MKT Exam 1

Market Opportunity

A combination of circumstances and timing that permits an organization to take action to reach a particular target market

oligopoly

A competitive structure in which a few sellers control the supply of a large proportion of a product

monopolistic competition

A competitive structure in which a firm has many potential competitors and tries to develop a marketing strategy to differentiate its product

Monopoly

A competitive structure in which an organization offers a product that has no close substitutes, making that organization the sole source of supply

Value

A customer's subjective assessment of benefits relative to costs in determining the worth of a product

Strategic Business Unit (SBU)

A division, product line, or other profit center within the parent company

marketing information system (mis)

A framework for managing and structuring information gathered regularly from sources inside and outside the organization

market

A group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase those products

market growth/market share matrix

A helpful business tool, based on the philosophy that a product's market growth rate and its market share are important considerations in determining its marketing strategy

Customer Lifetime Value (CLV)

A key measurement that forecasts a customer's lifetime economic contribution based on continued relationship marketing efforts

Marketing Concept

A managerial philosophy that an organization should try to satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals

homogeneous market

A market in which a large proportion of customers have similar needs for a product

heterogeneous market

A market made up of individuals or organizations with diverse needs for products in a specific product class

concentrated targeting strategy

A market segmentation strategy in which an organization targets a single market segment using one marketing mix

pure competition

A market structure characterized by an extremely large number of sellers, none strong enough to significantly influence price or supply

business cycle

A pattern of economic fluctuations that has four stages: prosperity, recession, depression, and recovery

marketing strategy

A plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market

executive judgment

A sales forecasting method based on the intuition of one or more executives

national advertising review board (narb)

A self-regulatory unit that considers challenges to issues raised by the National Advertising Division (an arm of the Council of Better Business Bureaus) about an advertisement

focus group

A small group of 8 to 12 people who are brought together to participate in an interview that is often conducted informally, without a structured questionnaire, to observe interaction when members are exposed to an idea or a concept

Target Market

A specific group of customers on whom an organization focuses its marketing efforts

Marketing Objective

A statement of what is to be accomplished through marketing activities

green marketing

A strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment

undifferentiated targeting strategy

A strategy in which an organization designs a single marketing mix and directs it at the entire market for a particular product

differentiated targeting strategy

A strategy in which an organization targets two or more segments by developing a marketing mix for each segment

Corporate Strategy

A strategy that determines the means for utilizing resources in the various functional areas to reach the organization's goals

decentralized organization

A structure in which decision-making authority is delegated as far down the chain of command as possible

centralized organization

A structure in which top-level managers delegate little authority to lower levels

sales force forecasting survey

A survey of a firm's sales force regarding anticipated sales in their territories for a specified period

customer forecasting survey

A survey of customers regarding the types and quantities of products they intend to buy during a specific period

better business bureau (bbb)

A system of nongovernmental, independent, local regulatory agencies supported by local businesses that helps settle problems between customers and specific business firms

marketing plan

A written document that specifies the activities to be performed to implement and evaluate the organization's marketing strategies

sustainable competitive advantage

An advantage that the competition cannot copy

federal trade commission (ftc)

An agency that regulates a variety of business practices and curbs false advertising, misleading pricing, and deceptive packaging and labeling

Perfomance standard

An expected level of performance against which actual performance can be compared

Market Orientation

An organization-wide commitment to researching and responding to customer needs

research design

An overall plan for obtaining the information needed to address a research problem or issue

marketing cost analysis

Analysis of costs to determine which are associated with specific marketing efforts

sales analysis

Analysis of sales figures to evaluate a firm's performance

statistical interpretation

Analysis of what is typical and what deviates from the average

SWOT analysis

Assessment of an organization's strengths, weaknesses, opportunities, and threats

segmentation variables

Characteristics of individuals, groups, or organizations used to divide a market into segments

Amazon Prime has one of the highest customer loyalty ratings in the entertainment industry with a significant percentage of current video streaming subscribers continuing to renew their subscription with Amazon on a yearly or month-to-month basis. In addition, many customers have cancelled their cable or satellite subscriptions and rely almost exclusively on streaming services such as Amazon Prime and Netflix for their entertainment. Amazon Prime video streaming is available as part of Amazon's $99/year Amazon Prime suite of offerings that includes free 2-day shipping on many Amazon.com orders. Customers can also choose to pay by the month for $12.99/month. If a significant percentage of subscribers continue their service on an annual basis, Amazon is able to build a stable revenue stream based on repeat purchasers. A quick snapshot of one customer revealed that the customer had subscribed to Prime for five years and generated over $700 in revenue to Amazon. Which of the following marketing terms best captures the importance of customer loyalty and its impact on Amazon?

Customer lifetime value

marketing decision support system (mdss)

Customized computer software that aids marketing managers in decision making

secondary data

Data compiled both inside and outside the organization for some purpose other than the current investigation

primary data

Data observed and recorded or collected directly from respondents

Demographic Variable

Demographic characteristics that marketers commonly use include age, gender, race, ethnicity, income, education, occupation, family size, family life cycle, religion, and social class.

relationship marketing

Establishing long-term, mutually satisfying buyer-seller relationships

strategic performance evaluation

Establishing performance standards, measuring actual performance, comparing actual performance with established standards, and modifying the marketing strategy, if needed

The main difference between marketing research and a marketing information system is that the MIS is an information-gathering process for specific situations whereas marketing research provides continuous data input. Select one: True False

False

total budget competitors

Firms that compete for the limited financial resources of the same customers

product competitors

Firms that compete in the same product class but market products with different features, benefits, and prices

Brand Competitors

Firms that market products with similar features and benefits to the same customers at similar prices

generic competitors

Firms that provide very different products that solve the same problem or satisfy the same basic customer need

Marketing Mix

Four marketing activities—product, distribution, promotion, and pricing—that a firm can control to meet the needs of customers within its target market

market segment

Individuals, groups, or organizations sharing one or more similar characteristics that cause them to have similar product needs

big data

Massive data files that can be obtained from both structured and unstructured databases

breakdown approach

Measuring company sales potential based on a general economic forecast for a specific period and the market potential derived from it

buildup approach

Measuring company sales potential by estimating how much of a product a potential buyer in a specific geographic area will purchase in a given period, multiplying the estimate by the number of potential buyers, and adding the totals of all the geographic areas considered

descriptive research

Research conducted to clarify the characteristics of certain phenomena to solve a particular problem

exploratory research

Research conducted to gather more information about a problem or to make a tentative hypothesis more specific

conclusive research

Research designed to verify insights through objective procedures and to help marketers in making decisions

experimental research

Research that allows marketers to make causal inferences about relationships between variables

expert forecasting survey

Sales forecasts prepared by experts outside the firm, such as economists, management consultants, advertising executives, or college professors

customer advisory boards

Small groups of actual customers who serve as sounding boards for new product ideas and offer insights into their feelings and attitudes toward a firm's products and other elements of its marketing strategy

Strategic Window

Temporary periods of optimal fit between the key requirements of a market and the particular capabilities of a company competing in that market

first-mover advantage

The ability of an innovative company to achieve long-term competitive advantages by being the first to offer a certain product in the marketplace

late-mover advantage

The ability of later market entrants to achieve long-term competitive advantages by not being the first to offer a certain product in a marketplace

Marketing Environment

The competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surround the customer and affect the marketing mix

sociocultural forces

The influences in a society and its culture(s) that change people's attitudes, beliefs, norms, customs, and lifestyles

company sales potential

The maximum percentage of a market that an individual firm within an industry can expect to obtain for a specific product

market share

The percentage of a market that actually buys a specific product from a particular company

Environmental Analysis

The process of assessing and interpreting the information gathered through environmental scanning

environmental scanning

The process of collecting information about forces in the marketing environment

Marketing

The process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment

market segmentation

The process of dividing a total market into groups consisting of people or organizations with relatively similar product needs in order to design a marketing mix that matches those needs

Strategic Planning

The process of establishing an organizational mission and formulating goals, a corporate strategy, marketing objectives, and a marketing strategy

Strategic Marketing Management

The process of planning, implementing, and evaluating the performance of marketing activities and strategies, both effectively and efficiently

Marketing Implementation

The process of putting marketing strategies into action

competitive advantage

The result of a company matching a core competency to opportunities it has discovered in the marketplace

marketing research

The systematic design, collection, interpretation, and reporting of information to help marketers solve specific marketing problems or take advantage of marketing opportunities

market potential

The total amount of a product that customers will purchase within a specified period at a specific level of industry-wide marketing activity

marketing analytics

The use of tools and methods to measure and interpret the effectiveness of a firm's marketing activities

core competencies

Things a company does extremely well, which sometimes give it an advantage over its competition

When evaluating relevant market segments, cost estimates are important to determine if an organization entering a particular segment can operate at costs equal to or below those of competitors. Select one: True False

True

Customer Relationship Management (CRM)

Using information about customers to create marketing strategies that develop and sustain desirable customer relationships

Honda conducts extensive consumer research and discovered that Latinos are reportedly 15% more likely to buy a Japanese auto brand, like Nissan, Honda, or Toyota, than any other group ethnic group. Honda is interested in the Latino market since it represents 20% to 30% of the brands' overall consumers. Due to its extensive use of research and customer insight, Honda has been the top-selling brand for Latinos for over 10 years thanks to effective marketing, like its partnership with the "La Reina de la Cancion" singing competition and an advertising campaign on Spanish-language TV. Based on this information, which orientation best applies to Honda? a. Market orientation b. Sales orientation c. Production orientation d. Target market orientation e. Environmental orientation

a. Market orientation

Richards Homes, a mobile home manufacturer since 1934, introduced its new iHome. The iHome is one of the first of its kind, designed as an updated, modern version of the modular home, offered as a base home plus add-ons known as "pods." The base home is a one-bedroom, one-bath, 734-square-foot version at a price of around $80,000. There is also a 1,000-square-foot version for around $100,000. All versions may add on the additional one-room pods, which are shipped to your location and constructed on site. The homes offer galvanized metal roofing, corrugated steel siding, Volatile Organic Compounds-free paints, and a "butterfly" roof that collects rainwater. The iHome uses 30% less energy than a similar square-foot home and offers "green" characteristics of solar panels, tankless water heaters, and low-flow faucets. In addition, it comes with bamboo flooring, a renewable resource. The modular, prefabricated design offers endless options for creating the customer's home, and its engineered building system cuts down on construction waste. Due to the "green effects" of the iHome, the state governments have given it a tax abatement for any sales taxes. Refer to Scenario 3.2. The iHome's reduction of energy use, renewable resources as materials, "pod" customization, reduction of construction waste, and tax abatement status is/are examples of reaction to which environmental forces? a. Political, economic, sociocultural, and technological b. Political, sociocultural, economic c. Sociocultural and economic d. Political and sociocultural e. Political and economic

a. Political, economic, sociocultural, and technological

Naomi owns a company that sells snowboards. During the winter, she sells so many snowboards that she constantly has to restock. However, Naomi always seems to have dozens of snowboards left in inventory once spring hits and demand falls rapidly. To try and sell these excess snowboards, Naomi offers steep discounts on her products, invests heavily in advertising to make consumers aware of the discounts, and instructs her in-store salespeople to use strong persuasion tactics to convince them to purchase the remaining snowboards. During this period of time, what type of orientation is Naomi embracing? a. Sales b. Market c. Promotion d. Marketing concept e. Production

a. Sales

The problem with using an undifferentiated strategy to market a "universal car" is that a. car buyers have heterogeneous needs. b. other car makers are already using an undifferentiated strategy. c. car buyers have homogeneous needs. d. car buyers cannot be segmented. e. the technology to produce a universal car does not yet exist.

a. car buyers have heterogeneous needs.

Customer costs include anything the buyer must give up in order to obtain the benefits the product provides. The most obvious customer cost is a. monetary price. b. availability. c. risk. d. time. e. effort.

a. monetary price.

A few months ago, Costco adopted a new brand of organic cheese. However, sales have been lower than expected. Costco decides to survey some of its customers at its stores to try and understand this issue. It set up demonstrations in several stores and asked consumers to try samples of its organic cheese product. It then asked them how they liked the cheese. The majority of respondents indicated they were very satisfied with the cheese's flavor. This occurred in trial after trial. Costco is confused. Satisfaction with the cheese is positive, yet sales continued to remain low. They ask you, a marketing consultant, why you think this is. You reply that while the tests had strong ___________, they did not have strong ____________. You recommend that Costco survey customers on their purchase intentions rather than their satisfaction with the product's taste. a. reliability; validity b. applicability; validity c. applicability; reliability d. validity; reliability e. compatibility; validity

a. reliability; validity

A business advantage of the concentrated targeting strategy for any company is that it a. allows a firm to utilize all of its production capacity. b. allows a firm to develop a special marketing mix for a single market segment. c. requires less intensive analysis of customers' characteristics and needs. d. requires less market research and information. e. maintains the firm's flexibility in moving into other market segments.

b. allows a firm to develop a special marketing mix for a single market segment.

Bose promises "better sound through research." This is an example of ________. a. services differentiation b. product differentiation c. people differentiation d. price differentiation e. channel differentiation

b. product differentiation

All of the following are steps in the marketing research process except a. reporting research findings. b. understanding your customer. c. collecting data. d. designing the research project. e. interpreting research findings.

b. understanding your customer.

MasterCard provides credit cards to individuals who use their cards for purchases of meals, gifts, travel services (e.g., transportation, hotel), fuel, and more. MasterCard makes extensive use of purchase information to aid in management and marketing decisions as well as in its marketing efforts to enhance the number of businesses that accept payment by the MasterCard. MasterCard leverages its information about consumers by analyzing the charging history of credit card members, website traffic, and information gleaned through the use of "cookies" and monitoring of social media, such as Twitter, Facebook, Instagram, and Pinterest. MasterCard believes data provides significant insights. What type of information does MasterCard utilize? a. Single-source data b. Social data c. Big data d. Marketing decision support system e. Experimental data

c. Big data

A marketing objective should be expressed in clear, simple terms; be _____________; specify a time frame for completion; and ensure the marketing objective is _____________ with both business-unit and corporate strategies. a. encompassing; consistent b. precise; centralized c. measurable; consistent d. detailed; decentralized e. legalistic; aligned

c. measurable; consistent

Age, rate of product use, location, and gender are all examples of common a. psychographic variables. b. demographic variables. c. segmentation variables. d. targeting strategies. e. geographic characteristics.

c. segmentation variables.

Benjamin Moore Company provides paint and supplies to businesses and individuals through its network of company-owned retail outlets. Benjamin Moore employs outside sales representatives who make personal calls with prospects and customers in order to gain insight about their needs and persuade them to utilize Benjamin Moore for their painting projects. Typically, a Benjamin Moore sales representative will focus his or her efforts on specific customers such as hospital facility managers, apartment complex managers, painting contractors, or education institution facility managers. Benjamin Moore is utilizing the ______ variable for segmenting business markets. a. number of employees b. customer size c. type of organization d. product use e. geographic location

c. type of organization

​An analysis of ____ examines internal factors that give the organization certain advantages and disadvantages in meeting the needs of its target markets. a. ​market opportunities b. ​organizational resources c. ​strengths and weaknesses d. ​opportunities and threats e. ​activities and responsibilities

c. ​strengths and weaknesses

Which one of the following best characterizes a marketing information system (MIS)? a. An MIS involves internal information collection about employees and customers. b. An MIS requires adjustments to its techniques to adapt to environmental circumstances and is in reality part of the accounting system. c. An MIS is conducted on a special-project basis when needed. d. An MIS provides a continuous flow of information about such things as distribution costs, prices, sales, and advertising expenses. e. An MIS is an orderly gathering of information that is not supplied through routine reporting systems such as sales reports and accounting data.

d. An MIS provides a continuous flow of information about such things as distribution costs, prices, sales, and advertising expenses.

To meet federal gas mileage regulations, Ford has developed aluminum vehicle bodies that are light enough to help conserve fuel. What kind of response is this to environmental forces? a. Regulatory active b. Inactive c. Proactive d. Reactive e. Counteractive

d. Reactive

When Snapple takes the information collected through research and attempts to assess and interpret what it means for its beverage marketing efforts, Snapple is engaged in environmental a. management. b. monitoring. c. scanning. d. analysis. e. assessment.

d. analysis.

Dasani, SmartWater, Aquafina, Glaceau, Pure Life, and Fiji are examples of __________ competitors in the beverage industry. a. generic b. category mangagement c. product d. brand e. total budget

d. brand

People for the Ethical Treatment of Animals (PETA) has demonstrated against the sale of coats made of animal furs. PETA's efforts to change shoppers' attitudes most directly represents a ____ force for fur retailers. a. self-regulatory b. political c. technological d. sociocultural e. legal

d. sociocultural

​A market opportunity results from a. ​an increase in market share and profits. b. ​technological determinism. c. ​an assessment of environmental forces. d. ​the right combination of circumstances and timing that permits an organization to take action to reach a particular target market. e. ​monitoring the firm's capabilities.

d. the right combination of circumstances and timing that permits an organization to take action to reach a particular target market.

Bass Pro Shops recognizes that outdoors enthusiasts are a diverse group. Likely segments include hunters, campers, and boaters. What is this segmentation method called? a.user status b.benefit c.behavioral d.psychographic e.usage rate

d.psychographic

Herbal Organics used actor and former NFL player Sweet Dave Brown to act as its spokesperson as the "Herbal Organics Man." It filmed humorous videos of the actor that went viral online. Herbal Organics saw sales of its deodorants increase substantially from the previous year. What type of competitive growth strategy did Herbal Organics use? a. Product penetration b. Market development c. Product development d. Diversification e. Market penetration

e. Market penetration

If Little Caesars wants to determine the impact of different coupon offers on pizza unit sales, it needs to conduct a. exploratory research. b. survey research. c. hypothesis development. d. stratified sampling. e. experimental research.

e. experimental research.

The first step in the target market selection process is a. selecting specific target markets. b. developing market segment profiles. c. evaluating relevant market segments. d. determining which segmentation variables to use. e. identifying an appropriate targeting strategy.

e. identifying an appropriate targeting strategy.

Coca-Cola executives realized that more consumers are concerned with health. It has since expanded into the bottled water and bottled juice markets. This is an example of a firm identifying and capitalizing on a a. core competency. b. strength. c. competitive advantage. d. marketing strategy. e. market opportunity.

e. market opportunity.

Only one variable can be used to segment a market. Select one: True False

false