MKTG 129 FINAL EXAM REVIEW

chapter 10, 11, 13, 14, 15, 16, 18

How do services differ from goods?

How do services differ from goods?

Services involve a deed, a performance, or an effort that cannot be physically possessed. services are not tangible, cannot be owned, returned, and cannot easily have their quality measured.

Explain each of the four differentiating characteristics with the help of examples.

• Intangibility: the inability of serices to be touched, seen, tasted, heard, or felt in the same manner that goods can be sensed. (ex. insurance)

• Inseparability: the inability of the production and consumption of a service to be separated. (ex. consumer must be presented during a haircut)

• Heterogeneity: the variability of the inputs and outputs of services, which causes services to tend to be less standardized and uniform than goods (ex. ingredient freshness and quality in a restaurant)

• Perishability: the inability of services to be stored, warehouse, or inventoried (ex: A movie theater experiences low levels of business on Tuesdays. To counteract this, they offer tickets for $5 on Tuesdays)

What are the five components of services that consumers use to evaluate service quality?

• reliability - ability to perform a service dependably, accurately, and consistently

• responsiveness - ability to provide prompt service

• assurance - knowledge and courtesy of employees and their ability to convey trust

• empathy - caring, individualized attention to customers

• tangibles - physical evidence of the service

What is the GAP model of service quality?

The GAP model of service quality is based on the idea that service quality is determined by the difference between customer expectations and customer perceptions of the service. it highlights five gaps that can prevent successful service delivery

What are each of the five GAPs in the gap model?

1. knowledge gap between consumer expectation and management perception

2. policy gap between management perception and service-quality specification

3. delivery gap between service-quality specifications and service delivery

4. communication gap between service delivery and external communications

5. customer gap between perceived service and expected service

What is price?

giving up in an exchange to acquire a good or service

What are the two opposing effects of price?

• the sacrifice effect of price

• the information effect of price

What are some pricing objectives that could be selected while setting the product price?

• survival

• maximum current profit

• maximum market share

• maximum market skimming

• product quality leadership

• other objectives

How does demand change with changing price?

the lower the price, the higher the demand for a product or service

How is elastic demand different from inelastic demand?

elastic demand - price change causes great change in demand

inelastic demand - price change causes little change in demand

What is dynamic pricing?

the ability to change prices very quickly, often in real-time - based on consumer demand

Why is dynamic pricing better than static pricing? Explain with the help of an example.

it is better because it brings in extra revenue and prevent loss of market shares. an example could be a company like amazon to use it because it helps them sell more and obtain more profits

What are the four ways to classify retailers?

1. Type of ownership
2. Level of Service
3. Product Assortment
4. Price

Classify Retails: Type of Ownership example

- Independent retailer: a retailer owned by a single person or partnership and not operated as part of a larger retail institution
- Chain store: a store that is part of a group of the same stores owned and operated by a single organization
- Franchise: a relationship in which business rights to operate and sell a product are granted by the franchisor to the franchisee

Classify Retailers: Level of Service example

ranges from full-service to self-service (ex: alterations, credit, delivery, consulting ,liberal return policies, lay-away, gift-wrapping, and personal shopping)

Classify Retailers: Product Assortment example

- Width is the assortment of products offered (ex: yankee candle)
- Depth is the number of different brands offered within each assortment (ex: lids)

Classify Retailers: Price example

- Low vs. High Profits
- Varies from day to day, minute to minute
- Mobile shopping has increased pricing complexity through price comparison by consumers and greater impulsiveness on mobiles

What is the inventory turnover ratio (ITR)?

the ratio showing how many times a company has sold and replaced inventory during a given period. sales / average inventory: (a calculation that estimates the value or number of a particular good or set of goods during 2 or more specified time periods)

Should retail stores aim to achieve low or high ITR? Why?

The higher, the better because to prevent overstock and loss of sales potential

What is the retailing mix?

a combination of the six Ps—product, promotion, place, price, presentation, and personnel
1. Product: The first element in the retailing mix is the product offering, also called the product assortment or merchandise mix
2. Place: Factors to be considered while choosing a location
- Economic growth potential, Amount of competition, Geography
3. Promotion, includes Advertising, Public relations, and publicity, and Sales promotion
4. Price
- Efficient and timely buying of inventory
- Offering value to consumers
5. Presentation
- Atmosphere: the overall impression conveyed by a store's physical layout, décor, and surroundings
*Employee type and density, Merchandise density, Fixture type and density, Sounds & Odors, Visual factors
- Layout: the internal design and configuration of a store's fixtures and products
6. Personnel - Salespeople are trained in the following selling techniques: Trading up and Suggestion selling

Retail Mix: Product example with Staburcks

offer a wide range of products including coffee, teas, pastries, sandwiches, and merchandise

Retail Mix: promotion example with Stabucks

adveristing campaigns on television, social media, rewards programs which offers discounts and freebies

Retail Mix: place example with Starbucks

selective locations to maximize foot traffic, they’re usually in busy urban areas, office buildings, shopping malls. cozy and inviting atmosphere

Retail Mix: price example with Starbucks

its premium coffee brand, products are often more expensive than their competitors but customers are willing to pay a premium for their quality

Retail Mix: presentation example with Starbucks

stores are designed with modern decor, comfortable seating and ambient music. presentation of drinks is important, trained baristas to craft visually appealing beverages

Retail Mix: personnel example with Starbucks

employees under go extensive training to ensure consistency in product quality and customer experience. friendly and knowledgeable.

What is the micromodel of communications process? explain with example

sender: teacher prepares a lecture on a topic to deliver to students

message: content of teacher’s lecture

channel: teacher speaking directly to students or using visual aids

receiver: students are the receivers

feedback: students asking questions for clarification, participation, taking notes

noise: students among themselves, malfunctioning projector

What is the AIDA micromodel of communications process?

attention, interest, desire, action

AIDA micromodel of communications process: attention example.

attention: imagine a billboard advertisement for a new smartphone that features bright colors, bold text, and a striking image of the phone's sleek design. draws the attention of passing motorists and pedestrians.

AIDA micromodel of communications process: Interest example

the advertisement could showcase the phone's high-resolution camera, long-lasting battery life, and advanced features like facial recognition technology. These features intrigue potential customers and make them want to learn more about the product.

AIDA micromodel of communications process: Desire example

the smartphone advertisement could depict scenes of people capturing special moments with friends and family using the phone's advanced camera features. These emotional appeals evoke a sense of desire in the audience, making them envision how the product could enhance their lives.

AIDA micromodel of communications process: Action example

the smartphone advertisement could include a CTA that encourages viewers to visit the nearest store to experience the phone's features firsthand or to visit the company's website to learn more and make a purchase.

What are the three important decision-making areas while designing a marketing communication? Explain each with the help of an example.

1. Type of product market
- consumer vs. business marketers
- advertising/sales promotion vs. personal selling
2. Product life-cycle stage
3. Buyer Readiness Stage

How does advertising influence market share?

Building Brand Awareness, Shaping Consumer Perceptions, Stimulating Demand, Competitive Advantage

What is the advertising response function?

- the relationship between advertising spending and the resulting impact on sales, market share, or other performance metrics
- helps marketers understand how changes in advertising investments translate into changes in business outcomes

What are the two main types of advertising?

1. institutional advertising

2. product advertising

Explain the two types of advertising with the help of examples.

institutional: Nike’s “just do it” campaign. focuses on inspiring and empowering individuals to pursue

product: coca-cola’s “share a coke” campaign. personalized coke bottles with popular names and phrases encouraging customers to share a coke with loved ones.

What is institutional advertising and how is it similar or different from advocacy advertising? Explain with the help of examples.

a form of advertising designed to enhance a company’s image rather than promote a particular product. institutional: Nike’s “just do it” campaign. focuses on inspiring and empowering individuals to pursue. advocacy: Always' "Like a Girl" campaign challenges gender stereotypes and empowers girls to reclaim the phrase "like a girl" as a source of strength and confidence. It aims to inspire girls to pursue their dreams and break free from limiting stereotypes.

What is product advertising?

a form of advertising that touts the benefits of a specific good or service

What are the three main types of product advertising?

• pioneering advertising: stimulate primary demand for a new product of product category

• competitive advantage advertising: to influence demand for a specific brand

• comparative advertising: compares two or more specifically named or show competing brands on one or more specific attributes

Explain each of the three main types of product advertising with the help of examples.

• pioneering advertising: Tesla have invested in advertising campaigns to highlight the benefits of EVs, such as zero emissions, lower operating costs, and advanced technology.

• competitive advantage advertising: Red Bull use competitive advantage advertising to emphasize the unique benefits of their energy drinks, such as increased energy, improved focus, and enhanced performance. Red Bull's advertisements often feature extreme sports athletes and adventurous activities, reinforcing the brand's association with energy and vitality.

• comparative advertising: "Mac vs. PC" advertising campaign by Apple is a famous example of comparative advertising. The campaign featured a series of commercials that humorously compared the Mac computer with PCs running Microsoft Windows. Through witty dialogue and visual demonstrations, Apple highlighted the Mac's advantages in areas such as design, ease of use, and virus protection, positioning it as the superior choice for consumers.

What are the four advertising objectives that could be selected while developing an advertising program?

• informative

• persuasive

• reminder

• reinforcement

What are the four criteria that help select specific media vehicles?

• cost

• audience selectivity

• flexibility

• noise level

What are the four media schedules that an advertising program can choose?

• continuous

• flighted

• pulsing

• seasonal

Continuous

steady advertising throughout the year

Flighted

Only on some days of the week/weeks of the month/months of the year while absent in others

Pulsing

Throughout the year with greater focus on some days of the week/weeks of the month/months of the year

seasonal

Only in the months when the product is most likely to be used

Explain each of the four media schedules that an advertising program can choose with the help of examples.

Continuous: Coca-Cola often uses a continuous media schedule for its advertising campaigns. Throughout the year, Coca-Cola maintains a steady stream of advertisements across various channels, including television, digital, print, and outdoor.

Flighted: a clothing retailer may run intense advertising campaigns leading up to Black Friday to drive sales and generate buzz, followed by a period of reduced advertising activity after the holiday rush.

Pulsing: Movie studios often use pulsing media schedules to promote upcoming film releases. Leading up to the release date, the studio maintains a baseline level of advertising to generate awareness and anticipation. As the release date approaches, advertising intensity increases with additional promotions, trailers, and media appearances by the cast and crew to maximize ticket sales.

Seasonal: brands like Ben & Jerry's and Häagen-Dazs ramp up advertising efforts in the spring and summer to remind consumers to indulge in their favorite ice cream flavors during the warmer months.

What is sales promotion?

a short-term incentive that motivates consumers or members of the
distribution channel to purchase a good or service immediately, either by lowering the price or by adding value

When can a sales promotion be considered to be effective?

give the consumer an incentive to make an immediate purchase

How should sales promotions differ with the type of target buyer?

sales should be tailored to characteristics, preferences, and behavior while target maximizes their effectiveness and relevance

Explain with the help of two different types of buyers.

1. loyal customers: reinforce behavior, increase consumption, change purchase timing

2. price buyers: appeal with low prices or supply added value that makes price less important

What are the major advantages of online marketing?

• can offer or send tailored information/messages

• can trace clicks on a page/ad

• contextual placement

• can place advertising based on search engine keywords

What are the major disadvantages of online marketing?

• consumers can screen out most messages

• ads can be less effective than they appear (bogus clicks)

• lost control over online messages via hacking/vandalism

What are the four Ps of effective social media marketing program focused on brand storytelling?

• persistent

• pervasive

• participatory

• personalized

Why was Lionsgate social media campaign of the second Hunger Games movie successful?

• engagement with fans leveraging social media platforms to create a sense of communirt

• interactive content - quizzes, polls, contests, and challenges that allowed fans to test their knowledge, showcase their creativity

• exclusive sneak peeks: released exclusive sneak peeks. trailers, and behind the scenes content from movie providing fans with insider access into the making of the film. rose anticipation and excitement

• timely and relevant content

What are some considerations that guide marketers’ decision regarding whether to go abroad with the marketing initiatives?

• better profit opportunities

• larger customer base

• reduce dependence on one market

• counterattack competitors operating in home market

• customers going abroad require international service

What are the three ways global marketers can choose which markets to enter?

1. waterfall approach:

2. sprinkler approach:

3. born global:

How are decisions regarding product and promotion inter-related while developing a global marketing program?

[commitment, risk, control, and profit potential]

(indirect exporting → direct exporting → licensing → joint ventures → direct investment)

What are some types of marketing organizations that global marketers can choose from?

• functional organization

• geographic organization

• product or brand-management organization

• market-management organization

• matrix-management organization

What is the stakeholder model of sustainable marketing?

looks after stakeholders

what are the six components of the stakeholder model

1. management

2. customers

3. local community

4. suppliers

5. owners/stockholders

6. employees

stakeholder model: management

team taken public stances on environmental issues, advocating of public lands and reducing carbon emmisions

stakeholder model: customers

values its customers as essential stakeholders in its business .engages with its customers through social media, email newsletters, and events to share stories, provide product updates, and solicit feedback. By aligning its brand with customer values and preferences, Patagonia has built a loyal customer base that supports its mission and sustainability initiatives.

stakeholder model: local community

partners with nonprofit organizations and community groups to organize events, clean-up initiatives, and outdoor education programs.

stakeholder model: suppliers

works closely with its suppliers to ensure ethical sourcing and responsible production practices throughout its supply chain. provides transparency into its supply chain, allowing customers to trace the origins of products and learn about the environmental and social impacts of production.

stakeholder model: owners/stockholders

maintained a long-term vision for the company, balancing financial objectives with social and environmental considerations.

stakeholder model: employees

offers competitive wages, benefits, and perks to attract and retain top talent who share its values and commitment to sustainability.

What is the pyramid of corporate social responsibility?

a framework that illustrates the levels of responsibility that corporations have towards society. (legal responsibilities, economic responsibilities, ethical responsibilities, philanthropic responsibilities)

Explain the pyramid with the help of examples.

legal - a pharmaceutical company complying with stringent regulations for product safety and marketing practices.

economic - involves producing quality products efficiently to ensure profitability and long-term viability.

ethical - retail company may implement fair labor practices, such as providing safe working conditions and fair wages for its employees, even in countries where labor laws are less stringent.

philanthropic - a technology company donating computers and software to schools in underserved communities to promote digital literacy and education.