MC

MKT Final Exam

Here is a detailed study guide for your ethics exam based on the Final Examination Study Guide - Fall, 2024 covering Chapters 11 to 15:

CHAPTER 11 – Pricing Products & Services

1. Price vs. Barter

  • Price: The money or other considerations exchanged for the ownership or use of a product or service.

  • Barter: Exchanging products and services for other products and services without using money.

  • Difference: Barter does not involve currency, whereas price does.

2. Value and Price

  • Value: The ratio of perceived benefits to price. Value = Perceived Benefits / Price.

  • If benefits increase or price decreases, value goes up.

  • Drives pricing decisions by focusing on what customers are willing to pay based on perceived benefit.

3. Pricing Approaches

  • Demand-Oriented:

    • Skimming Pricing: High initial price for innovators.

    • Penetration Pricing: Low initial price to gain market share.

    • Prestige Pricing: High price to convey quality.

    • Odd-Even Pricing: $19.99 vs. $20 to psychologically appear cheaper.

    • Bundle Pricing: Combining products and offering a lower total price.

  • Cost-Oriented:

    • Standard Markup Pricing: Adding a fixed percentage to the cost of all items.

    • Cost-Plus Pricing: Cost plus a specific amount or percentage profit.

  • Profit-Oriented:

    • Target Profit Pricing: Setting a price to achieve a specific profit.

    • Target Return-on-Sales: Price that ensures a certain profit % of sales.

    • Target Return-on-Investment: Price to generate a ROI target.

  • Competition-Oriented:

    • Customary Pricing: Based on tradition or competition (e.g., vending machine soda).

    • Above, At-, Below-Market Pricing: Based on competitors’ prices.

    • Loss-Leader Pricing: Selling below cost to attract customers.

4. Demand Curve

  • A graph showing quantity demanded at various price points.

  • Factors influencing demand: consumer tastes, availability of substitutes, and consumer income.

5. Elasticity of Demand

  • Elastic: Small price change causes large quantity change (luxuries).

  • Inelastic: Price change has little effect on quantity (necessities).

6. Cost and Profit Terms

  • Fixed Cost: Do not vary with production (e.g., rent).

  • Variable Cost: Vary with production volume (e.g., materials).

  • Unit Variable Cost: Variable cost per unit.

  • Total Cost = Fixed + Variable Costs.

  • Profit = Total Revenue – Total Cost.

7. Price Constraints

  • Factors limiting price flexibility:

    • Demand for the product class and brand.

    • Newness of the product.

    • Cost of producing and marketing.

    • Competitor pricing.

    • Legal/ethical considerations.

CHAPTER 12 – Marketing Channels

1. Marketing Channel (Intermediary)

  • Path that products and services take from producer to consumer.

  • Intermediaries: Middlemen like wholesalers, retailers, agents.

2. Types of Channels

  • Direct Channel: Producer sells directly to consumer (e.g., farmer’s market).

  • Indirect Channel: Uses intermediaries (e.g., manufacturer → wholesaler → retailer → consumer).

  • Digital Channels: Online platforms for direct access to consumers.

3. Channel Strategies

  • Direct to Consumer (DTC): Selling directly, especially via digital.

  • Multi-channel: Using more than one channel (e.g., stores + website).

4. Vertical Marketing Systems

  • Professionally managed and centrally coordinated channels.

    • Corporate: One company owns production and distribution.

    • Contractual: Independent firms integrate on a contractual basis (e.g., franchising).

    • Administered: Coordination by the power of one channel member.

5. Distribution Types

  • Intensive: As many outlets as possible (e.g., snacks).

  • Exclusive: One or few outlets (e.g., luxury cars).

  • Selective: Few selected outlets (e.g., electronics).

6. Logistics and Supply Chain

  • Logistics: Right product, right place, right time.

  • Supply Chain: All activities from raw materials to final delivery.

CHAPTER 13 – Retailing and Wholesaling

1. Retailing

  • Selling goods/services to final consumers for personal use.

  • Utilities Offered:

    • Time, Place, Form, Possession utility.

2. Retail Classifications

  • Ownership:

    • Independent Retailers: Stand-alone stores.

    • Corporate Chains: Multiple outlets under common ownership.

    • Contractual Systems: Franchises, retailer cooperatives.

  • Service Level:

    • Self-Service: Customer performs functions (e.g., gas station).

    • Limited Service: Some services provided (e.g., Walmart).

    • Full Service: Extensive services (e.g., Nordstrom).

3. Specialty Outlets

  • Carry depth in one category (e.g., Foot Locker).

4. Non-Store Retailing

  • TV Shopping: Buy via television.

  • Online Retailing: E-commerce.

  • Telemarketing: Selling via telephone.

  • Direct Selling: Personal interactions (e.g., Avon).

5. Retail Position Matrix

  • Classifies retailers by:

    • Breadth of product line (narrow vs. broad).

    • Value added (low vs. high).

6. Retailing Strategy & Mix

  • Retail Mix: Merchandise, pricing, store layout, communication.

  • Everyday Low Pricing (EDLP): Consistent low prices (e.g., Walmart).

  • Off-Price Retailing: Selling at reduced prices (e.g., TJ Maxx).

  • Store Location: Critical for foot traffic.

7. Performance Metrics

  • Sales per square foot, same-store sales growth, gross margin.

8. Retail Life Cycle

  • Introduction → Growth → Maturity → Decline

9. Wholesalers

  • Merchant Wholesalers: Take title to goods.

  • Agents/Brokers: Do not take title; connect buyers/sellers.

CHAPTER 14 – Interactive & Multichannel Marketing

1. Traditional vs. Digital Marketplaces

  • Traditional: Physical exchange environment.

  • Digital: Networked online exchanges.

2. Customer Relationships Online

  • Personalization: Tailoring content to individual users.

  • Permission Marketing: Only sending promotional messages to consumers who opt in.

3. Online Experience

  • Needs to be engaging, quick, and easy to navigate.

4. Online Consumer Profile

  • Tend to be younger, educated, wealthier, and time-starved.

5. Eight-Second Rule

  • Website should load in 8 seconds or users will leave.

6. Cross-Channel Consumers

  • Use multiple channels (e.g., research online, buy in-store).

7. Showrooming vs. Webrooming

  • Showrooming: Visit store, buy online.

  • Webrooming: Research online, buy in-store.

CHAPTER 15 – Marketing Communications

1. Promotional Mix

  • Blend of:

    • Advertising: Paid non-personal communication.

    • Personal Selling: Face-to-face selling.

    • Sales Promotion: Short-term incentives.

    • Public Relations: Managing public image.

    • Direct Marketing: Targeted individual communication.

2. Integrated Marketing Communications (IMC)

  • Coordination of all promotional activities for consistent messaging.

3. Six Elements of Communication

  1. Source

  2. Message

  3. Channel of communication

  4. Receiver

  5. Encoding

  6. Decoding

4. Communication Process

  • Sender encodes → Message → Medium → Receiver decodes → Feedback → Noise can interfere.

5. Mass vs. Customized Communication

  • Mass Selling: Broad message (e.g., TV ads).

  • Customized Interaction: Personal messages (e.g., sales call).

6. Advertising Characteristics

  • Reach wide audience.

  • Expensive.

  • No immediate feedback.

7. Personal Selling

  • Pros: Immediate feedback, persuasive.

  • Cons: High cost per contact.

8. Public Relations & Publicity

  • PR: Strategic communication to influence public perception.

  • Publicity: Unpaid media coverage.

9. Sales Promotion

  • Coupons, rebates, contests to stimulate demand.

10. Direct Marketing

  • Uses mail, email, catalogs for direct response.

11. Product Life Cycle & Promotion

  • Introduction: Inform

  • Growth: Persuade

  • Maturity: Remind

  • Decline: Phase out

12. Push vs. Pull Strategies

  • Push: Push product through channels (e.g., trade shows).

  • Pull: Stimulate consumer demand directly (e.g., ads).

13. Promotion Decision Process

  1. Identify target audience.

  2. Set objectives.

  3. Set budget.

  4. Design promotion.

  5. Schedule promotion.

  6. Evaluate results.

14. Developing an IMC Program

  • Design message, choose channels, determine schedule, evaluate impact.

15. Hierarchy of Effects

  1. Awareness

  2. Interest

  3. Evaluation

  4. Trial

  5. Adoption