ba 370 exam 1 (sdsu gaffen)

CHAPTER 1

OVERVIEW OF MARKETING

marketing

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

marketing plan

primary purpose is to specify the marketing activities for a specific period of time

employment marketing

programs to attract the "best and brightest" employees

involves undertaking marketing research to understand what potential employees are seeking and what they think about the firm, developing a value proposition and an employment brand image, communicating that brand image to potential employees and then fulfilling the brand promise by ensuring the employee experience matches that which was advertised

marketplace

refers to the world of trade; can be segmented or divided into groups of people who are pertinent to an organization for particular reasons

core aspects of marketing

1. satisfying customer needs and wants

2. entails an exchange

3. creates value through product, price, place, and promotion decisions

4. can be performed by individuals and organizations

5. affects various stakeholders

exchange

the trade of things of value between the buyer and the seller so that each is better off (mutually beneficial)

marketing mix

controllable set of decisions or activities that a firm uses to respond to the wants of its target markets

aka the four Ps (product, price, place, and promotion)

product

***CREATING VALUE

create value by developing a variety of offerings (goods, services, and ideas) to satisfy customer needs

goods vs services vs ideas

goods= items you can physically touch

services= intangible customer benefits that cannot be separated from the producer

ideas= intellectual concepts such as thoughts, opinions, and philosophies

price

***CAPTURING VALUE

everything that a buyer gives up (money, time, energy) in exchange for the product

place

***DELIVERING THE VALUE PROPOSITION

describes all activities and marketing techniques necessary to get the product to the right customer when the customer wants it

marketing channel management / supply chain management

the set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturer, warehouses, stores, and other firms involved in the transaction into a seamless value chain in which merchandise if produced and distributed in the right quantities, to the right locations, and at the right time, while minimizing systemwide costs and satisfying the service levels required by the customers

promotion

***COMMUNICATING VALUE

a communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response (an incentive to buy!)

what are the three types of business marketings?

B2C (ex. keurig sells its machine and coffee to you on their website)

B2B (ex. keurig sells similar items for office use)
C2C (ex. ebay and etsy)

marketing impacts various stakeholders:

-society

-customers

-employees

-supply chain partners (manufacturer, agents, wholesalers, retailers, etc.)

-industry

marketing is about satisfying __ and __

needs and wants

four components of the marketing mix

product, price, place, and promotion

who can perform marketing

individuals and organizations

what are the various eras of marketing?

1. production oriented

2. sales oriented

3. market oriented

4. value based marketing

production oriented era

believed that a good product would sell itself (turn of the 20th century)

manufacturer were concerned with product innovation, not with satisfying the needs of consumers

“customers can have any color they want so long as it’s black” - henry ford

sales oriented era

firms depended on heavy doses of personal selling and advertising (1920 to 1950… great depression and ww2)

consumers were conditioned to consume less… manufacturer had the capacity to produce more than customers really wanted/were able to buy

market oriented era

manufacturers focused on what consumers wanted and needed before they designed, made, or attempted to sell their products and services (after 1945 and ww2)

the US entered a buyers market (customer became king)…. marketing was discovered

value based marketing era

give their customers greater value than their competitors did (turn of the 21st century)

value

reflects the relationship of benefits to costs, or what you get for what you give;

customers see value as a fair return in goods/services for their hard earned money and scarce time (not just about a low price)

value co creation

customers act as collaborators to create a product or service that appeals mostly to them, such that it offers optimal value

relational orientation

method of building relationships with customers based on the philosophy that buyers and seller should develop long term relationships

customer relationship management (CRM)

a business philosophy and a set of strategies, programs, and systems that focus on identifying and building loyalty among the firm’s most valued customers

how do firms become value driven?

-build relationship with customers

-gather, analyze, and share information

-balance benefits and costs

-connect with customers using social/mobile media

four main activities that stem from value

1. adding value

2. market analytics

3. social and mobile marketing

4. ethical and societal dilemma

adding value

leverage various elements of marketing and work to build relationships with partners and customers to ensure that they introduce their product/service/idea to the marketplace at just the place and time customers want it

market analytics

collect massive amounts of data about how, when, why, where, and what people buy and then analyze those data to inform their choices

social and mobile marketing

to take advantage of new technologies and connect with customers using the latest social media channels

ethical and social dilemma

-conscious marketing

-socially responsible firms

-prioritizing socially responsible actions to achieve good corporate citizenship

(takes into account the benefits and costs of their actions for all stakeholders)

why is marketing important?

- expands global presence

- persuasive across channel members

- enriches society

- can be entrepreneurial

CHAPTER 2

DEVELOPING MARKETING STRATEGIES AND A MARKETING PLAN

marketing strategy

identifies: (1) a firms target markets, (2) a related marketing mix / its four Ps, and (3) the bases on which the firm plans to build a sustainable competitive advantage

sustainable competitive advantage

an advantage over the competition that is not easily copied and can be maintained over a long period of time (acts like a wall that the firm has built around its position in the market which makes it hard for outside competitors to contact customers inside)

four macro strategies for developing customer value / a sustainable competitive advantage

1. customer excellence

2. operational excellence

3. product excellence

4. locational excellence

customer excellence

focuses on retaining loyal customers and excellent customer service

operational excellence

achieved through efficient operations, excellent supply chain and human resource management, and strong relationships with suppliers

product excellence

having products with high perceived value and effective branding and positioning

locational excellence

having a good physical location and internet presence

marketing plan

a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specific in terms of the four Ps, action programs, and projected or pro forma (and other financial) statements

specifies the marketing activities for a specific period of time to achieve long term goals (how the product will be conceived/designed, how much it should cost, where/how it will be promoted, how it will get to the customer, etc.)

what are the five steps of a marketing plan?

1. define business mission and objectives

2. conduct a situation analysis (SWOT)

3. identify and evaluate opportunities (STP)

4. implement marketing mix and allocate resources

5. evaluate performance using marketing metrics

what are the three major phases of a marketing plan?

1. planning phase (steps 1 and 2)

2. implementation phase (steps 3 and 4)

3. control phase (step 5)

mission statement

a broad description of a firms objectives and the scope of activities it plans to undertake (what type of business are we? what are our objectives? what do we need to do to accomplish these objectives?)

SWOT analysis

a method of conducting analysis in which both the INTERNAL (strengths and weaknesses) and EXTERNAL (opportunities and threats) environments are examined

STP

**segmentation, targeting, and positioning

firms use these processes to identify and evaluate opportunities for increasing sales and profits

market segment

a group of consumers who respond similarly to a firm’s marketing efforts

market segmentation

the process of dividing the market into groups of customers with different needs, wants, or characteristics (who might appreciate products or services geared especially for them)

target marketing

the process of evaluating the attractiveness of various segments and then deciding which to pursue as a market

marketing positioning

the process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represent in comparison with competing products

integrated marketing communications (IMC)

encompasses a variety of communication disciplines (advertising, personal selling, sales promotion, public relations, direct marketing, online marketing/social media) in combination to provide clarity, consistence, and maximum communicative impact

value proposition

the unique value that a product or service provides to customers and how it is better than or different from those of its competitors

metrics

a measuring system that quantifies a trend, dynamic, or characteristic; used to explain why things happened and also project the future

(allows firms to determine why it did or did not achieve its performance goals)

portfolio analysis

management evaluates the firms various products and business (its portfolio) and allocates resources according to which products are expected to be the most profitable for the firm in the future

strategic business unit (SBU)

a division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives

product line

a group of products that consumers may use together or perceive as similar in some way

market share

the % of a market accounted for by a specific entity

relative market share

a measure of the product’s strength in particular market, defined as the sales of the focal product divided by the sales achieved by the largest firm in the industry

market growth rate

the annual rate of growth of the specific market in which the product competes (measures how attractive a particular market is)

…

stars

-high growth market and high market share products

-require heavy resource investments (promotions and new production facilities)

-when market growth slows, heavy users of resources → heavy generator of resources to become cash flows

cash cows

-low growth market and high market share products

-already received heavy investments, so have excess resources that can be spun off to those products that need it (can use excess resources in the ? quadrant for ex)

question marks

-high growth markets and relatively low market shares

-most managerially intensive products (require significant resources)

-need to decide whether to infuse ? w/ resources generated by cash cows so they can become stars OR withdraw resources and phase out the products

dogs

-low growth market and relatively low market shares

-should be phased out unless they are needed to complement/boost the sales of another product or for competitive resources

markets/products and services strategies:

(growth strategies)

-market penetration

-market development

-product development

-diversification

market penetration

employs the existing marketing mix and focuses the firm’s efforts on existing customers (gets current customers to buy more); attract new consumers to the firms current target market or encourage current customers to patronize the firm / buy more

ex. marvel has expanded it movie offerings → films can be seen in theaters, accessed on Xfinity, and viewed on DVDS in discount stores / grocery stores / book and comic stores

market development

employs the existing marketing offering to reach new market segments, whether domestic or international

ex. when marvel enhances the viewings of its movies by expanding into more global markets (releasing avengers endgame which grossed more than $2B worldwide)

product development

offers a new product or service to a firm’s current target market (connect with customers in a new and important way)

ex. the movie black widow which brings a new product to disney’s current market of marvel fans … created a new channel (netflix → disney plus)

diversification

introduces a new product or service to a market segment that currently is not served

related diversification

the current target market shares something in common with the new opportunity

ex. marvel has always had collectibles and tshirts, but now they diversified their offerings to include lampshades and pillows

unrelated diversification

the new business lacks any common elements with the present business (does not capitalize on core strengths associated either with markets or with products)

**very risky

ex. if marvel went into a child day care service industry, because it is so different from its core business and very risky

CHAPTER 5

ANALYZING THE MARKETING ENVIRONMENT

who is at the center of the marketing environment?

consumers

the immediate environment

-company capabilties

-competitors

-corporate partners

-physical environment

macro-environmental factors

CDSTEP:

-culture

-demographics

-social trends

-technological advances

-economic situation

-political/legal environment

culture

the shared meanings, beliefs, morals, values, and customs of a group of people (influences what, why, how, where, and when we buy)

country culture

entails easy to spot visible nuances that are particular to a country (dress, symbols, ceremonies, language, colors, food preferences, etc.) and subtler aspects which are harder to identify or navigate

**establish a universal appeal within the specific identities of country culture

regional culture

the influence of the area in which people live ; affects many aspects of people’s lives (dietary needs and preferences)

ex. mcdonalds implements slightly different variations of staple menu items for each region of the world

demographics

indicate the characteristics of human populations and segments, especially those used to identify consumer markets (race, religion, income, education, white collar vs blue collar, urban/suburban/rural)

-provides an easily understood snapshot of the typical consumer in a specific target market

generational cohorts

a group of people of the same generation typically have similar purchase behaviors because they have shared experiences and are in the same stage of life

economic situation

factor that affects the way consumers buy merchandise and spend money, both in a marketer’s home country and abroad

inflation

refers to the persistent increase in the price of goods and services (causes the purchasing power of the dollar to decline)

ex. when inflation increases, consumers probably don’t buy less food but they may shift their expenditures from expensive to less expensive steaks…. grocery stores and inexpensive restaurants win, but expensive restaurants lose

foreign currency fluctuations

change in the value of a country’s currency relative to the currency of another country; can influence consumer spending

interest rates

represent the cost of borrowing money; the cost to the customer or the fee the bank charges those customers for borrowing money

political/legal environment

comprises political parties, government organization, and legislation and laws (organizations must understand and conply with legislation regarding fair competition, consumer protection, or industry specific regulation)

which specifically prohibits monopolies?

sherman antitrust act

CHAPTER 6

CONSUMER BEHAVIOR

the consumer decision process

represents the steps consumers go through before, during, and after making purchases

1. need recognition

2. information search

3. alternative evaluation

4. purchase and consumption

5. post purchase

1. need recognition

when consumers recognize they have an unsatisfied need and they would like to go from their actual, needy state to a different, desired state

ex. regardless of the level of your hunger, your desire for ice cream will never be satisfied by any type of salad

functional needs

pertain to the performance of a product or service

ex. shoes purpose is to protect your foot

psychological needs

pertain to the personal gratification consumers associate with a product and services

ex. jimmy choo heels that cost thousands of dollars because there is a strong demand among women who love exciting and expensive shoes

2. information search

the length and intensity of the search are based on the degree of perceived risk associated with purchasing the product or service

-internal and external search

internal search

the buyer examines his or her own memory and knowledge about the product or service gathered through past experiences

ex. every time lauren wants to eat salad for lunch, she goes to sweet greens; if she is craving dessert, she heads to the cheesecake factory (**she relies on her memory of past experiences)

external search

the buyer seeks information outside his or her personal knowledge base to help make the buying decision (consumers can talk to friends, family, or a salesperson ; scour commercial media for unsponsored and unbiased info ; online search engines ; etc.)

internal locus of control

when consumers believe they have some control over the outcomes of their actions, in which case they generally engage in MORE search activities

external locus of control

when consumers believe that FATE or other external factors control all outcomes

-it doesn’t matter how much info they gather; if they make a wise decision, it is not to their credit, and if they make a poor one, it is not their fault

5 types of risks

1. performance risk

2. financial risk

3. social risk

4. physiological / safety risk

5. psychological risk

(associated with purchase decisions that can delay or discourage a purchase)