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60 Cards in this Set
- Front
- Back
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Capitalism
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A system where most means of production (capital) are privately controlled, privately owned and operated for profit.
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What are the four parts of Capitalism?
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-Right to private property
-Right to own a business and keep its profits -Freedom of competition -Freedom of choice |
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Socialism
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A system based on the idea that most basic businesses should be owned by the government. So that profits can be more evenly distributed among the people.
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Communism
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Economic/political system where government owns all major factors of production and makes all economic decisions itself
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What is the demand curve?
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Demand curve slopes down from left to right. Negative slope is known as law of demand, meaning people will buy more of something if its price falls.
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Law of supply
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The law of supply states that the higher the pr ice, the larger the quantity supplied so as to make a bigger profit since the output costs are so high. Hence, upward, positive slope.
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Market equilibrium
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A situation in which the quantity of a product demanded equals the quantity supplied so there is no pressure to change the price
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Excess demand
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a situation in which, at the prevailing price, consumers are willing to buy more than producers are willing to sell
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Excess supply
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Occurs when producers are willing to sell more than consumers are willing to buy
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Product-oriented definition
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Tells what a company does, sells, etc. It's a very broad definition. Can become outdated. Defined in terms of products and technologies.
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Market-oriented Definition
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More specific. The experience one gets out of using the company. The definition describes how the company satisfies customer needs.
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Business portfolio
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The collection of businesses and products that make up the company
Companies must analyze current portfolio and decide which ones receive more, less or no investment -Shape future portfolio by gathering strategies for growth and downsizing. |
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SBU
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Strategic business unit. Key businesses making up companies that have separate missions and objectives and that can be planned independently from other company businesses. It can be a company division, a product line within a division or sometimes a single product or brand.
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Product market expansion grid
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A portfolio-planning tool for identifying company growth opportunities through market penetration, development, product development, or diversification
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Market Penetration
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more sales to current customers without changing products. ex: add more stores or improved menus, prices etc
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Market development
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identifying and developing new markets for current products. ex: new demographic markets or groups such as seniors.
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Product development
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A strategy for company growth. Offering modified or new products to current markets. Ex. New diet drinks.
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Diversification
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A strategy for company growth through starting up or buying businesses outside of its current products and markets. Ex: adding hear music or XM music to Starbucks
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Stars
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Stars are high-growth, high-share businesses or products. They often need heavy investment to finance their rapid growth. Eventually their growth will slow down and they will turn into cash cows.
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Cash cows
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Cash cows are low-growth, high-share businesses or products. These established and successful SBUs need less investment to hold their market share. They produce a lot of cash that the company uses to pay its bills and to support other SBUs that need investment.
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Question Marks
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Question Marks: Low-share business units in high-growth markets. They require a lot of cash to hold their share, let alone increase it. Management needs to think hard about what question marks they want to grow into stars.
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Dogs
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Dogs: Dogs are low-growth, low-share businesses and products. They may generate enough cash to maintain themselves but do not promise large sources of cash.
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Marketing Environment
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The actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships wit target customers
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Microenvironment
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The actors close to the company that affect its ability to serve its customers-- the company, suppliers, marketing intermediaries, customerr markets, competitors and publics
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Macroenvironment
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The larger societal forces that affect the microenvironment-- demographic, economic, natural, technological, political and cultural forces.
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Actors in the microenvironment
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The company, suppliers, marketing intermediaries, customers, competitors, publics
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Marketing intermediaries
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Firms that help the company to promote, sell and distribute its good to final buyers; they include resellers, physical distribution firms, marketing service agencies, and financial intermediaries.
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Resellers
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Distribution channel firms that help the company find customers or make sales to them. Includes wholesalers and retailers who buy and resell merchandise
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Physical distribution firms
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Help the company to stock and move goods from their points of origin to their destinations
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Marketing service agencies
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the marketing research firms, advertising agencies,media firms and marketing consulting firms that help the company target and promote its products to the right markets
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Financial intermediaries
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Banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods.
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Five types of customer markets
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Consumer markets- individuals and households that buy goods and services for personal consumption
Business markets- buy goods and services for further processing or for use in their production process reseller markets- buy goods and services to resell at a profit Government markets- ade up of government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them international markets- buyers in other countries |
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Public
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Any group that cares about an organization's ability to reach its own objectives
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Seven types of publics
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Financial publics- company's ability to obtain funds. Banks, investment houses and stockholders
Media publics- carry news features Government publics- truth in advertising, product safety, important matters Citizen-action publics- helps the company to stay on top of environmental and minority issues Local publics- deals with local neighborhood residents on issues General public Internal publics- the internal workers at the companies. If the internal public feels good, their positive attitude spills over to the external public |
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Major forces in company's macroenvironment
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Demographic forces
Economic forces Natural forces Technological forces Political forces Cultural Forces |
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Demography
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The study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics.
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Baby Boomers
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The 78 million people born during the baby boom following World War II and lasting until the early 1960s
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Generation X
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45 Million people born between 1965 and 1976 in the "birth dearth"
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Generation Y
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The 72 million children of the baby boomers, born between 1977 and 1994
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Demographic environment
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Important because it involves people and people make up markets
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Demographic trends
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Include age, family structure, geographic population shifts, educational characteristics, and population diversity
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Generational Marketing
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Segments people by life
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Demographic environment trends
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The changing American Family
Geographic shifts in population Changes in the workforce increased diversity |
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Economic Environment
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Consists of factors that affect consumer purchasing power and spending patterns
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Subsistence economies
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Consume most of their own agriculture and industrial output
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Industrial economies
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Richer markets
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Engel's Laws
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Differences noted over a century ago by Ernst Engel in how people shift their spending across food, housing, transportation, health care, and other goods and services categories as family income rises
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Natural Environment
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Involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities.
-shortages of raw materials -increased pollution -increase government intervention -environmentally sustainable strategies -green marketing |
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Technological Environment
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Most dramatic force in changing the marketplace with many positive and negative effects
-internet -medicine -credit cards |
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Political Environment
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Consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.
-Legislation regulating business Increasing legislation protects companies, consumers the interests of society |
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Socially responsible behavior
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Occurs when firms actively seek out ways to protect the long-term interests of their consumers and the environment
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Cultural Environment
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Consists of institutions and other forces that affect a society's basic values perceptions and behavior
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Internal Databases
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Electronic collections of consumer and market information obtained from data sources within the company network
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Marketing Intelligence
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The systematic collection and analysis of publicly available information about competitors and developments in the marketing environment
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Marketing research
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The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.
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Secondary Data
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Consists of information that already exists somewhere, having been collected for another purpose
Low cost Rapid and easy process Short time span |
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Primary Data
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Consists of information gathered for the special research plan
High cost Very involved process Usually long process |
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Exploratory Research
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The gathering of preliminary information that will help to define the problem and suggest hypothesis or provide useful insight
Happens early on when you’re exploring a problem. -Not worried about numbers, you’re just trying to get insights. Observation Depth interviews Focus groups- a group discussion focused on a series of topics introduced by a discussion leader Ethographic research involves sending trained observers to watch and interact with consumers in their natural environment |
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Descriptive Research
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to describe things such as market potential for a product or the demographics and attitudes of consumers who buy the product
When you want to quantify things a little bit more. If you want to make claims like “50% of people are bothered by blah about my product” you have to do descriptive research in order to accurately do so. large representative samples Survey Research Questionaire |
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Casual Research
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to test hypothesis about cause-and-effect relationships
If I do x will y happen? Lab experiment Field experiment Taste tests |
