MKT 606 - Iacobucci Ch 1-8 Midterm exam

forecasting equation

$SP = MP x PI x Pr

Which of the following combinations is least desirable in market positioning? a.Heavy promotion and low availability b.Light promotion and high availability c.Low price and low quality d.High price and high quality

(a) Heavy promotion and low availability (b) is also less than optimal but does not involve the expense of promotion without having a way to meet increased demand that results from the promotion. Light promotion with high availability does not frustrate the customer that might jeopardize future sales.

What two perspectives are essential in assessing a market segment's attractiveness as a target? a.Marketability and positioning b.Profitability and strategic fit c.Strategic fit and marketability d.Profitability and marketability

(b) Profitability and strategic fit

In order to measure a brand's value, which of the following approaches is most appropriate? a.Determining the brand's popularity b.Making use of focus groups c.Surveying consumers extensively d.Translating results into a financial vocabulary

(d) Translating results into a financial vocabulary If marketers argue that their brands are assets, then they should be able to attach a monetary figure to that worth. The basic idea in brand valuation, then, is to derive measures that translate as best as possible into a financial vocabulary.

The positioning matrix

*Companies usually can't be great at everything due to limited resources *can a firm realistically hold the lowest price, highest quality position? *Marketers need to determine the "best" position for the firm

Umbrella approach

- Attaching the same brand name to products - Subsequent product introductions are easier for the customer to understand and accept - Higher initial awareness levels - Builds stronger brand associations - Stronger financial outcomes

self-branding

- Branding own ingredient to differentiate its quality from competitors - Works better when tweaking a minor attribute ex: tide's everfresh scent

Core vs. value added

- Core is essential to the product offering - Value-added is supplemental •Core elements are expected by customers. •Core elements that are substandard can trigger dissatisfaction. •Recall issued, poor quality, etc. •Marketers can compete/differentiate on value-added aspects. •Generous service plan, good staff, etc. •Core businesses may change as industries and firms change. •e.g., Victoria's Secret was 70% apparel but is now 70% beauty and fragrance. •It is key to continually ask •What business are we really in? •Who are our true competitors?

promotion by distribution

- Heavy-wide and light-exclusive make sense - Under advertised and hard to get products don't make sense

product quality by price

- Low-low and high-high make sense - Over-priced and good value products don't make sense

Purchase Phase

- Narrow consideration set (customer may delay the purchase/decide not to purchase) - decide on retail channel

Sizing markets considerations

- Some estimates are less firm than others - Each estimate should be as precise as possible - The more precisely defined the segment, the easier the numbers are to estimate

Distinguishing motivations

- Utilitarian VS. Hedonic - Conformity VS. Individuality - Risk Seeking VS. Risk Averse

Marketing Exchange

-The company offers something (product) that will benefit the customer (•The product can be designed to be more or less attractive. Increase/decrease quality, service, etc) -The customer offers something in return (payment) (High/low loyalty, high/low maintenance, spreads positive word-of-mouth, etc.)

Pre-Purchase phase

-customers recognize a need/desire (some are heavily marketer influenced; some are not: ex: having trendy clothes vs needing to eat) -customers search and evaluate products that address their need (conduct online search, ask friends, etc.) -customers create a consideration set (all brands considered as candidates for purchase)

top-down (inside out)

1. Idea generation 2. Design and development 3. Commercialization -Customer feedback is sought later in the process; marketing supports product launch -Works well in industries where internal R&D has expertise that end-customers lack

How to segment the market

1. Iterate between 2 approaches (managerial: top-down ideation. Customer based: bottom-up customer needs assessment). 2. •Begin with understanding the marketplace and then gather information on the customer's perspective. A segment may look desirable in terms of size and growth but be saturated with competitors and not consistent with firm goals. 3. •Doing both approaches is important. •Managers may hold beliefs that are not consistent with systematically gathered data.

The two most optimal matches on the position matrix are:

1. Low price, low quality, widely available, heavy promotions 2. high price, high quality, exclusive availability, light promotions

Types of business purchases

1. New Task Purchase/new buy 2. Straight Rebuy 3. Modified Rebuy

Hierarchy of brand associations

1. Product attributes - concrete aspects (color, size, shape, etc.) - easy to communicate and easy for competitors to copy 2. product benefits - abstract (save money, meet consumer need) - harder to create and communicate 3. emotional benefits -abstract (a means to a specific emotion - feel good, attractive, competent) - meaningful to consumers

product development philosphies

1. top-down (inside-out) 2. co-creation (bottom-up or outside in)

In an exchange, marketers need to

1.Determine what the customers want in order to increase the likelihood of exchange. 2.Determine what the company can profitably offer.

Select a favorite product and then answer the following questions: 1.How might the product maker extend its line (depth)? 2.How might the product maker implement a product category extension (breadth)? 3.Why would it do either? As times allows, have groups share ideas and strategies. Which ideas seem most likely to succeed? Which are most creative/unusual? •

1.How might the product maker extend its line (depth)? •Answer: Answers will vary but should illustrate ways to venture into other product categories. 2.How might the product maker implement a product category extension (breadth)? •Answer: Answers will vary but should illustrate ways to provide varieties of the core product. 3.Why would it do either? •Answer: This strategy leverages a brand's name—its brand equity—to get customers to buy something new

1.Do products have to die? 2.Are the lengths of product life cycles consistent across products? 3.Do individual brands have shorter or longer life cycles than product categories?

1.No—brands and products are not organic. 2. No—length varies; rebirth is possible; maturity can last a long time. 3. Typically shorter—sports are a mature product (longer life cycle), but subcategories (individual brands—e.g., eSports) can be new and evolving.

services are simultaneously produced and consumed; thus

1.Services cannot be stored; goods can. •Marketers need to even out demand. 2.Services cannot be separated from the provider; goods can. •Customer/service provider interaction becomes part of the service.

•Form groups of 3-5 participants. Half of the groups will be Service groups, and half will be Product groups. •Service groups will explain why the following should be considered as services; product groups will defend them as products. 1.United Airlines flight from NYC to LA 2.Monthly selection of clothing from Stitch Fix 3.Auto insurance 4.Meal at Outback Steakhouse 5.Chemotherapy treatment at Mayo Clinic •As a class, place each on a Product ↔ Service continuum.

1.United Airlines flight from NYC to LA Service: transportation / Product: actual seat on plane; ticket 2.Monthly selection of clothing from Stitch Fix Service: professional selects clothing / Product: actual clothing items 3.Auto insurance Service: provide peace of mind, risk mitigation / Product: contract; payment to restore car 4.Meal at Outback Steakhouse Service: preparation and serving of food / Product: food and drinks 5.Chemotherapy treatment at Mayo Clinic Service: medical help and support / Product: chemotherapy medication

Describe the process you used when you decided which college to attend and consider the following questions: 1.What need/desire drove you to consider "purchasing" college? 2.How did you search for information? 3.Which colleges were in your consideration set? 4.What criteria did you utilize to form this set?

1.What need/desire drove you to consider "purchasing" college? •Answer: Identified what was lacking; motivated either internally or externally 2.How did you search for information? •Answer: Online; mail from colleges; college recruiters; family/friends 3.Which colleges were in your consideration set? •Answer: Answers will vary 4.What criteria did you utilize to form this set? •Answer: Location; cost; field of study; family tradition; other

Writing a positioning statement

1.Who are you trying to persuade? 2.Who are you competing with? •Who are your competitors? •What is your major product category? 3.How are you better? •What makes you unique? •What are your points of difference? •Do you have any benefit that dominates competitors? •Make sure your statement is succinct. •Prioritize your brand benefits and choose the most important, compelling differentiator. •Think about what benefits the customer. •Examples: •Walmart: "Save money. Live better." •Porsche: "Engineered for magic. Every day."

Focus groups

A strategy to obtain data from a small group of people using interview questions •2-3 groups (per segment) of 8-10 customers •Usually last 1.5-2 hours •Goal is background information to improve product development or product positioning. participants give feedback on product concepts

Types of brand experiences

Affective (heart), intellectual (mind), and behavior (action)

System 1 Thinking

Automatic, fast, little or no effort, no sense of voluntary control •Automatic, unconscious •Efficient, heuristics •Routine decisions •May optimize a consumer's time

Who utilizes the purchase process?

B2C and B2B

As a customer, what does a brand do for you?

Brand conveys information; signals consistent quality; confers status; reduces customer risk; and makes purchase decisions easier.

1.As a company, what does a brand do for you?

Brand enhances loyalty; signals reliability; allows premium pricing; inoculates company from competitors; assists in STP; and encourages channel partners' support.

examples of intellectual brand experiences

CNN Nokia Vanguard

changes in the global economy

China and India's growth in both manufacturing and service sectors; shifts in nation's GDP; how the pandemic has affected production and consumption

Self-expression

Choice of brands express consumer personality to others.

Maps for Competitive Analysis

Compares overall perceived strengths and weaknesses with competitors Limited to two dimensions •A bar chart provides perceptual mapping of more than two dimensions among several competitors. •Provides more detailed information

Experience Marketing

Consumers are buying the experience e.g. ESPN Zone and Build-a-bear

Touch can

Convey brand imagery e.g., Well-designed products compared to value designed products e.g., Ergonomics, clean lines, simplicity, beauty, and sensual experiences

Perceptual fluency

Customers may pay the most attention to the content of a message - however, the colors, font, etc. make a brand impression as well

Product life cycle

Describes the evolution and duration of a product in the marketplace. introduction, growth, maturity, decline

Behavioral Economics Principles

Differences in system 1 and system 2 thinking

conjoint procedure

Different combinations of attributes are put together and compared •Customer says which is best, next best, etc. •Use in focus groups, online studies, etc. •Allows marketers to see what attributes are most attractive. •e.g., Should a laptop be light, powerful, specific color, and preloaded with software?

cumulative diffusion

Diffusion curve is recast to show cumulative sales - tipping point: point at which sales rate increases rapidly

top down: strategic fit

Does this market fit with who we are? - Understand firm's resources, strengths, weaknesses, brand personalities, etc.

what is the better branding strategy - umbrella, or house of brands?

Evidence suggests that the umbrella branding strategy provides stronger financial outcomes to the company than the house of brands. One reason is that certain costs are cut (e.g., the house of brands approach requires more advertising to build the multiple brands' equity, whereas advertising for the umbrella brands builds the shared brand name synergistically across the products).

global strategies

Glocalization -Different names in different countries -"Manufacturer globally, brand locally" Global brands -Same brand in all countries -More advantageous e.g., Amazon.com and Amazon.co.uk

Goods vs services

Goods: what is produced, products (shoes, medicine). these are usually tangible. Services: what is offered (lawyer, doctor). these are usually intangible

Segmentation

Grouping customers with similar needs

Michael Porter

Harvard Business School professor who is said to be "the single most important strategist working today, and maybe of all time," by Kevin Coyne of consulting firm McKinsey & Co. 1.Keeping costs down and prices competitive 2.Leading by differentiation 3.Niche positioning

How could firms capitalize on the opportunity presented by the aging population?

Health-related products and services; retirement locations; other real estate and retail implications

New buy

High involvement; purchase something that hasn't been purchased before requiring much thought and planning

Competitor analysis should provide consumers an answer to the question:

How is yours better than theirs?

Bottom up: profitability

How profitable will this segment be? - A function of the current market size, its anticipated growth, current and anticipated levels of competition, customer behavior and expectations

New Product Development Process

Idea generation Market potential Concept testing Design and Development Beta Testing Launch

Competition in perceptual maps

In this perceptual map of business shoes, brands depicted as points in the map close together are those perceived as similar (e.g., Ferragamo and Santoni), whereas brands farther apart are seen as more different (e.g., Santoni and Johnston & Murphy). The north-south, east-west directions are perceptual, and in this map, they may be interpreted as quality and relative expense. In segment 1, the positioning of Ferragamo, Santoni, and even the Cole Haan brands would predict one of these brands as the segment's first choice. Customer segment 2 would choose between Cole Haan and Johnston & Murphy.

product category extensions

Increase "Breadth"- new product line ex: amazon sells many different things

why do we target?

It is difficult to be all things to all people.

Straight rebuy

Low involvement; purchase what was purchased last time with little or no thought

Modified rebuy

Medium involvement; something about the purchase is altered requiring some thought

examples of behavioral brand experiences

Monster energy North face Subaru

Treacy and Wiersema

Operational excellence (Southwest) Product leadership (Apple) Customer intimacy (Amazon)

Promotion and distribution show tendency to realign

Optimal matches -Mass and niche Suboptimal matches -Hard to get: Why promote heavily if consumers can't find the product? -Underadvertised: If a brand has an exclusive image, why distribute it everywhere?

Quality and price align

Optimal matches: -High-end and value Suboptimal matches: -Overpriced: customers stop buying; firms drop price; increase quality or leave market -Good value: firms increase price or lower quality

calculate P

P = 3/4(0.7) = 0.525

PI increases as

Pr decreases

Targeting

Pursuing segment who makes the most sense for the firm

Customers vary in their marketing-oriented attitudes and other psychological aspects...

Qualities that marketers care about may be mapped onto segments in any product category. For any purchase, a segment of customers will seek premium purchases, another will be brand conscious, and another will be price sensitive. And, of course, just to provide us with a challenge, a customer who seeks quality benefits in one category (e.g., clothing) might be price sensitive in another (e.g., travel).

Form groups of 3-5 participants. Consider the following points and prepare a short summary to present to the class. •Your company manufactures high-end gas fireplaces. Current production is only at 70% of total capacity. The executive team is considering expanding production into new products. They have tasked your marketing team with reporting on what you recommend. •In your brief report, outline the factors you considered and what your recommendation would be. •Share group reports. ●

Recommendation for using excess production capacity •Can range from new innovative fireplaces to producing lower-cost fireplaces accessible to a wider market. •Assess how the recommendation considers the 5Cs (customer, company, context, collaborators, competitors), STP (segmentation, targeting, positioning), and the 4Ps (product, price, place, promotion). •As a class, discuss any especially creative recommendations or surprising interpretations of the goal.

System 2 Thinking

Reflective thinking that is slow, deliberate, and conscious. Often less charged with emotions. Usually needed when consumers are about to buy something expensive or something that isn't a frequently recurrent purchase, such as for cars, computers, phones, etc., it is slower and more effortful. •Effortful, conscious •Reasoned, thought through •Complex decisions May optimize certain product features

Mere exposure

Repeated exposure to an ad brings familiarity and a positive feeling

Operant conditioning

Skinner •used pigeons to show that learning occurs by positively reinforcing behavior. •Fixed ratio reward: reward is given every time or every 4th time, etc. •Variable ratio reward: reward timing varies unpredictably. •Subject will engage in the behavior more often if rewarded on the variable schedule.

point of inflection

The point at which the sales rate increases rapidly, aka when sales take off

5Cs, STP, and 4Ps are interdependent: T/F

True

4P's are the

WHAT (what is being marketed)

5C'S are the

WHO (central players) of the marketing management framework

STP is the

WHY and the HOW (tactics and communication)

Definition of brand association

We store information about a brand in our memories. Therefore, activation of a brand name (e.g., through advertising) triggers brand associations subsequently (even instantaneously). Links farther from the brand take longer to retrieve and activate. So, while the brand's associations include even indirect links, those attributes are not likely to be the first qualities that come to mind. In addition to memory implications, there are attitudinal ones that tend to be most heavily affected by the positivity or negativity of the nearest links.

When would co-branding work well?

When a company is introducing a new product attribute ex: adding cough medicine to candy

Global brand

a brand that obtains at least a one-third of its earnings from outside its home country, is recognizable outside its home base of customers, and has publicly available marketing and financial data

product mix

a company's product lines all lines of product that an organization/firm sells

The psychology of prospect theory

a consumer will value perceived losses and perceived gains differently, even though the amount is equal. Placing items "on sale" is a common use of the prospect theory. Ex: how great would you feel if you found $50, vs. how bad you would feel if you lost $50?

Brand extensions

a new product sold with the same brand name as a strong existing brand - leverage the brand's good name to get customers to buy something new

A customer is recruited (e.g., via email) to go to a website, where they are given a budget and have an opportunity to buy the new product, which is offered among competitors' or related products. Virtual grocery store aisles are displayed (sometimes in 3-D or virtual reality, but often just in a 2-D view) that provide the same information the customer would see on a typical trip to the grocery. There would be row after row of pictures of competitors' products, and the new product embedded, on the "shelf," as it would be when eventually launched. The marketer is looking for how often the new product is selected in this quasi-realistic context. What is this an example of? a. A simulated test market b. An area test market c. An electronic test market d. A focus group

a. A simulated test market

Positioning requires all of the following EXCEPT: a. Communicating to the manufacturer b. Building distributor relationships c. Designing a product with benefits that the target segment will value d. Pricing your product so it's profitable

a. Communicating to the manufacturer

Positioning statements can also serve as the foundation of the communications offered to all of the following external audiences EXCEPT: a. Employees b. Potential customers c. Shareholders d. Existing customers

a. Employees

Evelyn has an online cookie cutter business, and when she advertises her cookie cutters, she announces that delivery is within three weeks. Since slow delivery time is a weakness for Evelyn, what should she do? a. Evelyn should be motivated to make changes to address this shortcoming. b. Evelyn should use market research to assess the number of competitor's in the market. c. Evelyn should look for new opportunities. d. Evelyn should advertise about her company's strength—quality cookie cutters.

a. Evelyn should be motivated to make changes to address this shortcoming.

To help diminish disposable cup usage and waste, a coffee shop is experimenting with providing consumers their coffee in a mug they "check out." Sometime later, consumers either return the mug or they are charged $15. What does this example show? a. Ideas can come from observing social (or cultural or economic) trends. b. Ideas come from making decisions for frontline workers. c. Ideas come from giving information to the sales force. d. Ideas do not come from customers.

a. Ideas can come from observing social (or cultural or economic) trends.

Lowe's is a $48.8 billion home improvement chain with 1,725 stores. Lowe's recently changed its motto from "Let's Build Something Together" to its new motto "Do it Right for Less." The new motto imparts the message that shoppers are in good hands and will be guided through all stages of their home improvement in a cost-effective manner if they shop at Lowe's. This example shows all of the following about a position statement EXCEPT: a. It offers specific product details. b. It can serve as the foundation of communications to customers. c. It can serve to keep all managers aligned. d. It can serve as a guiding principle for decision making.

a. It offers specific product details.

As a manufacturer of exercise bikes, Peloton uses technology and design to connect the world through fitness, empowering people to be the best version of themselves anywhere, anytime. Peloton's positioning statement is not related to the direct competition of exercise bikes. It was broader: inspiring and energizing fitness experiences. This meant that the brand could compete not just against other exercise bikes, but against fitness classes in gyms. This example shows that: a. Peloton's positioning strategy is to appeal those interested in fitness. b. Peloton's target market consists only of bike riders. c. Peloton cannot compete with lower-priced exercise bikes. d. Peloton's target market consists only of those who work out in gyms. Hide Feedback Correct

a. Peloton's positioning strategy is to appeal those interested in fitness.

Choosing the right market segment is key. It helps a business strategically choose a competitive arena to operate in, which has led Cirque du Soleil to create new industries and the failure to do so has led to the demise of household brands like Sears. The most prominent risk facing local businesses is losing touch with customers or failing to recognize an upcoming demographic to be served. Determining which segments to target depends on an interplay of which two factors? a. Quantitative and strategic issues b. Geographic and volume factors c. Income and household size d. Age and gender factors

a. Quantitative and strategic issues

A Fortune magazine article by Jon Birger talks about a "second mover advantage" in which Lowe's is compared to #1 Home Depot; #2 Target vs. #1 Walmart; PepsiCo vs. Coca-Cola). Lowe's has wider aisles, brighter stores, and friendlier salespeople. Being #1, you're a natural target. All of the following are true about the second mover advantage EXCEPT: a. The number twos do not compete on operational efficiency. b. The second mover watches what #1 does and then does something different. c. The second mover is in a good position. d. The number twos compete on price and cost.

a. The number twos do not compete on operational efficiency.

"Payhip is an e-commerce platform that enables anyone to sell digital products or memberships directly to their fans and followers. You can embed Payhip directly into your website or you can use our storefront to sell your work. Payhip takes care of everything. We're an all-in-one e-commerce solution for creators." This position statement answers the question: a. What is our product? b. Who is our competition? c. Who is our market segment? d. Should we expand our business?

a. What is our product?

The consumer's perception of brand influences their buying decision in sports industry, so Nike always has been able to position to customer's expectation and athletic fantasy that is endorsed by real athletes. "For serious athletes, Nike gives confidence that provides the perfect shoe for every sport." This positioning statement from Nike is simple, direct, and tangible. It speaks to their target audience in a clear and concise manner. Positioning has many physical elements, but even more perceptual ones. What is positioning? a. Who your brand or company is in the marketplace vis-à-vis the competition b. What age group is targeted by Nike c. Who your brand is in the eyes of the manufacturer d. What price point is appropriate for Nike shoes

a. Who your brand or company is in the marketplace vis-à-vis the competition

A number of factors influence customers' acceptance of new products and the diffusion of the innovation throughout the marketplace. Consumer acceptance tends to be higher when the new product is all of the following EXCEPT: a. Without a clear relative advantage over existing products b. Easily tried or sampled in order to facilitate initial assessment c. Compatible with the customer's lifestyle d. Not overly comple

a. Without a clear relative advantage over existing products

Quality/price alignments: low quality/low price = a. basics b. good value c. over-priced d. high-end

a. basics

its important to define competition a. broadly b. narrowly

a. broadly

Marketers make the fewest forecasting mistakes if they assume that _________. a. consumers buy the same brand this time as they did last time b. consumers buy the brand that has the lowest price c. consumers buy the brand that is bundled with other products d. consumers try a new brand if they have a coupon

a. consumers buy the same brand this time as they did last time

Trader Joe's is a high-end grocer whose customers are committed to a healthy lifestyle. They want produce that is free of pesticides, and they want to make sure that those who supply the produce are fairly treated and fairly compensated. Trader Joe's customers feel strongly against child labor and animal testing. Trader Joe's knows their shoppers want organic produce AND fair- trade coffees AND cosmetics that have not been animal tested. This is an example of a _________. a. depth strategy: serving one segment well b. breadth strategy: reaching multiple segments c. several segments in the marketplace d. tailored strategy: customizing for segment

a. depth strategy: serving one segment well

Product lines can be pruned _____. a. if customers see no distinctions between brands or lines b. the company recognizes an opportunity for producing something that customers will value c. if the company can make the new brands or lines easily d. if the company can make new brands or lines better than competito

a. if customers see no distinctions between brands or lines

At the Rodriquez law firm, the office manager, Catherine, is in charge of making sure that all the office machines—such as computers, fax machines, scanners, and videoconferencing equipment is in good working order. If one of these valuable IT tools malfunctions, it is Catherine who contacts the IT support firm and has the problem addressed. According to the roles in a buying center, an office manager like Catherine who notices that one of the photocopiers/scanner in the office is frequently breaking down is fulfilling the ______ role. a. initiator b. user c. buyer d. influencer

a. initiator

For ________ products, the marketer just hopes to cut through the noise and clutter—getting customers' attention only long enough to register the brand name in the mind of the customer for sheer familiarity.

a. low involvement

Growth strategies: current products + current market a. market penetration b. product development c. market development d. diversification

a. market penetration

Porsche's 911 sells predominantly to men (90%) who are over age 50 with a household income over $300k. To the company's delight, most customers are willing to pay premium prices for a Porsche 911 because they value the brand. Companies use brands or variants of their brands to provide different offerings to satisfy different _________. a. market segments b. channel partners c. manufacturers d. brand association

a. market segments

Promotion/distribution alignments: heavy promo/wide distribution A. mass B. underadvertised C. hard to get d. niche

a. mass

The Ford Focus is a well-established car. It has a good brand reputation and has reached its peak level of market penetration. It would be difficult to gain a significantly greater market share. The product life cycle of the Ford Focus has been extended by constant upgrades and redesigns to keep the car on top of the market. In what stage of the product life cycle is the Ford Focus? a. Maturity b. Market growth c. Decline d. Market introduction

a. maturity

MIAMI UNIQUE LIMO is a luxury transportation service provider since 2007. The staff works hard to maintain a customer's satisfaction. Fully air-conditioned executive cars or limousines are clean and immaculately presented together with a fully uniformed chauffeur. Chauffeurs are professionally attired, drug screened, and DOT licensed. MIAMI UNIQUE LIMO hires extra drivers during the holiday season because of the increased number of tourists who come to Florida. During slower periods, far fewer chauffeurs are needed. This example shows that services are usually associated with ______. a. more variable costs than goods b. more manufacturing costs c. more fixed costs for selling goods d. better profitability estimates

a. more variable costs than goods

If you have an idea for a custom car but aren't sure how to make your dream a reality, Kaucher Kustoms has the solution. They work with clients to create actual buildable blueprints and three-dimensional models from sketches. You can then take those blueprints to a custom car builder and see your dream car in person. Some car manufacturers are experimenting with letting customers design their own models. This is an example of ________. a. one-to-one marketing b. market segmentation c. mass marketing d. heterogeneous marketing

a. one-to-one marketing

A small business's target market is the group of people it targets with advertising. These people are the consumers who are most likely to use the company's products and services. Marketers use different variables when determining their target markets, including demographics, personal interests and the times in which consumers shop. Target markets can vary by size. But a company's target market generally must be large enough. The basic idea of targeting is _________. a. selection b. niche marketing c. profitability d. brand preferences

a. selection

Medical Center Hospital set up a vaccination program that vaccinated over 3,000 people in one day in the parking lot of the high school football stadium. Local citizens registered online and were given a vaccination time. Then they waited in line in their cars to go through the registration, vaccination, post-vaccination check, and a follow-up appointment. The vaccinations were offered free of charge to anyone over the age set during the month of March, 2021. This is an example of ethical marketing because Medical Center Hospital is offering _____. a. similar health care services to all segments b. marked-up goods and services to socioeconomically disadvantaged groups c. confusing and exploitative financial instruments to older adults d. sugary cereals and junk food to kids

a. similar health care services to all segments

Singapore highlights its blend of modernity, boasting a strong economy and a luxurious hospitality industry, with a setting that is perceived as an exotic destination for many tourists. Macau, barely a dot on the map 20 years ago, has one of the world's richest economies due to its gambling revenues, which surpass those of Las Vegas. It is now seeking to make a name for itself in medical tourism, differentiating itself from China, for example, as a safer alternative. These examples show that ______. a. some brands need re-positioning even if they are well-known b. branding cities and countries is becoming increasingly popular c. destinations seek more tourism and branding helps d. a unique positioning can be claimed on the basis of historical, social, or cultural values

a. some brands need re-positioning even if they are well-known

Ali is running to an interview and the strap on his backpack breaks. Ali realizes he needs a new backpack and orders a new one online. When it arrives, he likes the looks, the pocket for his water bottle and other features. The price was fair. Ali is pleased with his purchase. This situation is an example of _______. a. the complete buying process b. pre-purchase behavior c. post-purchase behavior d. purchase behavior

a. the complete buying process

Fausto drives a Toyota Prius, and when his 2007 Prius had over 100,000 miles, Fausto traded it in for a 2019 model. Fausto likes this brand of car because it is reliable, and he is an avid fan of the Prius because his works not just predictably but fabulously. This example shows that brand building is based on ______. a. the predictability of the item being purchased b. more perceived risk c. the product performing with significant variability d. the customer's decision making made harder

a. the predictability of the item being purchased

An exchange relationship exists between a firm and its customers in marketing. a. True b. False

a. true

The 5Cs, STP, and 4Ps operate interdependently. a. True b. False

a. true - If a marketer treats the process of knowing more about the 5Cs as ongoing, they will be better informed while approaching the STP task. The "P" of positioning in STP is performed using the 4Ps. Thus, the 5Cs, STP, and 4Ps operate interdependently. Refer to 1-4: The "Marketing Framework": 5Cs, STP, and the 4Ps.

Laura has a bank account at BB&T because she receives decent rates, a debit/credit card, and she likes the friendly account managers and helpful tellers. The account is the core service, but Laura banks at BB&T because of the ________. a. value-added supplemental services b. variability of the service c. perishability of the service d. credence of the service

a. value-added supplemental services

Segmentation: Demographics

age, gender, income, family life cycle •Demographic variables are clear and easy to recognize. •However, they border on being simplistic stereotypes.

Marketing is defined as

an exchange between a firm and its customers

Competitor analysis

an organized approach for evaluating the strengths and weaknesses of current or potential competitors' marketing strategies

suboptimal matches

anything with heavy promo and exclusive distribution these two categories would be exceedingly frustrating for customers. No one wants to be tantalized constantly with messages to "Go buy our stuff!" and then not be able to find that stuff.

interbrand method

assess the value of a firm, subtract its physical and financial assets

experience qualities

attributes that can be assessed only during purchase and consumption of a service

Which of the following is an example of an industry marketing itself? a. An ad encouraging the consumption of a Snickers bar. b. An ad encouraging the consumption of eggs. c. An ad introducing Pizza Hut's new menu. d. An ad encouraging the purchase of a Firefox mountain bike.

b. An ad encouraging the consumption of eggs.

When Honda puts its name on a car, a motorcycle, or a lawnmower, it's saying, "We're proud to offer these products. These are ours." And with time, the brand name has gained status among consumers as being high quality ("Honda is a good brand"); that is, anything that comes from the house of Honda will be good. This example shows that all of the following are reasons for branding EXCEPT: a. Brand names identify company production and ownership. b. Brands signal inconsistent quality. c. Brands confer status. d. Brands convey information to customers.

b. Brands signal inconsistent quality.

__________ is a process of identifying competitors and gauging their business and marketing strategies to understand both their strengths and weaknesses and those of your own business. is provides a higher-level perspective of the entire marketing landscape and competitive intelligence. a. Competitive advantage b. Competitor analysis c. Beta testing d. SWOT analysis

b. Competitor analysis

Which of the following statements is true about goods rather than services? a.Goods are more difficult for customers to assess than are services b.Goods are dominated by search and experience qualities c.Goods are more difficult to price than are services d.Goods are dominated by experience and credence qualities

b. Goods are dominated by search and experience qualities Goods are dominated by search and experience qualities, and services are mostly comprised of experience and credence qualities. There are multiple marketing implications caused by these differences. It is easier to price a good than a service. Additionally, it is easier for customers to assess a goods purchase compared to a service purchase. Services require more cues as to their quality level than do goods.

Mailchimp is an all-in-one Marketing Platform for small business. We empower millions of customers around the world to start and grow their businesses with our smart marketing technology, award-winning support, and inspiring content." This positioning statement shows all of the following EXCEPT: a. How Mailchimp it unique b. How Mailchimp has a lower price that the competition c. How Mailchimp has a competitive advantage d. How Mailchimp is better for small businesses

b. How Mailchimp has a lower price that the competition

A very general way marketers have approached the analysis of a market is by estimating the purchase decision-making process which includes all of the following elements EXCEPT: a. Trial b. Positioning c. Awareness d. Repeat

b. Positioning

Apple is considered as the #1 innovative company in the world. The company's strategy involves terrific new products and business models. Apple pioneers into a new business spaces and creates new market niches. The company created game changers such as the iPod, iTunes, iPhone, and iPad. Competitors that chase Apple's latest release find themselves behind when just a few months later Apple introduces its latest and greatest offering. According to Michael Treacy and Fred Wiersema, in The Discipline of Market Leaders, in which of the basic corporate strategies to creating value and achieving market stature does Apple excel? a. Operational excellence b. Product leadership c. Price leadership d. Customer intimacy

b. Product leadership

Jack sells lumber to construction companies that build apartment complexes. As a B2B customer, Jack's business is classified according to what he sells. What is Jack's classification? a. Accessories (e.g., computers to help run the office) b. Raw materials (e.g., lumber, plastics) c. Business services (e.g., insurance, legal, consulting) d. Components (processed items that are components in a later finished product)

b. Raw materials (e.g., lumber, plastics)

Regarded as one of the supreme achievements in the history of Western music, Beethoven's Ninth is one of the most performed symphonies around the world. Based on Schiller's poem Ode to Joy, it finishes with a celebration of the unity and dignity of human -kind, a theme as relevant today as it was in 1824 when Beethoven wrote the symphony. Even though the notes are the same, performances of Beethoven's Ninth by the New York Philharmonic, the Atlanta Symphony, and Los Angeles Philharmonic are not. Different conductors highlight different aspects of the work even though Beethoven left clear directives as to dynamics and rhythm. This example shows all of the following EXCEPT: a. Services are more variable. b. Services are tangible. c. Services are customized and tailored. d. Heterogeneity across experiences is due to the "people" component of services.

b. Services are tangible.

The Daymont Hotel used a perceptual map to survey loyal travelers (through their frequent-flier program), and the sample was obtained from visitors to all its hotels. The perceptions were those of current, not potential customers. The Daymont is known for being "reasonable" in its rates and attracts younger crowds who don't want to spend lots of money for a room. The Daymont likes having a youthful appeal (or position!) but realizes that it is attracting people outside of the markets it is targeting. The use of a perceptual map has assisted the Daymont in all of the following EXCEPT: a. The Daymont's repositioning could include an ad campaign that emphasized reasonable rates b. The Daymont can be successful in the luxury hotel market c. The Daymont could attract older customers looking for reasonable rates d. The customer segments on the perceptual map offer a look at what's going on in the marketplace

b. The Daymont can be successful in the luxury hotel market

One perspective is a top-down vision of corporate strategy to answer the question ________. a. What is the profitability of the segment? b. What customers make sense for our firm? c. Should we take a data-informed approach? d. What is the segment size?

b. What customers make sense for our firm?

With respect to the 5Cs in the marketing framework, which of the following is an example of "context"? a. A firm's complementary good b. A firm's natural resources c. A firm's stock product d. A firm's stockholder

b. a firm's natural resources

Philippe wants to replace his iPhone. He is considering getting the iPhone 12, the latest model. Before buying the new iPhone, Philippe needs to do some research and give the purchase some serious thought. This is an example of _________. a. a convenience item b. a high involvement product c. a low-involvement product d. a shopping item

b. a high involvement product

Dr. Harris is an Ob/gyn physician who has practiced in Texas for over three decades. He has delivered several generations of babies and is highly respected for his years of service and willingness to get up in the middle of the night and rush to the hospital to deliver a baby. Dr. Harris accepts patients from all backgrounds, giving excellent medical care to all patients. The women in his community trust that he will care for them in a highly professional manner. This aspect of a service is called ______. a. experience b. credence c. variability d. intangibility

b. credence

Marketers begin with some knowledge base about the marketplace to include all of the following EXCEPT: a. Customers b. Customer perspective c. Company strengths d. Competitors

b. customer perspective

Ah ling owns a hair salon. She has to pay rent, purchase equipment such as hair dryers, and supplies such as paper towels. Ah ling wonders which of those costs are fixed and which are variable. Ah ling must realize that in services such as retail, a fixed cost would NOT be the ________. a. shop b. employees c. supplies d. equipment

b. employees

Themed retail outlets, such as Crayola Café, Build-a-Bear, ESPN Zone, and Lego stores, are as much about creating a shopping experience for its customers as they are about selling merchandise. Cirque du Soleil promises a circus and acrobatic performance that is one-of-a-kind. MotorTrend.com offers car enthusiasts an opportunity to try out their favorite cars through virtual road tests and simulations. These are examples of ______. a. cause marketing b. experience marketing c. services marketing d. image marketing

b. experience marketing

In the context of the marketing framework, corporation is one of the elements in the 5Cs. a. True b. False

b. false

In the context of the marketing management framework, the 4Ps precede STP. a. True b. False

b. false

The STP helps systematically frame the general analysis of the entire business situation. a. True b. False

b. false - Correct. The 5Cs force a businessperson to systematically frame the general analysis of the entire business situation. Refer to 1-4: The "Marketing Framework": 5Cs, STP, and the 4Ps.

Great marketing is an art based on an individual's soft skills and instincts. a. True b. False

b. false - Great marketing is not an "art," is not "soft," nor is it "intuitive." Great marketing is based on sound, logical—economic and psychological—laws of human and organization behavior. Refer to 1-4: The "Marketing Framework": 5Cs, STP, and the 4Ps.

With respect to the 5Cs in the marketing framework, "context" includes the backdrop of micro-environment factors. a. True b. False

b. false. - With respect to the 5Cs in the marketing framework, context includes the backdrop of macro-environment factors. Refer to 1-4: The "Marketing Framework": 5Cs, STP, and the 4Ps.

Quality/price alignments: high quality/low price a. basics b. good value c. over-priced d. high-end

b. good value

Typically, marketers at _____ create ads that are related to "Drinking responsibly." a. bars b. government agencies c. departmental stores d. breweries

b. government agencies

When it was first launched in 2007, the iPhone was priced at $600. The price was quite high, as Apple lacked any experience in the industry. But still, many did not hesitate to purchase the iPhone despite its prohibitive price. The so-called ________ are the first 2.5% who like to try new ideas and are willing to take risks. They tend to be relatively educated and confident in assessing information about a product on their own. a. early adopters b. innovators c. early majority d. laggards

b. innovators

Which of the following stages is NOT part of the product life cycle? a.Market maturity b.Market equilibrium c.Market decline d.Market introduction

b. market equilibrium

Pioneer Petroleum Company reorders its subscription to Word 365 from Best Buy, an approved vendor. However, Pioneer wants to alter some elements: features, design, packaging, quantity, or delivery times. This change reflects the changes in Pioneer's requirements or Best Buy's lease program. Pioneer has a desire to consider a vendor other than Best Buy. This buying situation is an example of a _________. a. specialty buy b. modified rebuy c. straight rebuy d. new buy

b. modified rebuy

Companies can make the mistake of being _______ when they define their core business, focusing on their product offerings, instead of recognizing that their true goal is offering benefits and value to their customers. a. customer-centered b. myopic c. promotion-oriented d. price focused

b. myopic

In B2B, big, expensive purchases can be complicated because it's not just one person making the decision. Each purchase involves several roles in a buying center: The initiator who notices that that the WiFi is not working; the user: who tries to get online; the influencer who prefers a different provider; and the buyer who selects the WiFi provider. The decision to get a better WiFi system is complicated by the fact that each of these B2B-buyer roles seeks slightly different attributes EXCEPT: a. Negotiation of installation dates b. No follow-up customer service c. Features d. Price

b. no follow-up customer service

During the COVID-19 pandemic, most people were not flying and the airlines suffered huge financial losses. Companies like Delta, American, and United had to cancel flights and leave the middle seat on most flights vacant to allow for social distancing. When an airplane leaves the ground with some seats vacant, the airliner cannot recoup those empty seats during rush traffic. This example shows the characteristic of _______ of services. a. credence b. perishability c. experience d. tangibility

b. perishability

STP stands for segmentation, targeting, and _____. a. pricing b. positioning c. promotion d. production

b. positioning

Growth strategies: current markets + new products a. market penetration b. product development c. market development d. diversification

b. product development

Felix is opening up a jewelry shop. He is evaluating how frequently customers purchase jewelry, how much customers typically spend, and how price sensitive are jewelry customers. Felix also wants to know the growth potential for his business. With this information, Felix can evaluate which segment to pursue. Felix realizes that small segments can be highly profitable. This example shows that when evaluating segments, smarter information about a segment is _______. a. frequency of purchase b. profitability c. segment size d. stability of the segment

b. profitability

With respect to STP in the marketing framework, the targeting process helps: a. provide additional information about a product to the public. b. select a group of customers from a set of identified groups. c. create an image of the product in the mind of a selected customer. d. educate customers about a product's benefits and values.

b. select a group of customers from a set of identified groups.

All of the following are true in regards to ways a brand achieves consistency for services except _______________. a. service providers have clear strategies for service recovery. b. service providers do not use experience flowcharts to note metrics. c. service providers aim for consistency across customer-employee interactions. d. services providers seek high-quality employees

b. service providers do not use experience flowcharts to note metrics.

PRIZM assumes that similar households in the same neighborhood share similar characteristics such as demographic data (i.e., age, race, education level, marital status, etc.), and variables such as lifestyle, attitudes, and behaviors. PRIZM works by assigning all households in each neighborhood to a neighborhood group. Households are grouped into one of 68 demographic and behavioral segments. PRIZM combines geographic and demographic information to form all of the following segments with labels and profiles EXCEPT ______. a. less affluent, renters, 25-44 years old b. some college, 18-24 years old, rural c. affluent, home owners, 45-60 years old d. affluent, 25-44 year old, suburbanites

b. some college, 18-24 years old, rural

What is one of the characteristics of a good positioning statement? a. Unemotional b. Succinct c. Long d. General

b. succinct

A restaurateur is considering expanding his restaurant into a chain. They spend $10,000 on market research, and using that research determined that opening a new location in a specific area isn't likely to be profitable. Yet it is really hard to say "Stop!" It's much easier to say "Well, it will be ok if we tweak X" and keep trying than to say, "Yes, all the work we have put into this project and we've wasted our time and money." This line of reasoning is called _______. a. concept testing b. the sunk cost fallacy c. design and development d. focus group research

b. the sunk cost fallacy

Promotion/distribution alignments: light promo/wide distribution A. mass B. underadvertised C. hard to get d. niche

b. underadvertised

American Airlines has a rewards program that allows members to earn points which can be redeemed for airline tickets. The core elements—a round trip ticket using frequent flyer miles--have come to be expected. If the frequent flyer program works as advertised, American Airlines doesn't earn praise in the eyes of the traveler, who won't rave to friends about how great American is. However, American uses value-addeds—such as 500-mile upgrades or one bag flies free—to increase a customer's level of satisfaction. This example shows all of the following EXCEPT: a. Value-addeds can kept from switching to competitors. b. A marketer can affect a customer's level of satisfaction through value-addeds. c. A core element usually leads to customer satisfaction. d. Companies often compete on the value-addeds.

c. A core element usually leads to customer satisfaction.

Which is an example of a brand extension that is aiming for breadth? a. Cheerios rolls out different flavors—apple cinnamon, honey nut, frosted—but all are called Cheerios. b. Häagen-Dazs has different flavors of ice cream: apricot and cream, cappuccino truffle, dark chocolate orange, green tea, rum raisin, strawberry cheesecake. c. Amazon has famously extended from books and CDs to drugstore goods, computers, furniture, jewelry, services (e.g., registries)—just about everything. d. Oscar Meyer has different-length hotdogs for different-length buns and makes Lunchables and bacon, all with the Oscar Meyer name. Hide Feedback

c. Amazon has famously extended from books and CDs to drugstore goods, computers, furniture, jewelry, services (e.g., registries)—just about everything.

Marketers believe that brands have value above and beyond the benefits of the product itself. It's not just that Coca-Cola is a well-known name; it's that the name immediately invokes certain images: the shape of the coke bottle, the logo, the red color, and some of the ads. This example shows that a brand is all of the following EXCEPT: a. Logos that become shorthand for the brand itself b. Logos that come to be associated with the brand c. Brand associations that are not under the company's control d. A portfolio of qualities associated with that name Hide Feedback

c. Brand associations that are not under the company's control

John is a recent college graduate, who works as a paralegal for the state of Georgia. One rainy morning, John's car broke down. John is the fourth owner of his current vehicle. The previous owners were his dad and two older siblings. When John got the car, it had 196,000 miles. Now, John is at a critical decision-making crossroads—purchase decisions. Specifically, when making a purchasing decision, there are stages that consumers like John carry out. All of the following are true about purchase behavior EXCEPT: a. Critics say that marketers create desires in people that they didn't already have. b. In the pre-purchase phase, the customer identifies that something is lacking. c. In the pre-purchase phase, buyers assess their purchase. d. Customers go through predictable stages in making a purchase.

c. In the pre-purchase phase, buyers assess their purchase.

"Like a good neighbor, State Farm is there." State Farm Insurance's catchy jingle builds associations via classical conditioning in consumer learning. The hope is that the catchy tune is in a person's head when it's time to buy car or home insurance. A customer can make a quick, one-time insurance payment. A 10-digit key code can be found in the paper bill, and bill notification email. This example shows that beyond the tangible qualities, all of the following describe brand associations EXCEPT: a. Every outgoing message from the company to the marketplace should be positive. b. Other associative elements enhance the perceptions of brands. c. Marketers can control every brand association. d. The slogan suggests the company has a worthy mission.

c. Marketers can control every brand association.

Emily, a mother of two small children, decided to buy Subaru because she wants a car that is really safe when she drives her boys to school. When Emily consulted Consumer Reports, she found that the Subaru ranked very high on safety. Emily lives in Atlanta where there is heavy traffic so she is driving in a highly congested area and wants to feel at ease when she is behind the wheel. On Maslow's hierarchy of needs, what need is Emily trying to fulfill? a. Need for affiliation b. Need for self-esteem c. Need for security d. Need for respect

c. Need for security

During the COVID-19 pandemic, airline travel decreased dramatically. To encourage people to fly, Southwest airlines has positioned itself as the low fare, friendly carrier. Southwest is offering 65,000 frequent flyer miles for a limited time plus 3,000 anniversary points, plus double points on Southwest purchases and points for a companion pass. Southwest doesn't charge change fees or baggage fees as opposed to competitors like American Airlines. According to Michael Treacy and Fred Wiersema, in The Discipline of Market Leaders, in which of the basic corporate strategies to creating value and achieving market stature does Southwest excel? a. Customer intimacy b. Technology c. Operational excellence d. Product leadership Hide Feedback

c. Operational excellence

With respect to STP in the marketing framework, which of the following statements distinguishes segmentation from targeting? a. Segmentation deals with tangible goods, while targeting deals with intangible services. b. Segmentation identifies the customers and collaborators of a company, while targeting deals with the competitive factors in an industry. c. Segmentation identifies groups with similar wants or needs, while targeting deals with the marketing efforts required for an identified group. d. Segmentation identifies the marketing effort required for a macro-environment group, while targeting identifies the marketing effort required for a micro-environment group.

c. Segmentation identifies groups with similar wants or needs, while targeting deals with the marketing efforts required for an identified group.

Susan dropped her iPhone and went online to Amazon.com to order a replacement case. Susan is an Amazon Prime customer so her email, credit card number, billing and mailing address are already stored electronically. When the iPhone case arrived, it didn't fit Susan's iPhone because she ordered the wrong size. Susan went back to Amazon.com and clicked on "return merchandise" and she received a bar code to facilitate the return at a UPS store. The iPhone case was returned via UPS at no charge. Susan reordered the correct size iPhone 6S case which will arrive in two days. This example shows all of the following EXCEPT: a. An online purchase is a mix of the tangible and the intangible. b. Information on prices and product attributes is easier online. c. The AI of shopping bots makes online shopping more difficult. d. An online purchase is a mix of goods and services.

c. The AI of shopping bots makes online shopping more difficult.

A top-down approach is found among companies with strong engineering orientations, pharmaceutical and biomedical firms, financial services, and many high-technology companies. The internal R&D team has expertise that the end users lack. It creates cutting-edge products (e.g., a new computer, pill, mutual fund, TV ), with advanced technological benefits and advantages that seem so obvious to the experts that the team believes the product will sell itself. Which is not true about a top-down approach? a. If feedback is obtained from customers, it can be a good approach. b. The ideas come from within the company. c. This approach is referred to as "co-creation" (with the customer). d. Feedback from customers and suppliers is sought later in the process.

c. This approach is referred to as "co-creation" (with the customer).

Sony VCRs are an example of a product in the decline stage, the final phase in the product life cycle. During the market decline stage, all of the following occur EXCEPT: a. Sales and profits fall. b. Sometimes the aging product is divested. c. Timing for divestment is easy to judge. d. Rate of decline is governed by the rate of change in consumer tastes

c. Timing for divestment is easy to judge.

The Toyota Prius competes with other hybrids, other cars, and other means of transportation such as the local metro or the airplane. Marketers at Prius realize just how broadly competition can be defined in the minds of customers. This example shows that marketers at Toyota have to ask all of the following questions EXCEPT: a. Who is our competition? b. What benefits do we want to provide to the consumer? c. What do our shareholders want? d. What is our business? Hide Feedback

c. What do our shareholders want?

McDonald's sells hamburgers in India that are made with plant-based meat rather than beef. McDonald's does not sell beef in India because it is as Hindu country, and Hindus do not eat beef due to religious beliefs. In Europe, however, McDonald's sells hamburgers made with beef because many Europeans eat beef. This example shows that when a large, heterogeneous market is segmented into smaller markets as in the case of McDonald's, a company can do all of the following EXCEPT _______. a. form a more homogeneous market b. meet the demands of one or two of the groups c. appeal to everyone d. create something that is closer to what those customers want

c. appeal to everyone

Brad is an avid biker. He rides a stationary bike indoors and an all-terrain bike outdoors. As a result, marketers target Brad with biking products. This is an example of segmentation according to _______. a. geography b. age c. behavior d. attitudes

c. behavior

With respect to STP in the marketing framework, the positioning process helps a marketer to: a. evaluate groups of industrial customers who share similar wants and needs. b. choose a niche group segment from a selected set of industrial customers. c. communicate a product's benefits clearly to the intended target customers. d. analyze the market potential for a product's horizontal diversification.

c. communicate a product's benefits clearly to the intended target customers.

The Apple Watch 6 is not a major upgrade relative to the Series 5 or even the 4 Series. While there's an extra fitness related feature (the blood oxygen sensor) and new colors, the best aspects are snappier responsiveness, smoother scrolling, brighter display, faster connection to WiFi and a longer-lasting battery. For the person who likes the latest & greatest, there is some benefit. This example shows that companies like Apple seek to improve their current products for all of the following reasons EXCEPT: a. innovative image b. corporate pride c. cut costs d. staving off competition

c. cut costs

To determine if the market potential is big enough to be attractive, the estimation process follows all of the following basic steps EXCEPT _______. Some data inputs will seem like pretty good estimates (e.g., population and sub-group sizes from Census.gov). For other data inputs, it is worth doing some sensitivity analyses a. think hard about segment differences. b. get all the data you can. c. decide on which media to use. d. make your assumptions clear.

c. decide on which media to use.

Promotion/distribution alignments: heavy promo/exclusive distribution A. mass B. underadvertised C. hard to get d. niche

c. hard to get

Gillette produces razors "Fusion" and "Mach" for men and "Venus Divine" for women. The razors have the same number of blades, but the XY version is blue or black, and the XX version is pink. This example shows that _________. a. mass customization is effective b. identical products cannot be positioned differently c. identical products can be positioned differently to different segments d. mass customizations provides for quality control

c. identical products can be positioned differently to different segments

Paul is going to a smoking cessation class that has a life coach available for individual counseling sessions. Paul has been smoking for decades and really wants to lead a healthier lifestyle, but he realizes that he can't stop smoking without help. Paul decided to talk to and get advice from the life coach and received a bill in the mail for the service he received. What characteristic of a service does this example exhibit? a. Inseparable b. Tangible c. Intangible d. Perishable

c. intangible

Growth strategies: new markets + current products a. market penetration b. product development c. market development d. diversification

c. market development

Tess is offering an online cooking website called Custom Cooks, complete with how-to videos showing Tess preparing special entrees and desserts. Tess will also give subscribers her recipes and answer any of their cooking questions. To build her customer base, Tess is offering one month free for a subscription-based service to Custom Cooks. Custom Cooks is an example of a ________ strategy. a. product development b. diversification c. market penetration d. market development

c. market penetration

Skinner studied pigeons pecking at a target, or rats pressing a bar, to receive food pellets. The pigeons (and rats) learned the desired behavior by being rewarded. The behavior is said to be positively reinforced. This method is called _________. a. classical conditioning b. brand association c. operant conditioning d. perceptual fluency

c. operant conditioning

Quality/price alignments: low quality/high price = a. basics b. good value c. over-priced d. high-end

c. over-priced

When customers say that a brand like Campbell's is sincere, they mean partly the soups (e.g., made from quality ingredients) and partly the company (e.g., the ingredients come from fair trade sources). Consumers consider the product and the company part of the brand's ______. a. community b. name c. personality d. logo

c. personality

Isabella loves to cook and is trying a new recipe from a cookbook for dinner. As she reads the instructions, someone is watching television in the background, and the noisy washing machine is running. Despite the distractions, Isabella still manages to read and follow the cookbook. She is able to do this because of _______ which refers to choosing to consider certain stimuli and effectively screening out others. a. a perceptual map b. a positioning statement c. selective attention d. the symbolism of colors

c. selective attention

Brooke is a millennial who wears a Rolex watch. She can tell time by using her cell phone or her Apple Watch, but she prefers the Rolex because the prestige of the Rolex bolsters her self-image. Brooke thinks it's luxurious to own a Rolex because the price is out of reach for many consumers, and affording a Rolex shows that Brooke is financially successful. This example shows that many brands serve as ______. a. symbols of reliability b. symbols of variability c. status symbols d. symbols of predictabilit

c. status symbols

Mac users use their Apples for anything a PC can do and wouldn't consider getting a Dell, Lenovo or any other brand of computers. Likewise, young executives drive BMW 3-series cars to show that they are on the road to great achievements. These examples show that the key brand associations include all of the following EXCEPT: a. The selves to which customers aspire b. The extent to which the customer relates to the brand c. The market segment d. The expression of the customers' ideal selves

c. the market segment

Marriott hotels offer customers free breakfasts, free coffee in the room, free WiFi, and a rewards program for customers who earn points towards a free-night's stay. Other featured amenities include express check-out, dry cleaning/laundry services, free self- parking, and a 24-hour front desk. The basic product is a hotel room, but services are added _______. a. to attract high-maintenance customers b. to reduce the number of customer service employees c. to differentiate Mariott from the competition d. to allow Mariott to charge high room rates

c. to differentiate Mariott from the competition

Ben & Jerry's slogan is: We make the best possible ice cream in the best possible way. This catchy slogan grabs the attention of ice cream lovers. Ben & Jerry's distinguishes itself from competitors because of its high-quality ice cream manufactured in a sustainable way. Ingredients are sourced locally, assisting the local dairy farmers in Vermont. Taking care of the environment is an important factor for Ben & Jerry's customers. This is an example of a(n) ________. a. mission statement b. customer intimacy c. unique selling proposition d. operational excellence

c. unique selling proposition

A low-involvement purchase would have which of the following characteristics? a.Low levels of price sensitivity b.Significant levels of word of mouth c.Use of price discounts d.Marketed with focus on providing information

c. use of price discounts

Mathematical model of diffusion

chapter 8 slide 37-38

why is the purchase phase central in the marketing exchange?

companies receive "payment" for satisfying customer needs/wants. All marketing activities contribute to this customer-company relationship.

Lexicographic method:

compare all brands on most important attribute; cut brands that don't have it; move on to next important attribute and compare and cut, etc.

example of a breadth strategy

computer companies make monitors ultra-compatible so they can be sold in desktop packages or as a second monitor for laptop users

Ideals

consumers make choices based on their knowledge and principles

Types of consumer purchases

convenience, shopping, specialty

A marketer should choose a brand name that

conveys its benefits

Co-creation (bottom-up or outside-in)

customer and company co-create products

marketers create segments because

customers vary in preferences

Perceptual map

customers' perceptions of firm's strengths/weaknesses relative to competitors. displays, in two or more dimensions, the position of products or brands in the consumer's mind

Tailored strategy

customizing products for each segment

Amazon.com looks just like Amazon.co.uk, and Google. com looks like Google.fr. There are corporate efficiencies to using the same brand information, communications, and strategies everywhere. True global brands are those that seek, achieve, and maintain similar positioning in all their markets. Which of the following is NOT true of a global brand? a. A global brand name carries one logo anywhere it is offered. b. A global brand name carries one brand name anywhere it is offered. c. A global brand name is available in most markets in the world. d. A global brand name seeks, achieves, and maintains different positioning everywhere in the world. Hide Feedback

d. A global brand name seeks, achieves, and maintains different positioning everywhere in the world.

All product-related issues become more complicated when we broaden our scope to include not just a particular brand of focus, but the company's larger portfolio. All of the following can be said about a product mix EXCEPT: a. Product lines can vary in depth. b. A product mix is composed of several product lines. c. Product lines can vary in width. d. A product mix is comprised of one product line. Hide Feedback

d. A product mix is comprised of one product line.

Business segmentation includes all of the following categories EXCEPT: a. NAICS industry b. Account size c. Company size d. Age and education

d. Age and education

Mourners in Egypt wear yellow, yet yellow implies courage in Japan and the opposite, cowardice, in the United States. This example shows all of the following EXCEPT: a. Simple colors imbue brand associations. b. The symbolism of colors varies across cultures. c. Marketers frequently use color to convey information. d. Colors cannot be integral to brand identities.

d. Colors cannot be integral to brand identities.

Best Buy is not performing well in Europe because of the European preference for smaller retail stores over big-box stores. Starbucks is not performing as well in Australia because locals prefer their own coffee shops' hospitality and boutique feeling. Repositioning global brands may be necessary for profitability. The positioning matrix helps marketers make decisions in many marketing scenarios. Best Buy and Starbucks should consider all of the following decisions EXCEPT: a. Do we go heavy promotion? b. Do we go wide availability? c. Do we go low price? d. Do we leave the market?

d. Do we leave the market?

Santos owns a hair salon in Odessa, Texas. He has won many awards for his styling and has designed the haircuts for several Miss Texas award winners. Santos currently markets his hair products to women between 25 and 55 years of age, but sales are flat because many women in this age group order hair-care products online or go to the hair salons at the local mall. If you were advising Santos on a strategy to increase the sale of his products, what strategy would you tell him to use? a. Niche strategy b. Positioning strategy c. Pricing strategy d. Expansion strategy

d. Expansion strategy

Ace Hardware sells snow-blowers and all the replacement parts for snow-blowers throughout its stores nationwide. When evaluating the level of sales, Ace's management realizes that snow-blowers tend to sell better in the North than in the South because of the heavy snow and ice during the winter months. On the other hand whereas the reverse is true for chlorine and patio furniture, which produce a greater number of sales at Ace Hardware in the South. This example shows that: a. Education shapes consumer preferences (e.g., opera vs. opry). b. Income facilitates certain consumer choices (e.g., Four Seasons vs. Motel 6). c. There can be cultural differences within a country. d. Geographic distinctions among customers are used to segment markets.

d. Geographic distinctions among customers are used to segment markets.

An energy drink like Red Bull is usually not considered a competitor of coffee brands such as Nespresso or Starbucks. However, since both coffee and energy drink fulfill a similar need (i.e., staying awake/getting energy), customers might switch from one to another if they feel that prices increase too much in either coffee or energy drinks. This will ultimately affect an industry's profitability. Michael Porter, in his books on competitive strategy, discusses generic strategies driven by keeping costs down and prices competitive. Using a positioning matrix, what should Red Bull map? a. Substitute products vs. high prices b. High price vs. high quality c. Heavy users vs. high quality d. Low price vs. high quality

d. Low price vs. high quality

A perceptual map is a visual technique that shows how the average target market consumer understands the positioning of the competing products in the marketplace. In other words, what information does a perceptual map NOT gain the marketer with respect to targeting? a. Given that price is their strength, a competing firm would react swiftly. b. If a segment targeted is price sensitive, our firm must be wary that a competitor will react. c. A segment will be attuned to price sensitivity if it owns a specific price point identity. d. New unidentified segments could add to the competition in the marketplace.

d. New unidentified segments could add to the competition in the marketplace.

Businessweek.com reports a Boston Consulting Group study in which "length of development times" was the #1 obstacle in innovation. External, regulatory delays to product launches include all of the following EXCEPT: a. Delays by approval agencies, such as patent offices b. The time for copyright registrations for intangibles like software and movies c. The length of time to market for clinical trials d. Pushing drugs to market too quickly resulting in side effects

d. Pushing drugs to market too quickly resulting in side effects

One in seven people are Hispanic and that this subpopulation is growing faster than any other. Hispanics represent 18.4 percent of the U.S. total population. In 2019, among Hispanic subgroups, Mexicans ranked as the largest at 61.4 percent. Following this group are: Puerto Ricans (9.6 percent), Central Americans (9.8 percent), South Americans (6.4 percent), and Cubans (3.9 percent). All of the following can be said about the power of the Hispanic consumer EXCEPT: a. Hispanic consumers control nearly $1 trillion in spending power. b. The power of the Hispanic consumer is a substantial trend. c. There are large-scale demographic shifts in the United States. d. The Asian-American population is growing faster than the Hispanic population.

d. The Asian-American population is growing faster than the Hispanic population.

In the United States and Japan, people spend what they earn (or more), so retirees are going to be hurting. Italy's citizens are among the oldest in Europe, but they're good savers. Germany's age demographics and savings habits are somewhere in between. These trends show all of the following EXCEPT: a. Demographic, lifestyle, and cultural trends boost or constrain the success of a new product. b. The most stunning demographic trend in America and Western Europe is the aging of the population. c. Trends form the context for new product forecasting. d. There is no wealth implication of aging.

d. There is no wealth implication of aging.

As part of their overall marketing strategy, a company needs to answer all of the following important branding questions EXCEPT: a. Will the company offer multiple products under the same brand name or roll them out with distinct brand names? b. What are the purposes of brand extensions, line extensions, and co-branding? c. How are brands best rolled out globally? d. What is a brand loyalty program?

d. What is a brand loyalty program?

Chipotle is a restaurant franchise that promises "Food with Integrity". Chipotle provides premium, real ingredients for customers looking for delicious food that's ethically sourced and freshly prepared. Chipotle's dedication to cultivating a better world by cutting out GMOs and providing responsibly raised food sets them apart in the food industry. Chipotle's positioning statement appeals to those who care about ethically sourced food. Chipotle's positioning statement answers which of the following questions? a. What is your competitive advantage? b. What is your product category? c. Who are you competing with? d. Who is your target segment?

d. Who is your target segment?

An actual product is the physical or tangible product which a consumer buys to get the core benefits that this product is offering. For example, if the core benefit that a consumer seeks is reading then a ______ is the actual product. a. bookmark b. an attractive cover c. quality paper d. book Hide Feedback

d. book

Entrepreneurs should forgo ego and choose brand names that ______. a. has no inherent meaning b. is the name of the founder such as Christian Dior or Yves Saint Laurent c. show little creativity in marketing d. convey information to customers about the benefits of the brand Hide Feedback

d. convey information to customers about the benefits of the brand

The central players in a marketing exchange are: a. price and promotion. b. collaborators and competitors. c. context and market concentration. d. customer and company.

d. customer and company.

Growth strategies: new markets + new products a. market penetration b. product development c. market development d. diversification

d. diversification

Katrina has an online jewelry business which sells trendy one-of-a-kind items, which are fun to wear. In addition to jewelry, Katrina sells t-shirts with funny messages such as "permanently tired." Katrina wishes to use social media to target potential customers in the 18-29, year old age group. Which platform should Katrina use? a. Instagram b. Snapchat c. Linked-In d. Facebook

d. facebook

Quality/price alignments: high quality/high price a. basics b. good value c. over-priced d. high-end

d. high-end

Marketers consider all of the following when evaluating a sementation plan EXCEPT: a. Databases to access segments b. Data for identify segments c. Fit with corporate goals d. Inactionable

d. inactionable

A terrific online source of U.S. demographic data is the census which provides data on all of the following categories EXCEPT _______. a. location of residence b. income c. age d. lifestyle

d. lifestyle

Juan plans to start a landscape business and provide lawnmowing, landscape design, shrub, tree, and flower planting, and landscape maintenance. Juan wants to choose which market segments to target. He should do all of the following EXCEPT ________. a. do some what-if-scenarios b. vary the numbers in the scenarios c. check the upper and lower bounds of his predictions d. loosely define the target market

d. loosely define the target market

Promotion/distribution alignments: light promo/exclusive distribution A. mass B. underadvertised C. hard to get d. niche

d. niche

Brooke has a small, special occasion, yard sign business. She paints birthday, anniversary, and graduation signs with the recipient's name included and rents the sign for $75. Brooke delivers and picks-up the sign. Even though Brooke doesn't advertise, Word-of-mouth, usually from one parent to another celebrating a child's birthday, has made Brooke's business grow. This is an example of: a. Experiences marketing b. Image marketing c. Mass marketing d. Niche marketing Hide Feedback

d. niche marketing

The Davidson Company sells lumber and wants to decide how much inventory it will need over the next year. There is a significant amount of new construction going on in the community. To assess the need for lumber, The Davidson Company looked at the data for lumber sales over the past several years and based his assumptions for future on past data. This example shows that it's always a risky to predict growth, but a smart technique is to ________. a. obtain data on the age of potential home buyers b. gather data on the income level of the targeted segment c. use the census data to see household trends d. obtain sales data in the industry for several years and draw a conclusion through a moving average

d. obtain sales data in the industry for several years and draw a conclusion through a moving average

Alan reads all the time. He rarely watches television because he prefers reading novels on his Kindle. He buys novels from Amazon.com every week and uses his Kindle because of the back-lighting on the screen and the ability to change the font size. Alan also likes the portability of the Kindle. It is lightweight and replaces carrying around heavy books. Alan's behavior shows that if marketers know consumers are avid readers, they know what they enjoy, their social orientation, and the categories of purchases they'd be easily enticed to make. This is why marketers are interested in _________. a. age demographics b. household composition c. country of origin d. psychological and lifestyle choices

d. psychological and lifestyle choices

When Eve goes to Amazon.com to purchase a pair of socks, she can just look at a pair and know before buying them whether she will like them. Eve can see the color, the price, the material they're made of, and she can imagine immediately what they'll feel like on her toes. This example shows that ________ qualities are the attributes that may be evaluated prior to purchase as customers like Eve learns about competitive offerings. a. perishable b. experience c. credence d. search

d. search

Todd has a small business that manufactures sportswear. Todd learns that corporate volleyball teams are growing in popularity, and they need team shirts with their logos. Todd feels that his company can provide the shirts with corporate logos and likely be successful. This is an example of: a. Market segmentation b. Profitability c. Perceptual mapping d. Strategic fit

d. strategic fit

At first glance, the Amazon logo looks like it is underlined by a smile but look closer—the smile is actually a kind of arrow! The smile at the bottom of the 'AMAZ' includes an arrowhead, starting at the A and ending with the Z. This conveys that they sell everything you need, from A to Z. The idea that an ad can be shown very quickly, online, on TV, or in the movies, so that it doesn't quite meet the threshold of consciousness, is said to be __________. The message is captured subconsciously, and marketers hope the message will compel action. a. a perception map b. sensation c. perceptual fluency d. subliminal advertising

d. subliminal advertising - An ad shown so quickly so that it doesn't meet the threshold of consciousness is called subliminal advertising. Refer to 2-3: The Marketing Science of Customer Behavior.

Nike makes athletic shoes, sports jerseys, gym bags, and other products, all of which bear the same company brand name and swish logo. Canon's cameras and photocopiers say Canon. GE puts its corporate brand on its diverse lines of appliances, lighting, financial services, and engines. A company like Nike or Canon that attaches the same brand name to all of its products is using (a)n _______ approach. a. house of brands b. brand-association c. brand equity d. umbrella branding

d. umbrella branding

Dollar General is a convenience-store franchise that sells Diet Pepsi. The local Pepsi distributors supply Dollar General based on whether it has heavy sales, medium sales or light sales of Pepsi or Diet Pepsi—big accounts vs. small accounts. This example shows that B2B customers like Pepsi distributors and Dollar General are usually segmented by _______. a. attitudes, b. transactions c. demographics d. volume

d. volume

In order to better understand how different groups of customers feel about its product, Villalat Company will need to a.position its product in the market. b.mass market its product. c.target market its product. d.segment the market.

d.segment the market.

Bases for segmenting in B2C

demographic, geographic, attitudes, behavior

Services are dominated by

experience and credence qualities

Intangibility (Goods and Services)

extent to which you have something concrete •Pure goods: e.g., paper & phone •Pure services: e.g., massage & babysitting •Hybrids: e.g., restaurant & beauty salon

Opportunities/threats are usually

external factors

perceptual maps help a. facilitate an understanding of position b. facilitate an understanding of targeting c. facilitate an understanding of the product

facilitate an understanding of position

brand communities

formal or informal groups of people united by their interest in and ownership of particular products •Customers connect with like-minded customers. •They have extreme attachments to brands. •e.g., Apple, Nintendo, Duck brand duct tape

Smell can

get attention, allow product sampling

Segmentation: Psychological

get inside the heads and hearts of customers •Attitudes (e.g., favorable attitude toward "green" products) •Knowledge and awareness (e.g., don't know about the product) •Wants and needs (e.g., need for safety) •Affiliations (e.g., members of the AMA) •Traits (e.g., extroverts who want to socialize) •Expertise & involvement (e.g., new motorcycle enthusiasts) •Brand attributes sought (e.g., low price and red color) •Risk orientation (e.g., risk-adverse late technology adopters) •Aspirations (e.g., want to be a better cook)

market segments are

groups of customers with similar reactions to the company's brand

Hard to sustain matches

high quality at low prices (with either light/heavy promo, wide/exclusive dsitribution) a company will be tempted to raise prices or let quality slip, settling back into an equilibrium on quality and price.

Example of a depth stratgey

high-end grocers know their shoppers will want organic produce AND fair trade coffees AND cosmetics that have not been animal tested

Non-compensatory method

if a brand doesn't have important attributes, it is cut

Hearing can:

increase spending (quick tempo music = increased spending) convey a brand (Harley Davidson's distinctive sound)

SWOT analysis chart

internal (corporate) + favorable = strengths internal (corporate) + unfavorable = weaknesses external (environment) + favorable = opportunities external (environment + unfavorable) = threats

strengths and weakness are (internal/external)

internal characteristics - usually used to compare to competitors •Should include customers' perspectives Requires market research

House of brands approach

introducing a new brand name for every product line •Any problems with one brand should not influence the other brands. •Brand images need not be consistent, which allows for targeting multiple segments. •More advertising expense is required. •e.g., Procter & Gamble has 80 major brands.

brand recognition

involves creating a positive link to the product in the consumer's mind so that the consumer is more likely to choose a particular brand from among many choices.

When estimating brand value

it is important to use a brand contribution index multiplier against the intangibles. Doing so helps to derive the proportion of those intangible earnings that can be legitimately claimed as due to the brand.

ex: of tailored strategy

lots of bev companies do this. for ex: targeting coca-cola to youth and diet coke to their parents, or macho beer to men and light beer to women. also razors!

Suboptimal matches on the positioning matrix

low quality/high quality, exclusive distribution, heavy promotion light promotion, low/high quality, exclusive distribution heavy promotion, high price, low quality, wide distribution heavy promotion, low quality, high price, exclusive distribution light promotion, high price, low quality, wide distribution light promotion, high price, low quality, exclusive distribution

Fourth stage of product life cycle

market decline •Sales and profit decline. •New products replace older generations. •Old products may be •Divested: sold—sell early to get best price •Harvested: support reduced •Rejuvenated: refurbished with new benefits

Second stage of product life cycle

market growth •Sales and profits increase. •Distribution coverage is greater. •Price may increase. •Competition: •Competitors enter the market and kill each other off or specialize. •Product needs competitive advantage. •Promotion focuses on product's superiority.

First stage of product life cycle

market introduction •Low sales •Heavy marketing spending on awareness •Pricing strategies •Penetration: low price •Skimming: high price; recoup R&D costs •Limited distribution

Strategic criteria for targeting

market is attractive + corporate strengths = go for it! market doesn't look so hot + corporate strengths = hmm... market is attractive + less capable corporation = hmm... market doesn't look so hot + less capable corporation = avoid

Third stage of the product life cycle

market maturity •Industry sales level off; competition is fierce with weaker firms leaving; profits decline. •Promotion focuses on product's superiority and provides a reminder to buy. •Product line may be extended and new benefits may be added. •Marketing costs increase and price falls due to competition.

MP

market potential

Both brand recognition and brand recall are

marketing goals

what determines positioning?

marketing mix: (4P's) - product - price - place - promotion

Marketing segmentation

mass marketing (low customer satisfaction) marketing segmentation (just right) one-to-one marketing (not profitable)

Types of segmentation

mass marketing, marketing segmentation, one-to-one marketing

heavy promotion + wide distribution

mass produced product

$SP

maximum sales

light promotion + exclusive distribution

niche product

breadth

number of product lines -Frigidaire sells refrigerators, washers, dryers, ranges, etc.

depth

number of products in a line -Frigidaire refrigerators have different sizes and features.

opportunities and threats are usually driven by changes in what?

one of the 5C's ex:•Ease of Internet access •Growing Hispanic population in United States •New competitors •New offerings from existing competitors •Lack of competitors within a market •Aging baby boomers

Positioning via perceptual maps

perceptual maps show graphical depictions of how the brands and their competitors are perceived in the minds of customers

examples of affective brand experiences

pixar hersheys twitter

The purchase process

prepurchase, purchase, postpurchase

credence qualities

product characteristics that are difficult to evaluate even after they have been experienced/post-consumption

Central offering in the marketing exchange

products

Segments should be

profitable, identifiable, accessible, actionable, compatible with company goals

Segmentation: VALS

psychographic segmentation tool based on three consumer motivations: ideals, achievement, self-expression

PI

purchase intention •Likelihood target will buy the product •Use recent marketing research (e.g., assume research suggests PI = 0.7) •Note: Customers usually overstate PI; estimate ¾ downward

Breadth strategy

reaching multiple segments with a single product

rejuvenated product

refurbished with new benefits

Goods are dominated by

search and experience qualities

census.gov cross-classifies businesses by what?

sector and size •Markets for some products or services might be limited only by imagination.

as segment size decreases

segments become less profitable

As segment size increases

segments become more heterogeneous

Consumers have what kind of attention

selective attention; they block out what is not relevant.

depth strategy

serving one segment well

Line extensions

similar products offered under the same brand name -increases DEPTH, new product within a line (ex: Cheerios has various flavors)

Brand personalities

sincerity: covers both product and company: quality and integrity excitement: innovative/cool competence: characterizes technical firms sophistication: leaders in tasteful design/fashion ruggedness: bring to mind their toughness

divested product

sold—sell early to get best price

SWOT

strengths, weaknesses, opportunities, threats

harvested product

support reduced

Search qualities

tangible attributes that may be evaluated prior to purchase

niche

targeting small market that firm serves well

the gatekeeper

the buying center participant who controls information or access to decision makers and influencers a person who can grant or block access to key decision-makers

Positioning is seen through

the eyes of the customer

mass produced product

the manufacturing of large quantities of standardized products

Brand associations

the mental links that consumers make between a brand and its key product attributes; can involve a logo, slogan, or famous personality

the initiator

the person who brings up the idea or identifies a need

the user

the person who consumes or uses the product or service purchased by the buying center

the buyer

the person who handles the paperwork of the actual purchase

diffusion of innovation

the process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters

attractiveness of the market relates to

the profitability for the company

Sensation and perception

the study of how the senses collect energy from the environment and then process this sensory information

Brand equity

the worth of a brand aka, the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service

Brands can command higher prices because...

they offset risk

brand recall

trickier than brand recognition. It requires a strong link to a particular brand within a product category so that the brand comes to mind as part of a consumer's consideration set. Can the consumer bring the product to mind even when the options are not in front of the consumer?

Critics say marketers create desires in people that they didn't already have: T/F

true

USP

unique selling proposition

positioning is achieved how?

via the marketing mix (4P's)

Beta testing

•A beta version is made available for trial. •Ideal to simulate a real-world purchase •Used to help forecast sales •Customer reactions to marketing materials are also examined. •Ad copy, price points, distribution, etc. •Clarifies image of product to customer •Allows company to get feedback •Try product in market on a small scale before an expensive full-scale rollout. •Area test markets •Product is made available and ads run in a few metropolitan areas. •Sales are observed and compared to sales in control markets. •Not as commonly used now: •Expensive, require setup, and tip off competition •Electronic test markets are more valid than area test markets. •Households within sample metropolitan area are selected; some are designated "test" and some are "control." •Electronic (cable) transmissions are sent to test households, but not sent to control households. •Differences between test and control households' purchasing are evaluated.

Brand name

•A brand starts with a name. •Some names immediately convey information. •e.g., YouTube •Some names suggest their benefits. •e.g., Optical4less •Some names are those of their founder. •e.g., Christian Dior

Market segments

•A group of customers who share similar inclinations toward a brand •e.g., One segment might purchase a car primarily to get from A to B while another segment may purchase a car primarily to impress their friends.

What is a product (4P's)?

•A product can be either a good or a service. •It is the most essential decision in the 4Ps because it is what the consumer is receiving in the exchange.

Forecasts are important to

•Accounting and finance for budgeting •Sales force for setting sales goals •Production and logistics for planning equipment, storage, transportation, etc.

Mass marketing

•All customers are treated the same. •Is usually more efficient but may not meet customer needs. •e.g., Pepsi seems to be mass marketed but is not. •Pepsi, Diet Pepsi, caffeine-free Pepsi, 2-liters, 12-pack cans, 6-pack bottles, etc.

Subliminal advertising

•An ad that is shown so quickly that it doesn't meet the threshold of liminal recognition. •Has been debunked by research.

Form small groups of 3-6 participants. Assign half of the groups to part A and half to part B. 1.In small groups, design a loyalty program for a deli that uses operant conditioning with •Part A: fixed ratio reward •Part B: variable ratio reward 2.Have groups share their loyalty program particulars and then discuss which reward ratio is likely to be more effective and why.

•Answer: •Part A: A fixed ratio reward might be a loyalty card (after 10 purchases, get one free); a deal-of-the-day; etc. •Part B: A variable ratio reward might be surprise deals (2-for-1 item at random times); an extra item randomly for recognized customers; sales •Answer: Answers will vary. In general, variable ratio rewards tend to be more effective.

Three major classes of purchases

•B2C: convenience, shopping, specialty •B2B: straight rebuy, modified rebuy, new buy •Involvement determines class

Attitudes are a mix of beliefs and importance weights:

•Beliefs (e.g., I think Sprite has caffeine) •Importance (e.g., I think having caffeine is important) •Customer may differ on both importance and beliefs

Why brand?

•Brands convey information to customers. •Company ownership •Predictability of quality •Reliability of product performance •Brands reduce the perceived risk in consumer choices. •Brands act as status symbols. •Brands link product characteristics to a company. •Brands convey quality. •Induce loyalty •Increase repeat purchasing •Allow charging of premium prices •Brands allow a single firm to pursue multiple market segments.

Segmentation defined

•Breaking the market into more homogeneous consumer groups •A single product, price, or promotion is unlikely to satisfy all consumers' needs. •e.g., Taylor Swift appeals to tweens; Robert Redford appeals to seniors.

Segmentation: Geographic/Demographic

•Combining geographic and demographic information can be powerful.

Positioning

•Communicating product's benefits clearly to the intended target •Developed through the 4Ps

Decision Making: stage 2

•Compare brands in detail. •Compensatory model (cost/benefits) •One excellent attribute can compensate for a poor attribute. •Some websites aid this process by allowing users to view a side-by-side comparison of attributes.

Concept in action: sensitivity analyses

•Conduct sensitivity analyses on the harder-to-verify numbers. •Increase and decrease the numbers and determine the impact on market size. •This process will determine: •Which numbers have the biggest impact •Conduct more research to ensure accuracy •The upper and lower bounds of the market, which will help planning

Segmentation: Behavioral

•Consumer-related behaviors people engage in (•Attitudes can't be observed; behaviors can. •Intentions do not always equal behaviors. •Behaviors help predict future behavior.) •Current users; nonusers (•Nonusers may use competitors or don't buy. •80:20: 80% of sales come from 20% of customers. •It costs six times more to acquire a new customer than to retain a loyal one.) •Patterns of co-purchasing (•Purchase a new house, usually purchase new appliances, curtains, etc. •Create opportunities for cross-selling.)

Segmentation according to psychologists

•Consumers have different motivations that drive their purchases.

Post-purchase phase

•Customers assess the purchase and the purchase process. •Customers determine satisfaction - Did the customer get what was expected? •Customers' level of satisfaction leads to: •Repeat purchases •Negative or positive word of mouth •Product returns, etc.

trends to watch

•Demographic, lifestyle, and cultural trends can boost or constrain success of new products. •Demographic trends •Aging of population •Hispanic population growth •Lifestyle trends •More wealthy Americans •Growing concern for environment and corporate social responsibility •Cultural trends •Cultural differences (e.g., Internet usage) Role of China and fast-growing economies

Positioning comprises much of a marketers responsibilities. it requires:

•Designing a product with benefits that the target segment will value. How do you want your customers to think about your brand? •Pricing your product so it's profitable yet seen as valuable. How high a price can you command for your brand? •Building distributor relationships to make the market offering available. Where do customers go to find your brand? •Communicating all of this to the customer through an array of promotional activities—what do you say about your brand?

Strategic needs of products at different points in their life cycles

•Determining reputation compared to competitors Assessing level of risk versus aggressiveness

Taste can

•Distinguish one brand from another •e.g., Coke vs. Pepsi

How to evaluate segmentation schemes

•Does the segmentation scheme have: 1. Data to identify segments? •Census data: available but may not be useful •Commercial data through VALS or Prizm: expensive •Specific survey may not be available. 2. Databases to access segments? •Databases that give access to the specific people within your chosen segments 3. Profitability? •Size matters but so does frequency and depth ($) of purchase, price sensitivity, segment stability, growth potential, competitive intensity, etc. •Use information to estimate segment value. •Be careful not to segment too narrowly. •Determine what matters to your product. 4. Fit with corporate goals? •Consider your firm's goals and image. •e.g., Subzero (high-end refrigeration) does not "fit" with the low-end refrigerator market. 5. Actionable? •Marketers must focus on the right criteria. •It is common to link usage, attitudinal, etc., variables to demographic variables to make the segment more actionable.

One-to-one marketing

•Each customer serves as a segment. •Product is tailored for each person's desires. •Is usually more effective in meeting customers' needs, but hard to achieve efficiently and may involve quality issues. •e.g., Dell allows customers to "build" their own computers; however, options are limited.

Diffusion of innovation: late majority (next 34%)

•Even more cautious •Often older and more conservative •Want to buy only proven products

Diffusion of innovation: early adapters (next 10-15%)

•Even more influential as opinion leaders because the group is bigger

Ex: what would come to mind first when Louis Vuitton is activated?

•First are the tangible attributes: luggage and briefcases. Next would be less tangible product benefits: good quality, good design, and expensive. Finally, those intangible product benefits appear: shows that I have good taste and can afford it.

Ingredient branding

•Form of co-branding in which one company adds value to a host product: •One company dominates the other: •e.g., Intel in many PCs

Segmentation: Geographic

•Geographic distinctions between customers can change preferences/needs. •Cultural differences can exist between countries or within a country. •e.g., residents of southern U.S. states prefers spicier food. •Urban living is different than small town. •e.g., NYC residents want smaller dishwashers. •Hot climates require different products than cold climates. •e.g., Minnesotans need snowblowers.

Launching of a product

•Goal of forecasting is to estimate sales potential ($SP), not sales •Determine market potential (MP); how many units might be sold •Start with secondary data (e.g., census, sales for similar products, relevant in-house benchmarking data, etc.) •Estimate the purchase intention (PI) •Likelihood target will buy the product •Use recent marketing research (e.g., assume research suggests PI = 0.7) •Note: Customers usually overstate PI; estimate ¾ downward

Product

•Goods or services customers need or want •What should constitute your product mix? What features and benefits should comprise each product?

Anatomy of a grocery store

•Group similar products •Group complementary products •Place common purchases far from the entrance •Group products to form consideration sets •Place high-profit and impulse-purchase items at end of aisles and checkout lanes

Acceptance of new products tends to be higher when the new product:

•Has clear relative advantage •Is compatible with customers' lifestyles •Is not overly complex or has a user-friendly interface •Is easily tried or sampled

High-involvement purchases

•Have less price sensitivity •Use brand communities and events •May generate word of mouth •Are usually distributed selectively •Marketers should focus on providing consumers with information

Low involvement purchases

•Have more price sensitivity •Use price discounts •Generally don't generate word of mouth •Are usually distributed intensively •Marketers should focus on how to capture consumers' attention

Specialty purchases

•High involvement; occasional purchases, often more expensive, require more thought •Customers put much effort into the purchase

Electronic Test Market

•Households within sample metropolitan area are selected; some are designated "test" and some are "control." •Electronic (cable) transmissions are sent to test households, but not sent to control households. •Differences between test and control households' purchasing are evaluated.

Brand association network

•How it works •When brand name is activated, associations are triggered. •Nodes closest to the brand are retrieved first. •Customer satisfaction with the brand is most heavily influenced by the positivity or negativity of nearest links. •Networks may be simple or complex. •It depends on focus and consistency of advertising.

Concept in action: market sizing

•How much advice can a consultant sell? •Use Factfinder.census.gov to estimate. Segments that refine total U.S. population: •Age 25-44 •Assume 26.6% of total population •Professional careers •Assume 18% professionals •Local population •Assume 580,000 in Las Vegas

Price

•How much should you charge given your costs, competitive pricing, and customer demand?

Place

•How will you get the product into customers' hands? Will you go directly to customers or use channel partners?

Vision can:

•Identify colors that convey product characteristics, brand identity, meaning

Competitor analysis is integral to differentiating benefits of new products

•Identifying which industries and companies are truly competitors •Anticipating competitors' likely reactions

Forecast sales

•If not promising, abort launch. •If promising, launch.

Segmentation according to economists

•Imperfect competition exists; consumers have unique needs.

Concept in action: Segmentation variables; insurance industry example

•Insurance industry example •Industry is large and competitive. •Segment market using cluster analysis •Survey customers; identify questions where there is variability in responses. •If no variability in responses, do not segment on that variable. •Useful segmentation has variation across groups.

Where do new ideas come from

•Internal •Boss/business owner •R&D, in-house experts, brainstorming •Employees (e.g., suggestion box) •Feedback from front line, sales force •External •Observing customers (complaints, lead-users, marketing research, focus groups, blogs) •Business partners (requirements to decrease costs, requests to enhance quality) •Competition •Context; that is, trend-spotting

Product launch delays can be caused by

•Internal activities such as testing •External factors such as regulations •e.g., new pharmaceuticals take years •Promotional efforts are intended to create enough sales to recoup development costs.

Strategies (strengths/weaknesses)

•Leverage firm's strengths •Improve or design around firm's weaknesses

Diffusion of innovation: innovators (first 3-5%)

•Like to try new products; willing to take risks

Convenience purchases

•Low involvement; standard, frequently consumed goods or impulse purchase •Consumers don't spend much time thinking or planning the purchase

Context

•Macro-environmental forces facing the firm: •What is going on politically or legally that might affect the firm? •What is going on with the economy that might affect the firm? •What trends are occurring in society that might affect the firm? •What technological innovations might affect the firm?

Maslow's hierarchy of needs

•Maslow suggests that people must have their basic needs met before moving on to more abstract needs. •Marketers may identify their product with one of Maslow's needs. •e.g., Volvo and safety needs •Many brands are associated with a sense of belonging, social acceptance, and respect.

Shopping purchases

•Medium involvement; not as frequently purchased •Consumers spend time and effort prior to purchase

Diffusion of innovation: early majority (next 34%)

•More risk averse •Waiting to hear about favorable experiences from early adopters

Diffusion of innovation: laggards or nonadopters: next 5-15%

•Most risk averse •Skeptical of new products •Stereotypically lower in income •Product category may not be relevant to them

What is a brand?

•Name of a specific product •Portfolio of qualities associated with a name •Invokes images in consumers' minds •Have value beyond the benefits of the product

Decision making, stage 1

•Non-compensatory method: if a brand doesn't have important attributes, it is cut. •Lexicographic method: compare all brands on most important attribute; cut brands that don't have it; move on to next important attribute and compare and cut, etc.

Use of the nudge

•Nudge is a gentle means of mental persuasion. •Operates on the level of the nonconscious •Marketing tool to influence consumers' information processing •Walks a fine line between helpful and unethical

•Have each group select a relatively recent product and outline the likely stages of this product's new product development process. •Each group shares with the class the highlights of their product's development process. •What differences were evident for various products?

•Outline the likely stages of this product's new product development process. •Answer: Products selected and the related new product development processes will vary between groups, but there should be a brief description of the idea generation; estimated market potential determination; design and development process; beta testing; and launch. •What differences were evident for various products? •Answer: Answers will vary. Processes should have similar elements that will vary in their specifics, depending on the product.

Classical conditioning

•Pavlov's dogs: •Stage 1: a dog drools at sight of food •Stage 2: a dog doesn't respond to a bell •Stage 3: ringing a bell while placing food in front of the dog elicits drool •Stage 4 (occurs over time): a bell rung in front of the dog elicits drool •A similar process can be used in advertising and jingles. •Companies may have negative brand associations in customers' memories. •Some companies change names to help create new associations (e.g., Philip Morris is now Altria; ValuJet is now AirTran).

simulated test market

•Popular premarket launch tests. •Customers are recruited and given play money to shop in a simulated environment. •They can buy the new product and competitors' products. •Advertising materials are available with competitors' advertising. •Marketers record purchases. •Customers complete a survey. •Data are used as input to forecast sales.

Single provider perceptual map

•Positioning various qualities on a perceptual map reveals a company's strengths and weaknesses.

Store brands

•Private label brands •Good for price-sensitive markets •Can be more of a "me-too" product offering •Can be premium private label •e.g., Walmart's "Sam's Choice" •Retailer can offer decent quality for lower prices due to reduced advertising costs. •Manufacturers are launching second labels to compete with store brands.

Colors are an important part of marketing

•Product characteristics (white for freshness for toothpaste) •Brand identity (Tiffany's aqua blue) •Meaning (affected by culture)

Area test markets

•Product is made available and ads run in a few metropolitan areas. •Sales are observed and compared to sales in control markets. •Not as commonly used now: •Expensive, require setup, and tip off competition

Product line strategies

•Product line managers can prune or supplement existing lines. •Offering multiple products through multiple segments is rather inefficient and doesn't leverage the company's knowledge of its customers or its products.

Goods vs. services: intangibility

•Pure goods: e.g., paper & phone •Pure services: e.g., massage & babysitting •Hybrids: e.g., restaurant & beauty salon

Diversification

•Pursue new markets with new products •Too difficult for most companies due to lack of experience in product and market •Toughest strategy

Market development

•Sell existing products to new segments •Move global or target different segment •May need to change image, channels, etc.

Product development

•Sell new or modified products to current customers •Introduce extensions or new variations •Company wants to be innovative

Market penetration

•Sell the same products to current customers •New ways to use, better marketing mix, etc. •Easiest strategy

Learning, memory, and emotions

•Sensory and perceptual impressions can become brand associations. •Learning is the process by which associations get past the sensory and perception stages into short-term memory and then, with repetition and elaboration, into long-term memory. •Classical and operant conditioning

Cultural differences

•Sociocultural differences—social class, age, gender, ethnicity, and nationality—influence consumer impressions and preferences and produce shopping patterns.

Achievement

•Some consumers will buy products and services to demonstrate their success to others.

Positioning Statement

•Succinctly communicates parameters of a position •Addresses the target market •Expresses a unique selling proposition (USP) •If a "real" attribute difference does not exist, create a "perceived" image difference. •e.g., For customers who want {target}, our brand is the best at {USP}. •

Managerial recap: targeting

•Targeting is important but not difficult. •Choose target by iterating between •Corporate fit •Utilize SWOT to help clarify corporate fit. •Segment sizing •Use secondary data (e.g., demographics). •Use customer survey data on attitudes and preferences and use behavioral data to smooth out the size estimation.

Targeting:

•Targeting is selecting one or more market segments to pursue.

Competitors

•The companies/people a firm works against and how they compare to the firm in terms of resources, capabilities, customer preferences, reaction patterns, etc.

Collaborators

•The companies/people a firm works with •Are these relationships strong? Can these relationships be improved or leveraged?

Company

•The firm's capabilities, resources, etc. •What does it do well? •What doesn't it do well?

Customer

•The firm's current and potential customers •What are current customers' preferences, buying trends, etc.? •What are potential customers' preferences? Should they be targeted?

Segmentation according to marketers

•The market is comprised of different segments.

Hmms are dilemma scenarios

•The video game market is attractive, but you have no strength in this market. •Can you develop a strength in video games? How much will this cost? etc. •Your strength is in thumb drives, but the market is unattractive. •Is there any segment that sees value in thumb drives? Can we redesign the product to give it value? How much will this cost?

How can a marketer capitalize on the baby boomer segment?

•They take their time and do research before spending. •They expect excellent customer service. •They may have age-related issues (e.g., less able to read small print, reduced mobility, chronic health issue, etc.). •Many are still quite active and even Internet-savvy; don't consider themselves "old"; appreciate patience.

Co-branding

•Two companies form a joint venture to create a product from both companies: •e.g., Tevlar fabric

Estimate growth

•Use census to determine size of additional cohorts. •Obtain sales data for previous years and extrapolate using a moving average. •e.g., 3-year moving average would average years 1, 2, 3; then average years 2, 3, 4; then average years 3, 4, 5; then fit a curve to the data (regression).

Marketing sizing estimation

•Use the purchase decision-making process: Awareness, trial, repeat, etc. •Population × % aware × % trial × % repeat •Multiply by how much and how often buy. •(Population × % aware × % trial × % repeat) × Per annum purchase •Multiply by average retail price paid to translate numbers into dollars.

Goods vs. Services: variability

•Variability •Goods are made by machines; services are usually people intensive. •Services change across customers and across time. •Marketers need to •Reduce bad variability •Enhance good variability •Self-service is advancing in many industries.

Promotion

•What communications mix will you use to communicate with your targets? What message will you use?

•In groups of 4-6 participants, select one of the following markets: •Pizza restaurant near a college campus •Specialty grocery store near an urban shopping mall •Electric mini-car dealership and respond to the following: 1.What variables do you use to segment the market? 2.After defining a segment, determine an approach (?) to use in expanding your business. 3.As a class, discuss the ways in which segment influenced the approaches used. •

•What variables do you use to segment the market? •Answer: Answers will vary, but should include categories such as age, gender, income, geographic location, education, etc. •After defining a segment, determine an approach (?) to use in expanding your business. •Answer: Answers will vary, but should include aspects such as advertising approaches; emphasis on product characteristics; collecting data on various segment demographics; etc. •As a class, discuss ways in which segment influenced the approaches used. •Answer: Answers will vary, but should address direction of expansion; profitability analysis of various segments; corporate fit of intended expansion, etc. •

What is positioning?

•Who your brand or company is in the marketplace vis-à-vis the competition and in the eyes of the customer •It has physical and perceptual elements.

Attitudes and decision making influence whether consumers

•Will buy a brand •Repeatedly purchase it •Become loyal •Recommend it to others, etc.

Decision making

•With a few choices, consumers easily compare brands to make decision. •With many choices, consumers use two stages: •Stage 1: Determine consideration set. •Stage 2: Compare brands to make a purchase decision.

a business customer is

•agent buying something on behalf of an organization. •e.g., administrative assistants, operations department, etc.

Goal of forecasting

•estimate sales potential ($SP), not sales •Determine market potential (MP); how many units might be sold Start with secondary data (e.g., census, sales for similar products, relevant in-house benchmarking data, etc.)