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MKTG 600 > Midterm > Flashcards

Midterm Flashcards

1
Q

*What is a market segment?

A

A group of customers that shares similar characteristics and responds to marketing offerings in a similar fashion.

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2
Q

*What are the four criteria for selecting a market segment?

A

Identifiable
Accessible
Stable
Profitable

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3
Q

*What are the three criteria for determining market attractiveness?

A

Market size - But size alone does not indicate market attractiveness.
Purchasing power of the segment
Behaviors of customers and competitors

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4
Q

*When selecting market segments, what is the most important thing to consider?

A

Select segments that provide the best fit between
competencies and objectives of firms, and
the needs and wants of customers.

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5
Q

*What are the four positioning considerations listed by Gwin and Gwin?

A

The target market
How the product is different or better than competitors
The value of this difference to the target market
The ability to demonstrate or communicate this difference to the target market

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6
Q

*According to Michael Porter, what does a unique strategy lead to?

A

A unique strategy leads to unique activities. A strategy will guide decisions on both internal and external activities of the company.

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7
Q

*What are the three types of fit according to Porter?

A
  1. Simple Consistency between activity and strategy - example Vanguard minimizes portfolio turnover and advertising to be consistent with low-cost strategy
  2. Activities are Reinforcing - example Neutrogena marketing to luxury hotels their dermatologist recommended soap
  3. Optimization of effort - example Gap restocking inventory in stores daily to optimize selection in store resulting in an inventory turnover of 7.5x per year
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8
Q

*What are the stages of the consumer decision making process?

A
  1. Need recognition - getting name out there
  2. Information search - consumer seeking more info
  3. Evaluation of alternatives - compare to competitors
  4. Purchase - traditional promotions
  5. Post purchase behavior - referrals, customer created content
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9
Q

*What are the Four Ps of Marketing?

A

Price, Place, Promotion and Product

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10
Q

*What are the five stages of the Product Life Cycle?

A
  1. Introduction
  2. Growth
  3. Competitive turbulence
  4. Maturity
  5. Decline
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11
Q

*What are the characteristics of the introduction phase of the PLC?

A
  • Price is high
  • Place - distribution is selective
  • Promotion - informational
  • Product is basic and Product line is kept simple
  • Customers are innovators
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12
Q

*What are the characteristics of the growth phase of the PLC?

A
  • Price - sales pick up, competition increases
  • Place - goal is to intensify coverage
  • Promotion - focus on brand building
  • Product- Race to segment: Product line is extended with newly added features
  • Customers at this stage are the early adopters.
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13
Q

*What are the characteristics of the competitive turbulence phase of the PLC?

A
  • Price pressure intensifies, price more competitive
  • Place -
  • Promotion-
  • Product -Firms tighten product line, bottom line focus emphasizes efficiency and retention/service
  • Customers at this stage are the early majority.
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14
Q

*What are the characteristics of the maturity phase of the PLC?

A

Price- defensive pricing

  • Place -
  • Promotion - focus on differentiating brands
  • Product- proliferation of brands at this stage, Sales peak and slow, so the goal is to protect market shares.
  • Customers at this stage are the middle majority.
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15
Q

*What are the characteristics of the decline phase of the PLC?

A
  • Sales start declining at a fast rate.
  • Primary issue is harvesting (unless you can innovate back down the life cycle)
  • Firms recognize decline & minimize investment;
  • Squeeze the product for as much earnings as they can.
  • Customers are laggards.
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16
Q

*What should a firm do when they reach the Decline phase of the PLC?

A

Minimize investment and milk the cash cow OR innovate back down the life cycle.

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17
Q

*What are Porter’s three generic strategies?

A

Cost leadership
Differentiation
Niche

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18
Q

*What are the four categories of perceived benefits of products?

A

Functional
Emotional
Social
Self-Expressive

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19
Q

*What are Prahalad and Hamel’s 3 Tests for Identifying a Competency in a firm?

A
  1. Provide potential access to different markets
  2. Make a significant contribution to perceived customer benefits
  3. Be difficult to imitate
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20
Q

*Draw the growth strategy matrix.

A

Existing Products, Existing Markets = Market Penetration Existing Products, New Markets = Market Development
New Products, Existing Markets = Product development New Products, New Markets = Diversification

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21
Q

*What is the purpose of a perceptual map? Draw one for the Fast Food Industry.

A

A perceptual map is a means for determining positioning. Fast Food could be drawn with price on one axis and quality on another. McDonalds would be lower price and quality while Panera and Chipotle would be higher price and quality.

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22
Q

*What is it called when you define the competition by the consumer’s decision process?

A

Consumer Decision Hierarchy

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23
Q

*What are the five steps of the customer decision process?

A
  1. Need recognition
  2. Information search
  3. Evaluation of alternatives
  4. Purchase
  5. Post purchase behavoir
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24
Q

*What are three weaknesses of using a financial ratio for a marketing metric?

A
  • no indication of the future performance
  • do not provide information about a firm’s competitive position
  • single metric offers limited perspective as it relates to long term goals/strategies
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25
Q

*What is a blue ocean strategy?

A

A strategy that goes for uncontested markets. Uncontested markets are created through innovation.

26
Q

*What type of market would you use a red ocean strategy?

A

Contested market

27
Q

*What are two different ways to measure market share?

A

Overall market share - personal computer market

Relative market share - high end professional laptop market

28
Q

*What types of marketing metrics are most subjective to measure?

A

Brand metrics

29
Q

*What are the strengths of using financial performance metrics?

A

Tends to be more objective

Helps to make apples to apples comparison

30
Q

*What is path dependency?

A

This is when established assets with network effects lock-in suboptimal standards.

31
Q

*What is path creation?

A

Entrepreneurs can exercise “mindful deviation” in creating new paths (timing is key).

32
Q

*What is the primary disadvantage to an offensive strategy?

A

Can be too aggressive, try to do too much and as a result, do a lot poorly and nothing well

33
Q

*What is the primary disadvantage to a defensive strategy?

A

Can be too conservative. Can underestimate competitors.

34
Q

*Draw the Boston Consulting Group Matrix.

A

High mkt growth, high mkt share = star
High mkt growth, low mkt share = ?
Low mkt growth, high mkt share = cash cow
Low mkt growth, low mkt share = dog

35
Q

*What is the point of the Boston Consulting Group matrix?

A

To determine resource allocation

36
Q

*what does synergy result from?

A

Presence of fit

37
Q

*What are five places you can find synergy?

A 
Vision/view of the market
Product lines
Cultures/philosophies/personalities
Structures
Brands
38
Q

*what are 3 metrics that can be used to measure the success of promotion?

A 
# of people exposed to ad
# of people who recall the ad (aided or unaided)
Social media metrics
39
Q

*What are 2 product related metrics?

A
  • % of products introduced in the last year

- % of revenue earned from new products

40
Q

*What are 3 brand related metrics?

A

Brand awareness
Brand loyalty
Brand equity

41
Q
  • What are 5 place metrics?
A
  • penetration within a retailer
  • proliferation to other retailers
  • time to market
  • product cost
  • servicing time
42
Q

*what are the two factors that guide strategy development with the Boston Consulting matrix?

A

Cash flow and product life cycle

43
Q

*According to Porter, why isn’t efficiency a strategy?

A

It does not differentiate

44
Q

*According to Porter, what is only possible with trade offs?

A

Sustainable competitive advantage

45
Q

*according to the Boston consulting matrix, what should you do with a cash cow?

A

Harvest

46
Q

*What is an offensive strategy?

A

Focuses more on customer acquisition

Challenge the competitors openly and directly with the goal of outperforming them in the marketplace

47
Q

*When firms use offensive strategies, what are 5 things they are trying to accomplish?

A
  • push for market share
  • enter mkt segments dominated by competitors
  • outspend competitors
  • increase aggressive price competition
  • intensify distribution
48
Q

*What is a defensive strategy?

A

Concentrate on post-purchase activities with the primary goal of keeping existing customers.

More about customer retention and conversion than about customer acquisition.

49
Q

*What are 5 types of offensive strategies?

A
  • Frontal attack
  • Flanking attack
  • Encirclement attack
  • bypass attack
  • blue ocean strategy
50
Q

*What are x examples of defensive strategies?

A

Hedgehog defense/strategic withdraw
Flank position defense
Mobile defense

51
Q

*What is a frontal attack?

A
  • Attacking a competitor head-on
  • Attack is directed at the competitors strengths not weaknesses
  • To be successful, firm employing strategy should have advantage of resource and strength
52
Q

*what is a flanking attack?

A
  • attacking a competitor at the side or rear via product differentiation/segmentation
  • directed at competitor’s weaknesses
  • firm incorporates an element of surprise
  • requires innovation
53
Q

*what is an encirclement attack?

A

Launched on several fronts
Engages competitor at front, rear and sides
Requires abundance and superiority of resources

54
Q

*What is a bypass attack?

A

Avoids direct confrontation with competitor
Attacks at point where competitor is not present but is adversely affected by attack
Strong differentiation and innovation to the point of “reinvention”
Focus on fundamentally different market driver/customer benefit/determinant attribute

55
Q

*What are two examples of a bypass attack?

A

Nintendo Wii - went for motion/virtual reality when Sony and Microsoft were going high resolution graphics

Netflix - video rental with not stores, cable network with no cable

56
Q

*What is a hedgehog defense?

A
  • aka strategic defense
  • involves withdrawing from a market and then preparing for a counterattack
  • most frequently in the form of spin-offs or dispositions
57
Q

*What are four advantages of a hedgehog defense?

A
  • enhances focus
  • enables allocation of resources to higher-growth business/product
  • for public companies, can increase resources and liquidity
  • create more homogeneous, high-growth business unit
58
Q

*What is flank positioning defense? Give an example.

A

Set up outposts as a hedge against uncertain eventualities

Example - cellphones enabling Skype and Facetime

59
Q

*What is a mobile defense? Give an example.

A

Abandoning a position, stretching domain of the market from where the firm can defend itself or launch counterattack
Example - rolling iPods into iPhones

60
Q

*What is culture?

A

The language values and idioms of a group

61
Q

*What should a target market represent a “fit” between?

A

customer wants/needs/expectations and firm’s competencies and objectives

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