Exam 2

Question 1

3 reasons why businesses purchase products?

Answer 1

Resale, direct use in producing products, use in general daily operations

Question 2

Market characteristics of organizational buyers

Answer 2

Derived demand, size of order or purchase, number of potential buyers, and purchases tend to be made by committee

Question 3

Difference between B2C vs. B2B purchase decision process

Answer 3

In B2C its a simple decision process. In B2B there is a longer decision process. Business customers are better informed, demand me detailed product information, goals of a purchasing agent may include advancement or financial awards, and some suppliers and business customers build and maintain mutually beneficial relationships or partnerships.

Question 4

Buying center

Answer 4

Consists of the group of people in an organization who participate in the buying process and share common goals, risks, and knowledge important to purchase decisions.

Question 5

Buying center roles

Answer 5

Users: members who frequently initiate the purchase, use the product and evaluate the product.
Influencers: technical personnel who develop the specifications and evaluate alternative products.
Buyers: select suppliers and negotiate terms.
Deciders: actually choose the products.
Gatekeepers: control the flow of information to and amount people who occupy other roles in the buying center.

Question 6

3 types of buying classes

Answer 6

New-task purchase: initial purchase of an item for use in performing a new job or solving a new problem.
Straight rebuy purchase: routine purchases of the same products under approximately the same terms of sale.
Modified rebuy purchase: when new-task purchases are changed on repeat orders or straight rebuy purchases are modified.

Question 7

Traditional vs. Reverse auction

Answer 7

Traditional has one seller and multiple buyers so price goes up as more buyers come.
Reverse has more sellers and one buyer so price goes down.

Question 8

Market segmentation

Answer 8

Aggregating prospective buyers into groups, or segments, that have common needs/wants and will respond similarly to a marketing action

Question 9

Market segments

Answer 9

Relatively homogeneous groups of prospective buyers that result from the market segmentation process.

Question 10

Effective segmentation does what two things?

Answer 10

Forms meaningful groupings and develops specific marketing actions

Question 11

One product multiple markets vs. multiple products multiple market segments

Answer 11

The costs can be cheaper because you don’t have to spend a lot of money on production costs.

Question 12

Synergies

Answer 12

Combining markets or products.
Ex. Retail business that sells clothes starts selling accessories to increase revenue. It can be a negative.

Question 13

Cannibalization

Answer 13

A loss in sales caused by a company’s introduction of a new product that displaces one of its won older products.

Question 14

Mass Customization

Answer 14

Tailoring goods or services to the tastes of individual customers on a high-volume scale

Question 15

Build-to-Order

Answer 15

Manufacturing a product only when there is an order for it

Question 16

5 Steps in segmentation

Answer 16

1. Group potential buyers into segments
2. Group products sold into categories
3. Develop a market-product grid and estimate size of markets
4. Select target markets
5. Take marketing actions to reach target markets

Question 17

Ways to segment consumer markets

Answer 17

Demographic, geographic, psychographic, and behavioristic variables

Question 18

Product positioning (head-to-head vs. differentiation)

Answer 18

Head-to-head: as a kin to primary competitors. Same thing, same way.
Differentiation: competing similar ways but do it differently

Question 19

Repositioning

Answer 19

Move to reach new markets.
Ex. Chocolate milk as an adult option instead of just for kids

Question 20

Product

Answer 20

-a good (tangible physical entity),
-service (intangible result of the application of human & mechanical efforts to people/objects),
- or idea (concept, philosophy, image, issue)

Question 21

3 layers of a product

Answer 21

Core product: the basic need/want the product fulfills (e.g. communication, productivity etc.)
Actual product: the actual product itself (e.g. IPhone)
Augmented product: All additional, non-tangible benefits the product provides (e.g. service, warranty, delivery, etc.)

Question 22

Non durable goods

Answer 22

1 or few uses, consumed in short period of time (3 yrs. or less), focus on consumer advertising

Question 23

Durable goods

Answer 23

Many uses, consumed over longer period of time (> 3 yrs.), focused on personal selling

Question 24

Benefits of packaging

Answer 24

Communication benefits: information conveyed to the consumer
Functional benefits: storage, convenience, protection, or quality
Perceptual benefits: shape, color, graphics, etc. distinguish brands, packaging can enhance brand image

Question 25

4 types of classifying products

Answer 25

Convenience products: relatively inexpensive, purchase frequently, low involvement.
Shopping products: somewhat expensive, mid-to-high involvement
Specialty products: unique items, buyers willing to expend significant effort to obtain
Unsought products: solve “sudden problems”, people don’t think about buying

Question 26

Product item

Answer 26

A specific product
Stock keeping unit (SKU)

Question 27

Product Line

Answer 27

Group of product or service items that are closely related

Question 28

Product Mix

Answer 28

All of the product lines offered by an org.

Question 29

Product Breadth vs. Depth

Answer 29

The depth of the product line includes the number of different products offered within the product line such as many different types of basketball sneakers for Nike. The breadth of the product line refers to the different categories of products in which the brand or company offers products.

Question 30

4 I’s of Services

Answer 30

Intangibility: services cannot be touched or seen before purchase.
Inconsistency: services depend on the people who provide them
Inseparability: services are consumed immediately, consumer cannot distinguish service from the provider itself
Inventory:
-idle product capacity: occurs when the service provider is available but there is no demand for the service.

Question 31

RATER framework

Answer 31

Reliability: did the company provide the promised service consistently, accurately, and on a timely basis?
Assurance: Did the knowledge, skills, and credibility of the employees insource trust and confidence?
Tangibles: were the physical aspects of the service appealing?
Empathy: was there a good relationship b/t employees & customers?
Responsiveness: Did the company provide fast, high-quality service to customers?

Question 32

Goods-services continuum

Answer 32

Enables marketers to see the relative goods/services composition of total products

Question 33

New product organizations perspective

Answer 33

Extend product line, jump in innovation, brand extension, true innovation

Question 34

New product: consumers perspective

Answer 34

Have to learn a new product, disrupts routine, can require new consumption patterns by consumers

Question 35

Why so many new products fail?

Answer 35

Insignificant point of difference, no economical access to buyers, not satisfying critical customer needs, bad timing, poor quality, too little market, and Poor marketing mix (4 P’s)

Question 36

Product Life Cycle

Answer 36

Introduction, growth, maturity, and decline

Question 37

Primary vs. selective demand

Answer 37

Primary demand is intended to promote product interest regardless of the brand. Selective demand refers a type of advertising that is intended to increase interest in a specific brand.

Question 38

Skimming vs. Penetration pricing

Answer 38

Price skimming sets prices higher to attract customers most interested in the product or service to maximize short-term profits. Penetration pricing uses lower prices to build a customer base for new products or services.

Question 39

Product Adoption

Answer 39

the process by which people learn about your product or app and start using it to accomplish their goals.

Question 40

Branding

Answer 40

A marketing decision by an org to use a name, term/phase, design, and/or symbols, or combination of these to identify its products and distinguish them from those of competitors.

Question 41

Brand equity

Answer 41

The added marketing/financial value a brand name gives to a product beyond the functional benefits provided.

Question 42

4 branding strategies

Answer 42

Multi product: ex Toro: snowblowers, lawn mowers, etc.
Multi-branding: ex Procter & Gamble: tide, cheer, ivory snow, and bold
Private branding: ex Sears: Kenmore appliances, craftsman tools, and diehard batteries
Mixed branding: ex Michelin: Michelin tires, sears tires. Ex Epson: Eason printers, ibm printers