MARK Final Review

188 terms by mutch09 

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Ch. 1, 2, 8, 10, 13, 16, 19, 21, 22

What is Promotion?

Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response.

What is Promotional Strategy?

A plan for the optimal use of the elements of promotion:

What are the Elements of the Promotional Straategy?

-Advertising
-Public Relations
-Sales Promotion
-Personal Selling

What are the Categories of Communication?

-Interpersonal Communication
-Mass Communication

What is the AIDA Concept?

Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message.

What does AIDA stand for?

-Attention
-Interest
-Desire
-Action

What are the Factors Affecting the Promotional Mix?

-Nature of the Product
-Satage in PLC (Product Life Cycle)
-Target Market Factors
-Type of Buying decisions
-Promotion Funds
-Push or Pull Strategy

What is Push Strategy?

Manufacturers may use agressive pesonal selling and trade advertising to convince a whole saler or a retailer to carry and sell their merchandise

What is Pull Strategy?

Stimualtes consumer demand to obtain product distribution

What is Integrated Marketing Communications?

The careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer.

What is Price?

Price is that which is given up in an exchange to acquire a good or service.

What is Revenue?

The price charged to customers multiplied by the number of units sold.

Profit =

Revenue - Expenses

What is Demand?

The quantity of a product that will be sold in the market at various prices for a specified period.

What is Supply?

The quantity of a product
that will be offered to the market
by a supplier at various prices for a specific period.

What is Price Equilibrium?

The price at which demand and supply are equal.

What is Elasticity of Demand?

Consumers' responsiveness or sensitivity to changes in price.

Elasticity =`

% change in Quantity Demanded / % change in Price

Inelastic Demand

E < 1

Elastic Demand

E > 1

Unitary Elasticity

E = 1

What are the Factors the Affect Elasticity of Demand?

-Availability of Substitutes
-Price Relative to Purchasing Power
-Product Durability
-A Product's other uses
-Rate of infaltion

What is Availability of Substitutes?

Consumer can easily switch from one product to another

What is Price Relative to Purchasing Power?

If a price is so low that it is an inconsequential part of an individuals budget, demand will be inelastic.

What is Product Durability?

Being able to repair the product rather than replacing it

How is A Product's Other Uses affect elasticity of demand?

The greater the number of different uses for a product, the more elastic the demand tends to be

How does Rate of Inflation affect the elasticity of demand?

When inflation is high, the more elastic the demand becomes

What is Yield Management Systems?

A technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity.

What are the types of Costs?

-Variable Costs
-Fixed Costs

What are Variable Costs?

Deviate with changes in level of output

What are Fixed Costs?

Do not deviate as level of output changes

Break-Even Quantity =

Total Fixed Costs / Fixed Cost Contribution

Fixed Cost Contribution =

Price - Avg. Variable Cost

What is Profit Maximization?

A method of setting prices that occurs when marginal revenue equals marginal cost.

What is Satisfactory Profits?

Reasonable level of profits

What is Target Return on Investment?

Measures managements overall effectiveness in generating profits with the available assets

What is Market Share?

Company's product sales as a percentage of total sales for the industry

What is Sales Maximization?

Rather than strive for market share, the company strives to maximize sales

What is Status Quo Pricing?

The company seeks to maintain existing prices or to meet the competitions prices

What is Marginal Revenue?

The change in total revenue (cost) with a one-unit change in output.

What does Markup Pricing use?

The cost of buying the product, plus amounts for profit and for expenses not otherwise accounted for.

What is Keystoning?

Marking the price by doubling the cost

What are other Determinants of Price?

-Stages of the PLC
- Competition
-Distribution Strategy
-Promotion Strategy
-Perceived Quality

What is Customer Relationship Management?

A company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups.

What is Customer-Centric?

The company customizes its product and service offering based on data generated through interactions between the customer and the company.

What is learning?

An informal process of collecting customer data through customer comments and feedback on product or service performance.

What is Knowledge Management?

The process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization.

What is the Customer Relationship Management Cycle?

- Identify Customer Relationships
- Understand Interactions with Current Customer Base
- Capture Customer Data Based on Interactions
- Store and Integrate Customer Data using IT
- Identify Best Customers
- Leverage Customer Information

What is Interaction?

Occurs when a customer and a company representative exchange information and develop learning relationships

What is Lifetime Value Analysis?

A data manipulation technique that projects the future value of the customer over a period of years.

What is Predictive Modeling?

A data manipulation technique in which marketers try to determine what the odds are that some other occurrence will take place in the future.

What is Social Media?

any tool or service that uses the Internet to facilitate conversations.

A Marketing Channel (or Channel of Distribution) is?

a set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer.

What are the Channel Intermediaries?

-Retailer
-Merchant Wholsaler
-Agents and Brokers

What is the Retailer channel?

A channel intermediary that
sells mainly to customers.

How are Merchant Wholesalers a channel?

An institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them.

How are Agents and Brokers a channel?

Wholesaling intermediaries who facilitate the sale of a product from producer to end user by representing retailers, wholesalers, or manufacturers.

What are Logistics?

The efficient and cost-effective forward and reverse flow as well as storage of goods, services, and related information, into, through, and out of channel member companies.

What are the Types of Channel Relationships?

-Arm's Length
-Integrated
-Cooperative

What are the Factors Affecting Channel Choice?

-Market Factors
-Product Factors
-Producer Factors

What do Market Factors Target?

Customer considerations

What are Product Factors?

More complex customized and expensive

What do Producer Factors pertain to?

The producer itself. Selling, Hiring or Storing

What are the Level of Distribution Intensity?

-Intensive Distribution
-Selective Distribution
-Exclusive Distribution

What is Intensive Distribution?

A form of distribution aimed at maximum market coverage

What is Selective Distribution?

By screening dealers and retailers to eliminate those, but not intangible area

What is Exclusive Distribution?

A form of distribution that establishes one or a few dealers within a given area

What is an Arm's length channel relationship?

Relationship between companies that is loose, characterized by low relational investment and trust, and usually taking the form of a series of discrete transactions with no or low expectation of future interaction or service

What is an Integrated channel relationship?

Relationship between companies that is tightly connected, with linked processes across and between firm boundaries and high levels of trust and interfirm commitment

What is an Cooperative channel relationship?

Relationship between companies that takes the form of informal partnership with moderate levels of trust and information sharing as needed to further each company's goals

What is Channel Power?

A channel member's capacity to control or influence the behavior of other channel members

What is Channel Control?

A situation that occurs when one marketing channel member intentionally affects another member's behavior

What is Channel Leader?

A member of a marketing channel that exercises authority/power over the activities of other members

What is marketing?

Is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

What does marketing do?

Creates value, Communicates value, Delivers value

The 4 P's

product, place, promotion, price

What do the 4 P's create?

Exchange between 2 people

The concept of exchange

People giving up something to receive something they would rather have.

What is Production marketing?

internal capabilities of the firm

What is Sales marketing?

agressive sales techniques and belief that high sales result in high profits

What is Market marketing?

satisfying customer needs and wants while meeting objectives

What is Societal marketing

satisfying customer needs and wants while enhancing individual and societal well-being

What is the Marketing Concept?

The idea that social and economic justification for an organization's existence is the satisfaction of cutomer wants and needs while meeting organizational objectives

What is Customer Value?

The relationship between benefits and the sacrifice necessary to obtain those benefits

What is Customer Satisfaction

The cutomer's evaluation of a good or service in terms of whether it has met their needs and expectations.

What is Relationship Marketing?

A strategy that focuses on keeping and improving relationships with current customers

Why is marketing important to society?

To assure that the product being marketed is beneficial and has good interest

Why is marketing important to business?

Assesing the wants and needs of potential customers

How does marketing have a, Role in everday life?

By ubderstanding the process of marketing, you will better understand the buying process and be able to negotiate more effectively with sellers

Why is there a good career opportunity in marketing?

For every product and service that is wanted and needed, there will always be a buyer and marketers help communicate to the buyer the importance of what is wanted and needed.

What is Strategic Planning?

A managerial process of creating and maintaning a fit between the organizations objectives and resources and the evolving market opportunities

What is needed with Strategic Planning?

1. Resources and Objectives
2. Evolving Market Opportunities

Resources & Objectives + Evolving Market Opportunities =

Long run profitability and growth

To help insure long run profitability and growth. You need?

long term commitment of resources

What is a marketing plan?

A written document that acts as a guidebook of marketing activities for the marketing manager.

What are the Elements of a Marketing Plan?

-Business Mission Statement
-Situation or SWOT Analysis
-Objectives
-Marketing Strategy
-Implementation Evaluation Control

What are the Elements of a Marketing Strategy?

-Target Market Strategy
- Marketing Mix

What are the Elements of a Marketing Mix?

-Product
-Place
-Promotion
-Price

What is the importance of a firm's mission statement?

Answers the question, "What business are we in?"

What is marketing myopia?

Defining a business in terms of goods and services rather than in terms of the benefits customers seek

What should Strategic Business Units have?

A distinct mission and specific target market

What does a SWOT analysis identify?

Internal strengths and weaknesses and also examining external opportunities and threats.

What are strengths defined as for a company?

Things the company does well

What are weaknesses defined as for a company?

Things the company does not do well

What are opportunities defined as for a company?

Conditions in the external environment that favor strengths

What are threats defined as for a company?

Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness

What is environmental scanning?

The collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan.

What is a marketing objective?

A statement of what is to be accomplished through marketing activities

What is competitive advantage?

The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition.

What is, sustainable competitive advantage?

An advantage that cannot be copied by the competition

What is a marketing strategy?

The activities of selecting and describing one or more target markets and developing and maintaning a market mix that will produce mutually satisfying exchanges with target markets.

What is implementation?

Process that turns a marketing plan into action assignments

What is marketing audit?

A thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization

What is sustainability?

The idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profits and help the world at the same time.

What is a Market?

People or organizations with needs or wants and the ability and willingness to buy

What is a Market Segment?

A subgroup of people or oganizations sharing one or more characteristics that cause them to have similar product needs

What is a Market Segmentation?

The process of dividing a market into meaningful, relatively similar, identifiable segments or groups

What is Criteria for Successful Segmentation?

-Substantiality
-Identifiablity and Measurability
-Accessibility
-Responsiveness

What is Substantiality segmentation?

Segment must be large enough to warrant a special marketing mix

What is Identifiability and Measurability segmentation?

Segments must be identifiable and their size measurable

What is Accessibility segmentation?

Members of targeted segments must be reachable with marketing mix

What is Responsiveness segmentation?

Unless segment responds to a marketing mix differently, no seperate treatment is needed

What are the Segmentation Bases?

Characteristics of individuals, groups, or organizations used to divide a total market into segments

What are the elements of the Demographic Segmentation?

-Age
-Gender
-Income
-Ethic
-Family life cycle

What are the elements of the Psychographic Segmentation?

- Personality
-Motives
-Lifestyles
-Geodemographics

What is Personality psychographic segmentation?

Reflects a person's traits, attitudes, and habits

What is Motives psychographic segmentation?

Appeal to consumer's emotional motives

What is Lifestyles psychographic segmentation?

Dividing people into groups according to the way they spend their time

What is Geodemographics psychographic segmentation?

Clusters potential customers into neighborhood lifestyle categories

What is Benefit Segmentation?

The process of grouping customers into market segments according to the benefits they seek from the product

What is Usage-rate Segmentation?

Dividing a market by the amount of product bought or consumed

What are the steps in Segmenting a Market?

-Select a market for study
- Choose bases for segmentation
-Select descriptors
-Profile and analyze segments
-Select target markets
-Design, implement, maintain marketing mix

What is Undifferentiated Targeting Strategy?

A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix

What are the Advantages of undifferentiated targeting strategy?

Potential savings on production and marketing costs

What are the Disadvantages of undifferentiated targeting strategy?

Unimaginative product offerings. companys more susceptible to competition

What is Concentrated Targeting Straategy?

Firm selects a niche market

What are the Advantages of a concentrated targeting strategy?

A company can concentrate resources. The company can better meet the needs of a defined segment. Allows small firms to better compete with larger ones. There is strong positioning for the product

What are the Disadvantages for a concentrated targeting strategy?

The segment is too small and changing. The larger competitors may market to a niche segment

What is Multisegment Targeting Strategy?

A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each

What are the Advantages for a multisegment targeting strategy?

There is greater financial success for the company.

What are the Disadvantages for multisegment targeting strategy?

There are high costs and cannibalization can occur.

What is Position?

The place a product, brand, or group of products occupies in consumers' minds relative to competing offerings

What is Positioning?

Developing a specific marketing mix to influence potential customers' overall perception of a brand, product, or organization in general

What is Product Differentiation?

A positioning strategy that some firms use to distinguish their products from those of competitors

What is Repositioning?

Is changing consumers' perception of a brand in relation to competing brands

What are Bases for Positioning?

-Attribute
-Emotion
-Use or Application
-Product User
-Product Class
-Competitor
-Price and Quality

What is the Attribute base for positioning?

A product is associated with a product feature or customer benefit

What is the Emotion base for positioning?

Targeting how a customer should feel toward the product

What is the Use or Application base for positioning?

Using buyers to position the product

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