MKTG EXAM 1

Marketing

The activity for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Customer Value

the perceived benefits, both monetary and nonmonetary, that customers receive from a product, compared with the cost associated with obtaining the product.

Communicating Value

Something that makes you or your business stand out

Delivering Value

The ability to buy the same product at many different places

Supply Chain

a set of multiple companies directly linked by one or more of the upstream and downstream flows of products, services, finances, and information from a source to a customer.

Production Orientation

efficient processes and production in order to create quality products and reduce unit costs.

Sales Orientation

the use of personal selling and advertising to persuade consumers to buy new products and more of existing products. Important during Great Depression until the end of WWII

Value

created by marketers for customers when they develop products that allow consumers to satisfy their needs and wants through exchange relationships.

The Most Basic Concept in Marketing

determining the difference between consumer needs and wants

Marketing Concept

the idea that a firm’s long-term success must include a companywide effort to satisfy customer needs

Housing Crisis and Recession of ‘07

Marketers tried to sell houses to people out of their level of income. This recession led to political pressure to reduce federal, state and municipal budgets. Public Universities were hit hard due to decreased funding from state legislatures

Marketing Mix

everything that a firm can do to influence demand for its good, service, or idea. The four Ps–product, price place, and promotion–provide marketers with the tools to increase customer awareness, sales, and profitability.

Product, Price, Place, and Promotion

The Four Ps

Globalization

the increasingly interconnected nature of the world economy

Marketing Analysis

the practice of measuring, managing, and analyzing market performance.

Strategic Planning

the process of thoughtfully defining a firm’s objectives and developing a method for achieving those objectives

Mission Statement

a concise affirmation of the firm’s long-term purpose. It describes the markets in which the firm will compete and the goods or services it will provide. An effective mission statement provides employees with a shared sense of ambition, direction, and opportunity

Marketing Plan

an action-oriented document that guides the firm’s marketing strategy. It must be consistent with the overall strategic plan of the organization, grounded in the firm’s mission statement

Key Components of the Marketing Plan

Executive Summary, Situation Analysis, Marketing Strategy, Financials, and Controls

Executive Summary

synopsizes the marketing plan’s main points. Also known as an “elevator pitch”

Situation Analysis

analyzes the environment within the following key sections: market summary, SWOT analysis, and competition

Marketing Strategy

defines the target market and outlines the positioning and marketing mix strategies based on specific, measurable, and realistic objectives. It should include decisions about segmentation, target markets, and positioning; strategic directions; and the marketing mix.

Segmentation, target markets, positioning, strategic directions, and the marketing mix

Included in a marketing strategy

Financials

details the financial projections, including the sales and expense forecasts and break-even analysis

Controls

proposes how to monitor and adjust the plan through the following key items: implementation, organizational structure, and contingency planning

Market Summary

analysis of important marketplace trends, potential sales through international expansion, and international growth opportunities

Direct Competitors

firms that sell similar products

Indirect Competitors

firms in the same industry that sell different products

Market Segmentation

The process of dividing a large market into smaller groups

Market Penetration, Product Development, Market Development, and Diversification

Tools and techniques of marketing strategy

selling more of existing goods and services to existing customers

Market Penetration

creating new goods and services for existing markets

Product Development

selling existing goods and services to new customers

Market Development

offering new goods and services to attract new customers

Diversification

Exporting, Licensing, Franchising, Joint Venture, Direct Ownership

International market entry strategies from least to most risky

Exporting

selling domestically produced products to foreign markets

Licensing

a legal process in which one firm pays to use or distribute another firm’s resources

Franchising

a contractual arrangement in which the franchisor prophecies a franchisee the right to use its name and marketing and operational support; in return the franchisee pays the franchisor a fee and, typically, a share of the profits

Joint Venture

a domestic firm partners with a foreign company to create a new entity; through this partnership, the domestic firm enters the foreign company’s market

Direct Ownership

a domestic firm actively manages a foreign company of overseas facilities

Return on Marketing Investment (ROMI)

a measure of the firm’s effectiveness in using the resources allocated to its marketing effort

Revenue Analysis

measures and evaluates revenue from specific products of regions. Its goal is to pinpoint what is working and what is not, relative to the objectives of the organization

Market Share Analysis

indicates market share, which is the percentage of the total market sales captured by a brand, product, or firm. Typically depicted using a pie graph

Profitability Analysis

measures how much profit the firm generates. It can also be broken down to measure the profit contribution of regions, channels, or customer segments. Often uses two important metrics to evaluate profitability: customer acquisition and customer profitability

Marketing Analytics

the practice of measuring, managing, and analyzing marketing performance. Its goal is to maximize marketing effectiveness and optimize return on investment

Marketing Environment

factors outside of a firm such as political, technological, or legal forces that affect the firm’s ability to meet its marketing goals. Those forces include political, economic, demographic, sociocultural, technological, and legal factors

Political, economic, demographic, sociocultural, technological, and legal

Factors of the Marketing Environment

Environmental Scanning

monitoring developments outside the firm’s control. The goal is to detect and respond to threats and opportunities that might affect the firm

Economic factors

influence almost every marketing decision a firm makes. It affects consumers’ willingness and ability to buy products

Sociocultural Factors

the combination of social and cultural factors that affect individual development

North American Free Trade Agreement (NAFTA)

established a free-trade zone among North American countries. Its goal was to eliminate barriers to trade and investment among the three countries

Consumer Ethnocentrism

a belief by residents of a country this it is inappropriate or immoral to purchase foreign-made goods and services

Currency Fluctuation

refers to how the value of one country’s currency changed in relation to the value of other currencies