Professional Documents
Culture Documents
EXAM REVISION
Date: June 13 2012 (pm) Time: 2 hour closed book exam l Exam format & Focus
l l Section 1: 10 Word finding (20 marks) Section 2: 15 MCQs (30 marks) w Section 3: 5 Written answers (50 marks) w Chapters to be examined 5, 7, 8, 9, 10, 12, 13
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Chapter 5
Consumers make buying decisions every day. And they make many different types of purchases. Most marketers undertake consumer research to try to learn more about: what consumers buy, who buys, how they buy, when they buy, where they buy and, most importantly, why they buy. The central question is:
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How do consumers respond to the various marketing stimuli the marketing organisation might use?
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Lifestyle
Buyers responses Product service & category selection Brand selection Reseller selection Experiences Purchase timing & repurchase intervals Purchase amount
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Personal Influences
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product there are a number of questions we might ask. w Why? w What is the person really seeking? w What needs is he or she trying to satisfy? A person has many needs at any given time.
Age and life-cycle stage Occupation Education Economic situation Personality & Self Concept Consumer lifestyle
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Social influences
A consumer's behaviour is also influenced by social factors, such as the consumer's household type and reference groups, as well as social roles and status. l These social factors can strongly affect consumer responses, companies must take them into account when designing their marketing strategies.
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Social influences
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Household types: changing lifestyles and buying roles affect marketing decisions Groups
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Information Search
Interest
Evaluation of Alternatives
Evaluation
Trial
Adoption
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Chapter 7
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Mass marketing.
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In mass marketing, the seller mass produces, mass distributes and mass promotes one product to all buyers Here, the seller produces two or more products that have different features, styles, quality, sizes and so on Here, the seller identifies market segments, selects one or more of them, and develops products and marketing mixes tailored to each
Product-variety marketing.
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dividing a market into distinct groups of buyers with different needs, characteristics or behaviour who might require separate products or marketing mixes. evaluating each market segments attractiveness and selecting one or more of the market segments to enter. setting the competitive positioning for the product and creating a detailed marketing mix.
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2. Market targeting
Target marketing.
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3. Market positioning
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Market Segmentation
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1. Demographic
3. Behavioural
2. Geographic
4. Psychographic
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Demographic segmentation consists of dividing the market into groups based on variables such as:
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Age Gender Family size Family life cycle Income occupation, education Race and nationality Religion
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Occasions Benefits sought User status Usage rate Loyalty status Buyer-readiness stage Attitude
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Undifferentiated marketing
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a company might decide to ignore market segment differences and go after the whole market with one market offer. It focuses on what is common in the needs of consumers rather than on what is different. a company decides to target several market segments, and designs separate offers for each. By offering product and marketing variations, it hopes for higher sales and a stronger position within each market segment is especially appealing when company resources are limited. Instead of going after a small share of a large market, the company goes after a large share of one or a few sub-markets.
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Market Market
Differentiated marketing
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Company Mix 1 Company Mix 1 Company Mix 2 Company Mix 2 Company Mix 3 Company Mix 3
B. Differentiated Marketing
Segment 1 Segment 1 Segment 2 Segment 2 Segment 3 Segment 3 Segment 1 Segment 1 Segment 2 Segment 2 Segment 3 Segment 3
Concentrated marketing
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Market Positioning
Once a company has decided which segments of the market it will enter, it must decide which positions it wants to occupy in those segments. Product position is the way the product is defined by consumers on important attributesthe place the product occupies in consumers minds relative to competing products
Positioning Strategies
Product Product Class Class Away from Away from Competitors Competitors Against a Against a Competitor Competitor
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Product Product Attributes Attributes Benefits Benefits Offered Offered Usage Usage Occasions Occasions
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G G C C A A D D B B FF
Users Users
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Chapter 8
Personnel Personnel
Image Image
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Characteristics of Services
l Intangibility l High involvement and personal nature l Variability l Synchronous delivery and
consumption
l Perishability
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people in service encounters, services are experiential in nature and often require special measures to assess quality such as mystery shoppers
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perform its functions; it includes the products durability, reliability, precision, ease of operation and repair, and other valued attributes l Strategic quality involves gaining an edge over competitors by consistently offering products and services that give customers better quality l quality is not a problem to be solved; it is a competitive opportunity
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Branding
l Branding is a major strategic decision l Branding requires long-term marketing
offered with varying features. From a basic model to a higher level e.g. car industry l Product design: the process of designing a products style and function
investment, especially for advertising, promotion and packaging l Powerful brands gain brand recognition and can command consumer loyalty l Companies that develop brands with strong consumer franchise are protected against competitors strategies. Such companies have high brand equity
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New
Multibrands
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Chapter 9
New products
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Product Development
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Maturity
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Begins when the company finds and develops a new product ideas. A period of slow sales growth as the product is being introduced to the market Period of rapid market acceptance and sales growth l
Introduction
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A period of slowdown in sales growth as the product gained acceptance by most of buyers. Period of drop in sales and profits as customers switch to new products
Decline
Growth
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Chapter 10
What is Price?
Price is the amount of money charged for a product or service, or the sum of values consumers exchange for the benefits of having or using the product or service l Price is the only element of the marketing mix that produces revenue-all other elements represent costs l A company does not usually set a single price, but rather a pricing structure that covers different items in its product line l The company adjusts product prices to reflect changing costs and demand and to account for variations in buyers and situations
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Cost-Plus Pricing
The simplest pricing method is cost-plus pricing adding a standard mark-up to the cost of the product. Construction companies, for example, submit job bids by estimating the total project cost and adding a standard mark-up for profit.
Cost-based pricing:
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Relationship Pricing
Special Relationship Enrichment w Shared Risk and Reward
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Value-Based Pricing
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Value-based pricing uses buyers perceptions of value, not the sellers cost, as the key to pricing. The company uses the non-price variables in the marketing mix to build up perceived value in the buyers minds. Price is set to match the perceived value.
START
Product
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for a new product to skim maximum revenue from the segments willing to pay the high price, the company makes fewer but more profitable sales
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Optional-Product Pricing
Pricing Optional Products Sold With The Main Product
Market penetration pricing: setting a low price for a new product in order to attract a large number of buyers and a large market share
Captive-Product Pricing
Pricing Products That Must Be Used With The Main Product
By-Product Pricing
Pricing Low-Value By-Products To Get Rid of Them
Product-Bundle Pricing
Pricing Bundles Of Products Sold Together
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Price-adjustment strategies
l Discount pricing and allowances: cash
Price-adjustment strategies
l Promotional pricing: loss leader pricing,
discounts, quantity discounts, functional discounts, seasonal discounts and allowances l Segmented pricing: setting different prices for different clients, product forms, places or times l Psychological pricing: adjusting the price to communicate the products intended competitive position
fair prices
l Geographic pricing: different pricing for
distant customers, zone pricing, basing point pricing and freight absorption pricing l International pricing: the company adjusts its price to meet different conditions and expectation in different world markets
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Chapter 12
IMC entails co-ordinating the organisations promotional efforts using such major communication elements as:
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advertising, sales promotion, public relations, direct and online marketing, and personal selling.
An organisations integrated marketing communication program consists of a specific blend of the above mentioned elements that will most effectively meet objectives such as to inform, persuade, and remind consumers as well as to reinforce their attitudes and perceptions.
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form Targeted
3. Message: The set of symbols that the sender transmits-
One-to-one
meaning to the symbols encoded by the sender-a consumer watches the ad and interprets the words and illustrations it contains.
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communicated back to the sender- research shows that consumers like and remember the ad.
9. Noise: The unplanned static or distortion during the
communication process that results in the receiver getting a different message from the one which the sender sent
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Preference
Conviction
Purchase
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Selecting a message
l Ideally the message should:
w Get Attention w Hold Interest w Arouse Desires w Obtain Action
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Selecting Media
Word of Mouth Personal Media Non-personal Media Opinion Leaders
Major Media
Events
Atmospheres
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Message Execution
Testimonial Testimonial Evidence Evidence Scientific Scientific Evidence Evidence Technical Technical Expertise Expertise Slice of Life Slice of Life
Lifestyle Lifestyle
2. PULL STRATEGIES Demand Retailer & Wholesaler Demand Personality Personality Symbol Symbol Consumer
Manufacturer
Marketing Activities
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Musical Musical
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Message Execution
Message Execution
Slice-of-life: This style shows one or more people using the product in a normal setting Lifestyle: This style shows how a product fits in with a lifestyle Fantasy: This style creates a fantasy around the product or its use Mood or image: This style builds a mood or image around the product, such as beauty, love or serenity Musical: This style shows one or more people or cartoon characters singing a song about the product
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Personality symbol: This style creates a character that represents the product. Technical expertise: This style shows the companys expertise in making the product. Scientific evidence: This style presents survey or scientific evidence that the brand is better or better liked than one or more other brands. Testimonial evidence: This style features a highly believable or likeable source endorsing the product.
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Chapter 13
Another major mass-communication tool is public relations it aims at building good relations with the companys various publics using different tools: PENCILS
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Sales Promotion
l Sales promotion is the act of influencing
Sales Promotion
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customer/consumer perception and behaviour to build market share and sales which reinforces brand image
1. Sales promotion is a term that is closely linked with direct
term direct marketing itself, nearly all marketing scientists and practitioners agree on what sales promotion tools do.
3. The term covers a range of incentives that are used with products promoted via either mass media advertising or by direct and online methods.
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Sellers use sales promotions to attract new triers, to reward brand-loyal customers and thereby retain them, to reduce the time between purchases, and even to turn light users into medium or heavy users. The aim might also be to regain past purchasers who have ceased buying. New triers of a product category fall into one of three groups: w non-users w loyal users of another brand w brand switchers.
methods used. Sellers may use consumer promotions to increase short-term sales or to help build long-term market share.
l The objective may be one of the following: 1. to entice consumers to try a new product or brand 2. to lure consumers away from competitors products or
brands
3. to get consumers to load up on a mature product 4. to hold and reward loyal customers.
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There are many types of personal selling jobs, and the role of personal selling can vary greatly from one industry to another and from one company to another. l The people who do the selling go by many names:
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Salespeople Sales representatives Account executives/representatives Agents District mangers Marketing representatives
Advertising consists of one-way, non-personal communication with target consumer groups. In contrast, personal selling involves two-way, personal communication between salespeople and individual customerswhether m face-to-face, m by telephone, m through video conferences, m or by other means. This means that personal selling can be more effective than advertising in complex selling situations
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the customers
l The sales-force represents the customers to
the company
l Sales people are concerned with producing
sales but should also be concerned with customer satisfaction and profit
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Training Salespeople
The Company The Company The Product The Product
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Compensating Salespeople
Salary
Benefits
Components of Compensation
Bonus
norms
l Using sales time efficiently
Commission
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