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VIRGINIA TECH / Business / BUS 1104 / Geographic segmentation, means what?

Geographic segmentation, means what?

Geographic segmentation, means what?

Description

School: Virginia Polytechnic Institute and State University
Department: Business
Course: Foundations of Business
Professor: Barry o'donnell
Term: Fall 2016
Tags:
Cost: 50
Name: Foundations Final Exam
Description: These notes will cover part of the exam. Also use the 1st and 2nd exam study guides already posted.
Uploaded: 12/11/2017
9 Pages 85 Views 3 Unlocks
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Foundationsof Business


Geographic segmentation, means what?



FinalExam

INSTRUCTOR:SteveSkripak

ThisExam is Cumulative

Review Session on December 13th

Sources to use:

Exam 1 study guide

Exam 2 study guide

This study guide covering chapters 13-17

The Study guide Steve sent out to us

The Other Wes Moore

50 Fill in the blanks (42 are on word bank and 8 are not) 75 points


What are the types of retailers?



Break even 10 points

7 or 8 Short answer 15 points

Chapter 13

● Marketing Concept: satisfying customer needs while meeting organizational goals ○ Guides all of the organization’s marketing activities If you want to learn more check out What is the unique selling proposition?

○ Puts the customer first

● 4 P’s of the Marketing mix----Moving to the four c’s

○ Developing a product (CLIENT) that meets the needs of the target market ○ Setting a price (COST) for the product

○ Distributing the product (getting it to a place (CONVENIENCE) where customers can buy it)

○ Promoting (COMMUNICATION) the product (inform potential buyers) ● Market Research: collecting and analyzing data that is relevant to a marketing situation


What is the pricing strategies?



○ How companies find out the customer’s needs

○ Heavily statistical field

■ Surveys (time consuming and response rate is low)

■ Personal Interviews (time consuming, but can ask open-ended If you want to learn more check out What does it take for females to keep offspring alive?

questions)

■ Focus Groups (group of 6-10 with a trained moderator)

● Market Segmentation: dividing the market into smaller segments

○ 1. Demographic Segmentation: groups based on age, gender, marital status, ethnic background, income

1Don't forget about the age old question of What are the common plasma proteins?

○ 2. Geographic Segmentation: groups based on climate, region, and population density

○ 3. Behavioral Segmentation: groups based on attitude towards the product, user status, or user rate (frequent flyer miles) If you want to learn more check out What is the meaning behind the tree of life?

○ 4. Psychographic Segmentation: groups based on individual lifestyles reflected in people’s interests, activities, attitudes, and values (lifestyle, values)

○ Benefits of Market segmentation --Convenience

○ Clustering Segments: putting segments together to determine the target market

○ Niche Market: really narrow segment of the market

● Test Marketing: New products, branding, packaging

● Trademark: symbol, word, or words legally registered or established by use as representing a company or product (US patent or trademark office)

● Branding: letter, word, sound, or symbol that would make their product stand out from similar products on the market

○ Private Branding (private labeling): company makes a product and then sells it to a retailer, who then resells it under its own name

○ Generic Branding: No branding info on product except for a description of the content, lowest quality of the product

○ Manufacturer Branding: sells one or more products under its brand name ■ Multiproduct-branding approach: many products under one brand name Don't forget about the age old question of Why should marketers turn to social media?

■ Multibranding: a company assign different brand names to each

product to cover each segment of the markets

○ Brand equity: added value of the product because of the brand name ○ Packaging: gives glimpse of product, attracts customers, and also provides info on the product

● Types of Retailers

○ Category Killer: Sells a wide variety of products in a certain category, lower price due to large scale (Dick’s Sporting Goods)

○ Convenience store: offers food, beverages, and other individual products, higher price, fast service, paying for convenience (7-11)

○ Department store: offers a wide variety of upscale products (Nordstrom) ○ Discount store: wide range of merchandise at lower value (Walmart) ○ Specialty Store: Offers wide variety of products in a narrow category, high level of personal service, higher prices (Henebry’s jewlwey) We also discuss several other topics like What do we mean when we say that memory is a constructive process?

○ Supermarket: Offers consumer staple products, food and household products (Kroger)

○ Warehouse club stores: Offers a wide variety of products in a warehouse setting, requires membership, sells in bulk (Costco)

○ Off Price retailer: buys leftover products, can be higher quality (tjmaxx) ● Social Media Marketing: Using social media in a company's marketing plan

2

○ Advantages

■ create brand awareness

■ connect with customers and potential customers by engaging them in two-way communication

■ build brand loyalty by providing opportunities for a targeted audience to participate in company-sponsored activities, such as contests

■ offer and publicize incentives, such as special discounts or coupons ■ gather feedback and ideas on how to improve products and

marketing initiatives

■ allow customers to interact with each other and spread the word

about a company’s products or marketing initiatives

■ take advantage of low-cost marketing opportunities by being active on free social sites

Chapter 14

● Pricing Strategies

○ Skimming Strategy: generates early profit, lower prices gradually to bring in new customers (introduction pricing strategy)

○ Penetration Pricing: initially charge low prices, over time after dominating the market share increase prices, used when there are a lot of competitors (introduction pricing strategy)

● Markup: charge more for a product than you paid for it (appears twice on final) ● Cost-based Pricing: price based on how much is costs to make the product and then add to make a profit

● Value-based Pricing:

○ Demand based pricing: Price based on how much customers are willing to pay

○ Dynamic pricing: Maximizes revenue on a given night or flight (for hotels and airlines)

■ Revenue management: Forecast demand and adjust the availability of various price points

○ Prestige pricing: setting prices higher to give the impression that their product is of higher quality

○ Odd-even pricing: pricing items a few cents (or dollars) under an even number

○ Loss leaders: Pricing an item less than what it costs to draw customers into the store

○ Bundling: Pricing items as a group, or bundle, at a discount to the cost of buying the items separately

● Stages of the product life style (for exam you only need to know stage name, customers, objectives, competitors and the shape of the curve)

○ Stage 1- Introduction: Other than those who work in the industry, people are likely to be completely unaware that a product even exists (build awareness)

3

■ Price levels- Depends

■ Competitors- Few

■ Profits- Negative

■ Customers- Few, innovators only

■ Objectives- Awareness and adoption

○ Stage 2- Growth: Rapid customer adoption (sales accelerate)

■ Price levels- Converges as competitors enter the market

■ Competitors- Rapidly rising (at its highest)

■ Profits- Rising

■ Customers- Rising, early adopters

■ Objectives- Gain Market share

○ Stage 3- Maturity: Survives the growth stage

■ Price levels- Initially high but tend to decline as growth appears

■ Competitors- Begins to decline through consolidation

■ Profits- Highest

■ Customers- High/Stable, begin to drop late in the cycle

■ Objectives- Defend shares and maximize profits

○ Stage 4- Decline: Sales drop significantly

■ Price levels- Initially declines but may rise as competitors exit

■ Competitors- Few or none

■ Profits- Declining

■ Customers- Declining

■ Objectives- Milk remaining value, minimize investment

● Premium price: charge more for your product than other products on the market that serve a similar need

○ Competitive advantage

■ Differentiation

■ Lower cost

4

Chapter 15

● Tourism

○ Accomodation and lodging

○ Food and beverage services

● Positive economic benefits

○ Provides a lot of jobs for lower educated people

○ Brings money into the economy

○ Develop local products

● Negative economic benefits

○ Natural disasters can cause lack of income if there is too much reliance ○ Property value may increase to the point of unaffordability

○ Businesses may shut down if seasonal

● Hotel Market Segments

○ Commercial 

■ Business

■ Stronger demand monday through thursday

■ Near airports or businesses

○ Leisure 

■ Recreational

■ Hotel after hotel after hotel

■ Given access to natural environment

■ Friday to sunday

○ Meetings and groups 

■ Corporate groups, Associations, Social, Military, Educational, Religious, and Fraternal groups (aka, SMERF)

■ Huge hotel

■ Convention demand is in fall and spring

■ Includes meetings, seminars

■ Big ballrooms, big conference rooms

○ Extended Stay 

■ Business and leisure

■ Living room, refrigerator, stove tops, meals downstairs

■ More than 5 nights

● Restaurants

○ Quick Service (QSR) 

■ Brands, chains, franchises

■ Food already made

○ Fast Casual 

■ Quality and prices are a little higher

5

■ Made to order

■ Seating more upscale

○ Full Service 

■ Ethnic 

● Reflect owner's culture

● Ethnic food

■ Family 

● Affordable menu

● Get waited on

● Lowest price

● Cater to children

● Noisy

■ Casual 

● Full bar

● Not as noisy

● Better quality than family

■ Fine Dining 

● Meals are brought to table

● Expensive

● Embellished

● Institutional Food service: Bulk order, prepared on sights, served to people ○ Hospitals, prisons

Chapter 16

● Accounting: evaluates a company’s financial performance, two fields ○ Management accountants: provide info and analysis for the organization’s decision makers to help them run it

■ Keep business running

■ Aka: Managerial Accounting

■ Helps managers carry out responsibilities

○ Financial accountants: furnish info to people both inside and outside of the organization to help them assess the organization’s financial performance ■ Tells outside world how well you are running the business (like

investors and government regulators)

■ Financial statement

● Income statement

● Statement of owner’s equity

● Balance sheet

● Statement of cash flow

○ Adhere to Generally Accepted Accounting Principles (GAAP): principles for financial reporting issued by the Financial Accounting Standards Board (FASB)

6

● Income Statement: summarizes all the transactions that have contributed to the profit or loss of a company over a period of time

● Balance sheet: records company’s financial position at a point in time, summarizes assets (things you own) and liabilities (things you owe)

○ Fundamental Accounting equation: Assets = Liabilities + Owner’s equity ● Know the difference between Financial Manager and Accountants ● Financial Management:

○ Decide the terms in which a company will sell to customers

○ Firms usually fail due to poor financial Management

○ Uses information to recommend strategies to improve results

○ Budgeting and forecasting to help in the control process

● Accountants:

○ Keep the books

○ Due the taxes

○ Create financial statements

● Financial Ratios

○ Profitability ratios: how much profit is made compared to the amount invested (return on investment) or the amount sold (return on sales)

■ Earnings per share (EPS): divides net income by the number of shares of stock outstanding

○ Liquidity ratio: how well positioned a company is to pay its bills in the near term

■ Current ratio: looks at the relationship between current assets and current liabilities

○ Debt ratios: how much borrowing a company has done in order to finance the operations of the business (more borrowed, higher risk and less likely to get a loan)

■ Debt-to-equity ratio: how the company is financed, calculates the

relationship between funds acquired from creditors (debt) and funds invested by owners (equity)

○ Efficiency ratios: how well your assets are being managed

● Under Capitalization: don’t have enough money

○ May lose key people, may lose your location, may not be able to buy materials for prototype

● Secured Credit: bank lends you money and they want to get paid back, has collateral ● Unsecured credit: don’t get paid back, line of credit, bank can reduce it at any time that they think conditions warrant

● Breakeven Analysis: number of sales needed to avoid losing money (no profit or loss)

○ Know how to do breakeven problems

○ Go on canvas for practice problems

Technology in Business

7

● Meetings and Travel

○ Virtual meeting, do not have to travel to meet with a client

○ Work from home

● Music Industry

○ Went from CD’s now to streaming services

○ Most musicians rely on tours for money now

● Payment

○ Venmo, paypal

○ Online bills

○ Online deposit

● Security

○ Data hackers

○ Drones

○ Fake news

● Medicine

○ Robotic surgery

● Agriculture

○ Indoor farming

● Education

○ Online classes

○ Loss of personal interaction

Chapter 17

● Credit rating: ability to borrow money in the future, is affected by making your loan payments on time

● Credit a numeric score ranging from 300-850 called a FICO score 

● Consider 5 criteria

○ 1. Payment history (paying bills on time)

○ 2. Total amount owed

○ 3. Length of your credit history

○ 4. Amount of new credit you have

○ 5. Types of credit you use

● What to do if you have a low FICO score

○ Cut credit cards out of life and live off

cash

○ Cut down on spending

● Stages of an individual’s life

○ Stage 1: building wealth.

○ Stage 2: process of preserving and

increasing wealth that one has

accumulated and continues to

accumulate.

8

○ In Stage 3: process of living on (and, if possible, continuing to grow) one’s saved wealth after retirement.

● Time is Money

○ Compound interest: the effect of earning interest on your interest. It is a powerful way to accumulate wealth

○ Time value of money: a dollar received in the present is worth more than a dollar received in the future due to its potential to earn interest

● Diversification: Spread out your investments; not all in the same area

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