Ch 1-3 Exam--Principles of Marketing (Theoni)

Define market.

Consists of all consumers who share a common need that can be satisfied by a specific product. Also must have the resources, willingness, and authority to purchase.

Define operations.

Daily execution of tactics.

Define marketing strategy.

How a company creates value for customers.

Define tactics.

Methods of implanting the strategy (Ex: the four P's).

Define benefits.

Positive results of consumption.

Define sociocultural environment.

Social factors affecting marketing: -Time. -Lifestyles. -Values. -Role changes.

Define consumer.

The entity (person or business) who converts the product to value.

Define consumer goods.

The goods individual consumers purchase for personal or family use.

Define consumption.

The process by which products are transformed into value.

Define marketing.

The science of profitably changing behavior.

Define value.

Value = (1) what you get - (2) what you give. 1. Benefits: quality, convenience, emotions, prestige, experiences. 2. Costs: time, money, effort, opportunity, emotions, image. ***Value is the personal assessment of the net worth obtained from an activity***

Define competitive intelligence.

(AKA CI) The process of gathering and analyzing publicly available information about rivals.

Define consumer product safety commission.

(AKA CPSC) Protects the public from potentially hazardous products. Through regulation and testing programs, the CPSC helps firms make sure their products won't harm customers.

Define food and drug administration.

(AKA FDA) Enforces laws and regulations on foods, drugs, cosmetics, and veterinary products. FDA approval is required before marketers can introduce many products to the market.

What are the steps in functional/market planning?

***Effective implementation of the four P's*** ***Steps are similar to strategic planning; key differences relates to focus on issues relating to the marketing mix/four P's*** 1. Perform a situation analysis (marketing environmental analysis and SWOT analysis). 2. Set marketing objectives (specific to the firms marketing mix/four P's). -Marketing objectives help to achieve the overall business objectives. -relates directly to the strategic goals. 3. Develop marketing strategies (adjust marketing mix/four P's for each market segment). 4. Implement and control the marketing plan.

Define technological environment.

-U.S. excels at basic and applied research. -Many firms use the marketing concept (all parts of the company work together to meet consumers needs and wants) to guide research rather than inventing it for its own sake. -New inventions may create a long-term competitive advantage (Ex: patents). -External technology (can by licensed) by competitors: 1. Creates a more efficient operation or better products. 2. May render existing products obsolete.

Define political/legal environment.

-Various legislations and agencies protect consumers from firms who are bad actors. -Other legislations protect firms from unfair competition. -Most of these laws date from 1900-1960's. -Agencies enforce these laws.

What are the business planning levels?

1. Strategic planning. 2. Functional (market) planning. 3. Operational planning.

Define operational planning.

A decision process that focuses on developing detailed plans for day-to-day activities that carry out an organizations functional plans.

Define competitive advantage.

A firm's edge over its competitors that allows it to have higher sales, higher profits, and more customers and enjoy greater success year after year.

Define mission statement.

A formal statement in an organizations strategic plan that describes the overall purpose of the organization and what it intends to achieve in terms of its customers, products, and resources.

Define costs.

Negative results of consumption.

What does SMART stand for?

Specific. Measurable. Achievable. Relevant. Time bound.

Define demographics.

Statistics that measure observable aspects of a population, including size, age, gender, ethnic group, income, education, occupation, and family structure. -Demographic data is relatively easy to identify, observe, and gather. -Often used because the data can be correlated with consumer behavior.

Define strategic planning.

The managerial process that matches the firms resources and capabilities to its market opportunities for long-term growth. -Top management defines the firms purpose and sets objectives. -Many large firms have separate strategic business units (AKA SBU's) (Ex: Disney). -Plays an important role in modern business: 1. Optimizes revenues across multiple lines of business. 2. Minimizes risk in a complex and changing global environment. -Includes steps that result in development of growth strategies.

Define product competition.

When firms offering different products compete to satisfy the same consumer needs and wants.

Define need.

A gap between the actual and desired state (not a necessity).

Define situation analysis.

An assessment of a firms internal and external environment.

Define collectivist culture.

Cultures in which people subordinate their personal goals to those of a stable community.

Define individualistic culture.

Cultures in which people tend to attach more importance to personal goals than to those of the larger community.

Define marketing mix.

The four P's; the essential interrelated components to create, communicate, and deliver value.

Define market planning.

The functional planning marketers do. Market planning typically includes both a broad 3-5 year marketing plan to support the firms strategic plan and a detailed annual plan for the coming year.

Define economic environment.

There are two general concepts for understanding the economic environment: 1. Measures of economic health. 2. Business cycle stage.

What are the four P's?

1. Product: a good, service, or idea. 2. Price: the assignment of value, or the amount, the consumer must exchange. -The most flexible of the four P's (easiest to change, quickest to give results). 3. Promotion: coordination of a marketers communication efforts to influence attitudes or behavior ( do this through informing, educating, persuading, and reminding). -includes integration of marcom (personal selling, advertising, sales promotion, and public relations). 4. Place (AKA distribution): the availability of the product to the consumer at the desired time and location. ***A change in one P affects all of the P's***

Define marketing concept.

A management orientation that focuses on identifying and satisfying consumer needs to ensure the organization's long-term profitability. -Modern marketers practice the marketing concept (a.k.a. "market orientation): identifying and satisfying the needs of consumers to ensure profitability. -But, marketing also must meet the needs of diverse stakeholders including: consumers, business buyers, sellers, investors, government agencies, and community residents.

Define monopoly.

A market situation in which one firm, the only supplier of a particular product, is able to control the price, quality, and supply of that product.

Define oligopoly.

A market structure in which a relatively small number of sellers, each holding a substantial share of the market, compete in a market with many buyers.

Define monopolistic competition.

A market structure in which many firms, each having slightly different products, offer unique consumer benefits.

Define value proposition.

A marketplace offering that fairly and accurately sums up the value that will be realized if the good or service is purchased.

Define want.

A specific desire representing a way a consumer may go about addressing a recognized need (how one fills the gap).

Define business strategy.

A system of activities that provide sustainable competitive advantage. -Sustainable: must not be easily copied by competitors. -Competitive: must be better at it than all your competitors. -Advantage: you must be really good at it.

Define exchange.

Acting out the decision to give up something to get something else of greater value.

Define SWOT analysis.

An analysis of an organizations strengths and weaknesses in its internal environment and the opportunities and threats in its external environment.

Define business planning.

An ongoing process of making decisions that guides the firm both in the short term and in the long term.

Define brand competition.

When firms offering similar goods or services compete on the basis of their brands reputation or perceived benefits.

Define gross domestic product.

(AKA GDP) The total dollar value of goods and services produced by a nation within its borders in a year.

Define strategic business units.

(AKA SBU's) Individual units within the firm that operate like separate businesses, with each having its own mission, business objectives, resources, managers, and competitors.

Define competitive environment.

***Competitive microenvironment*** -Considers the view from the individual consumer level. -Marketers face competition in the microenvironment involving consumer decision making at three levels: 1. Competition from discretionary income. 2. Brand competition. 3. Product competition.

What are the steps in strategic planning?

1. Define the mission statement. 2. Evaluate the environment (SWOT analysis). 3. Set organization or SBU objectives (should be SMART). -Organization goals (Ex: increase sales) and objectives (a specific outcome) should reflect the mission and be based on the environmental assessment. 4. Establish the business portfolio (BCG Matrix). 5. Develop growth strategies (Ansoff Matrix).

What marketing environments help determine decisions for domestic and global markets?

1. Political/legal. 2. Sociocultural. 3. Technology. 4. Competitive. 5. Economic.

Define functional planning.

A decision process that concentrates on developing detailed plans for strategies and tactics for the short-term, supporting an organization's long-term strategic plan.

Define Strategy.

A general term for a long term plan to achieve, and therefore, measure progress toward a goal.

Define product.

A good, service, or idea (Ex: place or person).

Define perfect competition.

A market structure in which many small sellers, all of whom offer similar products, are unable to have an impact on the quality, price, or supply of a product.

Define marketplace.

Any location or medium used to conduct an exchange.