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Marketing

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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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Relationship Marketing

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Establishing long-term, mutually satisfying buyer-seller relationships (stores that like you, that see you coming back)

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Customer Relationship Management (CRM)

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Using information about customers to create marketing strategies that develop and sustain desirable customer relationships

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Customer Lifetime Value

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A combination of purchase frequency, average value of purchases, and brand-switching patters over the entire span of customer's relationship with a company

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Utility

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The ability of a good or service to satisfy a human need

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Form utility

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Created by converting production inputs into finished products (having raw materials and making something out of them)

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Place utility

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Created by making a product available at a location where customers wish to purchase it (did they have it where I want it?)

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Time utility

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Created by making a product available when customers wish to purchase it (did they have it when I want it?)

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Possession utility

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Created by transferring title (OR ownership) of a product to a buyer

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Marketing Concept

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A business philosophy that firm should provide goods and services that satisfy customers' needs through a coordinated set of activities that allows the firm to achieve its objectives (produce what people want)

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To achieve success, a business must

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Communicate with potential customers to assess their needs, develop a good or service to satisfy those needs, continue to seek ways to provide customer satisfaction

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Implementing the Marketing Concept

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Obtain information about present and potential customers (needs: how well those needs are being satisfied; how products might be improved; customer opinions about the firm), pinpoint specific needs and potential customers toward which to direct marketing activities and resources, mobilize marketing resources to provide a product that will satisfy customers; price the product at an acceptable and profitable level; promote the product to potential customers; ensure distribution for product availability when and where wanted, obtain info on the effectiveness of the marketing effort and modify efforts as necessary

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Market

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A group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase such products

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Consumer markets

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Purchasers and/or households members who intend to consume or benefit from the purchased products and who do not buy products to make profit

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Business-to-business (industrial) markets

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Producer, reseller, governmental, and institutional customers that purchase specific kinds of products for use in making other products for resale or for day-to-day operations (thing what businesses would buy)

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Producer markets

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Individuals and business organizations that buy products to use in the manufacture of other products

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Reseller markets

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Intermediaries such as wholesalers and retailers that buy finished products and sell them for a profit

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Governmental markets

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Buy goods and services to maintain operations and provide citizens with products such as highways, education, utilities, defense

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Institutional markets

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Churches, not-for-profit private schools and hospitals, civic clubs, charitable organizations

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Marketing strategy

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A plan that will enable an organization to make the best use of its resources and advantages to meet its objectives (why are we trying to market it to them? will it sell?)

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Marketing strategy consists of

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The selection and analysis of a target market, and the creation and maintenance of an appropriate marketing mix (a combination of product, price, distribution, and promotion developed to satisfy a particular target market)

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Target market

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A group of individuals, organizations, or both, for which a firm develops and maintains a marketing mix suitable for the specific needs preferences of that group (all basketball players)

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Market segment

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A group of individuals or organizations within a market that share or more common characteristics (college basketball players)

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Market segmentation

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The process of dividing a market into segments and directing a marketing mix at a particular segments rather than at the total market

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Forces that make up the marketing environment

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Economic forces, sociocultural forces, political forces, competitive forces, legal and regulatory forces, technological forces

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Developing a Marketing Plan

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A written document that specifies an organization's resources, objectives, strategy, and implementation and control efforts to be used in marketing a specific product or product group

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Elements of a marketing plan

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Executive summary, environmental analysis, strengths and weaknesses, opportunities and threats, marketing objectives, marketing strategies, marketing implementation, evaluation and control

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Marketing mix consists of elements that the firm controls

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Product, price, distribution, and promotion. The firm generally has no control over forces in the marketing environment.

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Sales Forecast

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An estimate of the amount of a product that an organization expects to sell during a certain period of time based on a specified level of marketing effort (how much money predicted to make from selling)

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Importance of measuring sales potential

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Evaluate feasibility of enter new segments and decide how best to allocate marketing resources and activities

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Estimates should do several things

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Identify the relevant time frame covered by the forecast, define the geographic boundaries of the forecast, and indicate for which products the forecasts are relevant

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Marketing information system

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A system for managing marketing information that is gathered continually from internal and external sources

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Internal data sources

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Sales figures, product and marketing costs, inventory, sales force activities

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External data sources

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Suppliers, intermediaries, customers, competitors, economic conditions

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Outputs

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Sales reports, sales forecasts, buying trends, market share

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The six steps of marketing research

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Define the problem, make a preliminary investigation, plan the research, gather factual information, interpret the information, reach a conclusion

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Buying Behavior

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The decisions and actions of people involved in buying and using products

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Types of buying behavior

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Consumer and Business

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Consumer buying behavior

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The purchasing of products for personal or household use, not for business purposes

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Business buying behavior

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The purchasing of products by products, resellers, governmental units, and institutions

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Personal Income

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The income an individual receives from all sources less the Social Security taxes the individual must pay (all the money you make)

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Discretionary Income

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All the money you have left after you spend money on what you need to keep you alive.

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Product

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Everything one receives in an exchange, including all tangible and intangible attributes and expected benefits (good, service, or idea)

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Consumer product

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A product purchased to satisfy personal and family needs

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Business (industrial) product

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A product bought for resale, for making other products, or for use in a firm's operations

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Convenience product

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A relatively inexpensive, frequently purchased item for which buyers want to exert only minimum effort (paper towels, milk, sugar, shampoo, toothpaste)

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Shopping product

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An item for which buyers are willing to expend considerable effort on planning and making the purchase (outfit)

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Specialty product

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An items that possesses one or more unique characteristics for which a significant group of buyers is willing to expend considerable purchasing effort (car)

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The Product Life Cycle

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A series of stages in which a product's sales revenue and profit increase, reach a peak, then decline

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Introduction

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Customer awareness and acceptance are low

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Growth

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Sales increase rapidly as the product becomes well known

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Maturity

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Sales are still increasing but at a slower rate; later in this stage, sales and profits begin to slowly decline

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Decline Stage

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Sales volume decreases sharply and profits continue to fall

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Product line

answer

A group of similar products that differs only in relatively minor characteristics

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Product mix

answer

All of the products that a firm offers for sale

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Width of the mix

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The number of product lines the mix contains

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Depth of the mix

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Average number of individual products within each line

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Product modification

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The process of changing one or more of a products characteristics such as quality, function, aesthetics

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Line extensions

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Development of a product closely related to one or more products in the existing product line but designed specifically to meet somewhat different customer needs

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Brand

answer

A name, term, symbol, design or any combination of these that identifies a seller's products as distinct from those of other sellers (SC's triangle or Humanics, distinguishes you from everyone else)

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Brand name

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The part of a brand that can be spoken

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Brand mark

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The part of a brand that is a symbol or distinctive design

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Trademark

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A brand name or brand mark that is registered with the U.S. Patent and Trademark Office and is legally protected from use by anyone else

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Trade name

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The complete and legal name of an organization

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Manufacturer (producer) brand (type of brand)

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A brand that is owned by a manufacturer

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Store (private) brand (type of brands)

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A brand that is owned by an individual wholesaler or retailer

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Generic Brand (type of brand)

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A product with no brand at all

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Benefits of branding

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They reduce the amount of time buyers must spend shopping, help consumers judge quality, helps a firm introduce a new product with the same brand name, aids in promotional efforts because promotion of each branded product indirectly promotes others with the same brand.

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Brand loyalty

answer

The extent to which a customer is favorable toward buying a specific brand (Nike; focusing on Jordans)

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Brand equity

answer

The marketing and financial value associated with a brand's strength in a market: brand-name awareness, brand association, perceived quality, and brand loyalty

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Brand extensions

answer

A firm uses an existing brand to brand a new product in a different product category (EX: Procter & Gamble named a new product Ivory Body Wash)

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Packaging

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All of the activities involved in developing and providing a container with graphics for a product

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Functions of packaging

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Protect the product and maintain it's functional form; offer consumer convenience; promote the product by communicating its features, uses, benefits, and image.

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Design considerations of packaging

answer

Cost, single or multiple units, consistency among package designs, promotional role, needs of intermediaries, environmental responsibility

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Labeling

answer

The presentation of information on a product or its package

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Labeling may include

answer

Brand name and mark, trademark symbol, package size and contents, product claims, directions, safety precautions, ingredients, name and address of manufacturer, Universal Product Code symbol for automated checkout and inventory control

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Express warranty

answer

A written explanation of the producer responsibilities if the product is found to be defective or otherwise unsatisfactory.

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Supply

answer

The quantity of a product that producers are willing to sell at each of various prices. Quantity supplied increases as price increases.

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Demand

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The quantity of a product that buyers are willing to purchase at each of various prices. Quantity demanded increases as the price decreases

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Equilibrium

answer

Where the supply and demand curves intersect and quantity and price for buyers and sellers are equal

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Meaning and use of price

answer

The amount of money a seller is willing to accept in exchange for a product at a given time and under certain circumstances, price allocates goods and services among those who are willing and able to buy them, price allocates financial resources among producers according to how well they satisfy customers' needs, price helps customers allocate their own financial resources among various want-satisfying products

question

Price Competition

answer

An emphasis on setting a price equal to or lower than competitors' prices to gain sales or market share

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Non-price competition

answer

Competition based on factors other than price (quality, customer service)

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Buyers' perceptions of price

answer

Buyers will accept different ranges of prices for different products. A premium price may be appropriate if a product is considered superior or has inspired strong brand loyalty (It might be better to pay more if the product will last longer and be better)

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Survival

answer

Pricing the firm's products (maybe in a loss) in order to attract customers to establish the firm in a market (EX: The dollar store)

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Profit maximization

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Pricing with the intent to reap profits as large as possible from a market - usually an unattainable goal

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Target return on investment

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Pricing that allows the firm to attain its profit goal, which is a percentage of the investment the firm has made

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Market-share goal

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Pricing that will increase a firm's proportion of total industry sales

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Status quo pricing

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Pricing the firm's products so as not to disturb the stability of prices in the industry

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Breakeven quantity

answer

The number of units that must be sold for total revenue to equal the total cost

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Totally Revenue

answer

The total amount received from sales of a product

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Fixed Cost

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A cost incurred no matter how many units are produced or sold

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Variable cost

answer

A cost that depends on the number of units produced (100 or 1000 sweaters produced)

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Total cost

answer

The sum of the fixed costs and the variable costs attributed to a product

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Demand-based pricing

answer

Based on the level of customer demand for the product. Product prices are high when demand is high and low when demand is weak

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Price differentiation

answer

Setting different prices in segmented markets based on segment characteristics

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Competition-based pricing

answer

Based on meeting the challenge of competitors' prices in markets where products are quire similar or price is an important customer consideration

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Channel of distribution (marketing channel)

answer

A sequence of marketing organizations that directs a product from the producer to the ultimate user

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Middleman

answer

A marketing organization that links a producer and user within a marketing channel

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Merchant middleman

answer

Takes title to products by buying them (OWNS)

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Functional middleman

answer

Helps in the transfer of ownership of products but does not take title to the products (DOESN'T OWN)

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Retailer

answer

Buys from producers or other middlemen and sell to consumers

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Wholesaler middleman

answer

Sells products to other firms

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Producer to consumer (direct channel)

answer

No intermediaries, used by all services and by a few consumer goods, producers can control quality and price, do not have to pay for intermediaries, and can be close to their customers (dell computers)

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Producer to retailer to consumer

answer

Producers sell directly to retailers when retailers (Walmart) can buy in larger qualities

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Producer to wholesaler to retailer to consumer

answer

The traditional channel. Used when a producer's products are carried by so many retailers that the producer cannot deal with them all

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Producer to agent to wholesaler to retailer to consumer

answer

Often used for inexpensive, frequently purchased items, for seasonal products, and by producers that do not have their own sales forces

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Agent

answer

Functional middlemen that do not take title to products and are compensated by commissions paid to the producers

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A manufacturer may use multiple channels

answer

To reach different market segments when the same product is sold to consumers and businesses to increase sales or capture a larger market share.

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Producer to agent middleman to business user

answer

Usually used for operating supplies, accessory equipment, small tools, standardized parts

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Intensive Distribution

answer

The use of all available outlets for a product to saturate the market

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Selective Distribution

answer

The use of only a portion of the available outlet for a product in each geographic area

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Exclusive Distribution

answer

The use of only a single retail outlet for a product in a larger geographic area

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Supply-Chain Management

answer

Long-term partnership among channel members working together to create a distribution system that reduces inefficiencies, costs, and redundancies, while creating a competitive advantage and satisfying customers

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Category management

answer

The retailer asks a supplier how to stock the shelves

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Vertical channel inegration

answer

The combining of two or more stages of a distribution channel under a single firm's management

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Vertical marketing system

answer

A centrally managed distribution channel resulting from vertical channel integration

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Administered

answer

One channel member dominates the others

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Contractual

answer

Intermediary cooperation, rights and obligations are formalized in contracts

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Corporate

answer

The entire channel is owned by the producer

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Integrated Marketing Communications

answer

Coordination of promotion efforts to ensure maximal informational and persuasive impact on customers. Results in a consistent message to customers, long-term customer relationships, and the efficient use of promotional resources.

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Promotion

answer

Commonly the object of two misconceptions

question

Role of promotion

answer

To facilitate exchanges directly or indirectly by informing individuals, groups, or organizations and influencing them to accept a firm's products or to have more positive feelings about the firm. To maintain positive relationships between a company and various groups in the marketing environment.

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Promotion Mix

answer

The particular combination of promotion methods a firm uses to reach a target market

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Advertising

answer

A paid non-personal message communicated to a select audience through a mass medium

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Personal selling

answer

Personal communication aimed at informing customers and persuading them to buy a firm's products

question

Sales promotion

answer

The use of activities or materials as direct inducements to customers or sales persons

question

Public relations

answer

Communication activities used to create and maintain favorable relations between an organization and various public groups, both internal and external

question

Marketing mix

answer

Product, price, placement, promotion.

question

Types of Advertising by Purpose

answer

Primary -demand advertising, Selective-demand advertising, institutional advertising

question

Primary-demand advertising

answer

used to increase demand for all brands of a product in a specific industry

question

Selective-demand advertising

answer

used to sell a particular brand of product

question

Institutional advertising

answer

Designed to enhance a firm's image or build its reputation

question

Advertising Media

answer

The forms of communication through which advertising reaches its audience.

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Order getter

answer

Salesperson who is responsible for creative selling: selling a firm's products to new customers and increasing sales to current customers

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Order taker

answer

Salesperson that handles repeat sales in ways that maintain positive relationships with customers

question

Six Steps of the Personal Selling Process

answer

Prospecting, Approaching the prospect, making the presentation, answering objections, closing the sale, following up

Business chapters 12-20 – Flashcards

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