MIE 201 Exam 4

marketing

marketing

group of activities designed to expedite transactions by creating, distributing, pricing, and promoting goods, services, and ideas

functions of marketing

buying, selling, transporting, storing, grading, financing, market research, risk taking

BSTSGFRR

Bettie stresses to spread good for red risks

exchange

the act of giving up one thing (money, credit, labor, goods) in return for something else (goods, services, or ideas)

value

customer's subjective assessment of benefits relative to costs in determining the worth of a product

customer value = customer benefits - customer costs

customer costs

include anything a buyer must give up to obtain the benefits the product provides including cost, time, effort, and risk

marketing concept

the idea that an organization should try to satisfy customer needs coordinated activities that also allow it to achieve its own goals

market orientation

requires organizations to gather information about customer needs, share that information throughout the entire firm, and use it to help build long-term relationships with customers

must first determine what customers want and then produce it, rather than making the products first and then trying to persuade customers that they need them

production orientation

New technologies, such as electricity, railroads, internal combustion engines, and mass-production techniques, made it possible to manufacture goods with ever increasing efficiency

Together with new management ideas and ways of using labor, products poured into the marketplace, where demand for manufactured goods was strong.

sales orientation

businesspeople viewed sales as the primary means of increasing profits

those who adopted the sales orientation perspective believed the most important marketing activities were personal selling and advertising

marketing strategy

a plan of action for developing, pricing, distributing, and promoting products that meet the needs of specific customers

market

a group of people who have a need, purchasing power, and the desire and authority to spend money on goods, services, and ideas

target market

more specific group of consumers on whose needs and wants a company focuses its marketing efforts. Target markets can be further segmented into business markets and consumer markets

Business-to-business (B2B)

involves marketing products to customers who will use the product for resale, direct use in daily operations, or direct use in making other products

Business-to-consumer (B2C)

marketing directly to the end consumer

total-market approach

firms try to appeal to everyone and assume that all buyers have similar needs and wants

market segmentation

divide the total market into groups of people

market segment

collection of individuals, groups, or organizations who share one or more characteristics and thus have relatively similar product needs and desires

concentration approach

a company develops one marketing strategy for a single market segment

the concentration approach allows a firm to specialize, focusing all its efforts on the one market segment

multisegment approach

marketer aims its marketing efforts at two or more segments, developing a marketing strategy for each.

Many firms use a ____________ that includes different advertising messages for different segments

Requirements for a firm to successfully use a concentration or multisegment approach to market segmentation

1. Consumers' needs for the product must be heterogeneous.

2. The segments must be identifiable and divisible.

3. The total market must be divided in a way that allows estimated sales potential, cost, and profits of the segments to be compared.

4. At least one segment must have enough profit potential to justify developing and maintaining a special marketing strategy.

5. The firm must be able to reach the chosen market segment with a particular market strategy.

bases for segmenting markets

demographic, geographic, psychographic, behavioristic

DGPB - Diya’s Good Peanut Butter

psychographic segmentation variables

personality, motives, lifestyle

PML - Porshe, Maserati, Lambo

marketing mix

refers to four marketing activities—product, price, distribution, and promotion—that the firm can control to achieve specific goals within a dynamic marketing environment

PPPD

marketing environment

The competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surround the customer and affect the marketing mix

product

any physical good, service, or idea, or some combination--is a complex mix of tangible and intangible attributes that provide satisfaction and benefits

A good is a physical entity you can touch

price

value placed on an object exchanged between a buyer and a seller

distribution (place)

making products available to customers in the quantities desired

promotion

persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals, groups, and organizations to accept goods, services, and idea

The aim of promotion is to communicate directly or indirectly with individuals, groups, and organizations to facilitate exchanges

promotion includes advertising, personal selling, etc

marketing research

systematic, objective process of getting information about potential customers to guide marketing decisions

Such information might include data about the age, income, ethnicity, gender, and educational level of people in the target market, their preferences for product features, their attitudes toward competitors' products, and the frequency with which they use the product.

primary data

observed, recorded, or collected directly from respondents

secondary data

compiled inside or outside the organization for some purpose other than changing the current situation

buying behavior

decision processes and actions of people who purchase and use products. It includes the behavior of both consumers purchasing products for personal or household use and organizations buying products for business use

psychological variables of buying behavior

perception, motivation, learning, attitude, personality

PMLAP - Pick more lilies and petunias.

perception

the process of organizing and interpreting sensory information, enabling us to recognize meaningful objects and events

motivation

a need or desire that energizes and directs behavior

learning

a relatively permanent change in behavior due to experience

attitude

a positive, negative, or mixed reaction to a person, object, or idea

personality

an individual's characteristic style of behaving, thinking, and feeling

social variables of buying behavior

social roles, reference groups, social classes, culture

SRSC - Start risking, stop caring

social roles

shared expectations in a group about how particular people are supposed to behave

reference groups

groups with whom buyers identify and whose values or attitudes they adopt

social classes

groups of people that occupy different ranks or levels in society

culture

the enduring behaviors, ideas, attitudes, and traditions shared by a large group of people and transmitted from one generation to the next

influences development on marketing strategy

political, legal, regulatory, social, competitive, economic, and technological forces comprise the marketing environment.

PLRSCET - Police left robbers standing center even target

digital advertising

caters to both large and small companies

is often less expensive than traditional advertising

allows companies to directly interact with its customers

product development process

1. idea development

2. new idea screening

3. business analysis

4. product development

5. test marketing

6. commercialization

new idea screening

marketing manager should look at the organization's resources and objectives and assess the firm's ability to produce and market the product

important aspects to be considered at this stage are consumer desires; the competition; technological changes; social trends; and political, economic, and environmental consideration

business analysis

basic assessment of a product's compatibility in the marketplace and its potential profitability. Both the size of the market and competing products are often studied at this point.

product development

If a product survives the first three steps, it is developed into a prototype that should reveal the intangible attributes it possesses as perceived by the consumer

often expensive, and few product ideas make it to this stage

copyrights, potential target markets, packaging and labeling, and tentative advertising copy are part of marketing mix for PD

test marketing

trial minilaunch of a product in limited areas that represent the potential market

commercialization

full introduction of a complete marketing strategy and the launch of the product for commercial success

the firm gears up for full-scale production, distribution, and promotion

consumer products

for household or family use; they are not intended for any purpose other than daily living.

can be further classified as convenience products, shopping products, and specialty products on the basis of consumers' buying behavior and intentions.

convenience products

such as beverages, granola bars, gasoline, and batteries, are bought frequently, without a lengthy search, and often for immediate consumption

consumers spend virtually no time planning where to purchase these products and usually accept whatever brand is available

shopping products

such as computers, smartphones, clothing, and sporting goods, are purchased after the consumer has compared competitive products and "shopped around."

Price, product features, quality, style, service, and image all influence the decision to buy

specialty products

such as motorcycles, designer clothing, art, and rock concerts, require even greater research and shopping effort

consumers know what they want and go out of their way to find it. They are not willing to accept a substitute; special

business products

used directly or indirectly in the operation or manufacturing processes of businesses.

They are usually purchased for the operation of an organization or the production of other products; thus, their purchase is tied to specific goals and objective

product line

a group of closely related products that are treated as a unit because of a similar marketing strategy

product mix

all the products offered by an organization

stages of the product life cycle

introduction, growth, maturity, decline

IGMD - Implant, Grout, Molar, Dentist

introductory stage

consumer awareness and acceptance of the product are limited, sales are zero, and profits are negative

profits are negative because the firm has spent money on research, development, and marketing to launch the product

during this stage, marketers focus on making consumers aware of the product and its benefits

growth stage

sales increase rapidly and profits peak, then start to decline; increase then decrease from competition

one reason profits start to decline during the growth stage is that new companies enter the market, driving prices down and increasing marketing expenses

during this stage, the firm tries to strengthen its position in the market by emphasizing the product's benefits and identifying market segments that want these benefits

maturity stage

sales increase at the beginning, then the sales curve peaks and start to decline while profits continue to decline

characterized by severe competition and heavy expenditures - higher grade level; higher competition

decline stage

sales continue to fall rapidly

profits also decline and may even become losses as prices are cut and necessary marketing expenditures are made

as profits drop, firms may eliminate certain models or items. To reduce expenses and squeeze out any remaining profits, marketing expenditures may be cut back, even though such cutbacks accelerate the sales decline.

Finally, plans must be made for phasing out the product and introducing new ones to take its place

identify products with BPLP

branding, packaging, labeling, and product quality

branding

the process of naming and identifying products.

A brand is a name, term, symbol, design, or combination that identifies a product and distinguishes it from other products

manufacturer brands

brands initiated and owned by the manufacturer to identify products from the point of production to the point of purchase

private distributor brands

brands, which may cost less than manufacturer brands, that are owned and controlled by a wholesaler or retailer

generic products

products with no brand name at all

packaging

external container that holds and describes the product, influences consumers' attitudes and their buying decisions

protection, promotion, economy, convenience

labeling

presentation of important information on the package, is closely associated with packaging

content of a label, often required by law, may include ingredients or content, nutrition facts, care instructions, suggestions for use, the manufacturer's address and toll-free number, website, and other useful information. This information can have a strong impact on sales.

The labels of many products, particularly food and drugs, must carry warnings, instructions, certifications, or manufacturers' identifications

product quality

reflects the degree to which a good, service, or idea meets the demands and requirements of customers

products are often referred to as reliable, durable, easily maintained, easily used, a good value, or a trusted brand name

pricing objectives

specify the role of price in an organization's marketing mix and strategy

usually are influenced not only by marketing mix decisions, but also by finance, accounting, and production factors.

Maximizing profits and sales, boosting market share, maintaining the status quo, and survival are four common pricing objectives.

price skimming

a pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion

often used to allow the company to generate much-needed revenue to help offset the costs of research and development

penetration price

low price designed to help a product enter the market and gain market share rapidly

psychological pricing

encourages purchases based on emotional rather than rational responses to the price

even/odd pricing: people will buy more of a product for $9.99 than $10 because it seems to be a bargain at the odd price

symbolic/prestige pricing: high prices connote high quality. Thus the prices of certain fragrances and cosmetics are set artificially high to give the impression of superior quality

reference pricing

type of psychological pricing in which a lower-priced item is compared to a more expensive brand in hopes that the consumer will use the higher price as a comparison price.

The main idea is to make the item appear less expensive compared with other alternatives

price discounting

employed to boost sales

Quantity discounts reflect the economies of purchasing in large volumes.

Seasonal discounts to buyers who purchase goods or services out of season help even out production capacity.

Promotional discounts attempt to improve sales by advertising price reductions on selected products to increase customer interest.

Often, promotional pricing is geared toward increased profits

marketing channel (channel of distribution)

group of organizations that moves products from their producer to customers

Organizations that bridge the gap between a product's manufacturer and the ultimate consumer are called middlemen, or intermediaries.

They create time, place, and ownership utility. Two intermediary organizations are retailers and wholesalers.

which utilities are provided by intermediaries

time, place, ownership

retailers

buy products from manufacturers (or other intermediaries) and sell them to consumers for home and household use rather than for resale or for use in producing other products

Retailers arrange for products to be moved from producers to a convenient retail establishment (place utility).

They maintain hours of operation for their retail stores to make merchandise available when consumers want it (time utility).

They also assume the risk of ownership of inventories (ownership utility)

direct marketing

use of nonpersonal media to communicate products, information, and the opportunity to purchase via media such as mail, telephone, or the Internet

direct selling

involves the marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace

wholesalers

intermediaries who buy from producers or from other wholesalers and sell to retailers

supply chain management

connecting and integrating all parties or members of the distribution system in order to satisfy customers.

It involves long-term partnerships among marketing channel members working together to reduce costs, waste, and unnecessary movement in the entire marketing channel in order to satisfy customers

it goes beyond traditional channel members (producers, wholesalers, retailers, customers) to include all organizations involved in moving products from the producer to the ultimate customer

intensive distribution

makes a product available in as many outlets as possible - intense; all

selective distribution

uses only a small number of all available outlets to expose products.

most often used for products that consumers buy only after shopping and comparing price, quality, and style

exclusive distribution

exists when a manufacturer gives an intermediary the sole right to sell a product in a defined geographic territory - intermediary in defined geographic territory

physical distribution

includes all the activities necessary to move products from producers to customers—inventory control, transportation, warehousing, and materials handling

warehousing

is the design and operation of facilities to receive, store, and ship products.

A warehouse facility receives, identifies, sorts, and dispatches goods to storage; stores them; recalls, selects, or picks goods; assembles the shipment; and finally, dispatches the shipment

promotion mix

Advertising, personal selling, publicity, and sales promotion

APPS

integrated marketing communications

process of coordinating the promotion mix elements and synchronizing promotion as a unified effort

advertising

paid form of nonpersonal communication transmitted through a mass medium, such as television commercials, magazine advertisements, or online ads

advertising campaign

involves designing a series of advertisements and placing them in various media to reach a particular target audience

personal selling

is direct, two-way communication with buyers and potential buyers.

For many products—especially large, expensive ones with specialized uses, such as cars, appliances, and houses—interaction between a salesperson and the customer is probably the most important promotional tool.

most flexible of the promotional methods because it gives marketers the greatest opportunity to communicate specific information that might trigger a purchase

sales promotion

involves direct inducements offering added value or some other incentive for buyers to enter into an exchange

push strategy

attempts to motivate intermediaries to push the product down to their customers; push to customers

company attempts to motivate wholesalers and retailers to make the product available to their customers

pull strategy

uses promotion to create consumer demand for a product so that consumers exert pressure on marketing channel members to make it available; promotions pull customers to products

objectives of promotion

stimulate demand, to stabilize sales, and to inform, remind, and reinforce customers

promotional positioning

uses promotion to create and maintain an image of a product in buyers' minds ; promotion to create image for buyer

warehousing functions

ships, stores, receives goods