Coverage: Whatever we covered in class before Midterm ExamSample Exam QuestionsFormulas (will be provided on the last page of the midterm exam)REVIEW SHEETM300Midterm Exam Fall 2014Video camera monitoring for examsVideo cameras may be used to monitor the room during student assessment activities,including but not limited to, exams, tests, and quizzes. Video recordings may be used to investigate or support disciplinary action. All access to and use of video equipment and recordings will follow applicable IU policies.Coverage: Whatever we covered in class before Midterm Exam 1. Lectures up to Thu Oct 2, 2014.2. All the homework so far – include CLV analysis, SPAN analysis, Cannibalization problem (Scotch Magic Tape), Regression analysis (ZAZA’s ice cream), breakeven analysis.The following topics represent most potential areas for questions (not all inclusive).1. Breakeven Analysis – Why? How? - i.e. be able to work the formula and understand how the breakeven point changes when different variable are manipulated. Break-Even Analysis (BEA) – number of units necessary to reach profitability.BE Point (units) = Fixed Costs /( Unit Price - Unit Variable Costs )(includes unit Cost to Attract (CTA) and Cost to Serve (CTS)).– CTS = costs associated with helping the customer stay a customer (tech support, manuals, training, etc).– CTA = costs associated with gaining new customers (promotions, initialtraining, etc)2. The product/market expansion grid – be able to classify the four types of strategies and understand how to employ each of the strategies.Penetration Strategy: Increase Frequency of use among existing customers using existing products. (Sales Promotion and usage expansion)Market Development Strategy: Find new customers in new markets (New customers, same products). Widen the Distribution Network (Promotion to build demand. Ex: City bank giving $100 for opening checking acct.Product Development Strategy: Develop new products for existing customers (New Products, Same Customers.) Ex: Applebees changes menu oftenDiversification Strategy: Develop new products for new customers (New products, New Customers) Ex: Porche offers 4 door SUV13. Brand equity and four branding strategies (line extension, brand extension, multi-branding and new branding)-Brand Extensions -- new products in unrelated product categories that often carry the same brand name.-If a firm has a successful product it often offers product line extensions (PLE) or new products that closely resemble the firm’s existing products.4. Different types of brands (private brands, manufacturer brands, generic brands) and how they differ from each other-Generic Brand - a name that becomes a generally descriptive term for a product.-Private brand: a brand name owned by a retailer or wholesaler (middleman). Private brands offer their owners control over advertising, promotion, and pricebut lack the national recognition of manufacturer brands.-5. Five big marketing segmentation bases and how to use them-Base #1: Geography - dividing the overall market into groups based on geography. Most products derive the majority of their sales from a very small number of regions.-Base #2: Demographics - dividing consumers into groups based on sex, income, age, occupation, race, religion, education, etc.-Base #3: Psychographics or Lifestyle variables - dividing the population into homogeneous groups based on behavioral and lifestyle profiles developed by analyzing consumer activities, interests, and opinions (AIO) and values, attitudes, and lifestyles (VALS) through surveys. -Base #4: Usage Segmentation - dividing a population into groups based on purchase frequency and usage level.-Base #5: Benefit Segmentation – dividing a population into groups based on the benefits they seek in the product or service.6. Different types of value that firms can create for customersForm Value: Utility provided by changing raw material to finished product. Created by production but influenced by marketing.-Time Value: Making product more available when the customer needs it-Possession Value: Enhancing ability of customer to acquire and use product over time. (Free samples at Costco)-Place Value: Make product available where the customer needs it.-Information Value: Providing relevant info about the product.-Service Value: Providing excellent service on an ongoing basis27. Cannibalization Analysis – How? – i.e. be able to work the calculations and draw conclusions.-Cannibalization: A manufacturer must avoid damaging cannibalization or the theft of sales from existing products by a new product in the product line. Test marketing can determine the degree of cannibalization that may occur. -T-score = abs(Price per unit or cost / standard error)*(Test) product line-(Test) new product<Before Test Product line : Cannibalization, vice versa8. Marketing theorist - Theodore Levitt’s four points about marketing concept in the very first lecture.-There are no commodities; all products can be differentiated.-Products are problem solving tools. Consumers think more about holes and thirst than drill bits and colas.-There is a bias toward the measureable (sales, profit, etc). Firms should also attempt to measure more difficult phenomenon, like customer satisfaction, fun, and friendliness. -Make the intangible (reputation and brand equity or the power of the brand) more tangible to consumers.9. Regression analysis: how to calculate T-score, standardized coefficients, how to interpret regression results, etc.T-score = abs(Price per unit or cost / standard error)10.Product life cycle: different stages, marketing strategies and draw conclusions.Overall objective of these stages-Introductory stage: Increase awareness and stimulate trial of the new product. -Growth stage: Build consumers preference for its brand. With an increase in competitors, marketers must distinguish their products by giving consumers a reason to buy their products. Example, when coke introduced it “Fruitopia” fruit drinks in theearly 1990’s it emphasized mind, body, and planet by introducing the ads as “Welcome to Fruitopian life”.3-Mature stage: The objective is to defend market share and extend the project life cycle. A common way to hold market share it to offer pricing benefits to consumer in the way of promotions.11. Different types of marketing: anything can be marketed – people, idea, place, event, organization, etc.12. What is a brand? Brand equity?-