Mkc1 Exam Contemporary Marketing: Chapter 11, 13, 15, 19

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the differences between the 3 categories in the Consumer Product Classification System
Convenience products are purchased frequently with little thought going into the process. Shopping products are purchased after comparison of price, quality, style and color. Specialty products are purchased when buyers prefer a certain brand of product, usually with high prices.
Total Quality Management
The effort to create and market high-quality goods and services, with constant monitoring and improvement of the product.
purpose of the ISO system?
To ensure consistent quality among products manufactured and sold.
difference between the 4 stages of the Product Life Cycle
The Introductory Stage is where a product is new and unknown to consumers. The Growth Stage is where sales of the product rise and consumers purchase and repurchase products. The company starts to make a profit on the products. The Maturity Stage is where sales of the product continue to grow but will eventually hit a plateau. Competitors are in the market at this point. This is usually when companies try to differentiate or redesign their products. The Decline Stage is when a product’s sales start to decline because of changes in consumers’ choices of products or the product becomes obsolete.
examples of products in each of the 4 stages of the Product Life Cycle
Introductory – FIOS (fiber optic satellite systems); Growth – IPOD Touch/IPhone; Maturity – Laptop Computers; Decline – Analog televisions
difference between the 4 different product life extension strategies
Increasing Frequency of Use is where total sales will rise even though no new buyers enter the market. This happens when seasonal products are marketed throughout the year. Increasing the Number of Users is when the market size is increased by attracting new customers, sometimes internationally. Finding New Uses is when marketers will conduct surveys to allow consumers to suggest new ideas for products. Changing Package Sizes, Labels, or Product Quality is when companies will make physical changes to the look of their product to attract new buyers.
examples of each of the 4 product life extension strategies
Increasing Frequency of Use – UGGS Boots; Increasing the Number of Users – bicycles; Finding New Uses – Aspirin; Changing Package Sizes, Labels, or Product Quality – Coke Zero.
difference between direct selling, channels using intermediaries, dual distribution, and reverse channels
Direct selling is where there is direct sales contact with the final user. Channels using Marketing Intermediaries is when several different channels are used to deliver the product. Many times they are more efficient, less expensive, and less time-consuming than direct channels. Dual Distribution is the movement of products through more than one channel to deliver the product. Reverse Channels are designed to provide a way to return the product to the producer.
difference in the 3 levels of distribution intensity
Intensive Distribution distributes the product through all available channels. Selective Distribution is where a company chooses a limited number of retailers in a market to hand the sales of its product. Exclusive Distribution is when a company gives exclusive rights to a wholesaler or retailer to sell its products.
examples of products in each of the levels of distribution intensity
Intensive Distribution – M&Ms; Selective Distribution – Computers; Exclusive Distribution – Jaguar.
difference between horizontal and vertical channel conflict
Horizontal channel conflict is between channel members at the same level. Vertical channel conflict is between channel members at different levels.
describe the supply chain
Everyone who is involved in the manufacture, sale, and delivery of goods and services.
describe each of the 6 components of physical distribution
Customer service – how the distribution activities should be supported; Transportation – how the products should be shipped; Inventory control – the amount of inventory that should be maintained at each location; Protective packaging and materials handling – how the products should be packaged and handled in order to transport and store; Order processing – how orders should be handled; Warehousing – where the product stock should be kept before shipping
difference in the 5 primary objectives of Promotion
Provide Information to Consumers and Others – provide product information to potential customers by advertisements in print, broadcasting, software, etc.; Increase Demand – pursue ways to increase both primary demand and selective demand; Differentiate Product – show how a product is different from others on the market; Accentuate Product’s Value – use promotional techniques to show the product’s value and justify its price; Stabilize Sales – stabilize the fluctuation of sales that occur as current events or seasons change and interest wanes.
Comparison of the Six Promotional Mix Elements
Personal Selling: Advertising: Sales Promotion: . Direct Marketing: Public Relations: Guerrilla Marketing
Personal Selling: Advantages,Disadvantages
Advantages -- Permits measurement of effectiveness, elicits an immediate response, tailors the message to fit the customer; Disadvantages – Relies almost exclusively on the ability of the salesperson, involves high cost per contact.
Advertising: Advantages ; Disadvantages
Reaches a large group of potential consumers for a relatively low price per exposure, allows strict control over the final message, can be adapted to either mass audiences or specific audience segments; Disadvantages – Does not permit totally accurate measurement of results, usually cannot close sales.
Sales Promotion: Advantages Disadvantages
Advantages – Produces an immediate consumer response, attracts attention and creates product awareness, allows easy measurement of results, provides short-term sales increases; Disadvantages – Is non-personal in nature, is difficult to differentiate from competitors’ efforts.
Direct Marketing: Advantages , Disadvantages
Advantages – Generates an immediate response, covers a wide audience with targeted advertising, allows complete, customized, persona message, produces measurable results; Disadvantages – Suffers from image problem, involves a high cost per reader, depends on quality and accuracy of mailing lists, may annoy customers.
Public Relations: Advantages , Disadvantages
Advantages – Creates a positive attitude toward a product or company, enhances credibility of a product or company; Disadvantages – May not permit accurate measurement of effect on sales, involves much effort directed toward non-marketing-oriented goals.
Guerrilla Marketing: Advantages ; Disadvantages
Advantages – Is low cost, attracts attention because it is innovative, is less cluttered with competitors trying the same thing; Disadvantages – May not reach as many people, if the tactics are too outrageous, they may offend some people.
differences between a skimming pricing strategies, , penetration pricing strategies, and competitive pricing strategies
Skimming pricing strategies (market-plus pricing) involve intentionally setting a high initial price relative to the competition’s price. This provides high margins to support the higher priced product and promotional expenditures; Penetration pricing (market-minus pricing) sets a price lower than the competition’s price. This develops a high volume of sales to offset typically low margins; Competitive pricing strategies (going-rate or parity pricing) maintains pricing levels at or near those of the competition. By doing this a company can focus their efforts on the other elements of the marketing mix.
examples of each of the different pricing strategies
Skimming – IPOD; Penetration – Emachines computers; Competitive – cell phone sales
differences between the three global pricing strategies
Standard worldwide price is possible if foreign marketing costs are low and do not affect overall costs; Dual pricing establishes separate domestic and export price strategies; Market-differentiated pricing allows companies to price products according to marketplace conditions.
describe cannibalization
Companies create competition within their own products by allowing sales on the internet and in retail stores
describe bundle pricing
Offering products bundled together for one price, even if the consumer does not desire all of the products in the bundle.
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