Marketing 3000 Exam 1

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Marketing
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study of exchange
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Product Orientation
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“if we build it, they will come” focus on the efficient production of their products with no input from customers works when demand exceeds supply
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Sales Orientation
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philosophy is to sell (i.e., persuade people to buy) what is made internally driven introduced the concept of communication—albeit one-way, to the customer
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Customer Orientation
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that information about the market (e.g., potential customers, trends, competitors) is collected prior to making decisions that involve the selling process (e.g., what to sell, where to sell, how much to charge, how to promote the product). depends on a two-way relationship with customers where firms actively seek to discover unmet customer needs and then to satisfy them. “making what is desired or wanted” rather than “selling what we make.”
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3 things that characterize Customer Orientation
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1. customer focus 2. coordinated marketing effort 3. long-term success
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Customer focus
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consistent and continuous effort to find out what is needed or wanted by customers
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Coordinated Marketing effort
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that information about the customer or marketplace is shared throughout the organization. Other functional departments (e.g., research, finance, manufacturing) are partners in the effort to satisfy customer needs.
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Long-term success
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Firms whose actions are customer-driven are better able to adapt to a dynamic marketplace, and they perform better in the long run
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Relationship Marketing
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emphasizes the creation and maintenance of long-term relationships with all participants—customers, suppliers, retailers—in the exchange process
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Marketing Concept
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entails discovering and identifying the customers’ unmet needs, and then satisfying them. making a profit by serving the needs of customer groups
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American Marketing Association definition of 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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4 components of a strategic plan
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1. mission 2. objectives 3. strategies 4. portfolio plan
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key elements of mission statement
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1. Organization’s history 2. Organization’s distinctive competencies (what they do well) 3. The organization’s environment
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Present Products and Present Customers
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Market Penetration
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Present Products and New Customers
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Market Development
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New Products and Present Customers
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Product Development
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New Products and New Customers
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Diversification
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Market Penetration Strategies
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encouraging present customers to use more of the product, purchase more of the product, and directing programs at current participants
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Market Development Strategies
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new customers to use its present products -Arm & Hammer continues to seek new uses for baking soda
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Product Development
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offering different version of an existing product (mini Oreos), new and improved product (Gillette’s newest razor), new way to use existing product (Vaseline Lip Therapy)
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Diversification
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involves seeking new products for customers not currently being served
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Strategies based on Competitive Advantage
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1. cost leadership strategy 2. strategy based on differentiation
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Situation Analysis
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1. cooperative environment 2. Competitive environment 3. economic environment 4. social environment 5. political environment 6. legal environment
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Marketing Planning
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1. establish marketing objectives 2. select target market 3. develop the marketing mix
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marketing mix
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the set of controllable variables that must be managed to satisfy the target market and achieve organizational objectives Product, price, promotion, and place
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Marketing Planning (5 steps)
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1. Conducting a situational Analysis 2. Develop marketing Objectives 3. Determining Product position 4. Selecting target markets 5. Designing a strategic marketing mix
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external environmental forces
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Demographics: the characteristics of the population Economic trends: how business cycles play an important role in determining strategy Competitors: knowing competitors’ positions and strategies Sociocultural trends: used to identify the emergence of substitutes Political: reflected in laws and policies that regulate business and competition Technological and scientific advances: must be monitored and analyzed
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Cultural values are transmitted through …
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1. the family 2. religious organizations 3. educational institutions
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subcultures
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geographic areas, religions, nationalities, ethnic groups, and age
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reference groups
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groups that individuals looks to when forming attitudes and opinions primary= family and close friends secondary= fraternal organizations and professional associations
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situational influences
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1. physical features 2. social features 3. Time 4. Task feature 5. Current conditions
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product knowledge
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amount of information a consumer has stored in her memory about product classes, product forms, brands, models, and ways to purchase them
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Product involvement
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consumer’s perception of the importance or personal relevance of an item
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Extensive decision making
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most time and effort, involve highly complex or expensive purchase
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Limited decision making
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involves some time and effort but more moderate
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routine decision making
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most common types, simple, inexpensive, and familiar
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Hierarchy of needs
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1. physiological needs (food, water) 2. safety needs (protection) 3. belongingness and love needs 4. esteem needs 5. Self actualization needs
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Alternative Search
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1. Internal Sources (stored info and experience in their mind) 2. Group Sources (communication with family, friends, etc.) 3. Marketing Sources (looking at displays, packaging, displays) 4. Public sources (article about product, ratings of product) 5. Experimental sources (handling, examining, and trying product while shopping)
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Consumer Buying Process
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1. Need Recognition (internal or external) 2. Information Search 3. Alternative Evaluation 4. Purchase Decision 5. Post-purchase Evaluation
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External Stimuli
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1. having a problem with a product. 2. Comes from marketing mix elements. The creation of a new product can stimulate need recognition
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Alternative Evaluation
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A consumer’s information search process should yield a set of the most preferred alternatives, called the evoked set or consideration set. The consumer will then evaluate this set of alternatives in several ways
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Purchase Decision
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decision whether to buy or not (postpone) includes where to buy type of payment
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Post- Purchase Evaluation
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Perfomance – expectations = level of satisfaction
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The imperative and difficulty for marketers is to
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1. deliver on performance through quality products and consistent services; and 2. attract customers without exaggerating what they should expect.
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Availability Bias
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show that the information we use to form these types of judgments are biased by the availability of information cues. These information cues might come from personal experience
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2 types of availability bias
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1. Recency Effect- customers think about what they recently saw 2. Vividness: A single vivid experience is highly memorable and available to the mind for what could be an indefinite amount of time.
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Anchoring and Adjustment
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we tend to use information that is easy to recall (i.e., available) as original anchors and then make insufficient adjustments based on forthcoming, available data.
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representativeness heuristics
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People tend to judge the probability of an event by finding a “comparable known” event and assuming that the probabilities will be similar
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market segmentation
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process of dividing a market into groups of similar consumers and selecting the most appropriate groups to serve single product item can seldom meet the needs and wants of all customers.
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market segmentation process
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1. delineate firm’s current situation 2. determine consumer needs and wants 3. divide markets on relevant dimensions 4. develop product positioning 5. decide segmentation strategy 6. design marketing mix strategy
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a priori segmentation
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the marketing manger has decided on the appropriate basis for segmentation in advance of doing any research on a market
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post hoc segmentation
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people are grouped into segments on the basis of research findings
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basis for segmentation
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1. benefit segmentation 2. Psychographic segmentation – focuses on consumer lifestyles, VALS – values and lifestyles 3. Geodemographic
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Decide segmentation strategy
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1. decide not to enter the market 2. decide to not segment but to be a mass marketer 3. may decide to market to one segment 4. firm may decide to market to more than one segment and design a separate marketing mix for each
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Why to be a mass marketing
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1. the market is so small that marketing to a portion of its not profitable 2. Heavy users make up such a large proportion of the sales volume that they are the only relevant target 3. The brand is the dominant brand in the market and targeting to a few segments would not benefit sales and profits
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Segment
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1. measurable- the firm must be capable of measuring its size and characteristics 2. Meaningful- large enough to have sufficient sales and growth potential to offer long run profits for the firm 3. Marketable-
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competition based positioning
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Current understanding of how people store information in memory provides a starting point for developing a competition-based positioning strategy. One way information about a brand is stored in long-term memory is in natural categories. The objects “Bud Light,” “light beer,” “alcoholic beverage,” and ultimately “beverage” are nodes in memory that are related to each other hierarchically by associative bonds. The bonds imply that the object lower in the hierarchy (Bud) is an instance of the object that is higher in the hierarchy (light beer).
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Category membership
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Perhaps the most obvious situation is the introduction of new products, where the category membership is not apparent.
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point of difference
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specification not only of the category in which a brand holds membership, but also how a brand dominates other members of its category.
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Normative Benefits
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Normative benefits are ones that customers say are important because of societal standards rather than because these benefits actually influence behavior.
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Laddering up
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laddering up is based on the notion that in developing a product point of difference, two types of characteristics are considered. One is attributes and image, and the other is benefits.
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brand essence
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laddering up from attributes to benefits to abstract benefits until the benefit defines the essence of the brand
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secondary data
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information that has been already collected. It comes from internal sources such as accounting data, sales reports, or various databases that the company maintains. Secondary data sources outside the firm include government data, magazines and periodicals s because using data already collected is almost always more cost effective than collecting it yourself. Data from secondary sources usually has more credibility
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primary data
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information that is collected for a current, specific purpose
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random sampling
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This provides an equal chance for each member of the population to be selected as part of the sample.
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stratified sampling
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in this technique, the population is divided into groups based on a common characteristic, then a random sample is taken from each group.
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Area (geographic) sampling
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This is the same as stratified using geographical areas as the basis for the sample.
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convenience sampling
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choosing the most available subjects in the time allowed

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