MARK 3001: Exam 2
69 Cards in this Set
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Ethics
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Moral principles and values that govern actions
unwritten rules we've developed for interactions with one another govern us when sharing resources or honoring contracts
maintains an order & fairness, honesty
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Laws
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Society's values which are enforceable in court
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Framework for Ethical Decisions
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Societal & Culture norms
General Business norms
Company norms
Personal Norms/VAlues
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Societal Culture & norms
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Basic set of values of the society
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General Business norms
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What is the standard practice in business
Basic business values:
Consumer has right to safety, to be informed, to choose, & to be heard
No longer caveat emptor (the principle that the buyer alone is responsible for checking the quality and suitability of goods before purchase is made)
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Industry Standards
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American Marketing Association (AMA)
first, do no harm
foster trust and consumer confidence in the marketing system
valus of honesty, responsibility, fairness, respect, openness, and citizenship
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Company Norms
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What could those in your company say about this decision?
Code of conduct, company policy
Code of ethics
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Code of Ethics
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Many companies have them
Help marketing managers & employees make better decisions
guidelines help employees identify what their firm recognizes as acceptable business practices
effective internal control on behavior>more responsible than external controls(gov't regulation)
help emplo…
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Personal Norms/Values
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How do you feel about this decision?
Personal moral philosophies:
Moral Idealism: if any bad occurs, then the action is unethical
Utilitarianism: balance good versus bad
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Level of Responsibility Model
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To whom is a company responsible?
Investors only
All Stakeholders
Society in General
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Corporate Responsibility
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Profit Responsibility
Companies responsible only to stockholders and investors
one duty: maximize profit within the law
Stakeholder Responsibility
responsible to owners & customers, employees, suppliers
Societal Responsibility
responsible to owners & stakeholders & society in gener…
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Common Ethical Issues
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Product
Planned Obsolescence
Products that are "unhealthy"
Place
Is there an obligation to serve unsatisfied segments, even if limited profit
Price
What is "reasonable" profit
Most profitable
Promotion: how much "puffery" is okay
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Consumer Ethics
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If we expect firms to act ethically, then so should we
Unauthorized downloading or sharing computer files
Copyright violations Insurance fraud
Return of used items
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The Supply Chain
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Physical Supply Network
Raw Materials
Components
Manufacturer
Physical Distribution Network
Resellers
Consumers
Sometimes called Demand/Value chain: must have demand
supply chain reflects a production or sales orientation instead to marketing orientation
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Supply Chain Management
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management of all activities through which raw materials are transformed into products and made available to final consumers
Management requires:
Channel Management
Logistics Management
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Marketing Channel (channel management)
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A set of interdependent organizations involved in transfer of ownership as finished products move from producer(mfg) ot consumer
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Channel Structure
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Direct Channels: Mfg- end user
Best used when/for:
Complex, expensive, customized items
Many Business-Business products
mfg wants control
Indirect Channel: Mfg- Distributor- Retailer -end-user or Mfg- Ret - end user
Best Used for:
Low cost, standard items
Most consumer products
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Channel Intermediaries
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Retailer= sells mainly to final consumers
Merchant Wholesaler= Buys and takes title to goods from mfg; stores, ships, and sells to other businesses
Agent and/or Broker= Facilitates sale between mfg and others
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1st Reason to Use Intermediaries
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Intermediaries develop skills in selling
Customer knowledge
Efficiency in handling large volumes
Good merchanidizing
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2nd Reason to Use Intermediaries
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Intermediaries Overcome Discrepancies
Discrepancy of Quantity= manufacturer produces in large volume, consumers buy in small volume
Discrepancy of Assortment= manufacturer produces many of one item; consumer buys one of many items
Temporal Discrepancy= difference in when something is p…
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3rd Reason to Use Intermediaries
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Intermediaries Provide Contact Efficiency
25 Transactions needed when going from mfg - consumer(BAD!)
10 Transactions needed with 1 intermediary
Fewer transactions the better
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Channel Members Perform Marketing Functions
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Transactional
Promotion
Negotiation
Risk Taking
Logistical
Distribution
Sorting
Storing
Facilitating
Researching & Financing
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Importance of Channel Members
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Functions must always be performed
If no intermediaries, then must be performed by the manufacturer or the consumer
For standard, low cost consumer items, intermediaries reduce the cost to the final consumer
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Trends in Channel Design
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Disintermediation= elimination or reduction in the number of levels
Increased use of electronic channels
Software, movies, books online
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Logistics
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Management of physical flow of raw materials, components and products across the supply chain
Objective: To give customer(channel member or consumer) the needed level of customer service at the lowest cost
Measured in terms of:
Flexibility
Order cycle time
Order accuracy
Product ava…
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Logistical Components of the Supply Chain
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Sourcing & Procurement
Production Scheduling
Order Processing
Inventory Control
Warehouse & Marketing Handling
Transportation
Logistics Information System
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Sourcing & Procurement
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Obtain needed supplies in right quality at lowest cost
Develop long term relationships with suppliers
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Production Scheduling
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Determining method and timing of the manufacturing of a mix of products
Build to stock versus build to order
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Order Processing
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A system for easily receiving orders and accurately and quickly filling them
EDI- electronic data interchange: computer to computer exchange of ordering information
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Inventory Control
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Maintaining the correct amount of inventory
Goal is to meet product availability standards while keeping costs low
MRP, DRP systems
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Warehousing & Materials Handling Functions
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Storing products
Moving products within a facility
Receiving, sorting, storing, finding, getting ready for shipment
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Transportation
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Railroads
Motor Carriers
Pipelines
Water
Airways
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Trends in Supply Chain Management
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Advanced computer technology (RFID)
Outsourcing of logistics functions (3PLs)
Electronic distribution
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Relationship of Logistics to Marketing Mix
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Product characteristics can significantly impact logistics costs
Logistics must be aware of upcoming promotions
Effective logistics can reduce prices and/or increase revenue
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Service
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Text: intangible tasks
Any deed, act, or performance
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Importance of Services
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Services as a percentage of GDP- 81%
Services as a percentage of employment- 81%
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How Services Differ from Physical Goods
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Intangible: can't be seen, touched, tasted, felt, stored; makes evaluation of quality difficult
Inseparable: consumer must be present; must manage consumer
Perishable: services can't be produced ahead of time & stored; production & consumption occur at same time; can't inspect out defec…
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Key Dimensions of Service Quality
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How consumers view quality:
Reliability- serve performed correctly?
Responsiveness- is service performed on time?
Assurance- do employees look like/talk like they know what they are doing?
Empathy- do employees care?
Tangibles- are physical surroundings attractive, clean, etc.?
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Adjusting the Marketing Mix
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Basic marketing mix (4P's) is expanded
Strategies/applications differ in each of the 4P's as compared to applications for physical goods
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Expanded 4P's of Services (what are they)
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Physical evidence- Place & Product
Processes- Product & Price
People - Price & Promotion
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Expanded 4P's of Services (in detail)
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People
Employees
The Customer
Other customers all influence quality of experience
Physical Evidence
The tangible part of the service
The "services cape"
Processes
Activities which lead up to and are a part of the service
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Adjusting the Basic Marketing Mix
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Product: Emphasize the service process; Build brand image
Place: Generally no intermediaries; Convenience is important
Price: Prices are harder to set and justify to customers for many services; Use Price to adjust demand to supply
Promotion: Focus on making services seem tangible; Sha…
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Core Service
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Key service being purchased
Use a logo that reflects service (interactive imagery)
interactive imagery= logo itself tells you what the service is and what the company does
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Product
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Everything a person receives in an exchange
Physical good, service, idea
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Product Issues
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Types of products
Branding of products
Packaging of products
Number of products
How are new products developed and managed
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Types of Consumer Products
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Classified by search process
Type is not inherent to the product category
Convenience= merits little shopping
Shopping=will compare several options
Speciality= will go out of way to get
Unsought= unaware or unwanted
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Branding
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Brand= identification of the seller's product
Brand Name= that part that can be spoken
Brand Mark= part that cannot be spoken
Global Brand= At least 33% of the product is sold outside its home country
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What a Brand really is
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A shortcut in buying
A promise:
about performance
about quality
Who creates the promise
the company
the customers
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Brand
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Brand Love: loyalty beyond reason
Brand Equity: value of a company/brand name; what extra value does the brand name bring; Lanham Act
Developing Brand names: often outsourced to branding companies; easy to say, memorable, suggests product use, can be easily translated, evokes correct em…
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Branding Strategies
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Brand versus no brand (generic)
Manufacturer (by producer)
Private (by retailer)
Family (all products have same brand) versus Individual (each product has own brand)
Co-branding: two individual brands, from different companies, are shown on one package
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Functions/Benefits of Packaging
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Functional Benefits
Contain and protect
Perceptual Benefits
Promote- last 5 seconds
Create image
Value Benefit
Add value beyond the contents
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Number of Products
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Most firms offer a wide number of products
Product mix= all items a firm offers
Product line=group of related items
Depth of product line= how many items in the product line
Width of product mix= how many different product lines
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New Product Development
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Firms continually develop new products
New to world
New modification
New to firm
Use an established new product development process
Manage products throughout life cycle
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New Product Development Process
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New Product Strategy
Idea Generation
Idea Screening
Business Analysis
Development
Test Marketing
Commercialization
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New Product Strategy
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A goal or strategy on how new products will fit into overall corporate success
3M's strategy
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Idea Generation
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Sources of New Product Ideas
Customers
Employees
Distributors
Competitors
Vendors
R&D
Consultants
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Idea Screening
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Narrowing down and eliminating bad ideas
Includes concept testing
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Business Analysis
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Demand
Cost
Sales
Profitability
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Development
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Creation of prototype
Packaging, branding, labeling
Final gov't approvals if needed
Detailed marketing strategy
Significant cost commitment
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Test Marketing
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The Limited Introduction to determine consumer reactions
Sometimes done with a scanner panel
Sometimes done in a lab setting
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Commercialization
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Product
Inventory Buildup
Distribution
Advertising (consumer and trade)
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Why products fail
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Will this (new product development process) guarantee success in the market?- No, but will reduce risk
No discernible benefits/differences
Product quality problems
Poor execution of other marketing mix element
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Diffusion
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The process by which the adoption of a new product spreads.
Is faster when:
Complexity is lower
Compatibility is higher
Relative Advantage is higher
Observability is higher
Trial ability is higher
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Product Life Cycle
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Sales growth of new products can be tracked over time
Length of time varies but basic shape remains the same
Best used for product categories
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Product Life Cycle Introduction
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Characteristics: New product
High costs to market
Profit none (negative)
Generally no competitors
Innovators buy
Strategies: Must create primary demand
Offer basic product
Advertising should educate and inform
Sampling give-aways
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Product Life Cycle Growth
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Characteristics: Rapidly rising sales
Profits increase and often peak
Some repeat buyers
Competition begins to enter
Early adopters buy
Strategies: Must create specific (secondary) demand
Lower prices to gain market penetration
Expand distribution and advertising
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Product Life Cycle Maturity
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Characteristics: Sales reach high level, but growth slows
Many competitors (price)
Market saturation
Profits are high and then begin to decline due to price pressures
Middle majority buys
Strategies: Look for new product innovations and modifications
Heavily promote brand with remin…
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Product Life Cycle Decline
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Characteristics: Sales drop off
Profits stop
Laggards buy
Strategies: Reduce promotion
Consolidate inventory to a few locations
Consider modifying or dropping product
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Extending Time in the PLC
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Increase frequency of use- by same consumers
Increase number of users- expand into different target market with same product
Find new uses- identify new applications of the product
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MARK 3001: Exam 1