Exam 3 Flashcards by Diane McAfee

Core competency

Special skill set

Unique product, personnel

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Guerrilla Marketing

A unique, inexpensive form of advertising

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Four objectives of guerrilla marketing plan

Pinpoint target market

Determine customers wants through market research

Analyze competitive advantage and build marketing strategy around them

Create marketing mix

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Individualized marketing

One to one marketing

Gathering individual customers and developing a marketing plan designed specifically to appeal to them

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Relationship marketing

Involves developing, maintaining, and managing long term relationships with customers so that they will keep coming back to make repeat purchases

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Guerrilla marketing principles

Don’t just sell: entertain

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Focus on the customer

Customers are 5x more likely to leave because of poor service than for quality or price

94% of dissatisfied customers never complain but will not return

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How to focus on the customer

Fix the problem fast

Encourage customer complaints

Commitment to superior customer service

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Retain existing customers

70% of a company’s sales come from existing customers

Because 20% of a company’s customers account for 80% of its sales

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Repeat customers…

Spend 67% more than new customers

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What is quality?

Above consumers expectations and needs

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Total quality management

Quality not just in the product/service itself, but in every aspect of the business

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The quality process

Define
Measure
Analysis
Improve
Control
(Repeat process)

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Quality is different depending on where you go

Americans define quality….

Reliability
Durability
Ease of use
Known brand
Low price

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Customer astonishment

Listen to customers
Set standards
Measure performance
Hire the right employees

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Emphasis on speed

Speeding new products to the market

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The marketing mix

Product
Place
Price
Promotion

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Stages in the product life cycle

Intro 
Growth and acceptance 
Maturity and competition (most profit)
Market saturation
Product decline stage

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Distribution marketing mix

Place

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Unique selling proposition

A key customer benefit of a product or service that answers the critical question that every customer asks: what’s in it for me?

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6 sentence advertising strategy

Purpose
What can it offer to customers
Benefits
Target market
Response from target market
Image

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Publicity

Ant commercial news covered by the media that boosts sales– business does not pay

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Personal selling

The personal contact between sales personnel and potential customers resulting from sales efforts (form of advertising)

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Advertising

Any sales presentation that is non-personal in nature and is paid for by an identified sponsor

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Top salespeople...

Are enthusiastic and alert to opportunities Are experts in the products or services they sell

Audience

The number of paid subscribers a particular medium attracts

Reach

The total number of people exposed to an ad at least once in a period of time

Frequency

The average number of times a person is exposed to an ad in that same time period

Point of purchase

Stuff you but in the check out line

Email advertising

Make the subject line short

Email advertising spam

71%

Opt in opt out emails

Companies purchase email addresses that and "opted out" because they then know that the accounts are active account

Advertising media options

Know good and bad of each media *** look at slide***

Preparing an advertising budget

What is affordable Match competitors advertising expenditures Percentage of sales: past sales, forecasted sales Objective and task

Factors affecting price

``` Product or service costs Market forces Sales volume Credit terms and purchase discounts Desired image ```

Three pricing forces

Image Competition Value

Pricing

Sends signals to customers about quality and value

Competition

Consider competitors pricing and location Avoid price wars

Value-- three reference points

Price paid in the past Prices competitors charge Company's cost

Revolutionary products

Transform an industry

Evolutionary products

Make improvements to products that are already on the market

Me- too products

Allow the company merely to keep up with competitors

Introducing a new product: three goals

Get the product accepted Maintain market share as competition grows Earn a profit

Introducing a new product: three strategies

Penetration Skimming Life cycle pricing

Pricing for retailers

Dollar markup = retail price - cost of merchandise

Break even selling price

Profit + (var. cost per unit x quantity produced) + total fixed costs --------------------------------- Quantity produced

Credit cards in USA

144 million

Average person has how many credit cards?

Credit card merchant fees

Transaction fees Equipment fees Hold backs and chargebacks

Global deals

More people are involved Companies plus banks

Why go global?

Offset sales declines in the domestic market

Global business segments

North America is not the biggest As Asia companies grow online, their percentage will grow even more

Domestic joint ventures

Two or more US companies form an alliance for the propose of exporting their goods and services abroad

Foreign joint venture

A domestic firm forms an alliance with a company in the target nation

Exporting

Twice as many companies are able to export than those that do because of language barriers and money (exchange rate) barriers

FOB

Free on board

Letter of credit

The two companies go to banks who make the deal so no one loses out on anything

FOB

If shipment gets lost its on the shipping company

Barriers to trade

Help local economy

Tariffs

Taxes a government imposed on goods and services imported into that country Sugar

Quotas

Limits on the amount of a product imported into a county Only so many allowed

Embargoes

Total bans on imports of certain products Cuban cigars

Why barriers?

Politics

Dumping

Selling large quantities of a product in a foreign country below its cost to gain market share China sells their steal at lower prices than it costs them so that the U.S. market becomes dependent on them

Political barriers

Rules, regulations and risks

Business barriers

Business practices and laws

Cultural barriers

Differing languages, philosophies, traditions, and accepting business practices

International trade agreements North American free trade agreement

Created a single free trade zone with the U.S., Canada, and Mexico