Marketing Principles MKTG 2500
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This 12 page Class Notes was uploaded by Nathanial Mosciski on Wednesday September 30, 2015. The Class Notes belongs to MKTG 2500 at Western Michigan University taught by Zahida Luqmani in Fall. Since its upload, it has received 13 views. For similar materials see /class/216804/mktg-2500-western-michigan-university in Marketing at Western Michigan University.
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Date Created: 09/30/15
Exam 3 ReviewlNotes Chapter 9 Decision Support Systems Decision support system is an interactive flexible computerized info system that enables managers to obtain and manipulate info as they are making decisions o DSS creates customer profiles by looking at purchasing patterns o Database marketing is the fastest growing use of DSS The marketing research process 1 Indentify a problem by looking at external environment 2 Plan Design Primary data data collected for the first time so secrecy is contained source of data is known and can answer specific research questions that secondary cannot Specify sampling procedure Collect data Analyze data Prepare present report Follow up Secondary data data previously collected for any purpose other than the one at hand Primary data information collected for the first time used for solving the particular problem under investigation Ex Pilsbury wants to see what cookies will be more popular secondary info wont help A test market analysis has to be completed to gain primary data on solving the question at hand Survey Research Types o In home interviews provides high quality info but are expensive Mall intercept interview hard to get true representation of target market o Telephone interviews provides the best sample o Mail survey low cost and centralized control o Executive interviews interviews businesspeople at their office concerning industrial products Very expensive o Focus groups personal interviewing people are given options based on group interaction dynamics and the interplay of responses 05th o Mystery shopper makes sure services are being provided Questionnaire Design o Open ended questions easy to calculate because of the choices you re given o Closed ended questions limited list of responses o Scaled responses a closed ended question designed to measure the intensity of a respondents answer Types of errors o Measurement error occurs when there is a difference between the info desired and the info provided o Sampling error occurs when a sample somehow does not represent the target population o Frame error another type of sampling error arises if the sample drawn from a population differs from the target population o Random error occurs when the selected sample is an imperfect representation of the overall population Market research field service firms collect most primary data Competitive intelligence helps managers assess their competitors and their vendors in order to become a more efficient and effective competitor Chapter 10 Product Concepts Product both favorable and unfavorable that a person receives in an exchange May be tangible good a service or an idea o Business product used to manufacture other goods to facilitate and organizations operations comp software or to resell to other consumers o Consumer product a product bought to satisfy an indiduals personal needs or wants o Convenience product inexpensive item that merits little shopping effort o Shopping product usually more expensive than a convenience product and is found in fewer stores 0 Homogeneous shopping consumers see these products as the same frozen pizza o Heterogeneous shopping seen to differ in quality style sustainability etc Dell to Apple o Specialty product when consumers search extensively for a particular item and are very reluctant to accept substitutes Unsought products a product unknown to the potential buyer or known product that the buyer does not actively seek Product items lines and mixes Product item a specific version of a product that can be designated as a distinct offering among an organization s products o Product line group of closely related products cambell s soups o Product mix includes all the products a firm sells a Product mix width breadth number of product lines an organization offers o Product line depth number of product items in a product line Benefits of product lines o Advertising economies product lines provide economies of scale in advertising Several products can be introduced under the umbrella of the line Bing advertising for Bing but also advertising for units of xbox 360 o Package uniformity all packages in the line may have a common look kraft products Standardized components product lines allow firms to standardize components thus reducing manufacturing and inventory costs GM uses the same parts on mult Cars Efficient sales and distribution product line enables sales personnel for companies like PampG to provide a full range of choices to customers Equivalent quality purchasers usually expect and believe that all products in a line are about equal in quality Adjustments to product lines Product modification changes to the producs quality functionality andor style Planned obsolescence a term commonly used to describe the practice of modifying products so that those that have already been sold become obsolete before they need replacements Cell phones Repositioning changing consumers perceptions of a brand 0 Ex KoolAid was marketed to kids but now is being marketed to families Product line extension occurs when a company s management decides to add products to an existing product line in order to compete more broadly in the industry Product line contraction eliminating some products that serve the same purpose as another Branding A brand is a name term symbol design or combination thereof that identifies a seller s products and differentiates them from competitors products Brand equity refers to the value of the company and brand names Global Brand brand that obtains at least a third of its earnings from outside its home country Manufacturer brand brand of a manufacturer Private brand private label or store brand a name owned by a wholesaler or retailer WalMart s Ol Roy dog food Captive brand manufactured by a third party for exclusive retailers Individual branding companies use different brand names for different products PampG uses this type because they produce so many types products o Family branding marketing several different products under the same brand name sony o Cobranding places 2 or more brand names on a package Packaging o Used to contain and protect products promote products and facilitate the storage use and convenience of products o Universal Product Codes appears on most items in a supermarkets and high volume outlets to track the movement of products from the manufacturer to point of sale Warranties o A confirmation of the quality or performance of a good or service o Express warranty a written guarantee Implied warranty an unwritten guarantee that he good or service is fit for the purpose for which it was sold Chapter 11 Developing and Managing Products New products o New to the world products these products create an entirely new market reps the smallest category of new products o New product line new products that the firm has not previously offered allowing it to enter an established market Disney products o Improvements of existing products o Repositioned products existing products targeted at new markets o Lower priced products Meijer brand products products that offer a lower price for similar performance of say brand name products New Product Development Process o New product strategy inds the new product development process with the objectives of the marketing department the business unit and the corporation Idea Generation new product ideas come from customers employees distributors competitors vendors and research amp development 50 to 60 ideas are common for new product ideas Idea screening eliminates ideas that are inconsistent witht the organizations new product strategy Business analysis Preliminary figures for demand cost sales and profitability are calculated Development a prototype is developed Test market the introduction of a prouct and a marketing program to determine the reactions of potential customers in a market situation google introducing their high speed internet in test market cities Commercialization final stage in the development process This includes ordering production materials building inventories shipping the product to field distribution points offering services with the products and advertisement for the product New products and sustainability 70 to 90 of products fail within their first year Success factors include listening to customers concerns strong leadership commitment to new product development vision of future market Diffusion the process by which the adoption of an innovation spreads Category of adopters Innovators first 25 to try the new product Early adopters next 135 to adopt the new product Early majority next 34 to adopt Late majority next 34 Laggards final 16 to try the new product Product Characteristics and Rate of Adoption Complexity degree of difficulty involved in understanding and using a new product The more complex the product the slower is its diffusion Compatibility the degree to which the new product is consistent with existing values and product knowledge Relative advantage is the product superior to substitute products Observabilitythe degree to which the benefits or other results of using the product can be observed by others and communicated to target customers Trialability Degree to which a product can be tried on a limited bases Ex It s easier to try a new cereal than a new car Product Life Cycles Introductory stage the full scale launch of a new product into the marketplace This stage has a high failure rate little competition frequent product modification and limited distribution Growth Stage Increasing sales entrence of competitors market consolidation initial healthy profits and aggressive advertising iPad Maturity stage sales increase at a decreaseing rate saturated markets annual models appear lengthened product lines service and repair assume important roles and niche marketers emerge Decline stage long run drop in sales large inventories of unsold items and elimination of all nonessential marketing expenses Chapter 13 Marketing Channels A Marketing Channel can be viewed as a large canal or pipeline through which products their ownership communication financing and payment and accompanying risk flow to the consumer Functions of a market channel include specialization and division of labor overcoming discrepancies and providing contact efficiency Overcoming Discrepancies Discrepancy of Quantity the difference between amount produced and amount bought by consumers Discrepancy of assortment occurs when a consumer doesn t have all the items needed to receive full satisfaction from a product Temporal discrepancy situation that occurs when a product is produced but a consumer isn t ready to buy Ex Seasonal products Special Discrepancy The difference between the location of a producer and the location of widely scattered markets Channel Intermedia ries o Retailers sell directly to consumers and take title to goods o Merchants or Wholesalers firms that facilitate the movemtent of products and services from the manufacturer to producers resellers governments institutions and retailers They take title to products o Agents and Brokers facilitates the sale of a product from producer to end user by representing retailers wholesalers or manufacturers They don t take title to goods Channel Functions performed by intermediaries o Transactional Functions Contacting promotion negotiating and risk taking o Logistical functions physically distributing storing and sorting products o Facilitating functions researching and financing products Channels for Consumer Products Direct Retailer Wholesaler AgentBroker Channel Channel Channel Channel Producer x x x x Agents or x Brokers Wholesalers x x Retailers x x x Consumers x x x x Channels for Business Products AgentBroker Direct Direct Industrial AgentBroker industrial Channel Channel Distributor Channel Channel Agents or Agents or brokers brokers Industrial Industrial Distributor Distributor Industrial Industrial Govt Industrial Industrial User User Buyer User User Alternative Channel Arrangements o Multiple Channels a producer selects two or more channels to distribute the same product to target markets is called dual distribution or multiple distribution o Nontraditional Channels the internet mail order channels or infomercials They limit brand coverage but give a producer serving a niche market a way to gain market access and customer attention without having to establish channel intermediaries o Strategic Channel Alliances enable firms to use another manufacture s already established channel Market Channel Strategy Decisions o Factors that affect channel choice include 0 Market factors choice of distribution channels to target markets 0 Product factors Products that are more complex customized and expensive benefit from shorter distribution channels like pharmaceuticals scientific instruments planes and mainframe computer systems 0 Producer factors Several factors pertaining to the producer itself are important to the selection of a marketing channel The ability to train its own sales force and extend credit to their customers is important for making the channel more easily accessible to purchasing the product Level of Distribution intensity o Intensive product is available at almost every retailer Ex Proctor and Gamble is known for using this method o Selective exclusive territory is used to eliminate the product being carried in more than a few locations within a specific area o Exclusive more rare sightings of a product within a specific area 1262010 83000 PM 1262010 83000 PM
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