MKT 305 1st EditionExam # 3 Study Guide Chapters 8-10Chapter 8Market SegmentationInvolves aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing actionMarket SegmentsRelatively homogeneous groups of prospective buyers that result from the market segmentationprocessWays to Segment Consumer Markets- Geographic segmentation: region- Demographic segmentation: household size- Psychographic segmentation: lifestyle- Behavioral segmentation: product features- Behavioral segmentation: usage rateWays to Segment Organizational (Business) Markets- Geographic segmentation: statistical area- Demographic segmentation: NAICS code- Demographic segmentation: number of employees- Behavioral segmentation: usage rateProduct differentiationStrategy that involves a firm using different marketing mix activities, such as product features and advertising, to help consumers perceive the product as being different and better than competing productsSteps in Segmenting and Targeting Markets1. Group potential buyers into segments2. Group products to be sold into categories3. Develop a market-product grid and estimate size of markets4. Select target markets5. Take marketing actions to reach target marketsCriteria to Use in Selecting the Target Segments- Market size- Expected growth- Cost of reaching the segment- Compatibility with the organization’s objectives and resourcesProduct PositioningA product’s position is based on consumer perception of it. Two types of product positioning include head-to-head and differentiation.Product RepositioningTo reposition a product in consumer’s minds, you must change attributes, marketing, or both.Perceptual MapHelps producers/marketers know how best to reposition their productProduct Positioning Using Perceptual Maps1. Identify the important attributes for a product or brand class2. Discover how target customers rate competing products or brands with respect to these attributes3. Discover where the company’s product or brand is on these attributes in the minds of potential customers4. Reposition the company’s product or brand in the minds of potential customersChapter 9ProductA good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers’ needs and is received in exchange for money or something else of valueServicesIntangible activities or benefits that an organization provides to satisfy consumes’ needs in exchange for money or something else of valueConsumer ProductsProducts purchased by the ultimate consumerBusiness ProductsProducts organizations buy that assist in providing other products for resaleConvenience ProductsItems that the consumer purchases frequently, conveniently, and with a minimum of shopping effortShopping ProductsItems for which the consumer compares several alternatives on criteria such as price, quality, or styleSpecialty ProductsItems that the consumer makes a special effort to search out and buyUnsought ProductsItems that the consumer does not know about or knows about but does not initially wantDerived DemandSales of business products frequently result (or are derived) from the sale of consumer productsExample: Consumer demand for Ford increases, the company may increase its demand for paintspraying equipmentSupport ProductsItems used to assist in producing other products and servicesClassifying ServicesDelivery by Person/BusinessDelivery by Non-profitDelivery by GovernmentWhat impacts expectations?1. Frequency of use2. Distance between input/output and distance between investment/return3. ConditioningExample: People trust non-profits more than governmental agenciesUniqueness of ServicesIntangibility: Services are not a physical object that can be seenInconsistency: Quality of service varies with providerInseparability: The provider and services are inseparableInventory: Pertains to whether or not service is being renderedFive Dimensions of ServiceReliability: Do we deliver on our promises?Tangibility: Do we present a professional image/appearance?Responsiveness: Do we respond to our customers in a high quality manner?Assurance: Do we know and do we appear to know what we are doing?Empathy: Do we listen, take customer needs/concerns seriously, and really care about each customer?Product LineGroup of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price rangeProduct MixConsists of all of the product lines offered by an organizationReasons New Products FailInsufficient product protocol“Blinders” caused by biasInadequate competitive analysisDoes not meet consumer needsToo small a target marketInsufficient differentiationPoor product quality/performancePoor positioningInadequate budgetInsufficient access to marketBad timingPoor execution of marketingSmall Business Failure1. Lack of capital2. Insufficient customer base/target market3. Poor marketing4. Victim of their own successOrganizational problems in new product features1. Not really listening to the “voice of the consumer”2. Skipping stages in the new product process3. Pushing a poorly conceived product into the market to generate quick revenue4. Encountering “groupthink” in task force and committee meetings5. Not learning critical takeaway lessons from past failures6. Avoiding the “NIH problem”Seven stages in the new product processStage 1: New-product strategy developmentStage 2: Idea generationStage 3: Screening and evaluationStage 4: Business analysisStage 5: DevelopmentStage 6: Market testingStage 7: Commercialization Chapter 10Product Life CycleIntroduction: awarenessGrowth: differentiationMaturity: loyaltyDecline: deletionDecline IncludesHarvestLiquidationDivestitureSellingDifferent Types of Product Life CyclesHigh-learning products, slow-trending, complexity, low need perceptionLow-learning products, take offFads, repeating fadsSeasonalCriteria in Picking a Good Brand NameProduct benefitsMemorable, distinctive, positiveFit company or product imageNo legal or regulatory restrictionsSimple and