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CHAPTER ONE

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Marketing

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"the activity for creating, communicating, delivering, and exchanging offerings that benefit an organization, its stakeholders, and society at large."

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My definition of marketing:

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The art and science of creating the awareness and perception of value for a product or service so that someone has the desire to acquire it.

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What does Marketing seek to do?

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1. Discover needs and wants of customers 2. Satisfy them

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Marketing works with other departments in organizations to help provide customer-satisfying products required for the organization to survive and prosper.

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What is required for marketing to occur?

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1. Two or more parties with unsatisfied needs 2. A desire and ability to be satisfied 3. A way for the parties to communicates 4. Something to exchange

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Research has shown that companies are more successful when they try to meet an ________ ________ rather than create a need/want that did not previously exist. EX): ______

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existing need Apple

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Relationship Marketing

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Linking the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit.

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Customer Value:

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the unique combination of benefits received by the targeted buyers that includes quality, convenience, on-time delivery, and both before-sale and after-sales service at a specific price.

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CHAPTER TWO

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Core Values

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The fundamental, passionate, and enduring principles of an organization that guide its conduct over time.

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Mission

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A statement of the organization's function in society..............( often identifying its customers, markets, products, and technologies.) Often used interchangeably with vision.

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Organizational Culture

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The set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization.

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Business

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The clear, broad, underlying industry or market sector of an organization's offering.

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Goals

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Statements of an accomplishment of a task to be achieved, often by a specific time. Also called objectives.

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Situational Analysis

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means taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization's marketing plans and the external forces and trends affecting it.

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SWOT Analysis

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an acronym describing an organization's appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats.

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Marketing Mix (FOUR P's)

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Price Place Promotion Product

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The Four P's are all used to satisfy the "Market" of people with both the ________ and the _________ to buy a specific offering.

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desire ability

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CHAPTER THREE

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Multicultural marketing

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combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preference, and lifestyles of different races all contribute to the marketing strategy

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Describe how social forces such as demographics, population, culture and the changing family can have an impact on marketing strategy:

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Multicultural marketing which are combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preference, and lifestyles of different races all contribute to the marketing strategy. Population is expected to increase to 9.35 billion by 2050. US population is becoming larger, older, and more diverse, suggesting that niche markets based on age life stage family structure geographic location and ethnicity will become increasingly important.

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Understand how macroeconomic conditions and consumer income affect marketing:

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Value Consciousness has increased over the recent years. Disposable income is the money consumers have left after taxes to pay bills and buy necessities such as food, housing, clothing, and transportation. Discretionary income is the money left after paying for necessities and taxes, its fun money.

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Explain how technological changes can affect marketing:

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Electric commerce, that is any activity that uses some form of electronic communication in the inventory, exchange, advertisement, distribution, and payment of goods and services has increased tremendously and there are 2.4 billion internet users with 1.3 billion using social media meaning that social media advertising is the way of the future. Other technological forces that will increase marketing on the internet include: cloud computing, smart phones, nano-technology, genetically altered food, wireless power, and e-readers.

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Understand the forms of competition that exist in a market

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-Pure Competition -Monopolistic Competition -Monopoly

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Pure Competition

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where there are many sellers and they each have similar product. -Ex: Gas

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Monopolistic Competition

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Many sellers compete with substitutable products within a price range. If the price of coffee rises too much consumers may switch to tea. -Ex: Fast Food in San Marcos

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Monopoly

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Occurs when only one firm sells the products. -Are common for producers of goods considered essential to community: water, electricity, and cable service.

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Understand the role that regulation plays in the marketing environment:

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Regulation consists of restrictions state and federal laws place on business with regard to the conduct of its activities. Regulation exists to protect companies as well as consumers. Much of the regulation for the federal and state levels is the result of an active political process and has been passed to ensure competition and fair business practices. For consumers, the focus of legislation is to protect them from unfair trade practices and ensure their safety.

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Understand what is meant by multicultural marketing programs and why they are important:

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Multicultural marketing which are combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preference, and lifestyles of different races all contribute to the marketing strategy. The term "minority" will have a different meaning in a few years as most minority groups grow in numbers. Each of theses groups already represents significant spending power. Since business must now market their products to a consumer base with many racial and ethnic identities, in-depth marketing research that allows an accurate understanding of each culture is essential.

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CHAPTER FOUR

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Ethics:

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The moral principles and values that govern the actions and decisions of an individual or group. They serve as guidelines on how to act rightly and justly when faced with moral dilemmas.

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Laws:

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Societies values and standards that are enforceable in the courts. There are four ways to classify marketing decisions according to ethical and legal relationships: Ethical but illegal, Ethical and Legal, Unethical and Illegal, Unethical but legal.

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The Various Components of Social Responsibility

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Refers to obligations that organizations have (1) to the preservation of the ecological environment and (2) to the general public. Today emphasis is placed on what is termed the Triple-bottom-line Recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable long term growth. This includes Green Marketing, Cause Marketing, And Sustainable Development.

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Triple-bottom-line

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Recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable long term growth........................ This includes Green Marketing, Cause Marketing, And Sustainable Development.

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Different Types of Societal Responsibility (3)

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-Green Marketing -Cause Marketing -Sustainable Development

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Green Marketing

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Marketing efforts to produce promote and reclaim environmentally sensitive products

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Cause Marketing

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When the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products

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Sustainable Development

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Involves conducting business in a way that protects the natural environment while making economic progress

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CHAPTER FIVE

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Purchase decision process model (Stages)

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1. Problem Recognition 2. Information Search 3. Alternative Evaluation 4. Purchase Decision 5. Post Purchase Decision

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What goes on during the Problem Recognition Stage in the Purchase Decision Process Model?

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There is a difference between actual state and need that is unmet -ex: you're hungry, you need to eat

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What goes on during the Information Search Stage in the Purchase Decision Process Model?

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The info you need to make the decision on how to obtain your need

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What goes on during the Alternative Evaluation Stage in the Purchase Decision Process Model?

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Consumers create and use Evaluative Criteria which represent both objective attributes of a brand (such as display) and subjective ones (such a prestige) you use to compare different products and brands.

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What goes on during the Purchase Decision Stage in the Purchase Decision Process Model?

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When you make the decision

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What goes on during the Post Purchase Decision Stage in the Purchase Decision Process Model?

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People and companies want to make sure that you are continuing your satisfaction with their product and that you are not experiencing cognitive dissonance.

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Extended Problem Solving

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: Exists in high-involvement purchase situations for items such as automobiles and audio systems. -Ex: Big ticket items

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Limited Problem Solving

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Consumers typically seek some information or rely on a friend to help them evaluate alternatives. -might be used in choosing a toaster, a restaurant for lunch, and other purchase situations in which the consumer has little time or effort to spend.

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Routine Problem Solving

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Is typically the case for low-priced, frequently purchased products such as table salt, a soft drink, or snack.

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CHAPTER SIX

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Understand the key characteristics of organizational buying that make it different from consumer buying:

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-Organizational Buyers: Those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale. There are about 7.7 million firms in the industrial or business market. These industrial firms in some way reprocess a product or service they buy before selling it again to the next buyer. There are less organizations that consumers buy they have much bigger orders. Organizations buy products and services for one main reason: to help them achieve their objectives. Profits, Efficiency, Environment, Women/ Minority owned suppliers or vendors. -Organizational buying criteria: are the objectives attributes of the supplier's products and services and the capabilities of the supplier itself. -Commonly used criteria includes: Price, ability to meet quality specifications requited for the item, ability to meet required delivery schedules, technical capability, warranties and claim polices in the event of poor performance, past performance contracts, production facilities and capacity.

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Three types of buying situations:

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New Buy Straight Re-buy Modified Re-buy

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New Buy

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The organization is a first time buyer of the product. This involves greater risk, so more people enter into the decision process.

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Straight Re-buy

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A re-order of an existing product or service from the list of acceptable suppliers.

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Modified Re-buy

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Involves a change in product specifications, price, delivery, schedule, or suppliers.

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CHAPTER SEVEN

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Issues that a marketer must consider in global enviromental scanning

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values customs cultural symbols cross cultural analysis semiotics cultural enthocentricity

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Values

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: Represent personally or socially preferable modes of conduct or states of existence that tend to persist over time.

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customs

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Are what is considered normal and expected about the way people do things in a specific country.

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cultural symbols

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Things that represent ideas and concepts. Symbols and symbolism play an important role in cross cultural analysis because different cultures attach different meaning to things.

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cross cultural analysis

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Involves the study of similarities and differences among consumers in two or more nations or societies.

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semiotics

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Examines the correspondence between symbols and their role in the assignment of meaning for people.

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cultural enthocentricity

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The tendency to believe that it is inappropriate indeed immoral to purchase foreign-made products. The belief that buying imported products is wrong because such purchases are unpatriotic, harm domestic industries, and cause domestic unemployment.

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Global Market-entry strategies

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Indirect Exporting Direct Exporting Joint Venture Direct Investment

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Indirect Exporting

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Using an intermediary to assist in the exporting. The easiest way to start, least commitment and risk, but also produces the least profit because some of it has to go to the intermediary. You sell it through a partner

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Direct Exporting

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Selling products in other countries without using an intermediary. This is tougher because you don't have a cultural contact

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Joint Venture

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When a foreign company and local firm invest together to create a local business

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Direct Investment

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Entitles a domestic firm actually investing in and owning a foreign subsidiary -ex: Mercedes-Benz factory in Vance, Alabama.

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CHAPTER EIGHT

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Primary Data

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Facts and figures that are newly collected from the project. The main types of primary data are Observational, questionnaire, and other sources of data.

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Observational

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watching people mechanically, personally, or through neuromarketing methods

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questionnaire

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-Open-ended questions allow respondents to express opinions, ideas, or behaviors in their own words without being forced to choose among alternatives that have been predetermined by a marketing researcher. It captures the "voice" of the respondents. -Closed-ended or Fixed Alternative questions: Requires respondents to select one or more response options from a set of predetermined choices. -Dichotomous Question: The simplest form of a fixed alternative question that allows only a "yes" or a "no" response. -Semantic Differential Scale: A five point scale in which the opposite ends have one or two word adjectives that have opposite meanings ex: Very Important-Very Unimportant. -Likert Scale: How much do you like it? Ex: Strongly agree- Strongly disagree.

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Expirements

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Analyze the data and present the findings. Actions might include a particular promotion and advertising campaign or developing a new product. -Sales forecast: refers to the total sales of a product that a firm expects to sell during a specified time period under specified conditions and its own marketing effort. -Direct forecasting: Involves estimating the value to be forecast without any intervening steps. It is used more for everyday decisions. -Lost Horse Forecasting: Involves starting with the last known value of the item being forecast, listing the factors that could affect the forecast assessing whether they have a positive or negative impact, and making the final forecast. -Survey of buyers: Often low, the intentions of a prospective customer to buy the product during some future time period. -Sales force forecast: Involves asking the firms salespeople to estimate sales during a coming period. Also often low.

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Secondary Data

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Facts and figures that have already been recorded before a project at hand. It can be internal or external

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Internal

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such as sales figures or order requests

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External

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such as the data available for the us census

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CHAPTER NINE:

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Market Segmentation

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involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action. Market segments are the relatively homogeneous groups of prospective buyers that result from the market segmentation process. Each segment is made up of people who are relatively similar to each other in terms of their consumption behavior

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Product Differentiation

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which involves a firm using different marketing mix activities, such as product features and advertising, to help consumers perceive the product as being different and better than competing products. The perceived differences may involve physical features, such as size or color, or non-physical ones, such as image or price.

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Segmentation Strategies

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1. One Product and Multiple Market Segments 2. Multiple Products and Multiple Market Segments 3. Segments of One: Mass Customization 4. The Segmentation Trade- Off

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One Product and Multiple Market Segments

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When an organization produces only a single product or service and attempts to sell it to two or more market segments, it avoids the extra costs of developing and producing additional versions of the product. In this case, the incremental costs of taking the product into new market segments are typically those of a separate promotional campaign or a new channel of distribution. This strategy is common with books and magazines.

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Multiple Products and Multiple Market Multiple Market Segments

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common in the automobile industry where auto makers produce different lines of cars, trucks, and SUV's...each targeted to a different market.

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Segments of One: Mass Customization

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American marketers are rediscovering today what their ancestors running the corner general store knew a century ago: Each customer has unique needs and wants, and desires special tender loving care. Economies of scale in manufacturing and marketing during the past century made mass-produced goods so affordable that most customers were willing to compromise their individual tastes and settle for standardized products. Today's Internet ordering and flexible manufacturing and marketing processes have made mass customization possible, which means tailoring goods or services to the tastes of individual customers on a high-volume scale. Mass customization is the next step beyond build-to-order (BTO), manufacturing a product only when there is an order from a customer. Dell uses BTO systems that trim work-in-progress inventories and shorten delivery times to customers. To do this, Dell restricts its computer manufacturing line to only a few basic models that can be assembled in four minutes. This gives customers a good choice with quick delivery.

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The Segmentation Trade-Off

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Synergies versus Cannibalization The key to successful product differentiation and market segmentation strategies is finding the ideal balance between satisfying a customer's individual wants and achieving organizational synergy, the increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently. Marketers increasingly emphasize a two-tier, "Tiffany/Walmart" strategy." Many firms now offer different variations of the same basic offering to high-end and low-end segments. Gap's Banana Republic chain sells blue jeans for $58, whereas its Old Navy stores sell a slightly different version for $22.

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Variables used to segment markets

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Demographic Geographic Psychographic Behavioral

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Demographic

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which is based on some objective physical (gender, race), measurable (age, income), or other classification attribute (birth era, occupation) of prospective customers

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Geographic

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which is based on where prospective customers live or work (region, city size);

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Psychographic

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Want to know what your neighborhood is like? Go to claritas.com/MyBestSegments/Default.jsp and click the "You Are Where You Live" image. Then, type in your zip code (and security code) to find out what the most common segments are in your neighborhood.

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Behavioral

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...

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Product Features:

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Understanding what features are important to different customers is a useful way to segment markets because it can lead directly to specific marketing actions, such as a new product, an ad campaign, or a distribution system. -For example, college dorm residents frequently want to keep and prepare their own food to save money or have a late-night snack. However, their dorm rooms are often woefully short of space. MicroFridge understands this and markets a combination microwave, refrigerator, freezer, and charging station targeted to these students.

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Usage rate is the quantity consumed or patronage—store visits—during a specific period.

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It varies significantly among different customer groups. Airlines have developed frequent-flier programs to encourage passengers to use the same airline repeatedly to create loyal customers. Usage rate is sometimes referred to in terms of the 80/20 rule: a concept that suggests 80 percent of a firm's sales are obtained from 20 percent of its customers. The percentages in the 80/20 rule are not really fixed at exactly 80 percent and 20 percent but suggest that a small fraction of customers provides a large fraction of a firm's sales. •Geographic bases—88 percent. •Behavioral bases—65 percent. •Demographic bases—53 percent. •Psychographic bases—43 percent.

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80/20 rule

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a concept that suggests 80 percent of a firm's sales are obtained from 20 percent of its customers

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Product positioning

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refers to the place a product occupies in consumers' minds on important attributes relative to competitive products. By understanding where consumers see a company's product or brand today, a marketing manager can seek to change its future position in their minds. This requires product repositioning, changing the place a product occupies in a consumer's mind relative to competitive products.

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Head-to-head positioning

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involves competing directly with competitors on similar product attributes in the same target market. Using this strategy, Dollar rental car competes directly with Avis and Hertz.

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Differentiation positioning

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involves seeking a less-competitive, smaller market niche in which to locate a brand. McDonald's tried to appeal to the health-conscious segment when it introduced the low-fat McLean Deluxe hamburger to avoid competing directly with Wendy's and Burger King.

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CHAPTER 10

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Product Item

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a specific product that has a unique brand, size, or price. For example, Ultra Downy softener for clothes comes in several different sizes. Each size is a separate stock keeping unit (SKU), which is a unique identification number that defines an item for ordering or inventory purposes.

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Product Line

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a group of product or service items that are closely related because they satisfy a class of needs (a line of medications or household appliances), are used together (cosmetics), are sold to the same customer group (medical equipment), are distributed through the same outlets (plumbing supply distributor), or fall within a given price range (Dollar Stores).

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Product Mix

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consists of all of the product lines offered by an organization. For example, Cray Inc. has a small product mix of three supercomputer lines that are sold mostly to governments and large businesses. Fortune Brands, however, has a large product mix that includes product lines such as sporting equipment (Titleist golf balls) and plumbing supplies (Moen faucets).

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Breadth

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...

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Depth

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...

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product

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is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value.

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Non-Durable Goods

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A nondurable good is an item consumed in one or a few uses, such as food products and fuel.

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Durable Goods

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A durable good is one that usually lasts over many uses, such as appliances, cars, and mobile phones.

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Convenience products

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are items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort. (Soft drinks, snacks, inexpensive items)

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Shopping Products

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are items for which the consumer compares several alternatives on criteria such as price, quality, or style. (Restaurant meal, clothes, small appliances)

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Specialty Products

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are items that the consumer makes a special effort to search out and buy. (Cars, houses, jewelry, vacations).

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Unsought products

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are items that the consumer does not know about or knows about but does not initially want. (Insurance, medical procedures, root canal)

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Business Products

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(also called B2B products or industrial products) are products that organizations buy that assist in providing other products for resale

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Components

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are items that become part of the final product. These include raw materials such as grain or lumber, as well as assemblies or parts, such as a Ford car engine or car door hinges.

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Support Products include:

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are items used to assist in producing other goods and services. Support products include •Installations, such as buildings and fixed equipment. •Accessory equipment, such as tools and office equipment. •Supplies, such as stationery, paper clips, and brooms. •Industrial services, such as maintenance, repair, and legal services.

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Factors contributing to a new product's or service's failure:

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1. Not really listening to the voice of the consumer 2. Skipping stages in the new product process 3. Pushing a poorly conceived idea into the market to generate quick revenue (today's tablet computers to compete with i-pad) 4. Encountering 'groupthink' in task force and committee meetings 5. Not learning critical take-away lessons from past failures.

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Factors contributing to a new product's or service's success:

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1. New Product Strategy Development 2. Idea Generation 3. Screening and evaluation 4.Develpment 6. Market testing 7. Not all products can use test marketing 8. commercialization

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CHAPTER 11

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Stages of the product life cylce

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1. Introduction 2. Growth 3. Maturity 4. Decline

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Introduction Stage of the Product Life Cycle

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The product is introduced to the target market. Characterized by: 1. Sales grow slowly. 2. Minimal profits as a result of large investment costs in development

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Growth Stage of the Product Life Cycle

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Characteristics: •Rapid increases in sales •Competition appears •Profit peaks •Advertising shifts to selective demand. •Sales grow at an increasing rate because of new people trying the product and repeat purchasers bought again. •Changes appear..."New and Improved!"

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Maturity Stage of the Product Life Cycle

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Total industry sales slow, and marginal competitors begin to leave the market. Sales increase at a decreasing rate, and most consumers who would buy the product are either repeat purchasers of the item or have tried and abandoned it. Fewer new buyers enter the market. Marketing actions are focused on maintaining market share through product differentiation and finding new buyers. -Examples: Soft drinks and DVD players.

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Decline Stage of the Product Life Cycle

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Sales drop, often because of environmental changes. For example, CD's declined as digital music players proliferated. Companies typically follow one of two strategies: 1. Deletion: dropping the product from the company's product line...the most drastic strategy. This option is not taken lightly because there is usually a residual core of customers who continue to consume or use the product even in the decline stage. Example: IBM stopped making laptop computers. 2. Harvesting: the company retains the product but reduces marketing costs. The product continues to be offered, but salespeople do not allocate time in selling nor are advertising dollars spent. The purpose of harvesting is to maintain the ability to meet customer requests. Coca-Cola, for instance, still sells Tab, its first diet cola, to a small group of die-hard fans.

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Know what the diffusion of Innovation concept is and its implication for the product life cycle

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Not all consumers rush to buy a product in the introductory stage, and the shapes of the life-cycle curves indicate that most sales occur after the product has been on the market for some time. In essence, a product diffuses, or spreads, through the population, a concept called the diffusion of innovation. For a product to be successful, it must be purchased by innovators and early adopters.

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Branding

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A marketing decision in which an organization uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors.

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Brand name

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is any word, device (design, sound, shape, or color), or combination of these used to distinguish a seller's goods or services. Some brand names can be spoken, such as a Gatorade or Rollerblade. Other brand names cannot be spoken, such as the colored apple (the logotype or logo) that Apple puts on its machines and in its ads.

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Trade Name

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is a commercial, legal name under which a company does business

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Brand Equity

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The added value a brand name gives to a product beyond the functional benefits provided.

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Brand licensing

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A contractual agreement whereby one company (licensor) allows its brand name(s) or trademark(s) to be used with products or services offered by another company (licensee) for a royalty or fee

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Brand Personality

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a set of human characteristics associated with a brand name. Research shows that consumers often assign personality traits to products—traditional, romantic, rugged, sophisticated, rebellious—and choose brands that are consistent with their own or desired self-image. Marketers can and do imbue a brand with a personality through advertising that depicts a certain user or usage situation and conveys certain emotions or feelings to be associated with the brand. For example, the personality traits associated with Coca-Cola are all-American and real; with Pepsi, young and exciting; and with Dr Pepper, nonconforming and unique. The traits often linked to Harley-Davidson are masculinity, defiance, and rugged individualism.

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CHAPTER 12:

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...

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FOUR I's

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Intangibility Inconsistency Inseparability Inventory

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Intangibly

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Services are intangible; that is, they can't be held, touched, or seen before the purchase decision. In contrast, before purchasing a traditional product, a consumer can touch a box of laundry detergent, kick the tire of an automobile, or sample a new breakfast cereal. Because services tend to be a performance rather than an object, they are much more difficult for consumers to evaluate. To help consumers assess and compare services, marketers try to make them tangible or show the benefits of using the service.

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Inconsistency

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Because services depend on the people who provide them, their quality varies with each person's capabilities and day-to-day job performance. Inconsistency is much more of a problem in services than it is with tangible goods. Tangible products can be good or bad in terms of quality, but with modern production lines the quality will at least be consistent. On the other hand, one day the Philadelphia Phillies baseball team may have great hitting and pitching and look like a pennant winner and the next day lose by 10 runs.

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Inseparability

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In most cases, the consumer cannot (and does not) separate the deliverer of the service from the service itself.

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Inventory

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Inventory of services is different from that of goods. Inventory problems exist with goods because many items are perishable and because there are costs associated with handling inventory. With services, inventory carrying costs are more subjective and are related to idle production, which is when the service provider is available but there is no demand.

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Various ways that services can be classified

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Delivery by people or equipment Profit or Non-Profit Government Sponsored

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Delivery by people or equipment

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Some services require a person to deliver or perform the service, while other services are delivered by equipment or technology.

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Profit or Non-Profit

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In contrast to profit organizations, nonprofit organizations' excesses in revenue over expenses are not taxed or distributed to shareholders. When excess revenue exists, the money goes back into the organization's treasury to allow continuation of the service.

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Government Sponsored

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A third way to classify services is based on whether they are government sponsored. Although there is no direct ownership and they are nonprofit organizations, governments at the federal, state, and local levels provide a broad range of services.

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The service continuum

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What companies bring to the market ranges from the tangible to the intangible or good-dominant to service-dominant offerings referred to as the service continuum.

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CHAPTER 13

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Price

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is the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service

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Fixed Cost

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The sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.

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Unit Variable point

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Variable cost expressed on a per unit basis for a product.

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Break-even analysis

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is a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output.

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Price- (fixed cost + unit variable cost) =

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Break-Even point (or higher to succeed)

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Concept of price and the various terms for it in different types of purchase decisions

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-To attend college, you pay tuition and fees. -To get insurance, you pay a premium. -Airlines charge fares. -In your job, you get paid a salary.

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CHAPTER 14

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...

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Demand Oriented approaches

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Skimming prices Setting a low initial price prestige pricing Price lining Odd-even pricing Target Pricing Bundle pricing Yield management

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Skimming prices

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setting the highest initial price that customers really desiring the product are willing to pay.

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Setting a low initial price

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on a new product to appeal immediately to the mass market is penetration pricing.

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prestige pricing

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involves setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.

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price lining

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Setting the price of a line of products at a number of different specific pricing points. The purpose is to create various quality levels in the minds of consumers. In some instances, all the items might be purchased at the same cost and then marked up at different percentages to achieve the price points.

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odd-even pricing

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Setting prices a few dollars or cents under an even number.

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Target Pricing

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Manufacturers will sometimes estimate the price that the ultimate consumer would be willing to pay for a product. They then work backward through markups taken by retailers and wholesalers to determine what price they can charge wholesalers for the product. After estimating the consumer price, the manufacturer adjusts the composition and features of the product to achieve the target price to consumers.

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Bundle Pricing

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the marketing of two or more products in a single package price, based on the idea that consumers value the package more than the individual items.

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Yield Management

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pricing the charging of different prices to maximize revenue for a set amount of capacity at any given time. For example, hotels in Austin cost more during the week of SXSW or during the F1 Race than at other times of the year.

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Cost Oriented Approches

answer

Standard markup pricing Cost-plus percentage-of-cost pricing Cost-plus fixed-fee pricing Experience curve pricing

question

Standard markup pricing

answer

adding a fixed percentage to the cost of all items in a specific product class. -For example, a grocery store may affix the same markup to all items in the dairy case. The markup on staple items such as sugar, flour, and dairy products varies from 10 percent to 23 percent, whereas markups on discretionary items like snack foods and candy ranges from 27 percent to 47 percent.

question

Cost-plus percentage-of-cost pricing

answer

involves adding a fixed percentage to the total unit cost...often used on one-of-a-kind or few-of-a-kind items. Used most often when it is difficult or impossible to predetermine how much something will cost before it is produced.

question

Cost-plus fixed-fee pricing

answer

occurs when a supplier is reimbursed for all costs, regardless of what they turn out to be, but is allowed only a fixed fee as profit that is independent of the final cost of the project.

question

Experience curve pricing

answer

is based on the learning effect, which holds that the unit cost of many products and services declines by 10 percent to 30 percent each time a firm's experience at producing and selling them doubles.

question

Profit Oriented

answer

Target Profit Pricing EX: Suppose a picture framing store owner wishes to use target profit pricing to establish a price for a typical framed picture and assumes the following: •Variable cost is a constant $22 per unit. •Fixed cost is a constant $26,000. •Demand is insensitive to price up to $60 per unit. •A target profit of $7,000 is sought at an annual volume of 1,000 units (framed pictures). At 1000 units, your costs are $26,000 + $22,000 ($22 each @1000 units), for a total cost of $48,000. Add the profit you want ($7000) to the total cost ($48,000) and get a sum of $55,000. Divide that number by the number of units to get your price ($55,000/1000 = $55 per unit).

question

Competition Oriented Pricing Approaches

answer

Customary Pricing. Loss Leader Pricing A One-price policy flexible-price (aka dynamic pricing)

question

Customary Pricing

answer

For some products where tradition, a standardized channel of distribution, or other competitive factors dictate the price, customary pricing (setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors) is used. Tradition prevails in the pricing of Swatch watches. The $40 customary price for the basic model changed little in 10 years. Candy bars offered through standard vending machines have a customary price of 75 cents. A significant departure from this price may result in a loss of sales for the manufacturer. Hershey changes the amount of chocolate in its candy bars depending on the price of raw chocolate rather than vary its customary retail price so that it can continue selling through vending machines. Above-, At-, or Below-Market Pricing: For most products, it is difficult to identify a specific market price for a product or product class. Still, marketing managers often have a subjective feel for the competitors' price or market price. Using this benchmark, they then may deliberately choose a strategy of above-, at-, or below-market pricing (setting a market prices for a product or a product class based on a subjective feel for the competitor's price or market price as the benchmark). Examples:Rolex watches, Armani Suits, and Louis Vuitton luggage are always priced higher than their competition. Large department store chains such as JCPenney generally use at-market pricing. These chains often establish the going market price in the minds of their competitors. Similarly, Revlon cosmetics and Arrow brand shirts are generally priced "at market." They also provide a reference price for competitors that use above- and below-market pricing.

question

Loss Leader Pricing

answer

For a special promotion retail stores deliberately sell a product below its customary price to attract attention to it. The purpose of this loss-leader pricing, deliberately selling a product below its customary price, not to increase sales but to attract customers' attention in hopes that they will also buy other products as well, particularly the discretionary items with large markups. For example, Best Buy, Target, and Wal-Mart sell CDs at about half of music companies' suggested retail price to attract customers to their stores.

question

A one-price policy

answer

: (Also called fixed pricing) is setting one price for all buyers of a product or service. Example: Wilson Tennis Rackets.

question

Flexible-price policy (aka dynamic pricing)

answer

involves setting different prices for products and services depending on individual buyers and purchase situations. Dell uses flexible pricing. So do the airlines.

question

Markup

answer

Sale price- Unit Cost

question

Markdown

answer

Price that is lower than original sales price- Unit Cost

question

Gross Margin

answer

How much the item sold for- unit cost

question

CHAPTER 15

answer

...

question

Marketing Channels

answer

consist of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.

question

Intermediaries

answer

make possible the flow of products from producers to ultimate consumers by performing three basic functions (see Figure 15-2). Intermediaries perform a transactional function when they buy and sell products or services. But an intermediary such as a wholesaler also performs the function of sharing risk with the producer when it stocks merchandise in anticipation of sales. If the stock is unsold for any reason, the intermediary—not the producer—suffers the loss.

question

Supply chain

answer

refers to the various firms involved in performing the activities required to create and deliver a product or service to consumers or industrial users. It differs from a marketing channel in terms of the firms involved. A supply chain includes suppliers that provide raw material inputs to a manufacturer as well as the wholesalers and retailers that deliver finished products to consumers. The management process is also different. Supply chain management is the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering products and services that provide value to consumers.

question

Logistics

answer

involves those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost. It deals with the decisions needed to move a product from the source of the raw materials consumption, that is, the flow of the product. The performance of these activities is logistics management, the practice of organizing the cost-effective flow of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements.

question

Total logistics cost

answer

includes expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return products handling. Note that many of these costs are interrelated so that changes in one will impact the others. -For example, if a firm attempts to reduce its transportation costs by shipping in larger quantities, it will increase its inventory levels. While larger inventory levels will increase inventory costs, they should also reduce stockouts. It is important, therefore, to study the impact on all of the logistics decision areas when considering a change

question

Customer service

answer

is the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience. As suggested by Figure 15-10, a supply chain manager's key task is to balance these four customer service factors against total logistics cost factors.

question

Dealer

answer

A more imprecise term than distributor that can mean the same as distributor, retailer, wholesaler, and so forth

question

middleman

answer

any intermediary between manufacturer and end-user markets

question

distributor

answer

An imprecise term, usually used to describe intermediaries who perform a variety of distribution functions, including selling, maintaining inventories, extending credit, and so on; a more common tern in business markets but may also be used to refer to wholesalers

question

agent/broker

answer

Any intermediary with legal authority to act on behalf of the manufacturer

question

wholesaler

answer

An intermediary who sells to other intermediaries, usually to retailers; term usually applies to consumer markets

question

Chapter 16

answer

...

question

Ways to classify retail outlets

answer

-Form of ownership -level of service -the type of merchandise line

question

Form of ownership

answer

distinguishes retail outlets based on whether individuals, corporate chains, or contractual systems own the outlet.

question

level of service

answer

is used to describe the degree of service provided to the customer. Three levels of service are provided by self-, limited-, and full-service retailers.

question

the type of merchandise line

answer

describes how many different types of products a store carries and in what assortment.

question

FOUR types of "utilities" that retail offers:

answer

Time Place Form Possession

question

Time

answer

Sports authority having supplies even during the off season

question

Place

answer

Wells Fargo having ATM and stores world wide

question

Form

answer

Ralph Lauren offering buyers the Create Your Own collection to customize their own shirts.

question

Possession

answer

Car Max operating 106 superstores with "no-haggle" pricing.

question

Merchant wholesalers

answer

are independently owned firms that take title to the merchandise they handle. They go by various names, including industrial distributor. Most firms engaged in wholesaling activities are merchant wholesalers.

question

General merchandise (or full-line) wholesalers

answer

carry a broad assortment of merchandise and perform all channel functions. This type of wholesaler is most prevalent in the hardware, drug, and clothing industries. However, these wholesalers do not maintain much depth of assortment within specific product lines.

question

Specialty merchandise (or limited-line) wholesalers

answer

offer a relatively narrow range of products but have an extensive assortment within the product lines carried. They perform all channel functions and are found in the health foods, automotive parts, and seafood industries.

question

Four major types of limited service wholesalers

answer

Rack jobbers Cash and Carry wholesalers Drop shippers (or desk jobbers) Truck jobbers

question

Rack jobbers

answer

furnish the racks or shelves that display merchandise in retail stores, perform all channel functions, and sell on consignment to retailers, which means they retain the title to the products displayed and bill retailers only for the merchandise sold. Familiar products such as hosiery, toys, housewares, and health and beauty items are sold by rack jobbers.

question

Cash and Carry wholesalers

answer

take title to merchandise but sell only to buyers who call on them, pay cash for merchandise, and furnish their own transportation for merchandise. They carry a limited product assortment and do not make deliveries, extend credit, or supply market information. This wholesaler is common in electric supplies, office supplies, hardware products, and groceries.

question

Drop shippers (or desk jobbers)

answer

are wholesalers that own the merchandise they sell but do not physically handle, stock, or deliver it. They simply solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer. Drop shippers are used for bulky products such as coal, lumber, and chemicals, which are sold in extremely large quantities.

question

Truck Jobbers

answer

are small wholesalers that have a small warehouse from which they stock their trucks for distribution to retailers. They usually handle limited assortments of fast-moving or perishable items that are sold for cash directly from trucks in their original packages. Truck jobbers handle products such as bakery items, dairy products, and meat.

question

Six elements of communication

answer

-a source -a message -a channel of communication -a receiver and the process of -encoding and -decoding

question

communication

answer

Communication is the process of conveying a message to others and it requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding

question

Advertising

answer

is any paid form of non-personal communication about an organization, good, service, or idea by an identified sponsor. The paid aspect of this definition is important because the space for the advertising message normally must be bought. An occasional exception is the public service announcement, where the advertising time or space is donated.

question

Personal Selling

answer

is the two-way flow of communication between a buyer and seller designed to influence a person's or group's purchase decision. Unlike advertising, personal selling is usually face-to-face communication between the sender and receiver. Why do companies use personal selling?

question

The _________ can control to whom the message is delivered, which reduces the amount of __________ coverage. The seller can also see and hear the buyer's reaction to the message, which allows for modification of the message. The flexibility of personal selling can also be a disadvantage. Different sales-people can change the message so that no consistent communication is given to all customers. The high cost of personal selling is probably its major disadvantage. On a cost-per-contact basis, it is generally the most expensive of the five promotional elements.

answer

salesperson wasted

question

public relations

answer

is a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services. Many tools such as special events, lobbying efforts, annual reports, press conferences, RSS feeds, and image management may be used by a public relations department, although publicity often plays the most important role.

question

sales promotion

answer

is a short-term inducement of value offered to arouse interest in buying a good or service. Used in conjunction with advertising or personal selling, sales promotions are offered to intermediaries as well as to ultimate consumers. Coupons, rebates, samples, and sweepstakes are just a few examples of sales promotions. Sales promotions cannot be the sole basis of a campaign because gains are often temporary and sales drop off when the deal ends. Advertising support is needed to convert the customer who tried the product because of a sales promotion into a long-term buyer. If sales promotions are conducted continuously, they lose their effectiveness. Customers just assume there will be another one soon, so there is no reason to shop otherwise.

question

publicity

answer

is non-personal, indirectly paid presentation of an organization, good, or service. It can take the form of a news story, editorial, or product announcement. A difference between publicity and both advertising and personal selling is the "indirectly paid" dimension. With publicity a company does not pay for space in a mass medium (such as television or radio) but attempts to get the medium to run a favorable story on the company. In this sense, there is an indirect payment for publicity in that a company must support a public relations staff.

question

an advantage of publicity is ______________.

answer

-credibility -When you read a favorable story about a company's product (such as a glowing restaurant review), there is a tendency to believe it. The disadvantage of publicity relates to the lack of the user's control over it. A company can invite media to cover an interesting event such as a store opening or a new product release, but there is no guarantee that a story will result, if it will be positive, or who will be in the audience.

question

Direct Marketing

answer

uses direct communication (no intermediaries) with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet. The communication can take many forms including face-to-face selling, direct mail, catalogs, telephone solicitations, direct response advertising (on television and radio and in print), and online marketing.13 Like personal selling, direct marketing often consists of interactive communication. It also has the advantage of being customized to match the needs of specific target markets. Example: the GEICO and Progressive Insurance commercials that invite you to go online to inquire about insurance. "Fifteen Minutes can save you 15% or more!"

question

A firms _____________ ________ is the combination of one or more of the promotional tools it chooses to use.

answer

-promotional mix

question

Factors that determine which of the tools to use (with the promotional mix) depend on:

answer

1.The target audience. To whom are you directing the efforts? 2. The product life cycle. Where is the product in its life cycle? (Intro, Growth, Maturity, or Decline)

question

Three Steps In Developing the advertising program:

answer

1. Identify the target audience 2. Specify the advertising objectives 3. Set the advertising budget

question

Types of Agencies and services they provide

answer

-Full-service agency: Does research, selects media, also coordinates integrated campaigns with all marketing efforts -Limited-service (specialty) agency: Specializes in one aspect of creative process; usually provides creative production work; buys previously unpurchased media space -In-house agency: Provides range of services, depending on company needs

question

Evaluate Advertising programs

answer

-Post tests -aided recall -unaided recall -attitude tests -inquiry tests -sales tests

question

post-tests

answer

tests after an advertisement has been shown to the target audience to determine whether it accomplished its intended purpose.

question

aided recall

answer

After being shown an ad, respondents are asked whether their previous exposure to it was through reading, viewing, or listening. The Starch test shown in the accompanying photo uses aided recall to determine the percentage of those (1) who remember seeing a specific magazine ad (noted), (2) who saw or read any part of the ad identifying the product or brand (seen-associated), (3) who read any part of the ad's copy (read some), and (4) who read at least half of the ad (read most). Elements of the ad are then tagged with the results, as shown in the picture.48

question

unaided recall

answer

A question such as, "What ads do you remember seeing yesterday?" is asked of respondents without any prompting to determine whether they saw or heard advertising messages.

question

attitude tests

answer

Respondents are asked questions to measure changes in their attitudes after an advertising campaign, such as whether they have a more favorable attitude toward the product advertised.

question

inquiry tests

answer

Additional product information, product samples, or premiums are offered to an ad's readers or viewers. Ads generating the most inquiries are presumed to be the most effective.

question

sales tests

answer

involve studies such as controlled experiments (e.g., using radio ads in one market and newspaper ads in another and comparing the results) and consumer purchase tests (measuring retail sales that result from a given advertising campaign). The most sophisticated experimental methods today allow a manufacturer, a distributor, or an advertising agency to manipulate an advertising variable (such as schedule or copy) through cable systems and observe subsequent sales effects by monitoring data collected from checkout scanners in supermarkets.

question

Three main types of PRODUCT ADVERTISEMENT:

answer

Pioneering (or informal) Competitive (or persuasive) Reminder (or reinforcement)

question

Pioneering

answer

(or informational)...tells people what the product is, what it can do, and where it can be found.

question

Competitive

answer

(or persuasive). Comparative advertising is a form of competitive advertising. -The objective is to persuade the target market to select the firm's brand rather than that of a competitor. An increasingly common form of competitive advertising is comparative advertising, which shows one brand's strengths relative to those of competitors. Comparative ads are effective, but you better be able to back up your claims.

question

Reminder

answer

- It is used to reinforce previous knowledge of a product.

question

types of INSTITUTIONAL ADVERTISEMENT

answer

The objective of institutional advertisements is to build goodwill or an image for an organization rather than promote a specific good or service. Often this form of advertising is used to support the public relations plan or counter adverse publicity. Four alternative forms of institutional advertisements are often used: -advocacy -pioneering institutional -competitive institutional -Reminder Institutional

question

Advocacy

answer

advertisements state the position of a company on an issue. Chevron places ads encouraging consumers to use less energy. IBM is using advocacy ads to tell people how they are "helping to build a smarter planet." Another form of advocacy advertisement is used when organizations make a request related to a particular action or behavior, such as a request by American Red Cross for blood donations.

question

Pioneering institutional

answer

advertisements, like the pioneering ads for products discussed earlier, are used for announcements about what a company is, what it can do, or where it is located. Recent Bayer ads stating, "We cure more headaches than you think," are intended to inform consumers that the company produces many products in addition to aspirin. Amway uses pioneering institutional ads in its "Know You Know" campaign to inform people about the company and its products.

question

Competitive institutional

answer

advertisements promote the advantages of one product class over another and are used in markets where different product classes compete for the same buyers. America's milk processors and dairy farmers use their "Got Milk?" campaign to increase demand for milk as it competes against other beverages.

question

Reminder institutional

answer

advertisements, like the product form, simply bring the company's name to the attention of the target market again. The Army branch of the U.S. military sponsors a campaign to remind potential recruits of the opportunities in the Army.

question

Consumer-Oriented sales promotion

answer

or simply consumer promotions, are sales tools used to support a company's advertising and personal selling.

question

Trade-Oriented sales promotion

answer

or simply trade promotions, are sales tools used to support a company's advertising and personal selling directed to wholesalers, retailers, or distributors: Merchandise allowance, Case allowance, Finance allowance

question

"Social Media"

answer

The term "social media" is sometimes used interchangeably with the terms "Web 2.0" and "user generated content"—two concepts that are the foundations of today's social media.

question

Comparing Social and Traditional Media

answer

1.Both types can reach large audiences, but good execution is important. 2.Traditional media messages are expensive to produce and to publish. Social media are generally accessible to anyone with a smartphone, computer or tablet device. 3.Producing traditional media typically requires specialized skills and training and often involves teams of people. In contrast, sending messages on social media requires only limited skills, so practically anyone can post a message that includes words and images. 4.Traditional media can involve days or even months of continuing effort to deliver the communication, and time lags can be extensive. In contrast, individuals using social media can post virtually instantaneous content. 5.Traditional media, once created, cannot be altered. For example, once a magazine article is printed and distributed, it cannot be changed. But social media can be altered almost instantaneously by comments or editing. 6.Credibility and social authority. Individuals and organizations can establish themselves as an "expert" in their given field, thereby becoming an "influencer" in that field. For example, The New York Times has immense credibility among newspaper media. But with social media, a sender often simply begins to participate in the "conversation," hoping that the quality of the message will establish credibility with the receivers, thereby enhancing the sender's influence.

question

Four Major Social Networks

answer

Facebook Twitter LinkedIn YouTube

question

Twitter

answer

An Overview Twitter is a website that enables users to send and receive tweets, messages up to 140 characters long. Introduced in 2006, Twitter is based on the principle of "followers." So when you choose to follow another Twitter user, that user's tweets appear in reverse chronological order on your Twitter page.

question

answer

in a Brand Manager's Strategy, marketing managers can use LinkedIn to promote their brand in subtle ways. This is done mainly for business-to-business (B2B) image building, using profiles of company employees and networking with industry-re

question

YouTube

answer

offers great opportunity for a brand manager to produce and show a video that explains the benefits of a complex product (Figure 19-4). Since YouTube is owned by Google, it incorporates a search engine so users interested in a specific topic can find it easily. In terms of cost advantages, while a brand manager must pay the cost of creating a video, launching a new channel on YouTube is free. As with Google, a marketer buys ads on a cost-per-action basis, paying per-view based on key word searches. Companies also can connect with potential customers or others that mention their product by engaging them in conversations about YouTube videos.

question

Facebook

answer

An Overview Facebook is a website where users create a personal profile, add other users as friends, and exchange comments, photos, videos, and "likes" with them. Facebook users today can keep friends and family updated on what a user is thinking, doing, and feeling. Additionally, users may chat with friends and create and join common-interest groups, organized by workplace, high school, college, and Pages—some of the latter maintained by organizations as a means of advertising. Facebook is open to anyone age 13 and over. Brand managers using Facebook seek to maintain a continuing, positive conversation with their fans

question

THE FUTURE: _________ Media + ________phones + Exotic ______

answer

Social Media Smart phones Exotic apps

question

Real and digital worlds affects social media

answer

Trends in marketing's use of social media reflect what scientists call "mirror worlds" or "smart systems" that are really the convergence of the real and digital worlds. A smart system is a computer-based network that triggers actions by sensing changes in the real or digital world. This section discusses (1) the convergence of real and digital worlds, (2) how this convergence links social media to marketing actions, and (3) where all this may be headed in your future. The section closes by describing the global impact of social media on both marketing and international affairs.

question

CHAPETER 20:

answer

...

question

personal selling

answer

involves the two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person's or group's purchase decision.

question

Different forms of personal selling

answer

order taker outside order takers inside order takers Order Getter

question

order takers

answer

process routine orders or reorders for products that were already sold by the company. The primary responsibility of order takers is to preserve an ongoing relationship with existing customers and maintain sales. Two types

question

outside order takers

answer

visit customers and replenish inventory stocks of resellers, such as retailers or wholesalers. Take orders, and complete transactions with customers.

question

inside order takers

answer

also called order clerks or salesclerks, typically answer simple questions

question

order getter

answer

sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on customers' use of a product or service. Like order takers, order getters can be inside (an automobile salesperson) or outside (a Xerox salesperson).

question

The "sales plan" is a statement describing what is to be achieved and where and how the selling effort of salespeople is to be deployed. Sales plan formulation involves three tasks:

answer

(1) setting objectives, (2) organizing the sales force, and (3) developing account management policies. (This is from the notes but I can't find a direct answer to "if it's the best tool" in the notes. In the book the price of personal selling is mentioned to be a deterring factor. )

question

Personal Selling consists of six stages:

answer

(1) prospecting, (2) pre-approach, (3) approach, (4) presentation, (5) close, and (6) follow-up.

question

Consumers and companies populate two marketing environments today

answer

marketplace marketspace

question

Marketplace

answer

-traditional -Here buyers and sellers engage in face-to-face exchange relationships in a material environment characterized by physical facilities (stores and offices) and mostly tangible objects.

question

Marketspace

answer

an Internet-enabled digital environment characterized by face-to-screen exchange relationships and electronic images and offerings.

question

Different Types of online buyers

answer

-Click and Mortar -Hunter-Gatherers -Brand Loyalists -Time Sensitive Materials -Hooked, online, and single -Ebivalent Newbies

question

Click and Mortar

answer

women who tend to browse retailer Web sites but actually buy products in traditional retail outlets. They make up 23 percent of online consumers and represent an important segment for multichannel retailers that also feature catalog and store operations, such as J. Crew and JCPenney.

question

Hunter-Gatherers

answer

married couples with children at home who use the Internet like a consumer magazine to gather information and compare products and prices.

question

Brand Loyalists

answer

those who regularly visit their favorite bookmarked Web sites and spend the most money online. They are better-educated and more affluent Internet users who effortlessly navigate familiar and trusted Web sites and enjoy the online browsing and buying experience.

question

Time Sensitive Materials

answer

those who regard the Internet as a convenience tool for buying music, books, computer software, and electronics. They account for 17 percent of online consumers and can be found visiting Amazon.com, Dell.com, and SonyStyle.com.

question

Hooked, online and single

answer

young, affluent, and single online consumers who bank, play games, and spend more time online than any other segment. They make up 16 percent of online consumers, enjoy auction Web sites such as eBay, and visit game Web sites like Slingo.com and Jigzone.com.

question

Ebivalent Newbies

answer

relative newcomers to the Internet who rarely spend money online but seek product information.

question

Multichannel Marketing

answer

is the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in the traditional marketplace and online—the cross-channel shopper.

question

Porter's generic business strategies

answer

cost leadership strategy differentiation strategy cost focus strategy differentiation focus strategy

question

cost leadership strategy

answer

-(cell 1) focuses on reducing expenses and, in turn, lowers product prices while targeting a broad array of market segments. One way is by securing raw materials from lower-cost suppliers. Also, significant investments in capital equipment may be necessary to improve the production or distribution process and achieve these lower unit costs. The cost leader still must have adequate quality levels. -Campbell Soup's sophisticated product development and supply chain systems have led to huge cost savings. So its cost leadership strategy has resulted in lower prices for customers—causing its market share to increase in the current recession.

question

differentiation strategy

answer

-(cell 2) -requires products to have significant points of difference in product offerings, brand image, higher quality, advanced technology, or superior service to charge a higher price while targeting a broad array of market segments. This allows the firm to charge a price premium. -General Mills uses this strategy in stressing its nutritious, high-quality brands in reaching a diverse array of customer segments.

question

cost focus strategy

answer

-(cell 3) -involves controlling expenses and, in turn, lowering product prices targeted at a narrow range of market segments. Retail chains targeting only a few market segments in a restricted group of products often use a cost focus strategy successfully. -IKEA is now the world's largest furniture retailer by selling flat-pack, self-assembly furniture, accessories, and bathroom and kitchen items to cost-conscious consumers.

question

differentiation focus strategy

answer

-(cell 4) -requires products to have significant points of difference to target one or only a few market segments. -The average age of today's Toyota owner is 47. So a concerned Toyota product planning group visited cities where young people are buying and renting loft apartments. The planners discovered these young city dwellers need smaller cars they can park in cramped spaces. This suggests offering a new Toyota model with an important point of difference for a narrow segment of buyers—a differentiation focus strategy

question

Plans that exist

answer

-Long-Range Marketing Plans -Annual Marketing Plans

question

Long-Range Marketing Plans

answer

Typically, long-range marketing plans cover marketing activities from two to five years into the future. Except for firms in industries such as autos, steel, or forest products, marketing plans rarely go beyond five years into the future.

question

Annual Marketing Plans

answer

Usually developed by a marketing or product manager in a consumer products firm such as General Mills, annual marketing plans deal with marketing goals and strategies for a product, product line, or entire firm for a single year.

question

What makes up an effective marketing plan?

answer

-No Magic Formula -Communicate goals and the means of achieving them -have a responsible program champion willing to act -reward successful program implementation -Take action and avoid paralysis by analysis

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