Marketing Mid Term Chapter 1-8

Marketing
The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
Marketing Concept
The idea that the social and economic justification for an organization’s existence is the satisfaction of customer want and needs while meeting organizational objectives.
Relationship Marketing
A strategy that focuses on keeping and improving relationships with current customers.
What are the five conditions that must be satisfied for an exchange to take place?
1. There must be at least two parties
2. Each party has something that might be of value to the other party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the exchange offer.
5. Each party believes it’s appropriate or desirable to deal with the other party.
What are the FOUR marketing management philosophies and define key aspects of each?
1. Product Orientation – focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace.
2. Sales Orientation – based on the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits.
3. Market Orientation – based on the belief that firms exist to meet and satisfy the wants and needs of the consumer all while meeting economic and organizational objectives.
4. Societal Orientation – works to meet and satisfy consumer wants and needs but also strives to meet individuals’ and society’s long-term interests and concerns.
What are the key differences between the sales and marketing orientation
The key difference between the sales and marketing orientation include the organization’s focus – “inward looking” focus in sales-oriented firms focusing on selling what the organizations makes rather than making what the market wants, the firm’s business, those to whom the product is directed, the firm’s primary goal, and the tools used to achieve those goals.
Why is it important to study marketing?
It’s important to study marketing because it plays an important role in society, is tied to the most fundamental business objectives such as survival, profits, and growth, offers outstanding career opportunities, and affects your life every day.
Strategic Planning
The managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities
What are the elements of the marketing plan?
The elements of a marketing plan include a business mission, performing a situation or SWOT analysis, defining objectives, delineating a target market, and establishing components of the marketing mix.
Marketing myopia
Defining a business in terms of the goods and services rather than in terms of the benefits that customers seek.
Target Market
A defined group most likely to buy a firm’s product.
SWOT Analysis
Identifying the integral strengths and weaknesses and also examining external opportunities and threats.
Objectives
statement of what is to be accomplished through marketing activities.
Marketing Mix
– A unique blend of product, place, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.
4 P’s of Marketing
Product, place, promotion, and price, which together make up the marketing mix.
Competitive Advantage
The set of unique features of a company and its product that are perceived by the target market as significant and superior to the competition.
Environmental scanning
Collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan.
The external environment forces include?
The external environment forces include social, demographic, economic, technological, political/legal, and competitive.
Discuss strategies used to achieve a competitive advantage.
The three types of competitive advantages are cost competitive advantage, product/service differentiation, and niche strategies.
Marketing Strategy
The activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets.
Ethics
The moral principles or values that generally govern the conduct of an individual.
Corporate Social Responsibility
Business’s concern for society’s welfare.
Morals
The rules people develop as a result of the cultural values and norms.
Cause Related Marketing
The cooperative marketing efforts between a “for-profit” firm and a “nonprofit organization.”
Sustainability
The idea that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as opportunities to build profits and help the world at the same time.
Discuss the pyramid of corporate social responsibility (4 of them)
– Economic responsibilities which include being profitable, form the base of the pyramid.
– Legal responsibility which includes obeying the law and playing by the rules.
– Ethical responsibility, which includes being ethical, doing what is right, just, and fair, and avoiding harm. – Philanthropic responsibility, which includes being a good corporate citizen and contributing resources to the community and improving the quality of life.
Discuss arguments for Corporate Social Responsibility
Argument for CSR: It’s simply the right thing to do. If businesses aren’t responsible, the government will create new regulations and perhaps levy fines against corporations. Social responsibility can be a profitable undertaking.
. Discuss arguments against Corporate Social Responsibility
Argument against CSR: Businesses should focus on making profit and leave social/environmental problems to nonprofit organizations. Businesses are created to produce goods and services, and not to handle welfare activities. Being socially responsible might damage the company in the global marketplace
What is the relationship between the global economy and social responsibility?
Companies worldwide are placing high importance on social responsibility, so you will have difficulty doing business with other countries if you’re not socially responsible.
Federal Trade Commission
– A federal agency empowered to prevent persons or corporations from using unfair methods of competition in commerce.
Consumer Product Safety Commission
A federal agency established to protect the health and safety of consumers in and around their homes.
FDA
A federal agency charged with enforcing regulations against selling and distributing adulterated, misbranded, or hazardous food and drug products.
Multiculturalism
When all major ethnics group in an area – such as a city, county, or census tract – are roughly equally represented.
Explain the elements of the external marketing environment and explain how it affects a firm.
The external marketing environment consists of social, demographic, economic, technological, political and legal, and competitive variables. Marketers generally cannot control the elements of the external environment but rather must understand how it’s changing and the impact that change has on the target market. Then marketing managers can create a marketing mix to effectively meet the needs of target customers.
Discuss the demographic factors and their influence on the marketing mix.
The demographic factors that affect the marketing mix are population, age, ethnicity, race, and location,
Explain how the nature of competition is changing in America.
As the U.S population growth slows, global competition increases, cost rises, and available resources tighten, firms find that they must work harder to maintain their profits and market share regardless of the form of the competitive market
Discuss how technology has benefited marketers
External technology allows the firm to operate more efficiently or create a better product. It may allow for the creation of products that will render your existing products obsolete. Technology also serves as an effective weapon against inflation and recession.
Discuss the growing ethnic markets and the effect they have on marketing.
The growing ethnic markets provide companies with bottom line benefits, and diversity has become a priority for visionary leaders. Growing ethnic markets require business people to assess the social and cultural norms of different ethnic groups when developing their marketing plan.
. Discuss an example of how global innovation affects marketing
Innovation helps raise productivity and make the world a better place to live. Innovation pays off for creative organizations in the form of a higher average profit margin growth.
Consumer behavior
Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use.
Evoked set
(Consideration set) a group of brands, resulting from an information search, from which a buyer can choose.
Cognitive dissonance
Inner tension that a consumer experiences after recognizing an inconstancy between behavior and values or opinions.
Culture
The set of values, norms, attitudes, and other meaningful symbols that shape human behavior, and the artifacts of products, of that behavior as they are transmitted from one generation to the next.
Reference groups
A group in society that influences an individual’s purchasing behavior.
Maslow’s hierarchy of needs
A method of classifying human needs and motivations into five categories in ascending order of importance
Maslow’s hierarchy of needs: The five categories
1. Physiological – hunger, thirst
2. Safety – security, protection
3. Social – sense of belonging, love
4. Esteem – self-esteem, recognition, status
5. Self-Actualization – self-development, self-realization
What is the consumer decision-making process? What are the steps?
A five-step process used by consumers when buying goods or services.
(1) need recognition, (2) information search, (3) evaluation of alternatives, (4) purchase, and (5) post-purchase behavior.
Factors that affect the consumer decision-making process
The factors that affect the consumer decision making process are cultural factors, which include culture and values, subculture, and social class, social factors, which include reference groups, opinion leaders, and family, individual factors, which include gender, age/family life-cycle stage, personality, self-concept, and lifestyle, and physiological factors, which include perception, motivation, learning, belief and attitudes.
Three types of consumer buying decisions.
1. Routine Response Behavior
2. Limited Decision Making
3. Extensive Decision Making
Routine Response Behavior
which pertains to decision making exhibited by consumers buying frequently purchased, low-cost goods and services; requires little search and decision time. Example: Orange Juice
Limited Decision Making
requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category. Example: whitening toothpaste.
Extensive Decision Making
The most complex type of consumer decision making, used when buying an unfamiliar, expensive product or an infrequently bought item; requires use of several criteria for evaluation options and much time for seeking information. Ex: Car or Home
Market
People or organizations with needs or wants and the ability and willingness to buy.
Market segment
A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.
Market segmentation
The process of dividing a market into meaningful, relatively similar, and identifiable segments or groups.
Four basic criteria for market segmentation
Substantiality: Segment must be large enough to warrant developing and maintaining a special marketing mix.
2. Identifiability and measurability: Segments must be identifiable and their size measurable.
3. Accessibility: The firm must be able to reach members of targeted segments with customized marketing mixes.
4. Responsiveness: Unless one market segment responds to a marketing mix differently from other segments, that segment need not be treated separately.
The FIVE bases commonly used to segment consumer markets
Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
Benefit Segmentation
Usage Rate
Name and describe the bases for segmenting business markets
Company Characteristics: geographic location, type of company, company size, and product use.
Buying Processes: purchasing criteria such as price, quality, technical support, and service.
List the steps involved in segmenting markets
Select a market or product category for study.
2. Choose a basis or bases for segmenting the market.
3. Select segmentation descriptors.
4. Profile and analyze segments.
5. Select target markets.
6. Design and implement and maintain appropriate marketing mixes.
Concentrated targeting strategy
– A strategy used to select one segment of a market for targeting marketing efforts.
Niche
One segment of a market
Positioning
– Developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general.
Repositioning
Changing consumers’ perceptions of a brand in relation to competing brands.
Perceptual Map
A means of displaying or graphing in two or more dimensions, the location of products, brands, or groups of products in customers’ minds
Product differentiation
A positioning strategy that some firms use to distinguish their products from those of competitors.
Target market
A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
Family Life cycle
A series of stages determined by a combination of age, marital status, and the presence or absence of children.
Demographic segmentation
segmenting markets by age, gender, income, ethnic background, and family life cycle.
Psychographic segmentation
market segmentation on the basis of personality, values, lifestyles, and geodemographics.
Benefit segmentation
process of grouping customers into market segments according to the benefits they seek from the product.
. Geographic segmentation
segmenting markets by region of a country or the world, market size, marketing density, climate.
Usage rate segmentation
Dividing a market by the amount of product bought or consumed.
. What are the four criteria that are necessary to define a market?
(1) People or organizations with
(2) needs or wants and with
(3) the ability
(4) and the willingness to buy.
. Define market segmentation and discuss why market segmentation is important to the well-being of most companies.
Market segmentation is the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups. Market segmentation is important because it plays a key role in the marketing strategy of almost all successful organizations and is a powerful marketing tool for several reasons. Market segmentation helps marketers define customer needs and wants more precisely. It helps businesses create more accurate marketing objectives, improved resource allocation, and overall, better marketing results.
. Name the three targeting strategies.
Undifferentiated Targeting
Concentrated Targeting
Multisegment Targeting Strategy
Undifferentiated Targeting
: A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix.
Advantages: Potential savings on production/marketing costs
Disadvantages: Unimaginative product offerings.
Concentrated Targeting
A strategy used to select one segment of a market for targeting market efforts.
Advantages: Concentration of resources.
Disadvantage: Segments to small, or changing.
Multisegment Targeting Strategy
A strategy that chooses two or more well-defined marketing segments and develops a district marketing mix for each.
Advantages: Greater financial success
Disadvantages: High Cost.
3. Name the four major categories of business customers. (Pg. 237-239
Producers
Re-Sellers
Governments
Institutions
What is business marketing?
The marketing of goods and services to individuals and organizations for purposes other than personal consumption.
What is the key characteristic distinguishing
business products from consumer products?
Intended use, not physical characteristics