Principles of Marketing Exam 1

What are the four principles of conscious marketing?

1. Recognition of marketing's greater purpose 2. Consideration of stakeholders and their interdependence 3. The presence of conscious leadership, creating a corporate culture 4. The understanding that decisions are ethically based

What is customer relationship management (CRM)?

A business philosophy and set of strategies, program, and systems that focus on identifying and building loyalty among the firm's most valued customers. Firms collect information about their customers' needs and then use that information to target their best customers with the products, services, and special promotions that appear most important to them.

How do you conduct a situational analysis ?

A firm would perform a situation analysis using a SWOT analysis. SWOT consists of firms internal strengths, internal weaknesses, external opportunities, and external threats.

What is a marketing plan?

A marketing plan is a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four P's, action programs, and projected or pro forma income (and other financial) statements. Marketing plan should be a written plan yet many companies do no write it down. They do not write it down because they do not have the time or have not organized the strategy A written marketing plan provides a reference point for evaluating whether or not the firm has met its objectives. Stakeholders (investors and potential investors) want to know what the firm plans to do.

What is a marketing strategy?

A marketing strategy identifies: (1) A firm's target market(s) (2) A related marketing mix (its four Ps) to effectively reach the target market (3) The bases on which the firm plans to build a sustainable competitive advantage AKA how the firm will defend from competition and survive in the marketplace

What is relational orientation?

A method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship.

Is Walmart a conscious marketer, or is it a practitioner of CSR?

A practitioner of CSR

What does it mean to have multiple sources of advantage?

A single strategy (low prices or excellent service) is usually not enough to build a sustainable competitive advantage, so multiple approaches are required.

What is sustainable competitive advantage?

A sustainable competitive advantage is an advantage over the competition that is not easily copied and can be maintained over a long period of time. A competitive advantage acts like a wall that the firm has built around its position in a market. This wall makes it hard for outside competitors to contact customers inside ¾otherwise known as the marketer's target market.

Production-Oriented Era

Around the 20th century, most firms were production oriented and believed that a good product would sell itself

Value-Based Marketing Era

Better marketing firms realized that it was more to just wants and needs, they needed to give their customers greater value than their competitors did. Value reflects the relationship of benefits to costs, or what you get for what you give.

Sales-Oriented Era

Between 1920 and 1950, production and distribution techniques became more sophisticated. Manufacturers had the capacity to produce more than the customers really wanted or were able to buy. Firms depended on heavy doses of personal selling and advertising to reduce overproduction

Price

Capturing Value

Cash Cows (Lower Left Quadrant)

Cash cows are in low-growth markets but are high market share products. Because these products have already received heavy investments to develop their high market share, they have excess resources that can be spun off to those products that need it. For example, the firm may decide to use the excess resources generated by Brand C to fund products in the question mark quadrant.

Promotion

Communicating the Value Proposition

Define consumer-to-consumer (C2C) marketing.

Consumers sell to other consumers. For example, eBay and Etsy.

Describe what constitutes marketing's greater purpose

Corporate social responsibility describes the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concern of its stakeholders. These responsibilities are not mandated by law but are associated with the demands, expectations, requirements, and desires of various stakeholders.

Product

Creating Value

Market Penetration

Current market with current products (spend more on ads)

Customer Excellence

Customer excellence is achieved when a firm develops value-based strategies for retaining loyal customers and provides outstanding customer service Example: Chick Fil A, Ritz Carlton, & Disney

List the four macro strategies that can help a firm develop a sustainable competitive advantage

Customer excellence, operational excellence, product excellence, and locational excellence

What is value cocreation?

Customers act as collaborators to create a product or service that appeals mostly to them, such that it offers optimal value. This a creative way to provide value to customers.

Who are the various stakeholders that marketing impacts?

Customers, Supply Chain Partners, Employees, Industry, and Society.

Place

Delivering the Value Proposition

Which strategy is the riskiest?

Diversification

Marketing Ethics

Examines ethical situations that are specific to the domain of marketing, including societal, global, or individual consumer issues. Societal issues - products that may damage the environment Global issues - use of child labor Individual consumer issues - False advertising or marketing dangerous products

True or False: When a manufacturer sells truck and car parts to Toyota, this is an example of B2C marketing

False - B2B

True or False: Promotion deals specifically with retailing and marketing channel management, also known as supply chain management

False - Place

True or False: When the publisher of the well-known Babar looks wanted to celebrate the 80th anniversary of the series, it initiated a $100,000 campaign. This initiative represented the price component in the four P's.

False - promotion

True or False: Marketing's fundamental purpose is to create value by developing a variety of offerings that will earn income for the company.

False - purpose is to create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs

Duke's is a surfer-themed restaurant chain in Hawaii. Most of its customers are tourists. In a SWOT analysis for Duke's, the possibility that the recession might cut back on tourism in Hawaii would be considered a weakness. True or False?

False. A recession is an external factor with possible negative results, so it is a threat.

The strategic planning process always proceeds sequentially through the five steps. True or False?

False. Planning processes can move back and forth between the steps as needed.

STP refers to segmentation, testing, and promotion. True or False?

False. STP stands for segmentation, targeting, and positioning

The components of a SWOT analysis are strengths, weaknesses, opportunities, and tactics. True or False?

False. SWOT analysis are strengths, weakness, opportunities, and threats.

Issac is looking for ways to offer new goods and services to his existing customers. He is pursuing a market development strategy. True or False?

False. This is a product development strategy. A market development strategy offers existing products and services to new customers.

Operational Excellence

Firms achieve operational excellence through efficient operations, excellent supply chain management, and strong relationships with suppliers. Example: Amazon

What are goods?

Goods are items you can physically touch

What are all the elements of the marketing plan or marketing mix?

How a product or service will be conceived or designed, how much it should cost, where and how it will be promoted, and how it will get to the consumer

Step 1: Define Business Mission and Objectives

In Step 1 of the planning phase, marketing executives define the mission and/or vision.

Step 2: Conduct a Situational Analysis (SWOT)

In Step 2 they evaluate the situation by assessing how various players, both inside and outside the organization, affect the firm's potential for success (STILL PART OF THE PLANNING PHASE)

Step 3: Identify and Evaluate Opportunities (Implementation Phase)

In the implementation phase, marketing managers identify and evaluate different opportunities by engaging in a process known as segmentation, targeting, and positioning (STP)

What are five steps in the marketing plan?

Step 1. Define Business Mission and Objectives Step 2. Conduct a Situational Analysis (SWOT) Step 3. Identify and Evaluate Opportunities (Implementation Phase) Step 4. Implement Marketing Mix and Allocate Resources (Implementation Phase) Step 5. Evaluate Performance Using Marketing Metrics (Control Phase)

What is supply chain management?

Supply chain management is the set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and other firms involved in the transaction (e.g., transportation companies) into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, while minimizing systemwide costs and satisfying the service levels required by the customers

What is the marketing mix?

The Marketing Mix is the controllable set of decisions or activities that the firm uses to respond to the wants of its target markets.

Value creation is the central activity of marketing. Which is not a benefit to the firm from engaging in value creation and the ongoing process of identifying value-adding options for consumers?

The firm is able to sell fewer products

How does a firm respond to the wants of its target market?

The four P's or marketing mix is a controllable way that a firm responds to the wants of its target market.

What is the purpose of marketing?

The fundamental purpose of marketing is to create value by developing a variety of offerings, including goods, service and ideas, to satisfy customer needs.

What is a mission statement?

The mission statement is a broad description of a firm's objectives and the scope of activities it plans to undertake

Define business-to-consumer (B2C) marketing.

The process by which businesses sell to consumers is known as B2C.

Define business-to-business (B2B) marketing.

The process of selling merchandise or services from one business to another is called business-to-business (B2B) marketing

What do the four quadrants of the portfolio analysis represent?

They represent stars, cash cows, question marks, and dogs

Firms are typically more successful when they focus on opportunities that build on their strengths relative to those of their competition. True or False?

True

In the past, manufacturer's representatives did not have real-time inventory data about the products they were selling. Today, manufacturer's representatives are often provided online access to inventory data for the companies they represent. These online inventory systems allow companies to become more value driven by sharing information across the organization. True or False?

True

It is not always necessary to go through all the steps in the marketing planning process. True or False?

True

Many inventors struggle with the question, "I made it; now how do I get rid of it?" They have made the error of considering marketing as an afterthought. True or False?

True

The process of value cocreation, in which customers collaborate in product design, often provides additional value to the firm's customers. Ex. Nike True or False?

True

True or False: Apple makes its innovations compatible with existing products to encourage consumers to maintain a long-term relationship with the company across all their electronic needs

True

True or False: Happy Cow is an example of a location-based social media application

True

True or False: Margaret likes her morning coffee, and she always stops at Starbucks because it is on her way to work. Margaret is being influenced by the place element of the marketing mix.

True

True or False: Ninety-seven percent of marketers assert that they use social media tools for their businesses

True

True or False: Supply chain management is the set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and other firms involved in the transaction (e.g., transportation companies) into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time.

True

True or False: Understanding the marketplace and a customer's needs and wants is fundamental to marketing success

True

When companies embrace conscious marketing, they appeal not only to their shareholders but also to all of their key stakeholders. True or False?

True

Jose manages the electrical turbine engine division of General Electric Corporation. He makes most decisions independently, without consulting headquarters. Jose manages a strategic business unit. True or False?

True.

Strong supplier relations and efficient supply chains help firms such as Walmart to achieve operational excellence. True or False?

True. Operational excellence is achieved through efficient operations and excellent supply chain and human resource management.

SanDisk's MP3 player product line (called the Sansa) has a low relative market share. The MP3 player market is expected to decline over the next few years. In BCG portfolio analysis, the Sansa would be considered a dog. True or False?

True. The Sansa has low relative market share in a low-growth market, which is the definition of a dog.

What four main activities do value stem from?

Value stems from: · Adding Value · Using Marketing Analytics o Companies collect massive amount of data about how, when, why, where, and what people buy · Embracing Social and Mobile Marketing · Ethical and Societal Dilemma: Engaging in Conscious Marketing o Developing greener products, making healthier food options and safer products, and improving their supply chains to reduce their carbon footprint.

How to identify and evaluating opportunities using segmentation, targeting, and positioning (STP)?

With STP, the firm first divides the marketplace into subgroups or segments, determines which of those segments it should pursue or target, and finally decides how it should position its product and services to best meet the needs of those chosen targets. Market segment consists of consumers who respond similarly to a firm's different needs, wants, or characteristics - who therefore might appreciate products or services geared especially for them - is called market segmentation.

What is a strategic business unit?

a division of the firm that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives from other business units.

Question Marks (Upper Right Quadrant)

appear in high-growth markets but have relatively low market shares; thus, they are often the most managerially intensive products in that they require significant resources to maintain and potentially increase their market share. Managers must decide whether to infuse question marks with resources generated by the cash cows, so that they can become stars, or withdraw resources and eventually phase out the products.

Dogs (Lower Right Quadrant)

are in low-growth markets and have relatively low market shares Dogs are not destined for "stardom" and should be phased out unless they are needed to complement or boost the sales of another product or for competitive purposes.

Conscious Marketing

entails a sense of purpose for the firm that is higher than simply making a profit by selling products and services

What are ideas?

include thoughts, opinions, and philosophies; intellectual concepts such as these also can be marketed.

Business Ethics

is concerned with distinguishing between right and wrong actions and decisions that arise in a business setting, and any special duties or obligations that apply to persons engaged in commerce.

Why is Place important?

o Place represents all the activities necessary to get the product to the right customer when that customer wants it. Creative locations represent the chain's effort to improve its offering on this dimension of the marketing mix. o Place deals specifically with retailing and marketing channel management, also known as supply chain management. o Without a strong and efficient marketing channel system, merchandise isn't available when customers want it

Step 5. Evaluate Performance Using Marketing Metrics (Control Phase)

o The control phase entails evaluating the performance of the marketing strategy using marketing metrics and taking any necessary correct actions o IT IS NOT ALWAYS NECESSARY TO GO THROUGH THE ENTIRE PROCESS FOR EVERY EVALUATION! For instance, a firm could evaluate its performance in Step 5, then go directly to Step 2 to conduct a situation analysis without redefining its overall mission.

The goal of customer relationship management is to identify and build loyalty among a firm's most valued customers. These firms most likely have a ______________ ______________ with their customers.

relational orientation

Entrepreneurs launch ventures to satisfy_______

unfilled needs

How Does Marketing Create Value and How Do Firms Become More Value Driven?

· Build relationships with customers · Gather and analyze information · Balance benefits and costs · Connect with customers using social and mobile media

How can firms deliver customer value?

· Customer excellence · Operational excellence · Product excellence · Locational excellence These four forms of excellence are a way to achieve sustainable competitive advantage

What three questions does a mission statement attempt to answer?

· What type of business are we? · What are our objectives? · What do we need to do to accomplish those objectives?

Locational Excellence

Locational excellence is especially important for retailers and service providers. Many say "The three most important things in retailing are location, location, location." Competitive advantage based on location is not easily duplicated. Starbucks makes it difficult for competitors to enter a market and find good locations. Example: QuikTrip

Marketing-Oriented Era

Manufacturers and retailers focused on what consumers wanted and needed before they designed, made, or attempted to sell their products and service.

What are the four growth strategies?

Market penetration, market development, product development, and diversification

Internet sites, physical stores, and kiosks are most closely associated with which component of the marketing mix?

Place

Stars (Upper Left Quadrant)

Stars occur in high-growth markets and are high market share products. Stars often require a heavy resource investment in such things as promotions and new production facilities to fuel their rapid growth. As their market growth slows, stars will migrate from heavy users of resources to heavy generators of resources and become cash cows.

Step 4. Implement Marketing Mix and Allocate Resources (Implementation Phase)

Marketing managers are responsible for implementing the marketing mix using the four P's

What are the various components of a marketing strategy?

Need to identify a firm's target market, related marketing mix, the four P's, and the basis upon which the firm plans to build a sustainable competitive advantage.

Market Development

New markets with current products - Marvel - Black Panther internationally

Diversification

New product to new market

Product Development

New products to current market - Marvel series on Netflix

Does providing a good value mean selling at a low price?

No, value based marketing isn't just about a low price it is about creating products and services.

What are the three major phases of the marketing plan?

Planning, implementation, and control

Explain Price

Price is everything the buyer gives up - money, time, and/or energy - in exchange for the product. Marketers must determine the price of a product carefully on the basis of the potential buyer's belief about its value.

What is marketing?

Process of creating, capturing, communicating, delivering and exchanging offerings that have VALUE!

What type of strategy is growing the business from existing customers?

Product development and market penetration

Product Excellence

Product excellence occurs by providing products with high perceived value and effective branding and positioning. Some firms have difficulty developing a competitive advantage through their merchandise and service offerings, especially if competitors can deliver similar products or services easily. Example: Tiffany, Starbuck, Chick-Fil A, & Coke

What are the 4 P's or marketing mix?

Product, Price, Place, Promotion

Explain Promotion

Promotion is communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions and elicit a response.

What is a service?

Services are intangible customer benefits that are produced by people or machines and cannot be separated from the producer.