OSU Marketing Exam 1

marketing

activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

marketing seeks to

discover the needs and wants of customers and satisfy them

exchange

- how to achieve objective of discovering needs & satisfying them

- trade of things of value between a buyer and a seller so that each is better off after the trade

need

person feels deprived of basic necessities such as food, clothing, and shelter

want

need that is shaped by a person's knowledge, culture, and personality

market

people with both the desire and the ability to buy a specific offering

target market

one or more specific groups of potential consumers toward which an organization

the four Ps

product, price, promotion, place

product

good, service, or idea to satisfy the consumer's needs

price

what is exchanged for the product

promotion

a means of communications between the seller and buyer

place

a means of getting the product to the consumers

marketing mix

controllable factors - 4 p's - used marketing manager to solve marketing problem

environmental forces

social, economic, technological, competitive, and regulatory forces

customer value

unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price

relationship marketing

links organization to its individual customers, employees, suppliers, and other partners for mutual long-term benefit

- beginning before the sale and may evolve through different types of relationships after the sale

marketing program

a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers

market segments

homogenous groups of prospective buyers who have 1) common needs 2) will respond similarly to a marketing action.

Evolution: first stage, production era

early years of US until 1920s

goods were scarce and buyers accepted any goods available to them

evolution: second stage, sales era

1920s - 1960s

manufacturers could produce more goods than buyers could consume

competition grew

firms hired more salespeople to find new buyers

marketing concept era

late 1950s

marketing become motivating force among many America firms

marketing concept

organization should 1) satisfy needs and 2) achieve the organization's goal

General Electric launched this when 1952 annual report stated hat they introduce marketing at the beginning rather than the end of the production cycle

market orientation

focus on 1) continously collecting information about customer's needs 2) sharing this information across departments and 3) using it to create customer value

customer relationship era

started in 1980s

satisfy high expectations of customers

tech like AI, natural lanugage processing, robotics, augmented reality and virtual reality often increase value for customers

customer relationship management

process of identifying prospective buyers, understanding them intimately

- developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace and become advocates after their purchase

- requires involvement and commitment of managers and employees throughout the organization

customer experience

- foundation of customer relationship management

- internal response that customers have to all aspects of an organization and its offering

- internal response has direct and indirect contacts of the customer with the company

direct contacts

customer's contacts with the seller through buying, using., and obtaining services

indirect contacts

involve unplanned "touches" with the company through word-of-mouth comments from other customers, reviewers, and news reports

social responsibility

strategies like pure philanthropy, environmentally friendly and sustainable practices and creating shared value. organizations are accountable to a larger society

societal marketing concept

view that organizations should satisfy the needs of consumers in a way that provides for society's well being

Example: patagonia's worn wear program encourages customers to repair, trade, and eventually recycle all of its products

product

good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value

goods

physical objects

service

intangible items like airline trips, financial advice, or art museums

ideas

thoughts about concepts, actions, or causes

ultimate consumers

people who use the products and services purchased for a household

organizational buyers

manufacturers, wholesalers, retailers, service companies, nonprofits, government agencies that buy products and services for their own use or for resale

utility

benefits or customer value received by users of the product result of marketing exchange process

form utility

production of the product or service

place utility

having the offering available where consumers need it

time utility

having it available when needed

posession utility

value of making an item easy to purchase through the provision of credit cards or financial arrangements

organization

legal entity that consists of people who share a common mission

for-profit organization

privately owned org (target, nike) that serves customers to make a profit so it can survives

profit

money left after a for-profit organization subtracts its total expenses from its total revenues an is the reward for the risk it undertakes in marketing its offerings

nonprofit organization

nongovernmental organization that serves its customers but doesn't have profit as an organizational goal

industry

orgs that develop similar offerings

government agency

federal, state, county, or city unit that provides a specific service to its constituents

strategy

organization's long-term course of action designed to deliver a unique customer experience while achieving its goals

structure of today's orgs: corporate level

where top management directs overall strategy for the enter organization. i.e. the board of directors and senior management (CEO highest ranking)

structure of today's orgs: strategic business unit

subsidiary, division or unit of an organization that markets a set of related offerings to a clearly defined target market. set more specific strategic direction for their businesses to exploit value creating opportunities

structure of today's orgs: functional level

groups of specialists create value for org.

- department refers to specialized functions like finance and marketing

- strategic direction becomes its most specific and focused

cross-functional teams

consist of a small number of people from different departments who are mutually accountable to accomplish a task or a common set of performance goals

organizational purpose

describes why an organization exists, what problems it wishes to solve, and who it wants to be to every person it touches through its work

organizational foundation

organization purpose

core values

mission (value)

organizational culture

organizational direction

business

goals

-longterm

-shortterm

organizational strategies

result of org foundation + org direction

By Level

- corporate

- SBU

- Functional

By product

- Good

- Service

- Idea

Core Values

the fundamental, passionate, and enduring principles of an organization that guide its conduct over time

- capture firms heart and inspire & motivate stakeholders

Mission

statement of the organization's function in society that often identifies its customers, markets, products, and technologies

- should be clear, concise, meaningful, inspirational, and long term

organizational culture

values, ideas, attitudes, and norms of behavior that are learned and shared among the members of an organization

business

describes the clear, broad, underlying industry or market sector of an organization's offering

-Answer What do we do? What business are we in?

goals or objectives

statements of an accomplishment of a task to be achieved, often by a specific time

- profit goal

- sales goal

-market share goal

market share

ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself

Key performance indicators

demonstrate how effectively they are achieving each goal

Variation by Level

Moving down the levels in an organization involves creating increasingly specific, detailed strategies and plans

- Top Managers: create a portflio of market-product businesses (SBUs) consistent with mission

- SBU: focus on specific value-creation activities such as improving quality, lowering cost, or adding service s

Functional - issue is who makes tomorrow's sales call

Variation by Product

strategy is different when marketing a physical good vs. a service vs. a good

- develop a marketing plan for strategic marketing

marketing plan

roadmap for the marketing actions of an organization for a specified future time period, such as 1 yr or 5 yr

marketing dashboard

visual display of the essential info related to achieving marketing goal.

ex: CMO wants to see daily what the effect of a new social media campaign is on a product's sales

marketing metric

each display in marketing dashboard shows this which is a measure of the quantitative value or trend of a marketing action or result

Core Compentencies

special capabilities - the skills, tech, resources that distinguish the org from other orgs and provide customer value

competitive advantage

unique strength relative to competitors that provides superior returns, often based on quality, time, cost or innovation

To set a strategic direction, an org needs to answer two difficult questions:

Where are we now?

Where do we want to go?

To ask an org where it is at the present time involves identifying,

competencies, customers, and competitors

To set a direction for the firm and allocate resources to move in that direction, they can use two techniques

business portfolio analysis

diversification analysis

business portfolio analysis

a technique that managers use to quantify performance measures and growth targets of their firms' strategic business units

- determine which SBU or offering generates cash and which 1 requires cash to fund org's growth opportunities

BCG Portfolio Analysis

vertical axis: market growth rate

horizontal axis: relative market share

market growth rate

annual rate of growth of the SBU's industry

relative market share

sales of the SBU divided by the sales of the largest firm in the industry

Question Marks

- top right

- low share of high-growth markets

- require large injections of cash just to maintain market share

- dilemma: choosing right ones to invest in and phasing out the rest

Stars

- top left

- high share of high-growth markets that may need extra cash to finance their own rapid future growth

- when growth slows, they are likely to become cash shows

Cash cows

- bottom left

- generate large amounts of cash far more than they can use

- dominant shares of slow-growth markets and provide cash to cover the organization's overhead and to invest in other SBUs

Dogs

- bottom right

- low shares of slow-growth markets

- can make enough cash to sustain themselves, can't be a real winner for the organizations

- dropping SBUs that may be required if they consume more cash than they generate, except when relationships with other SBUs exist

Diversification Analysis

technique that helps a firm search for growth opportunities from among current and new markets as well as current and new products

- Market penetration

- Product development

- market development

- diversification

market penetration

- increase sales of current products in current markets

- selling more production (through better promotion or distribution) or same amount of ice cream at a higher price to its current customer

market development

- sell current products to new markets

- brazil is a new market to ben & jerry so as brazilian's incomes increase, consumers can buy more ice cream

but, ben and jerry brand may be unknown to Brazilian consumers

product development

- selling new products to current markets

- ben & jerry can leverage its brand by selling children's clothing in the US

- risky bc Americans might not see the company's expertise in ice cream as extending to children's clothing

diversification

- developing new products and selling them in new markets

- high risk if Ben & Jerry is it decides to sell clothing in Brazil because its not tested

strategic marketing process

involves the allocation of an organization's marketing mix resources to reach its target markets and achieve a competitive advantage

Guiding Principles Underlying the Strategic Marketing Process

- Customers are different

- Customers change

- Competitors change and react

- Organizational resources are limited

The Planning Phase of the Strategic Marketing Process

1) conduct a SWOT analysis

2) develop market-product focus

3) design the marketing program

SWOT analysis

strengths, weaknesses, (internal)

opportunities, threats (external)

task: translate the results of the SWOT analysis into specific marketing actions that will help the firm grow.

Develop a Market-Product Focus

often based on marketing segementation, tailor specific marketing programs for its target market segments

Develop Customer Value Proposition

- cluster of benefits that an organization promises customers (or segments) satisfy their needs

- formal statement that meets three criteria: it is relevant, details specific benefits in clear terms, states why targeted customers should purchase your products and not your competitor's offerings

Planning Phase Step 3:

Develop a Marketing Program

- includes the four Ps

- focused on the how aspect

points of difference

characteristics of a product that make it superior to competitive substitutes

- value proposition allows an org to specify meaningful and measurable marketing goals to be achieved

Implementation Phase of the Strategic Marketing Process

- carrying out the marketing plan that comes from planning

1) Obtain Resources

2) Design the marketing organization

3) defining precise tasks, responsibilities, and deadlines

4) actually executing the marketing program designed in the planning phase

Evaluation Phase of Strategic Marketing Process

Compare results with plans to identify deviations

- exploit positive deviations; correct negative ones

marketing strategy

means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it. term implies both the end sought (target market) and the means or actions to achieve it (marketing program)

marketing tactics

detailed day-to-day operational marketing actions for each element of the marketing mix that contribute to the overall success of marketing strategies

ex: writing ads, setting a temp price discount, two for one promotion

Gantt chart

graph of a program schedule

- use to schedule activities

- demonstrate how concurrent work on several tasks enables team members to deliver an executable marketing program on time

environmental scanning

process of continually acquiring information on evens occurring outside the organization to identify and interpret potential trends