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marketing 300marketing 300discussion section



Announcements?


Announcements?• Michael Shermer, author

of Mind of the Market• Topic: Irrationality• Place: March 1, 7:30,

Union Theater• Tickets: Union Box Office

(free!)


reminder– You can only turn in 1 discussion question after

2nd exam– If you haven’t turned in any yet, you need to do

the next two!


segmentsIs this a viable market segment (target market)?a)women who need new shoesb)teenagersc)professional man looking for dress socksd)diabetics who like sweetse)middle aged couple looking to buy a housef)people who like carsg)young people who look for variety in movie rentalsh)busy mother who wants to improve her health


targets and segmentsWhat is the difference between a target market and a segment?


targets and segments

VARIETY-SEEKERSVARIETY-SEEKERS

SNACKERSSNACKERS QUALITY-SEEKERSQUALITY-SEEKERS

HEALTH-CONSCIOUS

HEALTH-CONSCIOUS

LATE-NIGHT MUNCHIESLATE-NIGHT MUNCHIES

JUNK FOOD MARKET (OVERALL)


VARIETY-SEEKERSVARIETY-SEEKERS

SNACKERSSNACKERS QUALITY-SEEKERSQUALITY-SEEKERS

HEALTH-CONSCIOUS

HEALTH-CONSCIOUS

LATE-NIGHT MUNCHIESLATE-NIGHT MUNCHIES

JUNK FOOD MARKET SEGMENTS


HEALTH-CONSCIOUS

HEALTH-CONSCIOUS

TARGET


HEALTH-CONSCIOUS

HEALTH-CONSCIOUS

What kind of targeting approach is this?

SINGLE TARGET MARKET APPROACH


SNACKERSSNACKERS HEALTH-CONSCIOUS

HEALTH-CONSCIOUS

What kind of targeting approach is this if you have a single marketing mix?

COMBINED TARGET MARKET APPROACH


SNACKERSSNACKERS HEALTH-CONSCIOUS

HEALTH-CONSCIOUS

What kind of targeting approach is this if you have more than one marketing mix?

MULTIPLE TARGET MARKET APPROACH


Quiz #4

• A requisition

a) is only used for nonroutine purchases.b) is the same as a purchase order.c) sets the terms under a negotiated contract.d) is a formal contract between a buyer and a seller.e) none of the above is true.


Quiz #4

• Purchasing managers in business markets (compared to buyers in consumer markets) are generally:

a) fewer in number.b) more technically qualified.c) less emotional in their buying motives.d) more insistent on dependability and quality.e) all of the above.


Quiz #4

• Organizations always focus on economic factors when they make purchase decisions and are never as emotional as final consumers in their buying behavior.

a) Trueb) False

companies are made of people!


exam details• March 1, 5:40pm – see Learn@UW for location• Makeup exam: you should have received an email• Arrive early – no extra time if you’re late!• What should I bring?

– No. 2 pencil– Student ID – required to submit exam– Know your section number


Exam Prep

• get all section slides at: http://mywebspace.wisc.edu/rkamath

• read over class notes• do the quizzes on the book website

• do the quizzes on the book website

• do the quizzes on the book website!!!!!!!!

• www.mhhe.com/fourps


Exam Prep

• Don’t write on practice exam, please!


exam review1. Which of these sounds like sales-era marketing?a) “We just make stuff; we don’t try to sell it.”b) “We make whatever we want, and shove our

products down peoples’ throats”c) “We do whatever the guys in marketing tell us to”d) “We hire hotshot MBAs to find out all the latest

trends and then we just copy them.”e) “We hang around on Facebook listening in on

conversations to figure out how to market to young people”


exam review2. “Price” includes which of the following:a) Cost of a product to the companyb) Markup of a productc) Markup and discountsd) Markup, discounts, and allowancese) Markup, discounts, allowances, and geographic

terms


exam review3. Which of the following most describes a “breakthrough

opportunity?”a) Some guy mixes ingredients in his bathtub and sells it as a

Coke knockoffb) A greasy sandwich store opens a second location next to a

popular bar where college kids get drunk every weekendc) A pharmaceutical company spends 12 years and $127 billion

coming up with a drug that keeps you from saying dumb stuffd) Sven Evans knits handbags and sells them on EBaye) Knowing the shape of the economy, a Ford dealership has a

sale on all compact cars with broken windshields


exam review4. Phun Pharmaceuticals decides that in addition to selling pills,

they want to start selling snowboards. What strategy is this?a) Multiple target marketb) Combined target marketc) Market developmentd) Diversificatione) Market Penetration


exam review

Market Penetration

Market Development

Product Development

Diversification

Present products New products

Present markets

New markets


exam review5. Greasy Black Oil Co. wants to make a pre-packaged oil slick

product for thwarting tailgaters. Which should they do first?a) Get retailers on boardb) Figure out the 4 Psc) Start manufacturing the productd) Segment the markete) Create promotional advertising with snappy catchphrases

that people will repeat a lot


exam review6. Cantco says on their warranty that if their product blows up

within 90 days of purchase you can get a replacement free of cost. Your product blew up on day 88 but the company refuses to send you a new product. They can get in trouble under which act?

a) Total Quality Management Actb) Sherman Actc) Magnuson-Moss Actd) Terrance-Putnam Acte) This is the buyer’s problem. He can sue, but that’s about it.


exam review7. Reference groups would have the most impact on the sales

of which category of product?a) Shoesb) Salad dressingc) Hand soapd) Coffeee) Batteries


exam review8. Jieun Cha just bought a new Porsche, but as she speeds

home from the dealership, she wonders if maybe she should have just gotten the Ferrari. It had a carbon-fiber brake pedal, after all, and it was only $137,000 more. This is an example of:

a) Routinized response behaviorb) Dissonancec) Consumer insatiabilityd) Consumer justificatione) Post-purchase reconsideration


exam review9. Jeremy Jaghoff works for a large, faceless corporation. His

boss tells him that they’re going to need some supplies. Which of the following on the boss’ list is most likely to be a straight rebuy?

a) A solid gold chair for the executive suiteb) A brand new wi-fi network for the corporate complexc) 20 pizzas (extra cheese) delivered to the boss’ officed) 5,000 reams of papere) 200 headsets for the new employees they are hiring


10. Which is true about “target marketing”? a) Is limited to small sized marketb) Assumes that all customers are homogeneousc) Focuses on reasonably homogeneous market

segmentsd) All of the above

exam review


11. Subway uses many retail channels to reach its target markets while UW Credit Union uses none. Which of the marketing mix variables is being considered here?

a) Penetrationb) Productc) Promotiond) Placee) Price

exam review


12. Hafasco recently increased its couponing to its present customers. It appears that Hafasco’s is pursuing what kind of opportunity?

a) Market penetrationb) Product developmentc) Market developmentd) Mass marketinge) Diversification

exam review


13. The Sherman Act (1890) focuses on:a) Unfair methods of competitionb) Attempts to monopolizec) Deceptive packaging, branding or adsd) Product warrantiese) Clayton Act (1914)

exam review


14. Almost 50 percent of the total U.S. income is paid to the ________of U.S. families with the highest incomes. a) 20 percentb) 30 percentc) 50 percentd) 80 percente) 95 percent

exam review


15. On his way to buy a Stihl chainsaw, Leatherface hears from one of his friends that Craftsmans has more price-performance than Stihl. However Leatherface thought that his friend said that Stihl had more price-performance. This illustrates:

a) Selective perceptionb) Learningc) Selective retentiond) Reinforcemente) Selective exposure

exam review


16. Loopy went to Copps for grocery shopping. He wanted to buy Salt Mine brand potato chips. However, the store was temporarily out of that product, so he looked over the other familiar products/brands and decided to try a well advertised one. This case illustrates:

a) Routinized response behaviorb) Intensive problem solvingc) Limited problem solvingd) Extensive problem solving

exam review


17. Regarding the U.S. population trends in the U.S. consumer market, which of the following is NOT true?

a) About 13 percent of all Americans move each year.b) Some of the areas with the largest populations are losing

population.c) The overall U.S. population continues to grow rapidly.d) The percentage of population in older age groups has

increased.e) Big targets such as the metro areas are attractive but very

competitive.

exam review


exam review18. Frederick Krueger is a demoralized employee who works on the 5th

floor of an anonymous office building in an industrial park. His office’s printer ran out of toner again and Fred has decided that instead of buying the same toner that he always buys from a company-approved vendor, he is going to buy some knock-off toner from a sketchy vendor in South America. What kind of organizational buying is this?

a) new task buyb) new order buyc) depeche mode buyd) modified rebuye) modified buyf) straight rebuy


19. Ray was interested in a new guitar. Ray discussed the various type of with some knowledgeable friends and relied on their advice. Ray’s friends were acting as:

a) An economic influenceb) Routinized decision-makersc) A social classd) A lifestyle groupe) A reference group

exam review


20. As the owner of a Starbucks, Laurie had an annual income of $65,000 last year. She pays $30,000 per year in taxes and another $18,000 per year in grocery bills, house mortgage, and car payment. Last year she spend an additional $5,000 on a one-month visit to Zimbabwe. What was Laurie’s discretionary income last year?

a) $17,000b) $35,000c) $12,000d) $47,000e) $5,000

exam review


If you’re stuck on an application test question think about these things:

- How does this apply to the 4 P’s?- Who is involved? Who benefits? What are their

motivations?- There is no universal “best” strategy, distribution

method, promotion, etc… - (It’s all situational!)

PRO TIP


Please return practice exam when you leave!

PRO TIP


Segments

• Homogeneous within – as similar as possible with regards to their response to marketing mix variables and segmenting dimensions• Heterogeneous between – consumers in different segments should be as different as possible• Substantial – Large enough group of people to be profitable• Operational – Dimensions should be useful for identifying customers and adjusting marketing mix variables


• Broad Product Category– Electronics

• Generic market– Devices that help you capture an image

• Product Market– Digital Camera

• Multiple Target Market– One camera targeted at different market segments (different

marketing mixes)• Combined Target Market

– One camera targeted at different market segments (same marketing mixes)

Product Examples


Chapter 1: IntroMacro-marketing:

Study of marketing from the national (societal) perspective. Emphasis on how the whole marketing system works.

Micro-marketing:Study of marketing from an individual firm’s

perspective; 4 P’s.Macro-Micro dilemma:

What is good for an individual firm is not always good for society


Chapter 1: IntroThe marketing concept:

Total company effort to achieve customer satisfaction at a profit

The roles/focus of marketing over time Simple trade era/Sell surplusProduction era/Increase supplySales era/Beat competitionMarketing department era/Coordinate and

controlMarketing company era/Long-run customer

satisfaction


Chapter 1: IntroCustomer value = Benefits - Costs (From perspective

of the consumer)


• Micro and macro views of marketing– Micro view: a set of activities performed by organizations

• The American Red Cross seeks more volunteers. • “Pepsi sells in Japan.”

– Macro view: a social process• Internet changed the way of firm’s communication with

consumers. • Korea and the U.S. agree on a new trade agreement. • “Russia decided to focus more on consumer goods than

before.”– Micro-macro dilemma

• E.g.) What is good for some producers or consumers may not be good for environments.

Chapter 1.


Chapter 2: Strategy Planning• A marketing strategy requires:

1) Target market2) Marketing mix to appeal to target market

a. Productb. Placec. Promotiond. Price

• The marketing plan • contains the strategy along with timing details

for implementation


Chapter 2: Strategy Planning• Planning an effective strategy and marketing mix involves:

• SWOT Analysis •(Strengths, Weaknesses, Opportunities, Threats)

• Differentiation• Market Segment


Chapter 3: Evaluating Opportunities

When looking for opportunities, consider:1. External Environment

- economic, technical, political, legal, social, cultural

2. Competitors: compares your strengths and weaknesses to those of major competitors:

Target market Product, Place, Promotion, Price Competitive barriers Likely responses to your actions


Chapter 3: Evaluating Opportunities

3. Internal Environment- marketing plan must align with the firm’s

overall objectives

Evaluate all three together to find the best opportunities!


• Target marketers aim at specific targets (p67)– Single target market approach• Segmenting the market and picking one of the homogeneous

segments as the firm’s target market– Multiple target market approach• Segmenting the market and choosing two or more segments,

then treating each as a separate target market needing a different marketing mix

– Combined target market approach• Combining two or more submarkets into one larger target

market as a basis for one strategy

Chapter 4.


Chapter 4: Segmentation and Positioning

Market – potential customers with similar needsGeneric – broadly similar needs, diverse ways of

satisfying needsProduct – very similar needs, close substitutes

Segmentation 1) Name broad product market 2) Segment to select target market and marketing

mixShould be homogeneous within, heterogeneous

between, substantial, operational


Chapter 4: Segmentation and Positioning

Market approachesSingle targetMultiple targetCombined target

Qualifying dimension – includes a customer type in product-market

Determining dimension – affect customer’s purchase of specific product in product-market

Positioning – how customers think about proposed or present brands in the market


Chapter 5: Consumer Buying Behavior

Consumer Behavior – why do they buy what they buy?Economic Needs - Psychological NeedsSocial Influence-Purchase Situation

Psychological Influences within and individualNeeds, Wants, Drives

The PSSP Hierarchy of NeedsPersonal needs, Social needs, Safety needs, Physiological needs

Perception Determines what Consumers See & FeelSelective Exposure, Selective Perception, Selective Retention

Learning Determines what Response is LikelyThe Learning Process: Drive - - Cues - - Response


Chapter 5: Consumer Buying Behavior

Attitudes relate to buying - understanding attitudes & beliefs helps you target them!

The Consumer Decision ProcessConsumer Problem Solving:

Info Search - - Identify alternatives - - Set criteria - - Evaluate alternatives

Problem Solving ContinuumRoutinized response behavior - - Limited problem

solving - - Extensive problem solving


Chapter 6: Business Buying Behavior

Not all consumers are final consumers. The buying process is very different for these consumers (examples: B2B, middlemen, gov’t, nonprofits…)

Orgs typically focus on economic factors, not emotion

Many people with varying roles are involved in the purchasing decision. Know their roles and manners of influence


• Note the definitions of the following– Extensive problem solving

• When consumers put much effort into deciding how to satisfy a need

– Limited problem solving• When consumers put some effort

– Routinized response behavior• When he/she regularly selects a particular way of satisfying

a need when it occurs; mostly for purchases where he/she has much experience in how to meet a need

– Low-involvement purchases• For purchases that have little importance or relevance for

the customer

Chapter 5.


• Organizational Buying Behavior– New-task buying / A straight rebuy / Modified rebuy

• A straight rebuy is MOT likely to occur forA.A new computer networkB.A pension plan to meet the new legal issue C. Cartridge for the copy machineD.Screen component for a new mobile phone productE. Buying decision from a new vendor

Chapter 5.



Three types of buying processes: New-task Buying:

Due to new customer need so lots of info needed, many people involved

Straight RebuyRoutine repurchase so no new info required, little time and usually smaller

Modified Rebuy In between purchase with only moderate review

of buying decision



Few large manufacturers: produce 60%+ of value add; do most buying; centralized locations; clear, defined industries

Services larger in number, spread out, smaller, less formal…

Retailers/wholesalers are purchasing agents for target consumers

Government market often largest of all markets (30% of GDP in US); more set policies in gov’t buying process – e.g. competitive bid systems, approved supplier lists, etc.


GOOD LUCK ON THE EXAM!!

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