marketing quiz 2

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Pennsylvania State University *

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Marketing

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Feb 20, 2024

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MARKETING QUIZ 2- GUVVALA VARUN Question 1.Briefly explain brand extensions and give an example . What might be an advantage and a disadvantage of using brand extensions? (10 points) ANS: Brand Extension: This strategy involves extending an existing brand name to new product categories using sub-brand names. For example, Kellogg's is a well-known brand that has been expanded to include different product categories like cereal, snacks, and frozen foods. The sub- brand names for each product category include Kellogg's Corn Flakes, Kellogg's Pop-Tarts, and Kellogg's Eggo Waffles. Advantages are :  Launching new products in different categories is more accessible when the parent brand is well established.  In case the core product sees a drop in the sale, the new product can revive the parent brand.  Extending to different categories allows the brand to get new customers uninterested in the core product, thus increasing the customer base. Disadvantages are:  Brand extension is a strategy that can pose risks if not executed properly. One potential danger is relying too heavily on the parent brand's reputation without adequately promoting the new product, resulting in low sales and possible damage to the parent brand's image.  Another risk is venturing into markets or categories far from the brand's core products, leading to a loss of credibility and confusion among consumers. To minimize these risks, it is essential to conduct comprehensive market research and identify suitable opportunities for brand extension. Question 2. What is a product line? What is product line filling? What is product line stretching? Give an example for each. (10 points) ANS: A product line is a group of related products marketed under a single brand name that the same company sells. For example, a smartphone

company that offers different models with varying features and prices, such as a budget-friendly model, a mid-range model, and a high-end model Product line filling means adding new products to an existing product range to utilize excess production capacity, increasing the customer base, improve profits, or capture a larger market share. For example, a car manufacturer introduces a new model to fill the gap between two existing models in its product line. Product line stretching: This refers to growing a current product line. It can happen in three ways: upward, downward, or both. For example, Coca-Cola will introduce different types of high-quality soft drinks at different price ranges. Question 3. What is positioning ? What are perceptual maps ? What are the advantages of using perceptual maps? (10 points) ANS: Positioning is designing a company’s offering and image to occupy a distinctive place in the target market’s minds. Perceptual maps are graphical representations of how consumers perceive products or brands relative to each other based on specific attributes. They help marketers understand a product's position in the market. For example, a car perceptual map might show how consumers view brands regarding reliability, luxury, and affordability. The advantage of perpetual maps are:  To help us better understand market segments  To see how the target market perceives the brands in the marketplace  To track how successfully our new products have been positioned in the market  To monitor competitive brands and their changing market position Question 4. Briefly explain the five “new product adopter consumer groups” by presenting the individual differences in adopting innovations (hint: innovators, early adopters, etc.). (15 points) ANS: The five new product adopter groups are: a) Innovators: Innovators are the first consumers to adopt a new product. They are usually risk-takers (venturesome), and they are willing to try new products with little information or research. Innovators are a relatively small group, but they significantly influence the success of new products. b) Early Adopters: Early Adopters are the second group of consumers to adopt a new product. They tend to be opinion leaders in their

communities and are well-informed about the latest trends and technologies. Early Adopters are also relatively small in number but can have a significant impact on the success of a new product. c) Early Majority: The Early Majority is the third group of consumers to adopt a new product. They tend to be more cautious than early adopters but are still interested in trying new products. They often rely on recommendations from friends or family before making a purchase. d) Late Majority: The Late Majority is the fourth group of consumers to adopt a new product. They tend to be skeptical of new products and may wait until the product has become established in the market before making a purchase. They often rely on the experience of others before trying a new product. e) Laggards: Laggards are the final group of consumers to adopt a new product. They tend to be the most resistant to change and may only assume a new product when it has become essential or the only option available. Laggards often rely on traditional products and may be skeptical of new technologies. Understanding the behavior and characteristics of these different adopter groups is essential for marketers when introducing new products. By targeting each group with specific marketing strategies and messaging, companies can increase the likelihood of adoption and success for their new products. Question 5. Briefly explain the four market segmentation strategies and give an example for each. (Hint: geographic, demographic, psychographic, behavioral segmentation) (15 points) ANS: Segmenting consumer markets is dividing a market into smaller groups of consumers with similar needs or characteristics. Marketers can then create targeted marketing strategies for each group. For example, a company may segment the market for running shoes based on age, gender, fitness level, and running style. Geographic Segmentation: This involves dividing the market based on geographic location, region, city, or climate. For example, McDonald's, the fast-food giant, uses geographic segmentation to cater to local tastes and preferences. Demographic Segmentation: This involves dividing the market based on demographic characteristics such as age, gender, income, and education level. For example, Johnson's Baby Products uses demographic segmentation to target specific consumer groups based on age and income level. Psychographic Segmentation: This involves dividing the market based on lifestyle and personality characteristics. For example, Patagonia, an

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outdoor clothing company, uses psychographic segmentation to target consumers who value sustainability and environmentalism. Behavioral Segmentation: This involves dividing the market based on consumer behavior, such as buying patterns, product usage, and brand loyalty. For example, Amazon uses behavioral segmentation to target consumers based on their past behaviors and purchase history. Question 6. Briefly explain the four market targeting strategies and give an example for each. (Hint: full market coverage, multiple segments, single segment, individual) (15 points) ANS: a) Full Market Strategies: This involves targeting the entire market with a single product or service. This strategy is often used for products that appeal to a broad audience and are not specific to any particular group. Examples of complete market strategies include Coca-Cola, which targets everyone with its soft drinks, and McDonald's, which targets all consumers with its fast-food products. b) Multiple Segments: Targeting different market segments with other products or services. This strategy is often used when a business wants to appeal to various customer groups with different needs and preferences. For example, Procter & Gamble targets different market segments with multiple brands such as Tide, Crest, and Gillette. c) Single Segments: This involves targeting a specific market segment with a single product or service. This strategy is often used when a business has identified a niche market with unique needs and wants that still need to be met by existing products or services. For example, Rolex targets the luxury watch market with its high-end watches. d) Individuals as Segments: This involves targeting individual or small groups of customers with personalized products or services. This strategy is often used when a business can access detailed customer data and create products or services tailored to specific customer needs. An example of individuals as segments are Amazon, which recommends personalized products to customers based on their previous purchases and search history. Question 7: Each product has a life cycle, although its shape and length may not be known in advance. Explain each of the four stages in the Product Life Cycle and describe the sales, profits, competitors and marketing strategies at each stage. (20 points)

ANS: Introduction: In the introduction stage, the product is new to the market, and sales are usually low. Profits may be harmful, as the company may invest heavily in product development and marketing. Competitors may need to be more present. Marketing strategies in this stage focus on creating awareness and interest in the product, often through advertising and public relations. a. Growth: In the growth stage, sales increase rapidly as the product gains acceptance in the market. Due to economies of scale, profits may rise as production and marketing costs decrease. Competitors begin to enter the market and marketing strategies in this stage focus on differentiation and building brand loyalty. b. Maturity: In the maturity stage, sales growth decreases as the product reaches its maximum market penetration. Profits may start to decline as competition increases and prices are driven down. Competitors are numerous, and marketing strategies in this stage focus on defending market share and finding new uses or applications for the product. c. Decline: In the decline stage, sales and profits decline as the product becomes outdated or replaced by newer products. Competitors may exit the market, leaving only a few dominant players. Marketing strategies in this stage focus on reducing costs and maximizing profits from the remaining customer base, often through targeted promotions or price reductions. It's important to note that the length and shape of the Product Life Cycle can vary depending on factors such as product innovation, market saturation, and competition. Understanding where a product is in its life cycle can help companies make strategic decisions about marketing, production, and pricing to maximize profits and minimize risks. Question 8: Think about one of the customer service experiences you have had with a company. Explain the service you received and evaluate the company’s performance. What did you appreciate, what did you hate? What should they do in order to provide a better service next time? (5 points) ANS: I had a customer service experience with a hotel where I booked a weekend stay room. Unfortunately, I had to cancel my reservation due to a family emergency. I contacted the hotel's customer service, and the representative was understanding and empathetic, which I appreciated. They quickly processed my cancellation and refunded my deposit without any issues. What I appreciated most was the representative's helpful and understanding attitude. What I didn't like was that the hotel's cancellation policy needed to be more flexible, which made it difficult for me to make last-minute changes. To provide a better service next time, the hotel could consider offering more flexible cancellation policies or at least make it more transparent when booking about the terms and conditions around

cancellations. Overall, though, I was satisfied with the customer service experience.

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