Marketing Exam 3 Study Guide Flashcards

These flashcards provide key vocabulary and concepts from Chapters 9, 10, 11, and 12, focusing on the STP process, marketing research, product branding, and the new product development lifecycle.

STP Process

The three-phase process of Marketing consisting of Segmentation (Steps 1-2), Targeting (Steps 3-4), and Positioning (Step 5).

Geographic Segmentation

Organizing customers into groups on the basis of where they live, such as continents, regions, countries, or zip codes.

Demographic Segmentation

The most common segmentation strategy based on objective characteristics such as age, gender, education, income, and race/ethnicity.

Psychographic Segmentation

A method of segmenting customers based on how they define themselves, including self-values, self-concept, and lifestyle.

VALS Framework

The Values, Attitudes, and Lifestyles questionnaire used to support psychographic segmentation by categorizing consumers.

Benefit Segmentation

Grouping customers based on the specific benefits they derive from products or services, such as convenience, economy, or prestige.

Behavioral Segmentation

Dividing customers into groups based on how they use a product, often subdivided into occasion segmentation and loyalty segmentation.

Geodemographic Segmentation

The grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristics; based on the idea that "birds of a feather flock together."

Segment Profitability Formula

$$Segment Profitability = (Segment\,Size \times Segment\,Adoption\,\% \times Purchase\,Behavior \times Profit\,Margin\,\%) - Fixed\,Costs$$

Mass Marketing (Undifferentiated)

A targeting strategy where everyone is considered a potential customer; used mainly for basic commodities like steel or iron.

Differentiated Targeting

A strategy in which a firm targets several market segments with a different offering for each, such as Condé Nast publishing different magazines for different audiences.

Concentrated Targeting

A targeting strategy that focuses on selecting a single, primary target market to focus all energies on.

Micromarketing

An extreme form of targeting that tailors a product or service to suit an individual customer's needs; also known as one-to-one marketing.

Value Proposition

The unique value a product or service provides to its customers and how it is better than and different from those of competitors.

Perceptual Map

A visual representation of the position of products or brands in the consumer's mind in relation to two or more dimensions.

Secondary Data

Data that has been collected prior to the start of a focal research project by someone else for another purpose.

Primary Data

Data collected to address specific research needs, such as through focus groups, interviews, or surveys.

Churn Rate

The number of consumers who stop using a product or service divided by the average number of consumers of that product or service.

Qualitative Research

Informal research methods used to understand the phenomenon of interest through broad, open-ended responses like observation or focus groups.

Quantitative Research

Structured responses that can be statistically tested to confirm insights and hypotheses generated via qualitative research.

Core Customer Value

The basic problem-solving benefits that consumers are seeking from a product.

Actual Product

The physical attributes of a product including the brand name, features/design, quality level, and packaging.

Associated Services

The non-physical attributes of a product, such as warranties, financing, product support, and after-sale service.

Breadth

The number of product lines offered by a firm; also known as variety.

Depth

The number of categories or items within a specific product line.

Cannibalization

A situation that occurs when a new product from a firm competes with a similar existing product from the same firm, hurting its sales.

Brand Equity

The set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.

Brand Dilution

The negative impact on consumer brand perceptions that occurs when a brand extension is market inappropriately or fails to fit the brand image.

Primary Package

The packaging the consumer uses, such as the toothpaste tube, from which they typically seek convenience in terms of storage, use, and consumption.

Secondary Package

The wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners.

Diffusion of Innovation

The process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters.

Pioneers (Breakthroughs)

New product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market.

Innovators

The 2.5% of the population who are the first to have a new product or service, often paying a premium to be the test market.

Alpha Testing

An internal R&D effort to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended.

Beta Testing

Testing conducted by potential consumers who examine a product prototype in a real-use setting to determine functionality and performance.

Product Life Cycle (PLC)

The stages that new products move through as they enter, get established in, and ultimately leave the marketplace: Introduction, Growth, Maturity, and Decline.