Mktg 350-Exam 1

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Simple Trade Era

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A time when families traded or sold their "surplus" output to local distributors.

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Production Era

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A time when a company focuses on production of a few specific products-perhaps because few of these products are available in the market.

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Sales Era

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A time when a company emphasizes selling because of increased competition

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Marketing Department Era

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A time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm's activities.

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Marketing Company Era

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A time when, in addition to short-run marketing planning, marketing people develop long-range plans-sometimes five or more years ahead-and the whole company effort is guided by the marketing concept

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Marketing Concept

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The idea that an organization should aim all its efforts at satisfying its customers at a profit

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Marketing Mix

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The controllable variables that the company puts together to satisfy a target group.

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What are the four p's of the marketing mix?

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Product, place, promotion, price

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Product

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Concerned with developing the right "product" for the target market

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Place

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Concerned with all the decisions involved in getting the "right" product to the target market's Place

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Promotion

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Concerned with telling the target market or others in the channel of distribution about the "right" product

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Price

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Considers the kind of competition in the target market and the cost of the whole marketing mix.

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Customer Equity

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The expected earnings stream (profitability) of a firm's current and prospective customers over some period of time

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Lifetime Value of a Customer

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The total stream of purchases that a customer could contribute to the company over the length of the relationship

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Monopoly

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onecompany serves the entire customer base. Competitor-freeenvironments are rare.

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Monopolisticcompetition

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A number of different firms offer marketing mixes that at least some customerssee as different. Monopolisticcompetition is typical, and a challenge.

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Oligopoly

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asmall number of firms controls the market. Barriers to competitive entry arehigh.

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Purecompetition

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alarge number of firms compete with essentially similar (commodity) products.Price is typically the determining factor in making a purchase.

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Competitive Environment

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affectsthe number and types of competitors the marketing manager must face and howthey may behave.

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Head-on Competition

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Prudentmanagers choose strategies that avoidhead-on competitionand/or plan for competition when it is inevitable.

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8 Universal Functions of Marketing

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Buying, Selling, Transporting, Storing, Financing, Risk Taking, Market Information, Standardization, and Grading

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Buying

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•looking for and evaluating goodsand services.

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Selling

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promotingthe product to prospective buyers.

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Transporting

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movingthe goods from place to place.

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Storing

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holdingan inventory of goods until needed by customers.

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Financing

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providingnecessary cash and credit to produce, transport, store, promote, sell, and buyproducts.

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Risk Taking

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assumingresponsibility for uncertainties.

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Market Information

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thecollection, analysis, and distribution of all the information the marketerneeds to plan, implement, and control need-satisfying marketing activities.

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Standardization and Grading

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sortingproducts by size and quality.

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Marketingplans should make clear the following:

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•Whatmarketing mix will be offered, to whom, and for how long.• Whatcompany resources will be needed at what rate.• Whatresults are expected (this should also specify some means of control).• Theplan should also include some control procedures—so that whoever is to carryout the plan will know if things are going wrong.àAddingtogether more than one marketing plan results in a firm’s marketingprogram. •Marketing program: blends all of the firm’s marketing plans into one “big”plan.

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Marketing Plan

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A written statement that fillsout the marketing strategyby specifying the time-related details for carrying out the strategy.

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Mass Marketing

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offering a single marketing mix combination to everyone.

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Generic Market

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•a market with broadlysimilar needs—and sellers offering various,oftendiverse, ways of satisfying those needs.

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Product Market

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amarket with verysimilar needs and sellers offering various close substitute ways of satisfying those needs.

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What are the similarities between generic markets and product market?

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•Theproduct type—the type of good and/or service offered. Itshould meet customer needs.•Customer needs—refers to the needs of the customer (user) that are being met bythe product.•Customer types—identify who specifically is using the product.•Geographic area—identifies where the market is located.

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What are the differences between a generic and product market?

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A generic market has diverse ways of satisfying needs. A product market has similar and sellers have close substitutes.

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What are the two steps in the segmenting process?

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Naming broad product-markets, ordisaggregating and Segmenting is an aggregatingprocess

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Naming broad product-markets, or disaggregating

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•Marketersmust break apart all possible needs into some generic markets and broadproduct-markets in which the firm may be able to profitably operate.

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Segmenting is an aggregating process

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clusteringpeople with similar needs into a marketsegment.

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Positioning

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•Howcustomers think about proposed and/or present brands in a market. •Marketingresearch techniques are designed to collect information about consumerperceptions and determine differences among competing products in the mind ofthe consumer.

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The macro view of marketing includes asocial process that:

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• accomplishes the objectives ofsociety; • effectively matches supply anddemand; • is concerned with how marketingactivities affect society, and vice versa.

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Everyeconomy needs a macro-marketing system, because:

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• it helps to match supply anddemand;• different producers in a societyhave different objectives, resources, and skills;• every consumer has a different setof needs; system must effectively match consumers andproducers.

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Functionsof an effective macro-marketing system:

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•delivering the goods and servicesthat consumers want and need;• getting products to them at theright time, in the right place, and at a price they’re willing to pay;• keeping the consumers satisfiedafter the sale, and bringing them back to purchase again when they are ready.

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External Market Environment

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theeconomic environment,the technological environment, the politicaland legal environment,and the cultural and social environment.

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economic environment

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affectsthe way firms and the whole economy use resources. The economic environment isaffected by the interactions of all the elements of the macro-economic system.

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What are the key issues with the economic environment?

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The economic environment can changevery rapidly.

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Political Environment

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Thepolitical environment refers to the way societies order their governments andto the attitudes of the government and people toward business.

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How is nationalism a characteristic of a political environment?

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Anemphasis on a country’s interests before anything else. Nationalismcan be limiting in international markets, by reducing sales and blockingmarketing activity.

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How is regional economic groupings a characteristic of a political environment?

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Arebecoming more important. • The EuropeanUnion has unified European markets. • The NorthAmerican Free Trade Agreement (NAFTA) is building trade cooperation in NorthAmerica.

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The legal environment

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refersto the rules and laws that set standards for conduct that are enforced by legalpower. Starting in 1890, the United States Congress passed a series of lawsdesigned to encourage competition. Each of these laws regulates differentaspects of the marketing mix.

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What are key issue within the legal environment?

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•Thereis also a relationship between antimonopolylaws and marketing mix planning. • Forexample, the Sherman Act prohibits monopoly or conspiracy to control a product,distribution channels, or prices. •Prosecution is serious andcan lead to a variety of penalties, including heavy fines and jail terms.

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What are some important federal regulatory agencies within the legal environment?

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•Consumer protection is not new.•Sellers are required to be truthful, meet contracts, and stand behind theirproducts.•Food and drugs are controlled bythe Food and Drug Administration (FDA). • Onemajor initiative of the FDA is the development of standards for nutritionallabeling. •Product safety is also controlled. • TheConsumer Product Safety Act of 1972 empowers its commission to remove unsafeproducts from the market.•State and local laws may varywidely.• Forexample, every state has different automotive franchise legislation governingthe retailing of new vehicles. •Lawsand enforcement differ across countries:• Becauselegal environments are closely tied to national governments, laws andenforcement vary significantly around the world.

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Cultural and social environment

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•Thecultural and social environment affects how and why people live and behave asthey do. • Thisincludes demographic trends in population trends and income

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Technological Environment

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Theapplication of science to convert an economy’s resources to output. Technology affects marketing in two basicways: opportunities for new products and opportunities for new processes. Inmodern economies, the rate of technological change is very rapid.

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SWOT Analysis

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Identifies and lists the firms strengths, weaknesses, opportunities, and threats.

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Strength and weaknesses

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Come from assessing the company's resources and capabilities.

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Opportunities and threats

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Emerge from an examination of customers, competition, and the external market environment.

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Competitive Advantage

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afirm has a marketing mix that the target market sees as being better than acompetitor's mix. •hasto be viewed from the customer's perspective, not the firm's perspective; •can be achieved through excellence in any area of the four Ps or because of thefirm's other resources.

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Purpose of Marketing

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To facilitate the change or selling of widgets

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Customer Value

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The difference between the benefits acustomer sees from a marketing offering and the costs of obtaining thosebenefits. Differentcustomers may see the benefits and costs in different ways. The customermay not always dwell on value as a key determinant of buyingbehavior.

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Psychographic

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The analysis of a person's day-to-day pattern of living as expressed in that person's Activities, Interests, and Opinions- sometimes referred to as AIOs

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Pure Subsistence Economy

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There is no need to exchange goods and services and no marketing involved.

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Geographic

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Oftenused for segmentation. There may bedifferent languages or laws in different countries—or a business may only belocated in a certain geography.