Principles of Marketing – Chapter 1 & 2

The process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stake holders in a dynamic environment
Marketing
A specific group of customers on whom an organization focuses its marketing efforts
Target Market
Four marketing activities that a firm can control to meet the needs of customers within its target market
Marketing Mix
What are the four marketing activities of a marketing mix?
Product, pricing, distribution, and promotion
What can a product be?
A good, service, or idea
Marketing managers need to make products available in quantities desired to as many target market customers as possible
Distribution Variable
What three costs do distribution variables minimize?
Inventory, transportation, storage
Relates to activities used to inform individuals or groups about the organization and its products
Promotion Variable
A critical component of the marketing mix as customers are concerned about value obtained in an exchange
Price
Relates to a decision and actions associated with establishing pricing objectives and policies and determining product prices
Pricing Variable
What can Promotion Variables do?
Increase public awareness, educate customers, and sustain interest in a product
A customer’s subjective assessment of benefits relative to costs in determining the worth of a product
Value
Anything a buyer receives in an exchange
Customer benefit
Anything a buyer must give up to obtain the benefits the product provides including cost, time, effort and risk
Customer costs
What can the marketing mix enhance?
Perceptions of value
Provisions or transfer of goods, services, or ideas in return for something of value
Exchange
Rules of an exchange:
Need two or more parties, provide a benefit or satisfaction for both parties, party must have confidence in the promise of the “something of value,” build trust
Constitutes who have a “stake” or claim in some aspect of a company’s products, operations, markets, industry, and outcomes
Stakeholders
What does a marketing environment include?
Competitive, economic, political, legal and regulatory, technological, and socio-cultural
What is the lifeline of the business?
Customer relationships
Using information about customers to create marketing strategies that develop and sustain desirable customer relationships
Customer relationship management
What does Customer Lifetime Value emphasis?
Changes from share of market to share of customer
The process of planning, implementing, and evaluating the performance of marketing activities and strategies , both effectively and efficiently
Strategic Marketing Management
The process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, and marketing strategy
Strategic Planning
A long-term view, or vision, of what the organization wants to become
Mission Statement
What two questions does a Mission Statement involve?
Who are our customers? What is our core competency?
Determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to reach the organizations goal
Corporate Strategy
What issues are corporate strategy planners concerned with?
Corporate culture, competition, differentiation, diversification, interrelationships among business units, environmental and social issues
What should be consistent with corporate strategies?
Business-Unit strategies
A division, product line, or other profit center within the parent company
Strategic Business Unit
A group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase those products
Market
The percentage of a market that actually buys a specific product from a particular company is referred to
Market Share
Things a company does extremely well, which sometimes gives it an advantage over the competition
Core competencies
A combination of circumstances and timing that permits an organization to take action to reach a particular target market
Market opportunity
Temporary periods of optimal fit between key requirements of a market and the particular capabilities of a company competing in a market
Strategic windows
The place where opportunities, strategic windows, and core competencies meet
Competitive Advantage
What does an organizations long health depends upon?
Having some products that generate cash and others that use cash to support growth
What is most likely the most important planning decision of companies?
Choosing a target market