Final Exam Flashcards
Answer: A philosophy and set of activities focused on satisfying customers’ needs and wants and the exchange of value.
Question: What is marketing?
Answer: We all have the same general need/want and the willingness and ability to buy.
Question: What is a market?
Answer: Satisfaction is a comparison of what two things.
Question: What is 1) expectations and 2) perceived performance/outcomes?
Answer: Name the two components of marketing strategy.
Question: What is target market, SCA, and 4P’s?
Answer: A rule used by consumers in which they choose a product or service on the basis of one characteristic, regardless of the values of its other attributes.
Question: What is noncompensatory decision rule?
Answer: Related to product mix definitions, if Nike added a new shoe, it would be increasing its:
Question: What is a product line depth?
Answer: I bought a new pair of shoes, but they are not comfortable, and I’m not sure they are worth the money. I’m experiencing ….(technical psychological term, not laymen’s term)
Question: What is cognitive dissonance?
Answer: If a manufacturer advertised in a trade magazine targeted at businesses or sent sales reps to a business, this would be an example of _____ promotion.
Question: What is push?
Answer: A lot of newspapers define their business as “newspapers” instead of “sharing news” and therefore suffer from:
Question: What is marketing myopia?
Answer: Rob defined his business, performed an internal & external analysis and made objectives. He even identified how his product & company was unique and thought about communicating that. He decided where to distribute his product and how much it would cost consumers to engage in exchange. What part of marketing strategy is Rob missing?
Question: What is a target market?
Answer: The stages of the product life cycle (PLC), in order.
Question: What is introductory, growth, maturity, and decline?
Answer: The sub-goals of the promotion “p” (not sequential steps of promotion).
Question: What is inform, persuade, & remind.
Answer: The stages of the consumer decision-making process, in order
Question: What is:
1) need recognition
2) information search
3) evaluate alternatives
4) purchase/not purchase
5) post-purchase evaluation
Answer: Four main ways to build an advantage over the competition that can’t easily be copied
Question: What is locational, customer, product, and operational excellence?
Answer: The different strategies for picking a target market.
Question: What are 1) undifferentiated 2) concentrated 3) differentiated/multi-segment and 4) mass customization/micromarketing/1-to-1?
Answer: Most effective sales promotion tool at creating long-term results.
Question: What is sampling?
Answer: I’m well connected to the community and therefore, an opinion leader.
Question: Who is an early adopter?
Answer: I’m a brand that other companies get to use with permission.
Question: What is a licensed brand?
Answer: I am in charge of handling anti-trust issues and deceptive advertising.
Question: What is the FTC (Federal Trade Commission)?
Answer: I’m a combination of three variables (mostly demographic) and very useful in segmentation. Name me and my variables (there are two options for answers).
Question: What is the family life cycle (marital status, age, presence/absence/age of children) OR geodemographic (geography, demographics, & psychographics)
Answer: Defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.
Question: What is positioning?
Answer: During this stage of the product life-cycle, you start to focus on brand benefits. During this stage, you focus on product category benefits. Name the two stages.
Question: What is growth & introductory.
Answer: Sarah doesn’t care how much it costs, she will still buy her one coffee a day. She wishes she could have more, but because of her health condition, she can only have one. This characterizes:
Question: What is inelastic demand?
Answer: _________ are used to receive, store, and sort goods to ship to stores whereas ________ are used to ship goods to customers.
Question: What is distribution center & fulfillment centers?
Answer: In an advertisement, Kids’ Food Basket and Family Fare communicated a way for consumers to help raise funds for after-school meals. What 3 specific things is this an example of?
Question: What is a issue sponsorship, advocacy advertising, and cause-related marketing?
Answer: You use me to help determine how you want to position your product.
Question: What is a perceptual map/product space diagram?
Answer: Since marketers understand the effects of learning, often trade characters are used instead of real people to represent companies or brands to avoid the negative effects of _________. (technical term)
Question: What is stimulus generalization?
Answer: Components of attitudes
Question: What is ABC = affect (feelings), behavior, & cognition (beliefs) ?
4 P’s of Marketing
- Product P: creates value
- Promotion P: communicates value (inform, persuade, remind)
- Place P: delivers value
- Price P: captures values
Marketing
a philosophy and set of activities focused on satisfying customer’s needs and wants and the exchange of value
What is customer value?
Comparison of benefits and costs
What is customer satisfaction?
The feeling that a product or service has met a customers expectations. Performance vs. expectations
Corporate Social Responsibility (CSR)
Voluntary ACTIONS taken by a company to ADDRESS the ethical, social, and environmental IMPACTS OF ITS BUSINESS OPERATIONS and the concerns of its stakeholders
CSR Elements
Economic (be profitable)
Legal (obey the law)
Ethical (do what is right)
Philanthropic (be a good citizen)
What is the primary ethical dilemma companies face?
Trying to balance short term profit with societies needs
Ex. Micro-Macro dilemma
What is the document that acts as a guidebook for marketing managers
Marketing plan
What is marketing strategy and its three components
- Who is your target market
- Marketing mix (4 p’s)
- How will you be different from your competitors (SCA)
Always in this order
SWOT
Strengths (internal), weaknesses (internal), opportunities (external), and threats (external)
What is a segment
All have some general need/want that share some other characteristic that separates them from the rest of the market
Example of a segment
Women vs. men in the market for shampoo
What is a target market
A segment(s) of the market that you try to satisfy with a valuable 4 p’s
Better term for a target market is a target segment
What is positioning
Defining all 4 p’s in such a way that the customer gets clear, distinctive, and desirable understanding of what the product does/represents in comparison with the competition
The image in a customers mind
Mission statement
Focuses on the benefits rather than the goods/services the organization provides
RFID
(Radio Frequency Identification) enables firms to track an item from the moment it was manufactured, through the distribution system, to the retail store, and into the hands of the consumer.
Cookies
These help companies track what a customer does on the web, allowing marketers to better meet needs/wants but increasing privacy concerns.
Baby Boomers
Born between 1946 and 1964, this large group of consumers has massive buying potential.
Generation X
The group born after the Baby Boomers
Generation Y
The group that follows is called Millennials
Three major factors that influence the state of the economy
inflation, interest rates, and exchange rates.
Ethnicity is increasing in the U.S. due to
immigration and higher birth rates (compared to Caucasians) among African Americans, Hispanics and Asians.
Which group aren’t influenced by advertising very much
Hispanics
Fastest growing ethnic group
Asians
The Consumer Product Safety Commission
sets safety standards for consumer products (products used in the home).
The Federal Trade Organization
regulates unfair competitive practices and practices that deceive or are unfair to consumers.
What are the main factors that affect the customer decision-making (CDM) process
Marketing mix
Situational factors
Social factors
Psychological factors
Consumer Decision Making Process
- need recognition
- information search
- evaluation of alternatives
- purchase
- post purchase behavior
Evoked set/consideration set
Brands that you were considering for further consideration
Need recognition
What is your actual and desired state
What is the main goal for marketers regarding need recognition
To make the consumer realize they have a need
Marketing controlled info search
Ads, websites, etc
Non-marketing controlled info search
Consumer reviews, friends, etc
Cognitive dissonance
Doubt or tension that you made the wrong decision
Actions don’t match your beliefs
DSTEP
culture, demographics, social, technology, economic, political/legal.
Stimulus generalization
A form of learning that occurs when ones response is extended to a second stimulus similar to the first
Ex. Off-brand products
Perception
Process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. (Understanding your environment)
Five barriers to perception
Selective exposure Selective attention Selective comprehension Selective distortion Selective retention
Selective exposure
Consumer notice certain stimuli and ignores others
Selective attention
Just noticeable difference - just the amount a stimulus has to change to get you to notice it
Subliminal perception - When you notice the ad, but do not perceive it
Selective comprehension
Don’t interpret the stimuli correctly
Selective distortion
Consumer changes or distorts information that conflicts with feelings or beliefs
Selective retention
Consumer remembers only that information that supports personal beliefs
Learning
A process that creates changes in behavior or in a persons thought process through experience/practice and cognition
The two ways that you can boost your learning
Repetition and Reinforcement/punishment
The two primary ways that you can learn
Experience - by doing
Cognition - by gaining conceptual knowledge
Shaping
A technique using all 4 aspects of learning to create repetitive buying behavior
Usually used for consumables
Shaping examples
Coupons
Tampax box given to Justice customers
Gillette razors given on your 18th birthday
Maslow’s hierarchy of needs
A method of classifying human needs and motivations into five categories in ascending order of importance
What is the hierarchy (the pyramid) in order of importance
- self-actualization
- Esteem needs
- Belongingness/love needs
- Safety needs
- Physiological needs
Safety need factors
Physical well-being
Social need (belongingness/love) factors
Interaction with others
Esteem need factors
Inner desires
Self-actualization need factors
Personal growth and fulfillment
Segmentation
The process of breaking a market into segments
We segment _____, not _____
People, products
Geodemographic segmentation
Segmenting potential customers into neighborhood lifestyle categories; combines geography, demographics, and psychographics
Family life cycle
Combines 3 demographic variables:
Age, married (Y/N), and children (Y/N)
Geography segmentation
Where will the consumer use the product
Demographic segmentation
Age, gender, ethnicity, income, family size
Psychographic segmentation
Lifestyle, attitudes, interests, AIO (attitudes, interests, and opinions)
Usage rate segmentation
How often will the product be used
Occasion/situation of use segmentation
When will the product be used
Undifferentiated/mass marketing
Marketing approach that views the market as one big market with no individual segments and thus requires a single marketing mix
Ex. commodities (sugar, salt, water)
Undifferentiated/mass marketing advantages/disadvantages
Potential savings on production and marketing costs
Unimaginative product offerings and more susceptible to competition
Concentrated/niche
A strategy used to select one segment of a market for target marketing efforts
Concentrated/niche advantages/disadvantages
Can charge higher prices
All eggs are in one basket, very small market
Differentiated/multi-segment
A strategy that chooses two or more well defined market segments and develops a distinct marketing mix for each
Differentiated/multi-segment advantages/disadvantages
Greater financial success (bigger market share), economies of scale (cost/unit decreases as you produce more), lower overall risk (all of your eggs are not in your basket)
Higher costs and cannibalization (when sales for one product eat into the sales of another product)
economies of scale
(cost/unit decreases as you produce more)
cannibalization
when sales for one product eat into the sales of another product
Positioning
A process of defining the marketing mix variables so that target customers have a clear, distinctive, and desirable understanding of what the product does or what the company represents in comparison with the competition
a. Core Customer Value
i. What are the basic problem solving benefits that you want your product to have
Product lines
A group of closely related products
Ex. SUV’s (Ford), trucks (Ford), or sedans (Ford)
Product item
A specific version of a product that can be designated as a distinct offering among an organization’s products
Ex. Ford Escape, Ford Taurus, Ford F-150
Product mix
All product that an organization sells
Ex. Ford –> SUV’s, Sedans, trucks
Product mix width/breadth
The number of product lines in a mix
Adding a line would be going after a new market
Increasing product mix width/breadth would…
Diversifies risk
Capitalizes on established reputations
Brand extension - Adding a new product line with the same brand name
Adding product mix width/breadth would be like…
Apple going from iPod –> iPhone –> iPad –> iMac
Product line depth
The number of product items in a line
Increasing product line item depth would…
Attract new buyers with different preferences
Increase sales by further market segmentation
Capitalize on economies of scale (as you produce more of a product, the cost/unit goes down)
Increasing product line item depth would be like…
Adding a product line item would add a segment
Product line extension would…
Increase depth
Product line contraction would…
Decrease depth
d. Brand name
that part of a brand that can be spoken, including letters, words, and numbers.
i. Examples
1. Nike, 3m, Pepsi
e. Brand mark
the elements of a brand that cannot be spoken.
i. Examples
1. The golden arches, nike swoosh, mickey mouse ears
f. Brand equity
the value (assets and liabilities) of the brand name; ability to create demand and secure future earnings
- Brand awareness
measures how many consumers in a market are familiar with the brand and what it stands for and have an opinion about it.
g. Trademarks
the exclusive right to use a brand
h. What is a registered trademark?
i. A governmental office declares whether or not you are worthy of getting a registered trademark
o. Private brand
Brands developed and marketed by a retailer and available only from that retailer
Manufacturer brand
Brands owned and managed by the manufacturer
What is innovation
The process by which ideas are transformed into new offerings including products, services, processes, and branding concepts that will help firms grow
Why do firms innovate
If they don’t change, then the competitors will Wants and needs are constantly changing Things go out of style
What is diffusion of innovation
The process by which adoption of an innovation spreads throughout a market, over time and a cross various categories of adopters Tells us how consumers change
What is an adopter
Someone who used the product Someone who was satisfied by the product Someone who intends to buy the product again/keep using the product
Innovators
High socioeconomic status Has ties outside the community with manufacturers Like to take risks Obsessed with being first
Early adopters
Heavily involved in the community Less risky but still somewhat risky Opinion leaders (ones who influence others)
Early majority
Do a lot of research Very deliberate Don’t like risks
Late majority
Very skeptical Little bit older Only get the product if it is a gift or they are peer pressured into buying it
Laggards
Lower socioeconomic status Old Forced into buying the product Very suspicious of the new product Get ignored by marketers Still uses the old version of the product even with the new product available Typically one PLC behind
Introductory stage
Price is high, costs are high, sales are low, and usually have a negative profit High failure rates. Only 3% of new products survive this stage Little competition Limited distribution High ad and production costs Promotion focuses on awareness and information of the product category benefits Intensive personal selling to channels
Growth stage
Increasing rate of sales Initial healthy profits Entrance of competitors Prices normally fall Market becomes more segmented Aggressive advertising of the difference between brands Wider distribution
Maturity stage
Defined by sales increase at a decreasing rate Saturated markets Annual models appear Lengthened product lines Go after new geographic markets and segments High promotion and distribution costs Prices and profits fall
Decline stage
Defined by long run drop in sales Elimination of all nonessential marketing expenses Organized abandonment (Every 2-3 years, you should review all your product items and ask if we knew what we knew now, would we start making the product)
What is the point of the product life cycle
It is one of the most helpful tools for marketing managers because it tells them what the 4 p’s look like over the life of a product
The point of SCM
To deliver value
B. Members in a Supply Chain
a. Raw Material & Component Suppliers b. Manufacturers c. Wholesalers = buy from manufacturers and sell to retailers d. Distribution Centers i. Deliver to stores e. Fulfillment Centers i. Deliver to customers f. Retailers Sell to end consumers g. Transportation Companies Move goods by members
Indirect marketing channel
Uses intermediaries to sell to customers
Direct marketing channel
Sells directly to the customer without intermediaries
Push vs Pull
When firms want to reach the end user it is the pull strategy, when firms want to reach intermediaries then it is push strategy.
Integrated marketing communication
Promotion p- Advertising, personal selling, direct marketing, public relations, sales promotion, and online marketing. The combination of all communication methods to provide a clear consistent and impactful message.
Personal selling
two way communication between a buyer and seller designed to influence the buyer decision. greatest value to customer, as well as most effective and most expensive.
Personal selling process
1) Generate and qualify leads 2) Preapproach 3) Sales presentation and overcoming reservations 4) Closing the sale 5) Follow up
Institutional type of advertising
Used to promote the organization as a whole and is designed to establish change or maintain the organizations identity.
Product Type of advertisement
Informs persuades or reminds about a specific product or service
Advocacy Advertising
For profit company supporting a cause or issue
Sales promotion
special incentives or excitement building programs that encourage to try, buy, and buy more of a product or service. Samples, discounts, premiums.
Public relations
Educating stakeholders while building and maintaining a positive image.
Lobbying
Attempt to influence government actions.
New product publicity
info about a new product or service appearing in the mass media as a new news item
Crisis management
Coordinating efforts to handle or head off publicity or events
Product placement
Subtle promotion of an item using entertainment media
Event sponsorship
corporations support of an event usually in the cultural sports or entertainment sectors
Issue sponsorship
Corporations support of an issue
What affects price?
Competition, costs, company objectives, customers, and channel members.
What are some characteristics of price?
-Controversial because of so many companies and departments - Most difficult “P” to get correct
Price Skimming(NEW)
Innovators and early adopters are willing to pay more for product because it is new. Ultimately lowering the price slowly over time. (Riding down the demand curve)
Market Penetrating pricing(NEW)
Set prices low to boost sales and market share. For immediate sales, drives competitors out of the market. Disdain: Quality, capacity, and if market is willing to spend more for the product.
Production Era
(1900-1920’s): used whatever materials to produce what they could, supply is higher than demand
Sales Era
(1920’s-1950’s): worried more about selling than producing, convinced customers why they need that product
Market-Oriented Era
(1950’s-2000’s): satisfying the needs and wants of customers
Valued-Based Marketing Era
(2000’s-present): offer more value per product than the competitors, wants the benefits to outweigh the cost
Information centered companies
: collecting information (from customers and competitors) and sharing it (to manufacturers and employees)
Relationship Oriented companies
build relationships with everyone (customers, retailers, suppliers, employees) by customer relationship management (CRM)- a philosophy and set of strategies, programs and systems that focus on identifying and building loyalty with the firm’s most valued customers
Customer excellence
. Loyal customers (emotional attachment and resist competition) and 2. Good customer service (consistency is hard because it depends on humans, human resource management- good hiring, good training, happy employees)
Operational Excellence
- Good supply chain management (good relationship with vendors and retailers) and 2. Good operations (right place, right time, right way and at a low cost)
Product Excellence
Value = Benefit / Cost, product is reliable, durable, efficient, good appearance
Locational Excellence
If you have the best/ most convenient location, competition must then have the second best
What makes a good objective
S.M.A.R.T. objectives= statement of what is to be accomplished (Specific, Measurable, Attainable (realistic), Relevant (consistent) with mission statement, Time frame)
Market Penetration Strategy
A growth strategy that employs the existing marketing mix and focuses the firm’s efforts on existing customers
Market Development Strategy
A growth strategy that employs the existing marketing offering to reach new market segments, whether domestic or international
Product Development Strategy
A growth strategy that offers a new product or service to a firm’s current target market
Diversification Strategy
A growth strategy whereby a firm introduces a new product or service to a market segment that is dos not currently serve
-What makes a good mission statement?
- Focuses on the benefits rather than the good or service
- What role do marketers play in need recognition, info search, etc.?
` - They create stimuli (any unit of input that affects your senses) for all of these
-What are attributes?
- Characteristics important to you in your evaluation (compensatory decision rule- tradeoffs were made in your decision, noncompensatory decision rule- go with what performs best on the most important attribute no matter what else)
- Know the ABC model of attitudes (in book).
Attitudes: a person’s enduring, overall evaluation of an object or idea
- Affective: reflects what a person feels about the issue at hand (like or dislike of something, involves emotions) - Behavioral: the actions a person takes with regards to the issue at hand (based on what they know and feel) - Cognitive: reflects what a person believes to be true
What is a perceptual map (book)?
- Perceptual Map: displays, in two or more dimensions, the position of products or brands in the consumer’s mind
- Step 1. Determine customers’ perceptions and evaluations of the product or service in relation to competitors
- Step 2. Identify the market’s ideal points and size
- Step 3. Identify competitors’ positions
- Step 4. Determine consumer preferences
- Step 5. Select the position
- Step 6. Monitor the positioning strategy
- general information about the product “P” (what is it, what does it include, how does it relate to exchange)
Product: everything, both favorable and unfavorable, that a person receives in an exchange (includes goods, services, ideas, a person, place or organization)
- It’s the starting point in the Marketing Mix/ 4P’s
- product category vs brands
Product Category: a type of product or service
- Product Brands: a name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products
different types of cobranding
Cobranding: marketing 2 or more brands together in any of the 4P’s
- Ingredient Branding: one brand is an ingredient in other component/ brand (EX: intel in a computer, downy in tide) - Complementary Branding: 2 or more brands commonly used together (co-consumption or co-purchasing) (EX: diet coke and Bacardi, $5 chicken sandwich and coke)
-Reverse engineering
Process by which a man-made object is deconstructed to reveal its designs, architecture, or to extract knowledge from the object involved in manufacturing it usually in order to produce something similar
-Understand the general flow of goods & information
Directly to the store (perishable goods, many stores close, fashion items)
- Distribution Center then the store (less inventory, distribution centers are cheaper than getting a larger retail store to stock it all, less sales forecasting number errors) - Flow of information: captured by a tracking device - Store shares information with the buyer (promotions), manufacturer (places more orders), and distribution centers (delivers more inventory) - Buyer shares information with the manufacturer (making orders)
Intensive Distribution
strategy designed to get products into as many outlets as possible
Selective Distribution
lies between the intensive and exclusive strategies, uses a few selected customers in a territory
Exclusive Distribution
strategy in which only selected retailers can sell a manufacturer’s brand
- What is the promotional mix?
- Public Relations, Sales Promotion, Personal Selling, Advertising, Direct Marketing, Online Marketing
Public Relations
the organizational function that manages the firm’s communications to achieve a variety of objectives, including building a positive image and educating stakeholders
- “Free” media (don’t have to pay for news coverage), becoming cheaper, better because people don’t trust marketers
Sales Promotion
special incentives or excitement-building programs that encourages customers to try, buy or buy more of a product or service
- Easy to track
Personal Selling
two-way flow of communication between a buyer and a seller designed to influence the buyer’s purchase decision (personal interaction for the point of making a sale)
- Most expensive, low reach, most effective, adds most value for the consumer, easy to track
Advertising
the placement of announcements and persuasive messages in time or space purchased in any mass media communication by firms, non-profit organizations, government agencies, and individuals who seek to inform and/or persuade members of a particular target market or audience about their products, service organizations or ideas (impersonal one-way communication in which the company is identified)
- Builds good awareness interest, high total cost but low cost per contact, high reach
Direct Marketing
marketing that communicated directly with target customers to generate a response or transaction/purchase
- Growing, database technology improves, easy to track
Online Marketing
through websites, blogs and social media
- Easy to track
Advertising steps
Step 1. Identify the target audience
- Step 2. Identify the objectives (inform, persuade, or remind/ push or pull/ product or institutional) - Step 3. Determine the budget - Step 4. Identify the message (informative or emotional appeal) - Step 5. Evaluate and Select Media (media- internet or magazine, specific vehicle- www.CNN.com, media schedule- continuous (steady), flighted (bursts), pulsing (continuous and flighted combined) - Step 6. Create the Advertisement
Steps of the marketing plan
Step 1. Mission Statement: Answers “What business are we in and what do we need to be?”, answered at the highest corporate level (CEO), focuses on the benefits rather than the good or service (if you don’t you suffer from marketing myopia)
- Step 2. SWOT Analysis: Strengths, Weaknesses, Opportunities and Threats, and then S.M.A.R.T. objectives= statement of what is to be accomplished (Specific, Measurable, Attainable, Relevant with mission statement, Time frame) - Step 3. Target Market & Positioning Strategy - Step 4. Implement Marketing Mix - Step 5. Evaluate Performance
Three components of marketing strategy
- Target market: pick the group of customers you’re going to focus on satisfying their needs and wants with value
- Marketing Mix/ 4 P’s: How you’re going to satisfy that
- Sustainable Competitive Advantage (SCA): something the firm can persistently do better than competitors (won’t be copied in the long run/ how to be different)
Perception process
Step 1. Sensation of stimuli Step 2. Pattern recognition- match stimuli to long-term memory Step 3. Perception- understanding)
