Marketing Exam 1 Chapters 1-5

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identify the two primary goals of marketing.
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(a) discovering the needs of prospective customers and (b) satisfying them.
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Explain how marketing discovers and satisfies consumer needs.
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The first objective in marketing is discovering the needs and wants of consumers who are prospective buyers and customers. A need occurs when a person feels deprived of basic necessities such as food, clothing, and shelter. A want is a need that is shaped by a person’s knowledge, culture, and personality. The second objective in marketing is satisfying the needs of targeted consumers. Because an organization obviously can’t satisfy all consumer needs, it must concentrate its efforts on certain needs of a specific group of potential consumers or target market—one or more specific groups of potential consumers toward which an organization directs its marketing program. Finally, the organization develops a set of marketing actions in the form of a unique marketing program to reach them.
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Distinguish between marketing mix factors and environmental forces.
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Four elements in a marketing program designed to satisfy customer needs are product, price, promotion, and place. These elements are called the marketing mix, the four Ps, or the marketer’s controllable variables. Environmental forces, also called uncontrollable variables, are largely beyond the organization’s control. These include social, economic, technological, competitive, and regulatory forces.
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Explain how organizations build strong customer relationships and customer value through marketing.
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The essence of successful marketing is to provide sufficient value to gain loyal, long-term customers. Customer value is the unique combination of benefits received by targeted buyers that usually includes quality, price, convenience, on-time delivery, and both before-sale and after-sale service. Marketers do this by using one of three value strategies: best price, best product, or best service.
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Is the activity for creating, communicating, delivering, and exchanging offerings that benefit customers, the organization, its stakeholders, and society at large.
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Marketing
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Marketing focuses on ______ and ____ customer needs.
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discovering, satisfying
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Four factors of marketing?
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The four factors are: (1) two or more parties (individuals or organizations) with unsatisfied needs; (2) a desire and ability on their part to have their needs satisfied; (3) a way for the parties to communicate; and (4) something to exchange.
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An organization can’t satisfy the needs of all consumers, so it must focus on one or more subgroups, which are its _______ .
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Target market
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What are the four marketing mix elements that make up the organization’s marketing program?
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product, price, promotion, place
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are the uncontrollable forces that affect a marketing decision.
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Environmental Forces
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What are the Environmental forces?
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They consist of social, economic, technological, competitive, and regulatory forces.
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What are the two key characteristics of the marketing concept?
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(1) strive to satisfy the needs of consumers while also (2) trying to achieve the organization’s goals.
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are the people who use the products and services purchased for a household.
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Ultimate consumers
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are those manufacturers, wholesalers, retailers, and government agencies that buy products and services for their own use or for resale.
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Organizational buyers
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the marketing manager’s controllable factors that can be used to solve marketing problems.
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The marketing mix
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Effective marketing benefits society because it
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enhances competition, which improves the quality of products and services and lowers prices.
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The process of turning corn into ethanol shows how BioFuel Energy, a Minnesota ethanol producer, can create____utility.
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form
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____________applies innovative approaches to organize, create, and manage a venture to solve the practical needs of society and is usually structured as a nonprofit organization.
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social entrepreneur
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The term used to identify an organization’s long-term course of action designed to deliver a unique customer experience while achieving its goals is referred to as a______.
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Strategy
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Which of the following terms best describes the marketing concept?
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consumer oriented
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Which of the following products mentioned in Chapter 1 failed in the marketplace as a result of product misuse?
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Dr. Care toothpaste
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In the Boston Consulting Group (BCG) model for analysis of a firm’s strategic business units, or SBUs, the horizontal axis reflects __________.
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Relative market share
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Lands’ End ships each order within 48 hours and its guarantee is the best in the world, as exemplified by its tagline “Guaranteed. Period.” These marketing actions by Lands’ End most likely reflect its __________ goals.
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customer satisfaction
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The recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth is referred to as
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triple bottom line
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An information- and communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunications technologies and digitized offerings is referred to as __________.
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market space
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Recently, Gap Inc. ended its relationship with 23 foreign production facilities due to code violations. Several closings occurred because of the use of child labor. In response to these events, the Gap created a large team whose purpose is to travel worldwide to ensure compliance with its Code of Vendor Conduct. This is an example of
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social responsibility
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A _____ is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies customers’ needs and is received in exchange for money or something else of value.
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product
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Marketing creates four types of utilities which are?
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form,place,time, and possession
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integrates the marketing mix to provide a good, service, or idea to prospective buyers
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marketing plan
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______is the part of the marketing mix that communicates the value of the product to the consumer in many ways, such as advertising, social media, and public relations.
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Promotions
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Two characteristics of the marketing concept?
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Marketing was integrated into each phase of business, and product design focused on consumers’ needs.
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For marketing to exist there must be _____ parties with unsatisfied needs.
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two or more
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Describe three kinds of organizations and the three levels of strategy in them.
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An organization is a legal entity that consists of people who share a common mission. It develops offerings (goods, services, or ideas) that create value for both the organization and its customers by satisfying their needs and wants. Today’s organizations are of three types: for-profit organizations, nonprofit organizations, and government agencies. A for-profit organization serves its customers to earn a profit so that it can survive. A nonprofit organization is a nongovernmental organization that serves its customers but does not have profit as an organizational goal. Instead, its goals may be operational efficiency or client satisfaction. A government agency is a federal, state, county, or city unit that provides a specific service to its constituents. Most large for-profit and nonprofit organizations are divided into three levels of strategy: (a) the corporate level, where top management directs overall strategy for the entire organization; (b) the strategic business unit level, where managers set a more specific strategic direction for their businesses to exploit value-creating opportunities; and (c) the functional level, where groups of specialists actually create value for the organization.
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Describe core values, mission, organizational culture, business, and goals.
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Organizations exist to accomplish something for someone. Core values are the organization’s fundamental, passionate, and enduring principles that guide its conduct over time. The organization’s mission is a statement of its function in society, often identifying its customers, markets, products, and technologies. Organizational culture is a set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization. To answer the question, “What business are we in?” an organization defines its “business”—the clear, broad, underlying industry category or market sector of its offering. Finally, the organization’s goals (or objectives) are statements of an accomplishment of a task to be achieved, often by a specific time.
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Explain why managers use marketing dashboards and marketing metrics.
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Marketing managers use marketing dashboards to visually display on a single computer screen the essential information required to make a decision to take an action or further analyze a problem. This information consists of key performance measures of a product category, such as sales or market share, and is known as a marketing metric, which is a measure of the quantitative value or trend of a marketing activity or result. Most organizations tie their marketing metrics to the quantitative objectives established in their marketing plan, which is a road map for the marketing activities of an organization for a specified future time period, such as one year or five years.
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Discuss how an organization assesses where it is now and where it seeks to be.
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Managers of an organization ask two key questions to set a strategic direction. The first question, “Where are we now?” requires an organization to (a) reevaluate its competencies to ensure that its special capabilities still provide a competitive advantage; (b) assess its present and prospective customers to ensure they have a satisfying customer experience—the central goal of marketing today; and (c) analyze its current and potential competitors from a global perspective to determine whether it needs to redefine its business. The second question, “Where do we want to go?” requires an organization to set a specific direction and allocate resources to move it in that direction. Business portfolio and diversification analyses help an organization do this. Managers use business portfolio analysis to assess the organization’s strategic business units (SBUs), product lines, or individual products as though they were a collection of separate investments (cash cows, stars, question marks, and dogs) to determine the amount of cash each should receive. Diversification analysis is a tool that helps managers use one or a combination of four strategies to increase revenues: market penetration; market development; product development; and diversification.
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Explain the three steps of the planning phase of the strategic marketing process.
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An organization uses the strategic marketing process to allocate its marketing mix resources to reach its target markets. This process is divided into three phases: planning, implementation, and evaluation. The planning phase consists of (a) a situation (SWOT) analysis, which involves taking stock of where the firm or product has been recently, where it is now, and where it is headed and focuses on the organization’s internal factors (strengths and weaknesses) and the external forces and trends affecting it (opportunities and threats); (b) a market-product focus through market segmentation (grouping buyers into segments with common needs and similar responses to marketing programs) and goal setting, which in part requires creating points of difference (those characteristics of a product that make it superior to competitive substitutes); and (c) a marketing program that specifies the budget and actions (marketing strategies and tactics) for each marketing mix element.
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Describe the four components of the implementation phase of the strategic marketing process.
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The implementation phase of the strategic marketing process carries out the marketing plan that emerges from the planning phase. It has four key components: (a) obtaining resources; (b) designing the marketing organization to perform product management, marketing research, sales, and advertising and promotion activities; (c) developing schedules to identify the tasks that need to be done and the time, the people responsible, and the deadlines for each task—often with an action item list and Gantt chart; and (d) executing the marketing strategies, and the associated marketing tactics that contribute to the firm’s overall success.
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Discuss how managers identify and act on deviations from plans.
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The evaluation phase of the strategic marketing process seeks to keep the marketing program moving in the direction that was established in the marketing plan. This requires the marketing manager to compare the results from the marketing program with the marketing plan’s goals to (a) identify deviations or “planning gaps” and (b) take corrective actions to exploit positive deviations or correct negative ones.
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is a privately owned organization that serves its customers to earn a profit so that it can survive.
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for-profit organization
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is a nongovernmental organization that serves its customers but does not have profit as an organizational goal. Instead, its goals may be operational efficiency or client satisfaction.
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non-for-profit organization
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is where groups of specialists from the marketing, finance, manufacturing/operations, accounting, information systems, research & development, and/or human resources departments focus on a specific strategic direction to create value for the organization.
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functional level of an organization
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What is the meaning of an organization’s mission?
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A mission is a clear, concise, meaningful, inspirational, and long-term statement of the organization’s function in society, often identifying its customers, markets, products, and technologies. It is often used interchangeably with vision.
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What is the difference between an organization’s business and its goals?
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An organization’s business describes the clear, broad, underlying industry or market sector of an organization’s offering. An organization’s goals (or objectives) are statements of an accomplishment of a task to be achieved, often by a specific time.
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is the visual computer display of the essential information related to achieving a marketing objective. Each variable displayed in a marketing dashboard is a ______.
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marketing dashboard, metric
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is a measure of the quantitative value or trend of a marketing action or result.
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marketing metric?
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is a technique that managers use to quantify performance measures and growth targets to analyze their firms’ strategic business units (SBUs) as though they were a collection of separate investments.
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business portfolio analysis
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Explain the four market-product strategies in diversification analysis.
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The four market-product strategies in diversification analysis are: (1) Market penetration, which is a marketing strategy to increase sales of current products in current markets. There is no change in either the basic product line or the markets served. (2) Market development, which is a marketing strategy to sell current products to new markets. (3) Product development, which is a marketing strategy of selling new products to current markets. (4) Diversification, which is a marketing strategy of developing new products and selling them in new market
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What are the three steps of the planning phase of the strategic marketing process?
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Answer: The three steps of the planning phase of the strategic marketing process are: (1) Situation analysis, which involves taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization’s marketing plans and the external forces and trends affecting it. (2) Market-product focus and goal setting, which determines what products an organization will offer to which customers. (3) Marketing program, which is where an organization develops the marketing mix elements and budget for each offering.
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What are points of difference and why are they important?
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Points of difference are those characteristics of a product that make it superior to competitive substitutes—offerings the organization faces in the marketplace. They are important factors in the success or failure of a new product.
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What is the implementation phase of the strategic marketing process?
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The implementation phase carries out the marketing plan that emerges from the planning phase and consists of: (1) obtaining resources; (2) designing the marketing organization; (3) defining precise tasks, responsibilities, and deadlines; and (4) executing the marketing program designed in the planning phase.
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How do the goals set for a marketing program in the planning phase relate to the evaluation phase of the strategic marketing process?
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Answer: The planning phase goals or objectives are used as the benchmarks with which the actual performance results are compared in the evaluation phase to identify deviations from the written marketing plans and then exploit positive ones or correct negative ones.
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Explain the purpose of environmental scanning.
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Environmental scanning is the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends. Environmental trends typically arise from five sources: social, economic, technological, competitive, and regulatory forces. A firm conducting an environmental scan of the marketplace might uncover key trends such as the changing use of media, the increasing impact of new technologies, and many others.
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Describe social forces such as demographics and culture.
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The social forces of the environment include the demographic characteristics and the culture of the population. Three key demographic characteristics include a population profile, a description of generational cohorts (baby boomers, Generation X, and Generation Y), and a description of racial and ethnic diversity. Culture incorporates the set of values, ideas, and attitudes that is learned and shared among the members of a group.
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Discuss how economic forces affect marketing.
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Two aspects of economic forces include macroeconomic conditions related to the marketplace and microeconomic factors such as consumer income. Indicators of marketplace conditions include GDP, unemployment, and price changes (inflation or deflation). Consumer income has gross, disposable, and discretionary components. The state of the economy and changes in income can influence consumers’ ability to buy products and services.
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Describe how technological changes can affect marketing.
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Technological innovations can replace existing products and services. Changes in technology can also have an impact on customer value by reducing the cost of products, improving the quality of products, and providing new products that were not previously feasible. Electronic commerce is transforming how companies do business.
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Discuss the forms of competition that exist in a market.
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There are four forms of competition: pure competition, monopolistic competition, oligopoly, and monopoly. While large companies are often used as examples of marketplace competitors, there are 28 million small businesses in the United States that have a significant impact on the economy.
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Explain how regulatory forces ensure competition and protect producers and consumers.
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Regulation exists to protect companies and consumers. Legislation that ensures a competitive marketplace includes the Sherman Antitrust Act. Companies can protect their competitive position with patent and copyright laws. Consumers are protected by laws that address each of the four elements of the marketing mix. Laws such as the Lanham Act, which provides for the registration of trademarks, benefit both companies and consumers. Self-regulation through organizations such as the Better Business Bureau provides an alternative to federal and state regulation.
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Identify factors that influence ethical and unethical marketing decisions.
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Four factors presented in Figure 3-2 influence ethical marketing behavior. They are: societal culture and norms, business culture and industry practices, corporate culture and expectations, and personal moral philosophy and ethical behavior.
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Describe the different concepts of social responsibility.
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There are three concepts of social responsibility: profit responsibility, stakeholder responsibility, and societal responsibility.
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means that organizations are part of a larger society and are accountable to that society for their actions
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social responsibility.
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are the generation of 76 million among the U.S. population born between 1946 and 1964. These Americans are growing older and will all be 65 or older by 2030.
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Baby Boomers
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are those among the 15 percent of the U.S. population born between 1965 and 1976. These well-educated Americans, also known as the baby bust cohort because of declining birth rates, are supportive of racial and ethic diversity.
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Gen X’ers
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are the 72 million Americans among the U.S. population born between 1977 and 1994. The rising birth rate of this “baby boomlet” cohort is the result of baby boomers having children.
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Gen Y or millenials
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Why are many companies developing multicultural marketing programs?
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The reason for developing these programs is that the racial and ethnic diversity of the U.S. is changing rapidly due to the increases in the African American, Asian, and Hispanic populations, which increases their economic impact.
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How are important values such as sustainability reflected in the marketplace today?
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Many Americans desire and practice sustainability to preserve the environment. Specifically, these consumers buy products such as hybrid gas-electric cars. Consumers also prefer brands that have a strong link to social action (like Ben & Jerry’s—see Chapter 2). Companies are responding to this consumer trend by producing products that use renewable energy and less packaging.
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is the money a consumer has left after paying taxes to use for necessities such as food, housing, clothing, and transportation.
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Disposable income
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is the money that remains after paying for taxes and necessities and is usually spent on luxury items
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discretionary income
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How does technology impact customer value?
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(1) Consumers can now assess value on the basis of dimensions such as quality, service, and relationships due to the decline in the cost of technology. (2) Technology provides value through the development of new products.
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In pure competition there are a _____ number of sellers.
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large
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The ______Act forbids actual monopolies, whereas the_______ Act forbids actions that are likely to lessen competition.
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Sherman Antitrust; Clayton
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The Federal Trade Commission (FTC) monitors
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unfair business practices
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How does the Better Business Bureau encourage companies to follow its standards for commerce?
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The Better Business Bureau (BBB) uses moral suasion to get members to comply with its standards.
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What rights are included in the Consumer Bill of Rights?
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The rights to safety, to be informed, to choose, and to be heard.
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is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.
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moral idealism
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Marketing efforts to produce, promote, and reclaim environmentally sensitive products are called _____ .
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Green marketing
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involves conducting business in such a way that protects the natural environment while making economic progress. Green marketing is an ecological example of such an initiative.
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sustainable development?
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Identify the major sociocultural influences on consumer behavior.
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Sociocultural influences, which evolve from a consumer’s formal and informal relationships with other people, also affect consumer behavior. These involve personal influence, reference groups, the family, culture, and subculture. Opinion leadership and word-of-mouth behavior are two major sources of personal influence on consumer behavior. Reference groups are people to whom an individual looks as a basis for self-approval or as a source of personal standards. Family influences on consumer behavior result from three sources: consumer socialization, passage through the family life cycle, and decision making within the family or household. Finally, a person’s culture and subculture have been shown to influence product preferences and buying patterns.
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Distinguish among three variations of the consumer purchase decision process: extended, limited, and routine problem solving.
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Consumers don’t always engage in the five-stage purchase decision process. Instead, they skip or minimize one or more stages depending on the level of involvement—the personal, social, and economic significance of the purchase. For high-involvement purchase occasions, each of the five stages of the consumer purchase decision process is used and considerable time and effort are devoted to the search for external information and the identification and evaluation of alternatives. With limited problem solving, consumers typically seek some information or rely on a friend to help them evaluate alternatives. For low-involvement purchase occasions, consumers engage in routine problem solving. They recognize a problem, make a decision, and spend little effort seeking external information and evaluating alternatives.
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Describe the stages in the consumer purchase decision process.
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The consumer purchase decision process consists of five stages. They are problem recognition, information search, alternative evaluation, purchase decision, and postpurchase behavior.
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is perceiving a difference between a person’s ideal and actual situation big enough to trigger a decision
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Problem recognition
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involves remembering previous purchase experiences (internal search) and external search behavior such as seeking information from other sources.
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Information search
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clarifies the problem for the consumer by (a) suggesting the evaluative criteria to use for the purchase, (b) yielding brand names that might meet the criteria, and (c) developing consumer value perceptions.
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alternative evaluation
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involves the choice of an alternative, including from whom to buy and when to buy.
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The purchase decision
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involves the comparison of the chosen alternative with a consumer’s expectations, which leads to satisfaction or dissatisfaction and subsequent purchase behavior.
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Postpurchase behavior
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What is the first stage in the consumer purchase decision process?
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problem recognition—perceiving a need
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The brands a consumer considers buying out of the set of brands in a product class of which the consumer is aware are collectively called the .
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consideration set
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What is the term for postpurchase anxiety?
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cognitive dissonance
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The problem with the Toro Snow Pup was an example of selective .
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comprehension—consumers perceived the name to mean that Snow Pup was a toy that was too light to do any serious snow removal.
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What three attitude-change approaches are most common?
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(1) Change beliefs about the extent to which a brand has certain attributes. (2) Change the perceived importance of these attributes. (3) Add new attributes to the product.
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is a mode of living that is identified by how people spend their time and resources, what they consider important in their environment, and what they think of themselves and the world around them.
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Lifestyle
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What two challenges must marketers overcome when marketing to Hispanic consumers?
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(1) The diversity of nationalities among this subculture that affect product preferences and (2) the language barrier that can lead to misinterpretation or mistranslation of commercial messages when translated into Spanish.
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which in some way reprocess a product or service they buy before selling it again to the next buyer;
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(1) industrial firms,
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which are wholesalers and retailers that buy physical products and resell them again without any reprocessing; and
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(2) resellers,
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which are the federal, state, and local agencies that buy products and services for the constituents they serve.
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(3) government units,
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What are the three main types of organizational buyers?
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industrial, resellers, and government units
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provides common industry definitions for Canada, Mexico, and the United States, which makes it easier to measure economic activity in the three member countries of the North American Free Trade Agreement (NAFTA)
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North American Industry Classification System. (NAICS)
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What one department is almost always represented by a person in the buying center?
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purchasing department
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online trading communities that bring together buyers and supplier organizations to make possible the real-time exchange of information, money, products, and services.
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E-marketplaces
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In general, which type of online auction creates upward pressure on bid prices?
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traditional auction
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which type creates downward pressure on bid prices?
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reverse auction
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Describe the key characteristics of organizational buying that make it different from consumer buying.
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Seven major characteristics of organizational buying make it different from consumer buying. These include demand characteristics, the size of the order or purchase, the number of potential buyers, buying objectives, buying criteria, buyer-seller relationships and supply partnerships, and multiple buying influences within organizations. The organizational buying process itself is more formalized, more individuals are involved, supplier capability is more important, and the postpurchase evaluation behavior often includes performance of the supplier and the item purchased. Figure 5-4 details how the purchase decision process differs between a consumer and an organization.
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Explain how buying centers and buying situations influence organizational purchasing.
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Buying centers and buying situations have an important influence on organizational purchasing. A buying center consists of a group of individuals who share common goals, risks, and knowledge important to a purchase decision. A buyer or purchasing manager is almost always a member of a buying center. However, other individuals may affect organizational purchasing due to their unique roles in a purchase decision. Five specific roles that a person may play in a buying center include users, influencers, buyers, deciders, and gatekeepers. The specific buying situation will influence the number of people and the different roles played in a buying center. For a routine reorder of an item—a straight rebuy situation—a purchasing manager or buyer will typically act alone in making a purchasing decision. When an organization is a first-time purchaser of a product or service—a new buy situation—a buying center is enlarged and all five roles in a buying center often emerge. A modified rebuy situation lies between these two extremes. Figure 5-5 offers additional insights into how buying centers and buying situations influence organizational purchasing.
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Recognize the importance and nature of online buying in industrial, reseller, and government organizational markets.
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Organizations dwarf consumers in terms of online transactions made and purchase volume. Online buying in organizational markets is popular for three reasons. First, organizational buyers depend on timely supplier information that describes product availability, technical specifications, application uses, price, and delivery schedules. This information can be conveyed quickly via Internet technology. Second, this technology substantially reduces buyer order processing costs. Third, business marketers have found that Internet technology can reduce marketing costs, particularly sales and advertising expense, and broaden their customer base. Two developments in online buying have been the creation of e-marketplaces and online auctions. E-marketplaces provide a technology trading platform and a centralized market for buyer-seller transactions and make possible the real-time exchange of information, money, products, and services. These e-marketplaces can be independent trading communities, such as PlasticsNet, or private exchanges, such as the Global Healthcare Exchange. Online traditional and reverse auctions represent a second major development. With traditional auctions, the highest-priced bidder “wins.” Conversely, the lowest-priced bidder “wins” with reverse auctions.

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