MKT-100 (Fall2024)

Final Exam Review

SWOT

Strengths

Weaknesses

Opportunities

Threats

Product Strategies Matrix/Ansoff’s Matrix

Market Development

Market Penetration

Diversification

Product Development

Low Involvement

-Cost less/Low-risk

-Frequent/Quick decisions

High Involvement

-Cost more/High-risk

-Less frequent/Many decisions

Moderate Involvement

-Mid-cost/Limited risk

-Information required/Some decision

Primary Data

-Done by self

-Either Qualitative/Quantitative or Casual experiments

Secondary Data

-Done by others

Straight Buy

-Rebuy previously bought products

(Majority of B2B purchases)

New Buy

-Buying for the first time

(6 steps of the buying process)

Modified Buy

-Buying something similar with changes

ex. Changes in colour, quantity, delivery, etc.

(Current vendors have an advantage)

Geographic Segmentation

-Region, City, Density, Climate, Province, etc.

(Location)

Demographic Segmentation

-Age, generation, gender, family size, education, income, job, background, identity, religion, social class, etc.

(Characteristics of the people)

Psychographic Segmentation

-Life style, interests, personality, values, beliefs, etc.

(Who they are)

Behavioural Segmentation

-Product usage, brand loyalty, product benefits interests, user status, readiness to purchase, buy status, etc.

(What they look for in the product)

Convenience Offerings

-Bought often with minimum thought

ex. Buying bottled water

Shopping Offerings

-Bought with quality, price, or appearance in mind

ex. Buying a laptop after companing other brands

Specialty Offerings

-Bought for its exclusivity and brand luxury

ex. Buying a expensive limited edition Rolex

Unsought Offerings

-Bought unknowingly but at times necessary

ex. Buying insurance after purchasing a new car

Introduction Stage

-Recently entered the market

(New product)

Growth Stage

-Sales starts to grow after entering the market

(Product gains recognition)

Maturity Stage

-Reaches its best performance in the market and levels off

(Peak sales)

Decline Stage

-Sales/Profits steadily decline towards the of its life cycle

(End of a products run)

Price Skimming

-High initial price then steadily lowers as competitors enter

Price Penetration

-Low initial price to maximize sales/influence

Evaluation Difficulty: High Search Qualities

-Product can be easily evaluated before purchase

(Mostly goods)

Evaluation Difficulty: High Experience Qualities

-Product can be evaluated after use

(Goods and Services)

Evaluation Difficulty: High in Credence Qualities

-Product can be evaluated ONLY after use

(Mostly services)

4 Characteristics of a Service

Intangible - not physical

Inseparable - cannot remove from source

Variable - experience can differ

Perishable - limited period of time

The Pricing Framework (4 Steps)

-Set Pricing Objectives

-Estimate Demand, Costs, & Profits

-Determine Pricing Strategy

-Select Pricing Tactics

Price Framework Step #1: Set Pricing Objectives

-Profit Oriented: Prioritize margins per unit

-Sales Oriented: Prioritize sales units

-Status Quo: Maintain industry average/competitors prices

Price Framework Step #2: Estimate Demand, Costs, & Profits

-Demand: willingness to buy

-Costs: expenses from production

-Profits: sell price - cost price

Price Framework Step #3: Determine Pricing Strategy

Early Stages

-Price Skimming: highest margins

-Price Penetration: lowest margins

-Give Away: free trials

Later Stages

-Cost Plus Pricing: cost + margin

(Markup or Markdown)

Price Framework Step #4: Select Pricing Tactics

-Everyday low (always there)

-Promotional (sales)

-Loss leader (loss money on it)

-Bundling (deals)

-Odd/Even ($29.99/$30.00)

-Two-Part (free/premium)

-Instalments (several small payments)

-Differentiation (specific groups ex. student discounts)

-Dynamic (adjust to consumer behaviour ex. seasonal)

-Lining Levels (different product models)

-Demand Backward (price what customers want)

-Subscription (memberships)

-Captive (exclusive/limited)

-Prestige (high price)

-Sealed Bid (hidden auction bids)

-Going Rate (current value ex. gold, silver, etc.)

Direct Channels (B2C)

Producer to consumer

Indirect Channels (B2C)

Producer to…

Agent/Broker…

Wholesaler/Distributor…

Retailer…

Consumer (Steps may vary)

International Channels

-Exporting

-Licensing/Franchising

-Joint Venture

-Direct Foreign Investment

International Channels: Exporting

-Sell to foreign markets

ex. Made in china

International Channels: Licensing/Franchising

-Allow foreign owner to use brand

ex. Macdonalds

International Channels: Joint Venture

-Work with foreign company to pool resources

ex. Apple & Nike with Apple Watch

International Channels: Direct Foreign Investment

-Buy existing or create new company in a foreign market

ex. China buying microchip factory in Korea

Push Strategy

-Manufacturer gives more supply to resellers who push them to consumers

(Manufacturer to Reseller to Consumer)

Pull Strategy

-Manufacturers directly promotes to consumers who pull at resellers to demand the product

(Manufacturer to Consumer to Reseller)

3 Levels of Distribution Intensity

Intensive - offer to as many locations possible

Selective - offer to select locations

Exclusive - offer to very few locations

4 Channel Dynamics

-Leaders/Captains: most power/resources

-Conflicts:

Vertical, between members of channel

Horizontal, between channels/companies of same type

-Cooperation: show capabilities in increasing sales/fair exchange

-Integration:

Vertical, along the process (ex. manufacturer/retailer)

Horizontal, along with another chain (ex. retailer/retailer)

3 Types of Direct Promotion

Direct - personalized/interactive promotions

Mail, Flyers, & Catalogue - in home activate messages

Digital/Online - websites, emails, ads, etc.

Other Promotion Tools (9)

-Advertisements: give message

-Sales: incentives

-PR/Publicity: company image

-Sponsorships: financial support for events

-Mobile: online/messages on phones

-Professional: sales person

(+3 Direct Promotions)

4 Types of Sales Relationships: Transactional

-Each sale separate/no maintained relationship

4 Types of Sales Relationships: Functional

-Purchase normally/as long needs are met

4 Types of Sales Relationships: Affiliative

-Seller is knowledgable/trusted

4 Types of Sales Relationships: Strategic

-Buyer & Seller cooperate to benefit both parties

Sales Ethics

-Write down policies

-Provide documentation

-Provide training

-Mechanism to reinforce policies

Sales Funnel

-Leads (looking)

-Suspects (potential interest)

-Prospects (needs identified)

-Customer (finalized)

B2B Promotions

-Increase contact & prominence

B2C Promotions

-Product trials/samples

-Incentives/reduce financial burdens

-Increase awarness

Promotion Message Strategies

-Unique Selling Proposition (ex. Nikes “Just do it”)

-Promotion Objectives (A.I.D.A. Model)

-Media

-Budget

-Audience & Product Characteristics

Promotion Message Characteristics

-Appeal: attract attention (incite emotions)

-Message Tactics: Open/Close ended?, one sided/two sided? (gives reason to buy)

-Slogans, Jingles, & Mascots (memorable symbols)

-Order of Presentation (repetition/showcase focus)