MarkStrat Quiz Flashcards
describe some general characteristics of the markstrat world
- fictitious industrialized country of 80 million inhabitants whose monetary unit is the Markstrat dollar ($).
- roughly behaves like most markets
- inflation (2%) and GNP growth (4%) are fairly stable
- no major political, social, or economic event is anticipated in near future
What are the five primary characteristics of clinite products? (since they can be evaluated along more than 50 attributes)
- efficacy
- safety
- packaging
- pleasure
- usability
def. this refers to the ability of the product to deliver the benefit intended. For instance, the rating is a measure of the product’s sun protection, anti-wrinkle effect, color coverage, micro-emulsion, etc.;
efficacy
def. This attribute measures the degree to which the product produces few or many side effects. A high rating is an indicator of harmlessness, absence of allergic reactions, purity, medical approval, etc
safety
def. Characteristics of the product packaging. Several benefits are included here, such as attractiveness, convenience to carry, appropriate size, etc.;
packaging
def. This is a somewhat subjective attribute, but it is a measure of how pleasing a product is to use, over and above its efficacy or convenience. Here it refers to texture, scent, etc
pleasing
def. A measure which indicates ease of use, time to dry, required number of applications per day, compatibility with other skin care products, resistance to water, etc.;
usability
how are characteristic dimensions rated?
on a scale of 10 (poor) to 100 (excellent)
t or F: offering more of a given characteristic is always better
False, it is not necessarily better
e.g. . For instance, sun-protection products with very high protection indices will prevent you skin to tan; if your objective is to tan, you may want to use a lower index product.
describe clinite market
- Clinites are skin-care cosmetic products such as beauty or anti-aging creams, sun-care or skin care lotions.
- Clinite products have existed for several years and the market has grown quite consistently since the introduction of the first Clinite brand.
- It is now a well-established market, with several strong brands at different price points covering a wide range of needs.
- Analysts believe that the Clinite market will continue to grow over the next five years.
def. the cost at which each unit will be produced, based on an initial production batch of 2.5 million units
base cost (min is 1.2$)
The base cost is decided jointly by the Marketing department – which is mainly concerned with ____________ – and by the R&D department –which is mainly concerned with ___________
margin and profitability (marketing)
product feasibility (R&D)
describe the nutrite market
Nutrite products will satisfy entirely different needs from that of Clinite products so that demand for the two products will be completely independent. They will not be complementary in any way and there will not be any substitution from one to the other. It is anticipated that the Nutrite market will be quite attractive if high quality and great tasting products with clinically proven benefits is made available at the right price.
- Recent calculations suggest that an investment of about 10 million dollars may be required for the first Nutrite.
what are the 5 most important characteristics of the nutrite market
- clinical benefit
- nutrition facts
- packaging
- flavour
- variety
def, This refers to the ability of the product to deliver the benefit intended. For instance, the rating is a measure of the increase in skin elasticity, reduction of aging spots, reduction of hair loss, etc.;
clinical benefit
def. This attribute measures the degree to which the product is “good for you” or has high quality ingredients. A high rating is an indicator of no preservatives, little artificial color, no added sugar, reduced salt, low saturated fat, etc.;
nutrition facts
def. Characteristics of the product packaging. Several benefits are included here, such as attractiveness, convenience to carry, appropriate size, etc.;
packagaging
def. Quality of the product taste, in terms of uniqueness and pleasure of the taste experience with the product, and of ability to support the performance claim. For instance, high quality flavors can express concepts such as smooth, natural, fresh, etc..
flavour
def. A measure which indicates the number of product variations, in term of serving sizes, flavors or presentations.
variety
how are nutrite characteristics rated?
on a scale of 0 (poor) to 100 (excellent)
what is the min base cost for a nutrite
$2.30
describe naming conventions
Brand names are made up of up to six characters. The first letter identifies the firm marketing the brand (M, R, S, T, L or N). The second letter must be an ‘I’ for a Clinite or an ‘U’ for a Nutrite. The other characters can be letters or numbers and can be freely chosen by each firm to generate different brand names.
what are 5 consumer segments for clinite market
- high earners (Hi)
- Affluent Families (Af)
- Medium Income Families (Me)
- Low Income Families (Lo)
- Singles (Si)
def. The members of this group are characterized by their high incomes.
- They are women over 25 years of age, either single or married without kids, and studies show that they usually buy expensive products, which they can afford, and that their purchases are partially motivated by social status.
- They are heavy users, with an average loyalty to their favorite brands, and they are price insensitive to the point of disregarding cheap brands, and they demand high levels of performance attributes from their products.
high earners (hi)
def. Women in this segment are aged 25 – 45, are either married with kids or single parents.
Their high income levels leads them to be highly loyal, frequent buyers and users of cosmetics, and they are definitely not price sensitive.
Consumers in this segment are looking for high quality, high- performance and pleasant-to-use products.
They can afford expensive products and often view price as an indication of quality.
affluent families
def. These consumers have less disposable income than the Affluent Families, and are thus more price sensitive.
This segment also includes some sub-groups who do not fit with the other segments.
Although this segment is the largest and is composed of several sub-groups, most customers have similar needs.
They are looking for relatively inexpensive products with average physical attributes.
Experts believe that the penetration of this segment is not as high as the other segments.
As a consequence, its future growth rate could exceed forecasts.
Their loyalty is above average.
Medium Income families (Me)
def. Individuals in this segment have a similar family situation and age range as the Affluent Income families.
Their lower income levels, however, causes their budgets to be strained, and leads them to be less frequent buyers and users of cosmetics, and to be very price sensitive.
Their loyalty is below average.
low income families (Lo)
def. As the name of this segment indicates, ______ live alone.
They are generally between 16 and 35 years of age and can be students or employees.
All in all, while being relatively heavy users, they demand average levels of both performance and pleasure from their cosmetic products and tend to be rather price-sensitive.
_________ are not loyal to any brand; on the opposite, they tend to favor new brands and switch very easily is the new brands fit their needs.
Singles (Si)
what are the known three consumer groups/segments in Nutrites
- health conscious (He)
- families (Fa)
- elderly (El)
def. Those are individuals, usually young adults, who lead a “wellness-oriented” lifestyle and are generally concerned with nutrition, fitness, stress, and their environment.
- They accept responsibility for their health and are excellent customers for health-related products.
Although this segment will probably be the largest one in the early days, it represents only a small percentage of total potential consumers.
Health conscious (HE)
def. The second wave of Nutrite product will include affluent and medium-income families who are concerned with nutrition and its impact on their health.
They believe that healthy food can help parents and children live a better life and solve minor medical conditions
families (Fa)
def. Many metabolic and physiological changes occur in the body when people get older. Some medical conditions are also directly related to age such as dehydration, cholesterol, hypertension, osteoporosis, etc.
As getting older people to eat better is actually easier than persuading many young adults to do the same, industry experts believe that ______ are likely to become the biggest segment of Nutrite consumer within 3 to 5 years.
elderly
what are the four distribution channels?
- mass merchandisers and e-grocers (Carrefour, Walmart, peapod.com, walmart.com)
- specialized mass retailers (Sephora, Boots, CVS, Duane Reade)
- Department stores (Nordstrom, Macy’s, Sogo)
- beauty specialist portals (such as buymebeauty.com or feelunique.com (web-only) or ulta.com, sephora.com)
def. These “super stores” typically sell a wide variety of goods, including food items, housewares, and personal care products.
They strive to operate on a low-price, high-volume basis and to minimize overheads.
As a consequence, the level of service offered is lower than that of the two other channels.
While ___________c arry many different product categories, the depth of each product line is usually restricted to few units.
They often distribute the cheaper, lower-quality products. Their lack of technical expertise and the low level of service may well prevent them from distributing Nutrites in the early years. There are 3 main chains of such stores, for a total of 12,000 outlets.
mass merchandisers and e-grocers
def. These stores are usually smaller and also belong to organized chains.
They are geographically close to their customers (in shopping centers or downtown areas) and can provide a high level of customer service.
As they do not distribute many different product categories, cosmetics account for a large proportion of their sales.
These stores usually carry a broad product line for each category, including the most expensive and/or high- performance products.
Because of their high level of expertise in cosmetics, specialty stores are likely to be the preferred distribution channel for Nutrite products. Four main chains exist in this category, representing 2,000 stores.
specialized mass retailers
def. characterized by the wide product assortment they offer.
They usually have a significant amount of space displaying cosmetics, often with a specific counter dedicated to each major manufacturer.
They also provide extensive customer service.
_________________ are often organized in chains that have a degree of power in negotiating margins with manufacturers.
Similar to specialized mass retailers, _____________ are likely to be the second preferred distribution channel for Nutrite products.
Five such chains with a total of 10,000 stores are identified in the Markstrat world.
department stores
def. These are dedicated to highlighting the range of beauty products found in the owners’ stores.
There are about a dozen _________ in period 0.
All these various portals and sites have different characteristics in terms of image, awareness levels, financial strength, range of products offered, price ranges, the selling mechanisms applied (up-selling, cross-selling, automated replenishment), the customer base (proportion of each segment likely to visit the site), etc.
Convenience is the key advantage of __________ as consumers may shop from their home at the time of their choice. In addition, they have access to an almost unlimited choice and can compare features and prices very easily.
Privacy and security are the primary concerns of online shoppers, but new mechanisms are put in place by banks and e-commerce sites to reduce fraud.
Online stores are likely to become more important in the next 5 to 10 years.
beauty specialist portals
which distribution channels are importatn to clinite market?
all of them
