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Final Study Guide

by: Natalie Land

Final Study Guide MKT 301

Marketplace > University of Miami > Marketing > MKT 301 > Final Study Guide
Natalie Land
GPA 4.0

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Detailed study guide with detailed class notes godlike everyone
Howard Marmostein
Study Guide
MKT., MKT, MKT301, mkt201, Marketing, final
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This 3 page Study Guide was uploaded by Natalie Land on Tuesday April 26, 2016. The Study Guide belongs to MKT 301 at University of Miami taught by Howard Marmostein in Summer 2015. Since its upload, it has received 29 views. For similar materials see Marketing in Marketing at University of Miami.


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Date Created: 04/26/16
  PRELIMINARY  REVIEW  MKT301  EXAM  3     Discussion  Topics   Ritz-­‐Carlton  Case  Lessons   What  is  Marketing ?   BMW  Films  Video   Ford  Service  Confidence  Ad   Doubletree  Hotel  Slides   Pricing  Strategy  and  Tactics   Legal  and  Regulatory  Aspects  of  Pricing   Best  Buy  Video   Envirosell  Video   Concept  of  an  Interaction  of  Marketing  Variables   Health  Cruise  Case       -­‐   What  is  Marketing?   o   An  organizational  function  and  a  set  of  processes  for  creating  capturing,  communicating  and   delivering  value  to  customers  and  for  managing  customer,  relationships  in  ways  that  benefit  the   organization  and  its  stakeholders     -­‐   BMW  films  video   -­‐   Ford  service  confidence  ad     -­‐   Doubletree  hotel  slides     -­‐   Pricing  strategy  and  tactics     o   Before  strategy  we  always  refer  to  tactics     o   Two  different  strategies   §   Market  skimming:  does  company  start  out  with  high  price  or  low  price  with  a  new   product?     •   High  price  is  market  skimming  to  get  people  to  get  your  product,  people  are   willing  to  pay  a  high  price  initially     •   Reasons  for  high  price:     o   Make  it  seem  like  a  better  product:  quality     o   If  offered  at  a  low  price  It  is  very  difficult  to  higher  it  after  so  st art  high     §   Market  penetration   •   Low  price  why  would  firm  do  a  low  price?   •   Starting  with  a  low  price:  more  trial  could  be  a  series  of  products  and  want  to   get  to  be  known  first     •   Firms  want  to  get  product  out  their  before  competitor  does     •   Want  to  capture  market   when  competitor  is  really  close  behind  you     §   Price  elasticity  of  demand  is  very  high     •   Product  prices  can  change  as  product  advances     •   How  many  consumers  increase  or  decrease  by  raising  or  lowering  price     •   Percentage  change  in  number  of  units  we  expect  as  a  on e-­‐unit  percentage   change  in  price     •   How  changes  in  price  affect  the  quantity  of  the  product  demanded     •   If  products  are  highly  elastic,  then  low  price  is  better     •   Consumers  are  less  sensitive  to  price  increases  for  necessary  items,  like  milk   because  they  have  to  purchase  the  items  even  if  the  price  climbs     •   But  if  t-­‐bone  steaks  rises  beyond  a  certain  point  people  will  buy  less  because   they  can  turn  to  the  many  substitutes  for  this  expensive  meat     •   Percentage  change  in  quantity  demanded  divided  by  percentage  change  in   price     •   When  price  elasticity  is  less  than   -­‐1  then  the  product  is  elastic,  a  small  change   in  price  will  demand  less  of  the  product     •   Greater  than  -­‐1  means  raising  prices  wont  affect  much  demanded  prices     §   Price  fixing:  colluding  with  other  firms  to  control  prices     •   Two  gas  stations  across  from  each  other:  buy  from  same  wholesaler  what  if  we   both  agree  to  charge  the  same:  collusion   •   Horizontal  price  fixing:  you’r e  not  allowed  to  do  that:  prices  of  competing   resellers  have  to  be  decided  independently     •   Vertical  price  fixing:  you’re  a  watchmaker  who  sales  to  retailers  who  then  sale   to  consumers:  no  one  sales  your  watch  for  less  than  x  amount,  manufacturer   tells  retailer  you  can’t  sell  watch  for  x  amount     •   Once  ownership  of  good  transfers  to  buyer  its  up  to  them  how  they  sell  it     §   Price  discrimination     •   Same  product  same  food  same  cabin  one  guy  paid  3,000  dollars  the  other  1500   dollars,  this  is  bad  but  this  isn’t  price  di scrimination     •   Sales  of  identical  products  to  competing  resellers  is  price  discrimination;   consumer  isn’t  a  reseller  so  you  cant  price  discriminate     §   Predatory  pricing:     •   Guy  who  kills  the  other  guy     •   Sometimes  a  company  like  Walmart  operates  in  a  small  town,   they  see  a  small   little  pharmacy  and  say  price  our  pharmacy  items  for  a  low  cost  for  a  little   while.  Sacrifice  in  short  term  to  earn  higher  profitability  in  a  long  term     •   Price  below  cost  with  intent  of  beating  competitor     •     -­‐   Legal  and  regulatory  aspects  of  pricing     o   This  is  above     -­‐   Best  buy  video   o   Shows  customer  centricity  to  connect  with  the  consumers     o   Largest  consumer  retailer     o   They  understand  consumer  behavior  and  its  customer  focused     o   They  make  sure  to  get  employees  in  the  kn ow     o   Make  shopping  experience  easy,  with  personal  shoppers  to  help,  the  aisles  are  color  coded  and   consumers  look  at  shop  ability  they  look  at  how  easy  it  is  to  navigate  the  store     o   Best  buy  seeks  to  understand  needs  and  behaviors  of  specific  customers  by  li stening  to  customer     o   They  gear  the  company  towards  customer  needs     o   Customer  centricity:  listening  to  customer     o   Men  are  independent  shoppers  and  women  seek  more  assistant  so  they  have  personal  shoppers     o   Personal  shopping  assistant:  build  relationships  who  a re  your  customers,  who  are  their  families     o   Four  things  best  buy  did  differently     §   Visual  displays  made  them  softer  for  women     §   With  the  appliances  for  example  they  put  an  actual  fake  kitchen  and  they  placed  the   appliance  in  a  fake  scenario  so  women  picture  h ow  its  going  to  look  in  their  kitchen   instead  of  just  lining  up  the  appliances  they  show  the  actual  kitchen     §   Lowered  music  for  women  who  need  to  hear  people  conversing  with  somebody  and   men  don’t  care  about  this     -­‐   Envirosell  video     o     -­‐   Concept  of  an  interaction  of  marketing  variables     o   An  interaction  is  present  in  a  marketing  or  other  experiments  when  the  effect  of  one   independent  variable  depends  on  the  level  of  another  independent  variable     o   Effects  on  ads  for  a  restaurant     o   Copy  from  notes     o     -­‐   Health  cruise  case     o   Breakeven  analysis:  number  of   unit’s  company  needs  to  sell  to  achieve  a  net  income  of  zero,  we   cover  our  fixed  costs     o   Fixed  costs  equals  income  which  is  equal  to  zero     o   Cover  fixed  costs  which  in  this  case  it  was  590,000   §   Contribution:  not  sales  or  income   but  revenue  per  customer:  variable  cost  per   passenger  is  3000  dollars  minus  400  so  contribution  equals  2600   o   Should  health  cruises  go  ahead  with  cruise  since  200  passengers  had  signed  up  as  of  nov  14?   §   They  need  to  go  through  with  it  because  they  will  lose  l ess  money  if  they  sail  even  if   they  don’t  reach  a  break  even  which  they  wont     •   They  would  lose  72,000  compared  to  590,000  by  not  sailing     •   Because  these  are  a  positive  contribution  per  passenger  each   reduces  their   losses  by  $2600  per  passenger     •   It  would  also  be  bad  press  if  they  don’t  sail     o   Would  it  be  worthwhile  for  health  cruise  to  spend  either  12,000  or  30,000  for  advertising  on  nov   20  if  so  which  figure  would  you   recommend?     §   3a:  12,000  on  advertisement  should  they  do  so?  And  get  20  more  passengers  only?   •   This  would  have  worsened  our  position  by  12000  dollars  but  we  have  gained  20   more  passengers  with  a  contribution  of  2600  for  each  20(2600)     •   -­‐12000  +52,000=40,000  we  are  40000  dollars  better  than  where  we  used  to  be     o   how  realistic  are  Carolyn  estimates  of  2 0  and  40  more  passengers  for  the  advertising  campaigns   of  12,000  and  30,000   §   too  optimistic     •   motivational  bias:  bias  in  a  direction  that  powers  herself     §   too  pessimistic     •   ad  repetitions     •   firm  learn:  which  cities  got  lot  of  responses,  target  those  ones     o   should  health  cruises  consider  cutting  its  prices  by  50%  one  month  before  this  modern  voyage   sails?   §   Pros     •   Still  going  to  increase  contribution:  1500 -­‐400  equals  1100   •   Word  of  mouth     •   Repeat  purchase     §   Cons     •   Customer  learning  about  being  able  to  wait  to  pay  les s   •   Inseparability:  managing  the  customer  mix     •   Price  image:  high  quality  for  low  prices  is  usually  too  good  to  be  true     •   Less  quality  because  everything  is  packed     §     -­‐              


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