Marketing Final Exam Study Guide

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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
4.
5.
6.
7.
8.
9.
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
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
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
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
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.
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
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
3.
4.
5.
6.
7.
8.
c. ex: can be done through repetition in advertising
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
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
Geographic Segmentation
a. Based on where prospective customers live or work
b. Country
c. Region
d. City
e. Climate
f. Population density
Introduction Phase
a. Objective: Gain awareness
b. Product: One
c. Price: skimming or penetration
d. Promotion: Inform, educate
e. Place (distribution): Limited
Fixed Cost
a. The expenses that are stable and do not vary with quantity produced. Cost
doesn’t change no matter what
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
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