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Marketing Strategy Final
Marketing Strategy Final Study Questions
36
Marketing
Graduate
07/24/2008
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Term
In terms of promotions, what does the Consistency Thoerem mean?
 Definition
It means promotions should be consistent in all areas. For example, a company known for its fashion sense should not hire dingy sales people; this creates a questionable image because the company is not being consistent.
Term
Why is PR so important for promotion?[image]
 Definition
It equates to FREE INK. A company can get a lot of promotional mileage without a lot of money. A sporting goods store that sponsors a little league team is an example of helpful PR.
Term
How can a company control the flow of information going out to the public?
 Definition
By establishing a PR program. Unless a company controls the outgoing information. It becomes "catch as catch can".
Term
What is the Sleeper Effect?
 Definition
This happens when a company is trying to test for ad effectiveness (post-test). It means the company doesn't get immediate results from an ad campaign. The concept has to sink-in perhaps. Unfortunately this condition could cause the advertising to be pulled before its time.
Term
What is a Halo Effect?
 Definition
This is the aftermath of the promotion activity.
Term
What's the difference between absolute and relative cost when it comes to advertising?
 Definition

We have a choice between 2 magazine ads - one costs 10,000 dollars and the other costs 50,000 dollars for a full page ad. This is the actual cost.

 

In relative cost we have to evaluate the circulation potential of the magazine - not just the cost.
Term
What is Discriminatory Pricing?
 Definition
It means discriminating price based on location. For example a company may charge a premium for products sold in the inner city because they have to offset the cost of higher crime.
Term
What is a loss leader?
 Definition
Its when a company charges a lower price for a product that appeals to a large group of people. It's synonomous with Dumping.
Term
What is Samli's Six regarding consumer price sensitivity?
 Definition
  1. Competition - demand is elastic
  2. Importance of Product - demand is inelastic
  3. Urgency of Need - life threatening
  4. Ease of Want Satisfaction - inelastic; we won't buy more because it's on sale (salt for instance).
  5. Impact of Total Price - inelastic
  6. Economic Conditions - recession causes inelastic demand.
Term
The difference between TC and TR is greatest at what point?
 Definition

 When MC = MR

There's no need to sell anymore.

Term
What are two ways to establish a price for a  product?
 Definition
  1. Cost Plus Pricing - fixed cost + profit (most commonly used; however not a good approach because it ignores competition, demand and economic conditions)
  2. Supply and Demand Analysis - the idea is to make marginal cost (MC) and marginal revenue (MR) equal.
http://economics.about.com/od/coststructure/ss/revenue_costs.htm
Term
Explain fixed costs and variables costs on a per unit basis.
 Definition
On a per unit basis fixed costs are variable and variable costs are fixed.
Term
What is the dream of a marketer?
 Definition
To make the demand of a product inelastic.
Term
What is odd pricing and why is it useful?
 Definition
It's when you price an item at say $8.99. The consumer receives change and will possibly spend more time in the store to buy something else with the change given.
Term
What is psychological pricing?
 Definition
It means that everybody has a price range in mind and its up to the marketing person to find that price.
Term
What are the five steps of Ad Management?
 Definition
  1. What to say
  2. How to say it
  3. How to convey the message
  4. How much to spend
    1. All you can spend
    2. Competitive parity
    3. Fixed percentage of sales
    4. Fixed cost per unit
    5. build-up v.s break down
  5. How to test effectiveness
    1. Pre-test
      1. recognition
      2. attention getting
      3. recall
      4. action generating
    2. Post-test
      1. sleeper effect
      2. halo effect
Term
What is Competitive Parity?
 Definition
Its an Ad Management technique where a company uses the same or similar ad budget as its competitors.
Term
What are six ways to develop a powerful/optimal sales force?
 Definition
  1. Recruiting - important to have a head hunter.
  2. Screening - How do we screen?
    1. Resume - should reflect your ambition and skills
    2. Personal Interviews - BE PREPARED
    3. Cases
  3. Hiring - make sure employees are treated properly. We must hire best talent rather than the cheapest and make sure they survive.
  4. Training
    1. Formal - pay for degree by company.
    2. Informal - on the job training; extremely important.
  5. Motivating - connected to hiring; work with them and determine pursuing needs; Again, make sure employees are treated well.
  6. Compensation
    1. Straight salary
    2. Straight commission
    3. Salary + commission
Rod Stuart Has Too Many Cars
Term

We have three Dillards stores in Jacksonville: Arlington, St. Johns Towncenter, and the Westside. For every dollar of cost, each store brings in the following sales dollars:

 

Arlington Store = $100

Westside Store = $50

St. Johns Towncenter Store = $350

 

How could we improve the sales for all three locations?

Definition

By allocating the sales force from the lower performing stores to the better performing stores we better utilize our sales force. The goal is to even distribute the sales dollars for each store so that every store generates the same sales revenue per dollar of cost.

 

Arlington Store = $125

Westside Store = $125

St. Johns Towncenter Store = $125

 

 
Term
What are the 7 major functions of a wholesaler?
 Definition
  1. Reaching out to marginal markets - both 3rd World countries as well as industrialized nations
  2. Carrying inventories - gives retailer financial relief since they don't have to carry as much inventory.
  3. Financial help
  4. Information to manufacturers - provide key information such as demand prospects, competition.
  5. Sales support
  6. Promotional support
  7. Consulting
Roger Cox Farted In Stella Painter's Car
Term
What is specification buying?
 Definition
It's when we detect a large gap between top tier and middle tier in the market. We go to this manufacturer and propose creating a new private label.
Term
What is a brand? How does it differ from a trademark?
 Definition
A brand helps us establish a name and loyalty with the intension of creating inelelastic demand. A trademark is a legal brand.
Term
What is the difference between a public and private brand?
 Definition

A public brand is the manufacturer's brand is available in all stores.

 

A private brand is the distributor's brand is available in a single store. 

Term
What is the advantage of a private brand?
 Definition
You don't have to pay for the national promotion for the product. Kenmore is available only in Sears stores for instance.
[image]
Term
What is co-branding?
 Definition
It's when 2 different products are promoted simultaneously. Tostidos and Salsa for example. Both companies will benenfit from co-branding (synergistic impact).
Term
What is an umbrella or family brand?
 Definition
Have you driven a Ford lately? is an example of this. All Fords products are promoted. No specifics. General.
Term
What are the 2 functions of a channel?
 Definition

1.  To serve as the institution pathway

2.  Logistics (physical handling of product)

Term
What are the 4 steps in the product re-grouping process?
 Definition
  1. sorting out - homogenious groups; categorizing into smal, med, large
  2. accumulation - as we sort we accumulate
  3. allocation (to wholesalers and retailers, breaking the bulk)
  4. assorting- all goes into providing an assortment to customers. if the assortment doesn't match the target market, the retailer fails.

 
Term
What are the 3 types of wholesalers?
 Definition
  1. Full function wholesalers - they do it all
  2. Limited function wholesalers
    1. Manufacturer agents - deal with multiple, non-competing manufacturers. They can't represent 2 manufacturers producing the same product.
    2. Selling agents - represent only 1 manufacturer and its products. Takes care of marketing functions. Even has there own sales force.
Term
What factors optimize the value chain system?
 Definition

Transportation (place utility)

Warehousing (time utility)

Inventory control (form and possession utilities)

Location decisions (place utility)

Global sourcing (upstream, downstream - form utility)

 

Tomorrow Will Involve Lofty Gambling 
Term
As product become more complicated and customers become more sophisticated what becomes necessary?
 Definition
TWO WAY COMMUNICATION
Term
What are market channels?
 Definition
They are institutional pathways that help products move from maker to consumer.
Term
What are two aspects of the distribution process?
 Definition
  1. Market channels - REMEMBER the shorter the channel the better is not always true. The japanese proved this myth wrong.
  2. Physical handling of products
Term
What is the evolutionary aspect of channels?
 Definition
Some institutions will disappear over time.
Term
What is a channel captain?
 Definition
The channel captain will put the channel together and assure the channel is functioning properly. The channel always has a channel captain.
Term
What are 4 utilities provide by the market system?
 Definition
  1. Time - any time you want it
  2. Place - any place you want it
  3. Form - what kind of product? liquid? powder?
  4. Possession - owning the product.
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