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What is the main purpose of the ethical decision-making metric as described in the content?

To comply with legal regulations

To ensure profitability

To increase company visibility

To weigh alternatives and take action based on ethical principles (correct)

Which of the following best describes John Elkington's triple bottom line?

People, planet, and profitability (correct)

People, processes, and power

Planet, purpose, and productivity

Profit, performance, and marketing

How should a firm's mission statement influence its SWOT analysis?

It can guide the ethical tone and direction of the analysis. (correct)

It should primarily focus on financial capabilities.

It should be unrelated to the SWOT analysis.

It should only emphasize market trends.

What is an example of ethical action taken by the Thankyou Group?

Channeling 100% of profits into development projects globally Signup and view all the answers

During the implementation phase of an ethical marketing strategy, what key consideration must a firm evaluate?

Whether the product is ethically suitable for the targeted market Signup and view all the answers

Which component is NOT part of the value proposition?

Customer demographics Signup and view all the answers

What type of decision-making involves a consumer questioning the appropriateness of a purchase?

Postpurchase dissonance Signup and view all the answers

Which factor is associated with a consumer's internal locus of control?

Higher likelihood to engage in search activities Signup and view all the answers

Which type of consumer buying decision is characterized by infrequent purchases and high risks?

Extended problem solving Signup and view all the answers

What is meant by 'determinant attributes' in consumer decision-making?

Product features where competing brands are perceived to differ Signup and view all the answers

Which psychological factor affects consumer behavior through a person's enduring evaluation of feelings about an object or idea?

Attitudes Signup and view all the answers

Which of the following is a possible outcome if consumer expectations are met or surpassed?

Customer satisfaction Signup and view all the answers

In the context of consumer behavior, what does 'impulse buying' refer to?

Spontaneous purchasing without pre-planning Signup and view all the answers

What effect does perceived value have on consumer search processes?

Lower perceived value decreases search activities. Signup and view all the answers

Which of the following factors influence the consumer decision process as a social factor?

Reference groups Signup and view all the answers

What is the primary goal of an auto inventory replenishment system?

Ensure adequate stock Signup and view all the answers

Which of the following is NOT a factor in analyzing the macroenvironmental factors impacting a company's business?

Corporate partners Signup and view all the answers

What does the term 'hypercompetition' refer to in a market?

Rapidly evolving competitive pressures Signup and view all the answers

Which demographic factor should marketers consider when targeting consumers?

Generational cohorts Signup and view all the answers

What is the primary purpose of market segmentation?

To define customer needs and allocate resources effectively Signup and view all the answers

Which of the following is an example of psychographic segmentation?

Targeting interest in adventure travel Signup and view all the answers

In evaluating segment attractiveness, what does the term 'responsive' mean?

Positive reaction to the firm's offering Signup and view all the answers

What is a benefit of using demographic data in marketing?

Provides a snapshot of typical consumers Signup and view all the answers

What characterizes the strategy of undifferentiated marketing?

One marketing approach for the entire market Signup and view all the answers

What role do technological advancements play in the market environment?

They enable greater data storage and improved communication Signup and view all the answers

Which of the following does NOT describe the relationship between marketing and social issues?

Marketing is unaffected by political climates Signup and view all the answers

What might be a consequence of a firm's ability to effectively segment and target markets?

Better resource allocation and marketing effectiveness Signup and view all the answers

Which characteristic is essential for a segment to be deemed substantial?

Large enough size to support profitability Signup and view all the answers

What is the primary objective of conducting marketing research?

To understand consumer needs and identify business opportunities Signup and view all the answers

Which method of data collection primarily involves structured responses that can be statistically analyzed?

Quantitative research Signup and view all the answers

What type of data does secondary research primarily rely on?

Existing data collected by others Signup and view all the answers

What is a major advantage of using secondary data for research?

It is usually free or inexpensive to obtain Signup and view all the answers

Which brand strategy refers to the practice of marketing two or more brands together?

Co-branding Signup and view all the answers

In the product life cycle, which stage is characterized by limited product models and frequent modifications?

Intro Signup and view all the answers

What is the concept of break-even analysis primarily used to determine?

The point at which total revenue equals total costs Signup and view all the answers

How does a strong brand loyalty benefit a company?

It minimizes marketing costs due to repeat purchases Signup and view all the answers

Which of the following factors is NOT considered in the initial step of defining marketing research objectives?

Product line expansion opportunities Signup and view all the answers

Which type of product typically requires less effort in purchasing decisions?

Convenience goods Signup and view all the answers

What aspect does perceived value reflect in the context of branding?

The relationship between a product’s benefits and its cost Signup and view all the answers

Which method is particularly effective for understanding consumer issues and fostering relationships on social media?

Social media analysis Signup and view all the answers

What is the primary focus of a sales-oriented pricing objective?

Enhancing overall market share Signup and view all the answers

How many rooms must a hotel rent in one year to break even if rooms rent for $50 per night and they have fixed costs of $150,000?

5000 Signup and view all the answers

If the cost of goods sold (COGS) is $50 and the selling price is $75, what is the profit margin?

33.33% Signup and view all the answers

What pricing strategy starts with the cost and adds a markup percentage to determine the price?

Cost-based pricing Signup and view all the answers

Which of the following strategies focuses on how products are priced in comparison to competitors?

Competition-based pricing Signup and view all the answers

Which distribution intensity strategy aims for many outlets to sell a product?

Intense distribution Signup and view all the answers

What is the purpose of the 'AIDA' model in marketing communications?

To guide the process from awareness to action Signup and view all the answers

What type of advertising strategy focuses on generating awareness and interest among the target audience?

Institutional advertisements Signup and view all the answers

Which tactic is NOT typically considered part of integrated marketing communications (IMC)?

Inventory management Signup and view all the answers

Which of the following best describes the concept of 'digital marketing'?

Utilizing the internet for marketing goals Signup and view all the answers

What does personalization in digital marketing typically involve?

Tailored offers and recommendations based on user data Signup and view all the answers

In the sales promotional context, what is a 'premium'?

An item offered for free or at a discount to encourage certain behavior Signup and view all the answers

What marketing channel is characterized by direct interaction between the consumer and the brand?

Personal selling Signup and view all the answers

What is a characteristic of value-based pricing methods?

Setting prices based on consumer perceptions of value Signup and view all the answers

Which of the following is a benefit of online and multichannel retailing?

Deeper and broader selection of products Signup and view all the answers

Study Notes

The Importance of Marketing

Marketing plays a crucial role in a business's success. It helps expand global presence, enriches society, and can be entrepreneurial.
For example, Levi Strauss & Co. helps retailers manage inventory, and Krispy Kreme uses culturally-specific advertising.
Companies engage in Corporate Social Responsibility (CSR) to create greener products, healthier food, safer products, and reduce carbon footprints.
Entrepreneurs identify unmet needs and develop solutions, like Ben Cohen and Jerry Greenfield with Ben & Jerry's, and Simon Crowe with Grill'd.

Analyzing the Market Environment

The market environment encompasses all factors that can affect a company's business.
It includes a company's capabilities, competitors, corporate partners, and macroenvironmental factors.

Macroenvironmental Factors

Culture comprises a society's values, beliefs, and practices.
KFC uses different advertisements in the USA and Indonesia due to cultural variations.
Demographics provide snapshots of typical consumers, enabling marketers to target their offers effectively.
Generational cohorts have distinct characteristics and influence purchasing behavior.
Gen Z are digital natives, Gen Y prioritize work-life balance and parenting, Gen X possess spending power but are cynical, and Baby Boomers value leisure time and independence.
Social issues such as equality, transparency, health and wellness, and green consumerism impact consumer behavior.
Technological advancements enhance data storage, communication, and customer experience.
Economic situations, including inflation, currency fluctuations, and interest rates, influence consumer spending.
The political and legal environment comprises political parties, government organizations, and legislation.

Segmentation, Targeting, and Positioning

Market: a group of people or organizations with similar needs, wants, and resources.
Market Segment: a subgroup within a market that shares specific characteristics.
Segmenting the market helps understand customer needs, allocate resources effectively, and evaluate performance.
Segmentation Methods:
- Geographic: Based on location; Coke's 'Open Happiness' Australian summer ad.
- Demographic: Based on age, gender, income; Coke's 'Pixel' and 'Dream' beverages target Gen Z.
- Firmographic: Used in B2B marketing, based on company size and employee count; LinkedIn analyzes marketing data based on follower and update counts.
- Psychographic: Focuses on lifestyle, self-concept, and values; Airbnb markets experiences, emphasizing travel and adventurous lifestyles.
- Behavioral: Based on purchase, usage, and consumption patterns; Telsim categorizes consumers by monthly data usage.
Steps for Targeting & Positioning:
- Step 1: Establish Overall Strategy (Segmentation): Articulate the marketing strategy's vision and objectives.
- Step 2: Segmentation Methods: Use appropriate segmentation methods, such as Geographic, Demographic, Firmographic, Psychographic, or Behavioral.
- Step 3: Evaluate Segment Attractiveness (Targeting): Assess the segment's identifiability, substantiality, profitability, reachability, and responsiveness.
- Step 4: Select Target Market: Choose a target market by applying one of several strategies: Undifferentiated/Mass Marketing, Differentiated Targeting, Concentrated, or Micromarketing.
- Step 5: Develop Positioning Strategy: Create a brand image or identity that consumers perceive in a specific way, making it easy to remember.
- Perceptual Map: visually represents product and brand positions in consumers' minds.
- Value Proposition: Describes the target market, offering name or brand, product/service category, and unique selling proposition or benefits.

Consumer Behavior

The study of individuals, groups, and organizations who choose and purchase products.

Consumer Decision-Making Process:

Need Recognition: Occurs when a consumer recognizes a functional or psychological need.
Information Search: Driven by perceived value, locus of control, and actual or perceived risk.
Alternative Evaluation: Consumers compare alternatives using evaluative criteria and decision-making rules.
Purchase and Consumption: Factors include reduction of abandoned carts, availability of merchandise, and waiting times.
Postpurchase: Includes post-purchase satisfaction, dissatisfaction, dissonance, customer loyalty, and negative word of mouth.

Factors Influencing Consumer Decision-Making Process:

Psychological Factors: Motives, Attitudes, Perceptions, Learning, and Lifestyle.
Social Factors: Family, Reference Groups, Social Classes, Culture.

Culture

Culture is made up of visible artifacts and underlying values.
Visible artifacts include things like behavior, dress, symbols, physical settings, and ceremonies.
Underlying values refer to thought processes, beliefs, and assumptions.

Marketing Research

Marketing research helps brands understand consumer needs and wants, spot business opportunities, and avoid marketing failures.
It also assists in segmentation, targeting, and positioning, makes decision-making easier, and helps brands outsell competitors.
The process of marketing research involves data collection, recording, analyzing, and interpreting to inform decision-making.

Data Collection

There are two types of data: primary and secondary.
Primary data is collected for the specific purpose of the research, while secondary data is already existing data that is collected for other purposes.
Secondary data can be obtained from sources such as census data, trade associations, journals, and reports. This data can be inexpensive or free.
Internal sources provide data on things such as market trends.
Syndicated external secondary data can be purchased from commercial research companies like Ipsos, AC Nielsen, and IBIS World.
Scanner data is quantitative data collected by scanner systems.
Panel data is info collected from a group of consumers over time.

Qualitative Research Methods

These methods are used to understand a phenomenon of interest through broad responses.
Qualitative methods help researchers more clearly formulate their research objectives.
Observation is a method of collecting data without interacting with the subjects of the study.
Social media provides valuable insight into brand communities and allows for the spotting of issues and fostering customer relationships.
In-depth interviews can reveal information that might be difficult to obtain through other methods, but they are relatively expensive.
Focus groups gather insights from a group of people about a particular topic.

Quantitative Research Methods

Quantitative research methods consist of structured responses that can be statistically tested to confirm insights or hypotheses.
Surveys use questionnaires to systematically collect information from respondents.
Experiments can be conducted with groups or eye tracking.
Scanner data is collected through scanner systems.
Panel data is data collected over time from the same group of participants.

Key Differences Between Primary and Secondary Data

Type:
- Primary: Gathered directly from the source.
- Secondary: Gathered previously for another purpose.
Examples:
- Primary: Observed consumer behavior, focus group interviews, surveys, experiments.
- Secondary: Census data, sales invoices, internet information, books, journal articles, and syndicated data.
Advantages:
- Primary: Specific to the immediate data needs and topic at hand, offers behavioral insight generally not available in secondary data.
- Secondary: Saves time, readily available, free or inexpensive (except syndicated data), allows for a quick overview of a topic.
Disadvantages:
- Primary: Costly, time-consuming, requires sophisticated training/experience to design studies and collect data.
- Secondary: May not be precisely relevant to information needs, may be outdated, sources may not be original, data sources may be biased, methods for collecting data may be inappropriate.

Data Analysis and Insights

The information collected from data is used to explain, predict, and evaluate different situations.

Action Plan Implementation

After analyzing data, a marketing plan is created.
A typical marketing plan includes an executive summary, the main body of the plan, conclusions, limitations, and supplements (e.g., tables, figures, appendices).

Emerging Technology and Ethics

Companies must be transparent about how they collect and use customer data and should notify customers that their data is confidential.
Consumers should have the right to consent before any company can collect their personal data or use it for marketing purposes.
Regulations have not caught up with advancements in areas like social media, neuromarketing, and facial recognition software.

Product and Branding Decisions: Developing New Products

Product: A product consists of three components:
- The core product provides the main benefit.
- The actual product is the physical tangible good or service.
- The augmented product is enhanced with added features or services, like a warranty.
Types of Goods and Services:
- Convenience goods are items that are purchased frequently and with minimal effort, like bread.
- Shopping goods are goods that are bought less frequently and take more time to consider, like clothing.
- Specialty goods have unique characteristics or features and are often expensive, like supercars.
- Unsought goods are items that consumers don't normally think about buying but then become desirable when a need arises, like hand warmers.

Product Mix and Product Line Decisions

Product mix refers to the complete set of all goods and services offered by a company.
Product lines are groups of associated items that consumers tend to think of as being part of a group.
Product breadth refers to the number of product lines a company offers.
Product depth refers to the number of products within each product line.
Companies may need to adjust their product breadth and depth to align with their resources, address changing market conditions, or meet their priorities.

Branding

Branding involves connecting a product with a specific name, symbol, feature, or idea to enhance recognition and desirability.
Branding elements include:
- Brand names
- URLs
- Logos and symbols
- Characters
- Slogans
- Jingles/sounds
Branding benefits both customers and companies by:
- Facilitating purchasing
- Establishing loyalty
- Protecting from competition
- Representing assets
- Affecting market value.

Brand Equity

Brand equity is the value that a brand has in the marketplace.
The determinants of brand equity from the marketer's perspective include:
- Brand awareness measures how many consumers are familiar with a brand and its offerings, and whether they have an opinion on it.
- Perceived value focuses on the perceived relationship between the benefits of a product and its cost.
- Brand associations are mental links that consumers make between a brand and its key attributes, such as logos, slogans, or famous people.
- Brand loyalty occurs when consumers repeatedly buy the same brand's product over time rather than using multiple suppliers within the same category.

Brand Strategies

Brand ownership:
- Manufacturer/National Brands: owned and managed by manufacturers, such as Kellogg's cereal.
- Retailer/Store Brands: products developed by retailers (known as "premium" or "generic" brands), such as Woolworths brand couscous.
Individual Brands use different brand names for different products, which is helpful when products vary in use or performance.
Family Brands market several different products under the same brand name.
Brand extension involves using the same brand name for a different product line, increasing product breadth.
Line extension involves using the same brand name within the same product line, increasing product depth.
Cobranding is the practice of two or more brands working together on the same packaging or promotion.
Brand licensing involves a contractual agreement where one company allows another to use its brand name, logo, symbols, or characters in exchange for a fee.
Brand repositioning/rebranding is a strategy where marketers change a brand's focus to target new markets or adjust the emphasis of the brand to match changing market preferences.

Product Innovation

Companies must adapt and innovate to meet changing market demands.
Innovation is important because markets are dynamic, consumer needs are constantly evolving, and there is no shortage of alternatives or substitute products.
Innovation drivers include changing customer needs, market saturation, managing risk through diversification, fashion cycles, and improving business relationships.
The Diffusion of Innovation Theory describes how new products are adopted by different categories of prospective customers.
Not all innovations are successful, and some may lead to brand dilution.

The Product Life Cycle

Product Life Cycle describes the stages that a product goes through from introduction to decline.
The stages include:
- Introduction: Limited model numbers, frequent product modifications, limited distribution, intense effort to attract retailers, high prices, heavy promotion, and a focus on building product awareness.
- Growth: Expanded model numbers, frequent product modifications, expanded dealer network, intense effort to build long-term relationships, falling prices due to competition, continued heavy promotion, a focus on stimulating selective demand.
- Maturity: Large number of models, fewer product modifications, large dealer network, lower margins, intense effort to retain dealers and customers, promotions to retain existing customers, declining prices due to competition.
- Decline: Elimination of unprofitable models/brands, unprofitable outlets phased out, reduced promotion, low and stable pricing, possible price increases if competition is negligible.

Pricing Concepts: Establishing Value

Price: The overall sacrifice a consumer is willing to make to obtain the benefits of a specific product.
Price-quality relationship: Inexperienced consumers often use price as an indicator of quality, particularly when they have limited knowledge of products or brands.

Macro Influences on Pricing

The internet allows consumers to easily compare prices for goods and services online.
Economic factors influence consumer purchasing power and can impact the pricing of goods and services.

Company Objectives and Pricing

Profit-oriented objectives focus on profitability, such as:
- Target profit pricing: Setting prices to achieve a specific profit goal.
- Maximize profits: Setting prices to generate the highest profit possible.
- Target return pricing: Setting prices to achieve a specific return on investment.
Sales-oriented objectives focus on increasing sales and market share:
- Sales maximization: Setting prices to increase sales volume.
Competitor-oriented objectives look at competitor pricing:
- Competitive parity pricing: Matching competitor prices.
- Status quo pricing: Maintaining current prices, regardless of changes in cost.
Customer-oriented objectives focus on meeting customer expectations:
- Customer value pricing: Setting prices based on perceived value to customers.
- Customer demand elasticity: Understanding how changes in price affect customer demand.

Costs of Production and Break-Even Analysis

Variable costs: Costs that change with the volume of production.
Fixed costs: Costs that remain constant regardless of production volume.
Total cost: The sum of variable and fixed costs.
Break-even analysis: A tool for determining the sales volume needed to cover all costs.
- Break-even point (units): The number of units that must be sold to cover all fixed and variable costs.
- Break-even point (units): Fixed costs / (price per unit - variable cost per unit).

Pricing Strategies

Break-even analysis calculates the number of units needed to cover fixed costs. The example calculates the number of rooms a hotel needs to rent to break even in a year.
Markup is the percentage increase added to a product's cost to determine its selling price. For example, if the cost of goods sold is 50andthemarkupis5050 and the markup is 50%, the price is 50andthemarkupis5075.
Profit margin is the difference between selling price and cost of goods sold, expressed as a percentage of the selling price. For example, if the cost of goods sold is 50andthepriceis50 and the price is 50andthepriceis75, the profit margin is 33.33%.
Cost-based pricing starts with the cost of the product and adds a markup percentage to determine the price. It assumes costs remain constant regardless of production levels.
Competition-based pricing sets prices based on competitor pricing strategies, considering competitive price and premium pricing.
Value-based pricing focuses on the value a product offers to customers. It considers customer perceptions and factors like the cost of ownership.
Market penetration pricing aims to gain market share by setting low prices.
Price skimming sets high initial prices to capture maximum profits from early adopters.
Pricing tactics like markdowns, quantity discounts, seasonal discounts, coupons, rebates, leasing, price bundling, leader pricing, and price lining are used to attract customers.

Supply Chain Management

Supply chain management involves integrating suppliers, manufacturers, warehouses, stores, and transportation systems for efficient production and distribution.
Direct channels allow customers to purchase directly from manufacturers, like through company-owned stores, websites, or a dedicated sales force.
Indirect channels involve intermediaries like retailers or wholesalers that facilitate the sale of goods to consumers.
Vertical marketing systems align channel members under a dominant partner that controls the balance of power.
Distribution intensity refers to the level of market coverage a company seeks, ranging from intensive distribution through many outlets to exclusive distribution limited to a few select retailers.

Integrated Marketing Communications (IMC)

IMC integrates and coordinates various communication channels to deliver a consistent and compelling message about a company and its products.
The AIDA model outlines four stages for communication effectiveness: Awareness, Interest, Desire, and Action.
Advertising is a paid form of communication designed to persuade consumers. It is a prominent element of IMC.
Public relations involves generating positive publicity and favorable media attention. It's becoming increasingly important as consumers become more skeptical about marketing efforts.
Sales promotions incentivize customers or channel members with offers like premiums, discounts, or contests.
Personal selling involves direct communication between a salesperson and a customer to influence their purchase decision.
Direct marketing communicates directly with target consumers to encourage a response.

Digital Marketing

Digital marketing utilizes the internet and other digital communication channels to achieve marketing goals.
Social media marketing builds relationships with customers through valuable content and interactions. The 4E framework (Excite, Educate, Experience, Engage) guides social media strategies.
Customer engagement involves actively listening and responding to customers, involving them in conversations, and empowering them to share experiences.
Digital media types include social networks, media-sharing sites, thought-sharing sites, and mobile apps.
Digital channels encompass websites, search engines, email, mobile technology, and social media.

Ethics & CSR

Corporate Social Responsibility (CSR) involves voluntary actions taken by a company to address ethical, social, and environmental concerns.
Ethical decision-making involves weighing alternatives and using various ethical tests to ensure the chosen course of action aligns with moral principles.
Marketing ethics is crucial during planning and implementation phases. Planning involves aligning the company's mission and vision with ethical values, while implementation involves ensuring ethical practices in target market selection, production, and distribution.

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