Marketing Dev Final
George just bought a new phone. However, almost immediately he started experiencing glitches. George called the phone company's helpline. He was surprised to find that the helpline was entirely automated. The automated helpline described some common problems that customers might experience and provided instructions on what to do. George followed the instructions and his phone started working correctly. Although George was happy that the problem was fixed, he was frustrated that the entire process was automated. George would prefer to have a higher degree of ____________________ when he calls in to ask for help
Customer Contact
intangibility marketing challenges
Difficult for customer to evaluate; Customer does not take physical possession; Difficult to advertise and display; Difficult to set and justify prices; Service process is usually not protectable by patents
intangibility in service marketing
Increases the overall importance of the brand image when a consumer is deciding which to purchase; physical markers of quality and the experience
inseparability marketing challenges
Service provider cannot mass-produce services; Customer must participate in production; Other consumers affect service outcomes; Services are difficult to distribute
customer contact marketing challenges
Service providers are critical to delivery; Requires high levels of service employee training and motivation; Changing a high-contact service into a low-contact service to achieve lower costs is difficult to achieve without reducing customer satisfaction
heterogeneity marketing challenges
Service quality is difficult to control; Service delivery is difficult to standardize
perishability market challenges
Services cannot be stored; Balancing supply and demand is very difficult; Unused capacity is lost forever; Demand may be very time sensitive
client-based relationships marketing challenges
Success depends on satisfying and keeping customers over the long term; Generating repeat business is challenging; Relationship marketing becomes critical
When a customer takes part in the production of a service, other customers can affect the outcome of the service
True
demand curve
a graph of the quality of products expected to be sold at various prices if other factors remain constant; Many types of demand exist, and not all conform to the classic demand curve shown; ch19 slide5
category killer
a large specialty store that concentrates on a major product and competes based on low prices and product availability knocks out small businesses like, tech stores or bookstores (ex. Barnes and Noble, Best Buy, Petco)
tradition speciality retailers
a store that carries a narrow product mix w deep product lines; also called limited-line retailers, typically sells sports gear, apparel, jewelry, fabrics or computers ect. (ex. Dick's, Sunglass Hut)
power shopping center
a type of shopping center that combines off price stores w category killers (ex. no department stores, more anchor stores, Gap, TJ Maxx, Home Depot)
neighborhood shopping centers
a type of shopping center usually consisting of several small convenience and specialty stores, target market is within a ten minute drive, depth of the product line is limited (ex, local mini-marts, convenience stores)
regional shopping centers
a type of shopping center w the largest department stores, widest product mixes, and deepest product lines of all shopping centers, target markets may be customers traveling for far to get product or prices that their hometowns may not have
superregional shopping centers
a type of shopping center w the widest and deepest product mixes that attracts customers from many miles away;often have more beyond stores like ice skating rinks or amusement centers (ex. American Dream Mall, more rare)
community shopping centers
a type of shopping center with one or two departments stores, some speciality stores, and convenience stores; draws customers looking for specialty products not available in neighborhood shopping center's, wide varies of product mixes and deep product lines
sales promotion
activity and or material intended to induce resellers or salespeople to sell a product or consumers to buy it; can be designed to specifically stimulate reseller's demand and effectiveness, some are directed at increasing consumer demand, and some focus on both consumers and sellers; considerations - product and target market characteristics, product distribution and resellers, competitive and legal environment
institutional advertising
adverting that promotes organizational images, ideas and political issues
reinforcement advertising
advertising that assures users they choose the right brand and tells them how the most satisfaction from it (ex. 'you made the right choice' - on packaging like arm & hammers
advocacy advertising
advertising that promotes a company's position on a public issue
product advertising
advertising that promotes the uses, features and benefits of products; two types - pioneer and competitive
pioneer advertising
advertising that tries to stimulate demand for a product category rather than a specific brand by informing potential buyers about the product; goes back to stimulating primary vs. selective demand
reminer advertising
advertising used to remind consumers about an established brand's uses, characteristics, and benefits (ex. reminder 'were still here and the product is still good' - seen in food and bev)
when a company promotes its position on a public issue, this is specifically referred to as ______ advertising
advocacy
retailing
all transactions in which the buyer intends to consume the product through personal, family, or household use
wholesaler
an individual or organization that sells products that are bought for resale, for making other products, or for general business operations; bulk buying; warehouse clubs / warehouse showrooms
retailer
an organization that purchases products for the purpose of reselling them to ultimate consumers
experience qualities
attributes that can be assessed only during the purchase and consumption of the service (ex. when going to get a haircut and don't know how it will be - friendliness of the staff)
credence qualities
attributes that customers may be unable to evaluate even after purchasing and consuming a service; quality you figure out after service is complete (ex. after a hair cut you don't really know if they got all of your dead-ends or if the color will last/they got all your roots or the right color)
preappraoch - step 2
before contacting acceptable prospects, a salesperson finds and analyzes info ab each prospect,s specific product needs, current use of brands, feelings ab available brands, personal characteristics; involves identifying key decision makers, reviewing account histories and problems, contacting other clients for information, assessing credit histories and problems, preparing sales presentations, identifying product needs, and obtaining relevant literature ch18 slide14
client-based relationships in service marketing
build trust, demonstrate customer commitment, satisfy customers, word of mouth communication is a key factor (relationship marketing is VERY important - to keep existing clients and growing client base)
advertising agency
business dedicated to creating, planning, and handling advertising and sometimes other forms of promotion and marketing for its clients
marginal revenue - MR
change in total revenue resulting from the sale of an additional unit of product ch19 slide11
SEO - search engine optimization
choosing the right keywords to include on our website/in our content so when someone searches those keywords, we pop up (ex. organic); search engine optimization (SEO) takes a lot of work
promotion mix
combination of promotional methods used to promote a specific product
hypermarket
combination of supermarket and discount store; larger than a superstore (ex. Carrefour)
public relations
communication efforts used to create and maintain favorable relations between an organization and its stakeholders; internal or external stakeholders; focus on enhancing image of total organization
comparative advertising
compares the sponsored brand w one or more identified brands on the basis of one or more product characteristics (ex. print and commercials - bounty)
Tectron Products Company advertises a specific product heavily, and Initech wants to offset the effects of that advertising. In this case, Initech would most likely employ ______ advertising
competitive
service quality
customer's perceptions of how well a service meets or exceeds their expectation (two levels of expectation: desired and acceptable) (search, experience, and credence qualities)
primary demand
demand for product CATEGORY rather than a specific BRAND
selective demand
demand for specific BRAND; stimulated but differing product from competitors, increasing/encouraging more product usage, and advertising requires singling out attributes important to potential buyers
demand
depends on other factors in the marketing mix, including product quality, promotion, and distribution, as prices fall - demand rises; influence of demand - Changes in buyers' needs, Variations in the effectiveness of other marketing mix variables, presence of substitutes, Dynamic environment; some demand is predictable but some are not - organizations watch this to predict and fluctuate product and price to reflect customer needs; improvement of factors changes curve D2
fixed costs
do not vary w/ change in the number of units
perishability in service marketing
do the best job every time with training, make it worth the time because once it's gone you can't get it back; an airline ticket is for a certain day and time so if you get a cold you & can't travel you lose that ticket value and time
nonprice competition
emphasizing factors other than price to distinguish a product from competing brands; effective only under certain conditions - company must be able to distinguish its brand through unique product features, higher product quality, effective promotion , distinctive packaging, and/or excellent customer service (DIFFERIENTAION); distinguishing characteristics must be as important; company must extensively promote the brands distinguishing characteristics to establish its superiority and set it apart from competitors in the minds of buyers; advantages - can build customer loyalty toward its brand (Gucci or Louis Vuitton)
price competition
emphasizing price as an issue and matching or beating competitor's prices; to compete effectively on a price basis, a firm should be the low-cost seller of the product; disadvantages: competitors have the flexibility to change prices causing a price war advantages: gaining lowest price to draw customers
customer contact in service marketing
employee satisfaction is one of the most important factors in providing high service quality to customers
multichannel (or omnichannel) retailing
employing multiple distribution channels that complement their brick-and-mortar stores with websites, catalog's, and apps where consumers can research products, read other buyer's reviews and make actual purchases
As Hana prepares the script for a radio commercial for her boutique, she is engaging in the ________ stage of the communicating process
encoding
marginal cost - MC
extra cost incurred by producing one more unit of a product ch19 slide11
warehouse showroom
facility in a large, low-cost building with large in premise inventories and minimal service (ex. IKEA)
Because of service perishability, it is difficult to price services in a manner that takes into account fluctuations in demand
false
If a restaurant, known for its delicious food and fun entertainment, does not serve alcohol, it is displaying advocacy advertising
false
If an organization is large and has a large promotional budget, it should utilize all four promotional methods
false
Promotion to encourage trial uses attempts to retain loyal customers
false
Sarafina own a popular Mexican restaurant. she makes all her waiters, waitresses, and cooks go through a three-week training program in the hopes that they will learn how to offer moreconsitant, high-quality service. This is Sarafina's attempt to reduce problems associated with perishability
false
The preapproach is the first step in the sales process
false
a cash-and-carry wholesaler provides transportation, delivers product directly to customers, and places products on the retailer's shelves
false
a hairstylist who gives good haircuts in the morning but tends to give haircuts of lesser quality in the afternoon is suffering from the challenges associated with intangibility
false
a reseller advertising a manufacture's products is viewed as strong manufacturer support
false
credence qualities are attributes, such as taste, satisfaction, or pleasure, which can be assessed during the purchase and consumption of a service
false
in a comparative advertisement, advertisers point out that their brand has characteristics that are superior to those of competing brands, but they do not actually mention the brand names of competitors
false
retailers form an important link in the marketing channel because they are both producers and customers
false
sale promotion activity occurs more during peak selling periods than in off-peak selling periods
false
supermarkets specialize in selling shopping products
false
suppose Little Caesar's Pizza discounts its pizzas on Tuesday evening because demand is slow. this pricing strategy is known as low demand pricing
false
the core service is used to differentiate the service bundle from those of competitors
false
meghan is planning her upcoming wedding later this year. She has made a list of all the expenses that will be required for the wedding she has planned. Which of the following is NOT one of service products associated with Meghan's wedding
flowers for the church actual service products: delivery of the wedding cake, hiring a limo/driver & renting a reception hall
the final stage of the selling process is
follow up
name an industry where a broker is used (hint: remember, broker are for temporary exchanges)
food, real estate, securities, insurance
superstore
giant outlet offering food and non-food products founds in supermarkets, as well as most routinely purchases products (ex. SuperWalmart, SuperTarget)
services have six basic characteristics: intangibility, inseparability of production and consumption, perishability, client-based relationship, customer contact, and
heterogeneity
heterogeneity in service marketing
hire the right people, train them - invest in training, develop standards, evaluate consistently (training of starbs employees get trained so all mocha fraps taste the same in jersey and pgh)
prospecting - step 1
identifying and developing a database of potential customers; sales people use referrals - recommendations from current customers they have good relationships w/ to find prospects; advantages include more highly qualified sales leads, greater sales rates, larger initial transactions - aka planning stage ch18 slide12
what stage of the consumer buying process can promotion be used
information search (interest, stage 2), eval of alternatives (desire, stage 3), and purchase (action, stage 4) of 5
6 characteristics of services
intangibility, inseparability of production and service, perishability, heterogeneity, client-base relationship, close customer contact
In DHL decided to outsource all of its marketing efforts to the TAZ Advertising Agency, which specializes in advertising, sales promotion activities, and public relations, DHL would likely be striving to practice
integrated marketing communications IMC
brokers
intermediaries that bring buyers and sellers together temporarily; reps company only in that one customer interaction
agents
intermediaries that represent either buyers or sellers on a permanent basis; continuously rep company again and again over time, not just one experience
client-based relationships
internations that results in satisfied customers who use a service repeatedly over time
Pioneer advertising is most likely to be used during which of the following product life-cyclestages?
introduction
department store
large organization offering a wide product mix and organized into separate departments (ex. Macy's Khols, JCPenny's)
warehouse club
large-scale, members-only establishment combining cash-and-carry wholesaling with discount retailing - bulk buying (ex. BJ's, Costco)
customer contact
level of interaction between provider and customer needed to deliver the service - not only whom you interact with but where you interact too
name of the three different types of agents
manufactures agent, selling agent, commission merchant
what stages in the consumer buying process is made up of public relations and advertising
need recognition (awareness, stage 1); info search (intertest, stage 2); elav of alternative (desire, stage 3)
services buyer behavior process & journey
need recognition, info search, purchase, evaluation of alternatives, reaction
overcoming objections - step 5
one of the best ways to overcome objections is to anticipate and counter them before the prospect raises them - this approach is risky bc the salesperson may mention objections that the prospect would not have raised; if possible the salesperson should handle objections as they rise ch18 slide17
advertising
paid nonpersonal communication about an organization and its products transmitted to a target through mass media
Yusef has just finished compiling a list of potential customers and evaluating their ability, willingness, and authority to buy. He knows his next step in the personal selling process is to
preappraoch
inelastic demand
price change doesn't affect demand as much, a marketer can adjust the price upward without demand change = increase in overall profits; too much of an increase can cause a negative impact on the company; electricity is inelastic because it's not really affected by price change, but probably bc of an external factor (not a lot of competition); (ex. if the price increases demand doesn't change)
profits equation
profits = total revenue - total costs
Kevin Esposito, a salesperson for O'Malley Office Products, develops a list of potential customers and evaluates them on the basis of their ability, willingness, and authority to purchase copy machines. This process is called
prospecting
7 steps of personal selling process
prospecting, preapproach, approach, making the presentation, overcoming objections, closing the sale, and following up
uses of public relations
publicity - news release (press release), feature article, captioned paragraph, press conference; builds credibility, news value, significant word-of-mouth communications, perceptions of media endorsement and low cost compared to advertising, ch12 slide 61
sales corralation w advertising
rational appeal- focuses on info influence (arguments - central route); peripheral appeal- focuses on emotional influence (emotions - peripheral route) based on sex, humor, fear, personal relevance/resonance, storytelling
revenue equation
revenue = price * # of units
making the presentation - step 4
salespeople should match their influencing tactics like info exchange, recommendations, threats, promises, ingratiation, and inspiration appeals to their prospects; during the presentation, the salesperson must not only talk but listen; listening is most important - listening and cognitive empathy developed thru sales are linked; nonverbal modes of communication are especially beneficial in building trust during the presentation ch18 slide16
follow-up - step 7
salesperson determines whether the order was delivered on time and installed properly; contact customers to learn if they have any problems or questions - cant abandon after they buy, need to support and open the door to repeat purchases or referrals; used to determine customer's future product needs; vital to establish a strong relationship and create loyalty on the part of the buyer; ch18 slide23
supermarket
self-service store offering a complete line of food products found in supermarkets, as well as most routinely purchased products (Kroger, Safeway, Publix)
discount store
self-service, a general-merch store offering brand-name and private brand products at low prices (ex. Walmart, Target, Dollar Store)
elastic demand
sensitivity of demand to changes in price; percentage change in quality demanded caused by a percentage change in price it's much greater for products w elastic demand than for inelastic demand; if a marketer sells a product that is price elastic, then price increases will result in a significant decrease in demand = decreased profits; ch19 slide6
perishibility
services are produced at the time the consumer needs them, there is no way to hold them in inventory (ex. can't return a bad haircut, service can't be stored or just put the hair back)
convenience store
small, self-service store offering narrow product assortments in convenient locations (ex. 7-Eleven)
communication process
source -> coded message -> communication channel -> decoded message -> receiver or audience -> feedback sent to source and do cycle again ch16 slide2
closing the sale - step 6
stage in the personal selling process when the salesperson asks the prospect to buy the product; during the presentation, salesperson may use trial close by asking questions that assure the prospect will buy (fianaical terms, desired colors and sizes, or delivery arrangements and reactions to this is how they indicate how close the prospect is to buying ); salesperson should try to close at several pts during the presentation because the prospect may be ready to buy - comes w negations for deal terms and price; ch18 slide20
off-price retailers
stores that buy manufacturers' second, overruns, returns, and off-season merchandise for resale to consumers at a deep discount; limited lines of designers and 20-50% cheaper than department stores; ensure a regular flow of merch by establishing long-term relationships w suppliers (ex. Marshalls, TJ Maxx)
search qualities
tangible attributes that can be judged before the purchase of a product (ex. when searching for a place to get a haircut you like the variety of services offered)
marketing mix
the 4 P's: product, promotion, price and placement
intangibility
the characteristic that a service is not physical and cannot be perceived by the senses; Cannot physically see or touch service prior to purchase like you can with a good
product mix
the composite, or total, group of products that an organization makes available to customers
approach - step 3
the manner in which a salesperson contacts a potential customer; creating a favorable impression and building rapport w/ prospective clients are important tasks in the approach bc the prospect's first impressions of the salesperson are lasting ones; during initial visit, the salesperson strives to develop a relationship over just pushing a product; approaches through referrals, cold calling, social media, and repeat contacts ch18 slide15
personal selling
the marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace OR online; paid personal communication that attempts to inform customers and persuade them to buy products in an exchange situation
inseparability
the quality of being produced and consumed at the same time; Production of a service cannot be separated from its consumption by customers - shared responsibility between customer and service provider
specialty retailers
they DO NOT sell specialty items but instead offer substantial assortments in a few product lines
when to use personal selling
to involve more specific communication than advertising; have greater impact on customers; provide immediate feedback
when to use agents or brokers
to negotiate the deals with manufactures for wholesalers
total cost equation
total cost = fixed costs + variable costs
inseparability in service marketing
train employees, create a nice atmosphere, and create a memorable experience; no two haircuts are the same but both customers will be treated with the same respect and have what they wanted done
wholesaling
transactions in which products are brought for resale, for making other products, or for general business operations; do not include exchanges w ultimate consumers
competitive advertising
tries to simulate demand for a specific brand by promoting its feature, uses, and advertising relative to competing brands; three types - comparative, reminder, and reinforcement
Because salespeople are an expense to the company, yet they are the ones who generate revenues for the company, management must strive to achieve optimality in the size of its salesforce
true
Rapid feedback enables communicators to quickly improve the effectiveness of theircommunication
true
department stores are characterized by wide product mixes
true
if possible, the salesperson should handle objections when they arise
true
lack of control over the content and timing of public relations is a limitation in using publicity-based public relation tools
true
merchant wholesalers assume risks of ownership
true
native advertising is called "native" because it is meant to resemble the content itself
true
tangible attributes such as color, style, size, feel, or fit that can be evaluated prior to purchase are known as search qualities
true
the broker's primary function is to bring the buyer and seller together and assist in negotiating an exchange
true
the focus of personal selling is shifting from selling a specific product to building long-term relationships with customers by finding solutions to their needs, problems, and challenges
true
lifestyle shopping center
type of shopping center that is typically open air and features upscale speciality, fancy dining, entertainment stores, have fountains, benches, other amenities that encourage 'causal browsing' (ex. luxury store but its more ab the entrainment and what ELSE they have)
direct marketing
use of phones, the internet, and non-personal media to introduce products to customers, who can then purchase them via mail, phone, or internet (ex. online retailing, catalog marketing, direct-response marketing, tv home shopping)
variable costs
variable directly w/ changes in the number of units (unit cost * # of units)
heterogeneity (variability)
variation in quality among encounters, usually increases as the degree of labor intensiveness increases
Trey is a service provider for a low-contact type of service. Which of the services below is Trey most likely to provide?
website design
demand-based pricing
when the demand for a service is high, the price is high; when demand for a service is low, the price is low (off peak pricing- reducing prices during slow periods to boost demand)
low contact services
where a customer is barely involved (ex. the accountant doing your taxes - the customer is rarely involved; mobile banking apps (don't need to contact anyone to deposit checks, check accounts etc.)
high contact services
where a customer is heavily involved ex. (buying a house)
Peter works for a company that buys snacks such as chips, cookies, and candy in bulk from manufacturers. Peter's company then repackages them and sells them to vending companies that have vending machines at government institutions. Peter most likely works for a _____, while the vending machine company is a _____.
wholesaler, retailer