Name: Steven P Sanderson II

Date: 7/5/06
Class: Intro to Business BA11 5040
Professor: McNamara

Chapter 13
Questions from page 405

What are the three parts of the marketing concept?

The three parts to the marketing concept are customer orientation, service orientation and
profit orientation. A customer orientation is to find out what consumers want and provide
it for them. A service orientation is when an organization makes sure everyone has the
same objective – customer satisfaction. This should be a total and integrated
organizational effort. A profit orientation is the focus on those goods and services that
will earn the most profit and enable the organization to survive and expand to serve more
consumer wants and needs.

What are the four Ps of the marketing mix?

The four Ps of the marketing mix are as follows: Product, Place, Price and Promotion. A
product is any physical good, service or idea that satisfies a want or need plus anything
that would enhance the product in the eye of consumers, such as the brand. After you
have developed the product or designed the service you want to offer consumers, you
have to set an appropriate price. That price depends on a number of factors. For
example, in the cereal business, the price should probably be close to what other cereal
makers charge since most cereals are priced competitively. You also have to consider the
costs involved in producing, distributing and promoting the product. You might price the
product higher than other cereals to create an image of quality. Once the product is
manufactured, you have to choose how to get it to the consumer. Remember place is the
thirds P in the marketing mix. You may want to sell the cereal directly to supermarkets or
health-food stores, or you may want to sell it through organizations that specialize in
distributing food products. The last of the four Ps of marketing is promotion. Promotion
consists of all the techniques sellers use to inform people and motivate them to buy their
products or services. The include advertising’ personal selling’ public relations’
publicity’ word of mouth’ and various sales promotion efforts, such as coupons and
rebates.

Questions from page 411

What are the four steps in the marketing research process?

The four steps in the marketing research process are: Defining the question (problem or
opportunity) and determining the present situation, collecting data, analyzing the research
data and choosing the best solution and implementing it. Marketing researchers should
be given the necessary amount of time and freedom to be able to accurately discover
what the present situation is and what the problems and opportunities are. Obtaining
usable information is vital to the marketing research process. Research can become quite
expensive, so some trade-off must often be made between the need for information and
the cost of obtaining that information. Normally the least expensive method is to gather
information that has already been compiled by others and published in journals and books
or made available online. Such existing data is referred to as secondary data since you
aren’t the first one to gather them. Sometimes a focus group will be used. A focus group
is usually about 8 to 14 people and meets under the direction of a discussion leader.
Analyzing the research data is the next step in the process. The data collected in the
research process must be turned into useful information. Careful, honest interpretation of
the data collected can help a company find useful alternatives to specific marketing
challenges. For example by doing primary research Fresh Italy, a small Italian Pizzeria
found that even though they had superior taste the customers preferred free delivery.
Next you need to find the best solution and implement it. After collecting and analyzing
data, Market researchers determine alternative strategies and make recommendations as
to which strategy may be best and why. This final step in a research effort involves
following up on the actions taken to see if the results were as expected.

What is environmental scanning?

Environmental scanning is the process of identifying the factors that can affect marketing
success. These factors include global, technological, sociocultural, competitive and
economic influences.

Can you define the terms consumer market and B2B markets?
A consumer market includes all the individuals or households that want goods and
services for personal consumption or use. A B2B market are all the individuals and
organizations that want goods an services to use in producing other goods an services or
to sell, rent or supply goods to others.

Questions from page 422

Can you name and describe five ways to segment the consumer market?
Five ways to segment the consumer market are Geographic segmentation which is
dividing a market by geographic region, demographic segmentation which is done by
dividing the market by age, income and education level. Psychographic segmentation is
dividing the market using the group’s values attitudes and interests. Benefit segmentation
which is done by dividing the market by determining which benefits of the product to talk
about. Finally there is Volume or Usage segmentation which simply put is dividing the
market by usage.

What are four key factors tat make industrial markets different form consumer markets?
Compared to the consumer market the amount of potential customers in the B2B market
are relatively low that is there are just a few construction firms, accounting firms, mining
firms and so on compared to the 70 million households or more that are in America. The
size of business customers if relatively large; that is, a few large organizations account for
most of the employment and production of various goods and services. Nonetheless, there
are many small to medium-sized firms in the United States that together make an
attractive market. B2B markets tend to be geographically concentrated. For example,
oilfields tend to be concentrated in the Southwest and in Alaska. Consequently,
marketing efforts may be concentrated on a particular geographic area and distribution
problems can be minimized by locating warehouses near industrial center. Business
buyers are generally thought to be more rational as opposed to emotional then ultimate
consumers in their selection of goods and services.

What is niche marketing, and how does it differ from one-to-one marketing?
Niche marketing is the process of finding small by profitable market segments and
designing or finding products for them. Just how small such a segment can be is
illustrated by fridgedoor.com; this company sells refrigerator magnets on the internet. It
keeps some 1,500 different magnets in stock and sells as many as 400 per week. One-to-
one marketing means developing a unique mix of goods and services for each individual
customer. Travel agencies often develop such packages, including airline reservations,
hotel reservations, rental cars, restaurants and admission to museums and other
attractions for individual customers.

What is stakeholder marketing?

Well remember stakeholders are all the people who stand to gain or lose by the policies
and activities of a business. Stakeholder marketing, then is establishing and maintaining
mutually beneficial exchange relationships over time withal the stakeholders of the
organization. Organizatios that adopt stakeholder amerketing take the community’s
needs into mind when designing and marketing products. For example many companies
have responded to the market and now make what are called green products which have
no or very little impact on the environment.

Chapter 14
Questions from page 436

What value enhancers may be included in a total product offer?

A total product offer is defined as everything that consumers evaluate when deciding
whether to buy something; also called a value package. Some value enhancers that my be
included in a total product offer would be; service, access via internet, delivery, guarantee
and a variety of other things that could entice a consumer to want to buy one brand over
another. For example some auto companies are offering zero percent financing in
addition to a host of other things.

What’s the difference between a product line and a product mix?

A product line is a group of products that are physically similar or are intended for a
similar market. They usually face similar competition. For example P&G sell Cascade,
Dawn, Joy and Ivory for dish soaps. A product mix is the combination of all product
lines offered by a manufacturer. For example P&G sells not only dish soaps, but
antiperspirants, hair care, personal cleansing and many other types of product lines.

Name the four classes of consumer goods and service, and give examples of each.
First we have convenience goods which are products that the consumer wants to purchase
frequently and with a minimum of effort. One convenience store that comes to
everyone’s mind is 7-Eleven Next we have shopping goods an services which are
products that the consumer buys only after comparing value, quality, price and style from
a variety of sellers. Shipping goods and services are sold largely through shopping
centers where consumers can make comparisons. Sears is one store that sells mostly
shopping goods. Because many consumers carefully compare such products, marketers
can emphasize price differences, quality differences, or some combination of the two.
Next are specialty goods and services which are consumer products with unique
characteristics and brand identity. Because these products are perceived as having no
reasonable substitute, the consumer puts fort a special effort to purchase them. Examples
include fine watches and wines along with fur coats and autos like Jaguar. Next and
finally are unsought goods and services which are products that consumers are unaware
of, haven’t necessarily thought of buying, or find that they need to solve an unexpected
problem. Some examples would be emergency towing, funeral services and insurance.

Describe three different types of industrial goods.

One industrial good would be computers they are also consumer goods. Some other
examples would be production goods such as raw materials, component parts like engines
and production materials such as nuts and bolts. Some support goods that would be used
as industrial goods would be things like installations which would include buildings and
equipment, accessory equipment like tools and office equipment.

Questions from page 440

What six functions does packaging now perform?

The six functions that packaging now performs would be protect the goods inside, stand
up under handling and storage, must be tamperproof, deter theft and yet be easy to open
and use. Packaging also needs to attract the consumer’s attention, describe the contents
and give information about the contents, explain the benefits of the good inside, provide
information on warranties, warnings, and other consumer matters. Finally packaging
needs to give some indication of price, value and uses.

What’s the difference between brand name and trademark?

A brand name is that part of the brand consisting of a word, letter, or group of words or
letters comprising a name that differentiates a seller’s goods or services fro those of
competitors. A trademark is a brand that has been given exclusive legal protection for
both the brand name and the pictorial design they use.

Can you explain the difference between a manufacturer’s brand, a dealer brand, and a
generic brand?
A manufacturer brand would be something like Xerox, Kodak, Sony and Chevy. A dealer
brand would be something like Kenmore and Diehard. They don’t carry the
manufacturers name but the dealers name instead. A generic brand are no branded
products that usually sell at a sizable discount compared to national or private=label
brands. They feature basic packaging and are backed with little or no advertising.

What are the key components of brand equity?

First of all brand equity is defined by the combination of factors – such as awareness,
loyalty, perceived quality, images, and emotions, that people associate with a given brand
name.

Questions from page 446

What are the five steps in the new-product development process?

Generating new product ideas would be the first step in the process. A strong point can
be made for listening to employee suggestions for new products. The number one source
of ideas for new industrial products has been company sources such as employees. The
next step in the process would be product screening. Product screening is designed to
reduce the number of new product ideas being worked on at any one time. Criteria
needed for screening include whether the product fits in well with present products, profit
potential, marketability and personnel requirements. Product analysis is the next step in
the process. It’s largely a matter of making cost estimates and sales forecasts to get a
feeling for profitability off new product ideas. Products that don’t meet the established
criteria are withdrawn from consideration. Now comes product development and testing.
Concept testing involves taking a product idea to consumers to test their reactions. Do
they see the benefits of this new product? How frequently would they buy it? At what
price? What features do they like and dislike? These are all things that need to be taken
into consideration. Commercialization which is the next step involves promoting a
product to distributors and retailers to get wide distribution and developing strong
advertising and sales campaigns to generate and maintain interest in the product among
distributors and consumers. Finally we have the international challenge. U.S. marketers
have learned through experience that the secret to success in today’s rapidly changing
environment is to bring out high-quality new products and to bring them out quickly.
This is especially true in light of the rapid development process occurring in other
countries.

Can you draw a product life cycle and its parts?

A product lifecycle has four phases. They are as follows, introduction, growth, maturity,
and decline. In the introduction stage sales and profits move up slow and sometimes can
take years before they go anywhere. In the Growth stage sales and profits soar. With the
next stage sales start to level off and go flat. One example of sales going flat would be
with cellular phones. Finally comes the decline stage of a product like videocassettes,
they pretty much have gone the way of the eight track sales and profits are declining due
to new products like DVD’s.

Questions from page 452

Can you list two short term and two long term pricing objectives? Can the two be
compatible?
Two short term pricing objectives would to be to price the product high so as to recoup
the cost and to start making a profit, where a long term objective is to optimize profits.
Another short term pricing objective would be to achieve greater market share, and this
was done by U.S. automakers when they offered zero percent financing and employee
pricing. Another long term objective would be to eventually be able to sell your product
at a high premium by creating an image so you can sell at a high price.

What’s wrong with using a cost based strategy?

Using a cost based strategy is ok to find out what you need to sell you product at to make
a profit but it does not take any market conditions or human nature into consideration,
thus one will really never know if the product will be able to sell to make the anticipated
profit.

What’s the purpose of a break even analysis?

The purpose of a break even analysis is to show you when or what it will take to finally
turn a profit. To figure out what your BEP is a relatively simple formula can be used. It
is as follows BEP = Total fixed cost (FC) / Price of one unit (P) – Variable Cost (VC) of
one unit. Total fixed costs are the costs that don’t change such as rent and business
insurance. Variable costs change according to the level of production such as labor and
raw materials. For an example say there are $200,000 in fixed costs of a business you
wish to run. You want to sell you product for $4 and it costs you $2, the BEP formula
would be as follows: BEP = FC / P – VC = $200,000 / $4 - $2 = $200,000 / $2 = 100,000
units of product.

Can you calculate a product’s BEP if producing it costs $10,000 and revenue from the
sale of one unit is $20?
With this bit of information you are missing the VC part of the equation. For this
example we will assume that VC equals $5, if this is what it equaled the formula would
look like this; BEP = FC / P – VC = $10,000/ $20 - $5 = $10,000 / $15 = 667 units of
product.

Chapter 15
Questions from page 465

What is a channel of distribution, and what intermediaries are involved?

A channel of distribution is a whole set of marketing intermediaries, such as wholesalers
and retailers, that join together to transport and store goods in their path (or channel) from
producers to consumers. Some of the intermediaries would include agents/brokers which
are marketing intermediaries who bring buyers and sellers together and assist in
negotiation an exchange but don’t take title to the goods. The use of a wholesaler is
usually involved and they are a marketing intermediary that sells to other organizations.

Why do we need intermediaries? Can you illustrate how intermediaries create exchange
efficiency? How would you defend intermediaries to someone who said that getting rid
of them would save millions of dollars?
Intermediaries are necessary to business; if we did not have them then business as we
know would not exist today. Say if you are going to buy a car I don’t really think that
you would want to go to the manufacturer to get it you want to go to the dealer and place
your order. The dealer is one form of intermediary. You may place you order with them
but how is the product going to get made? The process of building the vehicle is quite
large and takes many intermediaries, I suppose you could get all of the parts yourself and
make the thing but that is impractical. So you order the vehicle let the plant build it, but
then it needs to get to you. I suppose you could pick it up, but here in NY you would
have to travel far to get it so it is easier to let the railroad ship it from the plant to the
dealer. The railroad would be another form of intermediary. Another intermediary
involved would be the banks that give you the loan for the car if you cannot pay cash for
it, and most people cannot or don’t so they are another intermediary. You could save
money by getting rid of all these people but how much would you really be saving in
time and gas money, by the time it is all done you should have just went to the dealer to
get it and let them handle everything from there.

Can you give examples of utilities created by intermediaries and how intermediaries
perform them?
In economics, the want-satisfying ability, or value that organization add to goods or
services when the products are mad more useful or accessible to consumers than they
were before is called a utility. Here are an example of some utilities and how they work.
A time utility would be adding value to products by making them readily available when
they are needed. A place utility adds value to products by having them where people
want them; some examples would be stores like 7-Eleven and Wal-Mart. Possession
utility is doing whatever is necessary to transfer ownership from one party to another,
including providing credit, delivery, installation, guarantees, and follow-up service.
Information utility adds value to products by opening two-way flows of information
between marketing participants, for example if you want to buy a car you can get
information from the library, internet, dealers and the government.

Questions from page 472

Describe the activities of rack jobbers and drop shippers.

A rack jobber will furnish a rack or shelves full of merchandise to retailers, display
products, and sell on consignment. This means that they keep title to the goods until
they’re sold, and then they share the profits with the retailer. A drop shipper will solicit
orders from retailer and other wholesalers and have the merchandise shipped directly
form a producer to a buyer. The own the merchandise but don’t handle, stock, or deliver
it. That’s done by the producer. Drop shippers tend to handle bulky products such as
coal.

What are some ways in which retailers compete? Give examples.

Retailers compete through a variety of methods one of the most notable ones being
through price. Discount stores such as Wal-Mart, Target, Kmart, and T.J.
Maxx/Marshalls – not to mention internet discount stores compete by price. The most
notable of the bunch is Wal-Mart. Wal-Mart has become such a large retailer that they
are even able to dictate what prices are going to be to the producers, that want to fight
over shelf space just to get their product known. Another form of competition between
retailers would be service competition. This involves follow ups to sales, guarantees, fast
installation, and good service. Location competition is another form retailer’s use. As
many banks put ATMs everywhere they become more accessible to their clients or
potential clients when they can do many things at kiosks or ATMs they then have more
value added services which in turn usually leads to more customers. Selection
competition is offering a wide selection of items in the same product category. Category
killer stores offer wide selection at competitive prices. They are called category killers
because they are so competitive that they usually sink the small guys.

What kinds of products would call for each of the different distribution strategies:
intensive, selective, exclusive?
Intensive distribution puts products into as many retail outlets as possible, including
vending machines. Products that need intensive distribution include convenience goods
such as candy, cigarettes, gum and popular magazines. Selective distribution is the use of
only a preferred group of the available retailers in an area. Such selection helps to assure
producers of quality sales and service. Manufacturers of appliances, furniture, and
clothing (shopping goods) usually use selective distribution. Exclusive distribution is the
use of only one retail outlet in a given geographic area. The retailer has exclusive rights
to sell the product and is therefore likely to carry a large inventory, give exceptional
service, and pay more attention the brand than others.

Questions from page 479

What are the four systems that have evolved to tie together members of the channels of
distribution?
Corporate distribution systems is one in which all of the organizations in the channel of
distribution are owned by one firm. If the manufacturer owns the retail firm, clearly it
can maintain a great deal of control over its operations. Sherwin-Williams for example
owns its own retail stores and thus coordinates everything. Contractual distribution
systems try to get retailers to sign a contract to cooperate. A contractual distribution
system is one in which members are bound to cooperate through contractual agreements,
there are three forms of contractual systems: franchise, wholesaler-sponsored chains and
retail cooperatives. Next we have administered distribution systems. If you were a
producer, what would you do if you couldn’t get retailers to sign an agreement to
cooperate? One thing you could do is to manage all the marketing functions yourself,
including display, inventory control, pricing and promotion. Supply chains are the latest
in systems coordination. Supply chain sometimes called value chain consists of the
sequence of linked activities that must be performed by various organizations to move
goods and service from the source of raw materials to ultimate consumers. The supply
chain is longer than a channel of distribution because it includes links from suppliers to
manufacturers, whereas the channel of distribution begins with manufacturers.

How does logistics differ from distribution?

Logistics is the marketing activity that involves planning implementing and controlling
the physical flow of materials, final gods, and related information from points of origin to
pints of consumption to meet customer requirements at a profit. One firm that does this
is UPS Supply Chain Services. I used to work together with them at Michigan Truck
Plant, which is where all of the Ford Expeditions and Lincoln Navigators are made, and
they handles so much of the work is was amazing, they planned everything and did it
efficiently, whereas distribution really deals with getting the product form A to B.
What are inbound logistics, outbound logistics and reverse logistics?
Inbound logistics involves bringing raw materials, packaging and other goods and
services form suppliers to producers. Outbound logistics is the area that involves
managing the flow of finished products and information to business buyers and ultimate
consumers people like you and me. Reverse logistics is the area that involves bringing
goods back because of defects or recycling materials.

Chapter 16
Questions from page 502

What are the four traditional elements of promotional mix?

Advertising is paid, nonpersonal communication through various media by organizations
and individuals who are in some way identified in the advertising message. The
importance of advertising in the U.S. is easy to document. The total ad volume exceeds
$231 billion yearly. Television in all its forms is the number one medium with direct mail
coming in at number two. Advertising also comes in other forms such as retail
advertising – which is advertising to consumers by various retail stores and supermarkets.
Trade advertising is advertising to wholesalers and retailers by manufacturers to
encourage them to carry their products. There are many other forms of advertising. Next
comes personal selling which is face-to-face presentation and promotion of goods and
services. It also involves the search for new prospects and follow-up service after the
sale. Effective selling isn’t simply a matter of persuading others to buy. In fact, it’s more
accurately described today as helping others satisfy their wants and needs. Given that
perspective, you can see why salespeople are starting to use the internet, portable
computers, paging devices, fax machines and a host of other devices. Personal selling
also involves prospecting which involves researching potential buyers, qualifying which
makes sure these people have a need for your product; these are only some of the steps in
the process. Next, sales and promotion, which can be done in a variety of ways. When a
business has a sales promotion they usually price products cheaper then normal or at a
loss to get awareness of the product out. Finally comes Public Relations. Public
Relations are the management function that evaluates public attitudes, changes policies
and procedures in response to the public’s requests, and executes a program of action and
information to earn public understanding and acceptance.

What are the three most important advertising media in order of dollars spent?
Advertising expenditure by media in terms of billions of dollars is as follows: Direct Mail
with U.S. volume of $44.7 billion or 19.3 percent; Newspapers with $44.3 billion or 19.2
percent; and finally Broadcast TV with $38.9 billion or 16.8 percent.

What are the seven steps to the B2B selling process?

The seven steps are Prospect and Qualify which is the first step in selling. Prospecting
involves researching potential buyers and choosing those most likely to buy. That
selection process is called qualifying. The qualify people means to make sure that they
have a need for the product, the authority to buy, and the willingness to listen to a sales
message. A person who meets these criteria is called a prospect. The second step is
called the preapproach. Before making a sales call, you must do further research. In the
preapproach phase, you must learn as much as possible about customers and their wants
and needs. Before you try to sell anything, you would want to find out which people in
the firm are most likely to use and be able to buy the product. Now comes the approach
stage. The old saying “You don’t have a second chance to make a good first impression.”
That’s why the approach is so important. When you call on a customer your opening
statements are very important. The idea is to give an impression of friendliness and
professionalism, to create rapport, to build credibility and to start the relationship. Now
that you have met them you need to make a presentation. IN the actual presentation of
what it is you are selling the idea is to match the benefits package to the needs of the
clients. After the presentation you will need to overcome and objective questions. You
should be able to anticipate any objective since there will always be some. Think of
questions as opportunities for creating better relationships, not as challenges to what
you’re saying. Now that you have overcome any objectives you need to close the sale,
start asking closing questions such as would you like that in blue or red?, would you like
to pay cash or use you credit card? Finally the last step comes, this is where you must
follow up with the new client, make sure the order. For some products the follow up
could last for years especially if you are selling software of heavy equipment.

What is a consultative salesperson?

A consultative salesperson is a salesperson that begins by analyzing customer needs and
then comes up with solutions to those needs. At Dell computer for example, it’s the sales
team, not tech support, which builds and manages customer’s extranet sites.

Questions from page 504

What are the three steps involved in setting up a public relations program?
The three steps in setting up a public relations program are as follows: listen to the
public, change policies and procedures. Businesses don’t earn understanding by
bombarding the public with propaganda they need to earn it. Finally you need to inform
people that you’re being responsive to their needs. It’s not enough to simply have
programs in the public interest. You have to tell the public about those programs so that
they know you’re being responsive.

What are the disadvantages and advantages of publicity versus advertising?

Publicity is any information about an individual, product, or organizations that’s
distributed to the public through the media and that’s not paid for, or controlled by, the
seller. Publicity works only if the media find the material interesting or newsworthy. The
idea, then, is to write publicity that meets those criteria. Gillette, for example used
publicity to launch its Sensor and Mach III razors. Dean Kamen got huge publicity for
his Segway scooter. Publicity may also be bad in the event that marketers have no
control over what is said or shown, the media are not obliged to use the publicity and
furthermore may alter it for ratings and you may get negative publicity.

Questions from page 510

What are the sales promotion techniques used to reach consumers? What promotion
techniques are used to reach businesses?
Some techniques used to reach consumers would be something like sampling which is
done a lot in places like super markets. Sampling is where a company will give
consumers a small sample of product so they can experience it before they buy it. Word
of mouth promotion is where people tell other people about your product or service they
have purchased, this can be good and this can be bad. If the word of mouth is good it can
prove positive for you and if it is bad it can be detrimental. Viral marketing is the term
now used to describe everything from paying people to say positive things on the internet
to setting up MLM selling schemes. For the B2B market trade shows are very important
and ways or businesses to get word out about their product and services.

What is viral marketing?

Viral marketing is the term now used to describe everything from paying people to say
good things about a product or service; this is done a lot in the investing penny markets
quite often. Another thing done usually is setting up MLM schemes to get the word out,
which allows customers to get commissions for directing traffic to them. Often
companies will tell their customers that they can earn unlimited income from an
opportunity they have for them and they take it.

Describe how to implement a push and a pull strategy.

A push strategy is a promotional strategy in which the producer uses advertising, personal
selling, sales promotion and al other promotional tools to convince wholesalers and
retailers to stock and sell merchandise. A pull strategy is a promotion strategy in which
heavy advertising and sales promotion efforts are directed toward consumers so that
they’ll request the products form retailers.

What are the three steps used in setting up an interactive marketing communication
system?
An integrated marketing communication system is a formal mechanism for uniting all the
promotional efforts in an organization to make them more consistent with each other and
more responsive to that organization’s customers and other stakeholders. That includes
the latest in internet communications and interactive tools. The result is a unified image
of the company in the public’s mind. In the past, advertising was created by ad agencies,
public relations were created by PR firms, and selling was done in house. There was
little coordination across promotion efforts. As a result, consumers often received
conflicting messages about a company and its products. This is where a good network
comes into play so all the necessary parties can have access to vital information.