Exam #1
Which of the 4 P's captures value?
Price
What is the difference between functional and psychological needs?
Functional needs look at how well the product performs
Psychological needs look at obtaining personal gratification – how does this product or service satisfy me personally?
What is the difference between variable costs and fixed costs?
Variable Costs: Primarily labor and materials, that vary with productions volume
Fixed Costs: Costs that remain essentially at the same level, regardless of any changes in the volume of production
What is the lagged effect?
A delayed response to a marketing communications campaign. It generally takes several exposures to a campaign before a consumer fully processes its message.
Statistics about age, gender, income, ethnicity, education, occupation, etc. are called?
Demographics
What are the three categories of social media?
1. Social Network Sites
2. Media-Sharing Sites
3. Thought-Sharing Sites
Name at least 4 of the Macro-environmental factors.
Possible answers:
What are the 5 C’s of Pricing?
Which of the following is the most common form of competition: Monopoly, Oligopolistic Competition, Monopolistic Competition, Pure Competition
Monopolistic Competition
What is the first step in the consumer decision process?
Need/want recognition
What are the five effects when it comes to The Wheel of Social Media Engagement?
1. The Information Effect
2. The Connected Effect
3. Network Effect
4. The Dynamic Effect
5. The Timeliness Effect
Describe the differences between a new buy, straight rebuy, and a modified rebuy.
New Buy: Buys a good or service for the first time, which means the buying decision is likely to be quite involved because the buyer does not have any experience with the item
Straight Rebuy: Occurs when the buyer simply buys additional products that have been previously purchased
Modified Rebuy: Changes, upgrades, different features. Buyer has purchased a similar product in the past but has decided to change some specifications such as the desired price, quality level, customer service level, options, and so forth
What are the five building blocks of service quality?
What is the difference between penetration pricing and price skimming?
Penetration Pricing: Set the initial price low for the introduction of the product
Price Skimming: For consumers who are willing to pay a higher price to have the product first
What are the four different types of blogs that are a part of the thought-sharing sites?
1. Corporate Blogs
2. Professional Blogs
3. Personal Blogs
4. Microblogs
What is the 4E framework and describe each one.
Excite the Customer: Offer must be relevant to its targeted customer
Educate the Customer: Marketers must educate potential customers about value proposition and communicate the offered benefit
Experience the Product: Vivid information that is provided about a firm’s goods/services – how they work
Engage the Customer: Using blogging, firms ensure that customers are engaging with the firm’s product
Explain the difference between primary and secondary data.
Primary Data: Data collected to address specific research needs. Examples include focus groups, in-depth interviews, surveys
Secondary Data: Information that has been collected prior to the start of the focal research project. External as well as internal data sources. Examples: research the internet, newspaper articles, company reports, etc.
Describe the four pricing orientations.
Profit-Oriented: Target profit pricing, maximize profits, target return pricing
Sales-Oriented: Focus on increasing sales, more concerned with overall market share, setting very low prices to increase sales
Competitor-Oriented: Main goal is to have no competitors, set prices very low
Customer-Oriented: Try to give greatest value to customer, high price for high value, people are willing to pay it
Describe the three levels of distribution intensity.
Intensive Distribution: Designed to place products in as many outlets as possible
Selective Distribution: Relies on a few selected retail customers in a territory to sell products
Exclusive Distribution: Granting exclusive geographic territories to one or very few retail customers so that no other retailers in the territory can sell a particular brand
What are three methods a firm uses to set prices and describe them.
Cost-Based Methods: Determine the final price to charge by starting with the cost
Competition-Based Methods: Set prices to reflect the way they want consumers to interpret their own prices relative to competitors’ offerings
Value-Based Pricing Methods: Setting prices based on the perceived value of the product
What are the four growth strategies and describe each one.
Market Penetration: Current product and service, current market
Market Development: New market, current product and service
Product Development: New product and service, current market
Diversification: New product and service, new market
Describe the differences between the consumer products. (Specialty, Shopping, Convenience, and Unsought)
Specialty Products/Services: Those for which customers express a strong preference that will spend considerable efforts to search for the best suppliers, something one has to really look for. EX. Medical professionals
Shopping Products/Services: Products or services for which consumers will spend a fair amount of time comparing alternatives. EX. Furniture
Convenience Products/Services: Products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase. EX. Bread
Unsought Products/Services: Products or services that consumers either do not normally think of buying or do not know about. EX. Funeral services
Describe the three factors that influence price elasticity of demand.
Income Effect: Refers to the change in the quantity of a product demanded by consumers due to changes in their income
Substitution Effect: Refers to consumers’ ability to substitute other products for the focal brand
Cross-Price Elasticity: The percentage change in the quantity of Product A demanded compared with the percentage change in price in Product B. Product A’s price increases, Product B’s price could either increase or decrease, depending on the situation and whether the products are complementary or substitutes
What are the four factors that differentiate services from goods and describe each one.
Intangible: Cannot touch it, taste it, or see it, atmosphere is important to convey value, images are used to convey benefit of value
Inseparable: Production and consumption are simultaneous, little opportunity to test service before use, lower risk by offering guarantees or warranties
Heterogeneous (Variable): The more humans needed to provide a service, the more likely there is to be heterogeneity such as technology, training, automation
Perishable: Cannot be stored for use in the future, consume it while it is being produced
What are the four types of competition and describe each one.
Monopoly: One firm provides the product or service in a particular industry, which results in less price competition
Oligopolistic Competition: Only a few firms dominate. Firms typically change their prices in reaction to competition to avoid upsetting an otherwise stable competitive advantage environment
Monopolistic Competition: Many firms competing for customers in a given market but their products are differentiated
Pure Competition: Large number of sellers offer standardized products or commodities that consumers perceive as substitutable