Marketing Exam 2 Study Guide

Comprehensive vocabulary flashcards covering foundational marketing concepts, segmentation, targeting, positioning, new product development, brand management, services marketing, and pricing strategies from Chapters 9 to 14.

5Cs of Marketing

Situation-analysis framework: Company, Customers, Competitors, Collaborators, and Context. It helps a business understand its internal capabilities, customers, rivals, partners, and external environment.

Company (5Cs)

The organization itself: its goals, resources, capabilities, offerings, costs, strengths, and weaknesses.

Customers (5Cs)

The people or organizations the business serves or wants to serve, including their needs, behaviors, preferences, and buying power.

Competitors (5Cs)

Other organizations competing for the same customers, needs, or spending. Consider direct and indirect competitors.

Collaborators (5Cs)

Outside partners that help the company create, deliver, or communicate value, such as suppliers, distributors, retailers, and agencies.

Context (5Cs)

The broader environment affecting the business, including economic, technological, social, cultural, political, legal, and competitive conditions.

SWOT Analysis

A situation-analysis tool that identifies internal Strengths and Weaknesses and external Opportunities and Threats.

Strengths (SWOT)

Internal advantages or capabilities, such as a strong brand, skilled employees, patents, or efficient operations.

Weaknesses (SWOT)

Internal limitations or disadvantages, such as limited funds, weak awareness, outdated technology, or poor distribution.

Opportunities (SWOT)

External trends or conditions the company could use to its advantage, such as a growing market or changing customer preferences.

Threats (SWOT)

External conditions that could hurt the business, such as new competitors, regulation, inflation, or changing technology.

Market Research

The process of collecting and analyzing information to understand customers, markets, competitors, and business problems or opportunities.

Primary Research

New information collected firsthand for a specific research question. Examples include surveys, interviews, focus groups, observation, and experiments.

Secondary Research

Information that already exists and was collected for another purpose. Examples include census data, industry reports, company records, academic studies, and published articles.

Qualitative Research

Research focused on understanding motivations, meanings, and experiences, usually using non-numerical data such as interviews or focus groups.

Quantitative Research

Research that gathers numerical data to measure patterns, compare groups, or test relationships, often through surveys or experiments.

Insight

A meaningful interpretation of information that reveals an underlying customer need, motivation, tension, or behavior and suggests an opportunity for action.

Good Insight

A good insight is specific, relevant, surprising or revealing, grounded in evidence, connected to a real customer need, and actionable for the business.

Market Segmentation

Dividing a broad market into smaller groups of customers who share similar needs, characteristics, or behaviors.

Market Segment

A group of customers within a market who have something meaningful in common and may respond similarly to marketing.

Good Segmentation

Segments should be identifiable/measurable, substantial, accessible/reachable, differentiable, and actionable. They should be useful for making marketing decisions.

Geographic Segmentation

Dividing a market by location, such as country, region, city, neighborhood, climate, or population density.

Demographic Segmentation

Dividing a market using measurable population characteristics such as age, income, gender, education, occupation, family size, or life stage.

Psychographic Segmentation

Dividing customers by lifestyle, interests, values, attitudes, personality, or social class.

Behavioral Segmentation

Dividing customers based on actions or relationship with a product, such as usage rate, benefits sought, loyalty, occasion, or purchase behavior.

Target Market

The specific segment or segments a company chooses to serve with its marketing efforts.

Choosing a Target Market

Evaluate segment size and growth, profitability, competitive intensity, accessibility, fit with company objectives/resources, and the ability to serve the segment better than competitors.

Mass Marketing

A strategy that offers essentially one product and marketing mix to the entire market, rather than tailoring it to segments.

Differentiated Marketing

A targeting strategy in which a company serves multiple segments with distinct offerings or marketing mixes.

Concentrated (Niche) Marketing

A strategy focused on one or a small number of segments, aiming to serve them especially well.

Micromarketing

Tailoring products or marketing programs to very narrow segments or individual customers, often by location or personal preference.

Product Differentiation

Creating meaningful distinctions between an offering and competitors' offerings, such as features, quality, design, service, convenience, or brand image.

Mass Customization

Using flexible production or technology to provide customized products or experiences at or near mass-production efficiency.

Build-to-Order

Making a product after a customer places an order, often allowing customization and reducing the need to hold finished inventory.

Cannibalization

When a company's new product takes sales away from one of its existing products instead of generating entirely new sales.

80/20 Rule

A general principle suggesting that a large share of outcomes (often about $80\%$) comes from a relatively small share (often about $20\%$) of customers or products. It is a rule of thumb, not a universal law.

Customer Lifetime Value (CLV)

The estimated total value or profit a customer will generate over the entire relationship with a company. It helps guide acquisition, retention, and service investment.

Personas

Research-based profiles representing important customer types. They summarize goals, needs, behaviors, motivations, and frustrations; they should be based on evidence rather than stereotypes.

Product Positioning

The strategic process of creating a desired place for a product or brand in the target customer's mind relative to competing alternatives.

Position

The place or perception a product or brand actually occupies in customers' minds compared with alternatives.

Positioning Statement

An internal strategic statement identifying the target customer, market/category, key customer need, brand or product benefit, and reason to believe the claim.

Perceptual Map

A visual tool plotting brands or products along dimensions customers use to compare them, such as price and quality. It can reveal competitors, gaps, and possible differentiation.

Usage Rate

How much or how frequently a customer uses a product. Common groups include light, medium, and heavy users.

Job To Be Done (JTBD)

The progress or outcome a customer is trying to achieve in a particular situation. Customers 'hire' a product or service to help get that job done.

Finding the Job To Be Done

Study the situation and desired progress: interview customers about what happened before, what they were trying to accomplish, barriers, alternatives, and why they chose or rejected solutions.

How JTBD Drives Strategy

It shifts attention from product features to the customer's underlying goal, helping identify target customers, competitors, product opportunities, positioning, and messaging.

New Product

An offering perceived as new by a company or market. Newness can involve a completely new product, a new line, an addition, an improvement, repositioning, or lower cost.

Six Types of New Products

Common categories: new-to-the-world products; new product lines; additions to existing product lines; improvements/revisions to existing products; repositioned products; and cost-reduced products.

New-to-the-World Product

A product that creates an entirely new market or category, such as a genuinely new kind of technology or solution.

New Product Line

A product category that is new to the company, allowing it to enter a market in which it did not previously compete.

Addition to Existing Product Line

A new size, flavor, model, style, or version added to a product line the company already sells.

Product Improvement or Revision

An updated version of an existing product with changes such as better performance, quality, design, features, or reliability.

Repositioned Product

An existing product marketed to a new use, audience, or perception without necessarily changing the product itself.

Cost-Reduced Product

An existing product redesigned or produced at a lower cost, often while maintaining its basic function or acceptable quality.

Why New Products Fail

Possible reasons include weak customer need, poor market research, unclear differentiation, incorrect pricing, poor timing, weak promotion/distribution, technical problems, strong competition, or insufficient resources.

Predicting New Product Success

Look for a clear customer need, strong product advantage, fit with company capabilities, market potential, customer acceptance, manageable costs, effective launch execution, and support from leadership.

Product

Anything offered to a market to satisfy a want or need; it can be a physical good, service, idea, or experience.

Nondurable Good

A tangible product consumed in one or a few uses, such as food, shampoo, or paper towels.

Durable Good

A tangible product that usually lasts for an extended period and is used repeatedly, such as furniture, appliances, or a car.

Services

Intangible activities, benefits, or satisfactions offered for sale, such as haircuts, banking, education, or transportation.

Consumer Products

Products and services purchased by final consumers for personal use.

Business Products

Products and services purchased by organizations for use in operations, production, or resale.

Convenience Products

Consumer products customers buy frequently, immediately, and with minimal comparison or effort, such as toothpaste or snacks.

Shopping Products

Consumer products customers compare on suitability, quality, price, and style before buying, such as furniture or clothing.

Specialty Products

Products with unique characteristics or strong brand identification for which buyers are willing to make a special purchase effort, such as a luxury designer item.

Unsought Products

Products consumers do not know about or do not normally think of buying, such as certain insurance or funeral services.

Derived Demand

Demand for a business product that comes from demand for the consumer product or service it helps produce.

Product Line

A group of closely related products sold by one company, often serving similar needs or customer groups.

Product Mix

The complete set of all product lines and individual items a company offers.

Product Line Extension

Adding new items, versions, or variations within an existing product line.

Brand Extension

Using an established brand name to introduce a product in a different product category.

Open Innovation

Using ideas, technologies, or knowledge from both inside and outside the organization to develop innovations, rather than relying only on internal research.

Stage-Gate Process

A structured new-product development process that divides work into stages separated by decision gates. At each gate, managers decide whether to continue, revise, pause, or stop the project.

Typical Stage-Gate Steps

A common sequence is discovery/idea generation, scoping, business case, development, testing and validation, and launch. Exact labels can vary by course or organization.

Standard Test Market

A product is launched in a limited number of representative cities using a full marketing plan, allowing the company to observe real-world sales and marketing performance.

Controlled Test Market

A research company controls product distribution and/or retail conditions in selected stores or markets to measure consumer response with more control than a standard test market.

Fail Forward

Treating a failed experiment or product attempt as a source of learning, using evidence to improve the next attempt rather than repeating the same mistake.

Three Layers of a Product

Core benefit, actual product, and augmented product.

Core Benefit

The fundamental problem solved or benefit the customer is buying. Example: a hotel guest is buying rest and a place to stay.

Actual Product

The tangible or observable offering, including features, design, quality, brand name, and packaging. Example: the hotel's room, bed, and amenities.

Augmented Product

Additional services and benefits surrounding the core and actual product, such as delivery, warranties, customer support, loyalty rewards, or free cancellation.

Product Life Cycle (PLC)

The pattern of a product's sales and profits over time, commonly described as introduction, growth, maturity, and decline.

Introduction Stage

The product is newly launched; sales are low, promotion and education costs are high, and profits are often low or negative. Objective: build awareness and encourage trial.

Growth Stage

Sales rise rapidly, profits often improve, competitors enter, and distribution expands. Objective: build preference and market share while differentiating the product.

Maturity Stage

Sales growth slows or levels off, competition is intense, and profits may be pressured. Objective: defend market share, encourage repeat purchases, and differentiate or modify the offering.

Decline Stage

Sales and profits fall as needs, technology, or preferences change. Objective: harvest, maintain selectively, reposition, or delete the product.

Trial

A customer's initial purchase or use of a product, especially important during introduction and adoption.

Repeat Purchasers

Customers who buy or use a product again after trying it. Repeat purchasing indicates satisfaction, habit, or loyalty.

Deletion

Removing a product from the product line, often because it is unprofitable, obsolete, or no longer strategically useful.

Harvesting

Reducing marketing and other investment in a declining product to maximize remaining cash flow or profit.

Diffusion of Innovation

The process by which a new product or idea spreads through a market over time.

Brand/Product Manager

A person responsible for coordinating a brand or product's strategy and marketing activities, often across functions such as product development, sales, finance, and promotion.

Product Modification

Changing a product's features, quality, performance, style, or other attributes to improve its appeal or extend its life.

Product Bundling

Offering two or more products together as a package, often for one combined price.

Market Modification

Changing or expanding the customer base or usage situations for an existing product, such as finding new users or increasing use frequency.

Product Repositioning

Changing how customers perceive a product relative to competitors, possibly by changing its target market, benefits emphasized, or marketing message.

Trading Up

Adding higher-priced, higher-quality, or more feature-rich products to a product line to attract customers seeking greater value or prestige.

Trading Down

Adding lower-priced, simpler products to a product line to reach more price-sensitive customers.

Shrinkflation

Reducing the quantity or size of a product while keeping its price the same or similar, effectively increasing the price per unit.

Branding

The process of creating and managing a distinctive identity and meaning for an offering.