Marketing Chapters 1-4

Production Orientation
a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace
Sales Orientation
the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits
Societal Marketing Orientation
-Extends the marketing concept by acknowledging that some products that customers want, may not really be in their best interest, or the best interest of society as a whole.
Customer Value
the relationship between benefits and the sacrifice necessary to obtain those benefits
Customer Satisfaction
customers’ evaluation of a good or service in terms of whether it has met their needs and expectations
Strategic Planning
the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities
Strategic Business Units
a subgroup of a single business or collection of related business within the larger organization
Strategic Alternatives
ansoff’s opportunity matrix, the Boston Consulting Group model, Generic Electric model
Ansoff’s Opportunity Matrix
strategic alternative; matches products with markets Firms can explore these options: Market Penetration , Market Development, Production Development
Market Penetration (Ansoff’s Strategic Option)
a marketing strategy that tries to increase market share among existing customers
Market Penetration Example
amazon.com introduced a streaming movie and tv service for its amazon prime customers, hoping to increase streaming media market share by encouraging current prime subscribers to use the new service instead of netflix
Product Development
a marketing strategy that entails the creation of new products for present markets
Product Development Example
Reckitt Benckiser Group produces Suboxone. They recently lost its patent protection and is now releasing Suboxone as a thin film that dissolves on the tongue. Reckitt Benckiser hopes to convert current Soboxone tablet users to the film.
Diversification
a strategy of increasing sales by introducing new products into new markets
Diversification Example
Ugg introduced a male footwear collection; can be risky when a firm is entering unfamiliar markets, but very profitable when a firm is entering a market with little or no competition
Boston Consulting Group
to determine the future cash contributions and cash requirements expected for each SBU, managers can used the ______________ portfolio matrix
Star
in the portfolio matrix, a business unit that is a fast growing market leader
iPad = Apple’s current ____.
Star
Cash Cow
in the portfolio matrix, a business unit that generates more cash that it needs to maintain its market share
Cash Cow Example
in a low-growth market, but the product has a dominant market share. Example: laptops/PCs
problem children (question mark)
in the portfolio matrix, a business unit that has low growth potential and a small market share
Competitive Advantage Example
BMW offers customers a four-year, 50,000 mile maintenance cost-free program called “BMW Ultimate Service.” The service includes free replacement of brake pad and rotors, wiper blades, scheduled maintenance, oil changes, and roadside maintenance. This marketing gives BMW a:
Sales Example
which marketing management philosphy focuses on the question, “How can we sell more aggressively?”
Exchange Control
– a law compelling a company earning foreign exchange from its exports to sell it to a control agency, usually a central bank.
Societal Marketing Example
Jewelry stores want to provide their customers with the highest quality of diamonds available at the lowest possible prices. Unfortunately, the lowest priced diamonds are sold by African rebels who use the profits to engage in genocide. Human rights organization have asked jewelers to buy diamonds that are “conflict free”–that is, from South Africa, Australia, or Canada. LeeBrant is one retail jewelry store that sells only diamonds that are certified to be from these countries. LeeBrant is exhibiting which marketing management orientation?
Education
_________ is the primary determinant of a person’s earning potential
If market share is maintained, stars are likely to grow into:
Cash Cows
each party believes it is appropriate to deal with the other party
A problem facing the timber industry is the absence of any effective way to prove that rain forest timber has been legally harvested. In places like Indonesia, as much as 80% of timber available for sale is illegally cut. Companies like The Home Depot do not want to sell timber from illegally logged forests even though the demand is great for timber from rainforests. What condition required for an exchange to occur is missing when a company tries to sell illegally aquired logs to The Home Depot?
creating cross-functional teams and instructing them to focus on creating greater customer value
After hearing his company criticized for its failure to respond to consumer needs, the CEO of a bank realized that his company needs to adhere to the marketing concept and implement a market-oriented strategy. What action would be the best approach in achieving this goal?
Production Example
a firm that adopts a ______ orientation to marketing will fail to consider whether what the firm produces most effeiciently also meets the needs of the market place
Market Grouping (Common Trade Alliance)
– occurs when several countries agree to work together to form a common trade area that enhances trade opportunities.
Multinational Corporation Example
Apple, Inc. has partnerships with wireless carriers in Japan, Spain, and a handful of other European countries. Apple works with suppliers and retailers worldwide. This means Apple is a:
Market Orientation Example
At the Sears website, customers can chat on-line with customer service reps while shopping. This live help allows customers to have questions answered before placing an order. This focus on meeting customer needs illustrates that Sears has a ____ orientation
demographically, gen Yers are an extremely large group of consumers
Merissa Champlain designs and sells clothes for young working women. Her marketing managers recently told her that she’ll be in financial trouble unless she starts designing clothes suited to Gen Yers. Why?
Social Change
The most difficult for marketing managers to forecast, influence, or integrate into marketing plans? -they include our attitudes, values, and lifestyles, they influence the products ppl buy the prices paid for products the effectiveness of specific promotions and how where and when ppl expect to purchase products
Boycott
– the exclusion of all products form certain countries or companies.Governments use boycotts to exclude companies from countries with which they have a political dispute.
Market Orientation Example
Best Buy has become the nation’s largest specialty retailer by focusing on the customer’s needs and wants. This philosophy is at the heart of a ______ orientation
Mission Statement
-is the foundation of any marketing plan, which answers the question ” what business are we in?”
Cost Competitive Advantage Example
Walmart realizes a _________ using its relationships with suppliers to give customers low prices and good customer service
What do the customers want and need??
Marketing Management Philosophy
Building Example
John R. Harland Co. is best known for printing checks. Its Financial Solutions division develops software for mortgage companies, which is a growing industry. The division is currently not producing at the desires level of profitability, but Harland plans to turn the division into a success by acquiring other companies that develop similar software. To accomplish this, Harland will be engaging in a ______ strategy
Diversification Example
orange growers in Florida have lost millions of dollars due to hurricanes. As a result, some growers have decided to bulldoze their orange groves and put in freshwater lakes for raising shrimp, a product that has a strong popularity and is more weather resistant. Former orange growers who are now raising shrimp are pursuing a _____ strategy
SWOT Analysis Example
Tub King is a small company that refinishes antique claw foot bathtubs and antique sinks, and provides training for bathtub refinishing. The company’s management is currently conducting a formal study of its current strengths and weaknesses by looking at the company’s profit and sales histories and searching for opportunites and threats by studying consumer trends. Tub King is conducting a _____.
Production Example
Researchers at PPG Industries spent considerable time, effort, and money developing a bluish windshield that would let in filtered sunlight but block out the heat. Little market research was done, but the scientists were convinced this new product would be significantly better than existing windshields even though it was more expensive and of a different color than the current models on the market. This scenerio suggests PPG most likely has a ______ orientation.
Tariff
-a tax levied on the goods entering a country. B/c a tariff is a tax, it will either reduce the profits of the firms paying the tariff or raise prices to buyers or both.
Societal Marketing Example
P&G decided to address the fact that Hispanic women are more likely to die from breast cancer because they’re reluctant to get mammograms or discuss screening. P&G brought screening to the supermarket, parking mobile mammography behicles in grocery store parking lots in Texas and inviting follow-up care. P&G adopted a _______ orientation to achieve its goal.
Product Development Example
Kraft introduced Philadelphia Ready to Eat cheesecake filling for those who do not have time to make cheesecake in the traditional manner. This is an example of a ______ strategy
Cultural Example
a soft drink manufacturer thinking of investing in a bottling plant in the Czech Republic should know the nation is proud of the fact it is among the world’s biggest beer drinkers. Czechs consume an average of 1/2 liter of beer a day for every man, woman, and child in the country. The ______ environment of this country could very easily prevent the soft drink bottling company from succeeding
Hispanics
a company that specializes in planning and organizing large family reunions has hired you to identify a target ethnic market. Which market would be ideal? (60% of Hispanic Americans are of Mexican descent)
Global Marketing Standardization Approach
-Production of uniform products that can be sold the same way all over the world
Many people fear world trade because it:
causes some people to lose their jobs as production shifts abroad
Environmental Scanning Example
after learning that many of their consumers were shopping at a nearby health food store for free range chickens and organic produce, IGA grocery stores began stocking more organic items. IGA adjusted its market strategy based on:
Marketing
is the activity set of institutions and processes for creating communicating delivering and exchanging offerings that have value for customers clients partner and society at large
If an organization has an SBU that it believes has the potential to be a star, what would be an appropriate goal?
Build
Divest
getting rid of SBUs with low shares of low-growth markets is called:
Marketing Plan
a written document that acts as a guidebook of marketing activities for the marketing manager
Marketing Myopia
defining a business in terms of goods and services rather than in terms of the benefits customers seek
SWOT Analysis
identifying internal STRENGTHS and WEAKNESSES, and also examining external OPPORTUNITIES and THREATS
Competitive Advantage
a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition
Cost Competitive Advantage
-being low cost competitor in an industry while maintaining satisfactory profit margins
Product/service Differentiation Competitive Advantage
-the provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition
Niche-Competitive Advantage
-the advantage achieved when a firm seeks to target and effectively serve a small segment of the market
Sustainable Competitive Advantage
an advantage that cannot be copied by the competition EX: Netflix
Target Market
-a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the need of that group, resulting in mutually satisfying exchanges
Environmental Management
-when a company implements strategies that attempt to shape the external environment within which it operates
Component Lifestyles
the practice of choosing goods and services that meet one’s diverse needs and interests rather than conforming to a single, traditional lifestyle
Demography
-uncontrollable variable in the external environment also extremely important to marketing managers it’s the study of people’s vital statistics, such as age, race and ethnicity, and location.
Purchasing Power
a comparison of income verses the relative cost of a standard set of goods and services in different geographic areas
Global Marketing
marketing that targets markets throughout the world – has become an imperative for business
Global Vision
-recognizing and reacting in international marketing opportunities, using effective global marketing strategies, and being aware of threats from foreign competitors in all markets
Licensing
the legal process whereby a licensor allows another firm to use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge
Contract Manufacturing
private label manufacturing by a foreign company (The foreign company produces a certain volume of products to specification, with the domestic firms brand name on the goods.)
Empowerment
Some market-oriented firms give employees expanded authority to solve customer problems on the spot. This is known as:
The firm’s performance
The sales and market orientations differ on all of the following characteristics EXCEPT:
Sales Example
A manufacturer of bowls, spoons, and cutting boards knows marketing can make his company a success. He wants to rely solely on promotion as the technique for attracting customers. He advertises extensively in cooking magazines and provides retailers who carry his product with attractive displays. From this information, you know that the manufacturer has a _____ orientation.
Market Orientation Example
At The Container Store, every employee is trained to serve customers. Full-time salespeople receive 240 hours of training. The Container Store works to hire people who are self-motivated and have a passion for customer service. The Container Store has a _____ orientation.
sales
StoryBlox creates and markets handmade wooden toys, which it sells to retailers in the Midwest. The company’s management believes its retail customers will stock more toys if its salespeople use aggressive marketing techniques, so the company provides strong incentives for salespeople and promotional allowances to resellers to get distribution for its toys. In other words, the company has a _____ orientation.
The concept of exchange is important to marketing because..
marketing actives help to create EXCHANGE.
Teamwork
_____ is the collaborative efforts of people to achieve common objectives.
Production Example
Indonesian logging companies harvest the rain forests for timber and assume that a market exists for their products. The typical Indonesian logging company has a(n) _____ orientation.
Marketing Concept Involves:
Focusing on customers’ wants and needs so that the organization can distinguish its product (or products) from competitors’ products.
Environmental Scanning
_____ is defined as the collection and interpretation of information about forces, events, and relationships that may affect the organization or the implementation of the marketing plan.
Using a cause simply to sell more of a product can hurt both the cause and the company
One potential drawback of cause-related marketing is that:
Niche Competitive Advantage Example
Technol Medical Products makes specialty face masks to shield healthcare workers from infection. Because it focuses on this narrow market, it is able to outsell its primary competitors–3M and Johnson & Johnson. Technol has a(n):
Culture
-central to any society is the common set of values shared by its citizens that determines what is socially acceptable. It underlines the family, the educational system, religion, and the social class system.
Legal
Japanese law prohibits the storage of more than 50 pounds of explosive at any single site in the nation. Every night, Universal Studios Japan hosts a fireworks display. The theme park recently came under government investigation when allegations were made that the park was detonating more than 50 pounds of explosives in its nightly fireworks displays. If the allegations are true, in terms of the pyramid of corporate social responsibility, then Universal Studios Japan is not operating at a(n) _____ responsibility level.
What represents a business unit that shows rapid growth but poor profit margins?
Problem Child / Question Mark
One of the arguments against social responsibility
The fact that many people believe that businesses should focus on making a profit and leave social and environmental issues to nonprofit organizations is:
Buyer for export
The _____ is an intermediary in the global market who assumes all risks and sells globally internationally for its own account. The domestic manufacturer usually treats it like a domestic customer.
Cultural Example
Muslim countries are receptive to most Disney products, but they have asked Disney not to include Piglet when it sells its Winnie the Pooh characters because Muslims (as a part of their religious beliefs) contend that pork in any form is unclean. This is an example of a _____ factor that directly affects Disney’s global operation.
Countertrade
International trade does not always involve cash. Sometimes companies accept all or part of the payment for goods or services in the form of other goods or services. This is known as:
Social Example
If you were to ask Americans what they most desire to make their lives easier, most will want more time. This feeling that there are not enough hours in a day is an example of a(n) _____ factor that has strongly influenced the marketing environment.
The growth of dual-income families has resulted in:
Purchasing Power
The increasing number of working women
Which of the following events has had the greatest effect on marketing?
Gross domestic product (GDP)
The total market value of all final goods and services produced in a country for a given time period is called:
Target markets change over time as consumers drop in or out of the market, and as tastes change
Which of the following statements best describes the typical target market?
Multinational Corporation
A(n) _____ is a company that is heavily engaged in global trade and moves its resources, goods, services, and skills across national boundaries beyond exporting and importing.
Target market Example
Colorific recently began competing with Crayola coloring products. At the beginning of the school year, the _____ for Colorific products consists of back-to-school shoppers.
Exchange’s FIVE conditions: (must take place for the exchange to take place)
1. There must be TWO PARTIES
2. Each party has something that might be of VALUE
to the other party
3. Each party is CAPABLE OF COMMUNICATION ADN DELIVERY
4. Each party i s FREE TO ACCEPT OR REJECT the exchange offer.
5. Each party believes it is APPROPRIATE OR DESIRABLE to deal with the other party
Marketing Management Pilosophies
-Production Orientation
-Sales Orientation
-Market Orientation
-Societal Marketing Orientation
Marketing Management Philosophies are ..
competing philosophies strongly influence and organization’s marketing processes.
Market Orientation
meaning they assume that a sale does not depend on an aggressive sales force but rather on a customer’s decision to purchase a product.
Marketing Concept includes the Following:
-Focusing on customer wants and needs so that the organization can distinguish its products from competitors offerings
-Integrating all the organizations activities including production to satisfy customer wants
-Achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly
Basic values strongly influenced attitudes and lifestyles:
Self Sufficiency, Upward Mobility, Work Ethic, Conformity
Tweens
-(ages 8-12) are a population of more than 20 million. With access to information, opinions, and sophistication well beyond their years these young consumers are directly or indirectly responsible for sales of over $180 billion per year and the remainder is spent by parents and family members for them.
Teens
– there are approximately 25 million teenagers int he US, they spend approximately 72 hours per week tuned in electronically to television, the internet, music, video games, and cell phones.
African Americans
-6 years younger on average than other american consumers. 47% are between 18 and 49, which is the top spending age demographic by marketers. Population is smaller/ but more black house holds then hispanic. 54% of black children are raised by single mothers. 88% are below the poverty line.
Asian Americans
-Fastest growing among minority groups.Make more money then other minority groups, 52% have at least a bachelors degree .They visit computer and consumer electronics web sites 36% more often and spend 72% more time at these sites than the total population.
The Impact of Trade and Globalization
Protests staged during meetings of the World Trade Organization , the World Bank and the International Monetary Fund have demonstrated that many people fear world trade and globalization.
Job Outsourcing
-(sending US Jobs abroad) has been highly controversial for several decades.Many executives say that it leads to corporate growth, efficiency, productivity, and revenue growth.
Negative sides????
Quota
– a limit on the amount of a specific product that can enter a country. Several US companies have sought quotas as a means of protection from foreign competition
Trade Agreement
-an agreement to stimulate international trade. Not all government efforts are meant to stifle imports or investment by foreign corporations
Dominican Republic-Central America Free Trade Agreement
-has been an unqualified success. It has created new commercial opportunities for its members, has promoted regional stability and is an impetus for economic development for an important group of US neighbors. Was instituted in 2005 bc it joined after the original agreement was signed, the Dominican Republic was amended to the original agreement title.
( It includes Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua)
-trade grew 18%
-US exported 24 billion of goods and services in 2010
World Bank
Offers low- interest loans to developing nations. Originally, the purpose of the loans was to help these nation build infrastructure such as roads, power plants schools, drainage projects and hospitals. Now it offers lans to helping developing nations relieve their debt burdens. It is also a major source of advice and information for developing nations.
International Monetary Fund (IMF)
– to promote trade through financial cooperation and eliminate trade barriers in the process. The IMF makes short term loans to member nations that are unable to meet their budgetary expenses.
Group of Twenty (G-20)
-finance ministers and central bank governors was establish. in 1999 to bring together industrialized and developing economies to discuss key issues in the global economy, helps to support growth and development across the globe
Exporting
-is selling domestically produced products to buyers in other countries . When a company decides to enter the global market, exporting is usually the least complicated and least risky alternative.
Direct Foreign Investment
-active ownership of a foreign company or of overseas manufacturing or marketing facilities