Marketing 706 Minseong Kim LSUS MBA Complete Exam Questions With Detailed Verified Answer, Exams of Marketing

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Marketing 706 Minseong Kim LSUS

MBA Complete Exam Questions

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Segmentation and Target Marketing ANSWER>>>> Consider markets as individuals, institutions, or a group of people Have similar needs that can be met by a specific offering Aim to identify specific customer needs and design marketing programs to satisfy those needs Firms must comprehensively: Understand current and potential customers Know customer motivations, behaviors, needs and wants Marketers must comprehend and define consumer needs better to help attain success Easier for marketers to make distinctions among smaller segments Issues in the buying process ANSWER>>>> 1. Describes the possible range of activities that may occur in consumers' making purchase decisions. Consumers don't always follow these processes in sequence and may even skip stages en route to making a purchase (e.g. impulse purchases or loyalty toward a product or brand)

2. Often involves a parallel sequence of activities associated with finding the most suitable merchant of the product in question. Consumers consider what product to buy and where they might buy it at the same time. In the case of name brand products, this selection process may focus on the product's price and availability at different stores or online merchants
3. choice of a suitable merchant may actually take precedence over the choice of a specific product. In some cases, consumers are so loyal to a particular merchant that they will not consider looking elsewhere. For example, if some consumers are fiercely loyal to American car manufacturers, they may limit their product selection to a single brand or dealership, greatly limiting their range of potential product choices

Need ANSWER>>>> Occurs when the customer's existing level of satisfaction and desired level of satisfaction are not the same Based on the internal (e.g., hunger, thirst and fatigue) or external (e.g., advertising, window shopping, interacting with sales people) stimuli Want ANSWER>>>> Consumers' desire for a specific product that will satisfy the need Demand ANSWER>>>> Occurs only when a consumer's ability and willingness to purchase a specific product backs up the want for that product Passive Information Search ANSWER>>>> consumer becomes more attentive and receptive to information. E.g. noticing and paying attention to automobile ads if the customer has a want for a specific car/brand Active Information Search ANSWER>>>> customer purposely seeks additional information, e.g. browsing the internet, asking friends, or visiting dealer showrooms Sources of Information ANSWER>>>> External sources Internal sources Internal sources ANSWER>>>> personal experiences and memories External sources ANSWER>>>> advertising, websites, packaging, display and salespeople Amount of time, effort, and expense dedicated to information search depends on:

Reducing the risk of purchase Making purchase easy Finding creative solutions to unexpected problems Key issues in the purchase decision stage: ANSWER>>>> Product availability Possession utility Product availability ANSWER>>>> closely related to the distribution component of the marketing program; convenience. It's goal is to put the product within the consumer's reach wherever that consumer happens to be Possession Utility ANSWER>>>> being very easy for customers to find a product; the ease of taking possession of the product. To increase it, marketers may have to offer financing or layaway for large dollar purchases, delivery and installation of products, such as home delivery of convenience items, or proper packaging and prompt shipment through mail 4 Possible Outcomes of Postpurchase Evaluation ANSWER>>>> Delight Satisfaction Dissatisfaction Cognitive dissonance (post-purchase doubt) Delight ANSWER>>>> products performance greatly exceeds buyer expectations Satisfaction ANSWER>>>> the product's performance "matches" the buyer's expectations

Dissatisfaction ANSWER>>>> the product's performance "falls" short of the buyer's expectations Cognitive dissonance (post-purchase doubt) ANSWER>>>> the buyer is unsure of the product's performance relative to his or her expectations High likelihood of experiencing dissatisfaction or cognitive dissonance when: ANSWER>>>> Dollar value of the purchase increases Opportunity costs of rejected alternatives are high Purchase decision is emotionally involving Firms can manage these responses by offering liberal return policies, providing extensive postsale support, or reinforcing the wisdom of the consumer's purchase decision Factors Affecting the Consumer Buying Process ANSWER>>>> Decision-making complexity

• Primary reason for variations in buying process Individual influences - Demographics, perceptions, motives, interests, attitudes, opinions, or lifestyles Social influences - Culture, subculture, social class, reference groups, and opinion leaders Situational influences - Affect amount of time and effort devoted to the purchase task Common Situational Influences ANSWER>>>> Physical and spatial influences Social and interpersonal influences Temporal influences Purchase task or product usage influences Consumer dispositional influences

Problem Recognition ANSWER>>>> Business buyers often recognize needs due to special circumstances, such as when equipment machinery breaks or malfunctions Develop Product Specifications ANSWER>>>> detailed product specifications often define business purchases because new purchases must be integrated with current technologies and processes Vendor Identification and Qualification ANSWER>>>> business buyers must ensure that potential vendors can deliver on needed product specifications, within a specified time frame and in the needed quantities Solicitation of Proposals or bids ANSWER>>>> the buying firm may request that qualified vendors submit proposals or bids Vendor Selection Criteria ANSWER>>>> The buying firm will select the vendor or vendors that can best meet its needs. Issues such as reputation, timeliness of delivery, guarantee, or personal relationships with the members of the buying center are often more important than the price Order Processing ANSWER>>>> processing involves the details of processing the order, negotiating credit terms, setting firm delivery dates, and any final technical assistance needed to complete the purchase Vendor Performance Review ANSWER>>>> in this stage, both product and vendor specifications can be evaluated Factors Influencing the Buying Process ANSWER>>>> Environmental conditions Organizational factors Individual Factors

Environmental conditions ANSWER>>>> Increase uncertainty, risk, and complexity associated with purchase Organizational Factors ANSWER>>>> Include internal and external environmental conditions Shift in a firm's resources can change buying decisions, such as a temporary delay in purchasing until favorable credit terms can be arranged. If a supplier suddenly cannot provide needed quantities of products or cannot meet a needed delivery schedule, the buying firm will be forced to identify and qualify new suppliers Individual Factors ANSWER>>>> Importance depends on specific buying situations and the importance of the firm's goals and objectives Occurs when members of the buying center are at odds over purchase decisions. Power struggles are not common in business buying, and they can bring the entire process to a halt if not handled properly. A manager's personal preferences or prejudices can influence a business buying decision as individual factors Market Segmentation ANSWER>>>> Process of dividing total market for a particular product into homogenous segments or groups Should create groups where members are similar to each other but dissimilar to other groups Involves the fundamental decision of whether to segment at all Mandate in todays economy due to: Search for niche or unique products Changing use of media Many firms take segmentation to the extreme by targeting small niches of a market, or even the smallest of market segments: individuals

Individualized Segmentation Approaches ANSWER>>>> One-to-one marketing Mass customization Extension Permission marketing One-to-one marketing ANSWER>>>> Creating an entirely unique product offering for each customer Mass customization ANSWER>>>> Extension of one-to-one marketing Provides unique solutions to individual customers on a mass scale Permission Marketing ANSWER>>>> Customers choose to become part of firm's target market Key advantage - customers are already interested in the product offering Consumers give companies permission to target them in their marketing efforts Opt- in email list Criteria for Successful Segmentation ANSWER>>>> Segmentation approach must be: Identifiable and measurable- the characteristics of the segment's members must be easily identifiable Substantial- the segment must be large and profitable enough to make it worthwhile for the firm Accessible - the segment must be accessible in terms of communication and distribution Responsive- the segment must respond to the firm's marketing efforts, including changes to the marketing program over time

Viable and sustainable- the segment must meet the basic criteria for exchange, including being ready, willing, and able to conduct business with the firm Reasons for shifts in target market ANSWER>>>> New or revised marketing strategies to correct problems in the previous marketing strategy In response to changes in specific marketing program elements (e.g., reducing price to enhance value or adding a new product feature to make the benefits more meaningful) Target market and marketing program are interdependent - changes in one typically require changes in the other Common Segmentation Variables used in Consumer Markets ANSWER>>>> Behavioral segmentation Demographic segmentation Psychographic segmentation Geographic segmentation Behavioral segmentation ANSWER>>>> most powerful approach since it uses actual consumer behavior or product usage to make distinctions among market segments. Unlike other types of market segmentation, most closely associate with consumer needs. Key to successful behavioral segmentation is to clearly understand basic needs and benefits sought by different consumer groups. Demographic Segmentation ANSWER>>>> dividing markets into demographic factors such as gender, age, income and to be the most widely used basis for segmenting consumer markets because demographic information is widely available and relatively easy to measure. It becomes less useful when the firm has a strong interest in understanding the motives or values that drive buying behavior.

Selective Targeting ANSWER>>>> firms that have multiple capabilities in many different product categories use selective targeting successfully. This strategy has several advantages, including diversification of the firm's risk and the ability to cherry pick only the most attractive market segments Mass market targeting ANSWER>>>> only the largest firms have the capability to execute mass market targeting, which involves the development of multiple marketing programs to serve all customer segments simultaneously Product specialization ANSWER>>>> firms engage in product specialization when their expertise in a product category can be leveraged across many different market segments Market specialization ANSWER>>>> firms engage in market specialization when their intimate knowledge and expertise in one market allows them to offer customized marketing programs that not only deliver needed products, but also provide needed solutions to customers' problems. Targeting Noncustomers ANSWER>>>> Understand why customers do not buy the products Unique customer need s Better competing alternative High switching costs Lack of product awareness Existence of long-held assumptions Marketing Program ANSWER>>>> strategic combination of 4 marketing mix elements (product, price, distribution or place, and promotion)

Aimed at maximizing tangible, intangible, and perceptual attributes of a complete offering The best marketing strategies consider all 4 elements Commoditization ANSWER>>>> Core product is incapable of differentiating the offering from that of the competition Product Strategy ANSWER>>>> Most critical strategic decision in a marketing plan Involves design, development, branding, and positioning decisions Products fall into 2 general categories: ANSWER>>>> Consumer products Business products Consumer products ANSWER>>>> for personal use and enjoyment Business products ANSWER>>>> for resale, use in making other products, or use in firm's operations Types of Consumer and Business Products ANSWER>>>> Convenience products Shopping Products Specialty Products Unsought Products Convenience products ANSWER>>>> Inexpensive, routinely purchased products that consumers spend little time and effort in acquiring.

Maintenance, repair, and operating products ANSWER>>>> products that are used in business processes or operations but do not become part of the finished product. Furniture, building security, janitorial services Installations ANSWER>>>> major purchases, typically of a physical nature, that are based on customized solutions including installation/construction, training, financing, maintenance, and repair. Enterprise software, buildings, heat and air systems Business services ANSWER>>>> intangible products that support business operations. These purchases often occur as a part of outsourcing decisions. Legal services, accounting services, consulting, research services The Product Portfolio ANSWER>>>> Product line- Group of closely related product items Product mix or portfolio- Total group of products offered by the firm Potential Benefits of Offering a Large Product Portfolio ANSWER>>>> Economies of scale- Offering many different product lines can create economies of scale in production, bulk buying, and promotion. Package uniformity- All packages in a product line have the same look and feel. Standardization- Product lines can use the same component parts.

Sales and distribution efficiency- sales personnel can offer a full range of choices and options to customers. Equivalent quality beliefs- Customers expect and believe that all products in a line are equal in terms of quality and performance. Intangibility ANSWER>>>> service firms (e.g., hotels, hospitals, hair stylists, nonprofit organizations, governmental agencies) develop and implement marketing strategies designed to match their portfolio of intangible products to the needs of target markets. Simultaneous production and consumption ANSWER>>>> 1.customers or their possessions must be present during service delivery;

2. other customers can affect service outcomes including service quality and customer satisfaction;
3. service employees are critical because they must interact with customers to deliver service;
4. converting high-contact services to low-contact services will lower costs but may reduce service quality. Perishability ANSWER>>>> 1. services cannot be inventoried for later use. Therefore, unused service capacity is lost forever (unsold hotel room and flight seat);
5. service demand is very time-and-place sensitive. As a result, it is difficult to balance supply and demand, especially during periods of peak demand;
6. Service facilities and equipment sit idle during periods of off-peak demand. Heterogeneity ANSWER>>>> 1. service quality varies across people, time, and place, making it very difficult to delivery good service consistently
7. there are limited opportunities to standardize service delivery;

Repositioning Cost reductions New-to-the-world products (discontinuous innovations) ANSWER>>>> Involve a pioneering effort by a firm that eventually leads to the creation of an entirely new market. New product lines ANSWER>>>> Represent new offerings by the firm, but the firm introduces them into established markets. Product line extensions ANSWER>>>> Supplement an existing product line with new styles, models, features, or flavors. Improvements or revisions of existing products ANSWER>>>> Offer customers improved performance or greater perceived value. Repositioning ANSWER>>>> Involves targeting existing products at new markets or segments. Cost reductions ANSWER>>>> Involves modifying products to offer performance similar to competing products at a lower price. New Product Development Process ANSWER>>>> 1. Idea generation: new product ideas can be obtained from a number of sources, including customers, employees, basic research, competitors, and supply chain partners.

2. Screening and evaluation: new product ideas are screened for their match with the firm's capabilities and the degree to which they meet customers' needs and wants.
3. Development: at this stage, product specifications are set, the product design is finalized, and initial production begins.
4. Test marketing: as a final test before launch, the new product is test marketed in either real or simulated situations to determine its performance relative to customer needs and competing products.
5. Commercialization: in this final stage, the product is launched with a complete marketing program designed to stimulate customer awareness and acceptance of the new product. Importance of a Pricing Strategy ANSWER>>>> 1. Relation to revenue equation (revenue = price × quantity sold). Only 2 ways for a firm to grow revenue: increase prices or increase volume of product sold
6. Easily changeable marketing variable. Pricing is the easiest of all marketing variables to change
7. Important consideration in competitive intelligence: Firms take considerable pains to discover and anticipate the pricing strategies and tactics of other firms.
8. Only real means of differentiation in highly commoditized markets. Price is considered to be one of the few ways to differentiate a product in commoditized and mature markets. Cost-plus pricing ANSWER>>>> strategy that is commonly used in retailing. As indicated above, the firm sets prices based on average unit costs and its planned markup percentage.