BBI - Competition and Marketing
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2017-06-25 22:04
Competition
| Question | Answer |
|---|---|
| Price fixing | competitors agree on prices they charge customers to decrease competition; thus causing product prices to be higher |
| Bid rigging | one or more companies agree not to submit a bid to narrow the competition, or competitiors agree who will win a "tendered contact" |
| Abuse of position | - Large company saturates the market with goods priced much lower than those of a small local business. - This results in the small local companies not being able to compete with lower prices |
| Exclusive dealings | - manufacturers cannot force suppliers to exclusively stock their product |
| Refusal to deal | - manufacturers cannot refuse to provide a product to a store |
| Merger | - occurs when two or more companies join together - might restrict competition (bank mergers of late 1990's) |
| Market share | - percentage of a total market's sales one company has - division in a market segment |
| Market segment | a portion of an overall market share (cars -> suv) |
| Demographics | - study of people in a population. Used to track potential customers. |
| 8 ways to study people | - age - gender - location - income - ethnicity - education - culture - family lifestyle |
| Brand name | - word/group of words that distinguish a one company product from others |
| Image | the way a consumer sees the business or thinks about the product that the business offers - i.e.: reputation |
| How is image used | - brand-id on packages - websites - promotional activities |
| Brand Identification | once a name, logo and slogan are developed everything associated with the product should carry those brand identifiers - i.e.: People recognize the company via its Brand identifier |
| Promotional activities | - ads should emphasize product-name and it should be mentioned repeatedly - e.g. flyers, banners, catalogues |
| Brand extension | image created by one product is transferred to another product made by the same company (e.g.: google search engine and google pixel-phone) |
| Psychographics | - Psychological traits of people. Used to track potential customers - i.e.: study of how people think |
| 3 ways to study psychographics | - attitude - lifestyle - values |
| Deep | having few products but in large quantities |
| Wide | having large variety of products |
| Value added services | extra services used to attract and keep customers |
| Service sector (Service market) | Businesses that provide mainly services |
| Competition benefits | - creation of new businesses - increased productivity - new and improved goods or services to improve our lives (cancer drugs, GPS) |
| Direct competition | - two or more companies sell similar goods or services - only minor differences between products (Coke & Pepsi are in SUGARY CARBONATED DRINK market) |
| Indirect competition | - products and services that aren't related directly to each other (subway and pizza nova are in the FOOD INDUSTRY) |
| Competition among goods | - quality - price - design - features |
| Competition among services | - convenience - quality - price - reputation |
Stockmarket
| Question | Answer |
|---|---|
| why does the public equate playing the Stockmarket with gambling? | investor puts money into something they can't control |
| against what can you measure the performance of your stock investments? | standard and poor's 500 index |
| Who is Bernie Madoff | - Bernie Madoff was an person who invested money - for 48 years he scammed people by taking their money and giving them back a little percentage - his clients thought they were stock investing (not knowing which ones) |
| What is a Ponzi scheme? | where an operator pays return to its investors from new capital paid by new investors |
Marketing
| Question | Answer |
|---|---|
| 4P's 2C's | - product - price - place - promotion - competition - consumer |
| 4P's - Product | - what is being sold (g/s)? - refers to product features - product image |
| 4P's - Place | - where is the product available - channel of distribution |
| 4P's - Price | - how much will consumers pay - involves production costs plus profit |
| Promotion | - how are potential customers made aware of g/s (advertising, sales promotions) |
| Competition | - who is the competition - how are "we" going to compete |
| Consumer | what kind of customer will be the target? (using demographic or psychographic research) |
| Marketing | Company figures out customer needs & wants, then stresses needs and wants of buyer (we offer a wide range of cellular networks that are efficient and inexpensive) |
| Selling | company makes product and stereos in need of seller (we are a phone company) - i.e.: sell to distributor |
| Factors that affect the marketing mix | government, consumer groups, press coverage, technology, economy |
| Channels of distribution | producer, intermediaries, retailer, consumer |
| Specialty channels | Vending machines, telemarketers, catalogues, internet, door-to-door |
| Pricing strategies | skimming, penetration, competitive, loss leader, markup |
| Pricing Strategy - Skimming | - initially company prices it products high to make profits before competition enters market |
| Penetration | - initially company sets lower prices than competition to get marketshare then slowly increases prices (water going under door and freezing, causing it to expand) |
| Pricing Strategy - Competitive | - company sets prices at same level as competition |
| Loss leader | - items priced at less than wholesale price - used to get consumer in the store |
| Pricing Strategy - Markup | - cost of g/s is multiplied by a certain percentage and that is added to cost price (think of it like taxing their own product) - i.e.: self-set product tax |
| Name brand (national) | - usually known nationally or internationally - often more expensive (thought to be better quality) |
| Private brand (store) | - products sold with retailers name on it - manufactured by other companies (often by the name brand manufacturers) - often less expensive than name brands - e.g.: the bay, Canadian tire |
| No name (generic) | - products without a distinctive name - often produced by name brand manufacturers - plain packaging - less expensive - limited product "flavours" |
| Push Branding | - sells products to retailers not consumers - idea is that if consumers see a product in a store, they will buy it - in many cases marketer pays shelf allowance to be allowed to stock where they want |
| Pull branding | - manufacturers try to convince customers they need a product and they should look for it by brand name. - companies must vigorously advertise, do promotional campaigns directed at consumers - marketers hope consumers will request their product to be at a retail store near them |
| Primary research | new information |
| Secondary research | - collected by someone else for you to use (statscan) |
| Types of research | consumer, motivation, product, pricing, advertising, sales |
| Consumer research | - determine how many people buy the product to predict sales potential |
| Market research | - determine who are the potential customers |
| Motivational research | determine why "we buy". emotional or rational motives |
| Product research | involves test marketing - color, taxation, sound, flavour, size, design |
| Pricing analysis | - production cost - competition - profit - pricing strategy |
| Advertising/media research | determine best advertising media that will reach your target audience |
| Sales analysis | determine whether sales are up to expectations |
| Another name for Packaging | "Silent sales person" |
| Characteristics of good packaging | protect/preserve convenience<promotion> |
| Product design | Form & Function |
| Product Life Cycle | Intro, growth, maturity, decline, decision point |
| Intro | - few customers - no competitions product is new or unique - sales are rising slowly - none to very low profits - skimming and/or penetration is used - promotion is aimed at early adopters |
| Product Life Cycle - Growth | - mass market customers - competition increasing - sales are rapidly increasing - profits increasing - pricing is very competitive - extensive promotions, attempting to get customer loyalty |
| Maturity | - mass market customers - very intense competition - flat, no growth - large profits - competitive |
| Product Life Cycle - Decline | - loyal customers - competition decreasing - sales decreasing - cheaper prices - attempt to stress differences between competitors goods and services |
| Product Life Cycle - Decision point | - loyal customers - competition decreasing - little or no sales - profits are very low |
| Other types of product life cycle | fad, niche, seasonal |
| Fad | - product that goes through the product lifecycle very quickly |
| Niche | - section of the market in which a product dominates with very few competitors |
| Seasonal | products that are popular only during a particular time/season |
| Types of promotion | Publicity, advertising |
| advertising techniques | life style, testimonial, informative, repetitive, Direct-to-home, Out-of-home |
| Promotions | coupons, contests, premiums, samples, special events |
| Parts of a print advertisement | headline, illustration, logo |
| AIDA | Attention. Interest. Desire. Action. Used when creating ads |
| Marketing distribution channel | way goods get from producer to consumer |
| Indirect marketing | use of intermediaries (fences) to get product from producer to consumer |
| Direct marketing | consumer buys g/s directly from producer |
| Producer | person/company that makes a product |
| Retailer | person/company who sells the product to the ULTIMATE CONSUMER |
| Wholesaler | buys product from producer in large quantities and resells to retailers or ultimate consumers in smaller quantities at a higher price |
| Ultimate consumer | person who buys the product for use (average "joe"/"jane") |
| Intermediaries | people who come in between producer & consumer. Also known as middle men |
| Direct-to-home | - highly segmented market - easy to measure effectiveness - often considered junkmail |
| Out-of-home | - low cost - can repeat message - high visibility - increasingly regulated - messages are short - seldom have viewers full attention |
| Radio | - highly mobile - high segmented market - messages are limited to audio |
| Television | - reach large audiences - lost cost per viewer - sight, sound and motion combined - highly segmented markets - high total cost |
| Newspapers | - large circulation, can rcarry coupons - low print quality - short life |
| Magazines | - long life - excellent print quality - high cost |
| Use of media in advertisement - Internet | - low cost - reach large audience - international range - audience selectivity - online media - requires research to know target market - clutter on internet (busy competing ads) |
