MKT 300 Midterm #1
Which of the following is the BEST example of management thinking during the "production era"?
"If we produce a good product, customers will find us and buy it" - if we can make it, it will sell
Sales Era
1920s to the 1960s, manufacturers found they could produce more goods than buyers could consume Competition grew and firms hired more salespeople to find new buyers Problem wasn't just to produce but to beat the competition and win customers When a company emphasizes selling because of increased competition
Learning
A change in a person's thought processes caused by prior experience Often based on direct experience: -Tasting ice cream for the first time Or also an indirect experience: -Watching an ad that shows other people enjoying ice cream
Target Market
A fairly homogeneous (similar) group of customers to whom a company wishes to appeal
"discretionary income"
A family's income AFTER paying taxes and paying for necessities
Dissonance
A feeling of uncertainty about whether the correct decision was made "buyer's remorse" May lead a customer to seek additional information to confirm the wisdom of the purchase
Competitive Advantage
A firm has a marketing mix that the target market sees as better than a competitor's mix May result from efforts in different areas of the firm - cost cutting in production, innovative R&D, more effective purchasing of needed components, etc.
Social Responsibility
A firm's obligation to improve its positive effects on society and reduce its negative effects
Social Class
A group of people who have approximately equal social position as viewed by others in the society
Market
A group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services -Ways of satisfying those needs
Generic Market
A market with broadly similar needs and sellers offering various, often diverse, ways of satisfying those needs
Target Marketing
A marketing mix is tailored to fit some specific target customers "Rifle approach"
Sustainable Competitive Advantage
A marketing mix that customers see as better than a competitor's mix and cannot be quickly or easily copied
A marketing manager made a speech in which he described his organization as having "really embraced the marketing concept over ten years ago." A critic in the audience argued that the manager didn't understand the "social responsibility" view of the marketing concept. Given the critic's argument, the marketing manager may work for:
A motorcycle company
Opinion Leader
A person who influences others Not necessarily wealthier or better educated -A person may know a lot on video games but nothing on clothing
Belief
A person's opinion about something May help shape a consumer's attitudes but don't necessarily involve any liking or disliking
Attitude
A person's point of view toward something -That "something" may be a product, an ad, a salesperson, a firm, or an idea Affect the selective processes, learning, and the buying decisions
Customer Service
A personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase - is often a key to building repeat business Individual attention comes at a price; personal selling and customer service can be expensive Personal effort is often blended with mass selling and sales promotion
Predictive Analytics
A process of using analytics to predict trends or future events from data
Customer Equity
A result of customer relationship management The total of discounted lifetime values of all of the firms customers. In layman terms, the more loyal a customer, the more is the customer equity Expected earnings stream (profitability) of a firm's current and prospective customers over some period of time -Three pathways for growth: Acquiring new customers Retaining current customers Enhancing the customer value by increasing their purchases
Macro-Marketing
A social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society
Drive
A strong stimulus that encourages action to reduce a need They're internal, the reasons behind certain behavior patterns A product purchase results from a drive to satisfy some need
Simple Trade Era
A time when families traded and sold their "surplus" output to local distributors
Marketing Plan
A written statement of a marketing strategy and the time-related details for carrying out the strategy Should have: -What marketing mix will be offered, to whom (target market), and how long -What company resources (shown as costs) will be needed at what rate -What results are expected (sales and profits, customer satisfaction levels, etc.)
Lifestyle Dimensions
Activities Interests Opinions Demographics
Cultural and Social Environment
Affect how and why people live and behave as they do - which affects customer buying behavior and eventually the economic, political, and legal environments Languages, education, religion, food, style of clothing and housing, views on work, marriage, and family
Competitive Environment
Affects the number and types of competitors the marketing manager faces and how they may behave While marketing managers may not be able to control these factors, they can choose strategies that avoid head-on competition -But also plan when competition is inevitable
When marketers monitor the economic situation affecting their target markets, they are likely to monitor changes in all of the following except
Age
Free Trade
Agreements between countries to not restrict imports and exports (NAFTA)
Segmenters
Aim at one or more homogeneous segments and try to develop a different marketing mix for each segment Fine tune their marketing mixes for each target market - perhaps making basic changes in the product itself - because they want to satisfy each segment well
Segmenting
An aggregating process that clusters people with similar needs into a market segment
Nationalism
An emphasis on a country's interests before everything else Affect how macro-marketing systems work Affect how marketing managers work as well -Nationalistic feelings can reduce sales - or even block all marketing activity - in some international markets (China made it difficult for outside firms)
Marketing Concept
An organization aims all its efforts at satisfying its customers at a profit
Competitor Analysis
An organized approach for evaluating the strengths and weaknesses of current or potential competitors' marketing strategies
Expectation
An outcome or event that a person anticipates or looks forward to Consumer expectations often focus on the benefits or value that the consumer expects from a firm's marketing mix
Advertising
Any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor Advertiser pays a media source (newspapers, tv network, or website) for permission of ideas, goods, or services
Channel of Distribution
Any series of firms or individuals who participate in the flow of products from producer to final user or consumer
Publicity
Any unpaid form of nonpersonal presentation of ideas, goods, or services - includes earning favorable coverage in newspaper stories and creating web pages that provide product information for interest customers A brand page on social media -FB, Twitter, Pinterest, etc.
Regarding the family life cycle, singles and younger couples without children
Are more willing to try new products and brands
Economies of Scale
As a company produces larger numbers of a particular product, the cost of each unit of the product goes down
Jim wants to position his firm against his competitors. In doing so he should
Avoid looking too much like the competitor so that he'd confuse the target segment
Competitive Barriers
Barriers to entry is an economics and business term describing factors that can prevent or impede newcomers into a market or industry sector, and so limit competition These can include high start-up costs, regulatory hurdles, or other obstacles that prevent new competitors from easily entering a business sector
Toothpastes sold in supermarkets and pharmacies promise various results, such as whiter teeth, protection against gum disease, tartar control, or fresh breath. Toothpaste marketers are using __________ segmentation.
Benefit
Marketing Program
Blends all of the firm's marketing plans into one "big" plan Success depends on the care that goes into planning the individual strategies and how well they work together to create value for customers and the firm
Baby Boomers
Born between 1946 and 1964 50s, 60s, 70s Large number of people in the group - powerful demographic force Spend 80% of all leisure travel dollars and buy two-thirds of all new cars, half computers, and one third of movies Like to shop in a physical store more than other generations
Generation Y (Millenials)
Born from 1978 to 1994 Emerged from the echo boom - when BB started having kids 20s and 30s Comfortable with technology, prefer convenience (sparking frozen food) Health conscious (gyms) Spend on experiences rather than possessions (bad for pricey cars but good for travel destinations) Don't mind "sharing" (Uber and Airbnb) Don't like bar soap or chewing gum
Universal Functions of Marketing
Buying · Looking for and evaluating goods and services Selling · Involves promoting the product · Most visible · The use of personal selling, advertising, customer service, and other direct and mass-selling methods to tell customers about the product Transporting · Movement of goods from one place to another Storing · Holding goods until customers need them Standardizing and Grading · Sorting products according to size and quality · Makes buying and selling easier because it reduces the need for inspection and sampling Financing · Provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products Risk Taking · Bearing the uncertainties that are part of the marketing process · A firm can never be sure that customers will want to buy its products · Products can also be damaged, stolen, or outdated Market information · Involves the collection, analysis, and distribution of all the information needed to plan, carry out, and control marketing activities, whether in a firm's own neighborhood or in a market overseas
Quality Ceramic, Inc. (QCI) defined five submarkets within its broad product-market. To obtain some economies of scale, QCI decided NOT to offer each of the submarkets a different marketing mix. Instead, it selected two submarkets whose needs are fairly similar, and is counting on promotion and minor product differences to make its one basic marketing mix appeal to both submarkets. QCI is using the:
Combined target market approach
Combined Target Market Approach
Combining two or more submarkets into one larger target market as a basis for one strategy
Mass Selling
Communicating with large numbers of potential customers at the same time Main form of advertising
Product Evolution
Companies who have the vision to not only see a product idea, but how that product can evolve over time. It's essentially the idea of mapping out, often before the first product is even manufactured, what future iterations of a product might be as it improves and grows
American legislative and economic thinking assumes that:
Competition among many small firms helps the economy
Personal Needs
Concerned with an individual's need for personal satisfaction - unrelated to what others think or do Accomplishment, fun, freedom, and relaxation - as well as a desire to make the world a better place
Physiological needs
Concerned with biological needs -Food, liquids, rest, and sex
Social Needs
Concerned with love, friendship, status, and esteem - things that involve a person's interaction with others
Safety Needs
Concerned with protection and physical well-being (perhaps involving health, financial security, medicine, and exercise)
Positioning Statement
Concisely identifies the firm's desired target market, product type, primary benefit or point of differentiation, and the main reasons a buyer should believe the firm's claims Template: · For (our target market), (our brand) of all (product type) delivers (key benefit or point of differentiation) because (our brand) is (reasons to believe)
Product/Space (Positioning) Map
Cross shaped graph that displays current markets along with 4 different descriptions of the product details ex) non deodorant, deodorant, high moisture, low moisture
Where Caroline grew up, everyone knew everyone else, no one locked the doors on their house, and a person's word could be trusted. When she went to work in another part of the country, she was surprised by how few people had similar values and beliefs. Caroline had to adjust to __________ differences.
Cultural
With respect to culture and consumer behavior,
Culture is the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people. It is useful to think of subcultures within cultures as they influence consumer behavior and therefore require different marketing mixes
Which of the following statements about customer value is true?
Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits
Direct Market Environment
Customers The Company Competitors
The first step in market segmentation should be
Defining some broad product-markets where you may be able to operate profitably
The first step in market segmentation should be:
Defining some broad product-markets where you may be able to operate profitably
Television advertising has recently expanded to include mini-ads, which are short ads lasting five to ten seconds. These ads are most useful in advertising to men, since men are more likely than women to channel surf during commercial breaks. This type of advertising will be more useful to marketers engaged in __________ segmentation.
Demographic
A soft drink company decided to produce a cola drink with more caffeine than usual in hopes of preventing current teen and early-twenties customers from shifting to coffee and tea drinks after graduating from college. The company test-marketed this new product at a Midwestern university. The company has segmented the market based on ________.
Demographics (age and geography)
Monopolistic Competition
Different firms offer marketing mixes that at least some customers see as different Each competitor tries to get control in its own target market Competition still exists because some customers see the various alternatives as substitutes Consumers have choices to satisfy needs (most brands)
Pure Subsistence Economy
Each family unit produces everything it consumes - no need to exchange goods and services and no marketing is involved Typical economy - Two or more parties are willing to exchange something for something else
External Market Enviornment
Economic Technological Political and Legal Cultural and Social
Ben Perez is driving along a mountain road. In the distance, he sees a road crew working on a fallen tree that has blocked the highway. When Ben first sees the road crew, which of the following perceptual processes has been engaged?
Exposure
A consumer's social environment includes
Family, reference groups, and culture
Oligopoly
Few large major companies Airlines, telecommunications, banking, etc.
Collaborators
Firms that facilitate or provide one or more of the marketing functions other than buying or selling
Ideally, a good marketing mix should:
Flow logically from all the relevant dimensions of a target market
Generation X
Followed Baby Boomers Born from 1965 to 1977 40s and 50s Smaller than the BB population Tend to be raising kids and spend money on their kids and like to do home improvement (Lowe's, Pottery Barn, etc.)
Which of the following population groups is the most tech-savvy?
Gen Y
Marketers often create a special marketing mix for loyalty segments because these segments are
Generally profitable
Marketers wanting to use social media to reach consumers should understand that _______ were born into a world that was already full of electronic gadgets and digital technologies such as the Internet and social networks.
Generation Z
Kimberly-Clark recently introduced rolls of toilet paper without the cardboard core. What social trend does this product respond to?
Green Marketing (LOHAS)
_________ occurs under conditions of low consumer involvement and little significant brand difference. Consumers have little involvement in this product category, they simply go to the store and reach for a brand
Habitual buying behavior
Artificial Intelligence (AI)
Having machines operate like humans with respect to learning and decision making Implemented by an Intelligence Agent -A device that observes an environment and acts to achieve a goal
Positioning
How customers think about proposed or present brands in a market Manager should know how he or she wants target customers to think about the firm's marketing mix -State Farm emphasizing the value of service and personal attention from its agents who live in the same neighborhood
Perception
How we gather and interpret information from the world around us
A S.W.O.T. analysis
Identifies and lists the firm's strengths, weaknesses, opportunities, and threats
SWOT Analysis
Identifies and lists the firm's strengths, weaknesses, opportunities, and threats
Sally is in the new marketing department of a midsized lawn and garden company. She is working on the first marketing plan the firm has ever used. She has defined the mission and objectives, and she just finished a situation analysis for the firm. The next step is to
Identify and evaluate opportunities by conducting segmentation, targeting, and positioning analysis
Marketing Company Era
In addition to short-run marketing planning, marketing people develop long-range plans (sometimes five or more years ahead) and the whole company effort is guided by the marketing concept
When considering income as a demographic variable affecting marketing efforts, marketers need to recognize that
Income in the US has become more unevenly distributed
Production Era
Industrial Revolution until 1920s Limited supplies and strong demand A good-quality product sold itself Company focuses on production of a few specific products - perhaps because few of these products are available in the market "if we can make it, it will sell"
Breakthrough Opportunity
Innovative firms which develop hard-to-imitate marketing strategies that are very profitable for a long time; fewer creative firms adopt risk-avoiding 'me-too' strategies Opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time
When setting objectives for the whole firm, TOP MANAGEMENT should:
Involve the marketing manager in the objective setting process
Personal Selling
Involves direct spoken communication between sellers and potential customers May happen face-to-face, over the telephone, or even an online conference Sometimes personal attention is required after the sale
Response
Is an effort to satisfy a drive Specific response chosen depends on the cues and the person's past experience
LOHAS
Lifestyles of health and sustainability - worldwide
Last semester, Henri bought his textbooks over the Internet and saved a considerable amount of money. Classes start in a few days, and he needs to decide right away how and where to purchase his books. Henri will most likely engage in a(n) __________ process.
Limited Problem-Solving
One of the benefits of a differentiated targeting strategy is that it allows the firm to diversify its business and
Lower Overall Risk
Economic Needs
Making the best use of a customer's time and money - as the consumer judges it Some look for lowest price, other look for convenience, or weigh price and quality for the best value Examples: -Economy of purchase or use (less expensive) -Efficiency in operation or use -Dependability -Improvement of earnings -Convenience
Production Orientation
Making whatever products are easy to produce and then trying to sell them Think customers exist to buy the firm's output rather than of firms existing to serve customers and - more broadly - the needs of society
When Colgate encourages its current customers to brush more often by taking their toothbrush and toothpaste to work with them, which market opportunity is Colgate pursuing?
Market Penetration
Four Basic Types of Opportunities
Market Penetration Product Development Market Development Diversification
Product-Market
Market with very similar needs and sellers offering various close substitute ways of satisfying those needs What: Product type To Meet What: Customer (user) Needs For Whom: Customer Types Where: Geographic Area
Marketing Department Era
Marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate firm's activities
Which of the following criticisms focuses more directly on a macro view of marketing, rather than a micro view?
Marketing exploits the poor and the uneducated
Competitive Rivals
Marketing managers narrow the focus of their analysis to their closest competitors Rivals offering similar products are usually easy to identify -May also be a firm that is currently serving similar needs with a different product -Netflix realizes HBO, YouTube, and Hulu, but also need to realize Fortnite
Marketing Analytics
Marketing metrics are used to perform marketing analytics The practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness
Triple Bottom Line
Measures an organization's economic, social, and environmental outcomes - as a measure of long-term success Profit is the economic outcome Social refers to how a company's business activities affect its employees and other people in the communities where it operates Environmental responsibility refers usually seeking to at least not harm the natural environment People, Planet, and Profit
Diversification
Moving into a totally different line of business - perhaps entirely unfamiliar products, markets, or even levels in the production - marketing system Products and customers that are very different from a firm's current base may look attractive to the optimists - but usually hard to evaluate Biggest Risk
Product Revolution
New products are "clean-sheet designs" Cut from a different cloth - positions a product as the most innovative of its kind
Marketing Ethics
No excuse for Sloppiness The moral standards that guide marketing decisions and actions
Product Development
Offering new or improved products for present markets By knowing the present market's needs, a firm may see new ways to satisfy customers Least to mid risky
Monopoly
One firm completely controls a broad product market One choice a consumer has to fulfill a need Great deal of government regulation Utility companies
Pure Competition
Only difference from an oligopoly is between the alternatives is the pricing Centered around commodities (OJ, syrup, etc.)
For U.S. businesses with strong export capabilities, expansion of U.S. trade agreements with other countries creates
Opportunities
In a SWOT analysis, increasing gasoline prices would represent a potential _______ for manufacturers of electric cars
Opportunity
Selective Exposure
Our eyes and minds seek out and notice only information that interests us Often relates to current needs -When we're hungry, we notice signs for restaurants
Senior Citizens
People over the age of 65
Economic Buyers
People who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money Economic-buyer theory says that consumers decide what to buy based on economic needs
Empty Nesters
People whose children are grown and who are now able to spend their money in other ways Tends to be a high-income period Often spend more on travel and other things they couldn't afford earlier in life - much depends on their income
_______ refer(s) to the process by which consumers select, organize, and interpret information to form a meaningful picture of the world
Perception
________ refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one's own environment. It is usually described in traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability, and aggressiveness
Personality
There are approximately 1 billion people living in India. Only about 200 million of these people earn more than the equivalent of $1,000 per year. According to Maslow's hierarchy, most of the other 800 million Indian consumers are primarily addressing their __________ needs.
Physiological
PSSP Hierarchy of Needs
Physiological needs Safety needs Social needs Personal needs
Market Share
Portion of total sales in a product category accounted for by a particular brand Portion of Apple iPhone sales compared to all smartphone sales
Which of the following statement about positioning is NOT true? Positioning techniques
Position products on a graph based on price level and quantity demanded
Whenever Donald calls on potential pest control customers, he emphasizes the fact that, unlike the national franchise competitors, he is a local business person and has been in business over twenty years. Donald is __________ his business relative to his competition.
Positioning
A former advertising campaign for GEICO Insurance used the slogan, "So easy, even a caveman could do it" to emphasize the ease of buying insurance on GEICO's website. This campaign was part of GEICO's
Positioning Strategy
Micro-Macro Dilemma
Producers and consumers making free choices can cause conflicts and difficulties What is "good" for some firms and consumers may not be good for society as a whole
To improve its profits, Delta Tool Corp. has redesigned its entire line of rechargeable power drills--adding several new or improved features and three new models. Apparently, Delta Tool is pursuing a ______________ opportunity
Product Development
Four Ps
Product, Price, Place, Promotion Reduce all the variables in the marketing mix to four basic ones
Cues
Products, signs, ads, and other stimuli in the environment - an individual chooses some specific response
Baby Boomers represent a huge demographic segment for travel marketers. Baby Boomers are also heavily motivated by self-fulfillment, which creates the possibility of __________ segmentation.
Psychographic
Education marketers have learned that the primary motivations of most nontraditional college students are self-respect and self-fulfillment, so they craft their marketing message to emphasize the benefits these consumers are looking for in a college education. What type of segmentation method was used to segment this market?
Psychographics
Education marketers know that the primary motivations of most nontraditional college students are self-respect and self-fulfillment, so they craft their marketing message to emphasize the benefits these consumers are looking for in a college education. What type of segmentation method was used to segment this market?
Psychographics
Low-Involvement Purchase
Purchases that have little importance or relevance to the customer Buying a box of salt isn't a burning issue in most people's lives
Implementation
Putting marketing plans into operation Strategies only work out as planned when they are effectively implemented
Which of the following does not encourage habitual buying behavior?
Putting out new products
When major airlines target business travelers because they travel often and typically pay at least three times the price for a ticket as leisure travelers, these airlines are segmenting the market primarily on:
Rate of Use
Which of the following factors, listed in a situation analysis for a major US auto manufacturer, is the best example of an opportunity?
Recent consumer studies have indicated that Chinese consumers prefer American cars
Marketing Metrics
Refer to numeric data that allow marketing managers to evaluate performance, often against a set target or goal
Economic Environment
Refers to macroeconomic factors -National income, economic growth, and inflation -Affect patterns of consumer and business spending The rise and fall of the economy in general, within certain industries, or in specific parts of the world can have a big impact on what customers buy
Reference Group
Refers to the people to whom an individual looks when forming attitudes about a particular topic Such people may influence a purchase decision People normally have several reference groups for different topics
Sales Promotion
Refers to those promotion activities - other than advertising, publicity, and personal selling - that stimulate interest, trial, or purchase by final customers or others in the channel Involve the use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars
Market Segment
Relatively homogeneous group of customers who will respond to a marketing mix in a similar way Criteria: · Homogeneous (similar): customers as similar as possible · Heterogeneous (different): customers as different as possible · Substantial: big enough to be profitable · Operational: useful for identifying customers and deciding on marketing mix variables
Multiple Target Market Approach
Segmenting the market and choosing two or more segments, then treating each as a separate target market needing a different marketing mix
Single Target Market Approach
Segmenting the market and picking one of the homogeneous segments as the firm's target market
Carmela Sanchez is planning to buy a pair of running shoes. Recently, she has been noticing more Adidas advertising in magazines. This is an example of:
Selective Exposure
When a gas station blows "fresh coffee smell" around the gas pumps to tempt customers to come inside for a cup, the gas station is using a form of ________ marketing to influence customers.
Sensory
The average adult is exposed to about 3,500 pieces of advertising information every single day, far more information than they can or are willing to process. Consumers who are exposed to more information than they can process are in a state of ________.
Sensory Overload
Nadia Ali loves the feel of her new sweater and the smell of her leather car seats on a crisp fall day. As she passes a billboard, she sees an ad for Baskin-Robbins ice cream and immediately does a U-turn into the shopping center where she knows the famous ice cream store is located. In the above example, Nadia is responding to ________.
Sensory inputs emanating from the external environment
Mission Statement
Sets out the organization's basic purpose for being Focuses on a few key goals rather than embracing everything Should guide managers in determining which opportunities to pursue
Operational Decisions
Short-run decisions to help implement strategies - may be needed
Gross national Income (GNI)
Similar to GDP Doesn't include income earned by foreigners who own resources in that nation
Electro Technologies, Inc. (ETI) has limited capital and wants to reduce the risk of competitors taking customers if it invests in a new product-market. Its broad product-market consists of three reasonably distinct submarkets. To identify a target market, ETI should probably focus on using the __________ approach.
Single Target Market
Intermediary
Someone who specializes in trade rather than production - plays a role in the exchange process
Marketing Strategy
Specifies a target market and a related marketing mix Big picture of what a firm will do in some market
Purchase Situation
Takes into account the purpose, time available, and location where a purchase is made
When positioning products relative to competitors' offerings, firms typically are most successful when they focus on opportunities
That build on their strengths relative to those of their competitors
Wants
The "needs" that are learned during a person's life -Everyone needs water, but some have learned to want LaCroix
Psychographics/Life Analysis
The analysis of a person's day-to-day pattern of living as expressed in that person's: Activities, interests, and opinions (AIOs)
Technology
The application of science to convert an economy's resources to output Affects marketing in two basic ways: -Creates opportunities for new products -Drives the development of new processes (ways of doing things)
Needs
The basic forces that motivate a person to do something -Could be someone's physical well-being, self-view, and relationship with others
Trust
The confidence a person has in the promises or actions of another person, brand, or company Trust drives expectations because when people trust, they expect the other party to fulfill promises or perform capably
Marketing Mix
The controllable variables the company puts together to satisfy this target group
Innovation
The development and spread of new ideas, goods, and services
Customer Value
The difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits -Functional: Save a customer time or effort -Emotional: Deliver fun and entertainment or design and aesthetics -Life Changing: Increase motivation or feelings of belonging
Customer Satisfaction
The extent to which a firm fulfills a customer's needs, desires, and expectations
Which of the following is NOT primarily an example of the influence of technology on the external market environment?
The government passes a law that prohibits use of cell phones while driving a vehicle
One of the reasons marketers use loyalty segmentation is
The high cost of finding new customers
Sustainability
The idea that it's important to meet present needs without compromising the ability of future generations to meet their own needs More and more consumers are considering sustainability and companies are becoming aware -McDonald's getting its coffee from sources that meet international sustainability standards (Fair Trade and Rainforest Alliance) -Reusable containers with the worry of plastics Two out of three consumers would pay more for a product they know is sustainable and that 81% say companies should help improve the environment
Reinforcement
The learning process occurs when the response is followed by satisfaction - that is, reduction in the drive Strengthens the relationship between the cue and the response May lead to a similar response the next time the drive occurs Repeated reinforcement leads to development of a habit - making the individual's decision process routine
Strategic (Management) Planning
The managerial process of developing and maintaining a match between an organization's resources and its market opportunities Includes planning not only for marketing but also for production, finance, HR, and other areas
Differentiation
The marketing mix is distinct from what is available from a competitor
Marketing
The performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client Begins by identifying customers' needs and meet those needs so well that the product almost "sells itself"
Marketing Management Process
The process of (1) planning marketing activities (2) directing the implementation of the plans (3) controlling these plans
Production
The process of actually creating goods and/or performing services
Benefit
The real reasons why a customer will buy your product or service: because it offers them some benefit It solves a problem for them, makes them feel a certain way, enhances their career or self-image, saves them money... whatever
Adoption Process
The steps individuals go through on the way to accepting or rejecting a new idea Similar to the decision-making process, learning plays a clearer role, and promotion's contribution to a marketing mix is more visible Awareness: Potential customer comes to know about the product but lacks details - may not even know how it works or what it will do Interest: If a consumer becomes interested, they will gather general info and facts Evaluation: Consumer begins to give the product a mental trial, applying it to their personal situation Trial: Consumer may buy the product to experiment with it in use - too expensive or isn't available for trial may never be adopted Decision: Consumer decides on either adoption or rejection - reinforcement leads to adoption Confirmation: Adopter continues to rethink the decision and searches for support for the decision - further reinforcement
Gross Domestic Product (GDP)
The total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country
Mass Marketing
The typical production-oriented approach - vaguely aims at "everyone" with the same marketing mix Assumes that everyone is the same - and it considers everyone to be a potential customer "Shotgun approach"
Dynamic Behavior Segmentation
The use of real-time data to continuously update a customer's placement in a market segment
Economic System
The way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in the society Types: -Command economy: Government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why Market-Directed Economy: -Individual decisions of the many produces and consumers make the macro-level decisions for the whole company
Culture
The whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people Groupings tend to be more similar in outlook and behavior -Often it is useful to think of subcultures within such groupings -Various religions, ethnic and regional subcultures
Generation Z
Those born since 1995 Still young and ideas and values are more speculative "digital natives" born in the world with phones, texts, emails, and the Internet More accepting of diversity of cultures, races, religions, etc. Post 9/11 and Great Recession, more realistic than optimistic views Prefer brands of long-term value, safety, and security Comfortable with social media, using different platforms for different reasons -Snapchat - real life moments -Twitter - news -Instagram - aspiration Socially conscious and take that into consideration with products
Qualifying Dimensions
Those relevant to including a customer type in a product-market Knowing how to drive (create a driving school)
Determining Dimensions
Those that actually affect the customer's purchase of a specific product or brand in a product-market Selling a car in order to drive (Ford)
In 2066, Ford Motor Company announced it would severely cut back its automobile production. For parts companies supplying Ford its parts, this represented a(n)
Threat
Customer Lifetime Value (CLV)
Total profits a single customer contributes to a firm over the length of the relationship Three metrics to estimate CLV: -Average profit margin -Retention rate -->Percentage of customers retained as compared to the total number of customers -Acquisition cost -->The expense required to acquire each new customer
Clustering Techniques
Try to find similar patters within sets of data Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments Use computers to do what previously was done mainly with intuition and judgement
Market Development
Try to increase sales by selling present products in new markets May involve searching for new uses for a product Mid to biggest risky
Combiners
Try to increase the size of their target markets by combining two or more segments Look at various submarkets for similarities rather than differences Try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix
Marketing Orientation
Trying to carry out the marketing concept Instead of just trying to get customer to buy what the firm has produced, a marketing-oriented firm tries to offer customers what they need
Market Penetration
Trying to increase sales of a firm's present products in its present markets - probably through a more aggressive marketing mix Try to strengthen its relationship with customers to increase their rate of use or repeat purchases or try to attract competitors' customers or current nonusers Least Risky
Market Segmentation
Two-step process of: -Naming broad product-markets -Segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes All customer needs - narrow down to the need to transport a person from point A to point B Some generic market - the "people transportation market" Broad product-market - the "bicycle riders' market" Similar, narrow product-market - these might include: · Submarket 1: --Exercisers · Submarket 2: --Off-road adventurers · Submarket 3: --Commuters · Submarket 4: --Socializers · Submarket 5: --Environmentalists
Machine Learning
Type of computer algorithm where a software application becomes more accurate in predicting outcomes without actual programming
Limited Problem Solving
Used by consumers when some effort is required in deciding the best way to satisfy a need Typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment
Many American consumers are purchasing hybrid automobiles even though they are more expensive than compact conventional autos. These consumers
Value contributing to a greener environment
Regarding consumer motivation, the text states that:
Wants are learned needs
Selective Retention
We remember only what we want to remember Even when we notice stimuli in the market, we may not place it in memory if we don't believe it or don't feel that information will be useful to us
Selective Perception
We screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs If we think Apple products are cool, we ignore ads by Samsung bashing Apple
The term "micro-macro dilemma" means that:
What is good for some producers and consumers may not be good for society as a whole
Discretionary Income
What is left of income after paying taxes and paying for necessities -Necessities vary from family to family and over time (dependent upon their lifestyle)
Unique Selling Point/Proposition (USP)
What makes your product or service better than competitors One feature or the perceived benefit of a good which makes it unique from the rest of the competing brands in the market Every product should have its own USP, which makes it stand apart from other products in the similar category.
While demographic and geographic segmentation of retail customers are relatively easy, these characteristics do NOT help marketers determine
What their customers need
Stimulus Discrimination
When a brand uses packaging designs in order to COMPLETELY differentiate itself from its competing brands
Stimulus Generalization
When a particular brand uses the similar/same packaging design for all or most of its products in order to extend its goodwill to all its products
Extensive Problem Solving
When consumers put much effort into deciding how to satisfy a need - as is likely for a completely new purchase or to satisfy an important need Conduct a more comprehensive information search, identify more alternatives, have more criteria for evaluation, and spend more time evaluating options
Routinized Response Behavior
When he or she regularly selects a particular way of satisfying a need when it occurs Typical when consumer has considerable experience in how to meet a specific need and requires no new information
"Pointless" Segmentation
When trying to account for everyone Some people will be too unique to segment
Customer-Relationship Management (CRM)
Where the seller fine-tunes the marketing effort with information from a detailed customer database Database stores information that is useful for segmentation
