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73 Cards in this Set
- Front
- Back
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What Is Marketing? |
Marketing is the action or business of promoting and selling products or services, including market research and advertising. |
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The 4 P's (Marketing Mix) |
Product - Research, product development, packaging, branding Promotion - Advertising, sales promotion, publicity Price - Cover costs and maintain reasonable to customers Place - Physical distribution, storage, inventory, management, channel selection |
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Industrial Goods VS Consumer Goods |
Industrial - raw materials (mining, logging, farms, oil) - Processed goods = processing of raw materials (trees into wood pulp) - Finished goods = used to make other product (automobile parts to an automaker) Consumer Goods - Non-industrial products intended for personal use by the general public - Retail stores sell consumer goods *However some consumer goods may also be marketed to industry* |
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Needs VS Wants |
Needs - something you require to live - food, protection, water, affiliation, etc. Wants - things beyond what is needed to survive - gourmet meals. iPods, hockey sticks - while you might want a fancy meal a simpler mean will keep you alive |
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Push VS Pull |
Push - products are sold to retailers, importers, wholesalers (stores in general) so not directly to the end consumer - Strategy makes itself readily available to consumers Pull - Products are sold directly to consumers - tries to convince consumers they "want" that product |
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Consumer Profile: Demographics |
The study of characteristics of people (age, gender, income level, family life style, etc. ) |
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Consumer Profile: Geographics |
- Marketing based on patterns based on where people live - Ex. rural consumers have different needs (snow removal, grass cutting, than apartment dwellers in the inner city (may not even need a car) |
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Consumer Profile: Psychographics |
- A system for measuring consumer beliefs, opinions, and interests - Looks to recognize patterns so that marketing mix can be done more effectively - Ex. People who are interested in exercise likely to value low fat foods
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Consumer-Use Statistics |
- Marketers look to identify how often someone consumes a product - Example, when consumer is a light user there is marketing opportunities to convince them to be a heavy user - Non-users are targeted to try and make the product have a higher value to them |
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Thorndlike's Law of Effect |
- Consumers are motivated to buy products that produce positive events and reduce negative events - Most purchases are influenced by both - Pain (economic costs, emotional costs) -consumers's motivation to purchase -pleasure:satisfy needs and wants |
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Maslow's Hierarchy of Needs (Top to Bottom) |
1. Self-Actualization - morality, creativity, spontaneity, acceptance, expensive purpose, meaning and inner potential 2. Self-Esteem - confidence, achievement, respect of others and the need to be unique individual 3. Love and Belonging - friendship, family, intimacy, sense of connection 4. Safety and Security - Health, employment, property, family and social stability 5. Physiological - breathing, food, water, shelter, clothing and sleep |
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Fad |
- A product that has intense selling and goes through one major selling period and then flops to loose profits and potentially never come back. - Ex: bell-bottoms, yo-yo, etc. |
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Trends |
- Lasts longer than fads - Mass movement of the marketplace toward a particular value - By identifying trends, marketers can predict likely market opportunities - This gives time to develop products in time to get them to the market |
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Niche Markets |
- Products with short growth stage and consistent maturity stage - Do not take a large market share |
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Seasonal Markets |
- Markets that change by the season - Ex, ice-cream sales, snow blowers, air conditions - Marketers try and create more sales outside of the season |
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The Product Life Cycle Diagram |
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The Product Life Cycle: Introduction |
- Product launch is the moment when a new product is introduced to the market - can be launched locally, regionally, etc. - launch is expensive; advertising, design, research, training, etc. - consumers who buy early are called early adopters or trendsetters - during the early stages, marketers target these consumers - galas, trendy publications, ceremonies, etc |
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The Product Life Cycle Growth |
- Sales are increasing - Now other consumers follow the trendsetters - Product has become more visible through advertising (crucial in this stage) and word of mouth - If product does not catch on, it may be scrapped - If product is pulled before production costs are recovered it is called a bust |
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The Product Life Cycle Maturity |
- Product sales slowly increasing or steady - Marketers promote the name of the product (possible as having a good history) - Development costs have been recouped - Large profits are often available, that may be used to develop more products - Brand reputation is used to promote other products |
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The Product Life Cycle Decline |
- Company unable to find new customers - Profits decrease - Marketers need to determine what is causing the decline - Might try and reverse the process by changing price, ads, design, etc. - May remove product from market |
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The Product Life Cycle Decision Point |
- Marketers determine the future of the product based on research - May reformulate, repackage, reintroduce - “New and Improved” - New features - Sell with other products |
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Oligarchy |
Small number of companies, each with significant control |
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Monopoly |
Single company controls the market |
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Perfect Competition |
Large number of small companies, no possibility of control |
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Monopolistic |
Large number of companies, possibility of some control |
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Direct Competition VS Indirect Competition |
Direct - all the products of the same type that compete for a consumer's money - Ex. two movies on at the same time Indirect - Products of different types that compete for the consumer's money - Ex. movies and pizza |
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USP |
Unique Selling Proposition - Something that no one else has - Ex. patents |
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Costs: Lowering Production Costs |
- Reducing costs to create or deliver products - Ex. new technology to make product more cheaper |
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Servicing a Niche Market |
- Finding a specific market that other have difficulty serving - Ex. specialized software |
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Creating Customer Loyalty |
- Customers can be loyal to brand, product retailer, etc. - Ex. customer may buy the same brand of shoes each time |
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Non-Sustainable Factors: Price |
- Is it possible to be competitive at a lower price? - Mainly equal products have no competitive advantage |
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Non-Sustainable Factors: Quality |
- Best, easiest to use, lightest, etc. - Ex. Godiva chocolates |
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Non-Sustainable Factors: Benefits of Use |
- Marketing the product based on what it does - Ex. greater car safety |
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Non-Sustainable Factors: Design Features |
- Features that are different between products - Ex. colour, shape, extra buttons, etc. |
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Non-Sustainable Factors: Promotion |
- Advertising is almost always required - Top-of-the-mind awareness - Ex. "Roll Up The Rim To Win" |
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Non-Sustainable Factors: Placement |
- Needs to get the product to the consumer - Stores, cities, corners - Ex. big retail stores that wipe out the competition are called category killers |
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Primary Research VS Secondary Research: Strategies |
Primary Research - Test marketers are kept secret so that consumers and competitors can't influence the test Secondary Research - Involves researching and interpreting this type of data - books, periodicals, data bases, internet, consultants, etc. |
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Qualitative Research VS Quantitative Research |
Qualitative Research - Research records, people, reactions, attitudes, responses, etc. Quantitative - Research measures variables that can be reported as numbers, choices, etc. |
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Open and Closed Question |
OCQ |
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Inventions VS Innovatioon |
Inventions - New devices, methods, or processes developed from study or experimentation - Canadian inventions: insulin Innovation - this is a product or service that uses new technology, items or processes to: - Change existing products - Change the methods used to produce products - Change the ways used to distribute products - Ex. computerized tax returns |
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Utility |
Utility is what makes a product valuable to the consumer (so they purchase it over another produ |
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Utilities: Form |
The relationship between the function and the form - Functionis what the product is intended to do - Form is the product look or type of service - Usually form follows function! - What a product does dictates what it looks like - A shoe has to allow you to walk first and then looks should come second - However, form is often an important selling point
Material - New materials can add significantly to the value - For example winter coats of today are much warmer, lighter and water repellent Scent - Very important in some products – which ones??? Flavour - In any food or drink product, flavour is critical These change over time too! Colour - Colour trends are an important part of marketing Design - A badly designed product has no utility - A toaster that doesn’t toast is an example - Ergonomic design is an important issue (the Fender Stratocaster, the Palm Pilot, well shaped mice) - Longevity, safety, comfort, beauty, aesthetics Packaging - Convenience, safety, environmentally friendly, re-usability, appearance, functio |
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Utilities: Information |
- Provides the consumer with info about the product - Well written manuals, phone service, technicians, internet sites, etc. Advertising often offers info about the product |
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Utilities: Time |
- Is the product available when the customer wants it? Both day time and seasonal considerations |
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Utilities: Possession |
- High when the product is easy to purchase - Credit can be made available, price reductions, etc. |
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Utilities: Place |
- Place utility is high if the customer can easily purchase the product - If the product is available in a local store, it is good - Internet sites have changed this |
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Positioning |
- The attempts by marketers to associate their product with an image, an attitude, a way of life, a way of thinking, etc. in the minds of the consumer - Ex. staples positions itself as a retailer with a huge variety of high quality office and high-tech products - Car companies position their product as fun, fast, exciting, etc. |
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Types of Positioning: Benefit |
- This is created by the benefit that a product offers - Ex. The fuel economy of hybrid car, the style of a pair of shoes - However, other companies can afford to add these benefits which nullifies the advantage |
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Types of Positioning: Target |
- Marketing needs to be focused on the consumer that is likely to buy it - Ex. don't market skateboard shoes to baby boomers - The positioning should make the consumer think that the product belongs to them and not others - However, what is popular today may not be tomorrow |
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Types of Positioning: Price |
- High pricing can position the product as luxury, attracting high end consumers - However, these products must come with high quality, service, or some reason such as social status - Low pricing also positions products - Medium pricing cannot be used to position as there are too many other products in the same range |
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Types of Positioning: Distribution |
- The way that a product is distributed can create positioning - Avon has sold products with part time sales staff for years - Some products are only sold in a certain stores - The first company to grab a new distribution channel may have quite an advantage (Amazon.ca is an example) |
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Types of Positioning: Service |
- Various services offered to help to position a product - Ex. a store open 24 hours a day - Ex. a no hassle return policy |
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Five Reasons For Packaging |
5 |
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Logos |
- Ann accepted genetic term for all the symbolic ways to create a brand - Trademarks - Trade names - Brand marks - Logotypes - Corporate symbols |
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Slogans |
A short catchy phrase that is always attached to company's name and logo |
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Labeling |
Display of information about a product on its container, packaging, or the product itself. |
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Break-Even Analysis (BEP) |
- This is used to find the break-even point, where the business starts to make profit - Uses the following values to calculate - variable costs-those costs affected by the quantity of good sold - fixed costs- costs independent of sales - gross profit-money left after variable costs paid BEP = Fixed costs / Gross Profit = calculates the # of units the company needs to sell to begin to make a profit |
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Economies of Scale |
- The more products a company makes the lower the cost of production for each item - Companies can - make products for other companies - keep the price low to hinder competition - create new brands - merge with competitors |
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Markup/Margin |
In the more complex example of selling price $339, a markup of 66% represents approximately a 40% gross margin. This means that 40% of the $339 is profit. Again, gross margin is just the direct percentage of profit in the sale price. In accounting, the gross margin refers to sales minus cost of goods sold. Markup is the difference between the cost of a good or service and its selling price. A markup is added onto the total cost incurred by the producer of a good or service in order to create a profit. The total cost reflects the total amount of both fixed and variable expenses to produce and distribute a product. |
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Deceptive Pricing Practices |
Illegal - Double Ticketing - having 2 prices - Bait and Switch - tries to get the customer (bait) then redirects the customer - False Price Sales - advertising the regular price as a sale price, raising a price before the product goes on sale - Marketing Boards - also set certain rules |
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Premium Pricing |
Used to indicate the luxury or high quality aspects of a product - customers expect excellent service |
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Market Skimming |
- This is observed when a new product is introduced the high price is set to capitalize on the new nature of the product - Companies try and recover their development costs before competitors arrive, or else the company may not be able to recover these costs. This is a major problem with this strategy |
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Penetration Pricing |
- When a product, a company may set a price low to attract customers into buying a number of units before competition sets in - Here the attempt is to sell lots of units to recoup the development costs - also it is a chance to build a customer base - If the research is not accurate however, the costs may not be recovered |
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Leader Pricing |
Companies set low prices on a few items to draw customers |
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Price Lining |
In this policy, identically priced items are grouped together in a store so that at high markup items are grouped with a lower ones |
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Consumer Demand |
- Consumer demand is important to understand - Ex. it is useless to market luxuries to people without food - Values change quickly - Technology, new trends, cost, social pressures, changes in life |
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Negotiated Pricing |
There the buyer and seller decide on the price (houses are the obvious example) |
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Volume Discount |
is an adjustment to the price of a product based on the quantity of that product in the quote line or order line item. |
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Psychological Pricing |
Prices are more attractive to consumers $9.99 instead of $10 |
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Interest - Free Pricing |
Customers are offered the chance to take the product for a year and pay no interest |
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Everyday Low Pricing |
- Here a company will guarantee that their price is the lowest, and hence don't need to advertise |
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Combo Pricing |
Consumers are offered a lower price on one item if they purchase another item (which usually has a high markup) |
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SWOT |
- Strength - Weakness - Opportunity - Threats |
