Chapter 9 STP
What type of segmentation divides the market into groups based on variables like purchasing habits, customer loyalty, and brand interactions.
What is Behavioral Segmentation?
What percentage of new products fail each year?
What is 95%
The lecture compares the role of a brand manager to what job?
What is a Conductor?
What are the 7 P's of Services Marketing?
What is price, product, place, promotion, people, physical environment, process.
Price is what the customer ___?
Value is what the customer ___?
What is
Price is what the customer Pays
Value is what the customer receives
What tool is a means of displaying in two dimensions the location of its own and competing products or brands in the minds of consumers.
What is a Perceptual Map?
When Apple introduced the iPod, it created a whole new market for portable digital music players. What type of new product was the iPod?
What is New to the World?
Which of the following scenarios best exemplifies a brand manager successfully extending a product's life cycle, as discussed in the sources?
A. A soda company introduces a new diet version of their popular beverage.
B. A tech company discontinues production of an outdated smartphone model.
C. A clothing retailer changes the packaging of their best-selling t-shirt.
D. A fast food chain offers a limited-time promotional discount on their classic burger.
The answer is A.
Here's why:
Extending the Product Life Cycle: The sources emphasize that a key goal of brand management is to extend a product's life cycle.12 Introducing a new product variation, like a diet soda, is a common strategy to re-energize consumer interest and reach new market segments.
Let's examine why the other options are not the best examples:
B: Discontinuing a product represents the decline phase of the product life cycle, not an extension strategy.12
C: While changing packaging can refresh a product's image, it's not as significant a strategy for life cycle extension as introducing a new product variation.
D: Limited-time promotions are short-term tactics to boost sales and don't fundamentally extend the life cycle in the way a new product variation can.12
Which scenario best exemplifies the challenge of intangibility in services marketing, as described in the provided source material?
a) A hotel chain standardizes its staff training program to ensure consistent service quality across locations.
b) A customer struggles to evaluate the quality of an online financial consulting service before making a purchase
c) A restaurant manager implements a reservation system to manage capacity and avoid long wait times for customers.
d) A theme park designs its physical environment to create a memorable and immersive experience for visitors.
What is B) A customer struggles to evaluate the quality of an online financial consulting service before making a purchase?
Explanation:
Intangibility refers to the inherent characteristic of services that makes them difficult to evaluate before consumption. Unlike tangible goods, services lack physical attributes that consumers can readily assess.
Option (b) highlights this challenge as the customer cannot physically experience the financial consulting service before purchasing it, making it difficult to assess its quality.
Gigi's Lemonade Stand sells 200 units at $1.00/unit. The total units sold in the lemonade category are 500 units. The total revenue in the category is $1,000. What is Gigi's Lemonade Stand's dollar share of the category? (Market share)
What is 20%?
(200 x $1) / 1000 = 20%
A marketing team is considering targeting a niche segment of consumers with a highly specialized product. However, they're concerned that the segment might be too small or difficult to reach effectively. Which two criteria of ISASDA are most relevant to their concerns?
What is Substantial and Accessible?
Substantial: This refers to the size of the segment. The marketing team needs to determine if the segment is large enough to justify the investment in developing and marketing the product. If the segment is too small, it might not generate enough sales to be profitable.
Accessible: This refers to the ability to reach the segment with marketing messages. The team needs to assess if they can effectively communicate with this niche segment through appropriate channels. If the segment is difficult to reach due to factors like geographic dispersion or lack of suitable media outlets, it might not be a viable target.
In this stage, companies like Google might conduct extensive user testing and gather feedback on a prototype for a new app before committing to a full-scale development. (Hint: Stage Gate Process)
What is Test and Validate?
A multinational corporation specializing in personal care products, "ShineCo," is considering how to best introduce a new line of men's grooming products. They want to leverage their existing brand recognition while targeting a specific market segment.
Which type of brand architecture would be most strategic for ShineCo to adopt for its new line of men's grooming products, considering the goals outlined in the scenario?
What is Endorsed?
Imagine you are a marketing consultant advising a new, upscale yoga studio. Which of the following marketing recommendations best aligns with the concept of "Physical Environment" within the 7 Ps of services marketing framework, as highlighted in the sources?
a) Develop a user-friendly mobile app for booking classes and managing memberships.
b) Partner with local health food stores to offer discounts and cross-promote services.
c) Invest in high-quality yoga mats, props, and lighting to create a calming and aesthetically pleasing studio space.
d) Implement a rigorous instructor training program to ensure consistent class quality and a positive customer experience.
What is C) Invest in high-quality yoga mats, props, and lighting to create a calming and aesthetically pleasing studio space.?
Which of the following products is likely to have the most inelastic demand?
a) A Louis Vuitton handbag. Luxury items like Louis Vuitton handbags often have inelastic demand curves because consumers are less sensitive to price changes.
b) A generic brand of paper towels. Generic brands are generally more sensitive to price changes making them more elastic.
c) A new video game console. A new video game console may have more elastic demand because consumers may be more sensitive to price changes, especially if there are competing consoles on the market.
d) A flight to a popular vacation destination during peak season. Flights to popular destinations during peak season are likely to have more elastic demand because consumers may have more flexibility in their travel dates.
What is B?
A luxury car brand focuses on highlighting its vehicles' advanced technology, elegant design, and exclusive features in its marketing. What is this an example of?
What is Positioning?
You are a product manager at a company known for its innovative kitchen appliances. The company is experiencing declining sales in its core product line of blenders due to increased competition and changing consumer preferences. To revitalize the brand and drive growth, you propose developing a “smart blender” integrated with cutting-edge technology and features. However, this initiative requires significant investment and carries inherent risks.
Drawing upon the Stage Gate Process outlined in the sources and considering the five stages – Develop & Scope, Business Case, Develop, Test and Validate, and Launch – create a strategic roadmap for the development and launch of your smart blender. For each stag
(Answers can vary)
What are the stages of the product life cycles? Be detailed and include the how their profit marging go with the timeline.
1. introduction
- New Products launch, building awareness.
-Investing lots of crash for people to hear about product or service
2. Growth
-Word is out about products
- Profit starts to take off but might drop price because of competition‘
3. Maturity
- Strong Sales, looking for repeat Purchases
- making good profit but it starts to turn down
(Product/Band Extension)
- Managers will try to extend the lifestyle as much as possible4. Decline
- Consumers have used sand understood product
- Sales start to drop
A marketing team for an assisted living community, similar to Wallick Communities as discussed in the source, is developing its marketing strategy. Considering the limitations of the traditional 4 Ps of marketing when applied to services, which of the following strategies would best address the need to incorporate the "process" element of the 7 Ps model?
a) Offering a free trial stay for potential residents to experience the community firsthand.
b) Highlighting the community's luxurious amenities and spacious living accommodations in advertisements.
c) Implementing a streamlined and transparent system for resident intake, care planning, and communication with families.
d) Partnering with local senior centers to host informational seminars about assisted living options.
What is C?
A local bakery sells artisanal bread for $5 per loaf. Their fixed costs, including rent and utilities, amount to $1,000 per month. The variable cost per loaf, covering ingredients and labor, is $2. How many loaves of bread must the bakery sell each month to reach its break-even point?
The break-even point for the bakery is 333.33 loaves of bread.
The formula for calculating the break-even point is: Fixed Costs / (Unit Price - Unit Variable Cost)
The bakery's fixed costs are $1,000 per month.
The unit price of each loaf of bread is $5.
The unit variable cost is $2 per loaf.
Plugging these values into the formula will result in: $1,000 / ($5 - $2) = 333.33 loaves.
Therefore, the bakery needs to sell 333.33 loaves of bread each month to cover its total costs and break even.
Two major athletic apparel brands, Nike and Lululemon, have achieved significant success by targeting distinct consumer segments.
Compare and contrast the segmentation and targeting approaches of these two brands, considering factors such as the types of segmentation.
Explain how their chosen target markets have influenced their respective product offerings, marketing strategies, and overall brand identities. (What is their position and positioning?)
Nike targets a broad audience of athletes and fitness enthusiasts, spanning a wide range of demographics and psychographic profiles. While Nike offers specialized products for specific sports and activities, its core target market is united by a shared passion for athletic performance, a desire to push limits, and a connection to the brand's "Just Do It" ethos. Nike's marketing often features high-profile athletes, emphasizing inspiration and achievement.
Lululemon: Lululemon focuses on a more niche market, primarily targeting women who practice yoga and other fitness activities that emphasize mindfulness and well-being. Lululemon's target audience is often described as affluent, health-conscious, and fashion-forward. The brand emphasizes community building, often hosting events and workshops in its stores. Lululemon's products are known for their high quality, technical fabrics, and stylish designs.
During the Business Case stage, Glucerna discovered that framing their product around managing hunger rather than just weight loss resonated more strongly with consumers. This pivot led to the successful repositioning of their product as...?
What is Glucerna Hunger Smart?
Imagine a company, "TechWave," that launched a revolutionary new smartphone, the "Galaxy X," a few years ago. Initially, sales skyrocketed as tech enthusiasts and early adopters rushed to buy the cutting-edge device. "Galaxy X" became a status symbol, enjoying a period of rapid market growth.
Describe the stages of the product life cycle this product would go through
Introduction: The initial launch of the "Galaxy X" represents the introduction stage. Sales were gradually increasing as the product entered the market and began to gain awareness.1
Growth: The period of rapid sales growth and "Galaxy X" becoming a status symbol aligns with the growth stage. During this phase, the product gained widespread acceptance, and profits likely increased.1
Maturity: As the market becomes saturated with competitors offering similar smartphones, the "Galaxy X" will likely enter the maturity stage. Sales growth would plateau, and TechWave might need to focus on maintaining market share through strategies like price adjustments or feature updates.
Decline: Eventually, as newer technologies emerge and consumer preferences shift, the "Galaxy X" will enter the decline stage. Sales will start to decrease, and TechWave might choose to discontinue the product or significantly reduce its marketing efforts.
Question: Considering the "Four P’s" explain why marketing for Wallick Communities (service) might be more difficult than marketing for Bob Evans (products).
Bob Evans: High Control of consumer experience
Wallick communities : Low Control of consumer experience
Price
Bob Evans: More Stable, less input that drive cost
Wallick Communities: Less stable more cost Inputs (food, housing, staff)
Promotion
Bob Evans: Less difficult to communicate product benefits, more tangible
Wallick Communities: More difficult, consumers need to experience Benefits before purchase
Place
Bob Evan’s:More intermediaries but can scale quickly
Wallick Communities: Less intermediars but more challenging to build scale
A furniture manufacturer is analyzing its pricing strategy for a popular line of armchairs. Each armchair sells for $500. The direct raw material cost per armchair is $150, and the direct labor cost is $100 per armchair. The company's monthly fixed costs, including rent, utilities, and salaries, amount to $50,000. What is the contribution margin per armchair?
a) $150: This represents only the direct raw material cost per armchair and does not account for direct labor costs.
b) $250: This is the correct contribution margin, calculated by subtracting both the direct raw material cost and the direct labor cost from the selling price.
c) $350: This represents the selling price minus the direct raw material cost only, and does not consider direct labor costs.
d) $650: This is the sum of the selling price and the total variable cost (direct raw material cost + direct labor cost), which is not how contribution margin is calculated.
What is b) $250 ?
To calculate the contribution margin per armchair, we subtract the variable costs per unit (direct raw material cost + direct labor cost) from the selling price per unit:
Selling price per armchair: $500
Direct raw material cost per armchair: $150
Direct labor cost per armchair: $100
Contribution Margin per armchair = $500 - ($150 + $100) = $250