midterm

Question 1

what is marketing?

Answer 1

the activity, set of institutions, and process for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Question 2

What are the 5 stages of marketing?

Answer 2

1. Understand the marketplace and customer needs and wants.
2. Design a customer value-driven marketing strategy.
3. Construct an integrated marketing program that delivers superior value.
4. Engage customers, build profitable relationships, and create customer delight.
5. Capture value from customers to create profits and customer equity.

Question 3

What motivates a consumer to take actions?

Answer 3

needs, wants, demands.

Question 4

What are needs, wants and demands?

Answer 4

needs = states of felt deprivation, not invented by marketers.
wants = the form taken by human needs as they are shaped by culture; needs become wants when they are directed to specific objects that satisfy the need.
demands = the wants for specific products backed up by buying power.

Question 5

How do consumers choose among products and services?

Answer 5

value and satisfaction.

Question 6

what is value proposition?

Answer 6

the full mix of benefits upon which a brand is positioned.

Question 7

managers main interests

Answer 7

Achieving high production efficiency.
Low costs.
Mass distribution.

Question 8

the production concept

Answer 8

consumers will prefer products that are widely available (availability) and inexpensive rather than features.

Question 9

the product concept

Answer 9

consumers will favor those products that offer the most quality, performance, or innovative features.

Design their products without customers’ inputs.
No considerations on competitors’ products.

Question 10

the selling concept

Answer 10

consumers, if left alone, will ordinarily not buy enough of the company’s products; companies have to undertake an aggressive selling and promotion effort.

Used by companies facing an overcapacity problem.
Selling whatever they have rather than making what market wants.
No concerns about post-purchase satisfaction.
Focus on creating sales transactions rather than on building long-term relationships.

Question 11

the marketing concept

Answer 11

achieving organizational goals depends on:
Determining the needs and wants of target markets.
Creating, delivering, and communicating customer values to its chosen target markets more effectively and efficiently than competitors do.

focus on marketing mix.

Question 12

customer-driven company

Answer 12

Good at serving existing customers.
Often times, a market doesn’t know what it wants.

Question 13

customer-driving company

Answer 13

Marketing research is less useful.
They see the future first.

Question 14

the societal marketing concept

Answer 14

organization’s task is to determine the needs, wants, and interests or target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.

Includes the marketing mix and the four P’s of marketing = product, price, place, promotion

Question 15

why is retaining customers more important than attracting new ones?

Answer 15

Talks favorably.
Pays less attention to competing brands.
Offers new product ideas.
Costs less to serve (since transactions are routine).
Buys more over time (stay loyal longer) → customer lifetime value.

Question 16

consumer-generated marketing

Answer 16

Consumers play roles in shaping their own brand experience.
Asking for new product and service ideas.
Inviting consumers to play a role in creating advertising programs and social media content.
Could be time-consuming, costly, and difficult process (uncontrollable).

Question 17

customer equity

Answer 17

total combined customer lifetime values of all the company’s customers.

More loyal customers → higher customer equity.
More willing to pay higher prices → higher customer equity.
More willing to purchase frequently → higher customer equity.

Question 18

customer lifetime value

Answer 18

the entire stream of purchases that the customer would make over a lifetime of patronage.

Question 19

microenvironment

Answer 19

Forces close to the company that affect its ability to serve customers.
The company, competitors, suppliers, marketing intermediaries, customers, and publics.

Question 20

macroenvironment

Answer 20

Larger, societal forces that affect the organization’s microenvironment.
Demographic, economic, natural, technological, political, and cultural.

Question 21

departments

Answer 21

management, finance, research & development, purchasing, manufacturing, accounting and human resources.
- Each department will have their own objectives.
- Need to work in harmony to create customer value.

Question 22

suppliers

Answer 22

companies which provide the resources needed.
Marketing managers need to monitor supply availability, pricing, and quality.

Question 23

Marketing intermediaries

Answer 23

firms that help the company promote, sell, and distribute.
Resellers → wholesalers, retailers.
Physical distribution firms → warehousing and transportation firms.
Marketing service agencies → marketing research, consulting, advertising agencies, media firms.
Financial intermediaries → bank, credit companies, insurance.

Question 24

customers

Answer 24

financial, media, government, citizen-action groups, local, general, internal.

Question 25

trends of interest

Answer 25

The Canadian population is expected to exceed 42 million by 2035. Changing age structure of the Canadian population. The Canadian population is getting older; the median age is 41 years. Main generations are: the baby boomers (born between 1946-1965; 9.4 mil.), generation X (born between 1966-1980; 7.2 mil.), generation Y (millennials; born between 1981-1997; 8.6 mil.), and generation Z (1998-2016; 8.6 mil).

Question 26

technological environment

Answer 26

New technology creates new markets and opportunities. Replaces existing products and services. Investment in R&D required. Need to closely monitor the changes in technological development.

Question 27

natural environment

Answer 27

Natural resources that are needed as inputs by marketers or that are affected by marketing activities. Growing shortages of raw materials. Increased pollution. Increased government intervention. Focus on environmentally sustainable strategies.

Question 28

political and social environment

Answer 28

Laws, government agencies, and pressure groups. Influence and limit organizations and individuals within a society. Increased emphasis on ethics and socially responsible actions. → Cause-related marketing: doing well by doing good.

Question 29

cultural environment

Answer 29

Institutions and other forces that influence society’s basic values, perceptions, preferences, and behaviors. The persistence of cultural values → core beliefs are passed on through family, friends, reinforced by institutions, and somewhat resistant to change. Canadian beliefs = cultural diversity, democracy, gender equality, sustainable development, universal healthcare, love of nature, hard work, being honest. Shifts in secondary values; more open to change.

Question 30

economic environment

Answer 30

Factors that affect consumer buying power and spending patterns. Income distribution.

Question 31

marketing research steps

Answer 31

1. Generating information. 2. Identify and refine problems. 3. Solve marketing and other business problems. 4. Identify and define marketing opportunities. 5. Evaluate marketing actions.

Question 32

sources of information

Answer 32

Internal data. Competitive marketing intelligence. Marketing research.

Question 33

internal data

Answer 33

Accounting dept: financial statements → sales, costs, and cash flows. Operations dept: production schedules, shipments, and inventories. Sales forces: reseller reactions and competitor activities. Marketing dept: customer demographics, psychographics, purchase behavior. Customer service dept: customer satisfaction, service problems. advantages and disadvantages: Can be accessed more quickly and cheaply. May be incomplete or in the wrong form. Keeping the database current is expensive.

Question 34

competitive market intelligence

Answer 34

the systematic collection and analysis of publicly available information about competitors and developments in the marketing environment.

Question 35

competitive market intelligence - sources

Answer 35

Employees, customers, trade shows, websites, marketing communications, suppliers, resellers, professional information services, “dumpster diving”. Monitoring social media sites. Major databases → passport GMID, Simply Analytics, etc..

Question 36

marketing research

Answer 36

the systematic design, collection, analysis, and reporting of data relevant to a marketing situation facing an organization.

Question 37

marketing research stages

Answer 37

Defining the problem and research objectives. Developing the research plan for collecting information. Implementing the research plan → collecting and analyzing the data. Interpreting and reporting the findings.

Question 38

types of research designs

Answer 38

Exploratory = gather preliminary information that will help to better define problems and suggest hypotheses; discovery of ideas and insights. Literature reviews, case analyses, in-depth interviews, focus groups, observations. Descriptive = better describe marketing problems, situations, or markets; determining the frequency with which something occurs or the relationship between two variables. Cross-section surveys, panel studies, product movement surveys, store audits, interviews (telephone, mail, personal). Casual = marketing research to test hypotheses about cause-and-effect relationships. Experimental designs, market tests.

Question 39

developing a research plan

Answer 39

Translating the research objectives into specific information needs. Research plans should be presented in a written proposal to be approved.

Question 40

A good research proposal should show:

Answer 40

- What data will be collected. - How it will be collected. - From whom it will be collected. - Who will analyze it. - Quality control standards that will be used. - How long it will take. - How much it will cost.

Question 41

primary data

Answer 41

gathered for a specific purpose or specific research project.

Question 42

observation

Answer 42

observation of relevant people, actions, and situations. - Mechanical observation (via machine or computer). - Checkout scanner (records shoppers’ purchases). - Cookies (to monitor the internet users’ web surfing behavior). Advantages + Disadvantages: - Good for exploratory research. - Can obtain info that people are unwilling or unable to provide. - Feelings, attitudes, motives, or private behavior cannot be observed.

Question 43

experiment

Answer 43

ecessary for establishing causation; never able to perfectly prove X causes Y because it is difficult to satisfy the conditions of causality.

Question 44

survey

Answer 44

segment of the population selected for marketing research to represent the population as a whole. - Perfect frame = every member of the population is represented once and only once. - Imperfect frame = not all the members of the population are represented in the frame.

Question 45

probability sample

Answer 45

Simple random sample = every member of the population has a known and equal chance of selection. Stratified random sample = the population is divided into mutually exclusive groups and random samples are drawn from each group. Cluster sample = the population is divided into mutually exclusive groups (blocks) and the researcher draws a sample of the groups to interview.

Question 46

nonprobability sample

Answer 46

Convenience sample = the researcher selects the population members from whom it is easiest to obtain information. Judgment sample = the researcher uses his or her judgment to select population members who are good prospects for accurate information.

Question 47

secondary data

Answer 47

Collected for some problem other than the one at hand. Sources → business data, government data, internet data. Advantages: Can be a good starting point for research. Can be obtained more quickly and cheaply. Can provide data that an individual company cannot collect on its own. Disadvantages: Researchers can rarely obtain all the data they need from secondary sources. Unavailable, out of date, wrong format, incomplete, irrelevant, inaccurate, and unreliable. Need to carefully evaluate the information whether it is relevant, accurate, current, impartial.

Question 48

consumer purchase behaviour

Answer 48

The purchase behaviour of final consumers (individuals & households) who buy goods and services for personal consumption.

Question 49

consumer decision-making process

Answer 49

1. Need recognition. → need recognition by internal or external stimuli. 2. Information search = consumer gathers information related to their attainment of the desired state of affairs. → internal information search = recall information in memory. → external information search = seek information in an outside environment. 3. Evaluation of alternatives = consumer’s information search should yield a group of brands. → brands that a consumer actually considers buying before making a purchase decision are known as the evoked set (the most preferred alternatives). 4. Purchase decision = when buying the product/service, the consumer may make choices about from whom to buy, and when to buy. → purchase decisions can be influenced by the attitudes of others (friends, other customers), and unexpected situational factors (no cash or credit card for payment). 5. Post-purchase evaluation = consumers are either satisfied or experience post-purchase anxiety.

Question 50

cognitive dissonance

Answer 50

feelings of post-purchase psychological tension or anxiety that results from an imbalance among an individual’s knowledge, beliefs, and attitudes after an action or decision is taken.

Question 51

factors influencing purchase decision

Answer 51

- Cultural = culture, subculture, social class. - Social = groups and social networks, family, roles and status. - Personal = age and life-cycle stage, occupation, economic situation, lifestyle, personality and self-concept. - Psychological = motivation, perception, learning, beliefs and attitudes.

Question 52

the product diffusion process

Answer 52

1. Innovators: The first buyers of a new product. Venturesome, willing to accept risk, socially aggressive, communicative, and cosmopolitan. 2. Early Adopters: The next customers to buy a new product. Enjoy leadership, prestige, and respect that early purchases bring. Tend to be opinion leaders. Adapt new ideas. 3. Early Mainstream: First part of the mass market. Outgoing, communicative, and attentive to information cues. “Early majority”. 4. Late Mainstream: Second part of the mass market. Less cosmopolitan and responsive to change. Include lower economic and social brackets, those past middle age, and skepties. “Late majority”. 5. Lagging Adopters: Last to purchase. Price conscious, suspicious of change, low income and status, tradition bound, and conservative. Often difficult to market to this small group.

Question 53

relative advantage

Answer 53

the degree to which the innovation appears superior to previous ideas; directly related to adoption rates.

Question 54

compatibility

Answer 54

the degree to which innovation is consistent with the values and experiences of potential adopters; the higher, the faster the rate-of-adoption.

Question 55

complexity

Answer 55

the relative difficulty understanding the innovation; the more difficult, the longer it will take to gain general acceptance.

Question 56

Divisibility (Trialability)

Answer 56

the degree to which the innovation can be tried on a limited basis; first adopters face financial loss and ridicule from others lessened by limited trials.

Question 57

Communicability (Observability)

Answer 57

the degree to which the results of using the product are observable to others; tangible superiority will increase the adoption rate.

Question 58

characteristics of business markets

Answer 58

1. In terms of market structure and demand: - Fewer, but larger buyers. - Derived demand. - Inelastic to price changes and more fluctuating demand (due to small number of business buyers). 2. In terms of the nature of the buying unit: - More decision participants. - More professional purchasing effort. 3. In terms of the buying decisions and the decision process: - Complex buying decisions = large sum of money, technical and economic considerations, and interaction among people at many levels of the buyer’s organization. - Decision process is longer and more formalized → requires formal written purchase orders and product specifications, and formal approval. - Buyers and sellers are more dependent.

Question 59

questions related to business buyer behaviour

Answer 59

What buying decisions do business buyers make? Who participates in the business buying process? What are the major influences on buyers? How do business buyers make their buying decisions?

Question 60

overview of STP

Answer 60

Segmentation → process of dividing a large market into smaller ‘pieces’, or groups with similar needs and/or desires. Targeting → the process of evaluating each market segment’s attractiveness and selecting one or more segments to serve. Positioning → arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Question 61

market segmentation process

Answer 61

1. Identify Bases for Segmenting the Market. 2. Develop Market Segment Profiles. 3. Develop Measure of Segment Attractiveness (Evaluation). 4. Select Specific Target Markets. 5. Develop Positioning for Target Segments. 6. Design, Implement, and Maintain Marketing Mix.

Question 62

multivariate segmentation

Answer 62

the process of dividing a market into distinct groups using multiple variables, such as demographics and behavior, to create highly targeted and tailored marketing strategies.

Question 63

Requirements for Effective Segmentation:

Answer 63

Measurable = size, purchasing power, profiles of segments can be measured. Actionable = effective programs can be designed for attracting and serving the segments. Substantial = segments must be large or profitable enough to serve. Differential = segments must respond differently to different marketing mix elements and actions. Accessible = segments must be effectively reached and served.

Question 64

segment profiles

Answer 64

WHO are they? WHAT do they want/value? WHEN do they buy (how often)? WHERE do they shop/buy? HOW are they influenced?

Question 65

Segment structural attractiveness.

Answer 65

Level of competition. New entrants. Substitute products. Power of buyers. Power of suppliers.

Question 66

Undifferentiated (mass) marketing

Answer 66

market coverage strategy that ignores market segment differences and targets the whole market with one offer.

Question 67

Differentiated (segmented) marketing

Answer 67

market coverage strategy that targets several market segments and designs separate offers for each.

Question 68

Concentrated (niched) marketing

Answer 68

marketing coverage strategy in which a company pursues a large share of one of a few submarkets.

Question 69

Micromarketing

Answer 69

the practice of tailoring products and marketing programs to the needs/wants of specific individuals and local customer groups.

Question 70

Choosing a Target Marketing Strategy:

Answer 70

Company resources. Degree of product variability. Product life-cycle stage → from undifferentiated/concentrated to differentiated. Market variability. Competitors’ marketing strategies.

Question 71

positioning

Answer 71

the way the product is defined by consumers on important attributes; involves implanting the brand’s unique benefits and differentiation in customers’ minds.

Question 72

steps for positioning

Answer 72

- Identifying possible competitive advantages → product, service, people, image. - Choosing the right competitive advantages → important, distinctive, superior, communicable, pre-emptive, affordable, and profitable. - Selecting an overall position strategy. - Developing a positioning statement. - Communicating and delivering the chosen positioning.

Question 73

Checking Your Positioning in Consumers’ Minds.

Answer 73

- Interpretation and usage in marketing. - Intensity of competition between brands → the closer two brands are in the map, the more similar they are perceived to be in the minds of customers. - How customers perceive each brand on each perceptual dimension. - Failure in differentiation. - Market opportunity.

Question 74

relationship selling

Answer 74

This is a sales technique that prioritizes building a connection with the customer over simply closing a sale. It focuses on understanding customer needs, providing value, and cultivating a long-term relationship that benefits both the customer and the seller.

Question 75

cross-selling

Answer 75

Cross-selling involves suggesting additional products or services to a customer that complement their initial purchase. It's a strategy to increase the customer's purchase amount by making them aware of additional value they could get from other items.

Question 76

up-selling

Answer 76

Up-selling is the practice of encouraging customers to purchase a more expensive item or upgrade than the one they are currently considering. This can be a higher-end product or service, with the aim of increasing the value of the sale.

Question 77

partnership marketing

Answer 77

Partnership marketing is a collaboration between two or more businesses where they combine resources and strategies to market their products or services. This can lead to shared customer bases, increased brand exposure, and cost savings on marketing expenses.

Question 78

share of customer

Answer 78

refers to the amount of a customer's spending within a specific category that is captured by a company. It goes beyond simply acquiring customers; it involves deepening the relationship with existing customers to increase the amount of business they do with the company across different products and services.