mktg 301 exam 2 Flashcards
marketing strategy is…
a middle ground between external and internal planning
What is a company’s mission statement?
a statement of an organization’s purpose (why do they exist)
What is an example of a good mission statement?
We deliver low prices every day and give ordinary folks the chance to buy the same things as rich people
What does a mission statement mean for other parts of a compay?
Leads to more detailed objectives in various departments
What does relative market share mean?
company strength
market growth rate
market attractiveness
Explain Cash Cows
An industry or product that we have a high market share of but a low growth rate (stable, just not expanding)
Predictable revenue
Coke
Explain Question Marks
Something that is happening where it is suddenly attractive, low market share but a high growth rate
Use money from cash cows, need funding to invest in the business in question
Goal to grow it into a star
Coke Zero (Pepsi has larger market share)
Explain Stars
Trying to expand the market share of our question mark, high growth and high market share
Want it to become a cash cow and settle down overtime
Cherry Coke, new flavors introduced
Explain Dogs
An industry or product that is not attractive, low growth rate and low market share
Something that has been tried, but is not successful
Exit when you have a dog
“New coke”, came from a new formula, people rejected it
What are some criticisms of the BCG Matrix?
Limited number of variables used
Ignores interrelationships between businesses (Disney movies are dogs, but support Disney as a whole)
Placement of a business in the matrix is highly dependent on definition of a matrix (beverages as a whole vs. Coke sodas)
What is Market Penetration?
Increase sales to current customers without changing the products being sold
Can be achieved by…
Price, place, promotion
What is Market Development?
Identify and develop new markets (geographic or demographic) for current products
What is Product Development?
Offering modified or new products to current markets
What is Diversification?
Trying to grow, start up or buy businesses outside of current products and markets
Explain a SWOT analysis
Strengths: Internal capabilities that may help a company reach its objectives
Weaknesses: Internal limitations that may interfere with a company’s ability to achieve its objectives
Opportunities: External factors that the company may be able to exploit it to its advantage
Threats: Current and emerging external factors that may challenge the company’s performance
4 P’s of the marketing mix
Product, Price, Promotion, Place
What factors go towards a successful implementation?
Company culture
Employees shared beliefs and values
Organization structure
Reward systems
What is marketing implementation usually about?
positive social relationships
How do you evaluate marketing plans?
Set marketing goals
Measure actual vs. Expected performance on goals
Take corrective action to close gaps between goals and performance, Marketing audit (bring in a third party)
What are the parts of segmentation?
Divide the total market into smaller segments
Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
Behavioral Segmentation
Intermarket Segmentation
Why would you divide the total market into smaller segments?
Have distinct needs, characteristics, behaviors
Respond similarly to marketing efforts, and therefore…
Might require their own products and marketing (4 Ps)
Geographic Segmentation
Dividing a market into different geographic units (country, country region, city size)
Demographic Segmentation
Dividing a market based on demographic variables (gender, family size, family life cycle, race, generation)
Easier to measure than most other types of variables
Psychographic Segmentation
Dividing a market based on social class, lifestyle, personality
Behavioral Segmentation
Benefits sought
Usage occasion
User status
Usage rate
Loyalty status
Intermarket Segmentation
Segments of consumer who have similar needs and buying behavior even though they are in different regions
Luxury cars, google, Ikea
Requirements for effective segmentation
Measurable, Accessible, Substantial, Differentiable, Actionable
What is targeting in STP?
Select the segment or segments to enter that are most attractive to our organization
Decide on a value proposition
Differentiation
What is positioning in STP?
Develop positioning for target segments
Develop a marketing mix for each segment
Explain Differentiated Marketing
Targets several market segments and designing separate offers for each
Explain Concentrated Marketing
Targets a large share of one or a few small segments or niches
Etsy, tetramin
Explain Micro Marketing
Tailoring products and marketing programs to suit the tastes of specific locales and individuals
Local marketing, individual marketing
Explain Individual Marketing
One to one marketing
Main tool: mass customization
Explain Positioning
Key concept that is to be communicated to the target consumer
Place the product occupies in the consumers mind relative to competing products
Products are created in a factory, brands are created in the mind
How do you differentiate to create a better competitive advantage?
Product
Services
Channels
People
Image
Explain Vertical Differentiation
One product is clearly better
Explain Horizontal Differentiation
“better” is a matter of opinion
What is a good example of a positioning statement
To (target segment) who (need), (brand) is (concept) that (point-of-difference)
What is the first level of products?
Core Customer Value
Decisions driven by customer behavior, marketing information, microenvironment, macroenvironment, strategy
What is the second level of products?
Actual Product
Brand name, features, design, quality level, packaging
What is the third level of products?
Augmented Product
Delivery and credit, after sale service, warranty, product support
Convenience, a type of consumer product…
Frequent purchase
Low price
Wide distribution
Sales promotion (ads)
gum, toothpaste
Shopping, a type of consumer product
Less frequent, some comparison
Mid-priced
Selective distribution
Word of mouth (reviews, publicity, salesperson, traditional advertising)
beats, northface jacket
Specialty, a type of consumer product
High price
Infrequent purchase, low price sensitivity, low comparison across brands
Exclusive
One to one, carefully targeted
bentley
Unsought, a type of consumer product
Consumers most likely to compare a $100 jacket
Little product awareness
Price varies
Distribution varies
Aggressive sales promotion
blood giving
Other Products, a type of consumer product
Industrial Products (b2b)
Organizations: For profit and non-profit
People: politicians, entertainers, pro athletes, doctors, lawyers
Places: tourism, country of origin immigration
Ideas (social marketing): public health campaigns, environmental campaigns, family planning, human rights
Does a brand name need to be inspiring?
no
Product attributes, an individual product decision
Quality (Features, style, design)
Performance (product performs better), Conformance (something meets an expected standard)
Know vertical differentiation
Packaging, an individual product decision
selling”
Rely on packing to sell product (Campbells soup)
Identifies product or brand
Supports brands positioning
Adds personality to the brand
Logo
Branding, an individual product decision
Marker of identification for a product
A promise to the customer
Brand identity and brand consistency lead to feelings of trust
What is product line length?
The number of items in a product line
How do you adjust the length of a product line?
Stretching: Downward (lower quality), Upward (higher quality), Both directions
Filling (more versions of same product)
Width, in a product mix
number of different product lines carried
Length, in a product mix
number of items in a line
Depth, in a product mix
number of versions offered of a product in a line
Consistency, in a product mix
how closely related various lines are
Explain Brand Equity
the positive effect that knowing the brand name has on customer response to the product
What does good brand equity provide
Greater awareness and loyalty
Basis for strong, profitable customer relationships
Willingness to buy over competitors and/or willingness to pay a premium for the brand
What is brand positioning based on
Product attributes
Benefits
Beliefs and values
What are desirable qualities for a brand name
Suggests product benefit and qualities
Easy to pronounce, recognize and remember
Distinctive
Extendable, not limited to one product
Translates easily into foreign languages
Capable of being registered and legally protected
What is some more bullshit about brands?
Genericization voids trademarks legal protection
Must include the registered trademark symbol
Some include the word “brand” for added protection
Brand Extension
Using a successful (existing) brand name to launch a product in a new category
Leveraging a brand name and going into a new category
Line Extension
Introduction of additional items within the current product category under the same brand name (Avoid cannibalization)
Multiband
Multiple brands by the same company in the same product category
New Brands
Used when existing brand names are either unsuitable for brand extension or the company doesn’t want to dilute them
What are the 4 service characteristics?
Intangibility, Inseparability, Variability, Perishability
What is the correct order of the stages of new product development?
- Idea generation
- Idea screening
- Concept development and testing
- Marketing Strategy Development
- Business Analysis
- Product Development
- Test Marketing
- New Product Failures
- Commercialization (launch product)
Idea generation
The systematic search for new product ideas
Internal sources: Company employees at all levels
External sources: Customers, competitors, distributors, suppliers, outsourcing partners
Idea screening
Screening process to reduce # of ideas by spotting good ones and dropping poor ones
Concept development and testing
Translate your product idea into a detailed concept stated in meaningful consumer terms (What will the consumer get out of this product)
Test concepts with a group of target consumers to find out level of appeal
Marketing Strategy Development
n initial marketing strategy is designed for the new product, consisting of
Target market and initial objectives
Launch Tactics
Long Term Objectives
Business Analysis
Does this idea make business sense
Involves a review of the sales, costs, and profit projections to assess fit with company objectives
Assess risk under various scenarios
IF results are positive, project moves to the product development phase
Product Development
Develop from concept into actual product (prototype)
Investment increases considerably, moving from idea into realm of reality
Test Marketing
Product and marketing program introduced in a limited setting
Can be expensive and time consuming and shows your plans to competitors
New Product Failures
Only 10% of new consumer products are still on the market and profitable after 2 years
Less than 2% are considered truly successful
Failures is due to problems at any stage of the marketing process
Commercialization (launch product)
Must decide when and where to initially introduce the product
Must develop a market rollout plan
