HAN 435 Sales and Marketing Exam

Marketing

the action or business of promoting and selling products or services, including market research and advertising

Prerequisites for Marketing

- Analysis of opportunities in the market

- Selection of target market

- Development of marketing mix

Who does marketing?

A person whose duties include the identification of the goods and services desired by a set of consumers, as well as the marketing of those goodsand services on behalf of a company

Marketing Mix Elements

Product

Price

Place

Promotion

Production Era

after the U.S. Civil War until the 1920s, goal was to lower manufacturing costs, many businesses were able to boost their profitability & increase price competitiveness by passing on reduced production costs to consumers

Sales Era

Began at the end of Production Era, people were becoming more connected & would no longer just buy products blindly

Marketing Era

Mid 1950s, companies focused on making products that customers wanted to buy; changed to "filling a hole in the market;" in this era, the field of market research took off

Holistic Marketing Era

"Everything matters" Marketing is integrated with all aspects of a company, production, distribution, advertising. Takes into account whether the company is acting in society's broader interest

Marketing Concept/Culture Era

-Customer orientation

-Competitor orientation

-Long-term focus

-Profitability

Internal Environment

Includes all the forces & factors inside the organization which affect its marketing operations; under control of the marketer; can be changed with the changing external environment. Includes sales, marketing, human resources, etc.

Internal Environment 5 M's

-Men

-Money

-Machinery

-Materials

-Markets

External Environment + 2 Types

Factors and forces which are external to the business, the marketer has little or no control. 2 types are micro & macro

Micro Environment

Forces and factors that are directly related to the business. Includes suppliers, market intermediaries, partners, customers, competitors, & the public (Aka Task Environment)

Macro Environment

External forces and factors which affect the industry as a whole but don't have direct effect on the business. 6 parts include demographic, economic, physical, technological, political-legal, & social-cultural environment (Aka Broad Environment)

Non-marketing Driven Planning Process

Non-market stakeholders are based outside of the organization & have no vested financial interest in company. Stakeholders may be affected by economic impact of company's success or failure.

Marketing Driven Planning Process

The internal, market stakeholders are owners, partners, investors, & shareholders & includes employees. Internal shareholders have a vested financial interest.

Target Market

a particular group of consumers at which a product or service is aimed

Market Oriented Company

organizes its activities, products, & services around the wants and needs of its customers

Product Oriented Firm

primary focus is on its product and on the skills, knowledge, and systems that support that product

Accountable Health Care Organization

(ACO) groups of doctors, hospitals, and other health care providers who come together voluntarily to give coordinated high quality care to Medicare patients

4 Marketing Mix Variables (4 P's)

Place, Product, Price, Promotion

5 Major Environmental Forces

-Economical

-Technological

-Social

-Competitive

-Regulatory

Inflation

Decline in the buying power when price levels rise further than income

Gross Income

Total amount of money earned by one person or family in 1 year

Disposable Income

Money left over after taxes to spend on basic needs

Discretionary Income

Money left over after taxes & basic needs for recreation or entertainment

New Task Buying

The 1 purchase decision that hasn't been done previously by the business as they didn't have the need for a new product/task

Modified Rebuy

a buying situation in which a person or organization purchases goods that have been purchased previously but changes either the supplier or other elements of previous order. The buyer wants to modify product specifications, terms, prices, suppliers.

Straight Rebuy

Purchasing or reordering of supplies on a routine basis from a supplier on an approved list. The suppliers make an effort to maintain product/service quality & automate reordering systems to save time

Users

a person who utilizes a computer/network service; generally lack technical expertise required to fully understand how they work

Influencers

form of marketing in which focus is placed on influential people rather than target market as a whole on social media; identifies people who have influence over potential customers & orients marketing activities around these influencers

Gatekeepers

Bc of complexity of companies, every company has its own decision making unit; the company has a certain group of people who make decisions

Deciders

Someone who makes decisions on issues using a lack of judgment & intelligence

Buyers

A person employed to select & purchase stock or materials for a large retail or manufacturing business

5 Steps of Marketing Research Process

-Problem recognition

-ID of research objectives

-Research design

-Data collection

-Analysis & evaluation of results

Step 1 - Problem Recognition

-Define the problem

-All stakeholders should be included in this phase

-Defining the problem is more in depth than identifying a symptom of the problem

Step 2 - ID of Research Objectives

4 Forms: exploratory, descriptive, test hypotheses, predictive

Step 3 - Research Design

-Plan for entire study

-Specify data needed & methods to be used to collect data

-Specify methods to analyze and interpret results

-Primary or secondary data

Primary Data

Information collected to address a specific research question; qual or quan; 1st hand observation or interview; most current data; costly/time consuming

Secondary Data

Information collected previously for another purpose (online databases, inexpensive, timely, objective, info may be dated & not tailored to specific needs

Syndicated Research

A cost-effective way to stay informed of trends & opportunities in your industry

Primary Data Collection Research Methods

-Observational

-Experimental

-Survey Research

Observational

type of correlational research in which a researcher observes ongoing behavior; can usually address the "what" not the "why" (cameras, professional shopper)

Experimental

Factors are manipulated to determine a causal relationship; quasi-experimental design

Survey Research

Telephone interviews, Personal interviews, Focus groups, Mail, Internet surveys

6 Steps to Designing a Sample

-Define population

-Specify sampling frame

-Specify sampling unit

-Select sampling method

-Determine sample size

-Specify sampling plan

Marketing Information Systems

A structured, interacting complex of persons, machines, and procedures designed to generate an orderly flow of pertinent information collected from intra-and extra-firm sources, for use as the bases for decision making in specific responsibility areas of marketing management

Marketing Mix Elements: Product

Any offering (goods or services) to the market by the company

Marketing Mix Elements: Price

The money paid by customers to obtain the product

Marketing Mix Elements: Place

The efforts which ensure the availability of the product in the market to customers

Marketing Mix Elements: Promotion

All the efforts by the company that ensure the sale of products to customers through better provision of info about the advantages of the product

Need

A condition in which there is a deficiency of something

Want

The wish or desire for something

Demographic Environment

Made up of people who constitute the market ;characterized as the factual investigation & segregation of population according to size, density, location, age, gender, race, occupation

Economic Environment

Constitutes factors which influence customers' purchasing power and spending patterns; Factors include GDP, GNP, interest rates, inflation, income distribution, government funding and subsidies, and other major economic variables

Physical Environment

Includes the natural environment in which the business operates. This includes the climatic conditions, environmental change, accessibility to water & raw materials, natural disasters, pollution etc.

Technological Environment

Constitutes innovation, research and development in technology, technological alternatives, innovation inducements also technological barriers to smooth operation

Political-Legal Environment

Includes laws and government's policies prevailing in the country. Also includes other pressure groups and agencies which influence or limit the working of industry and/or the business in the society

Social-Cultural Environment

Made up of the lifestyle, values, culture, prejudice and beliefs of the people; Differs in different regions

Strategic Planning

a process that describes the direction an organization will pursue within its chosen environment & guides the allocation of resources and efforts

4 Steps of Strategic Planning Process

-Define mission

-External assessment of threats & opportunities

-Internal assessment of strengths & weaknesses

-Establish set of priorities

Mission Statement

Defines what an organization is, why it exists, its reason for being. Should define who your primary customers are, identify the products/services you produce, & describe the geographical location where you operate

Vision Statement

Describes where the company aspires to be upon achieving its mission. Reveals the "where" of a business. Describes where the company wants a community, or world, to be as a result of the company's services

External Opportunities

Provide an organization with a means to improve its performance & competitive advantage in a market environment

External Threats

Anything from your organization's outside environment that can adversely affect its performance or achievement of its goals

SWOT

Strengths, Weaknesses, Opportunities, Threats

SWOT Analysis

Simple but useful framework for analyzing organization's strengths & weaknesses, and the opportunities and threats that you face. Helps focus on strengths, minimize threats, & take greatest possible advantage of opportunities available to you

Organizational Objectives

Short-term & medium-term goals that organization seeks to accomplish; will play a large part in developing organizational policies & determining the allocation of organizational resources

Public Image

The perception people have of your business when they hear your company name; composed of an infinite variety of facts, events, personal histories, advertising, & goals that work together to make an impression on the public

Organization's Philosophy

Distinctive and enduring principles & values guiding employees; may be one value or a small set of values

Organizational Self-Concept

Refers to the totality of a complex, organized, & dynamic system of learned beliefs, attitudes, & opinions that each person holds to be true about his/her personal existence

Barriers to Entry

Conditions that a company must overcome in order to pursue a business opportunity

Barriers to Exit

Costs of leaving a particular business line

Growth Market Strategies

-Market Penetration: increasing sales of present products in present markets

-Market Development: increase sales in new markets

-Product Development: introduce new products to present markets

-Diversification: introduce new products to new markets

Product Development Strategy: Backward Integration

Becomes own supplier

Product Development Strategy: Forward Integration

Offer new services closer to the customer

Diversification Strategy: Strategic Alliances

Formal arrangements with other companies to operate in a particular market

Diversification Strategy: Joint Ventures

New corporate entities created by strategic alliances

Consolidation Strategies

-Divestment: selling off business/product line

-Pruning: reducing # of product/service offerings

-Retrenchment: withdrawing from certain markets

-Harvesting: gradually withdrawing support from a product until market demand is reduced or eliminated

Boston Consulting Group Matrix

-Stars, cash cows, problem children, dogs

-Based on market growth & market share; can be used to focus on broad considerations

-A chart created by Bruce Henderson for the BCG in 1970 to help corporations analyze their business units (their product)

Competitive Market

When there are many producers competing to provide consumers with the goods/services needed. No single producer or consumer can dictate the market.

Marketing Plan

Comprehensive document or blueprint that outlines the advertising and marketing efforts for the coming year. Describes business activities involved in accomplishing specific marketing objectives within a set time frame.

Marketing Strategy

The section of your business plan that outlines your overall game plan for finding clients & customers for your business; focuses on what you want to achieve for your business & marketing efforts

Market Strategy Formulation

-Determine target market

-Specify market strategy

-Develop tactical plans for marketing mix

Multi-Market Strategy

Firms adopting this compete with each other in several distinct geographical markets, such firms carefully avoid other firms serving the entire market with differentiated products; intensifies with globalization

Market Leader

Could be a product, brand, company, organization, group name which has the highest percentage of total sales revenue of a particular market; dominates the market by influencing the customer loyalty towards it, distribution, pricing, etc.

Market Challenger

A firm that has a market share below that of the market leader, but enough of a presence that it can exert upward pressure in its effort to gain more control

Market Niche

The subset of the market on which a specific product is focused; Defines the product features aimed at satisfying specific market needs, as well as the price range, production quality & demographics that it is intended to target; a small market segment

Market Follower

A company that follows what the leader in its sector does; Does not like taking risks. Instead, it waits and observes what its competitors do, especially the market leader. It then only adopts the leader's successful strategies.

Tactical Action Plan

A course of action to achieve short-term goals, generally within a year or less; Represents the short-term efforts to achieve the strategic, longer-term goals; Concerned with what the units beneath top management must do, how they must do it and who has the responsibility.

Social Factors

-Demographics, Geographic shifts, Racial & Ethnic distinctions, Culture, Changing Providers, Changing Attitudes

Regulatory Factors

-Competition

-Pricing

-Distribution

-Promotion

-Self-regulation

-HIPPA

Decision-Making Model

Model that characterizes a decision as a way to convert people's needs & desires into preferred outcomes; contains 3 parts that serve the ultimate goal of creating the best possible decision outcome.

Routine Decision-Making

Brand loyalty; 2 aspects of brand loyalty: purchase & attitudinal loyalty. The model includes product-level, category.

Complex Decision-Making

High involvement, extended search

Limited Decision-Making

Low involvement; in the limited space we have, we can only cover some of the essentials (OTC pharmaceutical purchases)

Sociocultural Influences

Customs, lifestyles, & values that characterize a society. More specifically, cultural aspects include education, language, law & politics, religion, technology, material culture, values, & attitudes.

Family Life Cycle

The emotional and intellectual stages you pass through from childhood to your retirement years as a member of a family; In each stage, you face challenges in your family life that allow you to build or gain new skills.

Modified Life Cycle

The default life cycle & service transition statuses are delivered with the application; however, you can modify the wording & extend life cycles

Social Class

A set of subjectively defined concepts in the social sciences and political theory centered on models of social stratification in which people are grouped into a set of hierarchical social categories; the most common being the upper, middle and lower classes.