Chapter 7

Question 1

Marketing

Answer 1

The sum of all activities involved in getting goods and services from the original producer to the ultimate consumer

Question 2

Areas of marketing

Answer 2

• market research
• product development
• pricing
• advertising
• promotion
• sales
• logistics

Question 3

Market research

Answer 3

Finds or collects data to help solve marketing problems

Question 4

Secondary data

Answer 4

Is collected by someone other than the user ( census, survey )

Question 5

Primary data

Answer 5

Observed / collected by a business and relates specifically to its needs or problems

Question 6

Product development

Answer 6

• use market research to help develop new products, taking consumer reaction into account

Question 7

Pricing

Answer 7

• takes into account:
  1. The amount of labor
  2. The cost of materials
  3. Overheard (eg. Electricity)
• items sold in stores are marked up

Question 8

Advertising and promotion

Answer 8

• convinces the customer to buy the product

Question 9

Sale methods/ venues (3)

Answer 9

1. Selling products to retailers
2. Opening their own retail store
3. Selling online

Question 10

Logistics

Answer 10

The flow of goods and services both into and out of an organization. It consists of transportation, inventory, management, warehousing, storage, packing

Question 11

Centralized market strategy

Answer 11

• 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

Question 12

Increase in price arise because of added expenses in the following areas:

Answer 12

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

Question 13

3 promotion methods

Answer 13

1. Use existing ads - saves money (markets must be similar)
2. Translate ads - difficult
3. Create new ads - saves money (internet makes this easier)

Question 14

Two Cs of marketing

Answer 14

1) consumers

2) competition

Question 15

Target market

Answer 15

• 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)

Question 16

Ethnocentrism

Answer 16

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

Question 17

Ways to avoid ethnocentric thinking (3)

Answer 17

1. Visit the country
2. Read the country profiles ( department of foreign affairs and international trade
3. Offer your product on the internet in the language of the target nation to determine if there is a demand for it

Question 18

Discretionary income

Answer 18

Is the money remaining from an individuals salary or wages after all essential living expenses have been paid

Question 19

Direct competition

Answer 19

Businesses that provide products/ services that are almost identical to those offered by another company

Question 20

Indirect

Answer 20

Consumers in every country have a certain amount of discretionary income and regular spending habits. Any product that vies for consumer spending money

Question 21

2 types of competition

Answer 21

1. Direct

2. Indirect

Question 22

Competitive advantage

Answer 22

The ability of one company to produce a product more cheaply than another country

Question 23

4 typical competitive advantages

Answer 23

1. Lower production costs
2. Lower distribution costs (companies with factories in their target market have lower costs)
3. Product differentiation
4. Brand equity (# of consumers that can identify the brand)