Wolter MKTG 3310 Exam 1

Who determines the value of a product?

The customer. (Value=What you get-what you give)

ex. Customers saw value in PBR

If companies don't determine value, what do they do?

They offer value propositions. Which is a need satisfying market market offering

What is a customers perceived value?

The customer's evaluation of the difference between all the benefits and all of the costs of a marketing offering relative to those of competing offers.

What is satisfaction?

A pleasurable fulfillment response to a consumption experience.

What drives satisfaction?

Disconfirmation. which is when you disconfirm the performance of the thing in relation to my expectation.

ex. "I have my expectations for how good chipotle is going to be. As long as chipotle meets those expectations or even if they are just slightly above them, my expectations are disconfirmed and I'm satisfied."

What does the determination of satisfaction using disconfirmation tell us about McDonalds?

We can be satisfied by McDonalds as long as they meet our expectations, which are pretty low usually.

What is the ACSI and why does it matter?

A national metric of satisfaction that was consumer driven. ACSI caused companies to realize that satisfaction is important.

What can McDonald's ACSI scores tell us about their ability to satisfy?

ACSI tells us that even though our expectations are really low for McDonalds, they still don't meet them based on their ACSI scores. They just keep messing up, which is why they keep running through CEOs.

What is a market? What is it NOT.

The people that can, and possibly will buy the product. It is Not a demographic.

Is there such a thing as an Auburn target market? Why or why not?

No. Because as college students, we're not all in the market for that product we're talking about. Some of us go to McDonalds, chipotle, both, or neither.

Do markets share a common need or want?

No, for example PBR consumers don't all have common needs and wants. We subdivide the general market into target markets. (Blue E-Cigs).

What does the definition of a market tell us about Chik-Fil-A's customer satisfaction in relation to the LGBTQ controversy?

This doesn't affect customer satisfaction because the people that are angry at Chick-Fil-A are not even in their market really. To be in the market you have to want the product and you have to go get it.

What is the unique contribution of marketing to a firm?

Acquire cash flow from customers. Stimulate demand and evaluate and manage customer value. Acquires Data. From customers you get advertising by recommendation.

What is marketing?

co-creating value. It is "co-creating" because companies do not create value. We as marketers, co-create it with customers.

Book: Marketing consists of creating, maintaining, and growing desirable exchange relationships with clients, partners, and society at large.

Why is marketing an art and science?

Science- It's a science because we do research/data-analytics.

Art-figuring out how to respond in a momentary thing without knowing what to down science doesn't work.

Wendy's twitter

How would you answer the statements that marketing is advertising, is not necessary, selling more things to more people..., or the devil?

Advertising- They are also involved in price setting. Marketing research, long term customer relations.

Not Necessary-Just fulfilling long term accounts is not marketing. Marketing is taking care of the customer relationships

Selling more things, to more people, more often, for more people- Is there times where marketing wants to sell less things? Yes to create exclusivity.

More people or more often? Yes you want to constrain the amount you sell sometimes. Ex. Alabama power will market for people to use less energy. Han solo was made too soon so they are going to make movies less often. The market was saturated with Star Wars stuff. More people? Non profits. The Truth targets identity making more people quit smoking. Selling things for less money? Yes, promotions.

The Devil?-Marketing can be abused just like anything else, but it has a good side.

What is the marketing concept?

The role of the firm is to satisfy customers. Take care of your customers and everything else will take care of itself.

What is the selling concept?

not trying to figure out what customers want, but the company says we are going focus on making something awesome and then we are going to figure out ways to make you buy it.

What is the Product Concept?

The idea that consumers will favor products that offer the most quality, performance, and features; therefore, the organization should devote its energy to making continuous product improvements

What is the Production Concept?

Achieving the organization's goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.

What is societal marketing concept?

the idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests

What is a market orientation?

The implementation of the marketing concept throughout an organization.

1) generate information on the market

2) dissemination the info back through the organization

3) incentivize the company to use the info

What is a shareholder concept?

a focus on maximizing shareholder value

What are potential problems with a focus on shareholders?

Encourages short term thinking and you can maximizer shareholder value to the detriment of the firm (stock buybacks)

What are the difference between needs, wants, and demands?

Needs- States of felt deprivation

Wants- The form human needs take as they are shaped by culture and individual personality

Demands- Human wants that are backed by buying power

What are the evils of marketing?

(6 on a personal level)

(3 on a societal level)

• - High Prices- guy who raised eppy pen price to $600

• -Deceptive Practices- dealt with by laws also

• -High-Pressure Selling- time shares

• Shoddy, harmful, or unsafe products- Laws against this, we've kind of dealt with this

• Planned obsolescence- making products stop working before they should. IPhone battery example

• Poor Service to disadvantaged customers- certain richer segments of society get better experience at a store

• ON A SOCIETAL LEVEL

o -False wants & too much materialism

o -Too few social goods

o -Cultural Pollution

What are current consumer "rights?" (2)

-expect a product to be safe

-expect a product to perform as claimed

What are the proposed consumer rights?

-be well informed about the product

-be protected against questionable practices

-influence products & marketing in ways that improve "quality of life"

-consume in a way that will preserve the world for future generations (sustainable marketing)

What is the argument that consumers need protected rights and not to be held to a buyer beware mentality?

information asymmetry- when two parties in an exchange has different information.

What is the Milton Friedman view of businesses role in the world?

Shareholder value concept- role of the firm is to make profit and not be fraudulent. Do what you do best in business and be ethical

What is an argument for why Milton Friedman's Shareholder value concept is the correct view?

Firms competing and seeking profits can drive process down and benefit society as a whole

What is a societal marketing concept?

• -A company makes marketing decisions by considering

o Consumers wants

o The company's requirements

o Consumer's long-run interests

o And societies long run interests

What does the consideration of organizations and institutions have to do with the contrast between Milton Friedman's view of business's role and the societal concept's view?

They are flexible. We decide what they do as a society. And this changes over time

What are the three arguments for businesses to engage in other causes besides seeking a profit?

1) A good amount of consumers wants CEOs/businesses to take a part in social issues

2) sixty percent of the worlds economy are companies, so the companies have the most resources for change

3) if done right, there is a potential financial incentive to do so

Does marketing theory apply to both for-profit and non-profit organizations?

Yes, non- profits engage in marketing. They do serve customers

Does marketing in practice differ between For-Profit and Non-Profit companies?

yes, non-profit advertising is somewhat frowned upon though because they look like they are wasting money based on the numbers. But they are not wasting money. For-profit has advantage though because they can engage in marketing without falsely looking bad like non-profit companies. There is a difference

What factors determine whether firms are "rewarded" for engaging in CSR spending? (4)

o 1- Firms are rewarded when Quality is strong

o 2- Stake holders make intrinsic attributions about the firm's motives-when the firm does it not because the government is making you do it, or if you are making up for something

o 3- CSR spending is synergistic with R&D- and people have to know you are researching

4 -Advertising spending is higher compared to competitors

Which two mechanisms are the primary ones in effect to explain firm's CSR(Corporate Social Responsibility) spending?

o -1) good management, a strategic initiative to CSR that is ingrained in the company.

o - 2) penance CSI (irresponsibility), when a company does something bad then goes and tries to make-up for it

Which mechanism explaining a firms spending on CSR(Corporate Social Responsibility) leads to financial returns?

Good Management

What is cause-related marketing?

When charitable actions of a firm are tied to revenue.

ex. Wendys, TOMS, KFC

What is this amount in relation to advertising spending? Big or small?

Advertising gets an insane amount more money than cause related marketing

Why is cause-related marketing so hard to get right?

conceptual congruence and perceptual congruence

What is the idea of value creation and appropriation?

-Creation-all the activities that go into making a product have a significant value potential.

-Appropriation- all the things we do to appropriate value back out of the product or the firm.

Who are the main appropriators? (3)

3: firms, competitors, and society at large

Is marketing more related to value creation or appropriation?

o Appropriation- because advertising/branding is considered appropriation

What is marketing strategy?

Pick a target market and manipulate your marketing mix to satisfy that market. Which customers will we serve and how we best create value

What is a market segment?

Consumers who respond in a similar way to a given set of marketing efforts

Marketing mix

The four Ps-The set of tactical marketing tools that a firm blends to produce the response it wants in the target market.

What are positioning and differentiation?

How will we create value for the customers

What is the marketing mix?

The 4 Ps

What are the 4 Ps?

-Product, Price, Place, and Promotion

What do the 4 A's say about the 4 P's?

They say that the four P's are too much from the firm's perspective and outdated. The four A's put the four P's in the customer's perspective.

What kind of activities fit under each of the 4 Ps?

♣ Product- variety, quality, design,feature, brand name, packaging, services

♣ Price- List price, discounts, payment period, allowances, credit terms

♣ Place-exclusivities,channels, coverage, locations, inventory, transportation, logistics

♣ Promotion-personal selling, advertising, sales promotions, public relation.

Can you recognize what it means to change/vary the marketing mix?

♣ -Beware of what the activities are. If you change the four Ps, you are changing the marketing mix. Selling a bottle of wine in a new store other than Walmart. Serving different. Coke Zero instead of diet coke changed marketing mix

(activities from the 4 Ps)

What is customer lifetime value?

Allows companies to see customer as good investment over the customer lifetime of the customer.

What is customer equity?

The blowing up of customer lifetime value across the entire customer base (current and potential).

What do the two metrics: Customer Lifetime Value and Customer Equity allow a firm to do?

It allows the firm to consider customers as longterm resources worthy of investments. Pizza example

What is market share?

share of the market that you are serving.

What is the benefit of market share? Why?

Increased return on investment. More MS=More ROI

How is market share related to customer satisfaction?

The more market you have, the harder it is to satisfy your customers. Negative relationship

Does the drive for market share relate to the marketing concept?

♣ No, it relates to shareholder concept.

How does market share and share of customer contrast with each other?

One most market you can, customer share is getting a customer to spend as much as they can.

What is marketing myopia? Why does it matter?

-The mistake of paying more attention to the specific products a company offers than to the benefit and experiences produced by these products.

Railroad

What happens if a firm goes too far and defines itself too broadly?

The problem of being too broad leads you to not focus on what you do well. You don't always fail but these types of failures will come and you have to deal with them.

Amazon

What is Marketing Return on Investment (MROI)? (2x2)

MROI is the improved customers value

1) Increased customer attraction and increased customer retention

2)Increased customer lifetime value and customer equity

o What are the two paths of MROI?

o -1) increased customer attraction

o -2) Increased customer retention

What is the BCG Growth-share Matrix?

Is the market growing or not is there a lot of market share or not?

How do we handle each quadrant of the BCG Growth-share Matrix?

o AXIS: growth rate (Y) and relative market share (X)

o Quadrants:

o Star- Already have high market share and high growth rate. (apple watch)

o Question Mark- Have high growth rate but trying to find out how to get high market share. (apple Home Pod)

o Cash Cow- making money, and probably shouldn't invest a lot of money into it because market isn't growing. Should direct money to things that have more future potential. (apple)

Dog- market is not growing, and you have low market share. You either keep it or cut it off. (coke C2, grandfather drinks it)

What are problems of the BCG matrix?

They can be difficult, time consuming, and costly to implement. Management may find it difficult to define SBUs and measure market share and growth. In addition, these approaches focus on classifying current businesses but provide little advice for future planning.

What is a product/market expansion grid?

Should you make new products or not, should you expand to a new market or not.

What are the quadrants of the market expansion grid?

o Market Penetration-Existing product, existing market

o Product Development- New product, existing market

o Market Development-New market, existing product

o Diversification-New product, new market

Which quadrant is the riskiest of the market expansion grid?

Diversification-risky because unsure waters (new product and new market).

Which quadrant is often overlooked? Why?

Market penetration- staying with same market and same products, saying I think we can get closer to our market with what we already have. And get to know our market better.

What is a SWOT analysis?

-2 axis, 4 quadrants, positive and negatives to things external and internal to us.

Can you recognize external forces (opportunities and threats) from internal ones (strengths and weaknesses)?

-internal-internal to the firm

-external-the government doing something

Can you recognize positive forces (opportunities and strengths) from negative ones (threats and weaknesses)?

Positive forces-Negative forces- use critical thinking to see which is positive and negative

Why did we go over the Coke C2 and Coke Zero examples? What does critical thinking have to do with this?

Coke thought the atkins diet was a trend, but it was a fad. Someone in coke thought the low carb diet thing was a massive opportunity.

What is an economies of scale?

when I produce a lot of things, I get better at producing it