Retailing and Consumer Behavior Quiz

Marketing Definition

• Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Marketing Management Orientations

• The selling concept: Focuses on the factory, existing products, and selling/promoting to generate profits through sales volume.
• The marketing concept: Focuses on the market, customer needs, and integrated marketing to generate profits through customer satisfaction.
  • Production concept: Focus on production efficiency and availability.
  • Product concept: Focus on product quality, features, and innovation.
  • Selling concept: Focus on aggressive sales techniques.
  • Marketing concept: Focus on customer needs and satisfaction.
  • Societal marketing concept: Focus on customer needs and satisfaction, but with consideration for society's well-being.

Customer Needs, Wants, and Demands

• Needs: Basic human requirements (e.g., food, shelter, safety).
• Wants: Shaped by society and individual desires (e.g., gourmet coffee, luxury car).
• Demands: Wants backed by purchasing power (e.g., desire for a luxury car, able to buy one).

Advertising Decisions - Setting Objectives

• Informative advertising: Communicates customer value, builds brand image, explains new products/processes.
• Persuasive advertising: Builds brand preference, persuades customers to purchase, convinces others about products.
• Reminder advertising: Maintains customer relationships, reminds customers about the product, keeps brand in customer's mind.
  • This also includes correcting false impressions, informing the market of price changes, and describing available services/support.

Evaluate Strategic Direction - Ansoff's Matrix

• Present Product, Present Market = Market Penetration: Increase sales of existing products in existing markets.
• Present Product, New Market = Market Development: Introduce existing products in new markets.
• New Product, Present Market = Product Development: Develop new products for present markets.
• New Product, New Market = Diversification: Develop new products for new markets.

Actors in the Microenvironment

• Customers: Most important actors, aim is to serve target customers. The value delivered by the company is important.
• Company: Internal operations and departments interact to create and maintain customer value.
• Suppliers: Provide the parts and materials needed to make a product or service.
• Marketing Intermediaries: (e.g., wholesalers, retailers, agents) help with distribution and sales.
• Competitors: Other businesses offering similar products or services.
• Publics: Groups that affect or are affected by a company's activities.

The Company's Macroenvironment

• Factors like demographics, economic conditions, natural forces, technological changes, political/legal environments, and cultural forces shape customer and market behaviors. Changes should be considered when planning marketing strategies. Sustainability is important.

The Complete Process (Market Segmentation, Targeting, & Positioning)

• Market Segmentation: Identify bases for segmenting the market, develop profiles of resulting segments.
• Market Targeting: Develop measures of segment attractiveness, select the target segment(s).
• Market Positioning: Develop positioning for each targeted segment, develop marketing mix for each target segment.

Requirements for Effective Segmentation

• Measurable: Segment size and purchasing power can be measured.
• Accessible: Segments can be effectively reached and served.
• Substantial: Large and profitable enough to serve.
• Differentiable: Respond differently to different marketing mix elements/actions.
• Actionable: Effective programs can be designed for attracting and serving the segments.

Major Segmentation Variables

• Geographic: Location, climate, population density.
• Demographic: Age, gender, income, education, family size, occupation.
• Psychographic: Values, lifestyle, personalities.
• Behavioral: Usage, loyalty, occasions.

Geographic Segmentation

• Dividing the market into units like nations, regions, states, counties, cities, or even neighborhoods.

Demographic Segmentation

• Categories like age, gender, family size, family life cycle, income, occupation, lifestyle, education, religion, race, and generation are used.

Psychographic Segmentation

• Based on factors like social class, lifestyle, and personality traits of people.

Types of Consumer Decision Making

• Low Involvement: Problem recognition, evaluation search, purchase, and post-purchase (dissonance).
• High Involvement: Problem recognition, information search, evaluation of alternatives, purchase, and post-purchase.

Types of Business-Buying Decisions

• Straight Rebuy: Routine purchase of existing products.
• Modified Rebuy: Existing products but with some changes.
• New Buy: Completely new product or service.

Demand Curves

• Inelastic demand: Quantity demanded changes slightly when price changes.
• Elastic demand: Quantity demanded changes significantly when price changes.

Major Pricing Strategies

• Price ceiling: No demand above certain price.
• Price floor: No profits below certain price.
• Internal and external considerations: Marketing objectives, market demand, competitors' strategies, and product costs.

Selected Pricing Strategies

• Cost-plus pricing: Standard markup to cost.
• Competition-based pricing: Going rate.
• Value-based pricing: Value = Quality/Cost
• EDLP(Every Day Low Pricing): Strategy to keep all prices at low levels.
• Target Pricing: Setting prices so profits will meet objectives.
• Segment Pricing: Different prices for different segments.
• Bundling: Combining several items/products/services.
• Penetration pricing: Low prices to encourage market share.
• Skimming pricing: High prices to extract profits from early adopters—profits diminish as sales increase.

Break-even Pricing

• Point where total cost equals total revenue ($0 profit).

Amazon Echo Case Study—Pricing Decisions

• Calculate variable cost per unit , fixed costs, unit cost, markup price
• Find break-even volume for $179 price point.

What is a Product?

• Anything offered to a market for acquisition, use, or consumption to fulfill a want or need.

Consumer Products

• Products bought by final consumers for personal use.

Classification of Consumer Goods

• Convenience goods: Frequently bought, low cost, readily available (e.g., candy, newspapers).
• Shopping goods: Items consumers compare based on quality, price, style, and features (e.g., furniture, clothing).
• Specialty goods: Customers seek out specifically because of unique characteristics and brand identity (e.g., high-end cars, designer clothing).
• Unsought goods: Unwanted except when a need arises (e.g., emergency medical services).

Services

• Tangible and intangible activities, benefits, or satisfactions offered for sale.

Services Marketing

• Intangibility: Services cannot be seen, tasted, felt, heard, or smelled.
• Inseparability: Services cannot be separated from their providers.
• Heterogeneity: Quality depends on who provides service.
• Perishability: Services cannot be stored.

Customer-Centered New-Product Development

• Focuses on finding solutions to customer problems and creating satisfying experiences.

Product Life-cycle Strategies

• Graphically illustrates sales and profits based on time (introduction, growth, maturity, decline).

Integrated Marketing Communications

• Adjusting communication models to the ever-changing customers and marketing strategies.

Promotional Mix

• Public Relations: Building good relations with publics.
• Personal Selling: Personal presentations by sales force.
• Sales Promotion: Short-term incentives to encourage purchase.
• Advertising: Paid, impersonal mass communication.
• Direct Marketing: Direct, targeted communication.

AIDA Concept

• Attention: Getting noticed.
• Interest: Generating intrigue.
• Desire: Arousing the customer's desire to have the product
• Action: Convincing the customer to purchase.

Marketing Communications & PLC

• Different strategies for advertising, PR, sales promotion, personal selling, and distribution at each stage of the product life cycle (introduction, growth, maturity, decline).

Channel Strategies

• Direct Exchange: Manufacturer sells directly to customer.
• With Intermediaries: Manufacturer uses wholesaler and retailer to deliver product.
• Time Gaps: Delay between production and consumption (e.g., lead time).
• Space Gaps: Distance between production and consumption.
• Variety Gaps: Not enough options to produce certain products.
• Quantity Gaps: Products not in large enough supply(quantity)
• Information Gaps: Lack of awareness regarding products.

Channel Functions

• Information: Gathering and distribution.
• Promotion: Persuasive communication.
• Contact: Locating buyers and sellers.
• Matching: Aligning buyer and seller needs.
• Negotiation: Terms of exchange (pricing).
• Physical Distribution: Moving goods.
• Financing: Providing temporary funds.
• Risk Taking: Accepting product-related risks.

Types of Retailers

• Self-service: Customers perform most of the selection and checkout.
• Limited-service: Some services but the customer does checkout.
• Full-service: Extensive services.
• Specialty: Limited product lines and high service levels.
• Department: Wide product lines.
• Supermarket: Grocery items.
• Convenience: Small selection, open at all hours.
• Superstore: Wide range of products.

Wholesaling

• Includes all activities in selling goods/services to those buying for resale or business use.

Supply Chain Management

• Inbound logistics (suppliers to company), outbound logistics (company to resellers), and reverse logistics are part of the supply chain.

Retailing Trends & Developments

• Growth of non-store retailing: Online/internet order placement (ecommerce).
• Rise of Megaretailers: Combining several product lines in one large store like mass merchandisers or superstores.

Intensity of Distribution Levels

• Intensive Distribution: Many outlets (e.g., convenience goods).
• Selective Distribution: Fewer outlets (e.g., shopping goods).
• Exclusive Distribution: Very few outlets (e.g., specialty goods).

Channel Conflict

• Vertical Conflict: Between different levels of the channel (e.g., between manufacturers and retailers).
• Horizontal Conflict: Between various businesses at the same level in a channel (e.g., retailers competing with each other).

Vertical Marketing Systems

• Producer, wholesaler or other business owner, retailer, and customer act as a unified whole in order to satisfy customers' needs.

Vertically Integrated for Conflict Reduction

• Administered systems, corporate systems, and contractual systems have common goals to avoid conflict.

Push Versus Pull Strategy

• Push strategy: Encourage retailers to sell product (promotions given to retailers)
• Pull strategy: Direct marketing to customers in order to sell product on their own initiative.

Sales Promotion Tools

• Consumer Oriented (Pull): Samples, coupons, Price packs, premiums, awards, POPS, contests.
• Trade Oriented (Push): Allowances, co-operative advertising, trade contests, POP materials, training programs, specialty advertising, trade shows.

The Nature of Personal Selling

• Personal selling is the personal presentation by the firm's sales force for the purpose of making sales and building customer relationships.

Sales Force Strategy and Structure

• Territorial: Salesperson to geographic territory.
• Product: Salesperson specializes in a portion of products.
• Customer (Market): Salesperson specializes in specific customers or industries.

Branding Decisions

• Brand Sponsorship: Manufacturer, private brand, generic, hybrid.
• Brand Strategies: Deepening the line / Mix, broadening the line / Mix, stretching the brand upward and downward.

Major International Marketing Decisions

• Look at the global environment.
• Deciding whether to go global.
• Deciding which markets to enter.
• Deciding how to enter the market.
• Deciding on the global marketing program.
• Deciding on the global marketing organization.

Deciding - How to Enter the Market

• Exporting (indirect/direct)
• Joint Venturing (Licensing, Contract Manufacturing, Management Contracting, Joint Ownership)
• Direct Investment (Assembly facilities, Manufacturing facilities)

Deciding on the Global Marketing Program

• Standardized global marketing: Uses the same marketing strategy and mix for international markets.
• Adapted global marketing: Adjusts marketing strategy and mix elements to target markets.