Midterm #2 Review Contains all textbook material from Marketing 1, Marketing 2, Operations and Finance modules. Notes are summarized very concisely and grouped in a way that's easy to remeber

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Department
Accounting & Financial Management
Course
AFM 131
Professor
Robert Sproule
Semester
Fall

Description
Marketing 1 Marketing = process of determining customer needs and wants and then developing GS that meet these expectations - Tailored to market, which changes continually Green marketing: market efforts to produce environmentally sensitive products FOURS ERAS OF MARKETING - Production - Sales - Marketing concept  Customer orientation  Service orientation  Profit orientation - Customer relationship (1990s) FOUR P’S OF MARKETING - Product - Price - Place - Promotion Secondary data = info that has already been compiled by others Primary data = info gathered by yourself (eg. Via focus group) Environmental scanning: process of identifying the factors that can affect marketing success TWO DIFFERENT MARKETS A) CONSUMER MARKET: all individuals or households that want GS for personal use B) BUSINESS-TO-BUSINESS: all individuals and organizations that want GS to use in producing other GS CONSUMER MARKET Market segmentation: process of dividing the total market into groups whose members have similar characteristics Target marketing: marketing directed toward those groups - Geographic - Demographic – religion, education level, age - Psychographic – personality, social class - Behavioural – behaviour towards certain product Mass vs. Relationship marketing Mass marketing = developing products and promotions to please large groups of people Relationship marketing = goal of keeping individual customers over time Cognitive dissonance: psychological conflict that can occur after a purchase - Learning - Reference group - Culture - Subculture BUSINESS TO BUSINESS MARKET - Number of customers relatively few - Size of business is relatively large - Geographically concentrated - Business buyers thought to be more rational - Sales are direct - More emphasis on personal selling MARKETING 2 Total product offer (“value package”) = everything that consumers evaluate when deciding whether to buy something Product line = group of products that are similar or intended for a similar market Product mix = the combination of product lines offered by a manufacturer Product differentiation = creation of real or perceived product differences PRICING OBJECTIVES - Achieve target return on investment/profit - Building traffic – advertising loss leaders - Achieving greater market share - Creating an image - Furthering social objectives THREE APPROACHES TO PRICING 1) Cost-based pricing: measure production costs + margin of profit = price 2) Demand-based pricing  Bundling: grouping 2 or more product together and price them as a unit  Psychological pricing: make product seem less expensive eg. 199  Target costing: design product that satisfy customers and meets profit margin desired by firm 3) Competition-based pricing Price leadership = procedure by which 1 or more dominant firms set the pricing practices that all competitors in an industry should follow Break-even analysis: process used to determine profitability at various levels of sales Break even point = total fixed cost/ (price of one unit – variable cost of one unit) Total fixed costs: all expenses that remain the same no matter how many products are made or sold Variable costs: costs that change according to the level of production PRICING STRATEGIES FOR NEW PRODUCTS 1) Skimming price strategy = strategy in which a new product is price high to make optimum profit while there’s little competition 2) Penetration price strategy = strategy in which the product is priced low to attract many customers and discourage competitors RETAILER PRICING STRATEGIES 1) Everyday low pricing (EDLP) = setting prices lower than competitors and then not having any special sales 2) High-low pricing strategy = set prices that are higher than EDLP stores, but have many special sales where the prices are lower than competitors Demand-oriented pricing: recognizing the fact that different consumers may be willing to pay different prices, price on basis of consumer demand eg. Movie theatre adult vs. children tickets Marketing intermediaries = organizations that assist in moving goods and services from producers to business and consumer users Channel of distribution = a set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to transport and store goods in their path (or channel) from producers to consumers Agents and brokers: marketing intermediaries that bring buyers and sellers together and assist in negotiating an exchange but don’t take title to the goods Wholesaler = marketing intermediary that sells to other organizations Retailer = organization that sells to ultimate consumers THREE RETAIL DISTRIBUTION STRATEGIES 1) Intensive distribution: distribution that puts products into as many retail outlets as possible 2) Selective distribution: distribution that sends products to only a preferred group of retailers in an area 3) Exclusive distribution: distribution that sends products to only one retail outlet in a given geographic area Non-store retailing  electronic retailing: selling GS to ultimate customers over the internet Telemarketing: sale of GS by telephone Direct selling: selling to consumers in their homes or where they work PROMOTION AND THE PROMOTION MIX Promotion mix = the combination of promotional tools an organization uses Integrated marketing communication (IMC) = a technique that combines all promotional tools into one comprehensive and unified promotional strategy Advertising: paid, non-personal communication through various media by organizations and individuals who are in some way identified in the advertising message Personal selling: face to face presentation and promotion of GS Business-to-consumer (B2C) sales process: - Approach - Ask questions - Make presentation - Close sale - Follow up Public relations (PR): the management function that evaluate 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 Publicity = any information about an individual, product, or organization that’s distributed to the public through the media and that’s not paid for or controlled by the seller PROMOTION TOOLS 1) Sales promotion: the promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities 2) Sampling: promotional tool in which a company lets consumers have a small sample of a product for no charge Direct marketing: uses direct communication with consumers to generate a response in the form of an order, a request for further info, or a visit to a retail outlet OPERATIONS Production- the creation of finished GS using the factors of production Production management: describes activities that managers do to help their firms create goods Operations management: specialized area in management that converts or transforms resources into GS Facility location: process of selecting a geographic location for a company’s operations - Need inexpensive natural resources - Try to reduce time to market – need sites that allow products to move quickly w/ modes of transport conveniently on hand Facility layout: physical arrangement of resources including people in the production process - Used to improve the efficiency of the production process  assembly line layout: workers do only a few tasks at a time  Modular layout: teams of workers combine to produce more complex units of the final products  Process layout: similar equipment and functions are grouped together; allows for flexibility  Fixed-position layout: allows workers to congregate around the product to be completed; for major projects like a bridge or an airplane QUALITY CONTROL Quality = consistently producing what the customer wants while reducing errors before and after delivery to the customer Six sigma quality = a quality measure that allows only 3.4 defects per million events Statistical quality control (SQC) = process that some managers use to continually monitor all phases of the production process to ensure that quality is being built into the product from the beginning Statistical process control (SPC) = process of taking statistical samples of product components at each stage of the production p
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