quiz 1 457

The method a company uses to grow its business is largely dependent on:

- Company's financial situation - Competition - Governmental regulation

Product - what is the product ?

- core benefit: : What is the consumer really seeking? What is the problem that needs to be solved? - Actual product: brand name, features, quality level, packaging, design - Augmented product: delivery and credit, after-sale service, installation, warranty

strategies for challengers against market leaders: flanking attack how

-Value added customer service or distribution -Advantage for secondary market

strategies for challengers against market leaders (market expansion): encirclement how

-customization -address unique needs of each segments -Should surround leader's brand with a variety of offerings aimed at several peripheral segments -Makes the most sense when the market is fragments into many different applications segments or geographical regions with somewhat unique needs or tastes

strong brand equity

-it allows a company to charge a price minimum - it drives customer preferences - it increases customer loyalty

Consumer Decision Making Process

1. problem recognition 2. information search 3. alternative evaluation 4. purchase decision 5. post purchase behavior

strategies for challengers against market leaders: frontal attack goal

Challenge leader

Marketing Tactics: 4 Ps

Product Price Place Promotion

target market selection: concentrated

a marketing strategy in which a company focuses on one specific target market group for most or all of its marketing initiatives

Innovators

adopt something simply because it is new. They love exploring for the sake of exploring and are willing to take risks, even if those risks result in failure. - these are influencers, people with followings, journalists - 2.5% of population

the goal of penetration pricing

capture high market share

strategies for challengers against market leaders (confrontation): leapfrog use

change the game

attribute

characteristic , average cost, height, etc

levels

choices within an attribute such a price

Consumer Decision Making Process: cultural influences

culture subculture social class

promotions: advertising

cumulative effect, used for building brand awareness. TV, radio, newspaper, magazine, digital

In the SWOT analysis, O & T are

external and uncontrollable opportunities and threats

True/False: social media is the most effective way to reach a target audience

false

Consumer Decision Making Process: social influences

groups/ social networks family roles and status

supply chain management

includes suppliers, manufacturers, and retailers involved in distributing the product to the end customer. Supply chains encompass all businesses that interact with a specific product, including those that provide parts to the manufacturer.

strategies for challengers against market leaders (market expansion): encirclement goal

targeting several smaller untapped or underdeveloped segments in the market simultaneously

importance score

the larger the more influential attirbutes

true/false: personal selling is widely used in B2B markets

true

how does product life cycle help marketers make decisions?

use as a factor in deciding when it is appropriate to increase advertising, reduce prices, expand to new markets, or redesign packaging. help inform: -pricing -promotion -cost-cutting

Prestige Pricing Strategy

when retailers charge higher-than-average prices for merchandise and target customers who are seeking status and high quality

product differentiation

why you should choose our product over others

place: what are some regional influences on location?

- Weather - demographic - psychographic characteristics of the population base

demographic segmentation

- age -life-cycle stage - gender -income -occupation -education -religion -ethnicity -generation

laggards

- are slow to adopt and only do so when forced to because others have already adopted. - 16% of population

place

- City - Population growth or decline - region - Secondary and neighborhood business districts -Shopping malls and centers -Mixed use developments - Free-standing locations - Positional qualities within an area - corner location, opportunity for interception of customers on their way to other stores

how the flow of manufacturing costs work

- The flow of manufacturing costs involves using materials and labor to create a finished product for sale. - Implementing a supply chain management system can simplify and reduce the cost of the manufacturing process, especially for manufacturers with multiple parts. -A clothing manufacturer starts by bringing in raw materials like fabric, zippers, and other components necessary for clothing production. -The manufacturer incurs labor costs to operate machinery and perform other tasks using these materials. - Once the items are finished, they are packaged and stored until they are sold to customers.

product life cycle - decline stage

- as other companies emulate its success, the product may lose market share and begin its decline. - Product sales begin to drop due to market saturation and alternative products - Should a product be entirely retired, the company will stop generating support for it and will entirely phase out marketing endeavors. -company may choose to re-enter the product life cycle by introducing the revamp product to the market.

stages among new adopters of products

- awareness -interest - evaluation -trial -adoption

strategies for market leaders: fortress

- build a fortress capable of repelling attacks by current or future competitors

2 key pillars of competitive advantage

- cost leadership - product differentiation

the choice of channel management should be based on the

- effectiveness at reaching target market - relationship with channel members -competitors choice of channel members

what does the term "brand extension" refer to?

- extending an existing brand to a new product category

product life cycle - introduction stage

- first time customers are introduced to the new product. -A company must generally includes a substantial investment in advertising and a marketing campaign - promotional pricing may be low to drive customer engagement, and the sales strategy is still being evaluated. - may be little to no competition

strategies for market leaders

- fortress (defense position) - flanker -confrontation - market expansion

market segmentation

- geographic - demographic - psychographic - behavioral

growth strategy: Product Development

- get into new market

strategies for market leaders: market expansion goal

Use superior resources to compete in multiple segments

Channel Management

the process of deciding how to get goods into customer's hands

Rate of Adoption of Products

- innovators - early adoptors - early majority - late majority - laggards

growth strategies

- market penetration - market development - product development -diversification

product life cycle - maturity stage

- most profitable stage - market saturated with the product, -competition now at its highest - profit margins starting to shrink - a company may begin deciding how to innovate its product or introduce new ways to capture a larger market presence

when should a company consider repositioning its offering ?

- new target segments -new competitors -new segment needs

consider when looking at target market:

- size - profitability (how good does the customer want the quality to be/ how much we should spend on creation, how much we should advertise) - homogeneity (characteristics of group such as income) - reachable (how can you reach them?) (kids can be reached through parents, tv, youtube)

psychographic segmentation

- social class -lifestyle -personality

in a product life cycle:

- some products make never go through a growth or maturity phase - a declining market can be profitable

how do market leaders use the fortress strategy

-Modify and improve product -Reduce cost -Advertising & promotion to stimulate demand for brand, encourage repeat purchases

Limitations of PLC

-doesn't pertain to every industry -prospective planned obsolescence.; When a product enters the maturity stage, a company may be tempted to begin planning its replacement. -For producers who tend to introduce new products every few years, this may lead to product waste and inefficient use of product development resources.

3 requirements of core competencies

1. provide access to a wide variety of markets 2. contribute to the benefits of the product as perceived by the customers 3. hard for competitors to imitate

3 pillars of marketing strategy

1. segmentation 2. targeting 3. positioning

target market selection: - niche

A niche market is a specialized, smaller market of the target market. Example: If you are selling pet food, people who own pets are your target market

place: Shopping malls

Anchors and restaurants often drive customers to the mall. Many retailers benefit from the traffic generated by the anchors.

strategies for challengers against market leaders: flanking attack use

Appropriate when: -the market can be broken into two or more large segments -leader and/or other major competitors hold a strong position in the primary segment -no existing brand fully satisfies the needs of customers in at least one other segment

strategies for market leaders: confrontation use

Beat the competitor head-on

strategies for market leaders: confrontation goal

Defend against attacker

strategies for market leaders: flanker goal

Defend against attacker

strategies for challengers against market leaders: frontal attack how

Differentiate Added value of commercial team

the positioning statement

Format: To (target segment and need) our (brand) is (concept) that (point of difference). always starts with the customer and why they should buy product or service

strategies for challengers against market leaders: frontal attack use

Have sustainable competitive advantage

price: price-skimming

Initially set price high (making money off profit margin - how much is costs to make vs selling) - Intended to help cover R & D and launch costs - Projects a premium image - Can build up a reserve for the time when competition enters market - May or may not lower price later

strategies for market leaders: market expansion how

Line extensions New brands Alternative products Consider geography→ distribution and channels must be superior

strategies for market leaders: fortress goal

Maintain share

what marketing communication tool is used to build a long-term image for a brand

advertising

Consumer Decision Making Process: personal influences

age and life-cycle stages occupation economic situation lifestyle personality and self-concept

strategies for challengers against market leaders (confrontation): leapfrog goal

beat leader with market innovation

a niche strategy

is concentration strategy

place: Secondary and neighborhood business districts

secondary would be downtowns of suburbs like Bethesda or Silver Spring

the width of a product mix refers to

the number of different product lines carried by a company

target market selection

- undifferentiated (targets everyone) - differentiated (target) - concentrated - niche(localized)

core competencies

-5/6 things that a company does better than others - bind existing businesses together - help create new lines of business

product life cycle - growth stage

-If the product is successful, it then moves to the growth stage -This is characterized by growing demand, an increase in production, and expansion in its availability. -A company may still choose to invest heavily in advertising if the product faces heavy competition; but it will be geared more toward differentiating product from others than introducing - A company may also refine its product by improving functionality based on customer feedback. - increased sales and higher revenue. - As competition begins to offer rival products, competition increases, potentially forcing the company to decrease prices and experience lower margins

Marketing Myopia

-focusing only on selling product and services rather than seeing the big picture of what students really want - organizations only focusing on what they currently do, making them blind to the future and capitalizing on growth opportunities - to avoid this leaders should understand their business - the goal isnt to sell things but to satisfy customers because products can easily be replaced by competitive alternatives

geographic segmentation

-nations -regions -states -counties -cities -neighborhoods -population density (urban, suburban, rural) -climate

strategies for challengers against market leaders (confrontation): leapfog how

-new, superior technology -game-changing innovation - NOT a viable approach for all challengers -Challenger must have a technology superior to that of established competitors as well as the product and process engineering capability to turn that technology into an appealing product -Challenger must have marketing resources to effectively promote its new products AND convince customers already committed to an earlier version of the product that there are benefits to justify the cost of switching

understanding core competencies can

-prevent companies from making outsourcing mistakes - help create sustainable competitive advantage

strategies for market leaders: confrontation how

Meet or beat the competitor's attractive features Add-ons better than price reductions

strategies for market leaders: flanker use

Offer a second product to compete against challenger

strategies for market leaders: flanker how

Offer second product with comparable price point to challenger Substantive differentiation from lead product Advertising to stimulate primary demand

strategies for challengers against market leaders: flanking attack goal

Penetrate at point of weakness

ideal lifes-cycle of a Strategic Business Unit (SBU) based on the BCG model

Question mark Star Cash Cow Dog

price: Price Penetration (making money off volume)

Set price low in order to capture market share and realize the advantages of: - Economies of scale - Dominating the market and discouraging competitors from entering

segmenting, targeting, positioning

Strategy is ALL about the CUSTOMER. 1. Understand the consumer decision making process and influences on it. How do they make a decision? 2. Identify and apply market segmentation approaches. Can we put potential customers into "buckets" based on some observable factors? 3. Build on your understanding of marketing strategy to identify suitable targets for the marketing mix Write positioning statement consistent with a firm's marketing strategy How do we craft our tactics (next class) to meet the needs of these potential customers?

growth strategies: diversification

The method a company uses to expand its business is largely contingent upon its financial situation, the competition and even government regulation. Some common growth strategies in business include market penetration, market expansion, product expansion, diversification and acquisition. ; bring in new market

growth strategy: Market Development.

The next business growth strategy is targeting new markets with an existing product. - marketing to the existing customers

product life cycle management

The process of strategizing ways to continuously support and maintain a product

place: mixed use developments

There is exponential growth in this option now as city planners and developers look for ways to reduce urban sprawl. People work and live in these areas and retailers are often found on the ground floor—providing necessary goods and services.

growth strategy: market penetration

This is the least risky of business growth strategies but also has the lowest opportunity for growth. - loyalty programs are good for this; marketed to existing customers

promotions: sales promotion

Used to generate immediate action by the consumer - coupons, premiums, sweepstakes, contests, sales, bundling of products

strategies for market leaders: market expansion use

Wear-down the competition

fortress use

When current and potential customers have relatively homogeneous needs and desire AND firm's offering already enjoys a high level of awareness and preference in mass market

free-standing

allows for drive-thru windows and parking lots but require extra effort on the customer to frequent the location.

early adopters

are opinion leaders who quickly adopt new ideas to maintain their reputation as being ahead of the curve. - 13.5% of population - in these other categories, advertising will be focus on product differentiation and diversification to keep shelf space and then it will focus on brand loyalty

early majority & late majority

are the critical mass that ensures adoption. The early majority prioritizes productivity and practical benefits over coolness or reputation. The late majority expects extensive help and support before committing. - 34% of population equaling 68% of population

which segmentation is most important

behavioral segmentation is more important/ more powerful than demographic ex: umd knows if you go to games, library, interests, etc

promotions

companies want you to have their app to collect your data - location, web browsing history to tailor marketing appropriately

promotions: make sure all integrated marketing communications are

consistent, cohesive

prestige pricing is most attractive to which diffuser group ?

innovators

in which 2 stages are a lot of money being spent of advertising to drive awareness?

innovators & early adopters

four stages in a product's life cycle

introduction, growth, maturity, decline

promotions: public relations

long term strategy. May result in publicity. Used to build brand personality

place: Neighborhood business districts

meant to serve a neighborhood. Can be a strip center. Service retailers often locate in this area as customer is an important part of the service offering and must be present for the service to be created...haircuts, nail salons, etc.

to be useful, market segments should be

measurable, substantial, accessible, differentiable, and actionable

Consumer Decision Making Process: psychological influences

motivation perception learning beliefs and attitudes

how a product's penetration rate is calculated

number of consumers who own the product/ total reference population

target market selection: differentiated

occurs when a company creates campaigns that appeal to two or more different target audiences, demographics, or marketing segments. By targeting multiple well-defined customer profiles, a brand can build its customer base, master its niche, and begin to organically build brand awareness.

target market selection: undifferentiated

occurs when a company creates one campaign for its entire audience, with all segments seeing the same message.

A flanker brand is

often a lower-quality product designed to appeal to a low-price segment to protect the leader's primary brand from direct price competition

product life cycle

refers to the length of time from when a product is introduced to consumers into the market until it's removed from the shelves.

business logistics management

refers to the production and distribution process within the company.

a segmentation strategy is effective if provided

segments are substantial (large and profitable enough to serve)

conjoint analysis

technique used to develop an understanding of the attributes that guide consumer preferences by having consumers compare product preferences across varying levels of evaluative criteria and expected utility -use secondary data or conduct survey or interviews to understand preferences

end result of a successful positioning strategy

the creation of a customer-focused value proposition, a cogent reason why the target market should buy the product/service

the degree to which existing competitors control the distribution channels is an indicator of

the height of the barriers to entry

the greater the price elasticity, the greater

the sales volume growth with 1% price reduction

strategies for challengers against market leaders (market expansion): encirclement use

viable when segments are underserved