CLEP Principles of Marketing cheat sheet

Microenvironment actors: company, suppliers, marketing intermediaries, customer markets, competitors, publics; macroenvironment forces: demographic, economic, natural, technological, political/legal, sociocultural.

Controllable marketing mix = 4 Ps: Product, Price, Place, Promotion; services extend to 7 Ps adding People, Process, Physical evidence.

SWOT analysis classifies internal strengths and weaknesses against external opportunities and threats; opportunities and threats originate in the macroenvironment.

Exchange is the core concept: two or more parties give something of value to obtain a desired object, and each party must be free to accept or reject the offer.

Marketing concept holds that achieving organizational goals depends on knowing target-market needs and satisfying them better than competitors; production, product, and selling orientations come earlier historically.

Societal marketing concept adds consumer and societal long-run well-being to company profit and customer satisfaction; cause marketing and green marketing are applications.

Demographic environment variables: age structure, family composition, geographic shifts, education, ethnic mix, income distribution; generational cohorts differ in media and spending habits.

Economic environment distinguishes disposable income (after taxes) from discretionary income (after taxes and necessities); discretionary income drives luxury and nonessential demand.

Segmentation bases: geographic, demographic, psychographic (lifestyle, personality, social class), and behavioral (usage rate, benefits sought, loyalty status, occasion).

Effective segments must be measurable, accessible, substantial, differentiable, actionable; these five criteria are the standard test of segment viability.

Targeting strategies: undifferentiated (mass), differentiated (multiple segments), concentrated (niche), and micromarketing (local or individual).

Positioning is the place a product occupies in consumers' minds relative to competitors; it is built from a value proposition and a defensible competitive advantage.

Perceptual maps plot brands on two or more consumer-perceived attributes; gaps between clusters can reveal an unoccupied positioning opportunity.

Differentiation variables: product (features, performance, durability), services (delivery, installation, repair), personnel, channel, and image.

Positioning statement format: for [target segment] who [need], our [brand] is the [frame of reference] that [point of difference] because [reason to believe].

Product repositioning is triggered by declining sales, new competitors, or shifting consumer tastes; it risks confusing existing buyers and diluting brand meaning.

Consumer buyer decision process: need recognition, information search, evaluation of alternatives, purchase decision, postpurchase behavior; cognitive dissonance is postpurchase doubt relieved by information seeking.

Buying roles in the family or organization: initiator, influencer, decider, buyer, user, and gatekeeper.

Maslow's hierarchy ascends physiological, safety, social, esteem, self-actualization; lower needs generally must be met before higher ones motivate purchase.

Perception processes: selective attention, selective distortion (interpreting information to fit beliefs), and selective retention (remembering only supportive information).

Business markets differ from consumer markets: fewer but larger buyers, derived demand, more inelastic and fluctuating demand, professional purchasing, multiple buying influences, and closer supplier relationships.

Business buying process: problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification, performance review.

Buying center members: users, influencers, deciders, purchasers, and gatekeepers; the buying center is a decision unit, not a fixed department.

Buying situations: straight rebuy (routine reorder), modified rebuy (some terms change), and new task (first purchase, greatest risk and longest decision cycle).

Product levels: core benefit, actual product (features, design, quality, brand), and augmented product (warranty, delivery, installation, after-sale service).

Consumer product classes: convenience, shopping, specialty, and unsought; each implies different distribution intensity and promotion emphasis.

Product mix dimensions: width (number of product lines), length (total items), depth (variants per item), and consistency (closeness of lines in end use).

New-product development stages: idea generation, screening, concept testing, marketing strategy development, business analysis, product development, test marketing, commercialization.

Product life cycle stages: introduction (low sales, high promotion), growth (rising sales and profits), maturity (peak sales, intense competition), decline (falling sales); not all products follow the curve.

Branding terms: brand equity (differential value from the name), brand awareness, brand loyalty, line extension, brand extension, multibranding, and co-branding.

Services characteristics: intangibility, inseparability, variability, and perishability; each requires a matching strategy such as tangible cues, standardization, or demand management.

Packaging functions: protection, economy, convenience, and promotion; labeling carries persuasion and legally required information such as contents, warnings, and manufacturer identity.

Price floor is set by costs, price ceiling by demand and perceived value; competitors' prices and other mix elements position price within that range.

Cost-plus (markup) pricing = cost + markup; target-profit pricing = unit cost + (target return on investment x invested capital) / unit sales.

Break-even quantity = fixed cost / (unit price - unit variable cost); break-even price = fixed cost / quantity + unit variable cost.

Demand elasticity = percent change in quantity demanded / percent change in price; demand is inelastic when |elasticity| < 1 and price increases raise total revenue.

New-product pricing: market-skimming sets a high initial price to capture early adopters; market-penetration sets a low price to win share and volume quickly.

Psychological pricing: reference prices, odd-even pricing, customary pricing, and prestige pricing (high price signals quality).

Promotional pricing: loss leaders, special-event pricing, rebates, low-interest financing, and longer warranties; risks include brand dilution and price wars.

Price-adjustment tactics: quantity and cumulative discounts, functional (trade) discounts, seasonal discounts, allowances, segmented pricing, and geographic pricing such as FOB-origin and uniform delivered.

Channel level counts intermediaries between producer and consumer; a zero-level (direct) channel is producer to consumer, a one-level channel adds a retailer, a two-level channel adds a wholesaler.

Channel functions: information, promotion, contact, matching, negotiation, physical distribution, financing, and risk taking; functions can shift among members but cannot be eliminated.

Intensity options: intensive (convenience goods, many outlets), selective (shopping goods, chosen outlets), exclusive (specialty goods, limited outlets with exclusive dealing).

Vertical marketing systems: corporate, administered, and contractual (franchise, retailer cooperative, wholesaler-sponsored voluntary chain) coordinate levels under unified control.

Channel conflict is horizontal (same level) or vertical (between levels); disintermediation is the removal of channel members, often by direct online selling.

Retail positioning dimensions: target market, product assortment breadth and depth, price level, service level, and store atmosphere.

Retailer types: department stores, discount stores, supermarkets, convenience stores, specialty stores, category killers, off-price retailers, and warehouse clubs.

Wholesaler functions: selling and promoting, buying and assortment building, bulk breaking, warehousing, transportation, financing, risk bearing, market information, and management services.

Promotion mix tools: advertising, sales promotion, personal selling, public relations, and direct and digital marketing.

Push strategy directs promotion to channel members to move product forward; pull strategy directs promotion to final consumers to create demand that pulls product through the channel.

Advertising objectives divide into informative (introduction), persuasive (growth, comparative), and reminder (maturity); the AIDA model sequences attention, interest, desire, action.

Advertising budgeting methods: affordable, percentage of sales, competitive parity, and objective-and-task (most defensible because it builds budget from communication goals).

Sales promotion tools: consumer (samples, coupons, premiums, contests, sweepstakes, point-of-purchase displays) and trade (allowances, free goods, cooperative advertising, contests).

Media selection criteria: reach (percent of target exposed), frequency (exposures per person), impact, cost per thousand (CPM = cost / audience in thousands), and waste.

Public relations tools: press releases, publicity, sponsorships, events, and crisis management; publicity is unpaid, nonpersonal communication with no identified sponsor.

Integrated marketing communication requires consistent message and media coordination across all touchpoints; personal selling dominates in business markets and high-value, complex sales.

Research process: define problem and objectives, develop the research plan, collect information, analyze it, and present findings; defining the problem correctly is the most critical step.

Secondary data are already collected for another purpose (cheaper, faster, but may be outdated or irrelevant); primary data are collected for the current problem.

Exploratory research uses secondary data, observation, and focus groups; descriptive research uses surveys; causal research uses experiments to test cause and effect.

Probability samples: simple random, stratified, cluster, and systematic; nonprobability samples: convenience, judgment, quota, and snowball (no measurable sampling error).

Survey contact methods: mail, telephone, personal, online; each trades off cost, speed, response rate, and interviewer bias.

Questionnaire design rules: avoid leading, loaded, and double-barreled questions; place difficult or personal questions late; pretest the instrument before full fielding.

Marketing information system components: internal records (orders, sales, inventory, receivables), marketing intelligence (everyday competitor and market information), and marketing research.

Data quality criteria: validity (measures the intended construct), reliability (consistent results on repeat), and representativeness (sample reflects the target population).