Marketing at Duquesne University with Dr. Guskey Final Exam

Definition of marketing?

Marketing = an Exchange

What is the marketing conept?

Consumer = #1

What are the 4 Types of Utilities?

1. Form = the actual product

2. Time = Getting the product to the consumer when they want it

3. Place = Getting the product to the desired location on time

4. Possession = allow consumers to buy/own the product

What is Differential Advantage?

What is the company good/best at?

- Ex: Duquesne is the best because they only have Doctors as professors

What are the 4 P's in Marketing?

1. Product

2. Price

3. Promotion

4. Displacement (Place/Placement)

Corporate Mission

The whole of the main idea, corporate purpose and drivers behind a corporation, which sends the company, it's executives and employees along its way in a particular direction

Boston Consulting Group Matrix

Star = Top Left

Problem Child / ? = Top Right

Cash Cow = Bottom Left

Dogs = Bottom Right

What is the Star Aspect of the Boston Consulting Group?

1. Star (top left)

- Market Shares High,

Growth High = market leader in a growth industry

- Ex: Apple and Amazon

- They have sustained differential advantage despite rising competition

- Used own financing

What is the problem child / question mark aspect of the matrix?

2. Problem Child/Question Mark (top right)

- Market Share Low, Growth High

- Growing industry

- SBU could do well or could do bad (potential is there)

- Needs additional financial resources to expand market share

- Ex: technology industries

What is the cash cow aspect of the matrix?

3. Cash Cow (bottom left)

- Market share High, Growth Low

- Should invest money earned from cows to growth industries

- Loyal customers

- The industry is not growing, but they are strong market leaders

- Ex: Heinz ketchup, Tide Laundry detergent

What is the dog aspect of the matrix?

4. Dogs (bottom right)

- Market Shares Low, Growth Low

- Sell and get out fast! Things can get ugly

Growth Opportunity Matrix

1. Market Penetration (top left)

2. Product Development (Top right)

3. Market development (Bottom left)

4. Diversification (Bottom right)

Market Penetration

- Market current, product current

- sell the same product to the same consumer

- Ex: arm and hammer baking soda

- New uses are found: in freezer, refrigeration, kitty litter, toothpaste, etc.

Product Development

- Market current, product new

- New product to sell to same people (market)

- Ex: Jello pudding

- takes too much time to make, diet concerns, not convenient.... solution = snack packs, sugar free

Market Development

- Market new, product current

- Same product to sell to new people (market)

- Ex: Johnson and Johnson baby products = adults are using the shampoo now

Diversification

- Market new, product new

- New product sold to new market

- Riskiest place to be

- Ex: Gerber offering life insurance

Environmental Scanning / Monitoring

The process by which a firm gathers information about environmental changes in order to identify opportunities and determine threats.

What are the 6 Macro Environments

- Social/cultural = deals with people. Communication, technology, etc.

- Legal/political = gov. rules and regulations that apply to the company

- Ecology = safe water, air, environment

- Economic = sum of all economic activities

- Technology = advances in knowledge

- Competition = external factors that you have no control over have an impact on the company

Tylenol Case: Why was the product so successful BEFORE the poisoning incident?

- J&J introduced a new non-aspirin OTC drug that was easier on the stomach

- It looked identical to all other non-aspirins

- They used doctors to sell more than the competitors (superior marketing strategy)

- Established consumer confidence and loyalty

Market Segmentation

The process of dividing the market up into groups

What are the 5 Types of Segmentation?

1. Geographic Segmentation

2. Demographic Segmentation

3. Psychographic Segmentation

4. Benefit Segmentation

5. Micro Marketing / One-on-One / Niche

Target Market

Homogeneous (similar) segment of the market to which a marketer directs a specific marketing program

What are the 5 steps of marketing research?

- Identify objective - know the purpose

- Plan the research - determine the population, sample, data collection method, how to collect the data, and how to analyze the data

- Collect the data - actually conducting the survey, focus group, etc.

- Analyze the data - statistical packages, calculate the results

- Present Results - give a presentation or written report

What are the 3 Types of Primary Data?

1) Exploratory Research

2) Surveys

3) Experimental Research

Exploratory Research

- Qualitative Research

- Gain ideas, insights, gives a broad picture, let's you get into the mind of the consumer

- Not numbers

- Soft data, not hard data

- Cheaper

- Faster

- Flexible

- Not generalized

- Can't say its true for a large group of people

Types of Exploratory Data

1. Personal interviews

2. Focus groups

3. Observational studies

Surveys

- Descriptive

- The most commonly used

- Describes a characteristic of certain groups

- Establishes a proportion of people in a specific population who behave a certain way

- Make predictions

- You can generalize this data

Ways to collect surveys?

- Telephone

- Mail

- Face-to-face interviews

- Online surveys

Experimental Research

- Causal Research (cause and effect)

- one or more factors are manipulated under controlled conditions; can show cause and effect

- Ex: Vitamin C's

What are the different types of consumer buying behavior?

1. Complex Buying Behavior

2. Habitual / Routine Buying Behavior

3. Cognitive Dissonance or Dissonance Reduction

Complex Buying Behavior

- expensive products

- don't buy them all the time

- Risk = financial risk, safety issues, psychological factors (house, car)

- Hierarchy of Effect

Habitual Buying Behavior

- Buying out of habit

- relatively inexpensive products

- Don't go through the hierarchy of effect, but consumers may initially when they buy the product the first time

Cognitive Dissonance Buying Behavior

- Try to justify the purchase - buy then justify

- Ex: Dr. Guskey buying her expensive Cougar car because it was "safe"

- Buy then do homework after: Attitude, Behavior, then Knowledge

Characteristics of Industrial Buying Behavior (B2B) > Notecard

1. Variety of Goals

2. More people participate in the decision

3. More formal policies

4. Fewer buyers, but large buyers

5. Geographically concentrated

6. Derived Demand (indirect)

7. Inelastic Demand

8. More technical products than consumer market

9. More direct purchases in B2B

10. Make-or-buy decisions

Steps in the consumer decision process

1. Need / Want Recognition

2. Information Search

3. Evaluate Alternatives

4. Purchase

5. Post-Purchase

- all self-explanatory

Core Benefit

- Why you are buying the product

- Core aspect is inner circle

- Ex: Tylenol to relieve headaches and pain- Hershey gives you energy and a boast + relieves hunger

- Maytag washer/dryer for quality

- Duquesne University for quality education, better job, good future

Product Mix

- Design Mix

- Packaging

- Name

- Logo

- Trademark

- Function

Design Mix

The color, size, shape, ingredients, weight of a product

Packaging

- Protection of consumer (ex.) child safety packaging·

- Protection of product (ex.) cookies not broken· Keep fresh (ex.) Crackers not soggy, bread not stale·

- Promotion· Gets attention· Information, ingredients listed; regulations require it·

- Usage of product (Ex.) toothpaste in tube, aerosol can- need package in order to product

- Delivery, product shipping·

- Storage

- Display product in store·

- Environmental regulations, re: recycle and waste(ex.) L-eggs in plastic egg originally, but could not recycle

Name

- Identify the product

- Symbolic communication

- Legally protect

Logo / Trademark

- Logo = symbol of the product

- Represents something about the product

- Ex: Greyhound bus - dog running, looks like speed

- Trademark = name and/or a symbol, legally protected

- Ex: CBS = the eye, NBC = peacockA company's

- Trademark can be the name or the logo (or both)

Function

- What does the product do?

The performance, quality, the features.

Not always a direct contribution of marketing

What are the 4 types of consumer goods?

1. Convenience goods

2. Shopping goods

3. Specialty

4. Unsought goods

What is the product lifecycle?

1) Introduction to market

2) Growth = product begins to sell more and grow

3) Maturity = product reaches its peak, starts to decline

4) Decline = the product becomes less popular and falls off the table

Think of a bell curve for the different steps of the lifecycle

What are the characteristics of a service?

- Intangible

- Labor intense

- Variability in quality

- Simultaneous production and consumption

- No inventory

What are the 8 steps of new product development? (essay is on the product you created. Need to list the 8 steps and explain the process used for your product)

1. Idea Generation / Brainstorming

2. Idea Screening

3. Concept Development

4. Marketing Strategy

5. Business Analysis (Number crunching)

6. Product Development

7. Test Market (?) (Optional)

8. Commercialization

Idea Generation

- Quantity over quality

- Most anyone can have the ideas, just throwing them out and will pick one later in the process

Idea Screening

- picking a select few ideas, or the best overall idea

Concept Development

- Stage where a company compares its products to others through multi-dimensional scaling to see where their product would fit

- Multi-Dimensional Scaling (MDS) Software Package / Product Positioning Map = The closer the dots are, the more similar the products, in mind of consumer, the closer they are on the grid.

Marketing Strategy

- How will you use the 4 P's?

a. product - name, use, satisfy customers

b. price - how will you set the price?

c. promotion - how will you promote it?

d. place - how will you package and distribute it?

Business Analysis

- Number crunching (Determine if profitable)

a. estimate profits

b. Estimated sales

c. What are the costs going to be?

d. Estimate market share

- Cannibalization

a. When introducing new product, it may take over sales (eat) products of own company

b. So where are most of sales coming from for the new product - your competition or from your existing products?

c. Do not want to hurt established products you have (ex: Wheaties, introduced Energy Wheaties and its taking sales from old Wheaties)

Product Development (what are the tests used)

- Prototype - sample of product

- Research & Development creates samples

- Two types of questions

a. Functional tests = safe (do no harm), reliable (last) does what its supposed to do

b. Consumer tests = consumer tries it out. Ex: Leave Avon products with various people for men and women, follow up with questionnaire afterwards; leave cookies with consumers, follow up days later with an interview

Test Market (optional)

- Mini-launch of a product

- Go into 2-3 cities to market

- Ex: McDonald's - pizza, steak and cheese

- Pros: lots of information.

Ex: Who is buying? ? Where? When are they buying? How often are they buying? will they buy it again? What price are they willing to pay?

- Cons: Expensive, average $1,000,000 for test market; Take too much time

- 6 months to a year average time for a test market; lost of competition

Commercilization

- Taking a product to market

a. National launch - everyone has access to it at once

b. Roll-out - start in one area (ex: west coast), and rollout across to other cities

What are the 4 elements of the promotion mix?

1. Advertising = paid advertisement

2. Sales Promotion = stimulate purchasing

3. Publicity or Public Relations (PR) = non-paid advertisement

4. Personal Selling = oral presentation/meeting

What are the 4 methods of pricing?

1. Cost-oriented

2. Demand-Oriented

3. Competitive-Oriented

4. Consumer-Oriented

What are the two types of pioneer pricing?

a. Price Skimming - Charging consumers high price; sometimes the highest possible priceEasier to decrease price over time

- When introducing new product, especially hi-tech product, recapture cost to develop it

b. Price Penetration - to increase sales, lower price

- want to be market leader with lower prices

- Increase sales and increase market share; mass market focus

What are the functions of a wholesaler?

Notecard

1. Buy - Manufacturer

2. Sell - Retailer

3. Financing - Financial opportunity information

4. Provide Information

5. Help Promote

6. Buy in bulk, sell in smaller quantity

7. Transporting

8. Storage / Warehousing

Definition of a retailer

Perform all the activities involved in the sale of goods and services directly to the ultimate consumer.

What are the 3 types of distribution?

- Intensive Distribution

- Selective Distribution

- Exclusive Distribution

Intensive Distribution

- Convenience goods (habitual buying behavior)

- Maximum market exposure

- Distribution costs high

- Less control, convenience

- (ex.) Coke

- Per-unit profits are low

- It is the strategy aimed at the most consumers.

- Objective: Widespread market coverage, channel acceptance, and high volume sales and total profits

- Reseller: Many in number, all types of retail outlets

- Customers: Many in number, convenience-oriented

- Organization - Availability, limited communications, some service expected from intermediary

- Marketing Emphasis: Mass advertising, many nearby locations, keep items in stock

- Major weakness: Limited channel control

- Examples: Household products, groceries, office supplies, routine services

Selective Distribution

- Shopping (complex buying behavior)

- More control over product

- Train sales people in technical aspects

- Special attention to customers

- Quality, higher price

- (ex.) clothing, cars, electronics

(ex.) Apple: Use own distributors and select key distributors and train well in product lines

- Objective: Moderate market coverage, solid image, some channel control and loyalty, good sales volume and profits

- Resellers: Moderate in number, well-established, better retail outlets

- Customers: Moderate in number, brand conscious, somewhat willing to travel to store

- Organization - Better service expected from manufacturer or intermediary

- Marketing Emphasis: Promotional mix, pleasant shopping conditions, good service

- Major weakness: May be difficult to carve out a niche

- Examples: Furniture, clothing, mechanic tools, industrialized services

- (ex.) IBM: Select key distributors and train well in product lines

Exclusive Distribution

- Specialty; have to have

- Very few distributors

- Accepts lower total sales than in another type of distribution.

- Objective: Prestige image, channel control, loyalty, price stability and high profit margins

- Resellers: Few in number in a geographic area, perhaps having only one or two within a specific shopping location, well-established, reputable retail outlets

- Customers: Fewer in number, trend setters, willing to travel a distance to store, brand loyalty

- Organization - Focus on major accounts, superior service expected from manufacturer

- Marketing Emphasis: Personal selling, pleasant shopping conditions, good service

- Major weakness: Limited sales potential

- Examples: Very expensive cars, designer clothes, capital equipment, complex services

ESSAYS ON THE STUDY SHEET