CFMP Marketing Components 30%

Question 1

Define product

Answer 1

Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or a need. All banking services including checking and savings accounts, CDs, safety deposit boxes, online banking, cash management services, and loans our products.

Question 1

Define product item

Answer 1

A specific version of a product

Question 2

Define product expansion

Answer 2

The addition of a new product to an existing productline or of new product lines to an existing product mix. See also diversification.

Question 3

Define product line

Answer 3

A group of products that have similar characteristics or serve related functions. In banking, the savings product line includes passbook, statement, and money market savings accounts.

Question 4

Define product lifecycle

Answer 4

The successive stages of a product sales and profits. The four stages, which vary in length from product to product, include INTRODUCTION which provide slow sales growth and loss and profits, GROWTH which indicates rapid growth in sales and profitability, MATURITY which is a slowed sales growth rate and reduced profits, and DECLINE

Question 5

Define product management organization

Answer 5

The assignment of an individual or department to be responsible for introducing, marketing, and ensuring profitable sales of a product or product line.

Question 6

Define promotion mix

Answer 6

Do you need combination of for promotional activities: advertising, sales promotion, public relations, personal selling, that results in a profitable demand for products

Question 7

Define promotion

Answer 7

Activities that communicate the availability of products or services to the target market to increase customer awareness and demand

Question 8

Define public relations

Answer 8

A coordinated program of policies, conduct, and communication designed to foster goodwill and gain esteem from an organization’s Publics, which focuses on nonrevenue generating activity

Question 9

Define publicity

Answer 9

Any form of unpaid communication about goods or services that informs and persuade consumers to buy. The media reports persuade Publicity at no cost to the seller because it is judged to have news or human interest value. As a result, consumers find publicity to be a more credible source of information then paid advertising. For the issuing organization, the disadvantage of publicity is the loss of control over how the information is edited, and when and where it appears.

Question 10

Define product mix

Answer 10

The full range of products offered for sale by a company

Question 11

Service packaging

Answer 11

The practice of marketing a group of services as a single product.

Question 12

Define service

Answer 12

And intangible activity or benefit performed by a business that satisfies a customers need. In banking, this term is often used interchangeably with product.
The characteristics of services are intangibility, inseparability, variability, perishability.

Question 13

Define marketing mix

Answer 13

The combination of four marketing activities: product development, pricing, promotion, distribution. These are aimed at satisfying demand in the target market.

Question 14

What are the product lifecycle stages?

Answer 14

Introduction. Slow growth in sales as the product is introduced and the market becomes aware
Growth. Acceleration in sales as more people become aware and buy the product, competition enters the market
Maturity. The profitability of a product in the growth stage attracts intense competition as the maturity stage approaches maturity is characterized by its load rate of sales growth as many have already purchased it also by aggressive advertising to boost demand which booze costs and reduce his profit.
Decline. When the total sales of the product take a marked down turn.

Question 15

What are the product mix strategies

Answer 15

Product expansion and contraction, product modification, repositioning, trading up or trading down.

Question 16

What are the four product failures?

Answer 16

Failure to see the new product from the buyers viewpoint. Failure to research the needs of the market segments creatively. Failure to consider the degree of behavioral change required. Failure to communicate benefits clearly.

Question 17

What are the eight objectives to consider when setting the price of a product

Answer 17

Survival: adjust price levels so that the firm can increase sales volumes to match expenses.
Profit: identify price and cost levels that allow the firm to maximize profit.
Return on investment: identify price levels that enable the firm to produce targeted ROI.
Marketshare: Adjust price levels so that the firm can maintain or increase sales relative to competitors sales.
Cash flow: set price levels to encourage rapid sales.
Status quo: identify price levels that help stabilize demand and sales.
Product quality: set prices to recover research and development expenditures and establish a high-quality image.
Image: the price should communicate an image.

Question 18

Define price

Answer 18

What must be exchanged in return for receiving a good or service

Question 19

Define price elasticity of demand

Answer 19

The degree to which demand for a product decreases as the price for it increases.

Question 20

Define Price sensitivity

Answer 20

The degree to which changes in price will affect the demand for a product

A number of factors affect price sensitivity:
existence of close substitutes.
Consumer awareness of price differences.
Length of time a price difference persists.
Range of use.
Significance and frequency of purchase.
Nonprice benefits

Question 22

Define skimming pricing

Answer 22

Setting a high initial price for a product to attract the cream of the market. Consumers who will buy regardless of the price.

Question 22

Defined relationship pricing

Answer 22

Setting prices that provide an incentive for consumers to use multiple products

Question 23

Define penetration pricing

Answer 23

Setting a low initial price in order to attract a large marketshare quickly

Question 24

Behavior modification pricing

Answer 24

Setting a price that encourages consumers to alter their buying behavior Encourages the customer to take certain actions to reduce the cost for the bank. For example, a bank in an ATM network pays interchange fees when the customer uses another banks ATM. Discourages customers from using other banks ATMs, a bank charges customers more to use other banks ATMs than their own.

Question 25

Define repositioning

Answer 25

The implicit change of perception of product use, benefit, or value in the mind of the consumer

Question 26

Define fully allocated cost

Answer 26

The change in expenses resulting from increased production or added services, including both incremental cost of each service and the fair share of indirect expenses and other fixed costs

Question 27

Define early majority

Answer 27

Consumers who, unlike innovators and early adopters, are deliberate and cautious in their willingness to accept and use a new product before it has established mass appeal

Question 28

Define early adopter

Answer 28

A consumer who, after innovators but before the early majority, accept and uses a new product before it has established mass appeal.

Question 29

Define laggard

Answer 29

The relatively small number of consumers who are among the last to except and use a new product. Laggards tend to be from a lower socioeconomic standing, older, and more conservative.

Question 30

Define late majority

Answer 30

Consumers who are likely to accept and use a new product only after the majority of the population has found it satisfactory.

Question 31

Define innovators

Answer 31

The small number of consumers who are the first to accept and use a new product. Innovators tend to be younger and from higher socioeconomic groups.

Question 32

Define new product development

Answer 32

The process of taking ideas for new or enhanced products and developing them into actual goods and services that can be sold profitably. The eight basic steps in this process include idea generation, screening out ideas that are not viable or likely to succeed, concept testing, a business analysis to forecast sales and profitability, product development including production of prototypes or samples forms procedures and programming modifications, test marketing to determine consumer acceptance, Introduction or commercialization of the new product, evaluation.

Question 33

Define Pareto principle

Answer 33

The theory that states that 80% of a businesses profits come from 20% of its customers

Question 34

Define value pricing

Answer 34

To set a price for a product based on perceived value to the consumer, not on the basis of its cost to the producer

Question 35

What are some of the delivery channels for a bank

Answer 35

Bank branches, ATM, automated loan machine, telephone, Call Ctr., Internet, mobile banking, plastic cards, virtual Banks

Question 36

Define advertising

Answer 36

Any form of communication paid by a sponsor for the purpose of informing and persuading the target market about products, services, organizations, or ideas. By using advertising an organization can control what is said about its products or services, and when and where the information appears.

Question 37

Bank elasticity

Answer 37

The likelihood that customers will change banks in response to a change in the price of services

Question 38

What is the AIDAS formula?

Answer 38

An acronym for the five successive stages of consumer responsiveness in the selling process. The letters of the acronym stand for attention, interest, desire, action, satisfaction.

Question 39

What is a brand story

Answer 39

A compelling way to integrate a brand into the organization; a :30 commercial telling the story of the organization and containing common knowledge for the entire staff

Question 40

What is a channel of distribution

Answer 40

Also known as a marketing channel, a channel of distribution is the means through which goods and services move from seller to buyer.

Question 41

Define community relations

Answer 41

Active participation in and financial support of community projects by an organization for the purpose of fostering Goodwill and gaining public esteem

Question 42

Define customer relations

Answer 42

The policies and practices for handling all customer contacts including one on one transactions with employees, complaint resolution, and written communications in a professional manner that results in a favorable image of the organization

Question 43

Define sales promotion

Answer 43

Any device other than advertising, public relations and personal selling that provides an incentive to the consumer to purchase goods or services. For example, cents off coupons, premiums, in-store displays, gifts with purchase, incentives, seminars, specialties, contests.

Question 44

What are some ways to measure quality and loyalty?

Answer 44

Length of customer relationship. Depth of customer relationship. Time since last new account opening. New account survey. Closed account survey. Branch intercept survey. Mystery shops. Online surveys.

Question 45

What is the difference between marketing and selling?

Answer 45

"Selling is finding customers for what you have; marketing is making sure you have what customers want."

Question 46

What is the personal selling process

Answer 46

One on one contact between a sellers representative and a potential buyer for the purpose of arousing interest and convincing the buyer to purchase products. Personal selling lays the groundwork for long-term relationships between the buyer and seller.

Question 47

What are the five core activities to budget for in marketing

Answer 47

Advertising. Sales promotions. Market research. Training in sales and customer service. Public relations.

Question 48

What are the four elements in the promotion mix

Answer 48

Advertising. Sales promotion. Public relations. Personal selling

Question 49

What are the different ways to determine advertising share of marketing budget

Answer 49

Percentage method. Competitive parity method. Incremental method. Object and task method. Revenue generation method. The most rational method is the object and task method in which the bank determines its advertising objectives, the most cost-effective strategies and tactics for accomplishing these objectives, and the cost involved in carrying out the strategies and tactics

Question 50

What are the four goals of advertising

Answer 50

To stimulate increased awareness and use of profitable products and services thereby enhancing customer retention. To achieve a diversified financial base by attracting a steady influx of new customers including small businesses corporations of all sizes and individuals. To promote special events such as an opening of a new branch. To promote a favorable public reaction to the bank and to issues affecting the bank.

Question 51

What are the various styles used to communicate a message through advertising

Answer 51

Slice of life or case history: showing benefits associated with bank services. Beach image Lifestyle: illustrating how the service fits with the particular lifestyle or career. Businessman and mobile banking. Fantasy: create a fantasy about what might happen in connection with use of a bank service. Dreaming about what they will buy with a home-equity loan. Mood or image: builds a mood or image around the product or bank for example happiness, security, tradition, leadership, acceptance. Often used. Musical: used in radio or television involves one or more people singing a jingle about the bank. Personality symbol: create a character that represents a personifies the advertiser I E Tony the Tiger. Technical expertise: features the care the bank exercises in the experience of its personnel. Scientific evidence: present survey or scientific evidence that the bank or at services performed better than others. Testimonial evidence: highly credible or likable source endorsing the bank or service.

Question 52

What are the seven types of headlines

Answer 52

News: the cost of managing your money is about to go up. Now your money can work even longer hours than you do, introducing the nations most convenient Bank. Question: need a home improvement loan? What would you say if you somebody asked how your bank performs? Are you living on a gold mine? Is your back holding you up? Narrative: back in 1952, my biggest savings problem was keeping my piggy bank hidden from my brother. I may never need it but I sleep better knowing I have a line of credit. Command: if you have a certificate maturing, read this message. Keep your money where it belongs. Be smart, talk to bank before you buy your next car. 123 ways. Three easy steps to switch your banking account. 12 ways to pay your bills without leaving home. How what where when why: how to start a car. Where to go when you run out of cash before you run out of holiday. Wipe bank is a good thing for Art and antique dealers. What to do with your money when you don't know what to do with your money. Statement: the majority of headlines for bank ads fall loosely into this category in that the ads consist of a statement about the bank that cannot properly be called news and does not fit in any other category.

Question 54

What are specialties

Answer 54

Specialties are usable items that banks and other merchants provide to their customers free of Charge. For example, key rings, pens, calendars, paperweights with banks name or logo.

Question 54

What are the six steps involved in developing a promotional campaign

Answer 54

Set specific, measurable objectives. Select the media. Create the advertising. Develop the sales promotion materials. Market /train to the staff. Measure results.

Question 55

What is a premium

Answer 55

Cash or merchandise that a business gives away or sells at a discount as an incentive to purchase a product

Question 56

Describe the communication spectrum

Answer 56

The goal of the banks communication efforts is to move the target audience through the communication spectrum from unawareness of the bank or its products to awareness, to comprehension, to conviction, and to the desired action such as opening a new account.

Question 57

What are the 15 elements of public relations?

Answer 57

Counseling: advising management. Research: determining attitudes and behaviors of publics. Media relations: seeking publicity with or responding to communications media. Publicity: disseminating unpaid, planned messages. Employee or member relations: responding to and informing employees and their families. Community relations: seeking to be connected to the community through actions, participation, and communication with community, citizens, and leaders. Public affairs: developing effective involvement and public policy. Government affairs: relating directly to legislatures and regulatory agencies. Issues management: identifying and addressing issues of public concern in which an organization is or should be concerned. Financial relations: creating and maintaining investor confidence. Industry relations: relating with other firms in the industry. Development and fundraising: demonstrating the need for an encouraging support for an organization. Minority relations and multicultural affairs: relating with individuals and groups and minorities. Special events and public participation: stimulating interest through a focused event or activity. Marketing communications: combining activities designed to sell a product, service, or idea, including advertising, collateral materials, publicity, promotion, packaging, point-of-sale display, tradeshows, and special events.

Question 58

What are the primary tasks of the public relations department?

Answer 58

The primary tasks of the public relations department our media relations and publicity, investor relations with shareholders and the investment community, government relations, employee relations, customer relations, community relations, and crisis management.

Question 59

What are the four essential elements that the media expect from a bank in dealing with a crisis

Answer 59

Describe the risk accurately: the bank should make clear precisely what the risks are for each customer group that might be affected by the particular events it is better to over state risk than to understate it. Describe what actions the bank will take to mitigate the risk: for example the bank may decide to seek a merger partner, call inappropriate officials, relocate to a temporary facility, have Back Office work conducted by another bank, etc. Identify the cause of the risk: this demonstrates to the public that the bank knows what the problem is and will fix it. Demonstrate responsible management action: the bank must always appear to be in control of the event while carrying out its plan of action.

Question 60

And organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways which deliver benefit for the organization and its stakeholders

Answer 60

Marketing

Question 61

Product, price, promotion, place, possibly also including people. These are all a part of the:

Answer 61

Marketing mix components

Question 62

All the potential customer sharing a particular need or want and able to exchange or satisfy that need or want

Answer 62

Market

Question 63

Customer satisfaction, profit, total company effort, and social responsibility are all a part of the:

Answer 63

Marketing concept Components that drive the marketing concept include declining sales or marketshare, slow growth, a change in buying habits, increased competition, increased budgetary pressures.

Question 64

The tactical methodology for reaching the strategic goals

Answer 64

Marketing planning

Question 65

Market penetration, market expansion, product expansion, diversification are all types of:

Answer 65

Marketing strategies

Question 66

Expansion, contraction, modification, repositioning, and trading up or down are all types of:

Answer 66

Product strategies

Question 67

Innovators, early adapters, early majority, late majority, and Lagars are all examples of what

Answer 67

Adopter categories

Question 68

Do your graphic, demographic, psychographic, volume, and benefit are all ______ strategies

Answer 68

Segmentation strategies A market consists of all of the potential customer sharing a particular need or want who might be willing and able to engage or exchange to satisfy that need or want.

Question 69

Percentage, competitive parity, incremental, and objective and task are all examples of:

Answer 69

Budgeting methods

Question 70

Recruiting, training, motivating, and monitoring are all steps in the:

Answer 70

Sales process

Question 72

``` The total market sales of a product or service are highest when the product is in which of the following stages? A. Introductory B. Growth C. Maturity D. Decline ```

Answer 72

C. Maturity

Question 73

``` A radio advertisement that promotes home improvement loan requires which of the following disclosures? A. Member FDIC. B. Annual percentage yield. C. Equal housing lender. D. Projected loan payment. ```

Answer 73

C. Equal housing lender.

Question 74

Your bank is conducting a direct mail campaign to generate $10 million in new car loans. You wish to target this mailing to people who fit the profile for needing or wanting a new car. Which of the following customer criteria is MOST important in developing the mailing list? a. Deposit balances of $5,000 or more b. Current car loan interest rate of 8% or more c. College students in your market d. Customers with car loans at other financial institutions

Answer 74

d. Customers with car loans at other financial institutions

Question 75

You have negative financial news to report. Your FIRST public relations strategy should be to: a. contact the editor of the local paper b. develop an ad for the local paper c. issue a news release to area media d. draft talking points for Bank CEO or Bank spokesperson

Answer 75

d. draft talking points for Bank CEO or Bank spokesperson

Question 76

Each trip to the bank can bring a different experience for the customer. These different experiences are an example of which of the following characteristics of service? a. Fluidity b. Inseparability c. Perishability d. Inconsistency

Answer 76

d. Inconsistency

Question 77

The demand for mortgage loans has increased. The demand for mortgage insurance has also increased. This increase in mortgage insurance is an example of which of the following types of demand? a. Price b. Elastic c. Inelastic d. Derived

Answer 77

d. Derived

Question 78

You are going to be opening the bank’s first supermarket branch office and need to provide deposit and loan projections for the new office. Which of the following kinds of information is LEAST useful in determining your projections? a. Traditional branch results in the area b. Census information within a 5-mile radius of the store c. Demographic information on supermarket customers d. Deposit and loan results from other supermarket offices in the area

Answer 78

b. Census information within a 5-mile radius of the store

Question 79

Which of the following BEST describes the rationale supporting the use of market segmentation? a. Helps support branch merchandising efforts b. Follows product positioning analysis c. Necessary if the bank plans to adopt a mass marketing strategy d. Uses products or services to meet diverse customer needs

Answer 79

d. Uses products or services to meet diverse customer needs

Question 80

Two banks merge in your market area. You decide to target disgruntled customers of the merged banks with a direct-mail campaign offering incentives to move their business to your bank. You are pursuing a growth strategy of: a. diversification b. product development c. market development d. market penetration

Answer 80

d. market penetration

Question 81

You are asked to develop next year's marketing budget for the bank. Your boss does not give you a specific dollar amount to work with, but indicates that you should work with all department managers to find out what they want to accomplish for the year, and then develop the marketing budget to support those needs. With this direction, you should start by: a. developing a proposed budget for each department b. developing a suggested marketing plan for each department manager c. developing a template department marketing plan to show each department manager d. meeting with employees within each department to determine what they believe needs to be done in marketing

Answer 81

c. developing a template department marketing plan to show each department manager

Question 82

Which of the following refers to analyzing your customer's transactions to identify trigger events or flags that indicate a customer's readiness to buy a financial service, and then forwarding that customer's name to a salesperson? a. Strategic planning b. Profit maximization c. Real time marketing d. Sales effectiveness

Answer 82

c. Real time marketing

Question 83

If your bank decides to shift from being product-focused to customer-focused, the FIRST major decision facing the bank is to: a. identify the bank's target market b. identify which customer markets have the greatest potential c. determine the bank’s market segmentation approach d. determine satisfaction levels among current employees

Answer 83

c. determine the bank’s market segmentation approach Before all else, we need to understand HOW we're going to segment the market. Only then can we identify our target market and which customers have the greatest potential.

Question 84

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or a need.

Answer 84

Product

Question 85

The addition of a new product to an existing product line or of new product lines to an existing product mix.

Answer 85

Product expansion

Question 86

Introduction, Growth, Maturity and Decline are the 4 stages in the:

Answer 86

Product Life Cycle

Question 87

Activities that communicate the availability of products or services to the target market to increase customer awareness and demand

Answer 87

Promotion

Question 88

And intangible activity or benefit performed by a business that satisfies a customers need. In banking, this term is often used interchangeably with product. The characteristics of these are intangibility, inseparability, variability, perishability.

Answer 88

Service

Question 89

What are the four characteristics of Service

Answer 89

The characteristics of these are intangibility, inseparability, variability, perishability.

Question 90

The degree to which demand for a product decreases as the price for it increases.

Answer 90

Price elasticity of demand

Question 91

Product expansion and contraction, product modification, repositioning, trading up or trading down are examples of:.

Answer 91

Product Mix Strategies

Question 92

Setting a low initial price in order to attract a large marketshare quickly

Answer 92

Penetration Pricing

Question 93

Setting a high initial price for a product to attract the cream of the market. Consumers who will buy regardless of the price.

Answer 93

Skimming Pricing

Question 94

The implicit change of perception of product use, benefit, or value in the mind of the consumer

Answer 94

Repositioning

Question 95

``` In which order should the five successive stages of consumer responsiveness in the selling process be listed in? action attention desire interest satisfaction ```

Answer 95

The letters of the acronym stand for attention, interest, desire, action, satisfaction.

Question 96

Advertising. Sales promotion. Public relations. Personal selling are the four elements of the:

Answer 96

Promotion Mix

Question 97

A consumer who, after innovators but before the early majority, accept and uses a new product before it has established mass appeal.

Answer 97

Early Adopter

Question 98

Cash or merchandise that a business gives away or sells at a discount as an incentive to purchase a product

Answer 98

Premium

Question 99

Any device other than advertising, public relations and personal selling that provides an incentive to the consumer to purchase goods or services. For example, cents off coupons, premiums, in-store displays, gifts with purchase, incentives, seminars, specialties, contests.

Answer 99

Sales Promotion