Exam #1 Study GuideThe Marketing Concept = The organization determines the needs of the target market and satisfies thoseneeds at a profit.● If no profit, doesn’t matterThe Marketing Mix:1. Product: the bundle of attributes the consumer receives in a transactiona. can be a service or a good2. Price: What consumer must give up to receive the producta. Ex = money, time3. Place: All issues related to the system of distribution4. Promotion: All methods used to inform & persuade the target market about products that areavailable*Need of balance between product development & promotion ex = Best buy created interest in acamera but they didn’t have enough supply so it actually increased Amazon’s sales**Product, price & place comes first and then promotion*Promotions Mix:● A model of communication alternatives● Different companies use differing levels of each part of mixPAID (Control)FREE (Credibility)MEDIAAdvertisingPublicityPERSONALSalesSocial MediaAdvertising = paid, nonpersonal communication from a sponsor that informs, persuades, andreminds● (+): control of message, delivery of message, timing of delivery & low cost to reach each person● (): High absolute cost, low credibility, effectiveness has a delayed responsePublic Relations:● Develops understanding and goodwill● Publicity = media time and space that the organization does not pay for● CrediblePersonal Selling:● Sales people are in direct communication with potential customersDecision Sequence Model = Process used in advertising as a way to guide the creative process towardeffective strategy and execution1. Situation Analysis = Research based analysis of internal/external factors of an organization2. Objectives & Positioninga. Objectives = goals the company wants to achieveb. Positioning = the way the consumer perceives the brandc. Brand = intangible attributes attached to the product. (product = lipstick brand= covergirl)d. Brand Equity = Difference in perceived value between product & brand (common in fashion)3. Strategies: Actions that achieve the objectives ( creative, media, sales promotion)4. Budget Setting = $$ used to implement the strategy5. Implementation = putting strategies into action6. Evaluation = assesses the success of the campaign did campaign achieve the objectives?Levels of Involvement = the importance of the product to the consumer1. No Involvement: no interest = no purchase2. Low Involvement: Product purchased but no brand evaluation3. High Involvement: Purchase product after careful brand evaluationsHierarchy of Effects = Series of stages a consumer passes from unawareness to brand loyalty● High Involvement Hierarchy (ex = car)○ Awareness knowledge that the product exists○ Attitudes opinions about the product, can be positive, negative, or neutral○ Behavior Action related to product (test driving, buying, etc.)● Low Involvement Hierarchy (ex = popcorn)○ Awareness○ Trial Behavior action related to the product without the formation of attitude○ Attitude○ Repeat Behavior: subsequent action based on positive attitudeSchramm’s Model of ONE WAY Communication: Source encodes signal decodes destination● Potential Problems:○ Encoding: source perceives problem incorrectly (ex = Taco Bell not a diet place)○ Signal: Source understands problem but sends wrong signal that gives the wrong message○ Decoding: Receiver misunderstands/ misinterprets message○ Destination: Receiver understands message but forgets or ignores itAd Agency Organization:1. Account Servicing: Liaison between agency and client make sure everything is getting done2. Research: Involved in entire process, situation analysis, concept testing, evaluation3. Strategic Planning: Develops creative direction of campaign based on research4. Creative: makes verbal and visual message5. Media: delivery of message strive for most efficient use of money6. Production: Translates the copy and layout into finished form7. Traffic: Makes sure each department is meeting deadlinesTypes of Agencies:● Full Service: research, creative, media, PR, sales promotion, social media● Media Buying Service: specialists, often purchase in bulk, serves on a perunit basis● Creative Boutique: Small speciality agency, sometimes just concept development● InHouse: agency operated within corporation, some functions outsourced, more control over work,cheaper, less creativeConsumer Segmentation = purpose is to achieve the greatest amount of sales with small expense● Reasons for Segmentation: inefficient to market to everyone with same product, the companycannot develop separate products for each consumer● Factors leading to segmentation: Introduction of marketing concept (diversity of consumerneeds), higher standard of living, & increasing competition (demand for new products)● Aspects of Segmentation: Classifying consumers into potentially profitable groups, developingstrategies that will appeal to those groupsConsumer Classification:1. Enduring Variables = variables that stay with you over products and any fixed time, useful fordescribing purchase behavior for a variety of productsa. Demographics: age, gender, race, income, education levelb. Geographics: where you live and the consumption patterns/brand preferencec. psychographics: lifestyle, attitudes, interests, opinions2. Dynamic Variables = specific to an individual’s relationship with a product. Useful for developingmessaging and positioning strategiesa. Heavy vs, Light Users: 80/20 rule (80% of sales from 20% of customers)b. Early vs Late Adopters: Different people try product for first time at a different pointc. End Use: Consumers purchase the same product for different usesd. Brand loyal vs Brand Switching: brand loyal are most sought after customerse. Benefit segmentation: consumers seek different benefits from the same productSegmentation Strategies:● Undifferentiated: one product, all consumers, broad media & message strategy● Partially Differentiated: several products, distinct consumer segments, specific media/messages● Wholly Differentiated: Entire user population, multiple products, specific media/messages● Concentrated: one primary product, one consumer segment, specific media/messages● Specific Strategies:○ Rifle Message: specific statements, specific media (cable TV, direct mail, magazines)○ Rifle Media: Deliver message to specific audiences● Broad Strategies:○ Shotgun Message: broad statements○
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