Marketing Final Exam Chapter 10-16

Behavioral Segmentation

Divides a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product.

Geographic Segmentation

Divides groups based on physical location "Birds of a feather flock together

Demographic Segmentation

Divides the market into segments based on variables such as age, generation, life-cycle stage, gender, income, occupation, education, religion, & ethnicity

Targeting

Evaluate segments & Select the segment(s) to enter (serve)

Good-Value Pricing

Is offering just the right combination of quality and good service at a fair price (2008 Recession: Change in customer attitudes toward price/value).

Branding

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

Characteristics of Services

intangibility, inseparability, variability, perishability

Stages of the Product Life Cycle

introduction, growth, maturity, decline

Requirements for Effective Segmentation

measurable, accessible, substantial, differentiable, actionable

Seven Stages of New Product Development

1. new product strategy development 2. idea generation 3. idea screening 4. business analysis 5. product development 6. market testing 7. product launch

Predatory Pricing

A strategy to intentionally sell below cost to push a competitor out of a market, then raise prices to new highs is called predatory pricing (Sherman Antitrust Act 1890). .

Promotional Pricing

Characterized by temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales.

Price Fixing

Companies that collude to set prices at a mutually beneficial high level are engaged in price fixing (Sherman Antitrust Act 1890).

Psychological Pricing

Considers the psychology of prices and not simply the economics; the price is used to say something about the product

Differentiation

Differentiate offering to create superior value

Segmentation

Divide total market into smaller, similar segments with distinct needs, characteristics or behaviors

Psychographic Segmentation

Divides a market into different segments based on social class, lifestyle, or personality characteristics.

Every-Day-Low Pricing

Involves charging a constant everyday low price with few or no temporary price discounts.

Price Discrimination

Occurs when a seller offers different prices to different customers without a substantive basis, such that competition is reduced (Robinson-Patman Act 1936).

Positioning

Position offering in the minds of the target consumers vs. competition

Reference Pricing

Prices that buyers carry in their minds and refer to when they look at a given product. Reference might be formed by noting current prices or remembering past prices

High-Low Pricing

Pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.

Price

The amount of money charged for a product or service, or the sum of all the values that customers exchange for the benefits of having or using the product or service.

Value-Based Pricing

Uses the buyers' perceptions of value rather than the seller's cost. Cost-based pricing is product driven Value-based pricing is customer driven & priced to match perceived value

Five Specific Drivers of Innovation

consumer expectations, competition, globalization, technology, changing society

Segmentation Pricing

selling a product or service at two or more prices, where the difference in prices is not based on differences in costs