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Final Exam Study Guide

by: Alexis Cone

Final Exam Study Guide 86498 - MKT 3010 - 006

Alexis Cone
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Study guide for final exam!
Principles of Marketing
Amanda Cooper Fine
Study Guide
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This 66 page Study Guide was uploaded by Alexis Cone on Friday December 4, 2015. The Study Guide belongs to 86498 - MKT 3010 - 006 at Clemson University taught by Amanda Cooper Fine in Spring 2015. Since its upload, it has received 99 views. For similar materials see Principles of Marketing in Marketing at Clemson University.

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Date Created: 12/04/15
Final Exam Study Guide Chapter 1 Vocab:  Marketing- an organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders  Marketing Plan- a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified by the four Ps, action programs, and projected or pro forma income statements  Exchange- the trade of things of value between the buyer and the seller so that each is better off as a result  Marketing Mix (four Ps)- product, price, place, and promotion- the controllable set of activities that a firm uses to respond to the wants of its target markets  Goods-items that can be physically touched  Services-any intangible offering that involves a deed, performance, or effort that cannot be physically possessed; intangible customer benefits that are produced by people or machines and cannot be separated from the producer  Ideas-intellectual concepts-thoughts, opinions, and philosophies  B2C (business to consumers)-process in which businesses sell to consumers  B2B (business to business)-process of selling merchandise or services from one business to another  C2C (consumer to consumer)-process in which consumers sell to other consumers  Value-reflects the relationship of benefits to costs, or what the consumer gets for what he or she gives  Value Cocreation-customers act as collaborators with a manufacturer or retailer to create the product or service  Relational Orientation-method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship  Supply Chain-group of firms that make and deliver a given set of goods and services Videos:  Luxxicota is an Italian based company that produces the majority of the eyewear today, both sunglasses and prescription glasses. They produce brands such as ray ban, Oakley, polo, ect. They own sunglass hut as well LensCrafters and Pearle Vision. Material:  The Four Ps o Product-creating value  Overall goal is to create goods and services and ideas that have value o Price-delivering value  Trade value is anything that the consumer gives up o Place-delivering value  Deals the most with the supply chain- getting product from the manufacturer to the consumer  Optimizing value through supply chain management o Promotion-communicating value  Describing offerings to consumer  Brands must learn how differentiate themselves from other brands  Profitable Exchange is a personal value equation o Value= benefits - price o Price= cost + hassle  The fundamental purpose of marketing is to create value  Valued-Based Marketing o Balances the benefits and cost (cost-benefit analysis) o Firms must focus on four concepts to become value driven:  Sharing Information- marketers share information about customers and competitors and integrate it across the firms various departments  Balancing Benefits with Costs- firms must constantly measure the benefits that customer perceive against the cost of their offerings. They use available customer data to find opportunities to satisfy the needs of their customers, keep their cost down, and develop long-term loyalties.  Building Relationships with Customers- marketers have begun to focus on relational orientation (viewing their customers as relationships and not just as transactions)  Connecting with Customers by Using Social and Mobile Media- allows marketers to better connect with customers and thus serve their needs in a more efficient way  Who engages in Marketing? o For-profit companies o Business to Business (B2B) vs. Business to Consumer (B2C) o Non-profit organizations o Individuals (C2C- Consumer to Consumer)  Marketing is NOT: o Just buyers and sellers exchanging money o Simply about making profit o A random activity  Marketing has a specific plan known as the marketing plan Chapter 2 Vocab:  Marketing Strategy- a firms target market, marketing mix, and method of obtaining a sustainable competitive advantage  Sustainable Competitive Advantage- something the can persistently do better than its competitors  Customer Excellence- involves a focus on retaining loyal customers and excellent customer service  Operational Excellence- involves a firm’s focus on efficient operations and excellent supply chain management  Product Excellence- involves high-quality products; effective branding and positioning is key  Location- a method of achieving excellence by having a strong physical location and/or Internet presence  Marketing Plan- a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or fro forma income statements  Mission Statement- a broad description of a firms objectives and the scope of activities it plans to undertake  Situation Analysis- second step in a marketing plan; uses a SWOT analysis that assesses both the internal environment with regards to its strengths and weaknesses and the external environment in terms of its opportunities and threats  STP- the processes of segmentation, targeting, and positioning that firms use to identify and evaluate opportunities for increasing sales and profits  Market Segment- a group of consumers who respond similarly to a firms marketing efforts  Market Segmentation- the process of dividing the market into groups of customers with different needs, wants, or characteristics- who therefore might appreciate products or services geared especially for them  Target Marketing (Targeting)- the process of evaluating the attractiveness of various segments and then deciding which to pursue as a market  Market Positioning- involves the process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products  Products- anything that is of value to a consumer and can be offered through a voluntary marketing exchange  Metric- a measuring system that quantifies a trend, dynamic, or characteristic  Strategic Business Unit (SBU)- a division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objective  Product Lines- groups of associated items, such as those that consumers use together or think of as part of a group of similar products  Market Share- Percentage of a market accounted for by a specific entity  Relative Market Share- a measure of the products strength in a particular market, defined as the sales of the focal product divided by the sales achieved by the largest firm in the industry  Market Growth Rate- the annual rate of growth of the specific market in which the product competes  Market Penetration Strategy- a growth strategy that employs the existing marketing mix and focuses the firm’s efforts on existing customers  Market Development Strategy- a growth strategy that employs the existing marketing offering to reach new market segments, whether domestic or international  Product Development Strategy- a growth strategy that offers a new product or service to a firms current target market  Diversification Strategy- a growth strategy whereby a firm introduces a new product or service to a market segment that it does not currently serve Material:  A marketing strategy identifies (1) a firms target market, (2) a related marketing mix and (3) the bases on which the firm plans to build a sustainable competitive advantage  Marketing Plan o Step 1: Define the Business Mission Statement o Step 2: Situational Analysis (SWOT Analysis) o Step 3: Identifying and Evaluating Opportunities Using STP o Step 4: Implement Marketing Mix and Allocate Resources o Step 5: Evaluate Performance Using Marketing Metrics  Mission Statement o What is the purpose of the organization? o Type of business that is being engaged in o Not static and can change from year to year o Goals and objectives to accomplish  Rather general and overarching  Sustainable competitive advantage  Competitive Advantage o V- something of Value o I- difficult to Imitate o R- Rare in the marketplace o O- Organization can support the competitive advantage  SWOT Analysis o Strengths and weaknesses are internal to the firm o Opportunities and threats are external to the firm  STP o Segmentation- dividing the marketplace into segments or subgroups (gender, age, income, education, ect.) o Targeting- evaluating attractiveness of the different markets, used to decide which segment to pursue o Positioning- define the marketing mix so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison to competing products  Value and the 4 Ps o Product- creating value, customers must view the product as valuable enough to buy o Price- capturing value, firms want to charge a price that customers perceive as giving them good value for the product they receive o Place- delivering value, product must be readily accessible when and where the customer wants it o Promotion- communicating value, how marketers communicate the value of their product to consumers  Boston Consulting Group Matrix Relative Market Shares Market Growth Rate Stars Question Marks Cash Cows Dogs o Stars occur in high-growth markets and are high market share products, they will eventually become cash cows o Cash Cows occur in lower-growth markets but are high market share products o Question Marks appear in high-growth markets but have relatively low market shares o Dogs are in low-growth markets and have relatively low market shares  Growth Strategies: o Market Penetration- same offerings to the same customers in hopes of getting the current market to buy more o Market Development- same products to new markets o Product Development- new offerings in the same market o Diversification- variety of offerings for a variety of markets (new products and services to new markets) Products and Services Markets Current New Current Market Product penetration development New Market Diversification development  Downsizing is eliminating products or abandoning markets o This happens because of changes in the macro environment (recession, or changes in demographics), your product grew faster than your assets could support, you lacked the proper knowledge to succeed in the market, or your product was not relevant. Chapter 5 Vocab:  Macro-environmental Factors- aspects of the external environment that affect a company’s business, such as the culture, demographics, social issues, technological advances, economic situation, and political/regulatory environment  Culture- the set of values, guiding beliefs, understandings, and ways of doing things shared by members of a society; exists on two levels: visible artifacts and underlying values  Country Culture- entails easy-to-spot visible nuances that are particular to a country, such as dress, symbols, ceremonies, language, colors, and food preferences, and more subtle aspects, which are trickier to identify  Regional Culture- the influence of the area within a country in which people live  Demographics- information about the characteristics of human populations and segments, especially those used to identify consumer markets such as by age, gender, income, and education  Generational Cohort- a group of people of the same generation- typically have similar purchase behaviors because they have shared experiences and are in the same stage of life  Generation Z (Digital Native)- people in this group were born into a world that already was full of electronic gadgets and digital technologies, such as the Internet and social networks  Generation Y- generational cohort of people born between 1997 and 1995; biggest cohort since the original postwar baby boom  Millennials- consumers born 1977 and 2000 and the children of the Baby Boomers  Generation X- generational cohort of people born between 1965 and 1976  Baby Boomers- generational cohort of people born after World War II, between 1946 and 1964  Green Marketing- Involves a strategic effort by firms to supply customers with environmentally friendly merchandise  Greenwashing- exploiting a consumer by disingenuously marketing products or services as environmentally friendly, with the goal of gaining public approval and sales  Inflation-refers to the persistent increase in the prices of goods and services  Foreign Currency Fluctuations- changes in the value of a country’s currency relative to the currency of another country; can influence consumer spending  Interest Rates- these represent the cost of borrowing money  Political/Regulatory Environment- comprises political parties, government organizations, and legislation and laws Videos:  Target School Supplies Commercial- uses the beat of We Got the Beat song to attract parents of school children and then shows products kids would want in order to get their attention  RadioShack Commercial- about the 80s wanting their store back- RadioShack revamped their store but they wanted to show that its going to be the same store that was brought up to the modern day Material:  Consumers are at the center of all marketing activities and they affect marketers by portraying their different needs and wants  Immediate Environment o Company Capabilities  Internal Resources  Tangible resources- financials, physical property, or technological resources  Intangible resources- brand reputation, company culture, and intellectual property  Human resources (human capital)- skills that employees posses and incentives that employees have to be efficient and productive  Global resources- international labor, international offices, and international distribution o Competitors  Identify competitors  Direct- same things just a different brand  Indirect- same industry  Competitive intelligence- collecting information on competitors  Proactive vs. Reactive- always want to be proactive instead of reactive o Corporate Partners  Firms are part of alliances- how strong is your alliance?  Align with competitors, suppliers, ect.  Macroenvironment Factors  Culture- shared meanings, beliefs, values, morals, and customs  Demographics- characteristics of a population  Generational cohorts  Income- tied to purchasing power (how much you make, determines how much you can spend in the market)  Education- tied to income (more debt decreases purchasing power)  Gender- traditional gender roles have blurred over the last generation  Ethnicity  Social Trends- social issues, values, and concerns that help to shape culture  Technological Advances  Improves the value of products/services  Economic Situation- affects how consumers buy (cash, credit, ect.) and how money is spent (what do consumers buy)  Political/ Regulatory Environment- political parties involved and how much power they have, government organizations, legislations and laws (how does the legislation work and what laws are in place)  1890 Sherman Antitrust Act- prohibits monopolies or anything else that restrains trade or competition (allows for fair trade and a free market)  1914 Clayton Act- supports the Sherman Antitrust Act, looks more at pricing policies, clarifies that things such as price discrimination are not okay, and prohibits the combination of two or more competing corporations through pooling ownership of stock and restricting pricing policies  1936 Robinson-Patman Act- further clarifies price discrimination, and states that within the supply chain you cant charge different prices to different companies Chapter 6 Vocab:  Need Recognition- the beginning of the consumer decision process; occurs when consumers recognize they have an unsatisfied need and want to go from their actual needy state to a different, desired state  Functional Needs- pertain to the performance of a product or services  Psychological Needs- pertain to the personal gratification consumers associate with a product or service  Internal Search for Information- occurs when the buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences  External Search for Information- occurs when the buyer seeks information outside his or her personal knowledge base to help make the buying decision  Internal Locus of Control- refers to the when consumers believe they have some control over the outcomes of their actions, in which case they generally engage in more search activities  External Locus of Control- refers to when consumers believe that fate or other external factors control all outcomes  Performance Risk- involves the perceived danger inherent in a poorly performing product or service  Financial Risk- risk associated with a monetary outlay; includes the initial cost of the purchase, as well as the costs of using the item or service  Physiological Risk- the fear of an actual harm should a product not perform properly  Safety Risk (psychological risk)- associated with the way people will feel if the product of service does not convey the right image  Universal Sets- includes all possible choices for a product- category  Retrieval Sets- includes those brands or stores that the consumer can readily bring forth from memory  Evoked Set- comprises the alternative brands or stores that the consumer states he or she would consider when making a decision  Evaluative Criteria- consists of a set of salient, or important, attributes about a particular product  Determinant Attributes- product of service features that are important to the buyer and on which competing brands or stores are perceived to differ  Consumer Decision Rules- the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives  Conversion Rate- percentage of consumers who buy a product after viewing it  Postpurchase Cognitive Dissonance- the psychologically uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance; buyers remorse  Negative Word of Mouth- occurs when consumers spread negative information about a product, service, or store to others  Motive- a need or want that is strong enough to cause the person to seek satisfaction  Maslow’s Hierarchy of Needs- a paradigm for classifying people’s motives. It argues that when lower-level, more basic needs (physiological and safety) are fulfilled; people turn to satisfying their higher-level human needs (social and personal)  Physiological Needs- those relating to the basic biological necessities of life: food, drink, rest, and shelter  Safety Needs- one of the needs in the PSSP hierarchy of needs; pertain to protection and physical well-being  Love Needs- needs expressed through interactions with others  Esteem Needs- needs that enable people to fulfill inner desires  Self-Actualization- when a person is completely satisfied with his or her life  Attitude-a person’s enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea; consists of three components: cognitive, affective, and behavioral  Cognitive Component- a component of attitude that reflects what a person believes to be true  Affective Component- a component of attitude that reflects what a person feels about the issue at hand- his or her like or dislike of something  Behavioral Component- a component of attitude that comprises the actions a person takes with regard to the issue at hand  Perception- the process by which people select, organize, and interpret information to form a meaningful picture of the world  Learning- refers to a change in a person’s thought process or behavior that arises from experience and takes place throughout the consumer decision process  Lifestyle- a component of psychographics; refers to the way a person lives his or her life to achieve goals  Reference Group- one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors  Culture- the set of values, guiding beliefs, understandings, and ways of doing things shard by members of a society; exists on two levels: visible artifacts and underlying values  Situational Factors- factors affecting the consumer decision process; those that are specific to the situation that may override, or at least influence, psychological and social issues  Involvement- consumer’s interest in a product or service  Extended Problem Solving- a purchase decision process during which the consumer devotes considerable time and effort o analyzing alternatives; often occurs when the consumer perceives that the purchase decision entails a lot of risk  Limited Problem Solving- occurs during a purchase decision that calls for, at most, a moderate amount of effort and time  Impulse Buying- a buying decision made by customers on the spot when they see the merchandise  Habitual Decision Making- a purchase decision process in which consumers engage with little conscious effort Videos:  Ford Truck (truck functions like you need it to) commercial portrays a functional need  Escalade (makes you travel like royalty) commercial portrays a psychological need  Betty White snickers commercial (you aren’t you when your hungry) portrays physiological needs  ADT Commercial (being safe in your house) portrays a safety need  EHarmony commercial (about finding love) portrays a social need  Audi commercial (luxury has progressed) portrays an esteem need Material:  Consumer Decision Process o Need Recognition- recognizing that you have a need  Stimuli: internal comes from you and external comes from outside yourself  Needs  Functional- we need the product to perform a certain way  Psychological- personal gratification o Information Search  Internal (your own memories and knowledge)  External (ask others for their information)  Factors that affect information search  Perceived benefits vs. cost of search (cost- benefit analysis)  Locus of Control- an internal locus of control is much more likely to engage in information search  Actual vs. Perceived Risk o Performance risk- if the product doesn’t perform well, what does it look like? o Financial Risk- the more money related to the purchase the more risk associated with that purchase o Psychological Risk- functional vs. psychological needs- what is the risk of others will perceive me if I don’t buy the right thing? o Physiological Risk- some sort of safety or harm concern o Evaluation of Alternatives  Attribute Set- characteristics about the product  Universal Sets- knowing every possible option within a set  Retrieval Sets- options that you know about o Evoked- products and services you like o Inert- products and services you know nothing about o Inept- products and services you don’t like  Evaluation Criteria  Determinant attributes o Attributes consumers care most about o Attributes that differentiate products  Decision Heuristics- mental shortcuts o Somatic markers o Choosing based on brand o Choosing based on price o Choosing based on packaging o Purchase Decisions and Consumption  Choice is made based on how the consumer values the product o Postpurchase Behavior  Customer Satisfaction- consumer expectations vs. perceived performance (if performance is above expectations the customer is satisfied)  Postpurchase Cognitive Dissonance- what you believe doesn’t match up with your behavior  Buyers Remorse- not feeling good about your purchase decision  Customer Loyalty- marketers want to have a loyal relationship with customers; they want their customers to be satisfied with the goods purchased so that they will buy from the same company again  Negative Word of Mouth &/or Reviews can impact sales  Factors influencing the Consumer Decision Process o Maslow’s Hierarchy of Needs is about understanding the motives behind needs  Physiological- most basic needs (food, water, sex, ect.)  Safety- health, well being, ect.  Social (love)- sense of belonging  Esteem (personal needs)- status  Self-Fulfillment/Actualization- completely happy with oneself o Psychological Factors  Motives  Attitudes- feelings towards an object that are usually constructed by our culture and beliefs  Cognitive- what we believe to be true (what we know)  Affective- based on what we believe to be true, do we like or dislike something  Behavioral- based on whether we like or dislike something, how do we act towards it  Perception- something that really plays into what we think we need and how we make our purchase decisions  Learning- refers to changes in your behavior based on experience or reasoning  Lifestyle- made up of activities, interest, and opinions o Social Factors  Family- single most important buying organization in America  Reference Groups- those we look too for information regarding what to buy  Culture- where we grew up, morals, beliefs, ect. o Situational Factors- can override all psychological and social factors  Purchase Situations- shopping for others allows you to buy something you wouldn’t usually buy  Shopping Situations- something about the store or website gets you to purchase something you wouldn’t typically buy  Temporal Situations- something about your temporal state makes you more or less likely to buy something you wouldn’t usually buy Chapter 7 Vocab:  Business-to-Business Marketing (B2B)- the process of buying and selling goods or services to be used I the production of other goods and services, for consumption by the buying organization, or for resale by wholesalers and retailers  Derived Demand- the linkage between consumers’ demand for a company’s output and its purchase of necessary inputs to manufacture or assemble that particular output  Resellers-marketing intermediaries that resell manufactured products without significantly altering their form  Wholesalers-those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods (usually in smaller quantities) to retailers or industrial or business users  Distributors- a type of reseller or marketing intermediary that resells manufactured products without significantly altering their form. Distributors often buy from manufacturers and sell to other businesses like retailers in a B2B transaction  Request for Proposals (RFP)- a process through which buying organizations invite alternative suppliers to bid on supplying their required components  Web Portal- an Internet site whose purpose is to be a major starting point for users when connect to the Web  Buying Center- the group of people typically responsible for the buying decisions in large organizations  Initiator-the buying center participant who first suggests buying the particular product or service  Influencer-the buying center participant whose views influence other members of the buying center in making the final decision  Decider-the buying center participant who ultimately determines any part of or the entire buying decision- whether to buy, what to buy, how to buy, or where to buy  Buyer-the buying center participant who handles the paperwork of the actual purchase  User-the person who consumes or uses the product or service purchased by the buying center  Gatekeeper- the buying center participant who controls information of access to decision makers and influences  Organizational Culture- reflects the set of values, traditions, and customs that guide a firm’s employee’s behavior  Autocratic Buying Center- a buying center in which one person makes the decision alone, though there may be multiple participants  Democratic Buying Center- a buying center in which the majority in making decisions  Consultative Buying Centers- a buying center in which one person makes the decision but he or she solicits input from others before doing so  Consensus Buying Center- a buying center in which all members of the team must reach a collective agreement that they can support a particular purchase  New Buy- in a B2B setting, a purchase of a good or service for the first time; the buying decisions is likely to be quite involved because the buyer or the buying organization does not have any experience with the item  Modify Rebuy- refers to when the buyer has purchased a similar product in the past but has declined to change some specifications, such as the desired place, quality level, options, or so forth  Straight Rebuys- refers to when the buyer or buying organization simply buy additional units of products that have been previously purchased Material:  Who is involved in B2B Marketing? o Manufacturers or Producers o Resellers- buy product typically from a manufacturer and them resell it to another business (they do not significantly altar the product) o Institutions (colleges, universities, churches, ect.) o Government- typically the largest purchaser of goods and services  Characteristics of Organizational Buying o Demand Characteristics  Consumer demand deals with consumption, need recognition, and is all about the end user and what type of demand they have for the product  Derived demand looks at the link between consumer demand and the manufacturer (what does the firm have to do to meet consumer demand) o Size of the Order/Purchase  Amount of product being ordered by a company or a price tag  Some companies have certain regulations set in place on how much money can be sent o Number of Potential Buyers  B2B has way less potential buyer than B2C markets, thus one customer can make or break you o Organizational Buying Objective- different firms have different objectives that must be met when buying certain things  B2B Buying Process o Stage 1: Need Recognition  Unfulfilled need either internal or external to the firm o Stage 2: Product Specifications  Helps suppliers understand if they can provide you with the product you need  Collaborate with people to help come up with product specifications o Stage 3: Request for Proposals Process (RFP)  Suppliers bid on the need (we can supply you with this at this price) o Stage 4: Proposal Analysis, Vendor Negotiations, and Selection  Evaluate the proposals from different suppliers  Negotiate the terms  Selective Criteria o Price and value o Stage 5: Order Specification  Order Placed  Making a contract o Stage 6: Vendor Analysis  Factors Influencing the Buying Process o The Buying Center  How many people are involved o Organizational Culture  Who gets to make the decision?  Does everyone get a vote, does just one person decide, is it multiple people involved o If multiple people are involved, do they all get an equal say  Formal evaluation of performance (Do you want to renew?) o Buying Situation  Have we bought this product before or is it a first time purchase?  If we have purchased this product before we probably don’t need to go through all 6 stages  If we haven’t bought the product before we will most likely go through all six steps Chapter 9 Vocab:  Geographic Segmentation-the grouping of consumers on the basis of where they live  Demographic Segmentation- the grouping of consumers according to easily measured, objective characteristics such as age, gender, income, and education  Psychographics- used in segmentation; delves into how consumers describe themselves using those characteristics that help them choose how they occupy their time (behavior) and what underlying psychological reasons determine those choices  Self-Value- goals for life, not just the goals one wants to accomplish in day; a component of psychographics that refers to overriding desires that drive how a person lives his or her life  Self-Concept- the image a person has of him- or herself; a component of psychographics  Lifestyles- a component of psychographics; refers to the way a person lives his or her life to achieve goals  Value and Lifestyles Survey (VALS)- a psychographic tool developed by the SRI Consulting Business Intelligence; classifies consumers into eight segments: innovators, thinkers, believers, achievers, strivers, experiencers, makers, or survivors  Benefit Segmentation- the grouping of consumers on the basis of the benefits the derive from products or services  Behavioral Segmentation- a segmentation method that divides customers into groups based on how they use the product or service  Occasion Segmentation- a type of behavioral segmentation based on when a product or service is purchased or consumed  Loyalty Segmentation- strategy of investing loyalty initiatives to retain the firm’s most profitable customers  Geodemographic Segmentation- the grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristics  Undifferentiated Targeting Strategy (mass marketing)- a marketing strategy a firm can use if the product of service is perceived to provide the same benefits to everyone, with no need to develop separate strategies for different groups  Differentiated Targeting Strategy- a strategy through which a firm targets several market segments with a different offering for each  Concentrated Targeting Strategy- a marketing strategy of selecting a single, primary, target market and focusing all energies on providing a product to fit that markets needs  Micromarketing (one-to-one marketing)- an extreme form of segmentation that tailors a product or service to suit an individual customer’s wants or needs  Cookies-computer program, installed on hard drives, that provides identifying information  Value Proposition- the unique value that product or service provides to its customers and how it is better than and different from those of competitors  Value- reflects the relationship of benefits to costs, or what the consumer gets for what he or she gets  Perceptual Map- displays, in two or more dimensions, the position of products or brands in the consumer’s mind  Ideal Points- the position at which a particular market segment’s ideal product would lie on a perceptual map Videos:  The “Find Yourself Here” commercial for California shows that California is more than just the stereotypes (perceptions) associated with it- the commercial is a value proposition  Old Spice commercial is an example of repositioning, Old Spice decided to take on the role of the “Big Brother”, helping to navigate through the seas of manhood, this has allowed them to become a market leader  Apple uses their competitors in their commercials in order to focus on the negatives of their competitors Material:  Market Segmentation/ STP Analysis: o Step 1 (Establish Overall Strategy or Objectives)- mission, objectives, and current situation  Segmentation strategy o Step 2 (Segmentation)- dividing the market into segments o Step 3 (Evaluate Segment Attractiveness)- determine which segments to go after  Targeting strategy o Step 4 (Selecting Target Markets) o Step 5 (Identify and Develop Positioning Strategies)- helps to define the marketing mix variables, target customers need to understand the product, and there needs to be a value proposition  Segmentation Methods: o Demographic segmentation- breaking up the market by different demographics (age, gender, education, income, ect.)  Advantage- straightforward, easy to do, and typically cheap  Disadvantage- doesn’t always give the best information about predicting purchase behavior o Geographic Segmentation- based on where customers live (region, country, state, city, zip-code, ect.)  Proximity Marketing- idea of marketing to customers based on their location to your store (successful for smaller radiuses)  Geocoding- way to figure out where customers are from  Advantage- rather straightforward and helps companies that want to target specific areas  Disadvantages- doesn’t tell as much about consumer purchase intentions  Only successful when the language surrounding a product is different for different places o Psychographic Segmentation- breaks down into three things- self-values (life goals), self-image/concept (how do you view yourself), and lifestyle (activities, interest, and opinions)  Advantage- better for predicting and understanding customer behavior  Disadvantage- more expensive and time consuming  Tool- VALS Survey (Value and Lifestyle Survey) o Benefit Segmentation- what is the benefit that the customer is trying to derive from the product o Behavioral Segmentation- how do consumers use a product  Usage situation- what is the situation surrounding how you use the product  Occasional segmentation (holidays, weddings, tailgates, ect.)  Usage rate- how often do you use the products (potential user, first time user, regular user, heavy user, ect.)  Loyalty- how much you use a specific companies product o Geodemographic Segmentation- combination of geographic, demographic, and lifestyle  Evaluating Segment Attractiveness (5 measures): o Identifiable- are the segments distinct and unique from one another o Sustainable- are there enough people in the segment for us to go after this segment o Reachable- made up of three things  Segment has to know your product exists  Segment has to know how your product adds value to their life  Segment has to know where to get your product o Responsive- does the segment react positively to you product o Profitable- how profitable can this segment be now and in the future  Targeting Strategies (4 types): o Undifferentiated Targeting Strategy (mass marketing)  Advantage- low cost, everyone can be a consumer  Disadvantage- there is no branding, competing solely on price, and loyalty doesn’t exists o Differentiated Targeting Strategy- targeting several target markets after the market has been segmented (provide different offerings in order to serve more customers)  Overall idea is to gain customers from the competition, not just to shift present customers from one of your products to another  Advantages- decreases the risks that come from changes in the markets, gain overall market share  Disadvantage- very expensive because you have to support multiple products, their supply chain, packaging, multiple products, and marketing for each product o Concentrated Segmentation Strategy (niche marketing)- single target market segment  Advantage- if you gain loyalty from customers you will gain market share and be successful  Disadvantage- risk is very high because there is only one market, once larger companies see success they will come into the market and try to compete with you o Micromarketing (one-to-one marketing, mass customization)- products are tailored to individual consumers  Advantage- customer gets exact product they want which can lead to customer loyalty  Disadvantage- typically these products are more expensive; the products tend to take more time to get the consumer  Positioning Strategies: o Focus on how the product affects the consumer  Value (price vs. quality)  Salient attributes (determinant attributes)  Symbols (convey information about the brand)  Repositioning is “moving” a product in the consumer’s mind Chapter 10 Vocab:  Marketing Research- a set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers involved in marketing goods, services, or ideas  Secondary Data- pieces of information that have already been collected from other source and usually are readily available  Primary Data- data collected to address specific research needs  Sample- a group of customers who represent the customers of interest in a research study  Data- raw numbers or facts  Information- organized, analyzed, interpreted data that offer value to marketers  Syndicated Data- data available for a fee from commercial research firms such as information Resources Inc. (IRI), National Purchase Diary Panel, and ACNielsen  Scanner Data- a type of syndicated external secondary data used in quantitative research that is obtained from scanner readings of UPC codes at check-out-counters  Panel Data- information collected from a group of consumers  Data Warehouse- large computer files that store millions and even billions of pieces of individual data  Data Mining- the use of a variety of statistical analysis tools to uncover previously unknown patterns in the data stored in databases or relationships among variables  Qualitative Research- informal research methods, including observation, following social media sites, in-depth interviews, focus groups, and projective techniques  Qualitative Research- structured responses that can be statistically tested to confirm insights and hypotheses generated via qualitative research or secondary data  Observation- an exploratory research method that entails examining purchase and consumption behaviors through personal or video camera scrutiny  Sentiment Mining- data gathered by evaluating customer comments posted through social media sites such as Facebook and Twitter  In-Depth Interview- an exploratory research technique in which trained researchers ask questions, listen to and record the answers, and then pose additional questions to clarify or expand on a particular issue  Focus Group Interviews- a research technique in which a small group of persons (usually 8 to 12) comes together for an intensive discussion about a particular topic, with the conversation guided by a trained moderator using an unstructured method or inquiry  Survey- a systematic means of collecting information from people that generally uses a questionnaire  Questionnaire- a form that features a set of questions designed to gather information from respondents and thereby accomplish the researchers’ objectives; questions can be either unstructured or structured  Unstructured Questions- open-ended questions that allow respondents to answer in their own words  Structured Questions- closed-ended questions for which a discrete set of response alternatives, or specific answers, is provided for respondents to evaluate  Experimental Research (experiment)- a type of conclusive and quantitative research that systematically manipulates one or more variables to determine which variables have a casual effect on another variable  Biometric Data- digital scanning of the physiological or behavioral characteristics of individuals as a means of identification Material:  Marketing Research Process: o Step 1- define objectives and research needs  What information is needed?  Cost vs. benefit analysis o Step 2- design the research  Specify the constraints  Identify what type of data is needed to answer your question  Identify what type of research is needed to collect that data o Step 3- data collection process (typically the most expensive and the most subject to error)  Secondary Data- data collected prior to the research study  External sources o Syndicated data- can buy data from commercial research firms o Credibility issues- make sure the information is from a credible source for credible reasons  Internal sources o Data warehouse- store information about consumers o Data mining- analytical and statistical tools that look for useful information within data  Advantages- its fast, cheaper than engaging in your own research project, and can be used for preliminary insights  Disadvantages- may not be relevant to your research project, and can be out of date  Primary Data- data collected for specific research needs  Qualitative Research and Quantitative Research  Advantage- specific for a project, and is more likely to behavioral insight  Disadvantages- costly and takes more time to collect the data o Step 4- analyzing data and developing insights  Purpose- convert data to information; describe, explain, predict, and/or evaluate a particular situation o Step 5- action plan and implementation  Marketing Research Report  Qualitative Research o Observation- examine purchase and consumption behaviors of consumers  Interested in how people interact with products, people, spaces, brands, ect.  Can use personal observation or video observation  Ethnographic research- go into someone’s natural habitat to observe them  Observation only works when people are unable or unwilling to tell you when they need o In-depth Interviews- ask one person questions, record their answers, and ask follow up questions o Focus Group Interviews- small group of people (10-12) that have conversation guided by a moderator that are observed by people in another room  Can provide meaningful insight from the consumer  Get customers perceptions about products, services, brands, ect.  Resolve customer complaints  Quantitative Research o Survey Research  Questionnaire- systematic means to collect information from respondents  Very flexible (online, over the phone, in person, ect.)  Unstructured questions (open ended) o Advantage- not limiting the participant’s answer o Disadvantage- coding is hard and takes a lot of time  Structured questions (multiple choice) o Advantage- fast to code o Disadvantage- may be forcing participants into answers that they wouldn’t normally choose  Web Surveys- fast, cheap, have high response rates, and people lie less o Experimental Research- systematically manipulating one or more variables to determine the effects on other variables o Scanner Research- uses data from UPC codes  Panel Research- collect information from the same group of people over time  What to do when designing a questionnaire: o Avoid questions that the respondent cannot easily or accurately answer o Avoid sensitive questions unless absolutely necessary o Avoid questions that refer to more than one issue but only have one set of responses o Avoid leading questions that steer respondents to a particular response o Avoid one-sided questions that present only one side of the issue  Marketing Research Report: o Executive Summary- whole project in a nutshell o Body of Report- research objectives, methodology, and detailed findings o Conclusion o Limitations- did any of the limitations from step 2 affect your findings o Supplements- tables, graphs, charts, ect. Chapter 11 Vocab:  Product- anything that is of value to a consumer and can be offered though a voluntary marketing exchange  Core Customer Value- the basic problem solving benefits that consumers are seeking  Actual Product- the physical attributes of a product including the brand name, features/design, quality level, and packaging  Associated Services (augmented products)- the non-physical attributes of the product including product warranties, financing, product support, and after-sale services  Consumer Products- products and services used by people for their personal use  Product Mix- the complete set of all products offered by a firm  Product Lines- groups of associated items, such as those that consumers use together or think of as part of a group of similar products  Product Line Breadth- the number of product lines within a firm  Product Line Depth- the number of products within a product line  Brand Equity- the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service  Brand Awareness- measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements (brand name, logo, symbol, packaging, or slogan) in the firm’s communications to consumers  Perceived Value- the relationship between a product’s or service’s benefits and its costs  Brand Associations- the mental links that consumers make between a brand and its key product attributes; can involve a logo, slogan, or personality  Brand Loyalty- occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buying from multiple suppliers within the same category  Manufacturer Brands (national brands)- brands owned and managed by the manufacturer  Retailer/ Store Brands (private-label brands)- brands developed and marketed by the retailer and available only from that retailer  Family Brand- a firm’s own corporate name used to brand it product lines and products  Co-Branding- the practice of marketing two or more brands together, on the same package or promotion  Individual Brands- the use of individual brand names for each of a firm’s products  Brand Extension- the use of the same brand name for new products being introduced to the same or new markets  Line Extensions- the use of the same brand name within the same product line and represents an increase in a product line’s depth  Brand Dilution- occurs when a brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold  Brand Licensing- a contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, or characters in exchange for a negotiable fee  Brand Repositioning (rebranding)- a strategy in which marketers change a brands focus to target new markets or realign the brand’s core emphasis with changing market preferences  Primary Package- the packaging the consumer uses, such as the toothpaste tube, from which he or she typically seeks convenience in terms of storage, use, and consumption  Secondary Package- the wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners; can contain additional product information that may not be available on the primary package Material:  Branding: o Brand name- spoken name for a product o Domain name- .coms o Logos and symbols- visual components of the brand  Writing the brand name is the logo (Nike)  The logo without words is the symbol (swoosh check) o Characters- some sort of symbol that is human, character, or cartoon o Slogans o Jingles  Soundmarks are also considered jingles that can be protected and are part of the brand o Distinctive Packaging  Choosing a brand name: o What is the brand’s role? o Are you planning a line of products? o Long-term position in the market? o Insulting or irritating to anyone?  Value of branding: o Facilitate purchase  Is there a brand we know or recognize?  That brand can stand for quality to that consumer who doesn’t know much about a certain product o Establish loyalty  Consumers become less price conscious because the consumers are not looking at the competition o Protect from competition o Reduce marketing costs o Assets  Trademarks- protected by the Lanham Act o Impact market value  Determining Brand Equity: o Assets and liabilities associated with a brand add and subtract to and from the value of a brand o Brand awareness- how many people in a market are not only familiar with a brand but have an opinion about that brand and what the brand stands for? o Perceived value- benefits vs. costs in the mind of the consumer o Brand associations- what are the attributes we associate with a brand? o Brand loyalty- number of loyal customers to a brand o Net promoter score (NPS)- degree to which someone would recommend a brand/product to someone else  Anyone can own a brand  Strategies of Brand Ownership: o Manufacturer brands/ national brands- managed by manufacturers o Private-labels/ store brands- owned and managed by retailers  Premium brands- as good in quality as top manufacturer brand or better  Generic brands- have no branding at all  Copycat brands- try to position themselves as the same quality of manufacturer brands but for less price  Exclusive co-brands- store brands where the retailer collaborates with a national brand (exclusive line only available at that store)  Brand and Line Extensions Advantages o Cost effective, image transfer (taking the feeling from product A and trying to transfer those feelings onto product B), and complementary products  Co-Branding: o Advantages- enhances perception of quality (ultimately adds value to the product), and can work as a prelude to acquisition theory o Disadvantages- can be an issue if one or both of the companies experience something negative  Brand Licensing: o Advantages-can build brand equity, generates additional revenue o Disadvantages- dilution of brand equity through overexposure, they may not protect your brand in the same way you would, can decrease the value that consumers think a brand holds  Packaging is important because it reinforces the brand message; it protects the contents, ensures the product safety issues, addresses environmental concerns, and is a cost reduction  The role of product labeling is to provide information to the consumer about the product  Legal Requirements: o Federal Food & Drug Act  Created the FDA- primary federal agency that reviews food and packaging labels  FDA prohibits the manufacturing of food that has been fraudulently labeled or is unsafe for consumption o Fair Packaging and L


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