Chapter 7-11 Marketing

Market
people or organizations with needs and wants and the ability/willingness to buy
Market Segmentation
process of dividing a market into meaningful, similar and identifiable groups
Segmentation bases
characteristics of individuals, groups or orgs
Market segment
subgroup of people or orgs sharing 1 or more characteristics; causing similar product needs
FLC family life cycle
series of stages determined by age, marital status and presence/absence of children
niche
one segment of a market
positioning
specific marketing mix to influence customer’s perception of brand, product line or org.
repositioning
changing consumers perceptions of a brand in relation to competing brands
position
place a product, brand, group of products occupies in consumers minds relative to competing offerings
benefit segmentation
grouping customers in market segments based on benefits they seek from product
marketing research
planning, collecting, analyzing data relevant to a marketing decision
research design
specifies which questions must be answered, how and when data will be gathered and anaylzed
primary data
info that is collected for the 1st time, used for solving specific problem being investigated (surveys, obs. experiments)
focus group/online focus groups
7 to 10 people who participate in a group discussion led by a moderator
mystery shoppers
researchers posing as customers who gather observable data about a store
sample
a subset from a larger population
probability sample
every element in population has a known statistical likelihood of being selected
database marketing!
creation of large computerized file of customers profiles and purchase patterns
survey research
most popular method researchers use to gather primary data
universe
the population from which a sample will be drawn
warranty
confirmation of quality or performance of goods or services
product mix
all products an org sells
product modification
changing 1 or more of products characteristics
brand name
part of a brand that can be spoken
brand mark
part of a brand that can not be spoken
express warranty
written guarantee
brand equity
value of a brand name
co-branding
placing 2 or more brand names on product or package
brand loyalty
a consistent preference for one brand over all others
private brand
brand name owned by wholesaler or a retailer
implied guarantee
unwritten guarantee that good or service is fit for purpose it is sold
individual branding
using different brand names for different products
product line
group of closely related product items
product
everything both favorable/unfavorable that is received in exchange
family branding
marketing different products under the same brand name
PLC product life cycle
trace stages of product acceptance= birth to death
diffusion of innovation
process by which adoption of innovation spreads, major implication: They may need to change the message developed for targeted adopters over time.
concept test
test new idea before prototype
idea screening
first filter in the product dev process; rids bad ideas
maturity
3rd stage of plc- sales increase at decreasing rate
test marketing
limited intro of new product to see reaction
business analysis
stage where demand,cost,sales, and profitability are calculated
innovation
product perceived as new by the potential user
growth
period where sales increase rapidly; 2nd stage
commercialization
decision to market a new product, The final stage in the new-product development process
tangibles
physical evidence of a service;facilities, tools, equipment
trademark
exclusive right to use a brand or part of a brand
inseparability
inability to separate production and consumption of services
heterogeneity
variability of inputs and outputs of services
service
result of applying human or mechanical effort to people or object
intangibility
inability of services to be touched, seen, tasted, heard, felt
perishability
inability of services to be stored, warehoused, or inventoried
empathy
caring and individualized attention to customers
supply chain
connected chain of all business entities that perform/support the logistic functions
marketing channels
set of interdependent orgs that ease the transfer of ownership as products move from producer to business user or consumer
retailer
a channel intermediary that sells mainly to customers
merchant, wholesaler
institution that buys goods from manufacturers, takes title, stores them and resells and ships them
channel power
capacity to control/influence behavior of other channel members
channel control
one marketing channel member intentionally affects another member’s behavior
channel leader
member of marketing channel that exercises authority over other members
channel conflict
clash of goals and methods between channel members
direct channel
distribution channel where producers sell directly to consumers
channel members
all parties in marketing channel
outsourcing (contract logistics)
manufacturers/suppliers use of interdependent 3rd party to manage an entire function of the logistic system
distribution resource planning
strategically managing the efficient flow and strange of raw materials and finished goods from origin to consumption
segmentation bases
geography-market size, area, density
demography-age, gender, income, ethnic background, . family life cycle
psychographic- personality, motives, lifestyle, . . geodemographics
benefit sought- process of grouping customers
usage rate- frequency of buying a product
80/20- 80% of all demand come from 20% of customers
strategies for selecting target markets
undifferentiated-mass marketing, no market segment
multisegment- differentiated, many markets, 2 or 3
concentrated- nitch, one particular market
role of marketing research
Descriptive- gathering and presenting factual statements
Diagnostic-explaining data
Predictive- “what if?”
Marketing research process
1. define problem
2. plan design/primary data
3. specify sampling procedure
4. collect data
5. analyze data
6. prepare/present report
7. follow up
types of consumer products
convenience (inexpensive, easy to find) , shopping (requires comparison shopping) , specialty (expensive, reluctant to find) , unsought products (not actively seeked)
product item
a specific version of a product that can be designated as a distinct offering
product mix width
number of product lines in the organization
Product mix depth
average number of products in each line
pioneering advantage
its better to be first than it is to be better
categories of adopters
innovators, early adopters, early majority, late majority, laggards
Product life cycle stages
introductory
growth
maturity
decline
assurance
knowledge and courtesy of employees
responsiveness
ability to provide prompt service
reliability
ability to perform the service right the first time
agents brokers
wholesaling intermediaries who facilitate the sale of a product by representing channel members
wholesalers sell to
retailers (sam’s club=retailer)
Channels for consumer products
Direct- producer+consumer
Retailer- producer+retailers+consumers
Wholesalers- producer+ wholesalers+ retailers+ …… consumers
Agent/broker- producer+ agent/broker+ ……wholesalers+ retailers+ consumers
Levels of distribution intensity
intensive= every store
selective= several
exclusive=moderate
Early Majority
This group determines whether a new product succeeds or fails
Product line
products all function in a similar manner and provide similar benefits
Channel leader is also called
channel captain
contact efficiency
marketing channels make distribution simpler by reducing the number of transactions required to get products from manufacturers to consumers
observations
Can NOT learn about attitudes, motivation or feelings.. you can with mail questionnaire, mall intercept interviews, focus groups
Heterogeneity..
It is difficult to achieve consistency and standardization of services because of this service characteristic
geodemographics segmentation
neighborhood lifestyle categories
psychographic segmentation
personality, motives, lifestyles, geodemographics
satisficers
optimizers
take first familiar supplier
consider numerous suppliers
captive brand
a brand manufactured by a 3rd party for an exclusive retailer, without evidence of that retailer’s affiliation
facebook ads
customer relationship management…CRM, when personalized, caters to consumers’ desire to be treated as individuals.
disadvantage of multisegment target strategy
It increases a company’s susceptibility to cannibalization
CRM
entails tracking interactions with customers to optimize customer satisfaction and long-term company profits.
field service firm
specializes in interviewing respondents on a subcontracted basis.
Research design
The research design specifies which research questions must be answered, how and when data will be gathered, and how the data will be analyzed.
Marketing research problem vs. management decision problem
The marketing research problem is information oriented, while the management decision problem is action oriented.
question to trace marketing research problems
Did an unforeseen change in the external environment cause the plan to fail?
firms widen their product mix to
capitalize on established reputations.
disadvantage of test marketing
It exposes the new product and its marketing mix to competitors before its introduction.
PLC
It can be used to analyze a brand, a product form, or a product strategy.

It helps marketer managers forecast future events and suggest appropriate strategies.

mental stimulus processing
services directed at peoples minds: Training and education in professional psychology
people processing
service is directed at customer
Possession Processing
service is directed at customer’s physical possessions
Info processing
technology or brainpower directed at a customer’s assets: insurance, consulting
patronage oriented pricing
tries to maximize the number of customers using the service
operations oriented pricing
seek to match demand and supply so as to ensure optimal use of their productive capacity at any given time (hotels)
revenue oriented pricing
It focuses on maximizing the surplus of income over costs.
in order to price a service it is important to
define the unit of service consumption.
In a manufacturer monopoly,

In a retailer monopoly,

a single supplier may provide products to multiple retailers.

a single retailer may use multiple suppliers