Principles of Marketing Unit 1 – Flashcards
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Marketing (3 definitions)
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(1) A philosophy, an attitude, a perspective, or a management orientation that stresses customer satisfaction (2) An organization function and set of processes used to implement this philosophy (3) 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
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Conditions for Exchange (5)
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(1) At least two parties (2) Something of value for the other party (3) Capable of Communication and delivery (4) Free to accept or reject exchange (5) Desire to deal with other party
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Marketing Management Philosophies (4)
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(1) Product Orientation (2) Sales Orientation (3) Marketing Orientation (4) Societal Marketing Orientation
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Product Orientation
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Focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace. Q: What can we make or do best?
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Sales Orientation
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Belief that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits. Q: How can we sell more aggressively?
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Marketing Orientation
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Assumes that a sale does not depend on an aggressive sales force but rather on a customer's decision to purchase a product. Q: What do customers want and need?
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Achieving a Marketing Orientation (4)
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(1) Obtain information about customers, competitors, and markets (2) Examine the information from a total business perspective (3) Determine how to deliver superior customer value (4) Implement actions to provide value to customers
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Societal Marketing Orientation
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An organization exists not only to satisfy customer wants and needs but also to preserve or enhance individuals' and society's long-term best interests. Q: What do customers want/need and how can we benefit society?
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Relationship Marketing
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Strategy that focuses on keeping and improving relationships with customers
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Achieving Successful Relationship Marketing (4)
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(1) Customer-Oriented Personnel (2) Employee Training Programs (3) Empowered Employees (4) Teamwork
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Comparing Sales and Marketing Orientations (5 characteristics)
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(1) Organization's focus (2) Firm's business (3) Those to whom the product is directed (4) Firm's primary goal (5) Tools the organization uses to achieve its goals
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Reasons to Study Marketing (3)
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(1) Important to society (2) Important to business (3) Good career opportunites
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Strategic Planning (Definition)
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The managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities
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Strategic Planning (2 questions)
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(1) What is the organization's main activity at a particular time? (2) How will it reach its goals?
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Strategic Business Units (Definition)
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A subgroup of a single business or collection of related businesses within the larger organization
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Strategic Business Unites (5 characteristics)
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(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
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Strategic Alternatives
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Tools available for companies, or strategic business units, to use to manage the strategic direction of its portfolio of businesses
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Ansoff's Opportunity Matrix (4)
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1. Market Penetration- increase market share among existing customers 2. Market Development- Attract new customers to existing products 3. Product Development- Create new products for present markets 4. Diversification- introduce new products into new markets
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Innovation Matrix (3)
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1. Core Innovation- use existing products 2. Adjacent Innovation- add related products 3. Transformational Innovation- develop new products
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Boston Consulting Group Portfolio Matrix
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Stars, Question Marks, Cash Cows, Dogs
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Portfolio Matrix Strategies (4)
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1. Build: Usually used for Questions Marks that an SBU believes has the potential to be a Star 2. Hold: Usually used for Cash Cows so an SBU can take advantage of the very positive cash flow 3. Harvest: Used for Cash Cows, Question Marks, and Dogs - the goal is to increase the short-term cash return without too much concern for the long-run impact 4. Divest: Usually used for Question Marks and Dogs - get rid of the SBUs with low shares of low-growth markets
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SWOT Analysis
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Strengths- things the company does well Weaknesses- things the company does not do well Opportunities- conditions in the external environment that favor strengths Threats- conditions in the external environment that do not relate to existing strengths or favor areas of current weakness
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Competitive Advantage
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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
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Marketing Objectives
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Should be realistic, measurable, time specific, and compared to a benchmark
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Marketing Strategy
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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
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Marketing Mix (4 Ps)
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A unique blend of product, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market
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Global Vision (3 characteristics)
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1. Recognizing and reacting to international marketing opportunities 2. Using effective global marketing strategies 3. Being aware of threats from foreign competitors
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Negatives of Trade and Globalization (4)
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1. Lost jobs 2. Fear of losing jobs 3. Threat of outsourcing if workers do not accept pay cuts 4. Vulnerability to... (?)
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Benefits of Trade and Globalization (6)
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1. Expands economic freedom 2. Spurs competition 3. Raises productivity and living standards 4. Offers... 5. ... 6. ...
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Stages of Global Business Development (4)
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1. Companies operate in one country and sell into others 2. Set up foreign subsidiaries to handle sales 3. Operate an entire line of business in another country 4. Virtual operation
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Multi-domestic Strategy
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Subsidiaries of multinational firms are allowed to compete independently in domestic markets
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Global Marketing Standardization
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Production of uniform products that can be sold the same way all over the world
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External Environment Facing Global Marketers (5)
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1. Economic Development 2. Culture 3. Political Structure 4. Natural Resources 5. Demographic Makeup
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Star
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High market share/cash generation, high market growth rate/cash usage
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Question Marks
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(AKA Problem Child) Low market share/cash generation, high market growth rate/cash usage
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Cash Cows
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High market share/cash generation, low market growth rate/cash usage
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Dogs
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Low market share/cash generation, low market growth rate/cash usage
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Cost Competitive Advantage
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Having a cost competitive advantage means being the low-cost competitor in an industry while maintaining satisfactory profit margins
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Product/service differentiation competitive advantage
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The provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition
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Niche Competitive Advantage
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The advantage achieved when a firm seeks to target and effectively serve a small segment of the market. (Used by small companies with limited resources, often in a limited geographic market.)
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Sustainable Competitive Advantage
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An advantage that cannot be copied by the competition
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Product Strategies
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Includes: Physical unit, package, warranty, service, brand, image, value. Products can be: tangible goods, ideas, services.
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Place (Distribution) Strategies
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1. Making products available where and when customers want them 2. All activities from raw materials to finished products 3. Ensure products arrive in usable condition at designated places when needed
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Promotion Strategies
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Role is to bring about exchanges with target markets by: Informing, educating, persuading, reminding customers of the product's benefits. Includes: advertising, public relations, sales promotion, personal selling.
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Pricing Strategies
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Price is what a buyer must give up to obtain a product. Most flexible of the "4 Ps." Competitive weapon.
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Code of Ethics (4 characteristics)
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1. Helps identify acceptable business practices 2. Helps control behavior internally 3. Avoids confusion in decision making 4. Facilitates discussion about right and wrong
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Corporate Social Responsibilty
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A business' concern for society's welfare. Stakeholder theory says that social responsibility is paying attention to the interest of every affected stakeholder in every aspect of a firm's operation.
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Green Marketing
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The development and marketing of products designed to minimize negative effects on the environment or improve the environment.
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Cause-related marketing
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For-profit and non-profit organizations cooperate to generate funds.
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Social Factors
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Attitudes, values, lifestyles
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Demographic factors
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-People are the basis for any market -Demographic characteristics relate to buyer behavior -Demographic cohorts have their own needs, values, and consumption patterns -Demography: the study of people's vital statistics, such as age, race and ethnicity, and location
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Economic factors
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Consumers' income, purchasing power, inflation, recession
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Technological factors
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Technological success is based upon innovation, and innovation requires imagination and risk taking
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Political and legal factors
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New technology, society, businesses, consumers
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Competitive factors
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How many competitors? How big are competitors? How interdependent is the industry?
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Culture
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The common set of values shared by its citizens that determine what is socially acceptable
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Dumping
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The sale of an exported product at a price lower than that charged for the same or a like product in the "home" market of the exporter
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Tweens
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-Ages 8-12 -Population of 20 million -Directly spend about $30 billion annually -Respond very favorably to having control over their own experiences
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Teens
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-Population of about 25 million -95 percent of U.S. Teens are on the Internet -View shopping as a social sport -75 percent of teens are into social networking -A teen's average annual income is $3,095, while 21 percent are unemployed -$156 is spent on or by a teen each week
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Millennials (Generation Y)
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-Born between 1979 and 1994 -Surpassed population of baby boomers -Two Stages: Those born in 1994 are just entering young adulthood, Those born in 1979 have established careers and started families -Purchasing power of $200 billion annually
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Generation X
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-Born between 1965 and 1978 -Population of 50 million -Independent, resilient, adaptable, cautious, and skeptical -Gen Xers faced a 59 percent decline in net worth from 2005 to 2010 -Xers spend 62 percent more on housing, 50 percent more on apparel, and 27 percent more on entertainment
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Baby Boomers
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-Born between 1946 and 1964 -Boomers are carrying substantial financial burdens, including their children's educations, mortgages, and health care -Boomers spend $1.8 trillion annually on food, cars, personal care, and other personal products -Boomers are willing to change brands and try new things
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Licensing and Franchising
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Licensing is the legal process whereby a licensor allows another firm to use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge. Franchising is a form of licensing that has grown rapidly in recent years.
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Joint Venture
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The domestic firms buys a part of a foreign company or joins with a foreign company to create a new entity.
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Social Media in Global Marketing
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Used in understanding consumers and in building up brands as companies expand internationally
