Business Marketing Final Exam Reviewer

Comprehensive review flashcards covering service design and management, pricing strategies and programs, and personalized marketing communications.

How is a service defined in marketing?

A service is an activity or benefit offered to another party that creates value without transferring ownership.

What formula defines the customer experience in service design?

Promise + Process + People = Experience

How are offerings classified across the Goods-Services Continuum?

Tangible Good (Packaged food), Good + Service (Appliance with warranty), Hybrid Offering (Restaurant meal), Major Service + Goods (Air travel and meals), and Pure Service (Consultation).

What are the four core characteristics of services represented by the acronym I-I-V-P?

Intangibility (cannot be examined like an object), Inseparability (production and use often interact), Variability (performance may differ), and Perishability (unused capacity cannot be stored).

What are the three pillars of services marketing and their respective functions?

External Marketing (firm makes the promise), Internal Marketing (firm enables employees), and Interactive Marketing (employees and customers enact the promise).

How is customer satisfaction determined in relation to service quality?

Satisfaction rises when perceived service (what customers believe did happen) meets or exceeds expected service (what customers believe should happen).

What are the five service-quality dimensions captured by the acronym RATER?

Reliability (perform dependably), Assurance (inspire trust), Tangibles (show quality evidence), Empathy (understand the customer), and Responsiveness (help promptly).

What four elements make the invisible service process visible in a service blueprint?

Customer actions + Frontstage + Backstage + Support processes

What is the five-step sequential process for service recovery?

Acknowledge → Listen/Clarify → Correct → Explain → Learn/Prevent recurrence

What are the three forces behind establishing a sound price?

Customer (perceived benefits and willingness to pay), Business (costs and objectives/return), and Market (competitors, conditions, and substitutes).

What are the six key decisions involved in setting a price (O-D-C-C-M-F)?

Objective → Demand → Costs → Competitors → Method → Final Price

What are the five primary pricing objectives and their goals?

Survival (remain operational), Current Profit (emphasize near-term financial return), Market Share (attract buyers and expand volume), Market Skimming (earn more from early high-value buyers), and Quality Leadership (support a premium position).

Under what four conditions do customers tend to be less price-sensitive?

When few close substitutes exist, the need is urgent or important, the offer is difficult to compare, and benefits or uniqueness are easy to recognize.

What are the mathematical formulas for calculating Total Cost and Unit Cost?

$\text{Fixed Costs} + \text{Variable Costs} = \text{Total Cost}$ and $\text{Unit Cost} = \frac{\text{Total Cost}}{\text{Units Sold}}$

What are the six pricing methods outlined in Lesson #9?

Markup (cost + percentage), Target Return (desired financial return), Perceived Value (customer's value judgment), Value Pricing (useful value at an efficient price), Going Rate (prevailing competitor price), and Auction Type (buyer or seller bids).

What are the five types of discounts and allowances used in price adaptation?

Cash (early payment), Quantity (larger purchase), Functional (channel work), Seasonal (low-demand period), and Allowance (trade-in or support).

What four core requirements must a price satisfy according to important pricing principles?

A price should cover costs, reflect customer value, consider market conditions, and support business objectives.

What three elements must effective marketing communication provide to deliver personalization?

Relevance + Convenience + Relationship

What four methods make up the personalized communication mix?

Direct Marketing, Interactive Marketing, Word-of-Mouth Marketing, and Personal Selling.

What is the four-step execution process for direct marketing (S-S-P-M)?

Select → Send → Prompt → Measure

What four factors build trust in direct marketing, and what risks threaten it?

Trust requires Consent + Accuracy + Privacy + Respect. Risks include unwanted messages, misleading conditions, misuse of personal data, aggressive selling, and excessive contact.

What components must an effective direct mail message contain?

Clear Subject → Relevant Offer → Essential Details → Call to Action → Customer Control

What is the five-step respectful flow for telemarketing calls?

Introduce → Ask Permission → Identify Need → Present Offer → Agree on Next Step

What are the six digital performance measures used to track marketing results?

Reach (people who saw it), Engagement (people who interacted), Clicks (requested more information), Conversion (booked or purchased), Cost (cost of each result), and Repeat Business (customers who returned).

What is the difference between organic and encouraged word-of-mouth marketing?

Organic occurs when customers share naturally, whereas encouraged occurs when the business actively requests reviews, referrals, testimonials, or sharing.

What is the five-step process for managing customer reviews?

Acknowledge → Investigate → Respond → Resolve → Improve

What are the eight stages of the personal selling process (P-P-A-A-P-H-C-F)?

Prospect → Prepare → Approach → Assess Needs → Present → Handle Objections → Close → Follow Up

What primary advantage or purpose distinguishes each communication method?

Direct Mail provides targeted offers; Catalog offers organized comparison; Telemarketing offers immediate conversation; Digital provides broad, interactive access; Word of Mouth carries high credibility; and Personal Selling delivers customized solutions.