MGMT 105 Exam 1 Ch Summaries

What is marketing?

• activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for consumers and society

• about delivering value to stakeholders

• firms seek long-term profitability by identifying and satisfying consumers’ needs and wants

What is the marketing mix?

• product, price, place, promotion

• product = what satisfies customer needs

• price = assigned value

• place = gets the product to customer

• promotion = efforts to convince customer to buy product

What can be marketed?

• good, service, idea

• goods = tangible products

• service = intangible products

What’s the value of marketing?

• form, place, time, and possession utility

  • form = transforming raw materials into finished products

  • place = making products available where and when wanted

  • time = storing products until needed

  • possession = allowing customers to own, use, and enjoy product

• satisfying needs of stakeholders and society

Evolution of marketing

• production era: most efficient ways of production and distribution, late 19th century

• sales era: aggressively sell products, post WWII

• relationship era: customer satisfaction, 1980s

• triple bottom line era: financial, social, and environmental bottom line

• future focus on:

  • AI

  • machine learning

  • branded content

  • corporate social responsibility

  • user generate content

value from customer perspective

• value proposition = all benefits product promises to deliver

value from seller perspective

• are transactions profitable?

• are they providing value to stakeholders by creating competitive advantage?

• are they providing value through value chain?

value from societal perspective

• producers stress ethics and social responsibility

Basics of market planning

• assess factors within organizations and external environment (SWOT analysis)

• set objectives and develop strategies

• target marketing strategy = divide overall market into segment then target most attractive one

Use marketing process to create personal brand

• develop personal brand to meet needs

• make personal value proposition to deliver value

• exchange relationships

Decision to go global comes when

• domestic growth opportunities peak or decline

• success in foreign markets is possible due to competitive advantage

4 steps to deciding to go global

• 1. Whether to go global

• 2. Which market(s) to enter

• 3. Level of commitment

• 4. How to adapt marketing mix strategies: localize vs standardize

How do international organization like WTO, World Bank, IMF, economic communities, and country regulations facilitate and limit firm’s opportunities for globalization?

• UN General Agreement on Tariffs and Trade (GATT): reduces import tax levels and trade restrictions

• WTO: sets trade rules for its member nations and mediates disputes between nations

• World Bank: lending institutions that wants to reduce poverty, improve economies, promote sustainable development

• IMF: seeks to ensure stability of the international monetary exchange by controlling fluctuations in exchange rates

• economic communities: groups of countries that band together to promote trade amount themselves and make it easier for member nations to compete elsewhere

Economic environment

1. economic health of a country (GDP, per capita GDP + economic infrastructure)

2. level of economic development (least developed, developing, developed)

3. stage in business cycle

External environment

• economic: health, development, business cycle

• competitive: microenvironment (brand, product, discretionary income competition) + macroenvironment (monopoly, oligopoly, monopolistic competition, perfect competition)

• technological

• political and legal: laws, regulations, political constraints (nationalization, expropriation)

• sociocultural: demographics, values, social norms/customs, language, ethnocentricity

Foreign market entry strategies (least to most commitment, least to most risk)

• exporting

• contractual agreements (licensing, franchising)

• strategic alliance (joint venture)

• direct investment

localization/standarization strategies

• straight extension (standardization): keep exactly the same

• product adaptation (modified localization): slight changes

• product invention (localization): new for each country

global pricing strategies

• Ethnocentric = price of product stays the same everywhere

• Polycentric = global subsidiaries or distributors set their own prices based on their understanding of their market environment

• Geocentric = establishes global price floor/minimum for a product while recognizing that unique local market conditions should be considered when setting price

ethical philosophies

• utilitarian: decision that provides the most good/least harm

• rights: decisions that does the best job of protecting the moral rights of all affected (right to decide what kind of life to lead, to be told the truth, not to be injured, to privacy)

• fairness/justice: decision that treats all humans equally or fairly based on some standard

• common good: decision that contributes to the good of all in a community

• virtue: decision that’s in agreement with certain ideal virtues (honesty, courage, compassion, generosity, tolerance, love, etc)

Sustainability strategies (4Ps)

• Product strategies: use environmentally friendly and recyclable materials to make products and package them, fair trade suppliers

• Price strategies: aim to price green products close to others

• Promotion strategies: reuse old commercials

• Place strategies: sustainable distribution, locavorism

• fair trade suppliers

Things to observe to decide which industry and work environment is right for you

• clue to culture and work environment: location, personality of key players, management philosophy and style, level of risk taking behavior, company ethics, social responsibility

What is business planning?

ongoing process of making decisions that guides the firm both in the short and long term

• Identifies and builds on firm’s strengths, helps managers at all levels make informed decisions

3 levels of business planning

• strategic planning: match firm’s resources with capabilities for long-term growth

• functional planning: functional areas’ plans for short term, supporting strategic plan

• operational planning: detailed, day to day plans

Business objectives should be….

• specific, measurable, attainable, sustainable over time

Steps in strategic planning

• Define the mission, vision, values

• Evaluate the internal and external environment

• Set organizational or SBU objectives: specific, measurable, attainable, sustainable over time

• Establish business portfolio (groups of products/brands owned by organization)

• Develop growth strategies

Steps in functional/market planning

• 1. Perform situational analysis

  • Analyze economic, technological, political and legal, and sociocultural environments 

• 2. Set marketing objectives

  • Determine what the marketing function must accomplish if the firm wants to achieve overall business objectives

• 3. Develop marketing strategies

  • Decide which markets to target + develop marketing strategies (4Ps) to support positioning of the product in the market

• 4. Implement and control marketing plan

  • Manage various elements involved in implementing the marketing + monitor progress

Steps in operational planning

• Develop actions plans to implement the marketing plan, use marketing metrics to monitor how the plan is working

BCG growth market share matrix

Product market growth matrix

Return on marketing investment (ROMI)

• ROMI = Revenue (or profit margin) / Cost of Program (marketing expenditure)

• Year 1 Sales = First 6 months Sales + (First 6 months sales + (projected sales growth * first 6 months))

• Year 1 Marketing Expenditure = first 6 months + next 6 months

• Year 1 ROMI = Year 1 Sales / Year 1 Expenditure

Developing strategic plan for your career

• 5 yr plan, review it every year and update it

• mission statement defines overall purpose + what you hope to achieve in future

  • memorable, focuses on single theme, clear and concise, rallies you to action, serves as a guide for career decisions

• Do external analysis, personal SWOT analysis, career objectives (SMART goals)

What’s a marketing information system (MIS)?

• process that determines what information marketing managers need, then gathers/sorts/analyzes/stores/distributes relevant and timely marketing information to users

• MIS system components:

  • Four types of data: internal company data, marketing intelligence, market research, and acquired databases

  • Computer hardware and software to analyze data and create reports

  • Output for marketing decision makers

What is the marketing decision support system (MDSS)?

includes analysis and interactive software that allows marketing managers to access MIS data and conduct their own analyses, often within the company intranet

• Sophisticated statistical and modeling software tools

• Can ask “what if” questions

What’s evidence based decision making?

marketer’s capability to utilize all of the relevant information available (evidence) to make the best possible marketing decisions

• 3 main tasks

  • Gather evidence

  • Interpret the evidence (turn data into information to get customer insights)

  • Apply what you’ve learned (apply customer insights)

Steps in the Market Research Process

1. Gather evidence

• Define the research problem: objectives, population of interest, environmental context

• Determine the research strategy: secondary data, primary data (exploratory, descriptive, causal)

• Select the research design: survey, observational, online

• Collect the data: probability sample, non probability sample

2. Interpret evidence

• Analyze and interpret the data

• Prepare the research report

3. Apply what you've learned

• Implement data driven strategies

3 factors that influence quality of research results

1. Validity: extent to which the research actually measures what it intended to measure

• Internal validity: extent that the research design was set up in a manner so that what was intended to be measured was accurately measured and not obscured

• External validity: extent that research results are practically applicable to the relevant target market (do research results hold up in the real world?)

2. Reliability: extent to which research measurement techniques are free of errors

3. Representativeness: extent to which consumers in a study are similar to a larger group in which the organization has an interest

Exploratory research

• generate insights for future, more rigorous studies, qualtitative research

• indepth review = unstructured personal interview to understand motivations/beliefs/attitudes on something

• focus group = product oriented discussion with small group to enhance/change/create product

• market research online community = privately made group to understand customer sentiment

• case study = examination of firm for indepth understanding in real life context

• ethnography = observe people in own communities

Descriptive research

• systematic look into marketing problems, large sample, quantiative

• cross sectional = collect responses to questionairre

• longitudinal = tracks respondents over time

Casual research

attempts to identify cause and effect relationships between two or more things

Sampling

process of selecting respondents for a study

• probability sample = each member of the population has some known chance of being included, ensures sample represents population (simple random)

• non probability sample = use of personal judgement to select respondents (convenience sample)

Using research to find a job/internship

• look at big picture: industry, not job

• Investigate your assumptions

• Ask the right questions: type of people who succeed in that field, typical projects people in that job do, work environment, changes due to tech, advancement

• Start by searching industries then companies then jobs