Final Flashcards
What does the marketing concept mean?
The idea that a company should focus on satisfying the needs of the customer while at the same time trying to achieve the goals of the company
What is the Micro-Macro Dilemma?
Consumers and producers making frees choices can cause conflicts and difficulties. What is good for some firms and consumers may not be good for society as a whole
What is a SWOT Analysis?
What is a SWOT Analysis?
Strengths, Weaknesses, Opportunities, Threats
1) Gives high level view of a company’s current status
2) An indicator of a company’s health in the current moment
**Strengths and Weaknesses exist currently; Opportunities and Threats are probabilities in the future
What are the types of environment that the marketing department must contend with?
- Economic
- Competitive
- Technological
- Political/Legal
- Cultural/Social
Economic Environment
Refers to macro-economic factors that affect consumer and business spending patterns: GDP
Competitive Environment
Particularly harsh these days due in large part to rapid advances in technology, such as online shopping, the presence of Amazon, Craig’s List, the trend to buy used and recycled goods, etc.
Technological Environment
One of the fastest changing, making many products/services obsolete
Political/Legal Environment
Refers to nationalism, religion, etc
Cultural/Social Environment
Effects how and why people live the way they do
Four major areas of segmenting
- Geographic
- Demographic
- Psychographic
- Behavioral
Demographic Segmentation
According to the U.S. Census: Age, Gender, Occupation, Ethnicity, etc.
Psychographic Segmentation
Lifestyle
Geographic Segmentation
Physical Location
Behavioral Segmentation
Past Purchasing Behavior
What is the 80/20 Rule?
80% of a company’s business comes from 20% of your customers
What is the family life cycle?
A family’s progression from its formulation to retirement or dissolution
How is ones social class determined?
OCCUPATION NOT INCOME
What are the three largest U.S. Ethnic Subcultures today? and % of each?
- Hispanic = 17%
- African-American = 13%
- Asain = 4%
Four major categories of Business and Organizational customers, Which is the largest?
- Producers
- Governments
- Nonprofits
- Intermediary
Producers
Gonzaga, Manufacturers, Farms, Mines, Financial Institutions
Governments
Federal, State, and Local
Non-Profit Organizations
Act in the public interest or to serve a cause and do not seek financial profits
Intermediary
Someone who specializes in trade rather than productions
EX: Wholesalers and Retailers
What is brand equity?
The commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself
How do industry sales and profits behave over the product life cycle?
Industry profits decline while industry sales are still growing.
What are the three main ways that a producer can extend a product’s life cycle?
- Increasing A product’s Use
- Finding New Uses
- Changing Package Size, Labels, or Product Quality
What are the advantages to a company of using an IMC strategy?
- There is more consistency
- There is interactivity with customers
- Can leverage a firm’s promotion expenditures in a way that improves the brand image.
What are the 3 overall objectives of promotion?
- Informing
- Persuading
- Reminding
Definition of Advertising
1) Must be paid for
2) Non-personal or directed at a mass audience
3) Identify the sponsor of the communication
EX: Billboards, commercials, posters, radio, etc.
Definition of Sales Promotion
Involves paid marketing communication activities that are intended to stimulate consumer purchases and dealer effectiveness in the SHORT RUN
Definition of Publicity
Form of public relations that entails non-personal communication passed on via media by NOT paid for and no identified sponsor
EX: News stories, talk shows, consumer comments online
**IT’S FREE
Definition of Personal Selling
Involves oral communication with buyers for the purpose of making sales
What does mass selling mean?
A market strategy in which a firm decides to ignore market segment differences and appeal to the whole market with one offer or one strategy, which supports the idea of broadcasting a message that will reach the largest number of people possible
What is a message channel or medium?
Where/how the customer receives the firms message
What are the 5 categories of purchases in the consumer adoption curve and size of each?
Innovators = 3-5%, Early Adopters = 10-15% Early Majority = 34% Late Majority = 34% Laggards = 5-16%
What are encoding and decoding within the communication process?
Encoding - the process of the message source deciding what it wants to say and translating it into words/symbols that are meaningful to the receiver
Decoding - receiver analyzing and interpreting the message from the firm
What is a pushing strategy?
Directs the promotional mix to the channel members to gain their cooperation in ordering and stocking a product. In this approach, personal selling and sales promotion are most often used.
What is a pulling strategy?
Directs the promotional mix at the final consumers, encouraging them to seek the product from the retailer. Sometimes this involves customers asking their favorite retailers to stock an item that is not currently carried at that store.
What might be examples of “non-price competition”?
-Better customer service
Warranties
Packaging
Added features
In what industries does the U.S. Government regulate or oversee pricing?
- Utilities, insurance, state school
Why might the promotional expense percent for industries vary greatly?
Because every industry is different
What is Institutional Advertising?
Meant to build goodwill, or an image for an organization rather than promote a specific product or service
What is Cooperative Advertising?
The practice of producers sharing the ad costs with wholesalers or retailers
Which promo tools might be best are different stages of the consumer decision-making process? (see powerpoint)
- Product Advertising
- Pioneering Advertising
- Reminder Advertising
- Cooperative Advertising
How might a company determine its pricing objectives?
- Consumers Perceptions
- The Costs to produce & distribute the product
- Competition
- Channel Members
- Government
Give an example of a multichannel distribution system.
- Having online purchasing as well as specialty stores and convenience stores
Provide an example of inelastic demand and elastic demand.
- Elastic- motor vehicles, furniture (many substitutes)
Inelastic- water, gas, tobacco (not much substitute)
What is meant by “licensing” a product?
- Licensing: selling the right to use a process, patent, trademark, brand name, etc. to another country
Management Contracting: seller provides only mgmt. and marketing skills; does not own production/distrib.
What is price fixing?
- Coming to an agreement with competitors to immensely raise prices so everyone profits
What is the definition of a “markup”? What is a “markup chain?
-Markup is the dollar amount added to the cost of a product to get the selling price.
MU chain is mfr cost + mfr MU = Retailer cost + Retailer MU = Customers Price
Pros and Cons of everyday low pricing (EDLP)
Some advantages of EDLP include:
• Daily prices that are usually lower than major competitors= faster turnover
• Convenience—a more transparent pricing policy, saves customers from having to competitive shop for the best prices on a given item
• Consistency of prices reduces the company’s expenses—eliminating the cost of labor and advertising that are incurred when prices fluctuate due to sale events and specials
Some disadvantages of EDLP include:
• Customers have been conditioned to expect frequent sales and price reductions and EDLP does not allow for additional markdowns on EDLP prices
• The low markups on EDLP merchandise may produce lower bottom line profit
• Low prices may cause customers to question the quality of the merchandise offered at EDLP stores
Bundle pricing
bundling products together for a low price to make it efficient for customers. Great for increasing customer satisfaction.
Bait pricing
Lure customers with unrealistically low prices to bring them into the store and try to sell them items at a higher price on the pretext that the advertised bargains have sold out
Odd-Even Pricing
Psychological strategy of ending prices with a .99 or .00 to trick a customer
- Odd = .99 to imply there was a sale
- Even = .00 to imply regular or list prices
Price-lining
Set several price points for a product line so a few prices cover the field
EX: A mens tie section has prices of $28, $38, and $50 for good, better, best items
Leader pricing
The practice of pricing a product extremely low in order to attract customers into the retail store anticipating that they will likely also buy other (more profitable) items while shopping
Prestige Pricing
The practice of pricing goods at a high level in order to give the appearance of quality
What is the meaning of break even point?
Where total revenue from the quantity of product sold exactly equals the firms total costs
**Total Revenue = Total Costs
What are the biggest benefits of a distribution/channel system? (i.e. what does it do for a company?)
- It makes the process of getting products wanted easier and less expensive. Rather than buying straight from manufacturer they get products from an intermediary that assorts the products for different retailers.
What are the two best practices of successful companies known for their superior customer service?
- Taking customer comments and suggestions
- Identifying cause and effect of problems
What are the benefits to a firm of “branding” its products and/or its company?
- Authenticity, consistency, differentiation
- More relevance in the market
- Higher prices/ markups
- Brand name loyalty
- Brand extensions (new products under the same brand)
- Can insulate a brand from competition and price limitations
What are national brands vs. private-label brands? What are the benefits of the latter?
- National Brands- levis, coke, Quaker Private label- Kirkland, signature select Advantages to private label- • Profitable for store, eliminate middlemen • Quality control • Price • Lower retail prices • Uniqueness
What factors might be on a “vendor analysis” when one organization buys from another? (See slides)
- Product Quality Price Delivery Requirements Service Support Sales Staff Training Advertising Allowances Seasonal Price Breaks Innovation Partnership
What are some consumer behavior trends in our society
- Healthfulness, environmentalism, charity, status symbols
