question

What is marketing?

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The performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client; helps make sure that the right goods and services are produced and find their right way to consumers

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Why is marketing important to you?

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Marketing affects every aspect of your daily life including the choices you make on goods to buy, where to shop. It drives organizations to focus on what it takes to satisfy the customer; offers rewarding and exciting career opportunities, plays a big part in economic growth and development

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How does marketing differ from production? What is that distinction important?

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Marketing provides the direction for production and helps make sure the goods and services are given to the correct customer and fulfill the needs

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How is customer satisfaction linked to the marketing concept?

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The aim of marketing is to identify customer's needs and to meet those needs so well that the product sells itself

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Explain the relationship between customer satisfaction and profit? What is the micro-macro dilemma? Examples? How can you resolve it ethically?

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Micro: a set of activities performed by organizations Macro: social process that directs an economy's flow of goods and services; how the whole marketing system works; goal is to match supply and demand and to accomplish society's objectives Want to overcome the separation of producers and consumers (spatial, time, information, values, ownership) pg. 9 which are fulfilled by the universal functions of marketing

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Production

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making goods or performing services

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Customer Satisfaction

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the extent to which a form fulfills a customer's needs, desires, and expectations

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Innovation

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the development and spread of new ideas, goods, and services; marketing encourages R&D which fosters competition

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Marketing

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The performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client

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Macro marketing

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

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Economies of scale

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as a company produces larger numbers of a particular product, the cost of each unit goes down (discrepancy of quantity- producers want to produce and sell large quantities while consumers want to buy small)

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Buying

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looking for and evaluating goods and services

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Selling

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promoting the product (most visible method of marketing)

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Transporting

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movement of goods from one place to another

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Storing

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holding goods until customers need them

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Standardization and grading

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sorting products according to size and quality

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Financing

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

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Risk-taking

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bearing the uncertainties that are part of the marketing process

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Simple trade era

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1. A time when families traded or sold their "surplus" output to local distributers

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Production era

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2. After Industrial Revolution until the 1920s, a company focuses on production of a few special products because they are available in the market

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Sales era

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3. Goal was to beat the competition and win customers, emphasis on selling because of increased competition until 1950 when sales were growing rapidly in most areas of the economy

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Marketing department era

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Not sure where to put the company's efforts ; when all marketing activities (research, purchasing, production, shipping, sales) are brought under the control of one department to improve short run policy planning and to integrate the firm's activities

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Marketing company era

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1960 onward, marketing people develop long-range plans and the whole company is guided by the marketing concept

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Marketing concept

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an organization aims all its company's efforts at satisfying its customers at a profit

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Production orientation

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making whatever products are easy to produce and then trying to sell them (think customers exist to buy output rather than firms exist to serve customers and needs of society)

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Marketing orientation

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trying to carry out the marketing concept, tries to offer customers what they need

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Customer value

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

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Micro-macro dilemma

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producers and consumers making free choices can cause conflicts and difficulties

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Social responsibility

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

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Marketing ethics

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the moral standards that guide marketing decisions and actions, based on their own values, leads a company to make their own written code of ethics (ex. Trust, honesty, no arm, respect, fairness, responsibility)

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What are the benefits to marketing planning?

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Set objectives, evaluate opportunities, create marketing strategies, prepare marketing plans, develop marketing program. This leads to the implementation of programs and then control

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Explain how a situation analysis affects a SWOT and objectives. (Hint: Look at the planning process. Diagram the relationship between the situation analysis, the SWOT, the Critical Issues and the Marketing Objectives. Provide an explanation using consumer package good.)

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You are able to develop the SWOT from the situation analysis by weighing the external opportunities. The Critical Issues are other things that might affect plans that are worth noting Marketing objectives achieve goals

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Which of the 4 p's is most important? Explain your rationale

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Product, Place, Promotion, Price are all important as they are all part of the marketing mix and they all contribute to a whole. Product satisfies customer while place reaches the customer, promotion tells the customers about it and price is set after estimating customer reaction

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How does satisfying a need differ from providing a "benefit"? Explain by using an actual brand example.

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A need is economic, functional, physiological, psychological, social while benefits are situation specific but to satisfy specific or general needs

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Give an example of a breakthrough opportunity- is it evolutionary or revolutionary?

answer

Revolutionary because it is a hard to copy strategy that will be profitable for a long time.

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What are the 4 types of market growth strategies? Describe the circumstances that would drive the selection of each.

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Market penetration: trying to increase sales of a firm's present products in its present markets (aggressive marketing mix), usually come first Market development: increase sales by selling present products in new markets Product development: new/improved products for present markets Diversification : moving into totally different lines of business (unfamiliar products, markets, or even levels)

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Strategic (management) planning

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The job of planning strategies to guide a whole company, managerial process of developing and maintaining a match between an organization's resources and its market opportunities

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Target market

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homogenous group of customers to whom the company wishes to appeal

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Marketing mix

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

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Target marketing

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says that the marketing mix is tailored to fit specific target customers

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Mass marketing

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typical production oriented approach, aims at everyone with the same marketing mix, considers everyone to be a potential customer

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Channel of distribution

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any series of firms that participate in the flow of products from producer to final user or consumer

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Personal selling

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direct spoken communication between sellers and potential customers

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Customer service

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a personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase, key to building repeat business

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Mass selling

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communicating with large numbers of customers at the same time

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Advertising

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main form of mass selling, any paid form of non-personal presentation of ideas, goods, or services by an identified sponsor

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Publicity

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any unpaid form of non-personal presentation of goods, ideas, or services, including coverage in newspapers and news stories and web

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Sales promotion

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promotion activities, other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers (ex Samples, coupons, contests, novelties)

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Marketing plan

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written statement of a marketing strategy and the time-related details for carrying out strategy—what marketing mix offered, to whom, for how long, what resources, what results expected

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Customer equity

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expected earnings stream of a firm's current and prospective customers over some period of time; place an emphasis on long term profits

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Breakthrough opportunities

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

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Competitive advantage

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increase chances for profit and survival, firm has a marketing mix that the target market sees as better than a competitor's mix

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Differentiation

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the marketing mix is distinct from and better than what is available from a competitor

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S.W.O.T. analysis

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starts with a broad look at the market, paying special attention to customer needs, competitors, and the firm's objectives and resources; identifies and lists the firm's strengths, weaknesses, opportunities, and threats

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Market penetration

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trying to increase sales of a firm's present products in its present markets (aggressive marketing mix), usually come first

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Market development

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increase sales by selling present products in new markets

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Product development

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new/improved products for present markets

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Diversification

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moving into totally different lines of business (unfamiliar products, markets, or even levels)

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Name an example of a change in each component of the external and internal (direct) marketing environment. How would each of these changes be relevant to a marketer?

answer

External- economic, technology, political, legal, cultural, social trend Internal-

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What is the weakness of a competitive matrix? (Hint: what is included, what is not included..)

answer

start with rivals (closest competitors); a problem is that a successful marketing mix will attract copy cats and then profits are lost unless they make a sustainable advantage (one that can't be copied)

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What is the difference between an opportunity and a strength; a weakness and a threat? Give an example of how a threat for one company may mean and opportunity for another.

answer

Strength is internal to the person or company while opportunity is potential opportunities for the company as a whole Weakness is internal while a threat is external from another market/company/product/etc.

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How does monopolistic competition differ from pure competition? Why do marketers avoid pure competition?

answer

Monopolistic competition: a number of different firms offer marketing mixes that at least some customers see as different; each competitor tries to get control of their own target group (US economy) Pure competition is having everything the exact same with multiple buyers and sellers, perfect information; Marketers avoid pure competition because they need to out advertise their similar product to the same target group, try to offer a marketing mix better suited to the customers' needs than the competitors' offerings

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How do competitive barriers affect strategy?

answer

May limit you own plans, or block competitor's responses to an innovative strategy leading them to seek information about competitors; so they may have to change their product and distribution

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Give an example of how a population shift may change cultural norms (not the one given in lecture...). Pick a product or brand and describe how it would be affected by that change.

answer

P&G may lose some business because the baby boomers are in the age they are not having kids and then it is in between Gen X and Gen Y so depending on how the population is growing for the generations, will affect the purchase of diapers. Plus Gen Y are more independent and may take longer to have kids/ may not get married as young as the older generations

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Review the legislation prohibiting anticompetitive behavior and deceptive practices. Given these laws, why do we still see false advertising claims, deceptive packaging and predatory pricing?

answer

The laws that were placed on deceptive packaging and false advertising were made in the early 1900s and the marketing has obviously changed since then. There needs to be updates made.

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Competitive environment

answer

affects the number and types of competitors the marketing manager must face and how they may behave; allows them to plan for competition and avoid head on competition Pure competition, oligopoly, monopolistic competition, monopoly

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Competitor analysis

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an organized approach for evaluating the strengths and weaknesses of current or potential competitors marketing strategies

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Competitive rivals

answer

firms that will be the closest competitors

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Competitive barriers

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the conditions that may make it difficult for a firm to compete in a market

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Economic environment

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macro-economic factors including national income, economic growth, and inflation that affect patterns of consumer and business spending

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Technology

answer

The application of science to convert an economy's resources to output. Affects marketing by creating opportunities for new products and for new processes

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Cultural and social environment

answer

affects how and why people live and behave as they do, which affects customer buying behavior and eventually the economic political and legal environments (includes language, education, religion, food, clothing style, family)

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Gross domestic product (GDP)

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the total market value of all goods and services provided in a country's economy in a year by both residents and non-residents of that country

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Senior citizens

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people over 65, expected to grow in the next 5 years

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Baby boomers

answer

those born between 1946 and 1964, creating new opportunities in industries such as tourism, health care, and financial servces

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Generation X

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generation born immediately following the baby boom (1965-1977), better educated

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Generation Y

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Millenials (1978-1994), baby boomers started having kids, attractive market for housing, appliances, furniture, electronics; rely on technology, avoid advertising

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Sustainability

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the idea that ut's more important to meet present needs without compromising the ability of future generations to meet their own needs

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Strategic business unit (SBU)

answer

an organizational units (within a larger company) that focuses on some product markets and is treated as a separate profit center; some require more attention and resources and some have more growth

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Why is it important to segment? How do you know when to stop?

answer

Select target markets and develop suitable marketing mixes. Stop when you have some workable number of relatively homogenous target markets and then treat each target market differently

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How does a segment differ from a target? What are 4 key features of a good segment?

answer

A segment is a specific group inside of a target group. Homogenous within, Heterogeneous between, substantial (big enough to be profitable), operational (useful for identifying customers and deciding on marketing mix variables)

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When do you choose a single segment strategy vs. a multiple or a combined market strategy?

answer

Segment strategy aim at one or more homogenous segments and try to develop a different marketing mix for each segment Combined strategy increase the size of their target markets by combining 2 or more segments

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What is the function of a product space map?

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To show where consumers place most importance on and how the competition is

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When is the largest segment not always the best choice to pursue?

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Because they could be very different but they could also have many other competitors in that segment, it would be better to find a new market segment with less competitors.

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Market

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a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services, satisfy needs

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Market segmentation

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naming broad product markets and segmenting those product markets in order to select target markets and develop suitable marketing mixes

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Segmenting

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clustering people with similar needs into a market segment (homogenous group of customers who will respond to a marketing mix in a similar way)

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Single target market approach

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segmenting the market and picking one of the homogenous segments as the firm's target market

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Multiple target market approach

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segmenting the market and choosing two or more segments and then treating each as a separate target market needing a different marketing mix

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Combined target market approach

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combining two or more submarkets into one larger target market as a basis for one strategy

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Qualifying dimensions

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those relevant to including a customer type in a product-market ex. Need for car, money, credit but doesn't show what specific brand

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Determining dimensions

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those that actually affect the customer's purchase of a specific product or brand in a product-market ex. Affect what model or brand of car (safety, 4 wheel drive)

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Positioning

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refers to how customers think about proposed or present brands in a market

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Product/space (positioning) map

answer

represents customer perceptions for different brands and what has the most competition for different characteristics

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Differentiation Ch. 4

answer

a way of differentiating products to make them more competitive, how you are different from a competitor (better)

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Unique Selling Point (USP)

answer

For (target market), (our brand) of all (product type) delivers (key benefit or point of differentiation) because (our brand) is (reason to believe)

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Positioning Statement

answer

concisely identifies the firm's desired target market, product type, primary benefit or point of differentiation, and the main reasons a buyer should believe the firm's claim

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Why is the difference between discretionary and disposable income important to marketers?

answer

Disposable is current income minus taxes while discretionary is total minus taxes and necessity goods. These are different between the lower classes and the middle classes so it is important for marketers to target a specific group, especially if they are marketing a luxury (economic conditions affect consumer confidence, so better economy, less things are luxuries)

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What is the difference between a need and want and a drive? Why are needs that fall higher on the PSSP more powerful?

answer

Needs are the basic forces that motivate a person to do something and they are more basic than wants. Wants are needs that are learned during a person's life ex. Need a liquid but want a soda. A drive is a strong stimulus that encourages action to reduce a need (internal). A purchase results from a drive to satisfy a need. Physiological, Safety, Social, Personal- the personal is the highest because people want to buy things that make their life better and it is easier to market to personal needs

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Explain why it is difficult to get your target to notice and remember your message. Why won't simply out shouting your competition be effective?

answer

Selective exposure (notice only info that interests us), selective perception (screen out ideas that conflict with beliefs), selective retention (remember only what we want to remember) People only read and notice what they want and need

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What are the advantages and disadvantages to selective perception?

answer

Marketers spend tons of money for their ads to be ignored and sometimes the consumers miss things due to their beliefs and keep them having a closed mind. But its advantage is that they do not have to remember all of the ads but just the important ones they need

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What is the difference between a cue and drive and a response. What role does reinforcement play in learning?

answer

A drive (thirst) leads to the necessity of a response (decision) which may be skewed by a cue (like a big Coke sign) and the response would be to buy the coke; if a positive experience, a habit will form and that person will buy coke and they learned that they like coke

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What role do economic needs play in consumer buying decisions? Why is it important for marketers to understand how social influences, family, class, culture, ethnicity and purchase situation influence their target's needs and wants. Provide an example of how each can affect a marketing decision.

answer

Ethnic consumers are growing so advertising is catering to that ex. NFL Purchase reason can vary- whether for self or gift Time Surroundings People focus a lot on peers and their social class when they are making decisions. Also, the family structure plays a big role depending on the age, demographics, children or not, etc. ex. Empty nesters vs. young new parents (one spends on travel, the other diapers)

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How does understanding the amount of effort your target will put into their decision to buy impact marketing strategy?

answer

Depends on the economic needs, psychological variables, social influences, purchase situation; also tied to the amount of risk a buyer sees in making a wrong choice. If people place a small importance on buying, there will be a small social, financial risk; when highly involved, the price is high. The higher risk purchases need better marketing strategies that will thoroughly convince the consumer.

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What is the benefit to investing in reducing purchase dissonance when the sale has already been completed?

answer

If the person approves of the product/service, they will spread the word. You don't want them to return the product or feel guilty for buying it so it has to be a high enough quality for them to not regret the purchase.

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Economic buyers

answer

people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money (based on economic needs)

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Economic needs

answer

making the best use of a consumer's time and money ex. Economy of purchase, efficiency of operation, dependability in use, improvement of earnings, convenience

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Discretionary income

answer

what is left of income after paying taxes and for necessities (spent on luxuries)

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Needs

answer

basic force that motivates a person to do something

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Wants

answer

needs that are learned during a person's life

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Drive

answer

strong stimulus that encourages action to satisfy a need

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Physiological needs

answer

food, liquid, rest, sex

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Safety needs

answer

exercise, protection, physical well-being

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Social needs

answer

love, friendship, status, esteem

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Personal needs

answer

fun, freedom, and relaxation

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Perception

answer

how we gather and interpret information from the world around us

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Selective exposure

answer

eyes and minds seek out and notice only information that interests us

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Selective perception

answer

screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs

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Selective retention

answer

we remember only what we want to remember

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Learning

answer

a change in a person's thought processes caused by prior experience, based on direct or indirect experience

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Cues

answer

products, signs, ads, and other stimuli in the environment

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Response

answer

effort to satisfy a drive (depends on the cues and the past experiences)

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Reinforcement

answer

response is followed by satisfaction (reduction in the drive) and reinforcement strengthens the relationship between the cue and the response; may lead to a similar response the next time the drive occurs; repeated reinforcement leads to a habit (routine decision process)

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Attitude

answer

person's point of view towards something; affect selective proves, learning, and buying decisions, lead to like or dislike

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Belief

answer

person's opinion about something that may shape a consumer's attitudes

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Expectation

answer

an outcome or event that a person anticipates or looks forward to (focus on benefits or value that a customer expects form a firm) promotion that overpromises creates this problem

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Trust

answer

confidence of a person has in the promises or actions of another person, brand, or company. Trust drives expectations because when people trust, they expect the other party to fulfill promises or perform capably

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Psychographics (Lifestyle analysis)

answer

lifestyle analysis of a person's day to day pattern of living as expressed in that person's Activities, Interests, Opinions (AIOs)

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Empty nesters

answer

people whose children are grown and who are now able to spend their money in other ways (spend their income on high luxury things ex. Travel)

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Social class

answer

a group of people who have approximately equal social position as viewed by others in the society (education, occupation, living, income, etc.)

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Reference group

answer

group of people to whom an individual looks when forming attitudes about a particular topic

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Opinion leader

answer

person who influences others

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Culture

answer

whole set of beliefs, attitudes, and ways of doing things of reasonably homogenous set of people

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Extensive problem solving

answer

much effort into deciding how to satisfy a need

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Limited problem solving

answer

some effort put into deciding the best way to satisfy a need

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Routinized response behavior

answer

regularly selects a particular way of satisfying a need when it occurs, requires no new information, trusted brand or recommendation

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Low-involvement purchases

answer

routinized used, purchases of little importance or relevance for customer

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Dissonance

answer

wonder if they made the right choice, tension results, feeling of uncertainty about whether the correct decision was made; may lead a customer to seek more information to confirm the purchase

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Adoption process

answer

the steps individuals go through on the way to accepting or rejecting a new idea (awareness, interest, evaluation, trial, decision, confirmation)

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