Making goods or performing services.
the extent to which a firm fulfills a customers needs, desires, and expectations.
the performance of activities that seek to accomplish an organizations objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client.
pure subsistence economy
when each family unit produces everything it consumes.
a social process that directs an 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.
economies of scale
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.
looking for and evaluating goods and services.
involves promoting the product.
movement of goods from one place to another.
holding goods until customers need them.
standardization and grading
involves sorting products according to size and quantity.
provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products.
involves bearing the uncertainties that are part of the marketing process. A firm can never be sure that customers will want to buy its products. products can also be damaged or stolen, or outdated.
the development and spread of new ideas, goods, and services. As firms offer new and better ways of satisfying consumer needs, customers have have more choices for products, and this fosters competition for consumers’ money.
market information function
involves the collection, analysis, and distribution of all information needed to plan, carry out, and control marketing activities, wether in the firms own neighborhood or in a market overseas.
someone who specializes in trade rather than production- plays a roll in the exchange process.
firms that facilitate or provide one or more of the marketing functions other than buying or selling.
refers to the change of individuals or organizations- and activities that facilitate these exchanges- based on applications of information technology.
the way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in the society.
government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. These decisions are usually part of a government plan, so command economies are also called “planned” economies.
market directed economy
the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. In a pure market directed economy, consumers make society’s production decisions when they make their choices in the market place.
simple trade era
a time when families traded or sold their “surplus” output to local distributors. These specialists resold the goods to other consumers or other distributors.
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.
is a time when a company emphasizes selling because of increased competition.
marketing department era
is 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 firms activities.
marketing company era
is 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.
means that an organization aims all of its efforts at satisfying its customers- at a profit.
making whatever products are easy to produce and then trying to sell them. They think of customers existing to buy the firms output rather than of firms existing to serve customers and- more broadly- the needs of society.
means trying to carry out the marketing concept. Instead of just trying to get customers to buy what the firm has produced, a market-oriented firm tries to offer customers what they need.
three basic ideas are included in the definition of marketing concept:
1. customer satisfaction 2. a total company effort 3. profit- not just sales- as an objective.
measures an organizations economic, social, and environmental outcomes- as a measure of long-term success.
the difference between the benefits a customer sees from a market offering and the cost obtaining those benefits.
what is “good” for some firms and consumers may not be good for society as a whole.
a firms obligation to improve its positive effects on society and reduce its negative effects.
the moral standards that guide marketing decisions and actions.
marketing managing process
the process of 1. planning marketing activities 2. directing the implementation of the plans, and 3. controlling these plans.
strategic (management) planning
the managerial process of developing and maintaining a match between an organizations resources and its market opportunities. This is a top-management job. It includes planning not only for marketing but also for production, finance, human resources, and other areas.
specifies a target market and a related marketing mix. It is a big picture of what a firm will do in some market.
a big picture of what a firm will do in some market. Two interrelated parts are needed:
1. A target market- a fairly homogeneous (similar) group of customers to whom a company wishes to appeal. 2. A marketing mix- The controllable variables the company puts together to satisfy the target group.
A target market
A fairly homogeneous (similar) group of customers to whom a company wishes to appeal.
A marketing mix
The controllable variables the company puts together to satisfy the target group.
says that a marketing mix is tailored to fit some specific target customers.
that typical production-oriented approach- vaguely aims at “everyone” with the same marketing mix.
channel of distribution
is any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer.
The four P’s
Product, place, promotion, price
product- of the four p’s
physical good, service, features, benefits, quality level, accessories, installation, instructions, warranty, product lines, packaging, branding.
place- of the four p’s
objectives, channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, recruiting intermediaries, managing channels.
promotion- of the four p’s
objectives, promotion blend, salespeople- kind, number, selection, training, motivation; advertising- targets, kinds of ads, media type, copy thrust, prepared by whom; publicity, sales promotion.
price- of the four p’s
objectives, flexibility, level over the product cycle, geographic terms, discounts, allowances.
involves direct spoken communication between sellers and potential customers. personal selling may happen face-to-face, over the telephone, or even via teleconference over the internet. Sometimes personal attention os required after the sale.
a personal communication between a seller and a customer who wants the seller to resolve a problem with the purchase- is often a key to building repeat business. Individual attention comes at a price; personal attention and customer service can be very expensive.
is communicating with large numbers of customers at the same time.
is mass selling main form, and is any paid form of non-personal presentation of ideas, goods, or services by an individual sponsor. Advertising may occur in newspapers, on television, or over the internet, among other places.
any unpaid form of non-personal presentation of ideas, goods, or services- includes getting favorable coverage in newspaper stories or on television. Publicity also involves creating web pages where a firm can tell interested customers more about its product. The web page could be part of a social media tool like Facebook, Youtube, or pinterest.
refers to those promotion activities- other than advertising, publicity, and personal selling- that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve the use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars.
is a written statement of a marketing strategy and the time-related details for carrying out the strategy. It should spell out in full detail : 1. what marketing mix will be offered, to whom( that is, the target market) , and for how long; 2. what company resources (shown as costs) will be needed at what rate (month by month perhaps); and 3. what results are expected (sales and profits perhaps monthly or quarterly, customer satisfaction levels, and the like.) The plan should also include some control procedures – so that whoever is to carry out the plan will know if things are going wrong. This might be something as simple as comparing actual sales against expected sales- with a warning flag to be raised whenever total sales fall below a certain level.
putting marketing plans into operation. Strategies work out as planned only when they are properly implemented.
short-run decisions to help implement strategies – may be needed.
blends all of the firms marketing plans into one “big” plan.
customer lifetime value
or total stream of purchases that a customer could contribute to the company over the length of the relationship.
is the expected earnings stream (profitability) of a firms current and prospective customers over some period of time.
opportunities that help innovators develop hard to copy marketing strategies that will be very profitable for a long time.
means that a firm has a marketing mix that the target market sees as better than a competitors mix.
which identifies and lists the firms strengths, weaknesses, opportunities, and threats. The name S.W.O.T is simply an abbreviation for the first letters in the words strengths, weaknesses, opportunities, and threats. Strengths and weaknesses come from assessing the company resources and capabilities. For example, a local farmers market might have a great reputation in its community (strength) but have limited financial resources (weakness)
means that the marketing mix is distinct from what is available from the competitor.
means trying to increase sales of a firm’s present products in its present markets-probably through a more aggressive marketing mix.
means offering new or improved products for present markets. By knowing the present market’s needs, a firm may see new ways to satisfy customers.
means offering new or improved products for present markets.
means moving into totally different lines of business- perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system.
affects the number and types of competitors the marketing manager faces and how they may behave.
sustainable competitive advantage
a marketing mix that customers see as better than a competitor’s mix and cannot be quickly or easily copied.
an organized approach for evaluating the strengths and weaknesses of current or potential competitor’s marketing strategies.
who are their closest competitors. Rivals offering similar products are usually easy to identify- ask customers what other brands they considered.
an organized table that compares the strengths and weaknesses of a company with those of its competitive rivals.
refers to the macro-economic factors, including national income, economic growth, and inflation, that affect patterns of consumer and business spending.
is the application of science t convert an economy’s resources to output. Technology affects marketing in two basic ways; it creates opportunities for new products and for new processes (ways of doing things).
North America Free Trade Agreement( NAFTA)
lays out a plan to reshape the rules of trade among the United States, Canada, and Mexico. NAFTA basically enlarges the free-trade pact that had already knocked down most barriers to U.S- Canada trade and eliminated most such barriers with Mexico. It also established a forum for resolving trade disputes.
cultural and social environment
affects how and why people live and behave as they do- which affects customer buying behavior and eventually the economic, political, and legal environments. Many variables make up the cultural and social environment, some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; etc.
Gross Domestic Product (GDP)
the total market value of all goods and services provided in a country’s economy in a year provided by a countries residents and nonresidents of that country.
Gross National Income (GNI)
Is a measure that is similar to GDP, but GNI does not include income earned by foreigners who own resources in that nation.
(people over 65)
those born between 1946 and 1964.
Sometimes called gen x, refers to those born from 1978 to 1994.
sometimes called millennials, refers to those born from 1978 to 1994.
refers to those born since 1995.
aim at one or more homogeneous segments and try to develop a different marketing mix for each segment.
homogeneous shopping products
shopping products the customer sees as basically the same and wants the lowest price
heterogenous shopping products
shopping products the customer sees as different and wants to inspect for quality and suitability.
which segment to go after
design service to meet segment need, create a mix leads to competitive advantage
the process of planning marketing activities, directing the implementation of the plans, and controlling these plans.
(monopolistic competition) a market situation that develops when a market has 1. different (heterogeneous) products, and 2. sellers who feel they do have some competition in this market.
a special market situation that develops when a market has 1. essentially homogeneous products, 2. relatively few sellers, and 3. fairly inelastic industry demand curves
a market situation that develops when a market has 1. homogeneous (similar) products 2. many buyers and sellers who have full knowledge of the market, and 3. ease of entry for buyers and sellers.
the controllable variables that the company puts together to satisfy a target group.
DEFINITION OF ‘MARKET SEGMENT’
A group of people that share one or more characteristics. Each market segment is unique and marketing managers decide on various criteria to create their target market(s). They may approach each segment differently, after fully understanding the needs, lifestyles, demographics and personality of the target. To meet the most basic criteria of a market segment, three characteristics must be present:
Homogeneity (common needs within segment)
Distinction (unique from other groups)
Reaction (similar response to market)
INVESTOPEDIA EXPLAINS ‘MARKET SEGMENT’
Examples of common characteristics are: interests, lifestyle, age, gender, etc. Common types of market segmentation include: geographic, demographic, psychographic and behavioral.
Marketing Information system- A system that analyzes and assesses marketing information, gathered continuously from sources inside and outside an organization. Timely marketing information provides basis for decisions such as product development or improvement, pricing, packaging, distribution, media selection, and promotion. See also market information system.
Customer relationship management-s a system for managing a company’s interactions with current and future customers. It often involves using technology to organize, automate and synchronize sales, marketing, customer service, and technical support.
Enterprise resource planning- Accounting oriented, relational database based, multi-module but integrated, software system for identifying and planning the resource needs of an enterprise. ERP provides one user-interface for the entire organization to manage product planning, materials and parts purchasing, inventory control, distribution and logistics, production scheduling, capacity utilization, order tracking, as well as planning for finance and human resources. It is an extension of the manufacturing resource planning (MRP-II). Also called enterprise requirement planning.
decision support system-Computer system designed to provide assistance in determining and evaluating alternative courses of action. A DSS (1) acquires data from the mass of routine transactions of a firm, (2) analyzes it with advanced statistical techniques to extract meaningful information, and (3) narrows down the range of choices by applying rules based on decision theory. Its objective is facilitation of ‘what if’ analysis and not replacement of a manager’s judgment.
Massive database (typically housed on a cluster of servers, or a mini or mainframe computer) serving as a centralized repository of all data generated by all departments and units of a large organization. Advanced data mining software is required to extract meaningful information from a data warehouse. The term was coined by the US consultant W. H. Inmon.
data sets too large and complex to work with typical database management tools.
our eyes and minds seek out and notice only information that interests us.
people remember only what they want to remember.
multiple buying influence
means that several people- perhaps even top management- play a part in making a purchase decision.
perhaps production line workers or their supervisors
perhaps engineering or R&D people(research and development) who help write specifications or supply information for evaluating alternatives.
R&D (research and development)
Systematic activity combining both basic and applied research, and aimed at discovering solutions to problems or creating new goods and knowledge. R&D may result in ownership of intellectual property such as patents. In accounting for R&D costs, the development costs may be carried forward but the basic and applied research costs are often written-off as incurred.
The purchasing managers who have the responsibility for working with suppliers and arranging the terms of the sale
the people in the organization who have the power to select or approve the supplier- often a purchasing manager but perhaps top management for larger purchases.
people who control the flow of information within the organization. Gatekeepers might include purchasing managers, receptionists, secretaries, research assistants, book keepers, and many more.
government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why.