Chapter 12

Question 1

Formal definition of marketing

Answer 1

Creating, communicating, and delivering value to customers and managing customer relationships

Question 2

What is the ratio in deriving a product’s value?

Answer 2

Value = Benefits/Costs

Question 3

What are the four kinds of utility marketing strives to provide?

Answer 3

Form utility: marketing designs products that the customers want
Time utility: marketing provides products when customers will want them
Place utility: marketing provides products where customers will want them
Possession utility: marketing determines the terms of sales to successfully transfer possession of a product to the customers

Question 4

What is a consumer good?

Answer 4

Tangible goods that people buy for personal use. B2C

Question 5

What is an industrial good?

Answer 5

Physical items used by companies to produce other products. B2B

Question 6

What is relationship marketing?

Answer 6

Instead of marketing to focus on single transactions, marketing to build long lasting relationships and social ties.

Question 7

How does the political-legal environment influence marketing? Socio-cultural?

Answer 7

Political-legal: Certain legislation (i.e., environmental) cause marketing managers to try to manage a favorable position with the political/legal environment to gain public support.
Socio-cultural: A social demand around a particular area (healthy foods) cause companies to lean towards them.

Question 8

How does the technological environment influence marketing? Economic?

Answer 8

The technology environment is consistently shifting, creating new goods and services, resulting in lifestyle changes. In turn, these changes in lifestyle stimulate new products.
Marketers often study the business cycle as they try to anticipate consumer and business spending.

Question 9

How does the competitive environment influence marketing? What are the three types of competition?

Answer 9

Since consumers and commercial buyers have limited resources, marketers must make their product the most attractive; as once a dollar is spent, that dollar is no longer available for other purchases.

1. Substitute products: Fitness program or drugs for your cholesterol level?
2. Brand competition: Use google or bing?
3. International competition: Heighten by alliances such as European Union, USMCA, etc.

Question 10

What is a marketing plan?

Answer 10

Identifies what marketing will accomplish in the future. Specifies activities and resources that will be used to meet the target market’s needs and desires.

Question 11

What is a marketing objective?

Answer 11

Goals the marketing plan intend to accomplish, solely exists to support the company’s competitive position in the future.

Question 12

What is a marketing strategy

Answer 12

Identifies all the marketing activities that a business will use to achieve its marketing objective. Also makes adjustment to the said activities if they are not affordable.

Question 13

What is the marketing mix? (the 4 p’s)

Answer 13

Product, pricing, place, and promotion

The four basic components of a marketing strategy that marketing managers use to satisfy the target markets.

Question 14

Marketing Mix: Product

Product Differentiation

Answer 14

Marketers are in need of constantly adapting to changing tech, wants/needs from customers, and economic conditions.
(Creating a feature or image that makes a product different enough from an existing product to attract customers)

Question 15

Marketing Mix: Pricing

Answer 15

Selecting the best price to sell a product. Marketers must find a profitable middle ground that supports the manufacture’s cost of production, but also denies customers from turning to its competitors.

Question 16

Marketing Mix: Place (Distribution)

Answer 16

Deciding how to get the product to the consumer. Warehousing/inventory control, as well as decisions about the channels through which they distribute products. (Sell to other companies? Sell directly to retailers? Sell directly to consumers?)

Question 17

Marketing Mix: Promotion

Answer 17

The most visible component; relaying information about products. i.e., advertising, personal selling, sales, etc.

Question 18

What is market segmentation and target markets?

Answer 18

1. Dividing a market into categories of customer types or “segments”
2. Since products cannot satisfy all people, groups of people or organizations with similar wants/needs, who is expected to show interest in the same products

Question 19

Identifying market segments: Demographic variables

Answer 19

Describing population by characteristics such as age, income, gender, ethnic background marital status, race, religion, and social class.
(i.e., in Canada, marketers must consider the two varying interests between English-Canadians and French-Canadians, and adapt accordingly)

Question 20

Identifying market segments: Geographic variables

Answer 20

Geographical units, as big as countries right down to neighborhoods. (Umbrella business will prosper in BC, while utterly failing in the Arizona’s desert climate)

Question 21

Identifying market segments: Geo-demographic variables

Answer 21

Combination of geo and demographic traits. (well-educated, 25-34 year old with high paying job living in downtown areas of major cities). More effective as with greater number of variables separate the market more precisely.

Question 22

Identifying market segments: Psycho graphic variables

Answer 22

Lifestyles, opinions, interests, and attitudes. Explain why two people with the same geo-demographic variables may have complete opposite consumer choices. (one may be environmental friendly, the other may not)

Question 23

Identifying market segments: Behavioral variables

Answer 23

Divide market into groups bases on consumer knowledge, use, or response to a product. 
Benefits sought 
User status
Usage rate
Loyalty status
Occasion for use

Question 24

What is marketing research?

Answer 24

Studying what customers need and want; to make long-lasting, effective marketing decisions.

Question 25

When does a market research usually occur? What are the five steps to market research?

Answer 25

Usually when a new or altered product is being considered.

1. Study the current situation: What is the need, and what is being done?
2. Select a research method: Consider effectiveness and costs
3. Collect secondary data: Data from previous research- saves time, money, and effort. But primary data is sometimes required if the secondary is unavailable or inadequate.
4. Analyze the data: Make sure the data is actually useful
5. Prepare a report: Summary of the study/findings, various solutions, and recommendation for an appropriate course of action

Question 26

Marketing research method: Observation

Answer 26

Oldest form of market research, popular due to its low cost. Ranges from simple surveillance techniques or electronic observation and data analytics tools to gain info for micro-targeting purposes.

Question 27

Marketing research method: Survey

Answer 27

Questionnaire designed to collect honest answers about specific issues that simple observations cannot bring in. Moved away from mailing surveys to online surveys to save costs.

Question 28

Marketing research method: Focus Groups

Answer 28

6-15 people brought together, talking about a product or service led by a moderator. Employees may observe the conservation from behind, or listen to the taped recording to look for common themes. Groups are usually not told which company is sponsoring the research.

Question 29

Marketing research method: Experimentation

Answer 29

Compares responses of the same or similar individuals under different circumstances In situations where survey or focus groups won’t be useful, an experimentation is used.

Question 30

What is the study of consumer behaviour?

Answer 30

Studying the decision process of why people buy and consume certain products.

Question 31

What are the four major influences on consumer behavior?

Answer 31

Psychological
Personal
Social
Cultural

Question 32

What are the five stages a consumer goes through when making a purchase?

Answer 32

1. Recognizing a problem or need
2. Seeking information (to fulfill said problem or need)
3. Evaluating alternatives
4. Purchase decision
   (Rational motives: Logical evaluation of product; cost, quality, etc.
   Emotional evaluation: imitating others, aesthetics, etc)
5. Post-purchase evaluation

Question 33

What are product features? Value package?

Answer 33

1. Qualities, tangible and intangible, that a company builds into its products.
2. Bundle of both benefits and features that firms must constantly enhance to compete.

Question 34

What are the three categories of classifying consumer products?

Answer 34

1. Convenience goods/services: Regularly consumed, inexpensive. (i.e., milk, newspaper, etc)
2. Shopping goods/services: Purchased less often, more expensive, purchasing decision is delayed more as they compare style, performance, etc. (i.e., television, car insurance)
3. Specialty goods/services: Purchased very infrequently, expensive, consumer spends great deal of time choosing the ‘perfect’ item. (i.e., jewelry, catering, etc)

Question 35

What are the three categories of classifying organizational products?

Answer 35

1. Production items: Goods/Services used directly in the production process. (i.e., tea processed into tea bags, etc.)
2. Expense items: Goods/Services consumed within a year by firms (i.e., oil and electricity, building maintenance, etc.)
3. Capital items: Expensive and long-lasting goods/services, with more than a year of life expectancy (i.e., buildings, fixed equipment, such as water towers and accessory equipment, such as computers)

Question 36

What is a product mix?

Answer 36

Group of products that a company makes available for sale, whether consumer, industrial, or both.

Question 37

What is a product line?

Answer 37

Group of products that are closely related or sold to the same customer group who will use them in similar ways.