Marketing Final Study Guide
Marketing Final Study Guide MAR 250
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This 23 page Study Guide was uploaded by Melanie Guerrero on Saturday April 30, 2016. The Study Guide belongs to MAR 250 at Pace University taught by Harvey Markowitz in Winter 2016. Since its upload, it has received 33 views. For similar materials see Principles of Marketing (20335) in Marketing at Pace University.
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Date Created: 04/30/16
Chapter 15 Channel conflict – when one marketing channel member believes another channel member is engaged in behavior that prevents it from achieving its goal Customer service – the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience Disintermediation – when a channel member bypasses another member and sells or buys products direct Dual distribution – an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product Exclusive distribution – the extreme opposite of intensive distribution because only one retailer in a specified geographical area carries the firm’s products Intensive distribution – means that a firm tries to place its products and services in as many outlets as possible Logistics – those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost Marketing channel – consists of individuals and firms involved in the process of making product or service available for use or consumption by consumers or industrial users Multichannel marketing – the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationship with consumers who shop and buy traditional intermediaries and online Reverse logistics – a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal Selective distribution – lie between these two extremes and means that a firm selects a few retailers in a specific geographical area to carry its products Supply Chain – the various firms involved in performing the activities required to create and deliver a product or service to consumers or industrial users Total logistics cost – includes expenses associated with transportation, materials handling, and warehousing, inventory, stockouts (being out of inventory), order processing, and return products handling Vendor-managed inventory – whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items Vertical marketing systems – professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact Chapter 16 Breadth of product line – refers to the variety of different items a store carries, such as appliances and books Brokers – independent firms or individuals whose principal function us to bring buyers and sellers together to make sales Category management – this approach assigns a manager the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales and profits in the category Central business district – oldest retail setting, the community’s downtown area Community shopping center – typically has one primary store (usually a department store branch) and often 20-40 smaller outlets Depth of product line – means the store carries a large assortment of each item, such as show store that offers running shoes, dress shoes, and children’s shoes Form of ownership – this distinguishes retail outlets based on whether independent retailers, corporate chains, or contractual systems own the outlet Hypermarket – a form of scrambled merchandising, provide variety, quality, and low prices for groceries and general merchandise items Intertype competition – competition between very dissimilar types of retail outlets Level of service – is used to describe the degree or service provided to the customer Manufacturer’s agents – work for several producers and carry noncompetitive, complementary merchandise in an exclusive territory Merchandise line – describes how many different types of products a store carries and in what assortment Merchant wholesalers – independently owned firms that take title to the merchandise they handle Multichannel retailers – will utilize and integrate a combination of traditional store formats and non-store formats such as catalogs, television, home shopping, and online retailing Off-price retailing – selling brand-name merchandise at lower than regular prices (TJ Maxx) Power center – a variance of a strip mall with multiple anchor (or national) stores such as Home Depot, Best Buy, or JC Penny Regional shopping centers – consist of 50-150 stores that typically attract customers who live or work within a 5-10 mile range Retail life cycle – Early growth, accelerated development, maturity, and then a decline Retail positioning mix – a matrix developed by MAC group, Inc. and consists of two retail outlets: breadth of product line and value added Breadth of product line ranging from Broad – Narrow vertically and Value added low – high horizontally Retailing – includes all activities involved in selling, renting, and provided products and services to ultimate consumers for personal, family, or household use Retailing mix – includes activities relating to managing the store and the merchandise in the store Scrambled merchandising – offering several unrelated product lines in a single store, for example, 99 cents store Shopper marketing – the use of displays, coupons, product samples, and other brand communications to influence shipping behavior in a store Strip mall – serve people within a 5-10 mile drive, usually gas stations, hardware, laundry, grocery, and pharmacy outlets are found there. Telemarketing – using a telephone to interact with and sell directly to consumers Wheel of retailing – describes how new forms of retail outlets enter the market. Usually they enter as low-status, low-margin stores and gradually add embellishments to increase attractiveness and gradually increase prices with this addition and still add more services and their status increases Chapter 17 Advertising – includes expenses associated with transportation any paid form of nonpersonal communication about an organization, product, service, or idea by an unidentified sponsor All-you-can-afford budgeting – in which money is allocated to promotion only after all other budgeting items are covered Channel of communication – such as a salesperson, advertising media, or public relations tool Communication – Competitive party budgeting – matching the competitor’s absolute level of spending or the proportion per point of market share Decoding – the reverse or the process of having the receiver take a set of symbols, the message, and transform the symbols into an idea Direct marketing – uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet Direct orders – the result of offers that contain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction Encoding – the process of having the sender transform an idea into symbols Feedback – the senders interpretation of the response and indicates whether the message was decoded and understood as intended Field of experience – similar understanding and knowledge they apply to the message Hierarchy of effects – stages are: Awareness, interest, evaluation, trial and adoption Integrated marketing communications (IMC) – concept of designing marketing communication programs that coordinate all promotional activities-advertising, personal selling sales promotion, public relations and direct marketing- to provide consistent message across all audiences Lead generation – the result of an offer designed to generation interest in a product or service and a request for additional information Message – information sent by a source such as description of a new smartphone Noise – extraneous factors that can work against effective communication by distorting a message or the feedback received Objective and task budgeting – whereby the company 1. Determines its promotion objectives 2. Outlines the tasks it will undertake to accomplish those objectives and 3. Determines the promotion cost of performing those tasks Percentage of sales budgeting – funds that are allocated to promotion as a percentage of past or anticipated sales, in terms or either dollars or units sold Personal selling – the two-way flow of communication between buyer and seller designed to influence a person’s or group’s purchase decision Promotional mix – Public relations – a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services Publicity – nonpersonal, indirectly paid presentation of an organization, product, or service Pull strategy – directing its promotional mix at ultimate consumers to encourage them to ask the retailer for a product Push strategy – directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product Receivers – consumers who read, hear, or see the message Response – the impact the message had on the receivers’ knowledge, attitudes, or behaviors Sales promotion – a short-term inducement of value offered to arouse interest in buying a product or service Source – may be a company or person who has information to convey Traffic generation – the outcome of an offer designed to motivate people to visit a business Chapter 18 Advertising – any paid form of nonpersonal communication about an organization, product, a service, or an idea by an identified sponsor Consumer-oriented sales promotions – are sales tools used to support a company’s advertising and personal selling Cooperative advertising – common sales activity to encourage both better quality and greater quantity in the local advertising efforts of resellers, when a manufacturer pays a percentage of the retailers local advertising expense for advertising the manufacturer’s products Cost per thousand (CPM) – refers to the cost of reaching 1,000 individuals or households with the advertising message given the medium Frequency – average number of times a person in the target audience is exposed to a message or advertisement Full-service agency – provides the most complete range of services, including market research, media selection, copy development, artwork, and production Gross rating points (GRPs) – when reached (expressed as a percentage of the total market) is multiplied by frequency Infomercials – program length (30 minutes) advertisements that take an educational approach to communication with potential customers In-house agencies – made-up of the company’s own advertising staff may provide full services or a limited range of services Institutional advertisements – to build goodwill or an image for an organization rather than promote a specific good or service Limited-service agencies – specialize in one aspect of the advertising process, such as providing creative services to develop the advertising copy, buying previously unpurchased media (media agencies) or providing Internet service (Internet agencies) Posttests – after it has been shown to the target audience to determine whether it accomplished its intended purpose Pretests – are conducts before advertisements are place in any medium Product advertisements – 1. Pioneering (or informational) 2. Competitive (or persuasive) 3. reminder Product placement – involved the use of brand-name product in a movie, television show, video game or commercial for another product Publicity tools – several methods of obtaining nonpersonal presentation of an organization, product, or service without direct cost Rating – percentage of household in a market that are tuned to a particular TV show or radio station Reach – the number of different people or household exposed to an advertisement Trade-orientated sales promotions – sales tools used to support a company’s advertising and personal selling directed to wholesalers, retailers, or distributors Chapter 19 Apps – are small, downloadable software programs that run on smartphones and tablet devices Blog – a contraction of a “web log”, is a web page that serves as a publicly accessible personal journal and online forum for an individual or organization Facebook – a website where users create a personal profile, add other users as friends, and exchange comments, photos, video, and “likes” with them LinkedIn – a business-orientated website that lets users post their professional profiles to connect to a network of business people, who are also called connections Social Media – online media where users submit comments, photos, and videos-often accompanied by a feedback process to identify “popular” topics Twitter – a website that enables users to send and receive tweets up to 140 characters long User-generated content (UGC) – refers to various forms of online media content that are publicly available and created by end users YouTube – is a video-sharing website in which users can upload, view, and comment on videos Chapter 20 Account management policies – specifying whom salespeople should contact, what kinds of selling and customer service activities should be engaged in, and how these activities should be carried out Adaptive selling – involves adjusting the presentation to fit the selling situation, such as knowing when to offer solutions and when to ask for more information Consultative selling – focuses on problem identification, where the salesperson serves as an expert on problem recognition and resolution Emotional intelligence – the ability to understand one’s own emotions and the emotions of people with whom one interacts on a daily basis Formula selling presentation – format based on the view that a presentation consists of information that must be provided in an accurate, thorough, and step-by-step manner to inform the prospect Key account management – the practice of using team selling to focus on important customers so as to build mutually beneficial, long-term, cooperative relationships Need-satisfaction presentation – format emphasizes probing and listening by the salesperson to identify the needs and interests of prospective buyers Order getter – sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on customers’ use of a product or service Order taker – processes routine orders or reorders for products that were already sold by the company Partnership selling – aka enterprise selling, buyer and sellers combine their expertise and resources to create customized solutions; commit to joint planning; and share customer, competitive, and company information for their mutual benefit and ultimately, the benefit of the customer Personal selling – involves the two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision Personal selling process – 1. Prospecting 2. Pre-approach 3. Approach 4. Presentation 5. Close and 6. Follow up Relationship selling – the practice of building ties to customers based on a salesperson’s attention and commitment to customer needs over time Sales management – involves planning the selling program and implementing and evaluating the personal selling effort of the firm Sales plan – a statement describing what is to be achieved and where and bow the selling effort of salespeople is to be deployed. 1. Setting objectives, 2 organizing salesforce 3. Developing account management policies Sales quota – contains specific goals assigned to a salesperson, sales team, branch of sales office, or sales district for a stated time period Sales force automation (SFA) – the use of marketing dashboards to make the sales function more effective and efficient Stimulus-response presentation – format assumes that given the appropriate stimulus by a salesperson, the prospect will buy Team selling – the practice of using an entire team of professionals in selling to and servicing major customers Workload method – formula-based method integrates the number of customers served, call frequency, call length, and available selling time to arrive at a figure for the salesforce size Chapter 21 Behavioral targeting – uses information provided by cookies for directing online advertising from marketers to those online shoppers whose behavioral profiles suggest they would be interested in such advertising Bots – electronic shopping agents or robots that comb websites to compare prices and product or service features Choiceboard – an interactive, Internet-enabled system that allows individual customers to design their own products and services by answering a few questions and choosing form a menu of product or service attributes (or components), prices, and delivery options Collaborative filtering – a process that automatically groups people with similar buying intentions, preferences, and behaviors and predicts future purchases Cookies – computer files that a marketer can download onto the computer and mobile phone of an online shopper who visits the marketer’s website Cross-channel shopper – an online consumer who researches products online and then purchases them in a retail store Customerization – the growing practice of no only customizing a product or service but also personalizing the marketing and overall shopping and buying interaction for each customer Dynamic pricing – the practice of changing prices for products and services in real time in response to supply and demand conditions Eight-second rule – Customers will abandon their efforts to enter and navigate a website if download time exceeds eight seconds Interactive marketing – involves two-way buyer-seller electronic communication in a computer-mediated environment in which the buyer controls the kind of information received from the seller Online consumers – the subsegment of all Internet users who employ this technology to research products and services and make purchases Permission marketing – the solicitation of a consumer’s consent (called opt-in) to receive e- mail and advertising based on personal data supplied by the consumer Personalization – the consumer-initiated practice of generating content on a marketer’s website that is custom tailored to an individual’s specific needs and preferences Showrooming – when a shopper visits a retail store to inspect merchandise but then purchases the merchandise online Spam – electronic junk mail or unsolicited e-mail Viral marketing – Internet-enabled promotional strategy that encourages individuals to forward marketer-initiated messages to others via e-mail, social networking websites, and blogs Web communities – websites that allow people to congregate online and exchange view on topics of common interest Chapter 22 Action item list – an aid to implementing a plan that consists of four columns, 1. The task 2. The person responsible for completing that task 3. The date to finish the task 4. What is to be delivered Cost focus strategy – involves controlling expenses and, in turn, lowering product prices targeted at a narrow range of market segments Cost leadership strategy – focuses on reduces expenses and, in turn, lowers product prices while targeting a broad array of market segments Differentiation focus strategy – requires products to have significant points of difference in order to target one or only a few market segments Differentiation strategy – requires products to have significant points of difference in product offerings, brand image, higher quality, advanced technology, or superior service to charge a higher price while targeting a broad array of market segments Functional groupings – such as manufacturing, marketing, and finance, that represent the different departments or business activities within a firm Generic business strategy – one that can de adopted by an firm, regardless of the product or industry involved, to achieve a competitive advantage Geographical groupings – which sales territories are subdivided according to geographical location Line positions – managers who have the authority and responsibility to issue orders to people who report them Market-based groupings – utilize specific customer segments, such as the banking, health care, or manufacturing segments Marketing ROI – the application of modern measurement technologies to understand, quantify, and optimize marketing spending Product line groupings – in which a unit is responsible for specific product offerings Program champion – a person who is willing and able to “cut the red tape” to move the program forward Sales response function – the expense of the marketing effort to the marketing results obtained Share points – percentage points of market share, as the common basis of comparison to allocate marketing resources effectively for different product lines within the same firm Staff positions – have the authority and responsibility to advise people in line positions but cannot issue direct orders to them Synergy analysis – seeks market-product opportunities by finding the optimum balance between marketing efficiencies verses R&D-manufacturing efficiencies Time-based agenda – a meeting agenda that shows the running time allocated to each agenda item Marketing Math Final Review 1) MARKETING MATH PROBLEMS BMG Sells $35 each and $7 for Shipping and Handling TV Ad Cost = $72,000 TV Ad Time Cost = $600,000 Number of responses = 72,651 Call center to handle calls = $2.35/order Cost of Goods Sold = 55% Process of Shipping and Handling per Order = $7.53 Calculating Total Variable Revenue and Cost Unit Sales Price: $35 S+H Revenue: $ 7________ COGS: Revenue/Dollar Sales COGS calculates how Per Order = $42.00 much is needed to actually COGS $ 19.25 make the product Call Center Cost: $ 2.35 $35 × 55% = $19.25 Cost Process S&H $ 7.53 _______ Variable Cost Per Order = $29.13 Calculating Variable Profit Variable Profit = Total unit revenue – Total unit variable cost Variable Profit = $42.00 100% $19.13 69.4% [19.13/42.00] $12.87 30.6% [12.87/42.00] Contribution Margin per Unit = 30.6% (aka Variable Profit Margin) Calculating Direct (Fixed) Costs TV Ad Cost: $72,000 TV Time Cost: $600,000 Total Direct Costs = $672,000 Info given above: “ 72,651 responses” Calculating Gross Profit Gross Profit = Total Gross Revenue – Total Gross Variable Cost Total Gross Revenue [$42 × 72,651] = $3,051,342.00 100% Total Gross Variable Costs [$29.13 × 72651] = $2,116,323.63 69.4% Total Gross Profit = $935,018.37 30.6% Gross Margin = 30.6% Calculating Contribution Profit Contribution Profit = Gros s Profit – Direct (fixed) Costs Gross Profit = $935,018.37 Direct Costs = $672,000.00 Contribution Profit = $263,018.37 Calculating Contribution Margin (aka Contribution profit as a % of revenue) Contribution Margin = [Contribution Profit / Total Gross Revenue] × 100 Contribution Profit = $263,018.37 Total Gross Revenue =$3,051,342.00 × 100 th Contribution Margin = 8.6% [round to nearest 10 place of a decimal] Calculating Breakeven Units Break even [In Units] = Total Direct Costs/Variable Profit in dollars Total Direct Costs = $672,000 Variable Profit = $12.87 Break even in Units = 52,214 [Round to nearest whole number] Calculating Breakeven in Dollars Break even [In Dollars] = [Total Direct Costs/ Variable Profit Margin (%)] × 100 Total Direct Costs = $672,000 Variable Profit Margin = 30.6% Break even in Dollars = $2,196,078.43 [round to nearest penny] 2) Math Challenge #2 [Mark – Ups] Total Cost per set = $72.35 Mark up = 45% Advertising Investment = $750,000 Sold = 75,000 sets Calculating Total Variable Revenue and Profit only using Mark Up Variable Sales : -- 100% Variable Costs: $72.35 55% Variable Profit: -- 45% Basic Algebra Statement: $72.35 is 55% of what? .55 = 72.35 = $131.55 [round to nearest penny] .55 .55 Variable Sales = $131.55 Variable Costs = $ 72.35 Variable Profit = $59.20 Calculating Total Dollar Sales, Total Cost of Sales, Gross Profit, and Gross Margin Total Dollar Sales = [$131.55 × 75,000] = $9,866,250 100% Total Cost of Sales = [$72.35 × 75,000] = $5,426,250 55% Gross Profit = $ 4,440,000 45% Gross Margin = 45% Calculating Contribution Profit dollars and Contribution Margin Gross Profit = $4,400,000 Direct Costs = $ 750,000 Contribution Profit = $3,650,000 Contribution Profit = $3,650,000 Gross Revenue (Total Dollar Sales) = $9,866,250 Contribution Margin = 37%
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