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ADM 2320 Lecture Notes - Lecture 8: Reverse Engineering, Marketing Mix, Cash Flow

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School
University of Ottawa
Department
Administration
Course
ADM 2320
Professor
Ysabella Lee

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Document Summary

The product is the heart of the marketing mix. Price, place and promotion cannot be determined until a firm has a product to sell. Definition: anything that can be offered to a market for attention, acquisition, use or consumption, that might satisfy a need or a want. A product new to the world, the market, the producer, the seller, or some combination of these. Firms must innovate in order to stay in business and current. All products eventually decline, a firm must be good at developing new products to replace aging ones. The firm must be good at adapting its marketing strategies in the face of changing tastes, technologies, and competition. New market offerings provide value to both firms and customers. Consumer learning requires no new learning by consumer. Marketing emphasis generate consumer awareness and widespread distribution. Adding new products allows firms to create and deliver value by satisfying changing needs of current and new customers.

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Related Questions

The sales and profits of an individual product may not follow the life cycle pattern.

True
False

During the sales decline stage of the product life cycle, no firm can earn a profit.

True
False

During the introduction stage of the product life cycle:

none of the above.
most products achieve intensive distribution.
promotion is likely to be needed to increase primary demand.
"me too" products quickly take market share away from the innovator.
industry profits are at their highest.

During the introduction stage, what would hinder acceptance of a new product?

consumers may not see the new product as offering a superior alternative to whatever they are currently using.
risk in buying something for the first time.
all of the above.
the new product may not be compatible with the buyer's values.
problems communicating or demonstrating the new product's benefits.

During the market growth stage of the product life cycle:

industry sales grow slowly.
industry profits fall, then rise.
the market begins to fragment into sub-markets or segments.
all of the above.
the industry experiences the smallest profits


What is the most important reason why industry sales level off in the market maturity stage of the product life cycle?
persuasive promotion.
pool of potential users is exhausted.
aggressive competitors entering the markets.
less efficient firms leaving the market.
price cutting.

Gerhard Company has seen most of its competitors drop out of its product market due to declining sales and profits. However Gerhard still has much demand for its products from a small group of loyal customers. In which stage of the product life cycle is this product market?

sales decline.
market maturity.
market growth.
market development.
market introduction.

The length of a product's life cycle:

depends on the ease of entry to the market for competitors.
may be as short as 90 days.
may be as long as 100 years.
varies widely across products.
all of the above.

Regarding product life cycles, a good marketing manager knows that:

all of the above.
once a market goes into sales decline, oligopoly conditions set in.
a company's marketing mix usually should be kept constant over the product life cycle.
industry profits are increasing well after sales start to decline.
entirely different target markets may be involved at different stages of the product life cycle.

Generating "socially responsible" new product ideas:

reduces the long-term welfare of consumers.
is done by all companies.
is easy for new product planners.
is unprofitable and should not be done.
is promoted by consumer groups.


1.
If firms in a monopolistically competitive market are earningpositive profits,
A) firms will likely be subject to regulation.
B) barriers to entry will be strengthened.
C) some firms must exit the market.
D) new firms will enter the market.
2.

Panel c in the set of figures shown is consistent with a firm in amonopolistically competitive market that is


A) earning profit and is in both short-run and long-runequilibrium.
B) earning economic profit and is in short-run equilibrium, but notlong-run equilibrium.
C) earning profit and is in long-run equilibrium, but not short-runequilibrium.
D) earning a negative profit and is not in equilibrium.
3.
When a profit-maximizing firm in a monopolistically competitivemarket is producing the long-run equilibrium quantity,
A) its marginal revenue will exceed its marginal cost.
B) its average revenue will equal its marginal cost.
C) it will be earning positive economic profits.
D) its demand curve will be tangent to its average-total-costcurve.
4.
Monopolistic competition differs from perfect competition becausein monopolistically competitive markets
A) each of the sellers offers a somewhat different product.
B) strategic interactions between firms is vitally important.
C) there are barriers to entry.
D) all firms can eventually earn economic profits.
5.
The free entry and exit of firms in a monopolistically competitivemarket guarantees that
A) economic losses can persist into the long run, but not economicprofits.
B) both economic profits and economic losses can persist into thelong run.
C) economic profits can persist into the long run, but not economiclosses.
D) both economic profits and economic losses disappear in the longrun.
6.


Panel (a) shows a profit-maximizing monopolistically competitivefirm that is

A) All answers are correct
B) earning a zero profit.
C) charging a price that is equal to average total cost.
D) in long-run equilibrium.
7.
Since a firm in a monopolistically competitive market faces a
A) perfectly elastic demand curve, it will always operate withexcess capacity.
B) downward-sloping demand curve, it will always operate atefficient scale.
C) perfectly inelastic demand curve, it will always operate atefficient scale.
D) downward-sloping demand curve, it will always operate withexcess capacity.
8.
In a monopolistically competitive market,
A) firms can enter or exit the market without restriction.
B) each firm takes the price of its product as given.
C) each firm produces a product that is essentially identical tothe products of other firms in the market.
D) there are only a few sellers.
9.
The fact that there is a great deal of advertising of men’s shavingproducts indicates that
A) it costs firms very little to produce those products.
B) the market for those products is perfectly competitive.
C) those products are highly differentiated.
D) All answers are correct
10.
A profit-maximizing firm in a monopolistically competitive marketdiffers from a firm in a perfectly competitive market because thefirm in the monopolistically competitive market
A) has no barriers to entry.
B) faces a downward-sloping demand curve for its product.
C) faces a horizontal demand curve at the market clearingprice.
D) is characterized by market share maximization.

Hello,

I need help with my assignment. Here is the directions:

The final project in MBA 7600 is a marketing plan (see syllabus for details). Rather than try to imagine a new company or product out of thin air, it is most helpful to pick a publicly traded company (NYSE or NASDAQ) in which you are interested. You will then study this company through their annual reports and other available resources; analyze external environment and their strengths and weaknesses, identify a potential new market opportunity upon which the firm can act, and propose a plan of action for that opportunity. I want you to tell me three companies in which you would be interested in having the CMO role, and I will “hire” you for one of those jobs. In that way, I can insure that the class has a good mix of different types of industries, different sizes of companies, different types of products, etc. I advise AGAINST choosing firms like Apple, Google, Netflix and other multi-billion dollar corporations because they are generally too large to comprehend and analyze well in the short period we have. I find students usually do quite well with single business firms.

Please list three publicly traded companies along with their ticker symbol and in 100 words or less, why you are interested in each of them. If you feel especially strongly about one of the choices, label it as your #1.