Exam 1 (Chapter 1-5)

Cultural values

(Sociocultural Values) Changes in cultural values alter people's needs/desires for products Health, nutrition, and exercise growing in importance (sales of organic foods, herbal remedies, and vitamins have escalated) Definition of family is changing Children continue to be very important Trend towards eat-out and take-out meals Green marketing helps establish long-term consumer relationships by maintaining, supporting, and enhancing the natural environment

SWOT Analysis

-A tool marketers use to assess an organization's strengths, weaknesses, opportunities, and threats -Strengths and weaknesses are internal factors that can influence an organization's ability to satisfy its target market -Opportunities and threats exist independently of the company and therefore represent issues to be considered by all organizations, even those that do not compete with the company

Marketing Orientation (Mid 20th Century)

-An organization-wide commitment to researching and responding to customer needs -To be successful, a company must determine the needs and wants of specific target markets and fulfill consumer needs better than the competition -Marketing objectives: •Make what you can sell •Focus on buyer's needs -Linked to new product innovation

Sales Orientation (1st Half of the 20th Century)

-Competition increased and focus shifted to selling products -Consumers are unlikely to buy a product unless aggressively persuaded to do so -Marketing objectives: •Sell, sell, sell •Lack of concern for customer needs and satisfaction

Sociocultural Forces (PESTLE)

-Cultural Value -Demographic and Diversity Characteristics

What is CRM?

-Customer Relationship Management (CRM) -Using information about customers to create marketing strategies that develop and sustain desirable customer relationships -Build profitable relationships by: •Acquiring new customers •Enhancing the profitability of existing customers •Extending the duration of customer relationships

Identify marketing ethics for Place (Distribution)

-Ethical issues in distribution involve relationships among producers and marketing intermediaries -Manipulating a product's availability for purposes of exploitation -Using coercion to force intermediaries to behave in a specific manner -Channel stuffing - shipping surplus inventory to wholesalers and retailers at an excessive rate -Counterfeiting is a worldwide problem as the market for fake or pirated goods is enormous

Major types of marketing research

-Exploratory Research -Conclusive Research -Descriptive Research -Experimental Research

How does data help improve marketing research / information?

-Help a firm better understand market opportunities -Ascertain the potential for success for new products -Determine the feasibility of a particular marketing strategy -Reveal some surprising trends. -Failing to conduct research can prevent companies from maintaining a competitive advantage -Helps develop marketing mixes to match the needs of customers -The real value of marketing research is measured by improvements in a marketer's ability to make decisions

Production Orientation (2nd Half of the 19th Century)

-Industrial Revolution improved speed and efficiency -Customers interested in product availability at low prices -Marketing objectives •Cheap, efficient production •Intensive distribution •Market expansion

Qualitative data

-Information describing color, odor, shape, or some other physical characteristic -Yields descriptive non-numerical information

Why is marketing research important?

-It is the art of identifying and understanding customer needs and creating solutions that deliver satisfaction to the customers, profits to the producers and benefits for the stakeholders -Marketers conduct marketing research to: * Reduce the risk of and... * Thereby improve marketing decisions.

What is marketing?

-It is the foundation of every business -It's the business function that develops the products that people want to buy because they know they need them and because they can afford them and because they can find them.

Place (Distribution)

-Making products available... in the right quantities, at the right time, and the right place -Focus on minimizing inventory, transportation, and storage costs -Supply chain management

BCG matrix

-Market growth/market share matrix -A helpful business tool, based on the philosophy that a product's market growth rate and its market share are important considerations in determining its marketing strategy

Political Forces (PESTLE)

-Political, legal, and regulatory forces are closely interrelated -Political forces: •Enactment of legislation •Legal decisions interpreted by courts through civil and criminal cases •Regulatory agencies are created and operated, for the most part, by elected or appointed officials -Marketers may: •View political forces as beyond their control and simply adjust to conditions that arise •Influence the process through contributions and lobbying

Price

-Price is a critical component as customers are concerned about the value they receive -The price variable relates to decisions and actions associated with pricing objectives and policies and actual product prices. -Price is often used as a competitive tool -Intense price competition can lead to price wars

Product

-Products can be... Goods, Services, Ideas, Experiences, Places, People -The product variable involves: •creating or modifying brand •names •packaging •warranty and repair services -Product variable decisions and activities are important because they directly relate to customers' needs and wants

Corporate Strategy

-The How -A strategy that determines the means for utilizing resources in the various functional areas to reach the organization's goals -Keep overall mission in mind!

Core Values (The Strategic Planning Process)

-The Why "Guiding Principles Based on a Philosophy of Business and Life" •Are the fundamental, passionate, and enduring principles of an organization that guide its conduct over time. •Are developed by an organization's founders or senior management. •Are consistent with their essential beliefs and character. •Capture the collective heart and soul of the organization. •Serve to inspire and motivate its stakeholders •Are timeless and should not change due to short-term financial, operational, or strategic concerns. •Guide the organization's conduct. •Must be supported by the chief executive officer and board of directors.

Mission Statement (The Strategic Planning Process)

-The Why -A long-term, or vision, of what the organization wants to become

Technological Forces (PESTLE)

-The application of knowledge and tools to solve problems and perform tasks more efficiently Impacts of technology: -Dynamic change -Ability to reach customers -Self-sustaining in nature; spurs more development Negative impacts include: -Concerns over privacy -Intellectual property protection issues

Promotion

-The promotion variable relates to activities used to inform and persuade; to create a desired response -Goals: •Increase public awareness •Educate customers •Urge people to take a stance on a political or social issue •Help sustain interest in established products

Customers

-The purchasers of organizations' products; the focal point of all marketing activities. -Organizations have to define their products not as what the companies make or produce but as what they do to satisfy customers.

Identify marketing ethics for Promotion

...can create ethical issues in a variety of ways: -False, misleading or deceptive advertising -Manipulative or deceptive sales promotions, tactics and publicity Withholding important product information in a personal-selling situation -Bribery occurs when an incentive is offered in exchange for an illicit advantage -Another major ethical issue is promoting products to children that might be construed as harmful

Identify marketing ethics for Price

...common ethical issues are: -Price fixing -Predatory pricing -Failure to disclose the full price of a purchase -Indicating that an advertised sale prices is a reduction below the regular price when in fact that is not the case

Identify marketing ethics for Product

...ethical issues arrive when marketers... -Fail to disclose risks associated with a product -Fail to disclose information regarding the function, value or use of a product -Cover up defects that could cause harm to consumers Withhold critical performance information that could affect a purchase decision -Fail to inform customers about existing conditions or changes in product quality -Such failure is a form of dishonesty about the nature of the product -Product recalls happen when customers are asked to return defective products

What are the steps of the marketing research process?

1. Locating and defining issues or problems 2. Designing the research project 3. Collecting data 4. Interpreting research findings 5. Reporting research findings

What are the 6 forces in the marketing environment? (PESTLE)

1. Political Forces 2. Economic Forces 3. Sociocultural Forces 4. Legal and Regulatory 5. Technological Forces 6. Environment (Physical)

Value

A customer's subjective assessment of benefits relative to costs in determining the worth of a product

Marketing Concept

A managerial philosophy that an organization should try to satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals

Business cycle

A pattern of economic fluctuations that has four stages: prosperity, recession, depression, and recovery

Marketing strategy

A plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market

Target Market

A specific group of customers on whom an organization focuses its marketing efforts

Product development

A strategy of increasing sales by improving present products or developing new products for current markets (Present Market, New Product)

Market penetration

A strategy of increasing sales in current markets with current products (Present Market, Present Product)

Market development

A strategy of increasing sales of current products in new markets (New Market, Present Product)

A customer orientation focuses on? A. Satisfying customer needs and wants B. Producing new products and the efficiency of production C. Convincing consumers to buy products and services D. Creating customer value without detrimentally affecting the resources or biological systems of the earth E. Making products first and then finding customers to buy them

A. Satisfying customer needs and wants

Diversification

Allows firms to make better and wider use of their managerial, technological, and financial resources (New Market, New Product)

Willingness to spend

An inclination to buy because of expected satisfaction from a pro

Social Responsibility

An organization's obligation to maximize its positive impact and minimize its negative impact on society

SWOT analysis refers to: A. taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization's marketing plans and the external forces and trends affecting it. B. an appraisal of an organization's internal strengths and weaknesses and its external opportunities and threats. C. a regularly scheduled internal audit that takes place during a specified promotional campaign to ensure that marketing actions are successfully taking place. D. a careful comparison of a company's performance relative to its closest competitors in terms of both profits and market share. E. an in-depth analysis of how a specific department is spending its money relative to the incremental revenues those actions are generating.

B. an appraisal of an organization's internal strengths and weaknesses and its external opportunities and threats.

The product variable of the marketing mix can include all of the following except A. creation of brand names. B. consumer perception of the product price. C. development of product packaging. D. warranty issues. E. repair services.

B. consumer perception of the product price.

"To contribute to human welfare by application of biomedical engineering in the research, design, manufacture, and sale of instruments or appliances that alleviate pain, restore health, and extend life" is Medtronic's A. core value. B. mission statement. C. corporate culture. D. functional goal. E. environmental strategy.

B. mission statement.

The selling concept focuses on profit through ______, while the marketing concept focuses on profits based on _______. A. product innovation; aggressive advertising B. sales volume; customer satisfaction C. customer satisfaction; product innovation D. customer satisfaction; aggressive advertising E. sales volume; producing quality products

B. sales volume; customer satisfaction

Threats (SWOT)

Barriers that could prevent the company from reaching its objectives.

Types of Competitors

Brand Product Generic Total Budget

Economic Forces (PESTLE)

Buying Power - Resources, such as money, goods, and services, that can be traded in an exchange Income - For an individual, the amount of money received through wages, rents, investments, pensions, and subsidy payments for a given period Disposable Income - After-tax income Discretionary Income - Money that remains after paying for taxes and basic necessities (food, clothing, shelter)

How does marketing create value?

By meeting customer's functional and emotional needs -Customer value = customer benefits - customer costs -Consumers develop a concept of value through the integration of their perceptions of product quality and financial sacrifice

A ____ is created when a company matches its core competency to opportunities it has discovered in the marketplace. A. market opportunity B. market requirement C. competitive advantage D. strategic window E. competitive opportunity

C. competitive advantage

Total Budget

Compete for limited financial resources of same customer Coca cola vs. Gum

Product

Compete in same product class with different features, benefits, prices Soda vs. Energy Drinks

Marketing Environment

Consists of external forces that directly or indirectly influence an organization's acquisition of inputs (personnel, financial resources, raw materials, and information) and generation of outputs (goods, services, ideas). The marketing environment includes competitive, economic, political, legal and regulatory, technological, and sociocultural forces.

What is the focus of marketing?

Customers

Situation analysis requires a firm to consider both internal and external factors. Which of these is an example of an external factor? A. The firm buys its own fleet of trucks so it no longer needs to hire a trucking company for distribution. B. A hiring freeze is put into place. Although no one is fired no one can be hired. C. A goal is set to close the gap between production costs and profits. D. A local governance requires that all businesses within the city limits must reduce their waste by 5% or be fined. E. Shareholders are rewarded with a sizeable dividend check.

D. A local governance requires that all businesses within the city limits must reduce their waste by 5% or be fined.

Which of the following would not be a customer cost considered in determination of product value? A. Product's purchase price B. Time spent purchasing the product C. Effort spent purchasing the product D. Benefits received in the exchange for the products E. Risk of purchasing the product

D. Benefits received in the exchange for the products

The two major aspects of the evaluation phase of the strategic marketing process are A. segmenting the market and selecting target markets. B. establishing a business mission and designing measurable goals and objectives. C. designing the marketing mix and setting the budget. D. identifying deviations from goals and acting on the deviations. E. executing the marketing plan and designing the marketing organization

D. identifying deviations from goals and acting on the deviations.

Primary Data

Data that are newly collected for the research project

Secondary Data

Data that has been collected for reasons other than the specific research project

Demographics

Demographic and Diversity Characteristics Changes in a population's demographic characteristics lead to changes in how people live and consume products Increasing proportion of older consumers and singles Declining birth rate Growing number of immigrants

Discretionary income

Disposable income available for spending and saving after an individual has purchased the basic necessities of food, clothing, and shelter

Developing a marketing mix and identifying / analyzing a target market are important aspects of which part of strategic planning? A. Developing marketing activities B. Coordinating marketing objectives C. Establishing objectives D. Organizing the marketing function E. Creating a marketing strategy

E. Creating a marketing strategy

The Boston Consulting Group (BCG) business portfolio analysis requires an organization to locate the position of each of its SBUs on a growth-share matrix. The horizontal axis is the: A. national forecast. B. business portfolio in dollars. C. years of experience. D. market segment size. E. relative market share.

E. relative market share.

Strategic Performance Evaluation

Establishing performance standards, measuring actual performance, comparing actual performance with established standards, and modifying the marketing strategy, if needed

Opportunities (SWOT)

Favorable conditions in the environment that could produce rewards for the organization to act upon.

Marketing Mix

Four marketing activities—product, distribution, promotion, and pricing - that a firm can control to meet the needs of customers within its target market

Legal and Regulatory Forces (PESTLE)

Legal and Regulating Rules

Weakness (SWOT)

Limitations a company faces in developing or implementing a marketing strategy.

Competitive Growth Strategies

Market penetration Product development Market development Diversification

What is marketing research?

Marketing Research is the process of: -Defining a marketing problem and opportunity. -Systematically collecting and analyzing information. -Recommending actions.

What are the competitive structures? (MOMP)

Monopoly Oligopoly Monopolistic competition Pure competition

How do organizations deal with the marketing environment?

Organizations deal with marketing environments with environmental scanning and analysis. This information helps marketing managers predict opportunities and threats associated with environmental fluctuation.

What is marketing ethics?

Principles and standards that define acceptable marketing conduct as determined by various stakeholders

Types of Data

Qualitative, Quantitative, Primary, Secondary

Strength (SWOT)

Refer to competitive advantages, or core competencies, that give the company an advantage.

Descriptive Research

Research conducted to clarify the characteristics of certain phenomena to solve a particular problem Demands prior knowledge Assumes problem is clearly defined May require statistical analysis

Exploratory Research

Research conducted to gather more information about a problem or to make a tentative hypothesis more specific How are consumers' car buying habits changing? To better understand a problem or situation and/or to help identify additional data needs or decision alternatives Focus Groups In-depth interviews

Conclusive Research

Research designed to verify insights through objective procedures and to help marketers in making decisions What percentage of consumers will consider an electric car purchase? Used when the marketer has one or more alternatives in mind and needs assistance in the final stages of decision making Two types - Descriptive Experimental

Experimental Research

Research that allows marketers to make causal inferences about relationships Provides strong evidence of cause and effect Need a dependent variable and independent variable(s) in order to set-up research project

Cash cows (BCG/ lower left)

SBUs that generate large amounts of cash than can be invested in other SBUs.

Stars (BCG/ upper left).

SBUs with a high share of high-growth market that need extra cash to finance future growth.

Question marks or problem children (BCG/ upper right)

SBUs with a low share of high-growth markets.

Dogs (BCG/lower right)

SBUs with a low share of slow-growth markets.

Brand

Similar features and benefits at similar prices Coca Cola vs. Pepsi

What does SWOT analysis stand for?

Strengths, Weaknesses, Opportunities, Threats

Wealth

The accumulation of past income, natural resources, and financial resources

Technology

The application of knowledge and tools to solve problems and perform tasks more efficiently

What is the Marketing Environment?

The competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surround the customer and affect the market mix

Environmental Analysis (Marketing environment)

The process of assessing and interpreting information obtained in scanning.

Environmental scanning (Marketing environment)

The process of collecting information about forces in the marketing environment

Strategic Planning

The process of establishing an organizational mission and formulating goals, a corporate strategy, marketing objectives, and a marketing strategy

Marketing implementation

The process of putting marketing strategies into action

Competitive Advantage

The result of a company matching a core competency to opportunities it has discovered in the marketplace

Buying power

The size of the resources, such as money, goods, and services that can be traded in an exchange, that enable the individual to make purchases

Generic

Very different products solving same problem or satisfying same need Soda vs. Water

Ways of collecting data

Watching People (Observational Data), Asking People

Quantitative Data

Yields empirical information that can be communicated through numbers

Evolution of the Marketing Concept

•Production Orientation (2nd Half of the 19th Century) •Sales Orientation (1st Half of the 20th Century) •Market Orientation (Mid 20th Century) •Customer Orientation

SBU Strategy

•Strategic business unit (SBU) - A division, product line, or other profit center within the parent company •The revenues, costs, investments, and strategic plans of each SBU can be separated from those of the parent company and evaluated