Chapter 5: Marketing Flashcards
Describe the difference between: perfect competition, monopoly, oligopoly.
Perfect Competition:
- Many buyers and sellers.
- Equal access to information.
- No single participant can influence the price.
Examples: Stock markets, vegetable markets.
Monopoly:
- One company controls supply and pricing.
- Example: Systembolaget in Sweden (alcohol retail).
Oligopoly:
- Few firms influence each other’s pricing and decisions.
- Example: Gasoline retail market.
What is marketing?
Marketing encompasses all activities that contribute to the sale of a company’s products and services.
Describe the typical differences between markets for business products and markets for consumer products.
In business-to-business (B2B) markets, customers are relatively large and the relationships between customers and suppliers are typically long-term, whereas in consumer markets, customers are numerous and individual customers are less critical, often resulting in suppliers holding a stronger position.
What does “segment the market” mean?
Segmenting the market means dividing it into distinct customer categories based on factors such as customer type, geographic region, size, or quality awareness, and then focusing on specific segments to tailor marketing efforts accordingly.
Describe why brands are important for companies.
Brands are important for companies because they symbolize the promise made to customers, reflecting expectations regarding quality, price, and other attributes, and thus play a crucial role in defining the company’s market presence.
What is the difference between a brand and a product?
The difference between a brand and a product is that a brand represents the overall identity and promise of what customers can expect, while a product is a specific item offered under that brand. A brand can encompass multiple products, and a company can own several brands.
Describe the 4 different basic principles for pricing.
- Cost-Based Pricing:
Sets prices based on production cost plus profit margin. - Competition-Based Pricing:
Sets prices based on competitors’ prices. - Value-Based Pricing:
Sets prices based on the product’s perceived value to the customer.
Focuses on what customers are willing to pay. - Market-Based Pricing:
Sets prices based on market factors like supply and demand.
What are the differences between a wholesaler and a retailer?
Wholesale:
- Involves intermediaries between suppliers and the final point of sale.
- Wholesalers connect retailers with suppliers and manage product assortment.
Retail:
- The final step where products reach the end customers.
How does the type of distribution channel affect the company`s marketing?
Customer Engagement: Direct channels (e.g., online stores) allow direct interaction with customers.
Customer Experience: Direct control over the buying experience (e.g., company-owned stores).
Information Flow: Efficient management of product and information flow (e.g., direct sales teams).
Examples:
Direct Channel: Apple selling products through its own stores.
Indirect Channel: A clothing brand selling through department stores.
What does “relationship marketing” mean?
Relationship marketing focuses less on advertising and more on building long-term relationships with customers by delivering high quality and being responsive to their needs, thereby fostering trust and loyalty.
What are the typical differences between sales of goods and sales of services?
The difference between selling goods and services is that, with services, the seller cannot easily showcase the product itself and must instead help the customer understand the benefits of the service, making the seller’s impression and expertise crucial.
Describe the Marketing Mix 4Ps
- Product: The assortment and features of the products offered.
- Price: Pricing strategies and other sales conditions.
- Place: Distribution of the product, including storage, logistics, and sales channels.
- Promotion: Advertising, relationships, and direct sales efforts.
Describe the AIDA model
AIDA describes an effective sales process and stands for Attention, Interest, Desire, and Action. As one of the oldest marketing models, it is used in consumer marketing and advertising to outline the stages a consumer goes through: from noticing the product, showing interest, developing a desire for it, to ultimately making a purchase.
What is a so called key account manager?
A key account manager is a specialized salesperson responsible for managing a company’s most strategically important customers, ensuring strong business relationships, and connecting the right individuals within both the company and the customer’s organization. They may also be involved in preparing and managing proposals or bids.
What is a tender?
An tender (offert) is a proposal made by the selling company to the customer, commonly practiced in business-to-business sales. It details what the company can deliver, when it can be delivered, and at what price. After discussing the tender, a contract can be formalized.
