245 Terms CLEP Principles of Marketing

Market

Made up of everyone who wants or needs a product and has the willingness and ability to buy.

Products

goods, services, ideas, places, or persons.

Environmental Analysis

is a strategic tool. It is a process to identify all the external and internal elements, which can affect the organization's performance.

Consumer Analysis

is a critical section of a company's business plan or marketing plan. It identifies target customers, ascertains the needs of these customers, and then specifies how the product satisfies these needs.

Product Planning

the process of creating a product idea and following through on it until the product is introduced to the market.

Pricing Strategy

methods companies use to price their products or services.

Promotion Planning

methods companies will use to promote their products or services.

Physical Distribution Planning

methods for the movement of finished goods from production to the consumer.

Four P's of Marketing

Product;

Price;

Promotion;

and

Physical Distribution Planning.

Marketing Mix

A planned mix of the controllable elements of a product's marketing plan commonly termed as the 4 P's: product, price, place, and promotion.

Market Segmentation

process of dividing a market into categories of customer types, or "segments"

Target Market

A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges

Product Differentiation

A positioning strategy that some firms use to distinguish their products from those of competitors.

Lanham Act

prohibits companies from misrepresenting another company's products.

Marketing Plan

a road map for the marketing activities of an organization for a specified future time period.

Situation Analysis

uses SWOT analysis to assess the internal environment in regards to S and W. and assesses the external environment in regards to O and T.

Marketing Environment

Composed of two types of factors: those that the organization can control and those that it cannot control.

Anti-merger Act

broadens the power of the federal government to prevent mergers that would substantially reduce competition.

Macroenvironmental Factors

UNCONTROLLABLE factors that affect all firms:

1. Demographics or Demography;

2. Economic Conditions;

3. Competition;

4. Social and Cultural Factors;

5. Political and Legal Factors;

6. Technological Factors;

Wheeler Lea Amendment

Bans unfair or deceptive acts in commerce.

Magnuson Moss

Requires producers to provide clearly written warranties.

Federal Trade Commission

deals with unfair methods of competition.

US common law

producers must warrant their products as merchantable.

Federal Fair packaging and labeling act

1966;

goods must be clearly marketed and understandable.

Clayton Act

focuses to increase competition; outlawed practices that restricted competition; unions on strike were no longer considered in violation of anti-trust acts.

Microenvironmental Factors

external forces that impact specific company suppliers, marketing intermediaries, target market.

Sherman Act

1890;

Prevents businesses from restraining trade, using predatory pricing, contributing to monopolization or conspiracies.

Total Revenue

Price x Quantity

Social responsibility

Refers to the firm's obligations to society.

Marketing Strategy

The way in which the marketing mix is used to satisfy the needs of the target market and chief organizational goals.

Product or Marketing Opportunity Matrix

The four fundamental alternative marketing strategies available to the firm.

Market Penetration Strategy

Attempts to increase sales of the firm's existing products to its current markets - Present Products, Present Markets

Market Development Strategy

Attempts to increase sales by introducing existing products to new markets - Present Products, New Markets

Diversification Strategy

Aims new products at new markets - New Products, New Markets

SWOT Matrix

A tool used to assess the potential value and fit of new opportunities.

Internal SWOT

Strengths and Weaknesses

External SWOT

Opportunities and Threats

Strengths

Competitive advantages or distinctive competencies that give the firm a superior ability to meet the needs of its target markets.

Weaknesses

Limitations that a company might face in the development or implementation of a specific marketing strategy

Opportunities

Favorable environmental conditions that could bring the firm rewards if exploited

Threats

Competitive conditions or other barriers that might prevent the firm from reaching its goals.

Boston Consulting Group Matrix

a framework that classifies each product or product line within a firm's "product portfolio" as a function of their market shares relative to immediate competitors and growth rates for the industry.

Stars

Generate large profits, but also consume substantial resources to finance their continued growth.

High Industry Growth Rate, High Relative Market Share

Problem Child aka Question Mark

does not provide great profits, but still requires high levels of investments to maintain or increase market share.

High Industry Growth Rate, Low Relative Market Share

Cash Cows

generate large profits and require relatively little investment to maintain their market share in slow-growth industries.

Low Industry Growth Rate, High Relative Market Share

Dogs

are characterized by low profitability and little opportunity for sales growth.

Low Industry Growth Rate, Low Relative Market Share

Differential Advantage

unique qualities of a product that encourage consumers to purchase and be loyal; gives reasons to prefer one product over another.

Marketing Myopia

short sighted marketing strategy; focuses on products to sell rather than on customers; sellers can lose sight of customer preference as the needs and wants change over time.

Sustainable Competitive Advantage

An enduring differential advantage held over competitors by offering buyers superior value either through lower prices or other elements of the marketing mix. (example: location)

Marketing Research

The systematic process of planning, collecting, analyzing, and communicating information that is relevant to making better marketing decisions.

Marketing Research Process

is designed to yield reliable and objective answers to specific marketing questions. This process can be described in six steps.

Steps of Marketing Research

1. Define the Research Objective,

2. Determine Research Type,

3. Determine Research Approach (Qualitative v. 4. Quantitative),

4. Select Data Collection Method,

5. Analyze the results,

6. Report the findings.

Sampling

The process of gathering data from a selected subgroup chosen from the population of interest.

Primary Data

are information collected specifically for the current research study. Gathering primary data requires obtaining "new" information.

Secondary Data

consists of information that has already been collected for reasons not directly related to the current study.

Internal Secondary Data

is comprised of information available within the company.

External Secondary Data

is made up primarily of published sources.

Survey Research

is a means of systematically acquiring information from individuals by communicating directly to them.

Focus Group

research is and in-person data collection procedure in which the interviewer meets with five to ten people at the same time.

Observation

an unobtrusive data collection procedure.

Experimental Research

compares the impact of marketing variables on individuals' responses in a controlled setting.

Simulation

A technique that utilizes computer-based programs to assess the impact of alternative marketing strategies.

Marketing Information System (MIS)

made up of the people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute accurate information to marketing decision makers.

Forecasting

estimates the demand for a product; predictions are based on either qualitative or quantitative techniques:

-Internal Expert Opinions;

-Consulting Panels;

-Decision Tress and Scenarios.

Sales Forecasts

based on the analysis and extension of historical sales trend data.

Short term forecasts

typically predict sales for the next month or quarter; used for scheduling production and evaluating the impact of short-term promotions.

Medium term forecasts

are typically done annually and provide input to annual marketing plan review and revision.

Long term forecasts

are typically done for a five-year period and play a significant role in strategic planning.

Market Characteristics

Measurable characteristics to specify target markets and can be demographical or behavioral in nature.

Personal Demographics

identifiable characteristics of individuals and groups of people such as: age, gender, family size, income, occupation, and education.

Geographic Demographics

he identifiable characteristics of locations; includes county size, city size, population density, and climate.

Behavioral Dimensions

of markets include purchase occasion, user status, user rate, and brand loyalty.

Psychographics

refer to those factors that influence consumers' patterns of living or lifestyle. These include activities, interests, opinions, as well as social class, personality, and values.

Unfair Trade Act

Puts a lower limit on prices.

Laws that:

- put a lower limit on prices;

- prohibit sellers from selling below cost,

- intended to protect small firms form big giants (like Wal-Mart that operate at razor-thin profit margins).

Multi-Variable Segmentation

Recognizes the importance of interrelationships between factors in defining market segments;

-size,

-growth potential,

-profit potential.

Single Segment (or Concentration Strategy)

The decision to focus on one segment as a target market.

Multiple Segmentation Strategy (aka Differentiated Marketing)

The choice to pursue more than one target market with corresponding marketing mixes for each.

Mass Marketing (aka Undifferentiated Marketing)

Treats the total potential market as one vast target market.

Factors that influence involvement in a purchase

-personally important.

-relatively expensive or high-priced.

-consumer lacks information about the product.

-risks of making a bad decision are high.

-product offers great benefits to the buyer.

High Involvement Decision Making Steps

1. Need or Problem Recognition

2. Search for Relevant Information

3. Identification and Evaluation of Alternatives

4. Purchase Decision

5. Post-purchase Behavior

Cognitive Dissonance

This state of mental anxiety can be caused by a consumer's uncertainty about a purchase.

Low Involvement Decision Making Steps

1. Need or Problem Recognition

2. Purchase Decision

3. Post-purchase Behavior

Derived Demand

buyers derive their demand for materials from the anticipated demand by consumers for finished goods.

New task Buying

requires greater effort in gathering information and evaluating alternatives.

Straight Rebuy

process is used by purchasing inexpensive, low-risk products.

Modified Rebuy

used when the purchase situation is less complex than new-task buying and more involved than a straight rebuy.

Buyers

Individuals who identify suppliers, arrange terms of sale, and carry out the purchasing procedures.

Users

People within the firm who will use the product.

Influencers

individuals who establish product requirements and specifications based on their technical expertise or authority within the organization.

Gatekeepers

People within the organization who control the flow of relevant purchase-related information.

Deciders

The individual(s) who make the final purchase decision.

Buying Center

is not a specific place or location within an organization.

Consumer Products

Targeted toward individuals and households for final consumption.

Industrial Products aka Business Products

Typically purchased for resale, operational needs, or use in further production.

Convenience Goods

Those purchased frequently and with a minimum of shopping effort.

Shopping Goods

Those for which consumers typically make price-quality comparisons at several stores before buying.

Specialty Goods

Those for which buyers have strong brand loyalty - they'll accept no substitutes.

Unsought Goods

An additional category used for a very unusual class of consumer products.

Raw Materials

materials used to produce products. (ex. machinery, screws...)

Services

Tasks performed by one individual or firm for another.