Download Ch. 8 Answers (Sec. A-E) File

Marketing
1.
Marketing includes all activities involved in
getting goods and services from the
business that produces them to the
consumers who wish to purchase them.
Marketing includes research, development,
sales, distribution, advertising, and
promotion, but does not include the
production of goods and services. The two
fundamental roles of marketing are to sell
what business makes and to manage a
business’s brand or brands
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Group
How is marketing used
Area of
marketing
Manufacturers
Use research to know what to make
Research
Importers,
wholesalers, and
retailers
Use channels of distribution to get their new
products into the hands of consumers all over the
world
Distribution
Producers
Use marketing to sell products to stores
Sales
Stores
Use marketing to sell products to consumers
Sales
Service businesses
Use marketing to let people know where they are and
what they offer
Advertising and
promotion
Non-profit
organizations
Use marketing to promote their services
Advertising and
promotion
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3.
4.
A brand name is a word or a group of words that a business
uses to distinguish its products from the competitors’
products. It is the most important part of a product or
company’s image because it is how the company is identified.
It should be distinctive, stand out from the competition, and
be easy to remember
A logo is a special symbol that is associated with a product. A
logo can take the form of a monogram, whish is a stylized
rendering of the company’s initials or a combination of initials
and numbers , such as KFC or 3M. Some companies use
monograms to update an image that has become outdated and
undesirable. Logos can also be visual symbols(e.g. line
drawings of people, animals, or things) such as Apple
computer’s logo. A logo can be a abstract symbol; a shape that
carries a visual message but is not representative of an actual
thing. Often these types of logos are not distinctive enough to
stand out from other symbols. Nike’s swoosh is an example of
an effective abstract symbol.
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5.
6.
A slogan is a short, catchy phrase that is usually
attached to the company’s name and logo. It is
often used as a tagline in both print and broadcast
advertisements. Just hearing the slogan will often
remind you of the entire ad. And example of an
effective slogan is “Obey you thirst” from Sprite
Once a company develops a name, slogan or logo
for a product, everything associated with that
product should carry the identification. A business
wants to make sure no consumer ever has to guess
whether its product is the one they want.
Competition is so fierce that no company wants its
product to get lost on a store shelf, especially after
spending a great deal of money promoting the
brand
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7.
8.
Brand equity is the value of the brand in the
marketplace. Good marketing develops brand
awareness: customers can name your brand as part of a
specific category, whether it is a product, service, or
non-profit organization, or event. Better marketing
develops brand loyalty: customers prefer your brand and
support it. The best marketing is marketing that
develops brand insistence: the customer will accept no
substitutes. Products that have reached the brand
insistence level have enormous brand equity
A style curve is a graphic representation of a product’s
success in the market, illustrating the volume of sales
over time. Marketers determine what type of marketing
efforts to use based on where a brand is in the product
life cycle
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9. Introduction: the product is launched into the marketplace.
Consumers are unaware of the product and need to be
informed about the product’s features, availability, package
design, and brand identification. Selling is focused on early
adopters in the hope that they will influence others to buy the
product
Growth: once early adopters find a use a new product, others
soon try it and sales increase rapidly. Marketers manage their
products very carefully. As a product’s popularity increases,
competitors enter the market and modify the original product,
either by adding features and improving quality or by making a
similar product more cheaply and offering it at a lower price.
New competitors enter the market and dilute profitability.
Others, unsuccessful at making any money or attracting enough
customers away from originators drop out of the race. Finally,
at the top of the growth cycle, only a few winners survive
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Maturity: growth is flat: neither increases or decreases. New
consumers replace those who leave to purchase a competing
product. Brand equity is at its highest point. Products are
managed through continued advertising to keep the brand in
the public eye and remind consumers of its advantages over
the competition. Costs of sales and distribution are low
because the product has established an effective distribution
method and usually makes large profits as a result. Often
called cash cows because the income they generate can help
develop and fund new projects
Decline: products enter the decline stages as sales decrease.
A temporary decline may be cause by seasonal change or
new competition. But if the decline continues, businesses
research their markets to determine whether consumers are
actually rejecting the brand. A small change in price or a
new advertising campaign can reverse a temporary decline.
If brand equity drops, the business has a serious problem
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Decision point: whatever brand equity is let is used to
reposition a products and make it popular again with a
new consumer market. Businesses can reformulate,
repackage, and re-introduce a “new and improved”
product. Most often, a new promotion and repricing are
used to attract a new market. If these sales strategies
work the brand regains its original sales figures and
brand equity. If the decline continues in spite of efforts
to stop it, the manufacturer discontinues the product
and removes it from the market. New technology can
make old products obsolete and no amount of
marketing can restore life to these products
10. Three types of non-traditional life cycles are fads,
niches, and seasonal
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11.
12.
A fad is a product that is extremely popular for a very
short period of time (usually less then a year) and
appears in a very select target market (usually the
under-14 set). A trend lasts a lot longer than a fad
and influences numerous other areas. Pogs and
Tamagotchies are examples of fads. Low-carb diets
were a trend that crippled businesses such as Krispy
Kreme
If a business can sell most of its stock of a fad and get
out of the market just as the fad reaches its peak, the
business will make an excellent profit. Many fad
marketers, particularly those who make knock-offs,
enter the market at the wrong time or stay too long.
When a fad dies, it dies quickly and many business
get caught with a large inventory that no one wants to
buy
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13.
14.
A niche is a selection of the market in which a product
dominates and into which few competitors enter. Niche
products have a very short growth stage that leads to a
solid, but not financially spectacular, maturity stage.
Niche marketers usually invent their products and hold
exclusive patents and formulas. By the time other
business can invent a competing product, the original
manufacturer has already distributed its brand to most
of the businesses of stores that wish to purchase it, and
competitors have no one to sell their product to. Often,
niche marketers manufacture specialty parts
Barriers to entry into a market include small market size,
the cost of research and development, advertising
expenses, factory and equipment costs, design costs,
lack of distribution channels and the cost of raw
materials
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15.
The seasonal selling season is short, and
these business must keep adequate stock;
however, if they have to much inventory left
over at the end of a season, many of the
products will be out of style when the
season starts again next year. Therefore, it
is important to balance product quantity
with sales
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4.
These brands have likely reached the
maturity stage because brand equity is at its
highest point
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1.
Product concept marketers:
 Product: what a firm should make and sell
 Price:
what price will stimulate sales and generate
a profit
 Place:
where and how to sell the product
 Promotion: what advertising and promotion should
be created to boost product sales
Market concept marketers:
 Competitive market:
all the products or services
that might take sales away from a firm
 Consumer market:
all the people who are or
might become interested in buying the product or
service
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2.
Quality: if you improve the quality of your product, you will
attract more customers. Many established brand names take
pride in their quality, and consumers come to depend on it.
If some products can meet a customer’s need and be less
expensive because the don’t provide high quality, the
product or service has a good chance for success as well
Design: when designing a package, product developers
consider the package’s functions, including protecting the
product from light, dirt, germs, air. Water, tampering, and
damage. A good package makes it easy for the consumer to
use and identify the product. Package labels also help
consumers identify the product and can make the product
stand out from competitors
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Features: product developers consider the features of
products, such as the material use in construction, the
scent, the size, or the taste. Service providers outline
what they do. Service features are in the details
Benefits: each product or service has benefits that
attract different consumers. The consumer must
perceive these benefits in order to be interested
enough to buy
Product/service mix: retail stores provide services that
add value to the products they sell, including delivery
and installation. Many service businesses sell products,
such as popcorn at a movie theatre. The right
product/service mix can increase sales to existing
customers and can attract new customers by helping
the store be competitive
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3.
4.
Pricing decisions can make the difference between a
successful product and a failure. Consumers are very
price aware, and with the ability to check out competing
prices on the internet, they will not buy a product if the
prices are too high. For this reason, it is important to be
aware of how price sensitive a product is in order to
determine how much sales will go up or down when the
price goes up or down. Price must always be similar to
the price of competitive products. If the product appears
to be similar, but carries a much higher price, the
marketing mix should increase the promotional
component and make sure consumers know they are
paying more for more
Channels of distribution are the paths of ownership that
goods follow as they pass from the producer to the
consumer. They are the methods that a business uses to
sell and distribute it’s products
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Direct channels: products are sold directly to the consumer,
eliminating the costs of intermediaries. The maker-user
relationship allows consumers to inform business about their
needs, and may increase consumer confidence
Indirect channels:
 Importers: importers search for foreign products to bring into
the country, negotiate distribution deals with foreign
manufacturers, buy and store merchandise, and the sell it. Some
only arrange for delivery to local business
 Wholesalers: wholesalers buy goods in volume from producers or
importers and resell them to retailers in much smaller quantities.
Retailers who use wholesalers often pay more for a product than
those who buy directly from the manufacturer
 Retailers: retailers link directly to consumers, as they buy
merchandise that consumers want, have it in stock when
consumers want it, and display the merchandise so consumers
can examine it in an easy-to-reach location
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Specialty channels:
 Vending machines: vending machines are placed where consumers
work, study, shop, or travel. If the manufacturer owns the machine,
it dispenses only its own products, and there is no competition
unless a rival producer’s machine is nearby
 Telemarketing: telemarketing involves a sales pitch to consumers
over the phone. Many consumers find telemarketing annoying,
which may lead to negative reactions to the product or service
 Catalogues: catalogues provide information about merchandise that
consumers can purchase by mail, phone, or at the store, if one
exists. Although they can be expensive to produce, catalogue
businesses can be very successful
 E-commerce: E-commerce offers consumers convenience and
competitive prices, while cutting out intermediaries for
manufacturers and retailers, which reduces costs. It allows even
small entrepreneurs to compete globally
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6.
Coupons: coupons offer consumers money off the price of a
product. Because most coupons end up in the trash, advertisers
measure the effectiveness of a coupon by the redemption rate, or
the percentage of coupons that consumers actually use. An average
redemption rate is 5%. In general, the larger the value of the
coupon, the higher the redemption rate will be
Contests: contests are an exciting way to increase brand
recognition and sales. By law businesses most organize contests so
that anyone can enter, whether the person buys a product or not.
There are laws that forbid the use of gambling in contests.
Contests must require people either to demonstrate a skill or to
answer a skill-testing question
Premiums: premiums are giveaways of free items with the purchase
of a product, which usually carry the company’s logo to establish
brand recognition. Customer loyalty cards, which entitles
customers to a free product when the card is completed, ensure
sales because customers must buy the product to get the premium
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Samples: samples encourage brand trial. Samples can be
distributed door-to-door or at booths at a supermarket,
big box stores, and shopping centers. Information about
the product, its price, and where it can be found in the
store is provided along with the sample. Although the
costs are high, sampling is a very effective method of
sales promotion and usually results in increased sales
Special events: marketers organize special events to
attract customers and increase product sales. Celebrities
take part in special events to promote their athletic shoe,
new perfume, latest movie, or current CD. Sometimes,
special events include contests, premiums, and samples.
The main purpose is to excite customers, encourage their
participation, and ultimately, get them to buy the product
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7.
8.
9.
10.
The competitive market consists of all the sellers of a specific
product and is expressed most often in the terms of total
dollars spent annually on the product.
The percentage of the market that a company or brand has is
its market share. A market segment is a part of the overall
market that has similar characteristics
A company can increase its market share by increasing the
size of the overall market. Adding a new market segment adds
new customers, increasing the size of the market, and
increasing sales. The second way to increase market share is
by taking sales away from competitors
Indirect competition is competition between products or
services that are not directly related to each other. For
example, Cds and clothes compete for a consumer’s spending
dollar. Direct competition exists between products that are
very similar, such as Coke and Pepsi. Minor differences in
image, quality, price, design, features, and benefits influence
which product is purchased
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Businesses use demographics, the study of obvious characteristics that categorize
human beings, to target specific consumers
12.
A) age defines our tastes as well as our wants and our needs. Kids are customers, but
not often consumers because an adult, usually a parent, acts as a gatekeeper and
directs the child’s purchase. Products are sold to gatekeepers but are also targeted at
children, who have some influence over the decisions their gatekeeper makes
B) for items such as clothing and shoes, businesses still distinguish between men’s and
women’s product lines. However, many products that were formally targeted at females
(detergents, disposable diapers) or males (cars, power tools) are now being advertised and
sold successfully to both genders because purchasing decisions are now more likely to be
shared.
C) family life cycle stage often determines a person’s wants and needs. Businesses
compete for consumer dollars in different ways , depending on the group they are trying to
attract.
D) consumers are often grouped by how much money they have or earn. This grouping
affects what products or services a business tries to sell to them. Most manufacturers and
retailers make and sell products to consumers with average incomes and are mainly
interested in competing for discretionary income that almost all consumers possess
E) many Canadian cities have ethnic communities with businesses that target the
various wants and need of a particular ethnic group. These businesses compete for a
cultural market by importing goods from the consumer’s country or origin or producing
goods reflective of that country
11.
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13.
Psychographics is the study of lifestyles,
which is the way people live, and this
includes their values, beliefs, and
motivations. A person’s beliefs influence
what he or she purchases, so unless
companies consider lifestyle marketing, the
potential consumers in these groups will
miss the messages
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Hewlett-Packard vs. Dell computers: direct. Quality,
features, benefits, product/service mix, price, channels of
distribution, promotion
Book vs. movie: indirect
Neutrogena vs. Bioré facial cleanser: direct. Image, design
Kleenex vs. Puffs facial tissue : direct. Quality, design,
price, promotion
Concert tickets vs. new outfit: indirect
Aquafresh vs. Arm & hammer toothpaste: direct. Quality,
design, features, benefits, price, promotion
Hyundai vs. Mercedes: direct. Quality, design, features,
benefits, product/service mix, price, promotion
Cruise vs. all-inclusive resort vacation: direct. Quality,
benefits, product/service mix, price, promotion
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