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marketing final Flashcards

1
Q

What is marketing?

A

set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships

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2
Q

What is a marketing plan?

A
  • how the product or service will be conceived or designed
  • cost
  • where/how it will be promoted
  • how it will get to the consumer
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3
Q

What is the difference between a need and a want?

A
  • need: basic necessities of life (food, clothing, safety)
  • want: the way in which a person chooses to fulfill their need
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4
Q

What is a market?

A

the groups of people who need or want a company’s products or services and have the ability and willingness to buy them

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5
Q

What is a target market?

A

customer segment to whom the firm is interested in selling its products and services

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6
Q

What is exchange?

A

the trade of things of value between the buyer and the seller so that each is better off as a result

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7
Q

What is the marketing mix?

A
  • controllable set of activities that the firm uses to respond to the wants of its target markets
  • the four Ps: product, price, place, promotion
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8
Q

Describe ‘product’ in the four Ps.

A
  • developing goods, services, and ideas to satisfy customer needs
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9
Q

What are goods?

A

items that you can physically touch

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10
Q

What are services?

A

intangible customer benefits that are produced by people or machines and cannot be separated from the producer

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11
Q

What are ideas?

A

thoughts, opinions, philosophies, and intellectual concepts that can be marketed

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12
Q

Describe ‘price’ in the four Ps.

A

what the buyer gives up (money, time, energy) in exchange for the product

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13
Q

Describe ‘place’ in the four Ps.

A

all the activities necessary to get the product from the manufacturer/producer to the right customer when that customer wants it

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14
Q

Describe ‘promotion’ in the four Ps.

A

informing, persuading and reminding potential buyers about a product or service to influence their opinions

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15
Q

What is B2C (business-to-consumer) marketing?

A

when marketing intermediaries (like retailers) collect merchandise from producers in large amounts and then sell it to you in smaller amounts

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16
Q

What is B2B (business-to-business) marketing?

A

selling merchandise/services from one business to another

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17
Q

What is C2C (consumer-to-consumer) marketing?

A

consumers sell to other consumers (eBay)

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18
Q

What are the 4 orientations of marketing?

A
  • product orientation
  • sales orientation
  • market orientation
  • value-based orientation
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19
Q

Describe product orientation.

A

developing innovative products with little concern about whether the products best satisfy customers’ needs

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20
Q

Describe sales orientation.

A

companies try to sell as many of their products as possible rather than focusing on making products consumers really want

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21
Q

Describe market orientation.

A

start out by focusing on what consumers want and need before they attempt to sell their products and services

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22
Q

Describe value-based orientation.

A

attempt to discover and satisfy their customers’ needs and wants

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23
Q

What is value?

A

customers seek a fair return in goods and/or services for their hard-earned money

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24
Q

What is value cocreation? Give an example.

A
  • customers can act as collaborators to create the product or service
  • Nike allows customers to custom design their sneakers
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25
Q

In which orientations of marketing do markers gather and share information? Why do they do this?

A
  • market orientation and value-based orientation
  • they do this in order to define and refine their approaches to their customers and their markets
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26
Q

In which orientation of marketing do marketers balance benefits with costs? Why do they do this?

A
  • value-based orientation
  • to find opportunities to better satisfy their customers’ needs and develop long-term loyalties
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27
Q

What is relational orientation?

A

building relationships with customers based on the idea that buyers and sellers should develop a long-term relationship

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28
Q

What is customer relationship management (CRM)?

A

collecting information about their customers’ needs and then use that information to provide them with products, services, and promotions that may appeal to them

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29
Q

Why is marketing important?

A
  • expands a firm’s global presence
  • marketing is integrated across all of the supply chain
  • enriches society
  • play a role in the success of large corporations
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30
Q

What is a marketing strategy?

A
  • identifies target market
  • identifies the four Ps
  • identifies how the firm will build a sustainable competitive advantage
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31
Q

What is a sustainable competitive advantage?

A

advantage over the competition that cannot be copied and thus can be maintained over a long period of time

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32
Q

What are 4 strategies that may help a firm develop a sustainable competitive advantage? Describe them.

A
  • customer excellence: maintain customer loyalty and good customer service
  • operational excellence: efficient operations and excellent supply chain
  • product excellence: products with high value
  • locational excellence: good physical location and online presence
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33
Q

Describe the 5 steps of the marketing plan.

A
  • step 1: define the business mission and objective through mission statement
  • step 2: SWOT analysis (strengths, weaknesses, opportunities and threats)
  • step 3: STP (segmentation, targeting and positioning)
  • step 4: implementation of the four Ps
  • step 5: evaluate performance by using marketing metrics
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34
Q

What is segmentation?

A

dividing the market into distinct groups of customers where each individual group has similar needs, wants, or characteristics

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35
Q

What is targeting?

A

firm evaluates each segment’s attractiveness and decides which to pursue

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36
Q

What is positioning?

A

defining the marketing mix so that target customers are aware of what the product does or represents in comparison with competing products

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37
Q

What is a marketing metric?

A

system that quantifies a trend, dynamic, or characteristic

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38
Q

What is portfolio analysis? When is it performed?

A
  • allocating resources according to which products are expected to be the most profitable for the firm in the future
  • performed at the strategic business unit level of the firm
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39
Q

What is a market penetration strategy?

A

focuses on the existing marketing mix and existing customers

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40
Q

What is a market development strategy?

A

using the existing marketing offering to reach new market segments

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41
Q

What is a product development strategy?

A

offers a new product or service to a firm’s current target market

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42
Q

What is a diversification strategy?

A

introduces a new product or service to a market segment that is currently not served

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43
Q

What is downsizing?

A

exiting markets/closing certain businesses or stores

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44
Q

What is culture?

A

shares beliefs, morals and values

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45
Q

What is country culture?

A

artifacts, symbols, ceremonies, language differences

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46
Q

What is demographics?

A

age, race, gender, income

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47
Q

What is a generational cohort?

A

group of people of the same generation that have similar purchase behaviours because they have shared experiences and are in the same stage of life

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48
Q

Gen Z is also known as…

A

digital natives (born into a world full of electronic gadgets)

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49
Q

Gen Y is also known as…

A

millennials (grew up in a media-intensive and brand-conscious era)

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50
Q

What are robotics used for?

A

to fill orders for stores or individual customers

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51
Q

What is the Internet of Things (IoT)?

A

when multiple smart devices combine the data they have collected to help both consumers and companies consume more efficiently

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52
Q

What is inflation?

A

persistent increase in the prices of goods and services

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53
Q

What is a recession?

A

period of economic downturn

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54
Q

What is green marketing?

A

efforts by firms to supply customers with environmentally friendly merchandise

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55
Q

Describe the consumer decision process.

A
  • step 1: need recognition (when consumers recognize they have an unsatisfied need)
  • step 2: information search (search for various options that exist to satisfy that need)
  • step 3: evaluation of alternatives
  • step 4: purchase decision
  • step 5: postpurchase
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56
Q

What are functional needs?

A

performance of a product or service

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57
Q

What are psychological needs?

A

personal gratification consumers associate with a product and/or service

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58
Q

What is the difference between internal search for information and external search for information?

A
  • internal search for information: relying on memory and knowledge about a product/service
  • external search for information: seeks information outside their personal knowledge (talk to salesperson)
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59
Q

What are some factors that affect consumers’ search processes?

A
  • internal locus of control (people believe they have some control over the outcomes of their actions)
  • external locus of control (fate controls all outcomes)
  • performance risk, financial risk, social risk, physiological risk (safety risk), psychological risk
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60
Q

What is the difference between retrieval sets and evoked sets?

A
  • retrieval sets: brands that a consumer can easily recall from memory
  • evoked sets: brands that a consumer would consider purchasing from a set of brands that they are aware of
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61
Q

What are determinant attributes?

A

features that are important to the buyer and on which competing brands or stores are perceived to differ

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62
Q

What is a compensatory decision rule?

A

good characteristics compensate for bad characteristics

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63
Q

What is a noncompensatory decision rule?

A

choose a product/service on the basis of a subset of its characteristics, regardless of the values of its other attributes

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64
Q

What is decision heuristics?

A

mental shortcuts that help people narrow down their choices

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65
Q

What is postpurchase dissonance?

A

feeling of anxiety, regret, discomfort, or uneasiness that a customer may experience after making a purchase (usually for expensive products)

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66
Q

What is negative word-of-mouth?

A

when consumers spread negative information about a product/service to others

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67
Q

What is a motive?

A

need or want that is strong enough to cause the person to seek satisfaction

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68
Q

What is an attitude? What is it consisted of?

A
  • evaluation of their feelings about and behavioural tendencies toward an object or idea
  • consists of cognitive component (what we believe to be true), affective component (what we feel about the issue at hand) and behavioural component (actions we take based on what we feel)
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69
Q

What are reference groups?

A

one or more persons an individual uses as a basis for comparison regarding beliefs, feelings, and behaviours

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70
Q

What is a sensory situation?

A

store atmosphere, salespeople, crowds, promotions can affect decisions

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71
Q

What is involvement?

A

consumer’s degree of interest in or concern about the product or service

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72
Q

What is extended problem solving?

A

when the customer perceives that the purchase decision entails a great deal of risk

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73
Q

What is limited problem solving?

A

purchase decision that calls for a moderate amount of effort and time

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74
Q

What is habitual decision making?

A

consumers engage with little conscious effort

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75
Q

What is geographic segmentation?

A

organizes customers into groups on the basis of where they live

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76
Q

What is psychographic segmentation?

A

organizes customers based on how they live or how they describe themselves

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77
Q

What is self-concept?

A

the image people have of themselves

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78
Q

What is behavioural segmentation?

A

groups consumers on the basis of why they buy, how often, and how they plan to use the products or services

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79
Q

What is occasion segmentation?

A

based on when a product or service is purchased or consumed

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80
Q

What is benefit segmentation?

A

considers the benefits customers are looking for from products or services

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81
Q

What is loyalty segmentation?

A

loyalty initiatives to retain the firm’s most profitable customers

82
Q

What is usage rate segmentation?

A

heavy users, regular users, light users, occasional users

83
Q

What is geodemographic segmentation? Give an example.

A
  • combination of geographic, demographic, and lifestyle characteristics to classify consumers
  • people in the same neighbourhoods tend to buy the same types of cars, appliances, and apparel
84
Q

What are the steps of the segmentation-targeting-positioning process?

A
  • step 1: establish strategy/objectives
  • step 2: segmentation
  • step 3: evaluate segment attractiveness
  • step 4: select target market
  • step 5: positioning
85
Q

How does the market determine whether the target market is worth pursuing?

A
  • identifiable
  • reachable
  • responsive
  • substantial and profitable
86
Q

What is an undifferentiated targeting strategy?

A

used if the product or service is perceived to provide the same benefits to everyone, with no need to develop separate strategies for different groups

87
Q

What is a differentiated targeting strategy?

A

target several market segments with a different offering for each

88
Q

What is a concentrated targeting strategy?

A

when organization selects a single, primary target market and focuses all its energies on providing a product to fir that market’s needs

89
Q

What is micromarketing (one-to-one) segmentation?

A

when a firm tailors a product or service to suit an individual customer’s wants or needs

90
Q

What is mass customization?

A

one-to-one marketing with many people to create custom-made products or services

91
Q

What is a perceptual map?

A

displays the position of products or brands in the consumer’s mind

92
Q

What is brand repositioning (rebranding)?

A

marketers change a brand’s focus to target new markets

93
Q

What is innovation?

A

ideas are transformed into new products and services

94
Q

What is diffusion of innovation?

A

innovation spreads throughout a market group, over time and over various categories of adopters

95
Q

What are pioneers?

A

new-to-the-world products

96
Q

What are innovators?

A

buyers who want to be the first on the block to have the new product or service

97
Q

What are early adopters?

A

second subgroup that begins to use a product/service (after innovators)

98
Q

What is the early majority?

A

group that usually makes new products/services profitable

99
Q

What is the late majority?

A

last group of buyers to enter a new product market

100
Q

What are laggards?

A

consumers who avoid change and rely on traditional products until they are no longer available

101
Q

What is outsourcing?

A

hiring external companies to help generate ideas to develop new products and services

102
Q

What is alpha testing?

A

firm attempts to determine whether the product will perform according to its design and whether it satisfies the need for which it was intended

103
Q

What is beta testing?

A

uses potential consumers to examine the product prototype

104
Q

What is test marketing?

A

offering to a limited geographical area prior to a national launch

105
Q

Describe the product life cycle.

A
  • introduction stage: innovators try new offering
  • growth stage: increase in sales and competitors
  • maturity stage: adoption of the product by the late majority and intense competition
  • decline stage: firms either position themselves for a niche segment of die-hard consumers or completely exit the market
106
Q

What are associated services?

A

non-physical aspects of the product (warranties, financing)

107
Q

What are consumer products?

A

products and services used by people for their personal use

108
Q

What are specialty goods/services?

A

products/services toward which customers show such a strong preference that they will expend considerable effort to search for the best suppliers

109
Q

What are shopping goods/services?

A

consumer will spend fair amount of time comparing alternatives (furniture, appliances)

110
Q

What are convenience products/services?

A

consumer is not willing to spend any effort to evaluate prior to purchase

111
Q

What are unsought products/services?

A

products consumers either do not normally think of buying or do not know about

112
Q

What is a product mix?

A

the complete set of all products offered by a firm

113
Q

What are product lines?

A

items that consumers use together or think of as part of a group of similar products

114
Q

What is a product category?

A

items that the customer sees as reasonable substitutes for one another

115
Q

What is a firm’s product line breadth? Give an example.

A
  • the number of product lines offered by the firm
  • Colgate-Palmolive offers oral care, personal care, home care and pet nutrition
116
Q

What is product line depth? Give an example.

A
  • number of product categories within a product line
  • within Colgate-Palmolive’s oral-care line, it offers toothpaste, toothbrushes, kids’ products
117
Q

What is brand awareness?

A

how many consumers in a market are familiar with the brand

118
Q

What is perceived value?

A

relationship between a product or service’s benefits and its cost

119
Q

What is brand associations?

A

mental links that consumers make between a brand and its key product attributes, such as logo, slogan, or famous personality

120
Q

What is brand personality?

A

set of human characteristics associated with a brand

121
Q

What is brand loyalty?

A

when a consumer buys the same brand’s product or service again and again over time

122
Q

What are manufacturer brands? Give an example.

A
  • owned and managed by the manufacturer
  • Apple
123
Q

What is brand extension?

A

the use of the same brand name for new products being introduced to the same or new markets

124
Q

What is brand dilution?

A

when the brand extension adversely affects consumer perceptions about the attributes its core brand

125
Q

What is cobranding?

A

marketing two or more brands together

126
Q

What is brand licensing?

A

contractual arrangement between firms, whereby one firm allows another to use its brand name, logo and symbols in exchange for a negotiated fee

127
Q

What is competitive party?

A

firms set prices that are similar to those of their major competitors

128
Q

What is price elasticity of demand?

A

measures how changes in a price affect the quantity of the product demanded

129
Q

How do you calculate price elasticity of demand?

A

price elasticity of demand = %change in quantity demanded / %change in price

130
Q

When is the market for a product/service elastic? What does elastic mean?

A
  • when price elasticity (absolute value) is larger than 1
  • lowering prices raises profit (raising prices lowers profit)
131
Q

When is the market for a product/service inelastic? What does inelastic mean?

A
  • when price elasticity (absolute value) is smaller than 1
  • lowering prices lowers profit (raising prices raises profit)
132
Q

What is cost-based pricing method?

A

determine the final price to charge by starting with the cost, without recognizing the role that consumers or competitors’ prices play in the marketplace

133
Q

What is competitor-based pricing method?

A

set their prices to reflect the way they want consumers to interpret their own prices relative to the competitors’ offerings

134
Q

What is value-based pricing method?

A

setting prices that focuses on the overall value of the product offering as perceived by consumers

135
Q

What is everyday low pricing?

A

companies stress the continuity of their retail prices at a level somewhere between the regular, nonsale price and the deep-discount sale prices their competitors may offer

136
Q

What is price skimming/premium pricing?

A

willing to pay the higher/premium price to have the innovation first

137
Q

What is penetration pricing?

A

setting initial prices low for the introduction of the new product/service

138
Q

What is Buy Now Pay Later?

A

payment trend that allows consumers to spread the cost of their purchases over weeks or months

139
Q

What is price lining?

A

setting price points in between price floor and price ceiling

140
Q

What is price bundling?

A

practice of selling more than one product for a single, lower price

141
Q

What is leader pricing?

A

tactic that attempts to build store traffic by aggressively pricing and advertising a regularly purchased item

142
Q

What is loss leader pricing?

A

lowering the price below the store’s cost (opposite of leader pricing)

143
Q

What is the bait and switch tactic?

A

when sellers advertise items for a very low price without the intent to really sell any (deceptive)

144
Q

What is predatory pricing?

A

when firm sets a very low price for one or more of its products with the intent to drive its competition out of business

145
Q

What is price discrimination?

A

when firms sell the same product to different resellers at different prices

146
Q

What is price fixing?

A

colluding with other firms to control prices

147
Q

What is a distribution channel?

A

transfers the ownership of goods and moves them from the point of production to the point of consumption, most often to retailers

148
Q

What is the difference between wholesalers and retailers?

A
  • wholesalers: buy products from manufacturers and resell them to retailers
  • retailers: sell products directly to consumers
149
Q

What is the difference between direct distribution and indirect distribution?

A
  • direct distribution: no intermediaries between the buyer and the seller
  • indirect distribution: one or more intermediaries work with manufacturers to provide goods/services to consumers
150
Q

What is multi-channel distribution?

A

combination of direct and indirect distribution channels

151
Q

What is the difference between push and pull distribution strategies?

A
  • push: pushing your product to your consumers
  • pull: pulling your consumers to your products
152
Q

What is intensive distribution?

A

get products into as many outlets as possible

153
Q

What is exclusive distribution?

A

when a manufacturer grants a single retailer or distributor the exclusive rights to sell their products within a specific region

154
Q

What is selective distribution?

A

uses a few selected customers in a territory (between intensive and exclusive distribution)

155
Q

What is franchising?

A

the right or licence granted by a company (franchisor) to an individual (franchisee) to market and/or trade products and services in a specific area or territory

156
Q

What is retailing?

A

business activities that add value to products and services

156
Q

What is multichannel strategy?

A

selling in more than one channel (store, kiosk, Internet)

157
Q

What are general merchandise retailers?

A

discount stores, department stores, drugstores

158
Q

What is a discount store? Give an example.

A
  • broad variety of merchandise, limited service, low prices
  • Dollar Tree
159
Q

What are speciality stores? Give an example.

A
  • limited number of complementary merchandise categories in relatively small stores
  • Bookstores
160
Q

What are off-price retailers?

A

inconsistent assortment of merchandise at relatively low prices (Winners, Marshalls)

161
Q

What is rational appeal?

A

helps consumers make purchase decisions by offering factual information and strong arguments built around relevant issues

162
Q

What is emotional appeal?

A

aims to satisfy consumers’ emotional desires

163
Q

What is mass media?

A

newspapers, magazines, radio and television

164
Q

What is niche media?

A

speciality TV channels, direct mail, specialty magazines

165
Q

What is the difference between paid media, owned media and earned media?

A
  • paid media: comes from TV, print, radio
  • owned media: comes from websites
  • earned media: comes from word-of-mouth, publicity, buzz
166
Q

What is personal selling?

A

two-way flow of communication between a buyer and a seller (face to face, video teleconferencing)

167
Q

What is direct marketing?

A

marketing that communicates directly with target customers to generate a response

168
Q

What is the AIDA model?

A

attention leads to interest, which leads to desire, which leads to action

169
Q

What is informative advertising?

A

goal of moving the consumer through the buying cycle to a purchase

170
Q

What is persuasive advertising?

A

motivate consumers to take action

171
Q

What is reminder advertising?

A

remind consumers of a product or to prompt repurchases

172
Q

What is product placement?

A

when marketers include their product in non-traditional situations

173
Q

What are cold calls?

A

salespeople telephone or go to see potential customers without appointments

174
Q

What is preapproach?

A

when salesperson conducts additional research and develops plans for meeting with the consumer prior to meeting the customer

175
Q

What is exporting?

A

producing goods in one country and selling them in another

176
Q

What is indirect exporting?

A

when the exporting firm sells its goods in the host country through an intermediary

177
Q

What is direct exporting?

A

when exporting company sells its products in the host country directly, without the intermediaries

178
Q

What is strategic alliance?

A

collaborative relationship between independent firms (they do not create an equity partnership or invest in one another)

179
Q

What is a joint venture?

A

when a firm entering a new market pools its resources with those of a local firm to form a new company which ownership is shared

180
Q

What is direct investment?

A

when firm maintains 100% ownership of its plants, operation facilities, and offices in a foreign country

181
Q

What are 3 ethical issues in global marketing?

A
  • environmental concerns
  • global labour issues (working conditions, wages paid to factory workers in developing countries)
  • cultural imperialism (the belief that one’s own culture is superior to that of other nations)
182
Q

How do you calculate market share by sales?

A

market share by sales = your brand sales in $ / total sales for all brands in $

183
Q

How do you calculate market share by units?

A

market share by units = your brand sales in units sold / total sales for all brands in units sold

184
Q

How do you calculate profit? How do you calculate profit margin %?

A
  • profit = revenue - costs
  • profit margin = profit / revenue
185
Q

How do you calculate cost per unit?

A

cost per unit = fixed costs per unit + variable costs per unit

186
Q

Variable cost is also called…

A

COGS

187
Q

How do you calculate contribution per unit? How do you calculate contribution margin %?

A
  • contribution per unit = price per unit - variable costs per unit
  • contribution margin % = contribution per unit / price per unit
188
Q

How do you calculate markup on cost %?

A

markup on cost % = (price per unit - variable costs per unit) / variable costs per unit

189
Q

How do you calculate break-even in units?

A

break-even in units = total fixed cost / (price per unit - variable cost per unit)

190
Q

How do you calculate break-even in $?

A

break-even in $ = total fixed cost / (1 - (variable cost per unit / price per unit))

191
Q

When is the market for a product/service unit elastic? What does unit elastic mean?

A
  • when price elasticity (absolute value) equal 1
  • changing price has no impact on profit
192
Q

How do you calculate cross price elasticity?

A

cross price elasticity = %change demand of product 2 / %change price of product 1

193
Q

Describe cross price elasticity.

A
  • if two products are substitutes, a price increase in one will lead to an increase in demand for the other
  • if two products are complements, a price increase in one will lead to a decrease in demand for the other
194
Q

If cross price elasticity is positive…

A

products are substitutes

195
Q

If cross price elasticity is negative…

A

products are complements

196
Q

The selling price for the manufacturer is…

A

the variable cost for the distributor

197
Q

The selling price for the distributor is…

A

the variable cost for the retailer

198
Q

What is the lagged effect?

A

a delayed response by consumers to an advertising campaign

199
Q

What is price promotion?

A

a marketing strategy where a business temporarily reduces the price of a product or service to increase sales and attract customers

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