Marketing Midterm

New Product Development

-Determines direction company will take -May rely on SWOT analysis or environmental scanning Analyze benefits and risks

business analysis

-Estimating costs ▪Achieve economies of scale ▪Offshore -Identifying price Estimating demand

idea screening

-Ideas are accepted or rejected -Idea-screen questions -Concept test

types of adopters

-Innovators -Early Adopters -Early Majority -Late Majority -Laggards

idea generation

-Internal -External ▪Outsource ▪Open innovation

test marketing

-Introduce to a geographically-limited market -Also test marketing strategy -Expensive and time-consuming -Reveal product to competition -Simulated test markets

new category entry

-Less risky than new-to-market products -Risk arises when product fails to differentiate from competition

product life cycle

-New-product development -Introduction stage -Growth stage -Maturity stage Decline stage

product line extension

-Product line -Customers may already feel loyal to the product -Manufacturing may be easier -Far less risky than new-to-the-market products or new-category entries

product development

-Products: prototype -Services: protocols, equipment, staffing -This stage is long and costly

product launch

-Purchase materials -Hire employees -Manufacture enough to fill distribution pipeline -Strategically place good in warehouses -Prepare internal systems -Train new employees -Time to market is speed which company launches product

revamped product

-Reformulations of current products -Advertise along with existing products to capitalize on existing network -Less risky than new-to-the-market products or new-category entries

new to market

-Smallest percent of new products -Need strong R&D and marketing -Disruptive technology -Service innovation ▪New types of service ▪Changes to the way a service is processed or delivered

NEW PRODUCT DEVELOPMENT

1.New-product strategy development 2.Idea generation 3.Idea screening 4.Business analysis 5.Product development 6.Test marketing Product launch

three basic strategies of target markets

1.Undifferentiated targeting: Major advantage is potential savings 2.Differentiated targeting: Firm can provide increased levels of satisfaction and generate more sales 3.Niche marketing: For those who have specialized needs and will pay higher prices to meet the needs

diffusion

The process by which a product is adopted and spread across adopters

Which of the following is most likely a low-involvement purchase?

a bottle of shampoo

Which of the following would be considered an internal source of idea generation?

a company's employees

GM wanted to know what features were used the most in their new cars, so they invited 10 people who owned GM cars to sit in a room with a moderator and answer questions. This is an example of

a focus group

Compare the following to determine the best example of a high-involvement product purchase.

a new car

Trevor went to the store to get a new pair of running shoes but the store was temporarily out of the brand he normally buys. What is the term for this situation?

a stockout

Read the following and select which one best represents a growing ethical concern in targeting certain market segments.

a.Abercrombie and Fitch targeting tweens with sexualized clothing

Read the following statements to select which one is accurate regarding the use of social media in market segmentation.

a.By segmenting the market by those who are active on social media, companies can connect with a larger and more diverse consumer base.

Which of the following is the best example of how one's personal value system influences his or her buying behavior?

a.Christy decided to buy an electric vehicle because she is concerned about the harmful effects of carbon dioxide emissions produced by gasoline fuels.

Which of the following scenarios would most likely require an extensive external search for information?

a.Dustin and Janelle are looking to buy their first home.

Read the following statements to select the choice that is not true of market segmentation.

a.Market segmentation identifies which products will be profitable and which ones are not worth pursuing.

Read the following statements and select the one that is not an advantage of a product-line extension.

a.The new product is certain to be accepted by the market.

To find out what scent consumers prefer for a new floor cleaner, the researcher conducts a focus group and exposes the participants to several scents, asking them which one they would buy. Select the type of research being conducted.

a.causal

Which of the following would be considered external secondary data for research on how to improve the sales of an existing product?

a.data from the Census Bureau website

The owner of Tools by Joe has hired a company to help him find out whether customers and potential customers would prefer to shop in his store or online. What type of research would this company be conducting?

a.descriptive

An auto insurance company segmented its market by both gender and age, and designed different marketing campaigns to appeal to both. In the end, both segments responded the same to the different marketing strategies, in part, because both segments are required to have auto insurance. This firm failed to understand the criteria of market segments needing to be

a.differentiable.

Rico's firm manufactures homemade salsa. His product is sold around the country, but he adds extra jalapenos to his product sold in Texas, New Mexico, and Arizona because those customers prefer the extra heat and spice. Rico also markets the product differently based on the region of the country where it is sold. This represents what type of targeting strategy?

a.differentiated

Nora is in the market for a new HD television. She has spent quite a bit of time gathering information and thinking about the purchase. She has asked her friends for opinions about the models they own and is happy that there are a lot of models to choose from. Nora is most likely what type of adopter?

a.early majority

Read the following list of tasks and select the one that does not take place during the product launch stage.

a.make sure the product can be manufactured at a cost low enough to generate profits

It has been Kiona's dream to open a bakery, and while she has experience in making all types of baked goods, she always gets rave reviews for her hand-decorated cupcakes. So, rather than open a bakery that offers a wide variety of baked goods, Kiona's has decided to open a specialty cupcake shop to cater to that market only. This is an example of

a.market segmentation.

John works for a consumer products company. His job is to use information to identify and define marketing opportunities, evaluate marketing actions, and monitor marketing performance. John's work involves

a.marketing research.

Jayla and Stuart are trained researchers. They visit restaurants posing as customers in order to assess the level of service, quality of food, and competence of the wait staff. Jayla and Stuart are called

a.mystery shoppers.

Dell doesn't currently offer an e-reader in its product line. However, if the company decided to enter the market by producing an e-reader of its own, it would be classified as what type of product?

a.new category entry

The competitive analysis tool that creates a visual picture of where products are located in consumers' minds is called a

a.perceptual map.

Both Sam's Club and Costco have positioned themselves as providing a variety of items to shoppers at prices lower than retail stores. These stores have positioned themselves based on

a.price/quality relationship.

In order to develop a plan for marketing his new vitamin water, Rashid decides to conduct focus groups with members of fitness centers. This type of research is considered to be

a.primary data.

When Fisher-Price comes up with an idea for a new toy, it needs to ensure that the children who play with the toy will not choke on any of its parts and that the toy in general will not be a hazard to the children who will be using it. In what stage of the new-product development process will these safety checks occur?

a.product development

The Ford Motor Company produces the Fiesta, Focus, and Fusion. As a group, these cars represent a

a.product line.

Udi's Gluten Free sells bread, bagels, cookies, pizza crust, and other products that are gluten free. The combination of all the products that Udi's Gluten Free sells is referred to as its

a.product mix.

Stores like Cabela's, REI, and Bass Pro Shops that cater to outdoor enthusiasts' most likely use what type of segmentation strategy?

a.psychographic segmentation

Today's health conscious society has caused cereal manufacturers to rethink their products. Now many cereals such as Frosted Flakes are being marketed as being healthier because they are made with whole grains and have less sugar. This is an example of

a.repositioning.

Carson has opened up a new sports bar/restaurant in town. He has determined that his market segments are (1) students from the nearby college campus, (2) families with small children, and (3) young adult males. Carson now has to determine which of these segments will provide him with the best opportunity to maximize sales. The process of doing this is referred to as

a.targeting.

The marketers at Pantene included a trial size of their new shampoo in the September issue of InStyle Magazine. National sales increased dramatically within a few weeks, an example of this product's

a.trialability.

Clif Bar & Company, makers of energy and nutrition bars, expanded their product line to include Clif Kid Z Bars. These bars are specifically designed to provide the right kind of nutrition for growing children. For this product, Clif Bar & Company is segmenting the market based on

age

Advantages of Quantitative

analysis of data is faster, methods can be conducted quickly

Which of the following accurately represents the steps in the consumer adoption process?

awareness, interest, evaluation, trial, and adoption

Which of the following is not a way to categorize new products?

brand development

sequential

can track progress more easily, more control over complex products

Demographic segmentation divides markets by

characteristics such as age, gender, and income.

The second step in deciding how best to position a product is to

clearly define the product's competitive advantage.

Cognitive dissonance occurs during which stage of the consumer decision-making process?

cognitive dissonance

Which of the following is not one of the actual stages in the new-product development process?

concept testing

One concern about using social media, like Twitter, to compile marketing research data is

consumer privacy

The extent to which a country is connected to other cultures is referred to as

cosmopolitanism

The fact that you see a Starbucks on practically every corner would indicate that Starbucks is most likely geographically segmenting based on

customer convenience

Quentyn is a realtor selling high-end homes priced over $750,000. Before showing a property to prospective clients, Quentyn makes sure they are pre-qualified for a home loan commensurate with the price of the house. This pre-qualification is based mainly on the client's income, which is what type of segmentation variable?

demographic

Which data collection type uses techniques from the anthropology field to study consumer behavior?

ethnographic research

According to your text, which is one of the greatest influences on consumer behavior?

family members

Contractors that advertise the ability to turn home attics or the space above a garage into living areas are most likely targeting their market based on the demographic variable of

family size

primary data examples

focus groups, surveys, observations, personal interviews

maturity

full line of products, maintain distribution, price at or below competitors

What NPD process stage would organizations use social media to evaluate potential new products?

idea screening

As noted in your text, what tool is very useful for marketing low-involvement products?

in-store promotion

Franco is considered to be tech savvy by his friends. He is unafraid to take risks when it comes to trying new products and is always the first in his group to get the latest gizmo. What type of product adopter is Franco?

innovator

College Prep Tutors is a business that tutors high-school students who are preparing to take the ACT test as part of their college entrance requirements. Because it possesses a unique offering that is desirable to a specific market, College Prep Tutors would most likely use what type of target market strategy?

niche

Individuals who exert an unequal amount of influence on the decisions of others because they are considered knowledgeable about particular products are called

opinion leaders

advantages of primary data

pertains to a firms research

When a company needs to determine how much product to hold in inventory at various points in the distribution network, which of the fours Ps of marketing is being considered?

place

Statistical techniques and algorithms based on past behavior patterns to predict future behavior is

predictive modeling.

growth

price begins to fall as competition arrives, variety of models

INTRODUCTION

price is very high!

Which marketing research process step includes setting specific measurable research objectives?

problem definition

The first stage in the consumer decision-making process is

problem recognition.

concurrent

problems may be recognized earlier in the process

Which stage of the NPD process is usually the most expensive for new products?

product launch

A group of related products marketed by the same firm is its

product line

A mock-up of a good with the materials the firm expects to use in the final product is called a

prototype

Psychographic segmentation refers to the science of segmenting markets based on

psychology, demographics and personality.

A generic term used to describe a measurement device such as survey, test, or questionnaire is:

research instrument.

The U.S. Army slogan Be All You Can Be appeals to which level of Maslow's hierarchy of needs?

self-actualization

In marketing terms, the care you receive when you visit your family doctor is an example of

service

_______ divides people into groups based on opinion, the interests and activities they pursue.

Lifestyle segmentation.

Bart wanted to know how often freshman males at his school drank alcohol, but he couldn't survey every one of them. Bart decided that in order to give all freshman males an equal chance of being selected to participate in his mini-study, he would visit the dorms at dinnertime and ask them to choose numbers out of a hat. The ones with the number 5 were given a quick three-question survey. Bart is demonstrating

simple random sampling

decision support system (DSS)

software that enables timely access and use of the information the company collects.

Which of the following is a form of quantitative research that can be used to measure consumer attitudes, intended behavior, and the motivations behind behavior?

surveys

The group of customers that an organization decided to direct its marketing efforts is

target market

Which NPD process stage would a firm try the marketing strategy related to the new product?

test marketing

Which of the following is the focal point of all marketing efforts?

the buying decision

Compare the following definitions and select the one that accurately describes consumer behavior.

the study of how individuals make decisions about how to select, secure, use, and dispose of products to satisfy needs

Effective Market Segmentation

§Substantial: large enough for firm to make a profit §Measurable: size and purchasing power clearly identified §Differentiable: must be able to separate those in and out §Accessible: be able to reach and serve Actionable: able to attract certain segments

The selling of goods and services to end-user customers is referred to as

B2C

Which of the following statements regarding the concept of learning is not true?

Marketers have no effect on consumer learning

In consumer decision-making process, searches for info fall into which two main categories?

internal and external

At what stage of the product life cycle is price usually the highest?

introduction

Machine learning

is a discipline combining science, statistics, and computer coding to make predictions based on patterns discovered in data. Machine learning leverages the massive power and objectivity of computers to see things in Big Data that slow or biased humans often cannot.

Competitive intelligence

is the systematic gathering of data about strategies that direct and indirect competitors are pursuing in terms of new-product development and the marketing mix.

Walter does not like change. He thinks the cell phone he currently owns is just fine even though it doesn't have all the features of new phones on the market. Walter hopes that he doesn't lose this phone because the company doesn't make this style anymore and he doesn't want to get anything different. What type of adopter is Walter?

laggard

Which adopters should marketers spend the least amount of time and effort convincing to buy?

laggards

Which product adopter relies on others for information and buys a product because their friends did?

late majority

secondary data advantage

less expensive!

A person's typical way of life as shown by activities, interests, & opinions is referred to as

lifestyle

secondary data examples

literature reviews, company records, MIS

During which stage of the product life cycle do customer service and repairs begin to take on significance as a way to differentiate a firm's products?

maturity

TisSian wants to join a new health club. Her roommate belongs to a club that she heard about on the radio. She decides to use her roommate's free guest passes to try out the club to see if it meets her needs. What stage of the consumer adoption process does this represent?

trial

Advantages of Qualitative Research

uncovers details of why a behavior is happening, can be a good way to start research

The potential savings in developing and marketing the product is the major advantage of

undifferentiated

Which of the following is a behavioral segmentation variable?

usage rate

The largest change in online research over the last decade has come from

user-generated content associated with social media.

Predictive modeling

uses statistical techniques and algorithms based on patterns of past behavior to predict future unknown events, such as future buying behavior. 6 For example, a statistical model can be constructed based on historical records to calculate the impact of planned price changes on sales and profits.