Marketing 3401

virtue

A character trait valued as being good.

purchasing power

A comparison of income versus the relative cost of a set standard of goods and services in different geographic areas.

sustainable competitive advantage

An advantage that cannot be copied by the competition.

applied research

An attempt to develop new or improved products.

marketing planning

Designing activities relating to marketing objectives and the changing marketing environment.

marketing myopia

Defining a business in terms of goods and services rather than in terms of the benefits that customers seek.

Explain the importance to marketing managers of growing ethnic markets.

Hispanics are the fastest-growing segment of the population, followed by African Americans. Many companies are now creating departments and product lines to effectively target multicultural market segments. Companies have quickly found that ethnic markets are not homogeneous.

SWOT analysis

Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T).

dog

In the portfolio matrix, a business unit that has low growth potential and a small market share.

star

In the portfolio matrix, a business unit that is a fast-growing market leader.

problem child (question mark)

In the portfolio matrix, a business unit that shows rapid growth but poor profit margins.

cash cow

In the portfolio matrix, a business unit that usually generates more cash than it needs to maintain its market share.

Describe the components of a situation analysis.

In the situation (or SWOT) analysis, the firm should identify its internal strengths (S) and weaknesses (W) and also examine external opportunities (O) and threats (T). When examining external opportunities and threats, marketing managers must analyze aspects of the marketing environment in a process called environmental scanning. The six most often studied macroenvironmental forces are social, demographic, economic, technological, political and legal, and competitive.

Define strategic business units.

Large companies may manage a number of very different businesses, called strategic business units (SBUs). Each SBU has its own rate of return on investment, growth potential, and associated risks, and requires its own strategies and funding.

Describe ethical behavior in business.

The law typically relies on juries to determine whether an act is legal or illegal. Society determines whether an action is ethical or unethical. Morals are the rules that people develop as a result of cultural values and norms. More and more companies are using ethics training to help put good ethics into practice. Ethical beliefs vary a little from culture to culture. However, some ethical practices vary significantly from one culture to the next.

strategic planning

The managerial process of creating and maintaining a fit between the organization's objectives and resources and evolving market opportunities.

Describe the elements of the marketing mix.

The marketing mix (or four Ps) is a blend of product, place, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market. The starting point of the marketing mix is the product offering. Products can be tangible goods, ideas, or services. Place (distribution) strategies are concerned with making products available when and where customers want them. Promotion includes advertising, public relations, sales promotion, and personal selling. Price is what a buyer must give up to obtain a product and is often the easiest to change of the four marketing mix elements.

Develop an appropriate business mission statement.

The mission statement is based on a careful analysis of benefits sought by current and potential customers and an analysis of existing and anticipated environmental conditions. The firm's mission statement establishes boundaries for all subsequent decisions, objectives, and strategies. A mission statement should focus on the market or markets the organization is attempting to serve rather than on the good or service offered.

ethics

The moral principles or values that generally govern the conduct of an individual.

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.

planning

The process of anticipating future events and determining strategies to achieve organizational objectives in the future.

implementation

The process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes the plan's objectives.

product/service differentiation competitive advantage

The provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competition's.

Describe four marketing management philosophies.

The role of marketing and the character of marketing activities within an organization are strongly influenced by its philosophy and orientation. A production-oriented organization focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace. A sales orientation is based on the beliefs that people will buy more products if aggressive sales techniques are used and that high sales volumes produce high profits. A market-oriented organization focuses on satisfying customer wants and needs while meeting organizational objectives. A societal marketing orientation goes beyond a market orientation to include the preservation or enhancement of individuals' and society's long-term best interests.

morals

The rules people develop as a result of cultural values and norms.

competitive advantage

The set of unique features of a company and its products that is perceived by the target market as significant and superior to the competition.

Identify strategic alternatives and know a basic outline for a marketing plan.

The strategic opportunity matrix can be used to help management develop strategic alternatives. The four options are market penetration, product development, market development, and diversification. In selecting a strategic alternative, managers may use a portfolio matrix, which classifies strategic business units as stars, cash cows, problem children, or dogs, depending on their present or projected growth and market share. Another option is to use the GE Model, which classifies SBUs based on market attractiveness and business position. The marketing plan is a written document that acts as a guidebook of marketing activities for the marketing manager. A marketing plan provides the basis by which actual and expected performance can be compared. Although there is no set formula or a single correct outline, a marketing plan should include basic elements such as stating the business mission, setting objectives, performing a situation analysis of internal and external environmental forces, selecting target market(s), delineating a marketing mix (product, place, promotion, and price), and establishing ways to implement, evaluate, and control the plan.

demography

The study of people's vital statistics, such as their age, race and ethnicity, and location.

Explain the importance to marketing managers of current demographic trends.

Today, several basic demographic patterns are influencing marketing mixes. Because the U.S. population is growing at a slower rate, marketers can no longer rely on profits from generally expanding markets. Marketers are also faced with increasingly experienced consumers among the younger generations such as tweens and teens. And because the population is also growing older, marketers are offering more products that appeal to middle-aged and older consumers.

relationship marketing

a strategy that focuses on keeping and improving relationships with current customers.

societal marketing orientation

an organization exists not only to satisfy customer wants & needs but also to preserve or enhance individuals' and society's long-term best interest.

marketing orientation

assumes that a sale does not depend on an aggressive sales force but rather on a customer's decision to purchase a product.

sales oreintation

based on the idea that people will buy more goods & services if aggressive sales techniques are used and that high sales result in high profits.

teamwork

collaborative efforts of people to accomplish common objectives

production orientation

focuses on the internal capabilities of the firm

empowerment

giving the employee more authority to resolve guest issues on the spot

Discuss target market strategies.

The target market strategy identifies which market segment or segments to focus on. This process begins with a MOA, which describes and estimates the size and sales potential of market segments that are of interest to the firm. In addition, an assessment of key competitors in these market segments is performed. After the market segments are described, one or more may be targeted by the firm. The three strategies for selecting target markets are appealing to the entire market with one marketing mix, concentrating on one segment, or appealing to multiple market segments by using multiple marketing mixes.

market concept

social & economic justification for an organization's existence is the satisfaction of customer wants & needs while meeting organizational objectives.

customer satisfaction

the customer's evaluation of a good or service in terms of whether that good or service has met the needs & expectations

customer value

the relationship between benefits & the sacrifice necessary to obtain those benefits

Identify sources of competitive advantage.

A competitive advantage is a set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition. There are three types of competitive advantages: cost, product/service differentiation, and niche strategies. Sources of cost competitive advantages include experience curves, efficient labor, no-frills goods and services, government subsidies, product design, reengineering, product innovations, and new methods of service delivery. A product/service differentiation competitive advantage exists when a firm provides something unique that is valuable to buyers beyond just low price. Niche competitive advantages come from targeting unique segments with specific needs and wants. The goal of all these sources of competitive advantage is to be sustainable.

target market

A defined group most likely to buy a firm's product.

Food & Drug Administration (FDA)

A federal agency charged with enforcing regulations against selling and distributing adulterated, misbranded, or hazardous food and drug products.

Federal Trade Commission (FTA)

A federal agency empowered to prevent persons or corporations from using unfair methods of competition in commerce.

Consumer Product Safety Commission (CPSC)

A federal agency established to protect the health and safety of consumers in and around their homes.

code of ethics

A guideline to help marketing managers and other employees make better decisions.

Foreign Corrupt Practices Act

A law that prohibits U.S. corporations from making illegal payments to public officials of foreign governments to obtain business rights or to enhance their business dealings in those countries.

market development

A marketing strategy that entails attracting new customers to existing products.

product development

A marketing strategy that entails the creation of new products for current customers.

market penetration

A marketing strategy that tries to increase market share among existing customers.

inflation

A measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year.

pyramid of corporate social responsibility

A model that suggests corporate social responsibility is composed of economic, legal, ethical, and philanthropic responsibilities and that the firm's economic performance supports the entire structure.

recession

A period of economic activity characterized by negative growth, which reduces demand for goods and services.

mission statement

A statement of the firm's business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions.

marketing objective

A statement of what is to be accomplished through marketing activities.

diversification

A strategy of increasing sales by introducing new products into new markets.

strategic business unit (SBU)

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

casuist ethical theory

A theory that compares a current ethical dilemma with examples of similar ethical dilemmas and their outcomes.

stakeholder theory

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

utilitarian ethical theory

A theory that holds that the choice that yields the greatest benefit to the most people is the choice that is ethically correct.

deontological ethical theory

A theory that states that people should adhere to their obligations and duties when analyzing an ethical dilemma.

marketing audit

A thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization.

portfolio model

A tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate.

marketing mix

A unique blend of product, place, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.

marketing plan

A written document that acts as a guidebook of marketing activities for the marketing manager.

corporate social responsibility

Business's concern for society's welfare.

Explain why implementation, evaluation, and control of the marketing plan are necessary.

Before a marketing plan can work, it must be implemented; that is, people must perform the actions in the plan. The plan should also be evaluated to see if it has achieved its objectives. Poor implementation can be a major factor in a plan's failure. Control provides the mechanisms for evaluating marketing results in light of the plan's objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines. One of the major control tools is the marketing audit, which has four major components: it is comprehensive, systematic, independent, and periodic. After the marketing audit, it is important to perform post-audit tasks, which are to profile strengths and weaknesses, clarify the role of the audit, and assign someone to be responsible for implementing the results of the audit.

cost competitive advantage

Being the low-cost competitor in an industry while maintaining satisfactory profit margins.

Explain cause-related marketing.

Cause-related marketing is the cooperative effort between a for-profit firm and a nonprofit organization. It is different from philanthropy, which is a specific, tax-deductible donation. Cause-related marketing is very popular because it can enhance the reputation of the corporation and also make additional profit for the company. Sometimes companies have abused cause-related marketing and received much greater benefits than the nonprofit that has supposedly been helped. These cases are a small minority.

Greatest Generation

Cohort before the baby boomers who grew up in the Great Depression and fought in World War II.

environmental scanning

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.

Explain the concept of ethical behavior.

Ethics are the moral principles or values that generally govern the conduct of an individual or a group. Ethics can also be viewed as the standard of behavior by which conduct is judged. Ethical conflicts sometimes arise between businesses, customers, workers, and the surrounding community. Conflicts can sometimes be resolved through the reliance on ethical theories. Ethical theories that are applicable to marketing include: deontology, utilitarianism, casuist, moral relativism, and virtue ethics.

Identify several techniques that help make strategic planning effective.

First, management must realize that strategic planning is an ongoing process and not a once-a-year exercise. Second, good strategic planning involves a high level of creativity. The last requirement is top management's support and cooperation.

Describe several reasons for studying marketing.

First, marketing affects the allocation of goods and services that influence a nation's economy and standard of living. Second, an understanding of marketing is crucial to understanding most businesses. Third, career opportunities in marketing are diverse, profitable, and expected to increase significantly during the coming decade. Fourth, understanding marketing makes consumers more informed.

Discuss the differences between sales and market orientations.

First, sales-oriented firms focus on their own needs; market-oriented firms focus on customers'needs and preferences. Second, sales-oriented companies consider themselves to be deliverers of goods and services, whereas market-oriented companies view themselves as satisfiers of customers. Third, sales-oriented firms direct their products to everyone; market-oriented firms aim at specific segments of the population. Fourth, although the primary goal of both types of firms is profit, sales-oriented businesses pursue maximum sales volume through intensive promotion, whereas market-oriented businesses pursue customer satisfaction through coordinated activities.

evaluation

Gauging the extent to which the marketing objectives have been achieved during the specified time period.

Define Marketing

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.

Explain the criteria for stating good marketing objectives.

Objectives should be realistic, measurable, and time specific. Objectives must also be consistent and indicate the priorities of the organization.

baby boomers

People born between 1946 and 1964.

Generation X

People born between 1965 and 1978.

Generation Y

People born between 1979 and 1994.

moral relativists

Persons who believe that ethical truths depend on the individuals and groups holding them.

four Ps

Product, place, promotion, and price, which together make up the marketing mix.

control

Provides the mechanisms for evaluating marketing results in light of the plan's objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines.

basic research

Pure research that aims to confirm an existing theory or to learn more about a concept or phenomenon.

Discuss corporate social responsibility.

Responsibility in business refers to a firm's concern for the way its decisions affect society. A second theory says that the corporation should always pay attention to the interests of its stakeholders. These are: management, customers, the local community, owners/stockholders, suppliers, and employees. Social responsibility has four components: economic, legal, ethical, and philanthropic. These are intertwined, yet the most fundamental is earning a profit. If a firm does not earn a profit, the other three responsibilities are moot. Most businesspeople believe they should do more than pursue profits. Although a company must consider its economic needs first, it must also operate within the law, do what is ethical and fair, and be a good corporate citizen. The concept of sustainability is that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as an opportunity to earn profits and help the world at the same time.

Understand the importance of strategic planning.

Strategic planning is the basis for all marketing strategies and decisions. The goal of strategic planning is long-term profitability and growth.

Explain the determinants of a civil society.

The "social glue" that holds a society together is composed of six factors. They are: ethics, laws, formal and informal groups, self-regulation, the media, and an active civil society. All of these are necessary for a coherent, vibrant, and civil society. These six factors are more important in countries than ever before because of the increasing complexity of the global economy and the melding of customs and traditions within societies.

marketing strategy

The activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets.

niche competitive advantage

The advantage achieved when a firm seeks to target and effectively serve a small segment of the market.

cause-related marketing

The cooperative marketing efforts between a "for-profit"firm and a "nonprofit organization."

experience curves

The curves represent data on a chart that show costs declining at a predictable rate as experience with a product increases.

market opportunity analysis (MOA)

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.

green marketing

The development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment.

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

The external marketing environment consists of social, demographic, economic, technological, political and legal, and competitive variables. Marketers generally cannot control the elements of the external environment. Instead, they must understand how the external environment is changing and the impact of that change on the target market. Then marketing managers can create a marketing mix to effectively meet the needs of target customers.

sustainability

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

Describe the arguments for and against social responsibility.

Today, virtually all managers endorse social responsibility of corporations. It is, instead, a matter of what types of responsibility and the degree of responsibility. The arguments against social responsibility are: The job of the corporation is to maximize profits for stockholders; businesses are better suited to produce goods and services and not to be involved in welfare services; and if global competitors aren't socially responsible it could hurt the domestic competitor. The arguments for social responsibility are: It's the right thing to do; government will create new regulations and levy fines if firms aren't socially responsible; and social responsibility can enhance a company's profitability.

environmental management

When a company implements strategies that attempt to shape the external environment within which it operates.

Describe the social factors that affect marketing.

Within the external environment, social factors are perhaps the most difficult for marketers to anticipate. Several major social trends are currently shaping marketing strategies. First, people of all ages have a broader range of interests, defying traditional consumer profiles. Second, changing gender roles are bringing more women into the workforce and increasing the number of men who shop. Third, an increase in the number of dual-career families and proliferation of mobile devices have created demand for time-saving goods and services.

exchange

people giving up something to receive something they would rather have.