Marketing Concepts and Value

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Questions and Answers

What is the formula used to define value in marketing?

Value = Benefits received + price + non-financial costs

Value = Benefits received + [price – non-financial costs]

Value = [price + non-financial costs] – Benefits received

Value = Benefits received – [price + non-financial costs] (correct)

Which activity is NOT one of the four ways to provide value?

Creating

Promoting (correct)

Delivering

Communicating

During which time period did companies primarily focus on aggressive sales techniques?

1920s to post-World War 2 (correct)

Late 1800s

Post-World War 2 era

Pre-industrial revolution

What does the 'Place' aspect of the 4Ps of marketing refer to?

The process of distributing the product to consumers Signup and view all the answers

Which orientation became prevalent after the post-World War 2 era?

Product-oriented Signup and view all the answers

What is the primary focus of marketing according to the content?

Satisfying customer needs and wants Signup and view all the answers

Which concept describes the relationship between needs and wants?

Needs become wants when directed at specific products Signup and view all the answers

What aspect of marketing helps organizations deliver value to customers?

Creating a reliable customer base Signup and view all the answers

What is post-purchase dissonance most likely to occur due to?

Feelings of regret or doubt not meeting expectations Signup and view all the answers

Which buying behavior is characterized by automatic decisions with limited information?

Routine response behavior Signup and view all the answers

What does the term PESTC refer to in marketing analysis?

Political, Economic, Socio-Cultural, Technological, and Competitive factors Signup and view all the answers

What is a main characteristic of low-involvement buying decisions?

They typically involve routine purchases Signup and view all the answers

What is a key criticism of marketing mentioned in the content?

It creates unnecessary wants for goods/services Signup and view all the answers

How do social norms influence consumer behavior?

They set expectations for behavior in specific situations Signup and view all the answers

What internal factor is analyzed in a company's situation analysis?

Corporate culture Signup and view all the answers

Which factor influences a consumer's buying decisions based on their demographic characteristics?

Age and gender Signup and view all the answers

Which environment must businesses comply with as part of their marketing analysis?

Political environment Signup and view all the answers

What does service-dominant logic emphasize in marketing?

Delivering value regardless of the medium Signup and view all the answers

What influences can create a temporary change in spending behavior?

Emotional mood Signup and view all the answers

Which term describes competition that offers a different product that could satisfy the same need?

Indirect competition Signup and view all the answers

Which aspect of motivation aligns with Maslow's hierarchy of needs?

Fulfilling psychological and physiological needs Signup and view all the answers

What does classical conditioning in consumer behavior involve?

Associating a stimulus with a desired outcome Signup and view all the answers

What does the marketing mix primarily entail?

The 4 Ps: Product, Price, Place, and Promotion Signup and view all the answers

In terms of buying behavior, what does 'one-stop shopping' facilitate?

Increased convenience for varied shopping needs Signup and view all the answers

What is one of the key roles of marketing in organizations?

To educate customers about products Signup and view all the answers

What defines a subculture in consumer behavior?

A group within a culture with unique characteristics Signup and view all the answers

Why is understanding the external environment crucial for a company?

It allows adapting to changing market conditions Signup and view all the answers

What aspect of perception is concerned with how information is filtered by consumers?

Selective exposure Signup and view all the answers

What factor does sustainability in marketing focus on?

Engaging in practices that do not harm the environment Signup and view all the answers

Which factor is least likely to be a primary external influence on buying behavior?

Personal financial history Signup and view all the answers

What aspect of marketing evolves rapidly due to technology?

Metrics for evaluating performance Signup and view all the answers

In understanding consumer decision-making, which factor is a common psychological influence?

Motivation Signup and view all the answers

What characteristic of services indicates that they must be produced and consumed simultaneously?

Inseparability Signup and view all the answers

Which gap in the Service Gap Model occurs due to a disconnect between customer expectations and management's understanding of those expectations?

Knowledge gap Signup and view all the answers

What does dynamic pricing allow companies to do?

Vary prices based on demand or target group Signup and view all the answers

In which scenario would a company use a sales-oriented pricing objective?

To increase the number of units sold Signup and view all the answers

How does the quality of a service predominantly depend on its characteristic of variability?

It fluctuates widely based on individual experiences. Signup and view all the answers

What pricing objective focuses on ensuring profitability and maximizing return on investment (ROI)?

Profit-oriented objective Signup and view all the answers

What term describes the quality of offerings that consumers find difficult to evaluate after purchase due to the nature of services?

Credence qualities Signup and view all the answers

How can companies influence consumer behavior through pricing strategies?

By raising prices during peak demand Signup and view all the answers

What role does governmental regulation play in pricing strategies?

It protects consumer interests and promotes competition. Signup and view all the answers

What aspect of services can be affected by employing seasonal or part-time employees?

Variability Signup and view all the answers

Which factor plays a significant role in shaping consumer buying behavior?

Influence of family Signup and view all the answers

What is the first step in the marketing research process?

Define the problem or opportunity Signup and view all the answers

Which type of research focuses on understanding consumer attitudes through depth interviews?

Qualitative research Signup and view all the answers

What does derived demand refer to in the context of business markets?

Demand originating from another market Signup and view all the answers

Which of the following is NOT a stage in the B2B buying process?

Market evaluation Signup and view all the answers

In consumer buying behavior, children often influence purchases of which type of products?

Household products Signup and view all the answers

What does the 'collect the data' step involve in the marketing research process?

Surveys and physical measurements Signup and view all the answers

Which best describes the role of a producer in the B2B market?

Companies that transform purchased goods into other products Signup and view all the answers

What type of buyer adjusts their purchasing based on detailed specifications?

Producers Signup and view all the answers

Which characteristic is associated with products in the business market?

Technical complexity Signup and view all the answers

Which step involves cleaning and organizing data in the marketing research process?

Analyze the data Signup and view all the answers

Gatekeepers in a buying center are responsible for what?

Controlling access to the buying center Signup and view all the answers

What is the main purpose of using scorecards during the RFP evaluation process?

To rate supplier proposals Signup and view all the answers

Which is NOT a reason businesses seek financing for high-cost products?

To acquire cheaper alternatives Signup and view all the answers

What describes disintermediation in the context of supply chains?

Cutting out intermediaries to reduce costs Signup and view all the answers

What is a major benefit of a strategic channel alliance?

It allows access to shared resources for promotion Signup and view all the answers

Which channel selection factor focuses on the characteristics of the end consumer?

Type of Customer Signup and view all the answers

What does the push strategy primarily aim to do?

Assist channel partners in understanding the product Signup and view all the answers

Which distribution strategy involves using many intermediaries?

Intensive distribution Signup and view all the answers

What is the primary focus of a pull strategy in marketing channels?

Encouraging consumers to seek out a product Signup and view all the answers

In the context of channel dynamics, what characterizes a channel leader?

A recognized entity with significant influence Signup and view all the answers

What describes the role of industrial distributors?

Provide products to businesses without sale to end-users Signup and view all the answers

Which of the following is a characteristic of exclusive distribution?

Selling through one or few outlets only Signup and view all the answers

What characterizes a straight rebuy situation?

Purchasing the same product in the same quantity from the same vendor. Signup and view all the answers

What does licensing allow a company to do?

Use another company’s trademarks and patents for a fee Signup and view all the answers

In which buying culture does only one person make the final decision after consulting with others?

Consultative culture. Signup and view all the answers

What does relationship trust in B2B relationships refer to?

The confidence in a partner's reliability and integrity. Signup and view all the answers

What is the primary difference between targeted marketing and mass marketing?

Targeted marketing differentiates offerings for different customer groups. Signup and view all the answers

What is the main focus of one-to-one marketing?

Forming close, personal relationships with individual customers. Signup and view all the answers

Segmenting markets by behavior often looks at what aspect?

Individuals' usage rates of a product. Signup and view all the answers

What does the Total Cost of Ownership (TCO) encompass?

All costs associated with owning, using, and disposing of a product. Signup and view all the answers

Which of the following is true about product lines?

Line depth refers to the variety within a single product line. Signup and view all the answers

Which type of offering requires considerable consumer effort in comparing and selecting a brand?

Shopping offerings. Signup and view all the answers

Capital equipment offerings are characterized by which of the following?

Used for more than one year and depreciated appropriately. Signup and view all the answers

How does proximity marketing operate?

Through wireless technology to target nearby consumers. Signup and view all the answers

Psychographic segmentation focuses on which aspect of consumers?

Interests, opinions, and values of individuals. Signup and view all the answers

What best describes differentiated marketing?

Customizing different marketing strategies for distinct groups. Signup and view all the answers

What does the Bargaining Power of Buyers refer to in the Porter Five Forces Model?

The influence of consumers on the pricing and quality of products Signup and view all the answers

In a SWOT Analysis, which elements must be external to the company?

Opportunities and Threats Signup and view all the answers

Which of the following best defines a 'star' in the BCG Matrix?

High market growth and high relative market share Signup and view all the answers

What is the primary purpose of developing objectives within an organization?

To serve as benchmarks that help guide and motivate employees Signup and view all the answers

Which of the following strategies involves creating new products for existing target customers?

Product development Signup and view all the answers

What is a fundamental characteristic of operational excellence?

Building strong relationships with suppliers and efficient operations Signup and view all the answers

Which statement best describes 'question mark' products in the BCG Matrix?

They have high growth but low market share. Signup and view all the answers

What do market penetration strategies primarily focus on?

Increasing sales of existing products to existing customers Signup and view all the answers

Which of the following describes consumer behavior?

The study of why people acquire products or services Signup and view all the answers

Which type of plan is formulated at the corporate level?

Corporate-level plan Signup and view all the answers

What is an example of achieving customer excellence?

Implementing value-based strategies to retain loyal customers Signup and view all the answers

In the consumer purchase decision process, which stage comes after 'Need/Want Recognition'?

Search Signup and view all the answers

Which aspect of a marketing plan focuses on directing the marketing department's efforts?

Functional-level strategies Signup and view all the answers

What is a key outcome expected from evaluating the strength/impact of the five forces?

To assess the competitive landscape of the industry Signup and view all the answers

What do raw material offerings encompass in a firm?

Materials used to create products or provide services Signup and view all the answers

Which of the following best describes a brand extension?

Utilizing an existing brand name for a new product category Signup and view all the answers

What stage of the product life cycle is characterized by increasing competition and higher profits?

Growth Stage Signup and view all the answers

Which type of packaging is specifically designed for shipping?

Tertiary packaging Signup and view all the answers

What is the purpose of Quality Function Deployment (QFD)?

To start with customer desired benefits in designing an offering Signup and view all the answers

What does line filling refer to in product strategy?

Adding more products to an existing product line Signup and view all the answers

Which group of consumers is characterized as risk takers in the product adoption curve?

Innovators Signup and view all the answers

What is the primary responsibility of a category manager?

Making decisions within a broad grouping of offerings Signup and view all the answers

What indicates the decline stage in the product life cycle?

Changes in consumer preferences and technological advances Signup and view all the answers

Which stage involves the offering being tested with customers in real-world conditions?

Beta testing Signup and view all the answers

What is considered the primary packaging?

A single retail unit of a product Signup and view all the answers

Which of the following describes a market manager's role?

Overseeing decisions within a particular market Signup and view all the answers

What is a potential consequence of cannibalization in product offerings?

Reduced sales of an existing offering Signup and view all the answers

What is a key feature of the maturity stage of the product life cycle?

Predominance of repeat purchases by existing customers Signup and view all the answers

What are facilitating offerings?

Products and services supporting a company's operations Signup and view all the answers

What is the definition of the breakeven point in financial terms?

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

Which pricing strategy entails setting a low initial price to attract a higher consumer base?

Penetration pricing Signup and view all the answers

What characterizes price skimming as a pricing strategy?

Setting a high initial price for quicker cost recovery Signup and view all the answers

In which pricing strategy do companies often set prices below the next dollar value to enhance customer perception?

Odd-even pricing Signup and view all the answers

What is the primary goal of promotional pricing?

To attract customers into stores for additional purchases Signup and view all the answers

What defines a two-part pricing strategy?

Charging one price for a product and an additional price for servicing that product Signup and view all the answers

What role do intermediaries play in marketing channels?

They help companies sell products more efficiently Signup and view all the answers

Which type of wholesaler takes title to the goods and assumes more financial risk?

Merchant wholesalers Signup and view all the answers

In a supply chain, what does the term 'channel partners' refer to?

Companies that work together to promote or sell products Signup and view all the answers

Which pricing strategy is characterized by selling products at a price lower than the total cost to attract customers?

Loss leader pricing Signup and view all the answers

What is the purpose of quantity discounts?

To encourage larger purchases Signup and view all the answers

How does captive pricing primarily function?

Customers must buy companion products to use an initial product Signup and view all the answers

What is a primary feature of dynamic pricing?

Prices are adjusted based on real-time market data Signup and view all the answers

Which type of pricing involves sealing bids for buying or selling products?

Sealed bid pricing Signup and view all the answers

What is a distinguishing feature of price bundling?

Offering multiple products at a combined price lower than purchasing them separately Signup and view all the answers

What is the primary focus of a needs-satisfaction selling strategy?

Identifying problems and needs through questions Signup and view all the answers

Which selling strategy requires both parties to invest resources to create solutions?

Strategic-partner selling Signup and view all the answers

What does the BANT acronym stand for when qualifying a prospect?

Budget, Authority, Need, and Time Signup and view all the answers

What key information does a conversion ratio provide about a salesperson?

Effectiveness in moving customers through the sales funnel Signup and view all the answers

Which of the following practices can pose ethical concerns for salespeople?

Sharing customer information without consent Signup and view all the answers

What is the primary role of marketing in shortening the sales cycle?

Developing products that meet customer needs Signup and view all the answers

What is a fundamental purpose of conducting a win-loss analysis?

To evaluate sales performance after an opportunity Signup and view all the answers

What approach does lead scoring utilize to assess potential customers?

Use behavioral data to categorize leads Signup and view all the answers

How does effective communication from salespeople influence product offerings?

Informs product enhancements based on customer experiences Signup and view all the answers

What is the purpose of tracking competitor actions with CRM systems?

To exploit competitors' weaknesses and strengths Signup and view all the answers

What is the main purpose of a missionary salesperson?

To influence decision-makers who do not purchase. Signup and view all the answers

What are consumers increasingly aware of, according to recent studies?

Privacy issues and data security. Signup and view all the answers

What is a key responsibility of account managers in sales?

To manage ongoing business and identify new opportunities. Signup and view all the answers

Which type of advertising focuses primarily on providing immediate customer action?

Direct response TV. Signup and view all the answers

What role do salespeople play as boundary spanners?

They gather information about competitors in the market. Signup and view all the answers

Which option best describes display ads?

Advertisements placed on other companies' websites. Signup and view all the answers

What type of relationship describes individual sales without the intention of maintaining contact?

Transactional relationship. Signup and view all the answers

What do secure data collection methods provide to consumers?

Trust in the handling of their information. Signup and view all the answers

What is the primary focus of ad-based social media?

Advertising products/services on social media platforms. Signup and view all the answers

Which method is used to activate multiple senses and evoke emotions in marketing?

Catalogues. Signup and view all the answers

What is the primary purpose of the Attention, Interest, Desire, and Action (AIDA) model?

To guide companies in creating effective marketing campaigns Signup and view all the answers

Which method for determining a promotion budget is primarily used by small businesses?

Affordable method Signup and view all the answers

What type of promotional activity is considered a consumer sales promotion?

Coupons Signup and view all the answers

What is the primary aim of a press release in public relations?

To promote a company's positive image or news Signup and view all the answers

Which type of appeal is most likely to target a consumer's reasoning to promote a product?

Rational appeal Signup and view all the answers

What characterizes the competitive parity method of budgeting?

Matching promotional spending with competitors Signup and view all the answers

Which of these is NOT a type of loyalty program mentioned?

Event sponsorship Signup and view all the answers

What is the goal of crisis communication in public relations?

To manage negative publicity's impact Signup and view all the answers

Which marketing activity involves providing incentives to retailers to promote products?

Trade allowances Signup and view all the answers

What is an open-ended message meant to achieve in marketing communication?

To allow consumer interpretation and involvement Signup and view all the answers

What is the main consequence of manufacturers selling online in relation to wholesalers and retailers?

It creates competition for the same customers. Signup and view all the answers

What distinguishes vertical integration from a vertical marketing system?

Vertical integration involves a single channel member controlling others' functions. Signup and view all the answers

Which promotional strategy is primarily aimed at other businesses?

Trade promotions Signup and view all the answers

What is a key factor that influences the effectiveness of the promotion mix?

The budget available for promotions. Signup and view all the answers

Which option best describes a horizontal conflict?

Rivalry among wholesalers representing the same manufacturer. Signup and view all the answers

Which approach involves delivering personalized promotional materials to individuals?

Direct promotion Signup and view all the answers

How does geotargeting benefit advertisers?

By specifying ads based on user location. Signup and view all the answers

Which type of marketing involves financial support for events and venues?

Sponsorships Signup and view all the answers

What is the purpose of a unique selling proposition (USP)?

To emphasize a specific benefit consumers should remember. Signup and view all the answers

What role do environmental factors play in marketing?

They can cause temporary changes in consumer spending behavior. Signup and view all the answers

What is an example of a subscription service in marketing?

Instant access to streaming content. Signup and view all the answers

What is an important characteristic of integrated marketing communication (IMC)?

It seeks to build customer relationships. Signup and view all the answers

Which effort is aimed at improving a company's image?

Public relations Signup and view all the answers

What is a common characteristic of high-involvement products?

They involve significant consumer decision-making effort. Signup and view all the answers

Study Notes

Value and Marketing

Value is defined as benefits received minus price and non-financial costs (time, effort)
Value = Benefits received – [price + non-financial costs]
Value is provided by creating, communicating, delivering, and exchanging offerings.
The 4Ps of marketing are product/service, promotion, place/distribution, and price.

Evolution of Marketing

Early companies (late 1800s) were production-oriented.
Companies believed in reducing production costs.
From 1920s-WWII, companies were selling-oriented, pushing products through aggressive sales.
Post-WWII, companies were product-oriented, focusing on innovation.
From 1950-1990, companies were market-oriented.
Now, some are in a value era or a one-to-one era.

Key Aspects of Marketing

Marketing creates value, satisfies customer needs and wants.
Needs are basic (food, shelter), wants are specific product/service.
Needs become wants when directed towards a specific product.
Marketing entails exchange between parties (buyer/seller).
Marketing involves marketing mix decisions (4Ps).
Marketing can be done by companies and individuals; including B2B marketing.

Why Study Marketing?

Good marketing educates customers, delivers value to customers and organizations.
A reliable customer base leads to increased sales and profitability.

Common Themes in Marketing

Marketing's role in the organization
Customer-centric approach
Changing marketing environment

Marketing Environment

Criticisms of marketing include creating wants for unnecessary goods/services and not prioritizing sustainability.
Modern marketing is concerned with sustainability and social responsibility, avoiding damaging resources.
Service-dominant logic recognizes customers want value, regardless of delivery method.
Technology increases data for evaluating firm performance, including tracking consumer behavior.
Global issues affect marketing decisions.

Strategic Planning and Marketing Environment

Strategic planning allocates resources to capture market opportunities.
Situation analysis involves internal (company resources, capabilities, partners) and external (PESTC) environments.
Analyzing the internal environment involves examining resources (financial, personnel, brand, assets), capabilities (manufacturing, systems, marketing), and corporate partners (suppliers, distributors).
PESTC includes political, economic, socio-cultural, technological, and competitive environments.
Porter's Five Forces model analyzes direct competition, substitutes, potential entrants, supplier power, and buyer power.
SWOT analysis identifies strengths, weaknesses, opportunities, and threats (internal, external).
Objectives are specific, measurable, achievable, realistic, and timely (SMART).
Strategies outline actions to achieve objectives.

Consumer Behavior

Consumer purchase decision process includes need/want recognition, search, evaluation, choice, and post-purchase evaluation.
High-involvement decisions pose high risk (extended problem solving), low-involvement decisions pose low risk (routine response behavior).
Situational factors include physical surroundings, time, reason for purchase.
Personal factors include demographics, lifestyle, mood, personality.
Psychological factors include motivation, perception (selective exposure, attention, retention, distortion), learning (operant, classical), and attitudes.

Consumer Behavior (Societal Factors)

Societal factors include culture, subculture, social class, reference groups, and opinion leaders.
Family influences buying behavior.
Marketing research involves defining problems, designing research (primary and secondary), specifying samples, collecting data, analyzing data, and writing reports.
Primary data includes qualitative and (depth interviews, focus groups, ethnography) and quantitative data (surveys).

Business Buying Behavior

Business markets tend to have fluctuating demand and derived demand (demand from another source).
Products are often more technical and require more complex, multiple person buying processes (buying centers).
Marketing mix includes personal selling, negotiated pricing, and trade/quantity discounts.
Buying centers include initiators, influencers, deciders, buyers, users, and gatekeepers.
Buying situations include straight rebuys, new buys, and modified rebuys.
Buying cultures include autocratic, consultative, and democratic.

Market Segmentation and Targeting

Targeted (differentiated) marketing aims to satisfy different market segment needs, while mass marketing involves one product/price/promotion for all.
Segmentation bases include behavioral (usage rate), demographics (age, income), geographic (location).
Psychographics (activities, interests, opinions, values) help segment.
One-to-one marketing prioritizes best customers and tailors offerings to individual needs.

Products and Services

Offerings (products/services) are created to deliver value to customers.
Service-dominant approach integrates product, price, and service to better understand customer needs.
Products include core benefit, actual product, and augmented product.
Offering levels include product, technology platform, product line, product category.
Consumer offerings types include convenience, shopping, specialty, and unsought.

B2B Offerings

B2B offerings include capital equipment, raw materials, MRO supplies, facilitating offerings.
Offering elements include branding, packaging.
Brand management, product management, category management, market management, vertical market management.
Offering development process includes idea generation, screening, concept testing, feature specification, offering development.

Product Life Cycle

Products pass through stages (introduction, growth, maturity, decline).
Strategies for each phase may vary.
Harvesting and divesting are common tactics in the decline stage.

Product Adoption Curve

Consumers adopt new products at different stages (innovators, early adopters, early majority, late majority, laggards).

Service Strategy

Services are intangible actions, inseparable, variable, and perishable.
Service gap model highlights knowledge, standards, delivery, and communication gaps affecting service quality.
Service delivery is dependent on company and employee performance.

Price

Price reflects quality, affects revenues, attracts customers.
Pricing objectives include profit-oriented, sales-oriented, and status-quo objectives.
Demand considerations include price sensitivity (elasticity), competition, and economic conditions.
Cost considerations involve total costs, variable costs, and fixed costs, and the breakeven point.
Pricing strategies include penetration pricing, price skimming, cost-plus pricing, odd-even pricing.

Place and Distribution

Marketing channels use intermediaries (wholesalers, retailers) to efficiently reach customers.
Supply chain management is crucial to efficient distribution.
Channel selection depends on customer, product, partner capabilities, and the environment.
Vertical marketing systems involve formal cooperation among channel members.
Disintermediation involves removing intermediaries.

Integrated Marketing Communications (IMC)

IMC is a customer-driven process.
Promotion mix includes advertising, sales promotions, public relations, sponsorships, direct promotion, digital marketing, mobile marketing, and professional selling.
Budget, product life cycle, customer characteristics, consumer media preferences, regulations, and competition influence the promotion mix.
The communication process involves encoding, decoding, interference, and message repetition for effective communication.

Selling

Salespeople create value for customers, gather information, and manage relationships.
Types of salespeople include missionary, trade, prospectors, account managers, order takers, sales support.
Types of customer relationships include transactional, functional, affiliative, and strategic partnerships.
Selling strategies include script-based, needs-satisfaction, consultative, and strategic-partner selling.

Sales Cycle and Metrics

Sales funnels describe effectiveness, measured by conversion ratios.
Salespeople are evaluated based on revenue and activity goals.
Lead scoring identifies high-potential prospects.
Ethics in sales and sales management cover issues such as customer info sharing, gift-giving, and special requests.

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Description

This quiz covers fundamental marketing concepts including the definition of value and the evolution of marketing strategies. Learn how the marketing landscape has changed over time and the importance of customer needs and wants in creating value. Test your understanding of the 4Ps of marketing and their role in value creation.