Business 102 Exam

Channel Factors

Need for intermediaries, type of intermediaries available and ability of those companies to help with communication

Public Relations

Non-sales communication that businesses have with various audiences - Companies rely on public relations to build favourable corporate image and foster positive relations with relevant people Publics - Employees, stockholders, customers, suppliers, government, industry groups, reporters Tools - Press conference, public service announcement, press release To: build and maintain brand image, deal with unfavourable stories, maintain positive relationships with media

Market Coverage

Number of wholesaler or retailers that will carry the product

Inventory Control

Objective is to eliminate inefficiencies

Bundling

Offering several products for a single price that is presumably lower than the total price if all the products were sold individually - Promotes the sale of goods consumers usually wouldn't buy

Free and freemium Pricing

Offering some products for free which charging for others, or offering a product for free to some customers and charging others for it

Personal Selling

One on one interaction between salesperson and prospective buyer

Distribution/ Marketing Channels

Organised network of firms that work together to get goods/service from producer to customer

Distribution Strategy

Overall plan for moving products through intermediaries and to the final customer

Specialty Products

Particular brands that the buyer wants and seeks out regardless of the location and price. For example: Yeezy Boost

Types of Marketing

Place Marketing : Marketing used to attract people and organisations to a particular geographical area Cause-Related Marketing: Marketing promotes a cause or social issue- such as fitness, cancer awareness, environmental sustainability while still promoting a company and its products.

Intensive Distribution

Placing the product in as many outlets as possible

What we say-

Planned messages (advertising)

Logistics

Planning, movement and flow of goods and related information through the supply chain

Procurement/ Reverse Auction

Potential buyers identify what goods/services they need and pricing they are willing to pay and then suppliers respond with an offer

Advocacy Advertising

Presents a companies opinion on social issues "Advocacy advertising (also referred to as Issue advertising) is a strategy where companies present paid messages in support of a particular social, environmental or political cause or issue. It may do so in a manner that supports the company's position and best interests"

Social Media Release

Press release designed to enable quick and easy sharing via social networks and other media

Deceptive Pricing

Pricing schemes considered misleading

Consumer Products

Primarily sold to individuals for personal consumption

Time Utility & Place Utility

Products available when and where customers want to buy them, e.g. overnight courier, ATM in shopping malls. FedEx create time utility, coffee carts in offices create place utility, iTunes both time and place.

Product Advertising

Promotes features and benefits of specific products

Prototype Development

Prototypes are samples made for testing and evaluation of the product. It will allow you to analyse the usability, durability, scalability and the customer appeal of the product

Relationship Era

Relationship marketing= developing long-term, value added relationships over time with customers and suppliers.Cost-effective relationships with individual customers, suppliers, employees and other partners for mutual benefit. Eg Airbus: merged partner companies into one large firm, worked with airports to accommodate the huge aircraft E.g. Airlines with strategic alliances- Air NZ and Singapore Airlines with the Star Alliance program

Business Analysis

Review sales, costs and profit projection in terms of company objectives

Trade Promotions

Sales promotion efforts aimed at inducing distributions/retailers to push a producers products

Consultive Selling

Salesperson acts as a consultant or advisor to help customers find the best solution to their personal/business needs

Institutional Advertising

Seeks to create goodwill and build a desired image for a company, rather than promote specific products "Institutional advertising is designed to create goodwill and build a desired image for a company rather than to promote specific products." For example Coca-Cola used magazine advertising to promote sustainable packaging that was environmentally sound

Idea Screening

Selecting ideas that are most worthy of further development using a broader criteria

Discount Stores

Sell everyday goods below market price by keeping overhead low

Off-price Retailing

Selling high fashion products at steep discounts

Loss-leader Pricing

Selling one product at a loss as a way to entice customers to consider the other product

Product Line

Series of related products offered by a single company, e.g. MAC- foundation, concealer, lipstick, eyeliner, powder etc

Marketing Objective

Setting price to match objectives set in marketing plan

Cost-based Pricing

Setting prices based on production and marketing costs, then add a markup to arrive at selling price. Weakness: does not consider external factors eg customer demand or competitive prices. Too high: uncompetitive, too low: could have generated more profits

Sales Promotion

Short term incentive to build the reputation of a brand, encourage purchase and enhance relationship with current and potential customers

Pull Strategy

Simulates consumer demand via advertising and other communication efforts (pulling them in) -appeal directly to end consumers, customers learn of the product through communication efforts and request it from retailers/wholesalers

Comparative Advertising

Specifically highlights how one product is better than its competitors

Discounts

Temporary price reductions to stimulate sales or encourage certain behaviours such as paying with cash OR volume discounts for buying in bulk, disadvantage: price war eg airline industry

Cognitive Dissonance

Tension when a persons beliefs do not match their behaviour, e.g. buyer remorse - when the buyer immediately regrets a purchase as it was irrational

The core product

The core product comprises the fundamental benefit that responds to the customers problem of an unsatisfied need or want

The actual product

The expected product describes those attributes that actually deliver the benefit that forms the core product. They are the attributes that fulfill the customer's most basic expectations of the product.

Product Concept

The focus is on the production of the product, not satisfying the customers needs, they therefore expect customer to figure out what they need and then take steps to find it and purchase it

Product Placement

The paid display or use of products in television shows, movies and video games

Potencial Product

The potential product comprises all possibilities that could become part of the expected or augmented product

Marketing

The process of creating value for customers and building relationships with those customers in order to capture value back from them.

Possession Utility

The satisfaction customers gain when they actually own a product, legally and physically. E.g. mortgage companies

Marketing Mix

The set of tools used to create an appealing offering - Product or service that is designed to fulfill a need - Price - Place or distribution - sold at a place that is convenient - Customer communication and promotion

Core Message

The single most important idea an advertiser hopes to convey to the target audience about its products or company

Organisational Decision Making Process

These are more rational decisions as they are judge by economic value therefore less subconscious

Unsought Products

Things consumers aren't looking for; marketing challenge is to make consumers aware of existence and convincing them to consider purchase

Stealth Marketing

This is a huge issue in business communication transparency- it involves promoting goods and services to people who are unaware they are being marketed too

Marketing Analytics

Tools and techniques used by companies to track the behaviour of customers in order to improve marketing efforts and efficiency. Measures how well the marketing budgets are spent

Market Factors

Type of intended customers (customer vs. organisation), nature of competition, size and geographic spread of target market

Product Factors

Type of product, price range and stage in product life cycle

Price Discrimination

Unfairly offering attractive discounts to some customers and not others

What others say and do-

Unplanned messages (e.g. other customer, reviews, etc.)

E-commerce

Using the internet for wholesaling an retailing

Industrial and Commercial/ Organisational Products

Usually purchased in large quantities by organisations, used to make other products/ operate the organisation

Brand Equity

Value that a company has build up through its name

Market Minded Business

Will focus on creating value, satisfying goods/services customers will want to buy

Producer to wholesaler to consumer

Works well for small producers with lack of resources to sell/deliver to individual retailers

Augmented product

the product delivers the bundle of benefits that the buyer may not require as part of the basic fulfillment of their needs - significantly differentiate their offerings from those competitors - Can become an expected product layer

Attack Ads

- Can lead to decrease in sales for an entire product category by highlighting the negative aspects of products

Marketing Era

- Consumer orientation= emphasis first on determining unmet consumer needs and the designing systems to achieve them - Marketing concept= companywide consumer orientation with the objective of achieving long term success - strong marketing concept generally improves market success and overall performance - Eg Google "focus on the user and all else wil follow"

Consumer Promotions

- Contests/audience involvement tactics (build energy around a brand) - Coupons: printed or electronic certificates that offer discounts on particular items and are redeemed at time of purchase (spur sales) - Rebates: partial reimbursement of price, offered as a purchase incentive (boost sales but will cut into profits) - Point-of-purchase display: advertising ot other display materials set up at retail locations to promote products to potential customers as they are making their purchase decisions (capture impulse purchases) - Samples and trail-use versions - introduce products and encourage non-users to try it - Premiums= free/bargain prices items offered to encourage consumers to buy a product - Special event sponsorship (sales promotion tactic) Loyalty programs

Production Era

- Firms focus narrowly on production - They believe a high quality product will sell itself - However, just building a good product does not guarantee success, must also fill marketplace need

Direct Marketing Media

- Mail - Email - Direct response online - ads appear on web pages based on some knowledge of individual's interests/ behaviours - Telephone - major potential tool for both inbound (buyers call in to place orders) and outbound (sellers contact buyer with offers) marketing - Direct response TV - informercials etc.

Sales Era

- Manufacturers increase emphasis on sales focus to find customer for their output - Firms attempt to match output to to amount of demand - Sales orientation assumes customers will resist buying non-essential goods/services and therefore need to be persuaded to buy them

Producer to consumer

- Shortest and simplest channel length - More Control over pricing, promotion, service and delivery

Types of Products

1) Core benefit 2) Actual Product - brand names, features, design, packaging, quality level 3) Augmented Product - Delivery and credit, upgrades, installation, warranty, accessories, after sale service 4) Potencial product

Factors that influence purchase:

1. Culture 2. Socioeconomic level 3. Reference group 4. Situational factors, e.g. have a coupon, being in a bad mood- this will usually lead to buyers remorse 5. Self-image

Four Stages Through Which Products Progress

1. Introduction- products first commercial availability, careful planning and considerable investment is required. If introduction is too slow, products may die 2. Growth- rapid jump in sales, increased number of competitors and distribution outlets. Increased sales 3. Maturity- sales level off 4. Decline- sales and profits slip and fade away. Choice to either- decrease the cost of production to compensate or discontinue production and focus on my product development

Personal Selling Process

1. Prospecting - finding and qualifying potential buyers 2. Preparing - for "sales calls" 3. Approaching the prospect 4. Aligning with customer needs 5. Handling objections - have answers/alternatives of customer objections 6. Closing= point at which a sale is completed 7. Following up

Rational consumer purchasing process:

1. Recognise need 2. Search for information 3. Evaluate alternatives 4. Make purchase 5. Evaluate the product after use and consumption Trigger, active evaluation, purchase (retail environment), postpurchase evalution, loyalty loop

Optimal Pricing

A computer based pricing method that creates a demand curve of every product, to help select a price to meet marketing objectives

Relationship Marketing

A focus on developing and maintaining long- term relationships with customers, suppliers, distribution partners for a mutual benefit. Goal= customer loyalty- degree to which customers continue to buy from a particular retailer or buy the products from a particular manufacturer or service provider

Test Marketing

A product development stage in which a product is sold on a limited basis to gauge its market appeal, monitor consumer reactions eg software - releasing beta versions

Producer to agent/broker to wholesaler to consumer

Additional channel levels are common where specialists are required to negotiate transactions/ perform interim functions

Distribution Centres

Advanced warehouse facilities that specialise in collecting and shipping merchandise

Price Fixing

Agreement between two companies supplying the same products on the price they will charge

Physical Distribution

All the activities required to move the finished products from producer to consumer

Participative Pricing

Allowing customers to pay how much they think the product is worth

Conversation Marketing

An approach to customer communication in which companies initiate and facilitate conversations in a networked community of potential buyers and other interested parties Marketers can initiate conversations, respond to conversations within the community, provide useful information to current and potential customers

Social Media

Any electric media that transforms passive audience into active participants in the communication process by allowing them to share content, respond to content or contribute new content

Social Communication Model

Approach to communication based on interactive social media and conversational communication styles - Gives companies far less control over their messages

Marketing Systems

Arrangement by which channel partners co-ordinate their activities under the leadership of one of the partners

Communication Mix

Blend of communication vehicles (advertising, direct marketing, social media, personal selling, sales promotion, public relations) that a company uses` to reach current and potential customers

Press Release

Brief statement/video program released to the press announcing new information about a company, e.g. new product, management changes

Marketing Intermediaries

Business people/organisations that assist in moving and marketing goods and services between producers and consumers

Challenge - Involving the customer in the marketing process: Customer Relationship Management (CRM) Social Commerce

CRM: An information system that captures, organises and capitalises on all interactions with a company and its customers. Social Commerce: The creation and sharing of product related information, among customers and potential customers, e.g. through social media. One way to two way communication. These tools let customers communicate with companies and with each other, and provide feedback to the company

Speciality Stores

Carrying only particular types of goods, often with a deep selection in those specific categories

Form Utility

Change of raw materials to finished goods, e.g. ready to eat food as an alternative to ingredients

Skim Pricing

Charging high pricing for a new product in the introductory stage and then lowering the prices later Introductory phase: take advantage of strong demand before competitors enter the market High initial price with the intention of dropping the price later Early adopters are often willing to pay a premium to get their hands on new products as soon as possible

Integrated Marketing Communication (IMC)

Co-ordinating and integrating communication and promotion efforts with consumers to ensure greater efficiency and effectiveness OR Strategy of communicating and integrating communication and promotion efforts via advertising, social media and public relations

Marketing Research

Collection and analysis of information to make marketing decisions.

Distribution Mix

Combination of intermediaries and channels a produces used to reach its target customer

Media Mix

Combination of print, broadcast, online and other media used for an advertising campaign

Idea Generating

Coming up with ideas that will satisfy unmet needs

Word of Mouth

Communication among customers and other parties, transmitting information about companies and products through online or offline personal conversations Spreads voluntarily from person to person, marketers need to give people a good reason to pass long their messages

Advertising Media

Communication channels (e.g. TV, radia, newspaper)

Shopper/in-store marketing

Communication efforts directed at consumers while they are in the retail setting

Online Retailing

Companies using E-commerce technologies to sell over the internet

Organisational Market

Companies, government agencies or other organisations that purchase goods and services, either to resell or use to the creation of their own goods and services

Product Mix

Complete portfolio of products that a company offers for sale. Width - How many product line Length - How many items in each product line Depth - How many versions (different sizes, flavour etc.) of each product in a product line

Dynamic Pricing

Continually adjusting prices to reflect changes in supply and demand Advantage: move slow-selling products quickly, boost profits Eg airline, hotels

Advertising Appeal

Creative tactic used to capture audiences attention and promote preference of the product and company being advertised, e.g. emotion, humour, celebrity, sex, music, scarcity

What we do-

Customers' experiences via the products and services

Brand loyalty

Degree to which customers continue to buy from a particular brand

Advertising

Delivery of announcements and promotional messages via time and space purchased in various media

Cost Structure

Determines how much a company must spend to create and market its product

Brand Manager

Develop and implement the marketing strategy and programs for specific products/brands

Direct Marketing

Direct communication with potential customers other than sales contacts designed to stimulate a measurable response - Personally addressable - Does not involve the purchase of time and space in other media, company has control over delivery - Has a direct response aspect - trying to build lasting relationships and generating sales now - Tends to be customized to match the needs to target market - Cost associated with type of communication (mail, telephone, computer) - Eg telemarketing, direct response TV, mobile, mail order/direct mail, internet email

Direct Marketing Techniques

Direct marketing is a computer intensive multimedia effort - Has customer database which contains various amounts of information - Allows personalisation of interaction with customers Advantages: messages can be prepared quickly (online), builds a relationship with customers Disadvantages: declining customer response, database management is expensive, growing ethical concerns

Trade Allowances

Discounts or other financial considerations offered by producers to wholesalers or retailers

Value-based Pricing

Establish a price on a product's potential or perceived value in the marketplace. Start with target price, and analysis, estimate perceptions of customer value to establish the price and perceptions of value

Convenience Products

Everyday goods and services that people buy frequently, usually without much conscious planning

Convenience Products

Everyday goods/services that people buy frequently; usually without conscious planning

Warehouses

Facilities for storing inventory

Shopping Products

Fairly important goods/ services, bought less frequently, more planning and comparison involved

Auction Pricing

Firms set no price, but buyers competitive bid on products.

Sales Concept

Focus is on building a business by making as many sales transactions as possible. Customers= target to get sold to, not as a partners in a mutually satisfying relationship

Push Strategy

Focuses on intermediaries, motivating them to promote (push) products toward end users -carry its products and promote the products to their customers

New Product Development Process

Formal process of generating, selecting and developing commercialising profit ideas

Exclusive Distribution

Gives intermediaries exclusive rights to sell a product in a particular geographic area

Brand Communities

Groups of people united by the interest in and ownership of particular products

Marketing Concept

Idea that companies respond to customer's needs and wants while seeking long term profitability and coordinating their own marketing efforts to achieve company goals, e.g. Google

Press Conference

In-person and online gather with media representatives at which companies announce new information

Agents and Brokers

Independent wholesalers that do not take legal title to the goods they distribute, but may or may not be in possession of those goods - Primary role is to bring buyers and sellers together

Merchant Wholesalers

Independent wholesalers who take legal title to the goods they distribute

Consumer Market

Individuals/ households that purchase goods and services for personal use

Retailer

Intermediaries that sell goods and services to individuals for personal use

Wholesaler

Intermediaries that sell products to other intermediaries for resale or to organisations for internal use

Penetration Pricing

Introducing new product at a low price in the hope of building sales volume quickly Advantage: discourage competition Will not work if: companies cannot sustain the low prices, customers weigh other factors more heavily than price, prices that are too low - question quality, reliability and safety

Co-operative advertising

Involves financial arrangement in which companies with products sold nationally, share costs of local advertising with local marketing intermediaries

Commercialisation

Large scale production and distribution of the product

Department Stores

Large stores that carry a variety of products in different categories

Selective Distribution

Limited number of carefully chosen outlets distribute products

Permission Based Marketing

Marketers invite potential or current customers and ask their permission to deliver messages and promise to restrict their communication efforts to those subject areas to which audience members have expressed interest.

Distributors

Merchant wholesalers that sell products to organisational customers for internal operations or the production of other good, as opposed to retailers for resale