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Intro to Marketing Rutgers Chapter 1 – 6 Midterm Methot

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Marketing
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Process by which companies CREATE VALUE for customers and build strong customer relationships in order to CAPTURE VALUE from customers in return
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“Marketing is __________”
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marketing is customers
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Marketing is the process by which companies create _____________ for customers and capture __________ in return.
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value; value
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Value=
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perceived benefits – perceived costs
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The value of an offering is its perceived ______ minus its perceived ___________.
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benefits; costs
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The Marketing Process
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Analysis -> Decisions -> Outcomes
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4 P’s
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Product, Place, Price, Promotion
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Marketing Mix Decisions
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4 P’s :Product, Place, Price, Promotion
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The 5 Cs
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• Customers • Company • Competitors • Collaborators • Context
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The Marketing Process: ANALYSIS
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Understand the marketplace and customer needs and wants ex: The 5 Cs
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The Marketing Process: DECISIONS
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Design a customer value driven marketing strategy Construct an integrated marketing program that delivers superior value Aspirational and Marketing Mix decisions ex: segmentation, target positioning, 4P’s
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• Customer Needs
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• States of felt deprivation • Part of being human • e.g. physical needs, individual needs
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The Marketing Process: OUTCOMES
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Engage customers, build profitable relationships, and create customer delight. Relationship Management (customers and partners) Capture Value : (Create Satisfied, Loyal Customers, generate referrals)
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Customer Wants
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-Needs shaped by culture and individual personality • Described as specific objects
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Customer Demand
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Wants backed by buying power.
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Marketing Myopia
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Focus on company’s needs instead of customers’ needs and wants
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Market Offerings
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Market Offerings fulfill customer needs & wants.
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Customer Satisfaction
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How well a market offering meets or surpasses customer expectations
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When customer expectations exceed their actual experiences, the result is _______________.
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dissatisfaction
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Exchange
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Exchange is the act of obtaining a desired object from someone by offering something in return.
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Marketing Management Orientation
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-The company orientation towards the marketplace. -The philosophy the company applies while targeting a market. -There are 5 different marketing management orientations…
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Types of Marketing Management Orientation
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Production Concept Product Concept Selling Concept Marketing Concept Societal Concept
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Production Concept
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“Inside Out” Approaches FOCUS: production & distribution efficiency
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Product Concept
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“Inside Out” Approaches FOCUS: continuous product improvement
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Selling Concept
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“Inside Out” Approaches FOCUS: large-scale selling and promotion
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Marketing Concept
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“Outside In” Approaches FOCUS: delivering customer needs and value
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Societal Marketing Concept
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“Outside In” Approaches FOCUS: improving customer and society wellbeing
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Customer Lifetime Value (LTV)
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LTV is the value of the entire stream of purchases a customer makes over a lifetime of patronage
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Share of Customer
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Share of Customer is the % they get of the customer’s purchasing in their product categories Increase SOC of existing customers by: • Good customer relationship mgmt • More product variety • Cross-sell and up-sell opportunities
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Share of Customer helps companies measure __________.
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their percentage of spending from specific buyers in the market
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Customer Equity
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Customer Equity is the total combined LTVs of the all the company’s current & potential customers
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Customer Relationship Management
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Short-term / Long-term High Profit Butterflies/ True Friends Low Profit Strangers/ Barnacles
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Companies should invest in retaining all customers who purchase from them. (T/F)
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False
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I splurged on an expensive vacation in Hawaii 7 years ago but haven’t traveled much since. The resort likely now views me as a _______.
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Butterfly
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Customer Satisfaction relates to how well a market offering meets or surpasses ____________.
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customer expectations
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Strategic Planning
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Strategic planning helps a firm to maintain a strategic fit between its goals and capabilities and its changing marketing opportunities.
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Strategic Planning Process
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Strategic planning helps a firm to maintain a strategic fit between its goals and capabilities and its changing marketing opportunities. -define company’s mission -setting company objectives and goals -designing the business portfolio
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Mission Statement
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Market (customer) oriented • Purposeful • Emphasizes strengths • Aspirational • Clarifies what’s in, and what’s out
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Company Goals and Objectives
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The mission leads to long-term objectives – Business objectives – Marketing objectives • Objectives are achieved through short-term strategic goals ex: customer obj. operational obj. financial obj
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Business Portfolio
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Business Portfolio is a collection of businesses and products that make up the company. Steps in business portfolio planning: – Analyze the firm’s current business portfolio – Develop strategies for growth and downsizing to shape the future portfolio
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The BCG Growth-Share Matrix
The BCG Growth-Share Matrix
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Market Expansion Grid
Market Expansion Grid
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Market Penetration
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Making more sales to current customers without changing your original products/services
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Market development
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Identifying and developing new markets for existing products
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Product development
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Offering modified or new products to current markets
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Diversification
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Starting up or buying businesses beyond its current products or markets
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Offering modified or new products to current markets represents which expansion strategy?
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Production development
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Downsizing
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Reduces the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy • Reasons for downsizing: – Rapid growth of the company – Lack of experience in a market – Change in market environment – Decline of a particular product
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SWOT Analysis
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_________ are internal limitations that may interfere with a company’s ability to achieve its objectives.
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weaknesses
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Marketing Strategy & Action Program – 4Ps
Marketing Strategy & Action Program - 4Ps
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Product: variety, quality, design, features, brand name, packaging, services, Price: list price, discounts, allowances, payment periods, credit terms Promotion: Advertising, personal selling, sales promotion, public relations. Place: channels, coverage, locations, inventory, transportation, logistics
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Controls = Accountability
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Marketing ROI: – Standard marketing performance measures Financial ROI: Net return from a marketing investment divided by the costs of the marketing investment
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Contents of a marketing plan
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1. executive summary 2. current marketing situation 3. threats and opportunities analysis 4. objectives and issues 5. marketing strategy 6. action program 7. budgets
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In the Growth Share Matrix (aka BCG Matrix), SBUs that represent new innovations/ new product launches typically start in which quadrant?
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Question Mark
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Marketing Environment
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Outside forces that affect marketing management’s ability to build and maintain successful relationships with customers.
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Microenvironnment
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Actors close to the company that affect its ability to serve its customers. -company -customers -competitors -collaborators
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Macroenvironment
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Larger societal forces that affect the microenvironment
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Actors close to the company that affect the organization’s ability to serve its customers are part of the company’s ______________.
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Microenvironment
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5 majors forces in Macroenv.
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Demopgraphic economic natural technological political cultural
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Demographic Environment
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Demography: Study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics • Marketers analyze: • Changing age* and family structures • Geographic population shifts • Educational characteristics • Population diversity
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Economic Environment
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Economic factors that affect consumer purchasing power and spending patterns • Type of economy (industrial, developing, etc.) • Differences in income distribution • Changes in consumer spending
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Natural Environment
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• Physical environment and natural resources needed as inputs by marketers or affected by marketing activities • Environmental sustainability concerns increasing • Trends: • Shortages of raw materials • Increased pollution • Increased government intervention
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Technological Environment
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Most influential force • New technologies create new markets and opportunities.
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Cultural Environment
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• Institutions and other forces affect shape our basic beliefs, values, perceptions, preferences, and behaviors. • Cultural characteristics that affect marketing decision making • Core beliefs & values • Persistent, passed down through institutions and generations • Secondary beliefs & values • Cultural swings cause beliefs & values to change over time
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Political Environment
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Forces that influence and limit various organizations and individuals in a society – Laws, government agencies, and pressure groups • Goals of enacting business legislation: – Protect companies from each other – Protect consumers from unfair business practices – Protect the interests of society against unrestrained business behavior
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which of the following is a good strategy for marketing during a recession?
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Focus on family values
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According to the five- step model of the marketing process, the first step in marketing is ________. A) understanding the marketplace and customer needs and wants B) engaging customers, building profitable relationships, and creating customer delight C) designing a customer- driven marketing strategy D) constructing an integrated marketing program that delivers superior value E) capturing value from customers to create profits and customer equity
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A) understanding the marketplace and customer needs and wants
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________ is the art and science of choosing target markets and building profitable relationships with them. A) Segmentation B) Positioning C) Differentiation D) Marketing management E) Value engineering
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D) Marketing management
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Dividing a market into several sections of customers is known as ________.
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market segmentation
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JetBlue’s promise to put “You Above All” by “bringing humanity back to travel” is their ________. A) selling concept B) value proposition C) market offering D) production concept E) segmentation strategy
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B) Value proposition
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A ________ is purposeful, specifying what an organization wants to accomplish in the larger environment.
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Mission statement
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Which of the following best describes a company’s business portfolio? A) the target segments of the company’s various businesses B) the list of all the marketing activities in which the company invests C) the company’s strengths in terms of technology, people, and products D) the collection of businesses and products that make up the company E) the company’s products or services in a particular market
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D) the collection of businesses and products that make up the company
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The two dimensions the BCG approach uses to evaluate and manage SBUs are ________. A) market growth rate and relative market share B) relative market share and market penetration C) relative market share and product development D) market growth rate and market development E) market growth rate and market penetration
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A) market growth rate and relative market share
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Which of the following is part of the microenvironment of a firm’s marketing environment? A) the cultural forces that exist in a society B) the political state of the country in which the firm exists C) the technological resources available to the company D) the different demographic trends in the market E) the suppliers who work with the company
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E) the suppliers who work with the company
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Demographic, economic, natural, technological, political, and cultural forces form the ________ of an organization. A) microenvironment B) supply chain C) internal environment D) marketing intermediary network E) macroenvironment
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E) macroenvironment
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________ markets consist of individuals and households that buy goods and services for personal use. A) Consumer B) Business C) Retailer D) Government E) Wholesaler
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A) Consumer
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Market
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A Market is the set of actual and potential buyers of a product or service -share a particular want or need that can be satified through an exchange relationship
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Bic believes that saving handwriting will serve short-term customer needs and their long-term welfare. This represents which marketing management orientation? A. Societal Marketing Orientation B. Customer Relationship Orientation C. Sustainable Orientation D. Product Orientation
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A) Societal Marketing orientation
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A growing number of college students have a laptop or tablet with them at all times. Using SWOT analysis, what does this represent for Bic? A. Strength B. Weakness C. Opportunity D. Threat
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D. Threat
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Some customers have continued to purchase Bic pens for many years, and prefer more expensive designs and colors. To which customer relationship group do these customers likely belong? A. Strangers B. True Friends C. Barnacles D. Butterflies
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B. true friends
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Customer Insights
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are fresh understandings of customers and the marketplace, derived from marketing information. – used to create more value for customers -difficult to obtain because its not obvious and cusotmers are unsure of their own behavior
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Marketing Information Systems (MIS)
Marketing Information Systems (MIS)
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represent people and procedures for: 1. Assessing information needs 2. Developing needed information 3. Analyzing and using information
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Internal Data
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Consumer and market info obtained from data sources within the company network
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Marketing Intelligence
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Collection and Analysis of publicly available info about consumers, competitors & developments in the marketplace Actively scan environment
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Marketing Research
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Design, collection, analysis & reporting of data relevant to a specific marketing situation facing an organization focused studies exploratory research descriptive research causal research
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Exploratory Research
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Gather preliminary info to help define problem and suggest hypotheses.
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Descriptive Research
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Describe things, such as the market potential for a product of the demographics / attitudes of customers who buy it
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Causal Research
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Test hypothesis about cause and effect relationships.
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Q. In 1985, Coca-Cola should have first undergone ______ research to gather preliminary info and create a hypothesis as to why people were drinking less cola. A. Causal B. Usability C. Exploratory D. Descriptive
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C. Exploratory
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If Coca-Cola wanted to study the impact of changing the taste of Coke on purchase preference, they could have undergone _____ research. A. Causal B. Usability C. Exploratory D. Descriptive
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A. causal
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Primary Data
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• Gathering info for the specific purpose at hand.
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Secondary Data
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Collecting info that already exists somewhere; collected prior to purpose sources can include: internal, purchased outside, commercial database, and search engines
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Observational Research
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Gathering primary data by observing relevant people, actions, and situations • Ethnographic research
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Ethnographic research
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Sending trained observers to watch and interact with consumers in their natural environments
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Many companies are using _____ to gain more speed, scale, and efficiency from its ethnographic research efforts. A. in-house research teams B. mobile apps C. customer surveys D. online focus groups
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B. Mobile apps
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Survey Research
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Asking people questions about their knowledge, attitudes, preferences, and buying behavior
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Experimental Research
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Selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses
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Contact Methods
Contact Methods
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Mail, telephone, personal, online.
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Sampling Plan
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A Sample is a segment of the population selected to represent the population as a whole.
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Questionnaires
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A research instrument, can be administered in person, by phone, by email, or online. -closed-end ?’s or -open-end ?’s
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Mechanical Instruments
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neuromarketing checkout scanners smart shelves
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Steps in the Marketing Research Process
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-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
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Responsibilities of the market researcher:
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Interpret findings – Draw conclusions – Report findings to management
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Responsibilities of marketing managers:
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Work closely with researchers to interpret research results – Share responsibility for the research process and resulting decisions
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Forces Influencing Consumer behavior
Forces Influencing Consumer behavior
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Cultural, social, personal, psychological
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Adoption rate categories
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Relative advantage compatibility complexity divisibility communicability
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Relative advantage
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superiority vs/ existing products
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compatibility
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“Fit” with values of potential cusotmers
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complexity
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Difficulty to understand or use
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divisibility
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ability to be tried on a limited basis
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communicability
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results can be observed or described to others
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Relative Time of Adoption of Innovations
Relative Time of Adoption of Innovations
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Innovators early adopters early mainstream late mainstream lagging adopters
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Buyer decision process
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high involvement vs. low involvement utilitarian vs. self-expressive
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Segmentation
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Divide the total market into smaller segments
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Targeting
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Select the segment or segments to enter
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Differentiation
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differentiate the market offering to create superior customer value
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positioning
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position the market offering in the minds of target customers.
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Segmentation Variables
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Geographic, Demographic, Psychographic, Behavioral
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Demographic Segmentation
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Dividing a market into segments based on demographic variables Such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation
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Psychographic Segmentation
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Dividing a market into segments based on interests, attitudes, and opinions (IAO) – Social class – Consumer lifestyles – Consumer personality
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Behavioral Segmentation
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Dividing a market into segments based on their knowledge, attitudes, uses or responses about a product
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Occasion Segmentation
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•When get idea to buy •When make their purchase •When use the product
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Benefit Segmentation
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•Segment by different benefits buyers seek from the product
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User Status
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Nonusers •Ex-users •Potential users •First-time users
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Usage Rate
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Light users •Medium users •Heavy users
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Loyalty Status
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Loyal to brand •Loyal to store •Loyal to company
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Multiple Segmentation Bases
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help companies to: – Identify smaller, better-defined target groups – Identify and understand key customer segments – Reach customers more efficiently by tailoring market offerings and messages to customers’ specific needs • Help marketers segment people and locations into marketable groups of like-minded consumers.
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Behavioral Segmentation in Digital Mktg
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Contextual: • Targeting based on content of a specific webpage Retargeting: • Targeting based on previous interactions with specific cookies InterestBased • Targeting based on previous browsing activity
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Requirements for Effective Segmentation
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-Measurable: Size & profiles can be measured -Accessible: Segment can be effectively reached -Substantial: Large, profitable enough to serve -Differentiable: Distinguishable segments respond differently -Actionable Programs can be developed in to reach segments:
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Undifferentiated (mass)marketing
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targets broadly, Focuses on needs that are COMMON instead of needs that are different.
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Differentiated (segmented) marketing
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Focuses on several market segments, with a separate offering for each
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Concentrated (niche) marketing
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Focuses on going after a large share of one or a few smaller segments (or niches)
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Micromarketing (local or individual marketing)
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Focuses on tailoring products & marketing programs to individual customers ** most relevant but most expensive
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Value Proposition
Value Proposition
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benefits and price vs their competitors
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More for More Proposition
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Provides the most upscale product or service • Charges a higher price to cover the higher costs
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More for the same
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High quality at lower prices can be used to attack a more-for-more positioning
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More for less
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-Best winning position -Very difficult for companies to sustain such best-of-both positioning
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The same for less
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-Gives a good deal -Used by discount stores that offer deep discounts based on superior purchasing power and lower-cost operations
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Less for much Less
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Meeting consumer’s lower performance or quality requirements at a much lower price.
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Less for much Less
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The same for less
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More for less
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More for the same
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More for More Proposition
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Value Proposition
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Micromarketing (local or individual marketing)
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Concentrated (niche) marketing
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