Chap. 1-5 Marketing

· What are the 4 components of the marketing mix?

4 p's - product, price, place, promotion

LO2-2 Describe the elements of a marketing plan.

A marketing plan is composed of an analysis of the current marketing situation, its objectives, the strategy for the four Ps, and appropriate financial statements. A marketing plan represents the output of a three-phase process: planning, implementation, and control. The planning phase requires Page 55that managers define the firm's mission and vision and assess the firm's current situation. It helps answer the questions "What business are we in now, and what do we intend to be in the future?" In the second phase, implementation, the firm specifies, in more operational terms, how it plans to implement its mission and vision. Specifically, to which customer groups does it wish to direct its marketing efforts, and how does it use its marketing mix to provide good value? Finally, in the control phase, the firm must evaluate its performance using appropriate metrics to determine what worked, what didn't, and how performance can be improved in the future.

LO2-1 Define a marketing strategy.

A marketing strategy identifies (1) a firm's target market(s), (2) a related marketing mix (four Ps), and (3) the bases on which the firm plans to build a sustainable competitive advantage. Firms use four macro strategies to build their sustainable competitive advantage: Customer excellence focuses on retaining loyal customers and excellent customer service. Operational excellence is achieved through efficient operations and excellent supply chain and human resource management. Product excellence entails having products with high perceived value and effective branding and positioning. Finally, locational excellence entails having a good physical location and Internet presence.

What is the difference between conscious marketing and corporate social responsibility?

Although CSR is an important element of conscious marketing, it is not the same thing. The coming of conscious marketing organizations is a complex effort. And for some firms, it may prove virtually impossible to achieve

LO4-3 Differentiate between conscious marketing and corporate social responsibility.

Although CSR is an important element of conscious marketing, they are different from one another. CSR implies a focus on the triple bottom-line of good performance according to economic, environmental, and social criteria. Thus, good CSR can support and help promote conscious marketing. But conscious marketing goes beyond just CSR to refer to the overall meaning and purpose of the company and its marketing.

LO3-4 Understand various motivations for using mobile applications.

As mobile users increase in number and diversity, the applications developed to appeal to them are spreading as well. Although there are well over a million apps, they meet seven basic customer motivations: for "me time," and to socialize, shop, accomplish, prepare, discover, and self-express. By meeting a multiple of these motivations, companies can attract large numbers of customers. When choosing how to charge for apps, firms have four options: ad-supported, freemium, paid apps, and paid apps with in-app purchases.

LO4-6 Describe how ethics constitute an integral part of a firm's conscious marketing strategy.

Being a part of an ethically responsible firm should be important to every employee, but it is particularly important to marketers because they interact most directly with customers and suppliers and make decisions about how their products impact society and the environment. Thus, marketing issues present a multitude of ethical questions and opportunities to handle.

LO 4-1 Define conscious marketing.

Conscious marketing involves a sense of purpose for the firm that is more than simply making a profit by selling products and services. It consists of four main principles: a greater purpose, consideration of stakeholders, conscious leadership and culture, and ethics.

LO4-5 Explain how conscious leadership can produce a conscious culture in the firm.

Conscious marketing should be integrated into the very foundation of the firm by its leaders, such as in the firm's mission statement. Then top management must follow through and commit to supporting CSR, a strong ethical climate in the organization, and conscious marketing principles. When considering their strategy, conscious marketing firms ask not only "can we implement a certain policy?" but also "should we do it?" If any action is not ethical or socially responsible, the conscious firm will make changes to its marketing strategy.

· Which strategy is the riskiest?

Diversification

LO5-1 Outline how customers, the company, competitors, and corporate partners affect marketing strategy.

Everything a firm does should revolve around the customer; without the customer, nothing gets sold. Firms must discover their customers' wants and needs and then be able to provide a valuable product or service that will satisfy those wants or needs. If there were only one firm and many customers, a marketer's life would be a piece of cake. But because this situation rarely occurs, firms must monitor their competitors to discover how they might be appealing to their customers. If a firm does not monitor its competitors, the firm's customers might soon belong to its competitors. Though life certainly would be easier without competitors, it would be difficult, if not impossible, without corporate partners. Good marketing firms or departments work closely with suppliers, marketing research firms, consultants, and transportation firms to coordinate the extensive process of discovering what customers want and finally getting it to them when and where they want it. Finally, the purchases people make are influenced by their physical environment. The particular people are concerned about adverse changes to their environment, such as global warming and pollution. Firms are responding to these concerns with new products and services. For instance, electric cars and ride-sharing services are designed to save energy. And greener practices have spurred environmentally friendly, sustainable merchandise. Each of these activities—discovering customer needs, studying competitors' actions, working with corporate partners, and developing products and services that help improve the physical environment—helps add value to firms' products and services.

LO3-5 Recognize and understand the components of a digital marketing strategy.

Firms engage with customers through social and mobile media using a three-step process. First, they listen to the customer using techniques like sentiment analysis. Second, they analyze the data collected in the first step using metrics like the bounce rate, click paths, and conversion rates. Finally, they use this information to develop tactics to engage their customers in a way very similar to the process described in Chapter 18.

LO2-7 Describe how firms grow their business.

Firms use four basic growth strategies: market penetration, market development, product development, and diversification. A market penetration strategy directs the firm's efforts toward existing customers and uses the present marketing mix. In other words, it attempts to get current customers to buy more. In a market development strategy, the firm uses its current marketing mix to appeal to new market segments, as might occur in international expansion. A product development growth strategy involves offering a new product or service to the firm's current target market. Finally, a diversification strategy takes place when a firm introduces a new product or service to a new customer segment. Sometimes a diversification strategy relates to the firm's current business, such as when a women's clothing manufacturer starts making and selling men's clothes, but a riskier strategy is when a firm diversifies into a completely unrelated business.Page 56

LO4-7 Identify the four steps in ethical decision making.

First, firms can include ethics and social responsibility in their corporate mission. Second, they should institute policies and procedures to ensure that everyone working for the firm is acting in an ethically responsible manner. Firms can model their ethical policies after a well-established code of ethics like the one provided by the American Marketing Association. When making ethically sensitive decisions, firms can utilize a metric such as the ethical decision-making metric in Exhibit 4.6.

LO1-1 Define the role of marketing.

Formally, marketing is the "activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. But marketing has a prominent role in every person's daily life, whether he or she is exchanging money for conventional products, exchanging personal information for services, or exchanging time for a cause that gives him or her a good feeling. It includes a vast range of stakeholders, including not just the firm and the customer but also other members of the supply chain, communities, and society as a whole. Furthermore, the foundation of all marketing can be summarized in the four Ps, such that marketing defines the product, price, place, and promotion that firms use to get their offerings into consumers' hands.

· Who can perform marketing?

Ind. and companies

LO4-2 Describe what constitutes marketing's greater purpose.

Marketers must recognize that the purpose of business is more than making profits. The actual purpose might vary, such as providing necessary products, ensuring employment opportunities, or achieving greener production methods, but in all of these cases, the engagement improves the inputs as well as the outcomes of marketing actions.

LO1-2 Detail the evolution of marketing over time.

Marketing has evolved from a production or sales-oriented approach, in which firms told people what they could and should buy, to a market- and value- oriented perspective. In this more recent view, firms look to their markets to tell them what they need to product and provide, in a way that creates value for them and their customers.

LO2-4 Describe how a firm chooses which consumer group(s) to pursue with its marketing efforts.

Once a firm identifies different marketing opportunities, it must determine which are the best to pursue. To accomplish this task, marketers go through a segmentation, targeting, and positioning (STP) process. Firms segment various markets by dividing the total market into those groups of customers with different needs, wants, or characteristics who therefore might appreciate products or services geared especially toward them. After identifying the different segments, the firm goes after, or targets, certain groups on the basis of the firm's perceived ability to satisfy the needs of those groups better than competitors, and do so profitably. To complete the STP process, firms position their products or services according to the marketing mix variables so that target customers have a clear, distinctive, and desirable understanding of what the product or service does or represents relative to competing products or services.

LO3-2 Examine the seven critical elements of online marketing.

Online marketing now has a long history and is fairly established with marketing activities in various electronic channels, such as websites and blogs. There are numerous types of blogs, ranging from corporate, professional, and micro.

LO2-6 Summarize portfolio analysis and its use to evaluate marketing performance.

Portfolio analysis is a management tool used to evaluate the firm's various products and businesses—its "portfolio"—and allocate resources according to which products are expected to be the most profitable for the firm in the future. A popular portfolio analysis tool developed by the Boston Consulting Group classifies all products into four categories. The first, stars, are in high-growth markets and have high market shares. The second, cash cows, are in low-growth markets but have high market share. These products generate excess resources that can be spun off to products that need them. The third category, question marks, are in high-growth markets but have relatively low market shares. These products often utilize the excess resources generated by the cash cows. The final category, dogs, are in low-growth markets and have relatively low market shares. These products are often phased out.

LO2-3 Analyze a marketing situation using SWOT analyses.

SWOT stands for strengths, weaknesses, opportunities, and threats. A SWOT analysis occurs during the second step in the strategic planning process, the situation analysis. By analyzing what the firm is good at (its strengths), where it could improve (its weaknesses), where in the marketplace it might excel (its opportunities), and what is happening in the marketplace that could harm the firm (its threats), managers can assess their firm's situation accurately and plan its strategy accordingly.

· What is STP?

Segmentation, targeting, and positioning (STP). With STP, the firm first divides the marketplace into subgroups or segments, determines Page 41which of those segments it should pursue or target, and finally decides how it should position its products and services to best meet the needs of those chosen targets

LO5-3 Identify various social trends that impact marketing.

Social trends have a tremendous impact on what consumers purchase and consume. Understanding these trends—health and wellness, green marketing, and privacy issues—can help marketers serve their customers better.

LO5-4 Examine the technological advances that are influencing marketers

Technological advances in products and services continue to change the way we live, from more "thoughtful" coffeemakers to potential for self-driving cars and trucks in the not-so-distant future. At the cutting edge of these technologies is artificial intelligence, which relies on computers to perform humanlike tasks. A more physical technology is found in robotics, which are machines that can perform human tasks, like a machine that can "roll around" a store checking for out-of-stock merchandise, or one that takes your food order at a restaurant. Finally, the Internet of Things refers to products, such as home appliances that work more efficiently and are more able to perform more tasks by being connected to the Internet. How these and other technologically advanced products and services will diffuse into the marketplace is certainly not clear. What is clear, however, is that technology will continue to play an increasingly important part in the products and services we use every day.

LO3-1 Describe the 4E framework of digital marketing.

The 4E framework recognizes that marketers must: excite customers with relevant offers; educate them about the offering; help them experience products, whether directly or indirectly; and give them an opportunity to engage.

LO3-3 Understand the drivers of social media engagement.

The Wheel of Social Media Engagement highlights five factors that focus on the uniqueness of social media in driving engagement. The five spokes of the wheel are the information effect, connected effect, network effect, dynamic effect, and timeliness effect.

LO2-5 Outline the implementation of the marketing mix as a means to increase customer value.

The marketing mix consists of the four Ps—product, price, place, and promotion—and each P contributes to customer value. To provide value, the firm must offer a mix of products and services at prices its target markets will view as indicating good value. Thus, firms make trade-offs between the first two Ps, product and price, to give customers the best value. The third P, place, adds value by getting the appropriate products and services to customers when they want them and in the quantities they need. The last P, promotion, informs customers and helps them form a positive image about the firm and its products and services.

LO4-4 Describe the ways in which conscious marketing helps various stakeholders.

To describe the ways, we first have to identify the various stakeholders of a company—namely employees, customers, employees, the marketplace, society, and the environment: Employees: A firm committed to conscious marketing treats its employees with decency and respect. For many employees, working for an irresponsible firm would be antithetical to their own morals and values. Customers: When companies exhibit conscious marketing principles, customers know that they can trust the firms to provide healthy, ethically acceptable products and services. Many customers also feel better about buying from a company that engages in responsible practices, which provides them with the additional value of feeling good about buying from that company. Marketplace: An industry improves its practices and avoids scandals when it ensures that the participating firms act responsibly and appropriately in all areas. Society: This stakeholder is local, national, or global communities who benefit when conscious marketers give thought to how their practices might influence values or connections, such as providing aid to underprivileged communities. Environment: The benefits of conscious marketing might include cleaner air and water as well as healthier product options.

LO1-3 Describe how marketers create value for a product or service.

Value stems from at least four main activities that value-driven marketers undertake and are reinforced throughout the book: Adding value, such that they leverage various elements of marketing and work to build relationships with partners and customers to ensure that they introduce their product, service, or idea to the marketplace at just the place and time that customers want it. Marketing analytics, which companies use to gather vast amounts of information about customers and competitors, then analyze it and share it across their own organization and with partner firms. Social and mobile marketing, to take advantage of new technologies and connect with customers using the latest social media channels. Ethical and societal dilemmas, such that firms engage in conscious marketing that takes into account the benefits and costs of their actions for all stakeholders.

LO5-2 Explain why marketers must consider their macroenvironment when they make decisions.

What are the chances that a fast-food hamburger restaurant would be successful in a predominantly Hindu neighborhood? Not good. Marketers must be sensitive to such cultural issues to be successful, and they must also consider customer demographics—age, income, market size, education, gender, and ethnicity—to identify specific customer target groups. In any society, major social trends influence the way people live. In no other time in history has technology moved so rapidly and had such a pervasive influence on the way we live. Not only do marketers help identify and develop technologies for practical, everyday uses, but technological advances help marketers provide consumers with more products and services more quickly and efficiently. The general state of the economy influences how people spend their discretionary income. When the economy is healthy, marketing success comes relatively easily. But when the economy gets bumpy, only well-honed marketing skills can yield long-term successes. Naturally, all firms must abide by the law, and many legal issues affect marketing directly. These laws pertain to competitive practices and protecting consumers from unfair or dangerous products.

· Marketing is about satisfying ___ and ___

needs and wants

· What are the seven types of customer motivations for using mobile apps?

o 1) Me time o 2) Socialize o 3) Shop o 4) Accomplish o 5) Prepare o 6) Discover o 7) Self Express

Provide a specific example of a conscious marketing firm that considers the needs of each of its stakeholders.

o An example that includes elements of the employees, customers, the marketplace, and society. Patagonia or REI are perfect examples.

· What is the definition of marketing?

o An organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

· Which of the following is not a function of marketing's value creation process?

o Capturing value, delivering value, communicating value, exchanging value

In what way does corporate social responsibility differ from conscious marketing?

o Corporate social responsibility is one part of conscious marketing.

· What are the 4Es?

o Excite customers with relevant offers. o Educate them about the offering. o Help them experience products, whether directly or indirectly. o Give them an opportunity to engage with the firm's digital marketing activities

· What social media elements work best for each of the 4Es?

o Excite the Customer - social networks like Facebook and Google + o Educate the Customer - blogs and blogging tools (e.g., wordpress and twitter), HubSpot (all-in-one marketing software), YouTube and Google +, o Experience the Product or Service - YouTube, blogs and retailer's website, Engage the Customer - blogging and micro-blogging

· Downloading a chapter of a new book before buying it or listening to a few seconds of a song before purchasing it are examples of which aspect of the 4E framework?

o Experience the product

Markets must be segmented for any marketing strategy to be effective. This is because from the identified segments, the firm will choose one or more target markets. The choice of target market will then determine how which of these concepts are designed?

o Four Ps (product, price, place, promotion)

· What are the five steps in creating a marketing plan?

o In Step 1 of the planning phase, marketing executives, in conjunction with other top managers, define the mission and/or vision of the business. For the second step, they evaluate the situation by assessing how various players, both inside and outside the organization, affect the firm's potential for success. In the implementation phase, marketing managers identify and evaluate different opportunities by engaging in a process known as segmentation, targeting, and positioning (STP) (Step 3). They then are responsible for implementing the marketing mix using the four Ps (Step 4). Finally, the control phase entails evaluating the performance of the marketing strategy using marketing metrics and taking any necessary corrective actions (Step 5).

· List the four macro strategies that can help a firm develop a sustainable competitive advantage.

o Locational, Customer, Operational, and Product Excellence

The four fundamental growth strategies help firms identify growth opportunities in the marketplace. The strategies are based on two dimensions: new and current markets, and new and existing products and services. For example, market penetration is the strategy where the firm attempts to grow by having its existing market consume more of its existing products. On the other hand, the growth strategy that involves the firm attempting to grow by attracting a new market to its existing products is called what?

o Market development

· What are the four growth strategies?

o Market penetration o Product development o Market development o Diversification

· Does providing a good value mean selling at a low price?

o No, value-based marketing is about creating strong products and services.

· What are the various eras of marketing?

o PRODUCTION, SALES, MARKETING, CURRENT VALUE BASED ERA

· Differentiate between organic and paid search.

o Paid search is similar to conventional advertising because firms pay to appear higher up in the search results, and also often pay an additional fee every time a user clicks on their entry. An organic search ensues that determines the ranking that appears on the search engine's page. These rankings are not based on money obtained by firms appearing in the search. The more relevant the key term, the higher the ranking will be on the search engine's page.

What ethical questions should a marketing manager consider at each stage of the marketing plan?

o Planning phase o Implementation phase o Control phase

· What type of strategy is growing the business from existing customers?

o Product development and market penetration

What are the criteria for being a conscious marketer?

o Recognition of marketings greater purpose, consideration of stakeholders and their interdependence, the presence of conscious leadership creating a corporate culture, and the understanding that decisions are ethically based.

· What tool helps a marketer conduct a situation analysis?

o SWOT analysis - that assesses both the internal environment with regard to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats.

Identify the steps in the ethical decision-making framework.

o Stage 1 - identify issues o Stage 2 - gather info and identify stakeholders o Stage 3 - Brainstorm and evaluate alternatives o Stage 4 - choose a course of action

· How is advertising intent guidance provided to influencers?

o The FTC publishes recommendations to help influencers engage in ethical marketing such as mentioning endorsements or using #ad in their posts.

· Value creation is the central activity of marketing. Which is not a benefit to the firm from engaging in value creation and the ongoing process of identifying value-adding options for consumers?

o The firm is able to sell fewer products.

If a firm's salesforce pressures potential customers to purchase services they cannot afford or need, but they require that salesforce to work one week a year for Habitat for Humanity, that firm is

o Unethical yet socially responsible.

Is Walmart a conscious marketer, or is it a practitioner of CSR?

o Walmart has been highly criticized as the worst paying company in the U.S., yet it also engages in extensive CSR programs across the triple bottom line. It has committed to reducing its carbon footprint, donates more than 1 billion in cash and in-kind items to charitable causes per year - social performance - and still earns strong profits - economic performance. Most students will consider Walmart a practitioner of CSR and not a conscious marketer.

· What are the five drivers of social media engagement described in the Wheel of Social Media Engagement?

o connected, network, information, dynamic and timeliness

· What are the various components of a marketing strategy?

o identifies (1) a firm's target market(s), (2) a related marketing mix (its four Ps), and (3) the bases on which the firm plans to build a sustainable competitive advantage.

· What do the four quadrants of the portfolio analysis represent?

o quadrant 1 shows the star SBUs, o quadrant 2 shows the 'question mark' SBUs, o quadrant 3 shows' cash cow' SBUs, and o quadrant 4 shows' dogs' SBUs. o Strategic business unit (SBU) A division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives.