Principles of Marketing: Key Concepts and Applications

Posted on Sep 6, 2024 in Economy

  1. Three Levels of Product

    Question: Product planners need to think about products (and also services) on three levels, demonstrate the three levels of product and any accompanying features that might be present at each level.

    Answer: Product planners need to think about products (and also services) on three levels:

    1. Core product: The most basic level, which addresses the question: What is the buyer really buying? This level is at the center of the marketing offer.
    2. Actual product: Second, the product planner must build an actual product around the core product. Actual products may have as many as five characteristics: a quality level, features, design, a brand name, and packaging. These features are combined to deliver the core benefit.
    3. Augmented product: Lastly, the product planner must build an augmented product around the core and actual products by offering additional consumer services and benefits. The augmented product can include installation, delivery and credit, after-sale service, and a warranty.

  2. Five Tools of the Promotional Mix

    Question: Name the five tools of the promotional mix suggested by the textbook.

    Answer:

    1. Advertising: Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.
    2. Personal selling: Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships.
    3. Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service.
    4. Public relations: Building good relations with the company’s various publics by obtaining favorable publicity, building up a good “corporate image,” and handling or heading off unfavorable rumors, stories, and events.
    5. Direct marketing: Direct communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships.

  3. Retail Classification

    Question: Retailers can be classified in many ways. The chief method described in your text revolved around four specific areas. Cite each area and give an example of a retailer that might fit in each of these categories.

    Answer: The four categories used in the text were:

    • Amount of service: (e.g., self-service and limited service)
    • Breadth and depth of their product lines: (e.g., specialty stores, department stores, supermarkets, convenience stores, superstores)
    • The relative prices they charge: (e.g., discount stores, and off-price retailers–includes independent off-price retailers, factory outlets, and warehouse clubs).
    • How they are organized: (e.g., corporate chains, and franchise organizations)

  4. Product and Service Continuum

    Question: Explain the meaning of the terms product and service. Compare the differences and similarities by explaining the product-service continuum.

    Answer:

    A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. It includes physical objects, services, persons, places, organizations, and ideas.

    A service is any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.

    A company’s offer to the marketplace often includes both tangible goods and services. Each component can be a minor or a major part of the total offer. This continuum includes:

    1. A pure tangible good, such as soap or toothpaste
    2. A tangible good with accompanying services, such as an automobile company offering a car plus its warranty and repair services
    3. A service with accompanying minor goods, such as an airline offering transportation service but serving meals while traveling
    4. Pure services where the offer is primarily a service, such as a doctor’s exam.

  5. Social Marketing

    Question: What is social marketing? Give an example of a social marketing effort.

    Answer: Social marketing is the design, implementation, and control of programs seeking to increase the acceptability of a social idea, cause, or practice among a target group.

    Example: [Provide a specific example of a social marketing effort.]

  6. Stages of the Product Life Cycle

    Question: Identify and briefly characterize the five stages of the product life cycle.

    Answer:

    1. Product development: Begins when the company finds and develops a new-product idea. During product development, sales are zero and the company’s investment costs mount.
    2. Introduction: A period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction.
    3. Growth: A period of rapid market acceptance and increasing profits.
    4. Maturity: A period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition.
    5. Decline: The period when sales fall off and profits drop.

  7. Marketing Channels

    Question: Describe and illustrate the concepts of channel level, a direct marketing channel, and an indirect marketing channel.

    Answer:

    • Channel level: A layer of intermediaries that performs work in bringing the product and its ownership closer to the final buyer.
    • Direct marketing channel: A marketing channel that has no intermediary levels. For example, if a manufacturer sells directly to the consumer, there are no intermediary levels.
    • Indirect marketing channel: A channel containing one or more intermediary levels. The traditional distribution channel (an indirect marketing channel) is one where a manufacturer sells to a wholesaler who in turn sells to a retailer that then sells to a consumer.

  8. Major Channel Functions of Wholesalers

    Question: List and briefly identify the major channel functions performed by wholesalers.

    Answer:

    1. Selling and promoting: Wholesaler’s sales forces help manufacturers reach many small customers at a low cost.
    2. Buying and assortment building: Wholesalers can select items and build assortments needed by their customers.
    3. Bulk breaking: They buy in carload lots and break the bulk into smaller quantities.
    4. Warehousing: They hold inventories until retailers need them.
    5. Transportation: They provide the transportation link between manufacturer and retailer.
    6. Financing: They grant retailers credit when manufacturers will not.
    7. Risk bearing: By owning the merchandise they bear risk.
    8. Market information: They provide retailers with the latest information on selling and processing goods.
    9. Management services and advice: They help retailers with their training function and inventory and control systems.

  9. Integrated Marketing Communications (IMC)

    Question: Define and justify the need for integrated marketing communications (IMC).

    Answer: Integrated marketing communications (IMC) is the concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its products.

    The shift from mass marketing to targeted marketing, and the corresponding use of a larger, richer mix of communication channels and promotion tools, poses a problem for marketers. Confusion often arose in the minds of consumers because of the multiple communication messages they received. Integration has proved to be the key for solving this problem.

  10. Definition of Price

    Question: Define the price.

    Answer: As defined in the text, price is the amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service.