Marketing Exam 2- Dr. Sojka University of Cincinnati

Marketing Mix- The 4 P’s
Product
Price
Place
Promotion
Micro environment Factors
Politics
Demographics
Natural Environment
Technology
Culture
Geographic Segmentation
Dividing the market into different geographical units (nations, regions, states, cities, ect)
Demographic Segmentation
Divides market based on variables such as age, gender, income, religion, ect. Most popular for segmentation
Psychographic Segmentation
Divides buyers by social class, lifestyle, or personality characteristics.
Behavioral Segmentation
Divides buyers based on knowledge, attitude, uses, or responses to a product. (occasions, the benefit, user status, usage rate, loyalty status)
Geodemography Segmentation
Using multiple segmentation bases to divide the market.
PRIZM
Classifies every household under different demographic factors
Requirements for Effective Segmentation
Measurable
Accessible
Substantial
Actionable
Undifferentiated Target Strategy(mass marketing)
A firm ignores market segment differences and target the whole market with one offer
Differentiated Target Strategy(segmented marketing)
A firm targets several different market segments and designs a separate offer for each
Concentrated Target Strategy(niche marketing)
A firm goes after a large share of one or just a few smaller segments
Micro-marketing Target Strategy
Process of tailoring products and marketing programs to suit the tastes of specific individuals/locations
Product Postitioning
How customers perceive your product relevant to the competition
Positioning Map
Shows consumer perceptions of their brand vs. the competition on important buying dimensions
Product Differentiation
Used to make products different from the competitors
Service Differentiation
Give very speedy, convenient, or careful delivery, also high quality customer care(ex. jimmy johns delivery)
Channel Distribution Differentiation
Gain competitive advantage through the way they design their coverage, expertise, and performance
(ex. amazons smooth functioning)
People/staff Differentiation
Hiring and training people better than their competitors do(ex. Disney worlds friendly staff)
Product Differentiation
Brands are differentiated by features such as performance, style, and design(ex. Subway “healthy fast food”)
Image Differentiation
Developing a strong and distinctive company image/symbol(ex. McDonald’s golden arches)
Convenience Product
Low price and low customer involvement
Frequent purchase with little planning
Widespread distribution in convenient places
Mass promotion by producer
Ex- Toothpaste, magazines, laundry detergent
Shopping Product
Higher price
Less frequent purchase, lots of planning and effort
Selective distribution
Advertising and selling by producers and resellers
Ex- Appliances, TV’s, clothing
Specialty Product(luxury goods)
High price
Strong brand preference and loyalty
Exclusive distribution
Carefully targeted promotion by producers/resellers
Ex- Rolex watches, diamond jewelery
Unsought products
Price and distribution varies
Little product awareness/knowledge
Aggressive advertising
Ex- Life insurance, blood donations
Product Mix
Consists of all the lines/items a company sells
Product Width
Number of product lines a company sells
Product Length
Total number of items a company carries within its product lines
Product Line Filling
Adding more items withing the present range of the line
Upward Stretch
When a company lengthens its product line with more prestige products
Downward Stretch
When a company lengthens its product line with lower end products just to keep away competitors
Intangibility
Services cannot be seen, tasted, felt, heard, or smelled before it is bought(ex. cosmetic surgery)
Variability
The quality of services depends on who provides them as well as when, where, and how(ex. hotels)
Inseparability
Services cannot be separated from their providers, whether the providers are people or machines
Perishability
Services cannot be stored for later sale or use(ex. doctors appointments)
Brand Equity
The differential effect that knowing the brand name has on customer response to the produce and its marketing. Also a measure of the brands ability to capture consumer preference and loyalty
National(manufacturer)brand
ex Kroger, walmart
Store/private brand
Retailers create their own brand (ex Hollister, Xhilaration from Target)
Line Extension
When a company extends existing brand names to new forms, colors, ingredients, flavors, sizes, ect
(ex. different types of cheerios cereal)
Brand Extension
When a company extends a current brand name to new or modified products in a new category
Multibranding
When a company markets many different brands in a given product category(ex. soft drinks by PepsiCo)
New Brands
When a company makes a new brand
Sequential stages in new product adoption
1. Awareness
2. Interest
3. Evaluation
4. Trial
5. Adoption/purchase
Product Life Cycle: Introduction
Starts when a new product is launched. Takes time for sales growth, profits are low or negative due to distribution/promotion expenses
Product Life Cycle: Growth
Product sales start climbing quickly
Product Life Cycle: Maturity
When sales growth slows down, poses strong challenges to market. Longest stage
Product Life Cycle: Decline
Sales plunge to low levels where it stays for many years
Price
A quality indicator
New Product Pricing: Skimming
When companies invents new products, they set high initial products to see how it sells(ex. iPhone)
New Product Pricing: Penetration
Companies set a low initial price to get into the market quickly and deeply to attract a large number of buyers quickly and win market share(ex. IKEA)
Product Line
Management must determine the price steps to set in between various products in a line(ex. car wash)
Optional Product
A company offers to sell optional/accessory products with the main product
Captive Product
Companies make products that must go along with a main product(ex. video games for an Xbox)
Product Bundle
Sellers combine several products and offer the package at a reduced price
Segmented Pricing
The company sells a product or service at 2 or more prices, even though prices are not based on differences in cost
Customer-segment pricing
Different customers pay different prices for the same product or service(ex. senior discount)
Location-based pricing
A company charges different prices for different locations(ex. out of state tuition)
Time-based pricing
A firm varies its price by season, month, day, or even hour(ex. spring break discounts)
Discount
A reduction in the original price of a product
Cash discount
To buyers who pay bills on time
Quantity discount
To buyers who buy large volumes
Functional Trade Discount
To members who perform certain functions
Seasonal Discount
To buyers who buy out of season
Trade-in Allowance
Returning an item when buying a new one
Promotional Allowance
Rewards dealers who participate in their programs
Psychological Pricing
Sellers consider psychology of prices, not the economics
Dynamic Pricing
Adjusting prices continually to meet the needs of individual customers
International Pricing
Adjusting prices for international markets