chap 1-8 Flashcards

Question

What is customer relationship management?

Answer 1

The overall process of building and nurturing profitable customer relationships by delivering superior value and satisfaction. It deals with all aspects of acquiring, engaging, growing and listening to consumers.

Answer 2

The consumer’s evaluation of the benefits of one product or service over all the options available.

Answer 3

The extent to which a product’s perceived performance relative to a consumer’s expectations

Answer 4

Even though they have to assemble their own furniture, they have everyday low pricing on good-quality products delights customers and keeps them coming back

Answer 5

Brand exchanges created by consumers themselves – both invited and uninvited – by which consumers are playing an increasing role in shaping their own brand experiences and those of those consumers

Answer 6

Through uninvited consumer-to-consumer exchanges on websites, social media, and other forums, like Reddit

Answer 7

Oreo did a #MyOreoCreation contest asking fans to come up with new flavour ideas Lush also does something similar to this where loyal fans, the “Lushies” give their input.

Answer 8

Mcdonalds did a #McDStories on twitter for people to right happy meal stories instead it turned into a “bashtag” where people posted bad experiences with mcdonalds.

Answer 9

Working closely with partners in other company departments and outside the company to jointly bring greater value to consumers.

Answer 10

Distributions, retailers, and others who connect the company to its buyers

Answer 11

The value of the entire stream of purchases a customer makes over a lifetime of patronage

Answer 12

The share they get of the consumer’s purchasing that a company gets in its product categories.

Answer 13

Offer greater variety to current consumers, they can create programs to cross-sell and upsell to market more products and services to existing consumers.

Answer 14

Consumer equity is the total combined consumer lifetime values of all of the company’s current and potential consumers.

Answer 15

FALSE its: the more loyal the firm’s profitable consumers, the higher its consumer equity

Answer 16

Butterflies are high-profit but short-term customers, so businesses should enjoy the relationship while it lasts without over-investing. True friends are both highly profitable and loyal, making them ideal customers to build long-term relationships with through consistent engagement and value. Strangers offer low profitability and low loyalty, and are usually not worth pursuing or targeting with marketing efforts. Barnacles are loyal but bring low profitability, so companies need to find ways to increase their spending or consider letting them go.

Answer 17

The companies and people close to the business that affect its ability to engage and serve its customers, the company, suppliers, marketing intermediaries, competitors, publics, and customers

Answer 18

The larger societal forces that affect the microenvironment Demographic, economic, natural, technological, political and cultural forces

Answer 19

Marketing managers must collaborate with other departments like finance, R&D, and operations to ensure their strategies align with the company’s overall mission and to effectively execute campaigns.

Answer 20

Suppliers provide the resources needed by the company to produce its goods and services

Answer 21

The companies that help the company promote, sell, and distribute its products to final buyers. Example: coca cola being sold at McDonalds

Answer 22

Must position their product offerings uniquely against competitors’ offerings in the minds of consumers

Answer 23

Any group that has an actual or potential interest in or impact on an organizations ability to achieve its objectives * Financial publics These are people or groups that affect how easily a company can get money. This includes banks, investors, and shareholders. * Media publics These are people or platforms that share news and stories about the company. This includes TV, newspapers, YouTube, and social media. * Government publics These are government bodies that companies must follow rules from. Companies often talk to lawyers to make sure they’re following laws about things like product safety or advertising. * Citizen-action publics These are groups of people (like environmental groups or human rights organizations) that may speak out if they think a company is doing something wrong. Companies try to stay connected to them through their public relations team. * Internal publics These are people who work inside the company—employees, managers, unions, board members, etc. When they are informed and happy, it helps the whole company look good to the outside world too. * General public This is everyone in society. A company cares about what regular people think about it because it affects its reputation. * Local publics These are people and groups in the local area where a company is based. Big companies try to have good relationships with their neighbors and communities.

Answer 24

1. Consumer markets – These are individual people or families who buy things for their personal use (like groceries or clothes). 2. Business markets – These are companies that buy goods or services to use them in making their own products or running their business. 3. Reseller markets – These are businesses that buy products just to sell them again for a profit (like stores or online shops). 4. Government markets – These are government organizations that buy products or services to serve the public (like schools, hospitals, or public safety). 5. International markets – These include all the above types, but in other countries (foreign consumers, businesses, resellers, and governments).

Answer 25

This involves analyzing human populations based on size, density, location, age, gender, ethnicity, occupation, and other statistics Changing age structure: there is a decline in birth rates and an increase in life expectancy, leading to an older population in Canada. For example, the median age increased from 26 in 1970 to 33.6 in 2021.

Answer 26

Baby boomers (1946-1965): includes 9.2 million Canadians and has the highest spending power. They are expected to maintain active lifestyles and embrace new brands and technology. Generation X (1966-1980): often described as less materialistic and more skeptical, this generation tends to be loyal to brands. Millennials/Generation Y (1981-1996): the first generation to grow up with digital technology, they are practical, budget-conscious, and mobile. Generation Z (1997-2012): the most diverse generation, they prioritize social responsibility and brand transparency. Generation Alpha (born after 2012): The youngest generation, full of future potential

Answer 27

Marketers can tailor campaigns to specific age groups, often based on shared beliefs and values rather than just birth dates. This approach can be more effective than simply categorizing by age.

Answer 28

Significant shifts in family structures over the past decade include: Smaller households More one-person households An increase in multigenerational homes More common-law and same-sex couples Couples choosing not to have children A shift in household responsibilities, with men taking on more tasks

Answer 29

Interprovincial migration is influenced by job availability and wages. Canadian cities often blend with surrounding suburban areas, referred to as Census Metropolitan Areas (CMAs)

Answer 30

More Canadians are pursuing higher education. The proportion of women in the workforce is increasing There is a rise in part-time work and older individuals staying in the workforce longer

Answer 31

Growth in visible minorities and Indigenous workers A broader representation of women from diverse backgrounds More languages are spoken, and visibility of the 2SLGBTQ+ community is rising

Answer 32

Economic factors influence consumer purchasing power and spending habits Changes in the economy affect consumer values, leading to a trend towards more frugal and value-oriented lifestyles

Answer 33

the physical environment and natural resources that are needed by companies and consumed by customers

Answer 34

Events like extreme weather or natural disasters affect industries differently (increased demand for winter gear during harsh winters) Companies like FedEx and UPS prepare for disruptions with meteorologists and contingency plans

Answer 35

Resource shortages: water, forests, and other renewable resources are depleting Non-renewable resources are becoming costlier Pollution accountability: companies are reducing environmental footprints Government regulations: policies like carbon taxes and pollution controls encourage sustainable practices

Answer 36

Advances in technology create new market and product opportunities Digital tools, the Internet of Things, and social media are reshaping marketing Companies that don’t adapt risk becoming obsolete

Answer 37

This includes laws, government agencies, and groups that influence businesses Effective regulations can promote fair competition and protect consumers from unethical practices. There is a growing focus on ethics and corporate social responsibility

Answer 38

Protects companies from each other. Stops a competitor from acting unfairly. Protects consumers from unfair business practices such as bad quality products, invasion of privacy and misleading advertising. Protects the interests of society.

Answer 39

Companies linking themselves with worthwhile causes. Primary from of corporate giving

Answer 40

Societal beliefs and values shape behaviors and attitudes Core values: stable and passed from parents to children, reinforced by schools and institutions Secondary values: are more flexible and can change over time as people gain new experiences Understanding both core and secondary values is crucial for effective marketing

Answer 41

Cultural changes can occur, influenced by media and celebrities Marketers must track these shifts to identify opportunities or threats Major cultural values are reflected in how people view themselves, others, and society

Answer 42

Individuals may prioritize personal enjoyment or self-realization Some see themselves as communal, while others identify as individualistic Consumers choose products that align with their self-perception

Answer 43

Attitudes towards social interactions evolve Digital communication can enhance connections but also lead to people being “alone together” Consumers often rely on digital networks and communities to learn about and engage with products. (Brands should actively participate in these online spaces to connect with consumers)

Answer 44

Confidence in these institutions has declined over the past 2 decades Factors like corporate scandals and job downsizing have led to cynicism Organizations need new strategies to rebuild consumer and employee trust

Answer 45

Attitudes toward society can vary, some support it, others seek change while some wish to leave These views of influence consumption patterns and marketplace attitudes

Answer 46

Attitudes toward nature differ, some feel dominated by it, others seek harmony, while some aim it control it Theres a growing recognition of nature’s limits and fragility due to human actions This awareness has led to increased demand for natural and sustainable products

Answer 47

Beliefs about the universes origin and individual purpose vary widely. Although attendance at organized religious services has declined significantly in Canada, interest in spirituality is rising.

Answer 48

This changing perspective on spirituality influences consumer behavior, affecting choices in media, literature, and the products they purchase

Answer 49

Passive: some companies passively accept the marketing environment. They analyze environmental forces and design marketing strategies that will help the company avoid threats and take advantages of opportunities Proactive: some companies develop strategies to change the environment through aggressive actions to affect the publics and forces in their marketing environment - Hire lobbyists - Stage media events - Active on social media

Answer 50

Marketers must gain deep insights into customer needs and wants to create value and build relationships Source of insights: effective marketing information is crucial for obtaining these insights Competitive advantages: companies leverage customer insights to develop a competitive edge

Answer 51

Companies can now access vast amounts of marketing information from various sources, including social media and connected devices

Answer 52

Consumers generate significant data through online activities (browsing, social media, texting, geolocation)

Answer 53

Refers to complex data sets created by advanced technologies, with an estimated 74 zettabytes generated in 2021

Answer 54

Effective data analysis can yield valuable customer insights, but the sheet volume of data poses challenges for marketers. Marketers require better information rather than just more data

Answer 55

Data must be collected, purified, and refined before it can be useful, similar to the treatment of rainwater

Answer 56

The true benefit lies in its use to develop customer insights

Answer 57

CMI utilizes a variety of data sources, including focus groups, surveys, direct customer observation, and digital behavior monitoring

Answer 58

Programs like PeopleWorld allow marketers to extract insights using natural-language queries from a vast database of research and social media data

Answer 59

To provide managers with timely and relevant information that enhances customer value, engagement and relationships.

Answer 60

Consists of people and procedures focused on assessing information needs, developing necessary information, and aiding decision-makers in generating actionable insights

Answer 61

1. the MIT interacts with information users to assess information needs 2. it develops needed information from internal company databases, marketing intelligence activities, and marketing research 3. it helps users to analyze and use the information to develop customer insights, make marketing decisions, and manage customer relationships

Answer 62

1. Primary users: the marketing information system primarily serves marketing managers but can also assist external partners like suppliers and agencies 2. Customized insights: external tools like TELUS insights offer tailored insights on regional trends and sector-specific data 3. Balancing needs: a good marketing information system balances what users want with what they truly need and what is feasible to provide 4. Avoiding information overload: excessive data collection can be counterproductive some managers may request unnecessary information 5. Monitoring environment: the system should track the marketing environment to ensure decision-makers receive essential insights 6. Cost considerations: companies must evaluate whether the benefits of additional insights justify the costs associated with obtaining and managing that information

Answer 63

Internal data is information collected from within a company, such as marketing, customer service, accounting, sales, and marketing partners. Companies use it to build databases about customers and markets.

Answer 64

Internal data can be incomplete, outdated, or in an unusable format. It often requires advanced technology to manage effectively.

Answer 65

Scotiabank uses its internal database to improve customer experiences and run targeted marketing campaigns.

Answer 66

Marketing intelligence involves gathering information to understand customer behavior and competitors. Its goal is to help companies make better strategic decisions.

Answer 67

Techniques include observing consumers, getting employee insights, online research, and monitoring social media.

Answer 68

It helps marketers understand how consumers interact with brands and allows for quick reactions to competitor moves.

Answer 69

Samsung watches Apple’s product launches in real time to adjust its own marketing strategies.

Answer 70

Data can come from employees and external sources like paid databases, SEC filings, and online platforms.

Answer 71

There are privacy concerns, so companies need to be transparent about how they collect data to build trust with customers. Also, they should monitor their own data to avoid accidental leaks.

Answer 72

Provides specific insights for marketing situations and decisions Definition: marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation

Answer 73

Insights into customer motivations, purchasing behavior, and satisfaction Assessment of market potential and market share Evaluation of pricing, product, distribution, and promotion strategies

Answer 74

Large companies often have in-house research departments collaborating with marketing managers Both large and small companies may hire external research specialists for specific projects Companies may also purchase data collected by external firms for decision-making support

Answer 75

Traditional methods like in-person surveys and focus groups are being replaced by digital tools like social media monitoring, website feedback, and mobile tracking for faster and more flexible data collection.

Answer 76

* “Just-in-time” research gives quick access to consumer data for faster decisions. * COVID-19 sped up the move to digital methods due to safety concerns.

Answer 77

It means combining traditional research with digital analytics to better understand consumers. Using both types of methods together gives deeper insights.

Answer 78

* They give fast and affordable access to real-time consumer data. * They allow traditional research to focus on understanding deeper reasons behind consumer behavior.

Answer 79

1. Define the problem and research objectives. 2. Develop the research plan. 3. Implement the research plan. 4. Interpret and report the findings.

Answer 80

Marketing managers and researchers must work together—managers understand decision needs, while researchers know how to design effective studies.

Answer 81

* It's hard to identify the real problem without knowing the root cause. * Big data may tempt people to look for answers in data before fully understanding the issue.

Answer 82

It combines focused analysis (on known issues) with open-minded exploration (being open to unexpected insights). Researchers should ask smart questions to find useful information.

Answer 83

* Exploratory Research – Finds basic information to define the problem and create guesses (hypotheses). * Descriptive Research – Explains things like market size, customer behavior, or demographics. * Causal Research – Tests ideas about cause-and-effect (e.g., does a price increase reduce sales?).

Answer 84

Writing down the problem and goals helps guide the research and ensures both the manager and researcher are on the same page.

Answer 85

To figure out the exact information needed, create a good plan to gather that data, and present it to management.

Answer 86

* Existing Data Sources – Find and use already available data. * Research Approaches – Decide how to gather new data (e.g., surveys, interviews). * Contact Methods – Choose how to reach participants (e.g., online, in-person). * Sampling Plans – Plan how you’ll select the people or data for your research. * Instruments – Choose tools like questionnaires to collect the data.

Answer 87

* Customer demographics and lifestyles * How fast-food diners in general behave * How the new product affects customer experience * How ready employees are to manage the product * Sales and profit forecasts for vegan items

Answer 88

* The management problems being addressed * Research goals * What information will be gathered * Estimated costs * How the results will help make business decisions

Answer 89

* Secondary Data – Information already collected for another reason. * Primary Data – New data collected specifically for this research.

Answer 90

Researchers begin with a company’s internal database before exploring external sources.

Answer 91

* Nielsen: Shopper data from 900,000+ stores. * Experian Simmons: Consumer studies. * Environics Analytics: 45+ databases with 30,000+ variables. * Kantar: Cultural trends and shifts. * ProQuest/LexisNexis: Online databases for industry and media data.

Answer 92

* Faster and cheaper than collecting new data. * Offers data that might be too costly for one company to gather (e.g., store audits).

Answer 93

* May not cover specific needs (e.g., reactions to new products). * Can be outdated or not relevant—needs careful review.

Answer 94

Observation, Survey, and Experiment.

Answer 95

Mail, telephone, personal interviews, and online.

Answer 96

It involves watching people’s behavior. Used for site evaluation (e.g., Petro-Canada) or observing product feedback (e.g., Domino’s kitchens).

Answer 97

Researchers observe people in their natural environment to understand behavior better.

Answer 98

* Not all behavior is visible (e.g., private thoughts). * Interpreting observations can be tricky.

Answer 99

It uses direct questions to collect data. * Advantages: Flexible formats, great for describing market segments.

Answer 100

* Memory issues * Biased answers * Privacy concerns * Low response rates

Answer 101

To test cause-and-effect by changing variables (e.g., prices) and measuring the outcome (e.g., sales).

Answer 102

McDonald’s testing different sandwich prices in two cities.

Answer 103

Comparing two versions of something (like a web ad) to see which one performs better.

Answer 104

* Pros: Cheap, avoids interviewer bias * Cons: Slow responses, limited clarification

Answer 105

It's fast, cost-effective, and can reach lots of people easily.

Answer 106

Verifying identities, avoiding sample bias.

Answer 107

* Data Mining: Automatically collects consumer data * Behavioral Targeting: Uses online behavior to tailor ads

Answer 108

To make conclusions about a large group by studying a small, representative one.

Answer 109

* Probability: Everyone has an equal chance of being selected. * Nonprobability: Not random—faster, but may be biased.

Answer 110

* Questionnaires – Ask people questions. * Mechanical Instruments – Track behavior/emotions (e.g., scanners, GPS, heatmaps).

Answer 111

* Closed-ended: Choose from options (e.g., multiple choice). * Open-ended: Respond freely in their own words.

Answer 112

* Website heatmaps * Checkout scanners * GPS trackers * Neuromarketing (EEG, MRI)

Answer 113

Customer Relationship Management systems (like Salesforce or HubSpot) organize data to improve service and relationships.

Answer 114

It combines data from 70 sources into one view to improve customer satisfaction.

Answer 115

To analyze large amounts of data (web, mobile, purchases) and find useful patterns.

Answer 116

It tracks what people watch and on which devices to recommend content.

Answer 117

AI improves data analysis, personalizes content, and makes advertising smarter.

Answer 118

Data and AI are helpful, but human connections are key to long-term customer trust and loyalty.

Answer 119

this refers to how individuals and households make purchasing decisions for personal use, collectively forming the consumer market

Answer 120

comprises individuals and households that purchase goods and services for personal use

Answer 121

culture: set of basic values, perceptions, wants, and behaviours learned by a member society from family and other important institutions important to try to notice and anticipate cultural shifts to discover new consumer wants and demands subculture: groups of people with shared value systems based on common life experiences, situations, or interests example: religion, nationality

Answer 122

Membership groups (direct influence) and reference groups (direct or indirect influence).

Answer 123

Aspirational groups are those individuals wish to join. They influence aspirations and behaviors.

Answer 124

Marketers use them to understand consumer attitudes, lifestyles, and conformity pressures, focusing on opinion leaders.

Answer 125

Recommendations from trusted sources (e.g., friends, family) are more credible than ads and can encourage positive brand discussions.

Answer 126

It involves brands collaborating with influencers to promote products authentically, leveraging social media for visibility.

Answer 127

Family members serve as a significant influence and reference group in consumer decisions.

Answer 128

Both partners are increasingly involved in decisions; men are more often primary grocery shoppers.

Answer 129

Kids influence decisions on dining, vacations, and electronics, significantly affecting family spending.

Answer 130

They change strategies to reflect new norms, avoiding gender stereotypes.

Answer 131

Role refers to expected activities in a group; status is the societal esteem for that role.

Answer 132

A person’s job affects product choices, e.g., rugged clothes for construction workers vs. business attire for office workers.

Answer 133

They identify groups likely to be interested in their products and tailor offerings accordingly.

Answer 134

Preferences shift with age, family status, and life-cycle events like moving or having children.

Answer 135

It classifies neighborhoods into lifestyle types to help marketers target consumer groups effectively.

Answer 136

It affects shopping choices, store selection, and product preferences.

Answer 137

It includes a person’s activities, interests, and opinions, which influence buying patterns.

Answer 138

They focus on value creation through redesign, repositioning, and price reductions.

Answer 139

They use lifestyle insights to match products to consumer values and tailor marketing strategies.

Answer 140

It refers to human traits assigned to brands, like sincerity or sophistication, aligning with consumer traits.

Answer 141

A consumer’s self-image is tied to their possessions, influencing brand and product preferences.

Answer 142

Biological needs (e.g., hunger, thirst) and psychological needs (e.g., recognition, belonging).

Answer 143

Buying decisions are influenced by subconscious motives, often not fully understood by consumers.

Answer 144

A hierarchy from physiological needs up to self-actualization; people satisfy basic needs first before moving to higher-level ones.

Answer 145

A motivated individual acts based on how they perceive the situation.

Answer 146

Screening out most information due to overstimulation; marketers must capture attention.

Answer 147

Interpreting information in a way that aligns with existing beliefs.

Answer 148

Consumers retain information that supports their views, forgetting details about competing brands.

Answer 149

Experience, stimuli, cues, responses, reinforcement.

Answer 150

Positive experiences increase repeat purchases and brand loyalty.

Answer 151

Through experience; beliefs are knowledge-based, attitudes are consistent feelings.

Answer 152

They shape product and brand perceptions, guiding decisions.

Answer 153

Challenging attitudes with new products (e.g., Beyond Meat) that promote health/environmental benefits.

Answer 154

1) Need Recognition, 2) Information Search, 3) Evaluation of Alternatives, 4) Purchase Decision, 5) Post-Purchase Behavior.

Answer 155

Consumers may skip or reorder stages depending on the situation.

Answer 156

Simple decisions are quicker; complex ones take more time.

Answer 157

Routine = faster, familiar decisions; Complex = more thorough evaluation.

Answer 158

Internal stimuli (e.g., hunger) or external stimuli (e.g., advertising).

Answer 159

Buyer’s nature, product type, and situational context.

Answer 160

Personal, commercial, public, experiential.

Answer 161

They investigate consumer needs and how to address them.

Answer 162

They offer validation and trust beyond ads.

Answer 163

Reviews and opinions from consumers on platforms like Amazon or Yelp.

Answer 164

Based on buying situation and preferences; can be simple or complex.

Answer 165

By ranking brands and forming intentions based on evaluation

Answer 166

Attitudes of others and unexpected situational factors.

Answer 167

No—external influences can alter decisions.

Answer 168

Disappointment, satisfaction, or delight.

Answer 169

Regret or unease from choosing one option over another.

Answer 170

Satisfied customers make repeat purchases, recommend products, and buy more.

Answer 171

The mental journey a consumer takes from awareness to regular use of a new product.

Answer 172

1. Awareness 2. Interest 3. Evaluation 4. Trial 5. Adoption

Answer 173

1. Innovators (2.5%) 2. Early Adopters (13.5%) 3. Early Mainstream (34%) 4. Late Mainstream (34%) 5. Lagging Adopters (16%)

Answer 174

Offer promotions like discounts or free samples to encourage trials.

Answer 175

Innovators are risk-takers and the first to try; Early Adopters are respected opinion leaders who influence others.

Answer 176

Focus initial efforts on innovators and early adopters to build momentum for new products.

Answer 177

The degree to which a product appears superior to existing alternatives.

Answer 178

It reflects how well the product fits with consumers’ values and lifestyle.

Answer 179

How easy the product is to understand and use. Simpler products are adopted faster.

Answer 180

The degree to which a product can be tried before full adoption.

Answer 181

How easily the product’s benefits can be observed or explained to others.

Answer 182

Initial cost and perceived risk.

Answer 183

The buying behavior of organizations that purchase goods for production or resale.

Answer 184

Business demand that results from consumer demand (e.g., more smartphone demand = more chip purchases).

Answer 185

It involves more participants, is more formal, and includes technical evaluations and large financial stakes.

Answer 186

1. Straight Rebuy 2. Modified Rebuy 3. New Task

Answer 187

Selling a complete solution rather than individual products to meet customer needs.

Answer 188

To build long-term, collaborative relationships that go beyond single transactions.

Answer 189

1. Problem Recognition 2. General Need Description 3. Product Specification 4. Supplier Search 5. Proposal Solicitation 6. Supplier Selection 7. Order-Routine Specification 8. Performance Review

Answer 190

Assessing a product’s components to reduce cost and improve value.

Answer 191

Trade directories, internet searches, and recommendations from other companies.

Answer 192

Buyers share inventory data so suppliers can manage and replenish stock.

Answer 193

Buyer evaluates supplier performance and decides to continue, adjust, or end the relationship.

Answer 194

1. Segment the market into smaller groups 2. Target one or more of those segments 3. Differentiate your offering 4. Position the product in the minds of customers → The goal is to create value for your ideal customers.

Answer 195

Splitting the market into groups of people who have similar needs, behaviors, or characteristics.

Answer 196

Choosing which segment(s) to serve based on potential value.

Answer 197

Making your product or brand stand out by offering something better or unique.

Answer 198

Creating a specific image of your brand in customers’ minds, compared to competitors.

Answer 199

Dividing the market by location: countries, regions, cities, or neighborhoods.

Answer 200

Tailoring products and promotions to meet the needs of specific local areas.

Answer 201

Using mobile and digital tools to deliver highly specific, location-based ads (e.g., Google ads targeting your zip code).

Answer 202

Segmenting based on age, gender, income, education, occupation, ethnicity, or family life cycle.

Answer 203

People's preferences change with age, so marketers tailor products to life stages (e.g., kids, teens, seniors).

Answer 204

Marketers may target specific products to men or women, or use gender-neutral strategies to appeal to all.

Answer 205

High-income customers are targeted with premium products; low- and mid-income customers get budget options.

Answer 206

Segmenting by lifestyle, interests, attitudes, or personality traits.

Answer 207

Targeting consumers based on how they live — their habits, hobbies, and values.

Answer 208

Creating marketing that appeals to certain personality types or self-image.

Answer 209

Segmenting by consumer behavior — like how, when, or why they buy.

Answer 210

* Occasions: Holidays, birthdays, back-to-school * Benefits sought: Price vs. quality vs. convenience * User status: New, potential, or loyal customer * Usage rate: Light, medium, or heavy user * Loyalty status: Highly loyal or brand switcher

Answer 211

Using more than one segmentation type together — like age + income + lifestyle — for more accuracy.

Answer 212

Systems like Acxiom’s "Personicx" group people into clusters like "Cartoons and Carpools" or "Hard Chargers" using many variables.

Answer 213

* Deeper insights * Better targeting * Custom messages for specific consumer needs

Answer 214

They use: * Geography * Industry type * Company size * Usage rate and loyalty * Benefits sought

Answer 215

* Operating characteristics * Purchasing approaches * Situational factors * Personal characteristics (e.g., values of the decision-maker)

Answer 216

Segmenting global markets by: * Geographic region * Economic status * Political/legal systems * Cultural values

Answer 217

Finding customers with similar needs across different countries (e.g., high-tech fans in Japan and Germany).

Answer 218

It must be: 1. Measurable – size and buying power can be identified 2. Accessible – reachable through marketing 3. Substantial – large/profitable enough 4. Differentiable – clearly different from others 5. Actionable – can be effectively served

Answer 219

Treating the entire market as one, with a single offer (e.g., Coca-Cola in the early days).

Answer 220

Targeting multiple segments with tailored offers for each (e.g., L'Oréal's product lines).

Answer 221

Focusing on one specific segment or niche (e.g., Rolex only serving the luxury market).

Answer 222

Customizing products for very small segments — even individuals (e.g., personalized M&Ms or Nike sneakers).

Answer 223

* Resources: Limited = niche; large = differentiated * Product type: Uniform = mass; varied = segmented * Life cycle stage: Intro = mass; mature = segmented * Market variability: Similar needs = mass; diverse = segmented * Competition: Differentiation needed to compete

Answer 224

* Fast food chains targeting low-income areas with unhealthy options * Banks marketing high-interest loans to vulnerable consumers

Answer 225

Children are easily influenced. Companies like McDonald’s have been criticized for enticing ads, though some have shifted to healthier options.

Answer 226

Targeting that avoids exploiting vulnerable groups and promotes fairness, safety, and well-being.

Answer 227

It’s the promise of value a company commits to deliver to its customers — why they should choose your brand.

Answer 228

It’s how a product is placed in the minds of consumers compared to competitors, based on key attributes.

Answer 229

* Honda Fit = economy * BMW = performance * Visa = “Everywhere you want to be” * Bose = “Better sound through research”

Answer 230

They simplify decisions by mentally categorizing products. Good positioning helps avoid confusion and decision fatigue.

Answer 231

Marketers must actively plan, build, and reinforce brand positions — never leave it to chance.

Answer 232

A visual tool that shows how consumers perceive different brands based on key attributes (e.g., price vs. quality).

Answer 233

Some brands can easily position based on existing strengths, while others must work harder to stand out in crowded markets.

Answer 234

* Starbucks = premium, upscale * Dunkin' = casual, everyday approachable

Answer 235

1. Identify competitive advantages 2. Choose the best one(s) 3. Communicate them clearly and consistently

Answer 236

Making a product stand out by design, features, or performance (e.g., BMW = “Ultimate Driving Machine”).

Answer 237

Offering exceptional service (e.g., Rocket Mortgage = fast and easy application).

Answer 238

Using unique distribution methods to add value (e.g., Warby Parker’s direct-to-consumer model).

Answer 239

Hiring and training excellent staff to provide great service (e.g., Wegmans employees).

Answer 240

Using branding to stand out (e.g., Nike’s swoosh, Coca-Cola’s red).

Answer 241

A single, clear reason to buy your product (e.g., Walmart = low prices).

Answer 242

When a product delivers multiple benefits, like Toyota Land Cruiser = off-road + luxury.

Answer 243

1. Important 2. Distinctive 3. Superior 4. Communicable 5. Preemptive 6. Affordable 7. Profitable

Answer 244

1. More for More – Luxury at a high price (e.g., Mercedes) 2. More for the Same – More value, same price (e.g., Target) 3. Same for Less – Equal value, lower price (e.g., Walmart) 4. Less for Much Less – Basic value, super low price (e.g., Motel 6) 5. More for Less – High quality, low price (e.g., Home Depot’s early strategy)

Answer 245

A clear internal guide: “To [target segment and need], our [brand] is [concept] that [point of difference].” Example: “To Canadians needing affordable shipping, Canada Post is a courier that offers flat-rate delivery anywhere in Canada.”

Answer 246

Turning your positioning strategy into real action across the marketing mix (product, price, place, promotion).

Answer 247

Each part of the marketing mix should reflect and reinforce your positioning — from how the product looks to how it’s priced and advertised.

Answer 248

Building a strong position takes time and must be maintained carefully. Sudden changes can confuse customers.

Answer 249

Anything that can be offered to a market for attention, acquisition, use, or consumption that satisfies a want or need. Products can also be services events, people, places, organization and ideas.

Answer 250

Form of product that consists of activities, benefits or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. Example: banking, airline travel, hotel, retail

Answer 251

Core customer value, actual product, and augmented product.

Answer 252

It is the most basic level, answering the question: What is the buyer really buying? It's the fundamental benefit or value the customer seeks.

Answer 253

Someone buying an iPad is buying entertainment, connectivity, productivity, and self-expression, not just a tablet.

Answer 254

“In the factory, we make cosmetics; in the store, we sell hope.” — Charles Revson, Revlon.

Answer 255

The actual product. It includes product/service features, design, quality level, brand name, and packaging.

Answer 256

A Harley-Davidson motorcycle is an actual product that delivers the core customer values of freedom and independence.

Answer 257

Because consumers see products as bundles of benefits. Marketers must know what need or experience the product is meant to fulfill.

Answer 258

Design the actual product and then augment it to create full customer value and a satisfying brand experience.

Answer 259

With warranties, quick repairs, showrooms, accessories, mobile/web support, and membership in the Harley Owners Group (H.O.G.).

Answer 260

Augmented product. It includes additional services and benefits like warranty, after-sale service, delivery, and support.

Answer 261

Roadside assistance, rallies, events, and the HOG Magazine with product info, stories, and news.

Answer 262

Features, design, packaging, quality level, brand name.

Answer 263

Delivery and credit, product support, warranty, after-sale service.

Answer 264

Products and services bought by final consumers for personal consumption. These include convenience products, shopping products, speciality products, and unsought products.

Answer 265

Core customer value, actual product, and augmented product.

Answer 266

It is the most basic level, answering the question: What is the buyer really buying? It's the fundamental benefit or value the customer seeks.

Answer 267

Someone buying an iPad is buying entertainment, connectivity, productivity, and self-expression, not just a tablet.

Answer 268

“In the factory, we make cosmetics; in the store, we sell hope.” — Charles Revson, Revlon.

Answer 269

The actual product. It includes product/service features, design, quality level, brand name, and packaging.

Answer 270

A Harley-Davidson motorcycle is an actual product that delivers the core customer values of freedom and independence.

Answer 271

Augmented product. It includes additional services and benefits like warranty, after-sale service, delivery, and support.

Answer 272

With warranties, quick repairs, showrooms, accessories, mobile/web support, and membership in the Harley Owners Group (H.O.G.).

Answer 273

The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.

Answer 274

Society of Quality Assurance, international professional membership organization that provides a forum for organizations to exchange information about research and regulations that govern quality assurance practices.

Answer 275

Because consumers see products as bundles of benefits. Marketers must know what need or experience the product is meant to fulfill.

Answer 276

Roadside assistance, rallies, events, and the HOG Magazine with product info, stories, and news.

Answer 277

Performance quality (how well it performs) and conformance quality (consistency and freedom from defects).

Answer 278

Design the actual product and then augment it to create full customer value and a satisfying brand experience.

Answer 279

Features, design, packaging, quality level, brand name.

Answer 280

Delivery and credit, product support, warranty, after-sale service.

Answer 281

1. Individual product decision 2. Product line decision 3. Product mix decision

Answer 282

Total quality management is an approach in which all the company’s people are involved in constantly improving the quality of products, services, and business processes.

Answer 283

Style is the product’s appearance; design goes deeper, affecting function and usefulness.

Answer 284

Few customers want or can afford ultra-high-quality levels; companies choose a quality level that fits target market needs.

Answer 285

By observing users, understanding needs, and shaping the product-use experience based on those needs.

Answer 286

Yes. A Chevrolet may not perform like a Rolls-Royce but can still consistently meet expectations.

Answer 287

The product’s ability to perform its functions; for example, a Rolls-Royce offers higher performance quality than a Chevrolet.

Answer 288

Consistency in delivering the intended level of performance with no defects.

Answer 289

Talk to customers, conduct formal or informal research, ask what they like, and assess value vs. cost.

Answer 290

By starting with a basic model and adding features that provide value, they compete and stand out in the market.

Answer 291

Design improves the product’s usability, performance, and how it solves consumer needs—not just how it looks.

Answer 292

Add features that customers value most in relation to their cost to the company.

Answer 293

A name, term, sign, symbol, or design that identifies the maker or seller of a product or service.

Answer 294

They eliminated complex setups and wires, offering wireless control via smartphone with great sound quality.

Answer 295

Sonos created a wireless speaker system that’s easy to use, setup, and move—meeting modern consumer expectations.

Answer 296

Ability to build and manage brands

Answer 297

Designing and producing the container of wrapper for a product.

Answer 298

It creates immediate brand recognition and may be the seller’s last chance to influence buyers at the point of purchase.

Answer 299

Supermarkets: 15,000 to 60,000 items; Walmart supercentre: around 142,000 items.

Answer 300

55% of shoppers decide in-store, making packaging a critical promotional tool.

Answer 301

Amazon’s brown box with the curved arrow logo suggests both “a to z” and a smiley face.

Answer 302

It can provide competitive advantage, boost sales, and become part of the brand identity.

Answer 303

Its iconic blue box symbolizes elegance, exclusivity, and craftsmanship, aligning with its premium brand positioning.

Answer 304

It’s described as making hearts beat faster and conveying a sense of luxury and legacy.

Answer 305

Hard-to-open packages like sealed plastic clamshells or wire twist-ties that cause "wrap rage."

Answer 306

It frustrates consumers and can lead to lost sales.

Answer 307

Using excessive packaging materials, such as putting a tiny USB drive in a large cardboard display or shipping box.

Answer 308

It creates unnecessary waste and leads to poor customer brand experiences.

Answer 309

They enhance the customer’s overall brand experience and can be a major or minor part of the offering.

Answer 310

They build long-term relationships and customer loyalty, as seen with Lexus's service strategy.

Answer 311

Going beyond typical dealership experience, offering luxurious amenities, and delighting customers even post-purchase.

Answer 312

A promise to build the finest cars and treat customers like guests, including perks like complimentary service and car pickup.

Answer 313

Survey customers to assess current service value and gather ideas for improvement.

Answer 314

A group of related products sold to similar customers through similar channels and within similar price ranges.

Answer 315

They enhance the customer’s overall brand experience and can be a major or minor part of the offering.

Answer 316

They build long-term relationships and customer loyalty, as seen with Lexus's service

Answer 317

The number of items in the product line.

Answer 318

Adding more items within the current product range to capture more profit or market share.

Answer 319

Extending the product line beyond its current range—upward, downward, or both.

Answer 320

Mercedes introduced the CLA to attract younger, budget-conscious buyers.

Answer 321

Uber launched UberXL and Lyft launched Lyft Lux to target high-end customers.

Answer 322

BMW expanded down with MINI, up with Rolls-Royce, and filled gaps with multiple models in between.

Answer 323

All the product lines and items a seller offers for sale.

Answer 324

Width, length, depth, and consistency.

Answer 325

The number of product lines a company offers.

Answer 326

The total number of items a company carries within its product lines.

Answer 327

The number of versions offered of each product in the line.

Answer 328

By adding lines (width), lengthening lines, deepening versions, or increasing consistency.

Answer 329

How closely related product lines are in terms of end use, production, or distribution.

Answer 330

Dropped sedans and pivoted to EVs—planning to be all-electric by 2035.

Answer 331

U.S.: 68%, Canada: just over 70%.

Answer 332

Courts, hospitals, military, police, fire departments, postal service, schools.

Answer 333

About 63%.

Answer 334

Museums, charities, churches, colleges, foundations, hospitals.

Answer 335

Airlines, banks, hotels, telecoms, insurance, consulting, entertainment, medical and legal practices.

Answer 336

Services cannot be seen, touched, or tried before purchase. Providers must send tangible signals of quality.

Answer 337

Services are produced and consumed at the same time and cannot be separated from the provider.

Answer 338

Inseparability means customers are part of the service process, impacting the outcome.

Answer 339

Service quality depends on who provides it, and when, where, and how it’s provided.

Answer 340

One Marriott employee may be cheerful while another is grumpy—affecting customer experience.

Answer 341

Services cannot be stored; if unused, they are lost (e.g., missed appointments or off-peak hotel nights).

Answer 342

Adjust staffing and pricing to match demand—like restaurants hiring part-time staff for busy periods.

Answer 343

Through targeted marketing strategies like those of Enterprise, Zipcar, CVS, and TD Bank.

Answer 344

Because services are intangible, variable, inseparable, and perishable, making them harder to standardize and communicate.

Answer 345

A model linking employee satisfaction → customer satisfaction → service value → loyalty → profitability.

Answer 346

1. Internal service quality 2. Satisfied and productive employees 3. Greater service value 4. Satisfied and loyal customers 5. Healthy service profits and growth

Answer 347

High-quality, high-touch service, exceptional employee treatment, and attention to every detail.

Answer 348

Hire carefully, train thoroughly, reward generously; resulting in low turnover and highly motivated staff.

Answer 349

Like its top guests—free meals, careful orientation, recognition, free stays, and shared dignity.

Answer 350

1. Internal marketing (company → employees) 2. External marketing (company → customers) 3. Interactive marketing (employees ↔ customers)

Answer 351

Training and motivating employees to deliver excellent service; it must come before external marketing.

Answer 352

Quality depends on employee-customer interaction; service quality = how well the interaction is handled.

Answer 353

Improve service differentiation, quality, and productivity.

Answer 354

Making a service stand out through offer, delivery, or image.

Answer 355

Emirates' first-class suites; REI’s hands-on retail experience.

Answer 356

Curbside pickup and home delivery from grocery chains.

Answer 357

With symbols or mascots like GEICO’s gecko or the KFC Colonel.

Answer 358

By exceeding customer expectations and being consistent in delivery.

Answer 359

It varies with employee interactions and customer perceptions.

Answer 360

Turning a bad experience into a positive one by solving issues effectively.

Answer 361

* Listen * Acknowledge * Take action * Thank * Explain

Answer 362

They set high standards, monitor closely, and aim for near-zero defects.

Answer 363

* Train or hire better employees * Increase service quantity (risking quality) * Use tech to boost efficiency

Answer 364

It can damage quality, reduce innovation, and frustrate customers.

Answer 365

Airlines using kiosks, removing free snacks, and charging for basics—leading to bad experiences

Answer 366

By focusing more on quality, firms can charge higher prices and improve customer satisfaction.

Answer 367

Brands can outlast assets and become a firm’s most valuable intangible asset.

Answer 368

They claimed they could rebuild their businesses just with the value of their brand names.

Answer 369

A brand is more than a name or symbol; it’s the total perception and emotional connection consumers have with a product or company. It lives in the minds and hearts of consumers.

Answer 370

Brand equity is the differential effect that knowing the brand name has on consumer response. It’s positive when consumers prefer the brand over unbranded alternatives.

Answer 371

They often become iconic (e.g., Nike, Apple, Disney) and create deep loyalty and excitement, leading to long-term competitive advantage.

Answer 372

1. Differentiation – What makes the brand stand out 2. Relevance – How well it meets consumer needs 3. Knowledge – How much consumers know about it 4. Esteem – How highly consumers regard it

Answer 373

The brand must be differentiated, relevant, known, understood, and able to foster a positive connection.

Answer 374

Brand value is the total financial value of a brand. For example, Amazon: $334B, Apple: $303B, Google: $303B, Microsoft: $261B.

Answer 375

Strong brands foster loyal customer bases and emotionally driven buying behaviors.

Answer 376

* Greater consumer loyalty * Stronger bargaining power with resellers * Easier brand extensions * Defense against price competition * Emotional attachment from customers (e.g., Lululemon example)

Answer 377

Customer equity is the value of the customer relationships a brand creates. It’s the foundation of brand equity and marketing success.

Answer 378

Not just as collections of brands, but as portfolios of customers. The real asset is loyal customer relationships, not just the brand name.

Answer 379

To position themselves strongly in chosen target markets using marketing mix activities and unique approaches.

Answer 380

Because services differ from tangible products, requiring additional tactics like internal and interactive marketing.

Answer 381

By investing in employees: training, rewarding, free stays, and shared meals — creating loyalty and excellence.

Answer 382

A model linking service firm profits with employee and customer satisfaction.

Answer 383

Precede external marketing by inspiring employees to deliver the brand's promise.

Answer 384

1. Internal service quality → strong support & training 2. Satisfied employees → loyal & productive staff 3. Greater service value → efficient value delivery 4. Satisfied customers → repeat & referral behavior 5. Healthy profits → superior service firm performance

Answer 385

Because they delight both customers and employees. Happy employees = happy customers.

Answer 386

* Internal marketing: Company → employees * External marketing: Company → customers * Interactive marketing: Employees ↔ customers

Answer 387

The interaction between employees and customers.

Answer 388

Three months of training in interaction skills (e.g., at Four Seasons).

Answer 389

* Offer (e.g., Emirates' luxury suites) * Delivery (e.g., reliable staff, home delivery) * Image (e.g., GEICO gecko, Colonel Sanders)

Answer 390

1. Service differentiation 2. Service quality 3. Service productivity

Answer 391

Consistency and customer retention.

Answer 392

Starbucks’ service recovery method: * Listen * Acknowledge * Take action * Thank * Explain

Answer 393

Train better, hire skilled staff, use tech, and manage carefully to avoid cutting service quality.

Answer 394

Lower quality, customer dissatisfaction, and damaged service reputation.

Answer 395

The impact of knowing the brand name on customer response.

Answer 396

1. Differentiation 2. Relevance 3. Knowledge 4. Esteem

Answer 397

The total financial worth of a brand (e.g., Amazon = $334B).

Answer 398

* Higher awareness & loyalty * Leverage with resellers * Launching new products * Pricing power

Answer 399

Customer equity — the value of customer relationships a brand creates.

Answer 400

1. Brand positioning (attributes, benefits, beliefs & values) 2. Brand name selection 3. Brand sponsorship 4. Brand development

Answer 401

Brands that inspire deep emotional loyalty (e.g., Disney)

Answer 402

1. Attributes (least effective) 2. Benefits (e.g., Walmart = save money) 3. Beliefs & values (e.g., FedEx: “what we deliver by delivering”)

Answer 403

A clear, simple, honest message about what customers can expect.

Answer 404

1. Suggest benefits/qualities (e.g., Headspace) 2. Easy to pronounce/remember (e.g., Tide) 3. Distinctive (e.g., JetBlue) 4. Extendable (e.g., Amazon) 5. Translatable (e.g., Coca-Cola in Chinese = “tasty fun”) 6. Legally protectable

Answer 405

To avoid them becoming generic (e.g., yo-yo, trampoline).

Answer 406

Use trademark symbols and legal terms (e.g., BAND-AID® Brand Adhesive Bandages)

Answer 407

1. Manufacturer’s brand (e.g., Samsung) 2. Private/store brand (e.g., no name, AmazonBasics) 3. Licensed brand (e.g., Disney characters on merch) 4. Co-branding (e.g., Doritos + Taco Bell)

Answer 408

Private brands or private-label brands.

Answer 409

Higher margins, exclusivity, price advantages, and quality improvements.

Answer 410

Loblaws’ brands like President’s Choice, Joe Fresh, etc.

Answer 411

Using two brand names on one product (e.g., Android Oreo, Doritos Locos Taco).

Answer 412

Renting a well-known brand name or character (e.g., Frozen, Star Wars) for a fee.

Answer 413

* Broadens appeal * Strengthens equity * Enters new categories

Answer 414

Legal complexity, brand risk if one partner fails

Answer 415

Brand positioning, brand name selection, brand sponsorship, and brand development.

Answer 416

Product attributes, benefits, and beliefs and values.

Answer 417

Because attributes are easily copied by competitors, and consumers care more about what attributes do for them than the attributes themselves.

Answer 418

it links the brand to what it does for customers, like Whirlpool promoting better energy savings and less hassle in cleaning.

Answer 419

It means connecting with customers on a deep emotional level, like FedEx highlighting how their service impacts people's lives, not just package delivery.

Answer 420

A brand that creates emotional connections so strong that customers love it unconditionally (e.g., Disney, Apple, Coca-Cola).

Answer 421

Customers don’t just like lovemarks — they form deep emotional bonds with them and are extremely loyal.

Answer 422

A guest described feeling joy and magic every time they walk down Main Street and see Cinderella’s castle, calling it a source of real happiness.

Answer 423

It’s the company’s promise to deliver specific benefits, services, and experiences consistently to buyers.

Answer 424

Motel 6 promises affordability and simplicity (clean rooms, low prices), while the Ritz-Carlton promises luxury and memorable experiences.

Answer 425

Differentiation, Relevance, Knowledge, and Esteem.

Answer 426

Brand equity is the differential effect that knowing the brand name has on customer response. It reflects a brand's ability to capture customer preference and loyalty. High brand equity leads to competitive advantages like customer loyalty, bargaining power, and brand extensions.

Answer 427

Brand value is the total financial value of a brand. Brand equity is the emotional and perceptual connection consumers have with a brand.

Answer 428

Strong brand equity leads to high customer equity, which is the value of customer relationships a brand creates.

Answer 429

Brand positioning, Brand name selection, Brand sponsorship, Brand development.

Answer 430

Attributes, Benefits, Beliefs and values.

Answer 431

Lovemarks are brands that inspire loyalty beyond reason. Examples: Disney, Apple, Coca-Cola, Nike.

Answer 432

A brand promise is the company’s pledge to consistently deliver a specific set of features, services, and experiences. It must be clear, simple, and honest.

Answer 433

(1) Suggests benefits, (2) Easy to pronounce/remember, (3) Distinctive, (4) Extendable, (5) Translates well, (6) Registrable.

Answer 434

By using trademark symbols, avoiding generic use, and enforcing legal rights.

Answer 435

Store brands are private-label products offered by retailers. They offer more control, higher margins, and increasingly match or exceed national brand quality.

Answer 436

Manufacturer’s brand, Private brand, Licensing, Co-branding.

Answer 437

Licensing is renting the use of a well-known name, celebrity, or character for a fee to quickly build brand recognition.

Answer 438

Co-branding is when two companies join forces to market a product. Examples: Android Oreo (Google + Oreo), Doritos Locos Taco (Doritos + Taco Bell).

Answer 439

Line Extension, Brand Extension, Multibrands, New Brands.

Answer 440

A line extension is adding new forms, flavors, or sizes to existing products. Risk: overextension can cause confusion or dilute the brand.

Answer 441

Using an existing brand name to launch a product in a new category. Ex: Dyson extending from vacuums to lighting.

Answer 442

Multibrands are multiple brands in the same category. Drawback: brands might each have small market share and dilute company resources.

Answer 443

When the existing brand has lost power or doesn't fit a new product category.

Answer 444

Communicate the brand continuously, build customer engagement, train staff, monitor brand experiences, and audit strengths/weaknesses.

Answer 445

Acquisition and New Product Development.

Answer 446

95% fail due to overestimating demand, poor design, bad timing, weak positioning, or poor promotion.

Answer 447

1. Idea generation 2. Idea screening 3. Concept development and testing 4. Marketing strategy 5. Business analysis 6. Product development 7. Test marketing 8. Commercialization

Answer 448

Internal: R&D, employees (Google’s Area 120). External: customers, competitors, suppliers.

Answer 449

They foster creativity, innovation, morale, and can lead to major product breakthroughs (e.g., Facebook's “Like” button).

Answer 450

From distributors and suppliers who are close to consumers and provide insights into problems, new concepts, materials, and opportunities.

Answer 451

Companies study competitors’ products, analyze their strategies, and assess whether to develop similar or improved versions.

Answer 452

They provide feedback through complaints, suggestions, and platforms like Salesforce’s IdeaExchange, fostering two-way innovation and loyalty.

Answer 453

It involves inviting a wide audience—customers, employees, researchers, the public—to contribute product ideas, fostering diverse innovation.

Answer 454

Ben & Jerry’s “Do the World a Flavor,” Tupperware’s Clever Container Challenge, and Under Armour’s Future Show Innovation Challenge.

Answer 455

It maximizes innovation by drawing on both internal and external communities for fresh, unexpected, and powerful product ideas.

Answer 456

To reduce a large number of ideas and filter out weak ones early, saving resources for profitable concepts.

Answer 457

They evaluate the idea's value proposition, target market, costs, development time, and competition using a standard format.

Answer 458

A method asking: * Is it real? Is there demand? * Can we win? Do we have the resources and advantage? * Is it worth doing? Does it fit the company’s goals?

Answer 459

Honda developed concepts for different markets like exec jets, family luxury travel, and no-frills air taxis using HondaJet Elite.

Answer 460

* Idea: Initial thought of a product * Concept: Detailed version in consumer terms * Image: Consumer perception of the product

Answer 461

Testing new product concepts with target consumers using descriptions, symbols, or mockups to gain feedback.

Answer 462

It helps companies understand how consumers perceive product ideas before investing in development.

Answer 463

1. Target market, value proposition, sales/profit goals 2. Product pricing, distribution, budget 3. Long-run sales, profit goals, marketing strategy

Answer 464

Targeted at ultra-wealthy consumers, positioned as flexible, luxurious transport. Budget included ads, direct sales, events, and research.

Answer 465

Capture 60% global market share in personal jets, with 20% ROI. Increase prices and reduce marketing spend over time.

Answer 466

To assess if sales, costs, and profit projections meet company goals before moving to development.

Answer 467

Through market surveys, historical data, and forecasting. Expected costs are calculated across all business units.

Answer 468

R&D creates a tangible version (prototype) from the concept. This stage requires a big investment.

Answer 469

Through rigorous lab testing and real-world customer trials to ensure safety, quality, and satisfaction.

Answer 470

Brooks uses "Lab Rats" and "Wear Testers" to test running gear and gather feedback on design and performance.

Answer 471

It shapes design decisions and ensures the product aligns with users’ functional and emotional expectations (e.g., Carhartt Crew input).

Answer 472

Test marketing is the stage where the product and its full marketing program are tested in realistic market settings to evaluate performance before a full launch.

Answer 473

Targeting, positioning, advertising, distribution, pricing, branding, packaging, and budget levels.

Answer 474

When the product involves a big investment, high risk, or uncertainty about the marketing program.

Answer 475

Taco Bell tested Doritos Locos Tacos for 3 years with 45 prototypes. Starbucks tested VIA in stores for months before national release.

Answer 476

When the product is low-risk or the company is confident in its success. Also when speed to market is a priority (e.g. Starbucks mobile app).

Answer 477

* Controlled test markets: Panels of consumers in selected stores, combining purchase and demographic data. * Simulated test markets: Lab or virtual shopping simulations measuring consumer reactions and reducing cost/time.

Answer 478

It's the process of introducing the new product into the market, involving high costs such as manufacturing, advertising, and promotion.

Answer 479

1. Timing of launch (delayed or rushed), 2. Where to launch (single location, regional, national, global).

Answer 480

* Nintendo: $18M in one month for Switch ads * Tide: $150M for Tide Pods launch * Microsoft: $400M to launch Surface tablet * Apple: iPhone 12 in 50+ countries on day one

Answer 481

1. Customer-centred 2. Team-based 3. Systematic

Answer 482

It focuses on solving customer problems and creating customer-satisfying experiences by involving them throughout the process.

Answer 483

It leads to higher returns, more successful products, and greater growth in operating income.

Answer 484

A cross-functional team stays with the product from start to finish, overlapping stages to improve speed and collaboration.

Answer 485

* Sequential: Each department finishes its task before handing off. Slower but controlled. * Team-based: Teams work in parallel. Faster but may create confusion or tension.

Answer 486

Faster product development and a competitive edge in dynamic markets.

Answer 487

Prevents chaotic, ad-hoc innovation and ensures more good ideas are developed and brought to market.

Answer 488

A structured system to collect, evaluate, and manage new product ideas across the organization.

Answer 489

1. Encourages a culture of innovation 2. Generates more ideas 3. Increases chances of product success 4. Recognizes and rewards contributors

Answer 490

Finding ways to solve customer problems and create more customer satisfying experiences.

Answer 491

Test marketing is the stage where a product and its proposed marketing program are tested in realistic market settings. It helps marketers gain experience with marketing before committing to a full product launch, allowing companies to test strategies like targeting, pricing, branding, and distribution.

Answer 492

It is used when a new product requires a big investment, when risks are high, or when management is unsure of the product or its marketing strategy.

Answer 493

Test marketing can be expensive and time-consuming. It may also give competitors time to respond. Companies may skip or reduce testing when costs are low or if confident in the product.

Answer 494

1. Taco Bell – Took 3 years and 45 prototypes before launching Doritos Locos Tacos. 2. Starbucks – Tested Starbucks VIA for months before nationwide release.

Answer 495

* Controlled test markets: New products are tested among panels of shoppers and stores. * Simulated test markets: Consumer responses are measured in simulated store or online environments to save costs and time.

Answer 496

Commercialization is the process of introducing a new product to the market. It involves high costs (e.g., manufacturing, advertising, and distribution) and strategic decisions about timing and market locations.

Answer 497

* Timing: Avoid cannibalizing existing products or launching during economic downturns. * Where: Local, regional, national, or international markets.

Answer 498

It focuses on solving customer problems and creating customer satisfaction. It starts with a deep understanding of consumer needs and involves them in the innovation process.

Answer 499

Increases product differentiation, addresses key customer problems, and leads to higher returns and growth. Companies that engage customers early perform better financially.

Answer 500

It involves collaboration among departments working together simultaneously rather than sequentially. This speeds up development and improves coordination.

Answer 501

LEGO observed families, interviewed parents, and co-created with users. It led to innovations like specialized kits and LEGO MINDSTORMS. Customer ideas now inspire new products via LEGO Ideas.

Answer 502

* Advantages: Faster development, better communication, fewer bottlenecks. * Limitations: Can cause organizational tension or confusion in fast-moving industries.

Answer 503

It’s a structured, company-wide approach using an innovation management system to collect, review, and develop ideas consistently.

Answer 504

1. Encourages a culture of innovation across the company. 2. Produces more high-quality product ideas and increases success rates.

Answer 505

The PLC is the course of a product’s sales and profits over time. It includes 5 stages: Product development, Introduction, Growth, Maturity, and Decline.

Answer 506

1. Development: No sales, only investment. 2. Introduction: Slow growth, high marketing costs. 3. Growth: Rapid acceptance and profit increase. 4. Maturity: Sales slow, competition increases. 5. Decline: Sales and profits drop.

Answer 507

No. Some products fade quickly, some remain in maturity for years (e.g., Crayola, Coca-Cola), and others can re-enter growth after repositioning.

Answer 508

* Class: Broad (e.g., laundry detergent) – long lifecycle. * Form: Specific (e.g., liquid detergent) – shorter lifecycle. * Brand: (e.g., Tide) – most variable lifecycle.

Answer 509

* Style: Distinct mode of expression with recurring popularity. * Fashion: Popular for a time, then declines. * Fad: Short-lived, intense popularity (e.g., fidget spinners).

Answer 510

* Hard to predict timing, shape, or sales at each stage. * Strategy both causes and results from the PLC stage, making it complex to plan ahead.

Answer 511

By monitoring customer feedback, adjusting marketing strategies, and repositioning or innovating products to prolong growth or avoid decline.

Answer 512

* Launch of new product * Sales are slow, profits are negative or low * High marketing cost to raise awareness * Market isn’t ready for refinement * Firms focus on early adopters

Answer 513

A market pioneer is the first company to introduce a product. It must choose a launch strategy that aligns with its long-term positioning.

Answer 514

The product is first launched, sales grow slowly due to low awareness, and profits are low or negative due to high promotion costs. The market is not ready for product refinements, and companies target early adopters.

Answer 515

The market pioneer chooses a launch strategy aligned with product positioning, knowing it’s the first step in a long-term marketing plan for the product's life cycle.

Answer 516

Sustain market growth, improve quality, add features, expand segments and channels, lower prices strategically, and shift focus to building trial and purchase.

Answer 517

Sales increase as early adopters continue buying and others follow. Competitors enter, add features, and market expands. Costs decrease and profits rise.

Answer 518

Companies may sacrifice short-term profit by spending on improvement and promotion to gain high market share and dominance.

Answer 519

Sales growth slows, market is saturated, competition intensifies, and profits drop. The stage lasts longer and demands creative marketing strategies.

Answer 520

By modifying the market (finding new users or uses), modifying the product (features, packaging, etc.), or modifying the marketing mix (pricing, channels, promotion).

Answer 521

Quaker Oats refreshed its brand with healthy products and modern marketing, including digital media and lifestyle-focused messaging.

Answer 522

Sales and profits dip due to tech advances, shifting tastes, or increased competition. Firms may withdraw, reduce offerings, or cut budgets.

Answer 523

They waste resources, require constant adjustments, harm reputation, and delay replacements. Keeping them may hurt long-term strategy.

Answer 524

Maintain, harvest, drop, reposition, or reinvigorate the product to potentially return it to the growth phase.

Answer 525

It conducted research with families, redesigned products (e.g., scooters, battery-powered cars), and successfully revitalized its brand.

Answer 526

Social responsibility in product decisions and international product/services marketing.

Answer 527

Issues include patent protection, product safety, competition laws, and warranties. Companies must avoid copying products and follow safety laws.

Answer 528

When consumers are injured by a defective product, they can sue. Lawsuits can cost billions, as in the Volkswagen emissions case.

Answer 529

Companies must ensure product safety, fairness, and compliance with laws. Irresponsible actions can hurt reputation and finances.

Answer 530

They must decide which products to launch, where to launch, and how much to adapt versus standardize globally.

Answer 531

Pros: Consistent brand image, lower costs. Cons: May not meet local preferences, requiring adaptation.

Answer 532

By offering country-specific menu items (e.g., salmon burgers in Norway, McFalafel in Israel) and tailoring restaurant design to local customs (e.g., longer meals in France).

Answer 533

Deutsche Bank operates in 70+ countries and customizes services for global clients, reflecting the complexity of international service delivery.

Answer 534

U.S. retailers like Walmart and Office Depot are entering faster-growing markets abroad, as domestic markets saturate.