entry Test 2

total product

*entire bundle of your service*, product and meaning of your offering; includes extras like warranty, delivery, service

primary research

*new info* collected to solve a problem at hand or answer current questions

particularly attractive customers

-corporate customers -loyal customers -local customers -passionate customers

strategy builds 4 keys of decisions to make about your firm

1) The major goal you set for your firm 2) The types customers you seek and what you plan to offer them 3) the stage and trend of your chosen industry 4) the specific generic and supra strategies you chose to pursue perpetual mapping, industry analysis, post start-up

2 reasons market scope is important

1) helps you decide where o focus your sales and advertising efforts 2) gives you a way to determine which potential competitors you need to worry about most, namely those in your market scope

market

a business term for the population of your customers for your product or service

internal reference price

a consumers *mental image* of what a products *price should be*

mass market

a customer group that involves large portions of the population

survey

a data-collection method using a *questionaire*-in person, on iPhone, on paper, or on the internet

innovative strategies

a firm decides to do something that is totally different from what others in the industry are doing

incremental innovation

a firm patterns itself on other firms, with an exception of one or two key areas

focus group

a form of data gathering using a *small group* led by a moderator

multiple or bonus pack

combining more than 1 unit or the same product and pricing it lower than if each unit were sold separately

direct competition

other companies that make a similar product or provide a similar service; ex: direct competition for Coca Cola includes all other soft drink providers

net profit

the amount of money left after operating expenses are deducted from the business

profit before taxes

the amount of profit earned by a company before calculating the amount of income tax owed

margin

the amount of profit, usually stated as a percentage %

imitative strategy

the entrepreneur is doing more or less than the others are already doing

industry

the general name for the line of product or service being sold, or the firms in that line of business

competitive advantage

the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the industry

magic number

the post-tax income entrepreneur personally seeks from the business

pure innovation

the process of creating new products or services, which result in a previously unseen product or service

introduction stage

the product or service is being invented and initially developed

maturity stage

the third life cycle stage, marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies

cost benifits

the ways a firm can keep costs low for customer

inelastic product

there are *few substitutes and for which a change in price makes very little difference* in quantity purchased

core product

very basic description of what a product is-a bar of soaps house-cleaning service

goal

an intended outcome for your business

entry wedge

an opportunity that makes it possible for a new business to gain a foothold in a market

competitor

any other in the same business as yours

tangibillity

capability of being touched, seen, tasted or felt

industry dynamics

changes in competitions, sales and profits in an industry over time

differential advantages

characteristic that separates one company from another in product, price, promotion, and/or distribution

price gouging

charging and outrageously high price for something

off-peak pricing

charging lower prices certain times to encourage customers to come during slack periods (happy hour)

differentiation strategy

clarifying how one product is unlike another in a mass market

bundling

combining 2 or more products in 1 unit and pricing it less than if the units were sold separatly

markup

the amount an entrepreneur adds to the costs to provide profit

5 steps to the goal

1) what do you expect out of your business? 2) what is your product idea (and its industry) 3) how innovative or imitative will you be with your product? 4) who do you plan to sell to- everyone or target market? 5) where do you plan to sell- locally, regionally, nationally, globally?

generic strategies

3 widely applicable classic strategies for business of all types-differectation, cost and focus

2 major classification systems that code industries

NAICs (North American industry classification system) SIC (standard industrial classification systems)

perpetual mapping

a graphic display which positions products, services, brands or companies according to their scores on important strategic dimensions

concentrated strategy

a marketer selects *one specific group* of consumers and designs a marketing mix specifically for that group

differentiated stategy

a marketing strategy in which a marketer *selects two or more distinct groups* of consumers and designs specific marketing mixes to meet their needs

undifferentiated strategy

a marketing strategy that *uses no segmentation*; assumes that all consumers have virtually identical needs and can be reached by the same marketing mix

niche market

a narrowly defines segment of the population that is likely to share interests or concerns

blue ocean strategy

a strategy based on creating a new product or service which has no competitors

boom

a very rapid increase in sales in a relatively shot time

bot

a web-based program that uses artificial intelligence techniques to automate tasks such as searches

marketing plan

a written plan of all phases of marketing for a Busi., including info on the product, price, distribution, and promotion strategy, as well as a clear identification of the target market and competition (you wouldn't take a trip without a map or direction, so why would you start your business without the same consideration)

cost strategy

aimed at mass markets in which a firm offers a combination of cost benefits that appeals to the customer

markup pricing

an amount is added to the cost of a product to set a retail price and provide a profit

parallel competition

an imitative business that competes locally with others in the same industry

indirect competition

companies that provide alternatives that new dissimilar to your product/service that consumers might choose to meet a similar need ex: indirect competition for Coca Cola includes any other company providing items to quench thirst

strategic actions

competitive responses requiring a *major commitment of resources*

tactical actions

competitive responses with *low resources requirements*

growth stage

customer purchases increase at a dramatic rate

ethnographic research

data gathered by simple observation- *seeing what consumers do*, rather than asking them

scope

defines the geographic range covers by the market- from local to gloal

scale

describes the size of the market- a mass market or a niche market

heterogeneity

each time it is provided it will be slightly different from the previous time

retrenchment

establish firms must find new ways to business and its chances for survival

external reference price

estimation of what a price should be based on info external to a consumer, such as advice, advertisements, or comparison shopping

shake-out

following a boom in which there is a rapid decrease in the # of firms in an industry

gross profit

funds left over deducting the cost of goods sold

referral discount

given to a customer who refers a friend to the business

target market

group of people on which marketer focuses promotion and sales efforts on

SIC

has 4 midgets

NAIC

has 6 midgets; covers more industries and more of the newer industries

optimum price

highest price that will bring the desired level of sales in your intended market level

law of supply and demand

how the demand for a products and the supply of them affect each other

elasticity

idea that the markets demand for a product or service is *sensitive to changes in its price*

perishability

if it is not used when offered, it cannot be saved for later used

secondary research

info *already collected* for some other purpose than the current problem or questions

market research

interpretation of data to support future marketing decisions

services

nonphysical product

augmented products

ore product plus features that tend to differentiate it from competition

goods

physical product

the key to being successful is

picking a industry that offers good potential for making a profit and attractive opportunities to work with a minimum of risk and competition

market segmentation

process of *dividing the market into groups that have somewhat homogeneous needs* for a product or service

4 ps of marketing

product price, promotion, and placement (marketing mix)

me-too products

products similar to something already on the market

industry analysis (IA)

provides the entrepreneur with key info about the industry, such as its current situation and trends

open-ended questions

q's that allow respondents to express themselves as they choose; ex, "*What do you like about this book?*"

dichotomous questions

q's that are answered by selecting the proper category; ex, "*Have you shopped here before?*"

categorical questions

q's that are answered by selecting the proper category; ex, "*what is your ethnicity? White, black, Mexican...*"

scalar question

q's that are answered by some sort of scale; ex, "*on a scale of 1-5, how do you like this book?*"

dierct mall

receiving things in the mail (catalogs, brochures, letters) where they can order something and mail it back

value benefit

related to nature of product/service itself (quality, fusion dn reputation that give value to customer)

decline stage

sales and profits of the firms in the industry began a falling trend

periodic or random discounting

sales conducted at either predictable or nonpredicatable intervals

inseparability

service cannot be disconnected from the provider of the service

price lining

setting (usually) 3 price points:good quality, better quality, best quality

prestige or premium

setting *price above that of the competitor so as to indicate a higher quality* or that a product is a status symbol

captive pricing

setting *price for an idea relatively low*, and then *charging much higher prices for the expendables it uses.*

skimming

setting a *price at the highest level the market will bear*, usually bc there is no competition at the time

odd-even pricing

setting a price that ends in 5,7 or 9

partitioning pricing

setting price for a base item and then *charging extra for each additional component*

focus strategy

targets a portion of the market, called a segment or niche

degree of similarity

te extent to which a product or service is like another