Grade 11 Marketing Exam Review

Target Market

a specific (differentiated) group of people within the consumer market whom the business wishes would purchase the product.

Needs

Things that satisfy a basic requirement. Ex. food

Wants

Directed to specific types of items. Ex. Lambo

Good

• Tangible 

• Can be consumed now or later

• Can be reproduced so every good is the same

Service

• Intangible (you can’t touch it) 

• Usually consumed when you purchase it 

• Some variation depending on who is providing the service

Consumer Good

Non-industrial product intended for personal use by the general public. Ex, Footlocker sells Nike shoes. 

Industrial Good

Products used in business to make other products or assist in business operations. Ex: cotton to make a shirt.

4 P’s of Marketing

Product, place, promotion, price

Product

To design and develop a successful product, you must consider things like research, product development, packaging, and branding

Place

To ensure your product gets to the consumer safely and to a location accessible by them, you must consider things like physical distribution, storage, inventory management, channel selections

Promotion

To ensure consumers are aware of your product, you must use elements like: advertising, sales promotion, publicity

Price

Different pricing strategies fit different products and markets. You must consider: competitors’ pricing strategies, government regulations, operating/production costs, and consumers’ willingness/ability to pay.

Demographics

The study of obvious (observable and quantifiable) characteristics that categorize people: Ex. Age, Gender, Family life cycle, Income level, ethnicity and culture

Geographics

Segments markets based on where consumers are located (typically big urban cities vs. suburban communities vs. rural communities)

Product Usage

segments the market based on how consumers interact with the product.

Product Life Cycle

1. introduction

2. growth

3. maturity

4. decline

5. decision point

introduction

• When a new product is introduced in the marketplace. 

• Launches are expensive and include the cost of: research, machinery purchase, promotional activities, etc. 

• Initial price of the product is high.

growth

• Product is now visible and more people are using it and it is Most crucial stage for advertising because it is when a product will catch on or fail.

• Barriers to entry are factors that might prevent new competitors from entering the marketplace: small market size.

• Use push strategies

Maturity

Brand equity (reputation) is at its highest, so marketers highlight brand name, reputation, and how long the product has been around.

Decline

Company is unable to find new customers for a given product or service. Profits are minimal as sales decline.

Decision Point 

New promotions/advertisements, company removing product altogether, a change in price, updated product design, or repackaging.

Maslow’s Hierarchy of Needs

1. physiological

2. safety/security

3. affiliation

4. esteem

5. self-actualization

physiological

Hunger, thirst, shelter and warmth

Safety/Security

Freedom from danger, adequate financial support

Affiliation

Belonging to teams and clubs; having friends, loving relationships, and family ties.

Esteem

Celebrating personal achievement, being successful, and being admired by others.

Self-Actualization

If the above needs are met, the person may be motivated by growth needs.

Biological

Rooted in the basic need for survival. Most basic motivational forces are biological.

Emotional

• Push us to do things that are pleasurable or protect us from emotional pain.

• Play on love, sympathy, joy, comfort, anger, fear, affection, etc.

Rational

• Push us to make decisions based on what we believe is the logical and most appropriate thing to do when in a given situation. 

• Consider convenience, cost savings, safety, warranties, ease of purchase, etc

• Often in conflict with emotional forces

Social

Directed by our desire to fit in or conform to societal norms.

Monopoly

A market with only a few competitors.

Oligopoly

A market with multiple big competitors (eg: airlines, wifi providers)

Perfect Competition

A market with a lot of competition but no one can take over.

Monopolistic Competition

A market with a lot of competitors but 1 is big enough to take over.

Direct Competition

Competitors who provide similar products or services to your own. Ex.Coke v. Pepsi

Indirect Competition

Competitors who do not necessarily provide similar products or services, but whose products or services fulfill similar needs. Ex. Pepsi vs Minute Maid

Sustainable Competitive Advantages

• Methods by which a business holds onto its customers, in spite of the competition (i,e., these are long-term strategies). 

• Ex. A unique selling proposition (USP), lower production costs, servicing a niche market, customer loyalty.

Unique Selling Proposition

• Highlight the one thing your company’s product has that the competition does not offer.

• Benefits should be difficult for other others to copy

• Ex: licensed rights to a name, image of a character etc.

Niche Market

Provide a very specific product or service for a small, specific market

Customer Loyalty

customers are loyal to brands they trust

Primary Research

Unanalyzed, current data collected by a researcher himself/herself for their specific purpose.

Secondary Research

Research that has been previously collected by another person/organization.

Focus Group

• Small group of people brought together to discuss a particular product or problem. The interviewer asks questions

  • Pros: Get detailed answers

  • Cons: Expensive, members may give answers they think the interviewer wants to hear

Survey

Carefully planned questions that are used to gather data

Data Mining

Looking for connections between consumers’ behaviour/ traits and their purchasing patterns.

Closed-Ended Questions

ask a person to choose from two or more responses (like multiple choice, yes/no, likert scale)

Open-Ended Questions

Allow people to develop their own answer (like short answer or fill-in-the-blank), but are difficult to analyze.

Top-of-the-mind awareness

first brand consumers think of

Form Utility

• Form: product’s appearance or the “frills”(extras) of the service.

  • Form usually follows function → what the product is meant to do will influence what it looks like.

  • E.g.: a portable coffee cup must keep your drink hot and carry it without spilling → design will need insulating material and some sort of lid; colour choices can be factored in afterwards.

  • Considers scents, flavours, colours, packaging, etc.

Information Utility

Provides consumers with instructions and directions. E.g.: service  representatives, Internet hotlines, manuals, a recipe guide, how-to videos, etc.

Place Utility

Makes the product or service accessible and easier to find. E.g.: multiple store locations, online stores, etc

Time Utility

Provides the product when the consumer needs it. E.g.: stores that are open 24 hours a day, businesses that have seasonal products available all year round, companies with websites, etc.

Possession Utility

Makes a product easy to purchase by: Accepting different payment methods (credit card, debit, cash).Offering free delivery. Lowering the price of a product (a promotion or sale and Offering financing options.

Function Utility

• Function: what the product/service is supposed to do.

  • The more functional the product is, the more practical it is.

  • Consider materials, design, durability, quality, extra features of the product, etc.

Idea Generation

• Marketers listen to customers and brainstorm how to create or improve a product.

• Here, marketers record as many ideas as possible without judgement.

Idea Screening 

• Not all ideas are good ones, so the company must narrow down its choices.  

• Companies must test consumer reaction and the competitive situation in the market.

• Using this information, the company will choose an idea to pursue

Concept Development

• Design a prototype – a sample of what your product looks like and how it operates that you can test.

• Test for: User-friendliness, durability, safety, practicality, initial consumer feedback

Test Marketing

The product enters the product life cycle (introduction stage).

Positioning

Allows a brand to create an image—the outward representation of what it wants consumers to see it as.

Product-Dominant Brand Name

Try to connect a product with its positive attributes. Often made up of words designed to portray a positive image of the product.

Corporate Dominant Brand Name

Include the name of the manufacturing company.

Manufacturer Brand

Owned and initiated (created) by manufacturers.

Private Brand

Owned and initiated by wholesalers and retailers.

Generic Brand

Represent a general product category and do not carry a company or brand name.

Monogrammatic

Stylized writing of the company’s or product’s initials or name. E.g. KFC

Visual

Line drawings of people, animals, or objects. E.g.: Kodiak boots

Abstract

Shapes that carry a visual message but are not representative of identifiable objects. E.g.: The Nike “swoosh”

Strategies to Grow Your Brand

1. brand extension

2. brand acquisition

3. co-branding

4. brand licensing

Brand Extension

When a company uses one of its established brands to create a similar product

Brand Acquisition

One company buys another company or another brand to help make themselves more successful.

Co-branding

When two or more brands combine and cooperate for their mutual benefit.

Brand Licensing

When a company allows another company to use their brand identification for a fee

Price/Market Skimming

a pricing policy that sets a very high price for a new product.

Penetration Pricing

Policy that sets the price low for a new product 

Competitive Pricing

based on competitors

Psychological Pricing

Pricing strategy that creates an illusion for customers. 

Overstock

• Occurs when a business has more inventory than it can sell, 

• As a result, items: 

  • Become out of date 

  • Look old, start to fade, or get old/dusty 

  • Require markdowns (discounts) to sell

Out-of-stock

• Occurs when the item a consumer is looking for is unavailable. 

• As a result, the company:  

  • Loses these potential sales when customers leave to buy the product elsewhere

  • Lose potential customers, as they may become frustrated with the company and lose trust in it. 

5 Goals of Advertising

1. brand awareness

2. brand trial

3. brand reminder

4. brand preference

5. brand repositioning

Brand Awareness

Spreads brand information and delivers positioning message.

Brand Trial

Follows the belief that if a consumer tries it they may continue to purchase. E.g.: Coupons for new products encourage consumers to try something for the first time.

Brand Reminder

Remind consumers that the brand still exists.

Brand Preference

Attempts to convince customers that their brand is better than the competition.Uses statistics, endorsements (celebrities who push the product), etc.

Brand Repositioning

When the brand changes, the consumer needs to know (i.e., the repositioned Old Spice brand was advertised as being new & improved).

Reach

the number of people who are exposed to the message.

Frequency

the number of times an audience will see or hear the same message over a given period of time.

Selectivity

the ability of the medium to focus on a target audience

Durability

The longevity or lasting impact of an advertisement on the audience's memory and behaviour after exposure.

Clutter

The presence of multiple advertisements competing for attention in a single medium, reducing the effectiveness of individual ads.

how a brand/business deals with inventory

JIT and inventory management

JIT

• coordinates demand and supply of items so that suppliers deliver parts and raw materials just before they are required

AIDA

action, interest, desire, action

aida - attention

catchy headline, image, use of colour

aida - interest

providing info that is easy for the viewer to digest

aida - desire

convincing ur consumer using a motivational appeal

aida - action

website, phone number, where to buy product