marketing exam 2
21. As with the case of Samsung, many companies develop an IOT strategy? What is IOT and what effect will it have on the economy?
"internet of things"-a global environment where everything will be digitally connected, in sync with life
break even volume
fixed costs/(price-variable costs)
fad
a temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity -may be part of a life cycle or a fad may comprise a brands or products entire life cycle
7. What is the purpose and use of a Brand Logo and why are some companies doing "makeovers"?`
-logos are made to be quickly identifiable, positioning, recognition from consumers -makeovers for the digital age (may stand out better on certain devices)
8. What is the value of the "Lexus Covenant" for communicating with their customers?
-lexus' high quality support services create an unmatched car ownership experience and some of the worlds most satisfied car owners -creates unmatchable customer experience and satisfaction
International product and service Introduction must consider several critical issues. Name several issues and what the risks when introducing those products in other countries or regions.
-acquiring/dropping products(legal obligations to those who have stake), patent protection(obey patent laws, cannot illegally make another company established product), product quality(fda and regulations regarding safety of prod) and safety, and product warrenties (suing) -
individual product marketing: branding
-add value to consumers purchase b/c of identification for maker through symbol of sort -identifying products -loyalty -brand name becomes basis for whole story built on products special qualities
63. What is "Dynamic pricing" and how does Amazon implement it?
-adjusting prices continually to meet the characteristics and needs of individual customers and situations -amazon is automated, changes prices based on host of marketplace factors
57. Apple Computer gets a strong premium price for their product and rarely discounts. Their competitors like Xiaomi have created a cheaper alternative for their phone. How should Apple counter this type of competition?
-apple user experience -low end products don't fit their operating style or premium positioning -catering to burgeoning numbers of more affluent consumers in those markets who want and can afford the luxury
47. The airline industry pricing practices and the Spirit Airline strategy has many interesting rules? Describe Spirit Airlines pricing practices, like "ala carte" or auction-based pricing. What is the pros and cons? Why consumers like or dislike their methods?
-base fare and then you can add on whatever you want for an upcharge -pros: good option for cheap flying-just pack light and look at policies beforehand (more money for your destination) -cons: uncharge for every ******** thing, squished seating, risk for delays
32. Important decisions must be made by a company at each step of the PLC. In the introduction stage, why must a toy maker look at in the current product line when introducing new products?
-becasue of external factors that might affect their sales
38. What are some of the reasons that carrying a weak product in decline can hurt the company and be very costly?
-carrying a weak product can be costly, for it may take up too much of management time. -often requires frequent price and inventory adjustments -keeping weak products delays search for replacements, creates a lopsided product mix, hurts current profits, and weakens company's foothold on future
53. Trader Joe's has a new Pricing Mix and marketing strategy that changes the nature of pricing decisions. How do they price? Good-Value or value-added pricing?
-cheap gourmet -frugal pricing, bargain, low price and customer perception of value -maintaining strategy based on price and adjusting the nonprime elements of the marketing mix -good value pricing model
62. When would you use "Price-Bundling" prices and what are the good and bad points?
-combining several products and offering the bundle at a reduced price -fast feood restaurants -promote sales of products consumers might not otherwise buy, but the combined price must be low enough
individual product marketing: product support services
-customer experience -keeping customer happy after sale to create relationship
70. Lululemon Stores takes prestige pricing to the limits. What do they do to get value and such high price products?
-customers drawn to ambiance -created a story of working out, nature, feeling good -is it worth it?
individual product marketing: labeling/logos
-describe several thing about product (who, were what) -support positioning and personality , brand customer connection -create feelings surround brands
67. Why are international prices hard to determine and what are the factors that go into setting them?
-economic factors (conditions, competitive situations, laws and regulations, retailing system) -customer perceptions and preferences may vary country to country -price has become key element in international marketing strategies attempting to enter less affluent emerging markets
56. Taco Bell uses price as a weapon to compete. What is their method and how does target marketing contribute to their strategy of what to charge?
-emphasize the everyday good value -keep prices extremely low -targeting a few different groups -one group solely buying off value menu -one group adding stuff on from value menu
37. What decisions must be made in the Growth Stage of the PLC to extend the life of a product?
-firm faces trade off between high market share and high current profit -by spending money on product improvement, promotion, and distribution, the company can capture a dominant position. -in doing so, gives max current profit in which it hopes to make up in the next stage
33. Google Moonshot has a development process that is unique? Describe the process.
-futuristic long shots that if successful will profoundly change how people live -would rather see products fail quick than drawn out -diverse but still connected to google's internet related information mission
individual product marketing: packaging
-hold/protect product but now marketing tool -customer recognition -product safety -competitive advantage with good recognition
40. How can a company make a lot of money even in the Maturity stage of a product?
-modifying the market and expanding the base -modify products: freshen up products for new consumers -modifying marketing mix-improving sales by changing one of more marketing mix elements, offer new or improved services to buyers (cut prices to attract new users)
multi brand
-offers a way to establish different features that appeal to different consumer segments, lock up more shelf space, capture larger market share
2. How was GoPro successful when they redefined their products with experiences?
-physical product: price, lightweight, helps people capture and share lives -capture(what cameras do), creation (editing and production process from raw to edited), broadcast (distributing content to audience), recognition(payoff for the content creator thru likes or shares -expanding into go pro studio, makes it easier to edit the go pro vids, future lies in enabling and integrating the full user experience-capturing vids, sharing stories, life emotions
44. Price is one of the biggest headaches for Executive management but also the biggest opportunity to improve profitability. Why do executives not want to deal with it?
-prices have direct impact on a firms bottom line, small % of improvement can lead to big profitability, smart marketers are embracing it as an important competitive asset
65. A Manufacturer likes setting a "Reference price" as a psychological marker.
-prices that buyers carry in their minds and refer to when they look at a given product
18. Airbnb has a successful business model that use all four characteristics of service. What do they do to make sure they are in tune with their target market?
-pricing location, differentiating from hotels
1. Why is the question, "What is a Product?" not so simple to answer?
-product: anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need -include more than just tangible objects (services, events, persons, places, ideas or a mix0
48. How does one practice Cost-Based Pricing and what is the advantage and disadvantage of this method?
-setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk -adv: lower costs can set lower prices that result in smaller margins but greater sales and profits -some companies pay higher costs to add value and claim higher prices and margins
55. Why must the Price Demand curve be studied before any strategy or decisions are made on price?
-shows the number of units the market will buy in a given time period at different prices that might be charged -each price the company might charge will lead to a different level of demand
34. Why was Alphabet formed by Google to help their new product develop management?
-spread encouragement of innovation -give workers resources to succeed and be creative
68. What are the different considerations when one changes, increase or decreases prices from the customer? From the competition? What is the purpose of the "low-price fighter brand"? How are "store brands" used to serve this function?
-successful price can improve profits -when raising, company must avoid being perceived as a price gouger, cost effective ways to produce or distribute products -COMPANY MSUT ASSESS EACH COMPEITITORS LIEKELY REACTION low price fighter brand-adding a lower price item to the line ir create a separate lower price brand, necessary if the particular market segment being lost is price sentitive -store brands can attract budget buyers away from lower priced rivals
26. In developing a "Marketing Strategy Statement, what does a developer include in their initial proposal?
-target market, planned value proposition, sales, market share, profit goals -price,distribution, marketing budget -planned long run sales, profit goals, marketing mix
A "Promotional Price" is set but there are often restrictions on them... what are they?
-temporarily pricing products below list price, and sometimes even blow cost, to increase short run sales -holiday season-bargain war -constantly redoing prices can erode a brands value in eyes of customer, deal prone customer
52. Why is the shopper at the Whole Foods store willing to use a different type of pricing philosophy at that store and what is their main criteria for shopping there?
-the perception of good value and healthy living -hip and cool -alluring assortment for high quality, flavorful, and natural foods
15. Why would someone want to "Co-Brand" their product and what are the potential problems?
-the practice of using the established brand name of two different companies on the same product -carefu;ly coordinate advertising, sales promotion, and marketing -tarnishing of one brand may hurt the other
23. Idea Generation is the life-blood of New Product Development and internal sources, external ideas, Crowd-Sourcing are all methods for new products to be introduced. How did Under Armour get new ideas from their "Future Show" method? How does Bose do it?
-they encourage entrepreneurs to come to under armor with their ideas to help jumpstart it
35. Mattel has been extremely successful managing the Product Life Cycle of the Barbie Doll? Describe what they have done and implemented and why is it so important for their survival.
-trying to introduce new young dolls when barbies revenue was falling -lisencing characters from movies like frozen -must develop faster, nimble, customer focused process for developing relevant new products and guiding them thru lifecycle -barbie vlogs and new stuff surrounding grown up barbie in life cycle
46. Customer "value-based pricing" is best determined in what whom and how?
-udrd buyers perceptions of value as key to pricing -marketing cannot design a product and marketing program and THEN set price -company asses customers needs and value perceptions, sets target price based on it, what costs can be incurred and resulting product design,
64. Segmented pricing" is used to pass along lower prices by segment, geography, demographic, age group or sex. Is this fair and why do they do it?
0selling a reduct or service at two or more prices, were the difference in prices is not based on difference in cost -has to be legal -should reflect real differences in customer perceived value
zone pricing
A geographical pricing strategy in which the company sets up two or more zones. All customers within a zone pay the same total price; the more distant the zone, the higher the price.
3. What is the difference of the three levels of Products - Core, Actual or Augmented? Give an example by using Apple iPad.
Core-what is customer buying? Ipad (entertainment, self expression, productivity and connection) mobile and personal window to the world Actual-name, parts, styling, operating system, features, packaging Augmented-provides consumers with complete connectivity solution (offering additional consumer services and benefits) icloud
51. How did the Ritchie Brothers establish price for their used Machinery and what did they do to increase that price? What is the advantage for the Seller when they use "auction-pricing"
Ritchie brothers-set a base price, auction based , created an experience around ???
42. Describe the current strategies of Amazon and Walmart in their current Price War for Online Supremacy? What approach and competitive strategy are each one using?
Walmart-dominates offline retailing, "price driven" positioning, price war, looking to integrate online buying with its stores amazon-walmart of the web, general store, ambition to offer everything online
style
a basic and distinctive mode of expression -once a style is invented, it may last generations, passing in and out of vogue -cycle showing several periods of renewed interest
convenience product
a consumer product that customers usually buy frequently, immediately, and with minimal comparison and buying effort
unsought products
a consumer product that the consumer either does not know about or knows about but does not normally consider buying
shopping product
a consumer product that the customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, and style
fashion
a currently accepted or popular style in a. given field -grow slowly, remain popular for a while and then decline slowly
product concept
a detailed version of the new product idea stated in meaningful consumer terms
uniform delivered pricing
a geographical pricing strategy in which the company charges the same price plus freight to all customers, regardless of their location
20. What are the many definitions of a "New Product" and why must a branding and marketing program be developed for each?
acquisition and new products (old products transformed)
What is Cost-Plus method of pricing?
adding a standard markup to the cost of the product -doesnt make sense generally (but sellers are more certain about costs than demand, price competition is minimized
product idea
an idea for a possible product that the company can see itself offering to the market
brand positoning
attributes, benefits, beliefs and values
10. Zappos successfully re-thought the "Telesales" model and adopted the "Deliver Happiness" theme to their clients. What was their secret of success in this new model?
by upping their treatment of the employees, they in turn are excited to make the customers happy bc they love the company and what it stands for
9. What are the four service characteristics that a company needs to know when designing a Marketing campaign?
intangibility, variabliity, inseparability, perishability
30. Intuit's "Design for Delight" philosophy has helped their product development in what way?
customer centered new product development: intuit says that product should delight customers by providing experiences that go beyond their expectations -empathy, calls, understanding, turning those ideas into actual products -collection of customer feedback is worthy
what is brand equity?
differential effect that knowing the brand name has on customer response to the product or its marketing -must stand out -high brand equity competitive advantage (loyalty) and it carries to credibility
What is the difference between passing along discounts or rewarding allowances?
discounts-price reduction to buyers who pay bills within days allowances-trade: turning in old item when buying new (promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way
69. Pharma pricing model is often criticized. What are the two sides of the argument for why Pharma prices are set the way they are? What is Predatory Pricing? Price fixing?
ethical dilemmas, competitive forces don't operate well-forcing prices of medicine to go up -predatory pricing-selling below cost with intention of punishing a competitior or gaining higher long run profits by putting competitior out of business price fixing-sellers must set prices without talking to competitors
line extension
extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category -low cost, low risk way to introduce new products -meet consumer desires for variety -shelf space
brand extension
extending an existing brand name to new product categories -create immediate new product familiarity and acceptance at lower development costs
39. How does a company nurture and develop a community of "Early Adopters" for their product?
idk
commericalization
introducing a new product into the market -might result in high costs-may spend a lot more on a advertising and markeitng
22. How does "Crowd Sourcing" help in new product development?
inviting broad communities of people-customers, employees, independent scientists and researchers, and even the public at large-into the new product innovation process (taping into vast sources can create new ideas)
specialty products
items with unique characteristics that buyers are willing to expend considerable effort to obtain
brand development
line extensions, brand extensions, multi brands, new brands
brand sponsorship
manufacturer's brand, privates brand, licensing, co branding
bassing point pricing
pricing in which the seller designates some city as a basing point and charges all customers the freight cost from that city to the customer
54. Who within an organization should set price? Product Developers, Finance, Sale, Marketing?
marketing?
internal marketing
orienting and motivating customer contact employees and supporting service employees to work as a team to provide customer satisfaction -make sure employees believe in brand so they can authentically deliver brand to customers
FOB origin pricing
pricing in which goods are placed free on board a carrier; the customer pays the freight from the factory to the destination
considerations in setting price
product costs (price floor), competition and other external factors(competitors strategies and prices, marketing strategy objectives, and mix, nature of the market and demand), consumer perceptions of value(price ceiling)
variability
quality of services depends on who provides them and when, where, and how
individual product marketing: Product Attribute
quality-affects product or service performance--value and satisfaction features-competitive tool for differentiating the company's product from competitors products style-appearance of product, grab attention and pleasing aesthetics design-products usefulness as well as looks
24. The "New Product Screening" process says one should ask three questions - R, W, W. This stands for - Is it real? Can we win? Is it worth doing? What does this mean?
screening new product ideas. to spot good ones and drop poor ones as soon as possible -is there a real need and desire for the product and will customers buy it? is there a clear product concept, and will such a product satisfy the market? does the product offer a sustainable competitive advantage? does the product fit the company's overall growth strategy, sufficient profit potential?
brand name selection
selection, protection
intangibility
services cannot be seen, tasted, felt, heard, or smelled before purchase
inseparability
services cannot be separated rom their providers
perishabiltiy
services cannot be stored for later sale or use
59. When a company practices "market - skimming" what are they doing?
setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales (apple products high price at start)
60. An aggressive approach to eliminate competition is "Market-penetration pricing". What is the goal and objective of this strategy?
setting a low price for a new product in order to attract a large number of buyers and a large market share -penetrate quickly -falling costs allowing companies to cut prices further
61. Printer manufacturers, Amazon Kindle and shaving companies often use "captive" pricing to make profits. How does it work?
setting a price for products that must be used along with a main product; blades for razor(hopes to make up for thin margin of sales of razors)
49. What are "Target-Profit Pricing" and "Break-Even Analysis" and how are they used to determine price?
setting price to break even on the costs of making and marketing a product or setting price to make a target return -break even: total cost and total revenue expected at different sales volume levels -if company wants to make a profit, they can use this model to showcase how many units it needs to sell
50. Why is "Competition-based pricing" method often preferred by the sales function? What are the pros and cons?
setting prices based on competitors strategies, prices, costs, and market offerings -how does company's market offering compare with competitors offerings in terms of value? If they perceive it high, they can charge more if not however, they have to price is lower -look at current competitors and what are their pricing strategies
58. What is Product Line Pricing? Give an Example.
setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors pricing (ex: quicken offers line of financial management software)
43. How is a "Price" created for each product and how is it validated by the marketplace?
the amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service -price is flexible, only element that produces revenue, creates and captures value
31. What is the PLC - Product Life Cycle and why is it important to understand?
the course of a products sales and profits over its lifetime 1. product development 2. introduction 3. growth 4. maturity 5. decline important because not all products follow all five steps
product mix
the set of all product lines and items that a particular seller offers for sale -width, length, depth, consistency
test marketing
the stage of new product development in which the product and its proposed marketing program are tested in realistic market settings _-gives marketer experience with product before going to the greater expense of full introduction, lets company test product and its entire marketing program
social marketing
the use of traditional business marketing concepts and tools to encourage behaviors that will create individual and societal well-being -it involves a broad range of marketing strategies and marketing mix tools designed to bring about beneficial social change
product image
the way consumers perceive an actual or potential product
12. How is a brands' value determined and why is it important?
total financial value, numbers -differentiation (what makes the brand stand out), relevance (how consumers feel it meets their needs), knowledge (how much consumers know about brand and esteem)how highly consumers regard and respect brand)
new branding
when power of existing brand is declining, or create new name when branching different category
