Intro to Business Chapter 10

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The best definition of marketing is a. promotion and selling b. producing and distributing products and services to customers c. finding customers and convincing them to buy your products d. none of the above
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d. none of the above
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The two steps in marketing strategy are a. developing a product and promoting it to consumers b. identifying a target market and developing a marketing mix c. conducting marketing research and planning producing d. pricing a product and distributing it to customers
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b. identifying a target market and developing a marketing mix
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Which of the following is an example of a rational buying motive? a. love b. fear c. economy d. self-image
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c. economy
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True or false. Most new products introduced by companies are not totally new, but are improvements on existing products
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true
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True or false. The first step in marketing research is to develop a data collection procedure
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False
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The availability of a service must match the demand for that service at a specific time because it is a. heterogeneous b. perishable c. inseparable d. intangible
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b. perishable
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Which of the following conditions will result in a lower rather than a higher price? a. a higher customer demand b. a large quantity of available products c. a product that has very few similar competing products d. all of the above
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b. a large quantity of available products
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When businesses specialize in producing a specific type of product, a channel of distribution will be needed to adjust differences in a. timing b. location c. assortment d. quantity
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c. assortment
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Which of the following is not a part of effective communication? a. the sender b. the receiver c. the advertisement d. information
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c. the advertisement
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The most expensive but also most effective type of promotion is a. personal selling b. advertising c. publicity d. public relations
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a. personal selling
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advertising
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any paid form of communication through mass media directed at identified consumers to provide information and influence their actions
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effective communication
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The exchange of information so there is common understanding by all participants
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target market
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a specific group of consumers that have similar wants and needs
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consumer decision-making process
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the specific sequence of steps consumers follow to make a purchase
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distribution
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The locations and methods used to make a product or service available to the target market
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marketing mix
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The blending of four marketing elements-product, distribution, price, and promotion
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services
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intangible activities that are consumed at the same time they are produced
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marketing
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the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
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channel of distribution
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the route a product follows and the businesses involved in moving a product from the producer to the final consumer
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marketing research
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finding solutions to problems through carefully designed studies involving consumers
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marketing strategy
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a company’s plan that identifies how it will use marketing to achieve its goals
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buying motives
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the reasons consumers decide what products and services to purchase
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merchandising
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a set of promotional activities designed to obtain sales in the retail setting
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personal selling
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direct individualized communication with prospective customers to assess their needs and assist them in satisfying those needs with appropriate products and services
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promotion
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any form of communication used to inform, persuade, or remind
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price
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the money a customer must pay for a product or service
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retailers
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the final business organization in an indirect channel of distribution for consumer products
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developing business plans
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-most developed for 1 year and updated annually -always be prepared if money is needed -helps guide decision making
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major components of business plans
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1. Description of the business -idea -major products/services -ownership structure -goals 2. Description of Competition -characteristics of industry -condition of economy -strengths/weaknesses of competitors 3. Customer Analysis -target market (age, race, live, income, #) -sales forecasts (use conservative #s) -look at competitor sales/revenue 4. Operations Plan -how will company be organized (chart) -describe major operations -analysis of resources needed -human resource plans 5. Marketing Plan -describe marketing activities -how much $ needed -schedule of activities 6. Financial Plans -start up costs (inventory, supplies, licenses) -short term finances (current expenses) -long term financing (land, building, equip)
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marketing
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marketing is the activity, set of institutions and processes for: -creating -communicating -delivering -exchanging
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Marketing mix elements (4 Ps)
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product price promotion place
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products and services that have value for customers, clients, partners, and society
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includes: -public relations -sales promotion -ads -social media -distribution -$15 billion on marketing for kids -companies consider employees, stakeholders, and society
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examples of marketing activities
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-reading about products/services online -exposure to various advertising and branding -speaking with sales people at various stores -business storing supplies and merchandise -payment methods (credit cards, paypal, online) -businesses researching and gathering info about customers (big data) -business to business transactions and activities
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examples of organizations
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-advertising agencies (leo burnett) -marketing research firms -transportation companies -financial service companies (banks that allow businesses to accept credit cards) -wholesalers/retailers
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production era
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-focus on internal capabilities of the company -efficient production and distribution (assembly line) -less competition
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selling era
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-aggressive selling strategy is the focus -promotion and sales strategy is the priority
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consumer era
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-marketing strategy focuses on consumer needs total equality management (TQM) -externally focused on customer wants + needs -provide customer value -products perform to customer’s satisfaction -companies must earn customer trust -pricing matches product’s value and is realistic -some companies involve customers in creating products and services (crowdsourcing) -doesn’t mean its expensive (getting your money’s worth)
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the new era
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-consumer relationship management (CRM) -they use big data -improve business relationships through customer retention (keeping the customer, they will spread word) and customer acquisition (getting customers) -goal of CRM is to improve business relationships
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short answers
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-How would you describe how marketing has evolved?
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7 functions of marketing (packet)
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1. product/service management 2. distribution 3. selling 4. pricing 5. marketing research 6. financing 7. promotion
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consumer behaviors
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-effective organizations analyze customers before -products are marketed or developed -marketers must know what drives purchases -there are many theories regarding what influences customers to make purchases -there is agreement among marketers regarding the evidence of a decision making process 1. recognize a need 2. gather info 3. select/evaluate alternatives 4. make a purchase decision 5. determine the effectiveness of the decision
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buying motives
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Rational buying motives – purchases based on facts and logic Emotional Buying Motives – purchases based on feelings 1. make the viewer feel something (grab their attention) 2. involve your audience 3. give audience a reason to remember what you want them to 4. give audience an emotional reason to like you
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11 advertising types
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1. altruism -E 2. anger -E 3. bandwagon -E 4. emulation -R 5. fear -E 6. friendship -E 7. humor -E 8. intelligence -R 9. pleasure -E 10. sex appeal -E 11. status -E
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marketing research
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-process linking the producers, customers, and end users to the marketer through information 2 types: -quantitative (numbers, how many?) -qualitative (behavior, why?)
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value
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-define marketing opportunities and problems -generate, refine, and evaluate marketing strategies -help monitoring marketing performance -improve understanding of marketing as a process/tool
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why marketing research?
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1. who is your target market 2. what products are you selling – why would someone buy your product 3. who is your competition? – how big/old, strengths/weaknesses 4. who are your suppliers – buying/reselling, conditions of suppliers, where are they located
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steps
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1. define the marketing problem 2. analyze the situation 3. develop a data collection procedure 4. gather and analyze information 5. propose a solution
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secondary research
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-analyzing existing marketing information previously gathered for a different purpose
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primary research
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-studies completed to gather new information to solve a current problem
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types of research studies
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Surveys – questions designed carefully to gather info Observations – recording data regarding customer behavior Experiments – carefully controlled alternatives are compare to determine consumer preferences Focus Groups – group discussion about products/services to develop new ideas and problems or issues with products
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marketing strategy
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-marketing activities often cost 50% or more of selling price, so planning is key -marketing helps increase customer satisfaction and improves profit
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2 steps in marketing planning
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1. identify a target market -a specific group of consumers at which a company aims its products and services (avatar) -resist the temptation to be too general hoping to obtain more market share 2. create a marketing mix -blending of the 4 Ps
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product/service planning
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-product is the most important marketing mix element Terms: -basic product -product features – additions + improvements -product options – choices of features -brand name – unique identification for company’s products -packaging -guarantee/warranty
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product planning procedures
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new product planning is expensive – procedures need to be in place
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1. idea development
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-creative process – encouraged by companies -development comes from various sources like: -R+D employees (scientists) -salespeople -customers -problems
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2. idea screening
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-encouraging many ideas, then picking the best -will the product be profitable?
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3. strategy development
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-once a product idea appears viable -marketing strategy is developed -target market is determined -4 Ps are tested -alternative strategies are prepared + studied
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4. production and finance planning
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-facilities identified/equipment planned -labor needs determined -costs are considered to determine profit potential`
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5. limited production + test marketing
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-determines feasibility of production and marketing strategy before large investment -prototype or limited quantity may be created/tested
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6. full-scale production and marketing
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-information is continued to be gathered -competition is closely monitored
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product mix components
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1. product line 2. product assortment 3. packaging + labeling functions 4. brand development
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1. product line
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-group of similar products w slight variations -variations are usually in quantity or quality -differences in quantity – easiest way to alter product line is through size -differences in quality – various levels of quality is common for products -adding features is most common
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2. product assortment
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-complete set of all products a business offers to its market -one specific type of product (mattress store) -variety of products (costco)
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3. packaging + labeling functions
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-contain and protect -communicated -enhance convenience -facilitate storage -environmental sensitivity -display product codes -protect against tampering
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4. brand development
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– a name, symbol, word, or design that uniquely identifies a product, service of company -unique identification and image is the goal -name, logo, packaging design -colors, tagline, typeface -brand identity and brand image should match brand should be: -memorable -positive connotation -convey the “desired” image
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great products and services (Guy Kawasaki)
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1. Deep – cover everything, won’t disappoint 2. Intelligent 3. Completeness – not j a product, customer support 4. Elegant – simple to use 5. Emotive – make you feel passionate
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price a product
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selling price = product cost + operating expenses + profit gross margin = selling price – product costs
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why is pricing difficult in free enterprise system?
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-buyers will usually want to pay lowest price -sellers want to charge highest price possible
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setting a basic price
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cost based pricing -consider costs and profit goals – markup as appropriate demand based pricing -research what customers are willing to pay for your product and set price accordingly competition based pricing -price products consistent with your competitors -costs and demand are irrelevant
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price skimming vs. price penetration
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price skimming is when you initially price your product very high in hopes of maximizing products, but slowly lowering it over time. This is effective when your product has a unique advantage. Price penetration is selling your product at a low price in hopes of getting market shares and obtaining loyal customers. this also discourages competition
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status quo pricing
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matching competitors’ pricing or prices similar
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True/false? All businesses must complete some marketing activities even if that is not their focus.
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true
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True/false? A target market is a group of consumers that have similar wants and needs
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true
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True/false? Effective marketing begins with a good product
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false
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True/false? Finding solutions to problems through carefully designed studies involving consumers is called marketing research
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true
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True/false? Product packaging is the least important part of product planning because consumers simply throw away the packaging before using the product
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false
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True/false? The first step in new product planning is to develop a full marketing strategy
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false
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True/false? Highly complex and technical products generally have higher prices than simple products
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true
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True/false? A markup should be thought of as a pricing mistake because it reduces the amount of $ the business has to cover operating expenses and profits
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false
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True/false? A farmer selling at a roadside stand tomatoes she grew in her own garden is an example of a direct channel of distribution
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true
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True/false? Advertising is any form of communication used to inform, persuade, or remind
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false
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This marketing function involves determining ways for customers to locate, obtain, and use of the product is a. financial analysis b. distribution c. pricing d. selling
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b. distribution
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What is the first step in the consumer decision-making process a. gather info b. select alternatives c. evaluate alternatives d. recognize a need
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d. recognize a need
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A small # of consumers expressing opinions about a new product or service in a group discussion is a a. target market b. focus group c. survey group d. experimental group
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b. focus group
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The simplest form of a product is called the a. basic product b. brand name c. product feature d. option
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a. basic product
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Services are a. Easier than products to examine to see if they will meet your needs b. consumed at the same time they are produced c. the same no matter who provides them d. easier than product to store
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b. consumed at the same time they are produced
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A product will probably have a relatively high price a. if there are many companies supplying product b. if its supply is high c. if it has been on the market for a long time d. if it has many features and options
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d. if it has many features and options
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Product costs + Operating expenses + profit = a. gross margin b. selling price c. markup d. markdown
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b. selling price
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Businesses usually specialize in producing a specific type of product, while consumers want to purchase a variety of products. This illustrates differences in a. assortment b. quantity c. location d. timing
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a. assortment
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Which of the following is an example of personalized promotion a. advertising b. publicity c. personal selling d. sales promotion
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c. personal selling
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Non-paid promotion presented by the media rather than by a business is a. telemarketing b. advertising c. sales promotion d. publicity
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d. publicity
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marketing function that deals with determining the best ways for customers to locate, obtain, and use a company’s products and services
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distribution
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consumers who buy products and services for their own use
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final consumers
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marketing function that deals with designing and improving products and services
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product/service management
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buying a birthday card for a family member is an example of…
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emotional buying motive
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marketing function that involves communicating directly with potential customers to determine and satisfy their needs
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selling
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marketing function that involves budgeting for marketing activities and providing financial assistance to customers so they can buy goods and services
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financial analysis
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consumers who buy products for incorporation into other products
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business customers
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buying an automobile because it gets the best gas mileage and has been rated a cost-efficient purchase by a leading consumer magazine
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rational buying motive
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marketing function that deals with obtaining, managing, and using market information to improve business decision making
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marketing-information management
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marketing function that involves communicating information about products and services to potential customers
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promotion
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channels of distribution
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-route a product takes from producer to end user Businesses involved in the process: -wholesalers/retailers/specialized intermediaries
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direct channel
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producer/manufacturer directly to end user
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indirect channel
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one or more business between manufacturer/producer and end user
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need for distribution channels
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Due to complex economic systems distribution channels vary based on: -differences in quantity -differences in assortment -differeneces in location -differences in timing
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intensity of distribution
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how broadly your product will be distributed
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3 strategies
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1. intensive distribution -all suitable outlets 2. selective distribution -limits outlets to fit marketing strategy 3. exclusive distribution -one outlet selling product per area
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the role of promotion strategy
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-communication intended to persuade, inform, or remind selected target market -most visable “P” -used to maintain positive relationships, attract attention, and secure sales

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