Exam 3 Study Guide
Exam 3 Study Guide 86498 - MKT 3010 - 006
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86498 - MKT 3010 - 006
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This 18 page Study Guide was uploaded by Alexis Cone on Thursday October 29, 2015. The Study Guide belongs to 86498 - MKT 3010 - 006 at Clemson University taught by Amanda Cooper Fine in Spring 2015. Since its upload, it has received 239 views. For similar materials see Principles of Marketing in Marketing at Clemson University.
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Date Created: 10/29/15
Exam 3 Review Sheet Chapter 13 Vocab Serviceany intangible offering that involves a deed performance or effort that cannot be physically possessed intangible customer bene ts that are produced by people or machines and cannot be separated from the producer Customer Servicespeci cally refers to human or mechanical activities rms undertake to help satisfy their customers needs and wants Intangiblea characteristic of a service it cannot be touched tasted or seen like a pure product can lnseparablea characteristic of a service it is produced and consumed at the same time that is service and consumption are inseparable Heterogeneityas it refers to the difference between the marketing of products and services the delivery of services is more variable Perishablea characteristic of a service it cannot be stored for use in the future Service Gap results when a service fails to meet the expectations that customers have about how it should be delivered Knowledge Gapa type of service gap re ects the difference between customers expectations and the rm s perception of those expectations Standards Gapa type of service gap pertains to the difference between the rm s perception of customers expectations and the service standards it sets Delivery Gapa type of service gap the difference between the rm s service standards and the actual service it provides to customers Communication Gapa type of service gap refers to the difference between the actual services provided to the customers and the service that the rm s promotion program promises Service Qualitycustomer s perceptions of how well a service meets or exceeds their expectations VoiceofCustomer VOC Programan ongoing marketing research system that collects customer inputs and then integrates them into managerial decisions Zone of Tolerancearea between customers expectations regarding their desired service and the minimum level of acceptance service that is the difference between what the customer really wants and what he or she will accept before going elsewhere Empowermentin context of service delivery means allowing employees to make decisions about how service is provided to customers Emotional Support concern for others wellbeing and support of their decisions in a job setting Instrumental Support providing the equipment or systems needed to perform a task in a job setting Distributive Fairness pertains to a customer s perception of the bene ts he or she received compared with the costs inconvenience or loss that resulted from a service failure Procedural Fairnessrefers to the customer s perception of the fairness of the process used to resolve complaints about service Material Customer service is important to customers because it can help build customer loyalty and helps increase the value Hybrid products are those that are a combination of a good and a service Developed economies are becoming more service oriented 0 Production of goods is cheaper in other countries 0 Household maintenance became much more specialized 0 High value is placed on convenience and leisure 4 factors that contribute to marketing services 1 Intangible 0 Many times marketers try to put something tangible on an intangible object 2 lnseparable Production and consumption are simultaneous o Marketers try to overcome this by offering guarantees and warranties to make customers feel better about the situation 3 Perishable Services can t be stored warehoused or inventoried which impacts supply and demand Marketers want to match supply and demand so their isn t excess or shortages 4 Variable Heterogeneity Each time you experience a service it varies o Marketers try to standardize what they can and train their employees so they know what to do to try and overcome this Marketers can also use micromarketing and machine to try to have quality control A service gap is when a service fails to meet the expectations that customers have about how it should be delivered GAPS Model 0 Systematic way to see if we are achieving what we are supposed to when it comes to consumers 1 Knowledge Gap customer expectations vs rm s perception of customer expectations Gap occurs if the rm doesn t know what the customer expects of them Firm can close the gap by doing research on what the customer expectswants improving their service quality reliability responsiveness assurance empathy and tangibles employ VOC programs and understand their zone of tolerance 2 Standards Gap rm s perception of customer expectations vs service standards Gap occurs when management is unable to translate customer needs into managerial policy 0 Firms can close the gap by training their employees properly and making sure upper management is committed to uphold the set service standards 3 Delivery Gap service standards the company set vs the actual service Gap occurs if management can t get employees to do what they are supposed to do 0 Firms can close the gap by making sure their front line employees can actually help the customer having emotional and instrumental support and improving their technology 4 Communications Gap actual service provided vs the service promised Gap occurs because the services promised to customers are external to the rm 0 Firms can close the gap not setting unrealistic expectations for the customer It is important to understand customer expectations because rms want to increase their customer satisfaction to therefore increase customer loyalty Service quality is a customer s perceptions of how well a service meets or exceeds their expectations Evaluation of Service Quality 1 Reliability ability to perform the service dependany and accurately 2 Responsiveness willingness to help customers and provide prompt service 3 Assurance knowledge of and courtesy by employees and their ability to convey trust and con dence 4 Empathy caring individualized attention provided to customers 5 Tangibles appearance of physical facilities equipment personnel and communication materials Voice of Customer VOC Programs 0 An ongoing marketing research system that collects customer inputs and integrates them into managerial decisions Zone of Tolerance o How much can a service fall short of your expectation before you leave and nd the service elsewhere 0 The zone of tolerance is determined by rm asking a series of questions that relate to the ve service qualities and creating a graph based on the responses to the questions Service Recovery should be performed after the failure of a service Service recovery entails listening to the customer to nd a fair solution to their problem Distributive Fairness is what bene t you get from a rm when a service failure happens what did you get for what you gave up Procedural Fairness is what is the process to get retribution what did you have to do to get that bene t after the service failed Chapter 14 Vocab Pricethe overall sacri ce a consumer is willing to make money time and energy to acquire a speci c product or service Pro t Orientationa company objective that can be implemented by focusing on target pro t pricing maximizing pro ts or target return pricing Sales Orientationa company objective based on the belief that increasing sales will help the rm more than will increasing pro ts Premium Pricing a competitorbased pricing method by which they rm deliberately prices a product above the prices set for competing products to capture those consumers who always shop for the best or for whom price does not matter Competitor Orientation a company objective based on the premise that the rm should measure itself primarily against its competition Customer Orientationa company objective based on the premise that the rm should measure itself primarily according to whether it meets its customers needs Demand Curveshows how many units of a product or service consumers will demand during a speci c period at different pdces Prestige Products or Servicesthose that consumers purchase for status rather than functionality Price Elasticity of Demandmeasures how changes in a price affect the quantity of the product demanded speci cally the ratio of the percentage change in the quantity demanded to the percentage change in price Elasticrefers to a market for a product or service that is price sensitive that is relatively small changes in price will generate fairly large quantity demanded Inelasticrefers to a market for a product or service that is price insensitive that is relatively small changes in price will not generate large changes in the quantity demanded Income Effectrefers to the change in the quantity of product demanded by consumers due to a change in their income Substitution Effectrefers to consumers ability to substitute other products for the focal brand thus increasing the price elasticity of demand for the focal brand CrossPrice Elasticitythe percentage change in demand for product A that occurs in response to a percentage change in the price of product B Complementary Productsproducts whose demand curves are positively related such that they rise of fall together a percentage increase in demand for one results in a percentage increase in demand for the other Substitute Productsproducts for which changes in demand are negatively related that is a percentage increase in the quantity demanded for product A results in a percentage decrease in the quantity demanded for product B Variable Coststhose costs primarily labor and materials that vary with production volume Fixed Coststhose costs that remain essentially at the same level regardless of any changes in the volume of production Fixed Coststhose costs that remain essentially at the same level regardless of any changes in the volume of production Total Coststhe sum of variable costs and xed costs BreakEven Analysistechnique used to examine the relationships among cost price revenue and pro t over different levels of production and sales to determine the breakeven point BreakEven Pointthe point at which the number of units sold generates just enough revenue to equal the total costs at this point pro ts equal zero Monopolyone rm provides the product or service in a particular industry Oligopolistic Competitionoccurs when only a few rms dominate the market Price Waroccurs when two or more rms compete primarily by lowering their prices Predatory Pricinga rm s practice of setting a very low price for one or more of its products with the intent to drive its competition out of business illegal under both the Sherman Antitrust Act and the Federal Trade Commission Act Monopolistic Competitionoccurs when there are many rms sell closely related but not homogeneous products these products may be viewed as substitutes but are not perfect substitutes Pure Competitionoccurs when different companies sell commodity products that consumers perceive as substitutable price usually is set according to the laws of supply and demand Gray Marketemploys irregular but not necessarily illegal methods generally it legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer Everyday Low Pricing EDLPa strategy companies use to emphasize the continuity of their retail prices at a level somewhere between the regular nonsale price and the deep discount sale prices their competitors may offer HighLow Pricinga pricing strategy that relies on the promotion of sales during which prices are temporarily reduced to encourage purchases Reference Pricethe price against which buyers compare the actual selling price of the product and that facilitates their evaluation process Market Penetration Strategya growth strategy that employs the existing marketing mix and focuses the rm s efforts on existing customers Experience Curve Effectrefers to the drop in unit cost as the accumulated volume sold increases as sales continue to grow the sots continue to drop allowing even further reductions in the price 0 Price Skimminga strategy of selling a new product or service at a high price that innovators and early adopters are willing to pay in order to obtain it after the highprice market segment becomes saturated and sales begin to slow down the rm generally lowers the price to capture or skim the next most price sensitive segment 0 Loss Leader Pricingtake the tactic of leader pricing one step further by lowering the price below the store s cost 0 BaitandSwitcha deceptive practice of luring customers into the store with a very low advertised price on an inter the bait only to aggressively pressure them into purchasing a higherpriced model the switch by disparaging the lowpriced item comparing it unfavorably with the higherpriced model 0 professing an inadequate supply of lowerpriced item 0 Price Discriminationpractice of selling the same product to different resellers wholesalers distributors or retailers or to the ultimate consumer at different prices some but not all forms of price discrimination are illegal 0 Price Fixingthe practice of colluding with other rms to control pdces Horizontal Price Fixingoccurs when competitors that produce and sell competing products collude or work together to control prices effectively taking price out of the decision process for consumers 0 Vertical Price Fixingoccurs when parties at different levels of the same marketing channel ie manufacturers and retailers collude to control the prices passed on to consumers Manufacturer s Suggested Retail Price MSRPthe price that manufacturers suggest retailers use to sell their merchandise Material 0 Price includes the dollar price that people spend as well as the time and energy spent 0 Importance of Pricing 0 Judgment of value bene ts vs price 0 The only revenue generator 0 Important in purchase decisions 0 The key to a successful pricing strategy is to match the product or service with the consumer s value perceptions 0 Price is a Signal 0 Too high can signal low value Price outweighs the bene t received therefore diminishing the overall value give up too much for you are getting 0 Too low can signal poor quality 0 Pricing Strategies 0 Pro t orientationparticular pro t goal in mind that a company wants to achieve Use price to stimulate sales in order to achieve this desired pro t 0 Sales orientationall about increasing revenue regardless of what it does to the rm s pro t not caring about costs Concerned with building overall market share Want to establish position with consumers who are price sensitive or who want a prestige brand 0 Competitor orientationmeasure vs competitor Match the competitor pricing 0 Customer orientationneeds and values of target market are assessed Based on the information found out about the target market you set the target price 0 Demand curve shows how many units of a product or service consumers will demand during a speci c period at different pdces 0 Not all products follow the downward sloping demand curve prestige products 0 Price elasticity how changes in price affect the quantity of the product demanded 0 Price elasticitychange in quantity demanded change in price 0 Price elasticrelatively small changes in price will generate fairly large changes in the quantity demanded Durable goods refrigerators cars ect 0 Price inelasticrelatively small changes in price will not generate large changes in the quantity demanded Essential goodsthings we need to survive Factors In uencing Price Elasticity 0 Income effect How does a change in income affect the change in quantity demanded for a product 0 Substitution effect ldea that all things being equal the product will be more price elastic o Crossprice elasticity Looks at the impact of price and quantity demanded for two products As we change demand of one what happens to the price of the other OR as we change the price one what happens to the price of the other Complementary Products 0 As demand of A increases the price of B decreases Substitute Products 0 As price of A decreases the demand of B decreases Firms must understand costs in order to make effective pricing decisions The breakeven point the number or units sold generates revenue which equals the total costs revenuetotal costs0 0 Pro t at the breakeven point is equal to 0 Total cost xed costs variable costs 0 Fixed costs don t change 0 Variable costs change based on how much you produce Type of Competition 1 Monopolyone rm controls the market 0 Less price competition and fewer rms in the market 2 Oligopolistic Competitionhandful of rms control the market 0 More price completion and fewer rms in the market 3 Monopolistic Competitionmany rms selling differentiated products at different prices products are related but they aren t perfect substitutes Less price competition and many rms in the market 4 Pure Competitionmany rms selling commodities for the same price perfect substitutes More price competition and many rms in the market Channel Members 0 Manufacturers want to charge the highest price possible 0 Wholesalers o Retailers want to charge the lowest price possible lnternet In uences Prices 0 Increased consumer price sensitivity Have more access to information 0 New product categories 0 Growth of online auctions Contributed to price transparency Economic Factors ln uence Prices 0 Crossshopping Consumers shop in the different price tiers to get the best deals 0 Globalization global market New forms of labor raw materials increased demand ect 0 Local economic conditions Emplyments housing prices ect in the local market Pricing Strategies 0 Everyday low pricing EDLP Trying to have a low price consistently price lower than the competition 0 HighLow pricing Having a price point highger that the EDLP but then you have big sales that get people excited to buy your product New Product Pricing Strategies 0 Price Skimming Price decreases as it goes through the market Innovators and early adopters pay the highest prices because they are the least price sensitive In order for this to workconsumers must believe in your brand quality costs cant outweigh revenue and the market needs high barriers to entry 0 Marketing Penetration Start with a really low price in order to build market share quickly In order for this to workcustomers have to be price sensitive the experience curve has to kick in and low price have to be so low that competition cant come in and meet your low price Deceptive Illegal Price Advertising 0 Deceptive reference price Reference price is completely made up 0 Loss leader pricing When the store sees the product price below what the store costs are Illegal in some states 0 Bait and switch Get consumers into the store to but one product but then get the buy another more expensive product instead Predatory pricing is the practice of setting low prices with the intent of driving a competitor out of business Price discrimination is the practice of selling the same product to different customers at different prices 0 Can be legal or illegal depending on the situation Who is the consumer l you can offer student senior citizen and military discounts Not supposed to charge different prices in the BZB market but its ne for quantity discounts and perishable items or if you need to remain competitive because your competition drops their prices Price xing is when two companies get together and collude on what price to set in the market 0 Horizontal price xing across tow different supply chains 0 Vertical price xing within the same supply chain Chapter 15 Vocab Marketing Channel Managementrefers to a set of approaches and techniques rms employ to ef ciently and effectively integrate their suppliers Supply Chain Managementrefers to the set of approaches and techniques rms employ to ef ciently and effectively integrate their suppliers manufacturers warehouses stores and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities to the right locations and at the right time as well as to minimize system wide costs while satisfying the service levels their customers require Wholesalersthose rms engaged in buying taking title to often storing and physically handling goods in large quantities then reselling the goods to retailers or industrial or business users Distribution Centera facility for the receipt storage and redistribution of goods to company stores or customers may be operated by retailers manufacturers or distributed specialists Direct Marketing Channelthe manufacturer sells directly to the buyer Indirect Marketing Channelwhen one of more intermediaries work with manufacturers to provide goods and services to customers Vertical Channel Con icta type of channel con ict in which members of the same marketing channel are in disagreement or discord Horizontal Channel Con icta type of channel con ict in which members at the same level of a marketing channel are in disagreement or discord such as when they are in a price war Independent conventional Marketing Channela marketing channel in which several independent members each attempts to satisfy its own objectives and maximize its pro ts often at the expense of the other members Vertical Marketing Systema supply chain in which the members act as a uni ed system 0 Electronic Data Interchange EDIthe computertocomputer exchange of business documents from a retailer to a vendor and back 0 VendorManaged Inventoryan approach for improving supply chain ef ciency in which the manufacturer is responsible for maintaining the retailer s inventory levels in each of its stores 0 Push Marketing Strategydesigned to increase demand by motivating seers wholesalers distributors or salespeople to highlight the product rather than the products of competitors and thereby push the product onto consumers Pu Marketing Strategydesigned to get consumers to pull the product into the supply chain by demanding it Plannersin a retailing context employees who are responsible for the nancial planning and analysis of merchandise and its allocation to stores Receivingthe process of recording the receipt of merchandise as it arrives at a distribution center or store 0 Radio Frequency Identi cation RFID Tagstiny computer chips that automatically transmit to a special scanner all the information about a container s contents or individual products 0 Ticketing and Markingcreating price and identi cation labels and placing them on the merchandise 0 JustinTime JIT Inventory Systemsinventory management systems designed to deliver ess merchandise on a more frequent basis than traditional inventory systems the rm gets the merchandise quotjust in timequot for it to be used in the manufacture of another product in the case of parts or components or for sale when the customer wants it in the case or consumer goods 0 Quick Responsean inventory management system used in retailing merchandise is received just in time for sale when the customer wants it Videos 0 60 minutes episode on how robots can help in order processing and ful llment UPS commercial shows RFID tags 0 60 minutes episode on amazon deals with returns management Material 0 Supply Chain 0 Products 0 Services 0 Finances 0 Information Supply Chain Affects on Marketing 0 Ful lling delivery promises 0 Meeting customer expectations 0 Reliant on an ef cient supply chain Direct channel manufacturer sells directly to the customer Indirect channelbetween manufacturer and customer there are intermediaries Supply chain management integrates the supply chain members to produce and distribute merchandise when the customer wants in and in the right quantities and in the right locations Supply chain management can minimize costs and satisfy service level requirements Supply Chain Metrics 0 Marketing Management deals with sales increasing them 0 Logistics Management deals with costs keeping them down Supply Chain Con ict 0 Vertical within the channel 0 Horizontal between channels 0 Reasons Con icting goals between members of the supply chain or across different supply chains Unmet expectations within the supply chain Ideological differences 0 Manufacturer vs Retailer o Retailer says the customer is always right but manufacturer doesn t always see it that way Bene ts of Supply Chain Management 0 Lower costs for the rm 0 Greater exibility important in a dynamic market when changes are always occurring 0 Improved customer service 0 Higher revenues Supply Chain Components 0 Sourcing and procurement BZB buying process 0 Reduced costs 0 Negotiation skills are key Suppliers relationship management 0 Supports manufacturing ow Ensures resource availability 0 Production Scheduling Demand management Push motivating sellers to highlight a product incentives to push product onto the customer Pull customer demand pulls product down form the supply chain advantage is you wont have too much inventory disadvantage is you may not have enough inventory CPFR Collaboration between rms Planning plan production Forecasting used to plan production and Replenishment when necessary 0 Used in a vertically integrated supply chain Manufacturing ow management Necessary resources Flexibility Improve manufacturing output in terms of quality and speed 0 Order Processing and Ful llment Electronic data interchange EDI when computers share information with one another Reduce lead times when you realize you need to place the order and when you actually get the order Reduce inventory levels Free cash up 0 Inventory Control Low but adequate JustinTime Systems Reduced lead times Increase product availability Lower inventory investments at distribution centers Retail calls this a quick response system Vendormanaged inventory Manufacturer is responsible for maintaining the retailers inventory 0 Warehousing and Material Handling Safety stock Weaknesswhenever you have excess stock there are increased costs increased opportunity for theft increased taxes ect RFID tags Radio Frequency Identi cation Tags 0 Put into a variety of products as they go through the supply chain to provide information about the product as it moves through the supply chain 0 Transportation Getting your product from one part of the supply chain to another Average is 510 of the price you pay for your good is from transportation What mode of transportation makes the most sense keeps the cost down keeps the product safe ect 0 Customer Relationship Management CRM software systems help to manage this Prioritize marketing focus segmentation Customer service management Helps to ensure a strong relationship Uni ed response system within the supply chain to deal with customer complaints and comments 0 Touch points about trying to create a relationship with customers Returns management 0 Manage volume in a cost effective manner 0 40 of what is purchased is returned in ecommerce retail 0 Additional touch points Weakness recognition Chapter 16 Vocab Retailingthe set of business activities that add value t products and services sold to consumers for their personal or family use includes products bought at stores through catalogs and over the Internet as well as services like fastfood restaurants airlines and hotels 0 Multichannel Strategyselling in more than one channel 0 Distribution Intensitythe number of supply chain members to use at each level of the supply chain 0 Intensive Distributiona strategy designed to get products into as many outlets as possible 0 Exclusive Distributionstrategy in which only selected retailers can sell a manufacture s brand 0 Exclusive CoBranddeveloped by national brand vendor and retailer and sold only by that retailer 0 Mobile Commerce Mcommerce communicating with or selling to consumers through wireless handheld devices such as cellular phones Cooperative Advertisingan agreement between a manufacturer and retailer in which the manufacturer agrees to defray some advertising costs 0 Share of Wallet the percentage of the customer s purchases made form a particular retailer Material 0 Retailing is important because it is where marketing meets the consumer o Retailing is the end of supply chain where marketing meets the consumer Choosing Retail Partners 0 Channel structure How integrated is your supply chain What your goals and what are the goals of your partners 0 Customer expectations Who is the target market and where do they shop Determines which retailer to go to 0 Channel member characteristics How much power does each entity have in the supply chain 0 Distribution intensity How many retail partners do you want lntensive Get your product to as many retailers as possible Exclusive 0 Limiting your retail partners geographic regions price points ect o 4 P5 in Retailing 0 Product assortment and services mix 0 Price Match price to target market and to positioning strategy 0 Place Location is a big part to success 0 Promotion Sales staff within the store Promotional efforts to get prople into the store What marketing techniques do you utilize to get people to purchase your product Store experience is also important 0 Store Experience 0 0 000 O Entranceattracts buyers to come through their door Layoutput newest or most expensive merchandise on the right because that is the side people go to rst instinctively agship items milk are in the back of the store because the more items you pass the more likely you are to buy something Lightinghelps to create a mood Colordifferent colors exude different moods Sound Smellcan evoke emotions and memories 0 10 Disruptions in Retail 0 Omnichannel retail Consumer demand is all about getting products anything and anywhere Blurring lines between physical and digital Convergence of platforms having platforms work together for everyone s bene t especially the consumers Broader selection 0 Personalization of the retail experience Increased loyalty and satisfaction Omnichannel shoppers tend to spend 3 to 4 times more than single channel shoppers Mobile communication Support via apps and instore reception Affects 75 of purchases Big data analytics STPunderstanding your customers on a deeper level than just looking at demographics The untrained employee base means there is a lot of potential to be tapped by trained employees Share of wallet is a store knowing how much of your budget you are spending at their store as well as in competitor s stores Vertical integration Differentiated product Exclusive brands owned by retailer Zara and HampM are having an impact because the utilize their supply chains to product great value quickly Price transparency Coupled with social media Consumer empowerment Retailers have to work on getting smaller margins Cyber security Con dence issue for consumers they aren t trusting retailers to have their best interest at heart Legislation is going to start to impact cyber security Strategy is to make yourself safer than your competition Changing demographics Ageing baby boomers Healthy miennias that have a lot of needs have changed retail Increase in minority populations Implications Segmentation strategies 0 Product needs Cross boarder commerce Global pricing Tourism and product perception Putting pressure on retailers to have a global marketing strategy Mobile payments Still in infancy stage but a lot of growth is projected to happen Issues with who owns the data transactions ect Security issue consumers have to feel comfortable with these transaction methods Talent requirements CEO needs to be different New Skills People need to be cross funcitonal
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