Marketing Exam 2

BCOR 2201

70%

Percent of new products which fail

advantage

part of the accord model where you acknowledge differences/improvements compared to existing products (cheaper, easier, faster). Want this to be high

compatibility

part of the accord model where you acknowledge current behaviors, norms, and beliefs of products. Want this to be high

complexity

part of the accord model where you acknowledge benefits and consumers ability to realize those benefits. We want this to be low

observability

part of the accord model where you acknowledge how visible the benefits and usage are. we want this to be high

riskiness

part of the accord model where you acknowledge the cost, and what happens if the product fails to work. we want this to be low

divisibility

part of the accord model where you acknowledge the trialability, whether you can test the product to see if you like it (without large costs). We want this to be high

continuous innovation

type of innovation which requires no new learning by consumers

dynamically continuous innovation

type of innovation which disrupts consumer’s normal routine but does not require totally new learning

discontinuous innovation

type of innovation which requires new learning and consumption patterns by consumers

introduction

first step in product life cycle which features low sales, high cost per customer, financial losses, innovative customers, and few (if any) competitors. 

growth

second step in product life cycle which features increasing sales, cost per customer falls, profits rise, increasing # of customers, and more competitors.

maturity

third step in product life cycle which features peak sales, cost per customer lowest, profits high, and a stable number of competitors

decline

fourth step in product life cycle which features falling sales, cost per customer low, profits fall, customer base contracting, and number of competitors fall.

the chasm

the gap between early adopters and the mainstream market for a new, disruptive product. Takes place before the early majority and the innovators.

bass diffusion model

predicts not only the market potential, but also adoption and diffusion rates of a new product

diversification analysis

helps a firm search for growth opportunities among current/new products and current/new markets

market penetration

when a business markets a current product to a current market

product development

when a business markets a new product for current markets

market development

when a company markets a current product for new markets

diversification

when a company markets a new product for new markets

augmented product

level of product that features installation, delivery and credit, warranty, and after-sale service

actual product

level of product that features the packaging, brand name, quality level, design, and features

core product

level of product that features the product’s core benefit or service

channel

path that enables products to flow from producers to end users. Intermediaries make this possible

intermediaries

distributors and contacts that make flows in channels smoother

transactional function

channel function that features buying, selling, and risk taking (ownership of inventory)

logistical function

channel function that features transporting, storing, and sorting

facilitating function

channel function that features financing, providing information, promoting, and inspecting/testing

information needs

customer perspective that prefers trying before buying, advice and demos, comparing different products/prices, and customization

logistic needs

customer perspective that prefers variety/assortment, convenience, immediacy, and pre/post sale services

indirect channels

channels that use a retailer or wholesaler

direct channels

channels that don’t use a retailer/wholesaler, but go directly to a consumer

intensive distribution

distribution through every reasonable outlet in a market

selective distribution

distribution through multiple, but not all, reasonable outlets in a market

exclusive distribution

distribution through a single wholesaling middleman and/or retailer in a market

push strategy

proactively pushing a service onto consumers through targeted ads and promotions

pull strategy

attracting customers by creating demand and building a brand’s reputation

cost-based pricing

pricing to recover costs and achieve a target profit margin

value-based pricing

pricing that is supposed to calculate the perceived value of the product in the minds of the customer

strategic life cycle pricing

pricing that aims to maximize profits over time. Uses skimming pricing and penetration pricing

skimming pricing

pricing that aims to recover investment and profit from loyal customers by setting a high price then gradually lowering it

penetration pricing

pricing which aims to dive into the market, gain/steal market share, and deter competition. Does this through setting a low price to start.

price discrimination

charge consumers with high willingness to pay more than consumers with a low willingness to pay

prestige pricing

setting a high price for a product to signal its high quality, status, or luxury. Creates perceived value

anchoring effect

effect that states initial information is more influential than later information

left-digit effect

effect that explains that people give disproportionate weight to the leftmost digit of a number when making judgements or decisions, especially with prices

central

individuals in a social network at the core with many connections. Holds more power, and access to information.

peripheral

individuals in a social network who are on the edges of the network with fewer, more clustered ties. More important for spreading ideas, especially risky ones.

6 M framework

effective communication plan where you consider the market, mission, message, media, money, and measurement of your marketing plan.

market

aspect of 6 m framework where you decide who we should market to

mission

aspect of 6 m framework where you solidify your communication objective. What do you want to happen?

message

aspect of 6 m framework where you focus on what to say, and what type of appeal to use (emotional, rational, and behavioral).

affective appeal

emotional appeal, used to influence feelings to look attractive

cognitive appeal

rational appeal where you influence someone’s thoughts and beliefs in order to look attractive

behavioral appeal

appeal where you influence how one acts

value-based pricing

sets the price by calculating worth of a product for a particular customer segment

point of difference

differences between benefits offered by you versus competing brands

decision making process

process consumers go through where they maneuver need recognition, information search, alternative evaluation, purchase decisions, and post-purchase behavior, before/after purchasing a pruduct.

bottleneck analysis

analysis where you determine if you lose consumers due to an understanding gap, attractiveness gap, or a behavior change gap

media

aspect of 6 m framework where we determine your communication vehicles. Where, when, and how often do you share your message?

media scheduling

when and how often you communicate your message. There’s a continuous (steady) schedule, flighting (intermittent) schedule, and a pulse (burst) schedule. 

money

aspect of 6 m framework where you set a budget

measurement

aspect of 6 m framework where you evaluate your communication effectiveness. Can be done through impacts like direct sales effect or control tests, or by measuring key performance indicators.

key performance indicator

elements of your strategic plan that express what you want to achieve and by when. Quantifiable, outcome-based statements that are trackable to meet goals or objectives.

skimming pricing

pricing strategy when company sets high initial price to maximize profits early, then gradually lowers price over time

penetration pricing

pricing strategy where company sets a low initial price to quickly penetrate a market and gain significant market share

customary pricing

strategy where price is set based on what consumers are used to paying for similar items over time

experience-curve pricing

pricing strategy where company sets a lower initial price for a new product to gain market share, anticipating that costs will decrease as production increases

target pricing

pricing strategy where company sets the price of a product based on market conditions, customer demand, and desired profit margin, rather than starting with a cost/markup.