BA370 Marketing Olson Exam #1 Review

Marketing expert
How to market yourself and the fact that marketing is everywhere are two aspects of being a ____ ____.
Economics and Psychology
Marketing is derived from both ____ and ____. (Areas of studies)
Direct marketing exchange
Economic premise of all marketing actions. Two or more parties w/ unsatisfied needs.
Product
Place
Price
Promotion
The four aspects of the marketing mix that a firm uses to respond to the wants of its target markets.
Product
Segment of the marketing mix that CREATES value.
Placement
Segment of the marketing mix that DELIVERS value.
Price
Segment of the marketing mix that CAPTURES value.
Promotion
Segment of the marketing mix that COMMUNICATES value.
Products
Services
People
Places
Ideas
Five main areas marketing applies to.
Consumer
B2B
Industrial.
Three categories of products.
Consumer products
iPads, Legos, and ride-on lawnmowers apply to this product category.
B2B products
UPS shipping Amazon’s products is an example of this product category.
Industrial products
Cement, aircraft, and computer chips are examples of this product category.
Single exchange
Multiple interaction
Ongoing relationship
Three categories of services.
Single exchange
Type of service category that only happens once. ie bridal clothing, braces, funeral services
Multiple interaction
Type of service category that happens multiple times. ie airlines and casinos
Ongoing relationship
Type of service category that stems from the idea of loyalty. ie dentists, USC, Coca-Cola
Politicians
Athletes
Celebrities
Some examples categories of people.
Politicians
Type of people category that deals with people like Hilary Clinton, Sarah Palin, and Obama.
Atheletes
Type of people category that deals with people like Michael Jordan, Michael Phelps, and Michael Johnson.
Celebrities
Type of people category that deals with people like Justin Beiber, Angelina Jolie, and the Kardashians.
Travel
Investment
Two categories of marketing a place.
Travel
Type of place category that deals with visiting other places for leisure, business, etc. Currently the largest industry globally.
Investment
Type of place category that deals with cities, states, counties, etc. ie In the 80s, Ireland had an average of 6-7 kids per family who would leave the country and act as exported goods.
Ideas/Concepts
Most difficult marketing area to market.
Ideas/Concepts
Mothers Against Drunk Driving (MADD), smoking as hazardous to health, diseases, and religion are all examples of this marketing area
1. Production Concept
2. Product Concept
3. Selling Concept
4. Marketing Concept
5. Marketing Orientation
6. Experiental/Authentic Mktg
6 eras/periods in the history of marketing
Production Concept
Producer driven marketing period that dealt with production and operating efficiency. Economies of scale was introduced (ie Ford assembly line). MUST exist for every firm at its outset.
Product Concept
Producer driven marketing period that dealt with not only production, but with VARIETY and CHOICES as well. Kellogs and Chevy are two examples of firms that excelled in this era.
Selling Concept
Producer driven marketing period that dealt with marketing tactics and “gimmicks”. Production was at an all time high after WWII, so firms needed to innovate on pushing products to buyers.
Marketing Concept
Consumer driven marketing period that dealt with recognizing consumer needs and working backwards from there.
Marketing Orientation
Consumer driven marketing period that deals with ongoing relationship with customer (CRM). Introduced database marketing and social marketing in some cases.
Experiential/Authentic Value-driven Marketing
Marketing period in which consumers and products have a true relationship. The customer actually markets for the company. Sensory branding is a big aspect (ie consumers’ sense of belonging to brand, hatred of brand, etc)
1. Form utility
2. Time utility
3. Place utility
4. Possession utility
(5. Hybrids)
Five consumer utilities marketing provides.
Form Utility
Consumer utility that deals with uniform and consistent quality.
(ie Brewery makes better beer than you)
Time Utility
Consumer utility that deals with “when”. (ie Brewing beer takes time)
Place Utility
Consumer utility that deals with “where”. (ie Available as frosty cold beer at Petco Park)
Possession Utility
Consumer utility that deals with amount needed/wanted. (ie Available by the glass, keg, case, etc)
Pyramid of learning
1. Remembering
2. Understanding
3. Applying
4. Analyzing
5. Evaluating
6. Creating
Type of thinking required in marketing.
“Got Milk?”
Excellent marketing campaign to reposition milk against sodas. Ad campaign made milk seem more “useful” than soda (ie milk x oreos)
“Independence Day”
Movie that aired minimalistic/mysterious ads before it was even filmed. Essentially created the Alien fear among Americans.
Acai
Supposedly magical antioxidant with an exotic name.
Diamonds as engagement rings
Marketing campaigns consist of propaganda such as “a ___ is forever”
Logos
Conscious may be shut off, but the subconscious notices these.
1. Growth options
2. Portfolio analysis
3. Product life cycle
Three tools all managers need to forever be competitive.
1. Profit maximization
2. Market share
3. Sales
4. Performance / Quality provided
5. Innovation
6. Satisfaction Levels
7. Loyalty Levels
8. Social Responsibility
The eight marketing goals.
Profit maximization
Assumed to be the most common goal that businesses have.
Immediate profitability
Component of profit maximization that occurs when there is scarce supply, no competition, or intellectual property rights. (ie Disney increased prices from $96 to $100)
Long-term profitability
Component of profit maximization that occurs when a quality product and/or service is offered at fair price and margin. (ie iTunes sells songs for 99c vs. CD for $15)
Price gouging
Component of profit maximization that should not be done on ongoing basis.
Market share
A brand’s percentage of the total market sales. One of the most significant measurements of the market power. Having a lot of this offers leverage in channel and more ability to promote.
Sales
Businesses want lots of revenue especially in a cash strapped situation. ____ provides business with revenue. ie Volume ____ and Unit ____.
Performance / Quality provided
Brands like Sony, Apple, and Lexus give off this image.
Innovation
Introducing new ideas, methods, products, etc. Companies like 3M, Jack-In-The-Box and Rubbermaid are examples firms that leverage this.
Satisfaction levels
A measure of how products and services supplied by a company meet or surpass customer expectation. Not the best marketing goal.
Loyalty levels
Measurement in which consumers stick to a certain brand. Existing customers cost less than marketing to new customers. Elaboration is most desirable (ie people who pay for Budweiser clothes)
Social Responsibility
Marketing philosophy/goal that a company should take into consideration; “What is in the best interest of society in the present and long term?” (ie Ben & Jerry)
1. Market penetration
2. Market development
3. Product Development
4. Diversification
Four growth strategies
Market penetration
First growth strategy and easiest option. Occurs in current market with current/existing product. Strategy consists of 1. increasing consumption (ie McDonalds entering breakfast market or creating new uses for baking soda) and 2. appealing to previous and related users (ie fabric softener for students as opposed to 9-5 worker)
New market (aka Market development)
Second growth strategy in which the business enters a new market with current/existing products. There are two ways to go about this: entering domestic markets (ie tennis balls are now pet toys) or entering foreign markets.
New product (aka Product Development)
Third growth strategy in which business creates new items for consumption. Much harder to do. This can be done in three ways: creating related products, creating after-market products (ie video game accessories), and entering a different industry (ie gerber: babies to seniors)
Diversification
Fourth growth strategy that Olson highly suggests not trying. When a firm introduces a new product or service to a market segment that it does not currently serve.
Related Diversification
When the current target market and/or marketing mix shares something in common with the new opportunity. (ie MTV creating shows with a more positive message instead of wealth)
Unrelated Diversification
A growth strategy whereby a new business lacks any common elements with the present business. (ie if Nike ventured into child day care industry)
Portfolio analysis
When management evaluates the firms various products and services and allocates resources according to which products are expected to be most profitable for the firm.
Boston Consulting Group (BCG)
Developed this portfolio analysis that measures a firm’s growth potential in the category (NOT the brand’s growth, but the ENTIRE market). Sorts products/services into a 2×2 matrix. The horizontal axis represents relative market share and the vertical axis represents market growth rate.
Less than 5%
Low growth
Over 12%
Good growth
Stars
Product with really good market share AND high growth (ie Uber). This costs a lot and takes all the money it makes to support itself. Top left quadrant of BCG.
Cash Cows
Product with really good market share BUT low growth (ie. McD’s french fries) Requires little maintenance that makes lots of money because investments have been made for its market share already. Helps develop and fund other products via its excess resources. Bottom left quadrant of BCG.
Question Marks (aka Problem Child)
Products with low market share in high growth markets. (ie McDs Coffee) Most managerially intensive due to the fact that they require significant resources to maintain and hopefully increase market share. Top right quadrant of BCG.
Dogs
Products with low market share in low growth markets (ie TAB Cola). Do you kill the product or let it live? May generate enough resources to sustain themselves, but should be phased out unless needed to complement or boost sales of another product. Bottom right quadrant of BCG.
Marketing environment
Model with consumers in the middle, immediately surrounded by the company, its competition, and its corporate partners. Surrounding that immediate environment is the macroenvironment which consists of culture, demographics, social, technology, economic, and political/legal factors.
Target Market
* unique customer behavior *
Semi Controllable factors
The Target market is an example of this. Firm can control, but once selected, difficult to change.
Uncontrollable factors
Macro and micro environment is an example of this. Firm cannot control these.
Controllable factors
The market mix (four p’s) is an example of these. Firm can control.
Competitive Intelligence (CI)
Ability to continually scan the environment such as knowing industries that have come and gone. (ie watches replaced by phones and fitness trackers)
Macro environment
Factors of the marketplace that affect all buyers and sellers (ie economic, political, legal, social factors)
Macro economic analysis
Finding the correlation of the macro-economy on the industry/business. Understanding effects of inflation, unemployment, recession, depression, etc.
Neutral product
Product that economic conditions don’t really affect (ie Milk and disposable diapers)
Positively correlated product
Product that does well when the economy does well. When the economy is bad, these businesses will suffer. This is the majority of products. (ie homes, vacations)
Negatively correlated products
Product that does well when the economy does poorly. When the economy is doing well, the product sells worse. (ie “little luxuries” like Hersheys Kisses, cheap liquor. Also, MBA programs and dry cleaning due to people wanting jobs)
Micro economic analysis
Finding the correlation of the micro-economy on the industry/business. Understanding effects of GDP, consumer buying power, etc.
Demographics
Economic factor that consists of age cohorts, family structure, family roles, and pets. Indicates characteristics of human populations and segments, especially those used to identify consumer markets. Provide easily understood snapshot of typical consumer in a typical market.
Age cohorts
Group of people of the same generation. Each have different experiences.
Gen Z
Age cohort of those born 2001-2014
Gen Y
Age cohort of those born 1977-2000
Gen X
Age cohort of those born 1965-1976
Baby Boomers
Age cohort of those born 1946-1964
Neutral territory
Anywhere that isn’t a divorced parents’ home for the kids to enjoy. (ie hotel travel and tours)
Pets
Demographic with 5m born annually. Tons of accessories and toys made and bought for them. In 2015, US spent $400M on Halloween costumes for them.
Opportunities and threats
Laws create ___ and ___. (ie T-Ray scanner in airports, extravagant baby carriages)
Asian-American
Fastest growing population in terms of buying power.
Hispanic-American
Greatest current minority segment.
Cardinal Values
From this stems other values. (ie America – freedom, China – family, Mexico – tradition)
Primary Values
Values that stem from Cardinal Values (ie America – individualism, choice, materialism, patriotism)
Low tech factor
Macro economic factor that consists of technological constraints and possibilities and its impact on marketing strategies. (ie Heinz use glass bottles for so long because proper plastic bottles didn’t exist in the 50s. Their ads exclaimed “It’s worth the wait” in response to dumb glass bottle)
High tech factor
Macro economic factor that deals with the accelerating rates of technology. Cost and innovation expectations affects pricing. (ie Napster mentality – why pay when you can get it for free?)
“Magic moments”
Phenomenon when an individual resists and objects a product at first. Later, they finally cross the threshold and cannot live without said product. (ie transition from dumbphone to smartphone)
Consumer Behavior Model
Marketing inputs -> Consumer “Black Box” -> Desired behavioral outcomes
1. Problem recognition
2. Information search
3. Alternative review
4. Shopping behavior
5. Post purchase actions
The 5 steps of consumer behavior
1. Unaware of need
2. Aware of need
3. Aware of solution steps
The 3 steps of Problem Recognition
1. Internal search
2. External search
The 2 types of consumer information search
Internal search
Information search based on factors such as past experience, knowledge, existing knowledge, etc.
External search
Information search based on secondary sources, primary sources, and anything else outside of one’s own mental framework (like WOM). Secondary sources may be the internet and periodicals. Primary sources may be hands on demos like Costco and Guitar Center)
Alternative review
When a consumer considers other products in the same category.
1. Comprehend differences
2. Develop preferences
3. Situational factors
The 3 parts of alternative review.
Primary demand
Has to do with product category (ie tablets, laptops, smartphones)
Secondary demand
Has to do with brand differences (ie Absolut vs Grey Goose…how to differentiate?)
Evoked set
Macro economic analysis
1. Manufacturers
2. Resellers
3. Institutions
4. Governmet
The four business-to-business organizations
Manufacturers
Type of B2B organizations that buy raw materials, components, and parts that allow them make and market their own goods. (ie Volkswagen)
Resellers
Type of B2B organizations that sell manufactured goods without significantly altering their form. (ie wholesalers and distributors. Walmart)
Institutions
Type of B2B organization (such as hospitals, schools, and religious organizations) that buys all kinds of goods and services
Government
Type of B2B organization that happens to be one of the largest purchasers of goods and services. Can be local, federal, state, etc.
1. Need recognition
2. Product specification
3. RFP process
4. Proposal analysis and supplier selection
5. Order specification
6. Vendor/performance assessment metrics
The 6 steps of the B2B buying process.
Need recognition
First stage of the B2B buying process in which the buying organization recognizes that it has an unfulfilled need.
Product specification
Second stage of the B2B buying process in which the buying organization makes a list of potential specifications that vendors use to develop their proposals.
RFP Process (Request for proposals)
Third stage of the B2B buying process whereby organizations invite alternative vendors/suppliers to bid on supplying their required products to specification.
Web portal
An internet site whose purpose is to be a major starting point for users when they connect to the web. Often utilized by small companies that lack the ability to attract broad attention to their requests.
Proposal analysis, vendor negotiation, and selection
Fourth stage of the B2B buying process in which the buying organization evaluates all proposals it receives in response to its RFP.
Order specification
Fifth stage of the B2B buying process. The firm places its order with its preferred supplier and includes a detailed description of the goods, prices, delivery dates, penalties, etc. The supplier then sends an acknowledgement that it’s received the order and fills it by specified date.
Vendor performance assessment using metrics
Sixth stage of the B2B buying process in which the firm analyzes their vendors’ performance to make decisions about their future purchases.
1. Initiator
2. Influencer
3. Decider
4. Buyer
5. User
6. Gatekeeper
The 6 roles within the buying center.
Buying center
A group of people typically responsible for the buying decisions in large organizations.
Initiator
The buying center participant who first suggests buying the product or service.
Influencer
The buying center participant whose views influence other members of the buying center in making the final decision.
Decider
The buying center participant who ultimately determines any part of or the entire buying decision.
Buyer
The buying center participant who handles the paperwork of the actual purchase.
User
The buying center participant who consumes or uses the product or service purchased by the buying center.
Gatekeeper
The buying center participant who controls info or access to decision makers and influencers.