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Makerting Management > 4Ps > Flashcards

4Ps Flashcards

1
Q

What is a Product?

A

A product is anything that can be offered to a market to satisfy a want or a need

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2
Q

The future is…

A

hard to forecast

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3
Q

What are the common assumptions about products?

A

Products have a limited life
Products sales pass through distinct stages, each posing different challenges, opportunities, problems
Products require different marketing, financial, manufacturing strategies in each life-cycle stage

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4
Q

What are the 4 stages of PLC

A

Introduction
Growth
Maturity
Decline

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5
Q

What is the introduction stage?

A

A period of slow sales growth as product is introduced in the market where profits are nonexistent

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6
Q

What is the growth stage?

A

A period of rapid market acceptance and substantial profit improvement

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7
Q

What is the maturity stage?

A

A slowdown in sales growth because the product has achieved acceptance by most potential buyers

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8
Q

What is the decline stage

A

Sales and profits decline and Focus turns to profit rather than sales or share

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9
Q

What are the 3 attributes that consumers use to evaluate a product

A

Search Attributes
Experience Attributes
Credence Attributes

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10
Q

Brands can serve as…

A

a surrogate for quality information

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11
Q

Logos can also…

A

convey attributes

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12
Q

Product:

A

Change quality, design, packaging, sizes, warranties, return policies

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13
Q

Price:

A

Change list price, discounts, repayment period, financing terms

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14
Q

Promotion:

A

Change size of sales force, advertising campaign

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15
Q

Place:

A

Change numbers of intermediaries

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16
Q

What are the 3 kinds of surplus?

A

Producer Surplus
Consumer Surplus
Unrealized Surplus

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17
Q

Unrealized surplus when

A

true value>perceived value

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18
Q

No unrealized surplus

A

when perceived value>true value

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19
Q

What is the 3 options to make more profit?

A

Cut UVC (Unit Variable Cost)
Increasing price cutting into consumer surplus
Increasing WTP (cutting into unrealized surplus)

20
Q

One Caveat to this conceptualization of unrealized surplus:

A

There will not always be unrealized surplus to cut into.

21
Q

Ideally, price =

A

max WTP for each person (a form of price discrimination)

22
Q

What is Price Discrimination?

A

Selling a product/service at two or more prices that do not completely reflect a difference in costs.

23
Q

Some factors leading to Less Price Sensitivity

A

When buyers are less aware of substitutes
Or buyers cannot easily compare quality of substitutes
The purchase is small compared to buyer’s income/budget
Part of cost is borne by another party
Prestige products
Individual differences (tightwads and spendthrifts)

24
Q

Price Sensitivity and Modern Payment Methods

A

New payments methods reduce the pain of paying, making consumers less price sensitive and spend more

25
Q

Loss leader pricing:

A

Offer good at or below cost to entice customers to come in and buy other, higher-margin goods

26
Q

Competitive Pricing

A

Using price to steal share (rather than increasing surplus)

27
Q

Perhaps the simplest pricing method: the Markup Pricing

A

Adding a markup to the product’s cost
Ignores current demand, perceived value, and competition
Cost easier to determine rather than demand
Despite non-optimality, remains popular

28
Q

Some Pricing Takeaways

A

Pricing and different types of surplus
Forms of price Discrimination
Estimating demand and price sensitivity
Common pricing tactics

29
Q

What is a Place/Distribution?

A

Where you buy something. It can affect the perceived value.

30
Q

What is a Channel?

A

A set of interdependent organizations involved in the process of product or a service available to the final consumer

31
Q

How do Wholesalers (a.k.a. Distributors) add value for producers and retailers?

A

Have sales forces that help manufacturer reach many small business customers at low cost.
Hold inventories, reducing inventory costs and risk to retailers.
Achieve savings for retail clients by buying in discounted bulks, and breaking down into smaller units.

32
Q

What are the advantages of a Wholesaler?

A

add value for consumers
Reducing consumers’ search time
Reducing the discrepancy between the assortment of good produced and demanded
Manufacturers produce a large quantity of a limited variety of goods
Consumers generally desire a small quantity of a wide variety of goods

33
Q

What does Vertical Integration?

A

Gain control over other elements of the distribution channel

34
Q

Some problems with Vertical Integration

A

Reduces variety, makes shopping less convenient
Manufacturers and retailers perform specialized functions with associated economies of scale
When the manufacturer and retailer by a central Decision-Maker, the D-M may not have the know-how to manage both functions efficiently

35
Q

Two types of integrations

A

Vertical and Horizontal Integration

36
Q

What are the two types of Vertical Integration?

A

Forward vertical integration: incorporating distribution activities (“going direct”)
Backward vertical integration: Incorporating production of supplies

37
Q

Horizontal integration:

A

merging with/acquiring peers who perform similar functions

38
Q

What is Promotion?

A

Marketing communications
All means of promotion share common goals
Make customers aware of offerings
Make offerings attractive to customers

39
Q

Common Misconceptions of Promotion

A

Commercials = Advertising = Marketing Communications

40
Q

Who articulates the consumer proposition?

A

Manufacturers often work with ad agency’s account managers to develop a creative brief
Ad agency’s creative team (e.g., writers, art directors) interprets creative brief and proposes a campaign

41
Q

Framework of Objectives?

A

Is this a good objective?
To make Rotterdam residents aware that the Erasmus Medical Center offers free blood-pressure checkups
How about this
In one year, to make 70%of Rotterdam residents who are over 50 aware that the Erasmus Medical Center offers free blood-pressure checkups
Key elements:
Time horizon
Target
Communication
Effect Wanted

42
Q

Benefit of Having a Clear Objective

A

Helps determine your creative (type of media, content of communication, location etc).
A clear objective helps you evaluate your strategy

43
Q

Customer Funnel

A

Awareness
Interest
Consideration
Intent
Evaluation
Purchase

44
Q

Advertising Objectives:

A

Awareness
Consideration
Remind (Repeat)

45
Q

Marketing communication mix

A

Advertising
Consumer promotions
Events and experiences
Public Relations

46
Q

Common Marketing Communications Goals

A

Achieve an information goal
Achieve an image goal
Achieve a behavior goal

47
Q

Product placement

A

Because mere exposure helps…
The placement of advertisements into other forms
Tailor message to your segment

Makerting Management (3 decks)

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