exam 2 Flashcards
market
set of buyers who have some interest in the product
market segmentation
marketers differentiate products to appeal to certain groups
target market
segment a company choose to serve
- goal is to have product that best serves the needs of specific target markets
measurable
assess the size of the segment marketers wish to target
- need to calculate # of potential customers, size of advertising budget, and other decisions
criteria of segmentation (MARS)
- measurable
- accessible
- responsive (actionable)
- substantial
accessible
segments should be accessible
responsive (actionable)
segment should respond to marketing efforts
substantial
each segment should be large enough so a meaningful marketing strategy can be devised to bee profitable
- ↓ segment size = limit on the size of rev n profits
- impractical
5 bases for segmenting market
- demographic
- geographic
- psychographic
- benefit sought
- usage rate
demographic (segmenting markets)
- segmentations on variables sucha s age, income, gender, n ethnicity
- widely used, easy to measure, no full picture
geographic (segmenting markets)
segment based on national boundaries, regions, ect
psychographic (segmenting markets)
- consumers behaviors r influenced by attitudes n lifestyles
- difficult to measure, not easily available
benefit sought (segmenting markets)
consumers see differences in benefits for same products
3 segmentation for selecting target markets
- undifferentiated
- concentrated
- multisegment targeting
undifferentiated
- segments are ignored n the company may decide to go after the entire market
- lots of competitors
- useful under “production philosophy”
concentrated
goes after a single market
concentrated targeting
let companies channel all their efforts to a specific segment
niche targeting
focus on a very small segment not catered by other companies
- risky
multisegment targeting
company offers different brands in individual segments
- can cover big portion of the market
product differentiation n positioning
- differenration distinguishes their oroducts from competitors
- helps positioning of product
a) how consumers perceive brand
b) creating positioning is strategic decision that takes substantial investment
perceptual map
- chart used to illustrate product or brands
- companies place brands on maps to visually capture how their brands are perceived
repositioning
- can be outdated
- brand needs to be repositioned
- position alternations = difficult n create confusion
decision support systems (DSS)
interactive, computer-based, information system
- help managers make better decisions
- data comes from 2 sources
marketing research (data source 1)
project-driven, seeks to gather and analyze specific n well-defined set of data
7 systematic process of marketing research
- identify n formulate research problem
- collect secondary data
- plan primary data collection
- plan sampling procedures
- collect data
- analyze data
- preparing and presenting data
1st systematic process
identify n formulate research problem
- find statement of info needs whcih needs to be precise
2nd systematic process
collect secondary data
- public data
- data can be outdated or not have all answers
- syndicated data
secondary data
data that has been collected for other purpose and readily acceptable
syndicated data
collected data about sales n behaviors that are made available for sale
- ex: IRS
3rd systematic process
plan primary data collection
- 4 ways of collecting data
1. personal
- most expensive + quickest response
2. mail
- cheapest + low response + slowest
3. telephone
- expensive + faster
4. internet or web
- responses can be monitored and fast
4th systematic process
sampling procedures
- get group of respondents that represent the whole population
- 2 types of sampling procedures
1. nonprobability samples
2. probability samples
non probability samples
nonrandom
- 4 types
1. convenience sampling
2. judgment
3. quota
4. snowball
convenience sampling
sample that is easiest for researcher to access
judgment sampling
researcher chose who to sample
quota sampling
predetermined number of ppl from specific subgroup
snowball sampling
uses an initial participants to refer/recruit more participants
probability samples
random
- sample represent pop
- 4 types
1. simple random
2. stratified
3. systematic
4. cluster area
simple random sampling
subject are chosen randomly
stratified sampling
divide pop into subgroups based on characteristics
- ex: divided into race, gender, education
- still randomly sampled `
systematic sampling
customers list available in database, choosing samples from a set list
cluster area sampling
selecting samples from same or close by areas
4 errors in sampling
- frame error
- non response error
- response error
- random errors
frame error
lack of overlapping between sampling frame and pop
- Sampling is drawn from a list (aka sampling frame)
- Ppl from the list may differ in desired traits
how to minimize frame error
Minimize frame error by ensuring overlap between sampling frame and pop
non response error
ppl do not response to survey, leading to bias bc
non-respondents respond differently than respondents = error in sampling estimate that is based on respondents only
how to minimize non response error
try to get higher cooperation from all respondents
response error
respondent gives socailly desirable answers or questions are bias
- there’s a different in respondents actual opinions and answers
how to minimize response error
carefully wording things
random errors
random or chance error
how to minimize random errors
reduce by having a larger sample size
5th systematic process
collect data
- can often be contracted to a field service firm
6th systematic process
analyze data
- raw data was analyzed using a variety of technical techniques
- done by a field service firm or internally
7th systematic process
preparing and presenting data
- done by research team to client
4 types of marketing research
- exploratory
- descriptive
- performance monitoring
- causal
exploratory research
exploratory in nature and gives a feel for the situation
- finds are not conclusive
exploratory characteristic
- small samples, open-ended questions, non-probability samplings
- uses secondary research, in-depth qualitative interviews, or focus groups
descriptive research
describe things about a market, like who the customers are, what they want, and how they behave. It doesn’t explain why things happen
- uses survey, observational, and case studies
performance monitoring research
track company or brand performance over time
- involves panels that are compensation
causal research
aim at causality where variable A causes variable B
- use experiments
product (goods)
tangible offering or satisfaction of a need
service
intangible offering that satisfies needs
core
buying for a purpose
- ex: buying car for the purpose of transportation
augmented
additional add-ons that acts as an incentive for customers to buy
- what can dealers do to add to the products and motivate buyers to buy
convenience goods
frequently purchases, relatively inexpensive
- customers buy regularly
- doesnt require planning + low risks
impulse goods
brought on impulse w out planning
shopping goods
infrequently purchased, big ticket items
- washers, dryers, refrigerators
- consumers spend time learning about the product s
- compare brands + shop around
- marketers need to provide necessary info n make comparison-shop easy
specialty goods
infrequently purchased, big ticket items, but buyers have clear preferences for brands
- infrequent purchase but find exciting and know what they want
- no shopping around
- ex: watch, cars
unsought goods
ppl do’t seek for these and may hesitate
- requires aggressive selling
- ex: care insurance
product line
all products that a company carries
product line depth
refers to variations within the product type
- helps companies appeal to consumers w diff preferences
product line width
refers to the different types of products a company carries
- helps diversify risk by not relying on a specific product
product line extension
extend product line by increasing width or depth
product line contraction
company eliminate products and consolidate their sales among fewer variations
- occur when line is overextended
- variations fail to reach min threshold of sales n profits
product modification
modify existing products
- can be based on quality, functionality, or style
- tweak formulations n packaging to matcha change in market
planned obsolescence
company create new products knowing that they are making their current versions obsolete
- ex: iphone
core product
part of product that addresses consumers needs
warranty
promise for additional service or repairs
- enhance customers experience
primary packaging
holding or protecting the product
secondary packaging
carries legal and labeling info
- more of a marketing role
tertiary packaging
for shipping purposes and facilitates easy n save handling in transportation
- ex: boxes of __
brand
identify manufacturers products
- shorthand for what the product has to offer
- 3 components
brand 3 components
- name
- logos
- taglines
what happens when brand is registered
brand = trademark, service mark
if officially register w US patent n trademark office
brand equity
value associated w a brand
- based on marketing efforts that create product differentiation and influence consumers attitudes n buying behaviors
brand loyalty
consistent preference for one brand over others
- a key metric of marketing success
manufacturer brand
form the vast majority of brands
private labels
have ability to leverage existing equity n relationship w their customers
- sell label at lower prices but increase margin
brand extension
using existing brand name to launch new products
3 type of co-branding
- ingredient branding
- cooperative branding
- complementary
ingredient branding
brand carries ingredients of another brand
cooperative branding
when 2 brands get equal treatment n borrow from each others equity
- ex: clothing n sport
complementary co branding
promoting complementary brand that work well tgt
- work w another brand that offers product that enhancse yours
- no competition
new to the world product
discontinuous innovations and new to the world
- microwaves (at the time)
new product lines
products new to company but already offered by other
- increase width of product mix
- provide opportunities for it to diversify risks
additions to existing product lines
product that company is already offering but decide to add variations
- increase depth of product mix
- make it more appealing to other segments
improvements over existing products
involves minor or major changes
- make continuous improvement to stay on the cutting edge of what the company can offer
repositioned products
focus on changing the brands appeals to make the brand more relevant
lower priced product
focus on lowering the cost of products to make it more appealing
- company can afford to do it
new product development process
systematic process
- most expensive exercise companies undertake w several steps
new product development strategy
development of new products should be compatible w. company objectives
idea generation
creating a list of ideas
- may come customers, employees, trade partners, competitors, or R&D
- use brainstorming
idea screening
- eliminate ideas at each successive stage
- pick ones that match w company adjective, are viable, n retained
- involves concept test
concept test
detailed concepts r presented to consumers to get reactions
business analysis
estimating demands, sales, costs n profitability to study financial viability of products
development
- creating prototypes of the products
- give comp to see how realistic their concept is
testing marketing
test products in small settings before introducing them to market
commercialization
- launching products to the market
- assess market reactions n make necessary changes
5 categories of adopters
- innovators
- early adopters
- early majority
- late majority
- laggards
innovators (variety seekers)
- first group to adopt product
- small portion of market
- variety seekers
- try new products but unlikely to stick
early adopters (opinion leaders)
- next to adopt the product
- relatively big groups
- welcome new ideas n products cuz well-informed n passionate
- opinion leaders, seeks their advice, follow trends
- important to success of new products
early majority (deliberate/rational)
- one of the largest
- rational consumers
- weigh pros n cons
late majority (skeptics)
- one of the largest
- skeptic
- adopt product only after its adopted by others
- pressure to conform
laggards (resistant to change)
- reluctant to change
- prefer comfort of old n traditional
- important to understand same consumers may belong to different categories for diff products
product characteristics n rate of adoption
there’s 5 characteristics
- higher scores on each dimension = faster adoptions
relative advantage
advantage the new product offers over existing substitutes
compatibility
compatibility w physical setup, lifestyle, and values
simplicity
products are easy to understand and use have faster rate of adoption
communicability
easy to convey the benefits of product either by communication or demonstration
- adoption is likely to be fast
trainability
- consumers like the ability to try new product w out investment
- ex: trial size
- faster adoption when there’s way to avoid financial commitment
product life cycle
stages a product goes through from its inception to death
- applied to brand, product, or product category
- classic shape of PLC for successful PLC
- can varies depending on the product
- descriptive not predictive framework
4 stages of product life cycle
- introduction
- growth
- maturation
- decline
introduction
company start investing in development n commercialization of the product before it enters the market
- profit stays in negative zone
- slow sales growth
- market has not accepted the product
- marketing goal
marketing goal
create awareness for new offerings + explaining benefits of product
growth
- high growth rate in sales, customers accept product = rapid sales
- intense competition rapid growth attract other competitors
- many companies forego profits n invest heavily in their products w hope of dominating market
- doesn’t last long, near end, there’s consolidation
maturation
- sales stabilize or grow at a nominal pace
- price drop
- competition is intense
- more turmoil in market
- can last very long
decline
drop in sales
- marketers have 3 choices
1. maintain their product hoping other would quit
2. harvest or milk product by stoping further investment
3. divesting the product (selling to buyer or withdrawing from market)
services marketing
intangible, not physical objects
4 service characteristics
- intangibility
- inseparability
- heterogeneity
- perishability
intangibility
Services can’t be seen, tasted, or held before buying
- search quality
search quality
characteristic that can be assessed before the purchase
experience quality
characteristic that can be assessed only after experiencing the service
credence quality
difficult to assess
inseparability
service provider is inseparable from service provided
- Services are often produced and consumed at the same time
heterogeneity
Service quality can change depending on who, when, and how it’s delivered.
- never exactly the same
- standardization
perishability
services cannot be stored
- company vary prices/fee to address this concern
reliability (service quality)
ability to deliver consistent quality
responsiveness (service quality)
ability to provide prompt service
- addressing customer concerns
assurance (service quality)
refers to the knowledge, skill level, and credibility of the service providers
empathy (service quality)
includes a caring attitude and individualized attention
tangibles (service quality)
Many services are tangible, so its easier to evaluate and can be an indicator of service quality
gap analysis
fix the gap between what is needed and what is delivered
- breaks perceptions into several categories
gap 1
gap between what customers want and what mgmt thinks customer wants
- fix: mgmt should stay closely tuned to customers’ wants
gap 2
gap between what management thinks customers want and how they design the service to deliver it
- fix: develop systems that can meet customer desires
gap 3
gap between service quality specifications and service actually provided
- fix: training employees
gap 4
gap between what the company provides and what the customer is promised
- fix: expectations are realistic to deliver
gap 5
gap between what customers expect and what they actually experience
- fix: explain to customers what is being delivered
nonprofit organization
achieve a goal, not profit
- largest nonprofit is gov
supply chain mgmt (SCM)
The coordination actvities across suppliers, manufacturers, and distributors to efficiently produce and deliver g/s to customers.
supply chain integration (external)
occurs when multiple firms in supply chain coordinate activities
- seamlessly connect
- hard to determine where 1 company activities ends n next one start
demand supply integration (internal)
coordinate between functional areas inside company
- department creates demand coordinate activities w other department
- focus on supply side, catering to demand
relationships integration
ability of partner firms to rely on each other in a collaborative way to manage activities n projects
technology n planning integration
Integration of info technology so planning can be coordinated
material n service supplier integration
The seamless coordination of materials and supplier activities to ensure timely delivery and better value for customers.
customer integration
aims at providing long-lasting distinctive values-added offerings to customers w high sales n profitability potential
customer relationship mgmt (CRM)
Put customers at the center, focus on building relationships
- uses specialized software to manage contact
customer service mgmt (CSM)
ensure relationship remain strong
demand mgmt
align supply w customers demands so they can be served in the most cost-effective manners
order fulfillment
aims at generating, fulfilling, and delivering customer orders
- best order fulfillment processes reduce time between order n fulfillment
- reduce inv cost
manufacturing flow mgmt
Ensures firm has necessary resources to manufacture
supplier relationship mgmt
provide structural support to develop n maintain relationship w key suppliers
product development n commercialization
involves multiple firms to develop n launch new products
- many partners = competitive advantage
return mgmt
aims to minimize return-related costs n ensure pleasant experience for customers
- good return mgmt = more repurchase
- customers return = added costs
business logistics
physical movement of products through SCM
- 3 functions
1. source
2. make
3. deliver
- orchestrates these movement by involving multiple parties across organizational boundaries
securing n procurement
goals to reduce costs of materials n supplies
- done so by aggressive bargaining
inventory control
- lack of inv = loss of orders n customers disappointment
- marketers can identify demand at each level in supply chain n plan accordingly
material requirement planning (MRP)
manage inv from suppliers to manufacturers
distribution resource planning
determines the right quantity of finished goods to be sent to meet customer demand,
- optimizing inventory levels
- minimizing costs
automatic replenishment programs
bar code scanning at the retailer level helps automate real time basis
order processing
- “make” part of business logistics
- processes customers orders n fulfills them accurately n in a timely manner
- monitors flow of info from customers n flow of goods to customers
electronic data interchange
make order processing more automatic from use of computer technology
production
- based on build to stock system
- stock products were manufactured based on expected customer demand n shipped down supply chain
- newer systems are based on pull manufacturing
- reduce wage
pull manufacturing
products are produced based on customer’s specifications
warehousing n material handling
chip used to track/count products
transportation
which transportation channel to use
info system
reliable system
outsourcing logistics functions
companies increasing outsourcing to others who specialize in it
3rd party logistics company
provides logistics services, such as warehousing, transportation, and order fulfillment, on behalf of other businesses
4th party logistics companies
more comprehensive outsourcing partners
- provides consultant or managers (manage supply chain)
offshoring
outsourcing logistics to service providers outside the country
nearshoring
outsourcing w partner w company in nearby locations
supply chain risks,
potential disruptions that can negatively impact the flow of goods and services
suply chain resilience
protect inv n assets n do reactive planning
electronic distribution
EDM, digital marketing strategy ti promote g/s
sustainable supply chain mgmt
involves incorporating environmentally conscious thinking into all phases of supply chain management
end of life mgmt
includes recycling and clean disposal
retailing
act of selling to final consumer
- who is buying it and if end consumers buy it for their own use.
independent retailers
standalone operations, owned and operated by an individual or group.
product assortment and pricing
- most important decisions for retailers
- define target market
franchise retailers
buys into an existing brand and runs a store using that brand’s nam
level of service
store move from self to full service and labor cost component increases
- justified if each sale is sig value
- self service convience goods, limited service for shopping goods, n full service for specialty good
location
destination store
- people come to it
anchor stores
- important to have highly visible location cuz it depends on traffic near them
department store
- wide n deep product mix
- numerous department in the same store
- ex: sears
specialty stores
- carries specialty goods
- very narrow n deep product assortment
- customers expect assistance from knowledgable staff
supermarket
- large store w wide n deep product mix
drugstore
- moderately wide n deep products
convenience stores
- moderately wide but shallow product mix
- focused on high turnover convenience goods
discount stores
- provide reduce prices
- target
warehouse membership club
- wide n shallow product mix but gives a warehouse vibes
- sell items in bulk
- costco
automatic vending machines
- narrow assortment but wide variety of premises
- easy access
direct marketing
- selling directly to customers
online retailing
- selling things online
- buy things in the comfort of their homes
