ECON344 Chapter Notes - Chapter 9: Product Differentiation, Marketing Mix, Mass Customization

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greyelk341

19 Jun 2017

School

University of Waterloo

Department

Economics

Course

ECON344

Professor

Bharat Sud

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Document Summary

80/20 rule: 80% of a firms sales are obtained from 20% of its customers. Market segments: groups resulting from market segmentation that have common needs and respond similarly to marketing tactics. Market/industry potential: maximum total product sales to a segment/ period in specific environmental/ marketing conditions. Market-product grid: framework to relate the market segment to the products/marketing actions of the firm (size of market/ cell) Perceptual map: displaying the location of products/brand in customers" minds. Product differentiation: different marketing mix activities to aid improved perception of the production (selling 2+ products with different features for different market segments) Product positioning: placing a product in consumers" minds relative to the competitors". Sales/company forecast: maximum total sales/ period specific environmental/ marketing conditions. Salesforce survey forecast: estimation of sales in the future period. Survey of buyers" intentions forecast: asking prospective customers whether they"re likely to buy the product. Segmentation: links needs to actions through product differentiation.

Related Questions

Choose the right answer

Question 1

With respect to consumer behavior, one's attitudes, learning, and perceptions would be

		impersonal influences
		interpersonal influences
		personal influences
		insitutional influences

Question 2

In Maslow's hierarchy of needs,

		a physiological need must be met directly before social needs.
		esteem needs are the highest order of needs.
		self-actualization needs are the highest order
		safety needs and esteem are of the same importance.

Question 3

The most likely product to be purchased in an attempt to satisfy self-esteem needs would be

		"super class" tickets for your next air flight.
		a really fast computer.
		a home security system.
		yogurt and health food.

Question 4

Which of the following is not a characteristic that distinguishes organizational markets from consumer markets?

		Organizational markets are more geographically concentrated.
		More people exert influence on the organizational buying decision.
		The organizational market tends to have a greater number of buyers.
		Organizations often engage in multiple sourcing and vendor analysis.

Question 5

Consumers may attempt to reduce postpurchase anxiety in the consumer decision process by

		avoiding favorable information about the selected brand
		seeking reassurance from dissatisfied customers
		seeking information that favors the rejected brands
		ignoring unfavorable reports about the chosen brand

Question 6

The buying center concept explains how groups of people participate informally in business purchase decisions and

		methods to break through group perceptions.
		the role the group members play in buying decisions.
		how family units operate as buying centers.
		the process of performing vendor analysis.

Question 7

In the organizational buying process, a triggering event such as announcement of the availability of a new product whose use could improve the company's market performance is referred to as

		need or opportunity recognition
		identification of suppliers
		information search
		word-of-mouth exploration

Question 8

An undifferentiated marketing strategy

		serves the consumer better because the products offered are designed to meet the needs of a specific group of people
		benefits from the control and efficiency of short production runs
		ignores differences among consumer groups and focuses on the broad market
		is the most common strategy today and is used more now than in the past

Question 9

Goods purchased by the ultimate consumer for personal use are called

		personal products
		purchased products
		consumer products
		commercial products

Question 11

A particular purchasing agent might allow some salespeople to see the engineers responsible for developing product specifications but not allow others the same privilege. In the buying center, this purchasing agent is filling the role of

		a "hard" nose
		a gatekeeper
		an influencer
		a decider

Question 12

"Our prices are the lowest, we guarantee it" is an example of a positioning strategy based on the product's

		competitors
		price
		class
		application

Question 13

Segmenting the market based on exactly how an industrial purchaser will use products is referred to as

		customer-based segmentation
		benefits segmentation
		end-use application segmentation
		geographic segmentation

Question 14

The lumber your carpenter purchases to finish out your basement is classified as

		a home improvement product
		a raw material
		a business product
		a consumer good

Question 15

When consumer demand for personal computers affects computer manufacturers' demand for computer chips, this situation is known as

		volatile demand
		conjoined demand
		derived demand
		joint demand

Question 16

Which of the following is a personal factor in consumer bahavior?

		a cultural influence
		group membership
		friends' opinions
		a person's attitudes

Question 17

Cognitive dissonance would be most likely to occur after the purchase of

		sneakers
		groceries
		an automobile
		cosmetics

Question 18

Which of the following would be most likely to break through a person's perceptual screen?

		a newspaper ad featuring white type on a black background
		a black- and -white classified ad
		reducing the size of the ad
		using fewer colors in the ad

Question 19

The Fortune 500 list of America's largest firms based on sales revenues and number of employees provides a basis for

		market segmentation based upon customer type
		demographic segmentation based upon geographic location
		end-user segmentation of this market
		demographic segmentation based upon customer size

Question 20

Straight rebuy behavior by industrial purchasers will probably continue if the supplier provides

		poor service
		poor quality
		shipping delays
		satisfactory performance

Question 21

A controversial technique of subconscious communication, aimed at circumventing the perceptual screens, is called

		shadowed perception
		leger-de-main
		subliminal perception
		perception incognito

Question 22

Those products that are actually considered when making a consumer purchase decision are

		customer options
		customer selections
		the evoked set
		the product set

Question 23

The component of the business market that consists of individuals and firms that acquire goods and services to be used directly, or indirectly, in producing other goods and services is called:

		wholesaling and retailing
		the commercial market
		government
		an institution

Question 24

The institutional market does not include which of the following?

		hospitals
		museums
		motion pictures theatres
		universities

Question 25

Advertising for smoke alarms, air bags and life insurance typically uses which of Maslow's levels of needs to appeal to consumers?

		self-esteem needs
		safety and security needs
		physiological needs
		protection needs

Question 26

One type of buying center role is that of the

		influencer who supplies information for evaluation.
		authority figure who decides who, what, where, when, and how.
		disseminator who function is to get advertisements to prospects.
		specifier who needs on the specifications of products

Question 27

Manufacturing firms that convert to automated factory systems must purchase equipment that they have never bought before, such as robots and computers. This buying situation is called

		a straight rebuy
		a modified rebuy
		a contract purchase
		new-task buying

Question 29

A commonly used basis for segmenting consumer markets is

		product-related characteristics
		health-related matters
		information-related concepts
		performance-related criteria

1 points

Question 30

The business market is also known as the

		wholesale market
		corporate market
		organizational market
		distribution market

Question 31

Which of the following consumer problem-solving behaviors requires the least effort?

		extended problem solving
		limited problem solving
		impulsive buying
		routine response behavior

Question 32

The relationship between the demand for silk cloth and consumer demand for silk blouses and neckties is known as

		joint demand
		demand volatility
		derived demand
		consumer demand

Question 33

Examples of business market items that would usually be purchased as a straight rebuy are

		high quality raw materials
		heavy-duty machinery
		paper clips and pencils
		high-tech components

Question 34

The person who joins a local bowling league for the social interaction, even if he or she is a novice bowler, is probably trying to satisfy his or her

		esteem needs
		self-actualization needs
		physiological needs
		belongingness/social needs

Question 35

Campbell's "Soup for One" is an example of a product that is targeted to

		large families with high product usage of certain things but different preferences
		dual-income couples with no kids
		well-off older families
		non-traditional households such as nonfamily, single-person or single-parent situations

Question 36

Red Ryder Industries markets rodeo and horse riding supplies specifically to women. This is an example of

		market stratification
		market segmentation
		non-traditional marketing
		multi-gender marketing

Question 37

Purchases made by choosing a preferred brand or one of a limited group of acceptable brands are called

		extended problem solving
		routinized response behavior
		limited problem solving
		selective problem solving

Question 38

The slogan "the graying of America" describes the trend

		toward people retiring later in life
		of the word force to contain a disproportionate number of older Americans
		for gray hair to develop from years of high-stress urban work
		upward in the elderly population as Americans tend to live longer

Question 39

People or institutions must have sufficient purchasing power and the authority and willingness to buy to be considered a

		market
		buyer
		player
		segment

Question 40

Reference group influences would be most likely to be significant in the decision to buy

		a loaf of bread
		a Mercedes Benz
		a clock radio
		cellophane tape

Question 41

Internal search in the consumer decision process may include

		subscribing to consumer magazines to evaluate alternatives
		talking to family members
		reviewing past purchases
		surveying coworkers for buying options

Question 42

The process of dividing the total market into several smaller, homogeneous groups is called

		market penetration
		market segmentation
		market mixing
		market division

Match the definitions or complete the statements in the first part of the quiz with the appropriate terms found in the second part.

Definitions/Statements

1. _____ refers to marketersâ focus on a product rather than on the needs of the market.

3. The impact of technology on buyer behavior relates to factors such as ____; the use of technology to engage customers and build relationships; customization of products and promotional messages; and better prices and distribution.

4. In the case of situational influences, this relates to the situation in which or the occasion on which the product will be used, e.g., special occasion or everyday use.

5. In the case of situational influences, this relates to the fact if we are in a store, point-of-purchase displays could influence us to buy something. We could also make unplanned purchases because we remembered something from seeing the brand while we are in the store.

6. This discipline on which consumer researchers draw focuses on society and large groups in society such as family and social class.

7. This discipline on which consumer researchers draw focuses on cultures and differences among cultures.

8. These are temporary circumstances that affect consumer purchase decisions.

9. In the case of situational influences, this refers to the fact that the person and the occasion for which we are buying something influence our purchase decisions.

10. According to the simple model of consumer decision making, reference groups, family, social class, culture, and subculture are among the _____ on buyer behavior.

11. According to the simple model of consumer decision making, motivation, personality trait, perception, and attitudes are among the _____ on buyer behavior.

12. According to the simple model of consumer decision making, advertising, buzz agents, customized messages, social media, and word-of-mouth are examples of ____.

13. This discipline on which consumer researchers draw focuses on behavior in small groups and helps consumer researchers to understand issues such as opinion leadership, diffusion of innovations, and communication.

14. In the case of situational influences, ______ are consumer mood states or physiological state (for example, hunger, thirst) that influence consumer decision-making.

15. The selection of one or more segments by a marketer to serve.

16. Developing a distinct image for a brand in the mind of consumers.

17. This is an effort by a marketer to change the existing perception that consumers have of a brand.

19. ___ segmentation involves segmenting based on variables such as urban, rural, suburb, state, cities, counties, and regions.

20. ____ segmentation is based on variables such as consumersâ lifestyles as indicated by their activities, interests, and opinions.

21. This criterion for effective targeting says that marketers should have some way of deciding which consumers fall into which segments.

22. This criterion for effective targeting says that marketers should be able to reach segments with appropriate media and distribution channels.

23. This is the most popular segmentation system combining lifestyles and values of consumers.

24. This household segmentation model is based on a combination of geographic and demographic information and the principle that âBirds of a feather flock together.â

25. ______ is defined as âsending consumers personalized and prompt offers and promotional messages designed to reach the right consumers and deliver to them highly relevant messages at the right time and more accurately than when using conventional segmentation techniques.â

Terms

A. Positioning

B. Accessibility

C. Anthropology

D. Situational influences

E. Consumption situation

F. Task definition

G. Identification

H. Marketing-oriented

I. Targeting

J. Psychographic

K. Marketing myopia

L. PRIZM

M. Interactive and novel communication channels

N. Sociology

O. Demographic

P. Purchase situation

Q. Behavioral targeting

R. Antecedent states

S. Communication sources

T. Geographic

U. Sociocultural influences

V. VALS

W. Psychological influences

X. Social psychology

Y. Repositioning

Match the definitions or complete the statements in the first part of the quiz with the appropriate terms found in the second part.

Definitions/Statements

1. _____ refers to marketersâ focus on a product rather than on the needs of the market.

2. _____ companies do not try to persuade consumers to buy what the firm has already produced, but rather to produce only products that they know they can sell, thereby satisfying consumersâ needs and turning them into loyal customers. 3. The impact of technology on buyer behavior relates to factors such as ____; the use of technology to engage customers and build relationships; customization of products and promotional messages; and better prices and distribution.