Test #3 Flashcards
Segmentation that divides markets using demographics, psychology, and personality traits
Psychographic Segmentation:
categorizes consumers according to how they behave with or act toward products.
Behavioral Segmentation
Segmentation that divides markets by characteristics such as age, gender, income, education, and family size.
Demographic Segmentation
Segmentation that divides markets into groups such as nations, regions, states, and neighborhoods.
Geographic Segmentation
A targeting strategy that simultaneously pursues several different market segments, usually with a different strategy for each.
Differentiated Targeting
A targeting strategy that approaches the marketplace as one large segment.
Undifferentiated Targeting
A targeting strategy that involves pursuing a large share of a small market segment.
Niche Marketing
A subset of the marketing mix that includes four main elements of marketing communication: advertising, sales promotion, personal selling, and public relations.
Promotional Mix
A type of advertising that attempts to develop initial demand for a product.
Informative Advertising
A type of advertising that seeks to keep the product before the public in an effort to reinforce previous promotional activity.
Reminder Advertising
A type of advertising that attempts to increase demand for an existing product.
Persuasive Advertising
An advertising technique in which a company promotes its products through appearances in movies or on television shows or other media.
Product Placement
A promotion-mix budgeting strategy in which firms set their promotion budget based on what they believe they can afford.
Affordable Method
A promotion-mix budgeting strategy in which firms allocate a specific percentage of a period’s sales to the promotion budget for that period.
Percentage of Sales Method
A promotion-mix budgeting strategy in which a firm defines specific objectives, determines the tasks required to achieve those objectives, and then estimates how much each task will cost.
Objective and Task Method
A pricing tactic that involves constantly updating prices to reflect changes in supply, demand, or market conditions.
Dynamic Pricing
A pricing method in which a certain amount is added to the cost of the product, to set the final price; also called cost-plus pricing.
Markup Pricing
A pricing tactic that involves selling a product at a price that causes the firm a financial loss.
Loss Leader Pricing
A pricing tactic in which two or more products are packaged together and sold at a single price
Price Bundling
The practice of first setting prices low with the intention of pushing competitors out of the market or keeping new competitors from entering the market, and then raising prices to normal levels.
Predatory Pricing
A pricing objective that involves setting a relatively high price for a period after the product launches.
Profit Maximization
A pricing tactic that involves pricing a product higher than competitors to signal that it is of higher quality.
Prestige Pricing
When two or more companies collude to set a product’s price.
Price Fixing
The practice of charging different customers different prices for the same product.
Price Discrimination
The prices that consumers consider reasonable and fair for a product.
Reference Pricing
The point at which the costs of producing a product equal the revenue made from selling the product.
Break Even Pricing
Products developed by a retailer and sold only by that specific retailer. Also referred to as store brands.
Private Label Branding
A strategy in which two or more companies issue a single product in an effort to capitalize on the equity of each company’s brand.
Co-Branding
A reduction in sales volume or market share of a company’s existing product due to the introduction of a new product made by the same company.
Cannibalization
The value the firm derives from consumers’ positive perception of its products.
Brand Equity
The process of broadening the use of an organization’s current brand to include new products.
Brand Extension
