marketing
300
discussion section
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Announcements?
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Announcements?
• Michael Shermer, author
of Mind of the Market
• Topic: Irrationality
• Place: March 1, 7:30,
Union Theater
• Tickets: Union Box Office
(free!)
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reminder
– You can only turn in 1 discussion question after
2nd exam
– If you haven’t turned in any yet, you need to do
the next two!
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segments
Is this a viable market segment (target market)?
a)women who need new shoes
b)teenagers
c)professional man looking for dress socks
d)diabetics who like sweets
e)middle aged couple looking to buy a house
f)people who like cars
g)young people who look for variety in movie rentals
h)busy mother who wants to improve her health
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targets and segments
What is the difference between a target market and a
segment?
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targets and segments
JUNK FOOD MARKET (OVERALL)
VARIETY-SEEKERS
SNACKERS
LATE-NIGHT MUNCHIES
QUALITYSEEKERS
HEALTHCONSCIOUS
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JUNK FOOD MARKET
SEGMENTS
VARIETY-SEEKERS
SNACKERS
LATE-NIGHT MUNCHIES
QUALITYSEEKERS
HEALTHCONSCIOUS
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JUNK FOOD MARKET
SEGMENTS
VARIETY-SEEKERS
SNACKERS
LATE-NIGHT MUNCHIES
QUALITYSEEKERS
HEALTHCONSCIOUS
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TARGET
HEALTHCONSCIOUS
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What kind of targeting
approach is this?
SINGLE TARGET MARKET
APPROACH
HEALTHCONSCIOUS
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What kind of targeting approach is
this if you have a single marketing
mix?
COMBINED TARGET MARKET
APPROACH
SNACKERS
HEALTHCONSCIOUS
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What kind of targeting approach is
this if you have more than one
marketing mix?
MULTIPLE TARGET MARKET
APPROACH
SNACKERS
HEALTHCONSCIOUS
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Quiz #4
• A requisition
a) is only used for nonroutine purchases.
b) is the same as a purchase order.
c) sets the terms under a negotiated contract.
d) is a formal contract between a buyer and a seller.
e) none of the above is true.
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Quiz #4
• Purchasing managers in business markets (compared
to buyers in consumer markets) are generally:
a) fewer in number.
b) more technically qualified.
c) less emotional in their buying motives.
d) more insistent on dependability and quality.
e) all of the above.
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Quiz #4
• Organizations always focus on economic factors when they
make purchase decisions and are never as emotional as final
consumers in their buying behavior.
a) True
b) False
companies are made of people!
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exam details
•
•
•
•
March 1, 5:40pm – see Learn@UW for location
Makeup exam: you should have received an email
Arrive early – no extra time if you’re late!
What should I bring?
– No. 2 pencil
– Student ID – required to submit exam
– Know your section number
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Exam Prep
•
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• read over class notes
• do the quizzes on the book website
• do the quizzes on the book website
• do the quizzes on the book
website!!!!!!!!
• www.mhhe.com/fourps
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Exam Prep
• Don’t write on practice exam,
please!
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exam review
1. Which of these sounds like sales-era marketing?
a) “We just make stuff; we don’t try to sell it.”
b) “We make whatever we want, and shove our
products down peoples’ throats”
c) “We do whatever the guys in marketing tell us to”
d) “We hire hotshot MBAs to find out all the latest
trends and then we just copy them.”
e) “We hang around on Facebook listening in on
conversations to figure out how to market to young
people”
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exam review
2. “Price” includes which of the following:
a) Cost of a product to the company
b) Markup of a product
c) Markup and discounts
d) Markup, discounts, and allowances
e) Markup, discounts, allowances, and geographic
terms
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exam review
3. Which of the following most describes a “breakthrough
opportunity?”
a) Some guy mixes ingredients in his bathtub and sells it as a
Coke knockoff
b) A greasy sandwich store opens a second location next to a
popular bar where college kids get drunk every weekend
c) A pharmaceutical company spends 12 years and $127 billion
coming up with a drug that keeps you from saying dumb
stuff
d) Sven Evans knits handbags and sells them on EBay
e) Knowing the shape of the economy, a Ford dealership has a
sale on all compact cars with broken windshields
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exam review
4. Phun Pharmaceuticals decides that in addition to selling pills,
they want to start selling snowboards. What strategy is this?
a) Multiple target market
b) Combined target market
c) Market development
d) Diversification
e) Market Penetration
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exam review
Present products
Present
markets
New
markets
New products
Market Penetration
Product Development
Market Development
Diversification
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exam review
5. Greasy Black Oil Co. wants to make a pre-packaged oil slick
product for thwarting tailgaters. Which should they do first?
a) Get retailers on board
b) Figure out the 4 Ps
c) Start manufacturing the product
d) Segment the market
e) Create promotional advertising with snappy catchphrases
that people will repeat a lot
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exam review
6. Cantco says on their warranty that if their product blows up
within 90 days of purchase you can get a replacement free of
cost. Your product blew up on day 88 but the company refuses
to send you a new product. They can get in trouble under
which act?
a) Total Quality Management Act
b) Sherman Act
c) Magnuson-Moss Act
d) Terrance-Putnam Act
e) This is the buyer’s problem. He can sue, but that’s about it.
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exam review
7. Reference groups would have the most impact on the sales
of which category of product?
a) Shoes
b) Salad dressing
c) Hand soap
d) Coffee
e) Batteries
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exam review
8. Jieun Cha just bought a new Porsche, but as she speeds
home from the dealership, she wonders if maybe she should
have just gotten the Ferrari. It had a carbon-fiber brake pedal,
after all, and it was only $137,000 more. This is an example of:
a) Routinized response behavior
b) Dissonance
c) Consumer insatiability
d) Consumer justification
e) Post-purchase reconsideration
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exam review
9. Jeremy Jaghoff works for a large, faceless corporation. His
boss tells him that they’re going to need some supplies. Which
of the following on the boss’ list is most likely to be a straight
rebuy?
a) A solid gold chair for the executive suite
b) A brand new wi-fi network for the corporate complex
c) 20 pizzas (extra cheese) delivered to the boss’ office
d) 5,000 reams of paper
e) 200 headsets for the new employees they are hiring
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exam review
10. Which is true about “target marketing”?
a) Is limited to small sized market
b) Assumes that all customers are homogeneous
c) Focuses on reasonably homogeneous market
segments
d) All of the above
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exam review
11. Subway uses many retail channels to reach its target
markets while UW Credit Union uses none. Which of the
marketing mix variables is being considered here?
a) Penetration
b) Product
c) Promotion
d) Place
e) Price
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exam review
12. Hafasco recently increased its couponing to its present
customers. It appears that Hafasco’s is pursuing what kind
of opportunity?
a) Market penetration
b) Product development
c) Market development
d) Mass marketing
e) Diversification
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exam review
13. The Sherman Act (1890) focuses on:
a)
b)
c)
d)
e)
Unfair methods of competition
Attempts to monopolize
Deceptive packaging, branding or ads
Product warranties
Clayton Act (1914)
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exam review
14. Almost 50 percent of the total U.S. income is paid to
the ________of U.S. families with the highest incomes.
a) 20 percent
b) 30 percent
c) 50 percent
d) 80 percent
e) 95 percent
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exam review
15. On his way to buy a Stihl chainsaw, Leatherface hears
from one of his friends that Craftsmans has more priceperformance than Stihl. However Leatherface thought
that his friend said that Stihl had more price-performance.
This illustrates:
a) Selective perception
b) Learning
c) Selective retention
d) Reinforcement
e) Selective exposure
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exam review
16. Loopy went to Copps for grocery shopping. He
wanted to buy Salt Mine brand potato chips. However,
the store was temporarily out of that product, so he
looked over the other familiar products/brands and
decided to try a well advertised one. This case
illustrates:
a) Routinized response behavior
b) Intensive problem solving
c) Limited problem solving
d) Extensive problem solving
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exam review
17. Regarding the U.S. population trends in the U.S. consumer
market, which of the following is NOT true?
a) About 13 percent of all Americans move each year.
b) Some of the areas with the largest populations are losing
population.
c) The overall U.S. population continues to grow rapidly.
d) The percentage of population in older age groups has
increased.
e) Big targets such as the metro areas are attractive but very
competitive.
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exam review
18. Frederick Krueger is a demoralized employee who works on the
5th floor of an anonymous office building in an industrial park. His
office’s printer ran out of toner again and Fred has decided that
instead of buying the same toner that he always buys from a
company-approved vendor, he is going to buy some knock-off toner
from a sketchy vendor in South America. What kind of organizational
buying is this?
a) new task buy
b) new order buy
c) depeche mode buy
d) modified rebuy
e) modified buy
f) straight rebuy
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exam review
19. Ray was interested in a new guitar. Ray discussed the
various type of with some knowledgeable friends and
relied on their advice. Ray’s friends were acting as:
a) An economic influence
b) Routinized decision-makers
c) A social class
d) A lifestyle group
e) A reference group
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exam review
20. As the owner of a Starbucks, Laurie had an annual
income of $65,000 last year. She pays $30,000 per year
in taxes and another $18,000 per year in grocery bills,
house mortgage, and car payment. Last year she spend
an additional $5,000 on a one-month visit to Zimbabwe.
What was Laurie’s discretionary income last year?
a) $17,000
b) $35,000
c) $12,000
d) $47,000
e) $5,000
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PRO TIP
If you’re stuck on an application test question think about
these things:
- How does this apply to the 4 P’s?
- Who is involved? Who benefits? What are their
motivations?
- There is no universal “best” strategy, distribution
method, promotion, etc…
- (It’s all situational!)
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PRO TIP
Please return practice exam
when you leave!
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Segments
• Homogeneous within – as similar as possible with
regards to their response to marketing mix variables
and segmenting dimensions
• Heterogeneous between – consumers in different
segments should be as different as possible
• Substantial – Large enough group of people to be
profitable
• Operational – Dimensions should be useful for
identifying customers and adjusting marketing mix
variables
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Product Examples
• Broad Product Category
– Electronics
• Generic market
– Devices that help you capture an image
• Product Market
– Digital Camera
• Multiple Target Market
– One camera targeted at different market segments (different
marketing mixes)
• Combined Target Market
– One camera targeted at different market segments (same
marketing mixes)
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Chapter 1: Intro
 Macro-marketing:
 Study of marketing from the national (societal)
perspective. Emphasis on how the whole
marketing system works.
 Micro-marketing:
 Study of marketing from an individual firm’s
perspective; 4 P’s.
 Macro-Micro dilemma:
 What is good for an individual firm is not always
good for society
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Chapter 1: Intro
 The marketing concept:
 Total company effort to achieve customer
satisfaction at a profit
 The roles/focus of marketing over time
 Simple trade era/Sell surplus
 Production era/Increase supply
 Sales era/Beat competition
 Marketing department era/Coordinate and control
 Marketing company era/Long-run customer
satisfaction
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Chapter 1: Intro
 Customer value = Benefits - Costs (From perspective
of the consumer)
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Chapter 1.
• Micro and macro views of marketing
– Micro view: a set of activities performed by organizations
• The American Red Cross seeks more volunteers.
• “Pepsi sells in Japan.”
– Macro view: a social process
• Internet changed the way of firm’s communication with
consumers.
• Korea and the U.S. agree on a new trade agreement.
• “Russia decided to focus more on consumer goods than
before.”
– Micro-macro dilemma
• E.g.) What is good for some producers or consumers may
not be good for environments.
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Chapter 2: Strategy Planning
• A marketing strategy requires:
1) Target market
2) Marketing mix to appeal to target market
a. Product
b. Place
c. Promotion
d. Price
•
The marketing plan
•
contains the strategy along with timing details
for implementation
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Chapter 2: Strategy Planning
• Planning an effective strategy and marketing mix
involves:
• SWOT Analysis
•(Strengths, Weaknesses, Opportunities, Threats)
• Differentiation
• Market Segment
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Chapter 3: Evaluating Opportunities
When looking for opportunities, consider:
1. External Environment
- economic, technical, political, legal, social,
cultural
2. Competitors: compares your strengths and
weaknesses to those of major competitors:




Target market
Product, Place, Promotion, Price
Competitive barriers
Likely responses to your actions
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Chapter 3: Evaluating Opportunities
3. Internal Environment
- marketing plan must align with the firm’s
overall objectives
Evaluate all three together to find the best
opportunities!
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Chapter 4.
• Target marketers aim at specific targets (p67)
– Single target market approach
• Segmenting the market and picking one of the homogeneous
segments as the firm’s target market
– Multiple target market approach
• Segmenting the market and choosing two or more segments,
then treating each as a separate target market needing a different
marketing mix
– Combined target market approach
• Combining two or more submarkets into one larger target market
as a basis for one strategy
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Chapter 4: Segmentation and Positioning
 Market – potential customers with similar needs
 Generic – broadly similar needs, diverse ways of
satisfying needs
 Product – very similar needs, close substitutes
 Segmentation
 1) Name broad product market
 2) Segment to select target market and marketing
mix
 Should be homogeneous within, heterogeneous
between, substantial, operational
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Chapter 4: Segmentation and Positioning
 Market approaches
 Single target
 Multiple target
 Combined target
 Qualifying dimension – includes a customer type in
product-market
 Determining dimension – affect customer’s purchase
of specific product in product-market
 Positioning – how customers think about proposed
or present brands in the market
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Chapter 5: Consumer Buying Behavior
 Consumer Behavior – why do they buy what they buy?
 Economic Needs - Psychological Needs
 Social Influence -Purchase Situation
 Psychological Influences within and individual
 Needs, Wants, Drives
 The PSSP Hierarchy of Needs
 Personal needs, Social needs, Safety needs, Physiological needs
 Perception Determines what Consumers See & Feel
 Selective Exposure, Selective Perception, Selective Retention
 Learning Determines what Response is Likely
 The Learning Process: Drive - - Cues - - Response
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Chapter 5: Consumer Buying Behavior
 Attitudes relate to buying - understanding attitudes &
beliefs helps you target them!
 The Consumer Decision Process
 Consumer Problem Solving:
 Info Search - - Identify alternatives - - Set criteria - Evaluate alternatives
 Problem Solving Continuum
 Routinized response behavior - - Limited problem
solving - - Extensive problem solving
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Chapter 6: Business Buying Behavior
 Not all consumers are final consumers. The buying
process is very different for these consumers
(examples: B2B, middlemen, gov’t, nonprofits…)
 Orgs typically focus on economic factors, not
emotion
 Many people with varying roles are involved in the
purchasing decision. Know their roles and manners
of influence
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Chapter 5.
• Note the definitions of the following
– Extensive problem solving
• When consumers put much effort into deciding how to
satisfy a need
– Limited problem solving
• When consumers put some effort
– Routinized response behavior
• When he/she regularly selects a particular way of satisfying
a need when it occurs; mostly for purchases where he/she
has much experience in how to meet a need
– Low-involvement purchases
• For purchases that have little importance or relevance for
the customer
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Chapter 5.
• Organizational Buying Behavior
– New-task buying / A straight rebuy / Modified rebuy
• A straight rebuy is MOT likely to occur for
A.A new computer network
B. A pension plan to meet the new legal issue
C. Cartridge for the copy machine
D.Screen component for a new mobile phone product
E. Buying decision from a new vendor
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Chapter 6: Business Buying Behavior
 Three types of buying processes:
 New-task Buying:

Due to new customer need so lots of info
needed, many people involved
Straight Rebuy
Routine repurchase so no new info required,
little time and usually smaller
 Modified Rebuy

In between purchase with only moderate review
of buying decision
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Chapter 6: Business Buying Behavior




Few large manufacturers: produce 60%+ of value add;
do most buying; centralized locations; clear, defined
industries
Services larger in number, spread out, smaller, less
formal…
Retailers/wholesalers are purchasing agents for target
consumers
Government market often largest of all markets (30%
of GDP in US); more set policies in gov’t buying
process – e.g. competitive bid systems, approved
supplier lists, etc.
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GOOD LUCK ON THE EXAM!!
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