MKTG 300 Exam 1

Marketing

The process of creating, communicating, and delivering value to satisfy needs while achieving organizational goals.

Value creation

Designing offerings that deliver benefits exceeding the price/effort customers give up.

Who is involved in marketing?

Firms and customers exchanging value; success depends on understanding consumers and STP.

How value is delivered

Through communication, creativity/innovation, and the 4Ps (product, price, place, promotion).

Needs vs. Wants

Needs are basic requirements; wants are shaped by culture/preferences; when backed by buying power they become demand.

Demand (concept)

The quantity purchased in a market, expressed in units (volume) and/or monetary terms; basis for market share.

Market (definition)

A set of customers (consumers or businesses) that express needs/wants by buying products, services, or ideas.

Exchange (concept)

Mutual transfer of value between buyer and seller; foundation for relationships and profits.

Customer relationship management (CRM)

Tools/processes to manage interactions across the lifecycle to boost satisfaction, loyalty, and profits.

Customer lifetime value (CLV)

The present value of expected future profits from a customer over their lifetime.

American Customer Satisfaction Index (ACSI)

A benchmark of customer satisfaction across industries used to track perceived quality/value.

Net Promoter Score (NPS)

%Promoters − %Detractors from “How likely are you to recommend?”; gauges loyalty/word-of-mouth.

Customer value (4 types)

Economic (monetary), Functional (performance/features), Experiential (emotional/brand/design/service), Social (status/network).

Economic Value to the Customer (EVC)

Maximum price a customer should pay = total life-cycle cost of current option − total life-cycle cost of new option ± productivity differences.

Total cost of ownership (TCO)

Purchase + startup + operating/maintenance − productivity improvements over the product life.

EVC pricing implication

Price can be set below EVC to leave customer incentive while capturing value (margin).

Functional value

Utility from features and performance that help the product “do the job.”

Multi-Attribute Model (compensatory)

Overall attitude = sum of (attribute weight × brand performance); good can offset bad.

Non-compensatory model

Minimum cutoffs on key attributes must be met; poor performance on a key attribute disqualifies.

Compensatory vs. Non-compensatory

Compensatory trades off attributes; non-compensatory uses strict cutoffs with no trade-offs.

Features vs. Benefits

Customers buy benefits (outcomes/solutions), not features; “They want the hole, not the drill.”

Feature fatigue

Too many features can reduce usability and satisfaction despite higher capability.

Experiential value

Emotional responses from branding, design, CX, and service that elevate perceived value.

Branding

Creates associations and meaning that differentiate offerings and enable premium pricing/loyalty.

Design (role in value)

Improves aesthetics/usability; can signal quality and strengthen brand identity.

Customer experience (CX)

Totality of interactions across touchpoints; frontline employees and systems shape perceptions.

Social value

Value from identity, status, relationships, and belonging (e.g., network effects, influencers, community).

Network effects

Product becomes more valuable as more users join (direct/indirect).

Social capital

Benefits from relationships and community ties that enable information and opportunities.

Marketing process (big picture)

Analysis → Strategy → Decisions/Action: value exploration, creation, and delivery.

Objective vs. Strategy vs. Tactics

Objective = specific outcome; Strategy = high-level approach; Tactics = concrete actions (e.g., coupon insert).

Competitive strategies (leader)

Defend/enlarge share, innovate, expand demand (e.g., Apple).

Competitive strategies (challenger)

Attack leader/peers with differentiation or pricing (e.g., T-Mobile).

Competitive strategies (follower)

Imitate with lower risk/costs; maintain profit without provoking retaliation.

Competitive strategies (specialist/nicher)

Serve a focused segment deeply with tailored offerings (e.g., Upwork niches).

Ansoff Matrix

Market Penetration, Market Development, Product Development, Diversification (risk increases down/right).

Marketing planning steps

1) Situation analysis 2) Set objectives 3) Allocate resources 4) STP 5) Marketing mix 6) Implementation 7) Control/contingency.

BCG Matrix (definitions)

Stars = high growth/high share; Cash Cows = low growth/high share; Question Marks = high growth/low share; Dogs = low/low.

Relative market share (formula)

Company share ÷ largest competitor share (or Company sales ÷ competitor sales).

BCG resource guidance

Milk cows, invest in stars, experiment with question marks, minimize dogs.

Company orientations (production)

Focus on efficiency/costs; works when demand exceeds supply.

Company orientations (product)

Focus on quality/innovation; risk: marketing myopia (ignoring customer needs).

Company orientations (sales)

Emphasize persuasion and high volume; short-term focus.

Company orientations (marketing)

Start with customer needs; research-driven; build long-term relationships.

Societal marketing orientation

Balance consumer wants, company profits, and society’s long-term interests (sustainability/ethics).

SMART objectives

Specific, Measurable, Attainable, Relevant, Timely (e.g., “Gain 30% market share within two years”).

Situation analysis (3 parts)

Internal, Microenvironment (industry/competitors), Macroenvironment (PESTEL).

SWOT (structure)

Strengths/Weaknesses = internal; Opportunities/Threats = external.

Value chain analysis

Audit of activities/capabilities (product development, brand, CRM, distribution, communications) that create value.

Benchmarking

Compare key performance indices to best-in-class competitors to find improvement gaps.

Microenvironment: market analysis

Size, growth, profitability, entry barriers, cost structure, distribution, trends, KSFs.

Porter’s Five Forces

Rivalry, Supplier power, Buyer power, Threat of new entry, Threat of substitutes (industry attractiveness).

Macroenvironment: PESTEL

Political, Economic, Social, Technological, Ecological, Legal factors affecting the firm.

Market share (meaning)

Firm’s portion of total market demand—used to identify competitors and performance over time.

Demand projection

Forecast of future demand; informs capacity, resource allocation, and competitive planning.

Value Proposition Matrix

Maps customer pains/gains to product pain relievers/gain creators to craft clear value promises.

Why experiential & social value matter

Differentiate offerings, command preference, and build a strong/unique brand beyond price/features.