MKTG 311: FINAL EXAM
136 Cards in this Set
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PRODUCT concept
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idea that consumers will favor products that offer the most quality, performance, and features, continuous product improvements
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ProducTION Concept
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the idea that consumers will favor products that are available or highly affordable
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Selling concept
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the idea that consumers will not buy the firm's products unless it undertakes a large scale selling and promotion effort
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Marketing Concept
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creating customer loyalty and retention
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Societal Marketing Concept
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company should make good marketing decisions by considering consumers wants, long term interests
company's requirements
and society's long term interests (aka environmental friendly products)
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buyers' decision-making process
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Need
Info
Alteval
Purch
Postpurch
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Need Recognition
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♣ Functional Need - Serves a purpose, is a quality product, factual
♣ Psychological Need - Want to fit in, look good, targets emotion
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Information Search
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Top of mind + External Search
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Alternative Evaluation
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Universal, Retrieval, Evoked (highly considered)
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Purchase Decision
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Noncompensatory - if it doesn't satisfy ONE criteria, it will not be considered
♣ Compensatory - which has the most criteria achieved, compensate for what the other doesn't have
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1. Post-purchase decision - customer satisfaction
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♣ Did it meet expectations?
♣ Post-purchase dissonance - caused by a post purchase conflict (is this right for me?)
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Influencer
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The capacity or power of persons or things to be a compelling force on or produce effects on the actions, behavior, opinions, etc. of others
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Opinion Leader
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One who influences the opnion of others, they are the first to try out new products
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Reference Group
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formal and informal groups that affect buyers decisions
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Customer satisfaction
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Performance - Expectation = Satisfaction or Dissatisfaction
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Segmentation: 4 Main Bases
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four main bases—geo, demo, psycho, behavioral
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Geographic Seg
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Divides into geographical units such as nations, regions, states, countries or cities
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Demographic Seg
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Age, gender, family, income, religion, race
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Psychographic
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difficult to identify, divides buyers into groups based on social class, lifestyle or personality traits
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Behavioral
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Groups based on knowledge, attitudes, uses or responses to a product
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Requirements for Effective Segmentation
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MSADA: MeaSubAccDiffAction - measurable, substantial, accessible, differentiable, and actionable
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Measurable
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Must be identifiyable and size measurable
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Substantial
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is this group large enough to be worth developing and maintaining a special marketing mix for
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Accessible/Reachable
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Firm must be able to reach members of targeted segments with customized marketing mixes
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Differentiable
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segments need to be conceptually distinguishable and respond differently to different marketing
mix elements and programs
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Actionable
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cam effective programs can be designed for attracting and serving consumers who make up the segment?
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Undifferentiated Targeting
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Entire market with one product, mass marketing ex. Sugar
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Differentiated Targeting
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Targets segments with a unique product (Adv. Fits consumers better, dis. segments you cannot reach, more expensive)
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Niche (concentrated)
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Pick a segment and try to dominate, target a large share of a small market
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Micromarketing (Individual and local)
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treats every member as a different segment (local is group, individual is member)
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competitive advantage
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Attributes that allow the company to outperform it's competitors
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point of differentiation
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unique advantage of the product
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perceptual map
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Displaying, graphing in two or more dimensions, the location of products, brands or groups of products in customers; minds
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value proposition
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summarizes why a consumer should buy a product
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Positioning statement
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expression of how a product service or brand fills a particular consumer need in a way competitors don't
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Product Mix
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consists of all the products and items that a particular seller offers for sale
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Product Line
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A group of closely related product items
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Product line width (breadth)
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Number of product lines offered
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Product line length (depth)
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# of product items in a product line
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Brand equity
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A set of assets and liabilities linked to the brand that add to or subtract from the value provided by the product or service
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Brand Personality
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something to which the consumer can relate, and an effective brand will increase its brand equity by having a consistent set of traits.
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4 elements of brand equity
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perceived value, brand awareness, brand associations, and brand loyalty
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Perceived value
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the difference between a customer's evaluation of the benefits and costs of one product when compared with others
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Brand awareness
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o the extent to which consumers are familiar with the distinctive qualities or image of a particular brand ex. see bandage and think band aid
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Brand associations
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anything which is deep seated in the customers mind about the brand ex. apple signals associations with personalities
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Brand sponsorship
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manufacturers' brand, private label brand, co-brand, and licensed brand
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Manufacturers brand
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e brand name of a manufacturer
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Private label brand
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brand name owned by a retailer (Kirkland and Costco)
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Co-brand
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placing two or more brand names on a product or it's package
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Licensed brand
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Licensing your brand to have other products sold under your brand
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Marketing Concept
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creating customer loyalty and retention
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Brand Extension
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rand name in a different product category
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MultiBrands
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The act of a single company marketing two or more competing products under different brand names, where each brand targets a different consumer segment.
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New Brands
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creating a new brand for a new product
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Brand dilution
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Evaluate the fit between product/class - do not extend the brand name over many products
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Idea generation (different sources of product ideas)
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♣ Internal R&D
♣ Brainstorming
♣ Licensing - firms purchase rights to tech or ideas
♣ Competitors products - copycat/me too products/reverse engineering
♣ Consumer input - lead users modify existing products according to their own specific needs
♣ Crowdsourcing - consumers submit …
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Test marketing
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Test when product is large investment and uncertain
Do not test when simple line extension, risk of competitors finding out,
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4 stages of product lc
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Introduction, Growth, Mature, and Decline
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Intro
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slow sales growth, little.no profit, high promotion expense and distribution
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Growth
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building up brand preference, sales increase, new competitors, price stability to increase value, profits increase, promotion/manufacturing costs gain
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Mature
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slow sales, many suppliers, substitutes, overcapacity, increased promotion and R&D to make sales
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Decline
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maintain the product, harvest product or drop the product
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Cost based Pricing
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price = average unit cost + a markup
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Competitor Based Pricing
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Set prices to signal information of how product compares with competitors
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Value Based Pricing -
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o uses the buyers' perceptions of value, not the sellers' cost, as the key to pricing
♣ COGS sets the floor price
♣ Perceived value sets the ceiling
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Unit contribution
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revenues per unit - var expenses per unit
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Profit Margin (%)
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(revenue - COGS/revenue) x 100
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price elasticity of demand
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o % change in Q/ % change in D
o > 1 = elastic price sensitive, < 1 = inelastic price insensitive
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Market-skimming pricing
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high to low
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Market-penetration pricing
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low to high used to increase market share and make money later
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Product line pricing
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trying not to cannibalize the sales of other products on the line by making sure features are worth the levels
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Optional product pricing
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pay for the package that suits you better
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Bundled product pricing
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easier to lose a lot at one time versus continually losing money, bundle means discounts on things you would otherwise have to buy for more separately
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Captive product pricing
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low price on what's most important, make money off of whats required to use it ex. Printer is cheap, ink is expensive
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Loss leader pricing
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o enticing consumers into the store with popular aggressively priced items and hoping they will pick up other items while shopping
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Marketing Channels/Intermediaries
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Negotiate with one another, buy and sell products and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer to the hands of the consumer
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Marketing Channels/Intermediaries create values by
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♣ Transform the assortment of products into assortments wanted by consumers
♣ Bridge the major time, place, and possession gaps that separate goods and services from those who would use them
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Vertical integration of marketing channels
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o you are the producer wholesaler, retailer
o Advantages - can get new items out on the line, you have more control, nor markups, faster response system
o Disadvantages - expensive
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multiple-channel distribution
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Using two or more channels to distribute (ex. Online shopping and in store)
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benefits of physical (brick-and-mortar) stores for consumers
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touching/feeling, personal service, cash/credit, instant gratification
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benefits of online stores for consumers
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Broader selection, conveinent, customer reviews, shopping at any time, price comparison
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promotion mix 5 components
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advertising, sales promotion, personal selling, public relations, and direct marketing
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Promotion mix
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specific blend of advertising, PR, personal selling and direct marketing tools that the company uses to sell
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Advertising
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paid, non personal presentation/promos of ideas goods or services by an identified sponsor
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Advertising objectives
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to inform, to persuade, to remind
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Types of ads
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Pioneering, competitive, comparative
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sales promotion
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Aimed at the consumer with sales promotions/incentives used to introduce new products, clear out inventories, attract traffic, lift sales temporarily
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Personal Selling
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Personal presentations by sales force for person making sales (used for more expensive products)
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Public Relations
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Involves building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image and handling or heading off rumors
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Direct Marketing
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Involves making direct connection with carefully targeted individual consumers to both obtain an immediate response and cultivate long lasting customer relationships
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Push strategy
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give retailers incentives to put products in a good place
♣ Benefits - creates product exposure in potentially large retail environments
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Pull strategy
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o Consumers put pressure/demand on retailers/wholesalers to carry product
♣ Benefits - direct contact with customers, greater margins no discount, customers help generate ideas, ideal for premium priced products
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integrated marketing communication
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Integration by the company of it's communication channels to deliver a clear, consistent and compelling message about the organization and its brands, carefully blended mix of promotion tools
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AIDA model
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♣ Awareness
♣ Interest
♣ Desire
♣ Action
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Three types of message appeal
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rational, emotional, and moral
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Rational
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relate to self interest
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Emotional
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stirs up positive/negative emotions
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Moral
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appeals to consumers right and wrong
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Requirements for effective advertising appeals
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meaningful, believable and distinctive
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Choosing the advertising media
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♣ Reach
♣ Frequency
♣ Impact
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Branded entertainment
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gives brand the opportunity to communicate image in original way creating positive links between brand and the program
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Consumer generated marketing
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companies inviting customers to create material for an advertising campaign, and responding to what consumers say about their products.
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Buzz marketing
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focused on maximizing the word-of-mouth potential of a particular campaign or product
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Viral marketing
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induces Web sites or users to pass on a marketing message to other sites or users
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PR tools
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Press releases/sponsorship creates visibility to the media that fosters the spreading of information
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Advantages of public relations over advertising
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♣ Free media attention
♣ Consumers are more skeptical of marketing, and other costs of media have increased
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Mission statement
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specifies the organization's purpose or reason for being - target at all plans and programs should be aimed, A PLAN TO BE ACCOMPLISHED
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Positioning statement
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something you do to cause a change of perception in consumer's mind, HOW YOU WISH TO BE PERCEIVED
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BCG Star
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Invest in the best product, profit potential, may need increased inv. To grow
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BCG Cash Cows
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in the mature stage of life cycle, low growth, high share, stable, generates cash
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BCG" ?"
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High growth, low share, invest to convert to stars or phase out
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BCG Dogs
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low growth _ share, low potential, eliminate
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Market penetration
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selling existing products to existing markets, increase quality, productivity, marketing ex. Starbucks adding drive thru windows to their current coffee shops
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Market development
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must modify to adapt to local market ex. Coca cola creates coke diet and coke zero to target new markets
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Product development
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developing products for existing/current target market ex. Starbucks instant via/ice cream still targeting the same market of coffee lovers
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Diversification
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o developing new products for new markets with different brands ex. Coke producing premium milk or mcdonalds with a high end hotel
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SWOT analysis
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Stengths, Weaknesses, Opportunities, Threats
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Strengths
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internal capabilities that could help the company
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Weaknesses
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internal limitations that may interface with a company's ability to achieve objectives
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Opportunities
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External factors that the company may be able to exploit to it's advantage
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Threats
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Potential problems (internal and external)
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Michael Porter's four basic competitive strategies
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Overall Cost leadership, Differntiation, Focus, Middle of the Road
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Overall cost leadership
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lowest cost across the industry
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Differentiation
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better product/service across industry
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Focus
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lowest cost within industry segment
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Middle of the Road
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better product/service within industry segment
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Four sources of sustainable competitive advantage
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location excellence, product excellence, operational excellence, and customer experience excellence
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Market leader's competitive strategy: stimulate primary demand
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Emphasize category benefit, not limited to commodities, category leader benefits from competitor's advertising and promotion
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How to simulate primary demand/find new users
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New volume, same users increased volume, new value (same users) higher price paid, different uses (tide to go)
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Market challenger's competitive strategy: steal market share
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Attack market leader or weaker competitors, realistic assessment of relative strengths
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The concept of "blue ocean" strategy (i.e., finding a new niche market)
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The pursuit of differentiation and low cost to open up a new market space and create new demand
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Advantages of EDLP
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leads to more consistent or predictable demand.
Suppliers or retailers are able to more effectively control and forecast production, inventory costs, and shipping costs thus stabilizing demand
no advantage to customers to postpone a purchase prices always low
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Disadvantages of EDLP
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competitors can lower their prices to beat your, perception of low quality, inability for large sales
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Advantages of High-Low pricing
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can have large sales with big discounts, people feel the need to buy a lot during these sales
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Disadvantages of High-Low
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People will only shop in your clearance when there are no large sales, lower income when there are no sales
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Line Extension
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use of brand name for new item in same product category
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MKTG 311: Module 2