Marketing Final Study

Ultimate Consumers
end users
Organizations buyers
businesses that buy products for organizational use or for resale
Market Orientation
focuses efforts on continuously collecting information about customers’ needs, sharing this info across departments, and using it to create customer value
Utility
benefits or customer value received by users of product
Environmental Forces in marketing decision
social, economic, technological, competitive, and regulatory
4(5)P’s
Product = Customer benefits
place= convenience
price=costs
promotion=communication, **participation=connection**
Gross Income
amount of money made by a person, household, or family unit
Disposable Income
Income after taxes are paid, available for necessities
Discretionary Income
money a consumer has left after paying for necessities
Consumerism
an increase in influence, power, and rights of consumers in dealing with institutions
JFK’s Bill of Rights:
Rights to:
safety
be informed
choose
be heard
Economic Espionage
clandestine collection of trade secrets or proprietary information about a company’s competitors
Triple-Bottom Line
recognition of the need for organization to improve the state of the PEOPLE, PLANET, and PROFIT simultaneously to ensure long term, sustainable growth
Cause Marketing
When charitable contributions of a firm are directly tied to the consumer revenues produced through the promotion of one of its products.
Utilitarianism
“the greatest good for the greatest number of people”
Three Concepts of Responsibility
profit responsibility
stakeholder responsibility
societal responsibility
Purchase Decision Process
1) Problem recognition
2) Information search
3) alternative evaluation
4) purchase decision
5) post purchase behavior
Situational influences on purchase decision process
1) the purchase task
2) social surroundings
3) physical surroundings
4) temporal effects
5) antecedent states
Consumer Learning*
1) behavioral- developing an automatic response through repeat exposure
2) cognitive- observing the outcomes of others’ behaviors
Cognitive dissonance
post purchase psychological tension or anxiety
Personality
a person’s consistent behaviors or responses to recurring situations
Attitude
a learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way
Opinion Leaders
individuals who exert direct or indirect social influence over others
Word of mouth
influencing people during conversations
Reference Groups
people whom an individual looks to as a basis for self-appraisal or set of standards.
Marketing research
the process of defining a problem and opportunity, systemically collecting and analyzing information, and recommending actions
Marketing research approach
1) Define the problem
2) Develop research plan
3) Collect relevant information
4) Develop findings
5) Take marketing actions
3 types of marketing research
exploratory research- provides ideas about a relatively vague problem

descriptive research- generally involves trying to find the frequency that something occurs or the extent of a relationship between two factors

casual research- (most sophisticated) tries to determine the extent to which the change in one factor changes another one.

Primary Data
facts and figures that are newly collected for the project
Secondary Data
facts and figures that have been recorded before the project at hand
individual interview
when the researcher is flexible enough to ask probing questions or watch their reactions to visual materials. It involves a single researcher asking questions of one respondent (very expensive).
depth interviews
researchers ask lengthy, free-flowing kinds or questions to probe for underlying ideas and feelings.
focus groups
informal sessions of 6-10 past, present, or prospective customers in which a moderator asks questions about how they respond to the product.
open-eneded questions
allows respondents to express opinions, ideas, or behaviors in their own words
close-ended questions (fixed alternative)
require respondents to select one or more response options from a set of predetermined choices
dichotomous question
fixed alternative questions that allows only a yes or no response
scale
a fixed alternative questions with three or more choices
Semantic differentail scale
five point scale in which the opposite ends have one or two word adjective that have opposite meanings
Likert scale
when responded indicated the extend to which he or she agrees or disagrees with a statement
Market segmentation
aggregating prospective buyers into groups that have common needs and that respond similar to a marketing action
Market segments
relatively homogeneous groups of prospective buyers that result for them market segmentation process
product differentiation
using a different marketing mix, such as product features and advertising, to help consumers perceive the product as being different and better than competing products
Cannibalization
when new products or new chain is stealing customers and sales from the older existing ones within the same firm
Five-Step Process for Segmenting a Market
1) Group Potential buyers into segments
2) Group products to be sold into categories
3) Develop a market-product grid and estimate the size of the markets
4) Select target markets
5) Take marketing actions to reach target markets
4 Ways to Segment Consumer Markets
Geographical – Where customers live/work

Demographical – based on objective physical (gender, race), measurable (age,income), or other classification attribute of prospective customers

Psychographic- based on some subjective mental or emotional attributes (personality), aspirations (lifestyle), or the needs of prospective customers.

Behavioral- based on some observable actions or attitudes by prospective customers- such as where they buy, what benefits they seek, how frequently they buy, and when they buy.

Product Positioning
The place a product occupies in consumers’ minds on important attributes relative to competitive products
Product Repositioning
changing the place a product occupies in a consumer’s mind relative to competitive products
Segmentation and targeting are the link between the buyer’s needs and the organization’s marketing program
Segmentation and targeting are the link between the buyer’s needs and the organization’s marketing program
Targeting (selecting target segments)
a) market size
b) expected growth
c) competitive position
d) cost of reaching segment
e) compatibility with the organization’s objectives and resources
Consumer products
products purchased by the ultimate consumer
Business products
products organizations buy that assist in providing other products for resale
convenience products
items that the consumer purchases frequently, conveniently, with minimum shopping effort
shopping products
items for which the consumer compares several alternatives on criteria such as price, quality, or style
specialty products
items that the consumer makes a special effort to search out and buy
New-Product strategy development
The stage of a new-product process that defines the roll for a new product in terms of the firm’s overall objectives

Use SWOT analysis and environmental scanning to assess its strengths and weaknesses relative to the trends it identifies as opportunities or threats.

New-Product Process
1) New product strategy development
2) idea generation
3) screening and evaluation
4) business analysis
5) development
6) market testing
7) commercialization
Primary Demand
the desire for the product class rather than for a specific brand, since there are few competitors with the same product
Selective demand
the preference for a specific brand
Skimming strategy
helps the company recover the costs of cost and development by capitalizing on the price insensitivity of early buyers. 3M (Hit fast, price high, and get the heck out when me-too products pour in.)
Penetration pricing
to discourage competitive entry, a company can price low
Price Setting Steps
1) Identify pricing objectives ad constraints
2) Estimate demand and revenue
3) Determine cost, volume, and profit relationships
4) Select an approximate price level
5) set list or quoted price
6) make special adjustments or quoted price
Skimming pricing
Setting highest initial price that consumers really desiring the product are willing to pay. These customers aren’t very price sensitive.
Price Lining
selling not just a single product but a line of products at a number of different specific pricing points
odd-even pricing
setting prices a few dollars or cents under an even number
Target pricing
results in the manufacturer deliberately adjusting the composition of features of a product to achieve the target price to consumers
Bundle-pricing
the market of two or more products in a single package price (vacation packages with air, hotel, and car)
Loss-leader pricing
selling aa product below its customary price to attract attention to it
One-price policy (fixed pricing)
setting one price for all buyers of a product or service
Flexible-pricing policy (dynamic pricing)
involves setting different prices for products and services depending on individual buyers and purchase situations
Product-line pricing
charging a very low price for a product with the intent of driving competitors out of business.
Promotional mix
combination of communication tools, such as: advertising, personal selling, sales promotion, public relations, and direct marketing
Integrated Marketing Communications (IMC)*
communication programs that coordinate all activities in the promotional mix. IMC is a key element in a company’s customer experience management strategy.
Communication Elements
1) Source- may be a company or a person who has information to convey
2) Message- information sent by the source
3) Channel of communication- the way of conveying the message (Ex. Salesperson)
4) Receivers- Consumers who receive the message
5) Encoding- Process of the sender transforming an idea into a set of symbols
6) Decoding- process of having the receiver take a set of symbols and transform them back into the idea
Noise
extraneous factors that work against effective communication by distorting a message or feedback received.
Five Promotional Alternatives
1) Advertising
2) Personal Selling
3) Public Relations
4) Sales Promotion
5) Direct Marketing
Advertising (Promotional Alternative)
any paid form of non-personal communication about an organization, product, service, or idea by an identified sponsor
Personal Selling (Promotion Alternative)
the two-way flow of communication between a buyer and seller designed to influence a person’s or group’s purchase decision
Public Relations (Promotion Alternative)
A form of communication management that seeks to influence the feelings, opinions, and beliefs held by customers, potential customers, stockholders, suppliers, employees, and other publics about a company and its products or services.

MOST CREDIBLE TO CONSUMERS

Sales Promotion (Promotion Alternative)
A short-term inducement of value offered to arouse interest in buying a product or service.
Direct Marketing (Promotion Alternative)
Uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet
Push Strategy
Dewalt sells to home depot who markets to construction workers.
Pull Strategy
Dealt markets to construction workers who go to home depot to buy.
All-you-can-afford-budgeting
money is allocated to promotion only after all other budget items are covered.
Percentage of sales budgeting
funds are allocated to promotion as a percentage of past or anticipated sales, in terms of either dollars or units sold
Direct orders
the result of offers that contain all the info necessary for a prospective buyer to make a decision to purchase and complete the transaction
Customer decision making process
1) Need recognition
2) information search
3) evaluate alternatives
4) purchase decision
5) post purchase evaluation
Type of advertisements
Pioneering (informational)- Tells people what product is and what it can do

Competitive (persuasive)- Tells people to select their company rather than their competitors

Reminder- used to reinforce previous knowledge of a product.

Reach
the number of different people or households exposed to an advertisement
Rating
the percentage of households in a market that are tuned to a particular TV show or radio station.
Frequency
the average number of times a person in the target audience is exposed to a message or advertisement
Adaption process percentages
Innovators (2.5%)
Early Adopters (13.5%)
Early Majority (34%)
Late Majority (34%)
laggards (16%)
Business Eras
Production Era (1840-1930)- Minimal choice in products

Sales Era (1920-1970)- Salespeople used to sell

Marketing Era (1950-1999)- Use Advertisements to sell

Social Marketing Era (1990-present)- Use social media and other online resources to fit ads to people

All of the following are commonly held values in the United States except
Belief in fate (fatalism)
There are five stages in the consumer purchase decision process. The second stage is:
Information Search
Which of the following global trends has significant implications to global marketers
The size of the markets in India and China
Which of the following statements regarding baby boomers is most accurate
baby boomers are an important consumer market segment because of their relatively high wealth and workforce population
The owners of Old School Brand Authentic Antique Foods researched Civil War Records to come up with recipes used in the old-fashioned cookies the company produces and markets. This statement deals with which part of the marketing mix
Product-consumer needs
You have just purchased a Samsung tablet. As you head home from the store, you brood about whether your choice was right or whether you should have bought an Apple iPad 2 after seeing an ad for it on TV. This is most likely an example of
Cognitive dissonance
In a recent survey, consumers were asked the following question: Who should take the lead in addressing environmental issues? The results said ___ should.
Businesses
Which of the following organizations engage in marketing
Every Organization or individual can engage in marketing
Most people know that Tums contains calcium. Today, tums antacid stresses both the benefits of antacid and the fact that Tums can be a calcium supplement. The new promotion involves changing the consumers attitudes towards Tums by:
Changing Beliefs about the extent to which Tums has a specific attribute
Pepsi Cola made freshness an important attribute when they stamped freshness dates on its cans. Before doing so, few consumers considered freshness an issue. The new promotion involves changing the consumers attitudes towards Cola by:
Changing the perceived importance of attributes
Colgate-Palmolive invluded a new antibacterial ingredient, tricloson, in its Colgate Total Toothpaste and spent $100 million marketing the brand. The new promotion involves changing the consumers attitudes towards toothpaste by:
Adding new attributes to the product
Which of the following information sources is considered the least credible
marketer-dominated sources
Which of the following statements defines consumer needs and wants
Needs occur when a person feels deprived of basic necessities such as food, clothing, and shelter while wants are determined by a person’s knowledge, culture, or personality.
Which of the following trends identified in an environmental scan is an economic trend?
The U.S., Japan, China, and the EU will increase investments in a sustainable living infrastructure.
Which of the following statements about the marketing concept era is most accurate?
During the marketing concept era, companies tried to satisfy the needs of consumers while also achieving their goals.
Which of the following statements about stakeholders is most accurate
The organization, suppliers, shareholders, employees, and consumers are all stakeholders of an organization and should all benefit from the organization’s marketing activities
Which of the following statements about social class is most accurate
Social class is relatively permanent and homogeneous
The purpose of the Robinson-Patman act is to
Outlaw price discrimination for purchasers of the same product.
The name given to the group of consumers who are described as self-reliant, supportive of racial and ethnic diversity, and better educated than the previous generations is
Generation X
Retailers can reduce problems associated with selective retention by
Providing brochures for consumers to take home
As discussed in class, which statement about the marketing mix is false
The concept of the marketing mix was originally developed in the 1980s and has remained virtually unchanged since then in textbooks
Mountain Dew used potential customers to help develop new flavors including suggesting flavors, taste testing, naming, and developing promotion ideas. This demonstrates which combination of marketing mix elements?
Participation-connection
Is it predicted that the number of people in the United States over the age of 65 will
Almost double
Which of the following statements accurately distinguishes between laws and ethics?
Ethics deal with personal and moral principles whereas laws are society’s values that enforceable in the courts.
Gross income refers to
The total amount of money made in one year by a person, household, of family unit
Which of the following statements about environmental forces is most accurate?
Some environmental force can actually enhance a firm’s marketing opportunities
Scanning your memory for previous experience with products or brands occurs during which stage of the consumer purchase decision process
Information search
Ultimately ethical choices are based on
the personal moral philosophy of the decision maker
The Red Cross created a series of ads to encourage blood donations. After viewing the ad, Amanda went to donate blood. She returned home feeling happy because she did a good deed. Was this an exchange in a marketing sense?
Yes, because the donated blood was exchanged for a feeling of satisfaction.
For high-involvement purchases consumers typically do all of the following except
Consider few sellers
The US army used a video game to recruit new members. The creator wanted to provide a sense of training and teamwork one could find in the military. The game is designed for boys 14+, which represent the Army’s
Target market
List the hierarchy of needs in its correct order from bottom to top on the pyramid
Physiological, Safety, Social, Personal, and Self-actualization
The consumer bill of right codified the ethics of exchange it was outlined by ___ in ___.
JFK, 1962
____ of all products fail within three years
Over 90%
Which of the following statements about subliminal perception is most accurate?
About half of US consumers think that subliminal messages can cause them to buy things they don’t want.
Paul Avery is a salesperson at Ford in Wisconsin. There are no other Fords but there are other car brands in his town. Paul works hard to keep his customers happy to make sure they don’t go to those other brands. This is an example of:
Monopolistic Competition
Which of the following trends identified in an environmental scan is a regulatory trend?
Health consciousness will lead to more smoke-free areas
Which of the following statements about marketing is most accurate
Marketing involves more than simply selling and advertising
Kroger has small aisles and puts product displays at ends of aisles to gain attention while shoppers wait for others to pass. This situation is most closely related to which of the following situational influences?
Physical Surroundings
In the 19th Century, the belief was that production creates its own demand. In the 20th century, more products than demands, so companies hired more salespeople to find new buyers. This describes the
Sales era
If you wanted a new pair of shoes during the civil war, you gave an outline of your foot to a shoemaker. You bought them regardless of if they were a perfect fit. This is an example of the:
Production Era
Public opinion surveys show that 58% of US adults rate the ethical standards of business executives as
Fair or Poor
In the US, copying is frowned upon. Yet, in china, it does not carry a stigma. The difference between the two countries shows that _____ affects the view of ethical behavior held in each country
Societal culture and norms
The groups primarily served by a firm exhibiting profit responsibility include
Owners and stockholders
All of the following are true about perceived value except:
Satisfaction is more important than perceived value since satisfaction drives product choice.
Which of the following represents the majority of your purchases
Limited problem solving
Marketing seeks to discover the needs and wants of prospective customers and satisfy them. Essential to this process is the idea of exchange, which requires
The trade of things of value between buyer and seller so that each is better off after the trade.
Sophisticated firms have learned the marketing lesson that
the buying experience, customer satisfaction, and retention can increase firm profits
Reference groups refer to
People to whom an individual looks to as a basis for self-appraisal or as a source of personal standards
Which of the following statements regarding Geek Squad is MOST accurate
The need for the geek squad was the result of many environmental factors, not simply a need for technological knowledge
Which of the following statements concerning marketing research is most accurate
When collecting marketing research, people may or may not be willing to tell you what you want to know if it is potentially embarrassing
Which of the following regarding maturity stage of product life cycle is most accurate
Marketing attention is directed toward holding marketshare through further product differentiation and finding new buyers
As product adopters, member of the late majority
are skeptical and have below average social status
All of the following are criterion used for selecting target market segments except
Simplicity and cost of assigning potential buyers to segments
The first step in segmenting and targeting markets that link customer needs to marketing actions is to
Group potential buyers into segments
In terms of the business product classification categories, the clicker used to forward slides on a ppt would be a ____ product and the batteries in the clicker would be a ___ product
Accessory equipment; supplies
The relationship between a product line and product mix is
Product mixes include product lines
Development refers to the stage of the new-product process
That turns and idea on paper into a prototype
More than half of US households only have one or two people, so Aunt Jemima packages meals with only 1 serving. Aunt Jemima is using ____ as a basis to segment its market
Demographic characteristics
Based on our in class analysis given the segmentation data for the fast food market we reviewed about usage, which statement is most accurate?
Wendy’s could potentially be more successful by being the “best second alternative” by focusing on customers who might typically choose McDonald’s as their first choice, but who sometimes want something different.
As product adopters, innovators
Are venturesome, highly educated, and use multiple information sources
Which of the following is most likely to be an example of an unsought product
Life Insurance
Breyer’s introduced new ice cream on a limited scale to determine customer reactions. It was in the ____ stage of the new-product process
Market testing
Until 1996, US car makers made little right hand drive cars to japan while Germans made many. American car manufacturers could blame their failure to a great degree on
Not satisfying customer needs on critical factors
Setting research objectives and identifying possible marketing actions would take place during which stage of research approach?
Define the problem
A product refers to
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.
Product positioning refers to
The place a product offering occupies in consumers’ minds on important attributes.
Which of the following is an example of an effective positioning statement?
We provide small businesses under 10 employees with a cheaper way to do their payroll than hiring a full-service accounting firm.
Which of the following statements about market segmentation for organizational markets is most accurate?
Both consumer markets and organizational markets use demographic, geographic, and behavioral bases to segment markets.
A perceptual map refers to
A means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands, as well as its own product or brand
The third step of the marketing research approach is to
Collect relevant information
With respect to price, which of the following type of consumer product would most likely be very expensive
Specialty product
Which of the following statements regarding market segmentation is most accurate
If a business firm goes to the trouble and expense of segmenting its markets it expects to increase its sales, profits, and return on investment.
Research that involves trying to find the frequency that something occurs or the extent of a relationship between two factors is referred to as
Descriptive research
According to our discussion about RFID technology and marketing, which of the following is FALSE
It is not clear whether or not RFID will eventually be implemented as there are too many problems, and it is not clear if the benefits for marketing will outweigh the costs of the technology
A general rule of thumb among marketing researchers is to use _____ first then collect _____
Secondary data, primary data
The correct ordering for the steps in the new product development process is
New-product development, idea generation, screening and evaluation, business analysis, development, market testing, and commercialization.
In terms of brand loyalty, consumers are very brand loyal and will not accept substitutes for which type of consumer product
specialty product
Which of the following statements regarding segmentation bases is most accurate?
The identification of demographic variables is more objective than the identification of psychographic variables, which is more subjective.
Items for which the consumer compares several alternatives on several criteria such as price, quality, or style are referred to as
Shopping products
At which stage in the product life cycle do industry profits usually peak
end of growth
Estimates are that for every 3000 ideas, ____ actually end up as commercially successful new product(s).
1
Marketers pay slotting fees to grocers in payment for space, or slots, on their retail shelves. Such slotting fees significantly increase the cost of which stage of the new-product process?
Commercialization
Philips spent millions on advertising before TVs were available for sale in order to gain interest and acceptance. Phillips was trying to create _____ in the demand.
Primary Demand
In terms of the diffusion of innovation, early adopters account for ____ of product adopters.
13.5%
Making action recommendations, implementing action recommendations, and evaluating results take place during which stage of the five-step marketing research approach
Take marketing actions
Which of the following is NOT a disadvantage of online surveys
The cost
Which of the following statements best illustrates geographic segmentation?
In China, KFC sells a spicier chicken the farther away its restaurants are from the costal areas.
Which of the following is NOT considered a product given the definition we used in class?
Biodegradable fishing lures, monster buster spray, etc., are ALL actually products
Two important disadvantages of secondary data are that it is ____ and ____
Not up to date; not specific enough for the project
The 80/20 rules is most closely related to which consumer segmentation variable?
Usage rate
Recently, US dairies tried to change the way adults thought about milk. The dairies wanted to _____ chocolate milk in the minds of adult consumers.
reposition
What is the marketing objective for the growth stage of the product life cycle?
differentiation
Napster was the first software for exchanging MP3 music files. When it was introduced, Napster would have been an example of a
discontinuous innovation
Imagine that a new battery is developed, but the production process cannot be patented, so competitors could enter the market within a year. Which of the following would be the LEAST sound marketing program decision?
Select a skimming pricing strategy to position the product as “premium”

Penetration strategy would be best in order to discourage competition with a low price.

Which of the following are data collected from consumers to develop a perceptual map for a particular product?
The important attributes for a product or brand class.
Market segmentation referes to
Aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action
In terms of promotion, which of the following types of products would stress price, availability, and awareness?
Convenience
Which of the following statements about the introduction stage of the product life cycle is most accurate?
Because of the large initial investment costs, industry profits often must go negative to positive.
Criteria for forming segments involve both similarities and differences. Which of the following statements is most accurate
Within a segment, the needs of potential buyers should be similar; between segments, the needs of buyers should be different
Which of the following statements about the product life cycle as a pricing constraint is most accurate?
The newer a product is, the higher the price that can usually be charged.
Instead of everyday low prices (EDLP), supermarkets prefer a ____ approach based on frequent specials.
Hi-Lo pricing
Going to get food or drinks during commercials instead of watching commercials is an example of
Noise
Setting the highest intitial price that consumers who want a product are willing to pay when introducing a new product is
Skimming Strategy
Disney uses and integrated marketing communications program to promote travel to its theme parks because
Its strategy includes using all type of promotional activities that deliver a consistent message.
If Sony splits the cost of an ad with Home Depot for Home Depot to feature Sony products in the ad it is
cooperative advertising
“To persuade” is the promotional objective of which stage of the product life cycle
Growth
Calculate a firm’s total profit given that unit price = $40, quantity is $2000, fixed costs is $50,000, and variable cost per unit is $30.
$150,000
In some cases, penetration pricing my follow skimming pricing. The skimming pricing would help ____ and the penetration pricing would help ____.
Recoup initial research and development costs; increase market share
In the prepurchase stage of the consumer purchase decision process
Advertising is more helpful than personal selling
You can buy a GE dishwasher for $399 or a Bosch for $989. The Bosch is using ____ pricing.
Prestige
A manager offers a $20 off each item sale that costs $1000 to promote. If normal selling price is $40 and variable cost per unit is $15, how many additional units must result for the promotion to break even
200 units
Which of the following is the best approach to promotion budgeting
Objective and task budgeting
Jan estimates 100 customers will rent Jet Skis. She pays $2000 in rent and another $2000 in equipment expenses. If she charges $60 per rental, how much profit or loss will she make?
$2000 profit
When Cadillac uses advertising to promote specific features of its Escalade hybrid, it is using which type of product advertisement
Competitive
Which of the following statements about comparative advertising is true?
Comparative advertisements from a legal definition include both a specific competitor brand name and a specific feature that can be measured.
Airlines lowered prices to match a competitor to run them out of business, and subsequently raised them once they were successful. This is an example of
predatory pricing
A company has fixed costs of $6 million and unit variable costs of $5. Company wants profit to equal $2 million. How many pairs must they sell at a price of $15?
800,000
Market share is the ration of the ____ to those of the industry, including the firm itself.
Firm’s sales revenues or unit sales
When a firm offers a very low price on a product to attract customers to a store, and once in the store, they persuade them to purchase a higher-priced item, it is referred to as
Bait and Switch
When dell sells various laptops, it also installs MS Office and other software at a discount. This is an example of
Bundle pricing
The manufacturers of drugs encourage patients to learn more about the drugs and ask for them by name from a doctor. This is a _____ promotion strategy
Pull
Cost per thousand impressions is a measure of advertising _____
Efficiency
After watching the 30-minute infomercial on Oxy-Clean, Sarah was certain the cleaning product would work for her stain. In terms of communication process, Sarah was _____ the message from Oxy-Clean
Decoding
Inelastic demand exists when
The quantity demanded remains virtually the same regardless of price changes
The most commonly used pricing method for consumer products is _____
Cost-plus pricing
The first decision in developing an advertising program is to
Identify the target audience.
Which of the following is an important guideline provided in the text for using a fear appeal?
Don’t make the appeal so strong that the consumers will want to “tune out” the ad.
Which of the following types of promotion uses customized interaction?
Direct marketing
Which promotion tool has the highest credibility with customers
Public relations
If a retailer sells and item for $80 and paid $36 for it, what is the markup?
55%
Reminder ads are especially effective for products in which stage of their product life cycle
Mature
If a company uses prices that in in $9, it uses
Odd-even pricing.
Which of the following is an inherent strength of advertising?
Advertising is an efficient means for reaching large numbers of people
After the release of the movie E.T., sales of Reese’s Pieces soared. This is an example of _____
Product placement
The owners of a small bookstore want to run an ad in their local newspaper. The objective is to create awareness of their bookstore. Which of the following measures should be used to compare the number of different people exposed to the ad?
Reach
Ads such as “Retail Value $100, Our Price $85” is deceptive if
A verified and substantial number of stores in the area did not price the item at $100.
If a wholesaler buys a DVD player from Sony for $40 and sells it to Walmart for $100, what is the contribution margin?
60%
A 50-cents-off coupon for Crest toothpaste is an example of ____
Sales promotion
In 1990, a 30-second ad during the Super Bowl cost $700,000. By 2011, it cost $3 Mil. Most likely reason is _____
The number of TV viewers for the Super Bowl is growing
If the selling price is $25/item, variable cost is $15/item, ad expense is $60,000/year and sales expense is $20,000/year, what is the break-even quantity?
8000
A firm’s profit equation demonstrates that profit equals
Total revenue – total cost
Which of the following would be least likely to be used for mass selling?
Personal Selling
Deliberately selling a product below its customary price to attract customers’ attention in hopes they will buy other products as well is referred to as
Loss-leader pricing
Which of the following promotional elements requires expensive database management and often experiences declining response rates?
Direct marketing
Pioneering ads would most likely be used during which stage of the product life cycle?
Introductory
Which of the following is an inherent strength of personal selling?
Personal selling can provide the target audience with complex information
Which of the following is a typical example of a marketing variable cost?
Sales commissions
Which of the following statements regarding the promotional mix is most accurate?
The promotional mix can be influence by the product’s life-cycle, characteristics of the product, purchase decision stage of the buyer, and the channel of distribution
Amazon was changing prices based on buyer, rather than offering one price to all consumers for the same product. This is
Price discrimination