Principles of Marketing chapter 7-12

Business Marketing
marketing of good and services to individuals and organizations for purposes other than personal consumption
1. resale
2. direct use in producing other products
3. used in daily opperation
Strategic Alliances
cooperative agreement between business firms
1. Licensing or distribution agreement
2. Joint Ventures
3. Partnership
Business Vs. Consumer Goods
basic philosophy and practice of marketing are the same whether the customer is a business organization or a consumer
Business markets do however, have characteristics different from consumer market
Purchase Volume
business markets tend to purchase in large qualities
Number of Customers
business markets tend to have much fewer markets than consumer markets
Concentration of Customers
more geographically concentrated than consumer markets
Nature of Buying
unlike consumers, business markets approach purchases formally
Types of Negations
consumers generally expect sellers to set a price and credit them in terms in most situations
business markets negotiate is common and expected (delivery dates, pricing terms, and payment terms)
Buying Centers
group or people within the or organization who make business purchase decisions
1. Initiator
2. Users
3. Influences
4. Purchasers
5. Gate Keepers
Demand Characteristics of Business Markets
Joint Demand
Derived Demand
Fluctuating Demand
Joint Demand
two or more items are used in a final product
Derived Demand
organization by products that are needed for producing the final product they are selling, based on demand for that product
Fluctuating Demand
increase or decrease in consumer demand change business demand for a product
Market
people or organizations with needs/wants and the ability/willingness to buy
Market Segmentation
meaning fully identifying different group of customers
1. plays a key role in marketing strategy of all successful organizatoin
2. powerful market tool
3. helps segmentation marketers define customer needs/wants more precisely
Critical for Successful Market Segmentations
1. Substantiality
2. Identifiability and Measurably
3. Accessibility
4. Responsiveness
Substantially
large enough to warrant developing
Identifiability and Measurably
concrete measures of Segment size
Accessibility
must be able to reach numbers or targets market segments
Responsiveness (CSMS)
can be segmented into any criteria that seem logical
Segmentation Based for Consumer Market
1. Geographical Segmentation
2. Demographical Segmentation
3. Physiographic Segmentation
4. Benefit Segmentation
5. Usage Rate Segmentation
Geographical Segmentation
climate/terrain/city size/ popular density/urban/rural
Demographic Segmentation
age/gender/income/ethnic/family life
Benefit Segmentation
benefit consumers want (low sugar vs low calorie)
Usage Rate Segmentation
amount of product bought or consumed (former/first time/heavy users)
Psychographic Segmentation
personality, characteristics, motives, life styles
Strategies for Selecting Target Market
1. Multi-Segment Target Strategy
2. Undifferenced Target Strategy
3. Concentrated Target Strategy
Multi-Segment Target Strategy
more than 1 segment and creating a marketing mix
Undifferenced Target Strategy
defining a target market for particular product as a target market
A single marketing mix and aiming it toward the total market
Concentrated Target Strategy
dividing total market into groups with similar needs
Positions
a process that influences potential customers overall perception of a brand, product line, organization, in general
helps when choosing which segment to target
Perceptional Mapping
displaying/graphing in 2 or more groups of products in customer needs
Market Research
process of planning, collecting, and analyzing data relevant to a marketing decision
customer needs/wants
marketing opportunity for particular goods and services
changing attitudes and purchases patterns of customers
Primary Data
info that is collected for first time
used for solving the particular problem under investigation
Secondary Data
data previously collected for any purpose other than the one at hand
Open Ended Questioning
an interview question that encourages an answer phrase in respondents own words
Close Ended Questions
an interview question that encourages an answer phrase in respondents to make a selection from a limited list of response
Probability Sample
a sample in which every element in population has a known statistical likelihood of being selected-every population has every population has an equal chance of being selected
Non- Probability Sample
any sample in which little or no attempt is made to get a representation cross section of probability – respondents of convenience
Scaled Response Question
close ended question designed for the measure of the intensity of a respondents answer
Product
the heart of marketing mix
Type of Consumer Products
1. Convenience Products
2. Shopping Product
3. Specialty Product
4. Unsought Product
Convenience Products
relatively inexpensive that merrits little shopping effort (Basics=Food)
Shopping Product
more expensive than a convenience product and is found in fewer stores
(high risk = clothes/appliances)
Specialty Product
consumers search extremely extensive and is more expensive than a shopping product
(big purchases = extensive watch/expensive)
Unsought Product
new product the consumer does not intend on purchasing and the company must go directly to customers
Product Item
Specific version of a product that can be designed as a district offering amount among organization products
Product Line
A group of closely related product items
Product Mix
all products that an organization sells
Branding
the success of any business or consumer product depends on target markets ability to distinguish one product from another
Types of Branding
1. Branding Equity
2. Family Branding
3. Individual Branding
4. Generic Product Name
Branding Equity
value of a company of a brand name
Family Branding
marketing server different products under the same brand name
Individual Branding
using different brands names for different products
(used by companies with a proctor/gamble that set many different products/variety)
Generic Product Name
identifies a product by class to type and cannot be trademarked (shop rite brand)
Packaging Function
containing and protection products
promoting products
facilitation storage, use and convenience
Categories of New Product
1. New Product Lines
2. New To the World Products
3. Additions to existing product lines
4. Repositioning Product
5. Lower Priced Products
New Product Lines
set of products which the firms has not previously offered, allowed them to enter an established market
New to the World Product
creating an entirely new product
Additions to existing product line
new products that extends a firms established product lines
Improvements or revisions of existing products
any product that has been revised or updated whether significant or miniscule
Reposition Product
existing products targeted at new target markets or market segments
Lower Priced Products
refers to products that provide performance similar to competing brands but at a lower price
Idea Screening
the first filter in the product development process, which eliminates ideas that are inconsistent with the organizations new product salary or are obviously innapropiate for some other reason
Concept Testing
a test to evaluate a new product idea, usually before nay prototype has been created
Product Life Styles
concept that provides a way to trace the stages of a product acceptance from intro-> decline
Product Life Style Stages
1. Intro Stage
2. Growth Stage
3. Maturity Stage
4. Decline Stage
Testing Market
limited introduction of a product and a marketing program to determine the reactions to potential consumers in the market
Product Characteristics and Rate of Adoption
used to predict and explain the rate of acceptance and diffusion of a new product
Product Characteristics and Rate of Adoption Stages
1. Complexity
2. Compatibility
3. Relative Advantage
4. Observability
5. Triability
Complexity
degree of difficulty involved in understand the new product
Compatibility
degree to which the new product is consistant with existing value and product knowledg, past experiances and current needs and incompatible product
diffuse more slowly than compatible products
Relative Advantage
degree to which a product is percieved as superior to existing substitutes
observability
degree to which the benefits of other results of using the product can be observed by others and communicated to target marketers
Triability
the degree to which a product can be tried on a limited basis
Important of Services
services amount for 65% of USA GDP
Service
result of applying human or mechanical efforts to people of objects
How Server differ from Goods
1. Intangibility
2. Inseparability
3. Heterogeny
4. Perishability
Intangability
services are intangible performances
Inseperability
consumers must present during production of the services
goods are produce, sold, and then consumed
Heterogeny
services have greater diversity
Perishability
refers to the inability of services to be stored
Service Quality
customers perception of how well a service meets or exceeds their expectations
Types of Service Quality
1. Tangibility
2. Reliability
3. Responsiveness
4. Assurance
5. Empathy
Tangibility
physical evidence of the service
Reliability
consistently and dependently in performing the service
Responsiveness (Service Quality)
readiness of employees to provide the service
Assurance
Knowledge of Employees to provide the service
Empathy
caring and individual attention provided by employees
Service Promotion
1. Price
2. Guarantee
3. Performance Documentation
4. Availability
5. Training/Certification
6. Personal Selling
7. Word of Mouth
8. Must use a specific language
Intro Stage
launch of a product
Growth Stage
sales grow at an increasing rate
Maturity Stage
sales increase at a decreasing rate
Decline Stage
long run drop in sales