Market

group of people or organizations with needs or wants and a willingness to buy

Market Segments

a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

Substantial

a segment must be large enough to warrant a special marketing mix

Identifiable and Measureable

a segment must be identifiable and their size measurable

Accessible

   members of target segments must be reachable with marketing mix

Responsive

unless segments responds to a marketing mix differently, no separate treatment is needed

Demographic

based on age, gender, income

Psychographic

based on personality, motives, lifestyles and geo-demographics

Benefits

grouping customers based on the benefits sought from a product    

Type of organization

§  Producers

§  Resellers

§  Governments

§  Institutions

Geographic Location 

based on the number of employees, number of beds, number of members

Undifferentiated (total market approach) Targeting Strategy

 a marketing approach that views the market as one big market with no individual segments and thus requires a single marketing

Advantage: potential savings on production and marketing cost

  Disadvantages: unimaginative product offerings; company is more susceptible to competition

Concentration Targeting Strategy

a strategy used to select one segment of a market for targeting marketing effort

§  Disadvantages: segments too small, large competitors may marked to niche segments

§  Advantages: concentration of resources, meets narrowly defined segment, small firms can compete, strong positioning

Multi-segment Targeting Strategy

o   a strategy in which a company chooses two ore more well-defined market segments and develop a distinct marketing mix for each

§  Advantages: greater financial success, economies of scale

§  Disadvantages: segments too small, large competitors may market to niche segment

Marketing Reasearch Defined

-       is the process of planning, collecting and analyzing data relevant to a marketing decision

Marketing Reasearch Defined

o   Descriptive: gathering and presenting factual statements. Portrays information about target audience

o    Diagnostic:

§  Explaining data

§  Explains why consumers do what they do

§  Explains how one thing relates to another

o   Perdictive

§  What “if”

§  What would happen if we did something differently

Descriptive

gathering and presenting factual statements. Portrays information about target audience

Primary Data

data that are collected for the first time. They can be used for solving the problem under investigation

Secondary data

comes from a researcher that interacts with people to obtain facts, opinions and attitudes

Survey research

the most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions and attitudes

Observation research

o   research method that relies on three types of observation

§  People watching people

§  People watching an activity

§  Machines watching people

Ethnographic Research

the study of human behavior in its natural context

Universe

is the group from which a sample will be drawn

Sample

subset of a large population

Probability Sample

a sample in which every element in the population has a known statistical likelihood of being selected

Random Sample

is a sample in which little or no attempt is made to get representative cross-section of the population

Nonprobability Sample

is any sample in which little or no attempt is made to get representative cross-section of the population

Convenience Sample

is a nonprobability sample using respondents who are convenient or readily accessible to the researcher 

product

can be anything, either favorable and unfavorable, that a person receives in an exchange including tangible goods services and ideas

Convenience Goods

a relatively inexpensive item that merits little shopping effort. Inexpensive and widespread

Shopping goods

 a product that requires comparison-shopping, because it is usually more expensive and found in fewer stores. Fairly inexpensive and selective

Specialty goods

a particular item for which consumers search extensively and are reluctant to access substitutes. Expensive and limited

Production goods

items used in manufacturing that become part of the final product    

Support goods

Items used to assist in producing other goods and services, including installations, accessories, supplies and industrial services

Product item

a specific version of a product that can be designated as a distinct offering among an organization’s products

Product line

a group of products that are closely related, product items that satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlet or fall within a given price range

Product mix (narrow or wide)

o   all products than an organization sales

§  Width: the number of product lines an organization offers

§  Depth: The number of items in a product lines

o   Product modification

1.     Quality

2.     Functional

3.     Style

Planned obsolescence

the practice of modifying products so those that already been sold become obsolete before they actually need replacement

Repositioning

adjusting the advertising and target market of a product

Line extension

adding additional products to an existing product line in order to compete ore broadly in the industry

Line contractions

some products have low sales or cannibalize sales of other items

Product life cycle

is a concept that provides a way to trace the stages of a product’s acceptance, from its introduction to its decline

Product life cycle

Introduction

Growth

Maturity

Decline

Introduction

o   company needs to communicate features, uses and advantages of the products

Growth

companies encourage brand loyalty

Maturity

product begins to lose its distinctiveness

Decline

the product has already been replaced by new technology

Product modifications (quality, function, style)

 can lead to more frequent usage; more varied usage, and new uses, as well as attract new users

innovations

is the process by which the adoption of a new products spreads

Innovators

venturesome, generally highly educated, and have multiple information resources

Early adopters

on the cutting edge of technology, fast to adopt any new idea

Early majority

o   highly social, have many contacts; family and friends network

Late majority

skeptical, below-average social status

Laggards

latest group of people to adapt any new technology

New-to-the-world:

these products have never been seen before

o   New-to-the-world: 

o   Product line additions:

o   New category entries

o   Improvements or revisions

o   Repositioned products

o   Lower-priced products

Idea generating

o   some sources of new-product ideas are customers, employees, distributors, competitors, vendors, research and development and consultants 

Idea screening

this process is the filter in the product development process. It eliminates ideas that are inconsistent with the organization’s new-product strategy or inappropriate for some other reason

Business analysis

 some considerations in this stages are demand, cost, sales and profitability

Test marketing

is the limited introduction of a product and a marketing program to determine the reactions of potential customers in market situation

Equipment-based

§  Automated

§  Operated by semi-skilled labor

§  Operated by skilled labor

People-based

§  Unskilled labor

§  Skilled Labor

§  Professionals 

Intangibility

characteristic of something that cannot be physically touched

Inconsistency

variability in a service due to variability in the service provider

Inseparability

means that the service is consumed at the same time it is being produced

Inventory

the cost associated with maintaining the ability to deliver a service    

Reliability

is the ability to perform a service dependably and accurately

Responsiveness

the ability to provide prompt service

Assurance

is the knowledge and courtesy of employees

Empathy

is caring, individualized attention give to customers

Tangibles

includes appearance of physical facilities, equipment, personnel, and communication materials

Five Gaps

1.     The difference between consumer expectations and management perception of consumer expectations

2.     The difference between management perceptions of consumer expectations and the firm’s service quality specifications

3.     The difference between service quality specifications and actual service quality

4.     The difference between actual service delivery and external communications about the service

5.     The difference between service quality received and service desired

Brand

a name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitor’s product

Trademark

is the exclusive right to use a particular brand

Brand Name

is the part of a brand that can be spoken, including letters, words, and numbers

Brand Mark

 is the element of a brand that cannot be spoken

Manufacturer

the brand name of a manufacturer

Private

brand name owned by a wholesaler or a relator 

Individual

using different brand names for different products

Family

marketing several different products under the same brand name

Generic

refers to low-cost product with no brand name that is simply identified by its product category

Cobranding

placing two or more brands on a product or its package

Retailer

a channel intermediary that sells mainly to customers and takes title to goods

Merchant wholesaler

 an institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them

Agents or brokers

are wholesaling intermediaries who facilitate the sale of a product by representing channel members but do not take title to goods.

Intensive

the objective is to achieve mass market selling of convenience goods. There are many intermediaries

Selective

the objective is to work with selected intermediaries and specialty goods. There are several intermediaries

Exclusive

the objective is to sell specialty and industrial goods. There are a few or only on intermediary

Power

is a channel member’s capacity to control or influence the behavior of other channel members

Control

is a situation that occurs when one marketing channel member intentionally affects another member’s behavior

Leadership

a member of a marketing channel that exercises authority over the activities of other members

Conflict

: is a difference of goals and methods between distribution and cannel members

Partnering

the joining effort of all channel members to create a supply chain that serves customers and creates a competitive advantage

Supply Chain defined

a connected group of business entities, both internal and external a company that perform or support the logistics functions

Classifying retail outlets

o   Form of ownership

§  Independent, chain, contractual

o   Level of service

§  Self, limited, full

o   Product assortment

§  Depth vs Depth of line

§  Scrambled Merchandising

o   Prices charged

§  Full “suggested retail price”

§  Low price

Retail Strategy

is an arrangement in which a supplier grants a dealer the right to sell products in exchange for some type of consideration

Positioning

positions retail outlets on two dimensions: breadth of product line and value added

Retailing Mix

involves the activities related to managing the store and the merchandise at lower then usual prices

Shrinkage

occurs due to the breakage and theft of items

Off-price retailing

the sale of brand-name merchandise at lower than usual prices