D077 EXAM Study guide
Which department ensures that all new sales contracts comply with the ethical standards of the company? Marketing Accounting Human Resources Legal
Legal Correct! The legal team evaluates and approves the official language for a sales contracts.
Monitoring and Control
Monitoring and control is the final step of the marketing planning process. Here, the plan is implemented. Marketers track progress toward the stated objectives, measuring performance so adjustments can be made, if necessary. Example: A marketing manager reviews monthly sales reports, sales forecasts for the upcoming quarter, budgets for advertising campaigns, and product reviews from customers and compares this data against the marketing objectives described in the marketing plan.
A realtor has sent VIP invitations to local TV stations, inviting them to a private viewing of beachfront condos to generate media attention. Which element of the marketing mix is represented by this private viewing? Promotion Product Price Place
Promotion The realtor sent VIP invitations to local TV stations to generate media attention, which represents promotion. Each VIP that attends the event will be able to air the event on the TV station he or she represents.
Which action reflects the use of ethical marketing? Posting revised customer reviews Reselling returned products online Supply chain transparency reporting Labeling without instructions for use
Supply chain transparency
What type of marketing is a company using if their efforts are directed towards a specific group? Target Strategy Mass Undifferentiated
Target
A marketing manager for a U.S. puzzle factory plans to work with a t-shirt designer to add a puzzle t-shirt to his existing puzzle products to enter the Japanese market. Which growth strategy is being used by this company? Diversification Market penetration Market development Product development
Diversification
What is diversification?
Diversification increases profitability through greater sales volume obtained from new products and new markets.
The BCG matrix is comprised of four quadrants that show high and low market share and high and low growth potential. Each quadrant has a name and specific characteristics.
Dog: A product or business with low market share in a mature industry is a dog. There is no room for growth, which suggests that no new funds should be invested in it. Cash cow: A cash cow is a product or business that has high market share and is in a slow-growing industry. It is bringing in more money than is being invested in it, but it does not have much growth potential. The profits from a cash cow can be used to fund high-growth investments, but the cash cow itself warrants low investment. Question mark: A question mark is a product or business that has low market share currently, but is in a growing industry. This case is trickier: The product or business is consuming financing and creating a low rate of return for now, but its direction is unclear. A question mark has the potential to become either a star or a dog, so close monitoring is needed to determine its growth potential. Star: A star has high market share in a fast-growing industry. This kind of product or business is poised to bring a strong return on the funds invested. It also has the potential to become a cash cow at the end of the product life cycle, which can fund future investments.
When preparing a marketing plan, a manager is considering factors such as changing incomes, unemployment levels, inflation, and recession. Which element of the marketing environment is the focus of this manager Promotional Competitive Economic Political
Economic Correct! The economic environmental factor is described by changing incomes, unemployment levels, inflation, and recession.
Which role in the decision making unit justifies a purchase by linking it to profit? Economic buyer User buyer Alternative buyer Infrastructure buyer
Economic buyer "This individual is responsible for buying products that enable the company to achieve a business advantage. The economic buyer justifies the purchase by linking it to profit."
A customer is searching for a book on Ireland in a used bookstore that specializes in travel biographies. She wants to purchase the book as a birthday gift for a friend who has special memories of a trip to Dublin. What element of consumer behavior is influencing the customer's purchase? Price Family Emotion Society
Emotion
Why should marketing researchers follow best practices for ethical considerations? Become more cost-efficient with practices and sales gains Support understanding of recent sales benefits and promotions Obtain the largest growth in marketing for a specific time period Ensure respect for respondents and integrity of the data collected
Ensure respect for respondents and integrity of the data collected
Which factor contributes to a Business to Business (B2B) purchase decision in this situation? Environmental Organizational Governmental Interpersonal
Environmental There is a factor in the external environment. For example: the competitor's successful new product that spurs the company's purchasing to regain a competitive edge.
Which stage of the consumer decision-making process is skipped with low-involvement product purchases? Post-purchase Buy Act Evaluation
Evaluation For low-involvement decisions, consumers may move from need recognition to a purchase decision and skip search and evaluation steps.
business cycle
Expansions and contractions in the level of economic activities (business fluctuations) around a long-term growth trend refers to economy-wide fluctuations in production, trade, and general economic activity. Business cycle fluctuations occur around a long-term growth trend and have four distinct phases: expansion, peak, contraction, and trough. An expansion is characterized by increasing employment, economic growth, and upward pressure on prices.
Which attribute represents qualitative research? Exploring ideas, perceptions, and behaviors in-depth Calculating the exact percentage of people surveyed Allowing researchers to test and validate a hypothesis Collecting data that can be counted, tabulated, and analyzed
Exploring ideas, perceptions, and behaviors in depth
A realtor wants to sell luxury vacation homes and would like to identify potential buyers. What must the realtor understand to target this group? How buyers arrive at the decision to purchase a luxury vacation home What the total costs are when selling luxury vacation homes What the marketing budget is for selling luxury vacation homes How the sales projections for luxury vacation homes look next quarter
How buyers arrive at the decision to purchase a luxury vacation home
What is one factor a company should consider when designing a team selling approach? Who will lead the sales team How rewards will be distributed How to offer a complete package When to communicate with the customer
How rewards will be distributed
What is a characteristic that is true of integrated marketing communications (IMC)? IMC accesses more than one customer touch point. IMC is supported by and depends on sales. IMC predominantly uses mass communication. IMC has little regard for the values of consumers.
IMC accesses more than one customer touch point. Marketers use multiple exposures to their products by using "different touch points."
integrated marketing communications (IMC)
Immersive and targeted communication with customers to help move them through the various stages of the buying process. IMC involves carefully coordinating all promotional activities—traditional advertising (including direct marketing), sales promotion, personal selling, public relations, social media and e-commerce, packaging, and other marketing elements—to produce a consistent, unified, customer-focused message. Following the concept of IMC, marketing managers carefully work out the roles the various promotional elements will play in the marketing mix.
Individuals A and B are negotiating Individual A's pay package with multiple forms of pay and benefits to be discussed and agreed upon by both. While the goals are not compatible, Individuals A and B will have a long relationship as boss and worker which must be taken into account during their negotiation. Which approach to negotiation should these two individuals adopt? Inductive Deductive Distributive Integrative
Integrative
Which stage of the product life cycle is marked by low sales, little to no profit, and little competition? Introductory Decline Growth Maturity
Introductory This initial stage is when the product is first introduced. Early adopters will start to use the product and then the product will enter a growth stage if the product provides value to the customer.
An individual was hired by a firm and will negotiate a salary package soon. In preparation, the individual is researching what similar jobs in the area are paying. Which stage of negotiation is being illustrated by this individual? Closure Outcome Bargaining Investigation
Investigation
What is a challenge of a Customer Relationship Management (CRM) system? It will identify a marketing problem. It captures data across the customer life cycle. It is able to move a customer towards a final purchase decision It focuses on data that reflects majority preferences.
It focuses on data that reflects majority preferences.
What Does Marketing Research Investigate?
Marketing research identifies the problem to be solved or the opportunity to be explored, as well as the information required to address research questions. It also involves processes for collecting the information, analyzing it, identifying insights, and reporting findings and recommendations to those who will take action based on the results. Marketing research may cover a full spectrum of topics related to customers, products, and market dynamics, and it can use a variety of research methods.
A marketing department is reviewing a new Super Bowl ad for the company with the goal to reach the largest possible audience. Which marketing approach is being used? Mass marketing Personal selling Business-to-business Product differentiation
Mass Marketing
A sales representative calls on a company and is told, "We will order the same product and quantity that we ordered last month, but please have the product delivered to our western plant instead of our eastern plant." Which type of Business to Business (B2B) buying situation is this? New task Modified rebuy Straight rebuy Organizational purchasing
Modified rebuy
A sales representative is told by a client company "To prepare for our next month's production, order the same quantity of the same product that we ordered for this month's production but change the color from blue to red". Which type of Business to Business (B2B) buying situation is this? New task Modified rebuy Straight rebuy Relationship selling
Modified rebuy
What is an ethical marketing practice related to product? Posting on social media Money-back satisfaction guarantee Discount coupons for purchases Guaranteed next-day delivery
Money-back satisfaction guarantee
Which personal influence is related to physiology, safety and security, love and belonging, esteem, or self-actualization? Need Learning Attitude Perception
Need
A company is purchasing a product. This decision involves a large number of participants and the collection of a great amount of information. The product is expensive and there are high risks associated with the purchase. Which type of Business to Business (B2B) buying situation is this? New task Solution selling Straight rebuy
New Task
A company uses unified and constant communication to reach its customers, including print media, retail signage, an e-commerce website, and social media. What type of communication is this company using? Bundling Personal selling Omnichannel Influencer marketing
Omnichannel Omnichannel communication seeks to provide unified and consistent communication with customers across all channels a company employs. As the scenario suggests, the company is using both digital and print forms of communication and promotional materials.
Which customer has the lowest customer lifetime value (CLV) rate? Loyal customers with a huge purchase Repeat customers with buying potential One time customer with a huge purchase Frequent customers with buying potential
One time customer with a huge purchase
Benefits to customer relationship management (CRM)
Operational- Ensure customer satisfaction by integrating sales, marketing, and customer support Analytical- Use data to understand who the company's core customers are, how they behave, what they are looking for, and how satisfied they are Collaborative- Work across teams and departments more effectively, including with suppliers and vendors Provids data to the company across the customer life cycle
Which business factors are external to an organization? Opportunities and threats Strengths and weaknesses Financial and human resources Technical resources and products
Opportunities and threats
A shoe company is introducing a new shoe for the summer season and decides to price the shoe lower than the competition with the goal of increasing market share. Which pricing strategy is being used? Penetration Bundling Skimming Prestige
Penetration- Marketers use penetration pricing for new products to gain market share.
Which personal influence is described as a process by which a consumer identifies, organizes, and interprets information to create meaning? Motivation Learning Need Perception.
Perception Perception is described as a process by which a consumer identifies, organizes, and interprets information to create meaning. Perception can be shaped by learning, memory and expectations.
A new car dealer owner encourages the staff to maintain records on customer purchases. The goal is for the staff to contact these customers every three years to present new car models face-to-face. What type of promotion is this owner encouraging? Influencer marketing Public relations Personal selling Traditional advertising
Personal selling The selling of new cars through a negotiation process is personal selling which is part of the promotion strategy of the company. By maintaining personal contact and holding a face to face meetings with customers, the chances of selling a new car makes this promotional strategy effective.
An online consignment store offers free gifts with purchases within the next 30 days using an attractive and easy-to-use website. Which part of the marketing mix is represented by the company's website? Price and place Product and price Promotion and price Place and promotion
Place and promotion
A manager is considering the economics of an industry's factors that determine how competitive, attractive, and profitable the market is for the company's products. Which planning tool is being used by this manager? BCG matrix SWOT analysis Porter's five forces model Pro forma income statement
Porter's five forces model
What Is Positioning?
Positioning provides the basic foundation for effectively marketing any product or service to a target audience.2 Positioning is a strategic process that marketers use to determine the place an offering should occupy in a given market, relative to other customer alternatives. When you position a product or service, you answer these questions: Place: What place does the offering occupy in its market? Rank: How does the product or service fare against its competitors in the areas evaluated by customers deciding what to buy? Attitude: How does the company want customers to think about this offering and the benefits it offers them? Outcomes: What must it do to ensure the product or service delivers on the positioning selected?
An individual bought a premium computer but is now concerned that it will be obsolete in a couple of months after a friend mentions that a newer version will be coming out soon. The individual wishes that the purchase had been delayed until after the new version comes out. Which form of dissonance is this individual experiencing? Reduction Awareness Pre-purchase Post-purchase
Post-purchase
Which step of the complex decision-making process is involved after buy? Act Search Post-purchase Need recognition
Post-purchase
A downtown boutique seeks to create a perception of unique flip-flops that possess a superior quality. The boutique prices the flip-flops far above other retail prices of similar products to create the perception of superior quality. Which pricing strategy is the boutique using? Penetration Prestige Skimming Leader
Prestige Since the boutique is selling a commodity item but is creating the illusion of quality, the pricing strategy is prestige pricing. The boutique is raising the price of a product to increase the perception of its value.
A highway toll company has decided to charge no fees for car-pooling vehicles. Which element of the marketing mix is represented by this ethical decision? Place Price Product Promotion
Price
A realtor representing luxury condominiums offers pre-construction discounts to clients. Which part of the marketing mix does this approach represent? Place Price Product Promotion
Price
Which part of the marketing mix sets the exchange amount that a company will seek based on the perceived economic value to the customer? Cost Revenue Profit Price
Price Price is derived from the economic value the customer perceives in the product and the product positioning in the market place. If the customer perceives the product to be of great value, then the customer may be willing to pay much more for the product than the actual production cost.
A small town has two coffee shops. The shop owners agree to raise their prices for espresso drinks from $3 to $6 per cup because they are the only two shops in the market. Which illegal pricing tactic is being used? Price fixing Bait and switch Predatory pricing Price discrimination
Price fixing - competitors communicate to each other what they will charge.
Pricing Skimming Pricing a new product high to increase profits Pricing a new product lower than the perceived market price to attract market share Pricing products below normal markup or at cost to attract customers to a store where they would not normally shop Grouping related products together to encourage customers to buy both Raising the price of a product to increase the perception of its value Setting the price of a product according to the price of competitive products
Pricing a new product high to increase profits
Penetration pricing Pricing a new product high to increase profits Pricing a new product lower than the perceived market price to attract market share Pricing products below normal markup or at cost to attract customers to a store where they would not normally shop Grouping related products together to encourage customers to buy both Raising the price of a product to increase the perception of its value Setting the price of a product according to the price of competitive products
Pricing a new product lower than the perceived market price to attract market share
Leader pricing
Pricing products below normal markup or at cost to attract customers to a store where they would not normally shop
Primary data
Primary Data collection specifically tailored to the problem you are trying to address Information is directly related to what you want to know Can be costly or time-consuming to collectRequires expertise in data collection
A marketer developed a makeup tutorial video using the company's new cosmetic line designed to diminish dark circles around the eyes. Which stage of the consumer decision-making process is the marketer seeking to achieve? Act and buy Search and process information Evaluate and identify alternatives Problem and opportunity recognition
Problem and opportunity recognition
A local computer manufacturer offers a high-end computer with new graphic design capabilities. Which element of the marketing mix is represented by this offer? Place Price Product Promotion
Product
Which controllable element is included in the marketing mix? Legal Product Political Environmental
Product
Which controllable marketing function should a company use to achieve its firm-level goals and to satisfy the target customers' needs and wants? Sales Promotion Production Product
Product
A marketer introduces a tutorial video featuring the company's new cosmetic line. Which set of elements from the marketing mix is the marketer using? Price and place Product and price Promotion and place Product and promotion
Product and promotion
Which SWOT analysis component is under a company's control? Legal changes Social trends Product budgets Market entrants
Product budgets
A smartphone company has great brand loyalty but customers have become increasingly frustrated with the lack of new features. The company determines that adding new features will increase sales. Which growth strategy is the company using to achieve higher sales? Diversification Market penetration Market development Product development
Product development
A retailer offers all customers complementary, eco-friendly gift wrapping to add value to their holiday purchases. Which element of the marketing mix does this ethical decision-making address? Place Price Product Promotion
Product- adding something to the product purchase
A mobile phone carrier markets pricing plans to its customers differently depending on how much data the customers use each month. What type segmentation strategy is the mobile phone carrier using? Geographic Demographic Psychographic Product-related
Product-related
A marketing manager is conducting a situational analysis during the market planning process and needs to differentiate between controllable and uncontrollable elements. The manager decides to first identify the controllable elements. Which business element is the manager identifying? Culture Products Customer Competition
Products
An online consignment store offers gently used designer fashions and sends weekly text alerts to customers of new arrivals and popular items. Which element of a marketing mix is represented by this store's text alerts? Place Price Product Promotion
Promotion
What is an example of a controllable element that influences marketing decisions? Governmental regulations Promotional campaigns Technological advances Social factors
Promotional campaigns
Prestige pricing
Raising the price of a product to increase the perception of its value
Steps in the Life Cycle
Reach—getting a prospective customer's attention Acquisition—bringing a prospective customer into a sphere of influence Conversion—turning a prospect into a paying customer Retention—engaging an existing customer to keep them Loyalty and Advocacy—turning a customer into an advocate for the company
What is a limitation of primary data sources? Less flexibility in data collection Requires expertise in data collection Data may have changed during the period Fails to directly address the needed information
Requires expertise in data collection
A company designs a loyalty program for its customers who purchase their products every week. What type of problem-solving process do these customers exhibit? Limited Routine Extended Promotion
Routine
A customer is brand loyal to a product and repurchases the product each week. What type of problem-solving is being used by this customer? Extended Brand Limited Routine
Routine Routine problem solving occurs when a customer makes a purchasing decision automatically. This customer is brand loyal and repurchases based on routine problem-solving.
A hardware store sends a coupon to every resident of a town offering 10% off all services. What type of marketing mix strategy is the hardware store using? Personal selling Sales promotion Guerilla marketing Content marketing
Sales promotion In the scenario, a sales promotion is being offered to the public. In this case the 10 percent off is providing a direct incentive for customers to make an immediate purchase of the product.
secondary data
Secondary data information that has been previously collected for other purposes (internal or external) Typically lower cost and less time to collect Data already exists Information may be dated May not directly address what you need to know
Competitive pricing
Setting the price of a product according to the price of competitive products
A company develops a new, high end product which has no direct competition that is popular with customers. The company seeks to temporarily set the price of the product high to gain as much profit as possible. What is this name of this pricing strategy? Skimming Competitive Penetration Bundling
Skimming Since the product is a high end product with little competition, the company is seeking to skim as much profit from the new product until substitute products become available.
Which interpersonal influence affects consumer behavior through reference groups, which may be formal or informal, through friendship, face-to-face interaction, and even indirect contact? Family Society Culture Religion
Society Consumer behavior can be influenced by the groups you come into contact with, through friendship, face-to-face interaction, and even indirect contact. These are the effects of groups influencing one another through society.
marketing objectives
Specific, measurable achievements that an organization wants from its marketing activities within a specified time frame example: A marketing department develops a marketing plan that focuses on departmental goals and the actions the department must take to achieve them. The plan includes the marketing department's goals and then the objectives, actions, efforts, and other details needed to meet those goals.
According to the logic of the BCG matrix, marketers should focus investment in the areas that will provide good returns and fund future growth. Which quadrant of the BCG matrix meets this guideline? Dog Star Cash cow Question mark
Star
consumer confidence
Statistical measure of consumers' level of optimism about current and future economic conditions
Which component of the marketing planning process utilizes situation analysis to address the needs of the target customer? Threats Strategy Weaknesses Opportunities
Strategy
A company is promoting its ethical procurement of raw materials by including its materials suppliers on its website. What type of decision-making is being used by this company? Utilitarianism Ethical consumerism Supply chain transparency Boycott
Supply chain transparency occurs when a company publicly promotes working only with ethical suppliers and contractors. This company is practicing supply chain transparency by publishing its suppliers on its website.
A marketer selects the use of banner ads in order to achieve higher sales revenue. Which component of the marketing planning process is being represented by this action? Tactic Vision Mission Strategy
Tactic
Which action includes selecting a segment to serve as the focus of the marketing team's efforts? Mix Target Niche Differentiation
Target
The top of a retailer's e-commerce site has a banner that says, "Millennial shoppers appreciate the high-energy, engaging shopping experience in our stores!" What makes this positioning statement effective? Shopping is convenient. Message is promotional. Awareness is created. Target market is stated.
Target market is stated. Correct! An effective positioning statement concisely identifies the target market. The target audience is being identified as millennials in this statement.
Undifferentiated marketing
Targeting strategy involving a single offer and marketing mix for all segments, also called mass marketing
Micromarketing
Targeting strategy that focuses narrowly on catering to the needs of individuals or very small segments in a targeted geography
Concentrated marketing
Targeting strategy that focuses on a very limited, specific segment(s) of the market, also called niche marketing example: Question A luxury watch designer markets exclusively to professional golfers.
Differentiated Marketing
Targeting strategy where a company provides separate offerings to each different market segment that it targets
What does a market development strategy do for a company?
Targets new customers and new segments to expand the sales base
Uncontrollable Factors External factors
Technology innovations and changes Competition Economic trends Government policies and legislation Legal judgments Social trends
A salesperson sends a recorded sales pitch to potential clients through mobile phones. Which selling method is described in this scenario? Telemarketing Consulting Solution selling Team selling
Telemarketing
A customer reviews clothing items on an e-commerce site. The customer wants to be seen as current and trendy. The site stresses the value and durability of the clothing it sells, so the customer moves on to another site. What is the primary reason this customer left this website? The customer wanted to shop more online The product did not meet the pricing criteria The customer's idea of fashion was not reflected The claims of product durability were questionable
The customer's idea of fashion was not reflected
The four basic growth strategies according to the Strategic Opportunity Matrix
The four basic growth strategies according to the Strategic Opportunity Matrix are market penetration, market development, product development, and diversification. Market penetration: This growth strategy uses current products and current markets with the goal to increase market share. Market development: This growth strategy uses existing products to capture new markets. Product development: This growth strategy uses new products in the existing market. Diversification: This strategy creates completely new opportunities for the company by creating new products and new markets.
A manager is seeking to use the BCG matrix to design strategies for the company's products. The manager knows the market shares for the products. What other information about the company's products does this manager need to know to use this technique? The value proposition The market growth potential The SWOT analysis The consumer price index
The market growth potential Market share and market growth potential are the two different aspects considered in the BCG matrix.
marketing plan
The marketing planning process allows marketers to create a plan for how to execute a strategy aligned to key objectives. A marketing plan helps give direction to a company's marketing efforts. The steps in the marketing planning process include identifying a mission statement, conducting a situational analysis, defining objectives, developing a marketing strategy, and implementing processes for marketing and control. The marketing mission statement addresses what customers need and want from the company's products and services.
There are three drivers to customer equity:
There are three drivers to customer equity: value equity—how the customer assesses the value of the product or service provided by the company brand equity—how the customer assesses the value of the brand, above its objective value retention equity—the tendency of the customer to stick with the brand, even when it is priced higher than an otherwise equal product.
Consider the product positioning statements of these major retailers: Retailer A's customers are very brand-loyal because of the company's commitment to low prices and huge selection. Retailer B's shoppers appreciate a more elegant, upscale shopping experience and are willing to pay more for upscale brands. What is a common characteristic of these positioning statements? They define their differentiating strengths. They emphasize similarities with other retailers. They reflect similar positioning statements. They leverage the weakness of competitors.
They define their differentiating strengths. Each of these positioning strategies carves out a position in the retail market that defines the particular, differentiating strengths of each chain in the minds of customers.
What strategies do marketers use when positioning products? They orient the positioning statement toward their competitor's weaknesses. They work proactively to create a unique place in the market for the product. They emphasize characteristics similar to other products. They look at what competitors are saying about their product and then react.
They work proactively to create a unique place in the market for the product. Correct! Marketers work to create the desired position for a product rather than waiting for it to be created by customers, the public, or competitors.
Price discrimination When two or more competing companies agree (or collude) on how much to charge for a product or service When a company charges different prices to buyers of the same product in order to maximize profit When a company prices a product or service extremely low to drive out competition When a company advertises a product for a low price and "switches" a customer to a higher-priced product When a company has a monopoly on the market and prices products or services overly high to drive profit
When a company charges different prices to buyers of the same product in order to maximize profit
BCG Matrix
When a company has many different products or even many different lines of business, strategy becomes more complex. The company needs to not only complete a situation analysis for each business, but also determine which businesses warrant focus and investment. The BCG matrix (sometimes called the growth-share matrix) was created in 1970 by Bruce Henderson and the Boston Consulting Group to help companies with many businesses or products determine their investment priorities. The BCG matrix considers two different aspects of a business unit or product: What is the current market share? What is the market's growth potential?
When should the BCG matrix be used? When the product industry is in decline When a company has one product When a company has many products When the product industry is a monopoly
When a company has many products When a company has many different products or even many different lines of business, strategy becomes more complex. The company not only needs to complete a situation analysis for each business, but also needs to determine which businesses warrant focus and investment.
Predatory pricing (undercutting) When two or more competing companies agree (or collude) on how much to charge for a product or service When a company charges different prices to buyers of the same product in order to maximize profit When a company prices a product or service extremely low to drive out competition When a company advertises a product for a low price and "switches" a customer to a higher-priced product When a company has a monopoly on the market and prices products or services overly high to drive profit
When a company prices a product or service extremely low to drive out competition
Price fixing (collusion) When two or more competing companies agree (or collude) on how much to charge for a product or service When a company charges different prices to buyers of the same product in order to maximize profit When a company prices a product or service extremely low to drive out competition When a company advertises a product for a low price and "switches" a customer to a higher-priced product When a company has a monopoly on the market and prices products or services overly high to drive profit
When two or more competing companies agree (or collude) on how much to charge for a product or service
contractual vertical marketing system
a formal agreement between the levels (such as franchise, retail sponsored or wholesale sponsored) coordinates the distribution process. For example, many fast food chains operate as franchises.
Establishing appropriate expectations
a function of the prepurchase communications the seller has with them. If you set the expectations too low, people will not buy the offering. But if you set the expectations too high, you run the risk that your buyers will be dissatisfied.
corporate vertical marketing system
a single company owns all levels of production and distribution. For example, Apple sells the products it designs and manufactures through its own retail stores.
Porter's Five Forces model
a tool for analyzing the competitiveness of a market. Companies use the Five Forces model to identify opportunities or evaluate decisions in the context of the environment. Porter's Five Forces draws on industrial organization economics to derive forces that determine how competitive (and how attractive or profitable) a market is for a product. Often, the Five Forces are mapped against a SWOT analysis to develop a corporate strategy.
Strategy Development Process
A company might simultaneously execute business strategies to enter a new market, grow market share in an existing market, and improve organizational efficiency. The marketing strategy must identify a plan that will use the marketing function's resources and expertise most effectively to achieve its mission, objectives, and goals. The marketing strategy defines how the marketing mix (product, price, place, and promotion) can best be used to achieve marketing objectives. At its centerpiece is the target customer. Often organizations get so absorbed in their own strategies, initiatives, and products and forget to focus on the target customer.
techniques for sourcing secondary data
A company's internal data, such as sales and marketing records, customer account information, product purchasing, and usage data are typical secondary data sources. No cost. Many government agencies, as well as nonprofits and other nongovernmental organizations, collect and publish vast amounts of freely available data that may be useful for marketing research purposes. A variety of industry and professional associations publish data to inform professionals and the general public about what is happening in their profession or economic sector. A number of commercial marketing research companies offer syndicated marketing research. Syndicated research usually covers topics that may be of interest to multiple organizations. Research companies collect data, analyze it, and resell it to organizations interested in the topics and consumers these initiatives explore. Often these projects collect vast amounts of consumer data over time, providing a useful historical view about the consumer population and how it may be evolving over time. Database marketing organizations, sometimes called customer insights services providers, collect massive amounts of information about consumers by linking financial and credit data to tracking data about online and offline purchases and other behaviors. internet search (using a reputable search engine) to see what sources surface. Search engines can be hugely helpful in locating both free and commercially available secondary data.
A person has used their desktop computer to search for information on a household appliance they are considering purchasing. Within a few minutes, information from the person's desktop appears on their cell phone. Which current trend in personal selling caused this information to appear? Social styles matrix Artificial intelligence (AI) Integrated marketing communications (IMC) Consultative selling
Artificial intelligence (AI) Correct! Artificial intelligence was involved in this scenario to keep the information in front of the person.
A manager seeks to help the organization make good portfolio-management decisions. Which tool should the manager use for this process? BCG matrix Acid test ratio SWOT analysis Porter's five forces
BCG matrix
A woman visits a baby store, planning to buy a crib for $100. The salesperson tells her that the $100 crib is no longer available but a $250 crib can be purchased. The woman can see the $100 crib boxes on a shelf. Which pricing tactic was the salesperson attempting to use? Price fixing Bait and switch Predatory pricing Price discrimination
Bait and switch- sales person doesn't intent to sell you what was advertised.
A company operates in an industry where the customers are highly price sensitive, and the industry supply far exceeds the demand for the company's products. Which one of Porter's five forces is being illustrated by this company's situation? Bargaining power of suppliers Threat of new entrants Threat of substitute products Bargaining power of buyers
Bargaining power of buyers The bargaining power of customers is the ability of customers to put a company under pressure, which also affects the customer's sensitivity to price changes.
A company operates in an industry in which raw materials are scarce, and in which the vendors charge excessively high prices for raw materials. Which one of Porter's five forces is illustrated by this company's situation? Threat of new entrants Bargaining power of buyers Threat of substitute products Bargaining power of suppliers
Bargaining power of suppliers
Which equity driver involves assessing the uniqueness of a company's product from its competitors? Value Brand Retention Customer
Brand
A fitness application allows users to opt-out of its fitness reminder text messages but continues to send text messages for 30 days following the opt-out period. Users are not notified of this fact when they opt-out of the text messages. Which ethical marketing practice is the company violating? Customer value Sales promotion Customer privacy Brand engagement
Brand engagement
What is customer relationship management (CRM)?
CRM is a combination of policies, processes, and strategies implemented by a company that unify its customer interaction and provide a mechanism for tracking customer information. CRM software is used to support these processes, storing information on current, past, and prospective customers Customer relationship management (CRM) is based on meeting the needs of the customer. CRM software is used to support these processes, storing information on current, past, and prospective customers. Provides information for targeted marketing and sales purposes
Individuals A and B had to share one administrative support assistant between the two departments, and due to an increase in sales, the need for administrative support grew in each department. The two resolved the work time issue of the administrative support assistant for each department by emphasizing problem-solving and integration of each other's goals. Using this style created a win-win solution for both departments. Which style of handling conflict was used by these two individuals? Avoidance Competition Collaboration Accommodation
Collaboration
Which secondary data source deals with syndicated consumer data for purchase as well as database information on consumer purchases and behavior? Internet searches Commercial marketing research companies Government agency and nonprofit data Industry and professional associations Correct! This secondary data source deals with syndicated research of consumer data for purchase as well as database information on consumer purchases and behavior.
Commercial marketing research companies This secondary data source deals with syndicated research of consumer data for purchase as well as database information on consumer purchases and behavior.
In its ads and product literature, Phone A brand commonly compares its products and their operating systems against Phone B and their operating system. Which positioning strategy is being used by the Phone A brand? User Quality Attributes Competition
Competition
Individuals A and B had competing new product ideas and each needed scarce company resources. Individual A lobbied management to obtain all the resources possible regardless of how Individual B might be impacted or the relationship might be affected. Which style of handling conflict was used by Individual A? Accommodation Avoidance Competition Compromise
Competition People exhibiting a competing style want to reach their goal or get their solution adopted regardless of what others say or how they feel. They are more interested in getting the outcome they want as opposed to keeping the other party happy, and they push for the deal they are interested in making.
A sales representative interacts with a prospect by asking insightful questions that help the prospect identify the specific requirements of their needs. Throughout the process, the sales representative interacts with the prospect in a partner-type fashion. Then the sales representative recommends the product that represents the best value match that the company has to offer. The prospect responds by trusting the sales representative for continued, ongoing advice. Which selling approach was used to meet this prospect's needs? Tele-selling Team selling Consultative selling Business-to-business selling
Consultative selling
A small, local independent grocery store seeks to provide all the basic individual household necessities for personal use by its customers. What type of market is this grocery store targeting? Institutional Industrial Reseller Consumer
Consumer Grocery stores sell consumer goods for personal use. The target market would be consumers. Consumer markets include individuals and households who buy consumer goods and services for their own personal use. They are not interested in reselling the product or setting themselves up as a manufacturer.
What uncontrollable marketing element provides user input as to how the company delivers upon its value proposition? Quality control inspections Product delivery schedule Competitive elements Consumer feedback
Consumer feedback
How is marketing important to the customer's life cycle and relationship building? Promoting exclusive promotions with current customers is good for great relationship building. Retention power applies to potential customers more than current customers. Continuing the relationship building with current customers is useful as well as for potential customers. Customer challenges change the outlook of partnership to current customers.
Continuing the relationship building with current customers is useful as well as for potential customers. Correct! Marketing must create a relationship with the customer throughout the life cycle.
What Is Customer Equity?
Customer equity is the total combined customer lifetime values of all a company's customers.
What is a benefit of knowing a customer's lifetime value?
Customer lifetime value is one measure that marketing may use to determine the profitability and effectiveness of marketing campaigns.
Customer lifetime value
Customer lifetime value, also known as CLV, predicts how much profit is associated with a customer during the course of their lifetime relationship with a company.1 In other words, the lifetime value of a customer refers to calculating the costs of both acquiring and retaining a customer against all purchases made over the lifetime of the customer relationship.
What is a benefit of customer relationship management (CRM)? Pricing remains the same over time. Employees are happier, leading to better retention. Customer support assistance is integrated across channels. Marketing and sales messages are standardized for all customers.
Customer support assistance is integrated across channels. Correct! Whether customers were contacted via phone, email, in person or via some other means all touchpoints are recorded, noted and analyzed as to how to attain greater satisfaction.
A manager is researching an element of the marketing environment that the company cannot control. Which one of these elements is the manager considering? Place Pricing Promotion Demographic
Demographic
Which activity is conducted by salespeople but not by marketers? Implementing the four Ps Designing the brand message Copywriting advertising communications Determine the consumer's risk tolerance for the purchase
Determine the consumer's risk tolerance for the purchase
Which example describes the searching stage of the consumer decision-making process? Visiting a car dealership to test drive the two vehicles researched online. Becoming hungry after watching a food commercial. Purchasing the same item because it was on sale. Determining which movie to watch by visiting a movie critic's website.
Determining which movie to watch by visiting a movie critic's website. In this scenario, the desire to watch a movie has been recognized. Now the consumer wants to search for information to help decide on which movie to watch. The consumer has not used any information to rank preferences/options, yet, (i.e. highest movie reviews, theater preferences, genre preferences, available playing times, etc.), therefore, the consumer is not in the evaluation stage.
A consumer laundry detergent manufacturer makes several types of laundry detergents and wishes to create commercials for each of the products showcasing each product's strengths. What type of targeting strategy is being used by this consumer laundry detergent manufacturer? Micro-marketing Concentrated Differentiated Undifferentiated
Differentiated
A mattress retailer sells a variety of quality mattresses. The company wishes to reach a large customer base by offering graduated rebates to different customers depending on the size and quality of the mattress purchased by the customer. Several commercials are developed to highlight each mattress along with its accompanying rebate. What type of targeting strategy is being used by the mattress retailer? Concentrated Differentiated Micromarketing Undifferentiated
Differentiated
A company makes customized office chairs that are sold only through its website. What type of distribution channel is the company using? Agent-broker Indirect Supply chain Direct
Direct Directly through website
administered vertical marketing system
one member of the channel system effectively controls the system out of sheer power and size. It can determine the activities of the other channel levels without an ownership stake.
Strategic Opportunity Matrix
provides a planning tool to simplify, organize, and focus the possible options for growth for the company. The strategic opportunity matrix organizes growth strategies in a framework based on new versus existing markets and new versus existing products.
Market share
the percentage of a market (defined in terms of units sold or revenue) accounted for by a specific product or entity. Companies track market share data closely.
Marketing research
the process of systematic gathering, recording, and analyzing data about customers, competitors, and the market. Marketing research can help create a business plan, launch a new product or service, optimize existing products and services, guide expansion into new markets, determine customer needs based on contact points gathered from customer relationship management systems, and more. It can be used to determine which portion of the population will be most likely to purchase a product or service based on variables like age, gender, location, and income level. The purpose of marketing research is to help companies make better business decisions and gain advantages against the competition by better understanding their current and target customers.
SWOT analysis
examines the internal (controllable) and external (uncontrollable) factors that impact the organization and its strategies. The internal factors are strengths and weaknesses; the external factors are opportunities and threats. A SWOT analysis gives an organization a clear picture of the situation in which it operates and helps it determine which strategies to pursue Benefits of SWOT Analysis SWOT analysis offers two key benefits: (1) It encourages realistic planning, and (2) it improves an organization's ability to forecast future events.
Situational analysis
Helps marketers understand the controllable and uncontrollable forces that affect the company, including its competition. Various tools can support situational analysis.
Market-growth potential
includes analysis of similar markets, as well as analysis of the underlying drivers for marketing growth. It is an estimation of what the future value of a market will be.
A company analyzes its internal and external environments, identifies the needs of its target market, and develops a plan for accomplishing its mission, objectives, and goals. Which component of the marketing planning process has the company developed? Tactical planning Marketing plan Performance analysis Tactical implementation
Marketing plan
Price gouging
When a company has a monopoly on the market and prices products or services overly high to drive profit
A customer is planning a vacation. The customer begins researching hotels and amenities, airline pricing, local events, regional food, and available shopping. What type of problem-solving is the customer using? Routine Extended Planned Limited
Extended Extended problem solving occurs when a customer spends a lengthy period of time for a non-routine purchase by conducting information search and evaluation of product alternatives. This customer is conducting extensive information search and evaluation of alternatives for hotels and amenities, the price of airline flights, the local events, the regional food, and the shopping available.
Which interpersonal influence group is critically important as a consumer unit and has a major impact on attitude and behavior toward brands? Family Culture Society Leader
Family
Controllable internal factors
Financial resources Technical resources and capabilities Human resources Product lines
Which factor is used more efficiently when a target market has been identified? End users Potential users Fiscal resources Legal compliance
Fiscal resources
Bundling
Grouping related products together to encourage customers to buy both
Strategy and Tactics
It is important to differentiate between strategic and tactical planning in the marketing planning process. Strategies are what an organization is going to do to achieve its objectives.1 A marketing strategy is how you will achieve the specified objectives in the marketing plan. It is informed by a clear understanding of an organization's strengths and weaknesses, the competitive environment, the potential for growth, and the target customer. On the other hand, tactical plans are the actions a company implements to affect the controllable elements of the strategy. Tactics include specific actions, such as coupons, television commercials, banner ads, and social media posts, used to execute the strategy.1 Tactical plans specify the activities and allocation of resources (e.g., people, equipment, money) needed to implement the strategic plan over a given period.2 Strategy is the plan/needs and tactic is the how/action
A salesperson decides to provide an incentive to one influencer in each prospective company after they recommend his product and the sale is approved. What unethical practice is the salesperson using? Bait and switch Pyramid scheme Hard selling Kickback
Kickback A kickback occurs when an individual within a prospect-client's organization is paid a percent of a sale to recommend and influence the sales transaction.
A customer wants to purchase a novel for a flight that departs in less than an hour. The customer quickly searches for reviews to determine which book has the most positive ratings. What type of problem-solving is being used by this customer? Limited Routine Extended Consumer
Limited
A manufacturer of laminate wood flooring is seeking to expand its target market. What B2C option does the company have? Commercial home centers Fitness superstores Elementary schools Local homeowners
Local homeowners Selling to local homeowners represents B2C selling. This option would allow the manufacturer to expand into the consumer market.
Which ethical guideline should marketers keep in mind when collecting primary data content? Maintaining data transparency Separating groups by demographics Answering all questions from participants Avoiding plagiarism when gathering customer information
Maintaining data transparency
A marketing manager would like to take advantage of factors outside the company to develop an effective marketing plan. Which factor does the manager needs to consider? Market forces Company resources Product management Organizational capabilities
Market forces
An apparel company became the number-one provider in the U.S. New customers had switched to this company's clothing line instead of buying from competitors. Which strategic opportunity did the company use to achieve this goal? Diversification Market penetration Market development Product development
Market penetration
A company needs to effectively reach the target market with the right products, services and messages. Company leaders suggest reducing the consumers into smaller groups to streamline the process. Which concept is being illustrated? Using strategies Market segmentation Consumer evaluation Establishing promotions
Market segmentation
Which component must the marketing team create to effectively target each segment of the consumer market? Fiscal plans Marketing mix B2B marketing plan Research and development
Marketing Mix
Porter's Five Forces consist of the following:
Threat of new entrants One of Porter's Five Forces—the likelihood that new competitors will enter the market (or barriers to entry): From the view of the current companies in the market, profitable markets that yield high returns will attract new companies. This results in many new competitors and eventually decreases profitability for all firms in the industry. Unless the entry of new firms can be blocked by those already in the market, the profit rate will trend towards zero, also known as perfect competition. From the perspective of new entrants, high barriers to entry mean that the investment of getting into the industry makes it difficult to compete with current players in the market. Threat of substitute products or services: The existence of different products that fulfill the same need increases the likelihood that customers will switch to alternatives. This should not be confused with competitors' similar products. For example, with transportation, General Motors (GM) would view city subways as a substitute to someone buying a new car. Rivalry: For most industries, the intensity of competitive rivalry is the major factor in determining the competitiveness of the industry. This involves how many firms are in the industry and how their competitive dynamics reduce profitability. Airlines have extremely high rivalry, for example. Bargaining power of buyers: The bargaining power of customers is the ability of customers to put a company under pressure, which also affects the customer's sensitivity to price changes. If the supply greatly outstrips the demand, the buyers have more power than the suppliers. Bargaining power of suppliers: When there are few substitutes, suppliers of raw materials, components, labor, and services (such as expertise) to an organization can be a source of power over the organization. Suppliers can refuse to work with the company or charge excessively high prices for unique resources. Similar to power of buyers, this bargaining power relies on scarcity and basic economics of supply and demand.
The product manager for a dairy company's brand of butter is evaluating the risk posed by another company in the industry that introduced a butter-like product. Which one of Porter's five forces is this manager concerned about? Threat of substitute products Bargaining power of buyers Bargaining power of suppliers Threat of new entrants
Threat of substitute products
Which types of points are blogs, wikis, and social media that companies use to build and sustain relationships with the customer? Touch Print Adaptive Negotiation
Touch
A company publishes its environmental and social practices monthly on its website. What type of ethical behavior is being practiced by this company? Advocacy Sustainability Transparency Industrialization
Transparency
Primary Marketing Research Techniques
Typical primary marketing research techniques include behavioral observation, in-depth interviews, focus groups, social listening, survey research, and experimental research.
omnichannel communication
Unified and consistent communication with customers across all channels a company employs includes channels such as physical locations, e-commerce, mobile applications, and social media
An energy drink company is promoting the benefits of its caffeinated product without identifying the risks of consuming the drink. Which action should the company take to align its marketing with ethical practices? Engaging with the market Promoting product benefits Using transparent marketing Delivering the promised value
Using transparent marketing
Which equity driver involves assessing the worth of a company's product? Value Brand Retention Customer
Value
Bait and switch
When a company advertises a product for a low price and "switches" a customer to a higher-priced product
Tactical planning
describes what marketing will do or how they will do it to achieve the desired business results and achieve the marketing objectives.
