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Optimal Study Guide for Exam – Chapters 11, 12, & 13

Chapter 11: Building Customer Relationships Through Effective Marketing

Key Concepts

• Marketing Definition: The process of creating, communicating, delivering, and exchanging offerings that provide value to customers and society.

• Utility Types:

  1. Form Utility – Product’s design adds value.

  2. Place Utility – Accessibility/location of the product.

  3. Time Utility – Availability when needed.

  4. Possession Utility – Ease of purchase.

• Marketing Concept:

  • Businesses should meet customer needs while achieving organizational goals.

Marketing Strategy

• Components:

  1. Selecting a target market.

  2. Developing a marketing mix (Product, Price, Place, Promotion).

• Market Segmentation: Dividing a market into groups based on:

  • Demographics (age, gender, income).

  • Psychographics (lifestyle, personality).

  • Geographics (region, climate).

  • Behavioristics (brand loyalty, usage rate).

Consumer Buying Behavior

1. Need Awareness

2. Search for Alternatives

3. Evaluation of Alternatives

4. Purchase Decision

5. Post-Purchase Behavior

Influences on Consumer Behavior:

• Situational, psychological, and social factors.

Chapter 12: Creating and Pricing Products That Satisfy Customers

Key Concepts

• Types of Products:

  • Goods (physical items).

  • Services (intangible, like consulting).

  • Ideas (campaigns, social initiatives).

• Consumer Product Classifications:

  1. Convenience Products – Purchased frequently, little effort (e.g., snacks).

  2. Shopping Products – More research involved (e.g., electronics).

  3. Specialty Products – Unique characteristics, brand loyalty (e.g., luxury cars).

• Product Life Cycle: Introduction → Growth → Maturity → Decline.

Branding & Packaging

• Brand Components:

  • Brand Name – Spoken representation.

  • Brand Mark – Visual symbol/logo.

  • Trademark – Legal protection.

  • Brand Equity – Market strength of a brand.

• Levels of Brand Loyalty: Recognition → Preference → Insistence.

• Packaging Functions: Protection, convenience, promotion.

Pricing Strategies

• Cost-Based Pricing: Adding a markup to cost.

• Demand-Based Pricing: Price adjusts to demand.

• Competition-Based Pricing: Based on competitor prices.

New Product Pricing:

• Price Skimming – High initial price, then reduced.

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

Psychological Pricing:

• Odd-Number Pricing ($9.99 instead of $10).

• Multiple-Unit Pricing (bundling products).

• Reference Pricing (showing discount comparisons).

Chapter 13: Distributing and Promoting Products

Key Concepts

• Distribution Channels:

  • Direct (producer → consumer).

  • Indirect (involving intermediaries like wholesalers, retailers).

Market Coverage Strategies:

• Intensive Distribution – Product in all outlets (e.g., soft drinks).

• Selective Distribution – Limited outlets (e.g., designer clothes).

• Exclusive Distribution – One outlet per area (e.g., luxury cars).

Nonstore Selling

• Direct Marketing:

  • Catalog marketing, online retailing, telemarketing.

Integrated Marketing Communications (IMC)

• Coordination of promotional efforts for maximum impact.

Promotion Mix (IMC Elements):

1. Advertising – Paid, non-personal communication.

2. Personal Selling – Direct interaction with customers.

3. Sales Promotion – Discounts, coupons, samples.

4. Public Relations/Publicity – Free media coverage, brand image.