Chapter 9-14 marketing

market segmentation
aggregates potential buyers into groups that have common needs and will respond similarly to a marketing action
market segments
the homogeneous group of potential buyers that result from market segmentation
organizational synergy
the increased customer value achieved through performing organizational functions like marketing or manufacturing more efficiently
5 steps to segmentation
1)group potential buyers into segments 2)group products to be sold into categories 3)develop a market product grid and estimate size of markets 4)select target markets 5)take marketing actions to reach target markets
4 bases of segmentation
geographic(region), demographic(household size), psychographic(lifestyle), behavioral:product features/usage rate
usage rate
the quantity consumed or number of store visits during a specific period (frequency marketing does this)
market product grid/ purpose
framework relating the segments of a market (y axis) to products or marketing actions of the firm (x axis)
Purpose: trigger marketing actions to increase sales and profits
5 criteria to select target segmentation
market size, expected growth, competitive position, cost of reaching the segment, compatibility with the organizations objectives/resources
product positioning (and two types)
the place a product occupies in consumers minds
1)head to head: compete directly against competitors
2)differentiation: less competitive, appeals to small market
perceptual map
means of showing the position of products in consumers minds
4 steps of product positioning
1)identify the important attributes for the product
2)discover how target customers rate competing products
3)discover where the companies own product is rated
4) re-position the product in consumers mind
consumer products (4 types)
1)convenience
2)shopping (compared with price/quality/style)
3)specialty(consumer makes special effort to search out and buy)
4)unsought (consumer doesnt know about or want initially)
business products (2 types)
1) components (items that become part of final product)
2)support (items used to assist the production of other goods or serious)
product mix
consists of all the product lines offered by an organization
3 ways to classify services
1) delivery by people or equipment
2)delivery by business firms
3)delivery by government agencies
4 I’s of services
intangibility, inconsistency, inseparability, inventory
idle production capacity
when the service provider is available but there is no demand for the service
what is a new product
newer than existing product, only been out for less than 6 months, is a product line extension
marketing reasons for new product failure
no points of difference, incomplete product definition before production, no market attractiveness, bad marketing mix, poor quality, bad timing, doesnt satisfy customers, no economical access to buyers
new product process
7 stages an organization goes through to identify business opportunities and convert them to a salable good or service (strategy development, idea generation, screening and evaluation, business analysis, development, market testing, commercialization)
primary demand
desire for the product class rather than a specific brand
selective demand
preference for a specific brand
harvesting
company keeps product, but reduces marketing costs
4 types of product
high learning (longer intro), low learning (short intro), fashion (can go through twice), fad (quick into and decline)
3 ways for product manager to change product life cycle
modify product characteristic, modify market (find new customers), re position the product
brand personality
set of human characteristics associated with a brand name
brand equity
the added value a brand name gives a product
brand licensing
contract where one company allows its brand name to be used with products offered by another company for a fee
private branding strategy
manufactures products but sells them under the brand name of a wholesaler (sears, radio shack)
packaging
functional(storage) and perceptual benefits(color/graphics)
capacity management
integrating the service component of the marketing mix with efforts to influence consumer demand
final price (equation)
=list price-(incentives+allowances)+extra fees
value (equation)
perceived benefits/ price
profit (equation)
Total rev- Total cost
demand oriented pricing
skimming(highest those who really want product are willing to pay), penetration(low initial to appeal to mass market), prestige(high to attract quality seekers), odd even, target(adjust features of product to make price what consumers want), bundle(2 or more products in a single price), yield management (charge different prices to max revenue at certain capacity)
cost oriented pricing
standard markup(add a fixed % to all items in specific class), cost plus(add specific amount to arrive at price, used in business products)
profit oriented pricing
target profit pricing(annual target of profit),target ROS, target ROI
competition oriented pricing
customary(ie candy bars in a vending machine), above at or below market pricing, loss leader(special promotion to hopefully buy other products)
4 factors influencing demand
price, consumer tastes, availability of similar products, consumer income
break even point (equation)
BEP=fixed cost/(unit price-unit variable cost)
flexible price policy
setting different prices for products and services depending on individual buyers and demand
3 steps to set a final price
select and approximate price level, set the list price, make special adjustments(discounts, allowances, geographical)
3 functions of intermediaries
transactional(buy goods), logistical(transport), facilitating(make transaction easier for buyers)
direct marketing
consumers buy products without any face to face interaction with salesperson (catalog)
multichannel marketing
blending of communication and delivery channels
strategic channel alliance
one firms marketing channel used to sell another firms products (kraft distributing starbucks)
4 ways to satisfy buyer requirements
information, convenience, variety, pre/post sale services
channel conflict
when one channel member believes another is engaged in behavior that prevents them from achieving their goals
disintermediation
when a channel member bypasses another and sells or buys products direct (example of vertical conflict)
4 influences of channel captain
economic, expertise, franchises, identification with a certain channel member
supply chains differ from marketing channels because
supply chains include raw material suppliers