Quantitative Topics Review

• Chapters for study: 1, 2, 3, 5, 6, 7, 10, 11, 15
• Study material includes reviewing PowerPoint slides and practicing problems 1, 2, and 3, with an emphasis on completing practice problem 3
• Exams 1 and 2 are available for review
• Additional review on April 21

Quantitative Topics

• Contribution Margin is calculated by Sales Price / Variable Cost
• Market Share% is a percentage
• Percentage Sales Change vs. Year Ago is determined by (Total Revenue Current Year Sales – Last Year Sales) / Last Year Sales
• Units Sold is calculated by Sales / Selling Price when given Sales and Selling Price (S.P)
• The formula for Reach is Impressions / Frequency
• Breakeven analysis requires Fixed Costs, Variable Cost/Unit, and Selling Price/Unit
• Breakeven point is calculated by Total Fixed Costs / Contribution per unit
• Relative Market Share is calculated by Your Share / Largest Competitor's Share
• Relative Market Share helps determine if an item is a:
  • Cash Cow which has High Share and Low Growth
  • Dog which has Low Share, Low Growth
  • Star which has High Share, Low Growth
  • Question Mark which has Low Share and High Opportunity
• Types of Pricing Strategies include: Odd and Even pricing, Leader pricing, Bait and Switch, Penetration pricing and Skimming

Pricing Strategies

• Odd-Even Pricing: An odd pricing point like $9.99
• Leader Pricing: Draws in customers with a low-priced product
• Bait and Switch: Used to entice customers with a low-priced product with low stock, then trying to sell them a more expensive product
• Penetration Pricing: Starts with a low price to gain customer traction
• Skimming: Starts with a high price to recoup spending

Visions & Objectives

• Vision: Outlines what an organization wants to become in the future
• Mission: Declares the organization's purpose and reason for existence
• Objectives: Should be time-based, measurable, and consistent with the company's overall objectives at all levels

Purchasing Process

• Need Recognition
• Search for Product Information
• Product Evaluation
• Product Choices and Purchase
• Postpurchase Use and Evaluation
• Disposal

Market Research Process

• Define the Problem/Opportunity
• Design the Research
• Design the Data Collection Forms
• Specify the Sample
• Collect the Data
• Analyze the Data
• Write Research and Report Findings

New Product Process

• Idea Generation
• Idea Screening
• Feature Specification
• Development
• Testing
• Launch
• Evaluation

Consumer Behavior

• Consumer Behavior: attitude, perception
• Consumer Behavior concerns when, where, how, and why people buy and dispose of items
• Situational Factors: Atmosphere, Social Situation, Time, Reason for Purchase, Mood, Economic Situation
• Personal Factors: Personality, Gender, Age, Stage of Life, Lifestyle
• Societal Factors: Culture, Subculture, Social Class, Reference Groups, Opinion Leaders, Influencers, Family
• Psychological Factors: Motivation (inward drive), learning (how consumers change behavior), perception (how people interpret the world) and attitude (mental position)

Growth Strategies

• Market Development: Uses existing products to attract new customers
• Market Penetration: Selling existing products to existing customers
• Product Development: Uses new products for existing markets
• Diversification: Uses new markets and new products

Segmentation

• Segmentation includes:
  • Different types of segmentation
  • Brand Perception Map
• Criteria to select a Target Segment
• Behavioral segmentation divides people into groups based on their behavior toward products
• Demographic segmentation segments based on personal characteristics like age, income, ethnicity, and family size
• Geographic segmentation divides buyers based on location
• Psychographic segmentation differentiates buyers based on activities, interests, opinions, attitudes, values, and lifestyles

Product Life Cycle

• Introduction of the product
• Time to commercialize the product
• The product is then in the introduction stage where awareness is generated and trial is encouraged
• During the Growth Phase, companies must show benefits and value to persuade customers to buy versus competing products
• Most products are in the mature stage
• Sales level off during the mature stage
• A mature market typically has many competitors
• Companies modify the target market, the offering, or the marketing mix to extend the mature stage and avoid decline
• In the decline phase, a company decides to keep the product, harvest it by reducing spending until inventory is sold, or divest the product

Research Types

• Exploratory Research
• Descriptive Research
• Causal Research
• Ethnography

Research Characteristics

• Exploratory research investigates a problem and uses secondary data and methods like in-depth interviews and focus groups
• Causal research examines cause-and-effect relationships with field experiments and test markets
• Descriptive research gathers "hard" numbers using surveys, addressing questions of "who," "what," "where," "when," and "how"
• Ethnography studies daily life, social interactions, and product interactions

Research Terms

• Alpha Testing: Testing in a lab to ensure that the offering is working according to specifications
• Beta Testing: Testing with actual customers to ensure functionality in real-life conditions and involves testing the delivery mechanism
• Market Testing: Testing the strategy in the market to ensure the offering reaches buyers, receives positive feedback, and generates sales
• Rolling Launch: Making the offering available to certain markets initially to address any challenges with the launch
• Predictive analytics uses data to forecast future outcomes
• A Likert scale measures participant’s opinions, attitudes, and motivations with a range of answer options
• A dichotomous scale uses two possible answer choices

Porter's Five Forces

• Competitive Rivalry
• Substitute Products
• Potential Entrants
• Bargaining Power of Suppliers
• Bargaining Power of Buyers

Integrated Marketing

• Regardless of how communication is delivered, messages must remain consistent
• Brands provide a consistent message across touchpoints with consumers
• A customer touchpoint is any instance of consumer interaction with a brand
• Interactions work like a bank: deposits and withdrawals
• Each interaction must be a positive one

Promotional Metrics

• Reach = Impressions/Frequency
• Reach counts the number of unique individuals exposed to an advertisement
• Impressions count the total number of exposures to an advertisement
• Frequency measures the average number of times a user was exposed to the advertisement

Marketing Mix

• Integrated Marketing Communications (IMC) delivers a consistent message to buyers through all communication channels
• IMC builds brand and customer relationships
• Promotional Mix: Advertising, Consumer Sales Promotion, Trade Promotions, Direct Marketing, and Professional Selling
• Advertising: Paying for a message for a brand or organization to many people
• Consumer Sales Promotion: Incentives such as coupons, contests, games, rebates to supplement advertising and sales
• Professional Selling: Interactive approach to marketing involving a buyer and a seller, used more by B2B
• Public Relations: Builds rapport, promotes offerings, and supplements sales efforts
• Press Releases: News story by an organization to promote a product, organization, or person

Public Relations

• Press releases and other PR activities are used for damage control
• Crisis communication addresses the negative effects of bad publicity
• Online Reputation Management (ORM) measures to influence public perceptions
• Direct Response Marketing: Includes an offer and a call to action
• Sponsorships: Financial support for events to target specific groups

Sponsorships & Sales

• Sponsorships enhance a company's image and typically generate public relations
• Public relations improves the image and products
• Increased spending on sponsorships has made them a key component
• Product Placement: Getting a company's product included as part of media
• Sales promotions: Activities that supplement public relations and selling efforts
• Sales promotions encourage repeat business
• Sales promotions are trade promotions in business-to-business marketing
• Experiential marketing allows customers to physically interact with a brand
• Trade shows allow firms to display their offerings
• Conventions give sellers a chance to show products to customers
• Sales contests offer salespeople incentives
• Trade allowances provide channel partners incentives
• Free merchandise encourages retailers to sell products

Promotional Objectives

• AIDA: Attention, Interest, Desire, and Action
• Objectives may educate the consumer and create awareness
• USP highlights a specific benefit

Promotional Budget Methods

• Percent of last year's sales method: A percentage of current or projected sales is the marketing budget
• Affordable method: Companies spend what they can afford to promote a product
• Competitive parity method: Companies ensure their promotion budgets are comparable to competitors'
• Objective and task method: Budget based on a company's promotion objectives and necessary tasks

Advertising

• Advertising: Paid promotion by an identified sponsor
• Medium the general types of communication available
• Vehicle: The specific means within a medium
• A push strategy promotes a product to intermediaries
• A pull strategy targets final consumers directly with promotions
• The media landscape is shifting to digital
• Traditional media includes mobile marketing and out-of-home advertising
• Encoding: The marketer puts thoughts into the advertisement
• Decoding: The customer interprets the message
• Feedback: from customer to company