FBLA Marketing Questions and Answers

FBLA Marketing Questions and Answers Production Oriented Company focuses on internal capabilities of the firm rather than the desires or needs of marketplace Sales Oriented Company company believes they will sell more products and service if aggressive sale methods are used to gain higher sales Marketing Oriented Firm firm exists to satisfy consumers wants and needs and provides shareholders and corporate benefits Marketing Concept philosophy that firms should analyze the needs of customers and then make decisions to satisfy those needs and make a profit Functions of Marketing Distribution, Financing, Marketing Information Management, Pricing, Product/Service Management, Promotion) FoM: Distribution deciding where and to whom products need to be sold in order to reach the final users FoM: Financing getting the money that is necessary to pay for the operation of a business FoM: Marketing Information Management getting the necessary information to make sound business decisions FoM: Pricing Deciding how much to charge for goods and services in order to maximize profits FoM: Product/ Service Management obtaining, developing, maintaining, and improving a product or a product mix in response to marketing opportunities FoM: Promotion communicating with potential customers to inform, persuade, or remind them about business products FoM: Selling provides customers with goods and services they want Different types of business ownership sole-proprietorship, partnership, corporation, franchise, and licensing Sole proprietorship business owned and operated by one person Main Points of a Sole Proprietorship 1. Most common form of business ownership 2. Must provide the money and management skill to run the business 3. entitiled to all profits 4. relatively easy to start is responsible for all business debts and legal judgements 6. owner has unlimited liability Unlimited Liability Indefinite extent of liability to pay a firm's debts or obligations, extending beyond the investments of the firm's owner(s), partners, or shareholder(s) to their personal assets. Partnership the legal agreement between two or more people to be jointly responsible for the success or failure of a business Main Points of Partnership 1. least common form of business 2. partners share profits, successes, and failures 3. subject to relatively little regulation and fairly easy to establish 3. two kind of partnership(general and limited) 4. combines skill and voice of each partner 5. taxed less heavily than a corporation 6. business is dissolved if one partner dies 7. each partner is responsible for everything 8. assume and share debt General Partnership All general partners take active part in the firm's management, are jointly and severally liable for the firm's obligations, and are bound by the actions of the other general partners Limited Partnership Business structure that combines features of a limited company with that of a partnership for use as a tax shelter, but does not create a legal entity separate and distinct from its owners Corporation business is chartered by a state and legally operates apart from the owner or owners Main Points of a Corporation 1. most complicated form of business organization 2. usually large 3. those who work for it don't necessarily own it 4. form of governing body called boards(hire directors and officers to manage the affairs of the business and interests of stockholders) 5. value is divided among shares of stock which are sold through the stock market to stock holders 6. liabitlity for losses belong to the stockholder only the the extent of his or her individual investment and theyre not responsible for debts 7. corporation can own assets, borrow money, and perform business functions 8. each owner has limited liability 9. Increased Gov. regulation Limited Liability The legal protection available to the shareholders of privately and publicly owned corporations under which the financial liability of each shareholder for the company's debts and obligations is limited to the par value of his or her fully paid-up shares Franchise a grant or right to sell a parent companies product or service within a given area or territory License done to protect the public from unqualified people practicing in a business and to maintain the health and wellness of citizens Marketing mix 4 strategies that involve the decisions that a business must make Four P's Product, place, price, promotion product the good or service price what the consumers pays place the location where a product is marketed promotion the advertising Product mix (product assortment) refers to the total number of product lines a company offers to its customers. For example, your company may sell multiple lines of products. ... The four dimensions to a company's product mix include width, length, depth and consistency New Product Development (NPD) is the total process that takes a service or a product from conception to market The steps in product development include drafting the concept, creating the design, developing the product, and defining the marketing Service development is the end-to-end process of developing and launching a new service to be sold to customers Elements of service development market research, service strategy, customer experience, marketing, operations and launch of a new service product line extension the use of an established product brand name for a new item in the same product category product line extension disadvantages 1. extension in unrelated markets may lead to loss of reliability if a brand name is extended too far 2. risk that the new product may generate implications that damage the image of the core/original brand product line extension advantages Established and loyal customer base. Existing expertise. Retailer relationships. Low cost of production. Low cost of development. Provides market information. Competitive barriers. Easy to implement Product line diversification the practice of expanding the original market for a product. This strategy is used to increase the sales associated with an existing product line, which is especially useful for a business that has been experiencing stagnant or declining sales product line diversification disadvantages 1. entity will lose out due to having limited investment in the specific segment 2. limits the growth opportunities for an entity 3. demand new skill sets product line diversification advantages 1. provide an effective path to fast growth, as you sell more products to existing customers or establish new markets 2. Minimizing risk of loss - if one investment performs poorly over a certain period, other investments may perform better over that same period, reducing the potential losses of your investment portfolio from concentrating all your capital under one type of investment legal aspects of product development patents, copyrights, and trademarks patents grant of protection for an invention. It's granted by the U.S. Patent and Trademark Office (PTO) and has a term of 14 to 20 years. Owning a patent gives you the right to stop someone else from making, using or selling your invention without your permission copyrights Exclusive legal rights that protect works of authorship, composition or artistry. A copyright protects the publication, production or sale of the rights to a literary, dramatic, musical or artistic work or computer program or to the use of a commercial print or label trademarks Any symbol, word or combination thereof used to represent or identify a product. ... Trademarks and service marks are applied to a manufacturer's or a seller's products and services to distinguish them in the marketplace--a valuable marketing tool, in some circumstances 4 Important Functions of Packaging Product Identification, product protection, convenience, product promotion product identification Packaging serves as an identification of the product. A product is packed in special sized, colored and shaped container for keeping its difference from the products of competitors. For example, the yellow and black colored pack of KODAK ROLL tells itself of its producer. product protection The main function of packaging is to provide protection to the product from dirt, insects, dampness and breakage. For example, the products like biscuit, jam, chips, etc., need to be protected from environmental contact. That is why they are tightly packed convenience Packaging provides convenience in the carriage of the product from one place to another, in stocking and in consuming. For example, the new pet bottles of COKE makes the carriage and stocking easier. Similarly, the pack of FROOTI provides convenience in its consumption product promotion Packaging simplifies the work of sales promotion. Packing material in the house reminds the consumers constantly about the product. In this way, the packaging performs the role of a passive salesman. Consequently, it increases the sales importance of branding, labelling, and packaging Labelling, branding, and packaging can be used by marketers to encourage potential buyers to purchase the product. Packaging is also used for convenience and information transmission. Packages and labels communicate how to use, transport, recycle or dispose of the package or product. factors used by marketers to position product/business features/benefits, price/quality, competition features/benefits product features- characteristics of product you offer customer benefit- advantage customer gains from specific product features price/quality May stress high price as a sign of quality, or emphasize low price as an indication of value. competition the struggle among producers for the dollars of consumers factors that influence a product's price cost, quality, competition, and brand loyalty cost require the payment of (a specified sum of money) before it can be acquired or done quality consistently producing what the customer wants while reducing errors before and after delivery to the customer brand loyalty a favorable attitude toward and consistent purchase of a single brand over time how consumer practices affect prices shoplifting, improper returns, and product liability claims shoplifting businesses increase prices and add additional security measures in response to losses from shoplifting, consumers pay the final price, compensating for losses associated with shoplifting. ... A higher tax burden is placed on the consumer to recoup local and state taxes lost improper returns 1. creates a "return profile" that catalogs and analyzes the customer's returns at the store 2. replace tags (they might switch the UPC code on a $600 faucet with a lower-cost code that rings up at $50. They buy the faucet, then replace the fake UPC tag with the original, higher-priced code, and return the faucet to the store without the receipt for a $600 store credit, which can later be sold online) product liability claims 1. Negligence 2. Warranty 3. Strict Liability ways that government regulations/laws affect pricing practices price discrimination and collusion price discrimination the business practice of selling the same good at different prices to different customers collusion secret or illegal cooperation or conspiracy, especially in order to cheat or deceive others influences of supply and demand on pricing 1. Demand Increase: price increases, quantity increases. 2. Demand Decrease: price decreases, quantity decreases. 3. Supply Increase: price decreases, quantity increases. 4. Supply Decrease: price increases, quantity decreases. the concept of price elasticity Price elasticity of demand (PED) is a measure of the responsiveness of demand for a product after a change in that product's price. ... A good is said to have price inelastic demand when a change in price results in a less than proportional change in quantity distribution the action of sharing something out among a number of recipients direct distribution the product or service leaves the producer and goes directly to the customer with no middlemen involved