Marketing Test #2 Short Answer (9 12, 15 16) Market Segmentation: Combining potential buyers into groups with similar

ar needs that will respond to a similar marketing strategy Customer Resource Management: Identifying potential buyers in the market, determining the potential for increased profit, gauging consumer similarity to form a segment, determine the differences of segments (if there arent a lot dont segment into smaller groups), Gauge the potential of a marketing action reaching the segment Segmentation Grouping: Geographic Segmentation: Where customers live and/or work Demographic Segmentation: Age, Gender, Race, Family Size, Income, etc. Psychographic Segmentation: Personality, Lifestyles, and Aspirations Behavioral Segmentation (Product Features): Catering features to a group Behavioral Segmentation (Usage Rate): Targeting users, Rewards programs

80/20 Rule: 80% of a companys sales are earned from 20% of their customers. Marketing Mix: Product, Price, Promotion, Place Branding: Use of names, symbols, designs, phrases, or a combination of them all to identify and distinguish its products Brand Loyalty: Favorable attitude toward a brand which leads to consistent purchase over time

Classifying Products: Convenience: Items consumers purchase frequently with minimum shopping effort Shopping: Items consumers compare against alternatives before purchasing; price, quality, style Specialty: Items consumers make a special effort to go buy; typically expensive Unsought: Items consumers dont know about or know about but dont want initially Creating Brand Equity: Develop (develop positive brand awareness to give the brand an identity), Establish (create a meaning for the brand in the minds of customers, what it stands for and its functionality and/or performance), Elicit (get consumers to respond to a product in a certain way), Create Connection (brand loyalty and personal identification through a product).

Choosing a Brand Name: Name should suggest product benefits, be memorable, distinctive, and positive, should fit the company/ product image, no legal restrictions, simple. Branding Strategies: Multiproduct: Uses one name for all products; Sony, Samsung, etc. Multibranding: Gives each product a specific name; Disney & Touchstone Private: Selling items under the brand name of the retailer Mixed: Using their own brand name and a line for the reseller Macys vs. Target

Product Lines: A group of products that are closely related and similar based on customer needs and uses, market segmentation, where they are sold, and prices. Product Mixes: All the product lines offered by a company Pricing: Skimming: setting a really high price for a product upon its initial release, and dwindling it down over time. Penetration: Lowering the products price so that more people can afford it. Prestige: posting a high price so people are attracted to it; Expensive = Quality Bundle: Marketing to or more products at a single package price; customers value package over individual item Off-Peak Pricing: Charging different prices at different times of day or days of the week to reflect the variation in demand for a product Target: Work backwards through retailer markups so that when an item hits the stores it will be at a price the target market can afford/is willing to pay Odd-Even: Pricing items under and even number to give the illusion that it is within a different price range Standard Markup: markup based on estimated demand of the product

Target Profit: Pricing the product in order to reach a certain profit goal through sales.

The 4 Is of Services: Intangible: Services cant be held or touch, its a process that is executed by a worker which makes it hard to evaluate before purchasing Inconsistency: Services can be inconsistent; on companies put employee through methods like standardized training to try and teach them all the same process to have a successful service across the board instead of one that is great sometimes and bad others. Inventory: What you have available to the customer; Making the service convenient for all customers that use this service, such as having ATMs, Customer Help desks, and Real life agents available to all those that work with the bank (Idle production compacity) Inseparability: Diagnosing the service as a whole, even if some parts where good and others bad. Your time at the library may have been great but the classroom and cafeteria were bad. This could lead to the assumption that the school is bad overall.

Innovation Definitions: Continuous Innovation: Products that improve upon existing products, dont require new learning for use. Require growth of customer awareness and distribution since it already holds a market of buyers. Drastically Continuous Innovation: Product with new features requires a slight learning curve for use. Advertise point of difference and benefits of the new product. Discontinuous Innovation: Product that is completely new and requires a lot of learning before use. Its necessary to promote the product through trials or in personal tutorials so people understand how its used and how it works.

New product failures: Small Point of Difference: There is no real difference between a new product and a previous one that would draw customers in. Non-Defined Market & Product Definition: There is no target market for the product, no clear customer appeal, the purpose of the product isnt made clear. Little Market Attractiveness: There isnt enough need for a product in the market so people dont buy it.

Poor Execution of Marketing Mix Poor Product Quality: poor designed product; Xbox 360 and red ring of death. Not Satisfying Critical Needs: The product fails to provide the customer with what they need; cars in other countries without changing the side the wheel is on. Bad Timing: Introduction of a product to soon or too late into the market; Microsoft Zune. No Economically Accessible: The product isnt something people are will to buy, its not a necessity or a good convenience.

Product Lifecycle: Introduction: Product is introduced to its intended target, sales slowly grow and profit is minimal. Objective is to create product awareness through marketing and trials of the product. This phase requires the most power behind advertising. Growth: Rapid increase in product sales, more companies begin to sell similar products and prices begin to shift to reflect a more competitive selling environment. Changes appear in products to help differentiate them from other companies with similar products. Its all about product distribution at this phase to compete for shelf space Maturity: Slowing of product sales, customers buying the product are repeat buyers, sales decrease during this stage, profit is make buy holding onto the existing market and pushing the product differences from similar brands and possibly adding new product features. Decline: Sales drop and a product becomes outdated, companies either put it up for Deletion (completely killing a product) or Harvesting (keeping a product and reducing marketing costs, allowing customers that still values and use the product to keep it).

Elastic Pricing Demand: if the price of a product drops off slightly the demand for the product will rise and if the price increases slightly the demand may drop off. Inelastic Pricing Demand: if the price of a product increases or decreases slightly the demand for the product wont really change. Promotional Mix (5 elements):0

Advertising: Paid form of mass communication about a company, good or service by an unidentified sponsor. Personal Selling: Communication between a buyer and seller; sometimes face-to-face, to influence a purchasing decision. Public Relations: Communication management that seeks to influence the feelings, opinions, or beliefs of customers, employees, stockholders, etc. about a companys products or service through special events, press conferences, and/or lobbyists. Sales Promotion: short-term offer designed to create interest in buying a good or service. Direct marketing: Directly marketing to customers to get a response through orders, requests for more information, or retail store visits.

Push & Pull Strategies Push: Directing the promotional mix at retailers to get them to cooperate and sell a product by giving them special deals on purchasing a product or incentives for selling and/or reaching a sales goal for a product Pull: directing the promotional mix at customers to get them to ask retailers for a specific product; ask your doctor about Advair (or other prescription drugs or products).

Types of Advertisement: Product: Advertisements that focus on selling through providing information (pioneering), being persuasive (competitive), or reinforcing (reminder) previous knowledge of a product. Institutional: building goodwill or an image for an organization through stating the position of a company (advocacy), saying what the company does and where it is (pioneering), promoting the advantages of a product (competitive), and bringing the companys name to the attention of the public (reminder).

Types of Advertising Media: Television: reaches large audience, can target specific audiences, uses sound, visuals, and motionhigh cost to prepare and run ads, short exposure time and perishable message Radio: low cost, can target specific local audience, uses sound, humor, and intimacynot visual, short exposure and perishable message

Magazine: targets specific audience, high quality and colored, long life for ad, can be clipped and savedcompetes with other magazine features, long time to place, high cost Newspapers: excellent coverage of local markets, ads can be placed and changed quickly, can be saved, low costads compete for attention, short life span, poor color Yellow Pages: excellent coverage of geographic segments, long use period, available 24/7competition of other directories, difficult to keep up-to-date Internet: video and audio capabilities, animation can capture attention, ads can be interactive and linked to advertisercan take long to load, effectiveness still unsure Outdoor: low cost, local market focus, high visibility opportunity for repeat exposuremessages are short and simple, low audience selectivity, traffic hazard Direct Mail: high selectivity of audience, can contain complex and personalized information, high quality graphicshigh cost, poor image (junk mail)