UBUS Marketing Exam 1

Marketing Mix (Four Ps)
a unique blend of products, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market. 5th P is People – employees of the firm
Marketers can manage the _____ of a firm in order to meet _____ _____ _____ goals and objectives.
elements; Strategic Business Unit
Sustainable Competitive advantage
an advantage that cannot be copied by the competition
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
Exchange
people giving up something in order to receive something else they would rather have
Conditions for exchange
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 is appropriate or desirable to deal with the other party
Empowerment
delegation of authority to solve customers’ problems quickly – usually by the first person the customer notifies regarding a problem
Relationship Marketing
a strategy that focuses on keeping and improving relationships with current customers
Customer Value
the relationship between benefits and the sacrifice necessary to obtain those benefits
Customer Satisfaction
customers’ evaluation of a good or service in terms off whether it has met their needs and expectations
Teamwork
collaborative efforts of people to accomplish common objectives
Ansoff’s Strategic Opportunity Matrix matches products with markets. Firms can explore these four options:
1. Market Penetration
2. Market Development
3. Product Development
4. Diversification
Market Penetration
a marketing strategy that tries to increase market share among existing customers. Present Product/Present Market
Market Development
a marketing strategy that entails attracting new customers to existing products. Present Product/New Market
Product Development
marketing strategy that entails the creation of new products for present markets. New Product/Present Market
Diversification
a strategy of increasing sales by introducing new products into new markets. New Product/New Market
Marketing Objective
a statement of what is to be accomplished through marketing activities
Elements of a good Marketing Objective
1. Realistic
2. Measurable
3. Time Specific
4. Compared to a Benchmark
Market
people or organizations with needs or wants and the ability and willingness to pay
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
The purpose of market segmentation is to enable the marketer to
tailor marketing mixes to meet the needs of one or more specific segments
To be successful, a segmentation scheme must produce segments that meet four basic criteria:
1. Sustainability
2. Identifiability and Measurability
3. Accessibility
4. Responsiveness
Segment Bases (Variables)
characteristics of individuals, groups, or organizations
Geographic Segmentation
segmenting markets by region of a country or the world, market size, market density, or climate
Demographic Segmentation
segmenting markets by age, gender, income, ethnic background, and family life cycle
Family Life Cycle
a series of stages determined by a combination of age, marital status, and the presence or absence of children
Psychographic Segmentation
segmenting markets on the basis of personality, motives, lifestyles, and geodemographics
Geodemographic Segmentation
segmenting potential customers into neighborhood lifestyle categories
Benefit Segmentation
the process of grouping customers into market segments according to the benefits they seek from the product
User-Rate Segmentation
dividing a market by the amount of product bought or consumed
80/20 Principle
a principle holding that 20 percent of all customers generate 80 percent of the demand
Satisficers
business customers who place an order with the first familiar supplier to satisfy product and delivery requirements
Optimizers
business customers who consider numerous suppliers (both familiar and unfamiliar), solicit bids, and study all proposals carefully before selecting one
Steps in Segmenting a Market
1. 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 markets
6. Design, implement, and maintain appropriate marketing mixes
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 results
Undifferentiated Targeting Strategy
a marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix
Concentrated Targeting Strategy
a strategy used to select one segment of a market for targeting marketing efforts
Niche
one segment of a market
Multisegment Targeting Strategy
a strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each
Cannibalization
a situation that occurs when sales of a new product cut into sales of a firm;s existing products
Positioning
developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general
Position
the place a product, brand, or group of products occupies in the customers’ minds relative to competing offerings
Product Differentiation
a positioning strategy that some firms use to distinguish their products from those of competitors
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
Repositioning
changing customers’ perceptions of a brand in relation to competing brands
Experience Curve
curve that shows costs declining at a predictable rate as experience with a product increases
Boston Consulting Group Model
used to determine the future cash contributions and cash requirements expected for each strategic business unit
Portfolio Matrix
a tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate
The Portfolio Matrix breaks SBUs into four categories:
1. Stars
2. Cash Cows
3. Problem Children
4. Dogs
Stars
in the portfolio matrix, a business unit that is a fast-growing market leader
Cash Cow
in the portfolio matrix, a business unit that generates more cash than it needs to maintain its market share
Problem Child (Question Mark)
in the portfolio matrix, a business unit that shows rapid growth but poor profit margin
Dog
in the portfolio matrix, a business unit that has low growth potential and a small market share
Marketing Concept
the idea that the social and economic justification for an organization’s existence is the satisfaction of customers wants and needs while meeting organizational objectives
The Marketing Concept includes the following:
1. Focusing on customer wants and needs so that the organization can distinguish its product(s) from the competitor’s offerings
2. Integrating all the organization’s activities, including production, to satisfy customer wants
3. Achieving long-term goals for the organization by satisfying customer wants and needs legally and responsibly
Market Orientation
a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer’s decision to purchase a product; it is synonymous with the marketing concept
Marketers interested in customer value:
1. Offer products that perform
2. Earn Trust
3. Avoid unrealistic pricing
4. Give the buyer facts
5. Offer organization-wide commitment in service and after-sales support
6. Cocreation
Planning
the process of anticipating future events and determining strategies to achieve organizational objectives in the future
Marketing Planning
designing activities relating to marketing objectives and the changing marketing environment
Marketing Plan
a written document that acts as a guidebook of marketing activities for the marketing manager
Elements of a Marketing Plan
1. Business Mission Statement
2. Situation, or SWOT, Analysis
3. Objectives
4. Marketing Strategy – Target Market Strategy – Marketing Mix – Product – Place – Promotion – Price – People
5. Implementation – Evaluation – Control
Mission Statement
a statement of the firm’s business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions
Marketing Myopia
defining a business in terms of goods and services rather than in terms of the benefits customers seek
SWOT Analysis
identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)
Environmental Scanning
collection and interpretation of information about forces, events, and relationships in events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan.

Part of SWOT Analysis

Competitive Advantage
a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition
Cost Competitive Advantage
being the low-cost competitor in an industry while maintaining satisfactory profit margin
Costs can be reduced in a variety of ways:
1. Experience Curves
2. Efficient Labor
3. No-frills Goods and Services
4. Government Subsidies
5. Product Design
6. Reengineering
7. Product Innovations
8. New Methods of Service Delivery
Product/Service Differentiation Competitive Advantage
the provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition
Niche Competitive Advantage
the advantage achieved when a firm seeks to target and effectively serve a small segment of the market
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
Market Opportunity Analysis (MOA)
the description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments
Implementation
the process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes the plan’s objectives
Evaluation
gauging the extent to which the marketing objectives have been achieved during the specified time period
Control
provides the mechanisms for evaluating marketing results in light of the plan’s objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines
Marketing Audit
a thorough, systematic, periodic evaluation of the objectives, strategies, structure and performance of the marketing organization
Four Characteristics of a Marketing Audit:
1. Comprehensive
2. Systemic
3. Independent
4. Periodic
Marketing
1. a philosophy 2. 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
Steps in Segmenting A Market:
1. 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 markets
6. Design, implement, and maintain appropriate marketing mixes
Dynamic Planning
intranet resident planning designed to be extremely flexible and emergent strategy oriented
Dynamic Planning is apt to use
Enterprise Weblog software
Static Planning
far less flexible and not as conductive to emergent strategies
A static plan is more apt to be
a written document sitting in a three-ring binder on a manager’s desk
Strategic Planning
the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities
Strategic planning creates and maintains
a fit between the organization’s resources and the evolving market opportunities
The goal of strategic planning is to
sustain and increase long-run profitability and growth
Strategic decisions require
long-term commitments of resources
Strategic errors can threaten a firm’s _____, but a good plan can help _____ and _____ the firm
survival; protect and grow
Strategic marketing management addresses two questions:
1. What is the organization’s main activity at a particular time?
2. How will it reach its goals?
Strategic Business Unit (SBUs)
a subgroup of a single business or collection of related business within the larger organization
Characteristics of Strategic Business Units (SBUs)
1. A distinct mission and specific target market
2. Control over its resources
3. Its own competitors
4. A single business or a collection of related businesses
5. Plans independent of other SBUs
Production Orientation focuses on
Internal capabilities of the firm

Field of Dreams orientation – “if you build it, they will come.”

Doesn’t consider if what is produced meets market needs

Sales Orientation focuses on
Aggressive sales techniques and belief that high sales result in high profits

Marketing = Selling Things and Collecting Money

Disregards market needs and consumer demand

Despite the quality of sales force, often cannot convince people to buy what is not needed or wanted

Market Orientation focuses on
Satisfying customers needs and wants while meeting objectives
Societal Orientation focuses on
Satisfying customers needs and wants whiles enhancing individual and societal well being