Marketing Exam

Marketing

Marketing

all of the activities involved in the planning, pricing, promoting, distributing, and selling of goods and services to satisfy consumers’ needs and wants

Marketing Mix

4 P’s and 2 C’s

4 P’s

Product, Price, Promotion and Place

2 C’s

Customer and Competition

Industrial Product/Service

Goes directly to a business to be used for industrial purposes. Ex. raw materials, machinery, cleaning services, etc.

Consumer Product/Service

Goes directly to a consumer for recreational use. Ex. a book, a broom, hiring a maid, etc.

Regional marketing

can be within a city, region, or group of provinces

International marketing

sets up marketing and distribution centers in foreign markets-E.g. Honda USA, Honda Canada

Distribution Organization

organizes marketing activities around the ways that the product or service will be delivered to the customer. E.g. Coke-Vending machines, fast food chains

Product Lifecycle

describe the changes in consumer demand over time.

PLC Stages

Intro, Growth, Maturity, Decline, Decision Point

Fad

1. a product, service, or idea that is popular for a very short period of time. E.g. Silly bands

Trends

A product that is more lasting, and is a mass movement toward a particular style or value. E.g. Organic products, Environmentally-friendly products

Seasonal

predictable sales during certain times of the year. E.g. Winter tires

Niche Market

small section of the market that has little competition. E.g. Pet Hotel

Demographics

study of distinct characteristics of people (age, gender, family life cycle, income level, culture, and ethnicity)

Psychographics

measuring people’s beliefs, opinions, and interests

Maslow’s Hierarchy of needs

• Arranged in a pyramid shape-the most basic need is at the bottom.

• Needs-Physical, Safety, Social, Esteem, Self-Actualization

Direct Competition

Products that compete in the same category. E.g. Colgate, Crest

Indirect Competition

Products that are not in the same category but still compete for the same consumers’ income. E.g. Colgate toothpaste, Listerine mouthwash

Sustainable Competitive Advantage

are long-term methods by which a business holds onto its customers, in spite of the competition

Unique Selling Proposition (USP)

is the one thing that a company’s product has that competing companies do not have and are not likely to develop. E.g. Patent, License

Lowering product costs

using cost-efficient manufacturing processes to reduce the costs of making the product

Serving a niche market

recognizing an opportunity and taking advantage of it in producing a product

Customer Loyalty

the customer develops a strong relationship with the product/retailer and will not consider another brand or store

Non-sustainable competitive advantages

are those that can be used by competitors to shift sales in their direction (short-term)

Promotion (non-sustainable)

advertising to achieve ‘top of mind’ awareness

Placement (non-sustainable)

the more places the product is available, the more competitive it is. E.g. Big Box stores

Quality

A product can compete with others in its category by being the best

Benefits of Use

A product that can do more or perform better than another product will have a competitive advantage

Price (non-sustainable)

is only a competitive advantage if it is less expensive than a competitor’s product or service

Design features

A design that consumers prefer provides a product with a competitive advantage

SWOT Analysis

Strengths, Weaknesses, Opportunities, and Threats

Primary Data

unanalyzed, current information collected by a researcher for a specific purpose

Survey

a set of carefully planned questions that are used to gather data. Close ended questions-multiple choice, open ended questions-respondents give own answers

Test marketing

marketers produce a limited quantity of a product and introduce it into test markets (stores)

Focus group Interview

a small group of people brought together to discuss a particular product

observation

collect information by recording the actions of the person without interacting or communicating with them

Internal Information sources

sales, inventory, advertising, and production records

Secondary Data

marketing research collected and published by others- E.g. Stats Canada.  Less expensive than primary data

Types of Secondary Data

1. The Internet

2. Books

3. Periodicals-magazines & newspapers

4. Consultants

5. Databases

6. Marketing Research Professionals

Inventions

a new product that has never been done before-Eg. Black and White TV

Innovations

a change (eg. technology) to an invention E.g. Colour TV

Stages of Product Development

1. Idea Generation

2. Idea Screening

3. Concept development

4. Market Strategy

5. Feasibility Study

6. Product Design

7. Test Marketing

8. Market entry

Idea Generation

brainstorming whether an invention or innovation is to be done

Idea Screening

need to look at each idea to see if it is worthwhile and choose one.

Concept Development

designing of a prototype

Market Strategy

conduct market research

Feasibility Study

looks at the features and design of the product the consumers want, determine costs and a price

Product Design

takes into consideration consumers preferences.

Test marketing

If positive, launch product, if not, make necessary changes.

Market Entry

product enters the product life cycle.

Utility

what is added to a product to make it valuable to the market

Types of utility

1. Form utility

2. Time utility

3. Place utility

4. Information utility

5. Possession utility

Form utility

relationship between a product’s form and its function-scent, flavor, colour, design, packaging

Time Utility

when the product or service is available when the consumer wants it (bathing suits in summer)

Place Utility

makes it possible to purchase the product, the easier the product is to find, the more place utility it has

Information utility

provides consumers with instructions, directions, user manuals

Possession Utility

easy to purchase (eg. payment by credit card, payments, etc)

Logo

generic term for all the symbolic ways to create a brand

Monogrammatic logo

stylized writing of a company’s or product’s initials. E.g. CCM

Visual-line logo

drawings of people, animals, or objects. E.g. Roots uses a beaver

Abstract-shape logo

aren’t representative of identifiable objects. E.g. Nike’s swoosh.

slogan

short, catchy phrase that is attached to the company’s name and logo

Branding

A brand is the visual image that marketers create to allow consumers to identify their particular product or service

Corporate-Dominant Branding

include the name of the company in the brand name or as the name of the product. E.g. Roots

Product-Dominant Branding

connects a product with its positive attributes. E.g. Fancy Feast cat food-associates with gourmet cat food

Marketing Skimming

setting an initial high price for a product/service

Penetration Pricing

setting an initial low price for a product/service

Competitive Pricing

matching prices with competitors

Benchmark Pricing

standard price

Leader Pricing

pricing of a popular product at a low price to attract customers to the store

Everyday Low Pricing

where retailers guarantee to meet the lowest price in the market on certain staple goods

Negotiated Pricing

when a good/service is purchased for less than the published price- E.g. used products

Combo Pricing

customers get a special price on one item when they buy other items at the regular price

Return on investment

overall revenue and profit that the sales produce

Price Lining

selling various brands in a product line at different prices to appeal to different target markets

Supersizing

adding volume to a low cost product to increase its selling price and profits

Interest Free Pricing

selling products today that the customer pays for at a later date without paying an interest charge

Psychological Pricing

selling a product for $1.99 instead of $2

Purchase Discount

receiving a price reduction by buying in bulk

Channels of Distribution

1. Direct

2. Indirect

3. Specialty

Direct Distribution

product is sold directly from producer to consumer

Indirect Distribution

use of intermediaries (importers, wholesalers, retailers-‘middle man’) which sell to consumers

Specialty Distribution

any indirect channel that doesn’t involve a retail store (vending machine, online)

Intensive Distribution

products sold everywhere-E.g. Coke

Selective-control of distribution

to prevent retailers from selling product at too low a price E.g. Apple

Exclusive Distribution

manufacturer has made a deal with one or two retailers to sell the product exclusively. Products with a prestigious image Ferrari

Integrated

the company is the manufacturer, retailers, and distributor- IKEA

Goals of Advertisement

1. Brand awareness

2. Brand trial

3. Brand preference

4. Brand reminder

5. Brand repositioning

Brand Awareness

new product-‘introducing.’

Brand Trial

e.g. free trial periods for software

Brand Preference

convince consumers that their product is better than competition- “Leading Brand”

Brand Reminder

established brands remind consumers to continue using product-Heinz ketchup ‘nostalgic ads’

Brand Repositioning

looking for a new target market

Advertising Appeals

• Biological

• Emotional

• Rational

• Social

Advantages of TV Commercials

local reach, specific target market, little lead time (delivered immediately), portable/everywhere

Disadvantages of TV Commericals

not enough frequency or durability (don’t last long), Clutter (change station), only audio (no visual, limited impact)

Magazine Advantages

selectivity (delivers to specific market), durable (last for years), high quality

magazine disadvantages

expensive, long lead time (to produce)