Exam 2 Study Guide mgmt 322—Marketing Management
Disclaimer: This review does not necessarily cover all questions on the exam. It is simply an additional tool to assist students in preparing for the exam. Students are still responsible for all material from assigned textbook and Wall Street Journal readings, lecture/class discussions, and videos.
Required Materials: (2) #2 Pencils
Format: The exam will consist of 36 multiple choice questions and 5 matching questions worth two points each, and four short answer questions worth five points each.
Segmentation and Targeting
Understand the difference between a consumer market and business market
Consumer market – purchases and household members who intend to consume or benefit from the purchased products and do not buy products to make profit.
Business market – individuals or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations
Understand the alternative targeting strategies (undifferentiated, concentrated, differentiated) and the pros/cons of using each one
Undifferentiated – a strategy in which an organization designs a single marketing mix and directs at the entire market for particular product. Easy to manage/ In reality people have different needs, market not homogenous.
Concentrated - a strategy in which an organization targets a single market segment using one marketing mix. Also, concentrating on a single segment permits a firm with limited resources to compete with larger organizations that may have overlooked smaller segments.
Differentiated – Many companies employ differentiated targeting strategy by focusing on more than one market segment, using multiple marketing mixes. A firm may increase sales in the aggregate market through a differentiated strategy because its marketing mixes are aimed at more people. On the other hand a differentiated strategy often demand s more production process, materials, and people. Thus production cost might be higher.
Be able to define market segmentation and a segment
Market segmentation – the process of dividing a total market into groups with relatively similar product needs to design a marketing mix that matches those needs.
Market segment – individuals, groups with one or more similar characteristics that cause them to have similar product needs.
Variables for segmenting consumer markets—instructor added and deleted from the list in your textbook; refer to notes
demographic (age, gender, race/ethnicity, etc.)
geographic (city size, regions, neighborhoods, etc.)
psychographic ( personality characteristics motives and lifestyles),
behavioristic (usage rate, benefits) ( heavy, moderate, nonusers)
Variables for segmenting business markets (type or organization, size, etc.)
Geographic location
Type of organization
Customer size
Product use+
Product, Branding, and Packaging Concepts
Be able to define a product
Product – is a good , a service, an idea, or a combination of these.
Understand the five types of products on the Good-Services Continuum (pure good, good with accompanying service, etc.)—this concept is NOT in your textbook; refer to your notes
Good____________________Hybrid offering_________________Service
Good Service with accompany good
with accompany service
Understand the characteristics and how to market (using 4Ps) the alternative types of consumer products (convenience, shopping, specialty, unsought)
Convenience products – relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort.( commodities)
Shopping – items for which buyers willing to expand considerable effort in planning and making purchases.
(Appliances, bicycles, furniture, stereos, cameras, shoes).
Specialty – items which unique characteristics that buyers are willing to expand considerable effort to obtain. (Buyers do not compare alternatives).
Unsought- are products purchased when a student problem should be resolved.(Emergency medication)
Understand the characteristics and how to market (using 4Ps) the alternative types of business products (installations, accessory equipment, etc.)
Installations include facilities, such as office buildings factories and warehouses, and major equipment that are no portable, such as production line and very large machines.
Accessory equipment – equipment that does not become part of the final physical product but is used in production or office activities. (File cabinets, calculators and tools)
Raw materials – basic natural materials that become part of a physical product ( fuel , corn).
Component parts – items that become par to the physical product and are either finished items ready for assembly or products that need little processing before assembly.
Process materials – materials that are used directly in the production or other products but are not readily identifiable. (Salas dressing)
MRO supplies- maintenance, repair, and operating items that facilitate production and operations but do not become part of the finished goods.
Business services- the intangible products that many organizations use in their operations.
Be able to define and identify the following: product item, product line, product mix
Product item – a specific version of product that can be designated as a distinct offering among a firm’s product.
Product line- a group of closely related product items viewed as a unit because of marketing, technical, or en-use considerations. (Shoes with different flavors)
Product mix – the total group of products that an organization makes available to customers. (P&G)
Understand the dimensions of the product mix (width, depth, consistency)—consistency is NOT discussed in your textbook; refer to notes
Width of product mix is measured by the number of product lines a company offers.
The depth of product mix is the average number of different product items offered in each product line.
Know the four alternative growth strategies that can be employed using the product-mix dimensions (increase width by adding additional product lines, increase depth by adding new versions/forms of a product, etc.)—this concept is not your textbook; refer to notes
Be familiar with the characteristics (sales, profits, etc.) of products in each of the four stages of the product life cycle (introduction, growth, maturity, decline); furthermore, be able to describe the marketing mix (4Ps) for each stage (Ex. Promotion during the introduction stage is high and the messages revolve around the features, uses, and advantages of the product. The goal is to build primary demand.)
Introduction stage – the initial stage of a product’s life cycle –its first appearance in the marketplace – when sales start at zero and profits are negative.
Growth stage – the stage of a product’s life cycle when sales rise rapidly and profits reach a peak and the start to decline.
Maturity stage – the stage of product’s life cycle when the sales curve peaks and starts to decline as profits continue to fall.
Decline stage- the stage of a product’s life cycle when sales rapidly fall.
Know the alternative approaches to extending the product life cycle (quality modifications, feature improvements, etc.)
Understand the general characteristics of those in each of the five adopter categories (innovators, early adopters, etc.)
Innovators – 1st adopters of new products.
Early adopters – careful choosers of new products.
Early majority- those adopting new products just before the average person.
Late majority – skeptics who adopt when they feel it is necessary.
Laggards the last adopters who distrust new products.
Be able to define brand equity
Brand equity – the marketing and financial value associated with brand’s strengths in a market.
Be able to describe and differentiate the elements of a brand (brand name, brand mark, trade character)—brand mark and trade character are not in the textbook; refer to notes
The three degrees of brand loyalty (brand recognition, brand preference, brand insistence)
Brand recognition – a customer’s awareness that the brand exists and is an alternative purchase.
Brand preference – is stronger degree of brand loyalty.
Brand insistence – customer strongly prefers this brand and will not accept any substitute.
Be able to describe the characteristics and pros/cons of the different types of brands (manufacturer/service provider, private, generic)
Manufacture brands are initiated by producers and ensure that producers are identified with their products of purchase – Starbucks, Levi’s.
Private distribution brands- brand initiated and owned by resellers.
Generic brands indicate only the product category and do not include company name or other identifying terms.
Four alternative strategies for selecting a brand name (descriptive, suggestive, etc.)—follow information in your notes instead of what is in the textbook
Descriptive (easy)
Suggestive (easy)
Arbitrary (Dictionary)
Coined (Xerox)
Understand the definition and the advantages/disadvantages of alternative brand policies (family branding, individual branding, brand extensions, co-branding, licensing)
Individual branding – a policy of naming each product differently.
Family branding – branding all products with the same name.
Brand extension – using an existing brand to brand a new product in a different product category.
Co-branding – using two or more brands on one product.
Brand licensing - an agreement whereby a company permits another organization to use its brand on other products for licensing fee.
What are requirements for trademark protection (state and federal) and what level of protection does each provide; what mark designates that a brand has federal trademark protection—this is NOT directly addressed in your textbook; refer to note
-Federal trademark (highest level of protection), include ®
-State trademark
-Strategies for keeping a brand name from becoming a generic term (Kleenex, xerox)
Understand how a company can prevent a brand from becoming a generic term (spell with a capital letter, use as an adjective, etc.)
Know the three functions of packaging
Protecting the product
Customer convenience
Communication
Packaging issues (color—responses to, Cheskin’s research on shape and color, size of the package, etc.)—NOT in your textbook; refer to notes
Developing and Managing Goods and Services
Be able to define positioning
Positioning – creating and maintaining a certain concept of a product in customer’s mind.
What is a perceptual map and how can be used to formulate positioning strategy
Perceptual maps are created by questioning a sample of consumers about their perceptions of products, brands, and organizations with respect to two or more dimensions. Marketers can see how their brand is perceived compared with the ideal points.
Understand the alternative bases for positioning a brand (product attributes, price, quality, product user)—NOT all of these are discussed in your textbook
-Competition – positioned against competitors
-product attributes - safety
-price – walmart, target
-quality – positioned as high quality products
-product user – malboro for men
What is repositioning
Repositioning – positioning again in a new better view for old products
Understand characteristics of services (perishability, intangibility, etc.) and the marketing challenges each presents
Intangibility – a service that is not physical and cannot be touched.
Inseparability of production and consumption – occurs at the same time.
Perishability – once is not used it’s gone.
Heterogeneity – variation in quality
Client- based relationship- interaction that result in satisfied customers who use a service repeatedly over time.
Customer contact
Creating marketing mixes for services (development of services—product, distribution, price, and promotion). Example: How should services be promoted differently from goods?
Development of services
Prices of services
Distribution of services
Promotion of services.
Marketing Channels and Supply Chain Management
Channel functions (research information, financing, promotion, etc.)