Exam 21: Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

The reason that MICRO-marketing costs too much in many firms is that:

Satisfaction with a firm's marketing efforts can be roughly measured by

Making sure that the benefits a customer receives from a marketing mix exceed the customer's costs of obtaining those benefits is one way to gain a competitive advantage.

Consumers have a responsibility to preserve an effective macro-marketing system.

Use this information to answer the following questions that refer to the PSI case. Pump Systems, Inc. (PSI) produces two major kinds of water pumps. The smaller pumps range in price from $5-$30, and are used in drinking fountains and soft-drink machines. Most of these pumps are bought by manufacturers of these machines and built into their product. PSI also builds larger pumps used in swimming pools and reservoirs. The prices of these items range from $250-$500. These are usually purchased by contractors who build the pools and reservoirs. PSI sells nationally through sales reps located in the large industrial centers. These reps handle the selling function for PSI in their geographic areas and provide market information. They usually do the same thing for 10 to 20 similar manufacturers of noncompeting products--and are paid on a commission basis. There are no other producers of the smaller pumps in the United States--because PSI has patent protection. As a result of this, management has decided to follow a policy of pricing high--to maximize profits--while the patent lasts. Several competitors are in the market for the larger pumps. Industry prices and profits of these pumps have dropped in the past few years as a result of firms trying to increase their market shares. The product design has remained fairly stable over the last few years--and one firm dropped out as it saw that it would lose more money with its "me-too" product. Industry sales are increasing--but at a very slow rate. The price of these products is determined by adding a standard markup percentage to the variable cost of the items--to cover fixed costs and profit. For instance, pump Z has variable costs of $250 per unit, and a markup of 40 percent of this cost is added to the $250 to get its selling price. Management has estimated that fixed costs applicable to this product are $200,000 per year. PSI publishes a product catalog which is revised annually. Also, it exhibits in most trade shows. PSI follows a policy of charging the same price to all customers--so all will have the same costs at their own plants. All purchases are shipped directly from PSI's factory to its customers--and title passes at PSI's factory. -PSI's sales reps are:

The legal environment sets the minimum standards of ethical behavior in a society.

The main difference between a "strategy" and a "marketing plan" is:

A S.W.O.T. analysis

Evaluating marketing effectiveness is impossible.

According to the text, the proper function of marketing is to persuade consumers to buy what firms want to sell.

Advertising is probably the most criticized of all micro-marketing activities.

In the U.S. market-directed system, it is up to each _____ to decide how effectively individual firms satisfy the consumer's needs.

In conditions of monopolistic competition, marketing:

Which of the 4Ps in the marketing mix is most directly related to the branding strategy for Apple's iPad?

Which of the following does NOT support the idea that MICRO-marketing often DOES cost too much?

Use this information to answer the following questions that refer to the EI (Electech Inc.) case. Electech, Inc. (EI) produces a line of semiconductors for electronics products manufacturers. These items range in price from $5-$100 and are used in products the buyer is producing. EI also designs and builds computer networking equipment. The prices of these items range form $5,000 to $100,000. These are used to control production equipment. Usually, they are custom-made to the specifications of the buyer--the firm which will use the product in its own production process. EI sells nationally through independent sales reps--paid on commission--who work in the large industrial centers across the country. EI is more concerned with the quality of these reps than with the number of them. All of them also sell other lines. EI also uses five full-time salaried salespeople who work out of its corporate headquarters under a sales manager. The home office salespeople are "technical specialists" who sell almost all the networking equipment, while the "reps" mostly sell the semiconductors. Sometimes, however, the reps will send in leads to customers who want networking equipment. EI also sells some of its semiconductors through a Los Angeles wholesaler who carries stock for West Coast customers. There are many producers and importers of semiconductors in the U.S.--but several firms have captured large shares of the networking equipment market. EI has held its own, and in fact, over the past five years has increased its market share of these products to over 25 percent--because of its better technical designs. Industry-wide prices of the more or less homogeneous semiconductors have been forced further and further down over the last seven years--as have industry profits. The price of networking equipment is set by adding a standard markup percent to the direct cost of the items--for overhead and for profit. Following industry practice, all prices are quoted at the seller's factory. EI publishes a catalog which is revised periodically. And it exhibits in most equipment trade shows. -What promotion method is EI using when it publishes catalogs, and exhibits in trade shows?

Which of the 4Ps in the marketing mix is most directly related to the instructions that come with a new high-definition television set?

A S.W.O.T. analysis identifies the "special weapons or tactics" used by the competitor in a product-market that has the most profitable marketing mix.

Higher profits

In the United States, the basic objective of the market-directed economic system has been: