BUS 100 Chapter 11

How are marketing decisions affected by environmental forces?

These forces influence decisions about marketing mix ingredients. Changes in the environment can affect existing marketing strategies.

Identify and describe the major types of markets.

consumer markets consist of purchasers and/or household members who intend to consume or benefit from the purchased products and who do not buy products to make profits. business-to-business markets, also called industrial markets, are grouped broadly into producer, reseller, governmental, and institutional categories. These markets purchase specific kinds of products for use in making other products for resale or for day-to-day operations. Producer markets consist of individuals and business organizations that buy certain products to use in the manufacture of other products. Reseller markets consist of intermediaries, such as wholesalers and retailers, who buy finished products and sell them for a profit. Governmental markets consist of federal, state, county, and local governments. They buy goods and services to maintain internal operations and to provide citizens with such products as highways, education, water, energy, and national defense. Institutional markets include churches, not-for-profit private schools and hospitals, civic clubs, fraternities and sororities, charitable organizations, and foundations.

Identify and describe the six steps of the marketing research process.

1. Define the problem The problem is stated clearly and accurately, as it will determine the research issues and approaches, the right questions to ask, and the types of solutions that are acceptable. This is a crucial step that should not be rushed. 2. Make a preliminary investigation The preliminary investigation aims to develop a sharper definition of the problem and a set of tentative answers, which are developed by examining internal information and published data and by talking with persons who have experience with the problem. These answers will be tested by further research. 3. Plan the research At this stage, researchers know what facts are needed to resolve the identified problem and what facts are available. They make plans on how to gather needed but missing data. 4. Gather factual information Once a plan is in place, researchers can collect primary information by mail, interviews, observation, and get secondary information from commercial or government data sources. The choice depends on the plan and the available sources of information. 5. Interpret the information Facts by themselves do not always provide a sound solution to a marketing problem. They must be interpreted and analyzed to determine the choices available to management. 6. Reach a conclusion Once the data have been evaluated, researchers seek to draw conclusions and make recommendations. These may be obvious or not, depending on intangible factors and whether data used were complete. When there are gaps in the data, it is important for researchers to state this.

What is a market?

A market is a group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase them.

What are the major components of a marketing strategy?

A marketing strategy consists of (1) the selection and analysis of a target market and (2) the creation and maintenance of an appropriate marketing mix, a combination of product, price, distribution, and promotion developed to satisfy a particular target market.

How did the customer orientation evolve?

At first, Business had a strong production orientation, which placed a strong emphasis on increased output and production efficiency. In 1920s, Producers had to direct their efforts toward selling goods rather than just producing them. This new sales orientation was characterized by increased advertising, enlarged sales forces, and, occasionally, high-pressure selling techniques. During the 1950s, Marketers realized that the best approach was to adopt a customer orientation—in other words, the organization had to first determine what customers need and then develop goods and services to fill those particular needs

Data from a marketing information system is collected from which internal and external sources?

Data from internal sources include sales figures, product and marketing costs, inventory levels, and activities of the sales force. Data from external sources relate to the organization's suppliers, intermediaries, and customers. It can also come from competitors' marketing activities and economic conditions.

Describe the environmental forces that affect a firm's marketing decision and activities.

Economic forces—the effects of economic conditions on customers' ability and willingness to buy • Sociocultural forces—influences in a society and its culture that result in changes in attitudes, beliefs, norms, customs, and lifestyles • Political forces—influences that arise through the actions of political figures • Competitive forces—the actions of competitors, who are in the process of implementing their own marketing plans • Legal and regulatory forces—laws that protect consumers and competition and government regulations that affect marketing • Technological forces—technological changes that can create new marketing opportunities or cause products to become obsolete rapidly

What are the major components of a marketing plan?

Executive summary One- to two-page synopsis of the entire marketing plan Environmental analysis Information about the company's current situation with respect to the marketing environment SWOT analysis Assessment of the organization's strengths, weaknesses, opportunities, and threats Marketing objectives Specification of the firm's marketing objectives Marketing strategies Outline of how the firm will achieve its objectives Marketing implementation Outline of how the firm will implement its marketing strategies Evaluation and control Explanation of how the firm will measure and evaluate the results of the implemented plan.

What are the five stages of the consumer buying decision process?

First, the consumer acknowledges that a problem exists that might be solved by a good or service. Then, the buyer looks for information, which may include brand names, product characteristics, warranties, and other features, as well as product reviews. Next, the buyer weighs the various alternatives, makes a choice, and acquires the item. In the after-purchase stage, the consumer evaluates the suitability of the product, which will affect future purchases.

How does a customer's decision-making time vary with the type of product?

For frequently purchased low-cost items, a consumer uses routine response behavior, which involves very little search or decision-making effort. The buyer uses limited decision making for purchases made occasionally, or when more information is needed about an unknown product in a well-known product category. When buying an unfamiliar or expensive item, or one that is seldom purchased, the consumer engages in extended decision making.

Explain the four kinds of utility.

Form utility is created by converting production inputs into finished products. Place utility is created by making a product available at a location where customers wish to purchase it. Time utility is created by making a product available when customers wish to purchase Possession utility is created by transferring title (or ownership) of a product to a buyer.

Provide an example of each.

Form utility: a coconut water size of serving Place utility: sell online Time utility: Available at 1/20/2018 Possession utility: receipt

Why is sales forecasting important?

Managers may rely on sales forecasts when they purchase raw materials, schedule production, secure financial resources, consider plant or equipment purchases, hire personnel, and plan inventory levels.

Identify the major components of the marketing concept.

Marketers realized that the best approach was to adopt a customer orientation—in other words, the organization had to first determine what customers need and then develop goods and services to fill those particular needs

Why is it important to understand buying behavior?

Marketing managers are better able to predict customer responses to marketing strategies and to develop a satisfying marketing mix if they are aware of the factors that affect buying behavior.

How does technology facilitate collecting and analyzing marketing information?

Technology has allowed even small firms an unprecedented level of access to high-quality data.

How can technology help to build long-term customer relationships?

The Internet has expanded and improved relationship marketing options for many firms by making targeted communication faster, cheaper, and easier. Digital technologies allow firms to connect to consumers and have a dialogue with them in real time.

What are the benefits of retaining customers?

The benefits are their ability to provide feedback to a company and refer new customers of similar value, but these are important considerations as well.

Why is developing a well-written marketing plan important?

The plan helps establish a unified vision for an organization and is used for communication among the firm's employees. It helps marketing managers monitor and evaluate the performance of the marketing strategy.

Identify the four elements of the marketing mix.

The product ingredient of the marketing mix includes decisions about the product's design, brand name, packaging, and warranties. The pricing ingredient is concerned with both base prices and discounts. Pricing decisions are intended to achieve particular goals, such as to maximize profit or to make room for new models. The distribution ingredient involves not only transportation and storage, but also selecting intermediaries. The promotion ingredient focuses on providing information to target markets. The major forms of promotion are advertising, personal selling, sales promotion, and public relations.

Describe the major approaches used in target market selection.

UNDIFFERENTIATED APPROACH the organization can satisfy most customers with a single marketing mix, which consists of one type of product with little or no variation, one price, one promotional program aimed at everyone, and one distribution system to reach all customers in the total market. CONCENTRATED MARKET SEGMENTATION APPROACH When an organization uses concentrated market segmentation, a single marketing mix is directed at a single market segment. . DIFFERENTIATED MARKET SEGMENTATION APPROACH If differentiated market segmentation is used, multiple marketing mixes are focused on multiple market segments

What steps are involved when implementing the marketing concept?

a firm first must obtain information about its present and potential customers. The firm must determine not only what customers' needs are, but also how well these needs are satisfied by products currently in the market—both its own products and those of competitors. It must ascertain how its products might be improved and what opinions customers have about the firm and its marketing efforts. The firm then must use this information to pinpoint the specific needs and potential customers toward which it will direct its marketing activities and resources. Next, the firm must mobilize its marketing resources to (1) provide a product that will satisfy its customers, (2) price the product at a level that is acceptable to buyers and will yield a profit, (3) promote the product so that potential customers will be aware of its existence and its ability to satisfy their needs, and (4) ensure that the product is distributed so that it is available to customers where and when it is needed. Finally, the firm must again obtain marketing information—this time regarding the effectiveness of its efforts.

What are the major reasons for conducting marketing research?

because it involves collecting and analyzing data on what consumers want and need, their consumption habits, trends, and changes in the marketing environment.

What methods do businesses use to forecast sales?

organizations often use several forecasting methods, including executive judgments, surveys of buyers or sales personnel, time-series analyses, correlation analyses, and market tests.

What are the possible influences on this process?

the buying process is influenced by situational factors (physical surroundings, social surroundings, time, purchase reason, and buyer's mood and condition), psychological factors (perception, motives, learning, attitudes, personality, and lifestyle), and social factors (family, roles, reference groups, online social networks, social class, culture, and subculture).

What is the difference between disposable income and discretionary income?

the buying process is influenced by situational factors (physical surroundings, social surroundings, time, purchase reason, and buyer's mood and condition), psychological factors (perception, motives, learning, attitudes, personality, and lifestyle), and social factors (family, roles, reference groups, online social networks, social class, culture, and subculture).