Ch. 1 & 2 Marketing

Identify several techniques that help make strategic planning effective.

1. management must realize that strategic planning is an ongoing process and not a once-a-year exercise. 2. good strategic planning involves a high level of creativity. 3. top management's support and participation.

Production Orientation

A philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace?

explain why implementation, evaluation, and control of the marketing plan are necessary.

Before a marketing plan can work, it must be implemented—that is, people must perform the actions in the plan. The plan should also be evaluated to see if it has achieved its objectives. Poor implementation can be a major factor in a plan's failure, but working to gain acceptance can be accomplished with task forces. Once implemented, one major aspect of control is conducting and following through on a marketing audit.

1. Marketing affects the allocation of goods and services that influence a nation's economy and standard of living. 2. An understanding of marketing is crucial to understanding most businesses. 3. Career opportunities in marketing are diverse, profitable, and expected to increase significantly during the coming decade. 4. Understanding marketing makes consumers more informed.

Describe several reasons for studying marketing.

1. Sales: focuses on their own needs Market: focus on customers' needs and preferences 2. Sales: consider themselves to be deliverers of goods and services Market: view themselves as satisfiers of customers 3. Sales: direct their products to everyone Market: aim at specific segments of the population 4. Sales: place a higher premium on making a sale Market: seek a long-term relationship with the customer 5. Sales: pursue maximum sales volume through intensive promotion Market: pursue customer satisfaction through coordinated activities

Discuss the differences between sales and market orientation.

Objectives should be realistic, measurable, time specific, and compared to a benchmark. They must also be consistent and indicate the priorities of the organization. Good marketing objectives communicate marketing management philosophies, provide management direction, motivate employees, force executives to think clearly, and form a basis for control.

Explain the criteria for stating good marketing objectives.

Ansoff's opportunity matrix presents four options to help management develop strategic alternativies: market penetration, market development, product development, and diversification. A marketing plan should define the business mission, perform a situation analysis, define objectives, delineate a target market, and establish components of the marketing mix.

Identify strategic alternatives and know a basic outline for a marketing plan.

D) Satisfied

Joel bought dinner at a local restaurant. He had a pleasant time, enjoyed the food, and left in a good mood. Since the meal met Joel's needs and expectations, we can best say that he is: A) Disgusted B) Surprised C) Delighted D) Satisfied

B) Product Strategy

Know ​Sugar, Inc., sells cookies and nutrition bars. The marketers at Know ​Sugar, Inc. are trying to come up with a new and attractive packaging design for its cookies. In this scenario, Know ​Sugar, Inc. is working on its _____. A) Advertising Strategy B) Product Strategy C) Distribution Strategy D) Purchase Strategy

A) Exchange

Marie posted a for sale flyer for her used bicycle around campus. Stephanie responded, took it for a test drive, agreed on a price with Marie, and bought it. Marie and Stephanie are parties to a(n): A) Exchange B) Illegal Transaction C) Promotion D) Written Contract

A) Production Orientation

Researchers at 3M invented a new form of glass that filters harmful rays of sunlight and blocks heat. Without researching the market conditions, 3M went ahead and manufactured windshields with the new glass. It hopes that customers will like its new product. In this scenario, Fresnas Inc. has adopted a ______________. A) Production Orientation B) Sales Orientation C) Market Orientation D) Social Marketing Orientation

Discuss target market strategies.

Targeting markets begins with a market opportunity analysis (MOA), which describes and estimates the size and sales potential of market segments that are of interest to the firm. In addition, an assessment of key competitors in these market segments is performed. After the market segments are described, one or more may be targeted by the firm.

Sales Orientation

The belief that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits.

Develop an appropriate business mission statement.

The firm's mission statement establishes boundaries for all subsequent decisions, objectives, and strategies. A mission statement should focus on the market(s) the organization is attempting to serve rather than on the good or service offered.

Marketing Concept

The idea that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives.

D) Bombast Inc. satisfies its customers' wants and needs legally and responsibly.

The management of Bombast Inc. always favors market orientation over the other marketing management philosophies. In this case, which of the following is most likely to be true of Bombast Inc.? A) Bombast Inc. lacks an understanding of its competitors' strengths and weaknesses. B) Bombast Inc. manufactures products that are similar to its competitors' offerings. C) ​Bombast Inc. overlooks the importance of market research. D) Bombast Inc. satisfies its customers' wants and needs legally and responsibly.​

Describe the elements of the marketing mix.

The marketing mix is a blend of product, place, promotion, and pricing strategies (the four Ps) designed to produce mutually satisfying exchanges with a target market. The starting point of the marketing mix is the product offering. Place (distribution) strategies are concerned with making products available when and where customers want them. Promotion includes advertising, public relations, sales promotion, and personal selling. Price is what a buyer must give up in order to obtain a product.

1. Cost 2. Product/Service Differentiation 3. Niche

What are the 3 types of competitive advantage?

1. There must be at least two parties. 2. Each party has something that might be of value to the other party. 3. Each party is capable of communication and delivery. 4. Each party is free to accept or reject the exchange offer. 5. Each party believes it is appropriate or desirable to deal with the other party.

What are the 5 conditions of exchange?

a distinct mission and a specific target market, control over its resources, its own competitors, a single business, and plans independent for other SBUs in the organization.

What are the characteristics of an SBU?

1. Production-Oriented 2. Sales Orientation 3. Market-Oriented 4. Societal Marketing

What are the four marketing management philosophies?

Experience curves, efficient labor, no-frills goods and services, government subsidies, product design, reengineering, production innovations, and new methods of service delivery.

What do sources of cost competitive advantage include?

It has its own rate of return on investment, growth potential, and associated risks, and requires its own strategies and funding.

What does each SBU contain?

When a firm provides something unique that is valuable to buyers beyond just low price.

When does a product/service differentiation competitive advantage exist?

from targeting unique segments with specific needs and wants.

Where do niche competitive advantages come from?

D) Establishing a brand name

Which of the following is a distinct feature of a product/service differentiation competitive advantage? A) Controlling overhead costs B) Obtaining inexpensive raw materials C) Using government subsidies D) ​Establishing a brand name

B) Prime Cut Inc. that believes in the philosophy that aggressive sales techniques can result in high sales.

Which of the following is a sales-oriented organization? A) Americo Corp. that produces what the company management thinks should be produced. B) ​Prime Cut Inc. that believes in the philosophy that aggressive sales techniques can result in high sales. C) Zorelle Inc. that believes that a sale is based on a customer's decision to purchase a product. D) National Corp. that understands the needs and wants of the marketplace.

C) It focuses on delivering value and benefits the customers.

Which of the following statements is true of marketing? A) It rewards the seller not the buyer of the transaction B) It is focused on just selling goods, services, and/or ideas C) It focuses on delivering value and benefits the customers D) It is more of a philosophy than an organization function

A) Marketing offers great career opportunities in business and nonbusiness organizations.

Which of the following statements is true of marketing? A) Marketing offers great career opportunities in business and nonbusiness organizations. B) Only two percent of the entire civilian workforce in the U.S. performs marketing activities. C) Marketing is limited to the people of the marketing department of a firm. D) A consumer does not pay for the marketing costs.

A) Removing frills from products

Which of the following strategies can enable companies to gain a cost competitive advantage? A) Removing frills from products B) Focusing on serving marginal customers​ C) Developing additional exclusive functional departments D) Eliminating reverse engineering efforts

Customer Relationship Management (CRM)

a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups

Market Development

a marketing strategy that entails attracting new customers to existing products

Product Development

a marketing strategy that entails the creation of new products for present markets

Marketing Penetration

a marketing strategy that tries to increase market share among existing customers

Market Orientation

a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer's decision to purchase a product; it is synonymous with the marketing concept

competitive advantage

a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition

Mission Statement

a statement of the firm's business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions

marketing objective

a statement of what is to be accomplished through marketing activities

Diversification

a strategy of increasing sales by introducing new products into new markets

Relationship Marketing

a strategy that focuses on keeping and improving relationships with current customers

Strategic Business Unit (SBU)

a subgroup of a single business or collection of related businesses within the larger organization

marketing audit

a thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization

Portfolio Matrix

a tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate

marketing mix (four P's)

a unique blend of product, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market

Marketing Plan

a written document that acts as a guidebook of marketing activities for the marketing manager

sustainable competitive advantage

an advantage that cannot be copied by the competition

cost competitive advantage

being the low-cost competitor in an industry while maintaining satisfactory profit margins

Teamwork

collaborative efforts of people to accomplish common objectives

Environmental Scanning

collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan

experience curves

curves that show costs declining at a predictable rate as experience with a product increases

Customer Satisfaction

customers' evaluation of a good or service in terms of whether it has met their needs and expectations

Marketing Myopia

defining a business in terms of goods and services rather than in terms of the benefits customers seek

Empowerment

delegation of authority to solve customers' problems quickly—usually by the first person the customer notifies regarding a problem

On-Demand Marketing

delivering relevant experiences, integrated across both physical and virtual environments, throughout the consumer's decision and buying process

Marketing Planning

designing activities relating to marketing objectives and the changing marketing environment

evaluation

gauging the extent to which the marketing objectives have been achieved during the specified time period

SWOT Analysis

identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)

Cash Cow

in the portfolio matrix, a business unit that generates more cash than it needs to maintain its market share

Dog

in the portfolio matrix, a business unit that has low growth potential and a small market share

Star

in the portfolio matrix, a business unit that is a fast-growing market leader

Problem Child (question mark)

in the portfolio matrix, a business unit that shows rapid growth but poor profit margins

Exchange

people giving up something in order to receive something else they would rather have.

control

provides the mechanisms for evaluating marketing results in light of the plan's objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines

marketing strategy

the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets

Marketing

the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. It also requires all facets of a company to work together to pool ideas and resources. One major goal of this is to create an exchange. However, people engage in this whether or not an exchange happens.

niche competitive advantage

the advantage achieved when a firm seeks to target and effectively serve a small segment of the market

market opportunity analysis (MOA)

the description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments

Societal Marketing Orientation

the idea that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals' and society's long-term best interests

Strategic Planning

the managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities. It is the basis for all marketing strategies and decisions. These decisions affect the allocation of resources and ultimately the financial success of the company.

Planning

the process of anticipating future events and determining strategies to achieve organizational objectives in the future

implementation

the process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes the plan's objectives

product/service differentiation competitive advantage

the provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition

Customer Value

the relationship between benefits and the sacrifice necessary to obtain those benefits

A) Distribution

​Clique2Send, a cell phone manufacturer, decides to launch its new range of smartphones on the company's official Web site so that its logistics issues can be solved. With this modification, its customers can now buy the smartphones even if they are not sold in any of the stores in their locality. In this case, ​Clique2Send focuses on the _____ element of the marketing mix. A) distribution B) price C) evaluation D) promotion

D) It serves only a limited geographic market.

​Handi-Mandy Inc. makes and sells original handicraft goods. The management of the company has been successfully using a niche strategy for many years. In this case, which of the following is most likely to be true of Handi-Mandy Inc.? A) It offers products at a lower price than that of the competition. B) ​It lowers costs by removing frills and options from its products. C) It develops products that are similar to those of its competitors. D) It serves only a limited geographic market.

D) Be inward looking, focusing on selling what the firm makes.

​Havana Corp. manufactures electronic gadgets. It instructs its marketing team to competitively advertise and promote its gadgets. The company, instead of believing in market research, believes that the market will absorb more products if customers are made aware of the products. The workforce of Havana Corp. is most likely to: A) focus on determining the needs of its customers rather than selling aggressively. B) assume that sales depend on a customer's decision to purchase a product. C) take responsibility for its customers' well-being and interests. D) be inward looking, focusing on selling what the firm makes.

A) A superior production technology

​In the context of SWOT—internal strengths (S), weaknesses (W), external opportunities (O), and threats (T)—analysis, which of the following can be considered as a strength of an organization? A) A superior production technology B) A new unserved market C) ​Increased taxes on products D) Imitable products and services

B) Marketing Plan

​Issues such as product lines, promotional communications, and pricing are all delineated in the _____. A) statement of qualification B) marketing plan C) financial statement D) article of incorporation

C) NestPas Inc. will target existing customers rather than new customers.​

​NestPas Inc. plans to implement a market penetration strategy to increase its market share. According to Ansoff's strategic opportunity matrix, which of the following is most likely to happen? A) NestPas Inc. will move away from its core capabilities, and it will traverse a range of change.​ B) NestPas Inc. will enter markets that are already served by separate companies.​ C) NestPas Inc. will target existing customers rather than new customers.​ D) NestPas Inc. will create new products for the markets it has penetrated.

D) A group of individuals who are diabetic

​Pharmville is pharmaceutical company. It follows a target market strategy as its products are designed to suit the needs of a group of people with similar characteristics. In this case, which of the following market segments should be targeted by ​Pharmville? A) A group of individuals who reside in the same residential area. B) A group of individuals who work in the same organization. C) A group of individuals who are working professionals. D) A group of individuals who are diabetic.

A) Produce containers that are less toxic than its previous containers.

​Smyth Inc., a beverage manufacturer, follows a societal marketing orientation. It now wants to revamp its existing containers as they were found to be harmful to its users. In this case, Smyth Inc. will: A) produce containers that are less toxic than its previous containers. B) change the label of the old containers and use them. C) sell containers that will leave high amounts of chemical wastes when burned. D) manufacture containers that cannot be reused.

A) It involves establishing and tracking customer interactions with a company.

​Which of the following statements is true of customer relationship management? A) It involves establishing and tracking customer interactions with a company. B) ​It considers all customers as one large group that should be targeted with a single promotional strategy. C) It is used by sales-oriented firms to convince customers to buy their products. D) It involves targeting the average customer or everybody.

D) A good strategic plan can help protect and grow a firm's resources.

​Which of the following statements is true of strategic planning? A) Strategic decisions require short-term commitments of resources. B) ​The goal of strategic planning is to create daily operational schedules for first-line workers. C) Strategic planning lacks an understanding of customers and the market. D) A good strategic plan can help protect and grow a firm's resources.