CFMP Marketing Components 30% Flashcards
Define product
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.
Define product item
A specific version of a product
Define product expansion
The addition of a new product to an existing productline or of new product lines to an existing product mix. See also diversification.
Define product line
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.
Define product lifecycle
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
Define product management organization
The assignment of an individual or department to be responsible for introducing, marketing, and ensuring profitable sales of a product or product line.
Define promotion mix
Do you need combination of for promotional activities: advertising, sales promotion, public relations, personal selling, that results in a profitable demand for products
Define promotion
Activities that communicate the availability of products or services to the target market to increase customer awareness and demand
Define public relations
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
Define publicity
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.
Define product mix
The full range of products offered for sale by a company
Service packaging
The practice of marketing a group of services as a single product.
Define service
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.
Define marketing mix
The combination of four marketing activities: product development, pricing, promotion, distribution. These are aimed at satisfying demand in the target market.
What are the product lifecycle stages?
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.
What are the product mix strategies
Product expansion and contraction, product modification, repositioning, trading up or trading down.
What are the four product failures?
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.
What are the eight objectives to consider when setting the price of a product
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.
Define price
What must be exchanged in return for receiving a good or service
Define price elasticity of demand
The degree to which demand for a product decreases as the price for it increases.
Define Price sensitivity
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
Define skimming pricing
Setting a high initial price for a product to attract the cream of the market. Consumers who will buy regardless of the price.
Defined relationship pricing
Setting prices that provide an incentive for consumers to use multiple products
Define penetration pricing
Setting a low initial price in order to attract a large marketshare quickly
Behavior modification pricing
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.
Define repositioning
The implicit change of perception of product use, benefit, or value in the mind of the consumer
Define fully allocated cost
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
Define early majority
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
Define early adopter
A consumer who, after innovators but before the early majority, accept and uses a new product before it has established mass appeal.
Define laggard
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.
Define late majority
Consumers who are likely to accept and use a new product only after the majority of the population has found it satisfactory.
Define innovators
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.
Define new product development
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.
Define Pareto principle
The theory that states that 80% of a businesses profits come from 20% of its customers
Define value pricing
To set a price for a product based on perceived value to the consumer, not on the basis of its cost to the producer
What are some of the delivery channels for a bank
Bank branches, ATM, automated loan machine, telephone, Call Ctr., Internet, mobile banking, plastic cards, virtual Banks
Define advertising
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.
Bank elasticity
The likelihood that customers will change banks in response to a change in the price of services
What is the AIDAS formula?
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.
What is a brand story
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
What is a channel of distribution
Also known as a marketing channel, a channel of distribution is the means through which goods and services move from seller to buyer.
Define community relations
Active participation in and financial support of community projects by an organization for the purpose of fostering Goodwill and gaining public esteem
Define customer relations
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
Define sales promotion
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.
What are some ways to measure quality and loyalty?
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.
What is the difference between marketing and selling?
“Selling is finding customers for what you have; marketing is making sure you have what customers want.”
What is the personal selling process
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.
What are the five core activities to budget for in marketing
Advertising. Sales promotions. Market research. Training in sales and customer service. Public relations.
What are the four elements in the promotion mix
Advertising. Sales promotion. Public relations. Personal selling
What are the different ways to determine advertising share of marketing budget
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
What are the four goals of advertising
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.
What are the various styles used to communicate a message through advertising
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.
What are the seven types of headlines
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.
What are specialties
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.
What are the six steps involved in developing a promotional campaign
Set specific, measurable objectives. Select the media. Create the advertising. Develop the sales promotion materials. Market /train to the staff. Measure results.
What is a premium
Cash or merchandise that a business gives away or sells at a discount as an incentive to purchase a product
Describe the communication spectrum
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.
What are the 15 elements of public relations?
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.
What are the primary tasks of the public relations department?
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.
What are the four essential elements that the media expect from a bank in dealing with a crisis
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.
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
Marketing
Product, price, promotion, place, possibly also including people. These are all a part of the:
Marketing mix components
All the potential customer sharing a particular need or want and able to exchange or satisfy that need or want
Market
Customer satisfaction, profit, total company effort, and social responsibility are all a part of the:
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.
The tactical methodology for reaching the strategic goals
Marketing planning
Market penetration, market expansion, product expansion, diversification are all types of:
Marketing strategies
Expansion, contraction, modification, repositioning, and trading up or down are all types of:
Product strategies
Innovators, early adapters, early majority, late majority, and Lagars are all examples of what
Adopter categories
Do your graphic, demographic, psychographic, volume, and benefit are all ______ strategies
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.
Percentage, competitive parity, incremental, and objective and task are all examples of:
Budgeting methods
Recruiting, training, motivating, and monitoring are all steps in the:
Sales process
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
C. Maturity
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.
C. Equal housing lender.
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
d. Customers with car loans at other financial institutions
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
d. draft talking points for Bank CEO or Bank spokesperson
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
d. Inconsistency
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
d. Derived
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
b. Census information within a 5-mile radius of the store
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
d. Uses products or services to meet diverse customer needs
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
d. market penetration
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
c. developing a template department marketing plan to show each department manager
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
c. Real time marketing
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
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.
Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or a need.
Product
The addition of a new product to an existing product line or of new product lines to an existing product mix.
Product expansion
Introduction, Growth, Maturity and Decline are the 4 stages in the:
Product Life Cycle
Activities that communicate the availability of products or services to the target market to increase customer awareness and demand
Promotion
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.
Service
What are the four characteristics of Service
The characteristics of these are intangibility, inseparability, variability, perishability.
The degree to which demand for a product decreases as the price for it increases.
Price elasticity of demand
Product expansion and contraction, product modification, repositioning, trading up or trading down are examples of:.
Product Mix Strategies
Setting a low initial price in order to attract a large marketshare quickly
Penetration Pricing
Setting a high initial price for a product to attract the cream of the market. Consumers who will buy regardless of the price.
Skimming Pricing
The implicit change of perception of product use, benefit, or value in the mind of the consumer
Repositioning
In which order should the five successive stages of consumer responsiveness in the selling process be listed in? action attention desire interest satisfaction
The letters of the acronym stand for attention, interest, desire, action, satisfaction.
Advertising. Sales promotion. Public relations. Personal selling are the four elements of the:
Promotion Mix
A consumer who, after innovators but before the early majority, accept and uses a new product before it has established mass appeal.
Early Adopter
Cash or merchandise that a business gives away or sells at a discount as an incentive to purchase a product
Premium
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.
Sales Promotion