Principles of Marketing Exam 1- Melissa Moore

What is the population of the United States?

342 million

What is the population of the World?

8.1 billion

What is marketing in 3 words?

satisfying customers needs

What is marketing in 23 words?

the process by which companies engage customers, build strong relationships, and create customer value in order to capture value from customers in return

What is marketing in 5 boxes?

1. Understand the marketplace and customer needs and wants

2. Design a customer value-driven marketing strategy

3. Construct an integrates marketing program that delivers superior value

4. Engage customers, build profitable relationships, and create customer delight

5. Capture value from customers to create profits and customer equity

Of the 5 box model describing marketing, which ones create value and build relationships? Which capture customer value?

the first 4 CREATE value while the 5th one CAPTURES value

What is the marketing mix?

Product, Price, Place, Promotion

What are the 5 core concepts of understanding the marketplace and customer needs?

1. needs, wants, demands

2. market offerings

3. value and satisfaction

4. exchanges and relationships

5. markets

Define needs

states of felt deprivation

-physical, social, and individual

Define wants

form taken by human needs when shaped by culture and individual personality (& marketing!)

Define demands

human wants that are backed by buying power

Define market offerings

products, services, information, or experiences

-offered to satisfy a need or want

Define marketing myopia

paying more attention to the specific products than to the benefits and experiences produced

Define value and satisfaction

satisfaction: feelings of pleasure or disappointment resulting from comparing a product's perceives performance in relation to expectations

-managing expectations

Define Exchange and Relationships

-exchange: the act of obtaining a desired object by offering something in return

-relationships: marketing consists of creating, maintaining, and growing desirable exchange relationships

-strong relationships are built by consistently delivering superior customer value

Define Markets

all actual and potential buyers of a product

Define Marketing Management

Choosing target markets and building profitable relationships

Is marketing management the same thing as demand management?

yes it is the same

Define Market Segmentation

dividing the markets into segments of customers

Define Target Marketing

which segments to go after

Define Value Proposition

the set of benefits or values it promises to deliver to consumers to satisfy their needs

List the marketing management orientations

production concept, product concept, selling concept, marketing concept, and societal marketing concept

Define Production Concept

available/affordable

-the idea that consumers will favor products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency

Define Product Concept

-quality/performance/features

-the idea that consumers will favor products that offer the most quality, performance, and features; therefore, the organization should devote its energy to making continuous product improvements

Define Selling Concept

-large-scaling selling/promo

-the idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort

Define Marketing Concept

-needs and wants of customer

-the idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organization's goals

Define Societal Marketing Concept

-needs/wants + society

-the idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests

What is the difference between the selling and marketing concept?

selling takes an inside-out view and aims to sell what the company makes rather than making what the customer wants while marketing takes an outside-in view, focusing on satisfying customer needs as a path to profits

What is the difference between the marketing and societal marketing concept?

marketing focuses on satisfying customer needs as a path to profits while societal marketing focuses on doing what will benefit both the community and the company (combines society, consumers, and company needs)

What is CRM- Customer Relationship Management?

the overall process of BUILDING and MAINTAINING profitable customer relationships by delivering superior customer value and satisfaction

Relationship marketing vs transactional

relationship acquire and retain bonds/attachments while transactional is discrete and only acquires bonds/attachments

What are the 4 bonds or attachments to build a relationship?

Utilitarian, affective, symbolic, obligatory

What is customer-engagement marketing?

involves fostering direct, continuous customer involvement in shaping brand conversations, experiences, and community

-goes beyond just selling

Define Customer-generated Marketing

brand exchanges created by consumers

What is CLV- Customer lifetime value?

the value of the entire stream of purchases a customer makes over a lifetime of patronage

Review example of Stew Leonard on slide 67

Be able to do simple calculations

Define Share of Customer

portion of the customer's purchasing in their product categories

-increased by good CRM, offering greater variety, creating programs to cross-sell and up-sell

Define Customer Equity

the total combined customer lifetime values of all of the company's customers

What are the 4 different customer relationship groups? Know the 2x2 figure

1. Strangers (low potential profitability and short-term projected loyalty)

2. Butterflies (high profitability and short-term loyalty)

3. Barnacles (low profitability and long-term loyalty)

4. True Friends (high profitability and long-term loyalty)

What are the steps in strategic planning?

1. Defining the company mission

2. Setting company objectives and goals

3. Designing the business portfolio

4. Planning marketing and other functional strategies

Define Strategic Planning

the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities

Which steps in strategic planning are at the corporate level? What is the other level?

the first 3 steps are on the corporate level while the 4th one is on the business unit, product, and market level

What is a mission statement?

statement of the organization's purpose

-emphasizes company's strengths, focuses on customers and their experience, and is market oriented

What is market-oriented vs product oriented?

market-oriented : defined in terms of satisfying basic customer needs

ex: We sell "The Starbuck Experience"

product-oriented: myopically defined in terms of product or technology

ex: We sell coffee and snacks

What is a Business portfolio?

collection of businesses and products that make up the company

What is a portfolio analysis?

management's evaluation of the products and businesses that make up the company

What is a SBU- strategic business unit?

the key businesses that make up the company

What are the 4 parts of the BCG Growth Share Matrix?

1. Cash Cow: Low market growth rate and high relative market share

2. Star: High growth rate and high market share

3. Question Mark: High growth rate and low market share

4. Dog: Low growth rate and low market share

What is Ansoff's matrix? (Product/Market Expansion grid)

1. Market Penetration (existing products and markets)

2. Market Development (existing products and new markets)

3. Product Development (new products and existing markets)

4. Diversification (new products and new markets)

Which part of Ansoff's matrix is the most challenging?

Diversification

What is the value chain?

series of internal departments that carry out value-creating activities (internal)

What is the value delivery network?

composed of the company, its suppliers, its distributors, and its customers

(external)

What is marketing strategy?

the marketing logic by which the company hopes to create this customer value and achieve these profitable relationships

Define market segmentation

dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs

Define market segment

a group of consumers who respond in a similar way to a given set of marketing efforts

Define market targeting

involves evaluating each market segment's attractiveness and selecting one or more segments to enter

Define differentiation

refers to actually differentiating the market offering to create superior customer value

Define positioning

arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Define the product of the 4 P's

the goods-and-services combination the company offers to the target market

Define the price of the 4 P's

the amount of money customers must pay to obtain the product

Define the place of the 4 P's

the company activities that make the product available to target consumers

Define the promotion of the 4 P's

activities that communicate the merits of the product and persuade target customers to buy it

Define the 5 functions associated with the management of marketing

analysis, planning, implementation, organization, and control

Define SWOT

Strengths (internal, positive), Weaknesses (internal, negative), Opportunities (external, positive), Threats (external, negative)

Define Marketing ROI- Return on Investment

net return from a marketing investment divided by the costs of the marketing investment

Define Marketing environment

forces that affect marketing management's ability to build and maintain successful relationships with target customers

What are the two key marketing environments?

microenvironment and macroenvironment

What is the microenvironment and its components?

actors close to the company that affect its ability to serve its customers

-the company, suppliers, marketing intermediaries, competitors, publics, and customers

What is the macroenvironment and its components?

larger societal forces that affect the microenvironment

-demographic, economic, natural, technological, political, and cultural

Define the company and what environment it belongs to

-microenvironment

-interrelated groups in a company form the internal environment

Define the supplies and what environment it belongs to

-microenvironment

-provide the resources needed by the company to produce its goods and services

Define the marketing intermediaries and what environment it belongs to

-microenvironment

-help the company to promote, sell, and distribute its products to final buyers

Define the competitors and what environment it belongs to

-microenvironment

-marketers must gain strategic advantage by positioning products strongly against competitors

Define the publics and what environment it belongs to

-microenvironment

-any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives

Define the customers and what environment it belongs to

-microenvironment

-consists of individuals and households that buy goods and services for personal consumption

-5 types: consumer, business, reseller, government, and internaltional

Define demographics. Which environment is it included in?

-macroenvironment

-study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics

What are the current 5 generational groups?

1. Baby Boomers: 71 million born after WWII (1946)-1964

2. Generation X: 65 million born 1965-1980

3. Millennials (Gen Y): 73+ million born 1981-1996, the children of the baby boomers

4. Generation Z: 80 million, born 1997-2012

5. Generation Alpha: kids born after 2012

List the key demographic trends

1. Geographic population shifts

2. Changing age and family structures

3. Educational characteristics

4. Population diversity

Which generation is the wealthiest?

Generation Alpha

Which generation is the most comfortable with digital technology?

Generation Z

How is the American family changing?

-18% are married with children under 18 compared to the 40% in 1970's and other stuff

Are geographic shifts occurring? Changes in education? Diversity?

Yes to all, more people have begun to move from rural to metropolitan areas, and the American population has become more diverse, better educated, and more mobile

Has the American population become more diverse? What is the expected diversity percentages predicted for 2060?

Yes the American population is more diverse than ever

-By 2060, it is predicted that the American population will consist of 28% Hispanics, 15% Black Americans, and 9% Asian Americans

List the factors associated with the economic environment

inflation, unemployment, interest rates, growth of recession, differences in income distribution, changes in consumer spending

What is the political environment?

forces that influence or limit various organizations and individuals in a society

-laws, government agencies, and pressure groups

What are the 3 reasons government regulation is enacted?

1. To protect companies from each other

2. To protect consumers from unfair business practices

3. To protect the interest of society against unrestrained business behavior

Did P&G do ethnographic research?

yes slide 42 ch 4

What is ethnographic research?

sending trained observers to watch and interact with consumers in their natural environments

In reference to the cartoon on slide 12 of chapter 4, is it easy to gain customer insights?

Gaining consumer insight is tricky. Consumer needs and motives for buying are difficult to determine. Consumers might say one thing and then change their minds when presented with the choice.

Define MIS-Marketing Information System

Assess > Develop > Use

-consists of people and procedures to assess information needs, develop the needed information, and help decision makers use this information

In reference to the MIS, what are the three way of developing needed information?

internal databases, marketing intelligence, and marketing research

What are internal databases?

collections of consumer and market information obtained from data sources within the company network

What is marketing intelligence?

The systematic collection and analysis of publicly available information about competitors and developments in the marketing environment

Define Marketing Research

the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization

What are the four marketing research steps?

1. Defining the problem and research objectives

2. Developing the research plan for collecting information

3. Implementing the research plan- collecting and analyzing the data

4. Interpreting and reporting the findings

What are the 2 camps?

Qualitative and Quantitative

What are the 3 research types?

1. Experimental: selecting match groups of subjects, giving them different treatments, controlling related factors, and checking for difference in group responses

2. Survey: asking people questions about their knowledge, attitudes, preferences, and buying behavior

3. Observatory: gathering primary data by observing relevant people, actions, and situations; includes ethnographic research

What research approach would be used with each type of reaseach?

-Observatory= exploratory research

-Experimental= casual research

-Survey= descriptive

Define Primary Data

information collected for a specific purpose at hand

Define Secondary Data

information that already exists and is collected for another purpose

-collected quicker and at a lower cost