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.