BUS 160 Review Concepts: Chapters 11, 12, 13
1. Customer Relationship Management (CRM)
Definition: CRM is a strategy for managing an organization's relationships and interactions with potential customers and current customers. The goal is to improve business relationships to grow the business.
Key Components:
Data collection on customer interactions
Analysis of customer information for insights
Implementation of strategies to enhance customer satisfaction and loyalty
2. Types of Utility
Definition: Utility refers to the value or benefit derived from a good or service.
Types of Utility:
Form Utility: Created by converting raw materials into a finished product.
Place Utility: Created by making a product available where consumers want to purchase it.
Time Utility: Created by making a product available at a time when consumers want it.
Possession Utility: Created by the transfer of ownership of the product.
3. Substitute Types
Definition: Substitute goods are products that can be used in place of each other.
Characteristics:
High substitutability indicates that consumers can easily switch between products based on price or preference.
Example: Butter and margarine.
4. Marketing Objectives vs. Strategy
Marketing Objectives: Specific, measurable goals that a company aims to achieve through its marketing efforts.
Example: Increase market share by 10% within a year.
Marketing Strategy: The plan of action designed to achieve marketing objectives, which includes choosing target markets and building a marketing mix.
5. Product Differentiation
Definition: The process of distinguishing a product from others to make it more attractive to a target market.
Methods:
Unique features and benefits
Quality improvements
Branding and packaging
6. Integrated Marketing Strategy
Definition: A unified approach that combines all marketing communications tools to present a consistent message across various channels.
Importance:
Enhances consumer clarity and builds brand strength.
7. Segmentation Variables
Definition: Factors that segment a market into distinct groups of buyers.
Types:
Demographic: Age, gender, income, education
Geographic: Region, city size, climate
Psychographic: Lifestyle, personality traits
Behavioral: Purchase behavior, user status, loyalty status
8. Consumer Behavior
Definition: The study of individuals and groups in selecting and using goods and services.
Factors Influencing Consumer Behavior:
Cultural influences
Social influences
Personal factors
Psychological factors
9. Consumer Influences
Types:
Cultural: Culture, subculture, and social class impacts.
Social: Family, friends, and social media as influence factors.
Personal: Age, gender, income, and personal preferences impact decisions.
Psychological: Motivation, perception, learning, beliefs, and attitudes.
10. Evoked Set
Definition: A group of brands or products that a consumer considers when making a purchase decision.
Characteristics:
Represents options readily thought of and evaluated by the consumer.
11. Value Package
Definition: The complete bundle of benefits received from a product or service, beyond the price.
Components:
Quality, features, brand reputation, and after-sales service.
12. Types of Consumer Goods
Classification:
Convenience Goods: Low-priced items bought frequently (e.g., groceries).
Shopping Goods: Items consumers compare on criteria like quality and price (e.g., electronics).
Specialty Goods: Unique products for which consumers make special purchases (e.g., luxury cars).
Unsought Goods: Products that consumers do not think about often (e.g., life insurance).
13. Product Line vs. Mix
Product Line: A group of related products marketed by the same company (e.g., a line of skincare products).
Product Mix: The total number of product lines a company offers.
14. Product Development Process
Steps:
Idea Generation
Idea Screening
Concept Development
Market Testing
Commercialization
Importance: Essential for bringing new products to market successfully and ensuring they meet consumer needs.
15. National vs. Private Brand
National Brand: Products that are marketed under a manufacturer's name (e.g., Coca-Cola).
Private Brand: Products that are marketed under a retailer's name (e.g., Walmart’s Great Value brand).
16. Product Life Cycle and Profitability
Stages of Product Life Cycle:
Introduction: High costs, low sales; profitability is minimal.
Growth: Increased sales and profitability as product gains acceptance.
Maturity: Sales stabilize; competition increases leading to price reductions.
Decline: Decrease in sales and profitability; may lead to product discontinuation.
17. Product Placement for Brand Awareness
Definition: The inclusion of a brand within a film, television show, or other media to promote brand visibility.
Purpose: To enhance brand recognition and influence consumer perception of the brand positively.
18. Markup
Definition: The amount added to the cost price of goods to cover overhead and profit.
Calculation: Markup can be expressed as a percentage over the cost price.
Formula: ext{Markup} = ext{Selling Price} - ext{Cost Price}
19. Pricing Objectives
Types:
Profit Maximization: Setting prices to reach maximum profit.
Sales Maximization: Focusing on increasing sales volume rather than profit.
Market Share Objectives: Pricing to gain larger market share, even if profits are lower temporarily.
20. Distribution Channels
Definition: The path through which goods and services travel from the vendor to the consumer.
Types:
Direct Channel: Manufacturer sells directly to consumers.
Indirect Channel: Involves intermediaries like wholesalers and retailers.
21. E-Intermediary
Definition: An online intermediary that facilitates the buying and selling of products, often acting as a middleman in e-commerce transactions.
Examples: Amazon, eBay, and various travel booking sites.
22. Syndicated Selling
Definition: A marketing practice where multiple companies band together to sell a product or service, often through a shared sales platform or channel.
Advantages: Increases market reach and reduces costs through shared resources.
23. Product Positioning
Definition: The process of creating an image or identity for a product in the minds of the target market.
Strategies:
Utilizing attributes, uses, or user benefits as positioning bases.
24. Push vs. Pull Strategy
Push Strategy: A marketing strategy focused on pushing products through the distribution channels to retailers, often using trade promotions.
Pull Strategy: A marketing strategy that stimulates consumer demand to pull products through the supply chain, often through advertising and promotions.
25. Sales Promotion
Definition: Short-term incentive designed to encourage the purchase of a product or service.
Methods:
Coupons, discounts, buy-one-get-one-free offers, and contests.
26. Publicity vs. Public Relations
Publicity: The act of gaining public visibility or awareness for a product or service through media exposure.
Public Relations: The strategic communication process that builds mutually beneficial relationships between organizations and their publics.
Differences:
Publicity is often uncontrolled, while public relations is planned and managed.
27. B2B Selling Process
Definition: The process of selling goods and services from one business to another.
Stages:
Prospecting
Pre-approach
Approach
Presentation
Handling objections
Closing the sale
Importance: Understanding the B2B selling process is crucial for creating effective sales strategies and building long-term client relationships.