Chapter 13&14

Question 1

CRM

Answer 1

Customers relationship management

The progress of learning as much as possible about customers and doing everything you can go satisfy them- or even exceed their expectations with goods and services
Idea is to stimulate long-tern customer loyalty

Question 2

Evolution of marketing

USA has passed through four eras

Answer 2

• production era, Produce as much as you can, because there is a limitless market for you’
• selling era, mass production techniques, production capacity often exceeded the immediate market demand. Focus on selling
• Marketing concept era, after WOII soldiers came back, and demand goes up. And Babyboom and boom in spending, so competition was fierce, responsive to customer
• Customers Relationship era, adopting the practice of customer relationship management

Question 3

Environmental scanning

5

Answer 3

The process of identifying the factors that can affect marketing success.

• global: trends, competition
• technological: databases, computers
• Socialcultural: population shifts, values
• Economic: GDP, unemployment
• Competitive: speed, service, price, selection

Question 4

Marketing segmentation

5

Answer 4

The process of dividing the total market into groups whose members have similar characteristics.

Geographical: cities, countries
Demographical: age, income, education level
Psychographic: groupvalues, attitudes, interest
Benefit: preferences of targetmarket
Volume (of usage): volume of use

Question 5

Decision-making process

5

Answer 5

1. Problem recognition
2. Information search
3. Alternative evaluation
4. Purchase decision/or no purchase
5. Postpurchase evaluation (cognitive dissonance)

Question 6

Holy Trinity of marketing

Answer 6

Segmentation

• understanding and sizing up the potential market
• geographic, demographic, behavioral

Targeting
-process of selecting which market segment

Positioning
-strategic attempt to influence mind of target segments

Question 7

Band Equity

Answer 7

The set of associations and behaviors on the part of a brand’s customers, channel members and parent corporation that permits the brand to earn greater volume or greater margins that it could without the brand name

Question 8

Distributed product development

Answer 8

Used to describe handing off various parts of your innovation process often to companies in other countries

Question 9

A total product offer

Answer 9

Also called value package

Consists of everything consumers evaluate when deciding whether to buy something

Tangible: product itself and its packaging
Intangible: product’s reputations

Question 10

Manufacturers brand

Answer 10

Represent manufacturers that distribute products nationally

Question 11

Dealer (private-label) brands

Answer 11

Also known as house brands or distributor brands

Are products that do not carry the manufacturer’s name but carry a distributor or retailer’s name instead

Question 12

Knockoff brands

Answer 12

Illegal copies of national brand-name

Question 13

Brand awareness

Answer 13

How quickly or easily a given brand name comes to mind when a product category is mentioned

Question 14

Brand insistence

Answer 14

Product becomes a specialty good

Question 15

Commercialization

Answer 15

Promoting a product to distributors and retailers to get wide distribution and developing strong advertising and sales campaigns to generate and maintain interest in the product among distributors and customers

Question 16

The product life cycle

Answer 16

Introduction

Growth

Maturity

Decline

Question 17

Loss leaders

Answer 17

Products sold at price below cost to attract people to the store

Question 18

Three major pricing strategy

Answer 18

1. Cost-based pricing
   Producers often use cost as a primary basic for setting price (add profit margin)
2. Demand-based pricing
   Target costing makes the final price an input to the product development process, not an outcome of it. Firstly, estimate the sell price and demand - desired profit margin, result is target cost of production
3. Competition-based pricing
   Strategy based on what all the other competitors are doing.
   Price leadership: is the strategy by which one or more dominant firms set pricing practices all competitors in an industry follow

Question 19

Skimming

Answer 19

New product us priced high to make optimum profit while there is little competition

Question 20

Penetration strategy

Answer 20

Strategy in which a product is priced low to attract many customers and discourage competition

Question 21

EDLP

Answer 21

Everyday low pricing

Setting prices lower than competitors and then not having any special sales

Question 22

High-low pricing strategy

Answer 22

Setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than competitors

Question 23

Break-even analysis

Answer 23

BEP = FC/(P-VC)

BEP break even point
FC total fixed costs
VC variables costs one unit

Question 24

Non price competition

Answer 24

Compete on the product attributes other than price, eg more service/comfort/style/convience