entry Test 2
total product
*entire bundle of your service*, product and meaning of your offering; includes extras like warranty, delivery, service
primary research
*new info* collected to solve a problem at hand or answer current questions
particularly attractive customers
-corporate customers -loyal customers -local customers -passionate customers
strategy builds 4 keys of decisions to make about your firm
1) The major goal you set for your firm 2) The types customers you seek and what you plan to offer them 3) the stage and trend of your chosen industry 4) the specific generic and supra strategies you chose to pursue perpetual mapping, industry analysis, post start-up
2 reasons market scope is important
1) helps you decide where o focus your sales and advertising efforts 2) gives you a way to determine which potential competitors you need to worry about most, namely those in your market scope
market
a business term for the population of your customers for your product or service
internal reference price
a consumers *mental image* of what a products *price should be*
mass market
a customer group that involves large portions of the population
survey
a data-collection method using a *questionaire*-in person, on iPhone, on paper, or on the internet
innovative strategies
a firm decides to do something that is totally different from what others in the industry are doing
incremental innovation
a firm patterns itself on other firms, with an exception of one or two key areas
focus group
a form of data gathering using a *small group* led by a moderator
multiple or bonus pack
combining more than 1 unit or the same product and pricing it lower than if each unit were sold separately
direct competition
other companies that make a similar product or provide a similar service; ex: direct competition for Coca Cola includes all other soft drink providers
net profit
the amount of money left after operating expenses are deducted from the business
profit before taxes
the amount of profit earned by a company before calculating the amount of income tax owed
margin
the amount of profit, usually stated as a percentage %
imitative strategy
the entrepreneur is doing more or less than the others are already doing
industry
the general name for the line of product or service being sold, or the firms in that line of business
competitive advantage
the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the industry
magic number
the post-tax income entrepreneur personally seeks from the business
pure innovation
the process of creating new products or services, which result in a previously unseen product or service
introduction stage
the product or service is being invented and initially developed
maturity stage
the third life cycle stage, marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies
cost benifits
the ways a firm can keep costs low for customer
inelastic product
there are *few substitutes and for which a change in price makes very little difference* in quantity purchased
core product
very basic description of what a product is-a bar of soaps house-cleaning service
goal
an intended outcome for your business
entry wedge
an opportunity that makes it possible for a new business to gain a foothold in a market
competitor
any other in the same business as yours
tangibillity
capability of being touched, seen, tasted or felt
industry dynamics
changes in competitions, sales and profits in an industry over time
differential advantages
characteristic that separates one company from another in product, price, promotion, and/or distribution
price gouging
charging and outrageously high price for something
off-peak pricing
charging lower prices certain times to encourage customers to come during slack periods (happy hour)
differentiation strategy
clarifying how one product is unlike another in a mass market
bundling
combining 2 or more products in 1 unit and pricing it less than if the units were sold separatly
markup
the amount an entrepreneur adds to the costs to provide profit
5 steps to the goal
1) what do you expect out of your business? 2) what is your product idea (and its industry) 3) how innovative or imitative will you be with your product? 4) who do you plan to sell to- everyone or target market? 5) where do you plan to sell- locally, regionally, nationally, globally?
generic strategies
3 widely applicable classic strategies for business of all types-differectation, cost and focus
2 major classification systems that code industries
NAICs (North American industry classification system) SIC (standard industrial classification systems)
perpetual mapping
a graphic display which positions products, services, brands or companies according to their scores on important strategic dimensions
concentrated strategy
a marketer selects *one specific group* of consumers and designs a marketing mix specifically for that group
differentiated stategy
a marketing strategy in which a marketer *selects two or more distinct groups* of consumers and designs specific marketing mixes to meet their needs
undifferentiated strategy
a marketing strategy that *uses no segmentation*; assumes that all consumers have virtually identical needs and can be reached by the same marketing mix
niche market
a narrowly defines segment of the population that is likely to share interests or concerns
blue ocean strategy
a strategy based on creating a new product or service which has no competitors
boom
a very rapid increase in sales in a relatively shot time
bot
a web-based program that uses artificial intelligence techniques to automate tasks such as searches
marketing plan
a written plan of all phases of marketing for a Busi., including info on the product, price, distribution, and promotion strategy, as well as a clear identification of the target market and competition (you wouldn't take a trip without a map or direction, so why would you start your business without the same consideration)
cost strategy
aimed at mass markets in which a firm offers a combination of cost benefits that appeals to the customer
markup pricing
an amount is added to the cost of a product to set a retail price and provide a profit
parallel competition
an imitative business that competes locally with others in the same industry
indirect competition
companies that provide alternatives that new dissimilar to your product/service that consumers might choose to meet a similar need ex: indirect competition for Coca Cola includes any other company providing items to quench thirst
strategic actions
competitive responses requiring a *major commitment of resources*
tactical actions
competitive responses with *low resources requirements*
growth stage
customer purchases increase at a dramatic rate
ethnographic research
data gathered by simple observation- *seeing what consumers do*, rather than asking them
scope
defines the geographic range covers by the market- from local to gloal
scale
describes the size of the market- a mass market or a niche market
heterogeneity
each time it is provided it will be slightly different from the previous time
retrenchment
establish firms must find new ways to business and its chances for survival
external reference price
estimation of what a price should be based on info external to a consumer, such as advice, advertisements, or comparison shopping
shake-out
following a boom in which there is a rapid decrease in the # of firms in an industry
gross profit
funds left over deducting the cost of goods sold
referral discount
given to a customer who refers a friend to the business
target market
group of people on which marketer focuses promotion and sales efforts on
SIC
has 4 midgets
NAIC
has 6 midgets; covers more industries and more of the newer industries
optimum price
highest price that will bring the desired level of sales in your intended market level
law of supply and demand
how the demand for a products and the supply of them affect each other
elasticity
idea that the markets demand for a product or service is *sensitive to changes in its price*
perishability
if it is not used when offered, it cannot be saved for later used
secondary research
info *already collected* for some other purpose than the current problem or questions
market research
interpretation of data to support future marketing decisions
services
nonphysical product
augmented products
ore product plus features that tend to differentiate it from competition
goods
physical product
the key to being successful is
picking a industry that offers good potential for making a profit and attractive opportunities to work with a minimum of risk and competition
market segmentation
process of *dividing the market into groups that have somewhat homogeneous needs* for a product or service
4 ps of marketing
product price, promotion, and placement (marketing mix)
me-too products
products similar to something already on the market
industry analysis (IA)
provides the entrepreneur with key info about the industry, such as its current situation and trends
open-ended questions
q's that allow respondents to express themselves as they choose; ex, "*What do you like about this book?*"
dichotomous questions
q's that are answered by selecting the proper category; ex, "*Have you shopped here before?*"
categorical questions
q's that are answered by selecting the proper category; ex, "*what is your ethnicity? White, black, Mexican...*"
scalar question
q's that are answered by some sort of scale; ex, "*on a scale of 1-5, how do you like this book?*"
dierct mall
receiving things in the mail (catalogs, brochures, letters) where they can order something and mail it back
value benefit
related to nature of product/service itself (quality, fusion dn reputation that give value to customer)
decline stage
sales and profits of the firms in the industry began a falling trend
periodic or random discounting
sales conducted at either predictable or nonpredicatable intervals
inseparability
service cannot be disconnected from the provider of the service
price lining
setting (usually) 3 price points:good quality, better quality, best quality
prestige or premium
setting *price above that of the competitor so as to indicate a higher quality* or that a product is a status symbol
captive pricing
setting *price for an idea relatively low*, and then *charging much higher prices for the expendables it uses.*
skimming
setting a *price at the highest level the market will bear*, usually bc there is no competition at the time
odd-even pricing
setting a price that ends in 5,7 or 9
partitioning pricing
setting price for a base item and then *charging extra for each additional component*
focus strategy
targets a portion of the market, called a segment or niche
degree of similarity
te extent to which a product or service is like another