MKT 2500 Final Exam Review Note PDF

MKT 2500 Final Exam Review Note CH 9. Market Segmentation, Targeting, and Positioning Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. Market segments are the ho...

MKT 2500 Final Exam Review Note CH 9. Market Segmentation, Targeting, and Positioning Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. Market segments are the homogenous groups of prospective buyers resulting from market segmentation. Product differentiation: this strategy involves using different marketing mix actions. such as product features and advertising to help customers perceive products differently from competitors - when the expenses are greater than the increase in sales from segmentation a firm should not attempt to segment its market Segment markets when there is an opportunity for increased returns Three segmentation strategies: 1. One product and multiple market segments (Example: Books) 2. Multiple products and multiple market segments (Example: Cars) 3. Segments of one–“mass customization” (Example: Build-to-order) mass customization: tailoring products or services to the taste of individual customers on a high-volume scale organizational synergy: the increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently Ways to segment consumer markets: 1. Geographic segmentation (location) 2. Demographic segmentation (objective attributes) - gender, race, age, income, birth or occupation  3. Psychographic segmentation (personality & lifestyle) 4. Behavioral segmentation (product features & usage rate) Demographic: This segmentation is based on characteristics such as age, gender, income, education, occupation, and family size. It helps in understanding the basic profile of the target market. Geographic: This segmentation is based on the physical location of consumers. It includes factors such as country, region, city, climate, and population density. It helps in tailoring marketing strategies to specific geographical areas. Psychographic: This segmentation is based on consumers' attitudes, values, interests, and lifestyles. It helps in understanding the psychological and behavioral aspects of the target market. Behavioral: This segmentation is based on consumers' buying behavior, usage patterns, brand loyalty, and benefits sought. It helps in identifying different grou CH 10. Developing New Products and Services A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers’ needs and is received in exchange for money or something else of value. Products: a good, service, or idea consisting of a bundle of tangible and intangible attributes to satisfy consumer needs Services: intangible activities or benefits that an organization provides to satisfy customers Goods: tangible attributes that a consumer’s five senses can perceive intangible: attribute consisting of its delivery or warranties and embody more abstract concepts 1. Nondurable goods: good items consumed in one or a few uses such as food or fuel  2. Durable goods: one that lasts over many uses, such as appliances and cars Ideas: leads to a product or action such as a concept for an innovation or for getting people out to vote Consumer products: 1. Convenience products – Frequently purchased-(minimum purchase effort) 2. Shopping products – Compares criteria. (compares price, quality, and style) 3. Specialty products – Special effort to search/buy. 4. Unsought products – Items the consumer does not know about. Product class (or industry): a category for products ex: iPad classified as a table. Product item: a specific product that has a unique brand or size Different product forms exist within the product class: Example: In the recorded music industry there are records, tapes, CDs, MP3s. Product item: A product item is a specific product that has a unique brand, size, or price. Product line: A product line is a group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range. Product mix: A product mix consists of all of the product lines offered by an organization. Marketing reasons for new-product failures: 1. Insignificant point of difference. 2. Incomplete market and product protocol. 3. Failure to satisfy customer needs on critical factors. 4. Bad timing. 5. No economical access to buyers. 6. Poor execution of the marketing mix. 7. Too little market attractiveness. 8. Poor product quality. The new-product development process consists of the seven stages an organization goes through to identify opportunities and convert them to salable products or services. CH 11. Managing Successful Products, Services, and Brands A product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline. Introduction stage: Stimulate trial: the initial purchase of a product by the consumer Create primary demand for the product class: the desire for the product rather than for a specific brand Create selective demand for specific brands: the preference for a specific brand Skimming strategy with high initial price: helps a company recover the cost of development as well as capitalize on the price intensity of the early buyers Penetration pricing with low prices to appeal immediately to the mass market Growth stage: Rapid sales growth. More competitors enter market. Profits peak.  Advertising for selective demand. Repeat purchasers. Add new features. Broaden distribution. Maturity stage: Industry sales and product sales slow. Fewer new buyers – most are repeat customers. Profit declines due to fierce competition for buyers. Product differentiation. Marginal competitors leave the market. Examples: Soft drinks, breakfast cereals. Decline stage: Industry sales and product sales drop. Price decreases. Environmental changes cause disruption. Products dropped from product line (deletion). Retain product, but reduce marketing costs (harvesting). The Product Life Cycle and Diffusion of Innovation: Innovators – 2.5%.  Early adopters – 13.5%. Early majority – 34%. Late majority – 34%. Laggards – 16%. Diffusion innovation: product diffuses or spreads to the population usage barrier: the product is not compatible with other brands product manager/brand manager: manage existing products Product modification: involves changing some of the product characteristics, such as quality, performance, or appearance to increase the product value to increase sales Product bundling: the sale of two or more separate products in one package  New characteristics. Market modification Finding new customers. Increasing a product’s use. Creating a new use situation. Brand equity Provides a competitive advantage. Consumers are willing to pay a premium. A basic decision in marketing products is branding, in which an organization uses a name, phrase, design, symbols, or combination of these to identify its products brand name need to be: - product benefits - memorable distinctive and positive - fit the company product or image - no legal restrictions Multiproduct branding: With multiproduct branding, a company uses one name for all its products in a product class. This approach is sometimes called family branding or corporate branding when the company’s name is used. (Family branding or corporate branding)  1. Product line extensions: using the current brand name to enter a market segment and its product class (category of products) 2. Sub-branding: combines a corporate or family with a new brand to distinguish a part of its product line from others (AMEX with multicolored cards) 3. Brand extension: A strong brand equity also allows for brand extension: the practice of using a current brand name to enter a different product class. (example: Huggies brand name helping Kimberly-Clark expand) 4. Co-branding: is the practice of pairing two or more strong brands to facilitate the marketing of a joint product or service for their mutual benefit multibranding:A branding strategy that involves giving each product a distinct name when each brand is intended for a different market segment. CH 15. Managing Marketing Channels and Supply Chains Marketing channel: which consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users. Products and services flow through intermediaries. Functions intermediaries perform: Transactional (buying, selling), logistical(sorting, transporting), and facilitating(financing, marketing) functions. Channels create value for consumers : Time: product when you want it Place: where you want it Form: appealing to buyers Possession utilities: easy payment methods to own it Direct to consumer (D2C) marketing channels don’t need salesperson. direct channel because the producer and the ultimate consumers deal directly with each other. Direct-mail, catalogs, Web, TV. Multichannel marketing – Integrates online with traditional channels. Dual distribution – Uses different channels for the same product. Strategic channel alliances – One company’s channel used to sell another company’s products. Vertical marketing systems – Professionally managed channels. Corporate vertical marketing systems: The combination of successive stages of production and distribution under a single ownership Forward integration: Producer own retailer- Apple Backward integration: Retailer own producer - Kroger Contractual vertical marketing systems: independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing Wholesaler-sponsored voluntary chains. Retailer-sponsored cooperatives. Franchising. Contractual systems: Franchising:a franchisor (parent company) grants a franchisee (individual or firm) the right to operate a business using their established brand name and business model, in exchange for fees and adherence to specific guidelines outlined in a contract Manufacturer-sponsored retail: Car Dealership  Manufacturer-sponsored wholesale: Soda bottlers Service-sponsored retail: Mcdonalds Service-sponsored franchise system: H&R Block Administered vertical marketing systems: Achieve coordination at successive stages of production and distribution. Target market coverage (density). Intensive distribution: Involves selling a product in as many outlets as possible to reach as much of the market as possible. This strategy is often used for products with many competitors or weak brand loyalty. Selective distribution:Involves selling a product at select outlets in specific locations. This strategy is often used for high-end consumer products to maintain quality and customer satisfaction. Exclusive distribution: Involves selling a product through one or very few outlets. This strategy can be used to maintain a brand's image and product exclusivity. CH 16. Retailing and Wholesaling Retailing consists of all activities involved in selling, renting, and providing products and services to ultimate consumers for personal, family, or household use. CLASSIFYING RETAIL OUTLETS Depth of product line Specialty outlets: Limited- and single-line stores (such as Dick’s Sporting Goods). Category killers that dominate the market: Best Buy (electronics), Staple (office supplies), Barnes & Nobel (books). The breadth of product line General merchandise stores: Carry a broad product line with limited depth. Large department stores. Scrambled merchandising : a retail strategy where a store sells a wide range of products that are not typically related to their primary business or product lines Carry unrelated product lines in a single store Hypermarket Offers everything under one roof. Supercenter: Combines merchandise store with full-size grocery store. Intertype competition: when businesses of different types compete for customers by selling similar products: Occurs between dissimilar types of retail outlets. NONSTORE RETAILING Direct mail and catalogs: “The store that comes to the door.” Television home shopping: Consumers watch a shopping channel, then order. 24 hours/day, 7 days/week, 364 days/year. Online retailing: 24-hour access, comparison shopping, in-home privacy. CH18. Integrated Marketing Communications and Direct Marketing Promotional mix Combination of communication tools. Inform prospective buyers. Persuade them to try products.  Remind them of the product benefits. Integrated marketing communications (IMC) Coordination of elements is important. Communication Process Advertising Paid: The advertiser must pay for the space or time to broadcast their message on the chosen media platform. Nonpersonal: The communication is directed towards a large, general audience, not a specific person. Mass media: This refers to the broad communication channels used to reach a large audience, like television commercials, magazine ads, or billboards What are the advantages? Wide Reach: Brand Awareness: Cost-Effective: What are the disadvantages? High Production Costs Audience Fragmentation Low Engagement Public relations Influencing others about a product. Non-personal, indirectly paid presentation. What are the advantages? - building brand credibility and awareness through positive media coverage, establishing strong relationships with key audiences, and generating perceived authenticity What are the disadvantages? Limited Control: Once a story is released to the media, companies have limited control over how it is interpreted and presented. Potential for Negative Publicity: If not managed effectively, a negative event or controversy can quickly escalate through PR channels, damaging a company's reputation. Time-Intensive: CH 19. Advertising, Sales Promotion, and Public Relations TYPES OF ADVERTISEMENTS Product advertisements Three forms:  1. Pioneering (or informational) – Explains the product. 2. Competitive (or persuasive) – Promotes brands special features. 3. Reminder – Reinforces previous knowledge of product. Institutional advertisements – to build goodwill. Four forms of institutional ads: 1. Advocacy ad – States a company’s position. 2. Pioneering institutional – States information about a company. 3. Competitive institutional – Promotes advantages over other companies. 4. Reminder institutional – Promotes a company’s name. AD Message appeals: Fear appeals – Avoid negative experiences. Sex appeals – Increase attractiveness. Humorous appeals – Fun and exciting. Cost per Thousand (CPM) Impressions CPM = (Cost of Ad ÷ Audience size) x 1,000 CH 20. Using Social Media and Mobile Marketing to Connect with Consumers - Social media: are online media where users submit comments, photos, and videos accompanied by feedback and identify “ popular topics” - Social media interchangeably with the term Web 2.0, Web 3.0 user-generated content (UGC/consumer-generated content)  - UGC refers to any form of e-media that is available to the public and created by consumers or end users - 80% of content on social media is user- - generated Blends technology and social interaction - Media richness: This involves a degree of autistic visual and personal contact between two partners - Self-disclosure- individuals want to make a positive impression to achieve a favorable image with others Online conversation, games, and more. Web 2.0 and 3.0 allows for high degree of functionality, personalization, and customization. Two factors for classifying social media: 1. Media richness: Acoustic, visual, personal contact. 2. Self-disclosure: Make a positive impression and increase influence. Social networks and social media significantly influence marketing practices. The social network is person-to-person. Influencer marketing: the practice of focusing on the identification and recruitment of influencers to promote Based on personal influence. Advocates for a company’s products. Engages with followers. Influencers are paid. - Micro-influencers have fewer than 50,000 followers and macro have 500,00-1 mil - Mega influencers have 1 mil + - Numbers of followers contribute to an influencer's perceived credibility, knowledgeability, and authenticity - Social commerce - buying and browsing online on social media platforms (focuses on sellers and purchase transactions) - Social shopping is using social network services and websites by consumers to share their purchases, deals coupons, and reviews. (peer influence) Facebook Role in Marketing: Dominates as a platform for broad engagement, offering targeted advertising opportunities. Strategies: Utilize paid ads, sponsored stories, and detailed user analytics. Marketers must focus on building loyalty by creating engaging, shareable content and understanding user interests to foster deeper connections. Instagram Visual-Driven Marketing: Carousel ads allow for storytelling through multiple images or videos, enhancing product visualization. Instagram's focus on aesthetics makes it ideal for fashion, travel, and lifestyle brands. Strategies: Use reels and stories to create dynamic, short-form content that resonates with target audiences. Twitter Principle of Followers: Ideal for real-time engagement and creating dialogues around brands. Strategies: Post timely updates, utilize hashtags for visibility, and engage in customer service or trending topics to build follower relationships. YouTube Video Powerhouse: Serves as a key platform for educating and entertaining audiences. Tutorials, unboxings, and testimonials increase trust and brand authority. Strategies: Invest in high-quality, authentic videos and use pre-roll ads or influencers to expand reach. Pinterest Visual Discovery Tool: A platform for product inspiration, particularly in fashion, decor, and DIY niches. Strategies: Create visually appealing, clickable pins. Include direct purchase links to bridge interest with action. LinkedIn Professional Networking: Best for B2B marketing, recruiting, and thought leadership. Strategies: Share industry insights, foster collaborations, and advertise job opportunities to attract professionals and businesses.  Make sure to watch the videos we discussed during class (the link is included in the PPT slides) to prepare for your final exam.