UIOWA MKTG:3000 Midterm Exam 1: Chapters 1-6 (Rob Rouwenhorst)

Marketing

An organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Marketing Plan

A written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or pro forma income (and other financial) statements.

Exchange

The trade of things of value between the buyer and the seller so that each is better off as a result.

Example: You pay $5 at Starbucks (your money) → you get a coffee (their product).

Marketing Mix (4 P's)

The controllable set of activities a firm uses to meet customer wants.

1. Product

What the company sells (good, service, or idea).

2. Price

How much the product costs.

3. Place

Where and how the product is sold.

4. Promotion

How customers learn about the product.

Goods

Items that can be physically touched.

Example: A phone, clothes, or a loaf of bread.

Services

Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed; intangible customer benefits that are produced by people or machines and cannot be separated from the producer.

Example: A haircut, an Uber ride, or a Netflix subscription.

Ideas

Intellectual concepts—thoughts, opinions, and philosophies.

Supply Chain Management or Marketing Channel Management

A set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize system wide costs while satisfying the service levels their customers require.

Coordinating suppliers, manufacturers, warehouses, stores, and transportation so products get to the right place, in the right amount, at the right time, at the lowest cost.

Example: Amazon managing suppliers, delivery trucks, and warehouses to get your package to your door quickly.

Business-to-Consumer (B2C) Marketing

The process in which businesses sell to consumers

Example: Nike selling shoes to you through its website.

Business-to-Business (B2B) Marketing

The process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, or for resale by wholesalers and retailers

Example: A paper company selling office supplies to Staples.

Consumer-to-Consumer (C2C) Marketing

The process in which consumers sell to other consumers.

Example: Selling clothes on Poshmark or eBay.

Value

Reflects the relationship of benefits to costs, or what the consumer gets for what they give

Example: Buying a $7 coffee that feels worth it because it's convenient and tasty.

Value Cocreation

Customers act as collaborators with a manufacturer or retailer to create the product or service.

Example: Starbucks inviting customers to suggest and vote on new drink flavors through its "My Starbucks Idea" platform, which the company used to launch popular menu items.

Relational Orientation

Building a long-term relationship with customers instead of just focusing on single transactions.

Example: Amazon Prime encourages loyalty by giving members free shipping, streaming, and other perks so they keep coming back.

Customer Relationship Management (CRM)

A business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm's most valued customers.

Example: A coffee shop app that tracks your purchases and gives you a free drink after every 10 buys.

Marketing Strategy

A firm's target market, marketing mix, and method of obtaining a sustainable competitive advantage.

A company's plan for who they want to sell to, how they will sell, and how they will stay ahead of competitors.

Sustainable Competitive Advantage

Something a company does better than competitors that lasts over time.

Example: Apple's strong brand loyalty and ecosystem of products keep customers coming back.

Customer Value (Customer Excellence)

Focuses on retaining loyal customers and excellent customer service

Example: Chick-fil-A is known for fast service and polite staff, which makes customers return often.

Customer Value (Operational Excellence)

Involves a firm's focus on efficient operations, excellent supply chain management, and strong relationships with its suppliers

• Achieved through efficient operations and excellent supply chain and human resource management

Example: Walmart keeps prices low by running efficient operations and supply chains.

Product Excellence

Involves a focus on achieving high-quality products; effective branding and positioning is key

• Having products with high perceived value and effective branding and positioning

Example: Apple products are seen as premium because of their design, quality, and strong brand image.

Locational Excellence

A method of achieving excellence by having a strong physical location and/or Internet presence.

• Having a good physical location and interest excellence

Example: Starbucks succeeds because it has so many convenient locations everywhere.

Marketing Plain

A written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or pro forma income (and other financial) statements

Planning Phase

The part of the strategic marketing planning process when marketing executives, in conjunction with other top managers,

• (1) define the mission or vision of the business and

• (2) evaluate the situation by assessing how various players, both inside and outside the organization, affect the firm's potential for success

Implementation Phase

The part of the strategic marketing planning process when marketing managers

• (1) identify and evaluate different opportunities by engaging in segmentation, targeting, and positioning (see also segmentation, targeting, and positioning) and

• (2) implement the marketing mix using the four Ps

Control Phase

The part of the strategic marketing planning process when managers evaluate the performance of the marketing strategy and take any necessary corrective actions

Mission Statement

A broad description of a firm's objectives and the scope of activities it plans to undertake; attempts to answer two main questions: What type of business is it? What does it need to do to accomplish its goals and objectives?

Situation Analysis

Second step in a marketing plan; uses a SWOT analysis that assesses both the internal environment with regard to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats

SWOT Analysis

A method of conducting a situation analysis within a marketing plan in which both the internal environment with regard to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats are examined

Segmentation, Targeting, and Positioning (STP)

Firms use these processes to identify and evaluate opportunities for increasing sales and profits

The process businesses use to divide the market into groups (segmentation), choose which group to focus on (targeting), and decide how to present their product to that group (positioning).

Example: Coca-Cola segments by lifestyle and preferences, targets health-conscious people with Coke Zero, and positions it as a no-sugar alternative.

Market Segment

A group of consumers who react in a similar way to a company's marketing.

Market Segmentation

The process of splitting the overall market into smaller groups of people with different needs, wants, or traits.

Example: A car company segments buyers into groups like families (minivans), young professionals (sports cars), and eco-conscious drivers (electric cars).

Target Marking or Target

The process of evaluating the attractiveness of various segments and then deciding which to pursue as a market

Choosing which group of customers (segment) a company wants to focus on.

Market Positioning

The process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products

How a company makes its product stand out in customers' minds compared to competitors.

Example: Volvo positions itself as the "safest car brand," while Tesla positions as "innovative and electric."

Integrated Marking Communications (IMC)

Represents the promotion dimension of the four Ps; encompasses a variety of communication disciplines—general advertising, personal selling, sales promotion, public relations, direct marketing, and electronic media—in combination to provide clarity, consistency, and maximum communicative impact

Using different ways of promotion (like ads, social media, sales, PR, etc.) together to send a clear and consistent message

Example: Coca-Cola running the same "Share a Coke" campaign on TV, billboards, and social media so the message is unified everywhere.

Metric

A measuring system that quantifies a trend, dynamic, or characteristic

Strategic Business Unit (SBU)

A division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives

A part of a company that runs like its own mini-business, with its own goals and strategies, separate from other divisions.

Example: PepsiCo has SBUs like Frito-Lay (snacks), Gatorade (sports drinks), and Quaker (foods). Each has its own focus and strategy.

Product Line

Group of associated items, such as those that consumers use together or think of as part of a group of similar products

Market Share

Percentage of a market accounted for by a specific entity

Relative Market Share

A measure of the product's strength in a particular market, defined as the sales of the focal product divided by the sales achieved by the largest firm in the industry

How strong a product is compared to the biggest competitor, calculated by dividing its sales by the largest firm's sales.

Example: If Nike sells $50M and Adidas sells $100M, Nike's relative market share is 0.5 (50%).

Market Growth Rate

The annual rate of growth of the specific market in which the product competes

How fast a market is growing each year.

Example: If the electric car market grows 20% this year, that's its market growth rate.

Marketing Penetration Strategy

A growth strategy that employs the existing marketing mix and focuses on the firm's efforts on existing customers

Example: Starbucks giving loyalty rewards to encourage existing customers to buy more coffee.

Market Development Strategy

A growth strategy that employs the existing marketing offering to reach new market segments, whether domestic or international

Example: Netflix expanding from the U.S. to international markets.

Product Development Strategy

A growth strategy that offers a new product or service to a firm's current target market

Example: Apple introducing the Apple Watch to its existing iPhone users.

Diversification Strategy

A growth strategy whereby a firm introduces a new product or service to a market segment that it does not currently serve

Example: Apple launching the Apple Car (moving from electronics into automobiles).

Related Diversification

A growth strategy whereby the current target market and/or marketing mix shares something in common with the new opportunity

Example: Nike expanding from athletic shoes into athletic apparel and equipment (still in the sports industry).

Unrelated Diversification

A growth strategy whereby a new business lacks any common elements with the present business

Example: Disney buying ABC Television (moving from theme parks and movies into broadcasting).

Social Listening

Refers to how firms monitor and track what people are saying about them on social media

Digital Marketing

All online marketing activities, which includes all digital assets, channels, and media spanning not just online but also social media and mobile marketing

Social Media

The online and mobile technologies that distribute content to facilitate interpersonal interactions, with the assistance of various firms that offer platforms, services, and tools to help consumers and firms build their connections

The 4E Framework

Excite customers with relevant offers

• Excite the Customer

Educate them about the offering

• Educate the Customer

Help them experience products, whether directly or indirectly

• Experience the Product or Service

Give them an opportunity to engage with the firm's digital marketing activities

• Engage the Customer

The 7C Online Marketing Framework

1) Core Goals

2) Context Elements (Design & Navigation)

3) Content

4) Community

5) Communication

6) Commerce

7) Connection

Keyword

A phrase that describes the contents of a web page

Organic Search

The process of listing web page results based on the relevancy of key terms

Search Engine Marketing (SEM)

An activity used in online searches to increase the visibility of a firm by using paid searches to appear higher up in search results

Example: When a company runs ads on Google to make sure their website shows up at the top when people search for "best running shoes."

Paid Search

A method used by firms to appear higher up in the search results of a search engine. The position on the search page is based on a fee charged by the search engine, and often an additional fee is charged every time a user clicks on the entry

Example: Nike pays Google so that when someone types "buy running shoes," their ad shows up at the very top of the search results, and Nike pays Google each time someone clicks on it.

Blog (Weblog)

An online diary with periodic posts that allows people to share their thoughts, opinions, and feelings with the entire world; corporate blogs are a new form of marketing communications

Personal Blog

Website created by and usually for individuals, with relatively few marketing implications

Example: Someone writes a blog about their daily life, hobbies, or travel adventures just to share with friends and family.

Corporate Blog

Website created by a company and often used to educate customers

Example: HubSpot's blog, where the company publishes marketing tips and guides to help customers while promoting its own software.

Professional Blog

Website written by a person who reviews and gives recommendations on products and services

Example: A tech blogger who reviews the newest iPhones and laptops, recommending which products are worth buying.

Crowd Sourcing

Users submit ideas for a new product or service, and/or comment and vote on the ideas submitted by others

The Wheel of Social Media Engagement

1) Information

2) Connected

3) Network

4) Dynamic

5) Timeliness

Information Effect

With regard to the Wheel of Social Media Engagement, the information effect is the outcome of social media in which relevant information is spread by firms or individuals to other members of their social network

Example: A clothing brand posts about a new sale on Instagram, and followers share it with their friends.

Redlining

The historical practice by which housing providers have prevented certain protected classes of citizens from moving into an area, using subtle and difficult-to-prove methods of discrimination

Example: In the past, Black families were denied mortgages just because they lived in specific areas marked as "high risk," even if they could afford the loan.

Connected Effect

With regard to the Wheel of Social Media Engagement, the connected effect is an outcome of social media that satisfies humans' innate need to connect with other people

Network Effect

With regard to the Wheel of Social Media Engagement, the network effect is the outcome of social media engagement in which every time a firm or person posts information, it is transferred to the poster's vast connections across social media, causing the information to spread instantaneously

Ex: When a post spreads quickly because it's shared across many connections.

Dynamic Effect

With regard to the Wheel of Social Media Engagement, the dynamic effect describes the way in which information is exchanged to network participants through back-and-forth communications in an active and effective manner. It also expands the impact of the network effect by examining how people flow in and out of networked communities as their interests change (see also network effect)

How information flows through social media by ongoing conversations and how people move in and out of networks as their interests change.

Timeliness Effect

With regard to the Wheel of Social Media Engagement, the timeliness effect of social media engagement is concerned with the firm being able to engage with the customer at the right place/time—their ability to do so 24/7 from any location

The ability of social media to connect with customers instantly, anytime and anywhere.

AD-Supported Apps

Apps that are free to download but place ads on the screen when using the program to generate revenue

Freemium Apps

Apps that are free to download but include in-app purchases that enable the user to enhance an app or game (see also in-app purchase)

In-App Purchases

A purchase made on a freemium app that enables the user to enhance the app or game

Paid Apps

Apps that charge the customer an upfront price to download the app ($0.99 is the most common), but offer full functionality once downloaded

Paid Apps with In-App Purchase

Apps that require the consumer to pay initially to download the app and then offer the ability to buy additional functionality

The Three Stage Social Media Engagement Process

Listen:

• Systemic monitoring: utilizing social media monitoring tools

Analyze:

• Amount of traffic: Who are they? Where do they come from?

Do:

• Use data for personalized offers; aggregate data to understand trends

Sentiment Analysis

A technique that allows marketers to analyze data from social media sites to collect consumer comments about companies and their products

Hit

A request for a file made by web browsers and search engines. Hits are commonly misinterpreted as a metric for website success; however, the number of hits typically is much larger than the number of people visiting a website

Page View

The number of times an Internet page gets viewed by any visitor

Bounce Rate

The percentage of times a visitor leaves the website almost immediately, such as after viewing only one page

Click Path

Shows how users proceed through the information on a website—not unlike how grocery stores try to track the way shoppers move through their aisles

Conversion Rate

A measure that indicates what percentage of visitors or potential customers click, buy, or donate at the site

Keyword Analysis

An evaluation of what keywords people use to search on the Internet for their products and services

How to Do a Digital Marketing Campaign

1) Identifying Strategy and Goals

2) Identifying Target Audience

3) Develop Budget

4) Campaign: Experiment and Engage

5) Monitor and Change

Influencer Marketing

A marketing strategy that uses opinion leaders, popular on social media, to drive marketing messages to a targeted audience

The 4R's

Relevance, Reach, Response, Return

Conscious Marketing

Conscious Marketing is an approach to marketing where a company goes beyond just making profits. Instead, it:

- Has a higher purpose (making a positive difference, not just selling).

- Considers all stakeholders (customers, employees, community, environment).

- Practices conscious leadership and culture (leaders act responsibly and set the right tone).

- Follows ethics (doing what is right and fair).

An approach to marketing that acknowledges four key principles: a higher purpose, stakeholders, conscious leadership and culture, and ethics

Stakeholders

All the people or groups affected by a company's actions — not just owners and customers, but also employees, families, suppliers, government, the environment, and the community.

Business Ethics

Refers to a branch of ethical study that examines ethical rules and principles within a commercial context, the various moral or ethical problems that might arise in a business setting, and any special duties or obligations that apply to persons engaged in commerce

The study of right and wrong in business — the rules, values, and responsibilities that guide how companies and people should act in commerce.

Marketing Ethics

Refers to those ethical problems that are specific to the domain of marketing

Corporate Social Responsibility (CSR)

Refers to the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders

Triple Bottom Line

A means to measure performance according to economic, environmental, and societal criteria

People (Social) → How a company treats employees, customers, and communities. Example: fair wages, safe working conditions, supporting local communities.

Planet (Environmental) → How a company impacts the environment. Example: reducing waste, cutting carbon emissions, using renewable energy.

Profit (Economic) → The traditional financial bottom line. Example: making money and staying financially sustainable.

Key Conscious Marketing Strategy

Employees

• Employees

• Their Families

Customers

• Current Customers

• Potential Customers

Society

• Community

• Environment

Marketplace

• Partners

• Competitors

Marketing Planning Process

• Planning Phase

• Implementation Phase

• Control Phase

Socially Reasonable & Ethical

Both ethically and socially reasonable

Socially Irresponsible & Ethical

Ethical firm not involved with the larger community

Socially Reasonable & Unethical

Questionable firm practice yet donates a lot to the community

Socially Irresponsible & Unethical

Neither ethically nor socially responsible

Four Steps of Decision Making

Step 1) Identify Issues

Step 2) Gather information and identify stakeholders

Step 3) Brainstorm and evaluate alternatives

Step 4) Choose a course of action

Outside --> Blue Hexagon --> Red Square --> Gray Circle Outside

Outside: Culture

• Demographics

• Social Trends

• Technological Advances

• Economic Situation

• Political / Legal Environment

Blue Hexagon (Macro-environment):

• Company Capabilities

• Competitors

• Corporate Partners

• Physical Environment

Red Square:

• Immediate Environment

Gray Circle:

• Consumers

Factors That Affect Consumers' Immediate Environment

• Company's Capabilities

• Competitors

• Corporate Partners

• Physical Environment

Physical Environment

The land, the water, the air, and living organisms (flora and fauna)

Green Marketing

A strategic effort by firms to supply customers with environmentally friendly merchandise