Marketing Test One

Donald E. Petersen, chairman of the board of Ford Motor Company, remarked, "If we aren't customer driven, our cars won't be either." Explain how this statement reflects the marketing concept.

"Although students' answers will vary, they should address some of these points. The marketing concept focuses on satisfying customer needs while meeting organizational objectives. Most prosperous firms, including Ford, have adopted this management philosophy because experience has taught them that customer satisfaction is crucial to their success."

Differences between sales and market orientation: the firm's primary goal

1. A sales-oriented organization seeks to achieve profitability through sales volume and tries to convince potential customers to buy, even if the seller knows that the customer and product are mismatched 2. Sales-oriented organizations place a higher premium on making a sale than on developing a LT relationship with a customer 3. The ultimate goal of most market-oriented organizations is to make a profit by creating customer value, providing customer satisfaction, and building LT relationships with customers

Differences between sales and market orientation: Those to whom the product is directed

1. A sales-oriented organization targets its products at "everybody" or "the average customer." A market-oriented organization aims at specific groups of people. 2. A market orientation recognizes that different customer groups want different features or benefits. It may therefore need to develop different goods, services, and promotional appeals. 3. A market-oriented organization carefully analyzes the market and divides it into groups of people who are fairly similar in terms of selected characteristics. Then the organization develops marketing programs that will bring about mutually satisfying exchanges with one or more of those groups 4. Companies that adopt customer relationship management (CRM) is almost always market oriented, customizing product and service offerings based on data generated thru interactions between the customer and business, producing an internal system in which all of the company's decisions and actions are a direct result of customer information

Differences between sales and market orientation: organization focus

1. Personnel in sales-oriented firms tend to be inward looking, focusing on selling what the organization makes rather than what the market wants 2. Today, many successful firms derive their competitive advantage from an external, market-oriented focus

Differences between sales and market orientation: the tools used to achieve the organization's goal

1. Sales oriented organizations seek to generate sales volume through intensive promotional activities, mainly personal selling and advertising. 2. Market-oriented organizations recognize that promotion decisions are only one of four basic marketing decisions that must be made" product decisions, place (or distribution) decisions, promotion decisions, and pricing decisions. 3. Market-oriented organizations recognizes that marketing is not just the responsibility of the marketing department.

Differences between sales and market orientation: the firm's business

1. Sales-oriented firm defines its business (or mission) in terms of goods and services. A market-oriented firm defines its business in terms of the benefits its customers seek. People who spend their money, time, and energy expect to receive benefits, not just good and services. 2. Market-oriented firms that successfully create a connection with their customers and employees tend to create loyal customers which can increase overall profitability

Define strategic business units

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

Give an example of a company that is successfully following a production orientation. Why does following a production orientation make a firm in this industry successful?

Apple creates computers, operating systems, and gadgetry because it can and hoping to sell the result.

Explain how consumers' buying habits may change during a recessionary period.

Recession: 2 negative GDP quarters; a period of economic activity characterized by negative growth which reduces demand for goods and services

Discuss the external environment of marketing and explain how it affects a firm

a. Although managers can control the marketing mix, they cannot controls elements in the external environment that continually mold and reshape the target market i. Instead, managers react to changes in the external environment and attempt to create a more effective marketing mix in order to satisfy customers and remain competitive b. Environmental scanning is a process in which a team of specialists continually collects and evaluates environmental information in order to identify future market opportunities/threats c. Knowledge of customer needs and desires, by age segment, helps companies save promotional funds, retain existing customers, acquire new customers d. Successful firms realize that creating value for the customer is the key to larger profits and market share. Today, companies must operate in an environment that is becoming more demographically diverse, with customer needs and expectations becoming more individualized, and thr requirement of ethnic groups more distinct e. Need to identify the most valuable customers and understand their needs (Prado Principle: 20% of your customers produce 80% of your revenue) f. Successful firms know their competitors and attempt to forecast those competitor's futures.

Give three examples of how technology has benefited marketers. Also, give several examples of how firms have been hurt because they did not keep up with the changes in technology.

a. Benefits: i. Social media provides cheap ways to advertise and allow customers to get to know their company ii. No longer have to get people in the door of their store, just have to get them to your website iii. Allow businesses to control their inventory more precisely b. How firms have been hurt: i. Takes more time to communicate with customers ii. If not on social media, reduces # of people who know about your business compared to the competition

Discuss the three general strategies for selecting target markets.

a. By appealing to the entire market with one marketing mix b. Concentrating on one segment c. Appealing to multiple market segments using multiple marketing mixes

Identify sources of competitive advantage

a. Cost b. Product/service differentiation c. niche

Discuss the political and legal environment of marketing

a. Every aspect of the marketing mix is subject to laws and restrictions i. It is the duty of marketing managers or their legal assistant to understand these laws and conform to them, because failure to comply with regulations can have major consequences for a firm b. Federal laws that affect marketing fall into several categories of regulatory activity: competitive environment, pricing, advertising and promotion, and consumer privacy c. Legislation that affects marketing varies from state by state d. Four federal agencies most directly and actively involved in marketing affairs are: i. Consumer Product Safety Commission (CPSC): federal agency established to protect the health and safety of consumers in and around their homes ii. Food and Drug Administration (FDA): federal agency charged with enforcing regulations against selling and distributing adulterated, misbranded, hazardous food and drug products iii. Federal Trade Commission (FTC): federal agency empowered to prevent people or corporations from using unfair methods of competition in commerce iv. The Consumer Financial Protection Bureau

Discuss Ansoff's strategic opportunity matrix, and provide at least one example of how a company has implemented this strategy.

a. Market penetration: a marketing strarefy that tries to increase market share among existing customers i. EX: Starbucks sells more coffee to customers who register their reloadable Starbucks cards b. Market development: a marketing strategy that entails attracting new customers to existing products i. EX: Starbucks opens stores in Brazil and Chile c. Product development: a marketing strategy that entails the creation of new products for present markets i. EX: Starbucks develops powdered instant coffee called Via d. Diversification: a strategy of increasing sales by introducing new products into new markets i. EX: Starbucks launches Hear Music and buys Ethos Water

Describe several reasons for studying marketing

a. Marketing plays an important role in society b. Marketing is important to businesses c. Marketing offers outstanding career opportunities d. Marketing affects your life everyday

Describe the elements of the marketing mix

a. Product strategies i. Includes not only the physical unit but also its package, warranty, after sale service, brand name, company image, value, etc. b. Place (distribution) strategies i. Concerned with making products available when and where customers want them c. Promotion strategies i. Includes advertising, PR, sales promotion, and personal selling ii. Promotion's role is to bring about mutually satisfying exchanges with target markets by informing, educating, persuading, and reminding them of the benefits of an organization or a product d. Pricing strategies i. Price is what a buyer must give up in order to obtain a product ii. It is often the most flexible of the four Ps—the element quickest to change. iii. Price is an important competitive weapon and is very important to the organization because price x # of units sold = total revenue for the firm

Explain the criteria for stating good marketing objective

a. Realistic i. Should develop objectives that have a chance of being met b. Measurable i. Need to be able to quantitively measure whether or not an objective has been met c. Time specific i. By what time should the objective be met? d. Compared to a benchmark i. It is important to know the baseline against which the objective will be measured

Describe the components of a situation analysis

a. SWOT analysis: i. Strengths ii. Weaknesses iii. Opportunities iv. Threats b. When examining internal strengths and weaknesses, the marketing manager should focus on organizational resources such as production costs, marketing skills, financial resources, company image, etc c. When examining external opportunities and threats, marketing managers must analyze aspects of the marketing environment i. This process is called environmental scanning: the collection and interpretation of information about forces, events, relationships, in the external environment that may affect the future of the organization or the implementation of the marketing plan

Describe the social factors that affect marketing

a. Social factors include our attitudes, values, and lifestyles i. American values: 1. Self-sufficiency 2. Upward mobility 3. Worth ethic 4. Equality 5. Individualism 6. Achievement orientation 7. Helping others 8. The environment ii. People in the U.S. are piecing together component lifestyles: the practice of choosing goods and services that meet one's diverse needs and interests rather than conforming to a single, traditional lifestyle b. Social media: marketers can use social media to engage customers in their products and services. It enables firms to create conversations with customers and establish meaningful connections

Explain the importance to marketing managers of growing ethnic markets

a. The American demographic profile is rapidly changing as racial and ethnic groups continue to grow b. The U.S. will flip completely to a majority-minority makeup in 2045, meaning that non-Hispanic whites will make up < 50% of the population c. Because minorities as a group are younger than whites, the minority-white tipping point comes earlier for younger age groups

What is the purpose of environmental scanning? Give an example.

a. The goal in gathering the environmental data is to identify future market opportunities and threats/try to control elements in the external environment that continually mold and reshape the target market b. SWOT analysis in examining the external factors

Sales Orientation marketing management philosphy

i. Based on the belief that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits ii. Not only are sales to the final buyer emphasized, but intermediaries are also encouraged to push manufacturer's products more aggressively: to sales-oriented firms, marketing means selling things and collecting money

Societal Marketing management philosophy

i. Extends the marketing concept by acknowledging that some products that customers want may not really be in their best interest ii. This philosophy states that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also preserve or enhance individuals' and society's LT best interests iii. Marketing products and containers that are less toxic than normal, are more durable, contain reusable materials or are made of recyclable materials is consistent with societal marketing orientation.

Production Orientation marketing management philosophy

i. Focuses on the internal capabilities of a firm rather than on the desires and needs of the marketplace ii. Management assess its resources and asks these questions: "what can be do best?" "what can our engineers design?"

Market Orientation marketing management philosophy

i. States that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives ii. What a business thinks it produces is not of primary importance to its success. Instead, what customers think they are buying—the perceived value—defines a business. iii. Marketing concept includes the following: 1. Focus on customer wants and needs so that the organization can distinguish its products from competitior's offerings 2. Integrating all the organization's activities, including production, to satisfy customer wants 3. Achieving LT goals for the organization by satisfying customer wants and needs legally and responsibly