Test #1 - marketing

product

A good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumer needs and is received in exchange for money or something else of value.

Customer Value Proposition

Benefits promised to customers to satisfy their needs

Customer Value

Benefits to the buyer from the product service. Value strategies such as: -Best Price -Best Product -Best Service

demographics

Describing a population according to selected characteristics such as age, gender, ethnicity, income, and occupation

Marketing Tactics

Detailed day to day operational decisions essential to the overall success of the marketing strategies

Target Market

Groups of customers targeted by marketing programs

personality

a person's consistent behaviors or responses to recurring situations

Multicultural Marketing

combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences and lifestyles of different races

motivation

energizing force that stimulates behavior to satisfy a need (maslow)

brand loyalty

favorable attitude toward and consistent purchase of a single brand

Market Orientation

focuses its efforts on (1) continuously collecting information about customers' needs, (2) sharing this information across departments, and (3) using it to create customer value.

reference group

group of people who influence a person's attitudes, values, and behaviors; influence the aspiration levels that help set a consumers standards

opinion leaders

important for products that provide a form of self expression

social forces

of the environment include demographic characteristics of the population and its values

beliefs

ones perception of how a product or brand performs

word of mouth

perhaps the most powerful information source; friends or family who are viewed as trustworthy

marketing strategy

the means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it. The term implies both the end sought (target market) and the means to achieve it (marketing program).

Profit

the money left after a business firm's total expenses are subtracted from its total revenues and is the reward for the risk it undertakes in marketing its offerings.

involvement

the personal, social, and economic significance of a purchase to the consumer

perception

the process by which a person selects, organizes, and interprets information to create a meaningful picture of the world

Customer Relationship Management (CRM)

the process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace.

organizational culture

the set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization. An organization must connect with all of its stakeholders. Thus, an important corporate-level marketing function is communicating its core values and mission to them

purchase decision process

the stages a buyer passes through in making choices about which products or services to buy: 1. problem recognition 2. information search 3. alternative evaluation 4. purchase decision 5. postpurchase behavior

self-regulation

where an industry attempts to police itself

Describe three kinds of organizations and the three levels of strategy in them.

(1) for-profit organizations: Often called a business firm, is a privately-owned organization such as Target, Nike, or Cree that serves its customers to earn a profit so that it can survive. Profit is the money left after an organization subtracts its total expenses from its total revenues is the reward for the risk it undertakes in marketing its offerings. (2) nonprofit organizations: a nongovernmental organization that serves its customers but does not have profit as an organizational goal. Instead, its goals may be operational efficiency or client satisfaction. It also must receive sufficient funds above its expenses to continue operations. (3) government agencies: a federal, state, county, or city unit that provides a specific service to its constituents. (a) the corporate level, where top management directs overall strategy for the entire organization; (b) the strategic business unit level, where managers set a more specific strategic direction for their businesses to set value-creating opportunities (c) the functional level, where groups of specialists actually create value for the organization.

Explain why managers use marketing dashboards and marketing metrics.

- Although marketing managers can set strategic direction for their organizations, how do they know if they are making progress in getting there? As several industry experts have observed, "You can't manage what you don't measure." One answer to this problem is the growing field of data analytics, or big data, which enables data-driven decisions by collecting data and presenting them in a visual format such as a marketing dashboard-- the visual display of the essential information related to achieving a marketing objective. Example: When a chief marketing officer (CMO) wants to see daily what the effect of a new TV advertising campaign is on a product's sales. - Each display in a marketing dashboard shows a marketing metric, which is a measure of the quantitative value or trend of a marketing action or result. - Today's marketers use data visualization, which presents information about an organization's marketing metrics graphically so marketers can quickly (1) spot deviations from plans during the evaluation phase and (2) take corrective actions.

Explain how regulatory forces ensure competition and protect producers and consumers.

- Business: Much of the regulation from the federal and state levels is the result of an active political process and has been passed to ensure competition and fair business practices. o Patent Law: gives inventors the right to exclude others from making, using, or selling products that infringe the patented invention o Copyright Law: gives the author of a literary, dramatic, musical, or artistic work the exclusive right to print, perform, or otherwise copy that work. o Digital Millennium Copyright Act: made to improve protection of copyrighted digital products - Consumers: the focus of legislation is to protect them from unfair trade practices and ensure their safety. o Regulatory forces surround each element of the marketing mix (4 Ps). o Example: The Child Protection Act (1966), the Nutritional Labeling and Education Act (1990), and the Consumer Product Safety Act (1972), which established the Consumer Product Safety Commission. o Many of these laws came about because of consumerism, a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions. o Laws also address pricing, place, and promotion. The FTC Act of 1914, for example, established the Federal Trade Commission (FTC) to monitor unfair business practices.

Discuss how an organization assesses where it is now and where it seeks to be.

- By using situational or SWOT analysis. The ultimate goal is to identify the critical strategy-related factors that impact the firm and then build on vital strengths, correct glaring weaknesses, exploit significant opportunities, and avoid disaster-laden threats. Based upon 4 pillars: 1. Identify trends in the organization's industry. 2. Analyze the organization's competitors. 3. Assess the organization itself. 4. Research the organization's present and prospective customers.

Explain how organizations build strong customer relationships and customer value through marketing.

- Customer value is the unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price. - Research suggests that firms cannot succeed by being all things to all people so firms must deliver outstanding customer value with one of three value strategies: best price, best product, or best service - Examples: Best price: Target. It uses the Target brand promise of "Expect More, Pay Less®" - Best product: Starbucks. Starbucks seeks "to inspire and nurture the human spirit—one person, one cup and one neighborhood at a time," stressing "The best coffee for the best YOU," in the process. - Best service: Nordstrom. As a leading fashion specialty retailer, Nordstrom works to "deliver the best possible shopping experience, helping customers possess style—not just buy fashion." - A firm achieves meaningful customer relationships by creating connections with its customers through careful coordination of the product, its price, the way it's promoted, and how it's placed. - Relationship marketing links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit. Relationship marketing involves a personal, ongoing relationship between the organization and its individual customers that begins before and continues after the sale. - Developing a robust marketing program: a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers. Ideally, they can be formed into market segments, which are relatively homogeneous groups of prospective buyers that (1) have common needs and (2) will respond similarly to a marketing action. - 3M example: post-it pens.

Discuss how economic forces affect marketing.

- Definition: Pertains to the income, expenditures, and resources that affect the cost of running a business and household. Includes both macro and micro-economic factors. - Macro Conditions: performance of the economy based on indicators such as GDP (gross domestic product), unemployment, and price changes (inflation or deflation). - Consumer Income: o Gross: The total amount of money made in one year by a person, household, or family unit o Disposable: money a consumer has left after paying taxes to use for necessities such as food, housing, clothing, and transportation o Discretionary: the money that remains after paying for taxes and necessities. Used for luxury items.

Explain the purpose of environmental scanning.

- Definition: The process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends typically arising from five sources: social, economic, technological, competitive, and regulatory forces - Purpose: To monitor the environment for trends that could impact your business. - Example: growing popularity of video bloggers, to the increasing mobility and connectivity of consumers, to the importance of issues such as net neutrality

Describe how technological changes can affect marketing.

- Definition: inventions or innovations from applied science or engineering research. Each new wave of technological innovation can replace existing products and companies. - Impact: It primarily impacts customer value since the costs of technology are rapidly declining. This has pushed marketers to orient their service toward quality, service and relationships. o The advancement of technology also creates an environment of new products. o Data Analytics: Technology has resulted in the creation of a marketspace, an information and communication based electronic exchange environment occupied by sophisticated computer and telecommunication technologies and digital offerings. These capabilities led to electronic commerce (e-commerce)

Discuss the forms of competition that exist in a market.

- Definition: the alternative firms that could provide a product to satisfy a specific market's needs - Pure / Perfect Competition: Many sellers and they each have a similar product o Ex: commodities common to agribusiness (for example, wheat, rice, and grain) - Monopolistic Competition: Many sellers compete with substitutable products within a price range. o Ex: if the price of coffee rises too much, consumers may switch to tea - Oligopoly: A few companies control the majority of industry sales o Ex: The wireless telephone industry, dominated by four carriers that serve more than 95 percent of the U.S. market. Verizon, AT&T, Sprint, and T-Mobile - Monopoly: Occurs when only one firm sells the product o Ex: common for producers of products and services considered essential to a community: water, electricity, and cable service.

Describe social forces such as demographics and culture.

- Demographics: age, gender, ethnicity, income, and occupation is referred to as demographics. Three key demographic characteristics include a population profile, a description of generational cohorts, and a description or racial and ethnic diversity. - Culture: incorporates the set of values, ideas, and attitudes that are learned and shared among the members of a group. Because many of the elements of culture influence consumer buying patterns, monitoring national and global cultural trends is important for marketing. o Culture also includes values that may differ over time and between countries.

Explain how marketing discovers and satisfies consumer needs.

- Discovering the needs of prospective customers: Marketers often use customer surveys, concept tests, and other forms of marketing research to better understand customer ideas. Many firms also use "crowdsourcing" websites to solicit and evaluate ideas from customers. - (1) focus on what the customer benefit is, and (2) learn from past mistakes. - Satisfying needs: Identify a Target Market—one or more specific groups of potential consumers toward which an organization directs its marketing program. - Three specific groups that benefit from effective marketing: consumers who buy, organizations that sell, and society as a whole. - After identifying your target market, develop the 4 Ps: (Marketing Mix) - Product. A good, service, or idea to satisfy the consumer's needs. - Price. What is exchanged for the product. - Promotion. A means of communication between the seller and buyer. - Place. A means of getting the product to the consumer.

Identify the major sociocultural influences on consumer behavior.

- Evolve from a consumer's formal and informal relationships - Personal Influence: Opinion leadership and word-of-mouth behavior - Reference Groups: people to whom an individual looks as a basis for self-approval or as a source of personal standards - Family: consumer socialization, passage through the family life cycle, and decision making within the family or household - Culture: the set of values, ideas, and attitudes that are learned and shared among the members of a group - Subculture: Subgroups within the larger, or national, culture with unique values, ideas, and attitudes are referred to as subcultures

Distinguish among three variations of the consumer purchase decision process: extended, limited, and routine problem solving.

- Extended Problem Solving: Considerable time and effort are devoted to the search for external information and the identification and evaluation of alternatives (Example: Purchasing a house or car) - Limited Problem Solving: consumers typically seek some information or rely on a friend to help them evaluate alternatives (Example: Picking a restaurant for lunch) - Routine Problem Solving: For products such as table salt and milk, consumers recognize a problem, make a decision, and spend little effort seeking external information and evaluating alternatives.

Define marketing and identify the diverse factors that influence marketing actions.

- 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. - An organization's marketing activities should also create value for its partners and for society. - Marketing seeks (1) to discover the needs and wants of prospective customers and (2) to satisfy them - The key to achieving these two objectives is the idea of exchange, which is the trade of things of value between a buyer and a seller so that each is better off after the trade.

Distinguish between marketing mix factors and environmental forces.

- Marketing mix consists of the controllable factors such as the 4 Ps. - Designing an effective marketing mix also conveys to potential buyers a clear customer value proposition, which is a cluster of benefits that an organization promises customers to satisfy their needs. - Ex: Walmart's customer value proposition can be described as "help people around the world save money and live better—anytime and anywhere." - Environmental factors are those that are deemed uncontrollable and consist of social, economic, technological, competitive, and regulatory forces. - Recent studies and marketing successes have shown that a forward-looking, action-oriented firm can often affect some environmental forces.

Identify the major psychological influences on consumer behavior.

- Motivation: the energizing force that stimulates behavior to satisfy a need. Because consumer needs are the focus of the marketing concept, marketers try to arouse - Personality: a consumer's personality guides and directs behavior. Personality refers to a person's consistent behaviors or responses to recurring situations. o Identify Key Traits: enduring characteristics within a person or in his or her relationships with others. o Self-Concept: Ideal (how you want others to see you) & Actual (how others actually see you). - Perception: The process by which a consumer selects, organizes and interprets information to create a meaningful picture of the world. - Learned: refers to those behaviors that result from (a) repeated experience and (b) reasoning. Brand loyalty results from learning.

Describe core values, mission, organizational culture, business, and goals.

- Strategy is an organization's long-term course of action designed to deliver a unique customer experience while achieving its goals - Core Values are the fundamental, passionate, and enduring principles that guide its conduct over time. They capture the firm's heart and soul and serve to inspire and motivate its stakeholders. Core values also are timeless and guide the organization's conduct - Mission / Vision: a statement of the organization's function in society that often identifies its customers, markets, products, and technologies. Often used interchangeably with vision, a mission statement should be clear, concise, meaningful, inspirational, and long term - Organizational culture—the set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization. - A business describes the clear, broad, underlying industry or market sector of an organization's offering. an organization looks at the set of organizations that sell similar offerings—those that are in direct competition with each other to help answer "What do we do?" or "What business are we in?" - Goals or objectives are statements of an accomplishment of a task to be achieved, often by a specific time. Goals convert an organization's mission and business into long- and short-term performance targets. - Types of Goals: Profit, Sales, Market Share, Quality, Customer Satisfaction, Employee Welfare and Social Responsibility.

Describe the stages in the consumer purchase decision process

1. Problem Recognition: a. Perceiving a difference between a person's ideal and actual situations big enough to trigger a decision 2. Information Search: Seeking Value a. Internal: Scan your memory for past experiences with products or brands. b. External: Gather information from personal sources, public sources or marketing dominated sources. 3. Alternative Evaluation: Assessing Value a. clarifies the information gathered by the consumer by (1) suggesting criteria to use for the purchase, (2) yielding brand names that might meet the criteria, and (3) developing consumer value perceptions. 4. Purchase Decision: Buying Value a. Two choices remain: (1) from whom to buy and (2) when to buy. 5. Post-Purchase Behavior: Realizing Value a. The consumer compares it with his or her expectations and is either satisfied or dissatisfied.

Marketing Mix

1. Product 2. Price 3. Promotion 4. Place - Controllable factors because they are under the control of the marketing department in an organisation

Describe the different concepts of social responsibility.

1. Profit Responsibility: a. To maximize profits for their owners or stockholders 2. Stakeholder Responsibility: a. Focuses on the obligations an organization has to those who can affect achievement of its objectives. 3. Societal Responsibility: a. obligations that organizations have (1) to the preservation of the ecological environment and (2) to the general public.

Marketing metric

A measure of the value or trend of a marketing action or result

Mission (vision)

A statement of an organization's function in society

Business portfolio analysis

A technique that managers use to quantify performance measures and growth targets of their firms' strategic business units

marketing

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

Identify factors that influence ethical and unethical marketing decisions

Factors that Influence Ethics: 1. Society & Cultural Norms: Culture also serves as a socializing force that dictates what is morally right and just. This means that moral standards are relative to particular societies. 2. Business Culture & Industry Practices: Business cultures "comprise the effective rules of the game, the boundaries between competitive and unethical behavior, [and] the codes of conduct in business dealings." 3. Corporate Culture & Expectations: The set of values, ideas, and attitudes that is learned and shared among the members of an organization. - Consumer Bill of Rights: Grants consumers the right to safety, to be informed, to choose and to be heard. - Unethical Behavior: Influenced by economic espionage (illegal collection of trade secrets or proprietary information about a company's competitors) and bribery (Bribes and kickbacks are often disguised as gifts, consultant fees, and favors).

Marketspace

Information and communication based electronic exchange environment

market

Is people with both the desire and the ability to buy a specific offering.

Relationship marketing

Links the organization to its individual customers, employees, suppliers, and other partners for mutual long term benefits.

Ethics

Moral principles and values that govern the actions and decisions of an individual or group; guidelines on how to act justly in dilemmas

marketing plan

Most organizations tie the marketing metrics they track in their marketing dashboards to the quantitative objectives established in their marketing plan, which is a road map for the marketing activities of an organization for a specified future time period, such as one year or five years. The planning phase of the strategic marketing process (discussed later in this chapter) usually results in a marketing plan that sets the direction for the marketing activities of an organization.

Ultimate consumers

People who use products and services purchased for a household

Marketing program

Plan that integrates the marketing mix to provide a good, service or idea to prospective buyers.

Core values

Principles that guide an organization. They serve to inspire and motivate its stakeholders.

Market share

Ratio of a firm's sales to the total sales of all firms in the industry

Market segments

Relatively homogenous groups of prospective buyers that: 1. Have common needs 2. Will respond similarly to a marketing action

Explain the three steps of the planning phase of the strategic marketing process. Describe the four components of the implementation phase of the strategic marketing process.

STRATEGIC MARKETING PHASE: 1. SWOT Analysis: Where we are now, where its going. 2. Market-Product Focus and Goal Setting: Determining which products or services will be directed at which customers—a foundational step for STEP 3 3. Marketing Program: Step 2 adds the who and what. Step 3 involves developing the program's marketing mix (4Ps) and its budget. IMPLEMENTATION PHASE: 1. Obtaining resources a. This often-times means obtaining funds from savings, friends, family, or banks. For an existing company, funding may come from cash cows or stars. 2. Designing the marketing organization a. The product or brand managers and their subordinates help plan, implement, and evaluate the marketing plans for their offerings. 3. Defining precise tasks, responsibilities, and deadlines a. Holding regular meetings to focus on (1) the task, (2) the person responsible for that task, (3) the deadline, and (4) what is to be delivered. These are all considered action items that are forward looking, clarify targets and put pressure on people to achieve goals by a given deadline. 4. Actually executing the marketing program designed in the planning phase a. Required attention to both the marketing strategy and the marketing tactics. Marketing Strategy: the means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it Marketing Tactics: detailed day-to-day operational marketing actions for each element of the marketing mix that contribute to the overall success of marketing strategies.

SWOT Analysis

Strengths Weaknesses Opportunities Threats

Diversification analysis

Technique for searching for growth opportunities 4 market-product strategies: Market penetration Market development Product development Diversification

Generation X

The 45 million people born between 1965 and 1976 in the "birth dearth" following the baby boom.

Baby boomers

The 78 million people born during the baby boom following World War II and lasting until 1964.

Millennials (or Generation Y)

The 83 million children of the baby boomers, born between 1977 and 2000.

- Factors that Influence Marketing Actions:

The organization whose mission and objectives determine what business it is in and what goals it seeks. Environmental forces involving social, economic, technological, competitive, and regulatory considerations also shape an organization's marketing actions. - The organization must strike a balance among the sometimes differing interests of these groups. For example, it is not possible to simultaneously provide the lowest-priced and highest- quality products to customers and pay the highest prices to suppliers, the highest wages to employees, and the maximum dividends to shareholders. - For marketing to occur, at least four factors are required: (1) two or more parties (individuals or organizations) with unsatisfied needs, (2) a desire and ability on their part to have their needs satisfied, (3) a way for the parties to communicate, and (4) something to exchange.

Demography

The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.

exchange

The trade of things of value between buyer and seller so that each is better off after the trade.

societal marketing concept

The view that organizations hold satisfy the needs of consumers in a way that provides for society's well being.

Marketing dashboard

The visual computer display of essential marketing information

Environmental Forces

Uncontrollable factors such as: -Social -Economic -Technological -Competitive -Regulatory

consumerism

a modern movement for the protection of the consumer against useless, inferior, or dangerous products, misleading advertising, and unfair pricing

cause marketing

a strategy that aligns marketers with a particular cause to generate business while also providing social benefits

consumer behavior

actions a person takes in purchasing and using products and services

Competition

alternatives firms that could provide a product to satisfy a specific market's needs - pure competition, monopolistic, oligopoly, pure monopoly

strategic marketing process

an organization allocates its marketing mix resources to reach its target markets (This process is divided into three phases: planning, implementation, and evaluation), to answer 3 questions: 1. How do we allocate our resources to get where we want to go? 2. How do we convert our plans into actions? 3. How do our results compare with our plans, and do deviations require new plans?

Strategy

an organization's long-term course of action designed to deliver a unique customer experience while achieving its goals. All organizations set a strategic direction. And marketing helps to both set this direction and move the organization there.

learning

behaviors that result from repeated experience and reasoning; continual process

points of difference

characteristics of a product that make it superior to competitive substitutes—offerings it faces in the marketplace. They are the single most important factor in the success or failure of a new product.

regulation

consists of restrictions state and federal laws place on business with regard to the conduct of its activities

business

describes the clear, broad, underlying industry or market sector of an organization's offering. To help define its business, an organization looks at the set of organizations that sell similar offerings—those that are in direct competition with each other—such as "the ice cream business." The organization can then begin to answer the questions, "What do we do?" or "What business are we in?"

family life cycle

distinct phases from formation to retirement

Organizational buyers

manufacturers, wholesalers, retailers, service companies, not- for-profit organizations, and government agencies that buy products and services for their own use or for resale.

economy

pertains to the income, expenditures, and resources that affect the cost of running a business and household

technology

refers to inventions or innovations from applied science or engineering research

culture

set of values, ideas, and attitudes that are learned and shared among the members of a group

Goals or objectives

statements of an accomplishment of a task to be achieved, often by a specific time. For example, Netflix might set a goal of being the top provider of online movies by 2012. Goals convert an organization's mission and business into long- and short-term performance targets. Business firms can pursue several different types of goals: profit, sales, market share, quality, customer satisfaction, employee welfare, social responsibility

green marketing

strategy that involves the development and promotion of environmentally friendly products- stressing that attribute when the manufacturer communicates with consumers

subcultures

subgroups within the larger, or national, culture with unique values, ideas, and attitudes

situation analysis

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. An effective summary of a situation analysis is a SWOT analysis, an acronym describing an organization's appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats.

attitudes

tendency to respond to something that is consistently favorable or unfavorable; leads to behavior

perceived risk

the anxiety felt when a consumer cannot anticipate possible negative outcomes of a purchase

utility

the benefits or customer value perceived by a group of users.

Marketing Concept

the idea that an organization should (1) strive to satisfy the needs of consumers while also (2) trying to achieve the organization's goals

customer experience

the internal response that customers have to all aspects of an organization and its offering.

environmental scanning

the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends