FIRST Marketing 310 Exam 1 KU

Micro View of Marketing

a set of activities performed by organizations

Macro view of marketing

a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society

(blank) is the primary goal for most businesses

profit

marketing should begin with

customer needs and wants

pure subsistence economy

family unit produces everything it consumes

universal functions of marketing

1) Buying

2) Selling

3) Transporting

4) Storing

5) Standardization and Grading

6) Financing

7) Risk Taking

market information function

the collection, analysis, and distribution of all the information needed to plan, carry out, and control marketing activities

intermediary

specializes in trade rather than production

command economy

government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why

market directed economy

the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy

five stages in marketing evolutions

1) Simple Trade Era

2) Production Era

3) Sales Era

4) Marketing Dept. Era

5) Marketing Comp. Era

marketing department era

a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm's activities

marketing company era

a time when, in addition to short-run marketing planning, marketing people develop long-range plans—sometimes five or more years ahead—and the whole company effort is guided by the marketing concept.

marketing concept

an organization aims all its efforts at satisfying its customers at a profit

production orientation

making whatever products are easy to produce and then trying to sell them

marketing orientation

trying to carry out the marketing concept

marketing metrics

numeric data that allow marketing managers to evaluate performance, often against a set target or goal

triple bottom line

an organizations economic, social and environmental outcomes as a measure of long term success

purpose orientation

Focus on an organization's reason for being that extends beyond profit and creates value for stakeholders, including customers, employees, suppliers, investors, and communities

customer value

the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits

different types of benefits

Functional: save time, simplify

Emotional: lower anxiety, provide fun

Life-Changing: Give hope

World-Changing: making the world a better place

different types of costs

monetary: Money, fees, interest

inconvenience: time delay, effort required

micro-macro dilemma

what is "good" for some firms and consumers may not be good for society as a whole

social responsibility

a firm's obligation to improve its positive effects on society and reduce its negative effects

marketing ethics

the moral standards that guide marketing decisions and actions

marketing management process

1) Planning marketing activites

2) directing the implementation of plans

3) Controlling the plans

strategic (management) planning

the managerial process of developing and maintaining a match between an organization's resources and its market opportunities

marketing strategy

specifies a target market and a related marketing mix

target market

a fairly similar group of customers to whom a company wishes to appeal

marketing mix

the controllable variables the company puts together to satisfy this target group

mass marketing

production-oriented approach that vaguely aims at everyone with the same marketing mix

target marketing

a marketing mix is tailored to fit some specific target customers

4 P's of a Marketing Mix

Product, Price, Place, Promotion

Product

developing the right product for target market

place

reaching the target, getting it to where it's wanted

promotion

telling and selling the customer

price

setting a price musst consider competition in the target market and the cost of the marketing mix

personal selling

spoken communication between the seller and customer

advertising

paid form of nonpersonal presentation

publicity

unpaid form of nonpersonal presentation

sales promotion

promotion activities—other than advertising, publicity, and personal selling—that stimulate interest, trial, or purchase by final customers or others in the channel.

operational decisions

short-run decisions to help implement strategies

marketing analytics

The practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness

A Firm's Marketing Program

Step 1: Target market + marketing mix

Step 2: Marketing strategy + details and control procedures

Step 3: marketing plan + another marketing plan

Customer Lifetime Value (CLV)

represents the financial worth of a customer to a company over the course of their relationship

retention rate

% of customers retained compared to total # of customers

Acquisition Cost

the expense required to acquire a new customer

customer equity

the expected earnings stream (profitability) of a firm's current and prospective customers over some period of time

breakthrough opportunities

opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time

competitive advantage

a firm has a marketing mix that the target market sees as better than a competitor's mix

SWOT analysis

strengths, weaknesses, opportunities, threats

Differentiation

the marketing mix is distinct from what is available from a competitor

market penetration

trying to increase sales of a firm's present products in its present markets—probably through a more aggressive marketing mix.

market development

trying to increase sales by selling present products in new markets

product development

offering new or improved products for present markets

Diversification

moving into totally different lines of business - perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system

market environment

a company's target customers, the buying influences that shape the behavior of those customers, and competitors that market similar products to those customers

4 major areas of Market Environment

1) economic environment

2) tech environment

3) political and legal environment

4) cultural and social environment

3 Market environment variables

1) company

2) competitors

3) external market environment

mission statement

a short, specific written statement of the reason a business exists and what it wants to achieve

purpose statement

a statement of a company's purpose or reason for existing

resources that guide marketing strategy

1) financial

2) production

3) marketing

Finances in Marketing

1) large amounts of capital

2) r&d

3) cash flow

4) determines opportunities

Production in Marketing

economics of scale - as a company produces large numbers of a particular product, the cost of each unit in the product goes down

competitive environment

affects the number and types of competitors the marketing manager faces and how they may behave

pure competition

the market structure that exists when there are many small businesses selling one standardized product

Oligopoly

A market structure in which a few large firms dominate a market

monopolistic competition

a market structure in which many companies sell products that are similar but not identical

sustainable competitive advantage

a marketing mix that customers see as better than a competitor's mix and cannot be quickly or easily copied

competitive rivals

a firm's closest competitors

market share

the portion of a market controlled by a particular company or product.

economic environment

macro-economic factors, including national income, economic growth, and inflation, that affect patterns of consumer and business spending

inflation

A continuous rise in the price of goods and services

intelligent agent

a device that observes an environment and acts to achieve a goal

metaverse

a virtual-reality space in which users can interact with a computer-generated environment and other users.

Nationalism

an emphasis on a country's interests before everything else

legal environment

important laws in the US that regulate marketing practices

cultural and social environment

affects how and why people live and behave as they do

Gross Domestic Product (GDP)

A measurement of the total goods and services produced within a country.

Gross National Income (GNI)

The value of the output of goods and services produced in a country in a year, including money that leaves and enters the country

BCG Growth-Share Matrix

The Boston Consulting Group planning tool that evaluates business units in terms of their growth potential and market share.

stars are

low growth, high market share

cash cows are

high market share, high market growth

? is

low market shares, high market growth

Dogs are

low market shares, low market growth

generic market

a market with broadly similar needs and sellers offering various, often diverse, ways of satisfying those needs

product market

a market with very similar needs and sellers offering various close substitute ways of satisfying those needs

generic market is

customer needs + customer types + geographic area

product market is

customer needs + customer types + geographic area + product type (good/service)

Market Segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs

segmenting

clustering people with similar needs into a "market segment"

market segment

a relatively homogeneous group of customers who will respond to a marketing mix in a similar way

single target market approach

segmenting the market and picking one of the homogeneous segments as the firm's target market

multiple target market approach

segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix

combined target market approach

combining two or more submarkets into one larger target market as a basis for one strategy

best approach to segmenting product markets

1) select the broad product market

2) identify potential customer needs

3) form homogeneous submarkets

4) name the possible product market segments

5) evaluate product market segment behavior

6) estimate the size of each product market subsegment

clustering techniques

try to find similar patterns within sets of data

Customer Relationship Management (CRM)

where the seller fine-tunes the marketing effort with information from a detailed customer database

dynamic behavioral segmentation

refers to the use of real-time data to continuously update a customer's placement in a market segment

positioning

how customers think about proposed or present brands in a market