Principles of Marketing Exam 1 – Flashcards
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Process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return
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Marketing
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Human wants that are backed by buying power
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Demands
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3 Different kinds of Needs
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Physical (food, clothing, warmth, safety) Social (belonging and affection) Individual (Knowledge and self-expression)
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Some combo if products, services, info, or experiences offered to a market to satisfy a need or want (includes physical products, services, persons, places, orgs, info, and ideas)
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Market Offerings
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Mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products
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Marketing Myopia
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Act of obtaining a desired object from someone by offering something in return
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Exchange
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Set of all actual and potential buyers of a product or service
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Market
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Why is it important for marketers to set the right level of expectations?
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Expectations too low, satisfy but dont attract Expectations too high, buyers will be disappointed
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Art and science of choosing target markets and building profitable relationships with them
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Marketing management
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Customer segment that the company decides to go after
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Target Market
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Dividing the market into segments of customers
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Market Segmentation
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Idea that consumers will favor products that are available and highly affordable and that the org. should therefore focus on improving production and distribution efficiency
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Production Concept
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Idea that consumers will favor products that offer the most quality, performance, and features and that the org. should therefore devote its energy to making continuous product improvements
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Product Concept
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5 Alternative concepts under which organizations design and carry out their marketing strategies
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-Production -Product -Selling -Marketing -Societal Marketing concepts
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Idea that consumers will not buy enough of the firm's product unless it undertakes a large-scale selling and promo effort
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Selling Concept
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Philosophy that holds that achieving org. goals depends on knowing the needs and want of target markets and delivering the desired satisfactions better than competitors
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Marketing Concept
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idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long run interests, and society's long run interests
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Societal Marketing Concepts
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4 broad groups that make up the Marketing mix:
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-Product -Place -Price -Promotion
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Customers evaluation of the difference btwn all the benefits and all the costs of a marketing offer relative to those of competing offers
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Customer-percieved Value
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Type of relationship companies build. Ex: Nike creates this kind thru brand-building ads, PR, and its website
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Basic Relationships
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Type of relationship companies build. Ex: Nike sales reps work close with Sports Authority, Dicks, etc
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Full Partnerships
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Marketing relationships in which customers, empowered by today's new digital techs, interact w/ companies and w/ each other to shape their relationships w/ brands
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Customer Managed Relationships
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Brand exchanges created by consumers themselves - both invited and uninvited - by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers
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Consumer-generated Marketing
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Value of the entire stream of purchases that the customer would make over a lifetime of patronage
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Customer Lifetime Value
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Portion of the customer's purchasing that a company gets in its product categories
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Share of Customer
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Total combined customer lifetime values of all of the company's customers
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Customer Equity
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Low potential profitability and little projected loyalty
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Strangers
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Potentially profitability but not loyal
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Butterflies
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Both profitable and loyal
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True Friends
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Highly loyal but not very profitable
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Barnacles
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Customers expect companies to deliver value in a socially and environmentally responsible way
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Sustainable Marketing
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Process of developing and maintaining a strategic fit btwn the org.'s goals and capabilities and its changing marketing opportunities
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Strategic Planning
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Statement of the org.'s purpose - what it wants to accomplish in the larger environment
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Mission Statement
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Collection of businesses and products that make up the company
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Business Portfolio
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Process by which management evaluates the products and businesses that make up the company
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Portfolio Analysis
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Can be a company division, a product line w/i a division, or sometimes a single product or brand
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Strategic Business Unites (SBUs)
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Growth share matrix's 4 types of SBUs
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-Stars -Cash Cows -Question Marks -Dogs
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High growth, high share
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Stars
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Low growth, high share
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Cash Cows
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High growth, low share
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Question Marks
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Low growth, low share
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Dogs
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Company growth by increasing sales of current products to current market segments w/o changing the product
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Market Penetration
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Company growth by identifying and developing new market segments for current company products
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Market Development
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Series of internal departments that carry out value creating activities to design, produce, market, deliver and support a firm's products
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Value Chain
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Network made up of the company, its suppliers, its distributers, and ultimately its customers who partner with each other to improve the performance of the entire system
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Value Delivering Network
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Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers (Most important "P" thats not a "4 P")
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Positioning
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Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs
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Market Segmentation
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An overall analysis of the company. SWOT stands for:
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S - Strengths W - Weaknesses O - Opportunities T - Threats
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4 C's
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-Customer solution -Customer cost -Convenience -Communication
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Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives
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Marketing Implementation
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Measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved
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Marketing Control
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Net return from a marketing investment divided by the costs of the marketing investment
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marketing ROI
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Actors and forces outside marketing that affect marketing managment's ability to build and maintain successful relationships w/ target customers
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Marketing Environment
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Actors CLOSE to the company that affect its ability to serve its customers - the co, suppliers, marketing intermediaries, customer markets, competitors, and publics
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Microenvironment
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Larger societal forces that affect the microenvironment - demographic, econ, natural, tech, political, and cultural
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Macroenvironment
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Firms that help the company to promote, sell, and distribute its goods to final buyers
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Marketing Intermediaries
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Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. List the 7 types
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Public -Financial -Media -Gov -Citizen-Action -Local -General -Internal
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45 million people born btwn 1965 and 1976 in the "birth death" following the baby boom
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Generation X
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Economic factors that affect consumer purchasing power and spending patterns
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Economic Environment
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Natural resources that are needed as inputs by marketers or that are affected by marketing activities
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Natural Environment
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Looking for ways to offer today's more financially cautious buyers greater value
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Value Marketing
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Developing strategies and practices that create a world economy that the planet can support indefinitely
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Environmental Sustainability
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Forces that create new technologies, creating new product and market opportunities
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Technological Environment
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Laws, gov. agencies, and pressure groups that influence and limit various orgs. and individuals in a given society
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Political Environment
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Institutions and other forces that affect society's basic values, perceptions, preferences, and behaviors
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Cultural Environment
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Fresh understandings of customers and the marketplace derived from marketing info that becomes the basis for creating customer value and relationships
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Customer Insights
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People and procedures for assessing info needs, developing the needed info, and helping decision makers to use the info to generate and validate actionable customer and market insights
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Marketing Information System (MIS)
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3 ways Marketers can obtain the needed info
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-Internal data -Marketing intelligence -Marketing Research
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Electronic collections of consumer and market info obtained from data sources w/i the company network
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Internal Data
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Systematic collection and analysis of publicly available info about consumers, competitors, and developments in the marketing environment
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Competitive Marketing Intelligence
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Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an org.
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Marketing Research
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Marketing research to gather preliminary information that will help define problems and suggest hypothesis
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Exploratory Research
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Marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers
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Descriptive Research
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Marketing research to test hypothesis about cause-effect relationships
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Casual Research
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4 steps of market research process
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-Defining problem and objectives -Develop plan -Implement plan -Interpret and report
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Info that already exists somewhere thats collected for another purpose
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Secondary Data
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Info collected for the specifac purpose at hand
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Primary Data
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Gathering primary data by observing relevant people, actions, and situations
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Observational Research
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Form of obervational research involves sending trained observers to watch and interact w/ consumers in their "natural env."
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Ethnographic Research
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Gathering primary data by selecting matched groups of subjects, givin em diff. treatments, controlling related factors, and checking for differences in group responses
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Experimental Research
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Small group of consumers who interact directly and informally w/ product designers w/o a focus group moderator present
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Immersion Groups
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Segment of pop. selected for marketing research to represent the pop. as a whole
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Sample
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Managing detailed info about the individual customers and carefully managing customer touch points to maximize customer loyalty
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Customer Relationship Management
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Company-wide electronic data base of finely detailed customer info that needs to be sifted thru for gems
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Data Warehouse
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Buying behavior of final consumers - individuals and households that buy goods and services for personal consumption
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Consumer Buyer Behavior
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All the individuals and households that buy or acquire goods and services for personal consumption
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Consumer Market
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Group of ppl w/ shared value systems based on common life experiences and situations
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Subculture
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Person w/i a reference group who, bc of special skills, knowledge, personality, or other characteristics, exerts social influence on others
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Opinion Leader
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Need that is sufficiently pressing to direct the person to seek satisfaction of the need
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Motive (drive)
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4 major psychological factors that influence a person's buying choices:
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-Motivation -Perception -Learning -Beliefs/Attitudes
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3 Perceptual Processes:
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-Selective Attention -Selective Distortion -Selective Retention
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Person's consistently favourable or unfavourable evals, feelings, and tendencies twrd an object or idea
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Attitude
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Consumer buying behavior in situations characterized by high involvement and significant perceived diffs among brands
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Complex Buying Behavior
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Consumer buying behavior in situations characterized by high involvement but few perceived brand differences
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Dissonance-Reducing buying behavior
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Consumer buying behavior in situations characterized by low involvement and few significantly perceived brand differences
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Habitual Buying Behavior
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Consumer buying behavior in situations characterized by low involvement but significant perceived brand differences
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Variety Seeking Buying Behavior
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4 types of buying behavior:
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-Complex -Variety-Seeking -Dissonance-reducing -Habitual
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Buyer Decision process consists of 5 stages:
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-Need recognition -Info search -Eval. of alternatives -Purchase decision -Postpurchase behavior
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Buyer discomfort caused by postpurchase conflict
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Cognitive Dissonance
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5 stages in the process of adopting a new product:
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-Awareness - Interest - Evaluation -Trial -Adoption
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Buying behavior of orgs. that buy goods and services for use in the production of other products and servies that are sold, rented, or supplied to others
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Business Buyer Behavior
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Decision process by which business buyers determine which products and services their orgs. need to purchase and then find, evaluate, and choose among alt. suppliers and brands
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Business Buying Process
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Business demand that ultimately comes from (derives from) the demand for consumer goods
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Derived Demand
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Systematic development of ntwrks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others
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Supplier Development
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Biz. buying situation in which the buyer routinely reorders something w/o any modifications
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Straight Rebuy
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Biz. buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers
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Modified Rebuy
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Biz. buying situation in which the buyer purchases a product or service for the first time
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New Task
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3 major types of buying situations
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Straight Rebuy Modified Rebuy New Task
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Buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation
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Systems selling
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All the individuals and units that play a role in the purchase decision-making process
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Buying Center
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Members of the org. who will actually use the product
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Users
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People in an orgs. buying center who help define specifications and also provide info for evaluating alts.
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Influencers
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People in an orgs. buying center who make an actual purchase
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Buyers
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People in an orgs. buying center who have formal or informal power to select or approve the final suppliers
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Deciders
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People in an orgs. buying center who control the flow of info to others
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Gatekeepers
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8 Stages of the buying Process
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-Problem recognition -General need description -Product specification -Supplier search -Proposal solicitation -Supplier selection -Order-Routine specification -Performance review
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Stage of business buying process in which the buyer invites qualified suppliers to submit proposals
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Proposal Solicitation
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Stage of business buying process in which buyer writes the final order w/ chosen supplier, listing the tech specs, quantity needed, expected time of delivery, return policies, and warranties
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Order-Routine Specification
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Purchasing through electronic connections btwn buyers and sellers - usually online
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E-procurement
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Schools, hospitals, etc that provide goods/services to people in their care; low budget, captive audience
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Institutional Market
