MKTG3650 Final

The primary challenge for 3M’s inventor David Windorski was to design new products for college students. The first step in solving this challenge was to
Identify any unmet needs of students when they studied
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Marketing affects
all individuals, organizations, industries, and countries.
Maketing affects anyone who benefits from purchasing a product or service.
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For Marketing to Occur, there must be what?
1. two or more parties with unsatisfied needs
2. a desire and an ability to satisfy needs
3. a way for the parties to communicate
4. something to exchange
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You need information about how computers interact to reshape the workplace. As you walk into the bookstore, you notice seveal copies of ComputerWorld Magazine. You pick up the magazine and like what you see. What is needed next in order for marketing to occur?
You have to check you wallet to see if you have sufficient cash to purchase the magazine.
You have desire to make the purchase, now you need to make sure you have the ability (funds) to make the purchase.
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Which of the following groups would be the most likely target market for the Toyota Highlander fuel hybrid SUV?
People who want to drive fuel-efficient SUVs are most likely the target market
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After years of resistence, the People’s Republic of China finally allowed Coke to import soft drinks into the country. The restriction was an example of which environmental force?
Regulatory.
Government regulation is generally considered to be one of the uncontrollable or environmental forces that include social, technological, economic, competitive, and regulatory forces.
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During the ______ era in U.S. business history, the primary function of the Pillsbury Co was to mill quality flour.
Production.
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Social responsibility refers to
The belief that organizations are accountable to a larger society for their actions
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Organizational Buyers
Entities such as manufacturers, retailers, and government agencies that buy goods and services for their own use or for resale.
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Utility
The value to consumers that comes from the production or alteration of a good or service constitutes Utility.
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Form Utility
The authenticity of the product adds an extra benefit to the original product making it more valuable to the consumer.
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The owners of Old School Brand Authentic Foods researched Civil War-era documents to come up with the recipes for old-fashioned products the company produces and markets. Their concern with the authenticity of their recipes reflects a concern with _______ utility.
Form Utility
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Before Post-It Flag Highlighter could be introduced, there were several pre-launch issues that had to be addressed: technical, manufacturing, product, promotion, place (distribution), and ______
Pricing issues
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Ethics
The moral principles and values that govern the actions and decisions of an individual or group.
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Laws
Society’s values and standards that are enforceable in the courts
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Dictates what is Right and Just
Socializing force of Culture
Culture refers to the set of values, ideas, and attitudes that are learned and shared among members of a group.
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The Consumer Bill of Rights codified the ethics of exchange between buyers and sellers. It was outlined by _________ in ______.
John F Kennedy 1962

In 1962 John F Kennedy sponsored the Consumer Bill of Rights, a law that codified the ethics of exchange between buyers and sellers, which included the rights to safety, to be informed, and to be heard drafted.
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The right to be informed means
Marketers have an obligation to give consumers complete and accurate information about their products and services in terms of usage, safety, and privacy
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Social Responsibility
Organizations are part of a larger society and are accountable to that society for their actions
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3 concepts of Social Responsibility
Profit Responsibility
Stakeholder Responsibility
Societal Responsibility
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Profit Responsibility
Simpliest Form of Social Responsibility: Maximize profits for the company’s owners or stockholders
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Stakeholder Responsibility
Focuses on the obligations an organization has to its customers, employees, suppliers, and distributors
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Key difference between Cause Marketing and outright Charitable Contributions
Charitable Donations are contributed at the sole discretion of the firm; with cause marketing , the amount is directly affected by the consumers’ purchases of the offering.
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Green Marketing
includes marketing efforts to produce, promote, and reclaim environmentally sensitive products.
Ex. Lowes discontinued the sale of wood products fromt he world’s endangered forests
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Cause Marketing
benefits companies as well as causes. Research indicates that 89% of consumers under 25 yrs will switch to a brand or retailer that supports a good cause. (provided the price and quality are equal)
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Howard Schultz, founder of Starbucks, wants the Starbucks experience to includs not only great coffee, but great people, first-rate music, a comfortable and upbeat meeting place, and
sound advice on brewing excellent coffee at home.
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Purpose of Marketing Segmentation
To respond more effectively to the needs and wants of groups of potential buyers in order to increase its sales and profits
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Johnson’s Baby Oil advertised as skin softner for babies and make up remover for women
Single Product with Multiple Market Segments
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Synergy
Increased customer value achieved through performing organizational functions more efficiently
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5 steps of segmenting and targeting markets
1. Group potential buyers into segments
2. Group products ito be sold into categories
3. Develop a market-product grid and estimate size of markets
4. Select Target Market Areas
5. Take Marketing actions to reach target markets
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5 Criteria for Forming Market Segments
1. Potential for increased profit
2. Similarity of needs of potential buyers with a segment
3. Difference of needs of buyers among segments
4. Potential of a marketing action to reach a segment
5. Simplicity and cost of assigning potential buyers to segments
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Pychographic Segmentation
includes lifestyle segmentation variables, which determines how consumers like to spend their time : See fig 9-3
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5 Criteria for Selecting a Target Segment
1. Market Size
2. Expected Growth
3. Competitive Position
4. Cost of Reaching the Segment
5. Compatibility with the organization’s objective and resources
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Consumer markets break behavioral segmentation into variables based on ___________ or _____________.
Product Features or Usage Rate
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Organizational markets break demographic segmentation into variables based in part on __________ and __________.
NAICS code and Number of Employees
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Segmentation Bases for US Organizational Markets
geographic, demographic, and behavioral segmenation bases
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Demographic Segmentation
NAICS code, NAICS sector, Number of Employees, Annual Sales
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Magnavox sells its target markets many different types of TVs, from flat screens to combo TV/DVD. The larger sets can be outfitted with surround sound at a higher price. The smaller sets are much less expensive and allow the viewer to watch a DVD without extra equipment. Magnavox is using which type of segmentation variable in this example?
Behavioral Segmentation
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StubHub is
an online ticket broker that allows sellers to sell tickets at fixed price, by auction, or by price that declines as the event gets closer. StubHub competes directly with Ticket Master and Craigslist.
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Price, from a marketing viewpoint
the money or other considerations (including other goods and services) exchanged for the ownership or use of a good or service
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6 Steps in Setting Price
1.Identify pricing objectives and 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 to the list or quoted price
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Profit Equation
Profit = Total Revenue – Total Cost
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Price Equation
Total Cost = List Price – Incentives+ Other Charges
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Market Share
the ratio of a firm’s sales revenue or unit sales to those of the industty (competitors + the firm itself)
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When General Mills divides the sales revenue of its breakfast cereals ina single year by the total breakfast ceral sales of the industry, it is caldulating its _________
Market Share
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A Pure Monopoly
If market circumstances are:
some leader-follower price competition
some product differentiation
the purpose of advertising is to inform but avoid price competition
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Oligopoly
Few seller in an oligopoly try to avoid price competition because it can lead to disastrous price wars in which all lose money
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The vertical axis of a demand curve graph represents
price per unit
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Price Elasticity with elastic demand
always greater than 1
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Price Elastic
Items requiring large cash outlays relative to a consumer’s disposable income are price elastic
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Price Elastic
The more substitues a product has the more likely it is to be price elastic
Seasonal demand for items (snowblowers) doesnot impact price elasticity of demand since it is the product not the time period with sold that is the key issue.
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Marketing Channel
Individuals and firms involved in the process of making a good or service availablefor use or consumption by consumers or industrial users
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Transactional Function
Intermediaries contacting potential customers, promoting products, and seeking orders.
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Intermediaries make possible the flow from producers to buyers by performing
3 functions
1. a Transactional fuction that involves buying, selling, and risk taking because they stock merchandise in anticipation of sales
2. a Logistical function that involves gathering, storing, and dispersing of products
3. a Facilitating function, which assists producers in making goods and services more attractive to buyers
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Low Cost, Low unit value items
Adding a wholesaler is most common for low-cost, low-unit value items that are frequently purchased by consumers such as candy, confectionery items, and magazines
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Multichannel Marketing
the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online.
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General Merchandise Wholesaler
A wholesaler that carries a broad assortment of merchandise and performs all channel functions
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Food broker
a unique broker that acts in many ways like a manufacturer’s agent.
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Food Broker
Represents buyers and sellers in the grocery industry. Food Brokers difer from conventional brokers because they act on behalf of Producers on a Permanent Basis and receive a commission for their services
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Vertical Marketing Systems
Most popular of 3 types is Contractual Systems
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Channel Partnership
consists of agreements and procedures among channel members for ordering and distributing a producer’s products through the channel to the ultimate consumer. A central feature of channel partnerships is the collaborative use of information and communication technology to better serve customer’s and reduce the time and cost of performing channel functions
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Channel Partnership
Levi Strauss has a ______________ with Modell’s Sporting Goods that uses a POS scanning equipment and direct electronic linkage bt the two firms. Modell’s can instantaneously inform Levi what styles and sizes of Jeans are needed, thus assuring that the correct selection is in stock
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4 major considerations for satisfying buyer requirements when designing and distribution channels
1. Information
2. Variety
3. Pre- or Post-Sales Services
4. Convenience
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4 Forms of Influence
1. Economic
2. Expertise
3. Identification with a prarticular channel member
4. the legitimate right of one channel member to direct the behavior of other members
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3.4 Trillion
Companies must spend money and invest in transporting raw materials and finished goods, material handling, warehousing, storage, and holding inventory, and managing the distribution process including the cost of information technology. Worldwide these activities and investments cost companies about _____ a year.
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Customer service as it relates to the definition of logistics management implies
A firm must drive down logistics cost as long as it can still satisfy customer requirements
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Logistics deals with
decisions needed to move a product from one source of raw materials to consumption, or the flow of products.
Those decisions have to be made in a cost effective manner. A firm needs to drive down logistics costs as long as it can deliver expected customer service, which means satisfying customer requirements
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Supply Chain Management
The integration and organization of information and logistics across firms in a supply chain for the purpose of creating and delivering products and services that provide value to ultimate consumers
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Responsive Supply Chains
1. use more expensive transportation
2. achieve product variety and manufacturing efficiency by designing common platforms across several products and using common components
3. operate manufacturing facilities in many locations
4. invest in information technology to link with suppliers and customers
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Extranet
an Internet-based network that permits secure business-to-business communication between a manufacturer and its suppliers, distributors and sometimes other strategic partners
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Extranet
Fedex package shipping service is available on its________. In a single session, a company can enter all the information needed to prepare a shipper form, obtain a tracking number, print the form, and schedule a pick up.
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Most critical “Customer-service components” likely for Honda JIT manufacturing when it purchases original-issue windshield wiper blades
Dependability and on-time delivery – (the production schedule that depends on on-time delivery is the critical factor, late deliveries can shut down the production line)
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4 key logistic functions in supply chain
1. Transportation
2. Warehousing and Materials Handling
3. Order Processing
4. Inventory Management
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Motor Carriers
have a better record than rail carriers regarding lost and damaged goods
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Motor Carriers: Advantages-Disadvantages
Advantages: -Complete pick-up and delivery -Extensive routes -they are fairly fast
Disadvantages: -Size and Weight restrictions -Higher Cost -Weather Sensitive
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Distribution Center
A warehouse that emphasizes the timely movement of goods
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6 Justifications for Carrying Inventory
1. Offering a buffer against variations in supply and demand
2. Providing better service for those customers who wich to be served on demand
3. Promoting production efficiencies
4. Providing a hedge against price increases by suppliers
5. Protecting the firm from contingencies such as strikes and shortages
6. Promoting purchasing and transportation discounts
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Promotional Mix Consists of
1. Advertising
2. Personal Selling
3. Sales Promotion
4. Direct Marketing
5. Public Relations
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Communication
The process of conveying a message to others
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Personal Selling
The 2-way flow of communication bt a buyer and seller designed to influence a person’s or group’s purchase decision
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Public Relations
A form of communication management that seeks to influence the feelings, opinions, or beliefs held by stakeholders about an organization and its products or services
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Advertising Respectively
is any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor
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Integrated Marketing Communication (IMC)
the concept of designing marketing communications programs that coordinates all promotional activities to provide a consistent message across all audiences
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Source
Message encoding is usually done by the source, in this case the company selling the product
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Field of Experience
For a message to be communicated effectively, the sender and receiver must have a mutually shared _____________
(similar understanding and knowledge they apply to the message.
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Advertising Weaknesses
1. High absolute cost
2. Difficulty in receiving good feedback
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Publicity
a nonpersonal, indirectly paid presentation of an organization, product, or service that can take the form of a news story, editorial, or product announcement, among others
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Publicity
When a news story covers a terrible disaster and viewers are asked to send donations to the ARC, the organization benefits from _______________
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Introduction Stage
At which stage in the product life cycle would a company’s promotional objective most likely be to increase the level of consumer awareness?
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Maturity Stage: remind buyers of the marketer’s and its brand’s existence
Cake mix is in the maturity stage of its product life cycle. A manufacturing selling cake mixes would most likely use advertising to
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Push Strategy
Like many consumer products manufacturers, Hallmark Cards provides its retailers with case discount allowances of 10% to induce them to carry its products. Hallmark is using the ____________ strategy
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Push Strategy
When a manufacturer directs the promotional mix to channel members to gain their cooperation in ordering and stocking the product.
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Objective and Task
The best approach to promotion budgeting is the __________ budgeting method.
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3-D Advertising
Unlike traditional advertising, 3-D advertising immerses consumers in an experience
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Persuasive Advertising
Another name for competitive advertising
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3 Forms of Product Advertisements
1. Pioneering (Informational)
2. Competitive (Persuasive)
3. Reminder
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Advocacy Advertisement
states the position of the company
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Sex Appeals
In advertising, Sex Appeals suggest to the audience that the product will increase the attractiveness of the user.
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Reach
Reach refers to the number of different people or households exposed to an advertisement
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Share Point for TV
% of tv sets tuned to a particular program
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Disadvantage of TV as a advertising medium
1. Short exposure time and perishable message
2. High cost to prepare and run ads
3. Difficulty in conveying complex information
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Advantages of TV as an advertising meduim
1. Reaches extremely large audiences
2. Uses picture, print, sound and motion for effect
3. Can target specific audiences
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Newspaper as an advertising medium
Naitonal advertising campaign rarely include this mediumexcept in conjunction with local distribution of their products. In these instances, both parties often share the advertising costs usinga cooperative advertising program
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Click Fraud
is a deceptive clicking of ads solely to increase the amount advertisers must pay.
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3 commonly used Trade Promotions are:
1. Allowances and Discounts
2. Cooperative Advertising
3. Training of Distributors Sales Forces
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