stuff

Distinguish between consumer and capital economic goods and services

-Consumer good ~ goods used by the final consumers and that have no future productive use -Capital good ~ any good deployed to help increase future production -Most common: property, plant, equipment (PP&E)

Apply appropriate methods of handling customer inquiries, complaints, or difficult situations.

Addressing customers' concerns: Requests and questions- know the proper process to handle these Be able to give directions Know when a manager should be talking to a customer Be able to explain business policies Addressing customers' complaints Listen, take the customer aside, repeat (to show them that you understand but do not place blame), get help (if you need it), establish a plan

Identify ethical issues (e.g., false and misleading advertising, copyright infringement, and age group discrimination) in marketing.

Based on truth-in-advertising law - advertisements anywhere must be truthful, not misleading, and (when necessary) backed with scientific evidence Enforced by FTC (esp pay attention to ads that could affect consumer healths and pocketbooks) Copyright infringement: when a copyrighted work is reproduced, distributed, performed, publicly displayed, or made into a derivative work without the permission of the copyright owner.

Explain the concept and characteristics of private/free enterprise.

Basis of free enterprise system: personal property, compete, take risks, make conflicts Free enterprise system: encourages individuals to start and operate their own businesses in a competitive system, without government involvement

Describe the ways in which special interest groups (e.g., pressure from government and labor groups) and changing cultural characteristics (e.g., aging population, single-person households, and mobility) influence marketing.

Better Business Bureau (BBB): one of oldest nonprofit organizations to set up self-regulation among businesses To be a member a business must promise to follow the strict Code of Advertising American Marketing Association (AMA) has a Code of Ethics which those ethical companies subscribing to the AMA must follow Marketing exchange: products and services are safe and fit for intended uses Product development and management: disclosure of all potential risks

Identify online shopping techniques for sales and purchasing

Content marketing Coupons & deals Up-sale Create a sense of urgency Add images / demos Include customer reviews & testimonials Social media sharing options

Demonstrate completing the sales transaction, including method of payment and counting back change; the proper way to fold, wrap, and bag merchandise after a sale; and thanking customers and inviting them to return.

Cash sale when customer pays for purchase with cash or check (simplest if cash b/c if check may need to verify identity depending on store policy) Sales check: written record of a sales transaction that includes such information as the date of the transaction, the items purchased, sales tax, and the total amount due Valuable to a customer as an itemized receipt In complete form may include customer info and info about time of sale or identity of salesperson Most often printed but sometimes still written manually (by small businesses) Five steps of the process to handwrite sales checks Step 1: multiply unit price times quantity for each item and extend amounts to last column Step 2: Add item amounts to arrive at merchandise subtotal- enter in right line Step 3: calculate sales tax or look it up in a tax table Sales tax must be paid by buyer on all retail sales (calculated as percentage of merch subtotal) Step 4: calculate shipping charges (if applicable) Step 5: add subtotal, tax, and shipping for purchase total that customer pays Debit card sales Businesses with encrypted or coded PIN pad can ask whether customer using debit or credit- if debit key selected then terminal checks to see if enough funds in customer's account to pay for the sale- in which case funds transferred to merchant's account Advantages: bank that issues debit card charges merchant a flat rate- cheaper than when customer uses a credit card Access to money quicker for merchants than with check Convenience for people who can't have credit or carry a checkbook Credit card sales- by accepting it businesses can increase sales by as much as 40% Also most frequently used method of payment for Internet purchases For safety reasons, payment data sent via the Internet is encrypted So difficult for unauthorized individuals to gain access to card # If company accepts credit cards, pays fee to bank/agency that handles the billing and record keeping for each card transaction processed Fee is a percentage of credit card sales based on sliding scale (varies according to size of store account and how charges are processed) Amount of each credit card sale electronically deposited in the business's bank accounts as the sale is made (receipt issued by cash register) Credit card company deducts service charges from store's bank account immediately and store usually has access to funds next day If manually prepared credit card sales checks- deposited with deposit checks To protect selves against losses b/c of stolen or fake credit cards retail businesses sometimes put a floor limit on amount allowed to be charged Illicit charges disputed by true cardholder and company- store liable for amount of floor limit Most modern cash registers include integrated credit authorizer- comp returns approval or disapproval in less than a minute Electronic reading of credit card sales now common and mostly replaced manual checks- if manual though one copy for customer, seller, and bank/credit card agency Layaway: removing merchandise from sock and keeping it in a separate storage area until the customer pays for it Appeals to many shoppers and increases sales Makes deposit and agrees to pay within certain time period, receiving merch when it is fully paid On approval sale: agreement permitting a customer to take merchandise home for further consideration Often privilege for returning customers If goods not returned within time- sale is final Maybe credit card info taken from customer so sale can be processed if chosen later or customer has not send check/return to store to pay Cash-on-delivery sale: a transaction that occurs when a customer pays for merchandise at the time of delivery Sales tax: percentage fee placed by the government on the sale of goods and services Paid only by final user or individual customer (most cases the consumer) Doesn't apply to goods bought for resale Regressive tax- assessed at a flat rate that applies to persons of all income levels B/c each state has a different sales tax- think need to make Internet sales tax easier Don't think can trust residents to keep perfect records of Internet transactions and send to states to tax voluntarily But difficult for small businesses b/c don't have complicated comp software Return: merchandise brought back for a cash refund or credit Allowance: partial return of the sale price for merchandise that the customer has kept (usually when defect in merchandise) When returns/exchanges- need to refund/customer needs to pay appropriate amount of sales tax Shipping adds separate charges (but delivery charges generally exempt from sales tax) Cost depends on service used, weight, distance, etc. Till: cash drawer of a cash register Usually has 10 compartments (5 front/back)- usually bills kept in front and coins in back For bills- first compartment usually empty for checks/special items Second $20- then successively 10, 5, 1, etc. Larger bills first checked by head cashier/manager before kept under tray (to be more secure) Coins from 1st successively (left to right): silver/half dollars, quarters, dimes, nickels, pennies Opening cash fund: at the beginning of each business day, the limited amount of money provided for the cash register To verify fund- all counted and amount recorded and checked against amount planned for the register (should always be even at start of business day) Making change- should always make sure that have enough in the till With a POS system- customer display makes it easy to count correct change due Doing it without a customer display screen0 begin by announcing total amount of sale and count up amount tendered Do not take the bill until given change to the customer to eliminate dispute Count silently and then count aloud when handing change to customer Sales tally- those who use a cash register must account for day's sales and money at closing (aka balancing the cash, balancing the till, etc) Most cash registers automatically keep the tally Person responsible for register counts money, fills out brief report, sends tape from cash register to management Safeguards against theft and counterfeiting Always close cash drawer between transactions and always partially close while counting change to customer Always lock if you leave it Best to ignore interruption if they do so while you are counting change Important to routinely check all currency against counterfeits (esp higher denominations) Should have printed info about how to identify counterfeits Many new designs on currency too to prevent counterfeit with new security features

Identify online shopping techniques for sales and purchasing.

Content marketing Coupons & deals Up-sale Create a sense of urgency Add images / demos Include customer reviews & testimonials Social media sharing options

Identify the most efficient means (e.g., cost benefit analysis) for distributing different types of products and services

Direct sales force is costly But manufacturer has complete control over them and can easily monitor each sale rep's performance Whereas with agent manufacturer loses control over how sales are made Relative cost is lower esp b/c agents are paid a percentage of sales so cost of sales is always the same in relation to sales generated Exclusive distribution = protected territories for distribution of a product in a given geographic area Prestige, image, channel control, and high profit margin for both manufacturer and intermediaries Integrated distribution = a variation on exclusive distribution when some manufacturers own and run their own retail operations Selective distribution = limited number of outlets in a given geographic area are used to sell the product Goal is to select channel members that can maintain the image of the product and are good credit risks, aggressive marketers, and good inventory planners Intensive distribution = involves the use of all suitable outlets to sell a product Objective is complete market coverage - ultimate goal is to sell to as many customers as possible

Discuss the role e-commerce will play in the marketing of goods and services

E-commerce becoming more and more widespread --> need a strong marketing plan in e-commerce for a business to be able to survive

Discuss the role of federal regulatory agencies (e.g., Food and Drug Administration, Consumer Product Safety Commission, Environmental Protection Agency).

Food and Drug Administration (FDA): regulates the labeling and safety of food, drugs, and cosmetics sold in the United States Approves new products and reviews products already on the market Also responds to petitions for action Consumer Product Safety Commission (CPSC): responsible for overseeing the safety of products such as toys, electronics, and household furniture Can set standards for products that are considered hazardous and recall dangerous products Also enforces acts such as Flammable Fabrics Act, Poison Prevention Act, Refrigerator Safety Act, etc. ~ mostly concerned with safety of children Businesses should test products before marketing to public + should keep up with new guidelines in labeling of products (esp w/ directions for safe use) Securities and Exchange Commission (SEC): regulates the sale of securities Responsible for licensing brokerage forms and financial advisers Investigates dealings among corporations that affect stock values (e.g. mergers) Purpose is to protect investors from deceptive practices Requires all info given to investors about corporation is truthful Companies whose shares are traded on a stock exchange must publish a company's prospectus (document offered to potential investors) and an annual report (to present to investors to show how the company has performed) Environmental Protection Agency (EPA): to protect human health and our environment, responsibilities including monitoring, reducing pollution, overseeing disposal/recycling, etc. Federal Trade Commission (FTC): has responsibility of enforcing principles of a free enterprise system and protecting consumers from unfair or deceptive business practices Independent agency but reports to Congress on its actions Runs three bureaus: Bureau of~ Consumer Protection, Competition, and Economics Bureau of Consumer Protection: responsible for enforcing consumer protection laws and trade regulation rules Initiates lawsuits against violating companies Advertising Division: enforces truth-in-advertising laws Enforcement Division: ensures compliance w/ laws involving Internet; Postal Service; textile, wool, fur, and care labeling; energy use Financial Practices Division: covers Truth-In-Lending Act and leasing and privacy issues Marketing Practices Division: responsible for responding to fraudulent activities and scams International Division of Consumer Protection: promotes consumer confidence in international marketplace through cross border cooperation and information sharing Division of Planning and Information: helps consumers w/ information Bureau of Competition: prevention of anti-competitive mergers & business practices Federal Trade Commision Act Sherman Antitrust Act: (Also enforced by Antitrust division of the Justice Department) Clayton Antitrust Act: (Also enforced by Justice department) Hart-Scott-Rodino Amendment to the Clayton Act Robinson-Patman Act Also distribution laws Bureau of Economics: studies impact of its actions on consumers and reports its findings to Congress, exec branch, and public Government monitors the economy and controls monetary supply through the Federal Reserve System to ensure economic stability Small Business Administration: to support businesses and encourage the free enterprise system Note: however foreign governments may not provide legal protection or framework necessary to ensure that business ops conducted in safe and secure manner

Describe how marketing information is used in business decisions

Helps increase sales/profits, answers questions about what to produce and at what price Helps solve marketing problems and gauge potential of new ideas Helps keep track of what is happening with current markets of a company

Describe how marketing information is used in business decisions.

Helps increase sales/profits, answers questions about what to produce and at what price Helps solve marketing problems and gauge potential of new ideas Helps keep track of what is happening with current markets of a company

Describe the methods of handling merchandise and inventory control.

Inventory: all the goods stored by a business before they are sold Inventory management: process of buying and storing these materials and products while controlling costs for ordering, shipping, handling, and storage Usually responsibility of supply chain manager If too high inventory, more problems for business Uses up valuable storage space, increase personnel costs, increased interest expenses, etc. Just-in-time (JIT) inventory system: controls the flow of parts and material into assembly and manufacturing plants Coordinates demand and supply such that suppliers deliver parts and raw materials just before needed for use Computer link-ups between suppliers and transportation companies Inventory management is complex b/c retail businesses expected to: Maintain right quantities of merch without running out of stock Keep a wide product assortment w/o compromising wants/needs Purchase merch at large volumes to gain lowest prices while not buying more than it will sell Keep a current inventory on hand Good inventory management balances cost of inventory with benefits of maintaining large inventory Perpetual inventory system: tracks the number of items in inventory on a constant basis Tracks all new items purchased and returned and sales of current stock Manual system - employees gather paper records of sales and enter that info into the inventory system Computer based system - use hand held laser guns, stationary lasers, light pens, slot scanners etc to feed data directly from UPCs, sales checks, or merch tags into the comp Electronic Data Interchange involves comp-to-comp information exchanges and relays of sales info directly to a supplier Physical inventory system: information about stock levels is not maintained on an ongoing basis, rather, stock is visually inspected or actually counted to determine the quantity on hand Even if perpetual used, these are still conducted periodically Allows business to calculate income tax, determine correct value of ending inventory, identify stock shortages, plan future purchases, etc. To count, often use a combo of methods: Outside companies (e.g. Washington Inventory Services), regular employees, etc. Most businesses physically count inventory at least once a year Inventory clerks usually work in pairs- one counts and the other records the count Cycle counts: entire inventory is never counted at one time - small portion of the inventory is physically counted each day by stock keeping units so that entire inventory accounted for on a regular basis Stockkeeping unit (SKU): a unit or a group of related items Visual control E.g. smaller business often place stock cards on pegboards w/ stock numbers and descriptions for each item displayed Specify number of each item to be kept in stock Real-time inventory systems: Internet technology that connects applications, data, and users in real time Lets a comp constantly track every product it sells from when it is manufactured or when it arrives in the warehouse to when customer orders it online, and to when it arrives at the buyer's door

Explain the marketing concept and describe the benefits of marketing and their importance

Marketing concept: idea that a business should strive to satisfy customers' needs and wants while generating a profit for the firm Provides means for competition to take place Fosters development of new/improved products Increased demand --> lower prices Adds value/utility to a product

Examine the legal aspects of product development (e.g., patents, copyrights, and trademarks).

Patent: own rights an item or idea, apply through U.S. Patent and Trademark Office Exclusive rights to make/use/sell invention for up to 20 years Trademark: word, name, symbol, sound, or color that identifies a good or service and that cannot be used by anyone but the owner Can be renewed forever if being used by a business Copyright: involves anything that is authored by an individual, such as writings, music, and artwork Usually valid for author's life plus 70 years Trade secret: information that a company keeps and protects for its use only, but not patented (e.g. Coca-Cola formula) Licensing agreement: protects the originator's name and products

Identify ways that technology including the Internet impacts marketing

Point-of-sale (POS) system: common use of computers in retailing Consists of cash registers and peripherals such as scanners, touch screens, handheld checkout devices, printers, and electronic kiosks Customer Relationship management (CRM): Capturing customer info, viewing sales histories, and customizing promotions Also tracks customer satisfaction level Enterprise Resource Planning (ERP): Use of software to integrate all parts of a business management Interactive touch-screen computers for customers Interactive TV in advertising Click stream can be used to develop psychological profiles based on remote control clicks Internet: world's biggest computer network Internet service providers (ISPs) are companies that provide Internet access Wi-Fi (wireless fidelity): establishes a wireless Internet connection using radio frequencies World Wide Web: subset of the Internet and is a collection of interlined electronic documents Hypertext transfer protocol (HTTP): links documents together Uniform resource locator (URL): protocol used to identify and locate Web pages on the Internet, AKA web address Search engines Electronic mail: e-mail, good because instant delivery Intranet: private, secure network, usually within a company or organization, that contains proprietary company data and can be accessed only be internal users Extranet: network that enables customers to access data stored on an internal server Firewall: hardware and software checkpoint for all requests for or inputs of data, incoming and outgoing Congress's CAN-SPAM law: bans certain spamming techniques and requires senders to include a valid address Web Site Development Site map: outlines what can be found on each page within a web sitem, known as global navigation A website's domain name comes from the Internet Corporation for Assigned Names and Numbers (ICANN) Layout grids identify all Web page elements E-commerce: process of conducting business transactions on the Internet, B2B and B2C Rise of e-tailers

Identify ways that technology including the Internet impacts marketing.

Point-of-sale (POS) system: common use of computers in retailing Consists of cash registers and peripherals such as scanners, touch screens, handheld checkout devices, printers, and electronic kiosks Customer Relationship management (CRM): Capturing customer info, viewing sales histories, and customizing promotions Also tracks customer satisfaction level Enterprise Resource Planning (ERP): Use of software to integrate all parts of a business management Interactive touch-screen computers for customers Interactive TV in advertising Click stream can be used to develop psychological profiles based on remote control clicks Internet: world's biggest computer network Internet service providers (ISPs) are companies that provide Internet access Wi-Fi (wireless fidelity): establishes a wireless Internet connection using radio frequencies World Wide Web: subset of the Internet and is a collection of interlined electronic documents Hypertext transfer protocol (HTTP): links documents together Uniform resource locator (URL): protocol used to identify and locate Web pages on the Internet, AKA web address Search engines Electronic mail: e-mail, good because instant delivery Intranet: private, secure network, usually within a company or organization, that contains proprietary company data and can be accessed only be internal users Extranet: network that enables customers to access data stored on an internal server Firewall: hardware and software checkpoint for all requests for or inputs of data, incoming and outgoing Congress's CAN-SPAM law: bans certain spamming techniques and requires senders to include a valid address Web Site Development Site map: outlines what can be found on each page within a web sitem, known as global navigation A website's domain name comes from the Internet Corporation for Assigned Names and Numbers (ICANN) Layout grids identify all Web page elements E-commerce: process of conducting business transactions on the Internet, B2B and B2C Rise of e-tailers

Explain the role of promotion as a marketing function and identify the major purpose of advertising.

Promotion: persuasive communication Companies and organization rely on promotion to inform, enhance their public image, and educate the public Advertising Form of nonpersonal promotion where companies pay to promote ideas, goods, or services in a variety of media outlets Non-way communication

Explain the principles of supply and demand.

Supply: amount of goods producers are willing to make and sell Law of supply: economic rule that price and quantity supplied move in the same direction Demand: consumer willingness and ability to buy products Law of demand: economic principle that price and demand move in opposite directions Surpluses exist when supply exceeds demand Shortages exist when demand exceeds supply Equilibrium exists when supply equals demand

Explain the transportation systems and services (e.g., motor, rail, water, air) used in distribution

Transportation: marketing function of moving a product from the place where it is made to the place where it is sold Five major transportation systems: trucks, railroads, waterways, pipelines, and air carriers Trucks (aka motor carriers) are most frequently used transportation mode Carry higher valued products expensive to keep in inventory Also carry products like produce w/ limited shelf life Generally lightweight shipments transported over moderate distances Use for virtually all intercity shipping and for about 1/4 of intercity freight traffic (interstate commerce monitored by state/federal transportation agencies) Common carriers: provide transportation services to any business in their operating area for a fee Can change rates/geo areas if rates not diff from those published Handle more than 1/3 of all motor freight Contract carriers: for-hire carriers that provide equipment and drivers for specific routes, according to agreements btwn the carrier and shipper Can be one time or continuous basis Usually transport for multiple businesses and can charge diff rates to various businesses But must file contracts w/ appropriate state/federal regulatory agency Advantage - business does not need to invest in equipment Disadvantage: less flexibility for special pickups/handline, rush deliveries, direct shipments, etc. Private carriers: transport goods for an individual basis Equipment can be owned/leased to meet specific needs of business If business wants own private fleet - significant capital investment Starting a private carrier op requires large investment in equipment and facilities But let business maintain total control over equip, maintenance, availability, routes, delivery times, handling procedures, etc. and change schedules/routes/times to meet customer needs Many businesses combine private and for-hire carriers (use own trucks for local deliveries while contract/common for beyond local areas) Exempt carriers: free from direct regulation of rates and operating procedures Most often carry agricultural products Rates lower than common carriers b/c of exempt status In general, trucks cost more than rail and water carriers (b/c susceptible to delays) and are subject to size and weight restrictions Intermodal transportation- combines 2 more more transportation modes to maximize advantages of each E.g. piggyback service is carrying loaded truck trailers over land on railroad flat cars, then trucks take trailers to destinations Fishyback service is shipping loaded truck trailers over water on ships and barges Both of above examples combine adv of truck transportation w/ lower costs of rail and marine transportation Railroads another major form of transportation in US (trains responsible for 6% of total intercity ton-miles of freight) Ton-mile: movement of one ton (2,000 lbs) of freight one mile Trains important for moving heavy, bulky items (coal, steel, etc.) If refrigerated- keep perishable products Other specially designed cars haul combustible or hazardous materials Carload: minimum number of pounds of freight needed to fill a boxcar Established for different classifications of goods Once shipment reaches minimum weight, shipper pays lower rate, regardless of physical size of shipment Rates for less-than-carload shipments more expensive b/c partial carloads unloaded at each destination One of lowest cost transportation modes b/c large qtys at low per unit costs Need much less energy than motor carrier and seldom slowed by bad weather - so one of safest modes of transportation Disadvantage - lack of flexibility - onlyi along designated rail lines Marine shipping - barges and container ships transport merchandise within the US and around the world US marine shipping regulated by the United States Maritime Commission Waterways Inland shipping is shipping from one port to another on connecting rivers and lakes Intracoastal shipping is the shipping of goods on inland and coastal waterways btwn ports along the same coast International waterways are oceans and rivers that connect continents and countries Almost all overseas non-perishable freight is transported by container ships and barges b/c of low cost Advantage: low cost (container ships/barges are cheapest form of freight transportation) Disadvantage: slowest form of transportation Added cost sometimes b/c buyers located far from the port city must have products offloaded from container ships onto railroad cars or motor carriers to reach their destination Marine shipping is affected by bad weather and seasonal conditions Pipelines usually owned by company using them and considered private carriers Most frequently used to transport oil and natural gas (move crude oil from oil fields to refineries where its processed - then refined products (eg gasoline) then taken to retail outlets) Construction is high initial investment but operational costs are relatively small Best safety record among all major transportation systems Products carried move slowly but continuously, suffer minimal product damage/theft, and not subject to delivery delays due to bad weather Risk of leak is low but when does occur- extensive environmental damage Air cargo services - less than 1% of total ton-miles of freight shipped Often used to ship high-value, low-weight, time-critical items Some high-value products (e.g. emergency parts, medicines, etc.) also shipped by air Space restraints so products transported in smaller containers well suited Air transport regulated by Federal Aviation Administration (FAA) Airlines and air transport companies set own rates Advantage is speed + reduces inventory expenses/storage costs Disadvantage is cost - most expensive form of distribution Also include mechanical breakdowns, delays by bad weather, etc.

Identify the reasons for conducting market research

Used to: Determine consumer's attitudes and preferences Test product features Determine market size and growth potential Learn about competitive products Determine buying cycles Understand how the company is perceived by the public

Explain the concept of distribution and identify the channels of distribution

Channel of distribution = path a product takes from its product or manufacturer to the final user Intermediary = businesses involved in sales transactions that move products from manufacturer to final user Wholesaler= businesses that buy large quantities of goods from manufacturers, store the goods, and then resell them to other businesses Rack jobbers = wholesalers that manage inventory and merchandising for retailers by counting stock, filling it in when needed, and maintaining store displays Drop shipper = own the goods they sell but do not physically handle the actual products Retailer = sell goods to final customer for personal use Brick-and-mortar retailer = sell goods to the customer from their own physical stores (traditional retailers) Agent = intermediaries that bring buyers and sellers together Direct distribution = when producer sells goods or services directly to customer, w/o intermediaries Indirect distribution = involves one or more intermediaries

Identify consumer protection agencies (e.g., FTC, Better Business Bureau, and Consumer Product Safety Commission) and explain their services.

Federal Trade Commission (FTC): has responsibility of enforcing principles of a free enterprise system and protecting consumers from unfair or deceptive business practices Consumer Product Safety Commission (CPSC): responsible for overseeing the safety of products such as toys, electronics, and household furniture Better Business Bureau (BBB): one of oldest nonprofit organizations to set up self-regulation among businesses

`Describe the importance of marketing in a global economy.

Globalization: selling the same product and using the same promotion methods in all countries Some companies can do if uncover common need that transcends different cultures so identified a global consumer Benefit is global brand recognition Increased power of globalization with success of e-commerce Adaptation: company's use of an existing product and/or promotion to which changes are made to better suit the characteristics of a country or region Product adaptation vs promotion adaptation- need to consider cultural differences in both In promotion also consider use of adaptation pricing policy Customization: involves creating specifically designed products or promotions for certain countries or regions Each geographic area where a product/service is offered is a unique market segment

Explain the impact of the Internet on marketing

Internet is an unstoppable trend --> a good online presence is basically a necessity Online advertisements are cheap Almost considered the norm to have your own websites

Explain the functions of packaging and why each is important.

Package: physical container or wrapping for a product Functions of packaging Promoting and selling the product Mixed bundling: practice of packaging different products or services together Price bundling: occurs when two or more similar products are placed on sale for one package price Defining product identity Providing information Expressing customer needs Ensuring safe use Blister-packs: packages with preformed plastic molds surrounding individual items arranged on a backing Protecting the product

Identify the reasons for conducting market research.

Used to: Determine consumer's attitudes and preferences Test product features Determine market size and growth potential Learn about competitive products Determine buying cycles Understand how the company is perceived by the public

Explain the advantages and disadvantages of extending product lines and of product line diversification

Product line extension: when a company creates a new product in the same product line of an existing brand Intended to be a diff product appealing to somewhat diff needs of consumers - wider range of choices to increase product depth Fairly low risk since already established brand But be careful not to overexpose brand so to make customers confused Product line diversification - modification of a current product that serves to expand the potential market Purpose to increase customer base Almost always involves brand extension

Explain marketing research methods and procedures

Quantitative research: answers questions that start with "how many" or "how much" Usually gathers information from large numbers of people Relies heavily on surveys or questionnaires Qualitative research: focuses on smaller numbers of people to answers questions about "why" or "how" Relies on in-depth interview etc. Attitude research: (opinion research) designed to obtain info on how ppl feel about certain products, services, companies, or ideas Most commonly done by mail surveys or telephone interviews / opinion polls Market intelligence: concerned with the size and location of a market, the competition, and the segmentation within the market for a particular product or service Helps define potential target markets for a particular product or service and how to reach potential customers Done before a new product launch - used to guide marketing efforts for the new product Sales forecasting: an attempt to estimate the future sales of an existing product Economic forecasting: an attempt to predict the future economic conditions of a city, a region, a country, or other part of the world Most businesses rely on govt data to predict economic conditions Media research: (advertising research) focuses on issues of media effectiveness, selection, frequency, and ratings Important stats include audience, frequency, reach, and ratings Frequency = number of times a viewer in an audience sees/hears an ad Reach = percent of target audience that will see or hear an ad at least once To obtain measures, businesses often request info from print, broadcast, and electronic media of interest to them Info received would usually include a rate card listing the advertising costs, circulation/viewership figures, deadline dates, and other requirements for submission of an ad Different techniques to get reactions to an advertisement To determine effectiveness - readers asked abt extent to which they noticed the ad, remembered it, and associated with advertising brand Also measured on ability to change customer's beliefs/behavior Most broadcast ad testing research done on TV commercials E.g. Nielsen Media Research Inc provides audience measurement info for TV industry Arbitron Ratings Company assembles important data on radio advertising Product research: centers on evaluating product design, package design, product usage, and consumer acceptance of new and existing products Nature and scope of marketing research rapidly changing go keep pace with a changing marketplace Total quality management (TQM) programs place a premium on gathering and using database research in improving business ops Amount of info that can be gathered limited by amt of money and time company can afford to spend on equipment and by number of personnel needed to conduct research Marketing research info also has its limitations Marketing Research Process: 1. Defining the problem Problem definition: when the business clearly identifies a problem and what is needed to solve it Objectives develop questions 2. Obtaining data 3. Analyzing data Data analysis: process of compiling, analyzing, and interpreting the results of primary and secondary data Data mining: computer process that uses statistical methods to extract new information from large amounts of data 4. Recommending solutions Solutions usually presented in a well-written research report 5. Applying the results Research may be inconclusive, suggest further research or specific courses of action

Explain marketing research methods and procedures.

Quantitative research: answers questions that start with "how many" or "how much" Usually gathers information from large numbers of people Relies heavily on surveys or questionnaires Qualitative research: focuses on smaller numbers of people to answers questions about "why" or "how" Relies on in-depth interview etc. Attitude research: (opinion research) designed to obtain info on how ppl feel about certain products, services, companies, or ideas Most commonly done by mail surveys or telephone interviews / opinion polls Market intelligence: concerned with the size and location of a market, the competition, and the segmentation within the market for a particular product or service Helps define potential target markets for a particular product or service and how to reach potential customers Done before a new product launch - used to guide marketing efforts for the new product Sales forecasting: an attempt to estimate the future sales of an existing product Economic forecasting: an attempt to predict the future economic conditions of a city, a region, a country, or other part of the world Most businesses rely on govt data to predict economic conditions Media research: (advertising research) focuses on issues of media effectiveness, selection, frequency, and ratings Important stats include audience, frequency, reach, and ratings Frequency = number of times a viewer in an audience sees/hears an ad Reach = percent of target audience that will see or hear an ad at least once To obtain measures, businesses often request info from print, broadcast, and electronic media of interest to them Info received would usually include a rate card listing the advertising costs, circulation/viewership figures, deadline dates, and other requirements for submission of an ad Different techniques to get reactions to an advertisement To determine effectiveness - readers asked abt extent to which they noticed the ad, remembered it, and associated with advertising brand Also measured on ability to change customer's beliefs/behavior Most broadcast ad testing research done on TV commercials E.g. Nielsen Media Research Inc provides audience measurement info for TV industry Arbitron Ratings Company assembles important data on radio advertising Product research: centers on evaluating product design, package design, product usage, and consumer acceptance of new and existing products Nature and scope of marketing research rapidly changing go keep pace with a changing marketplace Total quality management (TQM) programs place a premium on gathering and using database research in improving business ops Amount of info that can be gathered limited by amt of money and time company can afford to spend on equipment and by number of personnel needed to conduct research Marketing research info also has its limitations Marketing Research Process: 1. Defining the problem Problem definition: when the business clearly identifies a problem and what is needed to solve it Objectives develop questions 2. Obtaining data 3. Analyzing data Data analysis: process of compiling, analyzing, and interpreting the results of primary and secondary data Data mining: computer process that uses statistical methods to extract new information from large amounts of data 4. Recommending solutions Solutions usually presented in a well-written research report 5. Applying the results Research may be inconclusive, suggest further research or specific courses of action

Explain how consumer practices (e.g., shoplifting, improper returns, and product liability claims) affect prices

Take into consideration when doing merchandising plans Planned retail reductions - selling price, shortages of merchandise caused by clerical mistakes, employee pilferage, customer shoplifting Formula for planned purchases: (PS + EOM stock + R) - BOM Stock = P PS = planned sales | EOM = end of month | R = reductions | BOM = beginning of month

Compare and contrast the types of economic systems (e.g., capitalism, socialism, and communism).

Market economy: where there is no government involvement in economic decisions What - Consumers decide on what should be produced through supply and demand How - Businesses decide how to produce goods and services For whom - People are motivated to work and invest money because those with more wealth and afford more goods and services Pure market: no government involvement interference at all Command economy: system in which a country's government makes economic decisions and decides what, when, and how much will be produced and distributed What - One person (often a dictator) or a group of government officials (central planning committee) decides How - Government decides For whom - Government decides (wealth is shared equally, supposedly) Mixed economy: combination of market and command economy The United States is a mixed economy leaning towards a market economy Capitalism: political and economic philosophy characterized by marketplace competition and private ownership of businesses = free enterprise Democracy Communism: social, political, and economic philosophy where an authoritarian government controls the factors of production No private ownership of property or capital Very few communist countries left Little financial incentive to increase productivity, little or no economic freedom Socialism: originally referred to a system on its way to the communist ideal of a classless society Most countries that are socialist have democratic political institutions Increased amount of government involvement compared to capitalism Tend to have more social services, higher taxes Government runs key industries and makes economic decisions, state takes care of noncompetitive companies in industries like telecommunications, natural resources, transportation, and banking E.g. Canada, Germany, Sweden have socialist elements Economies in transition Move towards privatization Developing economies

Explain why a marketing plan is essential and identify the components of a marketing plan.

Marketing Plan: a formal, written document that directs a company's activities for a specific period of time Details analysis and research efforts and provides a roadmap for how a product will enter the market, be advertised, and sold Also communicates the goals, objectives, and strategies of a company to members of the management team Managers know responsibilities, budget, and timelines for completion Helps to monitor a company's performance Basic elements found in all marketing plans: Executive summary: brief overview of entire marketing plan, briefly addressing each topic in the plan and giving an explanation of the costs involved in implementing the plan Also used to provide info to people outside of the organization Situation analysis: study of internal and external factors that affect marketing strategies (info from SWOT analysis and environmental scan) Objectives and goals: let everyone know what the marketing plan will accomplish To be useful should be single-minded, specific, realistic, measurable, and have a time frame Specific enough to avoid misunderstanding Objectives should be in line with the organization's goals and mission Mission statement provides the focus for a firm's goals with its explanation of the company's core competencies, values, expectations, and vision for the future Marketing strategy: identifies target markets and sets marketing mix choices that focus on those markets, which take into account the customer's wants/needs and the objectives of the marketing plan Position in the marketplace determines appropriate marketing strategy Should be focused on key points of difference (advantage a company, product, or service has over its competition E.g. quality of the product, superior distribution system, more creative d campaign, more competitive pricing structure, etc. Implementation: putting the marketing plan into action and managing it Obtaining financial resources, management, and staffing necessary to put the plan into action Sales forecasts: projection of probable, future sales in units or dollars Also outlines schedule of activities, assignments, forecasts, budgets, details of each activity, and who will be in charge of each activity Evaluation and control: measures that will be used to evaluate the plan- how to measure an objective and who will provide the evaluation Performance standard = an expectation for performance that reflects the plan's objectives Control section suggests activities for if objectives not met Control phase is to reduce gap between planned performance standards and actual performance Appendix: section of marketing plan including supplemental materials, such as detailed financial statements, sample ads, etc.

Analyze the differences between a production-oriented company, a sales-oriented company, and a marketing oriented company

Production oriented company: ignores customers wants/needs and focuses on effectively building a quality product, under the belief that if they can build the best product, the customers will automatically come to them Sales oriented company: focuses much of efforts on developing a sales force to promote and sell their products or services Sales force commonly considered most important part of business Marketing oriented company: vibrant, communicative businesses that actively seek ways to understand what their customers want and then design products specifically according to those desires

Identify and examine economic indicators and business cycles (e.g., GDP, GNP, and Consumer Price Index).

Productivity: output per worker hour that is measured over a defined period of time Business can increase productivity by investing in new equipment/facilities, training or providing financial incentives to staff, reduce work force and increase current responsibilities High productivity = higher profit Specialization and division of labor are key to productivity E.g. Assembly lines allow production to be more efficient Gross Domestic Product (GDP): output of goods and services produced by labor and property located within a country Private investments - spending by businesses for equipment and software, home construction Government spending - money spent by local, state, and federal governments Personal spending - all consumer expenditures for goods and services Expanding inventories - business are producing goods that are being stored in their warehouses, need to add to GDP Shrinking inventories - people are buying more than what was actually produced, need to subtract from GDP Gross National Product (GNP): total dollar value of goods and services produced by a nation, including goods and services produced abroad by U.S. citizens and companies Difference between GDP and GNP is GNP talks about who is responsible for production, not where it takes place Standard of living: measurement of the amount and quality of goods and services that a nation's people have, reflects quality of life Divide GDP or GNP of a country by its population to get per capita GDP or GNP Inflation: rising prices Low inflation rate (1-5%) - shows that an economy is stable Double-digit inflation (>10%) - devastates an economy Controlling inflation is one of the government's major goals Rising inflation - government raises interest rates to discourage borrowing money 2 inflation measurements - CPI and PPI Consumer price index (CPI): measures the change in price over a period of time by some 400 specific retail goods and services used by the average urban household Also called cost of living index - food, housing, utilities, transportation, medical care Producer Price Index (PPI): measures wholesale price levels in the economy Often a trendsetter, as producer prices generally get passed along to the consumer Drop in PPI => Drop in CPI Unemployment rate are jobless rates that are inversely related to economic expansion

Explain the concept of promotional mix and identify the elements of the promotional mix (i.e., advertising, publicity, sales promotion, and personal selling).

Promotional mix: combination of strategies and a cost-effective allocation of resources to achieve promotional goals 1. Personal selling Requires a company to employ sales representatives who generate and maintain direct contact with prospects and customers One of the costliest forms of promotion 2. Advertising Form of nonpersonal promotion where companies pay to promote ideas, goods, or services in a variety of media outlets Non-way communication 3. Direct marketing Directed to a target group of prospects and customers rather than a mass audience Goal: generate sales or leads for representatives to pursue Two types: printed direct mail and electronic direct mail Congress panned CAN-SPAM Act of 2003 due to consumer spam Requires senders of unsolicited commercial email to give recipients a way to opt out Prohibits use of deceptive subject lines and headers Requires valid return addresses to be provided on emails 4. Sales promotion Represents all marketing activities, other than personal selling, advertising, and public relations, that are used to stimulate purchasing and sales Objective: increase sales, inform potential customers about new products, and create a positive business or corporate image Directed at businesses or retail customers to boost sales - coupons, product samples, point-of-purchase displays 5. Public relations and Publicity (presence in media) Enable an organization to influence a target audience Designed to influence opinion and to create a favorable public image News release: announcement that is sent to appropriate media outlets, announcing newsworthy developments about the company Publicity: involves bringing news or newsworthy information about an organization to the public's attention, known as placement Unlike advertisement, placement of publicity is free Disadvantage is that the business can't always control it

Explore the ethical issues involved in selling (e.g., high pressure sales and misrepresenting product information).

Selling practices - bribes, kickbacks, favors, and high pressure tactics Cultural issues complicate these issues Often hard to draw the line between gesture and bribery/kickback Why companies impose strict rules against offering any type of gift to customers and against accepting gifts High pressure selling tactics and failure to follow through on promises made to close a sale

Describe the purpose and importance of selling

Selling: process of matching customer needs and wants to the features and benefits of a product or service Goal of selling is to help customers make satisfying buying decisions, which create ongoing, profitable relationships btwn buyer and seller Important b/c repeat business crucial to success of any company Easier and less expensive to keep current customers happy than generate new customers + happy customers likely to pass positive recommendations

Identify, explain, compare, and contrast the different types of business ownership (e.g., sole-proprietorship, partnership, corporation, franchise, and licensing).`

Sole proprietorship: business owned and operated by one person Disadvantage - unlimited liability Partnership: legal agreement between two or more people to be jointly responsible for the success or failure of a business General partnership: each partner shares in the profits and losses Limited partnership: Limited partner liable for any debts only up to the amount of his or her investment in the company Corporation: legal entity created by state or federal statute authorizing individuals to operate an enterprise Legal permission to operate Separate legal entity Stockholders: ownership of a corporation divided into shares of stock Board of directors Limited liability Public or private corporations Foreign corporation: incorporated under the laws of a state that differs from the one in which it does business Limited liability company (LLC): hybrid of a partnership and corporation, shielded from personal liability and all profits/losses pass directly to the owners without taxation of the entity itself Licensing: involves letting another company (licensee) use a trademark, patent, special formula, company name, or some other intellectual property for a fee or royalty Franchise: legal agreement to sell a parent company's product or services in a designated geographic area

Identify sources of primary and secondary data

-Primary data: data obtained for the first time and used specifically for the particular problem or issue under study -Survey method: research technique in which information is gathered through surveys, most common -Sample: part of target population that represents it accurately -Technological methods - online surveys, focus group chat sessions -Interviews - focus group interviews (8-12 people) -Observation method: research technique in which the actions of people are watched and recorded by cameras or observers Point-of-sale research: powerful form of research the combines natural observation with personal interviews to get people to explain buying behavior -Experimental method: research technique in which a researcher observes the results of changing one or more market variables while keeping controls -Secondary data: have already been collected for some purpose other than the current study -Obtained from internal sources such as marketing information system of a business -Internet sources -U.S. and state government sources -Specialized research companies -Business publications and trade organizations Advantages of secondary data - obtained easily Disadvantages of secondary data - not suitable for problem under study, potentially inaccurate

Describe the importance of branding, packaging, and labeling.

Brand: name, term, design, symbol, or combination of these elements that identifies a product or service and distinguishes it from its competitors To build product recognition and customer loyalty To ensure quality and consistency To capitalize on brand exposure Package: physical container or wrapping for a product Label: information tag, wrapper, seal, or imprinted message that is attached to a product or its package Brand label: gives the brand name, trademark, or logo Descriptive label: gives information about the product's use, construction, care, performance, and other features Grade label: states the quality of the product

Explain the concept of competition and describe ways competition affects marketing decisions

Competition: the struggle for customers - Forces businesses to produce better-quality goods and services at reasonable prices - Price competition: focuses on sale price of a product - Nonprice competition: businesses choose not to compete on the basis of factors that are not related to price, including quality, service, financing, business location, reputation

Explain the concept of competition and describe ways competition affects marketing decisions

Competition: the struggle for customers Forces businesses to produce better-quality goods and services at reasonable prices Price competition: focuses on sale price of a product Nonprice competition: businesses choose not to compete on the basis of factors that are not related to price, including quality, service, financing, business location, reputation

Examine direct and indirect channels of distribution (e.g., wholesaler, agent, and broker) and when each is most appropriate to use

Distribution channels for consumer products and services Channel A: Manufacturer/Producer directly to Consumer Selling products at the production site, having a sales force call on consumers at home, using catalogs/ads to generate sells, , telemarketing, using Internet for online sales B: Manufacturer/producer to retailer to consumer Used for products that become out of date quickly or need regular servicing (clothing, automobiles) Used by chain stores and online retailers C: manufacturer/producer to wholesaler to retailer to consumer Most often used with staple goods (items always carried in stock and whose styles don't change frequently) - e.g. supermarket items, candy, flowers, stationery D: manufacturer/producer to agents to wholesaler to retailer to consumer Used by manufacturers who prefer to concentrate on production and leave sales and distribution to others used in this channel E: manufacturer/producer to agents to retailer to consumer Used by manufacturers who don't want to handle their own sales to retailers Often used for expensive cookware, meat, cosmetics, and supermarket items Distribution channels for industrial products and services A: manufacturer/producer directly to industrial users Most often used for major equipment B: manufacturer/producer to industrial distributors to industrial users Most often used for small standardized parts and operational supplies needed to run a business Wholesaler take ownership of products, stock them, and sell as needed to industrial users C: manufacturer/producer to agents to industrial distributors to industrial users Used by small manufacturers w/o time or money to invest in direct sales force D: manufacturer/producer to agents to industrial user Also used if manufacturer doesn't want to hire own sales force Often used for construction equipment, farm products, dry goods

Explain the functions involved in marketing goods and services.

Distribution: process of deciding how to get goods in customers' hands Financing: getting money that is necessary to pay for setting up and running a business Marketing Information Management: gathering information about customer trends and competitors, storing it, and analyzing it to make good decisions Done continuously through market research studies Pricing: deciding how much to charge for goods and services in order to make a profit Based on: costs, what competitors charge, how much customers willing to pay Product/Service Management: obtaining, developing, maintaining, and improving a product or a product mix in response to market opportunities Marketing research guides product/service management towards what the consumer needs and wants Promotion: effort to inform, persuade, or remind potential customers about products/services Selling: provides customers with goods/services they want

Analyze the impact of changing economic conditions on marketing strategies.

Environmental scan = analysis of outside influences that may have an impact on an organization, typically including four areas: political, economic, socio-cultural, technological Political issues center around govt involvement in business operations Must remain alert to changes in law/regulations affecting their industry Global companies- under political structure and regulations of each country in which business is conducted Current state of economy always of interest to all businesses Robust economy ~ businesses more likely to invest more versus recession ~ upcoming marketing programs may be altered or scrapped altogether To measure: unemployment rate, inflation, retail sales figures, consumer confidence, productivity, etc. Value of dollar in relation to foreign currencies affects imports and exports Socio-cultural analysis is based on customers and potential customers Changes in attitudes, lifestyles, opinions, demographic factors, etc. provide opportunities and threats to a business Changing technology can be a threat to one industry but an opportunity for others Companies that keep abreast of the newest technological breakthroughs can use that knowledge to be more competitive

Describe the impact of specific marketing regulations/laws on both domestic and international business.

Federal Trade Commision Act: prohibits unfair methods of comp Sherman Antitrust Act: outlawed contracts/agreements limiting trade or comp in interstate commerce and prevented predatory pricing (Also enforced by Antitrust division of the Justice Department) Clayton Antitrust Act: reduced loopholes in above act and covered mergers and acquisitions (Also enforced by Justice department) Hart-Scott-Rodino Amendment to the Clayton Act: required companies to notify antitrust agencies before planning a merger Robinson-Patman Act: prohibits price discrimination Sarbanes-Oxley Act: passed in response to corporate scandals involving misuse of company funds and unethical corporate governance Addresses accounting and proper reporting of a corporation's financial situation Whistle-blowing: involves reporting an illegal action of one's employer - if did so, would be protected Making a decision to be one involves personal ethics

Explain the concepts of scarcity and elasticity of demand.

Scarcity: difference between wants and needs and available resources Scarcity is the basic economic problem, and it forces nations to make economic choices Supply and demand Demand elasticity: degree to which demand for a product is affected by its price Elastic demand: change in price creates a change in demand Law of diminishing marginal utility: consumers will buy only so much of a given product even though the price is low Inelastic demand: change in price has very little effect on demand for a product Factors influencing demand elasticity (5) Brand loyalty Price relative to income Availability of substitutes Luxury versus necessity Urgency of purchase

Explain the social responsibility (e.g., environmental issues, ethical decisions, community involvement) of marketing in society.

Businesses are concerned about consumers' perceptions of a company & issues impacting customers Providing information to consumers Ad council: nonprofit organization that helps produce public service advertising campaigns for govt agencies and other qualifying groups Employing self-censorship Standards established by Federal Communications Commission (FCC) in broadcast industry Beyond that, network execs establish own policies for self-regulation Responding to consumer concerns Businesses also have means of providing community support Local businesses - often support community efforts E.g. fund Little League teams, sponsor holiday food drives, act as drop off centers for Food Banks, etc. Large companies - have guidelines and initiatives that clearly define how they see their role in supporting community causes International businesses World Business Council for Sustainable Development (WBCSD): coalition of international companies with a mission involving social responsibility Includes Coca Cola, AT&T, Shell, Time Warner, Dow Chemical, etc. Socially responsible companies usually concerned about environment Cleaner fuel- vehicle fuels including certain types of alcohol, electricity, natural gas, and propane rather than gasoline Green marketing: companies make an effort to produce and promote environmentally safe products Often labeled as ozone-safe, recyclable, environmentally friendly, biodegradable, etc. Increasingly important for companies to build consumer loyalty Often consumers willing to pay for more environmentally friendly products

Distinguish between consumer and capital economic goods and services.

Consumer good ~ goods used by the final consumers and that have no future productive use Capita good ~ any good deployed to help increase future production Most common: property, plant, equipment (PP&E)

Describe the process for new product and service development (e.g., conception, development, and test marketing).

Generating ideas Variety of sources: customers, competition, channel members, employees, etc. Focus groups of customers to generate new product concepts Companies that manufacture - use a task force to approach product development Venture teams - independent of any department, responsible for developing new products not part of existing business Screening ideas Matched against company's overall strategy Evaluated for potential conflicts w/ existing products Might involve concept testing w/ customers Developing a business proposal Evaluate product in terms of size of market, potential sales, costs, profit potential, technological trends, overall competition, level of risk, etc. Production requirements must be considered Developing the product New product idea takes on physical shape and marketers develop marketing strategy Make plans related to production, packaging, labeling, branding, promotion,and distribution Technical evaluations - see if product is practical to make Tests on products to see how they'll hold up during normal and not-normal use by consumer Govt required testing for some products (e.g. GMOs, prescription drugs, etc.) Testing the product with consumers Test marketed in certain geo areas to see if accepted by consumers Sometimes may not do this b/c of cost or don't want to delay etc. Introducing the product (aka Commercialization) Can be expensive but important to advertise to introduce benefits of the product to consumers Evaluating customer acceptance By studying sales info for example

Discuss balance of trade, trade barriers, and concepts of tariffs

International trade: exchange of goods and services among nations, which occur among businesses but are controlled by governments of nations involved Imports: goods and services purchased from other countries Exports: goods and services sold to other countries Nations impose trade barriers when they want to limit trade (mainly tariff, quota, embargo) Tariff: a tax on imports (aka duty) Produces revenue for a country Protective tariff: a high tariff of which the purpose is to increased the price of imported goods so that domestic products can compete with them Quota: limits either the quantity or the monetary value of a product that may be imported Sometimes one trading partner voluntarily puts quotas on exports to improve relations with another country Embargo: a total ban on specific goods coming into and leaving a country May be imposed for health reasons or political reasons Politically based embargos may last for very long times (e.g. 30 yr embargo on Vietnam / embargo against Cuba) Protectionism: a government's establishment of economic policies that systematically restrict imports in order to protect domestic industries Opposite of free trade (e.g. done so by tariffs and quotas) Subsidizing domestic industries also allows them to be more competitive against foreign competition

Identify shipping and receiving processes.

Manufacturing companies depend on suppliers to deliver parts / raw materials used for products accurately and on time When received into stock- info must be recorded and tracked Whether receives raw materials / merch for resale, needs a process to handle the items Steps in stock handling process: receiving goods, checking them, marking goods w/ info, maybe delivering them to a place where used, stored, or displayed for sale Prior to accepting merch must make sure correct part delivered and right number (job of receiving clerk) Stock ordered by a business is received, checked, and often marked w/ selling price Where stock placed when received depends on type/size of business Sometimes area of loading dock or first floor to receiving or small businesses may use back room Large businesses/chain stores may have separate warehouses or distribution centers where stored until taken to department store Receiving record:where information recorded about the goods it receives (either manually or electronically) Items on the record depend on the needs of the business Each set of goods assigned a receiving number Sometimes this number recorded on a record called apron ~ form that is attached to the invoice that accompanies goods received before move through checking and marking Prevents payment of duplicate invoices (b/c paid only when proper info recorded on the apron) Merchandise is checked to verify quantity and condition Sometimes specially trained employees for this function Electronic data interchange systems have minimized the time for this process 4 methods to check merchandise: Blind check method: requires receiver to write the description of the merchandise, count the quantities received, and list them on a blank form or dummy invoice Dummy invoice then compared to actual invoice Considered most accurate method but time consuming Used when merch needs to be moved to sales floor but actual invoice not yet received Direct check method: merchandise is checked directly against the actual invoice or purchase order Faster than blind check but errors may not be found if invoice itself is incorrect Spot check method: random check of one carton in a shipment (such as one of every twenty) - carton checked for quantity and then one product in the carton is inspected for quality Rest of cartons assumed to be the same Quality check method: done to inspect the workmanship and general characteristics of the received merchandise Buyer often performs this check Merchandise checked to determine if quality of goods received matches quality of products ordered If goods damaged, damage report is prepared Upon return of merchandise, seller issues a credit memorandum Notification that buyer's account has been credited for the value of the returned merchandise

Explain the concept of target markets and market segmentation (e.g., demographics, psychographics, and geographic) and describe how it is used.

Target market: group identified for a specific marketing program Key to focus and success Market segmentation: process of classifying people who form a given market into even smaller groups (e.g. by age, price, desired features, etc.) To meet needs of various segments, develop unique marketing mix Have to decide which of the target markets to target Which markets company has an advantage to enable it to survive against its competition over a long period of time ~ sustainable competitive advantage Use data from governments, private research firms, trade associations, & own research Demographics: statistics that describe a population in terms of personal characteristics, such as age, gender, income, marital status, ethnic background, education, occupation, etc. Census often provides info to help decide age categories Baby Boom Generation (1946-1964) ~ Generation X/Baby Bust Generation ~ Generation Y Disposable income: money left after taking out taxes / Discretionary income: money left after paying for basic living necessities such as food, shelter, and clothing Geographics: segmentation of the market based on where people live Often relate closely to demographics b/c similarity among people in a certain area Psychographics: grouping people with similar lifestyles and shared attitudes, values, and opinions Behavioral: involves looking at benefits desired by consumers, shopping patterns, and usage patterns E.g. Some people, regardless of socio-economic status, desire luxury and premium merchandise Companies classify customers according to percentage of sales each group generates 80/20 rule: 80% of a company's sales are generated by 20% of its loyal customers Mass marketing: involves using a single marketing strategy to reach all customers Not as popular as it once was since most products can be segmented Niche marketing is current trend - markets are narrowed down and defined with extreme precision

Identify various forms and purposes of sales promotion (e.g., sweepstakes, coupons, contests, and specialty products).

Trade promotions: sales promotion activities designed to get support for a product from manufacturers, wholesalers, and retailers Promotional allowances: represent cash payments or discounts given by manufacturers to wholesalers or retailers for performing activities to encourage sales Cooperative advertising: manufacturer supports the retailer by helping to pay for the cost of advertising its product locally Slotting allowance: cash premium paid by manufacturer to retailer to help cover the cost of placing the manufacturer's product on the shelves Sales force promotions: awards given to dealers and employees who successfully meet or exceed a sales quota, like cash bonuses or merchandise or travel awards Trade shows and conventions: showcase a particular line of products Consumer promotion: sales strategies that encourage customers and prospects to buy a product or service Coupons: certificates that entitle customers to cash discounts on goods and services Premiums: low-cost items given to consumers at a discount or for free, designed to increase sales by building loyalty Coupon plans: ongoing programs offering a variety of premiums in exchange for labels or coupons obtained from a product or label Deals (price packs): offer short-term price reductions Incentives: promote many products because they create customer excitement and increase sales, generally are higher-priced products earned and given away through contests, sweepstakes, and rebates Product sample: free trial size of a product sent through mail, door-to-door, retail stores, trade shows Sponsorship has become an integral part of promotion, high-profile Promotional tie-ins (cross-promotion or cross-selling): involve sales promotional arrangements between one or more retailers or manufacturers that product mutually beneficial results Product placement: consumer promotion that involves using a brand-name product in a movie, television show, sporting event, or commercial Loyalty marketing programs (frequent buyer programs): reward customers for patronizing a company Online loyalty marketing Point-of-purchase displays: designed primarily by manufacturers to hold and display products, placed in high-traffic areas to promote impulse purchases

Explain considerations in Web site pricing

Website names: domain name registration Website homes: website hosting Building website: actual development Keeping it going: website maintenance

Explain concept and purpose of visual merchandising, display and trade shows to communicate with targeted audiences.

Visual merchandising: encompasses all of the physical elements that merchandisers use to project an image to customers Promotes interest in merchandise or services, encourages purchasing, and reinforces customer satisfaction Display: refers to visual and artistic aspects of presenting a product to a target group of customers Visual merchandisers responsible for total merchandise or service presentation, overall business/brand image, and building/placement of design elements Storefront: encompasses a store's sign or log, marquee, banners, awnings, windows, and exterior design, ambiance, and landscaping ~ project brand identity and help the company distinguish itself from competitors and surrounding stores Signs: designed primarily to attract attention, advertise a business, and project brand identity Original and easily recognized Name, letters, logo, materials, colors etc used to create store's image Marquee: architectural canopy that extends over a store's entrance Highly visible and company can exploit it for advertising E.g. may include store name, key products, hours of operation, phone number, etc. Entrance: usually designed with customer convenience and store security in mind Larger stores may have multiple Average mid size business needs at least two- one from street for pedestrians and one from adjacent to parking lot for those who drive Window displays: especially useful for visual merchandise Initiate selling process, create excitement, and attract prospects Interior displays- if done well enable customers to make selections w/o clerk assistance Five types: closed displays, open displays, architectural displays, point-of-purchase displays, and store decorations (diff situations call for diff types of displays) Architectural- model rooms to see how merch may look in their homes Store decs- often coincide with seasons or holidays Open- allows customers to handle and examine merch w/o help of salesperson Closed- allows customers to see but not handle merch Point-of-purchase displays (POPs): consumer sales promotion device designed to promote impulse purchases (usually more effective with new than established products) Kiosk: interactive POPs typically 4 ft high, w/ high tech screens,, etc. Growing popularity b/c of immediate product availability, more reliable technology, etc. Most popular are the ones w/ digital cameras Props (aka properties) are special display elements generally classified as decorative or functional Decorative include background scenery etcl Functional include items that hold merch (mannequins, shirt forms, etc.) Trade shows and conventions: showcase a particular line of products

Identify examples of service extensions (e.g., product warranty, technical support, or service contract).

Warranty: a promise or guarantee given to a customer that a product will meet certain standards (typically apply to materials, workmanship, and performance) Difference btwn guarantee and warranty is promotional value of the promise Guarantee usually used with things like "satisfaction guaranteed" Warranty usually framed as a series of specific promises Warranties help increase sales and profits - consumers take it into consideration Direct a company to focus on customer satisfaction Require company to adhere to performance standards Generate customer feedback Encourage quality in product development Boost promotional efforts Express warranty: one that is explicitly stated, in writing or verbally, to encourage a customer to make a purchase (if written can appear on product packaging, product literature, advertisement, picture on the box, etc.) Full warranty: guarantees that if a product is found to be defective within the warranty period, it will be repaired or replaced at no cost to the purchaser Limited warranty: may exclude certain parts of the product from coverage or require the customer to bear some of the expense for repairs resulting from defects Implied warranty: one that takes effect automatically by state law whenever a purchase is made Warranty of merchantability: seller's promise that the product sold is fit for its intended purpose Warranty of fitness for a particular purpose: used when the seller advises a customer that a product is suitable for a particular use, and the customer acts on that advice Extended warranties or service contracts provide repairs or preventive maintenance for a specified length of time beyond a product's normal warranty period Pay extra for such a contract at the time of purchase Business benefit w/ extra money on original sales and customer w/ assurance of long term satisfaction

Identify and explain the factors that influence a product's price (e.g., cost, quality, competition, and brand loyalty).

ost oriented pricing: marketers first calculate costs of acquiring or making a product and their expenses of doing business - then add projected price margin to these figures to arrive at a price Markup pricing: resellers add a dollar amount (markup) to their cost to arrive at a price Markup (usually a percent) is difference btwn price of an item and its cost Used primarily by wholesalers/retailers (involved in acquiring goods for resale) Markup high enough to cover expenses of running business and include intended profit Cost-plus pricing: all costs and expenses are calculated and then the desired profit is added to arrive at a price Used primarily by manufacturers and service companies More sophisticated than markup b/c all fixed/variable expenses calculated separately Fixed expenses - do not change based on productions Variable expenses - associated with production of the good/service and include costs related to labor and supplies Demand-oriented pricing: determine what consumers willing to pay for given goods and services Key to this method is consumer's perceived value of the item Relies on basic premises of supply-and-demand theory and on demand elasticity factors (on basic level more demand more a business can charge) Competition-oriented pricing: may learn of comp's prices and choose to price above, below, or in line with competition No relationship btwn cost and price or btwn demand and price Competitive-bid pricing: determines the price for a product based on bids submitted by competitors to a company or govt agency One price policy: all customers are charged the same prices (quoted by means of signs and price tags and no deviations permitted) Usually employed by retail stores Flexible price policy: customers pay different prices for the same type or amount of merch Allows for bargaining Avoided by retail stores b/c can cause legal problems and keeps some customers away Common for certain goods (e.g. cars, antiques, etc.) Disadvantage - not consistent profits and can be difficult to estimate sales revenue

Explain how a Web site presence can be used to promote a business or product

3 Principles in E-marketing: Entice visitors to your e-commerce website through: Search engine optimization Pay-per-click campaigns Public relations - news releases, articles, and stories Online advertising Convert visitors into customers through In site promotions Product discounts Customer recommendations Opt-in email promotions Website usability Encourage repeat customers through: Quality products Competitive pricing Building relationships Increasing per-customer purchases After sale marketing and relationship building

Describe the concepts and techniques used in selling and explain the steps in the selling process

7 Steps of selling process: 1. Approaching the customer: Critical step determining the mood, be perceptive and alert to customer's interest, put customer at ease Business-to-business selling Arriving early, prior research Retail selling Service approach: salesperson asks the customer if he or she needs assistance Ask open-ended questions Greeting approach: salesperson simply welcomes the customer Use a rising tone to your voice Merchandise approach: salesperson makes a comment or asks questions about product in which the customer shows interest Usually the most effective initial approach Immediately focuses attention on the product Can clear up confusion about features Using conversation skills to be engaging 2. Determining needs 3. Presenting the product 4. Overcoming objections 5. Closing the sale 6. Suggestion selling 7. Relationship Building Consultative selling: providing solutions to customer's problems by finding products that meet their needs Analysis of customer needs combined with product knowledge is its essence To be effective should also be trained in feature benefit selling Feature benefit selling: matching the characteristics of a product to a customer's needs and wants

Explain the factors that influence customer buying motives and decisions.

Customer buying motives Rational motive: a conscious, logical reason for a purchase (time, monetary savings) Emotional motive: a feeling experienced by a customer through associate w/ a product (social approval, love, prestige) 3 forms of customer decision making Affected by many factors: Previous experience, how often product is purchased, amount of ino to make a wise decision, importance of purchase, perceived risk, time to make decision Extensive decision making: used when there has been little or no previous experience with an item (often high risk, expense, or value to a customer- e.g. first home) Limited decision making: used when a person buys goods and services that he or she has purchased before but not regularly (moderate risk, needs some info- second car) Routine decision making: used when a person needs little information about a product (inexpensive, bought frequently, high satisfaction, etc.- e.g. groceries) Customers w/ developed brand loyalty for a product

Demonstrate the ability to translate product knowledge/customer service information into customer benefits.

Customers do not buy products but what those products do for them Product features: basic, physical, or extended attributes of the product or purchase Salesperson should know how these may benefit the customer Most basic feature is its intended use Physical features differentiate competing brands and models Additional features add more value to product and provide reasons for price differences across product models Customer benefits: advantages or personal satisfaction a customer will get from a good or service How does the feature help the product's performance? How does the performance information give the customer a personal reason to buy the product? Can make a feature-benefit chart after determining product features and customer benefits

Identify ethical issues and their impact on marketing.

Ethics: guidelines for good behavior- based on knowing difference between right and wrong Consumerism: involves the relationship of marketing to those who buy a company's goods or services --> societal effort to protect consumer rights by putting legal, moral, and economic pressure on business - consumers have 4 basic rights To be informed and protected against fraud, deceit, and misleading statements, and to be educated in the wise use of financial resources To be protected from unsafe products To have a choice of goods and services To have a voice in product and marketing decisions made by govt and business Ethical issues that can arrive with businesses Price gouging: pricing products unreasonably high when the need is great or when consumers do not have other choices Issues of privacy Industries maintaining customer databases w/ personal info have responsibility to keep the info private Product + marketing research must report findings honestly by disclosing all facts involved in research design and results Selling practices - bribes, kickbacks, favors, and high pressure tactics Cultural issues complicate these issues Often hard to draw the line between gesture and bribery/kickback Why companies impose strict rules against offering any type of gift to customers and against accepting gifts High pressure selling tactics and failure to follow through on promises made to close a sale Ultimately, management makes decisions about major ethical issues confronting a business Employees at all levels should follow decision making process to make right ethical choices Get the facts Identify all parties concerned Think of all your alternatives Evaluate your alternatives by asking yourself questions

Examine the role of salespersons in building customer relationships

Every interaction btwn salesperson and customer develops sales relationship Must make the customer feel important and valued and respected Must know what you are talking about so to make the best sale for both the seller and the consumer

Explain the concept of economic resources (e.g., land, labor, capital, and entrepreneurship)

Factors of production: resources (land, labor, capital, and entrepreneurship) Land: everything contained in the earth or found in the seas (raw material) Labor: all the people who work Capital: money to start and operate a business Includes raw materials that have been processed into a more useful form (such as lumber or steel) Includes infrastructure: physical development of a country, including its roads, ports, sanitation facilities, and utilities, especially telecommunications Entrepreneurship: skills of people who are willing to invest their time and money to run a business

Explain ways that government regulations/laws affect pricing practices (e.g., price discrimination and collusion).

Price fixing: when competitors agree on certain price ranges within which to set their own prices Proved only with evidence of collusion, or communication among competing firms to establish a price range Illegal because it eliminates competition Sherman Antitrust Act of 1890 - federal law against price fixing that outlawed monopolies Price discrimination: occurs when a firm charges different prices to similar customers in similar situations Clayton Antitrust Act of 1914 defines price discrimination as creating unfair competition Robinson-Patman Act of 1936 strengthens this, prohibiting sellers from offering one customer one price and another customer a different price if both customers are buying the same product in similar situations Intended to help smaller retailers compete with large chain stores Unit pricing: allowed customers to compare prices in relation to a standard unit or measure Resale price maintenance 1975 Consumer Goods Pricing Act outlawed practice of punishing retailers (by manufacturers who would force them to sell at a certain price) Manufacturers can suggest resale prices in advertising, price tags, price lists, agreements Cannot coerce, be anti-competitive Unfair Trade Practices Law (Minimum Price Law) prevents large companies with market power from selling products at very low prices to drive out their competition Loss leader: item priced at or below cost to draw customers into a store (in states where minimum price laws are not in effect) Price Advertising FTC (Federal Trade Commission) has developed guidelines for advertising prices Forbids advertising a price reduction unless the original price was offered to the public on a regular basis for a reasonable and recent period of time Company may not say its prices are lower than competitors' prices without proof based on a large number of items Premarked list or list price cannot be used as the reference point for a new sale price unless the item has actually been sold at that price Bait-and-switch advertising: Firm advertises a low price for an item it has no intention of selling, is illegal Price ethics Price gouging - unethical, if you set a price higher than normal for a product in high demand `

Identify sources of primary and secondary data.

Primary data: data obtained for the first time and used specifically for the particular problem or issue under study Survey method: research technique in which information is gathered through surveys, most common Sample: part of target population that represents it accurately Technological methods - online surveys, focus group chat sessions Interviews - focus group interviews (8-12 people) Observation method: research technique in which the actions of people are watched and recorded by cameras or observers Point-of-sale research: powerful form of research the combines natural observation with personal interviews to get people to explain buying behavior Experimental method: research technique in which a researcher observes the results of changing one or more market variables while keeping controls Secondary data: have already been collected for some purpose other than the current study Obtained from internal sources such as marketing information system of a business Internet sources U.S. and state government sources Specialized research companies Business publications and trade organizations Advantages of secondary data - obtained easily Disadvantages of secondary data - not suitable for problem under study, potentially inaccurate

Identify the advantages and disadvantages of each type of advertising and promotional media. (e.g., radio, television, direct mail, outdoor, and newspaper).

Print media: oldest and most effective types Newspaper advertising - flexible, low-cost, limited shelf-life Magazine advertising - longer life span, variety, cost higher, needs planning Direct mail - highly focused, can have low responses, image problem Printed or electronic direct-mail advertising Directory advertising - relatively inexpensive E.g. White Pages or Yellow Pages for listings Outdoor advertising - highly visible, relatively inexpensive, often restricted Standardized: Outdoor signs Non-standardized: used by companies at their places of business or in other locations throughout the community E.g. logos at buildings Transit advertising: found on public transportation Broadcast media: encompass radio and television Television advertising - compelling, but highest production costs Radio advertising - Mobile medium with immediacy and not as costly, but have a short life span and no visual involvement Online advertising: uses email or World Wide Web Banner and pop-up ads Specialty media: sometimes called giveaways or advertising specialties - relatively inexpensive, useful items featuring an advertiser's name or logo Must be practical, used frequently, and be highly visible Other advertising media In-store advertising

Explain the concept of product mix and describe types of product mix strategies for various product classifications.

Product mix = includes all the different products that a company makes or sells Width ~ number of product lines sold Length ~ number of total products or items in a company's product mix Depth ~ pertains to total number of variations for each product Consistency ~ pertains to how closely related product lines are to one another In terms of use, production and distribution Product mix strategy is a plan for determining which products a business will make or stock Small companies usually start w/ high consistency but limited width/depth/length Over time usually differentiate products and acquire new ones Expansion strategy - increasing width, length, or depth Contraction strategy - narrow the product mix, by eliminating full lines or simplifying assortment within a line Alteration of existing product - improve/establish products which are more profitable and less risky than existing products Positioning strategy - image that the product projects in relation to competitive products and other products marketed by the same company

Describe factors (e.g., features/benefits, price/quality, competition) used by marketers to position product/business

Product positioning: refers to the efforts a business makes to identify, place, and sell its products in the marketplace - focus is the image that a product projects - goal to set the product apart from competition Positioning by price and quality May offer economy, mid-priced, and luxury line Positioning by features and benefits Products associated w/ feature, attribute, or customer benefit Positioning in relation to the competition Positioning in relation to other products in a line

Identify major promotional activities used in marketing and the benefits of each.

Product promotion: convincing prospects to select its products or services instead of a competitor's brands Institutional promotion: used to create a favorable image for a business, help it advocate for change, or take a stand on trade or community issues

Identify the elements of the marketing mix (e.g., product, price, place, and promotion) and describe its contribution to successful marketing.

Product: choosing what products to make and sell Research, development of product features, what to do with current products Place: the means of getting the product into the consumer's hands Determine how and where a product will be distributed Price: what is exchanged for the product Price strategies: arriving at the list price or manufacturer's suggested retail price, discounts, allowances, credit terms, payment periods for industrial customers Special promotional marketing Promotion: decisions about advertising, personal selling, sales promotion, and publicity Promotional strategies: deal with how potential customers will be told about a company's products, including the message, media selected, special offers, and timing of the promotional campaigns

Explain storing (e.g., cold storage, commodity, bulk) and warehousing options (e.g., distribution centers, public, and private) and procedures to store merchandise until needed.

Storage: a manufacturing function that refers to the holding of goods until they are sold Inventory: amount of goods stored Products stored until orders are received from customers Might also need to be stored b/c production exceeded consumption or demand decreases Sometimes agricultural commodities may be available only during certain seasons Commodity storage makes products available year-round and ensures that price remains relatively stable Sometimes buy in quantity to get discounts on purchases then store them until needed May be stored at convenient locations to provide faster delivery Costs involved include: space, equipment, and personnel Also means spending money (capital) on inventory rather than investing it in another activity to provide a larger return Most products stored in warehouses (goods received, identified, sorted, stored, and dispatched for shipment) Private warehouse: facility designed to meet the specific needs of its owner Valuable for companies that move a large volume of products Can build in specialized conditions (e.g. temp controlled environment) Often house other parts of business ops (e.g. offices) Disadvantage: costly to build and maintain Should only be considered if significant amt of merchandise needs to be stored thus making total operating costs less than that of public warehouse Public warehouse: offers storage and handling facilities to any individual or company that will pay for its use Rent space but also provide other services to business E.g. shipment consolidation, receiving, unloading, inspecting, reshipping, order filling, truck terminal op services, etc. Helpful if businesses have low to medium volume storage or seasonal production Distribution center: warehouse designed to speed delivery of goods and to minimize storage costs Main focus is to sort and move products (not store them Planned around markets rather than transportation requirements Cut costs by reducing number of warehouses and eliminating excess inventory Some businesses (like paint companies) use distribution center to physically change the product - mix ingredients, label, and repackage shipments to retailers Also consolidate large orders from many sources and redistribute them as separate orders for individual accounts or stores within a chain Bonded warehouse: store products that require the payment of a federal tax Imported or domestic products cannot be removed until required tax paid Businesses can save on taxes when only taking goods out of storage and paying tax only when needed

Describe the influences of supply and demand on pricing and the concept of price elasticity.

Supply: amount of goods producers are willing to make and sell Law of supply: economic rule that price and quantity supplied move in the same direction Demand: consumer willingness and ability to buy products Law of demand: economic principle that price and demand move in opposite directions Price elasticity: measure of the relationship between a change in the quantity demanded of particular good and a change in its price % in quantity demanded / % change in price Product considered elastic if small change in price but large change in quantity demanded

Identify ways to obtain market data for market research (e.g., surveys, interviews, and observations)

Survey method: research technique in which information is gathered through surveys, most common Sample: part of target population that represents it accurately Constructing the Questionnaire A questionnaire has validity when the questions asked measure what was intended to be measured Research questionnaires have reliability when a research technique produces nearly identical results in repeated trials Writing Questions Open-ended questions vs Forced-choice questions (Yes/No, Multiple-Choice, Rating Scale, Level of Agreement) Basic Guidelines for writing questions Clear and brief Avoid bias Formatting Content formatting can be grouped together Administering the Questionnaire In-person surveys Incentives Technological methods - online surveys, focus group chat sessions Interviews - focus group interviews (8-12 people) Observation method: research technique in which the actions of people are watched and recorded by cameras or observers Point-of-sale research: powerful form of research the combines natural observation with personal interviews to get people to explain buying behavior Experimental method: research technique in which a researcher observes the results of changing one or more market variables while keeping controls

Identify ways to obtain market data for market research (e.g., surveys, interviews, and observations).

Survey method: research technique in which information is gathered through surveys, most common Sample: part of target population that represents it accurately Constructing the Questionnaire A questionnaire has validity when the questions asked measure what was intended to be measured Research questionnaires have reliability when a research technique produces nearly identical results in repeated trials Writing Questions Open-ended questions vs Forced-choice questions (Yes/No, Multiple-Choice, Rating Scale, Level of Agreement) Basic Guidelines for writing questions Clear and brief Avoid bias Formatting Content formatting can be grouped together Administering the Questionnaire In-person surveys Incentives Technological methods - online surveys, focus group chat sessions Interviews - focus group interviews (8-12 people) Observation method: research technique in which the actions of people are watched and recorded by cameras or observers Point-of-sale research: powerful form of research the combines natural observation with personal interviews to get people to explain buying behavior Experimental method: research technique in which a researcher observes the results of changing one or more market variables while keeping controls