MKC1: Fundamentals of Marketing and Business Communication

logistics
The physical flow of materials in the supply chain.
supply chain
All of the organizations that participate in the production, promotion, and delivery of a product or service from the producer to the end consumer.
exchanging
The act of transacting value between a buyer and a seller.
value era
From the 1990s to the present, some argue that firms moved into the value era, competing on the basis of value; others contend that the value era is simply an extension of the marketing era and is not a separate era.
service-dominant logic
An approach to business that recognizes that customers do not distinguish between the tangible and the intangible aspects of a good or service, but rather see a product in terms of its total value.
market oriented
The degree to which a company follows the marketing concept.
one-to-one era
From the 1990s to the present, the idea of competing by building relationships with customers one at a time and seeking to serve each customer’s needs individually.
exchange
The transaction of value, usually economic, between a buyer and seller.
selling orientation
A philosophy that products must be pushed through selling and advertising in order for a firm to compete successfully.
marketing plan
A document that is designed to communicate the marketing strategy for an offering. The purpose of the plan is to influence executives, suppliers, distributors, and other important stakeholders of the firm so they will invest money, time, and effort to ensure the plan is a success.
nonprofit marketing
Marketing activities conducted to meet the goals of nonprofit organizations.
creating
In marketing, a term that involves collaboration with suppliers and customers in order to generate offerings of value to customers.
offering
The entire bundle of a tangible good, intangible service, and price that composes what a company offers to customers.
communicating
In marketing, a broad term meaning describing the offering and its value to potential customers, as well as learning from customers.
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.”
delivering
In marketing, as in delivering value, a broad term that means getting the product to the consumer and making sure that the user gets the most out of the product and service.
sustainability
An example of social responsibility that involves engaging in practices that do not diminish the earth’s resources.
social marketing
Marketing conducted in an effort to achieve social change.
production era
A period beginning with the Industrial Revolution and concluding in the 1920s in which production-orientation thinking dominated the way in which firms competed.
selling era
A period running from the 1920s to until after World War II in which the selling orientation dominated the way firms competed.
marketing era
From 1950 to at least 1990 (see service-dominant logic era, value era, and one-to-one era), the dominant philosophy among businesses is the marketing concept.
social responsibility
The idea that companies should manage their businesses not just to earn profits but to advance the well-being of society.
value
Total sum of benefits received that meet a buyer’s needs. See personal value equation.
service-dominant logic era
The period from 1990 to the present in which some believe that the philosophy of service-dominant logic dominates the way firms compete.
marketing concept
A philosophy underlying all that marketers do, driven by satisfying customer wants and needs.
production orientation
A belief that the way to compete is a function of product innovation and reducing production costs, as good products appropriately priced sell themselves.
personal value equation
The net benefit a consumer receives from a product less the price paid for it and the hassle or effort expended to acquire it.

In other words…

Benefits – (price + hassle) = value

contract manufacturing
When companies hire manufacturers to produce their products in another country.
strategic planning process
A process that helps an organization allocate its resources under different conditions to accomplish its objectives, deliver value, and be competitive in a market-driven economy.
value proposition
A statement that summarizes the key benefits or value for target customers. It explains why customers should buy a product, why stakeholders should donate, or why prospective employees may want to work for an organization.
franchising
Granting an independent operator the right to use your company’s business model, techniques, and trademarks for a fee.
export
Sell products to buyers in foreign markets.
General Electric (GE) approach
A portfolio planning approach that examines a business’s strengths and the attractiveness of industries.
portfolio
A group of business units owned by a single firm.
joint venture
An entity that is created when two parties agree to share their profits, losses, and control with one another in an economic activity they jointly undertake.
product development strategy
Creating new products or services for existing markets.
corporate level plans
Plans developed for the corporation as a whole take place at the corporate level.
portfolio planning approach
An approach to analyzing various businesses relative to one another.
situation analysis
An assessment of an organization’s internal and external environments.
harvest
When a firm lowers investment in a product or business.
objectives
What organizations want to accomplish (the end results) in a given time frame.
direct investment
Owning a company or facility overseas.
green marketing
Marketing environmentally safe products and services in a way that is good for the environment.
target market
The group of customers toward which an organization directs its marketing efforts.
mystery shopper
A person who is paid to shop at a firm’s establishment or one of its competitors’ to observe the level of service, cleanliness of the facility, and so forth, and report his or her findings to the firm.
second-mover strategy
Corporate level strategy theorizing that closely observing the innovations of the first movers, and then improving on them can help an organization gain advantage in the marketplace.
business level plans
Plans developed for each strategic business unit typically have their own mission statement.
star
Business or offering with high growth and a high market share.
market penetration strategy
Selling more of existing products and services to existing customers.
cash cow
Business or offering with a large share of a shrinking market.
divest
When a firm drops or sells a product or business.
diversification strategy
Offering products that are unrelated to other existing products produced by the organization.
mission statement
Defines the purpose of the organization and answers the question of how a company defines its business.
first-mover strategy
Corporate level strategy theorizing that being the first organization to offer a product in the marketplace will be the long-term market leader.
license
Sell the right to use some aspect of the production process, trademark, or patent to individuals in foreign markets.
SWOT analysis
An acronym for strengths, weaknesses, opportunities, and threats, the SWOT analysis is a tool that frames the situational analysis.
Boston Consulting Group (BCG) matrix
A portfolio planning approach that examines strategic business units based on their relative market shares and growth rates. Businesses are classified as stars, cash cows, question marks (problem children), or dogs.
dog
Business or offering with low growth and a low market share.
question marks or problem children
Businesses or offerings with a low share of a high-growth market.
market development strategy
Selling existing products or services to new customers. Foreign markets often present opportunities for organizations to expand. Exporting, licensing, franchising, joint ventures, and direct investment are methods that companies use to enter international markets.
strategies
Actions (means) taken to accomplish objectives.
strategic business unit (SBU)
Businesses or product lines within an organization that have their own competitors, customers, and profit centers.
What are the four components of the marketing mix?
Promotion, Product, Placement, Price
What kinds of decisions does Product strategy include?
Deciding what the product will look like and do or what service we will offer.
What kinds of decisions does Price strategy include?
Deciding how much to sell the product for taking into account how much each unit cost to make and what our competitors are selling the same product for.
What kinds of decisions does Place strategy include?
Deciding where the business will reside and how the product will get to the business so it can get to the customer.
What kinds of decisions does Promotion strategy include?
Deciding how we will educate the public about our offering.
Describe each of the four eras/ orientations in the history of marketing:
a) Production era/orientation
From the Industrial Revolution to the 1920s, firms compete using the production orientation. Believing that if they get production cost down and price the product appropriately then it will sell itself.

b) Sales era/orientation
From the 1920s until WW2, firms compete using the selling orientation. Believing that a product can be sold through advertising and selling.

c) Marketing era/orientation
From the 1950s to the 1990s, firms compete by the marketing orientation. Believing that to sell a product you need to completely satisfy the customer.

d) Relationship era/orientation.
From the 1990s to the present, firms complete by getting to know their customers one-by-one, building relationship and satisfying their needs.

What company attitude characterizes each of the eras?
Production era – A good product sells itself.
Sales – Creative advertising and selling will overcome consumer’s resistance and persuade them to buy.
Marketing era – Find a need and fill it.
Relationship era – Long term relationship leads to success.
What is marketing myopia
Marketing myopia is when businesses focus on selling products instead of servicing the customer’s needs. If you serve the customer needs you will make more money.
Why is interactive marketing an important tool for marketers?
Interactive marketing is an important tool for marketers because it allows them to more personally advertise targeted messages, which increases the likelihood that a sale will be made.
What is the difference between strategic and tactical planning?
Strategic planning is the long-term goals; tactical planning is the short-term plan on how you’re going to accomplish your strategic plans. Tactical planning is more the step-by-step on how something is going to get done and in what timeframe.
What is the difference between a business plan and a marketing plan?
A business plan outlines the businesses goals and how they will be achieved. A marketing plan outlines the strategy for an offering and gives direction to a marketing group.
What is the purpose of a marketing plan?
Its goal is to influence executives into spending money, time and resources into seeing its success.
What are the two elements of every marketing strategy?
The two elements of every marketing strategy is product strategy and marketing strategy.
How would you describe first-mover strategy?
The strategy of the first-mover is to be the innovator, creating a market where there is none and gaining the entire market share.
What are the advantages and disadvantages of being a first mover?
Advantages: You are an innovator; you gain all the market share and profit
Disadvantages: You have no template to go by, you have to make everything up as you go which can cause costly mistakes.
How would you describe second-mover strategy?
Watching what the first mover is doing, improving upon it and then trying to take some or all of the first mover’s market share.
What are the advantages and disadvantages of being a second mover?
You can learn from the costly mistakes of the first-mover, improve upon them and steal market share.