MKT 291 Chapter 1-6 Learning Objectives

LO 1-1 Define Marketing and identify the diverse factors that influence marketing actions.

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. This definition relates to two primary goals of marketing: (a) discovering the needs of prospective customers and (b) satisfying them. Achieving these two goals involves the four marketing mix factors largely controlled by the org. and the five environmental forces that are generally outside of its control.

LO 2-3 Explain why managers use marketing dashboards and marketing metrics.

Marketing managers use marketing dashboards to visually display the essential information related to achieving a marketing objective. This information consists of key performance measures of a product category, such as sales or market share, known as marketing metrics, which are a measure of the quantitative value or trend of marketing actions or results. Today's marketers use data visualization to present marketing metrics graphically so they can spot deviations from plans and take correct actions.

LO 4-1 Describe the stages in the consumer purchase decision process.

(1) problem recognition (2) information search- internal and external search behaviors such as seeking info from other sources (3) alternative evaluation- clarifies the problem for the consumer by (a) suggesting the evaluative criteria to use for the purchase and (b) yielding brand names that might meet the criteria, and (c) developing consumer value perceptions. (4) purchase decision- alternative choices, from who to buy and when to buy (5) postpurchase behavior- comparison of the chosen alternative with a consumer's expectations, leads to satisfaction or dissatisfaction. Marketers study all of this but identifying consumer touchpoints and journey maps.

LO 2-5 Explain the three steps of the planning phase of the strategic marketing process.

An organization uses the strategic marketing process to allocate its marketing mix resources to reach its target markets. This process is divided into three phases: planning, implementation,and evaluation. The planning phase consists of (a) a situation(SWOT) analysis, which involves taking stock of where the firm or product has been recently, where it is now, and where itis headed and focuses on the organization's internal factors(strengths and weaknesses) and the external forces and trends affecting it (opportunities and threats); (b) a market-product focus through market segmentation (grouping buyers into segments with common needs and similar responses to marketing programs) and goal setting, which in part requires creating points of difference (those characteristics of a product that make it superior to competitive substitutes); and (c) a marketing program that specifies the budget and actions (marketing strategies and tactics) for each marketing mix element.

LO 5-3 Explain how buying centers and buying situations influence organizational purchasing.

Buying centers and buying situations have an important influence on organizational purchasing. A buying center consists of a group of individuals who share common goals, risks, and knowledge important to a purchase decision. A buyer or purchasing manager is almost always a member of the buying center. However, other individuals may affect organizational purchasing due to their unique roles in a purchase decision. Five specific roles that a person may play in a buying center include users, influencers, buyers, deciders, and gatekeepers. The specific buying situation will influence the number of people and the different roles played in a buying center. For a routine reorder of an item- a straight rebuy situation- a purchasing manager or buyer will typically act alone in making a purchasing decision. When an organization is a first-time purchaser of a product or service- a new buy situation- a buying center is enlarged in all five roles in a buying center often emerge. A modified rebuy situation lies between these two extremes.

LO 4-2 Distinguish among three variations of the consumer purchase decision process: extended, limited, and routine problem solving.

Consumers don't always engage in the five-stage purchase decision process. Instead, they skip or minimize one or more stages depending on the level of involvement-- the personal, social, and economic significance of the purchase. For high involvement purchase occasions, each of the five stages of the consumer purchase decision process is used and considerable time and effort are devoted to the search of external information and the identification and evaluation of alternatives. With limited problem solving, consumers typically seek some information or rely on a friend to help them evaluate alternatives. For low involvement purchase occasions, consumers engage in routine problem solving. They recognize a problem, make a decision, and spend little effort seeking external information in evaluating alternatives.

LO 2-1 Describe three kinds of organizations and the three levels of strategy in them.

For profit, non-profit, and government agencies. For profit organization serves its customers to earn a profit so that it can survive. A nonprofit organization is a non governmental org that serves its customers but does not have profit as an organizational goal. Its goals could be operational efficiency or client satisfaction. A government agency is a federal, state, county, or city unit that provides a specific service to its constitutes. Most large for-profit and nonprofit orgs are divided into three levels of strategy. (a) corporate level, where top management directs overall strategy for the entire organization; (b) the strategic business unit level, where managers set a more specific strategic direction for their businesses to exploit value-creating opportunities; and (c) the functional level, where groups of specialists actually create value for the organization.

LO 3-7 Identify factors that influence ethical and unethical marketing decisions.

Four factors influence ethical marketing behavior: (1) societal culture and norms, (2) business culture and industry practices, (3) corporate culture and expectations, and (4) personal moral philosophy and ethical behavior.

LO 2-4 Discuss how an organization assesses where it is now and where it seeks to be.

Managers of an organization ask two key questions to set a strategic direction. The first question, "Where are we now?"requires an organization to (a) reevaluate its competencies to ensure that its special capabilities still provide a competitive advantage; (b) assess its present and prospective customers to ensure they have a satisfying customer experience—the central goal of marketing today; and (c) analyze its current and potential competitors from a global perspective to determine whether it needs to redefine its business.Kerin (2014-01-15). Marketing (Page 46). McGraw-Hill Education. Kindle Edition.The second question, "Where do we want to go?," requires an organization to set a specific direction and allocate resources to move it in that direction. Business portfolio and diversification analyses help an organization do this. Managers use business portfolio analysis to assess the organization's strategic business units (SBUs),product lines, or individual products as though they were a collection of separate investments (cash cows, stars, question marks, and dogs) to determine the amount of cash each should receive. Diversification analysis is a tool that helps managers use one or a combination of four strategies to increase revenues: market penetration(selling more of an existing product to existing markets); market development (selling an existing product to new markets); product development (selling a new product to existing markets); and diversification (selling new products to new markets).

LO 1-5 Describe the characteristics of a market orientation.

Many firms have achieved great success by putting huge effort into implementing the marketing concept-- the idea that an organization should (1) strive to satisfy the needs of consumers while also (2) trying to achieve the organization's goals. Implementing the marketing concept creates a market orientation. An organization that has a market orientation focuses its efforts on (1) continually collecting info about customers' needs, (2) sharing this info across departments, and (3) using it to create customer value.

LO 5-4 Recognize the importance and nature of online buying in industrial, reseller, and government organizational markets.

Organizations dwarf consumers in terms of online transactions made and purchase volume. Online buying in organizational markets is popular for three reasons. First, organizational buyers depend on timely supplier information that describes product availability, technical specification, application uses, price, and delivery schedules. This information can be conveyed quickly via internet technology. Second, this technology sustainability reduces buyer order processing costs. Third, business marketers have found that internet technology can reduce marketing costs, particularly sales and advertising expenses, and broaden their customer base. Two developments in online buying have been the creation of e-marketplaces and online auctions. E-marketplaces provide a technology trading platform and a centralized market for buyer- seller transactions and make possible the real- time exchange of information, money, products, and services. These e-marketplaces can be independent trading communities, such as PlasticsNet Thank you, or private exchanges, such as the Global Healthcare Exchange. Online traditional and reverse auctions are upset and second major development. With traditional auctions, the highest- priced better "wins." Conversely, the lowest priced bidder "wins" with reverse auctions.

LO 2-2 Describe core values, missions, organizational culture, business, and goals.

Organizations exist to accomplish something for someone. To give organizations direction and focus, they continuously assess their core values, mission, organizational culture, business, and goals. Today's organizations specify their foundation, set a direction, and formulate strategies—'why,' 'what,' and 'how' factors, respectively. Core values are the organization's fundamental, passionate, and enduring principles that guide its conduct over time—what Enron forgot when it lost sight of its responsibilities to its stakeholders. The organization's mission is a statement of its function in society, often identifying its customers, markets, products, and technologies. Organizational culture is a set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization. To answer the question, 'What business are we in?' an organization defines its "business"—the clear, broad, underlying industry category or market sector of its offering. Finally, the organization's goals (or objectives) are statements of an accomplishment of a task to be achieved, often by a specific time. The organizational strategies vary by level in the org and by product. The strategies are often described in a marketing plan.

LO 4-3 Identify the major psychological influences on consumer behavior.

Psychology helps marketers understand why and how consumers behave as they do. In particular, psychological concepts such as motivation and personality; perception; learning; values, beliefs, and attitudes; and lifestyle are useful for interpreting buying processes. Motivation is the energizing force that stimulates behavior to satisfy a need. Personality refers to a person's consistent behaviors or responses to reoccurring situations. Perception is the process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world. Consumers filter information through selective exposure comprehension and retention. Much consumer behavior is learned. Learning refers to those behaviors that result from (a) repeated experience and (b) reasoning. Brand loyalty results from learning. Values, beliefs, and attitudes are also learned and influence how consumers evaluate products, services, and brands. A more general concept is lifestyle. Lifestyle, also called psychographics, combines psychology and demographics and focuses on how people spend their time and resources, what they consider important in their environment, and what they think of themselves in the world around them.

LO 3-6 Explain how regulatory forces ensure competition and protect producers and consumers.

Regulation exists to protect companies and consumers. Legislation that ensures a competitive marketplace includes the Sherman Antitrust Act and The Clayton Act. Companies can protect their competitive position with patent and copyright laws. Consumers are protected by laws that address each of the four elements of the marketing mix. Laws such as the Lanham Act, Which provides for the registration of trademarks, benefit both companies and consumers. self-regulation through organizations such as the Better Business Bureau provides an alternative to federal and state regulation.

LO 5-2 Describe the key characteristics of organizational buying that make it different from consumer buying.

Seven major characteristics of organizational buying make it different from consumer buying. These include demand characteristics, the size of the order or purchase, the number of potential buyers, buying objectives, buying criteria, buyer- seller relationships and supply partnerships, and multiple buying influences within organizations. The organizational buying process itself is more formalized, more individuals are involved, supplier capability is more important, and the post-purchase evaluation behavior often includes performance of the supplier and the item purchased.

LO 3-8 Describe the different concepts of social responsibility.

Social responsibility means that organizations are part of a larger society and are accountable to that society for their actions. There are three concepts of social responsibility: profit, stakeholder, and societal responsibilities.

LO 4-4 Identify the major sociocultural influences on consumer behavior.

Social-cultural influences, which evolve from a consumer's formal and informal relationships with other people, also affect consumer behavior. These involve personal influence, reference groups, the family, culture, and subculture. Opinion leadership and word-of-mouth behavior are two major sources of personal influence on consumer behavior. Reference groups are people to whom an individual looks as a basis for self-approval or as a source of personal standards. Family influences on consumer Behavior a result from three sources: consumer socialization, passage through the family life cycle, and decision-making within the family or household. Finally, a person's culture and subculture have been shown to influence product preferences and buying patterns.

LO 3-4 Describe how technological changes can affect marketing.

Technological innovations can replace existing products and services. Changes in technology can also have an impact on customer value by reducing the cost of products, improving the quality of products, and providing new products that were not previously feasible. AI, the Internet of Things, wearable technology, and data analytics are transforming how companies do business.

LO 1-4 Explain how organizations build strong customer relationships and customer value through marketing.

The essence of successful marketing is to provide sufficient value to gain loyal and long-term customers. Customer value is the unique combination of benefits received by targeted buyers that usually includes quality, price, convenience, on time delivery, and both before sale and after-sales service. Marketers do this by using one of three value strategies: best price, best product, or best service.

LO 2-7 Discuss how managers identify and act on deviations from plans.

The evaluation phase of the strategic marketing process seeks to keep the marketing program moving in the direction that was established in the marketing plan. This requires the marketing manager to compare the results from the marketing program with the marketing plan's goals to (a) identify deviations or"planning gaps" and (b) take corrective actions to exploit positive deviations or correct negative ones.

LO 1-2 Explain how marketing discovers and satisfies consumer needs.

The first objective in marketing is discovering the needs and wants of consumers who are prospective buyers and customers. This is not easy because consumers may not always know or be able to describe what they need and want. A need is basic necessities like food, clothing, and shelter. A want is a need that is shaped by a person's knowledge, culture, and personality. Effective marketing can clearly shape a person's wants and tries to influence what he or she buys. The second objective in marketing is satisfying the needs of targeted customers. An org must concentrate its efforts on certain needs of a specific group of potential customers or target market-- one or more specific groups of potential customers toward which an organization directs its marketing program. It then selects its target market segment(s), which is a relatively homogeneous group of prospective buyers that (1) have common needs and (2) will respond similarly to a marketing action. Finally, the organization develops a set of marketing actions in the form of a unique marketing program to reach them.

LO 1-3 Distinguish between marketing mix factors and environmental forces.

The four elements of the marketing mix that are designed to satisfy customer needs are PRODUCT, PRICE, PROMOTION, AND PLACE. These are the 4P's, or the marketer's controllable variables. The marketing mix also provides a clear customer value proposition-- a cluster of benefits that an offering satisfies. Environmental forces, also called uncontrollable variables, are largely beyond the organization's control. These include social, economic, technological, competitive, and regulatory forces.

LO 2-6 Describe the four components of the implementation phase of the strategic marketing process.

The implementation phase of the strategic marketing process carries out the marketing plan that emerges from the planning phase.It has four key components: (a) obtaining resources; (b) designing the marketing organization to perform product management,marketing research, sales, and advertising and promotion activities; (c) developing schedules to identify the tasks that need to bedone, the time that is allocated to each one, the people responsible for each task, and the deadlines for each task—often with an action item list and Gantt chart; and (d) executing the marketing strategies, which are the means by which marketing goals are to be achieved, and their associated marketing tactics, which are the detailed day-to-day marketing actions for each element of the marketing mix that contribute to the overall success of a firm's marketing strategies. These are the marketing program actions a firm takes to achieve the goals set forth in its marketing plan.

LO 3-2 Describe social forces such as demographics and culture.

The social forces of the environment include the demographic characteristics and the culture of the population. Three key demographic characteristics include a population profile, a description of generational cohorts (baby boomers, Generation X, and Generation Y), and a description of racial and ethnic diversity. Culture incorporates the set of values, ideas, and attitudes that is learned and shared among the members of a group.

LO 3-5 Discuss the forms of competition that exist in a market.

There are four forms of competition: pure competition, monopolistic competition, oligopoly, and monopoly. The key components of competition include the likelihood of new competitors, the power of buyers and suppliers, and the presence of competitors and possible substitutes. While large companies are often used as examples of marketplace competitors, there are 28.8 million small businesses in the United States, which have a significant impact on the economy.

LO 5-1 Distinguish among industrial, reseller, and government organizational markets.

There are three different organizational markets: industrial, reseller, and government. Industrial firms in some way reprocess a product or service they buy before selling it to the next buyer. Resellers-- wholesalers and retailers-- buy physical products and resell them again without any reprocessing. Government agencies at the federal, state, and local levels buy goods and services for the constituents they serve. The North American Industry Classification System (NAICS) provides common industry definitions for Canada, Mexico, and the United States, which facilitates the measurement of economic activity for these three organizational markets.

LO 3-1 Explain the purpose of environmental scanning.

This is the process of continually acquiring information on events occurring outside the organization to allow marketers to identify and interpret potential trends. Environmental trends typically arise from five sources: social, economic, technological, competitive, and regulatory forces. A firm conducting an environmental scan of the marketplace might uncover key trends such as the growing popularity of brand advocates, the increasing application of virtual reality and augmented reality, and the surging scrutiny regarding the collection and use of consumer data.

LO 3-3 Discuss how economic forces affect marketing.

Two aspects of economic forces include macroeconomic conditions related to the marketplace and microeconomic factors such as consumer income. Indicators of marketplace conditions include GDP, unemployment, and price changes (inflation or deflation). Consumer income has gross, disposable, and discretionary components. The state of the economy and changed in income can influence consumers' ability to buy products and services.