Marketing Final Exam

Market Share

Develop bundle pricing offers in order to increase market share

Profit

Set a profit by an 8 percent profit margin on all goods sold

Image enhancement

Alter pricing policies to reflect the increased emphasis on the products image quality

Competitive edge

Alter pricing strategy during first quarter of the year to increase sales during competitors introduction of a new product

Customer satisfaction

A measure of how pleased a customer is with the product or service they have purchased. It reflects the level of enjoyment, contentment, and overall happiness experienced by the customer with the product.

Law of demand

Increase in prices will lead to decrease in purchases

Prestige Product

A product that is associated with high status, luxury, and exclusivity, often due to its high price, quality, and brand image. These products are often used to signal social status and wealth and are marketed to appeal to consumers who value social distinction and prestige. Examples include luxury cars, designer clothing, and high-end jewelry.

Price of elastic demand

The percentage change of units sold to percentage change of cost

Elastic Demand

A change in price that will have a large change in demand

Inelastic Demand

A change in price will not effect the change in demand

Variable Cost

Per unit costs of production that will fluctuate depending on how many units are produced

Fixed Costs

Costs that do not vary with the number of units produced

Cost Plus pricing

Total Costs + desired profit margin = price

easy and low risk but has limitations

Target costing

considered what customers are willing to pay and make it their price

Yield Management

Price based on demand

Price leadership

When a dominant firm announces its new prices and competitors get in line or drop out 

Value EDLP Prices

Everyday low prices

Skimming

Launching at a high price in order to recover R&D / Advertising cost in order to become profitable

Penetration

Launching at a low price in order to gain market share

Trial Pricing

Introductory offer (start at a dollar a month and then goes to10 dollars a month)

Cryptocurrency

Digital Currency

Digital and mobile wallets

Payments through phones and mobile devices

Buy now pay later

Payment plans (4 payments of 15 dollars)

Core product

Basic benefits of product

Actual Products

Features, Brand, Quality, appearance and package

Augmented Product

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A product that includes additional features, services, or benefits beyond its core function. These additional features provide enhanced value to the customers and differentiate the product from its competitors. Examples of augmented products include warranties, customer service, installation, and maintenance support.

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Durable Goods

Goods that last over a long span of time

Non-durable goods

Goods that only last for short amount of time

Convenience Products

Typically, nondurable goods or services are bought with minimal effort. Consumers expect them to be low-priced and widely available.

Shopping Products

Goods and services for which consumers will spend time and effort to gather information on price, product attributes, and product quality. More likely to compare alternatives before they buy.

Speciality Product

Have unique characteristics that are important to buyers at almost any price. Usually an extended problem-solving purchase. Loyal customers.

Unsought Product

Goods and services for which a consumer has little awareness or interest until a need arises. Often require a lot of advertising or personal selling.

Continuous Innovation

Improvements and modifications to existing products

Discontinuous Innovation

Innovations that changes the way we live

Dynamically Continuous

Innovations that take time to learn to use

Adoption Curve

Curve that shows the longevity of product

Innovators

Risk-takers, well educated, access to disposable income

Early Adopters

Heavy media users, others ask for their opinion, care what other people think, influencers 

Early Majority

Don’t want to be first but don't want to last 

Late Majority

Older more conservative and less educated

Laggards

Bound by tradition, lower education and income

Product Line

Is the firm’s total product offering designed to satisfy a single need or desire of target customers

Product Mix

The total set of products a firm offers for sale

Brand Equity

A Brand’s value to its organization is over and above the value of the generic version of the product.

Brand extensions

Arise from a firm leveraging brand equity to sell new products using the same brand name.

Sub-brands

occurs when a firm creates a secondary brand to help differentiate a product line (e.g., Virgin Mobile, Virgin Atlantic, Virgin Galactic).

Product Life-Cycle

the length of time from a product first being introduced to consumers until it is removed from the market.

Introduction

The time where the product is introduced into the market

Growth

The time where the product is rapidly increasing in sales

Maturity

Where the product growth is stopping and demand is staying at an level point

Decline

When a product is on the decline and demand is declining

Problem Recognition

Identifying the problem

Information Search

Finding information to solve the problem or product

Evaluation of alternatives

Finding the alternative solutions or the what if I choose another product

Product Choice

Picking between the products

Post purchase evalution

Review of the product and how satisfied you are with the product

Herustics

rules of thumb or mental shortcuts used by individuals to arrive at good decisions with less mental effort

Compensatory Decision Rules

Strength on one attribute may compensate for a weakness in another

Internal Influence

Motivation

Influence

Learning

Attitude

External Influence

Social media

Time and place

Culture

Subculture

Producers

People who produce- fishing, lumber agriculture

Resellers

Wholesale and distributors and retailers

Institutions and organizations

Government and non profit organizations

Joint Business demand

When two or more products are involved for demand

Derived Business Demand

Stems from customers demand of product

Fluctuating Business Demand

Small changes in consumer lead to large changes of demand

Straight Rebuy

A purchasing process where the buyer regularly buys the same product from the same supplier without any modifications is called a Straight Rebuy.

Modified Rebuy

A buying situation in which an individual or organization buys goods that have been purchased previously but changes either the supplier or some other element of the previous order.

New Task/Buy

Buying situation in which a company places an order with a supplier for the first time

Break Even point

When the product starts to make a profit

habitual decision-making

The type of decision-making consumers use for every day, low-risk purchases, like cereal

Maslow's Hierarchy

A theory proposed that arranges human needs in a pyramid shape. The five levels include physiological needs, safety needs, love/belonging needs, esteem needs, and self-actualization needs.

Co-branding

When two brands partner to create a new product

IDEO

This is a global design firm that pioneered design thinking and believes in practicing "extreme empathy" to better meet customer needs

Awareness

During this stage of the product adoption pyramid, marketers should engage in massive advertising to spread the word about their product

P&G Amazon and Target

Amazon made a pact with P&G to allow Amazon to setup the stores to make it cheaper. Frustrated Target because they sell the exact same products and it created competition between Target and Amazon. Benefited P&G and Amazon because it created revenue and profit for both companies. Hurt the relationship between Target because P&G and Target were very loyal to each other.

Kwik Trip

Kwik Trip does Vertical Integration where they buy out their suppliers and or distributions channels. Kwik Trip will buy sell and ship all of their products

Costco chicken

Costco will always try to keep their chicken at 4.99 to get shoppers through the door

Rule of 7

States that customer has to see message or product 7 times before taking action on a product

Owned media

Where people have the site: websites, mobile sites, blogs

Paid Media

Where people buy the media: advertising, sponsorships

Earned Media

Where customers are the media: buzz, sharing content with others

Content Marketing

Sharing media to gain following.

Pros: Takes long time for it to return and have benefits

Cons: It is time consuming and you have to be an expert in marketing it

Advertising Marketing

Using paid advertising to market:

Pros: Get PPC (Pay per Click) and people are clicking on your advertisement

Cons: Loses value once you stop paying for it

Digital Marketing

4 types of Marketing


1. Search advertising
2. Display advertising
3. Social Media advertising
4. Video advertising

Public Relations

Strategy process to build a connection between organizations and their publics

Social Media Marketing

About choosing where is my market and what is the best place to post it

Infinte Dial

Longest running survey and has been running since 1898. Tracks mobile behaviors, internet audio, podcasting, social media, smart speakers and more.

Most popular social media


1. Facebook
2. Instagram
3. TikTok

Groundswell

How people learn about a new product

Content Marketing

A strategic **marketing** approach focused on creating and distributing valuable, relevant, and consistent **content** to attract and retain a clearly defined audience — and, ultimately, to drive profitable customer action.

Content Leaders

are the informed opinion **leaders** and the go-to people in their field of expertise. They are trusted sources who move and inspire people with innovative ideas; turn ideas into reality and know and show how to replicate their success.

Pew Research top 3 most used social media

Youtube Facebook Instagram

Integrated Marketing Communication

involves the planning, execution, and evaluation of coordinated, brand communication programs over time to targeted audiences. Aim is to deliver consistent messaging across platforms. Be careful not to confuse this term with omni-channel marketing

Marketing Communication 4 roles

1. Inform
2. Remind
3. Persuade
4. Build Loyalty and relationships

One to many marketing

Where marketer is going to large audience

Examples are:


1. Advertising
2. Sales Promotion
3. Public Relations

One to One

Where marketer is going for one person:

examples are:


1. Direct Selling
2. Database Marketing
3. Personal Selling

Many to Many

Consumers are talking to consumers about product:


1. Buzz media
2. Social Media

Advertising

Paid non personal communication, one to many communication, pros are reaches a large audience quickly, cons are it is expensive and not credible

Sales Promotion

Giving customers a short term incentive, one to many marketing, pros are it can help a short term goal, cons are it is not credible and not viable for a long time

Personal Selling

Selling a product to another person, is a high risk strategy, one to one selling, pros are it great in business to business and business to customer and is a good mix of credibility and control, con is it is not feasible in all transactions