mkt 300 exam 1 study guide

of 16

MKT 300-001

Jan 12th

, 2011

Chapter 1- Marketing: Connecting with Customers Creating & Capturing Value

Marketing: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering,

and exchanging offerings that have value. This value is intended for customers, clients, partners, and

society at large.

• In other words…

– Marketing is about serving the needs of society and accomplishing the goals of the

organization.

– It includes:

• Researching potential customers’ needs and wants.

• Developing appropriate goods and services.

• Communicating with the market.

• Creating, selecting, and managing channels to reach customers.

• Pricing to deliver superior customer value.

The Activity- Marketing activity centers on understanding the needs and wants of customers and

engaging in competitive behavior to satisfy those needs and wants.

Understanding the Needs and Wants of Customers

Marketers use customer orientation, an organizational philosophy that focuses on satisfying consumer

needs and wants.

Needs are fundamental requirements – the ultimate goals of behavior.

Wants are the specific form of consumption desired to satisfy a need.

Competitive Behavior:

Marketer measure success by the way their customers judge them, especially relative to competitors.

(3 elements of competitive Performance)

Effectiveness: when an organization’s activities produce results the matter to consumers.

Efficiency: operating with minimal waste of time and money.

Agility: the anticipation of market dynamics and speed of response to changing customer desires

and competitors’ actions.

Dan Slide: Avoiding Marketing Myopia (not on test)

Marketing Myopia: management’s failure to recognize the scope of its business (see table 1.2)

Set of Institutions- A market consists of organizations and individuals who have the desire and ability

to acquire a particular good or service.

Macro-Marketing: Marketing from a societal point of view.

Micro-Marketing: Marketing from the organization’s point of view.

***Four Types of Market:

1) Consumer: occurs when organizations sell to individuals or households that buy, consume, and

dispose of products.

2) Business-to-Business (B2B): when a business purchases goods or services to produce other goods,

to support daily operations, or to resell at a profit.

of 16

3) Nonprofit: when an organization does not try to make a profit buy instead attempts to influence

others to support its cause by using its service or by making a contribution.

4) Internal: when managers of one functional unit market their capabilities to other units within their

own organization.

Processes- marketing is an ongoing process. It is interested in the enduring, systematic management of

change.

For Creating, Communicating, and Delivering Value-

The marketing mix is made up of four controllable variables designed to appeal to a company’s target

market.

4 Ps of Marketing: (Product, Price, Promotion, Place)

And Exchanging Offerings that Have Value-

Value occurs for customers and for the organization only when an exchange is created, so marketing

creates valuable exchanges:

Exchange: a process in which two or more parties provide something of value to one another.

Relationship Marketing: relational exchanges through interactive, ongoing, two-way connections

among customer’s organization’s suppliers, and other parties for mutual benefit.

Examples: T-mobile, Verizon, AT&T, Coca-Cola

Providing Utility (Wal-Mart does): When marketing brings the many parties together and facilitates

exchanges. Four Fundamental Types of Utility:

1) Form Utility: a want-satisfying value that is created when knowledge and materials are converted

into finished goods and services. Example: McDonald

2) Place Utility: a want-satisfying value that is created by making goods and services conveniently

available. Example: DHL

3) Time Utility: makes goods and services available when they are wanted. Examples: UPS, DHL,

FedEx, L.L Bean

4) Ownership Utility: makes it possible to transfer the title of goods and services from one party to

another. Example: cash transaction.

For Customers, Clients, Partners, and Society-

1. For Customers and Clients:

Customer value: the consumer’s perceived gain derived from owning or using a product which is

deemed more significant than the cost of acquiring it.

Customer Satisfaction: the customer’s overall rating of their experience with a company and its

products.

Customer Loyalty: A measure of how often, when selecting from a product class, a customer

purchases a particular brand.

Dan Slide: Above and Beyond Loyalty

Recognition

Preference

Loyalty

ADVOCACY

of 16

2. For Partners (organization and its Stakeholders):

The single most important role of the marketing effort is to increase the value to the stakeholders by

establishing and implementing an effective marketing strategy.

3. For Society:

Society Sustainability - The processes organizations undertake to manage growth without

detrimentally affecting their resources or the earth.

The Evolution of Marketing:

Mass Marketing:

The mass production, mass distribution, and mass promotion of a product to all buyers.

Value-Driven Organization:

Organizations that implement the marketing concept by ensuring that all parts of the organization

work toward creating value for the customer.

Dan Slide: The 4-Eras “Blown Out”

1) Production Era (prior to the 1920s)

2) Sales Era (prior to the 1950s)

3) Marketing Era(since 1950s)

4) Relationship Era (since 1990s)

The Marketing Strategy Process: Situation analysis Target marketing Positioning Marketing mix decisions

1) Situation Analysis: The marketing activities required to understand the global marketing

environment, customer needs and wants, and the competition.

2) Target Marketing: A group of potential customers with similar characteristics that the company

tries to satisfy better than the competition

3) Positioning: The process of creating an image, reputation, or perception of the company and its

products in the consumer’s mind

4) Marketing Mix Decisions: The decisions required to address customers with one marketing mix.

– Product

– Place

– Promotion

– Price

Forces Important to Create and Capture Value: The future will center around better ways of creating value for customers through six supporting themes:

1) Technology and e-commerce

a. Product technology that spawns new goods and services

b. Mass customization, which is large scale customization of a product for a specific

customer by means built into a process

c. The internet, which facilitates two way global connectivity with customers

2) Relationships

a. In an effort to get closer- to become more connected- organizations today are

enthusiastically embracing relationship marketing.

of 16

b. Pure transactions (one time exchange of value) Repeated transactions (preference and

loyalty) Relationships (interactive, ongoing, two-way connections)

3) Globally

a. Global companies have an increased customer reach and a better understanding of

diversity and competition.

b. Marketers need to understand varying tastes and needs of global customers.

4) Diversity

a. Ethnic Background: Determined by birth and related to one or more of four elements:

country of origin, native language, race, and religion.

b. Ethnicity: The amount of identification an individual feels with a particular ethnic group.

5) Ethics

a. Ethics are the values or standards that govern professional conduct.

b. Marketing ethics deal specifically with how moral standards are applied to marketing

decisions, behaviors, and institutions.

c. The societal marketing concept seeks to balance customer satisfaction against corporate

profits and the well-being of the larger society.

6) Sustainability

a. The environment is where we live while economic and social development are the actions

we take to improve our environment.

Marketing: Your Involvement

Prospective Marketer

Member of a Target Market

Customer

Citizen

MKT 300-001

Jan 19th

, 2011

Chapter 2- The Marketing Strategy & Planning Process

The Concept of the Strategic Marketing Planning Process

of 16

The Organizational Vision: The vision helps maintain consistent direction despite market environments. The corporate vision

provides a common understanding of what the organization is trying to accomplish.

1. Core Values (the ethical foundation):

• The type of behavior expected from a company’s employees

• Sparrow Health System Core Values:

o Innovation

o Compassion

o Accountability

o Respect

o Excellence

2. Business Definition (mission):

• The fundamental contributions the organization provides to customers.

3. Strategic Direction (intent)

• The desired leadership position of an organization and the measures used to chart progress

toward reaching this position.

4. Strategic Infrastructure:

• The corporate configuration that produces the company’s core competencies and provides

the resources necessary to satisfy customer wants.

• Strategic Business Unit: Part of the firm that can be managed separately for marketing

purposes; it may be a division within the company, a separate product or product line, a

distinct group of customers, or a unique technology.

• Core Competencies: are the unique resources a company employs to create superior

customers value. Five types of core competencies:

1) Base technologies: the research and development skills of companies can be applied

to an endless array of product areas.

2) Process technologies: allow the firm to produce quality products in the most

effective and flexible manner possible.

3) Product technologies: the company’s ability to create new goods and services is

supported by product technologies.

4) People technologies: the procedures that provide the human connection between

companies and consumers are called people systems.

5) Information technologies: an exceptional information system can be a core

competency.

Dan Slide: 2 approaches to introductions

First Mover vs. Second Mover Strategy:

First mover strategy Theory advocating that the company that is first to offer a product in a

marketplace will be the long-term market winner.

Second mover strategy Theory that advocates observing closely the innovations of first movers and

then improving on them to gain advantage in the marketplace.

of 16

The Strategic Marketing Plan The Planning Team: Employees from several areas responsible for developing the company’s

strategic marketing plan.

Strategy: The development of resources with the intent of accomplishing goals and objectives in

a competitive arena.

Strategic Window: The time during which market needs and the competencies of the firm fit

together to create a significant opportunity.

Components of the Strategic Marketing Plan:

1. Objectives: Set in terms of desired profit, market share, or total sales. Objectives always provide a

time frame and must be verifiable

2. Situation analysis: The examination of marketing activities required to understand the marketing

environment, customer needs and wants, and the competition.

SWOT analysis: Strengths, Weaknesses, Opportunities, Treats

3. Target marketing: The process of selecting which market segments the firm will try to satisfy better

than its competitors.

4. Positioning: Creating a perception in the minds of consumers about the company and its products

relative to competitors.

5. Integrated Marketing Mix Plans

1) Product Plans: Determining which products to develop and which ones to drop.

2) Place Plans: Getting the right product, in the right condition, to the right customer, at the

right time, for the minimum cost.

3) Promotion Plans: Provides information about a company’s product or service to encourage

purchase.

4) Pricing Plans: Setting prices to reflect the value received by customers and achieve the profit

required by the organization.

The Marketing Control Process: Provides feedback on the success of strategy.

In a control review meeting, members of the planning team assemble to assess whether objectives are

being met.

Tactics : Short-term actions and reactions to specific market conditions through which

companies pursue their strategy.

Connecting Globally: Entering World Markets to Capture Value Geographic Scopes:

1. International: operating in one or a few foreign markets

of 16

2. Regional: operating within countries in close proximity, such as North America, Europe, Scandinavia,

or the Pacific Rim

3. Multinational: heavy involvement in a few countries located in various regions such as Italy, South

Africa, and Japan

4. Global: operating in nearly all world markets

Strategies for Foreign Market Entry 1. Export-Import: send products abroad for resale (exporting) or purchase products from foreign

companies for resale, usually as part of another product, within the home market (import).

2. Foreign licensing and franchising: agreements that permit foreign companies to produce and

distribute merchandise, often using trademarks and/or selected merchandising and customer delivery

approaches.

3. Overseas marketing and manufacturing: a marketing infrastructure and/or manufacturing facilities

abroad.

4. Joint ventures and strategic alliances: the shared ownership of operations by two or more local and

foreign companies (joint venture) or the pooling of resources by two or more companies for the

purpose of competing as one entity (strategic alliance).

Dan Slide: Unique contrast

MKT 300-001

Jan 24th

, 2011

Chapter 3- E-Commerce & The Global Marketing Environment

Marketing E-Commerce: internet marketing can be divided into two sectors:

1. Business- to - Consumer (B2C) e-commerce: is trade involving business selling to consumer

over the Internet. Example: eBay

2. Business-to- Business (B2B) e-commerce: is trade involving Internet sales in which businesses

sell to other businesses, including governments and organizations.

of 16

The structure of Internet marketing:

Internet Marketing Benefits Buyers and Sellers:

Value to Buyers: better information Values to Marketers: access to more customers

Greater convenience reduced supply chain costs

Wider selection and customization personalization

Better prices efficient two-way communication

The Global Marketing Environment The marketing environment is the sum of all factors that affect a business.

Environmental scanning collects and analyzes information to detect any trends that may affect a

company’s strategy.

The Microenvironment • The microenvironment is made up of forces close to the company influencing how it connects

with customers.

Relationships with Stakeholders:

• Marketers form interactive, ongoing, two-way relationships with stakeholders. Any group or

individual, other than competitors, who can influence or be influenced by an organization’s

actions is a stakeholder.

• Relationships with stakeholders: owners, employees, suppliers, intermediaries, action groups,

others.

• Competitive industry: competitors, competitive groups.

Industry Competition:

Competition involves companies of differing sizes and types. It may be individual companies or the

industry as a whole.

1) Existing Firms

2) Potential Competitors

3) Substitutes

4) Bargaining Power of Buyers & Suppliers

of 16

The Global Macro-environment: consists of large external influences considered vital to long-

term decisions but not directly affected by the company itself.

1) Technology

2) Economy

3) Demographic

4) Cultural diversity

5) Legal

6) Ethics

Technological Environment: the total body of knowledge available for development, manufacturing,

and marketing of products and services.

Economic Environment: the financial and natural resources available to consumers, businesses, and

countries.

1) Income and Spending Behavior

• Disposable income is the money consumers have left; Marketers prefer to use this as the

measure of consumer wealth.

2) Spending Power and Wealth Dispersion

• Spending power is the ability of people to purchase goods and services.

3) Natural Resources

• Marketers in quest of extracting natural resources must balance these efforts against

preservation of the environment.

4) Trading Blocs

• The world’s three major trading blocs – Europe, Pacific Rim, and North America –

compete for the mastery of international markets.

Demographic Environment: consists of the data that describe a population in terms of age, education,

health, and so forth.

1) Population

2) Urbanization

3) Density

4) Age Structure

Cultural Environment: consists of the learned values, beliefs, language, symbols, and behaviors

shared by people in a society and passed on from one generation to the next

1) Perceptions of Time

2) Size and Space

3) Negotiations and Agreements

Legal and Regulatory Environment: International, federal, state, and local regulations and laws;

agencies that interpret and administer them; and the court system.

U.S. Laws:

1) Promoting Competition

2) Affecting Company Size

3) Protecting Consumers

4) Protecting the Environment

Ethical Environment:

Marketing decisions fall into one of four categories:

of 16

1) Legal and ethical,

2) Illegal and ethical,

3) Legal and unethical,

4) Illegal and unethical

There is an important difference between what is legal and what is ethical, to determine legality, you

must examine the relevant law.

MKT 300-001

Jan 26th

, 2011

Chapter 4- Marketing Information and Research

Dan Slide: types of research firms

Syndicated Services

o Organizations that regularly provide a standardized set of data to all customers.

Full-Service Research Suppliers

o Firm that conducts complete marketing research projects.

Limited-Service Research Suppliers

o Firm that specializes in a limited number of activities, such as conducting field interviews or

performing data processing.

The Concept of Marketing Information Systems and Marketing Research Marketing Information Systems (MIS) are computerized systems that collect and organize

marketing data providing information for decision making. Marketing research is the assembly and

analysis of data about issues surrounding the marketing strategy.

Marketing Research is the formal assembly and analysis of data about specific issues surrounding a

marketing strategy.

MIS + Marketing research = Marketing Decision Making

MIS and Data Marketing Decision Support System (MDSS) allows decision makers to access raw data from an

MIS and manipulate it into a useful form.

A specialized type of MIS is a Transaction-Based Information System (TBIS), which is a

computerized link between a firm and its customers and/or distributors and suppliers.

o These systems provide data on customer preferences, loyalty, sales trends, and an array of

marketing issues.

Turning Data into Information: Data must be interpreted to assist upper-level managers and

executives in making quick, informed decisions

of 16

Types of Data:

1) External: comes from outside the company

2) Internal: found within the company

3) Primary: gathered for the first time for a particular issue being addressed

Dan Slide: types of primary research methods

a) Observation

o Examples: traffic counts, Nielsen TV ratings, taping shopping habits

b) Surveys

o Examples: focus group interviews, telephone surveys, online surveys

c) Controlled experiments

o Examples: test market

4) Secondary: those that already have been collected

Dan Slide: a bit more on secondary data

a) Secondary data collection

b) Secondary data comes from many sources.

c) Can be internal data or external data.

Data analysis: Data analysis transforms material into a usable form, in order to develop theories. It

involves data sorting, statistics, and/or models.

1) Data sorting

2) Statistics

3) Models

Information and decision making

1) Marketing planning: Marketing information is required for the situation analysis, segmentation,

targeting, and positioning.

2) Marketing mix decisions: Product- Place- Promotion - Price

3) Performance monitoring

The Marketing Research Process 1. Defining the problem: The marketing researcher and key decision makers should work together to

specify the problem.

2. Research design: An outline of what data will be gathered, which sources will be used, and how the

data will be collected and analyzed.

3. Exploratory research: designed to clarify the problem and suggest ways to address it.

1) Focus groups

2) Depth interviews

3) Projective techniques

4) Observation

5) Case analysis

4. Quantitative research: designed to provide the information needed to select the best course of action

and estimate the probable results.

Data collection methods

o Experiments

o Causal research

of 16

Administering surveys

o Personal interviews

o Mall intercepts

o Telephone surveys

o Mail surveys

o Internet surveys

Sampling

o The group of people who are asked to participate in the research.

o The people selected can be random or calculated.

5. Interpreting and reporting survey findings

In-company research

o Headed by experienced personnel who report to top executives.

o Usually includes project directors, analysts, and specialists.

External research

o Hired marketing research

o Done by outside agencies such as consulting companies, full-service research firms, and

syndicated data companies.

Global Marketing Research Is…

Very challenging

Not easy to locate secondary data in foreign countries

Is difficult to obtain exact translations

Can be hard to find participants

Global marketing research is becoming more and more prevalent as companies expand their scope of

operations.

Technology:

Technology has made it easier for marketers to connect with an increasing number of information

sources.

Ethics:

Marketing research can reflect the biases of marketers. The scientific method can help eliminate this

problem. Representatives from industry, individual companies, academia, and the government help

regulate the content of information and defend consumers from distorted messages.

MKT 300-001

Jan 31th

, 2011

Chapter 5- Understanding Consumer Behavior

The Concept of Consumer Behavior

Consumer behavior involves the actions and decision process of individuals and households in

discovering, evaluating, acquiring, consuming, and disposing of products.

of 16

Consumer Involvement and Decision Making Involvement and decision-making processes are closely related. Knowledge about them provides

insight into how and why consumers behave as they do.

Consumer Involvement: Involvement influences the relationship between evaluation and behaviors.

o Low-involvement purchases: require only simple decision making.

Passive learning occurs when consumers do not actively search for information

about low-involvement products.

Passive decision making Purchase Brand evaluation

Examples: Cereal, soap, soft drinks and similar items don’t require too much thought.

o High-involvement purchases: demand more extensive and complex decision making.

Active learning occurs when substantial energy is devoted to thinking about and

elaborating on information.

Active decision making Brand evaluation Purchase

Examples: buying a car, computer, requires a good deal of thought.

Consumer Decision Making:

1. Problem Recognition-

Occurs when a customer becomes aware of an unfulfilled desire

2. Information Search-

Consists of thinking through the situation, calling up experiences stored in memory, and

seeking information from others

3. Alternative Evaluation-

Based on decision a rule about which product or service is most likely to satisfy goals

4. Purchase Decision and Purchase-

The buying choice after carefully weighing the alternatives followed by a financial

commitment to make an acquisition

5. Purchase Evaluation-

The process of determining satisfaction or dissatisfaction after the buying choice

Psychological Factors that Influence Consumer Decisions Motivation: An internal force that directs behavior toward the fulfillment of needs.

Psychological needs are those that arise in the socialization process.

Motivational conflict:

1) Approach-approach conflict

2) Avoidance-avoidance conflict

3) Approach-avoidance conflict

Perception: The process of recognizing, selecting, organizing, and interpreting these stimuli in order to

make sense of the world around us.

1) Selective exposure

2) Selective attention

3) Selective comprehension

4) Selective retention

Learning: Any change in consumers’ behavioral tendencies caused by experience.

1) Classical conditioning- People can learn to respond to one stimulus in the same way as another if

the two stimuli are presented together. Generalization or discrimination can develop.

of 16

2) Operant conditioning- The use of reinforcement of punishment to discourage others.

Attitudes: Structured sets of beliefs that reflect the consumer’s knowledge and feelings about specific

products.

1) Cognitive

2) Affective

3) Behavioral

Information Processing: Brings together many psychological concepts to describe how consumers use

data to arrive at choices.

1) Encoding: The process of converting information into knowledge

2) Memory: The brain function that stores and recalls encoded information

Social Factors that Influence Consumer Behavior

Culture is the learned values, beliefs; language, symbols, and patterns of behavior shared by people

in a society and passed on from generation to generation.

Subculture: A group of people with shared values within a culture.

Social Class: A relatively homogeneous grouping of people based on similarities in income and

occupation.

“Marketers study global social class dimensions in order to understand consumer profiles,

habits, interests, and purchasing behavior.”

Reference groups: People whose norms and values influence a consumer’s behavior. Consumers

depend on them for product information, purchase comparisons, and rules about buying behavior.

1) Associative reference groups

2) Dissociative reference groups

The family:

Family Decision Making

– Autonomous decisions are made when a purchase is conceived and carried out by one

member of the family with little influence from the others.

– Joint decisions are made when two or more family members are involved.

Family Purchasing Roles:

1) Initiator: the person who first suggests that a particular product be purchased

2) Influencer: the person who provides valuable input to the decision-making process

3) Decision maker: the person who makes the final buying decision

4) Purchaser: the person who physically goes out and makes the purchase

5) User: the person who uses the product

Family Life Cycle:

1) Young singles

2) New couples

3) Full nesters

4) Working empty nesters

5) Retired empty nesters

6) Sole survivors

Using Technology to Track Consumer Behavior

Many marketers use the Internet as a tool to study consumer behavior.

of 16

The Ethics of Influencing Consumer Behavior Using sexual themes and shock tactics to influence consumers can have ethical implications.

Marketers must take caution in using these tactics.

MKT 300-001

Feb 2nd, 2011

Chapter 6- Understanding Business Marketing

The Concept of Business-to-Business Marketing Business-to-business marketing is the marketing of goods and services to other businesses,

governments, and institutions. It includes everything but direct sales to consumers. Globally,

it’s the largest market by far.

Derived Business Market Demand:

1) Derived Demand: The amount of sales for business-to-business products depends ultimately on

the demand for products by consumers.

2) Inelastic Demand: Products so necessary that a change in price has relatively little effect on the

quantity demanded.

3) Fluctuating Demand—The Accelerator Principle: When a small fluctuation in consumer

demand has a larger effect on business demand.

Types of Markets:

1) Commercial Markets

– Organizations that acquire goods and services, which are then used to produce other

goods and services.

2) Extractor Industries

– Organizations that obtain and process raw materials.

3) Trade Industries

– Organizations that acquire or distribute finished products to businesses or to consumers.

4) Institutions

– Public and private organizations that provide health, education, and welfare services to

consumers.

5) Utilities

– Companies that distribute gas, electricity, and water.

6) Transportation and Telecommunications

– Transportation is comprised of companies that provide passenger and freight service.

– Telecommunications companies supply local and long distance telephone service as well

as cable and broadcasting.

7) Government

– The subdivisions in the government market category are (1) the government, (2) 50 state

governments, and (3) 8,700 local units.

Globalization of Business Markets:

The growth of international business has provided companies with a number of business-to-

business marketing opportunities overseas.

of 16

Organizational Buying 1) The Make or Buy Decision: Occurs when companies must decide whether to supply products or

services in-house or buy them from other businesses. Outsourcing is the purchase of products

from other companies.

2) The outsourcing Decision:

3) Competitive Bidding: Used by organizations that want to obtain the lowest price rather than

establish long-term relationships with suppliers.

4) Web Auction: An online auction that matches buyers and sellers around the world

Steps in the Organizational Buying Process:

1) Problem recognition

2) General need description

3) Product specifications

4) Supplier search

5) Proposal solicitation and supplier selection

6) Order routine specification

7) Purchase and use of product

8) Performance review

Relationship between Buyers and Sellers:

1) The Courtship Phase

– Purchasers express their desires to sellers, who develop proposals designed to satisfy the

buyers’ needs

2) The Relationship-building Phase

– Buyers and sellers work together for the first time, which strengthens the bond between

them.

3) The Partnership Phase

– Begins after numerous purchases have been completed satisfactorily and long-term

agreements are reached

Relationships between Ethics and Business:

Purchasing agents are often familiar with the trade secrets, production plans, and

technologies of an organization. Misuse of this information has both ethical and legal

implications.

Functions Involved in Business Purchases:

1) Purchasing Agents: Hired to help the organization buy a broad range of products most

effectively. They establish and maintain purchase arrangements with all suppliers.

2) Functional Managers: Hold a position in a specific operational area of the buying organization.

3) Buying Center: A group of people in the organization who make a purchase decision

Influences on Organizational Behavior:

1) Background of Buying Center Members

2) Information Sources

3) Time and Risk Factors

4) Company Factors

5) Joint Decisions and Conflict Resolution

mkt 300 exam 1 study guide

Documents