marketing exam 2

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It can differentiate along the lines of product, services, channels, people, or image.

In what specific ways can a company differentiate itself or its market offer?

Organization marketing

consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization.

people differentiation

hiring and training better people than their competitors do

product attribute

For example, Whirlpool can position its major home appliance products on attributes such as quality, selection, style, and innovative features.

Greater service value

More effective and efficient customer value creation, engagement, and service delivery, which results in . . .

operating supplies (lubricants, coal, paper, pencils) and repair and maintenance items (paint, nails, brooms).

Supplies include

Customer value-based pricing

Which of the following refers to setting prices based on buyers' perception of value rather than on the seller's cost?

augmented product

around the core benefit and actual product by offering additional consumer services and benefits

target market

consists of a set of buyers who share common needs or characteristics that a company decides to serve

Person marketing

consists of activities undertaken to create, maintain, or change attitudes or behavior toward particular people.

style

is a basic and distinctive mode of expression

Design

is a larger concept than style.

Growth

is a period of rapid market acceptance and increasing profits.

quantity discount

is a price reduction to buyers who buy large volumes.

Market-penetration pricing

A company has set a low price on a new product it introduced. It wants to maximize its market share and attract a large number of buyers quickly. Which new product pricing strategy should the company use?

Customer service

A company's offer usually includes some support services, which can be a minor part or a major part of the total offering.

Perceptual positioning map

A manufacturer of half-ton pickup trucks creates a positioning map for the U.S. half-ton pickup market. The position of each circle on the map indicates the brand's perceived positioning on two dimensions: price and orientation (economy versus performance). The size of each circle indicates the brand's relative market share. This is an example of a _____.

Convenience products

Examples include laundry detergent, candy, magazines, and fast food.

Product mix width

For example, Colgate markets a fairly wide product mix, consisting of dozens of brands that constitute the "Colgate World of Care"—products that "every day, people like you trust to care for themselves and the ones they love."

Co-branding

For example, Google partnered with Oreo to name a latest version of its Android operating system Android Oreo, creating a fun association with great buzz value for both brands.

brand extension

For example, Google-owned Nest—which began as a maker of stylish, connected, learning thermostats that can be controlled remotely by phone—has extended its line with a host of smart and stylish smart-home products, including a smoke and carbon monoxide alarm, home monitoring cameras, a home security alarm system, and a video doorbell that lets you know who's calling.

optional-product pricing

For example, a car buyer may choose to order a navigation system and premium entertainment system.

by-product pricing

For example, cheese makers in Wisconsin have discovered a use for their leftover brine, a salt solution used in the cheese-making process. Instead of paying to have it disposed of, they now sell it to local city and county highway departments, which use it in conjunction with salt to melt icy roads.

product bundle pricing

For example, fast-food restaurants bundle a burger, fries, and a soft drink at a "combo" price.

Line extensions

For example, over the years, KFC has extended its "finger lickin' good" chicken lineup well beyond original recipe, bone-in Kentucky fried chicken. It now offers grilled chicken, boneless fried chicken, chicken tenders,

Service intangibility

For example, people undergoing cosmetic surgery cannot see the result before the purchase.

Service variability

For example, some hotels—say, Marriott—have reputations for providing better service than others. Still, within a given Marriott hotel, one registration-counter employee may be cheerful and efficient, whereas another standing just a few feet away may be grumpy and slow.

style

For example, styles appear in homes (colonial, ranch, transitional), clothing (formal, casual), and art (realist, surrealist, abstract).

fashion

For example, the more formal "business attire" look of corporate dress of the 1980s and 1990s gave way to the "business casual" look of the 2000s and 2010s.

courts, employment services, hospitals, military services, police and fire departments, the postal service, and schools.

Governments offer services through

product development

Here, R&D or engineering develops the product concept into a physical product.

Service inseparability

If a service employee provides the service, then the employee becomes a part of the service. And customers don't just buy and use a service; they play an active role in its delivery.

inelastic

If demand hardly changes with a small change in price, we say demand is

good-value pricing

In many cases, this has involved introducing less-expensive versions of established brand name products or new lower-price lines.

buildings (factories, offices) and fixed equipment (generators, drill presses, large computer systems, elevators

Installations consist of major purchases such as

product attributes, desirable benefit, strong beliefs and value

Marketers need to position their brands clearly in target customers' minds.

Usage rate

Markets can also be segmented into light, medium, and heavy product users

User status

Markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users of a product

Satisfied and productive service employees

More satisfied, loyal, and hardworking employees, which results in . . .

Geographic

Munoz Specialty Foods groups its customers by regions in the United States, such as Midwest, Northeast, and Southwest. For each region, Munoz creates a different set of advertisements and promotions. On which of the following segmentation variables does the firm divide its market?

Value-added pricing

New premium movie theaters offer features such as online reserved seating, high-backed leather executive chairs with armrests and footrests, the latest in digital sound, super-wide screens, and other amenities for which they charge a higher price. This is an example of which type of pricing?

Product quality

Quality affects product or service performance; thus, it is closely linked to customer value and satisfaction.

value-added pricing

Rather than cutting prices to match competitors, they add quality, services, and value-added features to differentiate their offers and thus support their higher prices.

market-penetration pricing

Rather than setting a high initial price to skim off small but profitable market segments, some companies use, Companies set a low initial price to penetrate the market quickly and deeply—to attract a large number of buyers quickly and win a large market share.

An indicator of quality

Roshika has been invited to a fancy dinner party and wanted to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as____.

Good-value pricing

Sadie's restaurant has listened to its customers over the years and is now able to offer the right combination of quality and good services at a fair price. Which pricing strategy is Sadie's using?

Satisfied and loyal customers.

Satisfied customers who remain loyal, make repeat purchases, and refer other customers, which results in . .

by having more able and reliable customer-contact people, developing a superior physical environment in which the service product is delivered, or designing a superior delivery process.

Service companies can differentiate their service delivery

They want to increase their service differentiation, service quality, and service productivity.

Service companies face three major marketing tasks

product lines upward

Sometimes, companies stretch upward to add prestige to their current products or to reap higher margins

marketing strategy statement

The first part describes the target market; the planned value proposition; and the sales, market-share, and profit goals for the first few years. The second part of the marketing strategy statement outlines the product's planned price, distribution, and marketing budget for the first year: The third part of the marketing strategy statement describes the planned long-run sales, profit goals, and marketing mix strategy:

income segmentation

The marketers of products and services such as automobiles, clothing, cosmetics, financial services, and travel have long used

price and orientation

The position of each circle on the map indicates the brand's perceived positioning on two dimensions:

demand curve

The relationship between the price charged and the resulting demand level is shown in the

Price discrimination

The robinson-patman act seeks to ensure that sellers offer the same price terms to customers at a given level of trade to prevent _____.

actual product.

They need to develop product and service features, a design, a quality level, a brand name, and packaging.

positioning statement

To (target segment and need) our (brand) is (concept) that (point of difference).

Understanding its consumers, markets, and competitors, and develop products that deliver superior value to customers

To create successful new products, a company must _____?

team-based new product development approach

Under this approach, company departments work closely together in cross-functional teams, overlapping the steps in the product development process to save time and increase effectiveness.

freight-absorption pricing

Using this strategy, the seller absorbs all or part of the actual freight charges to get the desired business. The seller might reason that if it can get more business, its average costs will decrease and more than compensate for its extra freight cost. Freight-absorption pricing is used for market penetration and to hold on to increasingly competitive markets.

differentiation (what makes the brand stand out), relevance (how consumers feel it meets their needs), knowledge (how much consumers know about the brand), and esteem (how highly consumers regard and respect the brand).

Valuator measures brand strength along four consumer perception dimensions

Promotional

When a retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store, it is practicing ______ pricing.

What is the buyer really buying?

When designing products, marketers must first define the core, problem-solving benefits, services, or experiences that consumers seek.

Unique selling proposition

When marketers aggressively promote only one benefit to the target market, the benefit promoted is known as the product or service's _____.

concentrated marketing

When the firm's resources are limited

Positioning

Which of the following describes the process of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers?

Innovation can be very expensive and very risky

Which of the following statements about new products development strategy is correct?

Modified and improved products are considered new

Which of the following statements concerning new products is correct?

Winning large market share

______ is one major objective associated with a market-penetration pricing strategy.

crowdsourcing

a company invites broad communities of people—customers, employees, independent scientists and researchers, and even the public at large—into the innovation process.

undifferentiated marketing (or mass marketing) strategy

a firm might decide to ignore market segment differences and target the whole market with one offer.'

time-based pricing

a firm varies its price by the season, the month, the day, and even the hour. For example, movie theaters charge matinee pricing during the daytime, and resorts give weekend and seasonal discounts.

discount

a price reduction to buyers who pay their bills promptly.

PLC concept can describe

a product class (gasoline-powered automobiles), a product form (SUVs), or a brand (the Ford Escape

cost-plus pricing (or markup pricing

adding a standard markup to the cost of the product

dynamic pricing

adjusting prices continually to meet the characteristics and needs of individual customers and situations.

business organizations offer services

airlines, banks, hotels, insurance companies, consulting firms, medical and legal practices, entertainment and telecommunications companies, real estate firms, retailers, and others.

private brand

also called a store brand

Services

are a form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

Allowances

are another type of reduction from the list price.

Convenience products

are consumer products and services that customers usually buy frequently, immediately, and with minimal comparison and buying effort.

Specialty products

are consumer products and services with unique characteristics or brand identifications for which a significant group of buyers is willing to make a special purchase effort

Unsought products

are consumer products that a consumer either does not know about or knows about but does not normally consider buying.

Fixed costs

are costs that do not vary with production or sales level.

Capital item

are industrial products that aid in the buyer's production or operations, including installations and accessory equipment.

Shopping products

are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style.

Consumer products

are products and services bought by final consumers for personal consumption

Fads

are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity

Total cost

are the sum of the fixed and variable costs for any given level of production

Industrial products

are those products purchased for further processing or for use in conducting a business.

Offering the same for less

can be a powerful value proposition—everyone likes a good deal.

Market targeting (or targeting)

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

social marketing

consists of using traditional business marketing concepts and tools to encourage behaviors that will create individual and societal well-being.

marketing strategy development

designing an initial marketing strategy for introducing this car to the market.

customer-segment pricing

different customers pay different prices for the same product or service. For example, museums, movie theaters, and retail stores may charge lower prices for students, people in the military, and senior citizens.

Behavioral segmentation

divides buyers into segments based on their knowledge, attitudes, uses, or responses to 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.

The Consumer Product Safety Act of 1972

established the Consumer Product Safety Commission, which has the authority to ban or seize potentially harmful products and set severe penalties for violation of the law

Zone pricing

falls between FOB-origin pricing and uniform-delivered pricing. The company sets up two or more zones. All customers within a given zone pay a single total price; the more distant the zone, the higher the price

channel differentiation

gain competitive advantage through the way they design their channel's coverage, expertise, and performance

geographic location

grouping countries by regions such as Western Europe, the Pacific Rim, South Asia, or Africa

Safety legislation

has been passed to regulate fabrics, chemical substances, automobiles, toys, and drugs and poisons.

Gender segmentation

has long been used in marketing clothing, cosmetics, toiletries, toys, and magazines.

Product classes

have the longest life cycles; the sales of many product classes stay in the mature stage for a long time.

customer equity

he value of customer relationships that the brand creates.

The Federal Trade Commission Act of 1914

held that false, misleading, or deceptive labels or packages constitute unfair competition.

value proposition

how it will create differentiated value for targeted segments and what positions it wants to occupy in those segments.

price elasticity

how responsive demand will be to a change in price.

modifying the marketing mix

improving sales by changing one or more marketing mix elements.

Consumer products

include convenience products, shopping products, specialty products, and unsought products.

Business services

include maintenance and repair services (window cleaning, computer repair) and business advisory services (legal, management consulting, advertising).

Materials and parts

include raw materials as well as manufactured materials and parts.

Micromarketing

includes local marketing and individual marketing.

concentrated marketing (or niche marketing) strategy

instead of going after a small share of a large market, a firm goes after a large share of one or a few smaller segments or niches.

Product line filling

involves adding more items within the present range of the line

Market segmentation

involves dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes.

More-for-more positioning

involves providing the most upscale product or service and charging a higher price to cover the higher costs.

Competition-based pricing

involves setting prices based on competitors' strategies, costs, prices, and market offerings.

Cost-based pricing

involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for the company's effort and risk.

Local marketing

involves tailoring brands and promotions to the needs and wants of local customers.

fashion

is a currently accepted or popular style in a given field

product concept

is a detailed version of the idea stated in meaningful consumer terms.

product line

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

Introduction

is a period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses

Maturity

is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition.

seasonal discount

is a price reduction to buyers who buy merchandise or services out of season.

Total quality management (TQM)

is an approach in which all the company's people are involved in constantly improving the quality of products, services, and business processes.

product idea

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

Undifferentiated marketing

is more suited for uniform products, such as grapefruit or steel

Brand equity

is the differential effect that knowing the brand name has on customer response to the product and its marketing.

Uniform-delivered pricing

is the opposite of FOB pricing. Here, the company charges the same price plus freight to all customers, regardless of their location.

Micromarketing

is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and local customer segments

Mass customization

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

Brand value

is the total financial value of a brand.

product position

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

product image

is the way consumers perceive an actual or potential product.

Unsought products

life insurance, preplanned funeral services, and blood donations to the Red Cross.

Service inseparability

means that services cannot be separated from their providers, whether the providers are people or machines.

Service perishability

means that services cannot be stored for later sale or use.

Value-based pricing

means that the marketer cannot design a product and marketing program and then set the price.

Service variability

means that the quality of services depends on who provides them as well as when, where, and how they are provided.

Internal marketing

means that the service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction.

Product line stretching

occurs when a company lengthens its product line beyond its current range.

good-value pricing

offering the right combination of quality and good service at a fair price

Multibranding

offers a way to establish different features that appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share.

sequential product development approach

one company department works individually to complete its stage of the process before passing the new product along to the next department and stage.

reference prices

prices that buyers carry in their minds and refer to when looking at a given product.

optional-product pricing

pricing optional or accessory products along with the main product.

Benefit segmentation

requires finding the major benefits people look for in a product class, the kinds of people who look for each benefit, and the major brands that deliver each benefit.

The Nutritional Labeling and Educational Act of 1990

requires sellers to provide detailed nutritional information on food products, and recent sweeping actions by the Food and Drug Administration (FDA) regulate the use of health-related terms such as low fat, light, high fiber, and organic.

target costing

reverses the usual process of first designing a new product, determining its cost, and then asking, "Can we sell it for that?" Instead, it starts with an ideal selling price based on customer value considerations and then targets costs that will ensure that the price is met

The Robinson-Patman Act

seeks to prevent unfair price discrimination by ensuring that sellers offer the same price terms to customers at a given level of trade.

psychological pricing

sellers consider the psychology of prices, not simply the economics. For example, consumers usually perceive higher-priced products as having higher quality.

predatory pricing

selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business.

Product forms

tend to have the standard PLC shape, such as dial telephones, VHS tapes, and film cameras passed through a regular history of introduction, rapid growth, maturity, and decline. The PLC conc

perceptual positioning maps

that show consumer perceptions of their brands versus those of competing products on important buying dimension

segmented pricing

the company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs.

modifying the market

the company tries to increase consumption by finding new users and new market segments for its brands

value proposition

the full mix of benefits on which a brand is differentiated and positioned.

pure competition

the market consists of many buyers and sellers trading in a uniform commodity, such as wheat, copper, or financial securities. No single buyer or seller has much effect on the going market price., marketing research, product development, pricing, advertising, and sales promotion play little or no role. Thus, sellers in these markets do not spend much time on marketing strategy.

basing-point pricing

the seller selects a given city as a "basing point" and charges all customers the freight cost from that city to the customer location, regardless of the city from which the goods are actually shipped.

test marketing

the stage at which the product and its proposed marketing program are tested in realistic market settings.

idea generation

the systematic search for new product ideas.

FOB-origin pricing

this practice means that the goods are placed free on board (hence, FOB) a carrier.

return-on-quality approach

viewing quality as an investment and holding quality efforts accountable for bottom-line results.

new products

we mean original products, product improvements, product modifications, and new brands that the firm develops through its own product development.

service profit chain

which links service firm profits with employee and customer satisfaction

Fair Packaging and Labeling Act of 1966

which set mandatory labeling requirements, encouraged voluntary industry packaging standards, and allowed federal agencies to set packaging regulations in specific industries.

Internal service quality

Superior employee selection and training, a quality work environment, and strong support for those dealing with customers, which results in . . .

materials and parts, capital items, and supplies and services

The three groups of industrial products and services are

Behavioral segmentation

Which of the following describes the process of dividing markets into groups based on consumers' knowledge, attitudes, uses, or responses?

Product line depth

refers to the number of versions offered of each product in the line.

R-W-W

("real, win, worth doing")

It can introduce line extensions, brand extensions, multibrands, or new brands.

A company has four choices when it comes to developing brands

intangibility, inseparability, variability, and perishability

A company must consider four special service characteristics when designing marketing programs:

Services differentiation

Amazon is now promising same-day pick-up of goods as well as local secure pick-up points. What point of differentiation is this?

Fad

An example is the fidget spinner—the small, three-pronged ball-bearing device that you flick and spin to relieve stress or just because it's fun to do.

Affordable

Buyers can afford to pay for the difference.

Occasion segmentation

Buyers can be grouped according to occasions when they get the idea to buy, actually make their purchases, or use the purchased items

differentiated marketing (or segmented marketing) strategy

By offering product and marketing variations to segments, companies hope for higher sales and a stronger position within each market segment.

Product mix length

Colgate carries several brands within each line.

distributors and suppliers can contribute ideas.

Companies can also obtain good new product ideas from any of a number of external sources.

image differentiation

Even when competing offers look the same, buyers may perceive a difference based on company or brand

Shopping products

Examples include furniture, clothing, major appliances, and hotel services

Demographic

Heeltoe, a boutique that caters to the footwear needs of women, manufactures two different lines of footwear based on the purchasing power of its customers. One product line caters to the needs of affluent, middle-aged women, and the other line targets younger professionals and homemakers. Heeltoe most likely segments the consumer market based on _____ variables.

component materials (iron, yarn, cement, wires) and component parts (small motors, tires, castings).

Manufactured materials and parts consist of

market-skimming pricing (or price skimming)

Many companies that invent new products set high initial prices to skim revenues layer by layer from the market. Apple frequently uses this strategy,

Healthy service profits and growth

Superior service firm performance.

Profitable

The company can introduce the difference profitably

Important

The difference delivers a highly valued benefit to target buyers.

Communicable

The difference is communicable and visible to buyers

Superior.

The difference is superior to other ways that customers might obtain the same benefit

identifying a set of differentiating competitive advantages on which to build a position, choosing the right competitive advantages, and selecting an overall positioning strategy.

The differentiation and positioning task consists of three steps

Product line depth

Then each variety comes in its own special forms and formulations. For example, you can buy Colgate Total in regular, clean mint, advanced whitening, deep clean, total daily repair, 2in1 liquid gel, or any of several other versions.

quality, features, and style and design

These benefits are communicated and delivered by product attributes such as

collect, review, evaluate, and manage new product ideas.

a company can install an innovation management system to

product

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

Product development

begins when the company finds and develops a new product idea

product differentiation

brands can be differentiated on features, performance, or style and design

Geographic segmentation

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

Concept testing

calls for testing new product concepts with groups of target consumers

Cultural factors

can also be used, grouping markets according to common languages, religions, values and attitudes, customs, and behavioral patterns.

product mix (or product portfolio)

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

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.

Psychographic segmentation

divides buyers into different segments based on lifestyle or personality characteristics.

Interactive marketing

means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter.

Service intangibility

means that services cannot be seen, tasted, felt, heard, or smelled before they are bought.

Product mix length

refers to the total number of items a company carries within its product lines.

product bundle pricing

sellers often combine several products and offer the bundle at a reduced price.

monopolistic competition

the market consists of many buyers and sellers trading over a range of prices rather than a single market price. A range of prices occurs because sellers can differentiate their offers to buyers. Because there are many competitors, each firm is less affected by competitors' pricing strategies than in oligopolistic markets. Sellers try to develop differentiated offers for different customer segments and, in addition to price, freely use branding, advertising, and personal selling to set their offers apart

product line length

the number of items in the product line

functional discount (trade discount)

to trade-channel members who perform certain functions, such as selling, storing, and record keeping

Customer value-based pricing

uses buyers' perceptions of value as the key to pricing.

Variable costs

vary directly with the level of production

width, length, depth, and consistency.

A company's product mix has four important dimensions

fixed-price policy

setting one price for all buyers—is a relatively modern idea that arose with the development of large-scale retailing at the end of the nineteenth century.

political and legal factors

such as the type and stability of government, receptivity to foreign firms, monetary regulations, and amount of bureaucracy.

by-product pricing

the company seeks a market for these by-products to help offset the costs of disposing of them and help make the price of the main product more competitive.

idea screening

which helps spot good ideas and drop poor ones as soon as possible.

Specialty products

Examples include specific brands of cars, high-priced photography equipment, designer clothes, gourmet foods, and the services of medical or legal specialists.

captive-product pricing

Examples of captive products are razor blade cartridges, video games, printer cartridges, single-serve coffee pods, and e-books. Producers of the main products (razors, video-game consoles, printers, single-cup coffee brewing systems, and tablet computers) often price them low and set high markups on the supplies.

Location-based pricing

When a college or university charges more for out-of-state students, it is practicing ____.

Spend a lot of money on product improvements, promotion, and distribution

Which of the following would be an appropriate strategy during the growth stage of the product life cycle?

Maturity

Which stage of the PLC is characterized by peak sales, low costs per customer, high profits, mainstream adopters, and a stable number of competitors that are beginning to decline?

Maturity

Which stage of the product life cycle normally lasts longer than the other and poses great challenges to marketing management?

product development

__________ is the step of the new product development process during which physical product is first developed

location-based pricing

a company charges different prices for different locations, even though the cost of offering each location is the same. For instance, state universities charge higher tuition for out-of-state students, and theaters vary their seat prices because of audience preferences for certain locations.

acquisition

by buying a whole company, a patent, or a license to produce someone else's product.

modifying the product

changing characteristics such as quality, features, style, packaging, or technology platforms to retain current users or attract new ones.

promotional pricing

companies will temporarily price their products below list price—and sometimes even below cost—to create buying excitement and urgency

Raw materials

consist of farm products (wheat, cotton, livestock, fruits, vegetables) and natural products (fish, lumber, crude petroleum, iron ore).

product form pricing

different versions of the product are priced differently but not according to differences in their costs. New York to London might cost $1,100, whereas a business-class seat on the same flight might cost $6,500 or more.

Customer-centered new product development

focuses on finding new ways to solve customer problems and create more customer-satisfying experiences.

conformance quality

freedom from defects and consistency in delivering a targeted level of performance

commercialization

introducing the new product into the market—it will face high costs.

Business analysis

involves a review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company's objectives.

Place marketing

involves activities undertaken to create, maintain, or change attitudes or behavior toward particular places.

Differentiation

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

brand

is a name, term, sign, symbol, or design or a combination of these that identifies the maker or seller of a product or service.

hyperlocal social marketing

location-based targeting to consumers in local communities or neighborhoods using digital and social media.

product line pricing

management must determine the price steps to set between the various products in a line

national brand

manufacturer's brand

A fad

n the early 1970s, Gary Dahl sold Pet Rocks. The product had a short, temporary period of unusually high sales driven by consumer enthusiasm and immediate product popularity, but then sales declined very quickly. The PLC sales pattern for Pet Rocks is known as?

controlled test markets

new products and tactics are tested among controlled panels of shoppers and stores.

Line extensions

occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category.

Deceptive pricing

occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers.

Co-branding

occurs when two established brand names of different companies are used on the same product.

age and life-cycle segmentation

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

product life cycle (PLC)

product development, introduction, growth, maturity, decline

consistency of the product mix

refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way

Product mix width

refers to the number of different product lines the company carries.

simulated test markets,

researchers measure consumer responses to new products and marketing tactics in laboratory stores or simulated online shopping environments.

through symbols and branding.

Finally, service companies also can work on differentiating their image

elastic

If demand changes greatly, we say the demand is

target costing

Many firms support such price-positioning strategies with a technique called

differentiated marketing (or segmented marketing) strategy

a firm decides to target several market segments and designs separate offers for each

brand extension

extends a current brand name to new or modified products in a new category

Decline

is the period when sales fall off and profits dro

intermarket segmentation (also called cross-market segmentation)

marketers form segments of consumers who have similar needs and buying behaviors even though they are located in different countries.

The Federal Food, Drug, and Cosmetic Ac

protects consumers from unsafe and adulterated food, drugs, and cosmetics

Labels and logos

range from simple tags attached to products to complex graphics that are part of the packaging

Style

simply describes the appearance of a product

concentrated marketing (or niche marketing) strategy

t can market more effectively by fine-tuning its products, prices, and programs to the needs of carefully defined segments. It can also market more efficiently, targeting its products or services, channels, and communications programs toward only consumers that it can serve best and most profitably.

individual marketing

tailoring products and marketing programs to the needs and preferences of individual customers.

oligopolistic competition

the market consists of only a few large sellers. For example, only a handful of providers—Comcast, Spectrum, AT&T, and Dish Network—control a lion's share of the cable/satellite television market. Because there are few sellers, each seller is alert and responsive to competitors' pricing strategies and marketing moves. In the battle for subscribers, price becomes a major competitive tool. For example, to woo customers away from competitors, they offers special discounts, free equipment upgrades, and lock-in prices

pure monopoly

the market is dominated by one seller. The seller may be a government monopoly (the U.S. Postal Service), a private regulated monopoly (a power company), or a private unregulated monopoly (De Beers and diamonds). Pricing is handled differently in each case.

performance quality

the product's ability to perform its functions.

economic factors

world markets can also be segmented based on

important, distinctive, superior, communicable, preemptive, affordable, profitable

A difference is worth establishing to the extent that it satisfies the following criteria

-Loyalty status

A market can also be segmented by consumer loyalty

captive-product pricing

Companies that make products that must be used along with a main product are using

Preemptive

Competitors cannot easily copy the difference

Distinctive

Competitors do not offer the difference, or the company can offer it in a more distinctive way

Dynamic pricing

Continually adjusting prices to meet the characteristics and needs of individual customers and situations is known as _____.

Idea generation

Crowdsourcing is used in the ______ step of the new product development process.

targeting

Once segments have been identified, market _____ evaluates each segment's attractiveness and selects one or more to serve

through museums, charities, churches, colleges, foundations, and hospitals.

Private not-for-profit organizations offer services

level and consistency.

Product quality has two dimensions

consumer products and industrial products.

Products and services fall into two broad classes based on the types of consumers who use them

competitive advantage.

To the extent that a company can differentiate and position itself as providing superior customer value, it gains

portable factory equipment and tools (hand tools, lift trucks) and office equipment (computers, fax machines, desks).

Accessory equipment includes

Business analysis

After market strategy is developed, the next step of the new product development process is _____?

Market segmentation

Dividing a market into smaller segments of buyers with distinct needs or behaviors that might require separate marketing strategies is known as?

Psychographic

Dividing buyers into groups based on social class, lifestyle, or personality characteristics is called _____ segmentation

Many companies have developed successful internal social networks and intrapreneurial programs that encourage employees to develop new product ideas

For example, AT&T has set up an internal online innovation community called The Innovation Pipeline (TIP), through which AT&T employees from all areas and levels of the company submit, discuss, and vote on new product and service ideas.

Service perishability

Some doctors charge patients for missed appointments because the service value existed only at that point and disappeared when the patient did not show up.

desirable benefit.

Thus, Whirlpool can go beyond technical product attributes and talk about benefits such as taking the hassle out of cooking and cleaning, better energy savings, or more stylish kitchens.

Packaging

involves designing and producing the container or wrapper for a product.


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