mkt-exam2

STP (Segmentation, Targeting, and Positioning) Process

Process where companies split people into groups, choose a group to sell to, and show why their product is best

1. Establish the Overall Strategy or Objectives

2. Use Segmentation Methods

3. Evaluate Segment Attractiveness

4. Select Target Market

5. Identify and develop positioning strategy

What are the 5 steps of the STP Process?

Psychographic Segmentation

A method of segmenting customers based on how they spend their time and money, what activities they pursue, and their attitudes and opinions about the world. In other words, grouping people by what they like, what they believe, and what they value

Substantial

One of the factors considered in determining a segment's attractiveness; refers to the idea that a segment must be big enough to worth selling to

Profitable

One of the factors considered in determining a segment's attractiveness; refers to ensuring that the segment will spend enough money to cover costs and reach the target profit

Current market growth, future growth rate, market competitiveness, and market access costs (profit margin)

What are the four key factors in determining the profitability of a segment?

Concentrated Targeting Strategy

A marketing strategy of selecting a single, primary target market and focusing all energies on providing a product to fit that market's needs

Micromarketing

Also called one-to-one marketing; an extreme form of segmentation that tailors a product or service to suit an individual customer's personal wants or needs

Market Positioning

The process of defining the marketing mix variables so that target customers have clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products

Value Proposition

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

Competition

A positioning method used by firms to position their products or services against a specific competitor or an entire product/service classification to ideally show how the firm's offerings are better/more valuable than its competitors

Perceptual Map

A display that includes two or more dimensions regarding the position of products or brands in the consumer's mind

Marketing Research

A set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers involved in marketing goods, services, or ideas

1. Defining the objectives and research needs

2. Designing the research

3. Collecting the data

4. Analyzing the data and developing insights

5. Developing and implementing an action plan

What are the 5 steps of the Marketing Research Process?

Secondary Data

Pieces of information that have already been collected from other sources and usually are readily available

Primary Data

New data collected to address specific research needs often by the company

Syndicated Data

Data available for a fee from commercial research firms such as Information Resources Inc. (IRI), NDP Group, and Nielsen

Focus Group Interview

A research technique in which a small group of people (usually 8 to 12) comes together for an intensive discussion about a particular topic (typically a product**), with the conversation guided by a trained moderator using an unstructured method of inquiry

Unstructured Questions

Open-ended questions that allow respondents to answer in their own words

Structured Questions

Closed-ended questions for which a discrete set of response alternative, or specific answers, is provided for respondents to evaluate

Data sources may be biased or not perfect

What is an example of the disadvantage of secondary research?

Time Consuming and Expensive

What are some examples of the disadvantages of the primary research?

Big Data

Data sets that are too large and complex to analyze with conventional data management and data mining software

Veracity

One of the Five Vs of Big Data that refers to the idea that big data should be accurate, reliable, and trusted

Marketing Analytics

Techniques that use advanced technologies and model to gather data so that the marketers can improve their decision making, optimizing their returns, and make appropriate customer-related decisions

True

True or False: It is extremely important for marketing to adhere to ethical practices when conducting marketing research regarding matters such as privacy.

Core Customer Value

The basic problem-solving benefits that consumers are seeking

Actual Product and Associated Services

What are two things that contribute to the product/ the core customer value?

Actual Product

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

Associated Services

The nonphysical attributes of the product including warranties, financing, product support, and after-sale service; also called augmented product

Convenience Products/Services

Products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase

Examples: common beverages, bread, soap, gas, chips

Breadth

Refers to the number of product lines offered by a firm; also known as variety

Depth

Refers to the number of categories within a singular product line

Example: Flavors of Dr. Pepper

Brand

This increases awareness and trust for customers and provides a way to differentiate a firm's products from its competitors

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; Fosters trust, loyalty, & reputation

Brand Awareness, Perceived Value, Brand Associations, & Brand Loyalty

What are the four elements that underlie brand equity?

Manufacturer/National Brands

Brands owned and managed by the manufacturer, which ensures that producers are identified with their products at the point of purchase

Retailer/Store Brand

Brand developed and marketed by a retailer and available only from the retailer; also called private-label brand

Brand Extension

The use of the same brand name for new products being introduced to the same or new markets

Primary Package

The packaging the consumer uses, such as the toothpaste tube, from which he or she typically seeks convenience in terms of storage, use, and consumption

Labeling

Element of branding used to tell what the product is and how to use it

Service

Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed

True

True or False: By providing good customer service, firms add value to their products and services.

Convenience and Leisure

Concerning services, what are things customers place high value in today so that consumers can save time and enjoy life?

Heterogeneity

Refers to the differences between the marketing of products and services as the delivery of services is more variable

Personal

Services are _ & different every time a service is provided.

Service Quality

Customers' perceptions of how well a service meets or exceeds their expectations

Knowledge Gap

A type of service gap; Reflects the difference between customers' expectations and the firm's perception of those expectations. In other words, the firm doesn't know what customers want

Assurance

The dimension of service quality that refers to the knowledge of and courtesy by employees and their ability to convey trust and confidence to consumers

Zone of Tolerance

The area between customers' expectations regarding their desired service and the minimum level of acceptable service - that is, the difference between what the customer really wants and what he or she will accept before going elsewhere

Delivery Gap

A type of service gap; the difference between the firm's service standards and the actual service it provides to customers; resolved by empowering employees

Communication Gap

A type of service gap; the difference between the actual service provided to customers and the service that the firm's promotion program promises

Quickly

It is in the firm's best interest to solve problems _ to act as a service recovery strategy.

Company Objectives, Customers, Costs, Competition, & Channel Members

What are the 5 Cs of Pricing?

Sales Orientation

A company objective based on the belief that increasing sales will help the firm more than will increasing profits

Profit Orientation

A company objective that can be implemented by focusing on target profit pricing, maximizing profits, or target return pricing

Competitor Orientation

A company objective based on the premise that the firm should measure itself primarily against its competition

Customer Orientation

A company objective based on the premise that the firm should measure itself primarily according to whether it meets its customers' needs

Demand Curve

A curve that shows how many units of a product or service customers will demand during a specific period at different prices.

Decreases

As price increases, the quantity demanded ?

Income Effect

A factor that influences the price elasticity of demand; the change in the quantity of a product demanded by consumers due to a change in their income

Substitution Effect

A factor that influences the price elasticity of demand; consumers' ability to substitute other products for the focal brand, thus increasing the price elasticity of demand for the focal brand

Cross-Price Elasticity

A factor that influences the price elasticity of demand; the percentage change in demand for product A that occurs in response to a percentage change in price of product B; can be used for complementary or substitute products

Fixed Costs ÷ Contribution Per Unit

What is the formula for Break-Even Analysis?

Oligopolistic Competition

Competition that occurs when only a few firms dominate a market

Example: Airlines, Shipping, Internet Providers

Pricing Strategy

A long-term approach to setting prices for the firms' products based on the five Cs of pricing to meet the goals of the firm

Market Penetration Pricing Strategy

A new product or service pricing strategy in which the initial price is set relatively low with the objective of building sales, market share, and profits quickly and to deter competition from entering the market

Price Skimming

A strategy of selling a new product or service at the highest price possible price that buyers who most desire the product will pay

Predatory Pricing

A firm's practice of setting a very low price for one or more of its products with the intent to drive its competition out of business