Chapter 4 Detail Flashcards
Markets
Groups who are willing and able to buy something because they have a need for it.
Market potential
Maximum number of prospective customers who can enter the market or that can be served within the defined market.
Market size
Revenue/unit sales for defined product market, within a specified period(time), within identified geographical boundaries.
Untapped market potential: Awareness
If customers are not aware of the product or understand all its benefits, they will not be able to determine the product’s potential value to them.
Untapped market potential: Availability
If products are not freely available, demand will be reduced.
Untapped market potential: Ability to use
If customers are not able to use products or perceive them to be technically complicated, products may not reach their full potential.
Untapped market potential: Benefit deficiency
Not all customers have the same product and lifestyle needs and some may not find the benefits of a product attractive or compelling enough to buy it.
The practical limit to any market reaching its full potential is that it’s not profitable to accommodate all the needs and desired benefits within a market.
Untapped market potential: Affordability
It may happen that despite finding the benefits of a product attractive, some customers are unable to afford it.
Market growth
Determined by
Current market penetration: total number ofcustomers who have entered that market and
Rate of entry: rate at which new customers enter the market
Categories of innovation: Easy sells
Most common new products entail limited changes and require limited adjustments to behaviour. High consumer acceptance, limited benefits to both consumers and companies.
Detergents with improved whiteners.
Categories of innovation: Sure failures
Marketers should avoid innovations that involve limited change and offer few benefits, but require significant behaviour change.
DVORAK keyboard
Categories of innovation: Long hauls
Many new products offer technological leaps, creating great value but requiring significant behaviour change.
Cellphones.
Categories of innovation: Smash hits
Innovations that offer great benefits but require minimal behaviour change.
Wireless HSDPA USB modem that made it possible to access the internet without a phone line from almost any location.
Product Life Cycle: Introduction
Introducing a product class is more time-consuming, difficult, expensive
Marketers should aim to move products ASAP through the introduction phase
Expanding the market by reating awareness and trial
Establish competitive advantage by differentiating the new product/line from current solutions
Product Life Cycle: Growth
Begins with a sharp increase in sales. Product line expands, new features developed (although at slower rate) to attract new segments.
Focus on gaining market share
Differentiate product from others that have entered the product class
As this stage reaches maturity, focus on extending growth
