-
What is a simulation?
Computer based programs to assess the alternantive marketing strategies.
-
What is an advantage of a simulation?
No contact w/consumer.
-
What is the Markeing Information System (MIS)?
- People, equiptment, and procedures used to analyze,evaluate & distribute accurate info to marketing decision
- makers.
-
What is forecasting?
A function of MIS- estimating demand for a brand or product using qualitative & quantitative techniques.
-
What are short-term forecasts used for?
Predicting sales for the next month or quarter- used for production scheduling & evaluating the impact of short-term promotions.
-
What are mid-term forecasts used for?
Providing input to annual marketing plan review & revision.
-
What are long-term forecasts used for?
5 year period- strategic planning.
-
What are personal demographics?
Identifiable characteristics of individuals and groups (age, sex, religion)
-
What are geographic demographics?
Identifiable characteristics of towns, cities, states (county size, population density, climate)
-
What are behavioral dimensions?
Purchase occasion, user status, user rate, customer attitudes, and brand loyalty.
-
What are psychographics?
Factors that influence consumers' patterns of living, such as activities, interests, opinions (AIOs), social class, and values.
-
What are AIOs?
Activies, interests, and opinions
-
What is an advantage of marketing segmentation?
It allows marketers to better match products to the needs of different customers.
-
What are the 2 steps in Segmenting?
- 1- Variables are chosen and market is divided among dimensions.
- 2- Segments are profiled.
-
What is Market Targeting?
After segmenting- where segments are evaluated in terms of attractiveness.
-
What are the three requirements of a homogenous segment?
- 1- Dimensions must be measurable
- 2- Market segment must be
- accessible/reachable through existing channels (media, distribution, sales force)
- 3- Each segment must be large enough to be profitable.
-
What is the best type of segmentation?
Segmentation that identifies meaningful differences b/t groups.
-
What is the difference between single-variable & multi-variable segmentation?
- Single-variable segmentation is one segmentation variable, while multi-variable involves 2 or more variables.
- Multi-variable segmentation shows interrelationships b/t factors that define market segments. (typical buyer behavior)
-
What is the single segment concentration strategy?
Decision to focus on one segment as the target market.
-
What is the differeniated/mutiple segmentation strategy?
Where more than 1 market is targeted.
-
What is undifferentiated/Mass Marketing?
Treating the total potential market as a whole.
-
What are consumer buying-related behaviors?
Purchasing, spending time researching, and comparing products.
-
What are the factors of high involvement decision making?
- 1- Product perceived as personally important
- 2- Relatively expensive 3-
- Consumer lacks relavant info
- 4- risks w/making bad decision are high
- 5- Products offer great benefits to buyer
-
What are the 5 stages of high - involvement decision making?
- - need or problem recognition
- - search for relevant info
- - identification & evaluation of alternatives
- - purchase decision
- - post purchase behavior
-
What are the 3 stages of low involvement decision making?
- - need/problem recognition
- - purchase decision
- - post purchase decision
-
How do organizational markets differ from consumer markets?
- Organizational buyers purchase materials for resale, operational needs, & for use in production.
- Fewer in number.
Consumers purchase finished goods for final consumption.
-
How does an organization derive demand?
From anticipated demand by consumers for finished goods.
-
What 3 things are needed to segment non-consumer markets?
- 1- customer type ( manufacturer, retailers, government ) 2- customer size ($)
- 3- buying situation ( new task, straight rebuy, modified
- re-buy)
-
Who are the 5 people w/in an organization that influence buying decisions?
- 1- buyers
- 2- users
- 3- influencers
- 4- gatekeepers
- 5- deciders
-
What is a buying center?
Entity comprised of all people who participate in decision making process.
-
What does product planning entail?
All phases of decision making related to new product development & management of existing products.
-
What are convenience goods?
Purchased frequently w/little effort
-
What are shopping goods?
Need price / quality comparison at several stores before purchase.
-
What are specialty goods?
High involvement decision making - no substitutes
-
What are unsought goods?
No demand exists
-
Define marketing
Process of planning & executing development, pricing, promotion, & distribution of goods & services.
-
What are products?
Goods, services, ideas, places, or persons
-
What is the marketing concept?
A customer oriented business philosophy that stresses customer satisfaction.
-
What are the 6 marketing functions?
- Environmental analysis
- Consumer analysis
- Product planning
- Price planning
- Promotion planning
- Place planning
-
What are the 4p's that make up the marketing mix?
Product, price, promotion, planning
-
What is market segmentation?
Dividing total market into submarkets based on similarities
-
What are market segments?
A group of customers with similar interests who will respond to marketing mix.
-
What is a target market?
One group of potential customers - could be segments or mass market
-
What is product differentiation?
When a product / brand is seen as different from competitors.
-
What is product positioning?
Shaping a products image in a customers mind.
-
What is a marketing plan?
Where a firm identifies target markets & provides guidelines for developing market mix.
-
What is a situation analysis?
An analysis that identifies a company's strengths, weaknesses, & threats.
-
What are marketing objectives?
Quantitative & qualitative goals of a firm. Must be measurable & have timeframe.
-
What 2 factors make up the marketing environment?
Factors an organization can & can't control.
-
What are the 6 uncontrollable forces in a market?
- Demographics
- Economics conditions
- Competition
- Social & cultural factors
- Political & legal factors
- Tech. Factors
-
What are the 3 micro-environmental factors that affect each firm uniquely?
- Suppliers
- Marketing intermediaries
- Target market
-
What is a marketing strategy?
Ways that a marketing mix can be used to satisfy the needs of a target market
-
What are the 4 components of the product / market opportunity matrix?
- Market penetration - increase sales of existing market
- Market development - increase sales of existing to new market
- Product development - new products to current market
- Diversification - new products to new market
-
What is the SWOT matrix?
A tool used to asses potential value & fit of new opportunities.
-
Define marketing research
Planning, collecting, analyzing, & communicating relevant info to make better marketing decisions.
-
What are the 9 areas that a situation analysis examines?
- 1- economic growth
- 2- tech. Development
- 3- social changes & buying behavior
- 4- legal & political development
- 5- size of existing market & potential market
- 6- rate of market growth
- 7- brand loyalty
- 8- competitive behavior
- 9- market share trends
-
What 3 questions does strategy development answer?
- -what business should we be in?
- -how will we compete?
- -what are the goals for the business?
-
What is marketing plan development?
Focuses on How the marketing mix can most effectively be used
-
How do you monitor performance?
Collect qualitative or quantitative info, measure effectiveness of sales, customer satisfaction, or brand switching.
-
What are the 6 steps of the marketing research process?
- 1-define research objective
- 2-determine research type (exploratory, descriptive, casual cause effect relationship)
- 3- determine qualitative or quantitative research approach
- 4- select data collection method
- 5- analyze results
- 6-report findings
-
What is the research design?
A plan for collecting & analyzing data
-
What is sampling?
Gathering data from a selected group from the population of interest
-
What are probability samples?
Selecting persons from designated population at random
-
What are non-probability sampling?
Nonrandom sampling from chosen population of interest.
-
What is primary data?
Info collected for current research study
-
What is secondary data?
Info already collected & Not relevant to current study
-
What are the 2 types of secondary data?
- Internal - data from info w/in the company
- External - data from published sources
-
What is survey research?
Systematically acquiring info from individuals through direct communication.
-
What is a focus group?
In person data collection - 5-10 ppl
-
What is observation?
Subjects behavior observed w/out their knowledge (videotaping at checkout )
-
What is experimental research?
Compares impact of marketing variables on individuals responses in a controlled setting.
-
What are examples of industrial/business products?
- -Raw materials
- -accessory equipment
- -installations
- -operating supplies
-
Services are intangible because:
A service cannot be touched, smelled, heard, or tasted.
-
Why are services parishable?
Service is rendered during a specific time.
-
Why are services inseparable?
The consumer is inseparable from the producer/servicer.
-
What is a tangible product?
Precisely defined (size, color, weight)
-
What is an extended product?
Both tangible and intangible. Intangible features: brand image and service features
-
What is a product line?
A set of closely related items
-
What is a product mix?
All product lines offered by a firm
-
What is product screening?
Where potential products are sorted by strengths/weaknesses. Remaining products tested.
-
What is concept testing?
Test to see if new products have sufficient customer interest
-
What is a business analysis?
Evaluation of a concepts commercial feasibility
-
What is product development?
Stage where ideas first produced in tangible form after initial market strategy.
-
What is test marketing?
Series of commericial experiments to test acceptance of new product. Done in solated geographic markets.
-
What is commericalization?
Full-scale production of complete market plan- corresponds to introduction stage in product life cycle.
-
What is Product Adoption?
Buyer decides to use product regularly.
-
What are the 5 categories of the diffusion process?
- 1- innovators
- 2- early adopters
- 3- early majority
- 4- late majority
- 5- laggers
-
What is product positioning?
Developing brand image in a customer's mind
-
What are idea points?
The consumer's perception of the perfect combo of qualities
-
What is mix expansion?
Provides firm w/new growth opportunities
-
What is contracting?
Reducing product mix
-
What is wide product mix?
Diversification strategy
-
What is a deep product mix?
Focus of the firm's resources on a smaller # of product lines
-
What is the product life cycle?
- 1-introduction
- 2-growth
- 3-maturity
- 4-decline
- (getting shorter)
-
What is brand management?
Diff. brands classified according to their origin.
-
What are manufactuer/National Brands?
Created by product manufacturers
-
What are dealer/private brands?
created by retailers/intermediaries
-
What are characteristics of a good brand name?
- -suggests benefits
- -short & simple
- -easy to spell/read/pronounce
- -memorable
-
What are the 5 levels of brand familiarity?
- 1-Brand insistence: no substitutes
- 2-Brand preference: 1 brand over others
- 3-Brand recognition: when consumers remember brand name
- 4-Brand Non-recognition: consumers don't know brand
- 5-Brand rejection: refuse to buy
-
What is the family brand strategy?
Same brand over several products
-
What are individual brands?
Can be assigned to each product when variation exists
-
What is a licensed brand?
Well established brand name that sellers pay to use
-
What are trademarks?
Brand names or charaters used to identify products. Registered trademarks legally for use by owners only.
-
What are the 3 primary functions of packaging?
- -Promotion
- -Production
- -& information
-
What is service marketing?
Differs from marketing goods- example: legal & medical services
-
4 ways service marketing different from marketing goods?
- -intangible:difficult to understand
- -Inseparability: services cannot be seperated from provider
- -Perishable: cannot be inventoried/resold
- -Variable: not performed same way each time
-
What are channels?
Physical distribution of products
-
What is sorting?
Separating goods by quality, color, size.
-
What is accumulation?
Grouping small shipments for transport
-
What is assorting?
Getting a wide variety of merchandise to meet diverse consumer preference
-
What are direct channels?
Moving goods from producer to consumer WITHOUT intermediaries
-
What are indirect channels?
Moving goods w/help of intermediaries
-
What is channel width?
# of independent members at 1 level of the distribution channel (ex. producer, wholesaler, retailer, final consumer)
-
What is channel length?
# of levels used to create distribution channel
-
What are the 3 distribution strategies?
- -Intensive: firm sells through every potential outlet
- -Selective: many, but not all
- -exclusive: 1 to 2 intermediaries in each market
-
What are the 3 systems used to coordinate distribution functions?
- 1-corporate channel: firm owns all channel members
- 2-Verticle integration: acquiring firms that opperate at diff. channel levels
- 3-Horizontal integration: acquiring firms that opperate at same channel level
-
What are multiple channels/dual distribution?
When a firm develops 2+ separate distribution channels
-
What is channel control?
Ability to influence channel members
-
What are the 2 types of channel conflict?
- -Horizontal conflict- b/t firms at same channel
- -Vertical conflict- b/t firms at diff. distribution levels
-
What is pushing?
Using promotional efforts to secure intermediary cooperationg
-
What is pulling?
Generating consumer demand- used for new products
-
What are the 4 fundamentals of physicial distribution?
- -transportation
- -materials handling
- -order processing
- -inventory managment
-
What is total costs concept?
Where minimizing costs conflicts with satisfying consumer demand
-
What is the distribution center concept?
Where the most effective strategy is the lower costs, satisfy demand and use distribution centers.
-
What is sub-optimization?
Reducing costs in one distribution function that increase costs overall
-
What is the customer service standard?
Different customer require different levels of service
-
What is the electronic data interchange (EDI)?
Allows integrated order processing, production, inventory planning, and transportation into single system.
-
What is materials handling?
Physical handling of goods in both warehouse & transportation.
-
What is unit loading?
Grouping boxes on a pallet or skid.
-
What is containerization?
grouping many items into 1 container
-
What is warehousing?
Designing & operating facilities for both storing & moving goods
-
What are the types of warehouses?
- -public & private
- -distribution center
- -bonded storage
-
What is order leadtime?
average length of time b/t customer placing order & receipt
-
What is the reorder point?
Inventory level where new orders need to be placed to avoid stockout.
-
What is stockout?
Shortage of product
-
What is the usage rate?
inventory sold/time period
-
What is safety stock?
Extra inventory
-
What is just-in-time (JIT)?
Making products available just as needed
-
What are the 5 transportation modes?
- -railroads
- -trucks
- -waterways
- -airways
- -pipelines
-
What are megacarriers?
Freight transport with several shipping modes
-
What is intermodal transportation?
2 + transporation modes used in combination
-
What are freight forwarders?
Specialized agencies that provide alternative transporation
-
What is wholesaling?
All activities related to the resale of products to organizational buyers & retailers
-
What is manufacturer wholesaling?
When the product's producter performs the wholesaling functions.
-
What is merchant (distributors/jobbers) wholesaling?
Independent firms that take title & posession of products they sell.
-
What is the difference between a full and limited service merchant wholesalers?
- Full service- extend credit
- Limited Service- doesnt extend credit
-
Who are rack jobbers?
Full-service merchant wholesalers that provide display racks
-
Who are drop shippers?
Limited-service merchant wholesalers that buy products and arrange for delivery. Take title of merchandise, but not physical posession.
-
Who are agents?
Independent wholesalers- do not take title. Paid through commission.
-
Who are brokers?
Temporary wholesalers that bring buyers & sellers together- do not take title
-
What is retailing?
All activities related to the sale of products to final consumers.
-
What are the 3 forms of ownership?
- 1-corporate chains: 10+ stores owned by same firm
- 2- Vertical market systems: individually owned and linked together
- 3- Independent stores- no affiliated w/corporate- higher prices.
-
What is non-store retailing?
Retail transactions that occur outside traditional store settings- direct selling, direct marketing, internet, catalog, tv. 20% of retail sales.
-
What is scrambled merchandising?
Adding products not related to tradition lines to sell quickly, increase profits, and build store traffic.
-
What is the wheel of retailing?
New retailers enter market w/low prices --> evolve into traditional store & add customers --> raise prices to meet higher operating costs --> move up & create opening for new retailer
-
What are the 3 components of promotion planning?
- -Promotion mix
- -Objectives
- -Budget
-
What is a promotion Mix?
Elements that contribute to the firm's communications- advertising, personal selling, publicity
-
What is Integrated Marketing Communications? (IMC)
- 4Ws:
- -who is the target market?
- -what are the objectives?
- When should the promotions run?
- -Which media should be used?
-
What are the 3 goals of promotion objectives?
- -Inform both intermediaries & users
- -Persuade buyers
- -Remind buyers about the availability
-
What are communication channels?
how promotional messages are sent
-
What is noise?
Poor messages or weak audience response
-
What 4 techniques can be used to establish promotion budgets?
- -% of Sales
- -Competitive Parity
- -Objective & task
- -All available funds
-
What objectives might be included in advertising?
new product introduction, establishing brand preference, enhancing firm's image and sales
-
What is media planning?
Choice and type of media
-
What are examples of alternative media?
TV, radio, newspapers, magazines, direct mail
-
What is reach?
% of a target audience exposed to an ad w/in timeframe. Usually 4 weeks
-
What is cost per thousand?
Advertising costs per thousand prospects
-
What is frequency?
Average # of times that target market is exposed to an ad- typically 4 weeks.
-
What are gross rate points? (GRPs)
Reach x Frequency = GRP
GRP = total weight of advertising delivered over 4 week period
-
What is the creative platform?
Overall concept & theme for an advertising campaign.
-
How do you gage advertising effectiveness?
Sales, store traffic, coupon redemption rates
-
What is publicity?
Communication not paid for by a sponsor
-
What are the 3 types of salespeople?
- 1-order getters
- 2-order takers
- 3-support salespeople
-
What is sales force allocation?
allocation of sales people should match talent w/territory.
-
What is prospecting?
Seeking prospective buyers/leads. Prospect must be qualified to buy.
-
What is the pre-approach?
Prior to meeting prospect- salesperson must decide how to intiate face to face
-
What is the approach?
When the seller 1st meets the prospective buyer
-
What are meeting objectives?
Important sales skill- objectives raised by prospect that indicate need for clarification & info
-
What are canned?
Memorized messages
-
What are 3 types of salesforce compensation?
- -salary
- -commission
- -combination
-
What is the drawing account method?
Commissions credited to drawing account- can withdraw at a fixed rate or get an advance.
-
What is a gauranteed draw?
not obligated to pay back difference.
-
What is direct marketing?
catalogs, direct mail, telemarketing, infomercials
-
What is price elasticity of demand?
% of Change in teh # of units demanded/ % of change in the price product
- Price Elasticity of Demand = (Q1-Q2) / (Q1+Q2)
- ______________
- (P1-P2) / (P1+P2)
- Q1= Initial quantity demanded
- Q2= New quantity demanded
- P1= intial price
- P2= new price
-
What is elastic demand?
When the value of price elasticity of demand formula is less than -1.
Tot. Revenue = Price x Number of Units Sold
-
What is the difference between elastic and inelastic demand?
-If demand is elastic, increase in price produces a decrease in demand and decrease in total revenue
- If demand is inelastic, an increase in price produces a decrease in demand and an increase in total revenue.
-
What is inelastic demand?
When the value of price elasticity of demand is greater than -1
-
What is perfect inelastic?
When demand doesn't decrease at all in response to price increases.
-
What is unitary elasticity?
- When the value of price elasticity of demand formula is -1
- Change in demand proportional to change in price.
Total revenue doesn't change in response to price increase/decrease.
-
What is the price elasticity of demand coefficient (Ed)?
Equal to the absolute value or non-negative value of price elasticity of demand formula.
-
What is the 1980 Sherman act?
Prevents businesses from restraining trade & interstate commerce (predatory monopolizing)
-
What is the robinson-patman act (1936)?
Prohibits price discrimination that reduces competition. Also prohibits producers from providing a higher level of service to large customers.
-
What is price skimming?
Introducing new product at high prices to offset production and firm costs
-
What is penetration pricing?
Using low intro prices to gain large share of market more quickly
-
What are the 3 categories of pricing decisions?
- 1-cost based
- 2-demand based
- 3- competition based
-
What is the one price policy?
same price to all customers in similar situations
-
What is flexible pricing?
Seller can change diff. prices to diff. buyers in similar situations
-
What is geographic pricing?
reflects transportation and other costs.- zone pricing & free on board (no shipping)
-
What is unit pricing?
Provides consumers w/info on alternate pricing to simplify comparison shopping.
-
What are alternative pricing objectives?
Where pricing strategy may reflect short-term goals & profit maximization
-
What is the price-quantity correlation?
Buyers believe higher prices = superior quality.
-
What is prestige pricing?
Retail prices for similar items that are higher than other brands
-
What is odd-even pricing?
Sets price just below even dollar values
-
How do marketers try to maintain customary prices?
By reducing size of packaging or changing ingredients to keep price the same
-
What is price lining?
Limited # of price poins for groups of lines or products- $24, $29, $36
-
What is leader pricing?
When a firm sells products below usual price to gain attention
-
Formula Markup %
Markup % = Selling Price - Product Cost / Selling Price
Selling Price = Markup amount + product cost
Markup amount = product cost x markup %
-
Formula Markdowns
Markdown% = Orig. Selling Price- Red.Price / Ori.Selling Price
-
Break Even formula
Tot. Revenue = Price x Quantity Sold
Tot. Costs= Fixed Costs + (Variable Cost/Unit x Quantity Sold)
- Break Even Points (Units) = Tot. Fixed Costs/ Price
- -----------------------
- Variable Cost/Unit
-
What is non-profit marketing?
Marketing of persons, ideas, and organizations for nonfinancial/social objectives.
-
When was the production era?
2nd half of 19th century- mass production concepts made it possible to manufacture goods more efficiently
-
When was the sales era?
Mid 1920s-1950s: Personal selling & advertising boom
-
When was the marketing era?
Early 1950s- Many businesses - focus on customer service
-
What is the code of conduct?
Eliminates unethical behavior
-
What is compensatory ethics?
Where moral right or wrong determined by consequences the action produces
-
What is non-compensatory ethics?
Maintain a universally true moral principle w/no exceptions
-
What is social responsibility?
Firm's economic, legal, ethical, and philanthropic obligation to society
-
What is a green market?
Using and making products that don't harm environment
-
What is reverse logistics?
Responsibility of the firm to make products that dispose well. Recycling.
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