Final exam MKT 3401

Market

Market

people or organizations with needs or wants and the ability and willingness to buy

Market segment

a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

Market segmentation

the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

A market segment must meet four criteria:

• sustainability

• identifiability and measurability

• accessibility

• responsiveness

5 bases for segmenting consumer

• geography

• demographics

• psychographics

• benefits sought

• usage rate

80/20 principle

a principle holding that 20 percent of all customers generate 80 percent of the demand

Undifferentiated targeting strategy

a marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix

When to use Undifferentiated targeting strategy

when a product has a broad, universal appeal and caters to a large market segment with similar needs

Concentrated targeting strategy

a strategy used to select one segment of a market for targeting marketing efforts

When to use Concentrated targeting strategy

when a company wants to focus all its marketing efforts on a single, well-defined market segment, particularly when they have limited resources, a niche product

Multisegment targeting strategy

a strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each

When to use Multisegment targeting strategy

when a company wants to reach a wider customer base

Different positioning bases

• attribute

• price

• value

Attribute

A product is associated with an attribute, product feature, or customer benefit

Price and quality

This positioning base may stress high price as a signal of quality or emphasize low price as an indication of value

Use or application

Stressing uses or applications can be an effective means of positioning a product with buyers

Product user

 This positioning base focuses on a personality or type of user

Product class

The objective here is to position the product as being associated with a particular category of products

Competitor

Positioning against competitors is part of any positioning strategy

Emotion

Positioning using emotion focuses on how the product makes customers feel

Planned obsolescence

the practice of modifying products so those that have already been sold become obsolete before they actually need replacement

Functions of packaging

• Contain and protects products

• Promote products

• Facilitate storage, use, and convenience of products

• Facilitate recycling and reduces environmental damage

Co-branding

placing two or more brand names on a product or its package

Types of co-branding

• ingredient branding

• cooperative branding

• complementary branding

Universal product codes (UPCs)

a series of thick and thin vertical lines (bar codes) readable by computerized optical scanners that represent numbers used to track products

Supply chain

the connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function

Supply chain management

a management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value

Supply chain agility

an operational strategy focused on creating inventory velocity simultaneously in the supply chain

Supply chain orientation

System of management practices that are consistent with a “systems thinking” approach

Leading supply chain oriented firms share five characteristics:

• They are credible

• They are benevolent

• They are cooperative

• They have the support of top manager

• They are effective at conducting and directing supply chain activity

3D printing

the creation of three-dimensional objects via an additive manufacturing (printing) technology that layers raw material into desired shapes

Big data

the rapidly collected and difficult-to-process large-scale data sets that have recently emerged, and which push the limits of current analytical capability

Types of retail ownership

• Independently owned

• chain stores

• franchises

Independent retailer

a retailer owned by a single person or partnership and not operated as part of a larger retail institution

Chain store

a store that is part of a group of the same stores owned and operated by a single organization

Franchise

a relationship in which business rights to operate and sell a product are granted by the franchisor to the franchisee

Gross margin

the amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted

Retailing mix

a combination of the four Ps with the addition of two more Ps—product, promotion, place, price, presentation, and personnel

• product

• place

• promotion

• price

• presentation

• personnel

Goals of Promotion

• informing

• persuading

• reminding

• connecting

Informing

seeks to convert an existing need into a want or to stimulate interest in a new product

Persuading

stimulate a purchase or an action

Reminding

keep the product and brand name in the public’s mind

Connecting

form relationships with customers

Earned media

a category of promotional tactic based on a public relations or publicity model that gets customers talking about products or services

Owned media

a new category of promotional tactic based on brands becoming publishers of their own content in order to maximize the brands’ value to customers

Paid media

a category of promotional tactic based on the traditional advertising model, whereby a brand pays for media space

Integrated marketing communications (IMC)

the careful coordination of all promotional messages for a product or a service to ensure the consistency of messages at every contact point at which a company meets the consumer

Effects of advertising on consumers

• Advertising affects peoples’ daily lives, informing them about products and services and influencing their attitudes, beliefs, and, ultimately, their purchases

• Helps change a consumer’s negative attitude toward a product into a positive one

• Reinforces positive attitudes toward brands

• Can affect the way a consumer ranks a brand’s attributes

Public relations

the element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern, and executes programs to gain public understanding and acceptance

• Public relations campaigns fit into overall marketing plans and focus on targeted audiences

Product placement

a public relations strategy that involves getting a product, service, or company name to appear in a movie, television show, radio program, magazine, newspaper, video game, video or audio clip, book, or commercial for another product; on the Internet; or at special events

Crisis Management

a coordinated effort to handle all the effects of unfavorable publicity or another unexpected unfavorable event

Personal selling

is a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other

Relationship selling (consultative selling)

a sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships

Steps in the Selling Process

1. Generating leads

2. Qualifying leads

3. Approaching the customer and probing needs

4. Developing and proposing solutions

5. Handling objections

6. Closing the sale

7. Following up

Lead qualification

determination of a sales prospect’s (1) recognized need, (2) buying power, and (3) receptivity and accessibility

Recognized need

preliminary questioning can often provide the salesperson with enough information to determine whether there is a need

Buying power

buying power involves both authority to make the purchase decision and access to funds to pay for it

Receptivity and accessibility

the prospect must be willing to see the salesperson and be accessible to the salesperson

Social media implications for marketers

• Marketers must realize that they often do not control the content on social media sites

• The ability to share experiences quickly and with such large numbers of people amplifies the impact of word of mouth in a way that can affect a company’s bottom line

• Social media allow marketers to listen

• Social media provide more sophisticated methods of measuring how marketers meet and interact with consumers than traditional advertising does

• Social media allow marketers to have much more direct and meaningful conversations with customers

Crowdsourcing

using consumers to develop and market products

• Companies get feedback on marketing campaigns, new product ideas, and other marketing decisions by asking customers to weigh in

Social media monitoring

the process of identifying and assessing what is being said about a company, individual, product, or brand

• Sentiment analysis

• Text mining

Text mining

a computational process that uses algorithms to extract information from written resources

Social media metrics

• buzz

• interest

• participation and engagement

• search engine ranks and results

• influence

• sentiment analysis

• website metrics

Buzz

volume of consumer-created buzz for a brand based on posts and impressions, by social channel, by stage in the purchase channel, by season, and by time of day

Interest

number of “likes,” fans, followers, and friends; growth rates; rate of virality or pass along; and change in pass along over time

Participation and engagement

number of comments, ratings, social bookmarks, subscriptions, page views, uploads, downloads, embeds, retweets, Facebook posts, pins, and time spend with social media platform

Search engine ranks and results

increases and decreases on searches and changes in key words

Influence

media mentions, influences of bloggers reached, influences of customers reached, and second-degree reach based on social graphs

Sentiment analysis

positive, neutral, and negative sentiment; trends of sentiment; and volume of sentiment

Website metrics

clicks, click-through rates, and percentage of traffic

6 categories of social media users

• creators

• critics

• collectors

• joiners

• spectators

• inactives

• conversationalists

Creators

Produce and share online content like blogs, websites, articles, and videos

Critics

Post comments, ratings, and reviews of products and services on blogs and forums

Collectors

Use RSS feeds to collect information and vote for websites online

Joiners

Maintain a social networking profile and visit other sites

Spectators

Read blogs, listen to podcasts, watch videos, and consume media

Inactives

Do none of these things

Conversationalists

People who post status updates on social networking sites and microblogging services

6 components of a social media plan

• Listen to customers

• Set social media objectives

• Define strategies

• Identify the target audience

• Select the tools and platforms

• Implement and monitor the strategy

Listen to customers

Marketers must not only hear what is being said about the brand, the industry, the competition, and the customer, but they must also pay attention to who is saying what and act upon that information

Set social media objectives

Set objectives that can be specifically accomplished through social media, with special attention to how to measure the results.

Define strategies

This includes examining trends and best practices in the industry.

Identify the target audience

This should line up with the target market defined in the marketing plan, but in the social media plan, pay special attention to how that audience participates and behaves online.

Select the tools and platforms

Based on the result of Step 4, choose the social media tools and platforms that will be most relevant. These choices are based on the knowledge of where the target audience participates on social media

Implement and monitor the strategy

Based on the observations, make changes as needed. It also becomes important, therefore, to go back to the listening stage to interpret how consumers are perceiving the social media campaign

Sharing economy

a socio-economic system that allows individuals and businesses to share assets for a price

What constitutes a product?

• warranty

• packaging

  • color

  • shape

  • label

  • sound

Profit

revenue minus expenses

Categories of pricing objectives

• profit oriented

• sales oriented

• status quo

Market share

a company’s product sales as a percentage of total sales for that industry

Return on investment (ROI)

net profit after taxes divided by total assets

• ROI = Net profits after taxes/total assets

Steps in setting the right price for a product  

• establish pricing goals

• estimate demand, costs, and profits

• choose a price strategy to help determine a base price

• fine-tune the base price with pricing tactics