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opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time.

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breakthrough opportunities

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actually making goods or performing services. Rather, they are part of a larger process—called marketing—that provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers

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production

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is the extent to which a firm fulfills a customer's needs, desires, and expectations.

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customer satisfaction

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the development and spread of new ideas, goods, and services. As firms offer new and better ways of satisfying consumer needs, customers have more choices among products and this fosters competition for consumers' money.

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innovation

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is the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. Let's look at this definition.

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Marketing

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when each family unit produces everything it consumes—there is no need to exchange goods and services and no marketing is involved. (Although each producer-consumer unit is totally self-sufficient in such a situation, the standard of living is typically relatively low.)

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pure subsistence economy

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means that a firm has a marketing mix that the target market sees as better than a competitor's mix. A competitive advantage may result from efforts in different areas of the firm—cost cutting in production, innovative R&D, more effective purchasing of needed components, or financing for a new distribution facility.

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Competitive advantage

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is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society.

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Macro-marketing

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which means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down.

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economies of scale

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are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. They must be performed in all macro-marketing systems. How these functions are performed—and by whom—may differ among nations and economic systems. But they are needed in any macro-marketing system. Let's take a closer look at them now.

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universal functions of marketing

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means looking for and evaluating goods and services.

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buying function

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involves promoting the product. It includes the use of personal selling, advertising, customer service, and other direct and mass selling methods. This is probably the most visible function of marketing.

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selling function

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means the movement of goods from one place to another

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transporting function

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involves holding goods until customers need them

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storing function

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involve sorting products according to size and quality. This makes buying and selling easier because it reduces the need for inspection and sampling

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Standardization and grading

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provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products.

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Financing

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involves bearing the uncertainties that are part of the marketing process. A firm can never be sure that customers will want to buy its products. Products can also be damaged, stolen, or outdated.

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. Risk taking

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involves the collection, analysis, and distribution of all the information needed to plan, carry out, and control marketing activities, whether in the firm's own neighborhood or in a market overseas.

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market information function

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someone who specializes in trade rather than production—plays a role in the exchange process

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intermediary

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—firms that facilitate or provide one or more of the marketing functions other than buying or selling. These collaborators include advertising agencies, marketing research firms, independent product-testing laboratories, Internet service providers, public warehouses, transporting firms, communications companies, and financial institutions (including banks).

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collaborators

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refers to exchanges between individuals or organizations—and activities that facilitate these exchanges—based on applications of information technology. Internet-based intermediaries—like Amazon.com and eBay.com—help cut the costs of many marketing functions. Other marketing specialists have popped up online: Search engines like Google facilitate information search, PayPal reduces consumer risks associated with paying for goods purchased online, and chat-based customer service firms help any company provide 24/7 customer support

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E-commerce

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the way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in the society

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economic system

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government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. These decisions are usually part of an overall government plan, so command economies are also called "planned" economies. It sounds good for a government to have a plan, but as a practical matter attempts by a government to dictate an economic plan often don't work out as intended.

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command economy

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the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. In a pure market-directed economy, consumers make a society's production decisions when they make their choices in the marketplace. They decide what is to be produced and by whom—through their dollar "votes."

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market-directed economy

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a time when families traded or sold their "surplus" output to local distributors. These specialists resold the goods to other consumers or other distributors. This was the early role of marketing—and it is still the focus of marketing in many of the less-developed areas of the world.

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simple trade era

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is a time when a company focuses on production of a few specific products—perhaps because few of these products are available in the market. "If we can make it, it will sell" is management thinking characteristic of the production era.

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production era

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is a time when a company emphasizes selling because of increased competition.

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sales era

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is a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm's activities.

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marketing department era

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is a time when, in addition to short-run marketing planning, marketing people develop long-range plans—sometimes five or more years ahead—and the whole company effort is guided by the marketing concept.

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marketing company era

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means that an organization aims all of its efforts at satisfying its customers—at a profit. The marketing concept is a simple but very important idea.

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marketing concept

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making whatever products are easy to produce and then trying to sell them. They think of customers existing to buy the firm's output rather than of firms existing to serve customers and—more broadly—the needs of society.

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production orientation

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means trying to carry out the marketing concept. Instead of just trying to get customers to buy what the firm has produced, a marketing-oriented firm tries to offer customers what they need. Three basic ideas are included in the definition of the marketing concept: (1) customer satisfaction, (2) a total company effort, and (3) profit—not just sales—as an objective. These ideas deserve more discussion.

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marketing orientation

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which measures an organization's economic, social, and environmental outcomes—as a measure of long-term success. Profit is the economic outcome. Social refers to how the company's business activities affect its employees and other people in the communities where it operates. The third bottom line takes into account environmental responsibility, usually seeking to at least not harm the natural environment. Together, these are sometimes referred to as measures of people, planet, and profit.11

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triple bottom line

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the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits.

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customer value

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What is "good" for some firms and consumers may not be good for society as a whole.

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micro-macro dilemma

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a firm's obligation to improve its positive effects on society and reduce its negative effects.

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social responsibility

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the moral standards that guide marketing decisions and actions. Each individual develops moral standards based on his or her own values. That helps explain why opinions about what is right or wrong often vary from one person to another, from one society to another, and among different groups within a society. It is sometimes difficult to say whose opinions are "correct."

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marketing ethics

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is the process of (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. Planning, implementation, and control are basic jobs of all managers—but here we will emphasize what they mean to marketing managers.

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marketing management process

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the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. This is a top-management job. It includes planning not only for marketing but also for production, finance, human resources, and other areas.

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strategic (management) planning

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specifies a target market and a related marketing mix. It is a big picture of what a firm will do in some market. Two interrelated parts are needed:target market and marketing mix

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marketing strategy

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a fairly homogeneous (similar) group of customers to whom a company wishes to appeal.

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target market

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the controllable variables the company puts together to satisfy this target group.

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marketing mix

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says that a marketing mix is tailored to fit some specific target customers. I

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Target marketing

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the typical production-oriented approach—vaguely aims at "everyone" with the same marketing mix. Mass marketing assumes that everyone is the same—and it considers everyone to be a potential customer.

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mass marketing

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Product Place Promotion Price

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"four Ps" make up a marketing mix

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is any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer.

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channel of distribution

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involves direct spoken communication between sellers and potential customers. Personal selling may happen face-to-face, over the telephone, or even via a videoconference over the Internet.

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Personal selling

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a personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase—is often a key to building repeat business. Individual attention comes at a price; personal selling and customer service can be very expensive. Often this personal effort has to be blended with mass selling and sales promotion.

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Customer service

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is communicating with large numbers of customers at the same time.

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Mass selling

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any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. Advertising may appear in newspapers, on television, or over the Internet, among other places.

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advertising

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any unpaid form of nonpersonal presentation of ideas, goods, or services—includes getting favorable coverage in newspaper stories or on television. Publicity also involves creating web pages where a firm can tell interested customers more about its product. The web page could be part of a social media tool like Facebook, YouTube, or Pinterest.

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Publicity

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refers to those promotion activities—other than advertising, publicity, and personal selling—that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve the use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars.

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Sales promotion

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is a written statement of a marketing strategy and the time-related details for carrying out the strategy. It should spell out the following in detail: (1) what marketing mix will be offered, to whom (that is, the target market), and for how long; (2) what company resources (shown as costs) will be needed at what rate (month by month perhaps); and (3) what results are expected (sales and profits perhaps monthly or quarterly, customer satisfaction levels, and the like). The plan should also include some control procedures—so that whoever is to carry out the plan will know if things are going wrong. This might be something as simple as comparing actual sales against expected sales—with a warning flag to be raised whenever total sales fall below a certain level.

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marketing plan

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putting marketing plans into operation. Strategies work out as planned only when they are effectively implemented.

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implementation

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short-run decisions to help implement strategies—may be needed.

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operational decisions

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blends all of the firm's marketing plans into one "big" plan.

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marketing program

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or total stream of purchases that a customer could contribute to the company over the length of the relationship.

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customer lifetime value

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is the expected earnings stream (profitability) of a firm's current and prospective customers over some period of time. Following the customer equity approach guides the marketing manager to make marketing decisions that enhance the firm's long-term profits—not just for the next quarter or year.

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Customer equity

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A useful aid for organizing information from the broader market and developing relevant screening criteria. Which identifies and lists the firm's strengths, weaknesses, opportunities, and threats. The name S.W.O.T. is simply an abbreviation for the first letters in the words strengths, weaknesses, opportunities, and threats.

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S.W.O.T. analysis

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means that the marketing mix is distinct from what is available from a competitor

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Differentiation

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means trying to increase sales of a firm's present products in its present markets—probably through a more aggressive marketing mix.

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Market penetration

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means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product.

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Market development

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means offering new or improved products for present markets.

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Product development

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means moving into totally different lines of business—perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system.

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Diversification

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1.Economic environment 2.Technological environment 3.Political and legal environment 4.Cultural and social environment

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external market environment

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which sets out the organization's basic purpose for being.

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mission statement

mk 303 fall 2015 ch 1 & 2 – Flashcards

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