Marketing Chapter 6-11
legal and ethical constraints
price fixing, price discrimination, deceptive pricing, predatory pricing
exporting
producing goods in one country and selling them in another
product & promotional strategies
product extension; product adaptation; communication adaptation; dual adaptation; product invention
managing the product life cycle
product manager; product modification; market modification; product repositioning
business products
products organizations buy that assist in providing other products for resale
consumer products
products purchased by the ultimate consumer
tariff
putting taxes on goods (imports) outside of the country
queries
questions the database can answer
constraints
restrictions placed on potential solutions to a problem
setting a final price - steps
select an approx. price level; set list or quoted price; make special adjust. to list or quoted price
licensing
selling the right to use some process, trademark, patent, or other right for a fee or royalty
product extension
selling virtually the same product in other countries
intangibility
services cannot be seen, tasted, felt, heard, or smelled before purchase
inconsistency
services depend on the people who provide them, their quality varies with each person's capabilities and day-to-day job performance
brand personality
set of traits people attribute to a product as if it were a person
above at or below market
setting a above, at , or below the market
prestige
setting a high price so that quality or status conscious consumers will be attracted to it
penetration
setting a low initial price to appeal to the mass market
skimming
setting a price at the highest level the market will bear
target return on sales
setting a price to achieve a profit that is a specified percentage of the sales volume
target return on investment
setting a price to achieve an annual target return on investment
high learning
significant customer education is required and there is an extended introductory period
target market (segment) selection criteria
simplicity and cost effectiveness of assigning potential buyers to segments; potential for increased profit; similarity of needs of potential buyers within a segment; difference of needs of buyers among segments; potential of a marketing action to reach a segment
late majority
skeptics who adopt new products when they feel it is necessary
demand oriented
skimming; penetration; prestige; odd-even; bundle
idea generation
stage 2, developing a pool of concepts to serve as candidates for new products, building upon the previous stage's results
internal & external screening
stage 3: screening and evaluation
business analysis
stage 4; specifies the features of the product and the marketing strategy needed to bring it to market and make financial projections
development
stage 5; the stage in the product development process in which a prototype is developed and a marketing strategy is outlined
market testing
stage 6; the stage of the new-product process that involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy
commercialization
stage 7; the stage of the new-product development process that positions and launches a new product in full-scale production and sales
cost oriented
standard mark up; cost plus
lost horse
starting with the last known value of the item being forecast; listing the factors that could affect the forecast; and assessing whether they have a positive or negative impact; making final forecast
psychographic segmentation
subjective mental or emotional attributes (personality), aspirations (lifestyle), or needs of prospective customers
total costs
sum of fixed and variable cost
cost plus
summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price
segments of one or mass customization
tailoring products or services to the tastes of individual customers on a high-volume scale
good
tangible attributes that a consumer's five senses can perceive
profit oriented
target profit; target return on sales; target return; target return on investment
decline of protectionism
tariff; quota
brand equity
the added value a brand name gives to a product beyond the functional benefits provided
methods
the approaches that can be used to collect data to solve all or part of a problem
inseparability
the consumer cannot distinguish the service provider from the service itself
product class
the entire product category or industry
data mining
the extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions
values
the ideas, beliefs, and attitudes about what is important that help guide the way you live
organizational synergy
the increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently
laggards
the last adopters, who distrust new products
bundle
the marketing of two or more products in a single package price
product manager
the person within an organization who is responsible for a product, a product line, or several distinct products that make up a group
value pricing
the practice of simultaneously increasing product and service benefits while maintaining or decreasing price
brand extension
the practice of using a current brand name to enter a different product class
currency exchange rate
the price of one country's currency expressed in terms of another country's currency
back translation
the process of translating material to a foreign language and then back to the original language
inventory
the quantity of goods that a firm has on hand
customary
the regular price for a product
analytics
the scientific process of transforming data into insight for making better decisions
sales forecast
the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts
cultural symbols
things that represent ideas or concepts in a specific culture
early adopters
those who adopt an innovation early in the diffusion process but after the innovators
SWOT & environmental scanning
used for stage 1: new product strategy development to assess strengths and weakness relative to the opportunities and threats
product form
variations of a product within the product class
transnational companies
view world as one market; emphasize & similarise (Walmart, Apple, Nike)
customs
what is considered normal and expected about the way people do things in a specific country
joint venture
when a foreign company and a local firm invest together to create a local business
geographic segmentation
where prospective customers live or work
expectations derived from
words of mouth; personal needs; past experiences; promotional activities
unit variable cost
VC/Quantity
pricing approach
demand oriented; cost oriented; profit oriented; competition oriented
actual experiences
determined by the way an organization delivers its service
gap analysis
differences between the consumer's expectations and actual experience
perceptual map
displays, in two or more dimensions, the position of products or brands in the consumer's mind
5 trends that have influenced the landscape of global marketing
economic protectionism by countries; economic integration among countries; global competition among global companies; presence of networked global marketspace; growing prevelance of economic espionage
international companies
engages in trade as extension of what they're doing in home country (Makeup comapnies)
barter
exchange goods without involving money
global competition
exists when firms originate, produce, and market their products and services worldwide
global market entry strategies
exporting; licensing; joint venture; direct investment
demand factors
factors that determine consumers' willingness and ability to pay for products and services
pricing constraints
factors that limit the range of prices a firm may set
questionnaire data
facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors
observational data
facts and figures obtained by watching, either mechanically or in person, how people actually behave
primary data
facts and figures that are newly collected for the project
secondary data
facts and figures that have already been recorded prior to the project at hand
target profit
firm sets an annual target of a specific dollar volume of profit
multinational companies
firms view countries as different & market them differently in other countries (Mr. Clean)
price
the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service
price as an indicator of value
the more expensive it is, the better it is
differentiation positioning
involves seeking a less-competitive, smaller market niche in which to locate a brand
one product and multiple market segments
W]when an organization produces only a single product or service and attempts to sell it to two or more market segments
direct investment
a domestic firm actually investing in and owning a foreign subsidiary or division
shopping products
items for which the consumer compares several alternatives on criteria such as price, quality, or style
unsought products
items that the consumer does not know about or knows about but does not initially want
specialty products
items that the consumer makes a special effort to search out and buy
convenience products
items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort
aspects of the product life cycle
length; shape; product class vs product form
deceptive pricing
price deals that mislead consumers
inelastic demand
1% decrease in price produces less than 1% increase in demand
elastic demand
1% decrease in price produces more than 1% increase in demand
mixed branding
a firm markets products under its own name and that of a reseller because the segment attracted to the reseller is different from its own market
pricing strategy (dumping)
a firm sells a product in a foreign country below its domestic price or below actual cost
decision
choice made from among available alternatives
surveys
collect data from subjects who respond to a series of questions about behaviors and opinions, often in the form of a questionnaire
break even analysis / break even point
FC/P-UVC
external data
Facts and figures available in locations outside a company
internal data
Facts and figures located inside the company
innovators
First adopters of new products
marketing reasons for new product failures
Insignificant point of difference; Incomplete market and product protocol before product development starts; Not satisfying customer needs on critical factors; Bad timing; No economical access to buyers; Poor product quality; Poor execution of the marketing mix: brand name, package, price, promotion, distribution; Too little market attractiveness
total revenue
P x Q
profit equation
Profit = Total revenue − Total cost; or Profit = (Unit price × Quantity sold) − (Fixed cost + Variable cost).
new product development process
SWOT & Environmental scanning; idea generation; internal & external screening; business analysis; development; market testing; commercialization
global brand
a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs
market modification
a company tries to find new customers, increase a product's use among existing customers, or create new use situations
multiproduct branding
a company uses one name for all its products in a product class
80/20 rule
a concept that suggests 80% of a firm's sales are obtained from 20% of its customers
price fixing
a conspiracy among firms to set prices for a product
product differentiation
a firm using different marketing mix actions, such as product features and advertising, to help consumers perceive the product as being different and better than competing products
market product grid
a framework to relate the market segments of potential buyers to products offered or potential marketing actions
communication adaptation
a global communication strategy of fully adapting advertising messages to local markets
demand curve
a graph that relates the quantity sold and price, showing the maximum number of units that will be sold at a given price
product line
a group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range
data warehouse
a place where databases are stored so that they are available when needed
loss leader
a product sold at a loss to attract customers
market segment
a relatively homogeneous group of customers who will respond to a marketing mix in a similar way
fashion fad
a short-lived fashion trend life
cannibalization
a situation that occurs when sales of a new product cut into sales of a firm's existing products
standard mark up
adding a fixed percentage to the cost of all items in a specific product class
expanding the 4Ps to 7Ps for Services
adding in people, physical environment, and process
market segmentation
aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action
degree of consumer learning
amount of learning effort consumers must exert to use the product
political-regulatory climate
analysis of countries political stability and trade regulations
brand name
any word, device (design, shape, sound, or color), or combination of these used to distinguish a seller's goods or services
branding
brand name; brand personality; brand equity
price plays 2 essential roles
capacity management, & affect perceptions
product adaption
changing a product in some way to make it more appropriate for a country's climate or consumer preferences
affect perceptions
changing the perception
Product repositioning
changing the place a product occupies in a consumer's mind relative to competitive products
product repositioning
changing the place a product occupies in a consumer's mind relative to competitive products
predatory pricing
charging a very low price for a product with the intent of driving competitors out of business or out of a market
price discrimination
charging different prices to different buyers for goods (Clayton Act amended by Robinson-Patman Act)
multiple products and multiple market segments
common in the automobile industry where auto makers produce different lines of cars, trucks, and SUV's...each targeted to a different market
packaging and labeling - benefits
communication, functional, perceptual
product invention
companies can invent totally new products designed to satisfy common needs across countries
Head-to-head positioning
competing directly with competitors on similar product attributes in the same target market
global consumers
consumer groups living in many countries or regions of the world who have similar needs or seek similar features and benefits from products or services
classifying services
consumer products; business products; convenience products; shopping products; specialty products; unsought products
3 other key factors that influence demand
consumer taste; price and availability of similar products; consumer income
continuous innovation
consumers don't need to learn new behaviors
advantages of different types of surveys
cost minimal; turnover time for results are quicker than normal ones
global environmental scan
currency exchange rate; cultural symbols; customs; back translation; values; political-regulatory climate
competition oriented
customary; above at or below market; loss leader
cloud environment
data storage; cloud computing capabilities
marketing research approach
define the problem; develop the research plan; collect relevant information; develop findings; take marketing actions
demographic segmentation
gender, race; age, income; birth era, occupation
general bases of segmentation
geographic; demographic; psychographic; behavioral
pricing objectives
goals that describe what a firm wants to achieve through pricing
shape
high learning; low learning; fashion, fad
challenges to market research
how can MR determine if consumers will buy a product they've never seen before; how can MR get consumers to answer questions they don't want to reveal; how can MR help people remember purchases
concepts
ideas that represent a class or category of objects, events, or activities
disadvantages of different types of surveys
in spam/junk; pop up blockers; complete multiple times
information technology
includes all of the computing resources that collect, store, and analyze data
idea generation vs idea evolution
individual interview, focus groups, fuzzy front end vs surveys
early majority
individuals who adopt a new product just prior to the average person
categories of product adopters
innovators; early adopters; early majority; late majority; laggards
4 I's
intangibility; inconsistency; inseparability; inventory
services
intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value
capacity management
integrating the service component of the marketing mix with efforts to influence consumer demand
types of companies in the global market
international; multinational; transnational
product life cycle
introduction; growth; maturity; decline
product modification
involves altering one or more of a product's characteristics, such as its quality, performance, or appearance, to increase the product's value to customers and increase sales
trend extrapolation
involves extending a pattern observed in past data into the future
multibranding
involves giving each product a distinct name
discontinuous innovation
involves making the consumer learn entirely new consumption patterns to use the product
low learning
little learning is required by the consumer and the benefits of purchase are readily understood
sales forecast techniques
lost horse; survey (buyers, sales force); trend extrapolation
odd - even
making prices .99
private branding
manufactures products but sells them under the brand name of a wholesaler or retailer
build to order
manufacturing a product only when there is an order from a customer
quotta
maximum amount of goods that are allowed to be imported/exported
dual adpatation
modifying both their products and promotion message
branding strategies
multiproduct branding; brand extension; multibranding; private branding; mixed branding
rise of economic integration
number of countries with economical goods forming translational trade groups or signed trade agreements European Union; NAFTA
behavioral segmentation
observable actions or attitudes by prospective customers
segmentation strategies
one product and multiple market segments; multiple products and multiple market segments; segments of one or mass customization
dynamically continuous innovation
only minor changes in behavior are required
deletion, harvesting
part of decline; dropping a product from company's line or retain the product but reduce marketing costs
trial
part of introduction; the initial purchase of a product by a consumer
value
perceived benefits/price
price elasticity of demand
percentage change in quantity demanded/ percentage change in price
product positioning
place a product occupies in consumers mind based on important attributes (head to head and differentiation)
price equation
price = list price - incentives and allowances + extra fees