MKGT 3310 exam 1

ch 1,2,3,7.1,13.1,13.2

what is a market

set of actual potential buyers of a product

market: the place where customers and companies come together

what is marketing

Marketing: managing exchanges with customers

consists of creating, maintaining, and growing desirable exchange relationships

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marketing concept

achieving the organizations goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors

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marketing concept implemented

the generation, dissemination, and use of customer information across an organization

market orientation

an approach that focuses on satisfying the customer rather than the product sold

who determines the value of a product

the customer (end user) determines the value of a product

if companies dont determine value, what do they do?

companies offer value propositions. a brands value proposition is the set of benefits or values it promises to deliver to a consumer to satisfy their needs. value propositions answer the customers question: “why should i buy your brand rather than a competitor”

what is a customers perceived value?

perceived benefits relative to the perceived costs associated with an exchange (what you get)-(what you give)

what is satisfaction?

a pleasurable fulfillment response to a consumption experience

how is satisfaction determined? what does this tell us about mcdonalds

satisfaction is driven by disconfirmation expectations- if they are met or slightly above. performance is based on your expectations of it

mcdonalds has the worst satisfaction because they dont meet the expectations you set

what is the ACSI and why does it matter?

American customer satisfaction index

to show the importance of satisfaction. national barometer of how businesses are based on customers satisfaction. gives companies the customers view

what is the unique contribution of marketing to a firm?

acquire cash flow from customers. stimulate, demand, evaluate and manage customer value. get money from customers to maintain customer-firm relationship

what is marketing not?

not equivalent to sales or advertising. its a broader concept that includes product design, pricing, and choosing where, when, and how to sell products to customers and a variety of other decisions

how would you answer the statements that marketing is advertising, not necessary, selling more things to more people…etc?

no, marketing is managing customer relationships. more people oriented

what do i mean when i say marketing is a philosophy, a discipline, a unit, and a set of activities?

philosophy- marketing concept

discipline- marketing ideas

unit- marketing department

set of activities- advertising, marketing research, innovation, communication, delivering services, and procuring

what are the difference concepts that compete with the marketing concept?

product orientation

sales orientation

market orientation

social orientation

OR selling concept

what is the role of marketing research?

measuring the outcomes of specific marketing activities against goals. testing it on a smaller scale to see how it will do on a larger one

what is a market orientation?

an approach that focuses on satisfying the customer rather than the product sold

what three characteristics of a firm are needed to be market oriented?

generation, dissemination, and end-use of customer information across an organization

* generate info on market throughout organization
* disseminate information through the organization to all departments
* incentivize departments to use it

what is a shareholder concept?

a focus on maximizing shareholder value

what are potential problems with a focus on shareholders? (shareholder concept)

* Shareholder orientation can… create very short-term perspectives and encourage behavior that maximizes shareholder value at the expense of a business’s wealth.
* It creates very short-term perspectives (4month stock holding period)
* Encourages behavior that maximizes shareholder value at the expense of a business’s wealth

what are the consumer bill of rights current consumer “rights”

the right to safety

the right to be informed

the right to choose

the right to be heard

the right to service

what is the argument that consumers need protected rights and not to be held to a “buyer beware” mentality

one party in exchange has a lot more information that puts them at an advantage over the other party

it depends on the info given to the consumer

bill of rights made to help with buy or beware

what is the milton friedman view of businesses role in the world?

only one social responsibility of business is to use resources and exchange in activities which will increase profits

businesses should engage because the consumer wants it and there is potential for financial return

the competition encourages businesses to innovate and create new products

what is social responsibility?

companies acting in part for the best interest of society rather than their own self interest (they can go hand in hand and be useful)

what is social marketing?

a company makes marketing decisions by considering consumers wants, the companys requirements, consumers long run interests, and societys long run interests

focuses on present issues

what does consideration of organizations and institutions have to do with the contrast between milton friedmans view of businesses roles and the societal concepts view?

o   As a society, we decide what companies are set to do.

o   Consumers right now want companies to do more than Milton Freidman’s view on businesses role.

what are the arguments for business to engage in other causes besides seeking a profit?

the issues the world faces are huge. companies control the resources (capital, social). consumers want businesses to engage in other causes

Does marketing theory apply to both for-profit and non-profit organizations? Does marketing in practice differ between the two? (lecture)

non profit: looks at the needs of consumers/society

in practice, there is no difference (in theory there should be)

What factors determine whether firms are “rewarded” for engaging in CSR?

quality is strong. stakeholders make intrinsic attributions about a firm motive. CSR spending is synergistic with R+D. advertising spending is higher compared to competitors

Which two mechanisms are the primary ones in effect to explain firm’s CSR spending? which one leads to financial returns?

good management(CSR- $$$)- allows financial returns

penance (CSI- CSR)

what is cause- related marketing?

when charitable actions of a firm are directly tied to consumer revenue

what is the annual amount of money spent on cause related marketing? what is this amount in relation to advertising spending? big or small?

cause sponsorship was estimated at 1.78 billion in 2013. worldwide advertising was 500 billion so only .04% of advertising spending was spend on CRM (small).

what is the marketing concept

the idea that if the firm loses focuses on the needs of the customers, then everything else will take care of itself

achieving the organizations goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better then competitors do

what are two arguments for why the milton friedman view of businesses role in the world is the correct view?

* having a market economy that makes products cheaper which allows people with less income to purchase more- raises the standard of living.
* people in poverty have more things (cars, tv, phone etc.)
* think of the role of business as transforming raw materials into goods

why is cause-related marketing so hard to get right

o   The brands and cause must fit together or else you won’t get a return on it.

o   Quality comes first.

o   Conceptual congruence (corporate values, target market, product positioning, mission, and brand personality)

o   Perceptual congruence (color consumption, size, shape, and visibility)

o   Cost of marketing spending and advertising spending

what is a marketing strategy?

a plan of action used to achieve a goal

what is a mission statement?

a definition of the firms business focus that provides direction for the company

how do you evaluate a mission statement?

what is marketing myopia and why does it matter?

marketing myopia: defining a company too narrowly and focusing on the company instead of the consumer and missing key environmental trends

the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products

its important bc you lose business

what happens if a firm goes too far and defines itself too broadly?

the firm will have a lot of failures and some successes. they are doing too many things bc there is no limit. ex. amazon

what is competitive advantage?

an advantage gained over competitors by offering greater customer value. needs to be hard to imitate. the technological advantage isnt always a competitive advantage

what is differentiation?

marketing strategy that differentiates a product from its competitors

what is the marketing mix?

unique combination of marketing activities used to encourage and facilitate exchanges by delivering value to the consumer

what are the 5 Ps of marketing mix? what kind of activities fit under each of the Ps

Product → variety, quality, design, brand name

Price → list price, discount, credit terms allowance

Place → channels, coverage, location, inventory, and transportation

Promotion → advertising, personal selling, sales, promotion, and public relations

Participation → social media

what are the 5 Cs in the marketing mix

customer benefits, connivence, cost, communication, connection

can you recognize what it means to change/vary the marketing mix?

if you can change one of the Ps- marketing mix changes

you can change the marketing mix by changing products for different tastes/target markets

ex. coca cola with variety of products from coke to water, products change which broadens target market

making marketing strategy accountable…

anytime a marketing manager invests in company resources, she or he should have in mind what to expect in return from those investments

marketers use analytical techniques designed to test marketing tactics to measure marketing effectiveness

sale is an overall measure of tactical success

* do not exist in isolation but with many other factors that affect success
* sales come at a cost (advertising, competitors, economics)

sales can now be computed in real time so they can use metrics previously reserved for strategic level planning for making tactical decisions

what is market share

a comparative metric of a firms marketing success, market share is the percentage of a brands sales relative to the total sales of all brands in a product category

what is the benefit of market share? why

economics of scale (get raw materials cheaper)

market power (control people upstream/downstream on the chain)

quality of management (attract top talent being big)

key to profitability!!

how is market share related to customer satisfaction?

the higher the share, the lower the satisfaction

negative relationship

ex. mcdonalds vs cfa

with massive share- hard to satisfy customers

* ex. smaller class= able to cater to students better

does the drive for market share relate to marketing concept?

no, it relates to the shareholder concept

companies pursue market share to chase ROI

* shareholder orientation

does customer satisfaction matter for monopolies? why?

Yes, customer satisfaction does matter for monopolies. While monopolies have limited competition, they still rely on customers to generate revenue and sustain their business. Customer satisfaction is important for several reasons:


1. Reputation: Satisfied customers are more likely to spread positive word-of-mouth, enhancing the monopoly's reputation and attracting new customers.
2. Retention: Satisfied customers are more likely to remain loyal and continue purchasing from the monopoly, reducing customer churn and maintaining a stable customer base.
3. Pricing power: Customer satisfaction can give monopolies the ability to charge higher prices, as customers are willing to pay a premium for a positive experience.
4. Regulatory scrutiny: Monopolies often face regulatory oversight, and customer satisfaction can help demonstrate that they are providing value to consumers and not exploiting their market power.

Overall, customer satisfaction is crucial for monopolies to maintain profitability, sustain their market dominance, and mitigate potential regulatory challenges.

what is ROI

return on investment- ROI gives a percentage net profit return on some investment, usually simply expressed as total costs; however managers can more narrowly consider ROI as returns on specific investments

what is CLV

customer lifetime value- total stream of purchases a customer contributes over their lifetime (length of relationship)

what is customer quality

total combined CLVs of a companys customers

the overall value of customer base

if you put money in, will you get out?

what do ROI, CLV, and customer equity allow a firm to do?

better measure a firms performance than current sales or market sale

consider the customers as resources worthy of investment as a long term resource

it allows companies to see which customers are valuable and increase the lifetime with the customers using the data

what is the idea of value creation and appropriation?

value creation: activities influence the potential magnitude of the advantage

* all the activities you do to help put value in something
* R+D
* ex. fidget spinner

value appropriation: activities influence the amount of the advantage a firm captures and the length of time the advantage persists

* all the values give value back to you
* pricing
* patents
* ex. beanie babies, off brand legos

who are the main appropriators?

firm, competitors, society/public

is marketing more related to value creation or appropriation?

it is a mix of the two. mixtures of both: promotion, participation, branding

what role do fidget spinners, beanie babies, nike and legos tell us about marketings role in value creation and appropriation?

nike allowed society to appropriate their products because they felt it helped the brand

beanie babies were marketed to be value created so years after buying the product theyd have more value

legos were appropriated by an off-brand chinese company which put value back in the lego brand

what is relative market share

compares a firms marketing success to that of key competitors in a product category; the metric can include several leading competitors in the category