Marketing 201 Midterm 2

Product oreintation

All about product. Not considering competitors or market needs

Sales orientation

Aggressive Sales

Porter's Five Forces Model

Five competitive forces

Threat of Entrants

New entrants can shake up an industry and cause increased competition as they seek to take market share from existing companies in the industry.

Power of Suppliers

Powerful suppliers can drive down industry profits by charging higher prices and reducing product and service quality.

Fraud Triangle

things that are present when a person engages in unethical practices

Perceptual Map

view consumers’ perceptions of brands on one or a series of spatial maps such that relationships between brands can be easily seen

Problem Recognition

Perceiving a need

Information Search

Seeking Value

Evaluation of alternatives

Assessing value

Purchase

buying value

post-purchase evaluation

consuming, experiencing, using, and evaluating value

Inovators

The first group of consumers (2.5%) to adopt a new product.

Early Adopters

The second group of consumers (13.5%) to adopt a new product

Early Majority

The third group of consumers (34%) to buy products that have proven to be successful.

Love Group

Brand loyal, they'll purchase anything from the brand

Swing group

Can be persuaded either way, most marketed, sell through the eyes of the love group

Hate group

Don't market to them

Geographic segmentation

Segmentation based on geographic region, population density, climate, or population size

Demographic segmentation

segment based on age, gender, income, social class, education, family size, religion, and ethnicity

Psychographic segment

Segmentation based on differences in personality, motives, or lifestyle

Behavioral segment

Segmentation in the market based on the core benefits customers seek, usage situations, brand loyalty, usage rates and price sensitivity. This includes categories such as brand-loyal, deal, price, and convenience shoppers.

Brand awareness

How recognizable a brand is

Brand image

the impression of a product held by real or potential consumers.

Brand Loyalty

Customers buy the same brand of product over and over rather than changing it around

Brand equity

the commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself.

Elastic Demand

the change in quantity demanded due to a change in price is large

Inelastic Demand

the change in quantity demanded due to a change in price is small

Push Strategy

taking the product directly to the consumer by making products readily available through various channels of distribution

Pull Strategy

producers direct their marketing activities toward the final consumer to encourage them to ask retailers (channel members) for the product

Direct Marketing

focuses on direct communication with consumers to encourage a direct response for a purchase, request for information, or visit to a website

Brand Loyal Shopper

High brand sensitivity, low price sensitivity: toothpaste, cigarettes, coffee, and soda

Convenience Shopper

Low brand sensitivity, low price sensitivity: energy drinks, junk food, eggs, dairy products, and over-the-counter medications

Deal Shopper

High brand sensitivity, high price sensitivity: diapers, hand and body soap, and pet food

Gap Analysis

Compares brands based on the importance and performance of their differentiating features and benefits. Customers make judgments regarding the importance of a brand’s features and benefits to the buying decision.

Hierarchal Values Analysis

Three-step research process that consists of interviewing customers to discover their core motivations or beliefs behind purchasing decisions. It consists of (1) eliciting distinctions, (2) pyramiding down, and (3) laddering up.

Personal Relevance Bridge

The emotional connection or the bridge between the product benefit and the personal benefit

Price Shopper

low brand sensitivity and high price sensitivity: plastic food bags, frozen pizza, and detergents

Segment Profile

Describes the demographic characteristics, geographic factors, attitudinal scores, and behavioral tendencies of the segment members. Explains similarities and differences between segments.

Segmentation basis

Used to assign people to various segments

"Me too" Marketing

offers the same price for the same benefits, which won’t give consumers a reason to change.

Attitude Brands

Based on emotions that consumers feel rather than just the physical characteristics they see or touch.

Business Analysis

The fifth stage in the New Product Development Process when marketers make a business case for the concept with forcasts, projections and estimates.

Capital Items

A business product which aids in the production or operations process

Commercialization

The final stage in the New Product Development Process which decides whether or not launch the product

Competitive Angle

Defines the severity of the problem the product addresses and the quality of the solution the product provides compared to the competition.

Convenience Products

A consumer product that is purchased without much thought because they are inexpensive and purchased frequently

Cult Brands

Brands that empower people to join a group.

Decline Stage

The fourth stage of the Product Life Cycle when marketers must make a decision regarding whether to rejuvenate a product or let it die. The goal of this stage is to reduce expenditures, milk the brand and maintain, harvest or drop.

Diffusion Process

The rate of product acceptance by the different groups of adopters.

Element of Differentness

A unique element that sets a product from its competitors

Cost-per-thousand Impressions (CPM)

How many opportunities (impressions) the general public has to view a particular ad. Calculated by taking the cost of the advertising and dividing by the total number of impressions

Gross Rating Point (GRP)

The percentage of all households with televisions that have an opportunity to view an ad multiplied by the number of opportunities a typical reached household has to view the ad over the course of a media plan

Integrated Marketing Communication

Shifts the focus to the consumer

Price Promotions

Promotions when products are offered at a discounted price

Sales Promotions

Short-term incentives to encourage product trial by new customers and to increase repeat purchases by existing customers.

Trade Promotion

Retailers who sell a company’s product are offered reduced prices called trade allowances

Value-added Promotions

Promotions that add value for the customers such as contests

Break-even Analysis

A method for examining the relationships among price

Break-even Point

The sales volume at which total revenue equals total cost. At this point

Competitive Pricing

A pricing strategy that considers pricing below

Consumer Surplus

The difference between the maximum price consumers are willing to pay and the lower amount they actually pay.

Cost-plus Pricing

A pricing strategy based on the cost of the product and a predetermined margin.

External Reference Price

The price everyone else is paying for the product.

Fixed Costs

Costs that do not vary with output quantity.

Golden Goose Pricing

Starts with understanding consumers like value pricing

Internal Reference Price

The price consumers think they should pay

Perceived Value

The customer’s perception of the relationship between the benefits and costs of a product.

Price Penetration

Marketers set a relatively low entry price to capture market share quickly.

Price Skimming

Marketers set a relatively high price to obtain high margins at the expense of sales quantity.

Pricing

The amount of money exchanged for a product or service.

Total Contribution

Unit contribution multiplied by the total number of units sold. The amount of money available to “contribute” to fixed costs and then to profits.

Total Costs

The total variable costs with the fixed costs

Total Revenue

The price per unit multiplied by the total number of units sold.

Unit Contribution

Unit price minus the unit variable cost.

Value Pricing

A pricing strategy that considers the customer’s perceived value of the product.

Variable Costs

Costs that are directly tied to the output quantity. As the company produces more or less of a product or service

Assurance

A dimension of service quality-treating customers with respect

Empathy

A dimension of service quality—facilitating access and communication with customers to understand their needs.

External Marketing Activities

In the Service Marketing Triangle

Inseparability

Describes service experiences which are impossible to separate the service from the service provider

Intangibility

Describes service experiences which are intangible or lack physical attributes

Interactive Marketing Activities

In the Service Marketing Triangle

Internal Marketing Activities

In the Service Marketing Triangle

Marketing Services

A broad set of strategies focused on economic activities offered to a client that are intangible and do not result in the ownership of anything

Perishability

Describes service experiences which cannot be stored for other customers

Reliability

A dimension of service quality-the ability of a services company to perform the promised service dependably and accurately

Responsiveness

A dimension of service quality—providing timely and prompt responses to customers

Services

Activities

Tangibles

A dimension of service quality—making the service tangible by using physical cues such as clean facilities

Variability

Describes service experiences which involve humans and deliver an inconsistent level of service from one provider to the next

Introduction Stage

The first stage of the Product Life Cycle when the product is introduced to the market. The objective of this stage is to build awareness and promote to inform and encourage trial.

Laggards

The last group of consumers (16%) to adopt a new product because of their skepticism and resistance to change.

Late Majority

The fourth group of consumers (34%) to adopt a new product after it has been largely adopted because they are more wary of risk.

Marketing Strategy

The fourth stage in the New Product Development Process which consists of detailing the target market and marketing mix

Materials and Parts

A business product that is used in the manufacturing process

Maturity Stage

The third stage of the Product Life Cycle when marketing managers seek to maximize profit by harvesting product loyalty. The goal of this stage is to maximize profit and to look at modifying the target market and marketing mix

Net Promoter Score

Used to measure the growth of brand equity. It is computed by taking the number of promoters and subtracting the number of detractors and then dividing the result by the total number of customers in the study

Product Development

The sixth stage in the New Product Development Process when the product is created.

Product Item

A specific version of a product.