MKC1 Marketing Fundamentals

how does cultural diversity affect marketing
by requiring tailored marketing strategies
what element should marketing managers consider when scanning the competitive environment
supply chain management
a group of producers of a particular product decided to all raise prices together and they were accused of overcharging consumers. which federal law would have allowed the US to investigate this unfair method of competition.
sherman antitrust act
which strategy will be best for the marketer to advocate while faced with a deflationary economic environment
seek a long-term contract guaranteeing the sale price of its product
a marketer believes its product has become obsolete for all markets. the marketer feels that a new technology may have created a substitute product and created new desires for their former consumers. what is the best marketing alternative
investigate the new technology for opportunities opening in a new industry
marketers in a foreign country have been extremely successful in selling a particular product to a specific target market. they decided to enter the US market and continue their current sales and promotional tactics. what will be the outcome?
targeting the same market in the US they will find that the product does not fit existing cultural values and will not be purchased.
an individual joins a nature protection group. how will the group membership influence the individuals purchasing behavior
the individual will make purchase decisions that comply with group norms
a marketer found its television promotions are no longer effective because consumers may no longer be watching the advertising commercials. which influence may be changing consumers behavior
attitude components
which type of problem solving process do consumers use when making major purchases
extended problem solving
which scenario requires high involvement decision making
selecting a college
when there are many competing products and services available to customers, which orientation should a firm adopt
market orientation
what is an example of marketing myopia
a department store that view itself as a clothing retailer
why would a manufacturer use market segmentation
to target customers who have similar characteristics
a firm want to expand its marketing efforts
diversity of various ethnic groups within the segment
which types of marketing are common positioning strategies
consumer behavior research and business to business marketing
which research methods are used by marketing researchers to collect primary data
observation, surveys, and controlled experiments
a food company plans to cut back on advertising fatty and sugary foods to children and to add new logos to its foods and drinks that highlight more nutritional offerings. which type of ethical issue is this company considering
promotional ethics
a firm conducts market research to analyze consumers perceptions of a product relative to other brands. which type of strategy is this
product positioning strategy
which is a method for a manufacturer to add to its product mix
purchase a product line from another company
a firms product offering moves into the maturity stage of the product life cycle. why would the firm increase its promotional outlay
to differentiate its product from those offered by competitors
which channel has the role of standardizing exchange processes, such as payment terms, delivery schedules, and purchase lots
the distribution channel
what is a component of a physical distribution system
customer service
a company decides to locate a new supplier for its main ingredient upon learning that activists have been destroying processing facilities in the area of their current supplier. which factor caused this change in the global supply chain
social cultural environment
what may a manufacturer do to control the minimum price for goods in compliance with fair trade laws
severely restrict the number of retail outlets carrying the merchandise
what describes the relationship between pricing objectives and promotion
pricing objectives and promotion are interdependent
a US distributor wants a considerable amount of flexibility with pricing. which pricing model would it choose for international sales
market differentiated pricing
which element of the promotional mix covers a wide audience with targeted advertising
direct marketing
a company wants to inform thousands of potential customers about the benefits of their product over products that customers have been using. which promotional strategy would be effective for this company
public relations
a company plans to introduce its new product in several different locations with a series of communications tailored for each location. which form of promotional strategy would the company select
interactive media
what is an element of relationship marketing
customer service
potential new entrants to an industry is one element in porters five forces model. how does the internet impact this force
the internet lowers barriers to entry
which tools can be used to develop both marketing plans and business plans
SWOT analysis
a firm has designed a plan that will affect the company for five or more years and provide long term direction for its decision makers. which type of planning has the firm developed.
strategic planning
why would a company choose a second mover marketing strategy over a first mover strategy
to avoid costly mistakes
how are the factors considered by a consumer when purchasing a specialty product different from factors considered when purchasing a convenience product
image and quality are major considerations for specialty products
what does a company marketing a shopping product include in its marketing mix
emphasis on seller’s image
a doctor gathers all friends and family into the waiting room to deliver news about an operation
face to face
what is the process of putting ideas into a message that a receiver will understand
encoding
a recently hired administrative assistant is overwhelmed by the number of telephone, email, and instant messages received in the new potion. how can the assistant effectively deal with these competing messages
by setting aside a block of time for dealing with email, instant messages, and telephone messages
with which step does the process of successful communication end
audience provides feedback to the sender
which process sequence will produce an effectively structured presentation
analyze audience, state thesis, outline support, write, revise message
which listener behavior facilitates active listening
asking questions
how can personal appearance be used to enhance verbal communication
by lending credibility to the presenter
a college professor is preparing to deliver a lecture on a specific theory. how might the professor effectively use visual aids to help students understand the theory
by summarizing the major points of the theory in a presentation
what does the nature of the audience determine in the content of a presentation
the amount of background information that should be used
a manager has been asked to notify employees of a layoff. which communication style would be appropriate for this communication
formal message to the staff
a female executive working in the us is transferred to a company facility in the middle east which communication differences is the executive likely to encounter
the executive will find that she may not be taken seriously in her role due to her gender
what should a team leader be aware of when communicating wiht a team whose members are both male and female
females focus on relationships and males focus on content
a company launches a website to market its products which type of communication is the the company using
formal
why would a company choose to use a blog for organizational communications instead of email or instant messages
blogs combine the global reach of the web site with the conversational exchanges of email or instant messages
a manager is changing the direction of an organization in a away that makes local employees feel uncertain about their futures which media is effective for communication with the employees about the change
corporate blog
what is a way a team leader can use communication to resolve conflict on a team
help team members talk about their anxieties
which explains how knowledge management facilitates organizational communication
only implicit knowledge is stored, thus minimizing demand on resources
one element of every marketing strategy is the group of people toward which the firm directs its marketing efforts. by which reference is this group known
target market
what is strategic planning
process of determining an organization’s primary objectives and finding and implementing steps that will achieve the objectives
what is tactical planning
setting short term actions that are needed to complete larger strategies
what is a marketing plan
description of specific actions and resources that are necessary to achieve a company’s marketing objectives.
what is a business plan
specifies all of a company’s objectives, how the objectives will be met, and the financing required to make the company successful
what are the two elements of a marketing plan
evaluate the external environment (economy, competition, political-legal). evaluate the internal environment (financial, HR, technological capabilities)
what is first mover strategy
corporate level strategy theorizing that being the first organization to offer a product in the marketplace will be the long term market leader
what is a second mover strategy
corporate level strategy theorizing that closely observing the innovations of the first movers, and then improving on them will gain advantage.
what is environmental scanning
tracking conditions in the marketplace that affect the way an organization does business ie competition and economy, social-cultural trends, political-legal regulations, tech changes, price/availability of natural resources
what are the five marketing environments
political-legal, competitive, social-cultural, economic, technological
what are the Porter’s 5 Forces
supplier power, threat of substitutes, buyer power, threat of new entrants, degree of rivalry
which economic factors affect consumer buying power
inflation, unemployment, interest rates, economic growth or recession
what should companies do with contracts during deflationary periods
1. price bundle at the level of fixed costs
2. un-bundle all goods/services pricing them on an individual basis
3. offer financing terms, volume discounts, trade-ins etc..
4. focus on the values delivered by your product (differentiation strategy)
how does product obsolence fit into the tech environment
new tech changes how we conduct business, old tech is retired and new tech is created
how does the internet affect porters five forces model for potential new entrants
reduces barriers to entry
how does the internet affect porters five forces model for bargaining power of buyers
shifts greater power to the end consumers
how does the internet affect porters five forces model for rivalry among competitors
blurs differences among competitors
how does the internet affect porters five forces model for bargaining power of suppliers
tends to increase bargaining power of suppliers
how does the internet affect porters five forces model for threat of substitutes
creates new substitution threats
what are the two portfolio planning approaches
Boston Consulting Group matrix (BCG) and General Electric Approach (GE)
what is the BCG approach
helps companies evaluate each of its strategic business units based on two factors 1. the SBU’s market growth and 2. SBU’s relative market share (4 box approach)
what is the GE approach
examines strengths and the attractiveness of the industry in which it competes.
sherman antitrust act
prohibits US firms from restraining trade by creating monopolies and cartels
clayton act
addition to the sherman act protected consumers against harmful, anti-competitive business arrangements by defining prohibitions and an enforcement scheme
robinson-patman act
prohibits price discrimination in sales to wholesalers, retailers, or other producers; prohibits selling at unreasonably low prices to eliminate competition
wheeler-lea act
amends the FTC act to outlaw additional unfair practices; gives the FTC jurisdiction over false and misleading advertising
Federal Trade Commission Act
FTC was established in order to promote fair trading practices and to protect consumers from corruption and illicit behavior on the part of corporations.
Federal Food and Drug Act
AN ACT For preventing the manufacture, sale, or transportation of adulterated or mis-branded or poisonous or deleterious foods, drugs, medicines, and liquors, and for regulating traffic therein, and for other purposes.
consumer product safety act
gives CPSC the power to develop safety standards and pursue recalls for products that present unreasonable or substantial risks of injury or death to consumers. also allows banning of products if there is no alternative
what is marketing
set of institutions and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
what are the four components of marketing
product (creating), Promotion (communicating), Place (delivering), Price (exchanging)
what is the production era of marketing
belief that the best way to compete was through innovation and reduction in production costs; lasted until the 1920’s
what is the sales era of marketing
belief it was necessary to push their products by heavily emphasizing advertising and selling; lasted from 1920 to after WWII
what is the marketing era of marketing
demand for goods increased as economy soared, products were in surplus creating an environment of marketing in order to find new ways to compete; lasted from 1950-1990
what is the relationship era of marketing
need to create value for customers by building relationships for each customer individually
what attitude characterizes the production era
high quality product would sell itself
what attitude characterizes the sales era
customer will resist purchasing nonessential goods and services and that the task of personal selling and advertising is to persuade them to buy
what attitude characterizes the relationship era
must establish and maintain relationships with customers
what is marketing myopia
defining themselves too narrowly, incapable of adapting to changing markets
why is interactive marketing an important tool for marketers
monitor interactions with customers and assess the customer’s level of satisfaction or dissatisfaction with their service. can also calculate the cost of attracting one more new customer and the associated profit
what is market segmentation
to identify the factors that affect purchase decisions and then group consumers according to the presence or absence of these factors.
what is a target market
a single market segment selected based on its potential profitability
what is psychographic segmentation
uses behavioral profiles developed from analyses of consumers activities to divide a population into groups that have similar psychological characteristics, opinions, interests, and lifestyles
what is behavioral segmentation (product-related)
benefit segmentation, segmenting buyer by the benefits they want from the product; usage rates of the product; how they use the product
what does a market segment need to have
measurable purchasing power and size; good profit potential; able to serve the market segment; match with marketing capabilities; ability and resources to compete; consistent with firm’s mission
what is market positioning
tailoring your product so that it stands out from the competition and people want to buy it
what are the five approaches to positioning
attributes; price/quality; competitors; application; product user; product class
what are the main types of buyer characteristics
behavioral; demographic; geographic; and psychographic
what is behavioral segmentation
divides people and organizations into groups according to how they behave with or toward products
what is demographic segmentation
segmenting buyers by tangible, personal characteristics such as age, income, ethnicity, family size,
what is geographic segmentation
segmenting buyers based on where they live
what is market positioning
involves tailoring a product or its marketing so that it stands out from the competition and people want to buy it.
what is repositioning
an effort to move a product to a different place in the minds of consumers
what is secondary research
gathering information that already exists about the topic in question (library or internet research) getting information second hand that has already been collect by someone else.
what is primary research
practice of gathering the original data yourself by means of observations, surveys and experiments.
what is a marketing information system
a system for recording internally generated data and reports; collecting market intelligence on an ongoing basis; analytics software to help managers with their decision making; system for recording marketing research information
what are the 7 steps in the marketing research process
1. define the problem 2. design the research (plan of attack) 3. design the data collection forms (surveys) 4. drawing the sample 5. collect the data 6. analyze the data for errors and draw conclusions 7. write the report presenting findings
what are the cultural influences that affect consumer buying behavior
values, beliefs, preferences and tastes handed down between generations
what are social influences that affect consumer buying behavior
pressure to impress someone or having a relationship with the person selling the product
what are the personal influences that affect consumer buying behavior
personality; self-concept; gender; age/stage of life; lifestyle
what are the steps of the consumer decision making-process
1. need recognition 2. search for product information 3. product evaluation 4. product choice and purchase 5. post purchase use and evaluation of product 6. disposal of the product
what is routinized response behavior
when a consumer purchases a product of a specific brand without much thought; part of their routine
what is limited problem solving
when a consumer has a particular product or brand that they prefer but a new unknown brand becomes available that they need to decide on
what is extended problem solving
occurs when brands are difficult to evaluate and the consumer must understand all the product features before making a decision
what is high involvement decision making
when products carry a high risk to buyers if they fail, are complex, or have high price tags
what is low involvement decision making
when products aren’t necessarily purchased on impulse, although they can. are inexpensive and pose a low risk to the buyer
what is a consumer market
many customers geographically dispersed; smaller total dollar amounts due to fewer transactions; shorter decision cycles; more reliance on mass marketing via advertising, web and retail; less rigid product standards
what is a business market
fewer customers geographically concentrated larger dollar amount due to more transactions; longer decision cycles; more reliance on personal selling; more rigid product standards
what are the major categories of business buyers
producers; resellers; governments; institutions
what is a buying center
groups of people within organizations that make purchasing decisions
what are interpersonal dynamics
office politics
what are the stages in the B2B buying process
1. need is recognized 2. need is described and quantified 3. search for potential suppliers 4. RFP’s are send 5. RFP’s are evaluated 6. order routine is established 7. post purchase evaluations are conducted and feedback provided to vendor
what is a straight rebuy
situation in which a purchaser buys the same product in the same quantities from the same vendor
what is a new buy
situation in which a firm purchases a product for the first time (most time consuming)
what is a modified re buy
situation in which a firm wants to buy the same type of product it has in the past but make some modifications to it. (different quantity, packaging, delivery)
why does clustering occur
the resources the firms need both human and natural are located in the same areas
what effect does e-commerce have on firms
B2B’s and B2C’s have found their ability to raise prices limited and increased competition
what is a sell-side site
site in which a single seller sells products to many different buyers
what is a buy-side site
site in which a business buys products from multiple sellers that go there to do business with that firm
what is a B2B exchange
an e-commerce site where multiple buyers and sellers go to find and do business with one another (craigslist for businesses)
what is a B2B auction
a web based auction that occurs between businesses (ebay)
what is the difference between marketing a good and a service
a product is a tangible good a person can buy. a service is an action that provides a buyer with intangible benefit
what is the difference between a product line and the product mix
a product line is a group of related offerings (apple ipods), a product mix is the entire assortment of products the firm has to offer
what is product cannibalization
sales coming from existing buyers of your own products
what are the four categories in the consumer product classification system
convenience offerings (bread); shopping offerings; specialty offerings (Orange county choppers); unsought offerings
what are MRO offerings
those that keep a company’s depreciable assets in working order (maintenance, repair, and operations)
what are facilitating offerings
products and services a company purchases to support its operations but are not part of the firm’s final product.
what is a brand
name, picture, design, or symbol or combination of those items, used by a seller to identify its offerings and differentiate them from competitors offerings
what is branding
set of activities designed to create a brand and position it relative to competing brands in the minds of consumers
what is a brand extension
involves utilizing an existing brand name or brand mark for a new product or category of products.
what are the four stages of the product life cycle
introduction; growth; maturity; decline
what is the introductory stage in the product life cycle
by law can only use the label new for 6 months in the US, profits are low costs are higher, promotion is needed ( Xbox one, Windows 8)
what is the growth stage in the product life cycle
increasing sales, more competitors, higher profits (gaming systems, computers/tablets)
what is the maturity stage in the product life cycle
sales level off, buyers are repeat purchasers, longest lasting stage (Quaker oats, Ivory soap)
what is the declining stage in the product life cycle
sales decrease and continue to drop, changes in consumer preferences, technological advances, alternatives on the market (typewriters, calculators, VHS, CD’s)
what are the four primary ways to extend the product life cycle
increase the frequency of use; increase the number of users; find new uses for the product; change the product
what are the ansoff matrix strategies
market penetration; product development; product diversification; market development
what is market penetration strategy
maintain or increase the market share of its current products; secure dominance of growth markets; restructure a mature market by driving out competitors; increase usage by existing customers
what is market development strategy
firms seeks growth by targeting its existing products to new market segments by pursuit of add market segments, development of new markets, new packaging, new distribution channels
what is product development strategy
develops new products targeted to its existing market segments, good when product needs to be differentiated in order to remain competitive; emphasis on R&D, being first to market and detailed insight into customer needs
what is product diversification strategy
firm grows by diversifying into new businesses by developing new products for new markets; most risky; referred to as the suicide cell
what is a marketing channel
the specific avenue a seller use to make a finished good or service available to you for purchase
what is vertical conflict
occurs between two different types of members in a channel (manufacturer, agent, wholesaler, or retailer
what is horizontal conflict
occurs between organizations of the same type
what is a supply chain
organizations that figure into any part of the process of producing, promoting, and delivering an offering to its user.
what is physical distribution
system of components linked together for the efficient movement of products (customer service, transportation, warehousing, order processing, inventory control, protective packaging)
what is intensive distribution
trying to sell their products in as many outlets as possible. often used for convenience offerings (soft drinks or newspapers)
what is selective distribution
involves selling products at select outlets in specific locations. ( models of TV’s in one store vs another)
what is exclusive distribution
selling products through one or very few outlets (TV series on only one network)
what is reverse logistics (distribution)
scrap products and materials are run backwards through the supply chain to extract value
what is offshoring
outsourcing work to companies abroad
why use offshoring
process can be performed more efficiently and more cost-effectively
what are some issues firms address when considering offshoring
loss of control to product quality and safety; loss of control of technology; social responsibility; environmental sustainability; time it takes to ship to the us
what is sourcing
process of evaluating and hiring individual businesses to supply goods and services to your business.
what is procurement
process of actually purchasing goods and services
what are the different types of pricing objectives
profit-oriented objectives; sales-oriented objectives; status quo objectives;
what are skimming pricing strategies
(market-plus pricing) involve intentionally setting a high initial price relative to the competitors price
what is penetration pricing strategy
(market-minus pricing) sets a price lower than the competition’s price
what are competitive pricing strategies
(going-rate or parity pricing) maintain pricing levels at or near those of the competition
what is bundle pricing
occurs when different offerings are sold together at a price that’s typically lower than the total price of customer would pay by buying each offering separately. (combo or value meals)
what internal factors affect pricing decisions
ROI, cash flow, market share, maximize profits, marketing strategy, fixed costs, variable costs
what external factors affect pricing decisions
elasticity demands, expectations of customers, distribution partners expectations, analysis of competition, regulations
what is elastic demand
price changes are reflective in the opposite change in demand by greater than % in price change
what is inelastic demand
price changes are reflective in the opposite change in demand by less than % in price change
what is unitary demand
occurs when a percentage change in price results in an equal and opposite percentage change in demand.
how do elastic markets impact revenue
increasing price lowers total revenue while decreasing price increases total revenue
how do inelastic markets impact revenue
increasing price raises total revenue while decreasing price lowers total revenue
how do unitary markets impact revenue
there is no change in revenue when price is changed
what is standard world-wide pricing
is possible if foreign marketing costs are low and do not affect overall costs
what is dual pricing
establishes separate domestic and export price strategies
what is market-differentiated pricing
allows companies to price products according to marketplace conditions
what is encoding
translates a message so that it’s appropriate for the message channel (the sender)
what is decoding
interprets the message for effective communication to occur (receiver)
what are the five objectives of promotion
provide information,increase demand, differentiate a product, accentuate value, stabilize sales
what is integrated marketing communication (IMC)
provide an approach designed to deliver on consistent message to buyers across an organization’s promotions that may span all different types of media (Mm mm good)
what are the 6 elements of the promotional mix
personal selling, advertising, sales promotion, direct marketing, public relations, guerrilla marketing
what is personal selling
interactive paid approach to marketing that involves a buyer and a seller. developing a relationship with the buyer
what is advertising
involves paying to disseminate a message that identifies a brand or an organization being promoted to many people at one time.
what is sales promotion
consists of other types of sales promotions (coupons, games, contests, rebates, mail in offers)that are not included as part of another component of the communication mix.
what is direct marketing
involves delivering personalized promotional materials directly to individual customers (mail, catalogs, internet, telephone)
what is push strategy
manufacturer to resellers to consumers
what is pull strategy
manufacturer to consumers to resellers to manufacturer
what activities are included in the practice of personal selling
approach, needs identification, presentation, objection handling, close, implement and provide customer service
what are the four types of relationships between buyers and sellers
transactional, functional, affiliative, and strategic
what are the four basic sales strategies
script-based selling, needs-satisfaction selling, consultative selling, and strategic-partner selling
what is sugging
selling under any phony type of front, posting fake review about products.
what is a formal communication network
downward communication flows from executives to employees conveying executive decisions and providing information that helps employees do their jobs. upward communication flows from employees to executives, providing insight into problems, trends etc… horizontal communication flows between departments to help employees share information
what is informal communication
referred to as the grapevine or rumor mill encompasses all communication outside the formal network.
what are the four communication barriers
noise/distraction; competing messages; channel breakdown; filters