Segmentation: Region
2) Demogrpahic Segmentation: Household size
3) Psychographic segmentation: Lifestyle
4) Behavioral Segmentation: Product features
5) Behavioral Segmentation: Usage rate |
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Term
|
Definition
| The quantity consumed or patronage-storage visits- during a specific period |
|
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Term
|
Definition
| Reward based to encourage customers to return and create brand loyalty, focuses on usage rate |
|
|
Term
| Segmentation Usage (survey from 220 most profitable companies) |
|
Definition
Geographic Base: 88 Percent
Behavioral Base: 65 Percent
Demographic Base: 53 Percent
Pyschographic Base: 43 Percent |
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Term
|
Definition
| The idea that 80 percent of a firm's sales are obtained from 20 percent of its customers |
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Term
|
Definition
| Unlikely to patronize with business |
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Term
| Ways to Segment Organizational Markets |
|
Definition
Geographic Segmentation: Statistical area
Demographic Segmentation: NAICS code
Demographic Segmentation: Number of employees
Behaviroal Segmentation: Usage rate |
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Term
|
Definition
| A framework relating the segments of a market to products or marketing actions of the firm |
|
|
Term
| Forming a Market-Product Grid |
|
Definition
Identifying and labeling the markets (horizontal rows)
Product groupings (vertical columns) |
|
|
Term
Five Criteria for Selecting Market Segment
|
|
Definition
1) Market Size
2) Expected Growth
3) Competitive Postion
4) Cost of Reaching the Segment
5) Compatibility With the Organization's Objectives/Resources |
|
|
Term
| Marketing Synergies (Market-Product Grid) |
|
Definition
| Running horizontally acroos the grid, each row represents an opportunity for efficiency in terms of a market segment |
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Term
| Product Synergies (Market-Product Grid) |
|
Definition
| Running vertically down the market-product grid, each column represents an opportunity for efficiency in research and development and production |
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Term
|
Definition
| The place a product occupies in consumers' minds on important features relative to competitive products |
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Term
|
Definition
| Changing the place a product occupies in consumers' minds relative to competitive products |
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Term
|
Definition
Involves competing directly with competitiors on similar product attributes in the same target market
One way of positioning a new product in the market |
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|
Term
| Differentiation Positioning |
|
Definition
Involves seeking a less-competitive, smaller market niche in which to locate a brand
Second way of positioning a new product in the market |
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Term
| Discovering Perceptions In Minds of Potential Customers (4 steps) |
|
Definition
1) Identify the important attributes for a product or brand class
2) Discover how target customers rate competing brands with respect to these attributes
3) Discover where the company's product or brand is on these attributes in minds of potential customers
4) Reposition the company's product or brand in the minds of potential customers |
|
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Term
|
Definition
| Means of displaying the postion of products or brands in consumers' minds |
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Term
|
Definition
| A good, service, or idea consisting of a bundle of tangible or intangible attributes that satisfies customer needs and is recieved in exchange for money or something of value |
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Term
|
Definition
| Has tangible attributes that a consumers 5 senses can percieve |
|
|
Term
|
Definition
| An item consumed in one or a few uses |
|
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Term
|
Definition
| Usually lasts over many uses |
|
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Term
|
Definition
| Intangible activities or benefits that an organization provides to satisfy consumers needs in exchange for money |
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Term
|
Definition
| A thought that leads to an action |
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Term
|
Definition
| Products purchased by the ultimate consumer |
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Term
|
Definition
| Items for which the consumer compares several alternatives |
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Term
|
Definition
| Items that the consumer makes a special effort to go out and get |
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Term
|
Definition
| Items that the consumer does not know about or knows about but doesn't initially want |
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Term
|
Definition
| Products organizations buy that assist in providing other products for resale |
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Term
|
Definition
| Sales of business products result from the sale of consumer products |
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Term
|
Definition
| Items that become part of the final product |
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Term
|
Definition
| Items used to assist in producing other goods and services |
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Term
|
Definition
| Specific product that has a unique brand, size, or price |
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Term
|
Definition
| Group of product or service 'Items that are closely related because they satisfy a class of needs, are used together, and in the same market segment' |
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Term
|
Definition
| All the product lines offered by a company |
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|
Term
| Uniqueness of Services (Four I's of Service) |
|
Definition
Intangibility
Inconsistency
Inseperability
Inventory |
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Term
|
Definition
| Service provider is available but there is no demand for the service |
|
|
Term
| Marketing Reasons for New Product Failures |
|
Definition
Insignificant points of difference
No economical access to buyers
Incomplete market and product protocal before product development
Not satisfying customer needs on critical factors
Bad timing
Poor product quality
Too little market attractiveness
Poor execution of marketing mix |
|
|
Term
|
Definition
| Consumers don't need to learn new behaviors |
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|
Term
| Dynamically Continuous Innovation |
|
Definition
| Only minor changes in behavior are required |
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Term
|
Definition
| Involves making the consumer learn entirely new consumption patterns to use the product |
|
|
Term
| New-Product Process (7 Stages) |
|
Definition
1.) New product Strategy Development
2.) Idea Generation
3.) Screening and Evaluation
4.) Business Analysis
5.) Development
6.) Market Testing
7.) Commercialization |
|
|
Term
| New Product Strategy Development (Stage 1) |
|
Definition
| Defines the role for the new product in terms of the firms overall objectives |
|
|
Term
| Idea Generation (Stage 2) |
|
Definition
| Involves developing a pool of concepts to serve as candidates for new products |
|
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Term
|
Definition
| An organization finds and executes creative new product ideas by developing strategic relationships with outside individuals/organizations |
|
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Term
|
Definition
| Generating insights leading to actions based on massive numbers of people's ideas |
|
|
Term
| Screening and Evaluation (Stage 3) |
|
Definition
| Stage of the new product process that internally and externally evaluates new-product ideas to eliminate those that warrant no further effort |
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Term
|
Definition
| Firms employees evaluate the technical feasibility of a proposed new product idea |
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|
Term
| Customer Experience Management |
|
Definition
| The process of managing the entire customer experience within the company |
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Term
|
Definition
| Firms use concept tests, external evaluations with consumers that consist of preliminary testing of a new-product idea rather than an actual product |
|
|
Term
| Business Analysis (Stage 4) |
|
Definition
| Specifies the features of the product and the marketing strategy needed to bring it to market and make financial projections |
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Term
|
Definition
| Turns the idea on paper into a prototype |
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Term
|
Definition
| Invovles exposing actual products to prospective customers under realistic purchase conditions to see if they will buy |
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Term
|
Definition
| Involves offering a product for sale on a limited basis in a defined area |
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Term
|
Definition
| A technique that simulates a full scale of test market but in a limited fashion |
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Term
|
Definition
| Positions and launches the new product in full scale production and sales |
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Term
|
Definition
| Introducing the product sequentially into geographical areas of the United States, which gradually minimizes risk |
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Term
|
Definition
| Cross functional team members who conduct the simultaneous development of both product and the production process stay with the product from conception to production |
|
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Term
|
Definition
| Uses a "do it, try it, fix it" approach - encouraging continuing improvement even after the initial design |
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|
Term
|
Definition
| Describes the stages a new product goes through in the market place: Introduction, growth, maturity and decline |
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Term
|
Definition
| Occurs when a product is introduced to its intended target market sales grow slowly and profit is minimal |
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Term
|
Definition
| The initial purchas of a product by a consumer |
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Term
|
Definition
| The desire for the product class rather than for a specific brand, since there are few competitiors with the same product |
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Term
|
Definition
| The preference for a specific brand |
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Term
|
Definition
1.) Skimming
2.) Penetration Pricing |
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Term
|
Definition
| High initial price to help the company recover the costs of development as well as capitalize on the price insensitivity of early buyers |
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Term
|
Definition
| Price low to discourage competitive entry and help build unit volume, but must monitor costs |
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Term
|
Definition
| Characterized by rapid increases in sales |
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Term
|
Definition
| People who tried the product, where satisfied, and bought again (along with new consumers coming in) |
|
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Term
|
Definition
Characterized by a slowing of total industry sales or product class revenue
Marginal competitors begin to leave the market |
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|
Term
|
Definition
|
|
Term
|
Definition
Dropping the product from the compnay's product line
Most drastic strategy |
|
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Term
|
Definition
| When a company retains the product but reduces marketing costs |
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|
Term
| Length of The Product Life Cycle |
|
Definition
| Companies need to pay attention to how long their product has been out on the market |
|
|
Term
|
Definition
| One for which significant customer education is requred and there is an extended introductory period |
|
|
Term
|
Definition
| Sales begin immediately because little learning is required by the consumer, and benefits of purchase are readily understood |
|
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Term
|
Definition
Life cycles for fashion products frequently appear in women's and men's apparel
Introduced, decline then seem to reappear |
|
|
Term
|
Definition
| Experience rapid sales on introduction and then equally rapid decline |
|
|
Term
| Product Manager/Brand Manager |
|
Definition
| Manages the marketing efforts for a close knit family of products or brands |
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Term
|
Definition
| Involves altering a product's characteristic, such as its quality, performance, or appearance to increase value and sales |
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|
Term
| Market Modification Strategies |
|
Definition
| A company tries to find new customers, increase a products use among existing customers, or create new use situations |
|
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Term
|
Definition
| Changes the place the product occupies in a consumers mind relative to competitive products |
|
|
Term
| 4 Factors of Repositioning |
|
Definition
1) Reacting to a competitiors postion
2) Reaching a new market
3) Catching a rising trend
4) Changing the value offered |
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|
Term
|
Definition
| Invovles adding value to the product through additional features of higher quality materials |
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Term
|
Definition
| Involves reducing the number of features, quality, or price |
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Term
|
Definition
| An organization uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from competitiors |
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Term
|
Definition
| Any word, device, or combination of these used to distinguish a sellers goods or services |
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Term
|
Definition
| A set of human characteristics associated with a brand name |
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Term
|
Definition
The added value a brand name gives to a product beyond the functional benefits provided
Improves competitive advantage
Consumers are often willing to pay a higher price for a product with brand equity |
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Term
|
Definition
| A company uses one name for all it's products ina branding class |
|
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Term
|
Definition
| The practice of using a current brand name to enter a new market segment in its product class |
|
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Term
|
Definition
| Combines a corporate or family brand with a new brand, to distinguish a part of its product line from others |
|
|
Term
|
Definition
| The practice of using a current brand name to enter a different product class |
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Term
|
Definition
| Invovles giving each product a distinct name |
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Term
|
Definition
| Chief purpose is to confront competitor brands |
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|
Term
| Private Branding Strategy |
|
Definition
| Manufactures products but sells them under the brand name of a wholesaler or retailer |
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Term
|
Definition
| Where a firm markets products under its own name and that of a reseller because the segment attracted to the reseller is different from its own market |
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Term
|
Definition
| Refers to any container in which it is offered for sale and on which label formation is conveyed |
|
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Term
|
Definition
| An integral part of the package and typically identifies the product or brand, who made it, where/when it was made, how it is to be used, and package contents/ingredients |
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|
Term
| Packeging/Labeling Challenges and Responses |
|
Definition
Connecting with customers
Environmental concerns
Health, safety, and security issues
Cost reduction |
|
|
Term
| 8 P's Of Service Marketing |
|
Definition
Product
Productivity
Price
Place
Promotion
People
Physical Environment
Process |
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|
Term
|
Definition
Exclusivity
Brand Name
Capacity Mangement |
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Term
|
Definition
| Capacity Mangment: Integrating the service component of the marketing mix with efforts to influence consumer demand |
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Term
|
Definition
Two essential roles:
To affect consumer perceptions
To be used in capacity mangement |
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Term
|
Definition
| Consists of changing different prices during different times of the day or days of the week to reflect variations in demand for the service |
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Term
|
Definition
|
|
Term
|
Definition
| To show the benefits of using the service |
|
|
Term
|
Definition
| Depend on people for the creation and delivery of the customer service experience |
|
|
Term
| Customer Experience Management (CEM) |
|
Definition
| Process of managing the entire customer experience with the company |
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|
Term
|
Definition
The money or other considerations exchanged for the ownership or use of a product or service
Price = List Price - Allowances + Extra Fees |
|
|
Term
|
Definition
| The practice of exchanging products and services for other products and services rather than for money |
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|
Term
|
Definition
The ratio of percieved benefits to price
Percieved Benefits/Price = Value |
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|
Term
|
Definition
Profit = Total Revenue - Total Cost
= (Unit Price*Quantity Sold) - (Fixed Cost-Variable Cost) |
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Term
|
Definition
| Weigh factors underlying expected customers tastes and preferences more heavily than cost, profit, or competition |
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Term
|
Definition
| Setting the highest initial price that customers really desiring the product are willing to pay |
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Term
|
Definition
| Setting a low initial price on a new product to appeal immediately to the mass market |
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|
Term
|
Definition
| Involves setting a high price so that quality or status-concious consumers will be attracted to the product and buy it |
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Term
|
Definition
| Setting prices a few dollars or cents under an even price |
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Term
|
Definition
| Manufacturer deliberately adjusting the composition and features of a product to achieve the target price |
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Term
|
Definition
| The marketing of two or more products in a single package price |
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Term
|
Definition
| The charging of different prices to maximize revenue for a set amount of capacity at any given time |
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Term
|
Definition
| Price setter stresses the cost side of the pricing problem, not the demand side |
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Term
|
Definition
| Entails adding a fixed percentage to the cost of all items in a specific product class |
|
|
Term
|
Definition
| Involves summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price |
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Term
|
Definition
| Price setter chooses to balance both revenues and costs to set a price |
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Term
|
Definition
| When a firm sets an annual target of specific dollar volume of profit |
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|
Term
| Target Return-On-Sales Pricing |
|
Definition
| Set prices that will give the firm a profit that is specified percentage of the sales volume |
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|
Term
| Target Return-On-Investment Pricing |
|
Definition
| Set prices to achieve a ROI target such as a percentage that is mandated by the board of directors or regulators |
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|
Term
| Competition-Oriented Pricing |
|
Definition
| Price setters stress what competitors or "the market" is doing |
|
|
Term
|
Definition
| Used for products where tradition, a standardized channel of distribution, or other competitive factors dictate the price |
|
|
Term
| Above, At, Or Below-Market Pricing |
|
Definition
| Marketing managers have a feel of what price consumers are willing to pay for the product and to place a price accordingly |
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|
Term
|
Definition
| (Low Price) Not trying to increase sales but trying to attract customers in hopes that they will buy other products produced by the firm |
|
|
Term
|
Definition
| A graph relating the quantity sold and the price, which shows how many units will be sold at a given price |
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|
Term
| Price Elasticity of Demand |
|
Definition
| A key consideration related to the products demand curve |
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|
Term
|
Definition
| A slight decrease in price results in a relatively large increase in units sold |
|
|
Term
|
Definition
| Slight increases/decreases in price will not significantly affect the demand |
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|
Term
|
Definition
The total money recieved from the sale of a product
The unit price of the product multiplied by the quantity sold
TR=P*Q |
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|
Term
|
Definition
| The total expenses incurred by a firm in producing and marketing a product; total cost is the sum of fixed costs and variable costs |
|
|
Term
|
Definition
| A technique that analyzed the relationship between total revenue and total cost to determine profitability at various levels of output |
|
|
Term
|
Definition
The quantity at which total revenue and total costs are equal
BEP=FC/P-UVC |
|
|
Term
|
Definition
| Specify the role of price in an organization marketing and strategic plans |
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|
Term
| Managing for Long-Run Profits |
|
Definition
| A company gives up immediate profit in exchange for achieving a higher market share |
|
|
Term
| Maximizing Current Profits |
|
Definition
| Targets can be set and performance can be measured quickly |
|
|
Term
|
Definition
| Increasing sales revenue will increase profit/market share |
|
|
Term
|
Definition
| Ratio of the firms sales revenues to those of the industry |
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|
Term
|
Definition
Factors that limit the range of prices a firm may set
Demand for the product
Newness of the product
Cost of producing/marketing the product
Competition prices
Legal/Ethical Considerations |
|
|
Term
| Pricing Constraint Step 1 |
|
Definition
| Select an approximate price level |
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|
Term
|
Definition
| Set the list or quoted price |
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|
Term
|
Definition
| Setting one price for all buyers of a product or a service |
|
|
Term
|
Definition
| Setting different prices for products and services depending on individual buyers and purchase situations |
|
|
Term
| Pricing Constraints Step 3 |
|
Definition
| Make special adjustments to the list or quoted price |
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Term
|
Definition
| Reductions from the list price that a seller gives above |
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|
Term
|
Definition
| Try to get customers to buy in bulk |
|
|
Term
|
Definition
| Encourage buyers to stock inventory earlier |
|
|
Term
|
Definition
| Reward wholesalers/retailers |
|
|
Term
|
Definition
| Encourage retailers to pay their bills quickly |
|
|
Term
|
Definition
| Reductions from the list/quoted price |
|
|
Term
|
Definition
| Reduction given when a used product is part of the payment on a new product |
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|
Term
|
Definition
| Adjustments made to reflect the cost of transportation of the products |
|
|
Term
|
Definition
| Seller pays the cost of loading the product but not the shipping cost |
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|
Term
|
Definition
| Price that gets quoted already contains all the cost of transportation |
|
|
Term
|
Definition
| Individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users |
|
|
Term
|
Definition
Middlemen
Agent/Broker
Wholesaler
Retailer
Distributor
Dealer |
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|
Term
|
Definition
| Any intermediary between manufacturer and end-user markets |
|
|
Term
|
Definition
| Any intermediary with legal authority to act on behalf of the manufacturer |
|
|
Term
|
Definition
| An intermediary who sells to other intermediaries, usually to retailers; term usually applies to consumer markets |
|
|
Term
|
Definition
| An intermediary who sells to consumers |
|
|
Term
|
Definition
| An imprecise term, usually used to describe intermediaries who perform a variety of distribution functions, including selling, maintianing inventories, extending credit, and so on |
|
|
Term
|
Definition
| A more imprecise term than distributor that can mean the same as distributor, retailer, wholesaler and so forth |
|
|
Term
|
Definition
Includes buying, selling and risk taking
Function performed by intermediaries |
|
|
Term
|
Definition
Includes assorting, storing, sorting, and transporting
Function performed by intermediary |
|
|
Term
|
Definition
Includes financing, grading, and marketing information and research
Function performed by intermediaries |
|
|
Term
| Direct Channel (Consumer) |
|
Definition
| The producer and the ultimate consumers deal directly with each other |
|
|
Term
| Indirect Channel (Consumer) |
|
Definition
| Intermediaries are inserted between the producer and consumers and perform numerous channel functions |
|
|
Term
| Direct Channel (Business) |
|
Definition
| Firms maintain their own sales force and perform all channel functions |
|
|
Term
| Indirect Channel (Business) |
|
Definition
| Having multiple intermediaries in order to reach industrial users |
|
|
Term
|
Definition
Indirect Business Channel
Performs a variety of marketing channel functions, including selling, stocking, delivering a full product assortment, and financing |
|
|
Term
|
Definition
Indirect Business Channel
Serves primarily as the independent selling arm of producers and represents a producer to industrial users |
|
|
Term
| Electronic Marketing Channels |
|
Definition
| Employ the internet to make products and services available for consumption or use by consumers or business buyers |
|
|
Term
| Direct Marketing Channels |
|
Definition
| Allow consumers to buy products by interacting with various advertising media without face-to-face meeting with a salesperson |
|
|
Term
|
Definition
| The blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers |
|
|
Term
|
Definition
| An arrangement whereby a firm reaches different buyers by using two or more different types of channels for the same basic product |
|
|
Term
| Strategic Channel Alliances |
|
Definition
| One firm's marketing channel is used to sell another firm's prdoucts |
|
|
Term
| Vertical Marketing Systems |
|
Definition
| Professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximize marketing impact |
|
|
Term
| Corporate Vertical Marketing System |
|
Definition
| Combination of successive stages of production and distribution under a single ownership |
|
|
Term
| Contractual Verticle Marketing Systems |
|
Definition
| When independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone |
|
|
Term
| Wholesaler (Contractual Verticle MKT) |
|
Definition
Sponsored voluntary chains
Involve a wholesaler that develops a contractual relationship with small, independent retailers to standardize and coordinate buying practices, merchandising programs, and inventory mangement efforts |
|
|
Term
| Retailer (Contractual Verticle MKT) |
|
Definition
Sponsored cooperatives
Exist when small, independent retailers from an organization that operates a wholesale facility cooperatively |
|
|
Term
| Franchising (Contractual Verticle MKT) |
|
Definition
| Contractual arrangement between a parent company (franchisor) and an individual or firm (franchisee) that allows the franchisee to operate a certain type of business under an established name and according to specific rules |
|
|
Term
| Administered System (3rd Verticle MKT System) |
|
Definition
| Achieve coordination at successive stages of production and distribution by the size and influence of one channel member rather than through ownership |
|
|
Term
| Factors Affecting Channel Choice and Management |
|
Definition
Target Market Coverage
Buyer Requirements
Profitability |
|
|
Term
|
Definition
Factor affecting channel choice
Achieving the best target market coverage requires attention to density which is the number fo stores in any given geographical area and also level of distribution |
|
|
Term
|
Definition
| A firm tries to place its products and services in as many outlets as possible |
|
|
Term
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Definition
| Extreme opposite of intensive distribution because only one retailer in a specified geograhpical area carries the firm's products |
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Term
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Definition
| The firm select a few retailers in a specific geographic region to carry its products |
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Term
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Definition
Factor affecting channel choice
4 Requirements:
Information
Convenience
Variety
Pre/Post Sale Services |
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Term
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Definition
Factor affecting channel choice
Determined by the margins earned (revenue minus cost) for each channel member and for the channel as a whole |
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Term
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Definition
| Arises when one channel member believes another channel emember is engaged in behavior that prevents it from achieving its goals |
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Term
| Vertical Conflict (Channel) |
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Definition
| Occurs between different levels in a marketing channel |
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Term
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Definition
| Channel conflict that arises when a channel member bypasses another member and sells or buys products direct |
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Term
| Horizontal Conflict (Channel) |
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Definition
| Occurs between intermediaries at the same level in a marekting channel such as two retailers that handle the same manufacturer's brands |
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Term
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Definition
| Channel member that coordinates, directs, and supports other channel members |
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