AEM 240 - final essays

AEM 240 - final essays - FINAL EXAM ESSAY QUESTIONS Among...

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FINAL EXAM ESSAY QUESTIONS Among this set of 10 questions2 of these will be on the final exam 1) Some contend that all businesses should be marketing-oriented and, indeed, that all marketing is about satisfying consumers. a) How exactly do consumers benefit from marketing? a. Marketing promotes competition, which in turn improves quality of products and services and lowers their prices b. More choice, better ability to find what you are looking for c. Utility- the benefits or customer value received by users of a product i. Form utility- the value that comes from the alteration or production of a product or service ii. Place utility- the value to consumers of having a good or service available where it is needed iii. Time utility- the value of having a good available when it is needed iv. Possession utility- the value to consumers of making an item easy to purchase d. Marketing activities influence the product features and packaging i. Marketing creates utilities by bridging space (place utility) and hours (time utility) to provide product (form utility) for consumers to own and use (possession utility) b) Why might the “marketing orientation” not always be appropriate? a. Marketing orientation focuses efforts on i. Continuously collecting information on customer’s needs ii. Sharing this information across departments iii. Using this info to create value b. Marketing orientation is not always appropriate i. Market myopia- concentration on customers may prevent company from looking forward and innovating ii. Cost of information may exceed revenues 1. research is costly iii. researchers can only learn expressed needs 1. consumers cant express exactly what they want 2. they are not visionary iv. the customer has only self interest 1. doesn’t care about the welfare of the company v. customers may misinterpret their own feelings vi. in some situations there is no need, for demand is greater than supply 1. as with art or religion
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c) Illustrate why very satisfied customers might be much more valuable than just satisfied customers? Very satisfied customers are apostles- they tell 3 people - 67% of sales are directly based on word of mouth A 5% increase in customer retention increases profits 70-80% 2) The first day of class, professor McLaughlin stated that marketing begins with, and has many natural linkages with, economics. a) List four key factors you would need to estimate the demand for a compact disc player - price - consumer tastes - price and availability of similar products - consumer income b) Marketers discuss price strategy. But there is no “strategy” in pure, neo- classical price-setting. How do economists suggest that price be set and why do marketers differ? - economists suggest that price should be set based on where the supply and demand curves intersect - marketers differ because the classic supply and demand graph does not give a realistic picture of supply and demand in the market place i. first, it is unrealistic to extend a demand curve beyond the range of prices for which it really applies 1.
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