Marketing study guide
Marketing study guide 092-201625
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This 7 page Study Guide was uploaded by Dominique Terry on Friday February 26, 2016. The Study Guide belongs to 092-201625 at Southern Illinois University Edwardsville taught by Joel Petry in Spring 2016. Since its upload, it has received 48 views. For similar materials see Marketing 300 in Marketing at Southern Illinois University Edwardsville.
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Date Created: 02/26/16
Exam #2 Review Chapter 7 1. Segmentation definition - Divide the total market into smaller segments 2. Types of segmentation for consumer markets (geographic, psychographic, etc.) - Geographic Segmentation- Dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods - Demographic Segmentation- Dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation - Psychographic Segmentation- Dividing a market into different segments based on social class, lifestyle, or personality characteristics - Behavioral Segmentation- Dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product - Occasion Segmentation- Dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item - Benefit Segmentation- Dividing the market into segments according to the different benefits that consumers seek from the product 3. Requirements for effective segmentation - Must be: Measurable, Substantial, Accessible, Differentiable, And Actionable 4. Target market - A set of buyers sharing common needs or characteristics that the company decides to serve 5. Desirable qualities for target markets - Local Marketing- involves tailoring brands and promotion to the needs and wants of local customer groups; cities, neighborhoods, and stores - Individual Marketing- involves tailoring products and marketing programs to the needs and preferences of individual customers, also known as: one-to-one marketing, mass customization, and markets-of- one marketing 6. Micromarketing - is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations; it includes Local marketing and Individual marketing 7. Product and brand positioning - is the way the product is defined by consumers on important attributes- the place the product occupies in consumers’ minds relative to competing products; perceptions, impressions, feelings 8. Perceptual mapping (the concept behind it) - Shows consumer perceptions of their brands versus competing products on important buying dimensions; the concept behind it is so that the results are employed in improving the product or developing a new one 9. Differentiation - Actually differentiating the market offering to create superior customer value 10.Types of segmentation - Product Differentiation - Service Differentiation - Channel Differentiation - People Differentiation - Image Differentiation 11.Desirable qualities for differentiation - Important, Superior, Appreciable, Distinctive, Communicable Chapter 8: 1. what is a brand - A Brand- represents the consumer’s perceptions and feelings about the product and its performance. It is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers - Brand- Name, term, sign, symbol, design, or some combination that identifies the products of one firm while differentiating the from the competition’s - Brands influence…identity - Brand equity is the differential effect that the brand name has on customer response to the product and its marketing - Brands are identified by all the components- not just what’s inside the package or its performance, emotive connection 2. brand sponsorship - Manufacturer’s brand- make the product, puts a name on it and that’s the brand; recognized brand Ex: Tylenol - Private brand- the biggest story in branding, major or smaller retailer; have their own version of product Ex: Walmart (Great value) - Licensed brand- like a franchise, sporting apparel Ex: hat with a sports team on it ; logos; pays a fee to us images or logos - Co-Brand- two brands that are well respected and come together for better product Ex: Betty Crocker brownies with the brand Hershey syrup 3. brand development strategies - Market penetration- same strategy Ex: Campbell soup, everyone knows what it is - Product development- same brand name and same customer’s just new flavors ex: Doritos, cool ranch, spicy nacho etc. - Market development- expanding the brand to different locations for new buyers but the product is the same - Product diversification- making a new product - Line Extension- same brand; just different flavors - Brand Extension- Doritos making beverage products - Multi-brands- one company making many brands Ex: one company owning different brands like, red lobster, olive garden, and long horn - New brands- new brands, product, customers, etc. Cannibalization- a result of lower sales of product due to a new product by the same producer/owner 4. product line - is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges; some forms are length and stretching upward and downward - Length- how many versions do we have of the same product Ex: different models of a car - Stretching- width; ex: coke has many different sizes from 8oz to 16oz etc. 5. organization, person, place and social marketing - Organization marketing- consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward an organization - Person marketing- consist of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular people - Place marketing- consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular places - Social marketing- is the use of commercial marketing concepts and tools in programs designed to influence individuals’ behavior to improve their well-being and that of society Chapter 9: 1. product life cycle stages and characteristics - Introduction stage- slow sales growth, little or no profit, and high distribution and promotion expense - Growth Stage- sales increase, new competitors enter the market, price stability or decline to increase volume, consumer education, profits increase, promotion and manufacturing costs gain economies of scale - Maturity Stage- slowdown in sales, many suppliers, substitute products, overcapacity leads to competition, increased promotion R&D to support sales and profits - Maturity Stage Modifying Strategies- Market, product, and marketing mix modifying - Decline Stage- maintain the product, harvest the product, drop the product 2. characteristics of the product lifecycle as it relates to the marketing mix/strategic implications-this is the slide between the two slides of you tube videos - Involves the comparison between the price, product, promo, place, and competition. Which is compared to the product development, introduction, growth, maturity, and decline of the product. A chart called the “Product life- cycle with 4 P implication”. 3. Consumers and the product lifecycle (early adopters, laggards, etc.) - Innovators- they are interested in anything new and quick to adopt new products; venturesome - Early adopters- they find the interest in the product and find use for the product ; they influence others to buy the product; young and restless - Early majority- pay attention to the early adopters, but pays attention to the product as well to make sure that it will bring them value; value shoppers - Late majority- they will wait until the product is accepted and for the price of the product to lower before retrieving it; skeptics - Laggards- very last group to retrieve a product; only get new products if they feel they have to ; traditionalist Chapters 10 & 11: 1. Different definitions of price - The amount of money we give up for the product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service - Only element of the marketing mix that produce revenue; all other represent cost - Understanding how much value consumers place on benefits they receive from the product and setting a price that captures that value 2. Price as an indicator of value - Is the customer seeing something and then beginning to think of the quality of the product. Ex: if something cost a lot you will think the quality is good, if something is cheap you will think the quality is cheap - Also companies have to pay attention to the price ceiling, price floor and other internal and external considerations, this helps to see how much profit they will be making from the product 3. Pricing influences - fixed cost, variable cost, demand, product life cycle, ROI maximization - Gov’t Regulations, consumer price sensitivity, other firm offerings, - perceived value (+/-), Competitive factors Also, before setting prices, the marketer must understand the relationship between price and demand for its products 4. All of the pricing strategies - Value-based pricing- uses the buyer’s perceptions of value, not the seller cost, as the key pricing. Price is considered before the marketing program is set. Value-based pricing is customer driven ; Cost-based pricing is product driven - Good-value pricing- offers the right combination of quality and good service to fair price ( e.g., value menu) ; Existing brands are being redesigned to offer more quality for a given price or the same quality for less price - Everyday low pricing (EDLP)- involves charging a constant everyday low price with a few or no temporary price discounts (Wal-Mart vs. kohl’s) - High-low pricing- involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items - Value-added pricing- attaches value-added features and services to differentiate offers, support higher prices, and build pricing power (car options and add on effects on price) ; pricing power is the ability to escape price competition and to justify higher prices and margins without losing market share - Cost-based pricing- involves setting price based on the costs producing, distributing, and selling the product plus a fair rate of return for its effort and risk; adds a standard markup to the cost of the product 5. Price Elasticity of demand definition, including inelastic and elastic demand - Price elasticity of demand- illustrates the response of demand to a change in price - Inelastic demand- occurs when demand hardly changes when there is a small change in price - Elastic demand- occurs when demand changes greatly for a small change in price - Price elasticity of demand= % change in quantity demanded/% change in price - PED> 1, demand is elastic; PED < 1, demand is inelastic 6. Factors that influence elasticity - Other factors influence elasticity aside from price - Availability of substitutes - Product use - Income ratio 7. Cross elasticity - Products are substitutes or complements if a change in price of one affects the demand of the other ( two-part tariff= razors, video games) - Lower margin or take loss on one to stimulate demand of the other - Loss leaders 8. Price cuts - Is also a price change that occurs due to excess capacity and increased market share - New models will be available - Models are not selling well - Quality issues 9. Predatory Pricing - Selling a below cost with the intention of punishing a competitor or gaining higher long-term profits by putting competitors out of business 10.Price fixing - Sellers must set prices without talking to competitors
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