BYU Marketing Exam #2

Marketing Segmentation
1. Effective for researching customer groups
2. Allocated marketing research
3. Identifies market opportunities
Criteria for Segmentation
M A D S U
What is MADSU?
Measurable, Accessible, Durable, Substantial, Unique Needs
What are Unique Needs?
Homogenous within segments and heterogenous across segments (MOST IMPORTANT) (Reach their heart, personal, time period)
What are the different Ways To Segment?
Geographic, Demongraphic, Psychographic, Behavioral
List ways to segment from order of most used to most useful?
G – D – P -B
Positioning is known as?
The HEART of Marketing strategy
What you say, how you say it, what you want them to hear
List Ways to Position from order of Most used to most useful?
How you are JUST AS GOOD as the competition
How you BEAT all the competition
How you are LOVED by popular people
How you FIT Consumers’ lifestyles
How you DELIVER what is most valued
When must the seller value-position the brand?
When determining what ways to position
What is a Product Item?
A SPECIFIC version of a product
What is the Product Line?
A GROUP of closely related product items
What is a Product Mix?
ALL PRODUCTS an organization sells
What are the 3 Levels of a Product?
Augmented Product (actual product), Core Product (personal benefits), Complementary Products (bundle of attributes)
Describe the Product Life cycle?
Introduction (Gain Awareness)
Growth (Maximize Market share)
Maturity (Maximize Profit)
Decline (Reduce Expenditures)
How do you gain awareness?
Promote to inform and encourage trial
How do you maximize market share?
Add features and improve quality, add channels and market share
How do you maximize profit?
Modify market, and marketing mix
How do you reduce expenditures?
Milk the brand, Maintain, harvest, or drop
Describe the New Product Development Process?
1-Idea Generation, 2-Idea Screening, 3-Concept Testing, 4-Marketing 5-Strategy, 6-Business Analysis, 7-Product Development, 8-Test 9-Marketing, 10-Commercialization
What is Idea generation?
Customers, Suppliers, Employees, R&D, Competition
Idea Screening is?
Missing the Boat -Type 1 Error (reject Ho when Ho is true)
Sinking the ship -Type 2 Error (Do not reject Ho when Ho is false)
Concept Testing is?
Test concept with potential customers
Marketing Strategy is?
Target Market
Marketing Mix = product, price, promotion, place (distribution)
Business Analysis is?
Forecasting, Profitability analysis, Legal
Product Development?
Create product / prototype
Market Testing?
-Place the product in several test markets (representative cities)
-Measure Performance
-Project results to the larger market
How many cities (2-6)
Which cities (microcosms of larger market)
Length of test? (long enough to observe repeated purchase rates)
WHERE THE PROCESS “BREAKS DOWN” MOST OFTEN?
Concept Testing b/c of finances, technology, demands, etc.
What are the business products in Market Testing?
Alpha testing, Beta testing, Trade shows, Distributors and dealers
What are the 3 advantages of branding?
1. Branding allows marketers to DISTINGUISH their PRODUCTS
2. CONSUMERS IDENTIFY products WISH TO BUY again/avoid don’t want
3. Branding is USEFUL when introducing NEW PRODUCTS.
What are the 3 types of Brands?
Functional, Image, Experiential
Functional Brands does what 3 things? 1. what does it create? 2. How does it differentiate? 3. Connect with customers?
1.Satisfy Functional Needs (Wash clothes, Relieve Pain, Close Shave)
2.Offers superior performance OR superior economy
3. Connects w/ customers helping them achieve basic goals related to physical needs (food, shelter, heath, safety)
What 3 things does the Image Brand (what the product represents) do?
1. Creates value by projecting a dusting / admiring image
2. Differentiates by offering a unique set of associations
3. Emotional images, symbols, association
Experiential brands differ from image and functional brands by?
1. Focus is on how the consumers feel when interacting with the brand
2. Products, environments, services combined = temporary multi sensory encounters with the brand
What are the three components of Brand Positioning?
1. Competitive Frames of Reference
2. Points of difference (PODs)
3. Point of Parity (POPs)
Competitive frames of reference focus on?
Nature of competition, Target Market
Points of difference (PODs) focus on?
Desirable to consumer, Deliverable by the Brand, Differentiating from competitors
Point of Parity (POPs) focus on?
Negate competitor point of difference, Demonstrate category credentials
Retail Positioning incorporates what?
Atmospherics, Product assortment, Employees
Elements in the store’s design that appeal to consumers’ emotions and encourage buying?
Atmospherics
The breadth and depth of the product line?
Product Assortment
What is the difference from the Product line breadth and the Product line depth?
# of different product lines vs. # of products within a line
Sales associates, clerks, servers, hosts, greeters, cashiers, in a store are known as the?
Employees
What are the 5 benefits of Using Intermediaries?
Break Bulk, Provide Assortment, Hold Inventory, Offer Services, Market Efficiency
Key words to differentiate the 5 benefits of Using intermediaries?
Bulk – buy quantity
Assortment – find variety
Inventory – buy when you want
Services – promote, deliver, warranty
Efficiency – buy few sellers
What are the 3 types of Market Exposure?
Intensive distribution, Selective distribution, Exclusive distribution
The BEST channel system should achieve what?
Ideal Market Exposure
The focus of Intensive Distribution is?
Maximize market coverage — make product available EVERY outlet for consumers – convenience goods
Selective Distribution focuses on?
Firm selects a Few Retail Outlets – specific geographic area – shopping and speciality goods
Exclusive distribution focuses on?
Level of distribution – ONE retail outlet – carries firm’s products – Speciality goods
Why do companies promote?
To communicate value to their chose customers
Explain the Push vs. Pull strategy?
Producer–(marketing activities)–>Intermediaries–(marketing activities)–>End Users = Push Strategy

v——–Marketing Activities——–v
Producer<--Intermediaries<--End Users = Pull Strategy

What are the three objectives of advertising?
Cognitive- build awareness
Affective- gain interest, liking
Behavioral- stimulate action
AIDA Model stands for?
Attention, Interest, Desire, Action
What is a Creative Brief?
Marketing managers communicate advertising strategy to advertising agencies using the creative brief
A creative brief consists of what 5 things?
1. Brand legacy 2. Copy Strategy 3. Executional considerations 4. Key customer groups 5. Key competitors
What is the Impact of Price on Profit?
Profit = Total Revenue – Total Cost
Profit = (___ x ___) -( ___ + ____x____)
Price x quantity – Fixed cost + variable cost x quantity
Direct Impact on profit? Price.
Price x quantity
Indirect impact on profit through quantity? Price.
Fixed cost + variable cost x quantity
Unit Margin = ____ – ______? aka?
Price – Unit Variable Cost
Unit Contribution
What is the Percent margin equation? (__ – __ / ___)
Price – Unit Variable Cost / Price
Break even analysis is determined by?
Fixed cost / unit contribution
Unit Contribution = Price – Unit Variable Cost
Price is determined by what?
Consumer is willing to pay NOT cost to manufacture, distribute, promote
What two things determine what the consumer is willing to pay?
1- Buying Situation or context 2- Core dimensions of the product
What are the different ways to select a pricing method?
Cost plus, Target Return, Skimming, Penetration, Prestige, Price, Odd-Even, Bundle, Yield Management, Going rate, Perceived value
What are the key words to each different pricing method?
Cost Plus- + amount
Target Return- ROI, profit
Skimming- high price “skim”
Penetration- low price “penetrate”
Prestige- ^price = ^quality
Price- diff prices
Odd-even $19.99
Bundle- 2+ packaging
Yield Management- match Demand & Supply
Going Rate- follow the competition
Perceived Value – Customer’s Will