Marketing Exam 2: Chapters 6-10

Marketing Research

process of defining a marketing problem and opportunity, systematically collecting and analyzing info, and recommending actions.

Steps of the Marketing Research Approach

1. Define the problem

2. Develop the research plan

3. Collect relevant info

4. Develop findings

5. Take marketing actions

Countertrade

using barter rather than money for making global scales

Gross Domestic Product

the total value of goods produced and services provided in a country during one year.

Balance of Trade

the difference between a country's total exports and total imports.

Trade Surplus

exports exceed imports

Trade Deficit

imports exceed exports

Globalization

focus on creating economic, cultural, political and technological interdependence among nations & economies.

Protectionism

the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports (tariffs or quotas).

Tariffs

government tax on products/services entering a country

Quota

a restriction placed on the amount of a product allowed to enter or leave a country

Exchange Controls

Government restrictions on the amount of a particular currency that can be bought or sold.

-* In international marketing, they directly affect how companies price products, collect revenue, repatriate profits and pay for imports.

Dumping

company sells a product in a foreign market at a price lower than its domestic market price of production cost.

What step of the marketing research approach does this represent?

- set the research objectives

- identify possible marketing actions

define the problem

What step of the marketing research approach does this represent?

- specify constraints

- identify data needed for marketing actions

- determine how to collect data

develop the research plan

What step of the marketing research approach does this represent?

- obtain primary and secondary data

collect relevant info

What step of the marketing research approach does this represent?

- analyze the data

- present the findings

develop findings

What step of the marketing research approach does this represent?

- make action recommendations

- implement action recommendations

- evaluate results

take marketing action

Measures of Success

criteria or standards, used in evaluating proposed solutions to the problem

Concept

ideas about prodcuts/services

Method

approaches used to collect data to solve all or part of a problem

Internal Data Sources

info the company collects from within its own organization;

financial and inventory records, customer databases

External Sources

info obtained from outside the company;

government reports, competitors, industry publications

Primary Data

gathered for the current project; can be obtained by your company or outside sources

- observational data

- questionnaire data

- social media, data mining, etc.

Secondary Data

gathered for some other purpose but somehow can still apply to your current study;

it already existed

- internal and external data

Is this an example of an internal or external data source?

Walmart analyzes its past sales records to determine which products sell the most, when customers purchase them, and which locations generate the highest sales.

internal

Is this an example of an internal or external data source?

Target uses U.S. Census Bureau data to analyze population demographics, such as age, income, household size, and geographic location, when evaluating potential store locations.

external

Is this an example of primary or secondary data?

Starbucks sends a survey to customers asking what new seasonal drink flavors they would like to see on the menu.

primary

Is this an example of primary or secondary data?

Starbucks uses a previously published industry report about coffee consumption trends to determine which types of coffee are most popular among consumers.

secondary

Sales Forecast

total sales of a product that a firm expects to sell during a specified time period under specified conditions

Main Techniques for Sales Forecasting

1) judgements of decision makers

2) surveys of knowledgeable groups

3) statistical methods

Sampling

selecting a smaller group from a large population known chance for being selecred

Probability Sampling

every member of population has a known chance for being selected

Convenience Sampling

non probability sampling;

researchers choose participants because they are easy and convenient to reach

Statistical Inference

using sample data to estimate, predict or draw conclusions about an entire population

Benchmarking

comparing your company's performance, products or marketing practices to competitors or industry standards to identify areas for improvement

Causal Research

relationships between two variables does not imply a cause-effect relationship

- cause has to precede effects

- experiments aid in establishing causality

Segmentation

market is divided into sub-groups where members of each have things in common but those things are different from other groups. Sub-groups are called segments.

Demographic Segment

age, gender, income, education

Why do we need market segmentation?

not all consumers have the same needs, wants, preferences, or buying behaviors. By dividing a large market into smaller groups of consumers with similar characteristics, companies can develop more effective marketing strategies.

Geographic Segment

based on physical location

Psychographic Segment

values, beliefs, interests, lifestyles

Behavorial Segment

actions, interactions and habits

- usage

- 80-20 Rule: 80% of outcomes come from 20% of inputs

Cross Tabulations

displays two or more categorical variables on a table to show intersecting frequencies to compare relationships.

What is the first step in the marketing segmentation process?

Identify basis of segmentation your firm will use

What is the second step in the marketing segmentation process?

Develop profiles for each segment

What is the third step in the marketing segmentation process?

Forecast market potential for segments

What is the fourth step in the marketing segmentation process?

Forecast probable market share and profits

What is the fifth step in the marketing segmentation process?

Select specific market segments to target

Targeting

choosing the segment you want to serve

Product Positioning

place a product occupies in consumers' minds based on important attributes relative to competitive products

Product Repositioning

changing the product position

Value Proposition

full mix of benefits upon which the brand is positioned

Unique Selling Proposition (USP)

something a brand is the best at and hence distinguishes them in the market

Cannibalization

company develops 1+ products in a market and instead of taking sales away from competitors, they take it away from their own other product

Product Line

closely related products based on tech used to make it or the marketing of the product or some other commonality

Product Mix

refers to the entire collection of products and product lines that a company offers for sale.

Line Extension

adding new products to a product line.

ex.) adding a new factor of toothpaste

Brand Extension

using existing brand name and introducing a new product in a different, product category

Individual Product Decisions

-product attribute

- labeling

- product support services

-packaging

-branding

Brand

name, term, symbol, or design that identifies one seller's goods/services and differentiates them.

- Historical Origin: craftsmen in Egypt, India and China

Functions of a Brand

- serves as an identifier

- signals quality

- offers reassurance*

Manufacturers Brand

product sold under the name, logo and trademark of the company that actually makes or produces it

Private Label Brands

product manufactured by a third-party, but sold exclusively under the retailer's name (i.e. Great Value)

Captive Brand

(only one retailer sells) similar to a private label but does not carry retailer's name.

Hides connection to retail chain.

Brand Equity

value of a brand to an organization. Comes from tangible and intangible aspects

Intangible Aspects

-brand awareness

- perceived quality

- customer associations

- brand loyalty

Brand Identity

what the brand stands for; should be fairly long-lasting

*emotional and visual expression of who your brand is

Positioning

strategic space you occupy in the market, relative to competitors

Tools Used in Brand Positioning Decision-Making

- research methods

- visual frameworks

- strategic matrices

- digital analytics software

What happens during the Introduction Stage of the Product Life Cycle?

The product is first introduced.

What are the sales characteristics during the Introduction Stage of the Product Life Cycle?

Sales are low.

What are the profit characteristics during the Introduction Stage of the Product Life Cycle?

Profits are negative or very low.

What is the level of competition during the Introduction Stage of the Product Life Cycle?

Competition is limited.

What is the marketing strategy during the Introduction Stage of the Product Life Cycle?

Build awareness and encourage customers.

What happens during the growth stage of the product life cycle?

The product becomes popular.

How do sales change during the growth stage of the product life cycle?

Sales increase quickly.

What happens to profits during the growth stage of the product life cycle?

Profits increase as sales grow and costs spread across units.

What happens to competition during the growth stage of the product life cycle?

Competition increases as others recognize success.

What is the marketing strategy during the growth stage of the product life cycle?

Differentiate the product from competitors and build brand loyalty.

What happens to the product during the Maturity Stage of the Product Life Cycle?

The product becomes well-established.

What are the sales characteristics during the Maturity Stage of the Product Life Cycle?

Sales are high, though they begin to reach peak.

What happens to profits during the Maturity Stage of the Product Life Cycle?

Profits peak and start declining.

What is the level of competition during the Maturity Stage of the Product Life Cycle?

Competition is very high.

What marketing strategies are used during the Maturity Stage of the Product Life Cycle?

Customer retention, differentiation, promotions, and improvements.

What happens to customer preferences during the Decline Stage of the Product Life Cycle?

Customer preferences change.

What happens to sales during the Decline Stage of the Product Life Cycle?

Sales decrease.

What happens to profits during the Decline Stage of the Product Life Cycle?

Profits decrease.

What happens to competition during the Decline Stage of the Product Life Cycle?

Competition decreases.

What is a common marketing strategy during the Decline Stage of the Product Life Cycle?

Reduce costs.

What is another marketing strategy during the Decline Stage of the Product Life Cycle?

Target remaining customers.

What can companies do with their product during the Decline Stage of the Product Life Cycle?

Reposition the product or discontinue it.

What percentage of the population are Innovators?

2.5%

What is the risk tolerance of Innovators?

Very high

How do Innovators behave towards new technology and products?

They love experimenting with new tech/products

What is the price sensitivity of Innovators?

Willing to pay more to be first

What marketing strategy should be emphasized for Innovators?

Emphasize innovation, exclusivity, and cutting-edge features

What percentage of the population are Early Adopters?

13.5%

What is the risk tolerance of Early Adopters?

High but selective

How do Early Adopters influence consumer behavior?

They are opinion leaders