D077 Study Guide

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Western Governors University *

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D077

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Marketing

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Feb 20, 2024

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docx

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D077 Study guide for all Modules D077- Module 1 Study questions (25%) 1. Define "marketing". Business function that identifies, satisfies, and retains customers through a set of activities related to creating, communicating, delivering, and exchanging offerings that have value for the customer. 2. Identify 3 functions of Marketing? Lesson 1 Bring value to customers whom the business seeks to identify, satisfy, and retain. 3. What is the marketing concept? Identify 3 important characteristics of this concept. Business philosophy holding that a company’s goals can be best achieved by identifying and satisfying the target customer’s needs and wants.  Focusing on needs and wants of customers so the organization can distinguish its product(s) from competitors – products can be goods, services, or ideas.  Integrating all organizational activities, including production and promotion, to satisfy wants and needs.  Achieving long-term goals for the organization by satisfying customer wants and needs legally and responsibly. 4. Identify the four elements in the Marketing mix. Identify at least three important characteristics of each of the elements of the marketing mix. Marketing mix represents the controllable elements in the marketing environment. Product: good, service, or idea; good – tires, smart phones, clothing; service – hotels, hair salon, airlines, accounting/engineering firm; idea – go green, give blood. Products have a life cycle. Product mix, product lines, product depth and width. Place: involves how the product gets from producer to customer – supply chain and inventory management. Direct/indirect distribution. Vertical marketing systems. Omnichannel retailing – having a uniform customer experience around all ways the customer can engage with the company. Price: something given in exchange for a product. Pricing strategy is based on demand, value, and cost. Pricing strategies include skimming, penetration, leader, bundling, and prestige. Promotion: methods for informing and influencing customers to buy the product. Create a unique promotional mix for each product. Promotional mix may include traditional advertising, sales promotion, public relations, and digital marketing (social media, online advertising, and

content marketing). Integrated Marketing Communications (IMC) is an approach that coordinates all promotional activities to produce a consistent customer-focused message. 5. What are the four stages of the product life cycle? Identify each stage of the product life cycle stage based on profit, sales, competitive pressures? Lesson 2 Introductory – low sales, little or no profit, little or no competition. Growth – increasing sales, rapidly increasing profit, market has accepted the product and competitors enter the market. Maturity – high sales, high then declining profits, high level of competition (may be hard for original company to compete). Decline – declining sales, declining profits, competitive pressure remains high and demand falls. 6. What are the variables companies are considering while creating a product strategy? Lesson 2 Brand name, packaging, colors, a warranty, accessories, and a service program. 7. Define product mix, product lines, and product depth? Lesson 2 Product Mix: the complete range of products offered for sale by a company throughout its product lines, also known as product assortment. Product Lines: series of similar products focused on a sector that a company creates under a single brand. (Product width is the number of products or series of products a company offers.) Product Depth: number of versions offered for each product in the product line. 8. Identify 5 characteristics of price skimming strategy. Lesson 2 Price skimming is intentionally pricing a new product high with intention of lowering it over time as competition increased.  High initial price helps find out what buyers will pay.  You can always lower the price later.  High initial price creates an image of quality and prestige.  When the price is lowered later, consumer may think they are getting a bargain.  High prices attract competition. 9. Identify 2 characteristics of Prestige pricing strategy? Lesson 2 Prestige pricing is raising the price of a product to increase the perceived value.  High prices = high status.

10. Identify 3 characteristics of Penetration pricing strategy? Lesson 2 Penetration pricing is intentionally pricing a product lower than the market price to gain market share into a new market.  Requires more extensive planning – company must gear up for mass production and marketing.  Initial low price might convince customers to switch brands/companies and may discourage competitors from entering the market. 11. Identify 2 characteristics each of leader pricing? Lesson 2 Leader pricing is pricing products below market price to attract customer to a store they might otherwise not shop at. Referred to as a loss leader – Costco rotisserie chickens. 12. Identify 2 characteristics each of bundle pricing? Lesson 2 Bundle pricing is grouping two or more related products together and pricing as a single product. 13. Identify 2 characteristics of Competitive pricing? Lesson 2 Competitive pricing involves setting the price of a product according to competitor prices. 14. Define the following components of promotion (Lesson 2)  personal selling: face to face presentation to a prospective buyer, often based on a long-term relationship.  advertising: any paid form of nonpersonal promotion by an identified sponsor that is delivered through traditional media channels.  online advertising: advertising through online channels.  content marketing: creation and sharing of online materials designed to create interest in a product, service, or idea without directly promoting the brand.  social media: using social media platforms to create a buzz about a product or company.  e-commerce: using a company’s website to generate sales through online ordering, information, and interactive components (e.g., games).  guerilla marketing: innovative and unconventional promotional tactics that engage customers through a unique experience.  public relations: creating and maintaining public goodwill through publicity and nonpaid forms of communication – linking organizational goals with key aspects of public interest.

 sales promotion: marketing activities that stimulate consumer buying – coupons, samples, displays, shows, exhibitions, demonstrations, etc. 15. What are the phases in a business cycle? Lesson 5 Expansion: increasing employment, economic growth, upward pressure on prices. Peak: highest point of the cycle, economy is producing at maximum allowable output, employment is at or above full employment, inflationary pressures on prices are evident. Contraction: growth slows, employment declines (unemployment increases), and pricing pressures subside. Trough: economy has bit a bottom from which the next phase of expansion and contraction will emerge. 16. What does a company consider under Place strategy? Lesson 2 Place involves how the product gets from producer to customer – supply chain and inventory management. Direct/indirect distribution. Vertical marketing systems. Omnichannel retailing – having a uniform customer experience around all ways the customer can engage with the company. 17. What is the difference between Distribution and Supply chain? Lesson 2 Distribution is the process of acquiring raw materials and moving materials and finished products from producer to consumer. Supply chain is the system a company uses for distribution. 18. What are vertical marketing systems? What are the three types of vertical marketing systems? Lesson 2 Page 9 Vertical marketing systems are cooperation between multiple levels of a distribution channel.  Corporate vertical marketing system – single company owns all levels of production and distribution (e.g., apple sells products they design and manufacture through retail stores).  Contractual vertical marketing system – formal agreement between levels coordinates the distribution process (e.g., franchises).  Administered vertical marketing system – one member of the channel controls the system out of power and size. 19. In general, what are the categories of environmental data that shape most marketing decisions. Lesson 4 page 11 Competitive: new and shifting competition from domestic and foreign based firms. Natural/ecological: natural resources, increased pollution, supply of raw materials, practices that support environmental sustainability.

Political/legal: changes in laws, regulatory agency activities, political movements. Socio-cultural: buying behaviors of specific cultures and subcultures, values of potential customers, changing roles of families, other societal trends (e.g., working from home, flexible work hours, etc.). Demographic: changes in ages of potential customers (e.g., baby boomers, millennials, etc.), birth and death rates, locations of various groups of people. Technological: advances in telecommunications and computer technology. Economic: changing incomes, unemployment levels, inflation, recession. 20. What does PEST stand for? Lesson 5 Political, Economic, Social, and Technological. Political: stability, regulation/de-regulation, statues/laws/codes of conduct, government funding/subsidies/support for specific industries, fiscal/monetary policy, tax rates, trade agreements. Economic: trends, stability (inflation, wages growth, GDP, GNP), exchange rates, trade agreements, seasonality/economic cycles, consumer confidence, consumer purchasing power (discretionary income). Social: demographic changes (population growth, age distribution, population density, geographic distribution), consumer attitudes (tastes/preferences), social influencers (role models, opinion leaders), shopping habits (preferred channels, channel switching, online/offline spending). Technological: innovation/breakthroughs/technological developments, new product materials or ingredients, new packaging solutions, improved production processes/business models, new ways of transacting business, new machinery/software. 21. Define the following terms: consumer confidence, inflation, generation gaps. Lesson 5 Consumer confidence: statistical measure of consumers’ level of optimism about current and future economic conditions. Inflation: general increase in prices of goods and services over time and decrease in the purchasing power of money. Generation gaps: differences in outlook, opinions, values, and cultural norms between people of different generations. 22. Identify at least three ethical considerations for product, price, place, promotion marketing mix variables. Lesson 6 Product:

Is production of the product sustainable for the environment? Are animals treated humanely in the production of the product? What are the labor conditions of producers? Is the product high quality and does it deliver on its promises to customers? Is the product designed and manufactured in line with the customer’s expectations (and other elements in the marketing mix)? Does the product packaging provide clear instructions for the use of the product (and its limitations? Will the product truly benefit customers? Does the product hurt customers or society? Price: Price fixing (collusion) – two or more competitors agree (or collude) on how much to charge for a product. Price discrimination – company charges different prices to buyers of the same product to maximize profit. Predatory pricing (undercutting) – pricing a product extremely low to drive out competition. Bait and switch – advertising for a lower priced product and switching a customer to a higher priced product. Price gouging – company has a monopoly on the market and prices products overly high to drive profit. Promotion: Will the product provide the benefits you say you will? Will the product deliver the promised value to customers? Is the company’s story being communicated in a fair and transparent way? Is the way you are communicating with customers transparent and respectful of the way they wish to engage with the brand? Are you aiming your marketing efforts at an appropriate audience for the product? Place: Does the distribution channel deliver the product at the price and quality promised? Do other companies in the distribution channel (wholesalers, retailers, etc.) perform as promised and deliver on expectations set for product, price, and promotions? Are labor conditions fair and humane throughout the distribution channel? Do all suppliers, producers, and transporters provide fair wages and ethical working conditions? Do all companies in the distribution channel follow best practices for environmental sustainability? Can workers who produce, transport, and sell products afford to buy them? Is data secured and consumer privacy protected in the way transactions and customer interactions are tracked?

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