Principles of Marketing Ch. 1, 2, and 4 – Flashcards

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What is Marketing?
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A philosophy, an attitude, a perspective, a management orientation PLUS a the 4P's
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American Marketing Association Definition
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Marketing is the process of planning and executing the 4P's to create exchanges that satisfy individual and organizational goals
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The 4P's
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Product, (stemming from product is) price, distribution, and promotion
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The Concept of Exchange
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The idea that people give up something to receive something they would rather have
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The necessary conditions for exchange are
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have at least two parties, something of value, communication and delivery, freedom to accept or reject, and desire to deal with other party
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The Marketing Management Philosophies are
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Production, Sales, Market, and Societal
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Define Production
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Focus on efficiency of internal operations
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Define Sales
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Focus on aggressive sales techniques and believe that high sales result in high profits
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Define Market
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Focus on satisfying customer needs and wants while meeting objectives
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Define Societal
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Focus on satisfying customer needs and wants while enhancing individual and societal well-being
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The guiding factor with all orientations (the four marketing management philosophies) should be
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the determination of what customers want, not what management thinks should be produced or sold
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Production involves which 4P?
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Price
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Sales involves which 4P?
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Promotion
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Market involves which 4P?
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Product
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Societal involves which 4P?
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Distribution
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Production focuses on
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*efficiency* saving money, lower costs, and tightening budget (Ex: homogeneous products like toilet paper)
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Sales focus on
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*aggressive* only cares about selling (higher sales = higher profits)
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Market focuses on
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*satisfying customer needs* research, cares about customer, and product convenience
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Societal focuses on
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*customer needs and societal well-being* cares about society (Ex: make a recyclable product to help society while making a profit)
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Sales Orientation
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Focus is internal, aggressive selling goods and services to everyone while aiming for maximum sales volume using the tool of promotion
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Market Orientation
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Focus is outward, satisfying wants and needs of people, focusing on specific groups, aiming for the goal of satisfying the customers using the tool of coordinating the use of all marketing activities
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Target Market
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specific group of people with a need or want (Ex: *Walmart* production, societal, and Market)
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Relationship Marketing
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The name of a strategy that entails forging long-term partnerships with customers, both individuals and firms
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Requirements for Building Relationships
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Know who your customers are, know what they value, know what they want to buy, and know how they prefer to interact
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Why study Marketing?
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It plays an important role in society, it is vital to business survival profits and growth, it offers career opportunities, it affects your life every day, half of every dollar spent pays for marketing costs, better-informed consumers, and a demand for customer satisfaction
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Strategic Planning Equation
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Resources and objectives + Evolving marketing opportunities = Long run profitability and growth
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The Marketing Plan
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A written document that acts as a guidebook of marketing activities for the marketing manager
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Marketing Plan Process
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First create a business mission statement, then come up with objectives, then situation or SWOT analysis, then marketing strategy, then implementation evaluation control
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Defining the Business Mission
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Focuses on the market(s) rather than the good or service and strategic business units may also have a mission statement
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Example of a Business Mission
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*Northwest* Education, Sports, Entertaining, Job Preparation
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Marketing Myopia
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Being too narrow and short-term; too broad won't have direction; markets served and customer benefits = good mission statement
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Strategic Business Units (SBUs)
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Large organization needed to be broken down into smaller departments, each department requires its' own strategies and funding
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Characteristics of a Strategic Business Unit
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A distinct mission and specific target market, control over their resources, their own competitors, and plans independent of other SBUs
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Marketing Objectives must be
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realistic, measurable, time specific, and consistent with organization's priorities
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Define the marketing objective Realistic
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realistic goal
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Define the marketing objective Measurable
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how you're going to meet your goal
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Define the marketing objective Time Specific
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Ex: check every month to make sure you're accomplishing goals
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SWOT Analysis includes
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Strengths, Weaknesses, Opportunities, and Threats
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Strengths
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Things the company does well
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Weaknesses
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Things the company does not do well
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Opportunities
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Conditions in the external environment that favor strengths
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Threats
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Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness
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Strengths and weaknesses are a ____________ assessment.
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Internal
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Opportunities and Threats are a ____________ assessment.
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External
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SWOT Analysis
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helps firms identify their competitive advantage
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Internal SWOT analysis includes
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Things we can control like: Production costs, marketing skills, employee capabilities, financial resources, available technology, superiority in manufacturing, service, quality, value perception, and company/brand image
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External SWOT analysis includes
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Things we can't control like: Social, Demographic, Economic, Technological, Political/Legal, and Competitive
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Social
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Ex: # of high school students or social media
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Demographic
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Ex: age, income, gender, marriage status
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Economic
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Ex: Employment rate
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Political/Legal
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Ex: laws on commerce
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Competitive
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Ex: can't control what competitors do
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Define Environmental Scanning
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Collection and interpretation of information about forces, events and relationships in the external environment that may affect the future of the organization or the marketing plan implementation
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What happens in an environmental scanning
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Examination of macro environmental forces (External SWOT analysis components), helps identify market opportunities, and provides guidelines for design of marketing strategy
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Environmental Scan is only used for ___________
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External SWOT analysis
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Competitive Advantage
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The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition (What they do better than anyone else)
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Examples of Competitive Advantage
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Southwest Airline Baggage or Northwest textbook rentals
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Types of Competitive Advantage
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Cost, Product/Service Differentiation, and Niche Strategies
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Cost
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being the low cost competitor in an industry while maintaining satisfactory profit margins (innovations, efficiency, design, and experience)
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Product/Service Differentiation
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advantage achieved when a firm provides something that is unique and valuable to buyers beyond simply offering a lower price than the competition (brand names, network, reliability, and image) Ex: google fiber
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Niche Stategies
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advantage achieved when a firm seeks to target and effectively serve a small segment of the market (having a business in only one region, being the only producer for a certain need)
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Define Niche
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Product that is extremely desirable
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Sustainable Competitive Advantage
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An advantage that cannot be copied by the competition
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Organization's Skills and Assets
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Patents, Copyrights, Locations, Equipment, Technology, Customer Service, and Promotion
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Portfolio Matrix
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Tools for allocating resources on the basis of relative market share and market share and market growth rate
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Star
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High growth, Market leaders, Require cash, and Large profits
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Cash Cow
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Low growth, High market share, and High cash flow
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Problem Child
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High growth, Low market share, Need cash, and Poor profit margins
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Dog
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Low growth, Low market share, and Minimal cash flow
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Star Examples
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smartphone
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Problem Child Examples
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smart HDTV or hybrid cars
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Cash Cow Examples
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cable TV, Internet, or cell phone service
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Dog examples
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VHS tapes or flip phones
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Benefits of marketing
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competitive advantage and allocation of resources
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Market Share
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stops at 100%, increases by taking from someone, lose by someone taking from you (your percentage of a product you're selling)
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Market
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to infinity, contracts or expands by economy, demographics, etc. (the product)
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Strategies for Resource Allocation
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Build, Hold, Harvest, and Divest
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Build
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Provide financial resources if SBU (Problem Child) has potential to be a Star
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Hold
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Preserve market share if SBU is a successful Cash Cow. Use cash flow for other SBUs. "Stay put" - already making money, don't need help
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Harvest
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Increase short-term cash return. Appropriate for all SBUs except Stars
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Divest
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Get rid of SBUs with low shares in low-growth markets. This is the dog
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Prospects
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most attracted customers
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Target Market Strategy
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Segment the market based on groups with similar characteristics, analyze the market based on attractiveness of market segments, and select one or more target markets
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The Marketing Mix
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Using the 4P's to produce exchanges with a target market
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Product Strategies
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product is the heart of the marketing mix and is the start of the 4 P's -includes a physical unit package, warranty, service, brand, image, and value
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Distribution (place) Strategies
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Anything to do with getting a product to a customer -product availability -involves all activities from raw materials to finished products
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Promotion Strategies
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Anything you can do to make a product more visible -Role is to bring about exchanges with target markets -Includes integration of personal selling, advertising, sales promotion, and public relations
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Pricing Strategies
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-The most flexible of the 4 P's - Price X Units sold = Total Revenue
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What does following up the marketing plan include
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Implementation, Evaluation, Control, and Marketing Audit
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Implementation
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execution of plan is where a plan fails - timelines, budgets, communication
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Evaluation
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monitor plan - track revenue/sales - formal and informal control programs
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Control
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control the plan
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Marketing Audit
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always taking an audit of our plan -Includes Comprehensive, Systematic, Independent, and Periodic
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Define The Marketing Audit
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A thorough, systematic, periodic evaluation of the goals, strategies, structure, and performance of the marketing organization
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Define Target Market
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A defined group most likely to buy a firm's product
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External Marketing Environment
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is not controllable, ever-changing marketplace, and environmental scanning
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The poverty of time
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A lack of time to do anything but work, commute to work, handle family situations, do housework, shop, eat, sleep
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A lot of ________ parent families work now
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two
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On average providing for kids is ______________ from __________ to ____________
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$250,000 from birth to eighteen
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________ percent of all females are in the workforce
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58
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Demographic Factors
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Age, Location, and Race and Ethnicity
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Generation Y
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called Millennials, age group under 25, product has to be cool, they have a lower work ethic, respond better to different types of ads, and love customized products and services
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Generation X
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are savvy and cynical consumers, indulge themselves with meals/alcohol clothing and electronics, and when they like somethings, they're really into it
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Baby Boomers
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Cohort, Cherish youth convenience and individuality, and politics love this group because they have time and money
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Older Consumers
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Age 65+, healthier wealthier and better educated, know exactly what they want and need, not happy with advertising treatment, healthcare is big in this group
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Multiculturalism
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When all major ethnic groups in an area--such as a city, county, or census tract--are roughly represented
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New technology is a weapon against __________ and _________
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inflation and recession
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Inflation
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decrease of the value of money
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Recession
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period of negative growth in the economy
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U.S. excels at _________ and ________ research
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basic and applied
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Information technology and the internet have _________ productivity
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increased
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When it comes to Political and Legal Factors, Laws and Regulations Protect
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Businesses, society, consumers, and new technology (Ex: FDA and FTC and identity theft and privacy)
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FDA
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Food and Drug Administration
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FTC
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Federal Trade Commission
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Regulatory Agencies
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Consumer Product Safety Commission, FTC, and FDA
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Competitive Factors are
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-Competition for Market Share and Profits - Global Competition
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Market Share shortened Definition
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our sales compared to available sales
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Example of Competition for Market Share and Profits
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e- books are competition for Barnes and Noble
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Global Competition
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More foreign firms are entering U.S. market, Foreign firms in U.S. now compete on product quality, and Global markets are highly competitive
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Ethical Behavior in Business
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- Judgments Vary -Just because something is legal, doesn't mean it is ethical
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Code of Ethics
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A guideline to help marketing managers and other employees make better decisions
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Corporate Social Responsibility
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Philanthropic, Ethical, Legal, and Economic
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Philanthropic
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Be a good citizen
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Ethical
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Do what is right
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Legal
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Obey they law
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Social Responsibility Define Economic
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Be profitable
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#4- A company that has a market orientation and adheres to the marketing concept does NOT
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d) Fuel sales growth through the application of aggressive sales techniques
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#15- There are many different kinds of cheese, but only Jarlsberg Lite has 50% less fat, 60% cholesterol, and 100% of the taste of other kinds of cheese. This describes Jarlesberg Lites:
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b) Competitive Advantage
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#22- Every night Universal Studios Japan hosts a firework display. The theme park recently came under Government investigation when allegations were made that the park was detonating more than 50 lbs. of explosives in its nightly fireworks displays. In small nations, the use of explosives is stringently controlled. This is an example of how ______ factors influence a business
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b) Legal & Political
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#13- One of the divisions of manufacture and markets health and beauty. This business has its own accounting engineering
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e) SBU's
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#16- SBU's are classified as ___________ are market leaders and growing fast
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d) stars
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#9- ___________ is the primary tool used by sales oriented org to achieve its corporate goals
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b) promotion
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