CLEP Principles of Marketing Study Notes

3 types of convenience products staples impulse

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3 Types of Convenience Products: Staples, Impulse &Emergency Capital Item (necessary element in setting price) – Long lasting product that can be depreciated ( examples: an installation, buildings, land rights, major equiopment in business/company . For tax purposes, the cost is spread over a number of years. Mass Marketing – lowest level that doesn’t involve any segmentation at all. Micro-Marketing – highest level where firms try to offer products/services to suit individual customers’ needs. Niche Marketing – caters to segments within segments of customers. Segment Marketing – offers different products for different groups of customer (not at individual levels). Macro Marketing – marketing at the societal level Unitary Elasticity – occurs when the total revenue stays the same when the price of a product is changed. Advertising Standard Commission Rate is 15%. ( example: what would ad agency receive for a magazine ad that cost $20,000? $20,000 x 15% = $3,000.) Pleasing Products – are not good for consumers’ in the long run, but do give immediate satisfication. i.e, disposable diapers . Desirable Products – gives immediate satisfaction and is good for consumers in the long run. Deficient Products – do not satisfy consumers in the long run or provide immediate satisfication. Salutary Products – are good for cosnumers in the long run, but do not give consumers immediate satisfaction. Descriptive Buying Method – form of buying a product through a written/verbal description and is often done without inspection. Inspection Buying – inspecting (careful examination) every item before you buy it. Sampling Buying - looking at only part of the potential purchase, making the assumption that the whole purchase will be of the same standards. Negotiated Contract Buying – agreeing to a contract to purchase, but the contract allows for changes in the purchasing arrangements. Regrouping Activities – adjust the quantities and assortments of products handled. Bulk-breaking – dividing larger quantities into smaller quantities Perceptual Map – 2-dimensional diagram that depicts a brand’s “position” along 2 product attributes in relation to its competition. (Used in product positioning) Nonbusiness Marketing – marketing activities undertaken by groups without an objective of profit, ROI (Return on Investment), or market share. ( ex: beer manufacturer running ad campaign to reduce teenage drinking) . Learning – change in a person’s thought processes caused by prior experience. Cue – product sign, ad, or other stimuli in the environment. Responses – efforts to satisfy a strong stimulus that encourages action.
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Oligopoly – competitive structure existing when a few sellers control the supply of a large proportion of a product. Reverse Channels – used to retrieve products that consumers no longer want. Exclusive Dealing – forbids an intermediary to carry products of a competing manufacturer. A Tying Agreement - requires a channel member to buy other products from a supplier besides the one preferred by the channel member.
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