fundamentals of marketing final exam

errors in communication
-encoded messages might not transform abstract idea by receiver or sender
-may be sent through wrong channel
-feedback may be delayed
-noise
noise
extraneous info in an ad
promotional elements
-advertising
-personal selling
-direct marketing
-sales promotion
-public relations
advertising
paid non personal communication
-involves mass media
personal selling
two way flow of communication between buyer and seller
-designed to influence purchase
adv of personal selling
controls to whom presentation is made
-feedback can help modify message
-persuasive
disadv of personal selling
flexibility- different sales person can change message
-high cost
sales promotion
short term inducement of value offered to arouse interest in buying
-discounts, coupons, sweepstakes
public relations
form of communication management that seeks to influence opinions about a company and its products
-indirect form of payment- so not paid
-non personal
adv of public relations
creates credibility
disadv of public relations
lack of user’s control over it
-hard to get media cooperation
direct marketing
promotion alternative that uses direct communication with consumers to generate response in form of order, request for further info, visit to store
-face to face- direct mail, catalog, telephone, tv
adv of advertising
-gets to lots of people
disadv of advertising
costly, hard to get good feedback
disadv of sales promotion
easily abused, duplicated, can lead to promotion wars
adv of direct marketing
leads to relationship with customer
-messages prepared quickly
disadv of direct marketing
declining customer response
-value of product goes down
-very costly
introduction
to inform
-increase awareness and interest
-all promotional mix is used
growth
to persuade
-brand differences stressed
-personal selling used
maturity
to remind
-sales promotion
-sponsorships
-direct marketing
-price cuts and discounts
-need to maintain existing buyers
decline
phase out
-little money spent on adv/promotion
-fast when replaced with better or cheaper thing
-slow when loyal customers exist
complexity
the more complex- the more personal selling required
risk
the more financial, social, and physical risk- the more personal selling required
ancillary services
the amount of service after the sale the more personal selling is required
push strategy
aimed at the channel
-push to their customers
-personal selling and sales promotion
-manufacturer- wholesaler- retailer-consumer
pull strategy
aimed at customers to pull from consumers
-ask doctor is __ is right for you
-customer asks for product so pulled through the channel
promotion objectives
-gain interest
-target audience is specified
-should possess 3 important qualities
1- be designed for well-defined target audience
2- be measurable
3- cover a specified time period
hierarchy of effects
sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action that includes

-awareness
-interest
-evaluation
-trial
-adoption

of the product

promotion budgeting
-after setting objectives, decide how much will be spent on promotion
percentage of sales budgeting
allocating funds to promotin as a percentage of past or anticipated sales
competitive parity budgeting
allocating funds to promotion by matching the competitor’s absolute level of spending or the proportion per point of market share

-matching competitors level of spending

all you can afford budgeting
allocating funds to promotion only after all other budget items are covered
objective and task budgeting
allocating funds to promotion whereby the company-

1- determines its promotion objectives
2-outlines the tasks to accomplish those objectives
3-determines the promotion cost of performing those tasks

product advertisment
3 forms- pioneering, competitive, reminder

-focused on selling a product

pioneering advertisment
informational
-tells people what product is
competitive advertisment
-persuasive
-promotes specific brands’ features
reminder advertisement
-used to reinforce previous knowledge of a product
institutional advertisement
ad designed to build goodwill or an image for an organization rather than promote a specific product

4 types
-pioneering, advocacy, competitive, reminder

advocacy advertisement
states position of a company on an issue
pioneering institutional
-used for announcements about what a company is, what it can do
– we can cure more headaches”
competitive institutional
-promote advantage of one product class over another and are used in markets where different products compete to same buyers
-got milk
reminder institutional
brings company name to attention of target market again
-army strong
selecting right media
media selection is related to
-target audience
-type of product
-nature of the message
-campaign objectives
-available budget
-costs of media
-reach
-rating
-frequency
-grp
-cpm
different media alternatives
tv, radio, magazines, newspapers, yellow pages, internet, ooh, direct mail
tv adv
large audience
motion
specific local audiences
tv disadv
high cost
short exposure
hard to convey complex info
radio adv
low cost
target local
quickly placed
sound, humor
radio disadv
no visual
short exposure
hard for complex info
mag adv
target specific
high quality
long life
clipped and saved
complex info
mag disadv
long time to create
high cost
competes with other features
newspaper adv
local coverage
placed quickly
saved
consumer response
low cost
complex info
newspaper disadv
compete with other features
poor quality
short life span
yellow pages adv
geographic segments
long use
24 hrs/ 364 days
yellow pages disadv
competitive directories
hard to keep up to date
internet adv
video and audio
animations
interactive
internet disadv
large files take time to download
ooh adv
low cost
local focus
high viewership
ooh disadv
short and simple
low selectivity of audience
traffic hazard
direct mail adv
high selectivity
complex info
personalized
high quality
direct mail disadv
high cost per contact
junk mail
transit
interior, exterior of buses, subways, taxis
disadv of transit
lots of traffic can make it hard to read
-hazard
consumer promotions
sales tools used to support a company’s advertising and personal selling directed to ultimate customers
coupons
clip out
-adv- encourage retailer support
-disadv- delay purchases
deals
reduced prices for first purchase to increase trial
-adv- reduce consumer risk
-disadv- delay purchase
premiums
free toy inside happy meal
adv-like free things
disadv- but for the free thing not for product
contests
have to do something to win
adv-encourage involment through product
disadv-require action
sweepstakes
send in form may be picked to win
-adv- use product
-disadv-sales drop after
samples
funsized products
adv-low risk for consumer
disadv-high cost for company
loyalty programs
repeat customers get these perks
-adv- create loyalty
disadv- high cost for company
point of purchase displays
encourage last minute sales
adv- product visibility
disadv- traffic control
rebates
have to do something- mail letter
adv- stimulates demand
disadv- copied, steal sales from future, reduce value of product
product placement
fedex tag line in movies
-adv- postive hearing
disadv- little control of presentation
blog
web log
serves as accesible journal and online forum
twitter
-website integration
engage with customers
cotweet and hootsuite to track and monitor activity
-large potential

ok brand exposure
good customer communication
good traffic to website

linkedin
shows orgs professionalism
networking to reach potential customers
small traffic but good for businesses and jobs

bad brand exposure
good customer communication
ok traffic to website

possession utility
getting a product to consumers so the can use it
interactivity
buyer seller communication in an internet environment
buyer controls info received from seller
choiceboard
interactive system that allows customer to design their own product by answering questions and choosing from menu, prices, delivery options
collaborative filtering
process that automatically groups people with similar buying intentions, preferences, behaviors, and predicts future purchases
personalization
generating content on marketer’s website that is custom tailored to an individuals specific needs and preferences
permission marketing
solicitation of a consumer’s consent to receive email and advertising based on personal date supplied by the consumer – called opt in
online experience
context
content
customization
connection
communication
community
commerce
context
aesthetic appeal of website
content
text, pics, sound
commerce
quick and simple sales
community
user to user communication
customization
modify itself or be modified
connection
how website links to others
cross channel shoppers
they research online and buy at store
-to compare among different retailers
-more info online
-ease of comparing multiple options
-51% of customers
-more educated
-both genders
-more money
multichannel marketing
hundai -> dealers and hundai.com -> auto buyers
transactional websites
electronic storefronts
focus on converting online browser to catalog online
-most common among catalog retailers and direct selling companies
promotional websites
websites that advertise and promote products and used
– interactive with games, contests, quizzes, coupons
environmental scanning
process of continually acquiring info on events occuring outside the org to identify potential trends

– come from

-social
economic
technological
competitive
regulatory

social trends
demographic shifts
cultural changes
economic trends
income, economic conditions
inflation- production cost and prices rise
recession-declining economic activity- decrease production and spend less
technological trends
tech impact on the world
changes rapidly
new markets
challenge- make products affordable
competitive trends
competition amongst businesses
difficult for new firms to enter market
regulatory trends
laws protecting competition
self regulation
acts- robinson, clayton, ftc
cognitive learning
connection between ideas
consumers learn through thinking and reasoning without direct experience
adjusting behaviors accordingly
neuromarketing
cap with sensor that scan brain waves
thoughts about products reside in subconscious mind
frito lay shiny
market segmentation
aggregating buyers into groups that have common needs and will respond similarly to a marketing action

-segmented by
geographic, demographic, psychographic, behavioral

one product with multiple market segmesnts
harry potter series
multiple products with multple segments
ford suvs and pickups targeted at different customers
mass customization
next step beyond build to order
success of market segmentation
balance between satisfying customer and achieving synergy
synergy
increased customer value through marketing more efficiently
geographic segmentation
based on where prospective customers live or work
demographic segmentation
based on attribute of customers- gender, race, age, income, birth era, occupation
psychographic segmentation
based on some subjective mental or emotional attributes- personality, lifestyle
behavioral segmentation
based on observable actions by customers- where they buy, what benefits they seeks, how frequently they buy, why they buy
fixed cost
stable and dont vary with quantity
rent, insurance, executive salaries
direct channel
producer and consumer deals directly
indirect channel
intermediaries between producer and consumer to perform channel functions
internet marketing channel
use internet to make goods available for customers
dual distribution
form reach buyers by two or more types of channels for same product
-hallmark stores and drugstores
strategic alliance channels
one firm used to sell another firms product
– kraft sells starbucks at supermarkets
situational influences
influence purchase decisions
-purchase task
social surroundings
physical surroundings
temporal effects
antecedent states
purchase task
reason for engaing in the decision to purchase
social surroundings
who is there when decision is made
physical surroundings
decor, music, traffic flow
temporal effects
time of day and time available
antecedent states
consumers mood and cash at hand
introduction
to inform
-minimal profit bc large investment and lack of profit
-create awareness and stimulate trial
-skimming- high initial price
-penetration-low initial price
growth
to persuade
-rapid sales increase
competition appears
aggressive pricing
differentiate from others
maturity
to remind
-slowing sales and revenue
competitors leave slowly
profit declines
focus on finding new buyers
decline
phase out
-sales and profits drop
-better or cheaper products probably available
-deletion- get rid of completely
-harvesting-keep but reduce adv and marketing costs
why buy online
convenience
choice
customization
communication
cost
control
convenience
browse
no traffic, long lines
compare with many sites
8 second rule
choice
selections and different websites
customization
can make it interactive exchange environment
communication
chat rooms, consumer to marketer, social networking, viral-forward messages to others
cost
cheaper
showrooming
inspect in store and buy online
control
seeks infor and alternatives
make purchase decision on own time
continous innovation
new feature to an existing product- no new learning required
generate awareness
tooth whitening to toothpaste
discontinous innovation
learn new consumption patterns to use the product
electric cars, dvrs
educate through product trial and personal selling
dynamically continous innovation
disrupts normal routine but not totally new learning
electric toothburch
point of difference benefits are advertised
product line extension
cheerios- honey nut cheerios
brand extension
ralph lauren clothes – ralph lauren paint
TAM
total market share
all shoes in US
SAM
served available market
tennis shoes
share
portion of SAM that you serve
-you annual units of sales
ways to increase market share
-take business from competition (make slice bigger)
-bring new customers from TAM to SAM to expand tennis show market (make pie bigger)
demand curve
relates the quantity sold and price, showing the maximum number of units that will be sold at a given price

left price
bottom quantity

prestige pricing
setting a high price for status conscious customers

rolex, cartier

) demand curve