MKT 300 Exam 1 Practice – Flashcards
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Marketing
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organizational function and a collection of processes designed to plan for, create, communicate and deliver value to customers and to build effective customer relationships in ways that benefit the organization and it's stakeholders.
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Exchange
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- At least 2 parties - Something of value - Communication and Delivery - Freedom to accept or reject - Desire to deal with other party
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Marketing Mix
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Product, Price, Promotion, Placement
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Consumer
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End user of product
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Customer
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Who buys the product
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If I BUY a gift card I am the
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CUSTOMER
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If I give the gift card to my friend to use he is the
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CONSUMER
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Demographics
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variables that allow us to group people together based on a common/similar attribute (age, gender, income, etc)
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Psychographics
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Understand how people are different. Individual activities and interests.
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Marketing Concept
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A consumer-oriented philosophy that suggests that satisfaction of consumer needs provides the focus for product development and marketing strategy to enable the firm to meet it's own goals
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3 Main Marketing Concepts
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Value, Customer Relationships, Customer Loyalty
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We have grown from loving to be ______ to hating to be sold but _____.
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SOLD, LOVING TO BUY
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Marketing Management Philosophies
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Production, Sales, Market, Societal
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Production Philosophy
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Focus on efficiency of internal operations. Push sales rather than Pull.
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Sales Philosophy
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Focus on aggressive techniques for overcoming customer resistance.
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Market Philosophy
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Focus on satisfying customer needs and wants
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Societal Philosophy
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Focus on satisfying customer needs and wants while enhancing individual and societal well being.
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Market Orientation
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An organizational perspective; puts the philosophy of the marketing concept into practice.
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Change is _____
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Constant
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Key issues in developing a competitive advantage include:
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-Create customer Value -Create customer Relationships -Create customer Loyalty
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Key to successful marketing:
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STP
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What does STP stand for?
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Segmenting, Targeting, Positioning
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Marketing Environment
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A set of forces, some controllable and some uncontrollable, that influence the ability of a business to create value and attract and serve customers
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Types of Marketing Environments
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Internal, Middle, External
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What happens when you move from the Internal levels of Marketing to the External levels of Marketing?
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You begin to lose control of all the factors involved within these.
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What are some of the factors that affect the Marketing Environment?
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Social Changes, Competition, Consumer Characteristics
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Porter's Five Environmental Forces
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Threat of new entrants Threat of substitute products Bargaining power of suppliers Bargaining power of customers Competitive rivalry within an industry
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Segmenting
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dividing market based on needs/benefits, demographics, lifestyles, behavioral measures, etc.
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Why do we segment?
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It allows markets to focus on specific/desired needs and wants and it allows companies to better allocate their resources.
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Segmentation Criteria: the "labels" used to categorize different factors of the market(s). The five criteria of segmentation are:
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Homogeneous Heterogeneous Substantial Identifiable Responsive
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Homogeneous
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members of a particular segment must be similar in their attitudes, behaviors, finances, etc.
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Heterogeneous
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groups must be different from other groups
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Substantial
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Groups must be of sufficient size to warrant special marketing efforts. Groups don't have to necessarily be large in size, just big enough to provide/achieve desired outcomes
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Identifiable
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Marketers must be able to identify group members and non-group members and be able to measure how many group members there are
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Responsive
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react in a similar manner to market offerings
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Most Common ways of Segmentation
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Demographics, Psychographics, Behavioral, Needs
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Demographic Segmentation
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Gender, Age, Income, Family size, Family life cycle, Occupation, Ethnicity
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Psychographic Segmentation
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Values, Lifestyle, Personality, Activities, Interests, Opinons, AIO
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Behavioral Segmentation
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Dividing market by the amount of product bought or consumed using the 20-80 rule
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Needs Segmentation
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Grouping customers into market segments according to the benefits they seek from a product (i.e.: Toothpaste)
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20-80 Rule
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The best 20% of our customers generate 80% of the demands and sometimes 80% of the profits. It is critical to make sure the demands of these customers are served.
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Targeting
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selecting the most appropriate segments to market to
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Target Market
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a group of people or organizations for which a given organization designs, implements, and maintain a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
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4 Targeting Strategies
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Undifferentiated, Differentiated, Niche, Micro
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Undifferentiated Targeting
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marketing approach where the target market is viewed as a whole. No individual segments thus requires a single marketing mix
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Differentiated Targeting
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strategy that chooses two or more well defined market segments that develops a distinct marketing mix for each
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Niche Targeting
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a strategy used to select one segment of a market for targeting marketing efforts. Only a few targets such as sports cars.
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Micro Targeting
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one-to-one marketing. each individual is offered a unique and customized good/service.
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Positioning
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The placement of a product or service offering in the minds of a selected target market
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Unique selling proposition
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the distinct aspect that an organization offers in order to stand out from the competition
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Why must companies select a position/image they want to target?
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In order to achieve their own personal benefits/goals that also apply to the customers
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Perceptual Mapping
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a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers' minds. -similar to categorizing.
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Repositining
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changing a consumer's perceptions of a brand in relation to competing brands
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Weber's Law
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The stronger the initial stimulus, the greater the added intensity needed to perceive a difference
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Perceptual Organization
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grouping certain elements in an environment to link to a product that is recognized by the way the items are grouped.
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Strategic Market Plan
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the managerial process of creating and maintaining a fit between the organization's objectives and resources and evolving market opportunities
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Strategic Market Plan Elements
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Business Mission Statement Objectives Situation/SWOT Analysis Implementation Evaluation Control
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Business Mission Statement
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What is the purpose of the organization? Should be market-oriented and defined in terms of customer needs
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Objectives
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what is to be accomplished through marketing activities SMART Objectives (Specific, Measurable, Achievable, Relevant, Time-Bound)
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Situation/SWOT Analysis
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Internal (Strengths, Weaknesses, Opportunities, Threats).
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BCG Matrix
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Composed of four quadrants: STARS, Cash Cows, Question Marks, DOGS
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STARS
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High Market Shares, High Growth Rates
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Cash Cows
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High Market Shares, Low Growth Rates
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Question Marks
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Low Market Shares, High Growth Rates
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DOGS
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Low Market Shares, Low Growth Rates
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Marketing Strategy
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The activities of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets.
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Strategic Focus Approaches
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Aggressive, Diversification, Turnaround, Defensive
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Aggressive Approach
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many internal strengths, many external opportunities
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Diversification Approach
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many internal strengths, many external threats
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Turnaround Approach
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many internal weaknesses, many external opportunities
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Defensive Approach
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many internal weaknesses, many external threats
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Competitive Advantage
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Set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition
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3 Categories of Competitive Advantage
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Cost, Product/Service Differentiation, Niche
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Competitive Advantage Positional Strategies
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Market Leader, Market Challenger, Market Follower, Market Niche
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Provide Examples of Market Leaders, Challengers, Followers, and Niches (respectively)
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Coca Cola, Pepsi, Dr. Thunder, Cream Soda
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Strategic Opportunity Matrix
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Market Penetration, Market Development, Product Development, Diversification
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Market Penetration
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Push existing products to existing customers
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Market Development
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Push existing products to new customers
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Product Development
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Push new products to existing customers
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Diversification
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Push new products to new customers
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Consolidation Strategies
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Retrenchment, Pruning, Divesting
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Retrenchment
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Pulling back on the marketing efforts of a specific product
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Pruning
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Discontinuing a certain branch of a given company, but the company itself doesn't stop
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Divesting
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completely abandoning the business of...
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Balanced Scorecard
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Considering Businesses from different perspectives Customer, Financial, Internal Business, Innovation and Learning
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Customer-Focused Strategic Planning
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Instills a corporate culture that places customers at the top of the organizational hierarchy
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Business Plan
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Written document that defines the operational and financial objectives of a business over a particular time, and defines how the business plans to accomplish those objectives
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Elements of the Business Plan
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-Nature of the Business -Organizational Objectives -Decision-making process Organizational Policies Resource Utilization
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Marketing Plan
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document that includes an assessment of the marketing situation, marketing objectives, marketing strategy, and marketing initiatives
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Consumer Culture
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sum total of learned beliefs, values, and customs that serve to direct the consumer behavior of members of a particular society
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Enculturation
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taking on a new role in life (coming to college and doing to the college lifestyle)
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Acculturation
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complete emersion into a foreign culture (you going to outside influences)
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Reverse Acculturation
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exposed to outside influences without leaving your comfort zone (outside influences coming to you)
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Corporate Social Responsibility
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concern for how a company's actions might affect the interest of others
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Philanthropic Responsibility
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Be a good citizen
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Ethical Responsiblity
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Do what is right
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Legal Responsibility
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Obey the Law
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Economic Responsibility
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Be profitable
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Sustainability
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the idea that socially responsible companies will outperform their peers by focusing on the worlds' social problems and viewing them as opportunities to build profits and help the world at the same time
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Ethical Development Levels
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Preconventional, Conventional, Postconventional
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Pre-conventional Morality
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based on what will be punished or rewarded (more childlike)
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Post-conventional Morality
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Long-run perspective (is this the right way to do things in the long run)
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Business-to-Business Marketing (B2B)
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Products used to manufacture other products. Businesses that work together with other businesses to create a product
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Evaluative Criteria for Business Buyers
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Price, Service, Quality
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Derived Demands
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organizations buy products that are used to produce consumer products (if demand for soft drinks increases, more corn syrup will be demanded by organizations)
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Inelastic Demands
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demand of a product doesn't change even if the price of the product goes up/down
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Joint Demands
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when multiple items are used together in final product. demand change for one product may change the demand for the others
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Fluctuating Demands
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when the demand for business products is more stable than consumer products (multiplier effect)
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Straight Rebuy
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company buys/orders the same materials for a product (no changes)
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Modified Rebuy
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changes in the original product are desired so a company may buy different materials for the same product (recycled materials)
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New Task
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first time and/or unique buy of goods and services for an organization
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Global Marketing Standardization
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production of uniform products that can be sold the same way all over the world
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One product One message
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using the same message on a product works worldwide (lays chips)
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Message Adaptation
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Changes are made to the message of a product to fit/adapt to the location where it's being sold (kit kat)
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Product Adaptation
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Changes are made to the product to meet location needs/wants in order for it to be effective (McDonalds; same message but a slight difference in product across the world)
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Product Invention
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Completely changing the message and the product so that it fits with the cultural differences of where it's being sold. (foster's beer, represents Australian beer in AMERICA but NOT in Australia)
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Licensing
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Legally allow the use manufacturing, patents, for a fee. Logos on shirts produced by other companies for a fee ( sparky logo)
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Contract Manufacturing
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A company and a manufacturer sign an agreement where the manufacturer makes the product, without a fee, sells them to the company with the demand and now it's up to that company to sell the product.
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Joint Ventures
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domestic companies join another company to create a new entity
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Direct Investment
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take active ownership of a foreign company/manufacturing facility on foreign soil
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Consumer Behavior
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The Dynamic interaction of affect and cognition, behavior, and the environment in which human beings conduct the exchange aspects (product and service purchases) of their lives Thinking, Feeling, Doing
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Consumer Behavior (simple definition)
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How consumers purchase, use, and dispose of purchased goods and services
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5 Step Consumer Decision-Making Process
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Need Recognition Information Search Evaluation of Alternatives Purchase Post-purchase Behavior
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Conjunctive Rule
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Product/Service must meet ALL minimum thresholds for it to become acceptable for "purchase"
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Multi-Attribute Rule
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Weighted total derived by multiplying importance rating by your evaluation
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Lexicographic Rule
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Ranking attributes in order of importance and choosing the product/service that is the BEST on the most important attribute assigned
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Factors Influencing Purchases
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Social, Personal, Psychological, Situational
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Reference Groups
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Direct and Indirect
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Direct Reference Groups
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Groups that may shape decisions and you ARE a member of. Primary and Secondary Groups
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Indirect Reference Groups
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Groups that may shape decisions and you ARE NOT part of. Aspirational and Non-Aspirational
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Personality
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Internal characteristics
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Lifestyle
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External characteristics
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Dogmatism
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open/closed mindedness
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Selective Exposure
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Consumer notices certain stimuli and ignores others
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Selective Distortion
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Consumer changes or distorts information that conflicts with feelings of beliefs
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Selective Retention
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Consumer remembers only that information that supports personal beliefs
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Consumer Beliefs
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Represent the knowledge a consumer has about objects, their attributes, and their benefits provided
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Attitudes
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consistent response toward an object
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Cognitive
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refers to thoughts
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Affective
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refers to feelings
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Conative
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refers to our actions
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Aact
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Attitude towards the act
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Aact =
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sum of Bi x Ei (beliefs x truths/opinions)
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SN
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Subjective Norms
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SN =
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sum of NBj x MCj (what others believe x my level of compliance/influence towards that belief)
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TORA
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a scale used to predict and influence behaviors among consumers/customers
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Consumer Insight
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perceived meanings of data collected from the study of consumer behavior
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Marketing Reseach
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acquisition and analysis of information used to identify and define marketing opportunities that connect consumers to marketers.
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Primary Data
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Information collected first-hand
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Secondary Data
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Information collected by someone else
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Qualitative Research
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Focus groups, observable data
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Quantitative Research
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Surveys, Experimentation, collectible data
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Dichotomous
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only two possible outcomes
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Multiple Choice
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closed-ended but providing more possible outcomes
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Likert Scales
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usually a 1-? scale
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Brand Development Index (BDI)
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( % of Brand to total US sales in market/ % of total US population in market) x 100
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Category Development Index (CDI)
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(% of product category total sales in market/ % of total US population in market) x 100
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Brand
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a brand is an identifying name, term, design, symbol or any other feature that identifies one marketer's product as distinct from those of other marketers
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Marketing is all about
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Creating Exchanges, Identity, Connections, Relationships, Solving Customer Problems
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Brands represent ______
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Solutions
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Brand Elements
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Names, Slogans, Websites, Logos, Color Schemes
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Brand Equity
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marketing and financial value associated with a brand's strength. How much a brand is worth.
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Benefit of Brand Equity to Consumers
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Search Cost Reducer, Signal of Quality, Risk Reducer, Symbolic Deivce
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Benefits of Brand Equity to Companies
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Source of Competitive Advantage, Predictability and security of Demand, Barriers to Entry, Financial Returns
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Marketing vs. Branding
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Marketing creates, communicates, and delivers the product while Branding helps instill the value of the product into the customers' minds for future reference.
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Brand Image
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salient and feeling-related associations
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Packaging
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Effective Packaging offers protection, economy, safety, and convenience
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Labeling
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used for identification, promotional, and informational and legal purposes
