World Trade & Global Marketing
These marketing discussions are about World Trade & Global Marketing
Dumping
When a firm sells a product below its domestic price or below its actual cost
Five trends have significantly influenced the landscape of global marketing:
Trend 1: Gradual decline of economic protectionism by individual countries.
Trend 2: Formal economic integration and free trade among nations.
Trend 3: Global competition among global companies for global customers.
Trend 4: Emergence of a networked global marketspace.
Trend 5: Growing prevalence of economic espionage.
Protectionism
the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas.
Argument for Protectionism
it limits the outsourcing of jobs, protects a nation’s political security, discourages economic dependency on other countries, and promotes development of domestic industries.
Tariff
a government tax on products or services entering a country, primarily serve to raise prices on imports. Discourages world trade
Quota
a restriction placed on the amount of a product allowed to enter or leave a country. Quotas can be mandated or voluntary and may be legislated or negotiated by governments. Import quotas seek to guarantee domestic industries access to a certain percentage of their domestic market.
World Trade Organization
Created in 1995 to address an array of world trade issues. There are 159 WTO member countries, including the United States, which account for more than 90 percent of world trade. The WTO is a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions. The WTO reviews more than 200 trade disputes annually.
Two Free Trade Groups
Two of the best-known examples are the European Union (or simply EU) and the North American Free Trade Agreement (NAFTA).
European Union
The European Union consists of 28 member countries that have eliminated most barriers to the free flow of products, services, capital, and labor across their borders. This single market houses more than 500 million consumers with a combined gross domestic product larger than that of the United States. In addition, 16 countries have adopted a common currency called the euro. Adoption of the euro has been a boon to electronic commerce in the EU by eliminating the need to continually monitor currency exchange rates.
EU Marketing Strategies
The EU creates abundant marketing opportunities because firms do not need to market their products and services on a nation-by-nation basis. Rather, pan-European marketing strategies are possible due to greater uniformity in product and packaging standards; fewer regulatory restrictions on transportation, advertising, and promotion imposed by countries; and the removal of most tariffs that affect pricing practices. European wide distribution from fewer locations is also feasible given open borders. French tire maker Michelin closed 180 of its European distribution centers and now uses just 20 to serve all EU countries.
NAFTA
The North American Free Trade Agreement (NAFTA) lifted many trade barriers between Canada, Mexico, and the United States and created a marketplace with more than 450 million consumers. NAFTA has stimulated trade flows among member nations as well as cross-border retailing, manufacturing, and investment.
Global Competition
exists when firms originate, produce, and market their products and services worldwide. The automobile, pharmaceutical, apparel, electronics, aerospace, and telecommunication fields represent well-known industries with sellers and buyers on every continent.
Three types of global companies
(1) international firms, (2) multinational firms, and (3) transnational firms.7 All three employ people in different countries, and many have administrative, marketing, and manufacturing operations (often called divisions or subsidiaries) around the world. However, a firm’s orientation toward and strategy for global markets and marketing defines the type of company it is or attempts to be.
International Firm
engages in trade and marketing in different countries as an extension of the marketing strategy in its home country. Generally, these firms market their existing products and services in other countries the same way they do in their home country.
Multinational firm
views the world as consisting of unique parts and markets to each part differently. Multinationals use a multidomestic marketing strategy, which means that they have as many different product variations, brand names, and advertising programs as countries in which they do business.
Transnational Firm
views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants rather than differences.
Global Marketing Strategy
Transnational marketers employ a global marketing strategy—the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ. This approach benefits marketers by allowing them to realize economies of scale from their production and marketing activities.
Global Brand
a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.8 Global brands have the same product formulation or service concept, deliver the same benefits to consumers, and use consistent advertising across multiple countries and cultures.
Global Consumers
consist of consumer groups living in many countries or regions of the world who have similar needs or seek similar features and benefits from products or services. Evidence suggests the presence of a global middle-income class, a youth market, and an elite segment, each consuming or using a common assortment of products and services, regardless of geographic location.
Emergency of Networked Global Marketspace
A networked global marketspace enables the exchange of products, services, and information from sellers anywhere to buyers anywhere at any time and at a lower cost. In particular, companies engaged in business-to-business marketing have spurred the growth of global electronic commerce.11 Ninety percent of global electronic commerce revenue arises from business-to-business transactions among a dozen countries in North America, Western Europe, and the Asia/Pacific Rim region.
Economic Espionage
is the clandestine collection of trade secrets or proprietary information about competitors. This practice is common in high-technology industries such as electronics, specialty chemicals, industrial equipment, aerospace, and pharmaceuticals, where technical know-how and trade secrets separate global industry leaders from followers.
Economic Espionage Act
makes the theft of trade secrets by foreign entities a federal crime in the United States.
Three uncontrollable environmental variables
cultural, economic, and political-regulatory
Cross-cultural analysis
the study of similarities and differences among consumers in two or more nations or societies.13 A thorough cross-cultural analysis involves an understanding of and an appreciation for the values, customs, symbols, and language of other societies.
Values in Society
represent personally or socially preferable modes of conduct or states of existence that tend to persist over time. Understanding and working with these aspects of a society are important factors in global marketing.
Customs
are what is considered normal and expected about the way people do things in a specific country.
Foreign Corrupt Practices Act and International Anti-Dumping and Fair Competition Act
These acts make it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country.
Cultural Symbols
things that represent ideas and concepts in a specific culture. Symbols and symbolism play an important role in cross-cultural analysis because different cultures attach different meanings to things.
Semiotics
examines the correspondence between symbols and their role in the assignment of meaning for people.
Language
Global marketers should know not only the native tongues of countries in which they market their products and services but also the nuances and idioms of a language.
Back Translation
where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.
A scan of global marketplace should include:
(1) an assessment of the economic infrastructure in these countries, (2) measurement of consumer income in different countries, and (3) recognition of a country’s currency exchange rates.
Economic Infrastructure
a country’s communications, transportation, financial, and distribution systems—is a critical consideration in determining whether to try to market to a country’s consumers and organizations.
Consumer Income and Purchasing Power
A global marketer selling consumer products must also consider what the average per capita or household income is among a country’s consumers and how the income is distributed to determine a nation’s purchasing power.
Seasoned global marketers recognize that people in developing countries often have government subsidies for food, housing, and health care that supplement their income. So people with seemingly low incomes are actually promising customers for a variety of products.
Currency Exchange Rate
the price of one country’s currency expressed in terms of another country’s currency, such as the U.S. dollar expressed in Japanese yen, euros, or Swiss francs. Failure to consider exchange rates when pricing products for global markets can have dire consequences.
Political Climate
Political stability in a country is affected by numerous factors, including a government’s orientation toward foreign companies and trade with other countries. These factors combine to create a political climate that is favorable or unfavorable for marketing and financial investment in a country or region of the world. Marketing managers monitor political stability using a variety of measures and often track country risk ratings
Four means of market entry
(1) exporting, (2) licensing, (3) joint venture, and (4) direct investment.
Direction of a firm’s potential profit and marketing strategies
A firm’s profit potential and control over marketing activities increase as it moves from exporting to direct investment as a global market-entry strategy. But so does a firm’s financial commitment and risk. Firms often engage in exporting, licensing, and joint ventures before pursuing a direct investment strategy.
Exporting
producing products in one country and selling them in another country. This entry option allows a company to make the least number of changes in terms of its product, its organization, and even its corporate goals.
Indirect Exporting
when a firm sells its domestically produced products in a foreign country through an intermediary. It has the least amount of commitment and risk but will probably return the least profit. Indirect exporting is ideal for a company that has no overseas contacts but wants to market abroad. The intermediary is often a distributer that has the marketing know-how and resources necessary for the effort to succeed.
Direct Exporting
when a firm sells its domestically produced products in a foreign country without intermediaries. Companies become involved in direct exporting when they believe their volume of sales will be sufficiently large and easy to obtain that they do not require intermediaries.
Licensing
a company offers the right to a trademark, patent, trade secret, or other similarly valued item of intellectual property in return for a royalty or a fee.
Advantages of Licensing
The advantages to the company granting the license are low risk and a capital-free entry into a foreign country. The licensee gains information that allows it to start with a competitive advantage, and the foreign country gains employment by having the product manufactured locally.
Disadvantages of licensing
There are some serious drawbacks to this mode of entry, however. The licensor forgoes control of its product and reduces the potential profits gained from it. In addition, while the relationship lasts, the licensor may be creating its own competition. Some licensees are able to modify the product somehow and enter the market with product and marketing knowledge gained at the expense of the company that got them started. To offset this disadvantage, many companies strive to stay innovative so that the licensee remains dependent on them for improvements and successful operation. Finally, should the licensee prove to be a poor choice, the name or reputation of the company may be harmed.
Franchising
A variation of licensing is franchising. Franchising is one of the fastest-growing market-entry strategies.
Joint Venture
When a foreign company and a local firm invest together to create a local business,
These two companies share the ownership, control, and profits of the new company.
Advantages of Joint Venture
The advantages of this option are twofold. First, one company may not have the necessary financial, physical, or managerial resources to enter a foreign market alone. Second, a government may require or strongly encourage a joint venture before it allows a foreign company to enter its market.
Disadvantages of Joint Venture
The disadvantages arise when the two companies disagree about policies or courses of action for their joint venture or when governmental bureaucracy bogs down the effort.
Direct Investment
The biggest commitment a company can make when entering the global market is direct investment, which entails a domestic firm actually investing in and owning a foreign subsidiary or division.
Advantages of Direct Investment
cost savings, a better understanding of local market conditions, and fewer local restrictions. Firms entering foreign markets using direct investment believe that these advantages outweigh the financial commitments and risks involved
Same Product, Same Promotion
Product Extension Strategy
Same Product, Adapt Promotion
Communication Adaptation Strategy
Same Promotion, Adapt Product
Product Adaptation Strategy
Adapt Promotion, Adapt Product
Dual Adaptation Strategy
Create a new Product
Product Invention Strategy
direct competition, also called category competition or brand competition
are products that perform the same function compete against one another.
Substitute products are goods and services that
perform very similar functions and can be used in place of one another
Indirect competition occurs when products provide
alternate solutions to the same market
Environmental scanning involves
monitoring developments outside of the firm’s control with the goal of detecting and responding to threats and opportunities.
Consumer confidence measures how
optimistic consumers are about the overall state of the economy and their own personal finances.
the six major external factors that influence the firm’s marketing environment
—economic, demographic, sociocultural, political, legal, and technological
Demographics are the characteristics of
human populations that can be used to identify consumer markets.
disposable income
is the amount of spending money available to households after paying taxes and the free time to spend it
Sociocultural refers to the
combination of social and cultural factors that affect individual development.
The currency exchange rate is the
price of one country’s currency in terms of another country’s currency
the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA)
focuses on eliminating tariffs, reducing nontariff barriers, and facilitating investment among the member states.
The European Union (EU)
was formed to create a single European market by reducing barriers to the free trade of goods, services, and finances among member countries.
The World Trade Organization (WTO)
regulates trade among participating countries and helps importers and exporters conduct their business.
The International Monetary Fund (IMF)
“works to foster international monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
Consumer ethnocentrism refers to a belief
by residents of a country that it is inappropriate or immoral to purchase foreign-made goods and services
Describe the market conditions that influence a firm’s decision to enter foreign markets
Marketers must consider domestic demand, the market potential abroad, and a firm’s ability to have a competitive advantage in foreign markets. The decision may be based on conditions where domestic demand is declining while demand in foreign markets is growing.
Explain what world trade means. What is the role of the WTO and economic communities in encouraging free trade? What is protectionism? Explain.
World trade refers to the flow of goods and services among different countries- the value of all the exports and imports of the world’s nations.
The WTO and economic communities encourage free trade. The objective of the WTO is to help trade flow smoothly, freely, fairly, and predictably.
Protectionism is a policy of enforcing rules on foreign firms designed to give home companies an advantage. Many governments set import quotas on foreign goods to reduce competition for their domestic industries.
Explain how GDP, the categories of economic development, and the business cycle influence marketers’ decisions in entering global markets. What are the BRIC countries? What is the Group of Eight (G8)?
The most commonly used measure of economic health of a country is the GDP, the total dollar value of goods and services a country produces within its borders in a year.
When marketers scout the world for opportunities, it helps if they consider a country’s level of economic development to understand the needs of people who live there and the infrastructure conditions with which they must contend.
BRIC countries are Brazil, Russia, India, and China.
The Group of Eight are the US, UK, Australia, Canada, France, Italy, Germany, and Japan.
Explain the types of competition marketers face: discretionary income competition, product competition, and brand competition.
Discretionary income competition: the amount of money people have left after paying for necessities such as housing, utilities, food, and clothing.
Product competition: when competitors offer different products to satisfy the same consumer needs and wants.
Brand competition: when competitors offer similar goods or services and vie for consumer dollars.
What are a monopoly, an oligopoly, monopolistic competition, and pure competition?
Monopoly: a market situation in which one firm, the only supplier of a particular product, is able to control the price, quality, and supply of the product.
Oligopoly: market structure in which there are a relatively small number of sellers, each holding a substantial share of the market compete in a market with many buyers.
Monopolistic competition: a market in which many firms offer slightly different products, each with unique consumer benefits.
Pure competition: market structure in which many small sellers, all of whom offer similar products, are unable to have an impact on the quality, price, or supply of a product
What aspects of the political and legal environment influence a firm’s decision to enter a foreign market? Why are human rights issues important to firms in their decisions to enter global markets?
When entering a foreign market, a firm must carefully weigh political and legal risks. They must consider regulatory issues, and human rights issues.
Human rights issues are important because businesses do not want to exploit workers or employ children or prisoners for slave wages.
What do marketers mean when they refer to technological and socio-cultural environments? Why do they need to understand these environments in a global marketplace?
The technological environment provides firms with competitive advantages. The technological environment profoundly affects marketing activities. Toll-free phone numbers, easy computer access to customer databases, and the Internet have made it possible for people to buy virtually anything they want without ever leaving their homes. Successful marketers continuously scan the external business environment in search of ideas and trends to spark their own research efforts. These need to be understood in a global marketplace to allow the actions taken by the firm to be most appropriate and effective in meeting customer needs and desires.
The socio-cultural environment refers to the characteristics of the society, the people who live in that society, and the culture that reflects the values and beliefs of the society. It includes the demographics, values, social, and language of the society. Whether at home or in global markets, marketers need to understand and adapt to the customs, characteristics, and practices of its citizens.
What is ethnocentricism? What is consumer ethnocentrism?
It relates to the tendency to prefer products or the people of one’s own culture to those from other countries. For firms that seek to enter a foreign market, this willingness to try products made elsewhere comes slowly.
Consumer ethnocentrism refers to consumers’ beliefs about products produced in their country versus those from another.
Describe the 4 levels of involvement that are options for a firm: exporting, contractual agreements, strategic alliances, and direct investment.
Exporting: involves the least risk. If a firm chooses to export, it must decide whether it will attempt to sell its products on its own or rely on intermediaries to represent it in the target country. Allows a firm to sell its products in global markets and cushions the firm against downturns in its domestic market. Firm is able to maintain control over design and production decisions.
Contractual agreement: a company in a foreign country to conduct some or all of its business there. Two of the most common forms of contractual agreement are licensing and franchising.
Strategic alliances: These relationships often take the form of a joint venture- a new entity owned by two or more firms is created to allow the partners to pool their resources for common goals. Easy access to new markets.
Direct Investment: firm expands internationally by buying a business outright in the host country. Direct investment allows a foreign firm to take advantage of a domestic company’s political savvy and market position in the host country.
What are the arguments for standardization of marketing strategies in the global marketplace? What are the arguments for localization? What are some ways a firm can standardize or localize its marketing mix?
Advocates of standardization argue that the world has become so small, with tastes so homogenized, that basic needs and wants are the same everywhere.
Those in favor of localization feel that the world is not that small and product and promotional messages should be tailored to local environments.
When a firm offers the same products in all its markets, it is following a standardization strategy. If a firm tailors its products or promotions to the specific tastes of a religion, it is localizing its marketing mix.
Describe the utilitarianism, rights, fairness or justice, common good, and virtue approaches to ethical decision making. What is ethical relativism?
Utilitarian approach: the decision that provides the most good or the least harm
Rights approach: the decision that does the best job of protecting the moral rights of all affected
Fairness or justice approach: the decision that treats all human beings equally
Common good approach: the decision that contributes to the good of all in the community
Virtue approach: the decision is in agreement with certain ideal virtues
Ethical relativism: what is ethical in one culture is not necessarily the same as in another culture
Why is it increasingly important that firms engage in sustainability? What are some ways strategies for the four P’s can include sustainability?
With growing world populations and increasing demand for products, sustainable business practices are necessary for life in the future.
Many firms practice sustainability when they develop target marketing, product, price, place/distribution, and promotion strategies designed to protect the environment and the future of our communities.
Some ways:
Target marketing: target green customers who are likely to buy eco-friendly products
Product strategies: some firms choose fair trade suppliers who pay a fair price to producers in developing countries
Price strategies: sustainable marketing practices aim to establish prices for green products that equal the prices of other products
Place/distribution strategies: shoppers buy products from farms within 50-100 miles of their homes
Promotion strategies: some firms “reuse” old commercials and tell customers that this is practicing sustainability
Marketing Research
the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions
Decision
a conscious choice from a among two or more alternatives
Exploratory Research
provides ideas about a relatively vague problem
Descriptive research
involves trying to find the frequency that something occurs or the extent of a relationship between two factors
Causal research
tries to determine the extent to which the change in one factor changes another one
measures of success
criteria or standards used in evaluation proposed solutions to the problem
Constraints
restrictions placed on potential solutions to a problem
Concepts
ideas about products or services
new product concept
a picture or verbal description of a product or service the firm might offer for sale
Methods
the approaches that can be used to collect data ti solve all or part of a problem
Sampling
selecting representative elements from a population: probability and non probability sampling
Probability Sampling
involves using precise rules to select the sample such that each element of the population has specific known chance of being selected
Non probability sampling
use arbitrary judgments t select the sample so that the chance of selecting a particular element may be unknown or 0
Statistical inference
drawing conclusions about population from a sample taken of that population
Data
the facts and figures related to the problem,divided into two main parts
Secondary Data
facts and figures that have already been recorded before the project at hand
primary data
facts and figures newly collected for the project. Internal or external
two ways of collecting primary data
observe people, ask them questions
Observational Data
Facts and figures otained by watching, either mechanically or in person, how people actually behave
Mystery Shopper
The shopper doesnt know what they are shopping for
Ethnographic Research
where anthropologists and oher trained observes seek to discover subtle emotional reactions as consumers encounter products in their “natural use environment”
questionnaire data
facts and figures obtained by asking people about their attitudes, awareness, intentions and behaviors
individual interviews
a single researcher asking questions of one correspondent
depth interviews
researchers ask lengthy, fee flowig kinds of questions to probe for underlying ideas and feelings
Focus Groups
informal sessions of 6 to 10 past, present and future customers in which a discussion leader asks their opinions about the firms and its competitors products
Mall intercept interviews
personal interviews of consumers visiting shopping centers. biased result though
open-ended question
allows respondents to express opinions, ideas or behaviors in their own words without being forced to choose among alternatives
Closed end or fixed alternative questions
require respondents to select one or more response options from a set of predetermined choices
dichotomous question
simplest form of fixed alternative question, allows only yes or no response
semantic differential scale
five point scale in which the opposite ends have one or two word adjectives that have opposite meanings
Likert Scale
the respondent indicates the extent to which he or she agrees or disagrees with a statement
Panel
sample of consumers or stores from which researchers take a series of measurements
experiment
involves obtaining data by manipulating factors under tightly controlled conditions to test cause and effect
drivers
independent marketing variables, often one or more of the marketing mix elemnts such as product features, prices, or promotion
Test Markets
offering a single product for sale on a limited basis in a defined area to helo decide the likely effectiveness of potential marketing actions
information
the distilled facts and figures whose interpretation leads to marketing actions
information technology
operating computer networks that collect, store, and process data
data wharehouse
where the ocean of data is collected and stored
sensitivity analysis
determines how a hypothetical change in a driver can affect sales
data mining
extraction of hidden predictive information from large databases
actions
delivering the results in clear pictures and, if possible, on a single page
Evaluating the Decision process itself
monitering the marketplace to determine if action is necessary in the future
Evaluating the Decision Process used
was the marketing research and analysis effective to develop reccomendations
Five Step Marketing Research Approach
Define the Problem—Develop the Research Plan—Collect Relevant information by specifying—develop findings—Take marketing actions
Which of the following refers to the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions?
marketing activation
marketing communications
marketing research – correct
marketing design
marketing operations
Which of the following is true of marketing research?
Research always provides the best solutions to problems that marketers commonly face.
Marketing research can rarely improve the quality of a marketing decision.
Marketing research generally increases the risk in making important marketing decisions.
Getting honest answers from respondents is a challenge faced by marketing researchers.
Research is one of the few perfect and absolute domains in marketing.
Which of the following is a major challenge that marketers face while conducting marketing research?
budget constraints
failure to develop an accurate research plan
dishonest answers from respondents
implementation of inappropriate findings
failure to collect relevant information
Which of the following is the first step of the systematic marketing research approach?
taking marketing actions
defining the problem
developing the research plan
collecting relevant information
developing findings
During which of the following stages of the systematic marketing research approach are research objectives set by marketers?
developing findings
developing the research plan
collecting relevant information
taking marketing actions
defining the problem
Explanation
The two key elements of defining a problem are setting the research objectives and identifying possible marketing actions.
During which of the following stages of the systematic marketing research approach do marketers identify the data needed for marketing actions?
developing findings
defining the problem
taking marketing actions
collecting relevant information
developing the research plan
Explanation
The second step in the marketing research process, developing the research plan, requires that the researcher (1) specify the constraints on the marketing research activity, (2) identify the data needed for marketing actions, and (3) determine how to collect the data.
Marketing input data and marketing outcome data are examples of
interview data.
external secondary data.
focus-group data.
observational data.
internal secondary data
Explanation
The internal records of a company generally offer the most easily accessible marketing information. These internal sources of secondary data may be divided into two related parts: (1) marketing inputs and (2) marketing outcomes.
In which of the following examples are external secondary data being gathered?
A manager calls customers to collect information on their purchase patterns at his store.
Managers at Fortran Foods analyze emails from customers to gather marketing insights.
Marketers conduct a focus group to understand the health concerns of older people.
A manager purchases a research report on the hiring practices of Fortune 500 companies.
Marketers at Toys Inc. visit preschools to observe young children using their products.
Explanation
Published data from outside an organization are external secondary data.
Which of the following is an advantage of secondary data?
The definitions and categories in secondary data are always apt and correct.
Secondary data help researchers save time.
Compared with primary data, secondary data are usually more specific to the problem being studied.
Compared with primary data, secondary data are more flexible.
Secondary data generally provide up-to-date and relevant information.
Explanation
Two important advantages of secondary data are (1) the tremendous time savings because the data have already been collected and published or exist internally and (2) the low cost, such as free or inexpensive Census reports.
Neuromarketing and mechanical methods are used by researchers to obtain
external secondary data.
data from focus groups.
internal secondary data.
observational data.
interview data.
Explanation
Facts and figures obtained by watching, either mechanically or in person, how people actually behave is the way marketing researchers collect observational data. Observational data can be collected by mechanical (including electronic), personal, or neuromarketing methods.
Which of the following types of data can be collected using focus groups?
ethnographic research data
external secondary data
questionnaire data
internal secondary data
neuromarketing data
Explanation
Questionnaire data are facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors. Questionnaire data can be collected using individual interviews, depth interviews, focus groups, open-ended questions, and closed-end or fixed alternative questions.
Compared with secondary data, primary data are
less specific to the problem being studied.
less time-consuming to collect.
less reliant on questionnaires and interviews.
less flexible.
more expensive to collect.
Explanation
Compared with secondary data, primary data have the advantages of being more flexible and more specific to the problem being studied. The main disadvantages of primary data are that primary data are usually far more costly and time-consuming to collect than secondary data.
Which of the following is true of information technology?
Information technology is mainly used in the last step of the marketing research approach.
Information technology can be used to retrieve data only from internal sources.
Information technology always generates qualitative results.
Information technology can be used to retrieve data only from external sources.
Information is usually stored in databases, which collectively form a data warehouse.
Explanation
Information technology involves operating computer networks that can store and process data. Marketers use information technology that consists of computers linked together through sophisticated communication networks to access and retrieve data from internal and external sources. These data sources are stored, organized, and managed in databases, which form a data warehouse.
The extraction of hidden predictive information from large databases is referred to as data
mining.
migration.
evaluation.
warehousing.
validation.
Explanation
Data mining is the extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions.
Which of the following steps in the marketing research approach deals with the evaluation of results?
developing the research plan
taking marketing actions
collecting relevant information
developing findings
defining the problem
Explanation
Taking marketing actions, which is the fifth step in the marketing research approach, involves making action recommendations, implementing the action recommendations, and evaluating the results.
_____ involves starting with the last known value of the item being forecast and making the final forecast.
A lost-horse forecast
A direct forecast
Trend extrapolation
A salesforce survey forecast
A survey of buyers’ intentions forecast
Explanation
Forecasting based on the judgments of a decision maker involve direct forecasts and lost-horse forecasts. A lost horse forecast involves starting with the last known value of the item being forecast and accordingly making the final forecast.
Jonathan, a research analyst, is distributing questionnaires among the customers of an industrial machinery outlet that has recently been established by his client. He wants to find out the likelihood of customers purchasing products from the new outlet in the next six months. Which of the following sales forecasting techniques is Jonathan using?
a survey of buyers’ intentions forecast
a lost-horse forecast
a direct forecast
a salesforce survey forecast
trend extrapolation
Explanation
Two common groups that are often surveyed to develop sales forecasts are prospective buyers and the firm’s salesforce. A survey of buyers’ intentions forecast involves asking prospective customers if they are likely to buy the product in future.
Which of the following is a statistical method used for sales forecasting?
a lost-horse forecast
a direct forecast
a survey of buyers’ intentions forecast
a salesforce survey forecast
trend extrapolation
Explanation
A statistical method of forecasting is trend extrapolation, which involves extending a pattern observed in past data into the future.
Marketing Research
The process of collecting and analyzing information in order to recommend actions
Measures of success
Criteria of standards used in evaluating proposed solutions to a problem
Constraints
Restrictions places on potential solutions to a problem
Data
The facts and figures related to a problem
Secondary data
Facts and figures that have already been recorded before the project at hand.
Primary data
Facts and figures that rare newly collected for a project
Observational data
Facts and figures obtained by watching, either mechanically or in person, how people behave.
Questionnaire data
Facts and figures obtained by asking ppl about their attitudes, awareness, intentions, and behaviors.
What is marketing research?
It is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions.
What is the five-step marketing research approach?
It provides a systematic checklist for making marketing decisions and actions. (1) define the problem (2) develop the research plan (3) collect relevant information (data); (4)develop findings; and (5) take marketing actions
What are constraints, as they apply to developing a research plan?
Constraints in a decision are the restrictions placed on potential solutions to a problem, such as time and money.
What is the difference in primary and secondary data?
Secondary data are facts and figures that have already been recorded before the project at hand, whereas primary data are facts and figures that are newly collected for the project.
What are some advantages and disadvantages of secondary data?
Advantages include time saving, the low cost, and the greater level of detail that may be available. Disadvantages are that the data may be our of date, unspecific, or have definitions, categories, or age groupings that are wrong for the project at hand.
What is the difference b/t observational and questionnaire data?
Observation are facts and figures obtained by watching, either mechanically or in person, how ppl actually behave. Questionnaire data are facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors.
Which type of survey provides the greatest flexibility for asking probing questions: mail, telephone, or personal interview?
Personal interview (or individual or depth interview, which is a special kind of individual interview)
What is the difference between a panel and an experiment?
A panel is a sample of consumers or stores from which researchers take a series of measurements, An experiment involves obtaining datat by manipulating factors under tightly controlled conditions to test cause and effect, such as changing a variable in a customer purchase decision (marketing drivers) and seeing what happens (increase/decrease in unit or dollar sales)
How does data mining differ from traditional marketing research?
Data mining is the extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions. Marketing research identifies possible drivers and then collects data.
What are the 3 kinds of sales forecasting techniques?
(1) Judgments of the decision maker (2) surveys of knowledgeable groups (3) statistical methods
How do you make a lost-horse forecast?
Begin with the last known value of the item being forecast, list the factors that could affect the forecast, assess whether they have a positive or negative impact, and then make the final forecast.
What is marketing research?
The process of defining a marketing problem and opportunity, systemically collecting and analyzing information, and recommending actions.
What is the five-step marketing research approach?
1. Define the problem
2. Develop the research plan
3. Collect relevant info.
4. Develop findings
5. Take marketing actions
What are constraints, as they apply to developing a research plan?
Restrictions placed on potential solutions to a problem.
What is the difference between secondary and primary data?
Primary is data that you collected. Secondary is data that was already collected, and is relevant to your research.
What are some advantages and disadvantages of secondary data?
Primary is expensive, but relevant. Secondary is free, but not always relevant.
What is the difference between observational and questionnaire data?
Observational is composed of facts and figures that were obtained by watching how people behave. Questionnaire data is obtained by asking people their opinions.
Which type of survey provides the greatest flexibility for asking probing questions?
Personal Interview
What is the difference between a panel and an experiment?
A panel is a sample of consumers or stores from which researchers take a series of measurements. An experiment involves obtaining data by manipulating factors under tightly controlled conditions to test cause and effect.
How does data mining differ from traditional marketing research?
Data mining is the extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions. Marketing research identifies possible drivers and then collects data.
In the marketing research for Tony’s Pizza, what is an example of (a) a finding and (b) a marketing action?
a. The finding is that annual sales are relatively flat, rising only 5 million units over
b. the four year period shows a finding (the decline in pizza decline) that leads to a recommendation to develop an ad targeting children 6 to 12.
What are the three kinds of sales forecasting techniques?
1. Judgments of the decision maker
2. Surveys of knowledgeable groups
3. Statistical methods
How do you make a lost-horse forecast?
Begin with the last known value of the item being forecast, list the factors that could affect the forecast, assess whether they have a positive or negative impact, and then make the final forecast.
In marketing research, the research objectives are the ________ goals of the decision maker.
specific and measurable
In a marketing decision, constraints are most likely to be restrictions on the ________ needed to solve the problem.
Time and money
Marketing researchers often use ________ by selecting a group of distributors, customers, or prospects, asking them questions, and treating their answers as typical of all those in whom they are interested.
Sampling
A company is interested in producing a dinosaur game for mobile phones and tablets. It selects a representative sample of boys and girls ages 4 to 8 who currently have access to a mobile device and like dinosaurs. After interviewing the children and collecting other relevant data, the firm then makes generalizations about what all young children want in their apps. The method used is
statistical inference
When a marketing researcher uses business periodicals and U.S. Census reports, she is using
External secondary data
A busy downtown hotel is distributing questionnaires to past visitors in order to develop ideas about how to improve its conference facilities and services. The hotel is
Primary data
The raw information obtained by iTunes about what songs are downloaded by its users would be considered ________ data.
Observational
The National Institute of Cancer used fMRI brain imaging to decide which potential anti-smoking advertising campaign elicited the largest amount of brain activity. This is an example of which type of marketing research?
Neuromarketing
A local political party made phone calls to assess likely voter turnout. The only question asked in the telephone interview was if the respondent planned to vote in the fall elections, to which one could answer either yes or no. This question would be considered
dichotomous
You are asked to complete a short survey after attending a free comedy show on campus. If the first question asked you to give an overall impression of the comedian, and had a five-point scale ranging from “hilarious” on one end to “not funny” on the other end, it would be what type of marketing research question?
semantic differential scale
All of the following are independent variables a market researcher may use in a marketing experiment except which?
dollar sales
Evaluating the decision and the process used for marketing research occurs in which stage of the process?
Taking marketing actions
In 2019, a marketing manager for New Balance’s Fresh Foam Zante shoe needs to forecast sales through 2021. She begins with the known totals for 2018 and adjusts for positive factors like acceptance of new high-tech designs and great publicity, and for negative factors like higher inflation and predicted moves by the competition. This type of forecast is referred to as
Lost horse forecasting
To forecast sales and schedule production needs Boeing asks its prospective customers what their likely purchases will be in the next five years, which is considered a
Survey of buyer intentions
All of the following are true of a salesforce survey forecast except which?
It is a more rigorous form of linear extrapolation.
Marketing research is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and
recommending actions.
Researchers have ridden alongside motorcycle enthusiasts to understand the relationship between riders and their beloved Harley-Davidsons. This is an example of ________ research.
Secondary
A disadvantage of using social media for marketing research is
the sample of individuals from whom content is gleaned may not be statistically representative of the marketplace.
All of the following are part of the five step marketing research approach expect which?
Investigate the competition
Target has used ________ to identify 25 products that, when bought together or over time, predict a woman’s likelihood of being pregnant as well as her child’s expected due date.
predictive modeling
Constraints
in a decision the restrictions placed on potential solutions to a problem
data
the facts and figures to a problem that are divided into two main parts: secondary data and primary data.
data mining
the extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions.
decision
a conscious choice from among two or more alternatives
information technology
involves operating computer networks that can store and process data
marketing research
the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions
measures of success
criteria or standards used in evaluating proposed solutions to a problem
observational data
facts and figures obtained by watching, either mechanically or in person, how people behave
primary data
facts and figures that are newly collected for the project
questionnaire data
facts or figures obtained by asking people about their attitudes, awareness, intentions, and behaviors
sales forecast
the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing effort. Also called company forecast
secondary data
facts and figures that have already been recorded before the project at hand
Ethnographic Research
specialized observational approach in which trained observers seek to discover subtle behavioral/emotional reactions as consumers encounter products in their nature use environment
5 steps of Marketing Research
1. define problem 2.determine research plan 3. collect relevant information through secondary and primary data 4. develop finding 5. take marketing actions
Define the problem
Set research Objectives; Identify possible marketing actions
Develop the research plan
Specify constraints; identify data needed for marketing actions; determine how to collect data
Collect Relevant Information
Obtain secondary data; Obtain Primary Data; Use Information technology and data mining
Develop Findings
Analyze the data; present the findings
Take Marketing Actions
Make action recommendatons; implement action recommendations; evaluate the results
Exploratory research
provides ideas about a relatively vague problem
Descriptive research
generally involves trying to find the frequency that something occurs or the extent of a relationship between two factors
Causal research
the most sophisticated, tries to determine the extent to which the change in one factor changes another
Causation
A cause and effect relationship in which one variable controls the changes in another variable.
Correlation
a reciprocal relation between two or more things, ex. swamp and malaria (really caused by mosquitos)
Between Subjects Experiment
an experimental design in which the independent variable is made to vary across >two or more groups < of subjects.
Within Subjects Experiment
Experiment in which each subject of a >single group< receives all the variables/stimuli.
Key Elements to collect data
1. Concepts 2. Methods
Concepts
ideas about products or services.
Methods
approaches that can be used to collect data to solve all or part of the problem
Sampling
a technique to select a group of distributors, customers, or prospects and treating the information they provide as typical of all those in whom they are interested.
Statistical Inference
generalizes the results from the sample to much larger groups of distributors, customers, or prospects to help decide on marketing actions
Secondary Data: Internal
Examples include detailed sales breakdowns by product line, by region, by customer, and by sales representative, as well as customer inquiries and complaints. Often a starting point for research
Secondary Data: External
Published data from outside the organization. Examples include, US Census, Trade Association studies, business periodicals
Census Bureau
Population poll every 10 years; Economic Census every 5 years
NAICS
North American Industry Classification System
Advantages of Secondary Data
1. Tremendous time savings because the data have already been collected andpublished 2. the low cost such as free or inexpensive census reports
Disadvantages of Secondary Data
1. Out of date data (census every 5-10 years) 2. Definitions or categories might not be quite right 3. Data may not be specific enough
Primary Data: Watching People
Observing people and asking them questions are the two principal ways to collect new or primary data for a marketing study. 3 main methods, Mechanical (including electronic), Personal, and Neuromarketing methods.
Mechanical Methods
Ratings system for TV, Anytime Anywhere Media Measurement (A2/M2) Initiative
Personal Methods
Personal shoppers, watching consumers in person or videotaping, Ethnographic research
Neuromarketing Methods
use of brain scanning to analyze buying processes, mixing the study of the brain with marketing
Primary Data: Asking people
Asking consumers to gather data. Divided into 1. Idea Generation methods and 2. Idea Evaluation Methods
Idea Generation Methods
Individual interview, Depth Interviews, Focus Groups
Idea Evaluation Method
the process by which the marketing researcher tries to test the ideas discovered earlier to help marketing manager recommend marketing actions.
CATI
Computer Assisted Telephone Interviewing
open-ended question
allows respondent to express opinions, ideas and behaviors
Closed-end or fixed alternative Question
require respondent to select one or more predetermined choices
Dichotomous question
simple form of a fixed alternative question that allows only a yes or no answer
semantic differential scale
five point scale using 1-2 word adjectives with opposite meanings
Likert Scale
respondant expresses the ec=xtent to which they agree or disagree
Wording Problems
Leading questions, Ambiguous question, unanswerable question, 2 questions in one, non-mutually exclusive answers
Panel
A sample of consumers or stores from which researchers take a series of measurements
Experiment
Obtaining data by manipulating factors under tightly controlled conditions to test cause and effect, an example of causal research
Marketing Drivers
independent, variables of interest, often one or more of the marketing mix elements such as price, product features, or promotion
Data Warehouse
Databases at the core where the ocean of info is collected and stored.
Sensitivity Analysis
querying the database with “what if” questions to determine how a hypothetical change in driver such as advertising can affect sales.
Actions
Delivering results in a clear picture and if possible, a single page
Sales Forecasting Techniques
1. Judgments of the decision maker (99%0 2. surveys of knowladgeable groups 3. Statistical methods
Direct Forecast
estimating the value to be forecast without any intervening steps ex.. “How many quarts of milk should i buy?”
Lost-horse Forecast
involves starting with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making the final forecast
Survey of Buyers Intentions Forecast
asking prospective customers if they are likely to buy the product during some future time period
Salesforce Survey Forecast
involves asking the salespeople to estimate sales during a coming period
Trend Extrapolation
involves extending a pattern observed in past data into the future
Market segmentation involves aggregating prospective buyers into groups that have common needs and will:
be open to marketing research.
possess the same attitudes.
match well with the firm’s proposed product differentiation strategies.
have access to the products.
respond similarly to a marketing action.
Which of the following is a variable that could be used for demographic segmentation of consumer markets?
household size
NAICS code
usage rate
city size
personality
An important part of creating a market-product grid is to:
– compare, in two dimensions, a firm’s position relative to its competitors.
– plot the market growth rate and relative market share of a firm’s offering.
– estimate the size of the markets.
– identify company strengths and weaknesses.
– develop marketing actions for each market segment.
Potential buyers within a market segment should be:
familiar with the product but not yet brand loyal customers.
similar in terms of the advertising media used.
able to provide significant product synergies.
similar to those from different segments.
cannibalized from competitors’ customers.
Which of the following is an example of a single product with multiple market segments?
– Kellogg’s and Post both make bran cereals with raisins to reach health-conscious consumers.
– Johnson’s Baby Oil is advertised as a skin softener for babies and as a makeup remover for women.
– Reach Toothbrush is available in a soft, medium, and hard bristle for adults and kids.
– Quaker Oats oatmeal sells both its hot cereals and cold cereals to people of all ages.
– Reebok makes tennis shoes, running shoes, walking shoes, and Weeboks.
Which segmentation base do organizations use most according to a recent study by the Aberdeen Group?
demographic
behavioral
psychographic
geographic
attitudinal
__________ is the third step in the five step process of segmenting and targeting markets.
Grouping product to be sold into categories
Grouping potential buyers into segments
Selecting target markets
Taking marketing actions to reach target markets
Developing a market-product grid
Which of the following is a criterion used to select a target market segment?
similarity of needs of potential buyers within a segment
measurements of customer perceptions
difference of needs of buyers among segments
potential of a marketing action to reach a segment
expected growth of a segment
Though the percentages are not always the same, a general rule in business says that the large majority of a firm’s revenues come from what percent of its customers?
50%
80%
5%
20%
35%
A key to positioning a product or brand effectively is to discover the perceptions in the minds of potential customers. This involves taking four steps, one of which includes:
developing a new marketing program that conforms to your leading competitor’s offering.
discovering where the company’s product or brand is on the relevant attributes in the minds of potential customers.
deciding which of your competitors would be the most effective partner in a corporate merger.
identifying market niches that were not previously discovered during the market segmentation process.
deciding whether to keep or delete a product group or item.
The purpose of market segmentation is to respond more effectively to the wants of groups of potential buyers in order to
increase sales and profits
When expenses are greater than the potential increased sales from market segmentation, a firm should
not consider market segmentation at this time
When a firm produces only a single product or service and attempts to sell it to two or more market segments, it avoids ________.
the extra cost of developing and producing additional versions of the product
Cannibalization would mostly likely occur if
General Mills launches Caramel Crunch Cheerios.
Which of the following is an example of a Tiffany/Walmart strategy?
Gap’s Banana Republic chain sells blue jeans for $58, whereas its Old Navy stores sell a slightly different version for $22.
Product features and usage rate are both variables used to employ ________ segmentation.
behavioral (segmentation)
If Wendy’s customers are buying an eating experience, which of the following rationales would make the most sense if you were to group the products Wendy’s sells?
grouping by meal occasion
Each cell of the complete market-product grid shows the ________.
estimated market size
In the early 1980s, Apple, Inc. was often called “Camp Runamok” because
all the employees were so young, so they often played more than they worked
A positioning approach that involves seeking a less competitive, smaller market niche in which to locate a brand is referred to as ________.
differentiation positioning
A good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers’ needs and is received in exchange for money or something else of value is referred to as ________.
a product
Consumer products refer to
products purchased by the ultimate consumer.
Items for which the consumer compares several alternatives on several criteria such as price, quality, or style are referred to as ________.
shopping products
Installations, accessory equipment, supplies, and industrial services used to assist in producing other products and services are referred to as
support products
Accessory equipment are support products that include items such as
tools and office equipment.
Compared with people-based services, equipment-based services do not have the marketing concern of
inconsistency.
Because services tend to be a(n) ________ rather than an object, they are much more difficult for consumers to evaluate
risk
What does idle production capacity refer to?
a situation where a service provider is available but there is no demand for the service
Many restaurants now ask consumers to evaluate their experience on a short questionnaire when they pay their bill. This assessment of consumer expectations compared to the actual experience they had is a form of ________.
gap analysis
A ________ is a group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlets, or fall within a given price range.
product line
A product that requires the learning of entirely new consumption patterns among consumers is referred to as a(n)
discontinuous innovation.
A few years ago, Frito-Lay developed Frito-Lay Lemonade as a thirst-quencher for those consumers who also like Frito-Lay’s salty snacks such as Fritos corn chips. But when people think of the brand name Frito-Lay, thirst-quenching is not a benefit that comes to mind and Frito-Lay Lemonade failed. This innovation strategy is known as a
brand extension.
One of the eight primary marketing-related reasons for new-product failure is ________.
incomplete market and product protocol
New-product strategy development refers to
the stage of the new-product process that defines the role for a new product in terms of the firm’s overall objectives.
Generating insights leading to marketing actions based on massive numbers of peoples’ ideas is called ________.
crowdsourcing
perceptual map
a graph displaying consumer perceptions of product attributes in two dimensions.
product
a good, service or idea consisting of a bundle of tangible and intangible attributes that satisfies consumer’s needs and is received and exchange for money or something else of value.
screening and evaluating
the stage of the new product process that internally and externally evaluates new product ideas to eliminate those that warrant no further efforts.
product life stages
The introduction stage, the growth stage, the maturity stage and the decline stage
CDI and BDI
category development index and brand development index.
disintermediation
channel conflicts that arises when channel member by passes another member and sells or buys products direct
self-service
when customers perform many functions during the purchase process including, customer babying their own grocery.
multichannel
retailers that utilize and integrate a combo of transitional store formats and non-store format
odd-even pricing
sets price a few dollars or cent under an even number
return on investment
the ratio of profit to the investment used to earn that profit.
loss-leader pricing
deliberately selling a product below its customary price not to increase
sale but to attract customer attentions in hopes that they would buy other products.
demand curve
the maximum quantity of products consumers will buy at a given price.
price elasticity of demand
the percentage change in quantity demanded relative to the percentage change in price.
elasticity and inelasticity demand
if an organization finds the demands for one of its product is inelastic, it can increase its total revenue with the strategy of raising its price.
fixed cost
the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
variable cost
the sum of the expenses of the firm that vary directly with the quantity of the product that is produce and sold.
break-even analysis
a technique that analysis the relationship between total revenue and total cost to determine profitability at various level of output.
80/20 rule
a concept that suggests 80 percent of a firm’s sales are obtained from 20 percent of its customers
market segmentation
involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action
market-product grid
a framework to relate the market segments of potential buyers to products offered or potential marketing actions
perceptual map
a means of displaying in 2 dimensions the location of products or brands in the minds of consumers
product differentiation
involves a firm using different marketing mix actions, such as product features and advertising, to help consumers perceive the product as being different and better than competing products
caused by existence of different market segments
product positioning
the place a product occupies in consumers’ minds based on important attributes relative to competitive products
product repositioning
changing the place a product occupies in a consumer’s mind relative to competitive products
usage rate
the quantity consumed or patronage–store visits–during a specific period varies significantly among different customer groups
geographic segmentation
segmentation based on where prospective customers live or work, Region
demographic segmentation
segmentation based on some objective physical, measurable, or other classification attribute of prospective customers
gender, race, age, occupation, income household size
psychographic segmentation
segmentation based on some subjective mental or emotional attributes, aspirations, or needs or prospective customers
personality, lifestyle
behavioral segmentation
segmentation based on some observable actions or attitudes by prospective customers, such as where they buy, what benefits they seek, how frequently they buy, and why they buy, usage rate
Which of the following statements concerning marketing research is most accurate?
When collecting marketing research, people may or may not be willing to tell you what you want to know if it is potentially embarrassing.
Which of the following regarding maturity stage of product life cycle is most accurate?
Marketing attention is directed toward holding market share through further product differentiation and finding new buyers.
As product adopters, members of the late majority
Are skeptical and have below average social status
All of the following are criterion used for selecting target market segments except:
Simplicity and cost of assigning potential buyers to segments
The first step in segmenting and targeting markets that link customer needs to marketing actions is to
Group potential buyers into segments
The relationship between a product line and product mix is
Product mixes include product lines
In terms of the business product classification categories, the click used to forward slides on a ppt would be a ____ product and the batteries in the clicker would be a ____ product
accessory equipment; supplies
Based on our in class analysis given the segmentation data for the fast food market we reviewed about usage, which statement is most accurate?
Wendy’s could potentially be more successful by being the “best second alternative” by focusing on customers who might typically choose McDonald’s as their first choice, but who sometimes want something different.
Development refers to the stage of the new-product process
That turns an idea on paper into a prototype
Breyer’s introduced new ice cream on a limited scale to determine customer reactions. It was in the ___ stage of the new-product process
Market testing
More than half of US households only have one or two people, so Aunt Jemima packages meals with only 1 serving. Aunt Jemima is using ___ as the basis to segment its market
Demographic characteristics
A product refers to:
A good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers’ needs and is received in exchange or money or something else of value.
Product positioning refers to
The place a product offering occupies in consumers’ minds on important attributes.
As product adopters, innovators
Are venturesome, highly educated, and use multiple information sources.
Which of the following is most likely to be an example of an unsought product?
Life insurance
Until 1996, US car makers made little right hand drive cars to Japan while Germans made many. American car manufacturers could blame their failure to a great degree on
Not satisfying customer needs on critical factors.
Setting research objectives and identifying possible marketing actions would take place during which stage of research approach?
Define the problem
Which of the following is an example of an effective positioning statement?
We provide small businesses under 10 employees with a cheaper way to do their payroll than hiring a full-service accounting firm.
Which of the following statements about market segmentation for organizational markets is most accurate?
Both consumer markets and organizational markets use demographic, geographic, and behavioral bases to segment markets.
A perceptual map refers to
A means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands, as well as its own product or brand.
The third step of the marketing research approach is to
Collect relevant information
With respect to price, which of the following type of consumer product would most likely be very expensive?
Specialty product
Which of the following statements regarding market segmentation is most accurate?
If a business firm goes to the trouble and expense of segmenting its markets, it expects to increase its sales, profits, and return on investment.
Research that involves trying to find the frequency that something occurs or the extent of a relationship between two factors is referred to as
Descriptive research
According to our discussion about RFID technology and marketing, which of the following is FALSE?
It is not clear whether or not RFID will eventually be implemented as there are too many problems and it is not clear if the benefits for marketing will outweigh the costs of the technology.
A general rule of thumb among marketing researchers is to use ____ first and then collect ___.
Secondary data; primary data.
The correct ordering for the steps in the new product development process is:
New-product strategy development, idea generation, screening and evaluation, business analysis, development, market testing, and commercialization.
In terms of brand loyalty, consumers who are very brand loyal and will not accept substitutes for which type of consumer product?
Specialty product
Which of the following statements regarding segmentation bases is most accurate?
The identification of demographic variables is more objective than the identification of psychographic variables, which is more subjective.
Items for which the consumer compares several alternatives on several criteria such as price, quality, or style are referred to as:
Shopping products
At which stage in the product life cycle do industry profits usually peak?
End of growth
Estimates are that for every 3000 ideas, ___actually end up as a commercially successful new product.
1
Marketers pay slotting fees to grocers in payment for space, or slots, on their retail shelves. Such slotting fees significantly increase the cost of which stage of the new-product process?
Commercialization
Philips spent million on advertising before TVs were available for sale in order to gain interest and acceptance. Philips was trying to create ____ in the market
Primary demand
In terms of the diffusion of innovation, early adopters account for ____ of product adopters.
13.5%
Making action recommendations, implementing action recommendations, and evaluating results take place during which stage of the five-step marketing research approach?
Take marketing actions
What is the marketing objective for the growth stage of the product life cycle?
Differentiation
Napster was the first software for exchanging MP3 music files. When it was introduced, Napster would have been an example of a
Discontinuous innovation
Imagine that a new battery is developed, but the production process cannot be patented, so competitors could enter the market within a year. Which of the following would be the LEAST sound marketing program decision?
Select a skimming pricing strategy to position the product as “premium”
Which of the following is NOT a disadvantage of online surveys?
The cost
Criteria for forming segments involve both similarities and differences. Which of the following statements is most accurate?
Within a segment, the needs of potential buyers should be similar; between segments, the needs of buyers should be different.
Which of the followings statements best illustrates geographic segmentation?
In China, KFC sells a spicier chicken the farther away its restaurants are from the coastal areas.
Which of the following is NOT considered a product given the definition we used in class?
All of the above are actually products.
Two important disadvantages of secondary data are that it is ___ and ___
Not up to date; not specific enough for the project.
The 80/20 rule is most closely related to which consumer segmentation variable?
Usage rate
Recently, US dairies tried to change the way adults thought about milk. The dairies wanted to ____ chocolate milk in the minds of adult consumers.
Reposition
Which of the following data are collected from consumers to develop a perceptual map for a particular product?
The important attributes for a product or brand class.
Market segmentation refers to
Aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action.
In terms of promotion, which of the following types of products would stress price, availability, and awareness?
Convenience
Which of the following statements about the introduction stage of the product life cycle is most accurate?
Because of the large initial investment costs, industry profits often must go from negative to positive.