marketing management Flashcards

Question

what is marketing control a formal process for

Answer 1

Marketing control is a formal process for: - Measuring performance - Comparing performance to established marketing and strategy objectives - Adjusting the objectives or strategies based on this analysis

Answer 2

Control of marketing activity - [ ] Insures that targets achieved - [ ] Insures early warnings of things going wrong - [ ] Allows corrective measures to be taken soon Development of marketing activities - [ ] Analysis environment and highlight strengths and weaknesses - [ ] Identifies available, options and age choice - [ ] Help to allocate resources - [ ] How to handle change? Coordination of marketing activity - [ ] Specifies exactly what is expected - [ ] Integrates different areas - [ ] Communicates, objectives and plans to staff - [ ] Reduces internal rivalry

Answer 3

SETTING THE RIGHT PRICE ● Price is the value that customers give up or exchange to obtain a desired product - Payment may be in the form of money, goods, services, favours or anything else that has value to the other party ● Pricing a new product must take into account the conditions of the market and competitors’ prices ● Value placed on what is exchanged ● Highly symbolic ● Consumer’s perspective: functional, quality, operational, financial, personal ● Seller’s perspective: costs, revenue, profit

Answer 4

1. develop pricing, objectives 2. Estimate demand 3. Determine costs 4. Evaluate the pricing environment 5. Choose a pricing strategy 6. Develop pricing tactics

Answer 5

PRICING STRATEGIES: ● Skimming price: firm charges a high premium price for its new product with the intention of reducing it in the future in response to market pressures - High price communicates superior product image - People may be willing to pay a premium bc they believe it makes a statement about their own worth ● Penetration pricing: new product is introduced at a very low price - Market is highly price sensitive and low prices stimulate market growth - Production and distribution costs fall with accomplished production experience - Low price discourages actual and potential competition ● Trial pricing: product carries a low price for a limited time period

Answer 6

● Demand refers to a customers’ desire for products. - How much of a product do consumers want? - How will this change as the price goes up or down?

Answer 7

● How sensitive are customers to changes in the price of a product? ● Price elasticity of demand is a measure of sensitivity of customers to changes in price. - Price elasticity of demand = percentage change in quantity demanded/percentage change in price. ● Influences on price elasticity: - Availability of substitute goods or services – If a product has a close substitute, its demand will be elastic. - Time period - The longer the time period, the greater the likelihood that demand will be more elastic. - Income effect - Change in income affects demand for a product even if its price remains the same.

Answer 8

● Average fixed cost is the fixed cost per unit produced (total fixed costs / number of units produced) ● Average fixed cost decreases as the number of units produced increases Fixed costs brackets overhead) call that don’t vary with sales or productive levels, executive salary rent Variable costs cost that do vary directly with the level of production, raw materials Sum of the fixed and variable costs for a given level of production

Answer 9

Break-even analysis examines relationship between cost and price and determines what sales volume must be reached at a given price before the company will completely cover its total costs and post which it will begin making a profit

Answer 10

● Analyse competitor’s costs, prices and offers ● Check economic conditions - e.g., pricing in a recession / responding to inflation ● Look at consumer trends ● Consider nearest competitor’s price ● Evaluate worth to customer for differentiated features ● Anticipate response from competition ● Price competition ● Price is instrument to beat competition (low-cost producer; standardised products) ● Non-price competition ● Product attributes / Brand loyalty / Customer loyalty

Answer 11

● Based on cost, demand, competition and customer needs ● Cost-plus pricing is a pricing method in which the marketer figures all costs for the product and then adds the desired profit per unit

Answer 12

Price adaption strategies – geographic, compensation deal, buy back arrangements ● Discounts/allowances – cash / quantity / seasonal / allowance discount ● Value pricing refers to re-engineering the company’s operations to become a low-cost producer without sacrificing quality, to attract a large number of value-conscious customers. ● In going-rate pricing, firms base prices on competitors’ prices, charging the same, more or less than major competitors. Smaller firms ‘follow the leader’. ● Perceived-Value Pricing – Buyer’s image of product performance e.g. deliver on time, warranty quality, customer support, supplier reputation, trustworthiness, esteem etc.

Answer 13

● Loss-leader pricing ● Special-event pricing ● Cash rebates ● Low-interest financing ● Longer payment terms ● Warranties and service contracts ● Psychological discounting

Answer 14

● Value pricing (EDLP) – offers a fair value to consumers and includes differentiated pricing. ● Demand - Demand-based pricing means that the selling price is based on an estimate of volume or quantity that a firm can sell in different markets at different prices - Yield management pricing

Answer 15

PRICING TACTICS ● Price bundling means selling two or more goods or services as a single package for one price. ● Captive pricing is a pricing tactic used when a firm has two products that are used together

Answer 16

● it’s a pricing tactic that establishes how firms handle the cost of shipping products to customers near, far and wide

Answer 17

● Dynamic pricing strategies - Price can be adjusted to meet changes in the marketplace - Online price changes can occur quickly, easily and virtually at no cost

Answer 18

● Internal reference prices – consumers have a set price or a price range in their mind ● Competition as reference price – if the price is close, the assimilation effect will encourage the customer to think that the products are similar enough to choose the lower priced product

Answer 19

● Odd even pricing ● Price lining

Answer 20

● Deceptive pricing practices ● Loss leaders ● Price fixing ● Predatory pricing

Answer 21

● Product: everything, both favourable and unfavourable, tangible and intangible, received in an exchange of an idea, service or good (Dibb et al, 2006: 297) ● A product (or service) represents all that a customer receives in an exchange ● A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need ● Marketers distinguish among three distinct ‘layers’ of the product: - Core product - Actual product - Augmented product

Answer 22

The Core Product: consists of all the benefits a product will provide The Actual Product: consists of the physical goods that supplies the desired benefit (appearance, styling, packaging…etc) The Augmented Product: consists of the actual product (for example: offering a warranty, repair service…etc

Answer 23

● Equipment, often called installations or capital equipment, is used in daily operations ● Maintenance, repair and operating (MRO) goods are consumed relatively quickly ● Raw materials are products of fishing, lumber, agricultural and mining industries used to in the final product ● Processed materials: produced by firms when they transform raw materials from their original state ● Specialised services: services which are essential to the organisation but are not a part of the actual production of a product ● Component parts: manufactured goods or subassemblies of finished items an organisation's needs to complete their own goods

Answer 24

● Packaging: involves designing and producing the container for a product ● Customer service: is an important element of product strategy ● Brand: is a name/symbol/design that identifies the seller of a product or service ● Labelling: identifies the product/brand, supports the brand’s positioning and adds personality to brand ● Product support services: what services will you offer along with packaging

Answer 25

● Discontinuous innovation: the product must create major change in the way people live - Consumers have to learn a great deal in order to be able to effectively use the product, e.g: AI ● Dynamically Continuous Innovation: a pronounced modification to an existing product - Requires a modest amount of learning for consumers to use, e.g: digital TV ● Continuous innovation: modification to an existing product - Customer doesn’t have to learn anything new e.g. shampoo bar ● Copycat: new product that copies, with slight modification, the design of an original product - Harder to legally protect designs than technological innovations - Resources in marketing means free things

Answer 26

1. Idea Generation ● Sources of new ideas - Customers, Salespeople, Service providers, Anyone with direct customer contact 2. Product Concept Development ● Expand ideas into more complete product concepts + describe features the product should have & benefits those features will provide and evaluate chance for success 3. Marketing Strategy Development ● Develop a marketing strategy that can be used to introduce the product to the marketplace - e.g., identify the target market, estimate its size, determine how the product can be positioned, plan pricing, distribution and promotion expenditures necessary for rollout 4. Business Analysis ● Assess how a new product will fit into a firm’s total product mix + evaluate whether the product can be a profitable contribution for an organisation’s product mix 5. Technical Development ● Work with engineers to refine the design and production process - i.e., develop one or more prototypes; evaluate prototypes with prospective customers; if applicable, apply for a patent 6. Test Marketing ● Try out the complete marketing plan – product, price, place and promotion – in a small geographic area that is similar to a larger target market. - Traditional test marketing is expensive + gives competition a chance to evaluate the new product - Simulated test markets eliminate competitive viewing and cost less 7. Commercialisation ● Launch the product! Full-scale production + Distribution + Advertising + Sales promotion and more

Answer 27

● NDP is very expensive ● NDP takes time ● Unexpected delays in development ● Poor success record (average of 10%) due to: - lack of research - technical problems (design, production etc.) - timing errors (product introduction)

Answer 28

● Excellent knowledge of consumers, markets & competitors ● Unique superior product (higher quality & value in use, new features) ● Well-defined product concept prior to development (target market, product requirements & benefits) ● Market needs ● Technological & marketing synergy ● Quality of execution in all stages

Answer 29

Selecting and Entering a Market ● In our complex society, we cannot assume everyone’s needs are the same ● Greater diversity in needs and wants ● Market fragmentation fuelled by technological and cultural advance

Answer 30

STEP 1: Segmentation - Identify and describe market segments - Those who are more likely to respond to your offer STEP 2: Targeting - Evaluate segments and decide which to go after STEP 3: Positioning - Design a good or service to meet a segment’s needs and develop a marketing mix that will create a competitive advantage in the minds of the selected target market

Answer 31

Segmentation: “The process of grouping customers in markets with some heterogeneity into smaller, more similar or homogeneous segments…” (Dibb et al, 2006: 223) ● Segmentation is the process of dividing a larger market into smaller pieces on the basis of meaningful and shared characteristics ● Segmentation variables are used to divide the market into smaller “slices” ● What influences Consumer Behaviour? - Consumer behaviour is the study of how individuals or groups buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and wants (Kotler et al., 2016) - Social Factors: reference groups, family, social roles, statuses

Answer 32

● Segmenting by age and generational marketing ○ Mature (Silver) consumers - Focus on lifestyle factors, such as mobility ○ Baby-boomers (born between 1946 and 1964) - Key segment due to their size and earnings, willing to invest money, time, and energy to maintain youthful image ○ Generation X (born between 1965 and 1978) - Has entrepreneurial reputation, views home as an expression of individuality ○ Generation Y (born between 1977 and 1994) - aka Millennials ○ Generation Z (born after 1994) ○ Generation Alpha – (born early to late 2010s) ● Gender ● Family Life Cycle - Family needs and expenditures change over time ● Income and social class - Strongly connected to buying power - Within a class, people tend to behave alike. Social class conveys perceptions of inferior or superior position ● Ethnicity ● Culture ● Place of residence - tailoring offerings to diff regions (otherwise they’ll have to purchase online) ● Geodemography - combining demographics with geography ● Geotargeting - Geographically customised web advertising that feeds local ads to users

Answer 33

● Uses psychological, sociological and anthropological factors to categorise customers ● Divides buyers into different groups on the basis of interests, opinions, values etc

Answer 34

Sustainable economy (very important to Boots, one of their key values!!) ● Healthy lifestyles ● Ecological lifestyles ● Alternative healthcare ● Personal development

Answer 35

- measurable -substancial - accesible -differentiable - actionable

Answer 36

● Organisational demographics - Firm size - Number of facilities - Domestic or multinational - Type of business - Production technology utilised ● SIC characteristics - Standard industrial classification of economic activities (SIC)

Answer 37

● The next step is targeting = evaluate each potential segment and decide upon which groups of customers to invest marketing resources - Selected groups are known as target markets ● Targeting is “the decision about which market segment(s) a business decides to prioritise for its sales and marketing efforts” (Dibb et al, 2006: 242)

Answer 38

1. Undifferentiated targeting strategy = appealing to a broad spectrum of people and efficient due to economies of scale when most consumers have similar needs - Example: Asda/Walmart 2. Differentiated targeting strategy = developing products for each of several customer groups with different product needs and appropriate when choice among well-known brands with distinctive images, and segments with distinct needs - Example: L’Oréal 3. Concentrated targeting strategy = focusing efforts on offering one or more products to a single segment - Example: Saga, Sandals

Answer 39

● Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market ○ Decided upon during product development ○ Product differentiation – key to successful marketing ○ Product / service / idea must have distinct image and position vis-à-vis competition ○ Based on customers’ perception – limited control ○ Product positioning affected by image and reputation ○ Critically influences the marketing mix

Answer 40

Step one - analyse competitors positions Step tw0- offer a good and service with a competitive advantage Step 3-finalise the marketing mix Stage 4 evaluate responded and modify needed How do customers view the brand ● Which competitive brands do customers perceive to be their closet competitors ● What market offering and company attributes are most responsible for these perceived differences

Answer 41

Perceptual mapping is “a tool used by marketers and marketing researchers to visually depict consumer perceptions and prioritising of brands and their perceived attributes” (Dibb et al., 2006: 248)

Answer 42

● Differentiation Strategies - Product - Personnel - Channel - Image

Answer 43

Setting SBU Objectives - Organisational goals and objectives should be direct outgrowth of the mission statement and consider internal and external environmental factors - Objectives should be SMART and may be directed toward financial, operational, or customer-based criteria. - Objectives translate what the organisation is aiming to achieve: - Quantitative = numbers e.g., margins, profits, sales, volumes etc. - Qualitative = which can be qualified e.g., service quality, training, customer relationship etc - Philosophical = ideological e.g., working towards a better society, doing the right thing etc

Answer 44

● Potential conflicts, diff goals and objectives, short term vs long term

Answer 45

● Current and potential customers – locate customers, find out what they want and communicate effectively ● Competitors – direct competitors and also substitute products and services (e.g., competition for leisure spend); monitor and assess competition (present & future) ● Intermediaries – co-operation and relationships ● Suppliers – right choice, negotiation of terms, relationship building ● Publics

Answer 46

● Changes all the time, it’s dynamic - Changes can create uncertainty, threats and opportunities - So it is crucial to monitor and check marketing environment for the organisation’s survival and achievement of goals (Kotler et al, 2016) ● The marketing mix is very dependent on the external environment - (Brassington et Pettitr, 2006:51)

Answer 47

● Refers to local, state, national and global laws and regulations that affect business ● Domestic Gov. Policy ● International Gov. activity

Answer 48

- Sociological factors - Public opinion - Media - Lobbyists ● Prior to brexit, EU laws

Answer 49

● Political actions of a government may constrain business e.g. economic sanctions ● Regulatory constraints on trade often restrict the marketing of goods e.g. local content rules ● Human rights issues

Answer 50

● Marketers need to understand state of the economy - e.g., overall economic health (GDP) and business cycle’s stages. ● Business cycle – pattern of changes or fluctuations in economy. ● Prosperity: high levels of demand, employment and income ● Recession: failing demand, employment and income ● Recovery: improvement in production, lowering unemployment and increasing income ● Depression: severe recession with falling prices and little demand ● Inflation – prices and cost of living rise while money loses its purchasing power because cost of goods escalates. - Incomes may increase but real income (what the pound will buy) decreases because goods and services cost more

Answer 51

● Involves consumer decision-making at 3 levels: 1. Competition for discretionary income – amount of money consumers have left after they pay for necessities - e.g. housing, utilities, food and clothing 2. Product competition – other organisations offering different ways to satisfy the same consumers’ needs and wants 3. Brand competition – competitors offering similar goods or services

Answer 52

● Marketers need to understand the big picture & overall structure of their industry. - Monopoly – one seller controls one market, illegal in UK - Oligopoly – relatively small number of sellers e.g. large supermarkets - Monopolistic competition – many sellers compete for buyers in one market e.g., sports shoe manufacturers - Perfect competition – many sellers offering the same good or service with no impact on quality, price or supply (rare occurrence)

Answer 53

● Bottom of the Pyramid (BOP) markets: poorest two-thirds of economic human pyramid – abject poverty - Lesser developed country (LDC) - Economic base is often agricultural - Developing countries - Economy shifts emphasis from agriculture to industry - Developed countries - Offer wide range of opportunities for international marketers

Answer 54

e Socio-Cultural Environment: ● Refers to characteristics of a society, its people and its cultural values and beliefs. You’ve got to know the following terms: - Demographics - Cultural values - Social norms - Language - Consumer ethnocentrism ----- *Understanding customers *Demographic structure of markets *Attitudes and opinions, personal ethics * Consumer movement forces *Leisure trends *Health concerns *Green movement *Environmental issues \ *Animal welfare

Answer 55

● Technology - Provides firms with important competitive advantages - Profoundly affects marketing activities - Can transform industries ● Innovations and improvements - New processes, materials, components and products e.g., low-calorie sweeteners, unleaded petrol, microchips, packaging ● Patent Legal document giving inventors exclusive rights to produce/sell a particular invention in that country

Answer 56

Production and distribution - e.g. computer aided design (CAD), computer aided manufacturing (CAM), materials handling, internet downloading ● Marketing/ administration - e.g. market research, databases, advertising media, online ordering, sales force support and promotional skills ● Impact on society and marketing

Answer 57

● Passive and reactive approach - Environmental forces viewed as uncontrollable - Opportunities approached with caution ● Proactive approach - Environmental forces can be shaped - Develop strategies to overcome environmental forces - Apply economic, psychological and promotional skills

Answer 58

● The traditional Promotion Mix refers to con=mmunication elements that the marketeer controls - - personal selling and direct marketing, direct mail and telemarketing - Personal (one-to-one) communication - personal selling and direct marketing, direct mail and telemarketing ● Purpose - persuade people to do business with a firm ● Check effectiveness of messages using the DRIP model: - Differentiate the offering - Remind customers you are there - Inform them of innovations or changes - Persuade them to consider you ● Integrated marketing communications (IMC) are used for planning, executing and evaluating coordinated brand communication programmes over time to targeted audience

Answer 59

Encoding Idea translated into physically perceivable from Mass (one-to-many) communication Message: content of communication that goes from the source to a receiver Medium communication vehicle reaching members of the target audience Source and receiver must share a frame of reference Noise: anything that interferes with effective Feedback: to complete the communication loop, the source gets feedback from receivers

Answer 60

● Integrated Marketing Communications (IMC): deliver consistent messaging across platforms with a multichannel promotion strategy combining traditional marketing communication with social media and other online activities

Answer 61

IMC Objectives ● Determine campaign purpose, direction and success ● Communications objectives (strategic) and promotional objectives (tactics) ● SMART objectives

Answer 62

● Advertising: pervasiveness, amplified expressiveness, impersonality ● Sales promotion: communication, incentive, invitation ● Personal selling: personal interaction, cultivation, response ● Events and experiences: relevant, involving, implicit ● Public relations and Publicity: high credibility, ability to catch buyers off guard, dramatisation ● Direct marketing and interactive marketing: customised, up-to-date, interactive ● Word of mouth marketing: credible, personal, timely

Answer 63

● Place – where customers can buy product or service (not shelf) ● Importance of buyers’ needs & behaviour ● Must provide customer satisfaction hence products available: ○ at right time ● Product – enhancing functions ○ Transport & storag

Answer 64

● Quantity of purchase ● Waiting/delivery time ● Convenience ● Product variety ● Service backup

Answer 65

● Wholesaling intermediaries are firms that handle the flow of products from the manufacturer to retailer or business user. ○ Cash-and-carry wholesalers ○ Mail-order wholesalers ● Agents and brokers ● Manufacturers’ agents ● Selling agents ● Commission merchants

Answer 66

● Distribution channels are sets of intermediaries that are usually independent organisations involved in the process of making a product or service available for use or consumption ● A distribution channel is a series of firms or individuals that facilitates the movement of a product from the producer to the final customer directly or indirectly. STEP 1: Develop distribution objectives STEP 2: Evaluate environmental influences STEP 3: Choose a distribution strategy STEP 4: Develop distribution tactics

Answer 67

● Decision factors: company, customers, channels, constraints and competition - Intensive, exclusive or selective distribution

Answer 68

● Select channel partners ● Manage the channel ● Develop logistics strategies

Answer 69

Channel leader – dominant firm that controls the channel with some form of power relative to other members e.g., ○ Economic power ○ Legitimate power ○ Reward or coercive power

Answer 70

● A supply chain is a set of three or more entities (organisations or individuals) directly involved in the upstream or downstream flows of product, service, finances and/or information from a source to a customer. ● The supply chain includes all the firms that engage in activities that are necessary to convert raw materials into goods or services and put it in the hands of a consumer or business customer. ● Supply chain management is the management of flows among the firms in a supply chain to maximise total profitability.

Answer 71

● Even small firms with limited resources can enjoy competitive advantages by making products available to customers around the globe at a very low cost. ● Disintermediation – process by which traditional intermediaries are eliminated as companies question the value added by layers in the distribution channel.

Answer 72

● Logistics is the process of designing, managing and improving the movement of products through the supply chain through purchasing, manufacturing, storage and transport. ● Transportations Mode Considerations: Dependability, Cost, Speed of delivery, Accessibility, Capability and Traceability Functions: ○ Order processing ○ Warehousing ○ Materials handling ○ Transportation ○ Inventory control

Answer 73

● Retailing is the final stop on the distribution path, the process by which goods and services are sold to consumers for their personal use Factors contributing to the retail evolution include demographics, technology and globalisation. ● Classified through merchandise mix, level of service, merchandise selection.

Answer 74

● Benefits ○ Shop 24/7 ○ Less travel ○ Relevant information easily accessible ○ More choice ○ Greater price information and lower prices ● Drawbacks ○ Lack of security ○ Fraud ○ Can’t examine items ○ Returns expensive ○ Lack of human interaction

Answer 75

● Benefits ○ Worldwide market ○ Lower costs ○ Specialised business opportunities ○ Real-time pricing ● Drawbacks ○ Lack of security ○ Must maintain online presence ○ Fierce price competition ○ Shop conflicts ○ Legal issues

marketing management Flashcards

(99 cards)