Study Guide Exam 2
Study Guide Exam 2 MKTG 360
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Popular in Marketing
This 14 page Study Guide was uploaded by Ashley Butz on Tuesday March 10, 2015. The Study Guide belongs to MKTG 360 at Washington State University taught by Dr. Jeff Joireman in Fall. Since its upload, it has received 173 views. For similar materials see Principles of Marketing in Marketing at Washington State University.
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Date Created: 03/10/15
Marketing 360 Study Guide Exam 11 Overall 0 Exam will consist of 50 multiple choice items Segmentation Targeting Positioning Chapter 7 0 What is segmentation Targeting Positioning I Segmentation identify and describe market segments based on shared characteristics 0 Gen X 0 Gen Y 0 Baby Boomers I Targeting Evaluate segments decide which to go after 0 Consumers have different sets of needs and desires 0 Segmentation helps identify appropriate marketing mix product price promotion place 0 Appropriate marketing mix helps products compete bc they are designed to meet more specific needs I Positioning design goodservice to meet segment s needs 0 Create marketing mix that leads to competitive advantage I Hybrid segmentation segmenting market based on more than one segmentation variable 0 Ex age and ethnicity not just age 0 Most segmentation is hybrid 0 What is a segmentation variable I Dimensions that divide the market into fairly homogenous groups each with own needs and wants 0 How can we classify segmentation variables 0 ConsumerrootedFacts 0 Demographics age age cohorts gender marital status family life cycle income education occupation social class 0 Geographic location address geodemographics 0 ConsumerrootedCognitions 0 Personality lifestyles and sociocultural values I Personality traits I Lifestyles psychographics and VALS I Sociocultural values and beliefs 0 ConsumptionspecificFacts 0 Usage and purchase behaviors I Usage rate I Usage situationoccasion I Brand loyalty behavior component I Psychographics factual behaviors leisure activities hobbies 0 ConsumptionspecificCognitions 0 Attitudes and preferences regarding the product I Benefits wanted I Level of involvement I Awareness of product alternatives I Brand loyalty perceived commitment and level of relationship 0 What is geodemographic segmentation and what is one commonly used geodemographic system I Hybrid of geographic and demographic I Classifications of actual addressable mapable neighborhoods where consumers live and shop I Looks for clusters of similar people I Assumes people of a feather ock together I PRIZM by Claritas 0 Ex mobility blues 53 upward bound 13 etc 0 What is psychographic segmentation What types of variables fall under this approach I Psychological sociological anthropological factors to develop segments 0 EX motives status personality sensation seeking culturesubculture interdependent lifestyles activities interests opinions I VALS2 values lifestyles system 0 Based on psychological characteristics relating to consumer behavior 0 Identify prevalence of 8 types by zip code 0 High resourceshigh innovation vs low resourceslow innovation I Ideals thinkers vs believers I Achievement achievers vs strivers I Selfexpression experiencers vs makers 0 Innovator high resources innovation 0 Survivor low resources innovation 0 What are usage rate situationspecific segmentation and person in situation segmentation I Usage rate segment 0 Based on how frequently people use product 0 Former potential 1st time user low med heavy users 0 Companies target heavy users I Less costly to advertise to and more loyal I Brand loyalty programs popular 0 Need to know what consumers expect from their relationship with you 0 Loyal customers are great but don t make them mad will respond more negatively with service failure I SituationSpecific Segment 0 Based on special occasions I whenthen scripts 0 when I encounter situation X I buy Y 0 Ex Christmas Valentine s Day mother s day etc I ConsumptionSpecific Cognitions 0 Based on benefit people seek 0 EX Toothpaste white teeth vs cavities taste sensory etc I Person in Situation Segment 0 Divide market on basis of benefits certain types of individuals person desire in certain situations 0 Different strokes for different folks in different situations 0 EX shoes in two segments and two contexts I Kidsadults homesports 0 What type of segmentation does the Old Spice video represent where the guy is ying through the air and changing personalities I Person in situation segmentation 0 Divide market based on benefits of certain types of individuals and certain situations 0 Changes deodorant for different situations deodorants for each activity 0 Old Spice different titles 0 Be familiar with different types of targeting strategies I Undifferentiated appeal to masses I Differentiated different strokes for different folks I Concentrated go after just one segment I Individualized even more narrow than concentrated 0 Onetoone marketing tailored to individual build relationship 0 Microtargeting and narrowcasting during election deliver tailored messages based on voter s specific concerns 0 Behavioral targeting deliver specific ads based on websites individual visited I Counter segmentation 0 Over time 2 segments may merge into 1 with similar needs 0 May require adopting broader target with same product 0 What are the key criteria for successful targeting I Sizeable large segment I Identifiable and measureable if not can t determine whether sustainable I Stable easier to predict and anticipate needs products won t be out of date too quickly I Accessible must be able to reach segment with marketing mix I Responsive segment responds differently than another segment if not no need to develop unique marketing mix I In line with company s goals and resources company may not want to go after all segments 0 What is a brand personality and what are the major types of brand personality I Brand personality 0 Distinctive image capturing product s or service s essence I Positioning image 0 Evaluate direct and indirect competition 0 Create productservice with competitive advantage 0 Develop marketing mix to appeal to target segment 0 Brand personality for product I Distinctive image that captures a product s or service s essence character benefit 0 Jeep rugged 0 RBI adventure 0 Ford capable 0 Personalities of brands rugged sincere exciting competent sophisticated 0 Measure response and adapt strategy for the product 0 What is a perceptual map and how is it useful I Classydistinctive I Conservative I Practicalaffordable I Sporty I Where does brand fit in Helps consumers build image Product Strategy Chapters 89 0 Layers of a product core actual augmented I Core all benefits provided I Actual physical good or service I Augmented actual product features supporting product warranty repair service after sale 0 Qualitydimensions I Overall ability of product to satisfy a need 0 Reliability Durability Precision Safety Ease of use 0 versatility I Durable benefit over long term high involvement in decision I Nondurable benefit over short time low involvement I Convenience Products 0 Low price purchased often widely available 0 Not much time in decision making 0 Staples necessary items widely available 0 Emergency buy in situation of dire need 0 Fast moving consumer goods consistently high turnover Shopping products high involvement decision Specialty products high involvement decision Unsought Products consumer not aware needs often impulse buys 0 Types of innovations continuous knockoffs dynamically discontinuous Innovation something new or different Typically purchased by few then spreads through population Continuous modify existing product to set apart Knockoffs copies existing product with few changes Dynamically continuous innovation that requires a fair amount of relearning Convergence two technologies converged together to create gt than sum of parts 0 Discontinuous innovation new product changes way we live 0 What is emergent nature unique capability to imagine or envision how concepts might be further developed so they will be successful in mainstream marketplace Traits related to emergent nature 0 Rational processing Re ection Verbal and visual processing balanced Openness Creativity Optimism 0 Moderately correlated with innovativeness and lead user status Emergent nature scale items 0 Right consumers for right products Can fill in the blanks for how product will fit in average person s life 0 Experiment with new ideas 0 Find patterns in complexity 0 Are concepts developed by consumers high in emergent nature better received YES concepts developed by those high in emergent nature better than by lead user status 0 Consumer adoption stages Awareness media blitz Interest start to see benefits search info Evaluation Trial before purchasing Adoption buy product Confirmation good experiences loyalty 0 Categories of adopters Innovators 25 Early adopters 135 Early majority 34 0 Indicates general acceptance of product Late majority 34 0 Adopt when littleno risk when necessary or due to social pressure Laggards late 16 0 What impacts rate of adoption Relative advantage Compatibility with other products water filter w camelback Complexity I Trailability reduce risk I Observability other people will see product used 0 Product lines product line limited line strategy full line strategy extension I Product line company s complete collection of product offerings to meet single need I Limited line strategy meet need of a smaller target segment I Full line strategy attempt to meet needs of broader consumer market I Product line extensions 0 Stretching adding new items to line 0 Filling adding sizes or styles 0 Contracting a product line dropping items 0 Risk cannibalization stealing existing users instead of going after new segment 0 Product life cyclestages I Introduction stage 0 Want firsttime buyers to adopt product 0 no profits because company is recovering from RampD I Growth stage 0 encourage loyalty 0 expand offerings 0 increase market share 0 profits increase and peak I Maturity stage 0 Sales peak 0 Profit margins narrow 0 Increased competition 0 Price competition 0 Reminder advertising I Decline stage 0 Market shrinks 0 Sales fall 0 Profits fall 0 Stay or go 0 Brand equity I Brand name term symbol or any other unique element of product that identifies one s product and sets it apart from competition I The brand is associated with additional amount of money consumers would spend bc of brand 0 How do consumers bondconnect with brands I Bonding 0 Consumer brand resonance 0 Consumer judgments 0 Consumer feelings 0 Brand performance 0 Brand imagery 0 Brand salience I Identity deep broad brand awareness I Meaning strong favorable and unique brand associations I Responses positive accessible responses I Relationships intense active relationship Services and Service Failures Chapter 10 0 How do services differ from products I Intangibility 0 US biggest exporter of services Intangibility can t feel taste hear touch or see in same way as physical product Fewer search qualities you can evaluate before purchasing More experience of qualities you can evaluate after purchasing credence qualities hard to evaluate after purchase ex medical consultation 0 To market link service with a tangible cue traveler s insurance umbrella Inseparability 0 production and consumption of services inseparable customer must be present when consuming service Perishability 0 Services can t be stored inventoried empty hotel room produces no revenue Variability 0 Services more variable than products due to variability in inputs and outputs ex training of workers 0 SERVQUAL measuring service quality Reliability most important 0 Dependable accurate consistent Responsiveness 0 Ability to provide fast service Assurance 0 Knowledgeable and courteous employees who earn our trust Tangibles 0 Physical facilities tools equipment used to provide service ies ying at restaurants Empathy 0 Interactional faimessjustice how consumers respond based on how fairly treated as individual 0 Caring individualized attention to customer 0 Perspective taking cognitive empathy 0 Empathic concern emotional empathy 0 Gap 1 customers want vs management thinks they want 0 Know customers needs satisfaction expectations Gap 2 customers want vs quality specifications management develops to meet desires 0 Understand satisfaction with service Gap 3 quality specs and actual service provided 0 Train and educate employees 0 Role con ict employee asked to do something con icting with another role or own values 0 Role ambiguity occurs when employee doesn t know what role is Gap 4 customer told company provides and what company actually provides 0 Accurate communication about services that doesn t lead to unrealistic expectations 0 Company needs to hire enough people to provide great service if that s their image Gap 5 service customers want and actual service received 0 Understand satisfaction with service Critical Incident Technique 0 Identify specific service encounters that led to problems and address them 0 Core vs supplementary service products Core 0 basic benefit customer is seeking Supplementary 0 services that support or enhance core service When core service becomes commodity supplementary competitive advantage 0 Four categories of service processes people possessions mental stimulus information I People tangiblecustomer 0 Directed at customer hairstyling transportation health clubs I Possession tangiblepossessions 0 Directed at customer s possessions car repair dry cleaning lawn care I Mental stimulus intangiblecustomer 0 Directed at people s minds entertainment sports education I Information intangiblepossessions 0 Directed at customer s assets banking financial consulting 0 Differentiate between a single deviation and a double deviation I Service failure single deviation 0 When service deviates falls below expectations I Failed service recovery double deviation 0 Following service failure company fails at service recovery stage 0 Ex REI 100 satisfaction guarantee how they deal with service failures 0 What is the difference between dissatisfaction and betrayal both in terms of its antecedents and consequences I Dissatisfaction 0 Negative affective state resulting from perception of unfulfilled expectations 0 Association with annoyance and frustration I Expectation disconfirmation 0 Definitive exit problemsolving complaining reparation do nothing I Betrayal 0 Beliefs that firm has intentionally engaged in actions violating what is normative in context of relationship Firm intentionally broke promise made to customer Association with anger Norm violation Love becomes hate relationship close relationship with service provider Higher expectations service failure creates higher desire for revenge Much worse outcomes when feel betrayed 0 Direct and Indirect forms of aggression retaliation 0 What three things lead consumers to feel betrayed I Relationship before service failure strength of connection I Service failure 0 Motive did the company have goodbad intentions I Service recovery complaining 0 Process I Customer response 0 Betrayal 0 Retaliation 0 Revenge efforts made by customers to punish cause inconvenience to a service firm for damages they feel it caused 0 Direct rage vindictive complaining to employees legal action against firm 0 Indirect negative wordofmouth negative publicity in mass media 0 Removal of future benefits going out of one s way to avoid firm 0 What is the difference between procedural distributive and interactional fairness I Procedural Fairness 0 Fairness among processes 0 Dispute resolution technique to resolve disputes 0 Transparency 0 Open and equal communication 0 Allocation of resources I Distributive Fairness 0 Rewards and outcomes distributed fairly I Interactional Fairness 0 Interactional justice had the largest impact on complainants39 repatronage and negative wordofmouth intentions 0 What is the key cognition in the process model of responses to service failures I those who are less educated or less frustrated will instead complain to line staff or use corporate guestcomment cards I facetoface complaints are the richest channel whether to line staff or management I guests who are more educated more likely to complain more frustrated and in need of greater information about the service failure will typically take their complaint directly to management either facetoface or via written communication 0 How can we intervene to reduce desire for revenge and increase desire for reparation following a failed service recovery 0 Apology 0 Compensation 0 Apology compensation sincere compensation seems bigger more satisfied 0 How does compensation improve the effectiveness of apologies I Compensation apology more sincere compensation seems bigger gt more satisfied customer CRM and lnteg rated Marketing Chapters 7 section on CRM and 12 0 What is CRM what does it allow firms to do how does it manage this and how does CRM view customers I Tracking of consumers preferences and behaviors over time to tailor value to each individual s unique wants and needs I Firms can talk to individual customers and adjust elements of marketing programs based on how each customer reacts I Use computers software databases and internet to capture information at each touch point between customers and companies gt allows better customer care I Proposes customers are relationship partners with each partner learning from each other every time they interact 0 Share of customer I of purchases a customer makes within a given category from a certain company vs of overall market 0 Lifetime value of customer I Potential profit an individual customer generates over hisher lifetime 0 How many times a year they visit company 0 Average bill for customer average cost for customer 0 Net lifetime value of customer years until deathtimes visityearaverage profit I More labor intense marketing target more valuable customers with high lifetime value and return for company I Less labor intense marketing can target less valuable customers 0 I Customer value treated like financial asset involving investment and return I Want to attract and retain customers who offer best investment I Return in Year 1 yearly profitinitial cost yearly cost to maintain I Return in Year 2 yearly profityearly cost to maintain 0 To what extent is CRM strategic in its interactions with high value and low value customers I Know your customer customizing products to individual customer needs I Can identify customers with high lifetime value and return for company More intense marketing efforts ex personal sales gt targets more valuable Less labor intense marketing ex direct marketing gt targets less valuable 0 What is integrated marketing communication Coordinating all aspects of marketing communication to send single message 0 Characteristics 0 Unified voice ultimate focus is customer goal to develop relationship with customer communication goes both ways meet needs of both customer and stakeholders keep communication open continuous measure results 0 exchanging shared meanings through symbols 0 Decoding receive message and interpret 0 Encoding communicate based on consumer Goals of marketing communications 0 inform persuade remind build relationships Integrated marketing communication theory 0 process used to plan develop execute and evaluate coordinated brand communication programs over time to targeted audience 0 0 transferring meaning from a source to a receiver Promotion 0 Coordination of marketer s communication efforts to in uence attitudes and behavior Promotion strategy 0 Advertising 0 impersonal paid communication which sponsor is identified Public relations 0 Communicating about company in order to build understanding acceptance relations with public 0 inform public about goals products Personal selling 0 Company rep communicates directly with potential buyer to communicate about good or service Sales promotion 0 Marketing activities beyond advertising PR and personal selling that encourage purchase behavior 0 Goal communicate competitive advantage 0 Be familiar with the communication model how a message ows from the source to the receiver Source company individual 0 Encoding translating idea into a form of communication that conveys meaning Message advertising public relations sales promotion salesperson pitch communication from consumers Medium magazines newspapers television radio billboards direct mail word of mouth 0 Decoding how a receiver assigns meaning to a message Receiver consumer Noise btw message and medium 0 Competing messages Feedback purchase data product awareness brand loyalty Hierarchy of Effects 0 Communication objectives 0 Awareness I Repetitive advertising slogans and jingles publicity stunts 0 Knowledge I Descriptive copy brochures infomercials public relations personal selling web site O Desire I Status appeals sex appeals celebrity endorsements 0 Purchase I Pointofpurchase displays coupons contests samples 0 Loyalty I Mailing to users licensed merchandise product placement 0 Who is and how is he relevant to the communication model Hint check YouTube Reptillian marketing 0 What are different communication objectives and how are they related to promotional efforts I WOM Marketing 0 Give people a reason to talk about product I Buzz Marketing 0 Use some form of highly visible entertainmentnews to communicate about product I Viral Marketing 0 Entertaining messages passed from customer to customer I Guerrilla Marketing 0 Promotion Where you least expect it 0 What is product placement and Why is it used I Insertion of branded products or services into mass media content with the intent of in uencing consumer attitude or behavior 0 Oversaturation of traditional advertising outlets 0 Reach a captive and involved audience 0 y under the radar may help avoid counterarguing and enhance persuasion 0 What are the trends in product placement over the past several decades I Placements have direct effects on three different outcomes 0 Brand recognitionrecall cognition 0 Brand attitudes affective reaction 0 Consumer choice behavioral intentions Pricing Chapter 11 0 Be familiar With the six different steps in price planning I Develop pricing objectives 0 Salesmarketing objectives 0 Goal reach a certain level of sales or market share 0 Profit objectives 0 Critical when product is a fad 0 Competitive effect 0 Goal have impact on competition cut into sales preempt introduction of competing product 0 Customer satisfaction 0 Price transparency 0 Image enhancement 0 Prestige products priced higher expensive is good I Estimate demand 0 Demand 0 Customer s desire for product 0 Demand curves 0 Graphs show impact of price on demand 0 Normal products 0 As price decreases demand increases 0 Prestige products 0 Curvalinear I Demand increases as price increases I If price too high demand begins decline I Determine costs 0 Variable costs 0 Production costs associated with materials parts labor 0 Vary depending on units produced 0 Fixed costs 0 Costs don t change as function of production 0 Rent salaries heating 0 Average fixed cost total fixed costs units 0 Total costs 0 Variable fixed costs 0 BreakEven Analysis 0 How many units to produce and sell at a given price in order to cover costs 0 BreakEven Point BEP 0 When total revenues total costs 0 Above BEP profit 0 Below BEP loss I Evaluate pricing environment 0 Overall goal 0 Once costs covered create competitive advantage 0 Price that meets the needs of customers better than competition 0 Factors to consider 0 Economy ex reduce prices during recession 0 Competition what are competitors doing 0 Consumer trends ex bargain hunting I Choose pricing strategy 0 Cost Plus Pricing 0 Add fixed amount to total costs of producing product 0 DemandBased Pricing 0 Adjust price based on expected demand 0 Target Costing 0 Figure out price and quality of product customer wants 0 Figure out how much it costs to make desired product 0 Evaluate whether you can make a profit 0 Yield Management Pricing 0 Charge different folks different prices to manage demand and maximize profits 0 Value pricing 0 Pricing to provide ultimate value to customer WalMart 0 get what you pay for 0 New Product Pricing 0 Skimming high price for highly desired product I Apple 0 Penetration very low price to encourage quick sales I Aspirin vacuum cleaners 0 Trial initially low price so customers can try it out I Microsoft Access 0 Creating loyalty to brand through trials I Develop pricing tactics 0 Pricing for individual Products 0 Two Part Pricing I Need to pay 2 times yearly fee per use 0 Country Clubs cell companies 0 Payment Pricing I Breaking overall price into smaller payments 0 Car payments 0 Pricing for Multiple Products 0 Price Bundling I Put multiple items together in bundle 0 Laptops cameras 0 Captive Pricing I Price basic product low and second complementary and necessary product at high profit margin 0 Printers for ink printers are cheap but ink stays high priced What is a demand curve and how does a demand curve for luxury products differ from nonluxury products I Normal products demand increases as price decreases I Prestige products demand increases as price increases What is price elasticity and how is it calculated I change in unit sales that results from a change in price What do we mean by elastic and inelastic demand I Elastic large change in demand small change in price elasticity gt 1 I Inelastic small change in demand large change in price elasticity lt 1 What is crosselasticity of demand I When changes in price for one product affect demand for another product I If products substitutes an increased for product 1 will lead to increased demand for product 2 I If products complementary an increased for product 1 will lead to decreased demand for product 2 What is the difference between a fixed cost and a variable cost for production I Production costs associated with materials parts labor I Vary depending on units produced Be able to conduct a break even analysis with simple numbers no calculator needed I BEP units Total fixed costs contribution per unit to fixed costs 0 Contribution per unit to fixed costs selling price per unit variable cost per unit 0 FixedPriceVariable I BEP Total fixed costs lvariable cost per unitprice per unit 0 Fixedl VariablePrice I How many units to sell to reach breakeven point of money invested I Denominator profit selling price variable cost Be familiar with different pricing strategies and tactics I PriceQuality inferences 0 Expensive good I OddEven Pricing 0 Odd prices sell more 0 For certain products services strategy may convey low quality 0 Medical bills I Price Lining 0 Developing variety of products at different price points 0 Satisfy each segment of market with different prices 0 Detergent companies 0 What is an internal reference price I Set price or range of prices consumers think are reasonable 0 Package of ground coffee on average Branding Richie Liu Chapter 9 O Branding I Provides recognition factor that helps products success I Build emotional connection with consumers 0 GAP rebrand 0 What is the difference between an individual and family brand strategy I Individual 0 separate and unique brand for each product 0 some contend route more clear and concise due to focused brand strategy for each product 0 Proctor amp Gamble I Family 0 Umbrella brand strategy 0 Market multiple products under same brand name 0 Apple 0 What is cobranding and why is it used ie what are some benefits of this strategy I Benefits partner brands in combining recognition power I Ingredient branding phenomena 0 Can attract customers to the host brand from familiarity and strong brand reputation of ingredient brand 0 Ingredient brand can sell more of product and obtain additional revenue from licensing agreement in place 0 Joint Alliance positive experience for weaker brands helps boost sales 0 amp Barnes and Noble 0 Hershey s chocolate amp Betty Crocker cake mixes 0 Apple amp Nike 0 Difference between line and brand extension I Line extension 0 Minor variants of single product are marketed under the same brand name 0 Ex more likely to buy baby wipes that are same brand as diaper I Brand extension 0 Extensions of brand name to other product categories as a marketing strategy to increase brand equity 0 New product referred to as spinoff 0 What is consumerbased brand equity I Effect of brand knowledge on consumer response to marketing of brand I Involves consumers reactions to an element of marketing mix for brand in comparison with reactions to same marketing mix element attributed to fictitiously named or unnamed version of product or service I Brand image and brand knowledge 0 What is an associative network and how is it related to brands I what consumer associates brand with based on stored memory experience information 0 everything you think of when you seehear certain brand I Associate brands with trust I Brands stay same can trust brand easier 0 Nike associated with color looks good swosh symbol running lightly weight can wear jeans with too etc 0 What is the role of the self in connecting brands and consumers I Cognitive selfschemas 0 Provide motive for future behavior 0 Consist of various facets I Dynamic nature of the self 0 Two components knowledge and evaluative I Consumers gravitate towards products and brands that align with their selfconcepts I We are the sum of our possessions I Extended self 0 Loss of possessions get upset bc personal relation 0 Investing self in objects 0 Collections 0 What is BESC Brand Engagement in the SelfConcept I High BESC better recall of branded possessions I More attention to brands upon incidental exposure I Willing to pay higher price and wait longer for preferred brand I Possessions can become integrated Within a person s selfconcept I Birth of selfbrand connections research I BESC defined as consumer s general propensity to incorporate important brands in selfconcept 0 Recall of branded possessions 0 More attention to brands upon incidental exposure 0 Loyalty operationalized as price and wait time
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