MBA 6050 Exam 1
Product quality
degree of excellence or superiority that an organization's product possesses
principal task of marketing function:
find effective and efficient means of making the business do what suits the interests of customers
innovators
first to buy a new product
product mix
full set of products offered for sale by an organization -described by width: number of individual product lines offered - depth: average number of products in each product line
Product line
group of products that share common characterisitcs, distribution channels, customers, or uses
target market
group or segment a company selects to serve
generic product
includes the essential benefits the buyer expects to receive
Situation analysis
involves analysis of the past, present, and likely future in 6 major areas of concern: -Cooperative environment: distributors, suppliers -Competitive environment: competitors - Economic Environment: macroeconomics - Social environment: societal norms - Political environment: attitudes/reaction -Legal environment: change in laws
Business to business marketing
marketing products and servies to producers, intermediaries, government agencies, and other institutions rather than to consumers
Brand
name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers
marketing manager system
one person is responsible for overseeing an entire product line with all of the functional areas of marketing
francisee extension
organization's attachment of corporate name to a product to enter either a new market segment or a different product class
Tangible product
physical entity or service that is offered to the buyer
horizontal market
product purchased by all types of firms in different industries
fads
product that experiences an intense but often brief period of popularity
shopping goods
purchased after some time and energy are spent comparing various offerings
Convenience goods
purchased frequently with minimum effort
laggards
reluctant to make changes and are comfortable with traditional products
brand equity
set of assets or liabilities linked to the brand that add or substract value
ISO 9000
standardized approach for evaluating a supplier's quality system
extended product
tangible product along with whole cluster of services that accompany it
product
the sum of the physical, psychological, and sociological satisfactions the buyer dervies from purchase, ownership, and consumption
Dual branding
two or more branded products are integrated
specialty goods
unique in some way for which consumer makes special purchase effort
brand extension
uses a current brand name to enter a completely different product class
line extension
uses a well-known brand name to enter into a new market segment
Disconfirmation paradigm
views consumer satisfaction as the degree to which the actual performance of a product is consistent with expectations a consumer had been purchased
divide markets on relevant dimensions
- 3 important things should be considered: 1) a priori (decide segment before research, if in business for long time) vs. post hoc (decide segment after research) 2) relevenat dimensions to use for segmentation 3) bases for segmenting consumer and organizational buyer markets
Situational influences on consumer decision making
- All of the factors particular to a time and place that have demonstrable and systematic effect on current behavior - Physical features: geographical and institutional location, decor, sounds, aromas, lighting, weather, and visible configurations of merchandise or other materials - Social features: other persons present, their characteristics, their apparent roles and interpersonal interactions - Time: may be specified in units ranging from time of day to season of the year - Task features: an intent or requirement to select, shop for, or obtain information about a general or specific purchase - Current conditions: momentary moods (such as acute anxiety, pleasantness, hostility, and excitation) or momentary conditions (such as cash on hand, fatigue, and illness) rather than chronic individual traits
Organization-specific factors (3)
- Orientation: the dominant function in an organization that may control purchasing decisions - Size- large organization: joint decision making; small organization: autonomous decision making - Degree of centralization- centralized organization: joint decision making is less; decentralized organization: joint decision making is more
Behavioral influences on organizational buying
- Personal motivations: organizational buyers are subject to the same personal motives or motivational forces as other individuals - Role perceptions: the manner in which individuals behave depends on - Innovative: weak commitment to expected norms of behavior - Adaptive: moderate commitment - Lethargic: strong commitment to traditionally accepted behavior
Psychological influences on consumer decision making
- Product knowledge: amount of information a consumer has stored in his or her memory about particular products and ways to purchase them
Elements of brand equity (5)
- brand loyalty, - name awareness - perceived quality - brand associations - other proprietary brand assets
Delineate frim's current situation
- firm must doe a compelte situational analysis when embarking on a new or modified marketing program - such an analysis aids in determining objetives, opportunities, and constraints to be considered when selecting target markets and developing marketing mixes
determine consumer needs and wants
- successful marketing strategies depend on discovering and satisfying consumer needs and wants - at a strategic level, consumer needs and wants are trasnalted into operational concepts
decide market segmentation
-a viable segment must be: 1) measurable: firms must be capable of measuring its size and characteristics 2) meaningful: should have sufficient sales and growth potential to offer long-run profits 3) marketable: can be reached and served by the firm in an efficient manner
Types of decision making (3)
1) Extensive decision making: requires the most time and effort since the purchase typically involves a highly complex or expensive product that is important to the consumer 2) limited decision making: requires a moderate amount of time and effort to search for and compare alternatives 3) routine decision making: involves little in the way of thinking and deliberation
Major types of marketing (6 types)
1) Product: marketing designed to create and exchange for tangible products 2) service: marketing designed to create exchanges for intangible products 3) person: marketing designed to create favorable actions toward persons 4) place: marketing designed to attract people to places 5) cause: marketing designed to create support for ideas, causes, or issues to get people to change undesirable behaviors 6) organization: marketing designed to attract donors, members, participants, or volunteers
Bases for segmentation (2)
1) benefit segmentation: focuses on satisfying needs and wants by grouping consumers on the basis of the benefits they are seeking in a product 2) psychographic segmentation: focuses on consumer lifestyles as the basis for segmentation
Strategic planning process (4 steps)
1) organizational mission - 3 elements: organization's history, distinctive competitiveness, and environment - mission statement should focus on: markets rather than products, achievable, motivating, and specific 2) organizational objectives - must be: specific, measurable, action oriented, and time bound -if done properly: can be converted into specific action, provide direction, establish long-run priorities, facilitate management control 3) organizational strategies -organizations can pursue strategies based on: products and markets, competitive advantages, and value -cost leadership strategy: firm would focus on being the low-cost company in industry - strategy based on differentiation: firm seeks to be unique in its industry 4) organizational portfolio plan - step 1: identify the various divisions, product lines, and so on that can be considered a business (AKA strategic business units) - step 2: establish methods to determine how resources should be allocated among the various SBU
Stages in the organizational buying process (4)
1) organizational need: recognizing needs, and a willingness and ability to meet them, often results in purchases 2) vendor analysis: organizational buyers rate each potential supplier on various performance measures 3) purchase activities: complexity of product or service number of suppliers available, importance of product to buying organization, and pricing influence the number of purchase activities to be performed 4) postpurchase evaluation: organizational buyers evaluate the vendors and products they purchase to determine whether the products are acceptable for future purcahses
Categories of organizational buyers (4)
1) producers: consis of businesses that buy goods and services in order to produce other goods and services for sale 2) intermediaries: group purchases products to resell at a profit 3) government agencies: operate at the federal, state, and local levels 4) other institutions: hospitals, museums, universities, nursing homes, and churches
Marketing influences on consumer decision making (4)
1) product influences 2) price influences 3) promotion influences 4) place influences
The P's of the research process
1) purpose of the research - first step in the research process - determine explicitly why the research is needed and what it is to accomplish 2) plan of the research - research plan spells out the nature of the research to be conducted - 3 influences: primary (your own) or secondary (others did it) data, qualitative vs. quantitative, or conduct own research vs. hire people to do market research 3) performance of the research - involves preparing for data collection and actually collecting them. - Cardinal rule: obtain and record the maximal amount of useful information, subject to the constraints of time, money, and respondent privacy 4) processing of research data - includes preparation of data for analysis and their actual analysis - critical part of this stage is interpreting and assessing the research results 5) preparation of research report - research report is a complete statement of everything done in a research project
Purchasing type influences on organizational buying (3)
1) straight rebuy: involves routinely reordering a product from the same supplier that it had been purchased from in the past 2)modified rebuy: involves the consideration of a limited number of alternatives before making a selection 3) new task purchase: involves an extensive search for informationa nd a formal decision process
Basic sources for purchase decision (5)
1)internal sources: stored information and experience a consumer has in memory for dealing with a particular need 2) group sources: common source of information for purchase decisions that comes from communication with other people 3) marketing sources: advertising, salespeople, dealers, packaging, and displays offered by marketers 4) public sources: newspaper articles about the product, and independent ratings of the product 5) experiential sources: information a consuimer gets from handling, examining, and while shopping for a product
Reference groups
Groups that an individual looks to when forming attitudes and opinions - Primary reference group: family and close friends secondary reference groups: fraternal organizations and professional associations
Purchasing roles (6)
Initiators: start the buying process by recognizing a need or a problem in the organization Users: use the prodct to be purchased Influencers: affect the buying decision by helping define the specifications for what is needed Buyers:have formal authority and responsibility to select the supplier and negotiate the terms of the contract Deciders: have the formal and informal power to select or approve the supplier that receives the contract Gatekeepers: control the flow of information to a buying center
Cognitive dissonance
Lack of harmony among a person's thoughts after a decision has been made
vertical market
Limited number of buyers
Total quality management
Organization wide commitment to satisfying customers by continuously improving every business process
Limitations of research process
Test marketing: the major goal is to measure new product sales on a limited basis where competitive retaliation and other factors are allowed to operate freely
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.
Product value
What the customer gets in exchange for what the customer gives
brand manager system
a manager focuses on a single product or a very small group of new and existing products
fashion
accepted and popular products that go through a repetitive cycle of popularity, lost popularity, and regained popularity
multibranding
assigns different brand names to each product
late majority
avoid risks and are cautions and skeptical about new ideas
early majority
avoid risks and make purchases carefully
early adopters
buy the product if the experience of innovators is favorable
Overview of the buying process
Stage 1: social influences, marketing influences, and situational influences Stage 2: psychological influences Stage 3: Consumer decision making
Structural influences on organizational buying
Structural influences: refers to the design of the organizational environment and how it affects the purchasing process - 3 important structural influences: purchasing roles, organization-specific factors, and purchasing policies and procedures
Purchasing policies and procedures
Sole sourcing: all of a type of product is obtained froma single supplier
develop product positioning
Positioning map: visual depiction of consumer perceptions of competitive products, brands, or models
Marketing Research
Process by which information about environment is generated, analyzed, and interpreted (aids decision making and is not a substitute for it)
market segmentation
Process of dividing a market into groups of similar consumers and selecting the most appropriate groups for the firm to serve
Marketing Planning
Produces 3 outputs: establish marketing objective, selecting the target market, developing the marketing mix -4 P's: product, place, promotion, price
Organizational goods
Purchased by business firms for the purpose of running the business
The marketing concept
Purpose is to rivet the attention of marketing managers on customer orientation, rather than on product orientation or selling orientation.