Chapter 7 Flashcards
Marketing
The sum of all activities involved in getting goods and services from the original producer to the ultimate consumer
Areas of marketing
- market research
- product development
- pricing
- advertising
- promotion
- sales
- logistics
Market research
Finds or collects data to help solve marketing problems
Secondary data
Is collected by someone other than the user ( census, survey )
Primary data
Observed / collected by a business and relates specifically to its needs or problems
Product development
- use market research to help develop new products, taking consumer reaction into account
Pricing
- takes into account:
1. The amount of labor
2. The cost of materials
3. Overheard (eg. Electricity) - items sold in stores are marked up
Advertising and promotion
- convinces the customer to buy the product
Sale methods/ venues (3)
- Selling products to retailers
- Opening their own retail store
- Selling online
Logistics
The flow of goods and services both into and out of an organization. It consists of transportation, inventory, management, warehousing, storage, packing
Centralized market strategy
- must increase the price of their products when selling in foreign markets
- sometimes the price is their product increases to the point that it is no longer competitive
Increase in price arise because of added expenses in the following areas:
1) labour costs: labour in foreign counties = cheaper
2) shipping
3) duties/ tariffs
4) legal costs: modifications to conform to standards in a foreign country market = expensive
3 promotion methods
- Use existing ads - saves money (markets must be similar)
- Translate ads - difficult
- Create new ads - saves money (internet makes this easier)
Two Cs of marketing
1) consumers
2) competition
Target market
- segment of the consumer market to which a particular product is targeted
- Defined by demographic information which is statistical data about various aspects (age gender etc)
Ethnocentrism
The belief that your own culture, values, beliefs, and customers represent the right way of doing things, and that other value systems are not important
Ways to avoid ethnocentric thinking (3)
- Visit the country
- Read the country profiles ( department of foreign affairs and international trade
- Offer your product on the internet in the language of the target nation to determine if there is a demand for it
Discretionary income
Is the money remaining from an individuals salary or wages after all essential living expenses have been paid
Direct competition
Businesses that provide products/ services that are almost identical to those offered by another company
Indirect
Consumers in every country have a certain amount of discretionary income and regular spending habits. Any product that vies for consumer spending money
2 types of competition
- Direct
2. Indirect
Competitive advantage
The ability of one company to produce a product more cheaply than another country
4 typical competitive advantages
- Lower production costs
- Lower distribution costs (companies with factories in their target market have lower costs)
- Product differentiation
- Brand equity (# of consumers that can identify the brand)
