marketing 5

Know the difference between competitive, comparative, and corporate advertising.

Competitive advertising - influences demand for the brand and remind consumers about an existing brand Comparative advertising - compares two or more competing brands' and/or product attributes/features. Corporate advertising - promotes the company as a whole, rather than any one specific product/brand (i.e., to create goodwill toward the firm, improve its overall image)

Know the difference between continuous vs. pulsing vs. fligting media schedule

Continuous schedule maintains a steady stream of advertising throughout the year. Examples: Ivory soap, Charmin toilet tissue, Tide detergent Pulsing schedule varies the amount of advertising throughout the year based upon when the product is likely to be in demand (seasonal items). Examples: Thanksgiving, Christmas, and back-to-school sales; cold and flue medication, suntan lotion, soups Flighting is an intense form of pulsing, in which advertising appears in short "bursts" with periods of little or no activity

Know the difference between consumer and trade sales promotion

Consumer sales promotion - B2C activities targeting the ultimate consumer. Trade sales promotion - B2B activities target a marketing channel member (wholesaler, retailer).

Know the various external influences on consumer decisions: culture, subculture, social class, group membership, opinion leaders, and gender roles.

Culture represents the shared values, beliefs, customs, and tastes produced or practiced by a group of people. A subculture is a group that coexists with other groups within a larger culture. Members of a subculture share a distinctive set of beliefs, characteristics, or common experiences Social class is the overall rank or social standing of groups of people within a society, according to factors such as: Family background Occupation Education Income Group Membership When you go along with the crowd, you tend to act differently (i.e., consider riskier alternatives) than if you were by yourself. Opinion leaders are people who influence others' attitudes or behaviors, due to the expertise they hold on a subject Gender roles relate to society's expectations regarding appropriate attitudes, behaviors, and opportunities for men and women

Know the following terms: customer relationship management, one-to-one marketing.

Customer Relationship Management (CRM) involves systematic tracking of consumers preferences and behaviors over time in order to tailor the value proposition to each individual's unique wants and needs. One-to-One Marketing Having knowledge of the customer enables firms to market directly to a specific customer

Know the difference between the following: joint and derived demand.

Derived demand - demand for business products results from demand for consumer products. Joint demand - occurs when two or more goods are used together to create a product.

Know the difference between direct and indirect channel.

Direct channels - consists of a producer (manufacturer) of a product or service and a customer. Indirect channels - contains one or more channel intermediaries (agents, wholesalers, distributors, and retailers)

Know the five methods of entering global marketplace (.i.e., exporting, contractual agreement, strategic alliances, and direct investment).

Exporting If a firm chooses to export, it must decide whether it will attempt to sell its products on its own or rely on intermediaries to represent it in the target country. Export merchants are intermediaries a firm uses to represent it in other countries. Contractual Agreements Contractual Licensing - when one firm (the licensor) gives another (the licensee) the right to produce and market its product in a specific country in return for royalties on goods sold. Franchising is a form of contractual licensing agreement in which the franchisee obtains the right to adopt an entire way of doing business from the franchisor. Example: McDonalds in India Contract Manufacturing (outsourcing) - manufacturing that contracts with a firm in a foreign country. Done to save on labor, material, etc. Strategic Alliances A type of joint ventures that allows two or more companies (with one or more domestic firms in the target country) to pool resources for common goals Strategic alliances often allow easier access to new markets. Direct Investment Direct investment is when a firm expands internationally through ownership. This is often done by buying all or part of a business in the host country

Know the difference between various decisions: extended, limited, and habitual problem-solving

Extended problem-solving - high involvement, high cost, complex product, evaluate many brands, long time to decide, may experience cognitive dissonance Limited problem-solving - moderate-low involvement, moderate cost, few alternatives Habitual problem-solving - little involvement, low cost, simple product, frequently purchased

Know the difference between the following product line strategies: full-line vs. limited-line strategy, extending vs. contracting strategy

Full-line strategy (create products to target many segments) vs. limited-line strategy (target one segment) Extending strategy (creating new product in a line to fulfill unmet needs) vs. contracting strategy (reducing the number of items currently in a product line).

Know the difference between one-to-many vs. one-to-one communication model

In the one-to-many model, elements of the promotion mix are intended to reach many prospective customers at the same time. Advertising - reaches large numbers of consumers at one time via TV, radio, magazines, newspapers, etc. Consumer sales promotion - includes contests, coupons, or other incentives designed to build interest in or encourage purchase immediately. Public relations - communication activities like press conference and news releases that seek to create and maintain a positive image of an organization and its products among various publics, including customers, government officials, and shareholders In the one-to-one model, marketers communicate at a personal level. Personal selling - involves direct interaction between a company representative and a customer that can occur in person, by phone, or even over an interactive computer link. Direct marketing - refers to techniques used to get consumers to make a purchase via personal appeal. Direct mail - depends on the quality of the mailing list and the effectiveness of the mailing piece. Telemarketing - rising postage rates and decreasing longdistance phone rates has popularized this method. Catalogs - usually are created and designed for highly segmented markets

Know the various stages of the product life cycle (introduction, growth, maturity, and decline)

Introduction Stage of the PLC New products with well-known brands have an advantage. Many products never make it out of the introduction phase (95% fail) due to low awareness. Growth Stages of the PLC The product is accepted by the marketplace and sales increase rapidly. The company begins to make profits. Marketers' key objective is to encourage brand loyalty by convincing consumers of the brand's superiority Maturity Stages of the PLC Maturity is usually the longest phase of the PLC. Sales peak, but the high level of competition often results in "price wars" and frequent sales promotion, which narrow profit margins. Decline Stages of the PLC A steady decrease in sales and profits occurs. The root cause is product obsolescence (forced by new technology) or a radical change in consumer needs. Marketers typically must decide whether to stay in the game or phase out a product

Know the difference between the following growth strategies: diversification, market development, market penetration, and product development.

Market penetration strategies seek to increase sales of existing products to existing markets. Example: Quaker Oatmeal and General Mills' Cheerios have been aggressively advertising that the product can help lower cholesterol. Market development strategies introduces existing products to new markets. Example: Nintendo Wii gaming system has become popular with older consumers (especially tennis and golf). Product development strategies create growth by selling new products in existing markets. Example: Extending the firm's product line (i.e., new flavors, sizes, packages) or altering/improving the product (e.g., adding vitamins, reducing fat). Diversification strategies emphasize both new products and new markets to achieve growth. Example: Enterprise Rent-A-Car sells coffee thru Keefe Coffee Company

Know the current AMA definition of Marketing and the concept of exchange

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Exchange occurs when one party gives up something in return for receiving something else.

Know the following retailing strategies: mass merchandizing, scrambled merchandizing, and selling against the brand

Mass Merchandizing Strategy - retailing strategy using moderate to low prices (e.g., EDLP) on large quantities of merchandise and lower service to stimulate high turnover of products. Examples: Wal-Mart, Home Depot Scramble Merchandizing Strategy - retailers offering a wide variety of nontraditional goods and services under one roof. Such merchandisers offer one-stop shopping for many of the customers needs. Examples: Kroger, Walgreens Selling Against The Brand - stocking well-known branded items at high prices in order to sell store brands (private labels) at discounted prices. Example: comparing Johnson against Equate baby power

Know the characteristics of market segments: identifiable, measurable, substantial, accessible, and responsive.

Measureable: quantifiable both in size and purchasing power. Identifiable: have members with similar wants and needs that are different from those in other segments. Substantial: be large enough to be profitable.

Know the difference between cost-based vs. demand-based pricing

Most frequently used cost-based pricing is cost-plus pricing, where per unit costs are totaled and markup is added to arrive at the final price In demand-based pricing, a firm bases selling price on an estimate of volume it can sell in different markets at different prices.

Know the difference between oligopolies, monopolistic competition, and purely competitive markets

Oligopolies (airlines) typically attempt to avoid price competition and are more likely to price similarly in order to remain profitable. Monopolistic competition (Restaurants) focus on non price competition (service) because consumers are less likely to comparison shop (selling somewhat different product). Purely competitive market (agricultural products and commodities) do little to alter price.

Know the difference between a multichannel and Omnichannel

Omni-channel Marketing - seamless shopping experience whether shopping online, mobile device, phone, or brick-and-mortar

What is the purpose of a product package (e.g., functional, communication)

Package is the covering or container for a product. Serves both functional (utilitarian benefit) and communication purposes Functional purpose: contain, protect, store, recycle, etc. Communication purpose: promotion (color, words, shapes, designs, and pictures) and information (nutrition, ingredients, benefits, recipes, directions, warnings, toll-free phone numbers, UPS codes)

Know the following internal influences on consumer decisions: perception, motivation, beliefs, learning, attitude, personality, lifestyle

Perception is the process by which we select, organize, and interpret information from the outside world. Marketers want consumers to perceive messages in the manner in which they were intended. Three factors are necessary for this to occur. The person must be: Exposed to the message: capable of registering a stimulus Pay attention to the message: mentally process activity (cues) Interpret the message correctly: by assigning meaning Motivation is an internal state that drives us to satisfy needs by activating goal-oriented behavior Learning is a relatively permanent change in behavior caused by observation or experience. Attitudes represent lasting evaluations of a person, object, or issue Personality is the set of unique psychological characteristics that consistently influence the way a person responds to situations in the environment. Lifestyle reflects a pattern of living (how people choose to spend their time, money, and energy).

Know the difference between probability and nonprobability sampling

Probability sampling - each member of the population has some known chance of being included Nonprobability sampling - a sample in which personal judgment is used to select respondents

Know the difference between reach and frequency

Reach is the percentage (or number) of different target markets that will be exposed to the media vehicle (ad in USA Today) at least once during a certain time period (week, month). Frequency is the average number of times a person in the target group will be exposed to a message during a certain time period (month).

Know the difference between primary and secondary data

Secondary data - data someone has already collected/gathered. Example: Trade associations Primary data - data collected by the firm to address a specific question. Example: "identify an alternate target market for the product

Know the difference between survey and observation data

Survey methods - involve some kind of interview or other direct contact with respondents who answer questions. Observation methods - situations in which the researcher records consumer behavior.

Know the difference between the various legal considerations in global trade (i.e., tariff, import quotas, boycott, and exchange control).

Tariffs A tax levied on goods entering a country (e.g., US imposed a 30% tax on solar panels from China) Import quotas Limits set by a government on the amount of a product entering a country Boycott Not buying certain products from a country (e.g., not buying paper from Brazil - rainforest to protest deforestation) Exchange control Foreign exchange must be sold to the government

Know the difference between top-down budgeting vs. bottom-up budgeting

Top-down Budgeting Techniques - budget is established at the executive level Bottom-up Budgeting Technique - budget necessary to attain certain goals

Know the various types of innovations: dynamically continuous, discontinuous, and continuous.

A continuous innovation is a modification to an existing product. It is the bulk of new products. A dynamically continuous innovation is a pronounced modification to an existing product To qualify as a discontinuous innovation, the product must create major change in the way people live. This innovation is harder to predict

Know the difference between the following terms: brand name, brand mark, trade character, trademark, brand equity, individual brand vs. family brand, national vs. store brand, generic brand

Brand name - the part of a brand that can be spoken, including letters, words, and numbers Brand marks/logos - the elements of a brand that cannot be spoken Trade characters - mascots and fictional characters developed for advertising narrative. Trademark TM is the legal term for a brand name, brand mark, or trade character protected by the USPTO. Brand equity refers to a brand's value to its organization over and above the value of the generic version of the product Individual brand strategy is when marketers use an unique brand for each item in the product line. Best when it's important to clearly and concisely communicate what the consumer can expect from the brand. Example: P&G, Unilever Family brand strategy is when multiple product items share a common brand name. Provides instant equity for new products if the family brand is strong. National (manufacturers) brands are those produced and marketed by a manufacturer. Heavy advertisement, enhances dealers prestige Example: Green Giants Private label (store) brands are those which are offered by a retail store or chain under an exclusive trade name Generic brand is a strategy in which products are not branded and are sold at lowest price possible.

What are the benefits channel members provide? Also, know the various types of discrepancies in channels of distribution (e.g., temporal, quantity, etc.)

Breaking bulk (quantity discrepancy) - channel members purchase large quantities of goods from producers but sell only one or a few at a time to many different customers. Example: In India you can buy a single cigarette Creating assortments (assortment discrepancy) - channel members provide variety of products in one location, so customers can conveniently buy many different items from one seller. Example: Walmart.com (17M) and Amazon.com (357M) products Transportation (spatial discrepancy) and storage (temporal discrepancy) - occurs when retailers and other channel members move the goods from the production point to other locations where they can hold them until such time when consumers want them

Know the portfolio matrix strategies: Build, Hold, Harvest, and Divest

Build Provide long-term financial resources (to gain market share) if the SBU (e.g., Question Mark) has potential to grow (e.g., Star). Hold Preserve market share (maintain the status quo) if SBU is successful (e.g., Cash Cow). Use cash flow for other SBUs. Harvest Increase short-term cash flow (e.g., eliminate R & D, reduce promotion) with no concern for long-term impact (e.g., brand). Appropriate for all SBUs, except Stars. Divest Sell or close the SBU with low market share in lowgrowth markets. Best for some Question Mark and dogs.

Know the difference between conventional and vertical marketing system

Conventional marketing system - independent system Vertical marketing system - highly integrated system

Know the difference between channel power, channel captain, channel cooperation, and channel conflict

Channel power is the ability of one channel member to influence, control, and lead the entire channel. The channel leader (channel captain) is the dominant firm that controls the channel. A firm becomes the channel captain because it has more channel power relative to other channel members Channel cooperation is stimulated when the channel leader takes actions that make its partners more successful. Example: high intermediary profit margins, training programs, cooperative advertising, and expert marketing advice, are invisible to end customers but are motivating factors in the eyes of wholesalers and retailers. Channel conflict is a clash among the members of a distribution channel. Conflicts may occur if channel members: Have conflicting goals Fail to fulfill expectations of other channel members Have ideological differences (roles and responsibilities)

Know the various types of retailers (e.g., convenient stores, supermarkets, specialty stores, etc.)

Convenience Stores - neighborhood retailers that carry a limited number of frequently purchased items (highturnover convenience goods) and cater to consumers willing to pay premium for easy of buying close to home. Example: 7-11 Supermarkets - food stores that carry a wide selection of edibles and related nonfood products. Examples: Publix, Kroger, HEB Box Stores - food stores that have a limited selection of items, few brands per item, few refrigerated items. Items are displayed in open boxes. Example: ALDI, LiDL Specialty Stores - retailers that carry only a few product line (specialize) but offer a good selection within the lines that they sell. Merchandise is tailored to specific target markets. Example: Foot Locker, Big and Tall Outlet, Yankee Candle Co Category Killer - a large specialty store that carries a vast section of products within a given category. Examples: Staples, Home Depot, Lowe's, Best Buy Leased Departments - departments within a large retail store that an outside firm rents Examples: Picture Me and Wood Forest Banks - in Walmart Variety Stores - retailers that carry a variety of inexpensive items (started as five-and-dime stores - Woolworth's) Examples: Dollar General, Family Dollar, Dollar Tree Drugstore - retailers that stock pharmacy-related products and services as its main draw. Example: Walgreen, CVS, Rite Aid Supercenter - retailer that combines groceries and general merchandise with a wide range of services in one location Examples: Wal-Mart Supercenter, Super Target Department Stores - retailers that sell a broad range of items and offer a deep selection within each product line. Stores are organized into different departments. Examples: Macy's, Bloomingdale's, Nordstrom's Full-service department stores like Sears and JCP have struggled Discount department stores like Kohl's are doing much better Hypermarkets - retailers with characteristics of both warehouse stores and supermarkets with virtually everything from grocery items to electronics Example: Carrefour, Big Bazaar, Tesco Pop-up Stores - temporary retail spaces that a company erects to help build buzz for its products. Examples: Halloween costumes, X-mas gifts/decorations, Fireworks Examples: Traditional retailers (Target, Kate Spade, Gucci, and Louis Vuitton) have experimented with popups

Know the difference between the following consumer products: convenience, shopping, specialty, and unsought.

Convenience products are frequently purchased nondurable goods or services bought with minimal time and effort. Consumers expect them to be low priced and widely available Shopping products are goods and services for which consumers will spend time and effort to gather information on price, stores, product attributes, and product quality. Specialty products have unique characteristics (no substitutes) that are important to buyers at almost any price. Unsought products are goods and services for which a consumer has little awareness or interest until a need arises

Know the difference between: core, actual, and augmented product

Core product - all the benefits (the main reason for buying) the product will provide consumers or organizations. Examples: transportation, communication, affection Actual product - the physical good or delivered service that supplies the desired benefits Example: appearance, brand, package Augmented product - the actual product PLUS other supporting features. These can be changed or adapted by marketers to attract consumers.

Know the sources of competitive advantage: cost vs. differential advantage

Cost advantage: cheaper production/sourcing cost thus lower Prices Differential advantage: providing a superior Product

Know the difference between the following terms: elastic vs. inelastic demand; fixed vs. variable costs

Elastic demand is when changes in price have large effects (sensitive) on the amount demanded. Increase in price can negatively impact revenues. Example: groceries Inelastic demand is when changes in price have little or no effect (not sensitive) on the amount demanded. Increase in price may not impact revenues Variable costs are the per-unit costs of production that will change depending on how many units a firm produces Example: the costs to make a pizza (labor cost of cook, cost of ingredients, boxes for the pizza) Fixed costs are costs that do not change with the number of units produced. The average fixed cost per unit will always decrease as the number of units produced increases. Example: rent on the building, cost of equipment, salaried employees, electricity, water, insurance, and most marketing expenses

Know the 3 phases of the wheel of retailing (e.g., entry, trading-up, and venerability

Entry phase - new types of retailers enter the market by offering lowerpriced goods with little focus on additional services or the facility itself. Trading-up phase - these retailers gradually improve their facilities, quality and assortment of merchandise, amenities and increase prices. Venerability phase - retailers move up to a high-end strategy with superior facilities, desirable amenities (free gift wrapping), higher operating costs, and higher prices.

Know the various types of business products (e.g., equipment, MRO, raw materials, processed materials, and component parts)

Equipment (installations/capital equipment) - used in daily operations. Examples: robotics (manufacturing), conveyor system (warehouse), fork lifts (retailers). Maintenance, Repair, and Operating (MRO) goods are consumed relatively quickly, low cost, and non-technical. Example of maintenance items: light bulbs, mops Example of repair items: small tools, nuts, bolts Example of operating supplies: paper, toner, machine oil Raw materials are products of fishing, lumber, agricultural, and mining industries used in the final product. Examples: milk, soybeans, trees, iron ore, wheat Processed materials are produced by firms when they transform raw materials from their original state Examples: treated lumber, wheat flower Component parts are manufactured goods or subassemblies of finished items an organizations needs to complete their own goods Examples: tires, spark plugs, hard drives

Know what is a SWOT Analysis

Examination of internal and external environments Internal environment consists of controllable elements within firm. These represent key Strengths and Weaknesses. Example: Key technologies, Patents, Processes, Machinery, Financial stability, Supplier relationships, Corporate reputation, Human (skills, training, loyalty) capital, Strong brand (brand awareness, image, equity, market share), etc. External environment consists of factors outside the firm which could positively (Opportunity) or negatively (Threat) impact operations. Theses are largely beyond direct management control, so planning is critical. Example: PEST analysis - Political/Legal/Ethical trends, Economy, Sociocultural trends, Technology trends, and Competition. Managers often synthesize environmental analysis into a format known as SWOT analysis/matrix.

Know the difference between the various research methods (e.g., exploratory, descriptive, and causal).

Exploratory research is useful for gaining better understanding of the problem Examples: identify new strategies, new product opportunities, consumers attitude about a product, etc. Data collected is qualitative from a few people Focus groups - consist of 5-9 individuals who have agreed to participate in an in-depth discussion of the product or service in question. Case studies - examines a firm or organization thoroughly, often for the purpose of identifying how certain processes or procedures are accomplished (e.g., firm buys). Ethnographic studies - often visit people's homes to see how they store and use products and services. Descriptive Research Systematically investigate marketing problems Results are expressed in quantitative terms from a large representative sample Example: means, percentages, frequency, etc. Can be done using cross-sectional or longitudinal designs Cross-sectional studies systematically use instruments (e.g., questionnaires) to collect information from consumer samples at a single point in time. Longitudinal studies attempt to track changes over time, by collecting data from the same set of consumers at multiple points in time. Causal Research Attempts to identify cause-and-effect relationship Often involves experiments Utilizes independent and dependent variables Example: a marketer may be interested in learning the degree to which sales volume (dependent variable) will change, if the price (independent variable) of a product is raised.

Know the term marketing concept

Firm's that embrace the marketing concept constantly seek information about current or changing needs from current and potential customers using company initiated research efforts. Focusing on customer wants and needs to distinguish products from competitors' offerings Integrating all the organization's activities to satisfy these wants and needs Achieving the organization's long-term goals by satisfying customer wants and needs legally and responsibly Most modern marketers practice the marketing concept

Know the stages of the new product development process and what happens at each stage (e.g., idea generation, product concept development, screening, marketing strategy development... test marketing, commercialization)

Idea Generation (Ideation) Marketers use a variety of sources to come up with ideas for new products. Product-concept Development and Screening Marketers take the ideas generated and expand these ideas into more complete product concepts. Marketing Strategy Development Marketers need to identify a target market, estimating its size and potential, and determining how to position the product to effectively appeal to the selected target market. Business Analysis To be commercially viable, the product concept must make a positive contribution to the overall profit of the firm Technical Development Engineers begin refining the product concept, develop detailed blueprints, schemata, and actual product prototypes (are fully functioning test versions of the product) Market Test Test market is a geographic market in which the "test" takes place (expose the actual promotion, distribution, and pricing strategy planned for the final product launch). Commercialization Commercialization is a full scale launch of the new product (i.e., nationally all at once or specific geographic region).

Know the main purpose of marketing communication (e.g., inform, persuade, etc.)

Inform - introduction and early growth stage of PLC Example: explain how product works, increase awareness, suggest various uses, build brand image Persuade - late growth and early maturity stage of PLC Example: encourage brand switching, change customer perceptions of product attributes, stimulate purchase Remind - late maturity and early decline stage Example: keep the product/brand in consumers mind, tell customers where to buy the product, reinforce need Build relationships - all stages of PLC Example: encourage customers to be brand advocates, exchange information with customers, form a connection with consumers

Know the various categories of adopters for the diffusion process (e.g., innovators, early adopters, etc.)

Innovators Extremely adventurous Risk takers Well-educated, young, better off financially Early Adopters Concerned about social acceptance (group norms and values) Heavy media users Tend to be opinion leaders Early Majority Avoid being first or last Middle class consumers with above average education Deliberate and cautious Late Majority Older consumers Conservative (risk averse) Lower than average education and income Laggards Lower education and income Bound by tradition (buy only when they have no choice) Marketers rarely target them

Know the 4 characteristics of services (e.g., intangibility, inseparability, perishability, etc.)

Intangibility - services can't be seen, touched, smelled, etc. Services can't be inspected or tried prior to purchase More difficult to evaluate services offered by different providers Marketers provide physical cues Examples: cues include the "look" of the facility, its furnishings, lighting, cleanliness, employee appearance, web site, advertising. Perishability - services can't be stored for later sale or consumption and must be used when available. Capacity management allows firms to adjust their services to match supply with demand. Example 1: appointment slots to see the doctor Example 2: weekend flash sales by airlines Variability (heterogeneity) - even the same service performed by the same person will vary when delivered on different days or at different times. Difficult to standardize services Training can minimize wide variations in service delivery Mystery shoppers and customer feedback can be used to identify cases of poor service quality Variability actually allows different customers to customize services (e.g., unique hairstyles). Inseparability - it is impossible to separate the production of a service from its consumption Difficult to detach the expertise, skill, and personality of a provider from the firm's employees Disintermediation may occur Examples: self-service gas pump, self-checkout

Know the communication process. Also, know the term Integrated marketing communication?

Integrated Marketing Communication (IMC) involves the planning, execution, and evaluation of coordinated brand communication programs over time to targeted audiences via different touchpoints The communication process explains how organizations create and transmit messages.

Know the difference between the various types of distributions (e.g., selective, intensive, exclusive)

Intensive distribution - maximize coverage by selling through as many outlets as possible. The purpose is to maximize market coverage This strategy works best with convenience goods Exclusive distribution - limit distribution to a single outlet in a particular region. Most appropriate for specialty goods or high-priced items with limited number of buyers Selective distribution - seeks to strike a balance between intensive and exclusive distribution. Most appropriate for shopping products (appliances, furniture)

Know the difference between merchandise breath and merchandise depth. Also know the difference between narrow, broad, shallow, and deep assortment.

Merchandise breadth (variety) - number of different product lines Narrow assortment - convenience stores carry a limited selection of product lines (e.g., candy, cigarettes, soft drinks, soda, chips). Broad assortment - Costco and Sam's Club offer a wide range of product lines (e.g., from eyeglasses to barbecue grills). Merchandise depth: variety of choices available within each product line Shallow assortment - factory outlet store may sell a limited selection of men's dress shirts (only white and blue all made by the same manufacturer and only in standard sizes). Deep assortment - specialty store may sell a large selection of men's dress shirts (but not much else) in varying shades and in hard-to-find sizes.

Know the difference between the various buying situations (e.g., straight rebuy, modified rebuy, and new-task buy)

New-task Buy A situation requiring the purchase of a product for the first time (no experience). (Involves multiple individuals and vendors, high risk and uncertainty). Testimonials and reviews are critical. Modified Rebuy A situation where the purchaser wants some change in the original order. (New supplier for better price, quality, delivery time) (Examples: cell phone service, computers) Straight Rebuy A situation in which the purchaser reorders the same goods/services without looking for new info. or investigating other suppliers. (Examples: paper, toner)

Know the difference between store and nonstore retailing. Also know the term direct selling.

Nonstore retailing is any method a firm uses to complete an exchange that does not require a customer to visit a store Direct selling occurs when a salesperson presents a product to one individual or a small group, takes orders, and delivers the merchandise

Know the following terms: positioning, repositioning

Positioning is the process by which marketers develop a marketing strategy (4Ps) to influence how a particular market segment perceives a product or brand in comparison (relative) to the competition Repositioning establishes a new position in response to market changes (values and behavior).

Know the various B2B markets: Producers, Resellers, and Organizations.

Producers (OEMs) - are individuals or firms that purchase products for use in the production of other goods/services Examples: raw materials, component parts, etc. Resellers - are individuals or firms that buy finished goods for reselling, renting, or leasing. Examples: wholesalers, distributors, and retailers. Organizations Government - are organizations that buy goods and services to support their operations. Examples: federal, state, county, and local governments Not-for-profit institutions - are organizations that buy goods and services to carry out public objectives. Examples: churches, educational, hospitals, foundations, etc.

What are the elements of the marketing mix (4P's)? Know what each of them mean (i.e., know the definition of product, price, place, and promotion).

Product The specific combination of features, functions, benefits, and uses sought by consumers. This includes: Physical unit Package Warranty Service Brand Image Promotion Includes all activities marketers undertake to inform, educate, persuade, and remind consumers about their product. Role of promotion is to bring about exchanges with target markets by influencing attitude and/or behavior. Each element of the promotion mix is coordinated with the others to create an Integrated Marketing Communication (IMC) message. IMC includes integration of the Promotional Mix (e.g., Advertising, Public relations, Sales promotion, Personal selling, Social media Place Product availability where (location) and when (time) customers want them Ensures products arrive in usable condition at designated places when needed All activities (supply chain) from raw materials to finished products. Place decisions are closely tied to the channel of distribution (the set of firms that work together to get a product from a producer to a consumer). Price Price is what a buyer must give up ($, product) to obtain a product. It is the assignment of value The most flexible of the "4 Ps" (quickest to change) Most important competitive weapon Total Revenues = Price x Units Sold Whereas higher prices may communicate higher quality, lower prices (sale, coupon) may increase demand.

Know the following terms: product adoption, diffusion process

Product adoption is the process by which a consumer or business begins to buy and use a new good, service, or idea. Diffusion is the process by which the use of a product or innovation spreads throughout a population. The point where a product's sales spike from a slow climb to a new level is called the tipping point

Know the difference between product line depth and product mix width

Product line depth/length is determined by the number of separate product items (i.e., SKUs) the firm markets within a product line. The product mix width is the number of different product lines supported by a firm

Know the difference between the 4 main eras: production, sales, relationship, and triple-bottom line.

Production Era (Popular 1900s-1940s) Marketing dominated by a production orientation A management philosophy that emphasizes the most efficient ways to produce (manufacturer) and distribute products Marketing promotion played a minor role Most popular during the beginning of the industrial revolution, when demand for products outstripped supply (sellers market) and consumer needs were thought to be homogeneous. Examples: Henry Ford's Model T, Ivory soap, Apple's Iphone Sales Era (Popular: 1940s-1960s) Marketing dominated by selling orientation A managerial view of marketing as a sales function, or a way to reduce inventory. Emphasis on aggressive promotional activities Popular after World War II, when production capacity exceeded demand. Led businesses to focus on one-time sales (transactional marketing) of goods (customer acquisition) rather than repeat business (customer retention). "Marketing's image was damaged during this time." Examples: Automobile Dealerships, Time shares Relationship Era (Popular: 1960s-1990s) Marketing focused upon consumer orientation A management philosophy that emphasizes satisfying customers' needs and wants Here, marketing plays a central role in companies Brought about the emergence of the marketing concept Total Quality Management (TQM) gained wide acceptance as a philosophy that involves all employees from the assembly line onward in continuous product quality improvement efforts. This is given birth to the instapreneur (an Instant entrepreneur is someone who uses online retail outlets, like eBay and Amazon, to market products that would otherwise be too costly to promote). Triple Bottom-Line Era (Popular: 1990s-Present) Marketing focused on societal marketing orientation An organization exists not only to satisfy customer needs and wants but also to preserve society's long-term interests. Management seeks to maximize ROI measurement across all three of the following areas The Financial Bottom Line (Profits): building long-term bonds with customers which emphasize financial gains to stakeholders. The Social Bottom Line (People): contributing to the communities in which the firm operates The Environmental Bottom Line (Planet): creating sustainable business practices that minimize damage to the environment. Examples: Investment firms like BlackRock donate time (volunteer), donate products (books), donate money (1% of profits)

Know the 6 pricing objectives (e.g., profit, sales, etc.)

Profit objectives focus on a level of profit growth or a target net profit margin. Example: To improve profit margins from 3% of sales to 6% of sale by 2019 Sales objectives focus on the dollar or units sold Example: To increase sales of all products of the company by 3% per year for the next 5 years. Market share objectives attempt to increase market share. Example: To develop bundle pricing offers to increase market share next year Competitive effect objectives attempt to dilute the competition's marketing efforts. Example: To alter pricing strategy so as to increase sales when competitor's introduce a new product Customer satisfaction objectives focus on keeping customers for the long term. Example: To continuously monitor customer expectations and alter price to match those expectations Image enhancement objectives attempt to get customers to relate a high price to potentially better quality

Know the difference between pull and push strategy

Push strategy - the company focuses its efforts on convincing channel members to carry and promote the product to the next member in the channel, or in the case of the retailer, to the ultimate consumer. Focus heavily on personal selling expenditures and trade promotions designed to incentivize the wholesalers and retailers to help distribute the product. Example: Pharma sales representatives call on physicians Pull strategy - the marketer focuses promotional efforts and spending more towards the ultimate consumers. By creating awareness for and interest in the product, the marketer expects to "pull" the product through the channel

Know the various factors that affect the rate of adoption (e.g., relative advantage, compatibility, complexity, trialability, and observability)

Relative advantage is the degree to which a consumer perceives a new product as offering superior benefits. Greater relative advantage means faster adoption Compatibility is the extent to which an innovation is consistent with existing cultural values, customs, practices, and norms. Lack of perceived compatibility slows adoption Complexity refers to the degree to which consumers perceive a new product as difficult to understand and use. Higher the degree of perceived complexity the slower the rate of adoption. Trialability refers to the ease of sampling a new product and its benefits. Lower costs associated with trial usage can speed rate of adoption. Observability refers to the degree to which others can see the new product and the benefits it provides. An innovation that is more visible will drive more word-of-mouth communication, hence quicker adoption.

Know the various new-product pricing strategies (e.g., skimming, penetration, and trial)

Skimming price - a high initial price (to recover R & D costs) is charged with the price being reduced in the future (to attract new buyers). Promotion is also heavily used. Examples: the first VCR was priced at $1,200, the first HDTVs was priced at $32,000. Example 2: three months after introducing the iPhone at $599 in 2007, Apple dropped the price by $200, enraging those who paid full price (Apple offered them a rebate on future upgrades) Penetration pricing - the product is priced low permanently in order to build unit sales quickly (discourages competition). Trial pricing - sets a low price initially (for limited time), after which the price is raised to "normal" levels Example: Cable companies offer a low initial price to acquire new customers

Know the various steps of the hierarchy of effects model

Step A: Create Awareness Make members of the target market aware of the new product "Hunk" Example of promotional objective: "to create 80 percent awareness of Hunk cologne among 18 to 24 year-old men in the first six months." Execution of objective: use PR, advertising, social media Step B: Provide Knowledge Consumers may have heard of the name "Hunk" but may not really know anything about it. Example of promotional objective: "to communicate the connection between Hunk and muscle building so that 60 percent of the target market develops some interest in the product in the first six months." Execution of objective: position relative to other colognes Step C: Create Desire Create favorable feelings toward the product and convince at least some members of this group that they would rather splash on "Hunk" instead of other colognes. Example of promotional objective: "to create positive attitudes toward Hunk cologne among 50 percent of the target market and brand preference among 30 percent of the target market." Step D: Encourage Purchase The company needs to get some of the men who have become interested in the cologne to try it. Example of proportional objective: "to encourage trial of Hunk among 25 percent of 18 to 24 year-old men." Execution of objective: mailing samples of "Hunk" to members of the target market, use POS coupons Step E: Build Loyalty Customers decide whether to stay with "Hunk" after they've gone through the first bottle or choose a competitor. Example of promotional objective: "to develop and maintain regular usage of Hunk cologne among 10 percent of men from 18 to 24 years old." Execution of objective: maintain ongoing communication with current users to reinforce the bond they feel with the product.

Know the difference between structured and unstructured data

Structured data are quantitative data that (1) are typically numeric or categorical (2) can be organized and formatted in ways that is easy for computers to read, organize, and understand (3) can be inserted into a database in a seamless fashion. Unstructured data are qualitative in nature and do not possess all three of the properties of structured data.

Know the difference between the following: two-part pricing, price bundling, distribution-based pricing, quantity discounts, trade discounts, cash discounts, seasonal discounts, odd-even pricing, price lining, prestige pricing, bait-and-switch price, loss-leader pricing, and price discrimination

Two-part pricing - is appropriate for services or products that require separate payments to purchase the product. Example: a country club requires an annual membership fee plus separate fees related to usage (rounds of golf played, pool usage, number of meals eaten at the restaurant, etc.). Price bundling - the cost of the combined items is less than if each item were purchased individually Distribution-based pricing helps firms determine how they will handle the cost of shipping products to their customers Quantity discounts are useful for encouraging larger purchases, as the amount of the discount varies according to the quantity purchased Trade (functional) discounts set a percentage discount off of the MSRP for a channel member for performing a function Cash discounts are used to encourage customers to pay their bills promptly Seasonal discounts price reductions that are available only at certain times of the year. Odd-even pricing is where prices include both dollars and cents. Price lining is a practice in which a limited number of price points are set for items in a product line Prestige pricing is for status conscious consumers buying luxury goods. The fact that not everyone can afford to purchase an item is exactly what makes it desirable, more exclusive, and better. Bait-and-switch is illegal Advertise low-priced item to lure customers to store (bait) Arriving customers find product is out of stock and are offered more expensive item (switch) Ethical retailers should offer "rain-checks", order sufficient quantities, provide a substitute product, etc Loss-leader pricing is restrictive in some states Use very low prices to get customers into the store Making up the "loss" through sale of other products Some states have "unfair sales acts" forbidding loss-leader pricing Price discrimination - firms sell products to channel members at different prices in a way that "lessens competition

Know the difference between the various targeting strategies (e.g., undifferentiated, differentiated, concentrated, and customized).

Undifferentiated/mass targeting strategy - the marketer assumes that people have similar needs, and an attempt is made to appeal (using 4Ps) to a broad spectrum of people. Differentiated/multi-segment targeting strategy - marketers develop two or more marketing strategies (multiple 4Ps) for each of several customer groups. Concentrated/niche targeting strategy - firms that focus their efforts on a single segment. Customized marketing strategy - firms tailoring specific products to individual customers.