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Marketing research

The process used to obtain information to determine consumer demand.

Decision

A conscious choice among alternatives.

Five-step marketing research approach

A structured method that includes defining the problem, setting research objectives, identifying possible marketing actions, developing the research plan, and specifying constraints.

Secondary Data

Data that exists and is collected for other purposes, which can be internal or external.

Primary Data

Data collected directly for the specific purpose at hand, such as observational or questionnaire data.

Big Data

Large amounts of data collected from a variety of sources that can provide insights.

Data Visualization

The presentation of analytical information to make it easily understandable.

Predictive Modeling

The use of data to predict future outcomes based on identified predictors.

Market Segmentation

The process of aggregating buyers into groups that have common needs and will respond similarly to marketing.

One product, multiple market segments

A strategy where a single product is marketed to diverse market segments.

Cannibalization

When a new product steals sales from an existing product within the same company.

Customer Lifetime Value (CLV)

The total expected financial contribution of a customer over the complete duration of their relationship with a brand.

Geographic segmentation

Segmenting markets based on geographical boundaries.

Demographic segmentation

Segmenting markets based on measurable characteristics such as age, gender, or income.

Psychographic segmentation

Segmenting markets based on lifestyle and personality traits.

Behavioral segmentation

Classifying consumers based on their behavior towards a product or service.

Intangibility

A characteristic of services that cannot be seen or touched before purchase.

Inconsistency

A characteristic of services that may vary in quality during delivery.

Product Life Cycle

The stages a product goes through from introduction to decline.

Skimming Strategy/Pricing

Setting a high initial price for a new product to maximize profit from early adopters.

Penetration Pricing

Setting a low initial price for a product to gain market share quickly.

Differentiation Positioning

Positioning a product to stand out in a less competitive market.

Service Quality Dimensions

The dimensions that evaluate service quality, including reliability, tangibility, responsiveness, and assurance.

Product Line

A group of closely related products offered by a company.

Product Mix

The complete range of products offered by a company.

Feature Bloat

The presence of unnecessary features on a product that complicate its use.

Continuous Innovation

Small improvements made to existing products that do not change consumer behavior significantly.

Newness from a legal perspective

A product is considered new for six months after its launch.

Brand Equity

The value added to a product by having a well-known brand name.

Multiproduct Branding Strategy

A branding strategy where a company uses one brand name for all its products.

Co-branding

A marketing partnership between two or more brands to create a product.

Pricing Objectives

Goals that guide pricing decisions, such as maximizing profit or increasing market share.

Price Elasticity of Demand

A measure of how quantity demanded of a good changes with a change in price.

Break Even Point (BEP)

The quantity at which total revenue equals total costs.

Unit Variable Cost

The cost to produce one additional unit of a product.

Sales Revenue

The income generated from selling goods or services.

Competitive Position

A firm's stance relative to its competitors in the market.

Market Modification

Efforts to find new customers or increase product use in existing markets.

Tiffany/Walmart Strategy

A marketing strategy that targets both high-end and low-end consumers.

Product Positioning Statement

A summary that defines how to position an offering in the market.

Value Pricing

the practice of simultaneously increasing product or service benefits while maintaining or decreasing price

Prestige Pricing

setting a high price so that quality or status conscious consumers will be attracted to the product and buy it

Bundle Pricing

The marketing of two or more products in a single package price

standard markup pricing

adding a fixed percentage to the cost of all items in a specific product case

Cost Plus pricing

summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price

target profit pricing

A firm that sets a annual target of a specific dollar volume of profit

target return on sales pricing

sets typical prices that will give them a profit that is a specified percentage of the sales volume.

target return on investment pricing

a method of setting prices to achieve ROI targets

customary pricing

Pricing used for products that are associated with tradition, a standardized channel of distribution, or other competitive factors that would dictate the price

above, at, or below market pricing

Setting a market price for a product or product class based on a subjective feel for the competitors price or market price as a benchmark

Loss leader pricing

Deliberately selling a product below its customary price, not to increase sales, but to attract customers’ attention to it.

What are the stages of the product life cycle?

Introduction, Growth, Maturity, and Decline.

Introduction stage of a product life cycle

occurs when a product is introduced to its intended target market.

adoption

Perceptual map

a means of displaying in two dimensions the location of products or brands in the minds of consumers.

What are the three major steps in setting a final price?

1. Select an Approximate Price Level

2. Set the List or Quoted Price - one price policy or dynamic price policy

3. Make Special Adjustments to the List or Quoted Price - discounts and allowances

One price policy

fixed pricing - setting one price for all buyers of a product or service

Dynamic Price Policy

flexible-price policy - involves setting different prices for products and services depending on individual buyers and purchase situations in light of demand, cost, and competitive factors.

What is the Five-Step Marketing Research Approach?

1. Define the problem

2. Develop the research plan

3. Collect relevant information

4. Develop findings

5. Take marketing actions

What are the 4 I’s of services?

1. Intangibility

2. Inconsistency

3. Inseparability

4. Inventory

What is the new product development process?

the seven stages an organization goes through to identify opportunities and convert them into salable products or services

What are the steps in the new product development process?

1. New product strategy development

2. Idea generation

3. Screening and evaluation

4. Business analysis

5. Development

6. Market testing

7. Commercialization

New product strategy development

defines the role for a new product in terms of the firm’s overall objectives

Idea Generation

developing a pool on concepts to serve as candidates for new products, building upon the previous stage’s results.

Screening and Evaluation

stage of the process that internally and externally evaluates new-product ideas to eliminate those that warrant no further effort.

Business Analysis

specifies the features of the product or service and the marketing strategy needed to bring it to market and make financial projections

Development

the stage of process that turns the idea on paper into a prototype

Market Testing

stage of the process that involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy.

Commercialization

the stage of the process that positions and launches a new product in full-scale production and sales.

Secondary Data

facts and figures that have already been recorded prior to the project at hand

Primary Data

facts and figures that are newly collected for the project.

Four Market Segments

1. Geographically

2. Behaviorally

3. Psychographically

4. Demographically

Geographic Segmentation

a marketing strategy that groups audiences by location to create more targeted marketing campaigns

Demographic Segmentation

a marketing strategy that involves dividing a customer base into groups based on shared characteristics, such as age, gender, income, or education

Psychologically Segmentation

a marketing research technique that groups consumers into groups based on psychological characteristics

Behaviorally Segmentation

a marketing strategy that groups customers into segments based on their actions and behaviors

Odd-Even Pricing

Setting prices a few dollars or cents under an even number

Data

facts and figures pertinent to the project

Secondary Data (Internal)

Marketing Inputs and Marketing Outcomes

Secondary Data (External)

Events that occur outside the firm

Three Pieces of Primary Data

Observational Data, Questionnaire Data, and Other sources of data

Observational data

can be collected by mechanical (including electronic), personal, or neuromarketing methods.

Questionnaire Data

are facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors.

Information Technology

all of the computing resources that collect, store, and analyze the data.

Discounts

reductions from list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller.

Allowances

reductions from list or quoted prices to buyers for performing some activity

Trade Discounts

To reward wholesalers and retailers for marketing functions they will perform in the future

Seasonal Discounts

To encourage buyers to stock inventory earlier than their normal demand would require

Cash Discounts

typically expressed as a percentage off the list price in order to encourage retailers to pay their bills quickly

At what part of the product life cycle does Total industry sales revenue lie?

Growth

At what part of the product life cycle does Total industry profit lie?

Maturity

Maturity

stage is characterized by a slowing of total industry sales or product class revenue.

Decline

stage when sales drop

Growth

stage that is characterized by a rapid increase in sales

Deletion

dropping the product from the company’s product line

Harvesting

is when a company retains the product but reduces marketing costs

Product Class

refers to the entire product category or industry

Product Form

pertains to variations of a product within the product class

Product Modification

involves altering one or more of a product’s characteristics, such as its quality, performance, or appearance, to increase the product’s value to customers and increase sales.

Trading Up

involves adding value to the product (or line) through additional features or higher-quality materials.