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
