MKT 300 Exam 1 Practice

Marketing
organizational function and a collection of processes designed to plan for, create, communicate and deliver value to customers and to build effective customer relationships in ways that benefit the organization and it’s stakeholders.
Exchange
– At least 2 parties
– Something of value
– Communication and Delivery
– Freedom to accept or reject
– Desire to deal with other party
Marketing Mix
Product, Price, Promotion, Placement
Consumer
End user of product
Customer
Who buys the product
If I BUY a gift card I am the
CUSTOMER
If I give the gift card to my friend to use he is the
CONSUMER
Demographics
variables that allow us to group people together based on a common/similar attribute (age, gender, income, etc)
Psychographics
Understand how people are different. Individual activities and interests.
Marketing Concept
A consumer-oriented philosophy that suggests that satisfaction of consumer needs provides the focus for product development and marketing strategy to enable the firm to meet it’s own goals
3 Main Marketing Concepts
Value, Customer Relationships, Customer Loyalty
We have grown from loving to be ______ to hating to be sold but _____.
SOLD, LOVING TO BUY
Marketing Management Philosophies
Production, Sales, Market, Societal
Production Philosophy
Focus on efficiency of internal operations.
Push sales rather than Pull.
Sales Philosophy
Focus on aggressive techniques for overcoming customer resistance.
Market Philosophy
Focus on satisfying customer needs and wants
Societal Philosophy
Focus on satisfying customer needs and wants while enhancing individual and societal well being.
Market Orientation
An organizational perspective; puts the philosophy of the marketing concept into practice.
Change is _____
Constant
Key issues in developing a competitive advantage include:
-Create customer Value
-Create customer Relationships
-Create customer Loyalty
Key to successful marketing:
STP
What does STP stand for?
Segmenting, Targeting, Positioning
Marketing Environment
A set of forces, some controllable and some uncontrollable, that influence the ability of a business to create value and attract and serve customers
Types of Marketing Environments
Internal, Middle, External
What happens when you move from the Internal levels of Marketing to the External levels of Marketing?
You begin to lose control of all the factors involved within these.
What are some of the factors that affect the Marketing Environment?
Social Changes, Competition, Consumer Characteristics
Porter’s Five Environmental Forces
Threat of new entrants
Threat of substitute products
Bargaining power of suppliers
Bargaining power of customers
Competitive rivalry within an industry
Segmenting
dividing market based on needs/benefits, demographics, lifestyles, behavioral measures, etc.
Why do we segment?
It allows markets to focus on specific/desired needs and wants and it allows companies to better allocate their resources.
Segmentation Criteria: the “labels” used to categorize different factors of the market(s). The five criteria of segmentation are:
Homogeneous
Heterogeneous
Substantial
Identifiable
Responsive
Homogeneous
members of a particular segment must be similar in their attitudes, behaviors, finances, etc.
Heterogeneous
groups must be different from other groups
Substantial
Groups must be of sufficient size to warrant special marketing efforts. Groups don’t have to necessarily be large in size, just big enough to provide/achieve desired outcomes
Identifiable
Marketers must be able to identify group members and non-group members and be able to measure how many group members there are
Responsive
react in a similar manner to market offerings
Most Common ways of Segmentation
Demographics, Psychographics, Behavioral, Needs
Demographic Segmentation
Gender, Age, Income, Family size, Family life cycle, Occupation, Ethnicity
Psychographic Segmentation
Values, Lifestyle, Personality, Activities, Interests, Opinons, AIO
Behavioral Segmentation
Dividing market by the amount of product bought or consumed using the 20-80 rule
Needs Segmentation
Grouping customers into market segments according to the benefits they seek from a product (i.e.: Toothpaste)
20-80 Rule
The best 20% of our customers generate 80% of the demands and sometimes 80% of the profits. It is critical to make sure the demands of these customers are served.
Targeting
selecting the most appropriate segments to market to
Target Market
a group of people or organizations for which a given organization designs, implements, and maintain a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
4 Targeting Strategies
Undifferentiated, Differentiated, Niche, Micro
Undifferentiated Targeting
marketing approach where the target market is viewed as a whole. No individual segments thus requires a single marketing mix
Differentiated Targeting
strategy that chooses two or more well defined market segments that develops a distinct marketing mix for each
Niche Targeting
a strategy used to select one segment of a market for targeting marketing efforts. Only a few targets such as sports cars.
Micro Targeting
one-to-one marketing. each individual is offered a unique and customized good/service.
Positioning
The placement of a product or service offering in the minds of a selected target market
Unique selling proposition
the distinct aspect that an organization offers in order to stand out from the competition
Why must companies select a position/image they want to target?
In order to achieve their own personal benefits/goals that also apply to the customers
Perceptual Mapping
a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds.
-similar to categorizing.
Repositining
changing a consumer’s perceptions of a brand in relation to competing brands
Weber’s Law
The stronger the initial stimulus, the greater the added intensity needed to perceive a difference
Perceptual Organization
grouping certain elements in an environment to link to a product that is recognized by the way the items are grouped.
Strategic Market Plan
the managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities
Strategic Market Plan Elements
Business Mission Statement
Objectives
Situation/SWOT Analysis
Implementation Evaluation Control
Business Mission Statement
What is the purpose of the organization?
Should be market-oriented and defined in terms of customer needs
Objectives
what is to be accomplished through marketing activities
SMART Objectives (Specific, Measurable, Achievable, Relevant, Time-Bound)
Situation/SWOT Analysis
Internal (Strengths, Weaknesses, Opportunities, Threats).
BCG Matrix
Composed of four quadrants:
STARS, Cash Cows, Question Marks, DOGS
STARS
High Market Shares, High Growth Rates
Cash Cows
High Market Shares, Low Growth Rates
Question Marks
Low Market Shares, High Growth Rates
DOGS
Low Market Shares, Low Growth Rates
Marketing Strategy
The activities of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets.
Strategic Focus Approaches
Aggressive, Diversification, Turnaround, Defensive
Aggressive Approach
many internal strengths, many external opportunities
Diversification Approach
many internal strengths, many external threats
Turnaround Approach
many internal weaknesses, many external opportunities
Defensive Approach
many internal weaknesses, many external threats
Competitive Advantage
Set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition
3 Categories of Competitive Advantage
Cost, Product/Service Differentiation, Niche
Competitive Advantage Positional Strategies
Market Leader, Market Challenger, Market Follower, Market Niche
Provide Examples of Market Leaders, Challengers, Followers, and Niches (respectively)
Coca Cola, Pepsi, Dr. Thunder, Cream Soda
Strategic Opportunity Matrix
Market Penetration, Market Development, Product Development, Diversification
Market Penetration
Push existing products to existing customers
Market Development
Push existing products to new customers
Product Development
Push new products to existing customers
Diversification
Push new products to new customers
Consolidation Strategies
Retrenchment, Pruning, Divesting
Retrenchment
Pulling back on the marketing efforts of a specific product
Pruning
Discontinuing a certain branch of a given company, but the company itself doesn’t stop
Divesting
completely abandoning the business of…
Balanced Scorecard
Considering Businesses from different perspectives
Customer, Financial, Internal Business, Innovation and Learning
Customer-Focused Strategic Planning
Instills a corporate culture that places customers at the top of the organizational hierarchy
Business Plan
Written document that defines the operational and financial objectives of a business over a particular time, and defines how the business plans to accomplish those objectives
Elements of the Business Plan
-Nature of the Business
-Organizational Objectives
-Decision-making process
Organizational Policies
Resource Utilization
Marketing Plan
document that includes an assessment of the marketing situation, marketing objectives, marketing strategy, and marketing initiatives
Consumer Culture
sum total of learned beliefs, values, and customs that serve to direct the consumer behavior of members of a particular society
Enculturation
taking on a new role in life (coming to college and doing to the college lifestyle)
Acculturation
complete emersion into a foreign culture (you going to outside influences)
Reverse Acculturation
exposed to outside influences without leaving your comfort zone (outside influences coming to you)
Corporate Social Responsibility
concern for how a company’s actions might affect the interest of others
Philanthropic Responsibility
Be a good citizen
Ethical Responsiblity
Do what is right
Legal Responsibility
Obey the Law
Economic Responsibility
Be profitable
Sustainability
the idea that socially responsible companies will outperform their peers by focusing on the worlds’ social problems and viewing them as opportunities to build profits and help the world at the same time
Ethical Development Levels
Preconventional, Conventional, Postconventional
Pre-conventional Morality
based on what will be punished or rewarded (more childlike)
Post-conventional Morality
Long-run perspective (is this the right way to do things in the long run)
Business-to-Business Marketing (B2B)
Products used to manufacture other products. Businesses that work together with other businesses to create a product
Evaluative Criteria for Business Buyers
Price, Service, Quality
Derived Demands
organizations buy products that are used to produce consumer products (if demand for soft drinks increases, more corn syrup will be demanded by organizations)
Inelastic Demands
demand of a product doesn’t change even if the price of the product goes up/down
Joint Demands
when multiple items are used together in final product. demand change for one product may change the demand for the others
Fluctuating Demands
when the demand for business products is more stable than consumer products (multiplier effect)
Straight Rebuy
company buys/orders the same materials for a product (no changes)
Modified Rebuy
changes in the original product are desired so a company may buy different materials for the same product (recycled materials)
New Task
first time and/or unique buy of goods and services for an organization
Global Marketing Standardization
production of uniform products that can be sold the same way all over the world
One product One message
using the same message on a product works worldwide (lays chips)
Message Adaptation
Changes are made to the message of a product to fit/adapt to the location where it’s being sold (kit kat)
Product Adaptation
Changes are made to the product to meet location needs/wants in order for it to be effective (McDonalds; same message but a slight difference in product across the world)
Product Invention
Completely changing the message and the product so that it fits with the cultural differences of where it’s being sold. (foster’s beer, represents Australian beer in AMERICA but NOT in Australia)
Licensing
Legally allow the use manufacturing, patents, for a fee. Logos on shirts produced by other companies for a fee ( sparky logo)
Contract Manufacturing
A company and a manufacturer sign an agreement where the manufacturer makes the product, without a fee, sells them to the company with the demand and now it’s up to that company to sell the product.
Joint Ventures
domestic companies join another company to create a new entity
Direct Investment
take active ownership of a foreign company/manufacturing facility on foreign soil
Consumer Behavior
The Dynamic interaction of affect and cognition, behavior, and the environment in which human beings conduct the exchange aspects (product and service purchases) of their lives

Thinking, Feeling, Doing

Consumer Behavior (simple definition)
How consumers purchase, use, and dispose of purchased goods and services
5 Step Consumer Decision-Making Process
Need Recognition
Information Search
Evaluation of Alternatives
Purchase
Post-purchase Behavior
Conjunctive Rule
Product/Service must meet ALL minimum thresholds for it to become acceptable for “purchase”
Multi-Attribute Rule
Weighted total derived by multiplying importance rating by your evaluation
Lexicographic Rule
Ranking attributes in order of importance and choosing the product/service that is the BEST on the most important attribute assigned
Factors Influencing Purchases
Social, Personal, Psychological, Situational
Reference Groups
Direct and Indirect
Direct Reference Groups
Groups that may shape decisions and you ARE a member of.
Primary and Secondary Groups
Indirect Reference Groups
Groups that may shape decisions and you ARE NOT part of.
Aspirational and Non-Aspirational
Personality
Internal characteristics
Lifestyle
External characteristics
Dogmatism
open/closed mindedness
Selective Exposure
Consumer notices certain stimuli and ignores others
Selective Distortion
Consumer changes or distorts information that conflicts with feelings of beliefs
Selective Retention
Consumer remembers only that information that supports personal beliefs
Consumer Beliefs
Represent the knowledge a consumer has about objects, their attributes, and their benefits provided
Attitudes
consistent response toward an object
Cognitive
refers to thoughts
Affective
refers to feelings
Conative
refers to our actions
Aact
Attitude towards the act
Aact =
sum of Bi x Ei (beliefs x truths/opinions)
SN
Subjective Norms
SN =
sum of NBj x MCj (what others believe x my level of compliance/influence towards that belief)
TORA
a scale used to predict and influence behaviors among consumers/customers
Consumer Insight
perceived meanings of data collected from the study of consumer behavior
Marketing Reseach
acquisition and analysis of information used to identify and define marketing opportunities that connect consumers to marketers.
Primary Data
Information collected first-hand
Secondary Data
Information collected by someone else
Qualitative Research
Focus groups, observable data
Quantitative Research
Surveys, Experimentation, collectible data
Dichotomous
only two possible outcomes
Multiple Choice
closed-ended but providing more possible outcomes
Likert Scales
usually a 1-? scale
Brand Development Index (BDI)
( % of Brand to total US sales in market/ % of total US population in market) x 100
Category Development Index (CDI)
(% of product category total sales in market/ % of total US population in market) x 100
Brand
a brand is an identifying name, term, design, symbol or any other feature that identifies one marketer’s product as distinct from those of other marketers
Marketing is all about
Creating Exchanges, Identity, Connections, Relationships, Solving Customer Problems
Brands represent ______
Solutions
Brand Elements
Names, Slogans, Websites, Logos, Color Schemes
Brand Equity
marketing and financial value associated with a brand’s strength. How much a brand is worth.
Benefit of Brand Equity to Consumers
Search Cost Reducer, Signal of Quality, Risk Reducer, Symbolic Deivce
Benefits of Brand Equity to Companies
Source of Competitive Advantage, Predictability and security of Demand, Barriers to Entry, Financial Returns
Marketing vs. Branding
Marketing creates, communicates, and delivers the product while Branding helps instill the value of the product into the customers’ minds for future reference.
Brand Image
salient and feeling-related associations
Packaging
Effective Packaging offers protection, economy, safety, and convenience
Labeling
used for identification, promotional, and informational and legal purposes