Marketing Chapter 6,7,8,10,11

Geographic Segmentation

Calls for dividing the market into different geographical units, such as nations, regions, states, counties, cities, or even neighborhoods.

Indirect Marketing Channel

Channel containing one or more intermediary levels

Multimodal Transportation

Combining two or more modes of transportation

Positioning

Consists of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Market Targeting

Consists of evaluating each market segment's attractiveness and selecting one or more market segments to enter.

Convenience Product

Consumer Product that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort.

Unsought Product

Consumer product that the consumer either does not know about or knows about but does not normally think of buying.

Specialty Product

Consumer product with unique characteristics or brand identity for which a significant group of buyers is willing to make a special purchase effort.

Marketing Strategy Statement

Describes the target market, the planned value proposition, and the sales, market-share, and profit goals for the first few years; Outlines the planned product price, distribution, and marketing budget for the first year; Describes the planned long-run sales, profit goals, and marketing mix strategy

Marketing Strategy Development

Designing an initial marketing strategy for a new product based on the product concept

Marketing Channel Design

Designing effective marketing channels by analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating them

Product Development

Developing the product concept into a physical product; in order to ensure that the product idea can be turned into a workable market offering

Consumer Perception Dimensions

Differentiation Relevance Knowledge Esteem

Channel Conflict

Disagreement among marketing channel members on goals, roles, and rewards- who should do what and for what rewards

Behavioral Segmentation

Divides buyers into segments based on their knowledge, attitudes, uses, or responses concerning a product.

Demographic Segmentation

Divides the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.

Income Segmentation

Dividing a market into different income segments.

Psychographic Segmentation

Dividing a market into different psychographic segments.

Gender Segmentation

Dividing a market into different segments based on gender.

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.

Decline Stage: MARKETERS will likely?

Eliminate/reposition items Cut promotions Eliminate marginal distributors Plan to phase out product

Line Extension

Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category.

Brand Extension

Extending an existing brand name to new product categories.

Introduction Stage: BUYERS must be aware of?

Features Uses Advantages

Intermarket (Cross-market) Segmentation

Forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries due to new technologies.

Segmentation Variables

Geographic Demographic Psychographic Behavioral

Segmenting International Market

Geographical location Economic factors Political and legal factors Cultural factors

Exclusive distribution

Giving a limited number of dealers the exclusive right to distribute the company's products in their territories

Product Line

Group of products closely related because they function in a similar manner, are sold to the same customer groups, marketed through same types of outlets, or fall within given price ranges.

Commercialization

Introducing a new product into the market

Crowdsourcing

Inviting broad communities of people into the new product innovation process

Differentiation

Involves actually differentiating the firm's market offering to create superior customer value.

Market Segmentation

Involves dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.

Mass Customization

Is the process by which firms interact one to one with masses of customers to design products and services tailor-made to individual needs.

Product Position

Is the way a product is defined by consumers on important attributes—the place a product occupies in consumers' minds relative to competing products.

Usage Rate in Market Segmenting

Light Medium Heavy

Service Variability

Major characteristic of services- their quality may vary greatly, depending on who provides them and when, where, and how.

Service Inseparability

Major characteristics of services- they are produced and consumed at the same time and cannot be separated from their providers

Service Intangibility

Major characteristics of services-they cannot be seen, tasted, felt, heard, or smelled before they are bought.

Supply Chain Management

Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final customers

User Status in Market Segmenting

Markets can be segmented into: Nonusers Ex-users Potential users First-time users Regular user

Brand

Name, term, sign, symbol, or design that identifies the products or services of seller(s) and differentiates them from those of competitors.

Product Width

Number of different product lines the company carries

Product Detail

Number of versions offered for each product in the line

Age and Life-cycle Segmentation

Offering different products or using different marketing approaches for different age and life-cycle groups.

Segmenting Business Market

Operating characteristics Purchasing approaches Situational factors Personal characteristics

Internal Marketing

Orienting and motivating customer-contact employees and supporting service employees to work as a team to provide customer satisfaction

Marketing Logistics (or physical distribution)

Planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at profit

Repositioning

Positioning decisions are for all products, existing and new -Existing brands must be reevaluated and sometimes repositioned; Accomplished by changing? Price Distribution Image through promotion Packaging Benefits

Co-branding

Practice of using the established brand names of two different companies on the same product

Industrial Products

Product bought by individuals and organizations for further processing or for use in conducting a business

Consumer Products

Products bought by final consumers for personal consumption.

Ways of Screening New Ideas - R-W-W Framework?

R - is there a REAL need and desire for the product? W - can we WIN? does it offer an advantage? W - is it WORTH DOING? does it fit our growth strategy?

Market Variability

Refers to shifts and changes in the market. (If most buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts, undifferentiated marketing is appropriate)

Idea Screening

Screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible

Marketing Channel Management

Selecting, managing, and motivating individual channel members and evaluating their performance over time

Product Mix (Product Portfolio)

Set of all product lines and items that a particular seller offers for sale.

Perceptual Positioning Maps

Show consumer perceptions of their brands versus those of competing products on important buying dimensions.

Intensive Distribution

Stocking the product in as many outlets as possible

Individual Marketing

Tailoring products and marketing programs to the needs and preferences of individual customer. - Also known as one-to-one marketing, mass customization, and markets-of-one marketing.

Micromarketing

Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes local marketing and individual marketing.

Concept Testing

Testing new-product concepts with a group of target customers to find out the degree of consumer appeal toward the concepts Methods: presenting the concepts to consumers symbolically or physically or with a word or picture description; asking customers about their reactions to the concepts

Empathy

The CARING, individualized attention provided to customers

Reliability

The ability to perform the service dependably and ACCURATELY

Tangibles

The appearance of PHYSICAL FACILITIES, equipment, personnel, and communication materials

Service Profit Chain

The chain that links service firm profits with employee and customer satisfaction

Product Quality

The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.

Product Life Cycle

The course of a product's sales and profits over its lifetime; summarizes a brand's volume, profits, and strategy

Disintermediation

The cutting out of marketing channel intermediaries by product or service producers, or the displacement of traditional resellers by radical new types of intermediaries

Brand Equity

The differentiated effect that knowing the brand has on customer response to the product or its marketing

Assurance

The knowledge of and courtesy by employees and their ability to convey TRUST & CONFIDENCE

Integrated Logistics Management

The logistics concept that emphasizes teamwork, both inside the company and among all the marketing channel organizations, to maximize the performance of the entire distribution system

Value Delivery Network

The network made up of the company, suppliers, distributors, and ultimately customers who "partner" with each other to improve the performance of the entire system in delivering customer value

Brand Mark

The part of the brand that is not made up of words (example Nike "swoosh")

Decline Stage

The product life-cycle stage in which a product's sales decline; Sales: fall rapidly

Growth Stage

The product life-cycle stage in which a product's sales start climbing quickly; Sales: rise rapidly; Profits: peak and start to decline Promotion costs start to drop as a % of sales

Maturity Stage

The product life-cycle stage in which sales growth slows or levels off; stage in which most products are in Sales: curve peaks and starts to decline; Profits: continue to fall Intense competition Emphasis on improvements/differences in competitors' products Weaker competitors exit the market Advertising and dealer-oriented promotion predominate

Introduction Stage

The product life-cycle stage in which the new product is first distributed and made available for purchase; Sales: start at zero; Profits: negative High risk of failure

Test Marketing

The stage of new-product development in which the product and marketing program are tested in realistic market settings; gives the marketer an experience with marketing a product before the introduction; tests the product and its marketing program; costs can be high; time consuming

Idea Generation

The systematic search for new-product ideas

Selective Distribution

The use of more than one, but fewer than all, of the intermediaries who are willing to carry the company's products

Responsiveness

The willingness to help customers and provide PROMPT services

Commercialization - Considerations for launching a new product?

Time Place (single location, region, national market, or international market)

Interactive Marketing

Training service employees in the fine art of interacting with customers to satisfy their needs

Chain Stores

Two or more outlets that are commonly owned and controlled

Multiple Segmentation Bases

Use multiple variables in an effort to identify smaller, better-defined target groups

Social Marketing

Use of commercial marketing concepts and tools in programs designed to influence individuals behavior to improve their well-being and that of society

Manufacturers' sales branches and offices

Wholesaling by sellers or buyers themselves rather than through independent wholesalers

Product Concept

a detailed version of the new product idea stated in meaningful consumer terms

Trademark

a legal designation of exclusive use of the brand

Product Idea

an idea for a possible product that the company can see itself offering to the market

Concept Development

developing a new product into alternative product concepts; find out how attractive each concept is to customers; choose the best one

Channel captain

has the final say on products to be distributed through the channel and the manner of their distribution, oversees channel partners, and deals with channel conflict and issues

Local Marketing

involves tailoring brands and promotions to the needs and wants of local customer groups- cities, neighborhoods, and even specific stores.

Growth Stage: MARKETERS must?

stress brand benefits to encourage brand loyalty analyze production position ensure efficient distribution system

Brand Name

the part of the brand that can be spoken (ex. NIKE)

Product Image

the way a product is perceived by consumers

Competitor's Marketing Strategies

when competitors use differentiated or concentrated marketing, focusing on the needs of buyers in specific segments.

Market-targeting Strategies

- Undifferentiated (mass) marketing - Differentiated (segmented) marketing - Concentrated (niche) marketing - Micromarketing (local or individual marketing)

Major Stages in New Product Development? (8)

1. Idea Generation 2. Idea Screeening 3. Concept Development and Testing 4. Marketing Strategy Development 5. Business Analysis 6. Product Development 7. Test Marketing 8. Commercialization

4 Service Characteristics?

1. Intangibility 2. Variability 3. Inseparability 4. Perishability

Stages of Product Life Cycle

1. Introduction 2. Growth 3. Maturity 4. Decline

the four major steps in designing a customer value-driven marketing strategy

1. Market segmentation 2. Market Targeting 3. Differentiation 4. Positioning

Requirement for Effective Segmentation

1. Measurable-The size, purchasing power, and profiles of the segments can be measured. 2. Accessible-The market segments can be effectively reached and served. 3.Substantial- The market segments are large or profitable enough to serve. 4. Differentiable- The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. 5.Actionable- Effective programs can be designed for attracting and serving the segments.

5 Determinants of Service Quality?

1. Reliability 2. Responsiveness 3. Assurance 4. Empathy 5. Tangibles

Evaluating Marketing Segments

1. Segment size and growth 2. Segment structural attractiveness- many strong and aggressive competitors, easy for new entrants, potential substitute products, buyers with strong bargaining power, and powerful suppliers that can control prices or products or services. 3. Company objectives and resources

Loyalty Status in Marketing Segmenting

1.Completely loyal- they buy one brand all the time and can't wait to tell others about it. 2.Somewhat loyal- they are loyal to two or three brands of a given product or favor one brand while sometimes buying others.

Manufacturers using the word "new"

6 months

Store Brand

A brand created and owned by a re-seller of a product or service

Retailer

A business whose sales come primarily from retaining

Horizontal Marketing System

A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity

Conventional Distribution Channel

A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, even at the expense of profits for the system as a whole

Wheel-of-retailing concept

A concept that states that new types of retailers usually begin as low-margin, low-price, low-status operations but later evolve into higher-priced, higher-service operations, eventually becoming like the conventional retailers they replaced

Shopping Product

A consumer product that the customer, in the process of selection and purchase, usually compares on such bases as sustainability, quality, price, and style.

Franchise

A contractual association between a manufacturer, wholesaler, or service organization (a franchisor) and independent businesspeople (franchisees) who buy the right to own and operate one or more units in the franchise system

Franchise Organization

A contractual vertical marketing system in which a channel member links several stages in the production-distribution process

Vertical Marketing System (VMS)

A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contacts with them, or has so much power that they all cooperate

Multichannel Distribution system

A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments

Wholesaler

A firm engaged primarily in wholesaling activities

Services

A form of product consisting of an activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything.

Category Killer

A giant specialty store that carries a very deep assortment of a particular line and is staffed by knowledgeable employees

Shopping Center

A group of retail businesses built on a site that is planned, developed, owned, and managed as a unit

Distribution Center

A large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible

Supermarket

A large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of grocery and household products

Channel Level

A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer

Service Parishibility

A major characteristic of services- they cannot be stores for later sales or use

Undifferentiated (mass) Marketing

A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. - Focuses on what is common in the needs of consumers rather than on what is different.

Differentiated (segmented) Marketing

A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.

Concentrated (niche) Marketing

A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches. - Markets more effectively by fine-tuning its products, prices, and programs to the needs of carefully defined segments. - Market more efficiently, targeting its products and services, channels, and communications programs toward only consumers that it can serve best and more profitably

Direct Marketing Channel

A marketing channel that has no intermediary channels

Discount Store

A retail operation that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume

Department Store

A retail organization that carries a wide variety of product lines- each line is operated as a separate department managed by specialist buyers or merchandisers

Specialty Store

A retail store that carries a narrow product line with a deep assortment within that line

Off-price Retailer

A retailer that buys at less-than-regular wholesale prices and sells at less than retail. Examples are factory outlets, independents, and warehouse clubs

Service Retailer

A retailer whose product line is actually a service, including hotels, airlines, banks, colleges, and many others

Business Analysis

A review of the sales, costs, and profit projections for a new product; to find out whether these factors satisfy the company's objectives

Target Market

A set of buyers sharing common needs or characteristics that the company decides to serve.

Marketing Channel (or distribution channel)

A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user

Convenience Store

A small store, located near a residential area, that is open long hours seven days a week and carries a limited line of high-turnover convenience goodsq

Superstore

A store much larger than a regular supermarket that offers a large assortment of routinely purchased food, products, nonfood items, and services

Contractual VMS

A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than they could achieve alone

Corporate VMS

A vertical marketing system that combines successive stages of production and distribution under single ownership- channel leadership is established through common ownership

Administered VMS

A vertical marketing system that coordinates successive stages of production and distribution, not through common ownership or contractual ties, but through the size and power of one of the parties

Broker

A wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation

Agent

A wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title to goods

Packaging

Activities of designing and producing the container.

Wholesaling

All activities involved in selling goods and services to those buying for resale or business use

Retailing

All activities involved in selling goods or services directly to final consumers for their personal, nonbusiness use

Third-party Logistics (3PL) Provider

An independent logistics provider that performs any or all of the functions required to get its client's product to market

Merchant Wholesaler

An independently owned wholesaler business that takes title to the merchandise it handles

Independent off-price retailer

An off-price retailer that is either independently owned and run or is a division of a larger retail corporation

Warehouse Club

An off-price retailer that sells a limited selection of brand name grocery items, appliances, clothing, and a hodgepodge of other goods at deep discounts to members who pay annual membership fees

Factory Outlet

An off-price retailing operation that is owned and operated by a manufacturer and that normally carries the manufacturer's surplus, discontinued, or irregular goods

Product

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

Private label

Brand that is created and owned by a reseller

CREST Method of Resolving Service Failures

C - "Calm the customer" R - "Repeat the problem" E - Use "Empathy statements" S - "Solve the problem" T - Make a "Timely Response"