USC BUAD 307 Midterm 1 – Flashcards
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What are the seven building blocks of marketing?
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corporate image, positioning, product, distribution, promotion, price, marketing information systems
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What are Marketing information systems?
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system to collect, analyze, report take action on information from marketplace
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What is Corporate image?
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image of organization, division, or individual; need to create, protect, enhance this image
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What is Positioning?
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lock (group of people called target audience who have an unfilled need for a type of product) & key (creating image of the product to fill this unfilled need)
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What is Product in terms of the 7 building blocks?
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goods/services developed to meet the demands of market targets & to achieve goals of marketing plan
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What is Price in terms of the 7 building blocks?
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amount of money buyers are willing to pay vs amount seller is willing to sell for
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What is Distribution?
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making it easy for buyers to buy your goods
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What is Promotion?
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communicate benefits of complete product to instil buying action (complete product is not just product, it also contains the framework the product is created in/distributed to)
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What is SWOT?
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strength, weakness, opportunity, threats
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What does the universal marketing structure map say to include on an advertisement?
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headline, body text, close, photos/graphics, good format, signature
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What does the UMS say about the headline?
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should contain main points, unique benefit, hook, name of company
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What does the UMS say about the body text?
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contains details, only 16% of people read this section
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What does the UMS say about the close?
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solicit buying action, tie with headline, end communication and contain marketing information system code to track user behavior
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What does the UMS say about the photos/graphics?
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help communicate main unique benefit, visually compelling, make product look good, break up text into smaller pieces
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What does the UMS say about the format?
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make it easier for people to pick out and remember main and unique benefits; let people get benefits without reading entire ad
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What does the UMS say about the signature?
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name, logo, slogan, to identify the communication
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What are the main elements of a marketing plan?
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goals, strategies, measure performance, take corrective action
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What does the marketing plan structure contain?
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need, mission, traack record/history, current situation, definition of market, business revenu emodel, market potential, limiting factors, goals, marketing strategies, sales forecast, budget timeline, future & conclusion
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What are the steps of the new product development system?
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Idea generation, Screen those ideas, Develop prototype, Market test, New product introduction
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What do you look at in the old product elimination system?
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Return on investment, Revenue threshold
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What is Corporate Image?
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perception in the minds of your target audience
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What is the corporate image strategy structure?
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Creating, Protecting, Enhancing
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Who are publics? Give examples.
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publics are stakeholders in a company. They include owners, market targets, employees, vendors, bankers, markets, governments, unions, surrounding communities, etc
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In creating corporate image, you need a mission. What are the three main components of this mission?
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what you do, target audience, uniqueness
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What are the steps to creating strategies for building a good corporate image?
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create mission statement, corporate identity tools, identify publics, enlist publics in sales army, train sales army, use promotion strategies to communicate with publics, create positive publicity
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What are some corporate identity tools?
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name, logo, slogan, mascot, font, color, jingle
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What are the rumor protection procedures?
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don't publicize the rumor (don't even deny), promote the opposite without mentioning the rumor, provide proof to support
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What are the fact procedures?
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admit and apologize, limit the scope to claim that mistakes are made by small numbers, propose a believable solution so it doesn't happen again
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What's better, a broken relationship that got fixed or a relationship where nothing bad has ever happened?
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broken relationship that became fixed, this is called a tested relationship
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Promoting successes is a good way to build a corporate image. What are some ways of doing this?
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use promotional vehicles, use empty spaces to hang material that document success, sales notebook for salespeople to refer to, distribute information to publics
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How does unethical behavior affect corporate image?
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loss of trust which leads to lower profits
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How do you use corporate image as a competitive weapon?
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if you have a great corporate image the marketplace will want to buy from you, work for you, do business with you.
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What are some warm colors?
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red, orange, yellow,
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What are some cool (as in cold) colors?
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green, blue, indigo, violet
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How is a color affected when you add its complement?
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the temperature and tone of the color is dampened
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What is RGB and where is it used?
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red green blue, used for television/screens
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What is CMYK and where is it used?
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cyan magenta yellow black - why is K black? b could mean blue, and there's a technical detail; used for print because RGB doesn't work with ink/paint
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What is HLS?
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hue, saturation, luminance
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What did the Marriot Studies prove?
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proves that tested relationships are the strongest
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What is a positioning lock?
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lock is the target market segment with an unfilled need
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What is a positioning key?
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key is the image of the product that fills that need better than competitors
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How do the positioning lock and key work together?
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the key fulfills the needs of the lock
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What stands level 3 positioning apart from all the other levels?
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At Level 3, competitors are locked out, and greater sales will come from a unique image
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What are three types of competitors?
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direct, indirect, your own other products
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When should you combine corporate image with branding?
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The product image should incorporate the image of the company if it will boost sales and not hurt the company's image or slaes of other products
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What are some reasons to separate corporate image from branding?
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company policy, product is risky or the company has a bad image, company is too closely identified with one type of product, lock and key mismatch - not putting Toyota onto luxury cars, instead Lexus
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How does positioning relate to market share, economics, and capacity of people to remember things?
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according to economists, people like choices but don't like too many, they like oligopolies
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How many wedges in a pie chart on market share usually?
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5-7
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How many items can the human brain handle?
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Up to 7
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How many ad messages is the human brain bombarded with each week in the USA?
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20k at rate of 3k/day
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What are some positioning tools?
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name, logo, slogan, color, font, mascot, bottle shape, jingles, other unique symbols
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What is Repositioning?
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competitive strategy where you move competitors out of their position and take it from them. basically it's repositioning competitors out of their position.
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How do you carry out repositioning?
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brilliant marketing plan, healthy communications budget, third party independent proof, good quality product, good customer service
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What is the Elephant's trunk?
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the elephant's trunk is a unique feature/benefit
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Why is the elephant's trunk a good positioning strategy?
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focus on differentiation - sell the "elephant" by focusing on the trunk, neutralize the competition - we can emphasize the trunk (our product's unique and important features/benefits) while explaining to customers that our product can also do what all the others do
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What are the five major market subsegments?
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innovator, early adopters, early and late majority, laggards
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What's the difference between a store brand and a captive brand?
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store brand has the store it's being sold from's brand on label while captive brand is a store brand without the store's name
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What is a product
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goods and services developed to meet the needs of market targets and to achieve the goals of the Marketing Plan
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What are peripheral components of a product?
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service quality
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What is the standard product model?
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everyone who buys the product starts with same basic product, they then can customize it
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What is the diversified product model?
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each product is already diversified to meet the needs of the target market segment
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What is the hybrid product model?
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start with a diversified product and add options and accessories to further customize it
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What are the steps in the product life cycle?
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introduction, growth, maturity, decline
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What is a Product Line?
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product families developed to meet need of different segments - think Zebra's Technology's kiosk, desktop, mobile
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What is the lettuce product strategy?
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make a new product from parts that were discarded
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What is a FAB Table?
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features, advantages, benefits, tangibles; for each product, a FAB table will help create more competitive products and help execute promotion strategies
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What's the difference between a feature and a benefit?
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Features: inherent product characteristics. Benefits - what the product does for particular product segment
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How do you use product as a competitive weapon?
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make it an industrial standard like MSWord, patent protection, trademark protection, better design, easier to use, better quality
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What's better, get money first or get people first?
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get people.
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What is pricing?
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amount of money buyers are willing to pay and sellers are willing to sell
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Control over price comes from...
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quality and execution of strategies from before, like brand image and other building blocks.
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An Elastic demand curve means (small/large) price change have a (small/large) demand change
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small, large
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An Inelastic demand curve means a (small/large) change in price has a (small/large) demand change
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large, small
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What is the Balance sheet equation?
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assets=liabilities+owners equity
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What is the P&L or IS Equation?
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profits=revenues-Cost of sales-expense
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What is the Gross profit target pricing strategy?
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take cost and apply GPM target to get price
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What is the Contribution margin pricing strategy?
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if you know demand curve, maximize profit
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What is the Dynamic pricing pricing strategy?
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price goes up as supply goes down or more people bid for same item (hotels, airlines)
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What is the Leader pricing strategy?
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leader charges average 9% more
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What is the Follow the leader pricing strategy?
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if you are not leader and have poor positioning
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What is the Match competition pricing strategy?
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if non-leader makes first move
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What is the Loss leader pricing strategy?
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get prospects to visit store/website
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What is the Volume pricing strategy?
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discounts based on volume
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What is the Predatory pricing strategy?
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price super low to gain share; technically illegal but hard to prove
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What is the Most significant digit pricing strategy?
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retailer in low to mid market
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What is the Price leader pricing strategy?
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have to be big/powerful with economies
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Why is using price alone the weakest strategy?
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Easiest to beat - takes no effort, just an email from an executive, Only room for one low-price leader, Razor thin GPM, Low price leaders rarely compete on price alone, Small segment, Implies low quality, Hard to sustain - because of all of the above
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What is MSRP?
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manufacturer suggested retail price
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What is the equation for Gross Profit margin?
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(P-C)/P where P=price; C=cost to make product
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What is the equation for Profit?
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Revenue - (Cost + Expenses)
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What is the equation for Markup %?
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P/c - 1
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What are some Price Strategy Objectives?
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help sell product, increase profit, increase market share, sell other products, achieve goal of plan, move slow-moving products, reinforce positioning/corporate image, get people to try product, motivate resellers, beat competitors, work with sales promotion to do the above
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What is Bundle Pricing?
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sell multiple products together & give buyer discount
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What is Dynamic Pricing?
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use consumer behavior psychology
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How can you use pricing as a competitive advantage?
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Cost Advantage - comes from economies of purchasing, manufacturing, sales, lower overhead structure
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What is the Price value rule?
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primary way to establish value of unknown product from unknown company is price
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Control over price comes what what?
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positioning and corporate image?
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What is Distribution?
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process of making it convenient for market targets to buy find use
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What are some distribution channel options?
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direct to end buyer (direct marketing), distributor + dealer, big dealer
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In distribution, what added value do distributors contribute?
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warehouse product for levels above and below
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In distribution, what added value do dealers contribute?
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add value by making it convenient for end buyers to find buy use product
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What's the difference between a reseller and an agent?
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agents never own the product, they just sell for the level above to the level below, while resellers make up the distribution channel by buying the product from the level above
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What are some problems with using a manufacturer's agent?
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unless they're trained they might not be very familiar with your product. Also, they're selling other company's products as well, so they don't spend all of their time selling your product.
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What do manufacturers usually make in gross margin?
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50%
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What do distributors usually make in gross margin?
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10%-15%
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What do dealers usually make in gross margin?
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30-50%
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What are the factors that influence distribution strategy?
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Positioning strategy - don't sell Gucci at K-mart, Price you can charge. If you position well you can well on any channel, otherwise price will be restriction, Control desired - if you need control over how product is sold you need to sell direct, Knowledge of market and culture - if you don't have knowledge you need to partner with resellers who do, Geographical reach - unless you can sell/ship anywhere you'll be restricted to certain locations, Customer convenience - distribution is about convenience that you can provide to your customers who may be resellers or ot end buyers, Resources available - if you don't have the sales stauff you will have to use resellers or manufacturers reps, Return on investment - ultimately ROI will determine distribution strategy if you can calculate for each option
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What is supply push?
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sales people push on retailers to buy more in anticipation of demand, so they push products down via channels (upcoming holiday season = more buyers soon)
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What is demand pull?
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promotion creates demand from end buyers who demand it from dealers who demand it from distributors who demand it from manufacturers
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What are some ways to prevent channel competition?
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Sell different products through different channels, Don't compete with customers - if you sell cheaper on website than at store, customers will be mad - HOWEVER, you can sell cheaper by volume, so you could have a website for people who buy at least 100 units, or something like that., Send them business - give resellers business rather than compete with them, Tell them you will compete in some channel when you sign them up
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How do you use distribute to lock out competitors?
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tie up shelf space: if other distributors can't sell their goods then you have essentially won the battle; tie up virtual space: buy the good domainn names or relevant key words as prt of Search Engine Marketing
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What is cumulative attraction?
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better to locate store with competitors - this way more people come and therefore more business occur
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What is on consignment?
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if level above has less economic power than the level below, the product could be sold on consignment where product gets delivered and reseller doesn't pay until product gets sold
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What are slotting fees?
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fees paid to retail chains by manufacturers for shelf space
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What is the Advantage of great positioning on distribution?
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companies with uniqueness in positioning have better control of price
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What is merchandising?
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location of the product in store, or on web page the location on the screen
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What are the main promotion categories?
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person selling - face to face, one on one promotion, advertising - impersonal communication that is typically paid (print/broadcast/outdoor/online), direct - communication without face-to-face contact(direct mail, telemarketing, direct response advertising, internet), sales promotion - putting items on sale, coupons - *average US coupon redemption = 2.5%*, one-on-many face-to-face - trade shows, seminars, speeches, publicity & public relations - stunts, awards, testimonions, video clips, podcasts, blogs, product placement - get product in TV show, movie, video game, for a positive impression, Social Networking (word of mouth) - arm sales army with information easily passable to colleagues to spread positive word about company/product, Visitors & Callers - making positive impression on visitors or callers to store/office/web site, Free samples - give out free samples to target audience, Company/product ID vehicle - stationery, business cards, packaging that carry name,logo,slogan,color,font, Specialty advertising - coffee mugs, pens, other giveaways that you can sell too to promote product
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What is the AIDA model?
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attention, interest, decision, action
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What is UMS?
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universal marketing system
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What is UWS?
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universal web system
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What is the KISS principle?
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keep it simple and don't be stupid
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What are the objectives of promotion?
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inform, position, initiate word of mouth, prompt buying action, build brand relationship, sell
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What are the main promotion mediate categories?
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paid, owned, earned, sold, hijacked
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What are the main promotion media channels?
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print, broadcast, outdoor/out of home, direct, social networking/word of mouth, face to face
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How do you select media to use for promotion?
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determine which media the target audience frequences, select most cost effective media channels, negotiate best deal, develop budget, measure result and take corrective action
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What are the publicity and public relations strategies?
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get editorial calendars,
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What is the zero moment of truth?
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point at which prospect decides to select your brand other because of a brand preference triggered by promotion, their investigation, a trusted recommendation
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What is the 1st moment of truth?
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point when buyer chooses your brand when standing in front of it
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What is the 2nd moment of truth?
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customer forms opinion about product
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What is the 3rd moment of truth?
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after using product, customer compares with other options
