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192 Cards in this Set
- Front
- Back
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Marketing Defined
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-Customers are the focus
-Marketing deals with products, price, distribution, and promotion -Marketing builds satisfying exchange relationships -Marketing occurs in a dynamic environment |
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The Importance of Marketing in Our Global Economy
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-Marketing costs consume a sizable portion of buyers’ dollars
-Marketing is used in nonprofit organizations -Marketing is important to businesses -Marketing fuels our global economy -Marketing knowledge enhances consumer awareness -Marketing connects people through technology -Socially responsible marketing can promote the welfare of customers and society -Marketing offers many exciting career prospects |
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Stakeholders
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Those constituents who have a “stake,” or claim, in some aspect of a company’s products, operations, markets, industry, and outcomes; these include customers, employees, investors and shareholders, suppliers, governments, communities, and others
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Marketing
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The process of creating, pricing, distributing, and promoting goods, services, and ideas to facilitate satisfying exchange relationships with customers and other stakeholders in a dynamic environment
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Customers
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The purchasers of an organization’s products; the focal point of all marketing activities
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Target Market
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-A specific group of customers on whom an organization focuses its marketing efforts
-Large or small customer groups -Single or multiple product markets -Single or multiple products -Local to global markets |
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Customers
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The purchasers of an organization’s products; the focal point of all marketing activities
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Target Market
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-A specific group of customers on whom an organization focuses its marketing efforts
-Large or small customer groups -Single or multiple product markets -Single or multiple products -Local to global markets |
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The Marketing Mix
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Four marketing activities—product, pricing, distribution, and promotion—that a firm can control to meet the needs of customers within its target market
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Product
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Goods, services, or ideas that satisfy customer needs
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Pricing
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Decisions and actions that establish pricing objectives and policies and set product prices
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Distribution
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The ready, convenient, and timely availability of products
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Promotion
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Activities that inform customers about the organization and its products
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Exchange
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The provision or transfer of goods, services, or ideas in return for something of value
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Exchange Conditions
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-Two or more participants have something of value that the other party desires.
-Exchange provides mutual benefit/satisfaction. -Each party has confidence in the exchange value of the other party’s offering. -Each party must meet the expectations of the exchange to become trusted by the other parties. |
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Marketing Environment
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The competitive,
economic, political, legal and regulatory, technological, and sociocultural forces that surround the customer and affect the marketing mix |
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Marketing Concept
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A philosophy that an organization should try to satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals
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Customer satisfaction
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-Analysis of customers’ current and long-term needs
-Analysis of competitors’ capabilities -Integration of firm’s resources |
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Evolution of the Marketing Concept
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-Production Orientation
-Sales Orientation -Marketing Orientation |
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Implementing the Marketing Concept
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-Becoming marketing oriented requires establishing an information system to discover customers’ needs and using the information to create satisfying products.
-coordinating all marketing activities by restructuring the organization. -obtaining the support of all managerial and staff levels in the organization. |
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Relationship Marketing
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-Establishing long-term, mutually satisfying buyer-seller relationships allowing for cooperation and mutual dependency
-Increased value of customer (loyalty) over time results in increased profitability. |
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Customer Relationship Management (CRM)
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Using customer information to create marketing strategies that develop and sustain desirable relationships
-Identifying buying-behavior patterns -Using behavioral information to focus on the most profitable customers |
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Value
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A customer’s subjective assessment of benefits relative to the costs in determining the worth of a product
Customer value = customer benefits – customer costs |
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Customer Benefits
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Anything desired by the customer that is received in an exchange
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Customer Costs
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Anything a customer gives up in an exchange for benefits
-Monetary price of the benefit -Search costs (time and effort) to locate the product -Risks associated with the exchange |
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Marketing Management
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The process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently
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Effectiveness
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The degree to which an exchange helps an organization achieve its objectives
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Efficiency
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The process of minimizing the resources an organization must spend to achieve a specific level of desired exchanges
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Planning
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-Assessing opportunities and resources
-Determining marketing objectives -Developing a marketing strategy and plans for implementation and control -How, when and by whom are marketing activities performed? |
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Organizing
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-Developing the internal structure of the marketing unit
-Functions, products, regions, customer types |
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Implementation
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Coordinating marketing -activities
-Motivating marketing personnel -Developing effective internal communications within the unit |
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Control
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-Establishing performance standards
-Comparing actual performance to established standards -Reducing the difference between desired and actual performance |
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Effective Marketing Control Process
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-Provides for quick detection of differences in planned and actual performance
-Accurately monitors activities and is flexible enough to accommodate changes -Incurs low process costs relative to the costs of a “no-control” situation -Is understandable by both managers and subordinates |
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The Importance of Marketing in Our Global Economy
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-Mktg costs consume a sizable portion of buyers’ dollars
-Mktg used in nonprofit organizations -Important to business -Mktg fuels global economy -Mktg knowledge enhances consumer awareness -Mktg connects people through technology -Socially responsible marketing promotes welfare of customers and society -Mktg offers many exciting career prospects |
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Strategic Planning
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The process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, marketing strategy, and a marketing plan
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Marketing Strategy
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A plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market
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Marketing Plan
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A written document that specifies the activities to be performed to implement and control an organization’s marketing activities
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Core Competencies
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Things a firm does extremely well (strengths), which sometimes give it an advantage over its competition
-Financial and human resources -Reputation, goodwill, and brand names |
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Market Opportunity
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A combination of circumstances and timing that permits an organization to reach a target market
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Strategic Windows
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Temporary periods of optimal fit between the key requirements of a market and the particular capabilities of a firm
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Competitive Advantage
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The result of a company’s matching a core competency (superior skill or resources) to opportunities in the marketplace
-Manufacturing skills -Technical skills -Marketing skills |
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SWOT Analysis
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An assessment of the organization’s strengths, weaknesses, opportunities, and threats
-Strengths: competitive advantages or core competencies -Weaknesses: limitations on competitive capability -Opportunities: favorable conditions in the environment -Threats: conditions or barriers to reaching objectives |
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Mission Statement
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-A long-term view, or vision, of what the organization wants to become
-The mission statement answers two questions: 1. Who are our customers? 2. What is our core competency? |
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Marketing Objective
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A statement of what is to be accomplished through marketing activities to match strengths to opportunities, or to provide for the conversion of weaknesses to strengths
-Should be stated in clear, simple terms -Should be accurately measurable -Should specify a time frame for accomplishment -Should be consistent with business-unit and corporate strategy |
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Corporate Strategy
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Determines the means for utilizing resources in the various functional areas to reach the organization’s goals
-Determines the scope of the business -Guides its resource deployment -Identifies its competitive advantages -Provides overall coordination of functional areas |
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Issues Influencing Corporate Strategy Development
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-Corporate culture
Competition -Differentiation -Diversification -Interrelationships among business units -Environment concerns and social issues |
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Strategic Business Unit (SBU)
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A division, product line, or other profit center within a parent company
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Market
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A group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase those products
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Market Share
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The percentage of a market that actually buys a specific product from a particular company
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Market-Growth/Market-Share Matrix
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A strategic planning tool based on the philosophy that a product’s market growth rate and market share are important in determining marketing strategy
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Factors determining SBU/product’s position within a matrix
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1. Market growth rate
2. Relative market share |
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BCG Classification
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- Star
- Cash Cow - Dog - Question Mark |
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Star
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Star—high growth market, dominant market share
requires additional resources for continued growth |
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Cash cow
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low growth, dominant market share -- generates surplus resources for allocation to other SBUs
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Dog
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low/declining market, subordinate market share --
has diminished prospects and represents a drain on the portfolio |
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Question mark
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high growth market, low market share -- represents a high-risk/cost opportunity requiring a large commitment of resources to build market share
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Defining/understanding the target market
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-focusing on specific profitable customer groups/market segments.
-recognizing changes occurring in the market. |
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Creating the Marketing Mix
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-Analyze customer needs, preferences, and behavior
-Have the skills and resources required for product design, pricing, distribution, and promotion -Maintain strategic consistency and flexibility in marketing mix decisions |
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Marketing Planning
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The process of assessing opportunities and resources, determining objectives, defining strategies, and establishing guidelines for implementation and control of the marketing program
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Benefits of Planning
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-Provides the basis for internal communication among employees
-Defines the assignment of responsibilities and tasks and sets the schedules for implementation -Presents objectives and specifies resource allocations -Helps in monitoring and evaluating the performance of the marketing strategy |
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Marketing Implementation
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process of putting marketing strategies into action
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Intended Strategy
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strategy that the company decides on during the planning phase
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Realized Strategy
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strategy that actually takes place
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Internal Marketing
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-Coordinating internal exchanges between the firm and its employees to achieve successful external exchanges between the firm and its customers
-Helping employees understand and accept their roles in the marketing strategy |
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External customers
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Individuals who patronize a business
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Internal customers
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A company’s employees
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Total Quality Management (TQM)
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philosophy that uniform commitment to quality in all areas of the organization will promote a culture that meets customers’ perceptions of quality
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Benchmarking
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Comparing the quality of the firm’s goods, services, or processes with that of the best-performing competitors
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Empowerment
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Giving customer-contact employees authority and responsibility to make marketing decisions on their own
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Centralized Organization
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A structure in which top management delegates little authority to levels below it
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Decentralized Organization
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A structure in which decision-making authority is delegated as far down the chain of command as possible
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Marketing Control Process
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Establishing performance standards and trying to match actual performance to those standards
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Taking Corrective Action
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-Improve actual performance
-Reduce or change the performance standards -Do both |
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Problems in Controlling Marketing Activities
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-Lack of information
-Uncontrollable influence of market environment changes on marketing activities -Time lag that occurs between marketing campaigns and their results delays corrective actions |
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Environmental Scanning
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The process of collecting information about forces in the marketing environment
-Observation -Secondary sources -Market research |
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Environmental Analysis
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The process of assessing and interpreting the information gathered through environmental scanning
-Accuracy -Consistency -Significance |
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Reactive approach to Environmental Forces
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-Passive view of environment as uncontrollable
-Current strategy is cautiously adjusted to accommodate environmental changes |
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Proactive approach to Environmental Forces
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-Actively attempts to shape and influence environment
-Strategies are constructed to overcome market challenges and take advantage of opportunities |
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Monitoring Competition
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-Helps determine competitors’ strategies and their effects on firm’s own strategies
-Guides development of competitive advantage and adjusting firm’s strategy -Provides ongoing information about competitors -Assists in maintaining a marketing orientation |
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Economic Forces
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-Buying Power
-Willingness to Spend |
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Buying Power
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-Resources, such as money, goods, and services, that can be traded in an exchange
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Disposable income
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after tax income
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Discretionary income
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disposable income available for spending and saving beyond the basic necessities of life
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Willingness to Spend
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An inclination to buy because of expected satisfaction from a product, influenced by the ability to buy and numerous psychological and social forces
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Expectations influencing the willingness to spend
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-Future employment
-Income levels -Prices -Family size -General economic conditions (e.g., rising prices) |
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Stages in the Business Cycle
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-Prosperity
-Recession -Depression -Recovery |
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Prosperity
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Low unemployment and high total income create high buying power
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Recession
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Rising unemployment reduces total buying power; consumer and business spending decline
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Depression
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Unemployment extremely high, wages and total disposable income are very low, and there is a lack of consumer confidence
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Recovery
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Economy is moving out of recession or depression towards prosperity
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Federal Trade Commission (FTC)
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influences marketing activities most; can seek civil penalties and require corrective advertising
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Self-Regulatory Forces
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-Better Business Bureau
-National Advertising Review Board (NARB) |
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Food and Drug Administration (FDA)
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Enforces laws and regulations to prevent distribution of adulterated or misbranded foods, drugs, medical devices, cosmetics, veterinary products, and potentially hazardous consumer products
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Consumer Product Safety Commission (FCC)
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Ensures compliance with the Consumer Product Safety Act; protects the public from unreasonable risk of injury from any consumer product not covered by other regulatory agencies
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Federal Communications Commission (FCC)
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Regulates communication by wire, radio, and television in interstate and foreign commerce
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Environmental Protection Agency (EPA)
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Develops and enforces environmental protection standards and conducts research into the adverse effects of pollution
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Federal Power Commission (FPC)
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Regulates rates and sales of natural gas producers, thereby affecting the supply and price of gas available to consumers; also regulates wholesale rates for electricity and gas, pipeline construction, and U.S. imports and exports of natural gas and electricity
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Technology
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The application of knowledge and tools to solve problems and perform tasks more efficiently
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Impact of Technology
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-Dynamic means constant change
-Reach refers to how technology quickly moves through society. -The self-sustaining nature of technology as the catalyst for even faster development |
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Sociocultural Forces
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The influences in a society and its culture(s) that change people’s attitudes, beliefs, norms, customs, and lifestyles
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Demographic Diversity and Characteristics
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-Increasing proportion of older consumers
-Entering another baby boom -Increasingly multicultural U.S. society |
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Cultural Values
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Primary source of values is the family
Values influence: -Eating habits (healthier foods) -Alternative health and medical treatment choices |
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Social Responsibility
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An organization’s obligation to maximize its positive impact and minimize its negative impact on society
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Marketing citizenship
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The adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders
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Stakeholders
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Constituents who have a “stake” or claim in some aspect of the company’s products, operations, markets, industry, and outcomes
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Marketing Ethics
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Principles and standards that define acceptable marketing conduct as determined by various stakeholders
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Ethical Issue
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An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical
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Influence Factors of Ethical Standards
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-Company
-Industry -Government -Customers -Interest Groups -Society |
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Cause-Related Marketing
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The practice of linking products to a particular cause on an ongoing or short-term basis
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Strategic Philanthropy
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The synergistic use of organizational core competencies and resources to address key stakeholders’ interests and achieve both organizational and social benefits
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Green Marketing
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The specific development, pricing, promotion, and distribution of products that do not harm the natural environment
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Consumerism
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The organized efforts of individuals, groups, and organizations to protect the rights of consumers
-Lobbying government officials and agencies -Letter-writing campaigns and boycotts |
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Kennedy’s Consumer “Bill of Rights”
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-Right to safety
-Right to be informed -Right to choose -Right to be heard |
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Codes of Conduct (Ethics)
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Formalized rules and standards that describe what the company expects of its employees
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Benefits of Codes of Conduct and Social Responsibility
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-Socially responsible companies (and their employees) can better respond to stakeholder demands.
-A company’s reputation for social responsibility is important to consumers’ buying decisions. -Social responsibility and ethical behavior reduce the costs of legal violations, civil litigation, and damaging publicity. |
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Electronic Commerce (E-Commerce)
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Sharing business information, maintaining business relationships, and conducting business transactions by means of telecommunications networks
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Electronic Marketing (E-Marketing)
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The strategic process of creating, distributing, promoting, and pricing products for targeted customers in the virtual environment of the Internet
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Benefits of E-Marketing
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1. Open and Instantaneous Flows of Information
-Marketers and customers share information in real-time on prices, specifications, and product availability. 2. Enhanced Customer Service Efficiencies -Rapid response and always-on availability 3. Worldwide Scope -Opens markets to firms of all sizes |
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Addressability
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marketer’s ability to identify customers before they make a purchase
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How E-Merchants Attain Addressability
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-Limit access to areas of their web site to encourage customer registration
-Offer contests and prizes in exchange for consumer information -Place “cookies” on visitor’s computer to track visitor usage and preferences |
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Interactivity
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the ability to allow customers express their needs and wants directly to the firm in response to the firm’s marketing communications
-Real-time interaction with customers -Broader market coverage at a lower cost |
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Community
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a sense of group membership or feeling of belonging
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Blogs
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web-based journals where writers can editorialize and interact with others
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Memory
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the ability to access databases or data warehouses containing individual customer profiles and past purchase histories and to use these data in real-time to customize a marketing offer.
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database
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a collection of information arranged for easy access and retrieval.
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Control
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Refers to customers’ ability to regulate the information they view and the rate and sequence of their exposure to that information.
-The Web is a pull medium because users control the information they view -Marketers have to work harder and more creatively to retain customers at their web sites |
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Portal
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a multiservice web site that serves as a gateway to other web sites.
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Accessibility
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The ability to obtain information available on the Internet.
-Informs and educates the inquiring consumer about competing products and prices -Creates competition for the consumer’s attention |
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Digitalization
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the ability to represent a product, or at least some of its benefits, as digital bits of information.
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E-Marketing Strategy Considerations
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-Target Markets
-Product Marketing -Distribution Systems -Promotion Mediums -Pricing |
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Customer relationship management (CRM)
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focuses on using information about customers to create marketing strategies that develop and sustain desirable long-term relationships.
-A focus on CRM is possible in e-marketing because of marketers’ ability to target individual customers. -The ability to identify individual customers allows marketers to shift their focus from increase share of market to increasing share of customer. -CRM is often based on the use of information technology. |
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The 80/20 Rule
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80 percent of business profits come from 20 percent of customers.
-Advances in technology allow marketers to profile customers in real-time and thereby assess their lifetime value (LTV) to the firm. -Some customers may be too expensive to retain given the low level of profits they generate. -Firms should focus instead on developing and managing long-term relationships with more profitable customers. |
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Personal Privacy Issues
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Unauthorized placement of “cookies” on personal computers
-Web site information requirements for registration -Collection of information from children -Use of “spyware” in software |
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Spam
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Unsolicited commercial e-mail (UCE)
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Misappropriation of Intellectual Property
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Illegal copying of copyrighted software, movies, CDs, and other creative materials
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International Marketing
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Developing and performing marketing activities across national boundaries
-Provides growth opportunities -Promotes innovation -Fosters marketing of better, less expensive products |
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Cultural and Social Forces
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Beliefs and values about:
-Family -Religion -Education -Health -Recreation |
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Economic Differences Affecting International Marketing
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-Standards of living
-Credit -Buying power -Income distribution -National resources -Exchange rates |
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Gross Domestic Product (GDP)
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The market value of a nation’s total output of goods and services for a given period; an overall measure of economic standing
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Import tariff
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A duty levied by a nation on goods bought outside its borders and brought in
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Quota
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A limit on the amount of goods an importing country will accept for certain product categories in a specific period of time
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Embargo
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A governmental suspension of trade in a particular product or with a given country
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Exchange controls
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Government restrictions on the amount of a particular currency that can be bought or sold
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Balance of Trade
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The difference between the value of a nation’s imports and exports
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Political, Legal, and Ethical Forces
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-Differences in legal and ethical standards have caused some companies to establish ethics programs and standards for international business conduct.
-Differences may revolve around such things as intellectual property, labor conditions, payoffs and bribes, and tips and gifts. |
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The North American Free Trade Agreement (NAFTA)
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An alliance that merges Canada, Mexico, and the United States into a single market
-Eliminates barriers -Eases investment -Simplifies trade |
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The European Union (EU)
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An alliance that promotes trade among its member countries in Europe
-Market unification -Common currency (euro) -Economic efficiency |
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The Common Market of the Southern Cone (MERCOSUR)
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An alliance that promotes the free circulation of goods, services, and production factors, and has a common external tariff and commercial policy among member nations in South America
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Asia-Pacific Economic Cooperation (APEC)
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An alliance that promotes open trade and economic and technical cooperation among member nations throughout the world
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General Agreement on Tariffs and Trade (GATT)
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-An agreement among nations to reduce worldwide tariffs and increase international trade
-Dumping: selling products at unfairly low prices |
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World Trade Organization (WTO)
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-An entity that promotes free trade among member nations
-Provides legal ground rules for international commerce and trade policy |
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Importing
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The purchase of products from a foreign source
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Exporting
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The sale of products to foreign markets
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Importing and exporting may be facilitated by:
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-Exporting agencies
-Trading companies |
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Licensing
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An alternative to direct investment requiring the licensee to pay commissions or royalties on sales or supplies used in manufacturing
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Franchising
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A form of licensing in which the franchiser grants the franchisee the right to market its product in accordance with the franchiser’s standards
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Contract Manufacturing
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The practice of hiring a foreign firm to produce a designated volume of product to specification
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Joint venture
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A partnership between a domestic firm and a foreign firm or government
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Strategic alliance
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A partnership (possibly of traditional rivals) formed to create a competitive advantage on a worldwide basis
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Direct Ownership
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A situation in which a company owns subsidiaries or other facilities overseas
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Multinational Enterprise
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A firm that has operations or subsidiaries in many countries
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Customization
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Adjusting marketing mixes according to cultural, regional, and national differences
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Globalization
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The development of marketing strategies that treat the entire world (or its major regions) as a single entity
-Includes standardization of products, promotion campaigns, prices, and distribution channels -“Think globally, act locally” |
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Standardization of International Marketing
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Easiest marketing mix variables to standardize
-Brand name -Product characteristics -Packaging -Labeling More difficult to standardize -Media allocation -Retail outlets -Pricing |
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Effect of a Firm Having a Global Presence
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Provides global competitive opportunities for creating value through
-adapting to local market differences -exploiting economies of global scale and scope. -acquiring optimal locations for activities and resources. -maximizing the transfer of knowledge across locations. |
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Marketing Research
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The systematic design, collection, interpretation, and reporting of information to help marketers solve specific marketing problems or take advantage of marketing opportunities
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The Benefits of Marketing Research
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-Helps firms stay in touch with customers’ changing attitudes and purchase patterns
-Aids in the development of marketing mixes that match the needs of customers -Assists in better understanding of market opportunities -Determine the feasibility of a particular marketing strategy -Improves marketer’s ability to make decisions |
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Locating and Defining Problems or Research Issues
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Focusing on uncovering the nature and boundaries of a situation or question related to marketing strategy or implementation
-Departures from normal or expected marketing results -Biases in marketing information that distort its meaning -Evidence of possible or potential market opportunities |
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Research Design
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An overall plan for obtaining the information needed to address a research problem or issue
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Hypothesis
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-An informed guess or assumption about a certain problem or set of circumstances
-Accepted or rejected hypotheses act as conclusions for the research effort |
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Exploratory Research
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Research conducted to gather more information about a problem or to make a tentative hypothesis more specific
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Descriptive Research
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Research conducted to clarify the characteristics of certain phenomena to solve a particular problem
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Causal Research
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Research in which it is assumed that a particular variable X influences a variable Y
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Reliability
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A condition existing when a research technique produces almost identical results in repeated trials
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Validity
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A condition existing when a research method measures what it is supposed to measure
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Types of Research Data
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-Primary data: data observed and recorded or collected directly from respondents
-Secondary data: data complied both inside and outside the organization for some purpose other than the current investigation |
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Sample
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a limited number of units chosen to represent the characteristics of a total population
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Types of Sampling
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-Probability: each element has an known chance for study
-Random: each element has an equal chance for study -Stratified: study population divided into like groups -Nonprobability: element’s likelihood of study is unknown -Quota: population is grouped and elements are arbitrarily chosen |
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-Population
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all the elements, units, or individuals of interest to researchers for specific study
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Survey Methods
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-Mail Survey
-Telephone Survey -Online Survey -Personal Interview Survey -In-home (door-to-door) interview -Focus-group interview -Telephone depth interview -Shopping mall intercept interviews |
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Open-Ended Question
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Type of Question:
What is your general opinion about coffee shops? |
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Dichotomous Question
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Type of Question:
Have you ever purchased a coffee product? Yes _____ No _____ |
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Multiple-Choice Question
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Type of Question:
What income group are you in? $0-$19,000 _____ $20,000-$59,999 _____ $60,000-$99,000 _____ more than $100,000 _____ |
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Observation Methods for Data Collection
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-Direct contact with subject is avoided to reduce possible awareness of observation process.
-Physical conditions, subject actions, and demographics are noted. -Observations may be combined with same subject interviews. -Data gathered may be influenced by observer bias. |
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Experiment
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A research method that attempts to maintain (control) certain variables while measuring the effects of experimental (uncontrolled) variables
-Independent variable: acts on the dependent variable -Dependent variable: is affected by variations in the independent variable |
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Statistical Interpretation
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Analysis of survey data to determine what is typical or what deviates from the average that indicates:
-How widely the responses vary -How the responses are distributed -Which hypotheses are supported -Which hypotheses are rejected -Whether construction errors have invalidated the survey’s results |
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Reporting Research Findings
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Take an objective look at survey findings
-Report deficiencies and reasons for deficiencies Prepare a formal, written document -Summary and recommendations: Short, clear, and simply expressed for executives -Technical report: Contains more detailed information about research methods and procedures and important data gathered |
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Marketing Information Systems
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A framework for the management and structuring of information gathered regularly from sources inside and outside an organization
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Databases
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A collection of information arranged for easy access and retrieval
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Single-Source Data
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Information provided by a single marketing research firm
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Marketing Decision Support Systems
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Customized computer software that aids marketing managers in decision making
-Capability to create market models based on changes in marketing variables -Artificial Intelligence (AI) assists in customer support |
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International Issues in Marketing Research
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Modification of data-gathering methods to account for regional differences
Use of two-pronged approach to international marketing research -Detailed search for and analysis of secondary data -Field research to refine firm’s understanding of how local environment will shape/restrict data-gathering about customer needs and preferences |
