Marketing Exam 2

market segmentation

dividing a market into distinct groups

market targeting (targeting)

evaluating each market segment’s attractiveness and selecting one or more segments to serve

differentiation

designing the market offering to create superior customer value that is distinct from that offered by competitors

positioning

creating a clear, distinctive, and desirable place for a marketing offer relative to competing products in the minds of target consumers

geographic segmentation

dividing a market into different geographical units, such as nations, states, regions, countries, cities, or even neighborhoods

demographic segmentation

dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation

age and life-cycle segmentation

dividing a market into different age and life-cycle groups

gender segmentation

dividing a market into different segments based on gender or gender identity

income segmentation

dividing a market into different income segments

psychographic segmentation

dividing a market into different segments based on lifestyle or personality characteristics

behavioral segmentation

dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product

occasion segmentation

dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item

benefit segmentation

dividing the market into segments according to the different benefits that consumers seek from the product

target market

the total set of targeted buyers across the market segments that a company decides to serve

undifferentiated marketing (mass)

a marketing coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offering

differentiated marketing (segmented)

a market coverage strategy in which a firm targets several market segments and designs separate offerings for each

concentrated marketing (niche)

a market coverage strategy in which a firm goes after a large share of one or a few segments or niches

micromarketing

tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes hyperlocal marketing and individual marketing

hyperlocal marketing

location-based targeting to consumers in specific locations using digital, mobile, and social media technologies

individual marketing

tailoring needs and marketing programs to the needs and preferences of individual customers

product positioning

the way a product is defined by consumers on important attributes - the place it occupies in consumers’ minds relative to competing products

competitive advantage

an advantage over competitors gained by differentiating and positioning a company as providing superior or different customer value

value proposition

the full positioning of a brand - the full mix of benefits on which it is positioned

positioning statement

a statement that summarizes company or brand positioning

product

anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need

service

an activity, benefit, or satisfaction offered for consumption or sale that is essentially intangible and does not result in a customers’ ownership of anything

customer solutions

carefully thought-out bundles of products and services that are designed to comprehensively solve customer’s problems

customer experiences

market offerings with a strong sensory or emotional component that play out for the customer over time

consumer products

products bought by final consumers for personal consumption

convenience products

consumer products that customers usually buy frequently, immediately, with low customer involvement, and with minimal comparison and buying effort

shopping products

consumer products that the consumer, in the process of selecting and purchasing, usually compares on such attributes such as sustainability, quality, price, and style

specialty products

consumer products with unique characteristics or brand identifications for which buyers are willing to make a special purchase effort

unsought products

consumer products that the consumer either does not know about or knows about but does not normally consider buying

industrial products

products bought by individuals and organizations for further processing, use in conducting a business, or resale

social marketing

the use of traditional marketing concepts and tools to encourage behaviors that will create individual and societal well-being

product quality

the characteristics of a product or service that bear on its ability to consistently and reliably satisfy stated or implied customer needs

brand

a name, term, sign, symbol, or design, or a combination of these that identifies the products or services of one seller o group of sellers and differentiates them from those of competitors

packaging

designing and producing the container or wrapper for a product

product line

a group of products from a company that are closely related because they function in a similar matter, are sold to similar customer groups, serve similar customer needs, are marketed through the same type of outlets, or fall within given price ranges

product mix (or product portfolio)

the set of all the product lines and items that a seller offers for sale

service intangibility

services usually cannot be seen, tasted, felt, heard, or smelled before they are bought

service inseparability

services are produced and consumed at the same time and cannot be separated from their providers

service variability

the quality of services may vary greatly depending on who provides them and when, where, and how they are provided

service perishability

services cannot be stored for later use or sale

service profit chain

the chain that links customer satisfaction and profits for service firms with employee satisfaction

brand equity

the differential effect that knowing the brand name has on a customer’s emotions, attitudes, and behaviors related to the product or its marketing

brand value

the total financial value of a brand

store brands (or private labels)

brands created and owned by a reseller of a product or service

co-branding

the practice of using the established brand names of two different companies on the same product

line extension

extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category

brand extension

extending an existing brand name to new product categories

new product development

the development of original products, product improvements, product modifications, and new brands through the firm’s own product development efforts

idea generation

the systemic search for new product ideas

crowdsourcing

inviting broad communities of people - customers, employees, independent scientists and researchers, and even the public at large - into the new product innovation process

idea screening

evaluating new product ideas to spot good ones and drop poor ones

product concept development

detailed version of the new product idea stated in terms that are meaningful to the consumer

concept testing

testing new products with a group of target consumers to find out if the concepts have strong consumer appeal

marketing strategy development

designing an initial marketing strategy for a new product based on the product concept

business analysis

a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives

product development phase

developing the product concept into a physical product or a detailed service blueprint to ensure that the product idea can be turned into a workable market offering

test marketing

the stage of new product development in which the product and its proposed marketing program are tested in realistic market settings

commercialization

introducing a new product into the market

customer-centered new product development

new product development that focuses on finding new ways to solve customer problems and create more customer-satisfying experiences

team-based new product development

new product development in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness

product life cycle (PLC)

the course of a product’s sales and profits over its lifetime

style

a basic and distinctive mode of expression

fashion

a currently accepted or popular style in a given field

fad

a temporary period of unusually high sales or interest driven by consumer enthusiasm and immediate product or brand popularity

introduction stage

when a new product is first distributed and made available for purchases, period of slow sales growth and nonexistent profits because of heavy expenses

growth stage

when a products sales start climbing quickly, rapid market acceptance, and increasing profits

maturity stage

when a products sales growth slows or levels off, profits level off or decline because of increased spending to defend against competition

decline stage

when a products sales fade away, sales fall off and profits drop

price

the amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service

customer-value based pricing

setting price based on buyers perceptions of value rather than on the seller’s cost

good-value pricing

offering just the right combination of quality and good service at a fair price

value-added pricing

attaching value added features and services to differentiate a company’s offers and charging higher prices

cost-based pricing

setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk

fixed costs

costs that do not vary with production or sales level

variable costs

costs that vary directly with the level of production

total costs

the sum of the fixed and variable costs for any given level of production

cost-plus pricing (markup pricing)

adding a standard markup to the cost of the product

break-even pricing (target return pricing)

setting price to break even on the costs of making and marketing a product or setting price to make a target return

competition-based pricing

setting prices based on competitors’ strategies, prices, costs, and market offerings

target costing

pricing that starts with an ideal selling price and then target costs that will ensure that the price is profitably met

demand curve

a curve that shows the number of units the market will buy in a given time period at different prices that might be charged

price elasticity

a measure of the sensitivity of demand to changes in price

market-skimming pricing (price skimming)

setting a high price for a new product to skim maximum revenues layer by layer from customer segments in line with their willingness to pay

market-penetration pricing

setting a low price for a new product in order to quickly attract buyers and gain a large market share

product line pricing

setting the price steps between various products in a product line based on cost differences between the products, customer evaluations or different features, and competitors prices

optional-product pricing

the pricing of optional or accessory products along with a main product

captive-product pricing

setting a price for products that must be used along with a main product

by-product pricing

setting a price for by products to help offset the costs of disposing of them and help make the main products price more competitive

product bundle pricing

combining several products and offering the bundle at a reduced price

discount

a straight reduction in price on purchases during a stated period of time or of larger quantities

allowance

promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturers products in some way

segmented pricing

selling a product or service at two or more prices, where the difference in prices is not based on differences in costs

psychological pricing

pricing that considers the psychology behind how customers evaluate price and value, not just the economics

reference prices

prices that buyers carry in their minds and refer to when they look at a given product

promotional pricing

temporarily pricing products below the list price, and sometimes even below cost, to increase short run sales