Marketing 3000 exam 1 – Mizzou

Marketing
is the study of exchange
requirements of marketing
-2 or more parties
-communication
Marketing’s first task
discovering consumers needs
(when new product fails, marketing wasn’t practiced)
Marketing’s second task
satisfying consumer needs
-find the right combination of;
Product (most important)
Price (important-with similar goods)
Promotion (if products & price are same)
Place (vending machine)**
What are the 4 ps
1. Product, 2. Price, 3. Promotion 4. Place
Functional definition of marketing
entails the facilitation of exchanges (suggests that there are techniques that may improve the exchange process, helping businesses and customers make more efficient exchanges)
communication
is part of all marketing exchanges
marketing as business philosophy
Evolved from “self-centered” firm to an empathetic, customer-based one
Product orientation
focus on the efficient production of their products with no input from costumers
-“if we build it, they will come”
Sales orientation
to sell (persuade people to buy) what is made
-“just sell the damn product”
Marketing orientation
requires that information about the market (potential customers, trends, competitors) is collected prior to making decisions that involve the selling process (what to sell, where to sell, how much to charge, how to promote the product)
-“making what is desired or wanted” rather than “selling what we make”
marketing orientation is characterized by
marketing orientation is characterized by
Relationship marketing concept
the creation and maintenance of long-term relationships with all participants (customers, suppliers, retailers) in the exchange process
Strategic planning
the process of developing and maintaining a strategy fit between the organizations goals and capabilities and its changing marketing opportunities
1. conducting a situation analysis
2. developing marketing objectives
3. segmentation and selecting target markets
4. determining product position
5. designing a strategic marketing mix
What are the 5 parts of market analysis
1. conducting a situation analysis
Environmental analysis- is an ongoing process of identifying external forces, analyzing them, and predicting their potential impact
Demographics
referring to the characteristics of a population (E.g., age, ethnicity, income, gender) (change in size or distribution)
Economic trends
____________ such as business cycles – periods of prosperous growth or decline (recessions) – affect almost every marketing program
Competitive
a substitute product is one from a different product category that can be substituted or used instead of another product
Sociocultural
a change in consumer taste
Political and legal
environments of a market are reflected in laws that regulate competition or protect consumers
Technology
advances, may have developments that have sweeping effects for businesses (innovations such as internet, tablets, smart phones)
2. developing marketing objectives
To be effective objectives need to be specific, measurable, and attainable.
3. segmentation and selecting target markets
-selecting target markets requires an assessment of potential demand from potential consumer segments
-consumer segment must be large enough to generate enough demand to be profitable
Market segmentation
the process of dividing the market up into different groups of potential customers who share a common characteristic that differentiates them from other groups
4. determining product position
Every product should have something special about it (differential advantage) that makes a particular group of consumers select it over competing alternatives, the positioning of a product
positioning
refers to a product’s image in relation to competing products
-based on the differential advantage or unique selling position
-Product
-Place
-Pricing
-Promotion
5. Designating a strategic marketing mix
Marketing mix
refers to the blend of product, distribution (place), pricing, and promotion strategies, known as the “four P’s”
-must be designed for each target market
Target market
the intended target of a particular marketing mix
Marketing research
the process of defining a marketing problem or opportunity, systematically collecting and analyzing information, and making recommendations based on that analysis
Purpose of marketing research
to aid managerial decision making, and it is the function that links the customer and public to the marketer
Secondary data
is information that has already been collected
secondary data internal sources
such as accounting data, sales reports, or various databases that the company maintains
Government data (the census)
-Magazines and periodicals (Buying Power Index, The Wall Street Journal)
-Or Syndicated data services (Marketing Research Corporation of America)
Secondary Research data includes
-Using data already collected is almost always more cost effective
-Usually has more credibility because it is often available from multiple sources and because its collection is usually independent of the firm or research interest at hand
When possible use secondary data because
Primary data
is information that is collected for a current, specific purpose
Primary data research
1. Broad exploratory research which is performed to identify the scope of research issues
2. Descriptive research which determines the magnitude of the issues
3. Experimental research is used to narrow the issues down to a decision
-focus group
-depth interview
-projective technique
Exploritory research includes what three things?
Focus group
conduct an open discussion with the group about what they consider when choosing a pizza place (wants to uncover things that might not be an issue at their existing locations)
Depth interview
is unstructured, are conducted one-on-one to maximize the depth an individual may be questioned
projective technique
is an unstructured, indirect form of questioning that asks respondents to interpret the behavior of others
-By answering how others act or think, respondents indirectly project their own motivations, attitudes or feelings into the situation
-Useful when discussing situations that might be embarrassing to the respondent
Descriptive research
using surveys of students to see how students rate the importance of each issue uncovered in exploratory research
variety of surveys (most popular)
-Mall intercept- randomly survey people at a shopping center
-Telephone
-Internet
-And Mail
Experimental research
there is a hypothesis used to create a decision rule
Observational research
can be personal observation
-EX: Fischer Price wants to measure the preference for new toys, they could put children in the room with the toys and record how often/long they played with the toys
Sampling
involves selecting representative units (the sample) from a total population
population
includes all elements, units, or individuals that are of interest to researchers for a specific study
Random sampling
this provides an equal chance for each member of the population to be selected as part of the sample
Stratified sampling
in this technique, the population is divided into groups based on a common characteristic, then a random sample is taken from each group
Area (geographic) sampling
this is the same as above using geographic areas as the basis for the sample
Functional, social, personal, experimental
Describe benefits and costs categories
Functional benefit
buy and use it for something
EX: learn about marketing- get course credit, Hammer, water filter
Social benefit
EX: cell phone, country club membership, social media
EX: meet friends, business partners, etc
fun experiences
EX: have fun, joy of learning
EX: football games, tailgating, concert
Example of Experimental Benefit
Personal benefit
feeling good about your
EX: feeling good about learning or excelling
EX: makeup, working out
Monetary, temporal, psychological, and Behavioral
Describe each cost
Monetary cost
tuition and book fees
Temporal cost
time spent in class and studying
Psychological cost
stress studying for exams and listening to instructor
Behavorial cost
expending energy walking to class or getting sick from lectures
What is a big part of analyzing the marketing environment
A big part involves monitoring the external market for better trends. Examples of products that have benefited from these trends are Gyms, and organic/gluten free markets.
1. Industry competitiveness
2. Availability of substitutes
3. threat of potential entrants
4. Supplier power
5. buyer power
What are Porter’s Five Forces model?
1. Industry competitiveness
intensity of current competitors
-low intensity= higher profitability
-industry has low intensity when few firms are competing (more intensity=less profit)
EX: only two commercial aircraft
2. Availability of substitutes
customers can choose different product as a substitute
-few or no substitutes=higher profitability
-EX: fresh veggies -> vitamins**
3. Threat of potential entrants
high barriers to entry= higher profitability
High barriers to entry exist when…
– high capital requirements
– large scale to make money
– high product differentiation
– network externalities (technology)
EX: word software, tesla
4. Supplier power
fewer suppliers hurt profitability because they can charge higher
EX: tires
Lower bargaining power when…
-high number
-low information
5. Buyer power
information effects this
lower buyer power
EX: medical services (low info)
sustainable competitive advantage
an advantage vs. competition that can be maintained consistently over time
EX: McDonalds-operations, service efficiency with variety of items
1. Market penetration- promotion, lower prices – existing products and existing markets
2. Market development- same product, new group of people
3. Product development- same market, new product
4. Diversification- new market, new product
Intensive Growth Strategies (Ansoff’s product/market expansion grid)
market penetration
What type of growth strategy is it when in one particular market firm
-syndicated research services
-marketing information systems
-marketing intelligence systems
-non-recurring research projects
Marketing research includes
syndicated research services
collecting data from consumers from some other company
marketing information systems
consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers
-own data collecting sells people (weekly reports, recurring) (can be automatic- Mcdonalds)
marketing intelligence systems
-or decision support systems
non-recurring research projects
e.g. study of consumers perceptions toward hospital strategic alliance
(not something you do every year)
-study pregnant people to switch hospitals- mothers didn’t want to move to other hospital
1. defining the problem and research objectives
2. developing the research plan
3. collect the information
4. analyze the information
5. present the findings
What are the 5 steps of the Marketing research process?
Good marketing research
1. is scientific (objective)
2. is creative (# of lights on in hotel)
3. uses multiple methods (more accurate)
4. realizes the interdependence of models and data
5. acknowledges the cost and value of info
6.maintains “healthy” skepticism
7. is ethical (Important-don’t deceive the participants) not ethical- call during dinner
market share= (individual product sales)/(total industry sales)
% of 1 company’s or brand has in the total industry sales
-add everything (including the one out)
Demand forecasting
estimating sales of product during future time period
sales forecast
a _______ is based on a specific marketing plan
-expressed in dollars or product units
-typically covers a 1-yr period
estimating future demand
-market factor analysis
-survey of buyers’ intentions
-past sales analysis
-composite of sales force opinion
-expert opinion
-market test method
market-factor analysis
demand for a product is assumed to be related to the behavior of certain sales activity
survey of buyer intentions
a sample of current or potential customers are asked how much of a particular product they would buy at a given price during a specified future time period
past sales and trend analysis***
flat % increase applied to past volume or past volume average
-economically stable
-trend analysis related to progression analysis, angle is used to predict future sales
sales- force composite
a bottom-up method consisting of collecting estimates of sales for the future period from all salespeople
executive judgment
obtaining opinions regarding future sales volume from one or more executives
test marketing
a firm markets its product in a limited geographic area, measures sales, and then projects the company’s sales over a larger area
(goes to a city to try out new product)