Lectures 4-6

Question 1

what is a market

Answer 1

a group of customers with heterogeneous needs and wants.

Question 2

Target market

Answer 2

a particular group of consumers at which a product or service is aimed.

Question 3

Target marketing is based on three premises

Answer 3

1. Individual buyers can be identified
2. Sellers understand the needs of buyers
3. Sellers meet the needs of target buyers

Question 4

Market segments

Answer 4

Subgroups within the total market that are relatively similar in regard to certain characteristics

Question 5

Mass marketing

Answer 5

A mass marketer sees buyers as having common wants, needs and demands.
A single product offering is created, communicated and delivered to meet the needs of most people in the market

Question 6

One-to-one marketing

Answer 6

seeks to appeal to each customer by providing aunique, customised offering that will meet their individual needs

Question 7

When choosing target markets, the organisation will generally consider three factors

Answer 7

1. Its own resources
2. Market demand
3. competition

Question 8

Small organisations with limited financial resources frequently adopt one of the following specialised approaches to target marketing

Answer 8

1. Product specialisation
2. Market specialisation
3. Product-market specialisation

Question 9

The target marketing process 3 stages

Answer 9

1. Segmentation
2. Targeting
3. positioning

Question 10

Market segmentation 2 steps

Answer 10

1. define market segments
2. Profiling the market segments

Question 11

Identify segmentation variables (4)

Answer 11

geographic
demographic
psychographic
behavioural

Question 12

Effective segmentation criteria (5)

Answer 12

Measurability
Accessibility
Substantiality
Practicability
Stability

Question 13

Market targeting involves…

Answer 13

a systematic examination of the range of possible market segments, their potential sales volume and revenues

Question 14

Evaluate potential segments through analysis of…

Answer 14

Sales potential
Competitive situation
Cost structure

Question 15

Positioning

Answer 15

how the customers distinguish the organisation, its products and its brands from competitors when they are selecting from among the available alternatives

Question 16

Market positioning

Answer 16

the way in which target segments perceive an organisations offering in relation to competing offerings

Question 17

Company positioning

Answer 17

a positioning strategy designed to create a single market perception of the organisation in relation to competitors
e.g Apple vs Microsoft

Question 18

Brand positioning

Answer 18

a positioning strategy designed to create a market perception of a particular brand, usually based on product attributes
e.g.Lexus vs Toyota

Question 19

Some commonly used positioning variables include:

Answer 19

Attributes
use/application
Product user
Price and quality
Product class

Question 20

The marketing mix for each segment should:

Answer 20

Be consistent with the desired positioning
Be internally consistent
Be sustainable in the long term

Question 21

Product

Answer 21

a good, service or idea offered to the market for exchange

Question 22

Total product concept

Answer 22

Describes the core product, expected product, augmented product and potential product in order to analyse how the product creates value for the customer

Question 23

Core product

Answer 23

the fundamental benefits of product

Question 24

Expected product

Answer 24

attributes that actually deliver benefits

Question 25

Augmented product

Answer 25

benefits buyer may not require as part of basic fulfilmentof needs

Question 26

Potential product

Answer 26

all possibilities that could become part of the expected or augmented product

Question 27

Shopping products

Answer 27

moderate to high engagement decision making, with the purchases decision based on features, quality and price

Question 28

Convenience products

Answer 28

inexpensive, frequently purchased, products bought with low engagement decision making

Question 29

Specialty products

Answer 29

highly desired products with unique characteristics that consumers will make considerable effort to obtain

Question 30

Unsought products

Answer 30

purchased to meet a sudden, unexpected need

Question 31

The typical stages a product progresses through during its life cycle

Answer 31

○ New Product Development: ○ Introduction ○ Maturity ○ Decline

Question 32

Product line extensions

Answer 32

new products that are closely related to existing products ina the product line

Question 33

Brand

Answer 33

A collection of symbols intended to create an image in the customers mind that differentiates a product from competitors' products

Question 34

○ Brand image

Answer 34

■ The set of beliefs that a customer has regarding a particular brand

Question 35

○ Brand equity

Answer 35

■ Added value that a brand gives a product

Question 36

○ Brand loyalty:

Answer 36

Customers highly favourable attitudes and purchasing behaviourtowards a brand

Question 37

Brand metrics

Answer 37

Value of brand in terms of brand assets, stock price analysis, replacement cost, brand attributes, and brand loyalty

Question 38

○ Compulsory label information can include:

Answer 38

Brand name and logo Product name Ingredients list Use by date or date of packaging Bar code

Question 39

Igor Ansoff9s product-market growth strategy:

Answer 39

Market Penetration Product Development Market Development: Diversification

Question 40

○ Price is directly related to profitability (equation)

Answer 40

Profit = (price x sales volume) - total costs

Question 41

○ Determining pricing objectives

Answer 41

should be specific, measurable, actionable, reasonable timetabled

Question 42

○ Return on investment (ROI)

Answer 42

The profit required to justify investment in a particular product orproject

Question 43

Pricing objectives tend to focus on various combinations of the following issues:

Answer 43

profitability long‐term prosperity market share positioning what the customer is prepared to pay

Question 44

○ Pricing can be based upon

Answer 44

Costs Demand Competition

Question 45

➢Cost-based pricing

Answer 45

a percentage or dollar amount is added to thecost of a product in order to determine its selling price

Question 46

Fixed costs

Answer 46

Costs that are constant regardless of the amount of products being sold e.g. cost of factories

Question 47

Variable costs

Answer 47

Costs a company incurs to sell additional products e.g.delivery costs

Question 48

○ Break-even analysis

Answer 48

An analysis designed to estimate the volume of unit sales required tocover total costs

Question 49

○ Break-even point

Answer 49

■ The quantity at which total revenue = total costs

Question 50

Margins

Answer 50

The effect on costs and revenue when an organisation produces and sells one more unit of product

Question 51

○ Demand curve

Answer 51

A plot of how much people will buy things based on a products price

Question 52

Economies of scale

Answer 52

As the amount of units produced increases, thecost to produce each unit decreases

Question 53

Low‐cost production

Answer 53

Often based on country of origin

Question 54

○ Penetration pricing

Answer 54

setting a low price in order to gain rapid market share and turnover for a new product

Question 55

○ Price skimming

Answer 55

Charging the highest price that customers who most desire the product are willing to pay, and then lowering the price to bring in larger numbers of buyers

Question 56

○ Pricing includes areas subject to legal restrictions:

Answer 56

essential services misleading and deceptive conduct price collusion price discrimination comparability and clarity of pricing