Marketing 3110 Exam 1 Clinton Amos

What is a multinational corporation?

**Multinational corporations are those heavily engaged in international trade, moving products and services across national boundaries. A multinational company may have several worldwide headquarters. The role of multinational corporations in developing nations is a subject of controversy. Critics claim that the wrong kind of technology is transferred to developing nations. For example, capital-intensive technology does not substantially increase employment. Multinationals sometimes support oppressive regimes if it is in their best interests. Another criticism is that firms take more wealth out than they bring in.

What is global marketing standardization?

*Production of uniform products that can be sold the same way all over the world. Communication and technology have made the world smaller, and thus the emergence of global markets for standardized products, as opposed to segmented foreign markets with different products.

What do social factors influence? (Attitude, Values, Lifestyle)

-Social change is perhaps the most difficult external variable for marketing managers to forecast, influence, or integrate into marketing plans. -Social factors influence the products people buy, the price paid, the effectiveness of specific promotions, and how, where, and when people expect to purchase products. -Millennials want meaningful work

Why is it beneficial to study marketing? (PP CH1 #25)

- Important to society - Important to business - Good career opportunities - Marketing affects you every day

What are the major components of a marketing plan? (2-3)

- Some elements are common to all marketing plans. These include the business mission and objectives, performing a SWOT analysis, determining a target market, and establishing a marketing mix. - Other elements that may be included are budgets, implementation timetables, required marketing research efforts, or elements of advanced strategic planning.

Be able to distinguish the legal considerations for entering the global marketplace (e.g., tariffs, quotas)

-Tariff: A tax levied on goods entering a country -Quota: Limit on the amount of a product entering a country -Boycott: Exclusion of products from a country -Exchange Control: Foreign exchange must be sold to a control agency -Market Grouping: Common trade alliance -Trade Agreement: An agreement to stimulate international trade

What is pre-conventional morality?

-Based on what will be punished or rewarded -Self-centered, calculating, selfish

What is post-conventional morality?

-Concern about how they judge themselves -Concern if it is right in the long run

What are the three main types? (2-6)

-Cost -Product/service differentiation -Niche

Differentiate the external environmental forces that global marketers face (e.g., culture, political structure).

-Culture -Natural Resources -Economic Development -Political Structure -Demographic Makeup

A recent study of marketing professionals found that their ethical judgments were influenced by several factors. What are these factors and how does each of these factors contributes to the ethical environment of a marketing organization? (3-3b)

-Extent of ethical problems within the organization -Top managements actions on ethics -Potential magnitude of consequences -Social consequences -Probability of a harmful outcome -Length of time between decision and the onset of the consequences -Number of people to be affected

What are some natural resources forces that global marketers face?

-International dependencies -Shifts of wealth -Inflation and recession -Export opportunities if resources are abundant -Stimulus for military intervention

What are some cultural forces that global marketers face?

-Language and cultural idioms. -Customs and traditions -Values and expectations of sales presentations

What is conventional morality?

-Moves toward the expectations of society -Concerned over legality and the opinion of others

What are some demographic makeup forces that global marketers face?

-Population density -Urban or rural -Age

Apple's attempt to develop a self-driving car is an example of what type of research?

Applied Research

What are some political structure forces that global marketers face?

-Tariff: A tax levied on goods entering a country -Quota: Limit on the amount of a product entering a country -Boycott: Exclusion of products from a country -Exchange Control: Foreign exchange must be sold to a control agency -Market Grouping: Common trade alliance -Trade Agreement: An agreement to stimulate international trade

Be able to recognize examples of the major factors in the external marketing environment (social, economic, etc.)?

-The factors within the external environment that are important to marketing mangers can be classified as social, demographic, economic, technological, political and legal, and competitive. -You must first understand how customers buy, where they buy, what they buy, and when they buy. -You must understand what drives consumer decisions. -You must identify the most valuable customers and understand their needs. -You must understand the competition.

What are the three main target market strategies (e.g., concentrate on one segment)? 2-8)

1. Appeal to the entire market with one marketing mix 2. Concentrate on one marketing segment 3. Appeal to multiple markets with multiple marketing mixes

What are three criteria for good marketing objectives? (2-7)

1. Communicate marketing management philosophy 2. Provide management direction 3. Motivate employees 4. Force executives to clarify their thinking 5. Form a basis for control

What is an SBU (strategic business unit)? (2-2)

A Strategic Business Unit (SBU) is a subgroup of a single business or a collection of related businesses within the larger organization, and has the listed characteristics. An SBU has... A distinct mission and specific target market Control over its resources Its own competitors A single business or a collection of related businesses Plans independent of other SBUs e.g. -Jaguar -Jeep

Boston Consulting Group Portfolio Matrix: CASH COW

A cash cow generates more cash than it needs to maintain market share. It is in a low-growth market, but the product has dominant market share. The marketing strategy is to maintain market dominance by being the price leader and by making technological improvements. Allocate excess cash to high-growth prospects.

What is a competitive advantage? (2-6)

A competitive advantage is the set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition. A firm's competitive advantage is the reason or reasons that cause customers to patronize that firm and not the competition.

Boston Consulting Group Portfolio Matrix: DOG

A dog has low growth potential and a small market share. Most dogs leave the market. The strategy options are to divest or harvest.

What is a marketing objective? (2-7)

A marketing objective is a statement of what is to be accomplished through marketing activities. To be useful, stated objectives should be: Realistic Measurable Time specific Compared to a benchmark e.g. "Our objective is to achieve 10 percent dollar market share in the cat food market within 12 months of product introduction."

Boston Consulting Group Portfolio Matrix: PROBLEM CHILD 0R QUESTION MARK

A problem child shows rapid growth but poor profit margins. It has a low market share in a high-growth industry. It needs a great deal of cash to prevent conversion to dog status. Strategies are to invest to gain better market share, acquire competitors, or drop the SBU.

What are some sources of product/service differentiation competitive advantage ? (2-6)

A product/service differentiation competitive advantage is the provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition. Product/Service Differentiation tends to provide a longer lasting competitive advantage than does cost competitive advantage. As a result, this strategy is more attractive to many top managers. Brand name: Lexus Strong dealer network: Caterpillar Product reliability: Maytag Image: Neiman Marcus Service: FedEx

Boston Consulting Group Portfolio Matrix: STAR

A star is a fast-growing market leader. Stars usually have large profits but need cash to finance growth. A marketing tactic is to protect market share by reinvesting earnings in product improvement, distribution, promotion, and production efficiency. Strive to capture new users as they enter the market.

Know aspects of the marketing mix (four P's).

A unique blend of: Product Place (distribution) Promotion Pricing strategies designed to produce mutually satisfying exchanges with a target market.

What are some key American values?

A value is a strongly held and enduring belief. The four basic values shown influenced the attitudes and lifestyles during the first 200 years of the United States. They are: Self-sufficiency: Every person should stand on his or her own two feet. Upward mobility: Success comes with getting an education, working hard, and playing by the rules. Work ethic: Hard work, dedication to family, and frugality are moral and right. Conformity: No one should expect to be treated differently from everybody else. Values are formed through interaction with family, friends, and influencers such as teachers, religious leaders, and politicians. The environment can also play a role in shaping values. U.S. consumers rank the characteristics of product quality as (1) reliability, (2) durability, (3) easy maintenance, (4) ease of use, (5) a trusted brand name, and (6) a low price.

The University of Florida's study on the benefits of studying before taking a test is an example of what type of research?

Basic Research

What are the two main types of research?

Basic Research: Pure research that aims to confirm an existing theory or to learn more about a concept phenomenon. Applied Research: An attempt to develop new or improved products.

Coca Cola's brand Classic Coke is an example of which BCG portfolio matrix category?

Cash Cow

What is corporate social responsibility?

Corporate social responsibility is a business's concern for society's welfare.

Not using the number 9 (considered to be unlucky in Japan) in an advertising campaign in an example of a global marketer compensating for which external environmental force?

Cultural

What are some sources of niche competitive advantage ? (2-6)

Discuss how a small firm serving a particular niche market can successfully compete against larger, global firms with greater resources. (For example, how might a small bookstore owner compete with Barnes & Noble and Amazon.com?) Used by small companies with limited resources May be used in a limited geographic market

Identify the strategic alternative for growth: Toyota acquires Cascade fork lift company

Diversification

Coca Cola's brand Mellow Yellow is an example of which BCG portfolio matrix category?

Dog

What are the components of a situation (SWOT) analysis?

Internal: Strengths - things the company does well. Weaknesses - things the company does not do well. External: Opportunities - conditions in the external environment that favor strengths. Threats - conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.

What is environmental scanning? (2-3)

EXTERNAL: HELPS IDENTIFY OPPORTUNITIES AND THREATS Environmental scanning is the 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. Designing a marketing strategy is based on six major environmental forces: Social Demographic Economic Technological Political/Legal Competitive

What environmental influences have affected the values of Americans?

Examples: Great Depression, Women's Role in the Workplace, Hippie Revolution of 1960s, the September 11 terrorist attack.

Internal components of SWOT analysis?

Focus on organizational resources: Production costs Marketing skills Financial resources Company or brand image Employee capabilities Technology

What is the marketing concept? (1-2)

Focusing on customer wants and needs to distinguish products from competitors' offerings Integrating all the organization's activities to satisfy these wants Achieving the organization's long-term goals by satisfying customer wants and needs legally and responsibly

One Product, One Message:

Global marketing standardization means developing a single product for all markets and promoting it the same way worldwide. However, even a same product/same message strategy may require changes to suit local needs.

Boston Consulting Group Portfolio Matrix:

High Market Share Low Market Share High Market Growth Star Problem Child ? Low Market Growth Cash Cow Dog

Know the different types of global market entry (e.g., exporting) and their riskiness.

Listed in order of riskiness: 1. Export: Sell domestically produced products to buyers in other countries. 2. Licensing and Franchising: Legal process allowing use of manufacturing/patents/knowledge. 3. Contract Manufacturing: Private-label manufacturing by a foreign country. 4. Joint Venture: Domestic firm buys/joins a foreign company to create new entity. 5. Direct Investment: Active ownership of a foreign company/manufacturing facility.

What is marketing myopia? (2-3)

MISSION STATEMENT TOO NARROW Business mission statements that are stated too narrowly suffer from marketing myopia. (defining a business in terms of goods and services rather than in terms of the benefits customers seek) e.g. Frito-Lay defines its mission as being in the snack food business rather than the potato chip business. Sports team has a mission not just to play games, but to server fans.

Identify the strategic alternative for growth: J&J launches a campaign to inform consumers that baby shampoo is not just for babies.

Market Development

Starbucks Example?

Market Penetration Starbucks sells more coffee to customers who register their reloadable Starbucks cards. Product Development Starbucks develops powdered instant coffee called Via. Market Development Starbucks opens stores in Brazil and Chile Diversification Starbucks launches Hear Music and buys Ethos Water.

Identify the main four strategic alternatives for growth (e.g., market penetration, etc.). (2-3)

Market Penetration: Increase market share among existing customers Manufacturer cents-off coupons Market Development: Attract new customers to existing products. Expansion into global markets by companies such as McDonald's, Coca-Cola, and Pepsi Product development: Create new products for present markets McDonald's introduces yogurt parfaits, salads, and fruit to offer customers more healthy options. Diversification: Introduce new products into new markets. CVS, Avon, Coca-Cola

What is marketing? (1-1)

Marketing is 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. (See Powerpoint for more detail)

Why write a marketing plan? (2-3)

Marketing planning is the basis for all marketing strategies and decisions. Issues such as product lines, distribution channels, marketing communications, and pricing are all delineated in the marketing plan. The creation and implementation of a complete marketing plan will allow the organization to achieve marketing objectives and succeed. However, the marketing plan is only as good as the information it contains and the effort, creativity, and thought that went into its creation.

What are some fears associated with global trade?

Millions of Americans have lost jobs Millions fear losing jobs Threat of outsourcing if workers do not accept pay cuts Vulnerability to operations moving offshore

Differentiate moral relativism, casuist ethical theory, and virtue ethics.

Moral Relativism: an ethical theory of time-and-place ethics; that is, the belief that ethical truths depend on the individuals and groups holding them. Casuist Ethical Theory: ethical theory that compares a current ethical dilemma with examples of similar ethical dilemmas and their outcomes. Virtue Ethics: Theory that relies on experience of well developed virtues (charter traits values and being good) to solve ethical dilemmas. Examples of virtues include: self-discipline, friendliness, caring, courage, compassion, trust, responsibility, honest, determination, enthusiasm, and humility.

What are some sources of cost competitive advantage ? (2-6)

Notes: Sources of Cost Reduction Experience Curves: Costs decline as experience with a product increases, and encompasses marketing, manufacturing, and administration costs. Efficient Labor: Labor costs in low-skill, labor-intensive industries can be reduced by going offshore or by outsourcing. No-frills Products: Removing frills and options can reduce costs. Government subsidies: Governments may provide grants and interest-free loans for target industries. Product design: Cutting-edge design and reverse engineering can offset costs. Reengineering: Reengineering in the form of pruning product lines, closing obsolete factories, or renegotiating supplier contracts can make firms more efficient. Product innovations: New technology and simplified production techniques can reduce production costs. New methods of service delivery: Examples include: * Outpatient surgery and walk-in clinics in the medical industry * Online-only magazines can help save on material and shipping costs.

Coca Cola's brand Gold Peak Tea is an example of which BCG portfolio matrix category?

Problem Child or Question Mark

Understand the global marketing mix options (e.g., promotion adaption, product invention, etc.)

One Product, One Message: Global marketing standardization means developing a single product for all markets and promoting it the same way worldwide. However, even a same product/same message strategy may require changes to suit local needs. Product Invention: This refers to creating a new product or drastically changing an existing product. For example, consumers in different countries use products differently, requiring different product characteristics. Product Adaptation: Products, including packaging, are slightly altered to meet local conditions. Promotion Adaptation: The same basic product is maintained, but the promotional strategy is altered to position the product effectively in different countries. Promotion varies in different countries. Language barriers, translation problems, and cultural differences create headaches.

Differentiate preconventional, conventional and postconventional morality. (3-2)

PRECONVENTIONAL -Based on what will be punished or rewarded -Self-centered, calculating, selfish CONVENTIONAL -Moves toward the expectations of society -Concerned over legality and the opinion of others POSTCONVENTIONAL -Concern about how they judge themselves -Concern if it is right in the long run (PRE = MOST CHILDLIKE POST = LEAST CHILDLIKE)

Identify the strategic alternative for growth: Kraft expands flavors on mac and cheese

Product Development

Differentiate the four marketing management philosophies? Be sure to recognize examples. (1-2)

Production - internal capabilities of the firm. What can we make or do best? Sales - Aggressive sales technique and a belief that high sales = high profits. How can we sell more aggressively? Market - Satisfying customer needs and wants, while meeting objectives. What do customers want and need? Societal - Satisfying customer needs and wants, while enhancing individual and societal well-being. What do customers want/need, and how can we benefit society?

Product Adaptation:

Products, including packaging, are slightly altered to meet local conditions.

What is stakeholder theory?

Stakeholder theory says that social responsibility is paying attention to the interest of every affected stakeholder in every aspect of a firm's operation.

Coca Cola's brand Odwalla is an example of which BCG portfolio matrix category?

Star

What is relationship marketing? (1-3)

Strategy that focuses on keeping and improving relationships with customers. Needs for Successful Strategy: - Customer-oriented personel - Effective Training Programs - Empowered Employees - Teamwork

What are some sources of sustainable competitive advantages? (2-6)

Sustainable competitive advantage is an advantage that cannot be copied by the competition. A firm that has successfully achieved a competitive advantage will stake out a position unique in some manner from its rivals. SOURCES: -Promotion -Patents -Copyrights -Locations -Equipment -Technology -Customer Service A sustainable competitive advantage is a function of the speed with which competitors can imitate a company's strategy and plans. Imitation requires a competitor to identify the leader's competitive advantage, determine how it is achieved, and learn how to duplicate it.

What is green marketing?

The development and marketing of products designed to minimize negative effects on the environment or improve the environment. -Environmentally aware customers pay more for products -Companies must try to educate customers of environmental benefits

What are some primary economic factors?

The four economic areas of greatest concern to marketers are: -consumers' incomes -purchasing power -inflation -recession

What is sustainability?

The idea that socially responsible companies will outperform their peers by focusing on the worlds social problems and viewing them as opportunities to build profits and help the world at the same time.

What is strategic planning? (2-1)

The managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities. (The goal is to sustain and increase long-run profitability and growth. Strategic decisions require long-term commitments of resources.) 2 MAIN QUESTIONS: What is the organization's main activity at a particular time? How will it reach its goals? e.g. • Macy's implements an additional beauty sales approach • General Motors sells the Saab nameplate • PepsiCo's decision to focus on "Healthy Fare" and the recent backlash/financial struggle from decreased Pepsi sales.

Promotion Adaptation:

The same basic product is maintained, but the promotional strategy is altered to position the product effectively in different countries. Promotion varies in different countries. Language barriers, translation problems, and cultural differences create headaches.

Know the BCG portfolio matrix (e.g., stars, cash cows)? (2-3)

The second model for selecting strategic alternatives is the Portfolio Matrix from Boston Consulting Group. The Portfolio Matrix classifies each SBU by its present or forecast growth and market share. The assumption is that market share and profitability are strongly linked. The four classifications are Stars, Problem Child (Question Mark), Cash Cows, and Dogs.

Product Invention:

This refers to creating a new product or drastically changing an existing product. For example, consumers in different countries use products differently, requiring different product characteristics.

What is Marketing Opportunity Analysis? (2-8)

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.