Essentials of marketing chapter 1-4

production
actually making goods or performing services
marketing
provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers
innovation
the development and spread of new ideas, goods and services
pure subsistence economy
when each family unit produces everything it consumes there is no need to exchange goods and services and no marketing is involved
macro marketing
social process that directs and economy’s flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society
macro marketing
its role is to effectively match this heterogeneous supply and demand and at the same time accomplish society’s objectives
economies of scale
which means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down
universal functions of marketing
are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information
buying function
means looking for and evaluating goods and services
selling function
involves promoting the product, includes the use of personal selling, advertising, customer service, and other direct and mass selling methods (this is the most visible function or marketing)
transporting function
means the movement of goods from one place to another
storing function
involves holding goods until customers need them
standardization and grading
involve sorting products according to size and quality
financing
provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products
risk taking
involves bearing the uncertainties that are part of the marketing process
market information function
involves the collection, analysis, and distribution of all the information needed to plan, carry out, and control marketing activities, whether in the firm’s own neighborhood or in a market overseas
intermediary
someone who specializes in trade rather than production-plays a role in the exchange process
E-commerce
refers to exchanges between individuals or organizations and activities that facilitate these exchanges based on applications of information technology
command economy
government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why
market-directed economy
the individuals decisions of the many producers and consumers make the macro-level decisions for the whole economy
simple trade era
a time when families traded or sold their “surplus” output to local distributors
production era
is a time when a company focuses on production of a few specific products -perhaps because few of these products are available in the market
sales era
a time when a company emphasizes selling because of increased competition
marketing department era
a time when all marketing activities are brought under the control of one department to improve short run policy planning and to try to integrate the firm’s activities
marketing company era
a time when in addition to short run marketing planning, marketing people develop long range plans, sometimes five or more years ahead, and the whole company effort is guided by the marketing concept
marketing concept
means that an organization aims all its efforts at satisfying its customers- at a profit
production orientation
making whatever products are easy to produce and then trying to sell them
marketing orientation
means trying to carry out the marketing concept
customer value
the difference between the benefits a customers sees from a market offering and the costs of obtaining those benefits
micro macro dilema
what is good for some firms and customers may not be good for a society as a whole
social responsibility
a firm’s obligation to improve its positive effects on society and reduce its negative effects
marketing ethics
the moral standards that guide decisions and actions
Marketing Management Process 34
The process of planning marketing activities, directing the implementation of the plans, and controlling these plans.
Strategic (management) planning 35
The managerial process of developing and maintaining a match between an organization’s resources and its market opportunities.
Marketing Strategy 36
Specifies a target market and a related marketing mix.
Target Market 36
A fairly homogeneous (similar) group of customers to whom a company wishes to appeal.
Marketing Mix 36
The controllable variables that the company puts together to satisfy a target group.
Target Marketing 36
A marketing mix is tailored to fit some specific target customers.
Mass Marketing36
The typical production-oriented approach that vaguely aims at everyone with the same marketing mix.
Channel of distribution 39
Any series of firms or individuals who participate in the flow of products from producer to final user or consumer.
Personal Selling 40
Direct spoken communication between sellers and potential customers, usually in person but sometimes over the telephone or even via a video conference over the internet.
Customer Service 40
A personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase-is often the key to building repeat business.
Mass Selling 40
Communicating with large numbers of potential customers at the same time.
Advertising 40
Any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor.
Publicity 40
Any unpaid form of nonpersonal presentation of ideas, goods, or services.
Sales Promotion 40
Those promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers or others in the channel.
Marketing Plan 42
A written statement of a marketing strategy and the time-related details for carrying out the strategy.
Implementation 43
Putting marketing plans into operation.
Operational decisions 43
Short-run decisions to help implement strategies.
Marketing program 44
Blends all of the firm’s marketing plans into one big plan.
Customer lifetime value 45
Or total stream of purchases that a customer could contribute to the company over the length of the relationship.
Customer equity 45
The expected earnings stream (profitability) of a firm’s current and prospective customers over some period of time.
Breakthrough Opportunities 49
Opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time.
Competitive Advantage 49
A firm has a marketing mix that the target market sees as better than a competitor’s mix.
SWOT analysis 52
Identifies and lists the firm’s strengths and weaknesses and its opportunities and threats.
Differentiation 52
The marketing mix is distinct from and better than what’s available from a competitor.
Market Penetration 53
Trying to increase sales of a firm’s present products in its present markets-probably through a more aggressive marketing mix.
Market Development54
Trying to increase sales by selling present products in new markets.
Product development 54
offering new or improved products for present markets.
Diversification 55
Moving into totally different lines of business-perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system.
mission statement 64
sets out the organization’s basic purpose for being
competitive environment 66
affects the number and types of competitors the marketing manager must face and how they may behave
sustainable competitive advantage 68
a marketing mix that customers see as better than a competitor’s mix and cannot be quickly or easily copied.
competitor analysis 68
an organized approach for evaluating the strengths and weaknesses of current or potential competitor’s marketing strategies
competitive barriers
the conditions that may make it difficult, or even impossible for a firm to compete in a market
competitive rivals 68
firms that will be the closest competitors
competitor matrix 68
an organized table that compares the strengths and weaknesses of a company with those of its competitive rivals.
economic environment 69
refers to macro-economic factors including national income, economic growth, and inflation that affect patterns of consumer and business spending
technology 70
the application of science to convert an economy’s resources to output
nationalism 73
an emphasis on a country’s interests before anything else affect how macro-marketing systems work
North American Free Trade Agreement (NAFTA) 74
lays out a plan to reshape the rules of trade among the United States, Canada, and Mexico
cultural and social environment 77
affects how and why people live and behave as they do which affects customer buying behavior and eventually the economic, political, and legal environments
gross domestic product (GDP) 79
the total market value of all goods and services provided in a country’s economy in a year by both residents and non-residents of that country
gross national income 79
a measure like GNP, but doesn’t include income earned by foreigners who own resources in that nation.
senior citizens 81
people over the age of 65
baby boomers 81
those born between 1946 and 1964 are now creating new opportunities in industries such as tourism, health care, and financial services
generation x 82
the generation born immediately following the baby boom from 1965 to 1977
generation y 82
also known as the Millenials, refers to those born from 1978 to 1994
generation Z 82
born after 1995. digital natives born into a world that already used digital media.
sustainability 83
that idea that it’s important to meet present needs without compromising the ability of future generations to meet their own needs
strategic business unit (SBU)
an organization unit (within a larger company) that focuses on some product-markets and is treated as a separate profit center
market 93
a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services; which is satisfying those needs.
generic market 93
a market with broadly similar needs-and sellers offering various, often diverse, ways of satisfying those needs.
product-market 94
a market with very similar needs and sellers offering various close substitute ways satisfying those needs.
market segmentation 97
is a two-step process of (1) naming broad product-markets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes.
segmenting 98
a process of clustering people with similar needs into a “market segment.”
market segment 98
homogeneous group of customers who will respond to a marketing mix in a similar way
single target market approach 100
segmenting the market and picking one of the homogeneous segments as the firm’s target market
multiple target market approach 100
segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix.
combined target market approach 100
combining two or more submarkets into one larger target market as a basis for one strategy.
Combiners 100
try to increase the size of their target markets b combining two or more segments.
Segmenters 101
aim at one or more homogeneous segments and try to develop a different marketing mix for each segment.
Qualifying dimensions 103
are those identified characteristics that let you include a customer or groups of customers in your target segment.
Determining dimensions 103
what actually affects the customer’s purchase of a specific product or brand in a product-market.
Clustering techniques108
when trying to find a similar pattern within sets of data
customer relationship management (CRM) 108
where the seller fine-tunes the marketing effort with information from a detailed customer database
Positioning 110
refers to how customers think about proposed or present brands in a market.
What are the three basic ideas in the marketing concept?
creating a message, branding, and positioning.
Marketing Mix Variables- Four P’s of marketing (product, price, place, and promotion).
product: tangible, services, packaging, warranties, branding
price: price of others in the line, flexibility, objectives, discounts, georgic, legs, cost and demand, price sensitivity, competition and subs.
is the revenue-generating function of the marketing mix. In setting the “right” price, marketing managers must consider many factors, all of which combine to make pricing a combination of science and art.
Place: Channels of distribution. Right consumer in the right place time and quantity in the right conditions at a reasonable cost.
Promotion: Telling and selling=- ads, publicity, sales promotion, and personal selling. Target market involvement.
What is the product market? What is a generic market? How do they compare?
generic – food, product- cell phones. generic have advantage of a market need limiting competition
What are company objectives? What are marketing objectives?
Company: provide the larger framework for setting marketing objectives.
Marketing objectives: guide the development of objectives for each element of the marketing mix.
planned economic system
inputs are based on direct allocation. economic planning may be carried out in a decentralized distributed or centralized manner.
modern view of marketing
begins with potential customer needs