Marketing Final Exam Study Guide
Chapter 16
1.
Possession Utility a.
Allowing several payment and credit options b.
the value of making an item easy to purchase through the provision of credit cards or financial arrangements
2.
Depth of Product Line (number of products in a product line) a.
The store carries a large assortment of each item, such as a shoe store that offers running shoes, dress shoes, and children’s shoes. b.
Ex: Sports Authority carries a wide assortment of related items, Victoria’s Secret carries primarily one line
3.
Limited Service a.
Customer does most functions. Sales people available for assistance b.
Ex: Walmart, Target
4.
Specialty Outlet a.
Full-service retailers b.
Provide many services. Sells more distinctive, higher margin brands c.
Ex: Nordstrom offers on-site alterations and tailoring, free exchanges and easy returns, gift cards, Nordstrom credit cards, 7 days a week customer service line
5.
Category Killer a.
Specialty discount outlets that focus on one type of product at very competitive prices b.
Ex: Best Buy (electronics), Barnes & Noble (books) c.
They often dominate the market
6.
Direct mail/Telemarketing a.
High retailer and customer involvement b.
Direct mail retailing i.
Eliminates cost of a store and clerks ii.
Improve marketing efficiency through segmentation and targeting iii.
Create customer value by providing a fast and convenient means of making a purchase iv.
Encourage customers to visit a website, social media pages, or store c.
Telemarketing i.
Using the telephone to interact with and sell directly to consumers ii.
Viewed as more efficient than direct mail iii.
Do Not Call Registry—consumer privacy issues, industry standards, ethical guidelines
7.
Maintained markup a.
The difference between the final selling price and retailer cost
8.
Rack Jobber a.
Furnish the racks or shelves that display merchandise in retail stores, perform all channel functions, and sell on consignment to retailers (meaning they retain the title to the products displayed)

b.
Ex: hosiery, toys, housewares, health and beauty, paperback books in drug store
Chapter 17
1.
IMC Program a.
Integrated Marketing Communications b.
Promotional elements: i.
Advertising ii.
Personal selling iii.
Public relations iv.
Sales promotions v.
Direct marketing
2.
Communication error/Response a.
Source may not adequately transform the abstract idea into an effective set of symbols b.
A properly encoded message may be sent through the wrong channel and never make it to the intended receiver c.
The receiver may not properly transform the set of symbols into the correct abstract idea d.
Feedback may be so delayed or distorted that it is of no use to the sender e.
Effective communication: sender and receiver have a mutually shared field of experience f.
Response: the impact the message had on the receiver’s knowledge, attitudes, or behaviors
3.
Personal Selling a.
Customized b.
Cost: fees paid to salespeople as either salaries or commissions c.
Strengths: immediate feedback, very persuasive, can select audience, can give complex information d.
Weaknesses: extremely expensive per exposure, messages may differ between salespeople
4.
Introduction/Growth Stage a.
Introduction i.
To inform ii.
Activities: publicity in magazines, salesforce calls on intermediaries, sales promotions, free samples b.
Growth i.
To persuade ii.
Activities: personal selling to intermediaries, advertising to differentiate
5.
Push/Pull Strategies a.
Push Strategy (direct promotion at channel members) i.
Manufacturers want channel members to order and stock their product ii.
Personal selling and sales promotions are very important iii.
Salespeople call on wholesalers to encourage orders and provide sales assistance

iv.
Sales promotions are used to stimulate demand v.
By pushing the product through the channel, the goal is to get the channel members to push it to their customers b.
Pull Strategy (direct promotion at ultimate consumers) i.
Manufacturers face resistance from channel members who do not want to order a new product or increase inventory levels of an existing brand ii.
Directing your promotional mix at ultimate consumers to encourage them to ask the retailer for a product iii.
Seeing the demand, retailers will then order more from the wholesalers, thus requiring more manufacturing iv.
Consumer  Retailer  Wholesaler  Manufacturer v.
Ex: pharmaceutical companies using direct-to-consumer prescription drug advertising (encourage consumers to ask for a specific drug by name) vi.
Ex: “Ask your doctor about Relpax today!”
6.
Demographics (chapter 17, page 489) a.
Direct marketing programs use consumer information stored in databases
(demographics are most easily collected from the consumer) b.
When you buy something from let's say Victoria's Secret, it might ask your age, gender, and location and then it knows 20 year old girls from Dallas Texas are most likely to buy workout clothes and that's what they'll use to target other people and to send relevant information to the consumer
Chapter 18
1.
Frequency a.
The average number of times a person in the target audience is exposed to a message or advertisement
2.
Cost per thousand (CPM) a.
Refers to the cost of reaching 1,000 individuals or households with the advertising message in a given medium
3.
Magazines a.
National Issues b.
Regional Issues c.
Advantages: can target specific audiences, high quality color, long life of ad, ads can be clipped and saved, can convey complex information d.
Disadvantages: long time needed to place ad, relatively high cost, competes for attention with other magazine features
4.
Sales Promotion a.
Coupons i.
Objectives: stimulate demand ii.
Advantages: encourage retailer support iii.
Disadvantages: consumers delay purchases b.
Deals i.
Objectives: increase trial, retaliate against competitor’s actions

ii.
Advantages: reduce consumer risk iii.
Disadvantages: consumers delay purchases, reduce perceived product value c.
Premiums (ex: Happy Meal toy) i.
Objectives: build goodwill ii.
Advantages: consumers like free or reduced-price merchandise iii.
Disadvantages: consumers buy for premium, not product
5.
Sample a.
Objectives: encourage new product trial b.
Advantages: low risk for consumer c.
Disadvantages: high cost for company
6.
News Conference a.
Where media representatives are: i.
Invited to an informational meeting ii.
Sent advance materials regarding the content b.
Common in sports
Chapter 19
1.
Blogs a.
A contraction of “web log” b.
A web page that serves as a publicly accessible journal and online forum c.
Shows a sequential journey
2.
Twitter/Brand Buzz a.
Based on the principle of “followers” b.
Short message length c.
Immediate, real time—good for promotions (message is out right away) d.
Generate brand buzz by developing an official Twitter profile, recruiting followers, and showing photos of their products i.
Follow twitter profiles that mention their product and monitor what is said ii.
Respond to criticisms to develop happier customers iii.
Tweet on topics that provide value to customers e.
User characteristics: 50% male, 50% female f.
Brand exposure: OK i.
Offers unique opportunities for website integration and to engage with customers g.
Customer communication: GOOD i.
Use twitter monitoring programs such as CoTweet or HootSuite to track what people are saying about your brand h.
Traffic to website: GOOD i.
Potential can be large; focus on sending out info relevant to your brand and audience interested in your tweets i.
Over 300 million active users j.
500 million tweets a day

3.
LinkedIn a.
Best for recruitment, retention and industry collaboration i.
Make connections, find jobs and business opportunities ii.
Review profiles iii.
Enable advertisers to reach target market iv.
Position business as BEST place to work in the industry b.
User characteristics: 56% male, 44% female c.
Brand exposure: BAD i.
Effective to demonstrate an organization’s professionalism; have employees maintain complete profiles to do this d.
Customer Communication: GOOD i.
Not the primary focus, but small businesses find it valuable as a networking service to reach potential customers e.
Traffic to website: OK i.
Traffic may be small, but can be valuable from a B2B and business development perspective f.
350 million registered users g.
6 billion professionally-oriented searches annually h.
Over 3 million companies with pages that post news and job openings i.
Over 30 million students and recent college graduates
4.
Mobile Marketing a.
The broad set of interactive messaging options that are used to communicate through personal mobile devices b.
Price-comparison searches: scan product bar codes or QR codes c.
Location-based promotions: Use your GPS-enabled phone for location check-ins to receive discounts d.
Loyalty programs: Win loyalty points for walking into stores and receive discounts from them
Chapter 21
1.
Possession/Form Utility a.
Possession: Getting a product or service to consumers so they can own or use it i.
Is accelerated—using online reservation systems like Orbitz to get lowest fares and rates b.
Form: the production of the product or service—can include customization
2.
Choiceboard & filtering a.
Choiceboard: an interactive, internet-enabled system that allows individual customers to design their own products and services by answering a few questions and choosing from a menu of product or service attributes, prices, and delivery options b.
Collaborative filtering: a process that automatically groups people with similar buying intentions, preferences, and behaviors and predicts future purchases. i.
“Customers who bought this also bought”

3.
Permission marketing a.
The solicitation of a consumer’s consent (opt-in) to receive e-mail and advertising based on personal data supplied by the consumer.
b.
Used to build and maintain customer relationships c.
1. Only send customers relevant information d.
2. Allow them to opt out e.
3. Assure them you won’t sell their information
4.
Connection a.
The network of linkages between a company’s site and other sites. b.
These links are embedded in the website; appear as highlighted words, a picture, or graphic
5.
Online Consumer a.
Equal between men and women, but women buy more b.
Tend to be better educated, younger, and more affluent than the general U.S. population c.
20% of online consumers account for 69% of total sales d.
Top products: computer and consumer electronics, apparel and accessories, automobile and auto parts, books/music/video
6.
Customization a.
Arises from internet-enabled capabilities that make possible an interactive exchange environment for shoppers b.
Also benefit from Customerization: customizing a product or service
7.
Communication a.
Marketer to consumer email notification b.
Consumer to marketer buying and service requests c.
Consumer to consumer chat rooms, instant messaging, social networks d.
Viral marketing- a promotional strategy that encourages forwarding marketerinitiated messages to others via email, social networking, etc.
8.
Cost/Control a.
Cost: i.
Can be cheaper online than in retail stores ii.
Is the practice of changing prices for products and services in real time iii.
Overall reduction in consumer’s cost of external information search b.
Control: i.
Consumers want control over their online shopping behaviors as they:
1.
Seek information and evaluate alternatives
2.
Make purchase decisions on their own time
9.
Cookies a.
Computer files that a marketer can download onto the computer and mobile phone of an online shopper who visits the marketer’s website b.
Allow the marketer’s website to record a user’s visit, track visits to other websites, and store and retrieve this information in the future

c.
Also contain visitor information such as expressed product preferences, personal data, passwords, and credit card numbers
10.
Cross Channel Shoppers a.
Who they are: they research products online and then purchase them at a retail store b.
Why they do it: i.
Desire to compare products among different retailers ii.
Need for more information than is available in stores iii.
Ease of comparing options without having to go to multiple retail locations c.
Sales from cross channel shoppers >> exclusive online retail sales d.
About them: i.
51% of U.S. online consumers are cross-channel shoppers ii.
represent both genders equally iii.
are more educated iv.
earn significantly more money
11.
Transactional Website a.
Essentially electronic storefronts b.
They focus on converting an online browser into an online, catalog, or in-store buyer c.
Transactional websites are most common among store and catalog retailers and direct selling companies
12.
Multichannel Marketing a.
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 the traditional marketplace and marketspace—the crosschannel consumer b.
transactional websites and promotional websites c.
can’t buy things on a promotional website (Tide, P&G)
Comprehensive Chapters
1.
Consumption Trends a.
Fewer people drinking coffee—more people like tea b.
More households with single cup brewers c.
Due to decline in demand, manufacturers are offering new flavors and seasonal blends d.
Testing delivery services e.
Starbucks and others are beginning to enter K-cup industry
2.
Cognitive Learning a.
Consumers also learn through thinking, reasoning, and mental problem solving without direct experience b.
Involves making connections between 2 or more ideas or simply observing the outcomes of others’ behaviors and adjusting your own accordingly

c.
ex: can be done through repetition in advertising
3.
Neuromarketing a.
Uses a cap with dozens of sensors to scan brain waves b.
Use it to analyze the buying processes in people c.
Can lead to changes in advertising, packaging, etc.
d.
Frito Lay Discovery
4.
Demographic Segmentation a.
Based on objective physical, measurable, or other classification attribute of prospective customers b.
Age c.
Gender d.
Family size e.
Race f.
Marital status g.
Income h.
Education i.
Occupation
5.
Geographic Segmentation a.
Based on where prospective customers live or work b.
Country c.
Region d.
City e.
Climate f.
Population density
6.
Introduction Phase a.
Objective: Gain awareness b.
Product: One c.
Price: skimming or penetration d.
Promotion: Inform, educate e.
Place (distribution): Limited
7.
Fixed Cost a.
The expenses that are stable and do not vary with quantity produced. Cost doesn’t change no matter what
8.
Direct Channel a.
Producer and ultimate consumer deal directly with each other
Short Answer
1.
10 things middlemen do a.
Transactional Function (buying and selling products/services) i.
Buying—purchasing products for resale or as an agent for supply of a product ii.
Selling—contacting potential customers, promoting products, and seeking orders

iii.
Risk taking—assuming business risks in the ownership of inventory b.
Logistical Function (things intermediary does) i.
Assorting—creating product assortments from several sources to serve customers ii.
Storing—assembling and protecting products at a convenient location iii.
Sorting—purchasing in large quantities and breaking into smaller amounts iv.
Transporting—physically moving a product to customers c.
Facilitating Function (making the transaction easier) i.
Financing—extending credit to customers ii.
Grading—inspecting and testing products and assigning them quality grades iii.
Marketing—providing marketing information to customers and suppliers
2.
Developing an IMC Program/Campaign a.
Planning: Developing the promotion program i.
Identify the target audience ii.
Specify the objectives (awareness, interest, evaluation, trial, adoption) iii.
Set the budget (percentage of sales, competitive parity, all you can afford, or objective and task) iv.
Select the right promotional tools (advertising, personal selling, sales promotion, public relations, direct marketing) v.
Design the promotion (artwork, characteristics of salesperson, coupons/samples/sweepstakes, news releases, written/verbal/electronic forms of delivery)--related to the tools you pick vi.
Schedule the promotion (when it will air or be seen) b.
Implementation: Executing the promotion program i.
Pretest the promotion
1.
Portfolio: all options put in portfolio and consumers are asked to read through it
2.
Jury: having consumers rate different ads
3.
Theater: consumers invited to view new shows, movies, or commercials ii.
Carry out the promotion c.
Evaluation: Assessing the promotion program i.
Posttest the promotion (inquiry and sales tests, surveys) ii.
Make needed changes
3.
Advertising Appeals a.
Fear Appeals—suggest that consumers can avoid some negative experience through the purchase and use of a product or service (ex: showing how drug and alcohol use is bad, smoking commercials) b.
Sex Appeals—suggest to the audience that the use of a product will increase the attractiveness of the user (ex: Bebe and Carl’s Jr) c.
Humorous Appeals—imply either directly or more subtly that the product is more fun or exciting than competitors’ offerings (ex: AFLAC duck and Old Spice)

4.
Why consumers shop online: The 6 C’s a.
Convenience i.
Don’t have to deal with going to a store, can compare prices on different sites online, 8 second download rule b.
Choice i.
Can see more options online than in store, can use chat rooms c.
Customization i.
Can build your own online, customerization d.
Communication i.
Marketing emails, buyer and service requests, consumer chat rooms and social networking e.
Cost i.
Can be cheaper online, prices change in real time online f.
Control i.
We want control over our shopping behaviors, seek info and evaluate alternatives, can buy on our own time