MKT 190

code of conducts

(also called codes of ethics) consist of formalized rules and standards that describe what the company expects of its employees

oligopoly

A competitive structure in which a few sellers control the supply of a large proportion of a product

Describe the development of a marketing plan.

A key component of marketing planning is the development of a marketing plan, which outlines all the activities necessary to implement marketing strategies. The plan fosters communication among employees, assigns responsibilities and schedules, specifies how resources are to be allocated to achieve objectives, and helps marketing managers monitor and evaluate the performance of a marketing strategy.

marketing concept

A managerial philosophy that an organization should try to satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals

market strategy

A plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market

Summarize the marketing concept.

According to the marketing concept, an organization should try to provide products that satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals. Customer satisfaction is the marketing concept's major objective. The philosophy of the marketing concept emerged in the United States during the 1950s after the production and sales eras. Organizations that develop activities consistent with the marketing concept become market-oriented organizations. To implement the marketing concept, a market-oriented organization must establish an information system to discover customers' needs and use the information to create satisfying products. It must also coordinate all its activities and develop marketing mixes that create value for customers in order to satisfy their needs.

disposable income

After-tax income

Explain how competitive factors affect an organization's ability to compete.

All businesses compete for customers' dollars. A marketer, however, generally defines competition as other firms that market products that are similar to or can be substituted for its products in the same geographic area. These competitors can be classified into one of four types: brand competitors, product competitors, generic competitors, and total budget competitors. The number of firms controlling the supply of a product may affect the strength of competitors. The four general types of competitive structures are monopoly, oligopoly, monopolistic competition, and pure competition. Marketers monitor what competitors are currently doing and assess changes occurring in the competitive environment.

willingness to spend

An inclination to buy because of expected satisfaction from a product, influenced by the ability to buy and numerous psychological and social forces

Critique the role of social responsibility and ethics in improving marketing performance.

An increasing number of companies are incorporating ethics and social responsibility programs into their overall strategic marketing planning. To promote socially responsible and ethical behavior while achieving organizational goals, marketers must monitor changes and trends in society's values. They must determine what society wants and attempt to predict the long-term effects of their decisions. Costs are associated with many of society's demands, and balancing those demands to satisfy all of society is difficult. However, increasing evidence indicates that being socially responsible and ethical results in valuable benefits: an enhanced public reputation (which can increase market share), costs savings, and profits.

marketing orientation

An organizationwide commitment to researching and responding to customer needs

marketing cost analysis

Analysis of costs to determine which are associated with specific marketing efforts

centralized organizations

Authority is concentrated at the top level Very little delegation to lower levels, A structure in which top-level managers delegate little authority to lower levels

levels of competition (industry)

Brand competition,Product competition,Generic competition,Total budget competition

Profits can be obtained through relationships in the following ways

By acquiring new customers By enhancing the profitability of existing customers By extending the duration of customer relationships

marketing environment includes what forces

Competitive Economic Political Legal and regulatory Technological Sociocultural

stakeholders include

Customers Employees Investors and shareholders Supplies Government, communities and more

decentralized organizations

Decision making authority is delegated as far down the chain of command as possible, A structure in which decision-making authority is delegated as far down the chain of command as possible

relationship marketing

Establishing long-term, mutually satisfying buyer-seller relationships

total budget competition

Firms that compete for the limited financial resources of the same customers

Describe the three factors of ethical decision making.

Individual factors, organizational relationships, and opportunity interact to determine ethical decisions in marketing. Individuals often base their decisions on their own values and principles of right or wrong. However, ethical choices in marketing are most often made jointly, in work groups and committees, or in conversations and discussions with coworkers. Organizational culture and structure operate through organizational relationships (with superiors, peers, and subordinates) to influence ethical decisions. Organizational, or corporate, culture is a set of values, beliefs, goals, norms, and rituals that members of an organization share. The more a person is exposed to unethical activity by others in the organizational environment, the more likely he or she is to behave unethically. Organizational pressure plays a key role in creating ethical issues, as do opportunity and conditions that limit barriers or provide rewards.

prosperity

Low unemployment and relatively high total income, which together ensure high buying power (provided the inflation rate stays low)

External Analysis (Environmental Scanning)

Markets and Societal Trends Consumers / Customers Industry and Competition Size and Dynamics The Macro Environment Technology The Economy Globalization Politics and Regulations

Competition

Other organizations that market products that are similar to or can be substituted for a marketer's products in the same geographic area

Marketers take two approaches to environmental forces:

Passive - Accepting them as uncontrollable Proactive - Attempting to influence and shape them

Procompetitive Legislation

Preserves competition Laws have been created to prevent businesses from gaining an unfair advantage through bribery

legal and regulatory forces

Pro-competitive Legislation Consumer Protection Legislation Encouraging Compliance with Laws and Regulations Regulatory Agencies Self-Regulatory Forces

strategic windows

Temporary periods of optimal fit between the key requirements of a market and the particular capabilities of a company competing in that market

wealth

The accumulation of past income, natural resources, and financial resources

marketing citizenship

The adoption of a strategic focus for fulfilling the economic, legal, ethical and philanthropic social responsibilities expected by stakeholders

Briefly describe the marketing environment.

The marketing environment, which includes competitive, economic, political, legal and regulatory, technological, and sociocultural forces, surrounds the customer and the marketing mix. These forces can create threats to marketers, but they also generate opportunities for new products and new methods of reaching customers. These forces can fluctuate quickly and dramatically.

core competencies

Things a company does extremely well, which sometimes give it an advantage over its competition

what two questions should the mission statement answer

Who are our customers? What is our core competency?

value

a customer's subjective assessment of benefits relative to costs in determining the worth of a product,

Organizational (corporate) culture

a set of values, beliefs, goals, norms and rituals that members of an organization share

green marketing

a strategic process involving stakeholder assessment to create long-term relationships with customers while maintaining, supporting, and enhancing the natural environment

ethical issue

an identifiable problem, situation or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical

environmental forces

competitive, political, technological, sociocultural, legal and regulatory, economic

Strategic performance evaluation

consists of: Establishing performance standards Measuring actual performance Comparing actual performance with established standards Modifying the marketing strategy, if needed

sociocultural forces

consumerism,Demographic and Diversity Characteristics, Cultural Values

corporate strategy

determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to reach the organization's goals

distribution

involves adding value in the minds of that supermarket chain's shoppers because the chain has a flavor no one can buy anywhere else.

product

involves developing the product with benefits valued by the target market

promotion

involves using marketing communication to associate the new products with the positive reputations of the two parent companies and build on the value of their brand names.

market opportunity

is a combination of circumstances and timing that permits an organization to take action to reach a particular target market

SWOT analysis

is a tool marketers use to assess an organization's strengths, weaknesses, opportunities, and threats

performance standard

is an expected level of performance against which actual performance can be compared

first mover advantage

is the ability of an innovative company to achieve long-term competitive advantages by being the first to offer a certain product in the marketplace

late mover advantage

is the ability of later market entrants to achieve long-term competitive advantages by not being the first to offer a certain product in a marketplace

Sustainability

is the potential for the long-term well-being of the natural environment, including all biological entities, as well as the interaction among nature and individuals, organizations and business strategies

competitive advantage

is the result of a company matching a core competency to opportunities it has discovered in the marketplace

Customer relationship management (CRM)

means using information about customers to create marketing strategies that develop and sustain desirable customer relationships

levels of strategic planning

mission statement corporate strategy business unit strategy marketing strategy marketing mix elements

Customer lifetime value

predicts the net value (profit or loss) for the future relationship with a customer

STP

segmentation, targeting and positioning

Cause-related marketing

the practice of linking products to a particular social cause on an ongoing or short-term basis

Strategic philanthropy

the synergistic use of organizational core competencies and resources to address key stakeholders' interests and achieve both organizational and social benefits

Target market

A specific group of customers on whom an organization focuses its marketing efforts

Better Business Bureau (BBB)

A system of nongovernmental, independent, local regulatory agencies supported by local businesses that help settle problems between customers and specific business firms

marketing plan

A written document that specifies the activities to be performed to implement and control the organization's marketing strategies

Discretionary Income

Disposable income available for spending and saving after an individual has purchased the basic necessities of food, clothing, and shelter

impacts of technology

Dynamic change Ability to reach customers Self-sustaining in nature; spurs more development

Factors that affect consumers' general willingness to spend:

Expectations about future employment Income levels Prices Family size General economic conditions

Product Competitors

Firms that compete in the same product class but market products with different features, benefits, and prices

Brand Competitors

Firms that market products with similar features and benefits to the same customers at similar prices

generic competition

Firms that provide very different products that solve the same problem or satisfy the same basic customer need

income

For an individual, the amount of money received through wages, rents, investments, pensions, and subsidy payments for a given period

Articulate how economic factors influence a customer's ability and willingness to buy products.

General economic conditions, buying power, and willingness to spend can strongly influence marketing decisions and activities. The overall state of the economy fluctuates in a general pattern known as the business cycle, which consists of four stages: prosperity, recession, depression, and recovery. Consumers' goods, services, and financial holdings make up their buying power, or ability to purchase. Financial sources of buying power are income, credit, and wealth. After-tax income used for spending or saving is disposable income. Disposable income left after an individual has purchased the basic necessities of food, clothes, and shelter is discretionary income. Factors affecting buyers' willingness to spend include product price; level of satisfaction obtained from currently used products; family size; and expectations about future employment, income, prices, and general economic conditions.

Product can be...?

Good—a physical entity that you can touch Service—the application of human and mechanical efforts to people or objects to provide intangible benefits to customers (includes experiences) Idea—concept, philosophy, image, or issue

Consumer Protection Legislation

Protects people from harm Prohibits hazardous products Requires information disclosure Aimed at particular marketing activities

recovery

The economy moves from depression or recession to prosperity

market share

The percentage of a market that actually buys a specific product from a particular company is referred to as that product's (or business unit's)

Identify the types of political forces in the marketing environment.

The political, legal, and regulatory forces of the marketing environment are closely interrelated. Political forces may determine what laws and regulations affecting specific marketers are enacted, how much the government purchases, and from which suppliers. They can also be important in helping organizations secure foreign markets. Companies influence political forces in several ways, including maintaining good relationships with political officials, protesting the actions of legislative bodies, helping elect individuals who regard them positively to public office through campaign contributions, and employing lobbyists to communicate their concerns to elected officials.

environmental analysis

The process of assessing and interpreting the information gathered through environmental scanning How you deal with the information collected during scanning

environmental scanning

The process of collecting information about forces in the marketing environment

Marketing

exchange of value, Marketing is the process of creating, pricing, distributing, and promoting goods, services, and ideas to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment. The essence of marketing is to develop satisfying exchanges from which both customers and marketers benefit. Organizations generally focus their marketing efforts on a specific group of customers called a target market. A target market is the group of customers toward which a company directs a set of marketing efforts.

cash cows

have a dominant share of the market but low prospects for growth

question marks

have a small share of a growing market and generally require a large amount of cash to build market share

dogs

have a subordinate share of the market and low prospects for growth

sales analysis

uses sales figures to evaluate a firm's current performance

National Advertising Review Board (NARB)

A self-regulatory unit that considers challenges to issues raised by the National Advertising Division (an arm of the Council of Better Business Bureaus) about an advertisement

monopolistic competition

A competitive structure in which a firm has many potential competitors and tries to develop a marketing strategy to differentiate its product

monopoly

A competitive structure in which an organization offers a product that has no close substitutes, making that organization the sole source of supply

customer lifttime value

A key measurement that forecasts a customer's lifetime economic contribution based on continued relationship marketing efforts

pure competition

A market structure characterized by an extremely large number of sellers, none strong enough to significantly influence price or supply Does not exist in the real world, although some industries come close

sustainable competitive advantage

An advantage that the competition cannot copy

Federal Trade Commission (FTC)

An agency that regulates a variety of business practices and curbs: False advertising Misleading pricing Deceptive packaging and labeling

Describe how marketing creates value

Individuals and organizations engage in marketing to facilitate exchanges—the provision or transfer of goods, services, and ideas in return for something of value. Four conditions must exist for an exchange to occur. First, two or more individuals, groups, or organizations must participate, and each must possess something of value that the other party desires. Second, the exchange should provide a benefit or satisfaction to both parties involved in the transaction. Third, each party must have confidence in the promise of the "something of value" held by the other. Finally, to build trust, the parties to the exchange must meet expectations. Marketing activities should attempt to create and maintain satisfying exchange relationships.

social responsibility

Is an organization's obligation to maximize its positive impact and minimize its negative impact on society

Explain the different variables of the marketing mix

Marketing involves developing and managing a product that will satisfy customer needs, making the product available at the right place and at a price acceptable to customers, and communicating information that helps customers determine whether the product will satisfy their needs. These activities—product, price, distribution, and promotion—are known as the marketing mix because marketing managers decide what type of each element to use and in what amounts. Marketing managers strive to develop a marketing mix that matches the needs of customers in the target market. Before marketers can develop a marketing mix, they must collect in-depth, up-to-date information about customer needs. The product variable of the marketing mix deals with researching customers' needs and wants and designing a product that satisfies them. A product can be a good, a service, or an idea. In dealing with the distribution variable, a marketing manager tries to make products available in the quantities desired to as many customers as possible. The promotion variable relates to activities used to inform individuals or groups about the organization and its products. The price variable involves decisions and actions associated with establishing pricing policies and determining product prices. These marketing-mix variables are often viewed as controllable because they can be changed, but there are limits to how much they can be altered.

Marketing mix

Product Distribution (Place) Promotion Price

Explain why marketing is important to our global economy.

Marketing is important to our economy in many ways. Marketing costs absorb about half of each buyer's dollar. Marketing activities are performed in both business and nonprofit organizations. Marketing activities help business organizations to generate profits, and they help fuel the increasingly global economy. Knowledge of marketing enhances consumer awareness. New technology improves marketers' ability to connect with customers. Socially responsible marketing can promote the welfare of customers and society. Green marketing is a strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment. Finally, marketing offers many exciting career opportunities.

buying power

Resources, such as money, goods, and services, that can be traded in an exchange

examples of core competencies

Tangible Intangible Financial Non-financial

marketing environment

The competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surround the customer and affect the marketing mix

strategic marketing management

The process of planning, implementing, and evaluating the performance of marketing activities and strategies, both effectively and efficiently

marketing implementation

The process of putting marketing strategies into action

exchanges

The provision or transfer of goods, services, or ideas in return for something of value

customers

The purchasers of organizations' products; the focal point of all marketing activities

depression

Unemployment is extremely high, wages are very low, total disposable income is at a minimum, and consumers lack confidence in the economy

recession

Unemployment rises and total buying power declines, stifling both consumer and business spending

stakeholders

are constituents who have a stake, or claim, in some aspect of a company's products, operations, markets, industry, and outcomes

stars

are products with a dominant share of the market and good prospects for growth

Strategic windows

are temporary periods of optimal fit between the key requirements of a market and the particular capabilities of a company competing in that market

Core competencies

are things a company does extremely well, which sometimes gives it an advantage over its competition

Strategic business unit (SBU

is a division, product line, or other profit center within the parent company

market

is a group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase those products

market growth/market share matrix

is a helpful business tool, based on the philosophy that a product's market growth rate and its market share are important considerations in determining its market strategy

mission statement

is a long-term view, or vision, of what the organization wants to become

strategic plannng

is the process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, and marketing strategy