Exam 3

TRUE or FALSE: The group called Generation X is currently the largest US age group segment with nearly 96,000,000 people.

FALSE

TRUE or FALSE: The macro environment includes the companies intermediaries.

FALSE

What is the strongest social influence on consumers?

FAMILY

Explain the funny names for combining two modes of transportation, i.e. "piggyback"

FISHYBACK: boat → truck PIGGYBACK: train → truck TRAINSHIP: train → ship AIRTRUCK: air → truck

What is the major difference between Merchant Wholesalers and Agents/Brokers?

MERCHANT WHOLESALERS: Largest group of wholesalers. Account for 50% of wholesaling. •Merchant Wholesaler: Full-service Wholesale merchants Industrial distributors •Merchant Wholesaler: Limited-service Cash-and-carry wholesalers Truck wholesalers Drop shippers Producer's cooperatives Mail-order wholesalers AGENTS/BROKERS: •Do not take title to goods •Perform only a few functions •Specialize by product line or customer type *Brokers bring buyers and sellers together. *Agents represent buyers on a more permanent basis. •Manufacturers' agents •Selling agents •Purchasing agents •Commission merchants

What are the typical markups used by manufacturers, wholesalers, and retailers? What is a "Keystone" markup?

Manufacturer adds 15% of costs as markup Wholesaler adds 30% of cost as markup Retailer "keystones" or doubles the cost to come up with the final price to the consumer (50%.... 100%)

LOGISTICS:

Planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption.

Understand the various optional pricing strategies.

Product Line pricing: (price lining) good, better, best. Optional-product pricing: do you want to add something to that? Captive-product pricing: ex. cheap razor but expensive blades, cheap lamp but expensive light bulbs. By-product pricing: "side" businesses w/ main product Product Bundle pricing: "if you bundle, we charge less!" ex. suitcase w/ duffle bag

The classy cologne company uses a good-better-best strategy and prices all their colognes at either $19.00, $28.50, or $45.99. This is an example of...

Product line pricing

Be able to classify retailers by service, product lines, prices, and business structure.

RETAILERS: can be classified based on: • The amount of service they offer, or • The breadth and depth of product lines, or • The relative prices charged, or • How they are organized. SERVICES: • Self-service retailers serve customers who are willing to perform their own "locate- compare-select" processes to save money. Ex. burlington, ridley's grocery store, texaco • Limited-service retailers provide more sales assistance because they carry more shopping goods about which customers seek information. Ex. lowes, • Full-service retailers usually carry more specialty goods for which customers need or want a lot of assistance or advice. Ex. mr. mac, big o tires PRODUCT LINES: • Specialty stores (inc. Category Killer) • Department store • Supermarkets • Convenience store • Superstore • Service retailer PRICES: • Regular price • High quality/high price • Discount store • Off-price retailer BUSINESS STRUCTURE: • Corporate chain stores • Franchise • Small business/Sole Proprietorship (single store)

Understand various geographic price strategies used for shipping.

SEGMENTED PRICING: (different segments get charged differently) GEOGRAPHIC PRICING: (FOB-origin, uniform-delivered, zone) ZONE: "let's cut this map up into 5 sections" UNIFORM-DELIVERED: post office, stamp is the same price no matter where it gets delivered FOB: freight on board- shipping starts when package is on the bus. Costs set the lower limit of prices (price floor) while market demand sets the upper limit (price ceiling). Price Adjustments: CASH DISCOUNTS: (such as "2/10 net 30") QUANTITY DISCOUNTS: (cumulative and noncumulative) ex. punch cards ALLOWANCES: discounts you need to account for y) ex. senior citizen discounts, credit score, PROMOTIONAL PRICING: (don't overuse!) ex. hobby lobby, pier 1 PSYCHOLOGICAL pricing: marketer must consider the psychology of prices.

Briefly describe how each of these wholesalers perform their job: Selling agents = Industrial distributors = Purchasing agents = Commission merchants = Cash-and-carry wholesalers = Truck wholesaler/jobber = Drop shippers = Producer's co-ops = Mail-order wholesalers = Manufacturers' agents =

Selling agents = Industrial distributors = Purchasing agents = Commission merchants = Cash-and-carry wholesalers = Truck wholesaler/jobber = Drop shippers = Producer's co-ops = Mail-order wholesalers = Manufacturers' agents =

What is "Reach"?

Sending one postcard to a lot of people.

What is RFID?

Smart tag to track goods through the channel.

What is RFID? Smart tag to track goods through the channel.

Smart tag to track goods through the channel.

The United States population is approximately: a. 29 million b. 322 million c. 7.3 billion d. 3.2 billion

b. 322 million

The main advantage to a company for using secondary data is: a. It is the most up-to-date information b. It is less expensive to collect c. It directly answers to current research question d. None of the above

b. It is less expensive to collect

Internal business records, previous market research documents and historical sales records are good sources of: a. Primary data b. Secondary data c. Observational research d. None of the above

b. Secondary data

To develop a target marketing strategy there are 4 steps after you figure out the market you are interested in. Answer the next question about this strategy. Which is step 1? a. set a budget b. decide how to differentiate your product c. segment the market d. decide how to position your product in the consumer's mind

b. decide how to differentiate your product

To develop a target marketing strategy there are 4 steps after you figure out the market you are interested in. Answer the next question about this strategy. Which is the final step? a. set a budget b. decide how to position your product in the consumer's mind c. create a PLACE strategy d. choose 1 or more segments to focus on

b. decide how to position your product in the consumer's mind

Interest:

consumer seeks info about new product.

Trial:

consumer tries new product on a small scale to improve his or her estimate of its value.

How do channel members add value? (be able to explain each of the following)

- Dissemination of information - Promotion (to channels members and final consumers) - Contact with other channel members - Matching supply with demand (i.e. bulk breaking) - Negotiation of quantity, price, etc. - Physical distribution (logistics) - Financing (2/10 net 30) - Risk taking

What are the five categories of the Adoption Model?

1. Awareness 2. Interest 3. Evaluation 4. Trial 5. Adoption

Business Markets:

1. the business market contains far fewer buyrs, bu is much bigger in total $$. 2. buyers are more geographically concentrated. 3. business demand is derived from consumer demand.

A clothing store receives merchandise from the wholesaler, then uses a keystone markup to set the retailer price that the final consumer will pay. What is a keystone markup?

100% over wholesale

VERTICAL MARKETING SYSTEMS:

ADMINISTERED: channel members remain independent but voluntarily work together. CORPORATE: single firm owns manufacturing, wholesaling, and retailing operations. CONTRACTUAL: cooperation is enforced by contracts that spell out member

Define the five categories of a promotional mix. ADVERTISING PERSONAL SELLING PUBLIC RELATIONS DIRECT MARKETING SALES PROMOTION

ADVERTISING: non-personal, mass, high CPM PERSONAL SELLING: personal, targeted, highest CPM PUBLIC RELATIONS: non-personal, mass, low CPM DIRECT MARKETING: personal, SALES PROMOTION

Give an example of a PR ad:

BP oil spill

In which box in the BCG model does this product belong: suave sells a line of shampoo that looks and smells like johnson's baby shampoo. this line of gels currently has captured a large (62%) share of the shampoo market but the market growth for it has slowed down considerably.

CASH COW

Overall, what are the four management positions common in channel management?

CHANNEL CAPTAIN: the person who is in charge CHANNEL CONFLICT: HORIZONTAL: retailer to retailer VERTICAL: retailer to producer

Skimming pricing is intended to appeal to which market segment?

Consumers who are innovative and are seeking new high quality products and are willing to pay more for them

The four major categories of consumer influences

Cultural Social Personal Psychological

What are the four major categories of consumer influences.

Culture, Social, Personal, Psychological

List the 2 types of warehouses. Distribution and storage

DISTRIBUTION & STORAGE

What is EDLP?

EDLP: everyday low price

TRUE or FALSE: A likert scale question survey gives only two choices, such as yes/no or true/false.

FALSE

TRUE or FALSE: An example of primary research is when a marketing manager instructs his company to use the data from the government census.

FALSE

TRUE or FALSE: CRM stands for consumer reality marketing

FALSE

TRUE or FALSE: In marketing, the term "customers" does not include the government.

FALSE

TRUE or FALSE: Let's say you satisfied your thirst this morning w/ orange juice: the WANT was the thirst, the NEED was the orange juice.

FALSE

TRUE or FALSE: Segmenting a market by age has not been very effective.

FALSE

TRUE or FALSE: The baby boomers were born from the great depression. Early 1930's through 1942.

FALSE

Major subculture groups:

Hispanic consumers African-American consumers Asian-American consumers Mature consumers

Distribution strategy decisions:

INTENSIVE: in as many retailers that you possibly can get. i.e. doublemint gum SELECTIVE: i.e. maytag washer EXCLUSIVE: i.e. rolex watches

Give an example of an ad for each these advertising objectives:

Inform: poo pourri, squatty potty Persuade: Compare: pepsi vs. coke Remind: conair hair straightener

As a new product category moves through the PLC, what typically happens to price?

It starts very high then begins to get lower at each stage

Which direction does price tend to move as a product moves through the PLC? (higher or lower)

LOWER

What is Penetration Pricing?

MARKET PENETRATION: setting a low initial price in order to penetrate the market quickly. *can attract a largenumberof buyers quickly and win a large market share. also effective when your "new" product is entering a mature industry already far along the PLC.

What is Skimming?

MARKET SKIMMING: setting a high price for a new product to "skim" revenues layer by layer from those willing to pay the high price. *company makes fewer but more profitable sales.

If you have a product that is a CASH COW, what should your strategy be w/ this?

MILK IT

Subcultures that are NOT based on ethnicity:

Mature consumers, boomers, country western, catholic, mormon.

The buyer decision process:

Need recognition --> Information search --> Evaluation of alternatives --> Purchase decision --> Post purchase behavior

Under _________, the market consists of a few sellers who control a large percent of the market and are highly sensitive to each other's pricing and marketing strategies so they all price about the same.

Oligopoly

What is the difference between a Power Center and a Lifestyle Center?

POWER CENTER: LIFESTYLE CENTER:

Your company has decided to put 1.5 million dollars into promoting NEW PRODUCT but plans to promote it to the same OLD MARKET SEGMENT they have been targeting. What is this strategy called?

PRODUCT DEVELOPMENT (? / "problem child")

How is Public Relations different from Advertising?

PUBLIC RELATIONS has a low CPM, ADVERTISING has a high CPM.

What part of PR is FREE ... is that good or bad for the company?

PUBLICITY, it can either be good or bad depending on the news.

Be clear about the differences: Pure Competition, Monopolistic Competition, Oligopoly, Monopoly.

PURE competition: MONOPOLISTIC competition: ex. clothing, food, software OLIGOPOLY: MONOPOLY: one company (illegal)

Name 4 of the 6 transportation modes:

Pipelines, air, internet, railway, water, truck

Under _________, the market consists of many buyers and sellers trading in a uniform commodity such as wheat, copper, or financial securities, w/ no individual control over their own market price.

Pure competition

What is difference between a Retail Mix and the Marketing Mix?

RETAIL MIX: •Product and Service Assortment •Retail Prices •Promotion •Location •Store Atmosphere •Services MARKETING MIX: product, place, price, promotion

Explain the two types of warehouses.

STORAGE, DISTRIBUTION

What is "Frequency"?

Sending multiple postcards to a specific group of people.

Name six transportation modes.

TRUCK, RAILWAY, WATER CARRIER, PIPELINE, AIR, INTERNET, (mode of transportations)

TRUE or FALSE: The results from a random sample can be used to suggest that testing all members of the same population would show close to the same results.

TRUE

TRUE or FALSE: To achieve customer satisfaction, you need to meet or exceed their expectations.

TRUE

What is a container?

The thing used to hold/pack the product. It makes it easier to load/unload the materials from different modes of transportation.

Which mode carrier has the most in "ton-miles"?

Train 6 yrs ago, now truck

What is the difference between Value-based pricing, Cost-based pricing, and Competitive-based pricing?

VALUE-based pricing: setting prices based on buyers' perceptions of value rather than on seller's costs. COST-based pricing: setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk. COMPETITIVE-based pricing: matching the price of the competition, promoting other marketing mix variables instead of price.

What type of pricing is a business using when it uses the buyer's perception of what a product is worth, rather than using the actual costs and standard markups?

Value-based pricing

What is a "container"?

What the products are delivered in. Makes it easier to load/unload things to different modes of transportation.

Do PR people use advertising media to get their message out?

YES

Cognitive Dissonance:

a buyer's doubts shortly after a purchase about whether it was the right decision.

Belief:

a descriptive thought that a person holds about something.

Attitude:

a person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea.

Research that involves observing objects in their natural habitat is called: a. Ethnographic research b. Experimental research c. Natural research d. Paranormal research

a. Ethnographic research

Your marketing department is currently researching the consumers in your target market using demographics. Which of the following is NOT a demographic measurement? a. Favorite book b. gender c. Ethnicity d. Age

a. Favorite book

Going around campus to collect data about how students carry their backpacks is called: a. Observational research b. Experimental research c. Ethnic researc

a. Observational research

When a person feels deprived of food, this creates "hunger", which is defined by marketers as a: a. need b. want

a. need

Which mode carrier costs the most?

air

Which mode carrier is the most safe/secure?

air

Describe a product that is PUSH marketed:

an oreo ad in the middle of an aisle walkway it is "pushing" oreos onto customers.

What is the slogan that represents the marketing concept? a. "carefully establish price floors and ceilings" b. "find a need and fill it" c. "no matter what your product is, if you promote it will it will sell"

b. "find a need and fill it"

How is Social Class measured?

by a combination of occupation, income, education, wealth, and other variables.

The focus group involves personal interviewing of _____________ people who have been recruited to meet together to give their opinions about products and concepts. a. 60 to 100 b. 15 to 30 c. 6 to 10 d. Unlimited

c. 6 to 10

American born from about 1977 through 2000 are members of the market segment called: a. Generation X b. Baby boomers c. Millennial's d. The silent generation e. Generation Z

c. Millennial's

In this course, the term that means "all the potential buyers of a product" is ________________. a. segment b. buyer group c. market d. audience

c. market

__________ refers to sellers being preoccupied w/ their own products and losing sight of customers needs. a. seller far-sightedness b. marketing monopoly c. marketing myopia d. low value planning

c. marketing myopia

Which marketing philosophy focuses on streamlining the production process in order to lower costs? a. societal marketing concept b. selling concept c. production concept d. delivery concept

c. production concept

Awareness:

consumer becomes aware of the new product, but lacks info about it.

Evaluation:

consumer considers whether trying the new product makes sense.

Adoption:

consumer decides to make full and regular use of the new product.

What is CPM?

cost per thousand (M) look up equation!

A recent research study involved a group of students that was not shown power points during the semester and another group that was. The Resulting test scores were measured to determine the effect of using PowerPoint during lectures. This type of research is called: a. Survey research b. Secondary research c. Observational research d. Experimental research d. Experimental research

d. Experimental research

The most expensive form of primary research is: a. Mail/fax b. Email c. Telephone d. Personal interview

d. Personal interview

Which of the following descriptions most accurately characterizes Millennials? a. They prefer television advertising b. They have less debt than previous generations c. They are less ethnically diverse than the earlier age group segments d. They are considered the children of baby boomers e. All of the above are true d. They are considered the children of baby boomers

d. They are considered the children of baby boomers

Of the 5 marketing concepts which were based on historical philosophies, which one pushes improving the salesperson's skills for getting customers to make a purchase, no matter what the product is: a. product concept b. delivery concept c. contemporary concept d. selling concept

d. selling concept

Before designing a customer driven marketing strategy (model #1) a company needs to: a. build profitable relationships w/ retailers b. construct key components of a marketing strategy c. use CRM to create partnerships w/ key consumers d. understand the marketplace, especially customer needs and wants

d. understand the marketplace, especially customer needs and wants

Learning:

defined as a relatively permanent change in behavior due to experience. occurs due to an interplay of drives, stimuli, cues, responses, and reinforcements.

The micro environment includes all of the following EXCEPT: a. suppliers b. competitors c. media d. retailers e. laws

e. laws

Subculture:

groups of people w/ shared value systems based on common life experiences.

RETAILING:

includes all the activities involved in selling goods or services directly to final consumers for their personal, non-business use.

A Motive (or drive):

is a need that is sufficiently pressing to direct the person to seek satisfaction.

What is the difference between the marketing mix and the marketing strategy?

marketing mix: 4 P's marketing strategy: marketing mix + target product

Describe a product that is PULL marketed:

medication that is advertised on tv, "making" customers go into the store and ask for it.

Reference groups:

membership, aspirational and social network groups.

Inventory management:

must balance between too much and too little. Just in time

Occupation:

occupation influences the purchase of clothing and other goods.

Age & life-cycle stage:

people change the goods they buy over their lifetimes.

Lifestyles:

people w/in the same subculture, social class,, and occupation may have different lifestyles.

Perception:

process by which people select, organize, and interpret info to form a meaningful picture of the world.

Personality:

refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one's own environment.

Perception can be influenced by:

selective attention selective distortion selective retention

Economic situations:

some goods and services are especially income-sensitive.

Self-concept theory:

suggests that people's possessions contribute to and reflect their identities.

The adoption process:

the mental process through which an individual passes from first hearing about an innovation to final adoption of the product.

Which mode carrier is the slowest?

water