Marketing 360

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Value
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the benefits a customer receives from buying a good or service
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Marketing Fields
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supply-channel management brand management advertising new product planning
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Consumer
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Ultimate user of a brand or service
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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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Exchange
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Delivering value to everyone who is affected by a transaction
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Stakeholders
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The buyers, sellers, investors, and community residents in a company
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Need
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When a gap exists between a consumer’s actual state and some idea or desired state the consumer has a
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Want
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A desire for a particular product a consumer uses to satisfy a need in a specific way that is culturally and socially influenced
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Benefit
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The outcome that motivates a customer’s buying behavior
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Demand
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A customer’s desire for a product coupled with the buying power or resources to obtain the product is called
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Marketplace
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For a product, consumers must share a common need that can be satisfied by the product and have the resources, willingness, and authority to purchase the product to be a part of this
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Utility Types of Utility
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Sum of benefits we receive when we use a good or service: Form Place: Products are available when consumers want them. Shipping a dress from New York Time Possession: allows you to own, use, and enjoy the product- bridal stores have a variety of styles and colors a woman could not get on her own
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Form Utility
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The benefit marketing provides by transforming raw materials into finished products as a manufacturer does by combining silk, thread, and a zipper to create a bridesmaids gown
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Time Utility
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Women who rent their wedding gowns instead of buying them and wearing them only once are taking advantage of this utility
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Exchange
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For this to occur, at least two people or organization must be willing to make a trade and each must have something the other wants
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In which kind of market would a Production orientation be most successful?
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A seller’s market in which demand is greater than supply
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Companies that have this type of orientation tend to be more successful at making one time sales than at repeat business
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Selling
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Consumer
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This type of orientation is a management philosophy that focuses on ways to satisfy customers needs and wants
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Total Quality Management
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Focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement
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Triple Bottom Line Orientation
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A business orientation that looks at financial profits, The community in which the organization operates, and creating sustainable business practices
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Companies that focus on a triple bottom line orientation are likely to place a priority on this
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Production Orientation EX: Walmart cutting back on emissions and improving the quality of their production
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List the 3 components of the triple bottom line orientation
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Financial bottom line social bottom line environmental bottom line
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Customer Relationship Management (CRM)
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involves systematically tracking consumers preferences and behaviors over time in order to tailor the value proposition as closely as possible to each individuals unique wants and needs EX: Internet can personalize messages and products to better meet the needs of consumers
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Social Marketing Concept
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Maintains that marketers must satisfy customers needs in ways that will also benefit society and are profitable to the firm EX: satisfying environmental and social needs for a cleaner, safer environment by developing recyclable packages, adding safety features to cars etc.
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Sustainability
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A company that focuses on this is concerned with meeting present consumer needs without compromising the ability of future generations to meet their needs EX: Walmart uses recyclabe cardboard to ship goods, baseball players wore jerseys made out of plastic retrieved from taiwan and japan
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Green Marketing
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A marketing strategy that supports environmental stewardship by establishing an environmentally founded differential benefit in the minds of consumers
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Services
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Intangible products that we pay for and use but never own
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Consumer Goods
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Tangible products that individuals purchase for personal or family use
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Business to Business Marketing
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the marketing of goods and services from on organization to another
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Industrial Goods
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Goods individuals or organizations buy for further processing or for their own use when the do business EX: Automakers buy tons of steel to use in the manufacturing process, and they buy computer systems to track manufacturing costs and other essential information to operations
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E-Commerce
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The buying and selling of products over the internet EX: books, CDs, cars etc.
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Companies look at this when they calculate the lifetime value of a customer
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How much profit they expect to make from a particular customer, including each and every purchase she will make from them now and in the future
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Value Chain
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A series of activities involved in designing, producing, marketing, delivering, and supporting any product
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In addition to marketing activities, this includes business functions such as human resource management and technology development
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Value Chain
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Web 2.0
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Social networking is an integral part of this
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Marketing
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A decision process in which marketing managers determine the strategies that will help the firm meet its long term objectives and then execute those strategies using tools they have at their disposal
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Marketing Plan
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A document that describes the marketing environment, outlines the marketing objectives and strategy, and indentifies who will be responsible for carrying out each part of the marketing strategy
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Marketing Planning
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Process of thinking strategically about the big picture and where the firm and products fit within it
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Market Segment
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A distinctive group of consumers within a large market who are similar to one another in some way and whose needs differ from other customers in the larger market EX: ford, general motors, and BMW have different cars for different market segments
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Target Market
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A market segment on which an organization focuses its marketing plan toward which it directs its marketing efforts.
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Market Position
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How the target market percives a product in relation to competitors products
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Name the 4 P’s
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Price: used as a signal of quality Product: design and packaging (free delivery) Place: places product is available Promotion: how firm communicates with consumers
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Marketing Mix
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The tools the organization uses to create a desired response among a set of predefined consumers
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What is part of the product element of the marketing mix
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The packaging EX: Virgin cola came out in distinct packaging to stand out among competitors
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Price
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The assignment of a product’s value, or the amount the consumer must exchange to receive the offering EX: Adidas 1 computerized running shoe got a lot of attention but it was very expensive so it made buying the shoe a state statement for a hardcore runner
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Promotion
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Element of the marketing mix that communicates the value proposition using forms such as personal selling, advertising, coupons, and publicity
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Place
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Element of the marketing mix that is most closely associated with a companys supply chain
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A business Plan
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includes the decisions that guide the entire organization or its business units
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Marketing Plan
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A document that describes the marketing environment, outlines the marketing objectives and strategies, and identifies how the company will implement the control those strategies
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Product Cannibalization
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when a new product takes sales away from original brand
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Economies of Sale
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If we make more of a product, we can make it at a lower cost per item
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Line Extension
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another product under the same brand EX: new flavors, package differences, same product category
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Brand Extension
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new product category under same brand name Different product class EX: shoes, toys, sunglassses
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Relationship Marketing
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The concept of a long term continuous partnership focused on problem solving
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Code of ethics
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A firms set of written standards of behavior to which everyone in the organization must subscribe and which establish standards for how the organization interacts with its stakeholders
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Strategic Planning
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The managerial decision process that matches the organizations resources and capabilities to its market opportunities for long-term growth EX: firms strategic planner might set objective to increase total revenue by 20% in the next 5 years
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SBU stands for
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Strategic business units EX: Disney’s SBU’s include the theme parks, tv network, cruise line divisions
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The marketing plan it a type of
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Functional Plan
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Functional planning
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decision process that concentrates on developing detailed plans for strategies and tactics for the short term supporting an organizations long term strategic plan EX: Jay Minkoff at first flavor set an objective by introducing three new products during the coming year
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Operational Planning
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A decision process that focuses on developing detailed plans for day to day activities that carry out an organizations functional plans EX: first flavor may develop plans for a marketing campaign to promote the product by creating buzz via social media
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Strategic Planning Step 1:
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Mission Statment: formal document that describes organizations overall purpose and what it hopes to achieve in terms of its competitors, products, and resources
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Strategic Planning Step 2:
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Asses the organizations internal and external environments
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Situational Analysis
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An assessment of a firms internal and external environment
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Analysis of a firms internal environment identifies the firms
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strengths and weaknesses
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Internal environment
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Employees, technologies, facilities, finances
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A firms internal business environment does NOT include
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elements of the legal environment
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External Environment
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consumers, competitors, economy etc.
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Within a larger corporation, each SBU
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has its own business portfolio EX: if disney loses money at a theme park, they hope to make up for it with at homers who are watching disneys television programs
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Portfolio analysis
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a tool management uses to assess the potential of a firms business portfolio. It helps management decide how to allocate resources among the firms current SBU’s
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The growth market share matrix developed by the Boston consulting group is a type of
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portfolio analysis
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Stars
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SBU’s with products that have a dominant market share in high growth areas EX: disney invested a lot into its tv operations seen as stars in Hannah Montana and Narnia. Also the re-release of toy story
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cash cows
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strategic business units that have a dominant market share in a low growth potential market EX: Disney’s theme parks because sales have been steady or only slightly increasing/decreasing over time
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Question Marks
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SBU’s with products that have low market shares in fast growing markets EX: disney stores retail market has lagged in recent years
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Dogs
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SBU’s with products that have a small share of slow-growth market EX: when disney announced shutting down pluto and goofy
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Category of BCG model when sales have been steady and the firm has a large market share
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Star
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A limitation of the BCG matrix
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It doesnt tell managers the best ways to make growth happen
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Strategic Plan Step 3
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Set organizational or SBU objectives identify what firm hopes to accomplish within the general time frame of the business plan
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Strategic Plan Step 4
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Establish Business Portfolio strategic planning includes making decisions about how to best allocate resources across these businesses to ensure growth for the total organization
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Strategic Plan Step 5
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Develop growth strategies BCG matrix helps managers decide which SBU’s they should invest in for growth Marketing strategies: market penetration, market development, product development, and diversification
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Marketing Penetration Strategy
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A growth strategy that attracts users of competitive brands
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Market Development Strategy
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introduce existing products to new markets EX: nintendos WII has become popular with older consumers because its active functionality during the game provides an opportunity for a light and fun physical workout
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When mcdonalds purchased donato’s pizza and a controlling interest in Chipotle Mexican Grills, the company was pursuing this strategy
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Diversification- emphasize both new products and new markets to achieve growth
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Product development strategies
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create growth by selling new products in existing markets
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This provides managers with 4 different fundamental marketing strategies: market penetration, market development, product development, and diversification
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BCG growth market share matrix
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when general mills urged consumers to lower their cholesterol by eating cheerios twice a day over the course of six weeks, the aim was to increase usage among current customers. What strategy did General mill use
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Market Penetration
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Strategy that emphasizes both new products and new markets to achieve growth
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Diversification
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First step of the marketing planning process involves closely examining this
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marketing environment
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What step in developing a marketing plan includes an analyses of the marketing environment?
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Situation Analysis
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Second Step of the marketing planning process is to
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Set marketing objectives EX: Jay Minkoff- decide what to accomplish in terms of first flavors marketing mix
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In a marketing plan, these state what the marketing function must accomplish to achieve overall business objectives
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Marketing objectives
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In this step of the marketing planning process, decisions are made concerning what markets to target and what marketing mix strategies to use
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Develop marketing strategies
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In this stage of marketing planning process, marketing must determine how they want consumers to think of their product in comparison to competing products
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Develop marketing strategies
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Southwest Airlines used this strategy to target customers who could not previously afford air travel
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Pricing strategy
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Marketers communicate a products value proposition to the target market by implementing a
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promotional strategy
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Product strategy
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Decision such as product design, packaging, branding support services etc. EX: jetblue airways included in seat video games and television as a key product feature during the flight
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Target market strategy
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Advertising, sales, promotion, public relations, direct marketing and personal selling
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Many airlines now encourage customer to purchase online “ticketless” flight reservations by charging a fee to those who purchase tickets as ticket counters. What kind of strategy is this
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distribution (how, when and where firm will make the product aviailable to targeted customers
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After marketing strategies are developed, the next step in the marketing planning is
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Implementation can make or break plan
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Control
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the formal process of monitoring progress toward meeting marketing objectives 1. measure performance 2. compare this performance to the established marketing objectives or strategies 3. make adjustments to the objectives or strategies on the basis of the analysis
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Making adjustments to the marketing plan is part of
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implementation and control
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Marketers need to understand this environment of a country from two perspectives : the overall level of development of a country and the current stage of its business cycle
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Economic
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gross domestic product (GDP)
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the most commonly used measure of economic health of a country
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gross national product (GNP)
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measures the value of all goods and services produced by a country’s individuals or organizations, whether within the country’s borders or not
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What is true about a least developed country (LDC)?
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it has an economy based on agriculture
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Business cycle
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a severe recession, a period in which prices fall but there is little demand because few people have money to spend and many are out of work. This condition is a part of it
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Inflation
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Occurs when prices and the cost of living rise while money is lost
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Discretionary income
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the amount of money an individual has left to spend after paying for necessities such as housing, utilities, food and clothing
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The YMCA and gold gym engage in this competition when they both try to attract customers to buy their fitness center services
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Brand
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Monopoly
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one seller controls a market
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Ogliopoly
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a structure where there are a relatively small number of sellers, each holding substantial market share, in a market with many buyers EX: airlines
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Monopolistic Competition
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a structure where there are many sellers, each having slightly different products and each having only a small share of the market EX: athletic shoe manufacturers such as nike, new balance compete with one another to offer consumers some unique benefit.
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perfect competition
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a structure where there are many small sellers each having similar products, and each unable to have a significant impact on the quality price or supply of a product EX: farmers markers
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Technological Environment
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firms are constantly scanning this environment in search of ideas and trends that can spark their own research efforts. Sometimes an idea can transform an industry, such as transistors revolutionizing the file of consumer electronics.
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Sherman Antitrust Act
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Developed to eliminate monopolies and to guarantee free competition
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Fair Packaging and Labeling Act
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created the regulatory body that enforces laws against deceptive advertising and product label regulations.
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Food and Drug Administration
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A US regulatory agent that enforces laws and regulations on foods, drugs, cosmetics, and veterinary products. Markets of pharmaceuticals must get approval from this agency before introducing products to the market
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Sociocultural environment
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refers to the characteristics of a society, the people who live in the society, and the culture that reflects the values and benefits of the society
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Collectivist culture
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people tend to subordinate their personal goals to those of a stable community EX: try selling someone a product that is “sure to make you stand out” to someone trying to “fit in”
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Individualistic culture
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people tend to attach more importance to personal goals than to the needs of the larger community
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Ethnocentrism
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the belief that ones own norms and the products made in ones own country are superior EX: french evaluate food products from other countries very critically EX: british store called marks and spencers in france is selling english style sandwiches
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After exporting, the next level of commitment a firm can make to a foreign market is a contractual agreement. What are two of the most common types of such agreements?
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Licensing and franchising
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Licensing Agreement
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When a firm gives another firm the right to produce and market its product in a specific country or region in return for royalties sold on goods EX: sesame street is licensed to many countries
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Franchising
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A form of licensing that gives the franchise the right to adopt an entire way of doing business in the host country
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What is true about the market entry strategy of a direct investment?
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It allows a foreign firm to take advantage of a domestic company’s political savvy and market position EX: Mcdonald’s purchases lettuce and pickes from local farms

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