Exam 1 MKT 300, Jim Karrh, Fall 2023 University of Alabama

Product

can be a good, a service, or an idea

Good

A physical entity that you can touch

Service

involves human (and maybe mechanical) efforts to provide intangible benefits

Idea

A concept, a philosophy, an image, or an issue

Distribution (place)

having your product available at the right time and in appropriate locations

Promotion

involves communication activities and

selling.

Price

Can be used as a completive tool

Why is price important in the Marketing mix?

It is the most flexible

What is the marketing mix?

Product, Price, Distribution, and Promotion

Value

a customer’s subjective assessment of benefits relative to costs in determining the worth of a product

Customer Value =

customer benefits - customer costs

Stakeholders

are all of the constituents who have a "stake," or claim, in some aspect of a company's products, operations, markets, industry, and outcomes

Customers

the purchasers of organizations' products; the focal point of all marketing activities

Target Market

a specific group of customers on whom an organization focuses its marketing efforts

What are the 6 forces that affect Marketing?

Economy

Politics

Laws and Regulations

Technology

Sociocultural Changes

Competition

Mission statement

A long-term view, or vision, of what the organization wants to become

Most common words in mission statements

Service (in 76% of corporate mission statements),

customers,

quality,

value,

employees,

growth,

environment

First-mover advantage

The ability of a company to achieve long-term competitive advantages by being the first to offer an innovative product in the marketplace

Late-mover advantage

The ability of later market entrants to achieve long-term competitive advantages by not being the first to offer a product in a marketplace

Market penetration

is a strategy of increasing sales in current markets with current products.

Market development

is a strategy of increasing sales of current products in new markets.

Product development

is a strategy of increasing sales by improving present products or developing new products for current markets.

Diversification

allows firms to make better and wider use of their managerial, technological, and financial resources.

Performance standard

An expected level of performance against which actual performance can be compared

Sales analysis

Comparisons to forecasted sales, average sales in the industry, sales of key competitors, etc.

Marketing cost analysis

Environmental scanning

The process of collecting information about forces in the marketing environment

Environmental analysis

The process of accessing and interpreting the information gathered through environmental scanning

Brand competitors

Firms that market products with similar features and benefits to the same customers at similar prices

Product competitors

Firms that compete in the same product class but market products with different features, benefits, and prices

Generic competitors

Firms that provide very different products that solve the same problem or satisfy the same basic customer need

Total budget competitors

Firms that compete for the limited financial resources of the same customers

Monopoly

A competitive structure in which an organization offers a product that has no close substitutes, making that organization the sole source of supply

Oligopoly

A competitive structure in which a few sellers control the supply of a large proportion of a product

Monopolistic competition

A competitive structure in which a firm has many potential competitors and tries to develop a marketing strategy to differentiate its product

Pure competition

A market structure characterized by an extremely large number of sellers, none strong enough to significantly influence price or supply (does not exist in the real world)

Buying power

Resources—such as money, goods, and services—that can be traded in an exchange

Income

For an individual, the amount of money received through wages, rents, investments, pensions, and subsidy payments for a given period

Disposable income

After-tax income

Discretionary income

Disposable income

available for spending and saving after an individual has purchased basic necessities

Business cycle

A pattern of economic fluctuations that has four stages:

What are the 4 stages of the Business cycle?

Prosperity

Recession

Depression

Recovery

Prosperity

A stage of the business cycle characterized by low unemployment and relatively high total income, which together ensure high buying power (provided the inflation rate stays low)

Recession

A stage of the business cycle during which unemployment rises and total buying power declines, stifling both consumer and business spending

Depression

A stage of the business cycle when unemployment is extremely high, wages are very low, total disposable income is at a minimum, and consumers lack confidence in the economy

Recovery

A stage of the business cycle in which the economy moves from depression or recession to prosperity

Federal Trade Commission (FTC)

An agency that regulates a variety of business practices and curbs false advertising, misleading pricing, and deceptive packaging and labeling

The Food and Drug Administration (FDA)

enforces regulations prohibiting the sale and distribution of adulterated, misbranded, or hazardous food and drug products

The Consumer Product Safety Act

protects the public from unreasonable risk of injury from any consumer product not covered by other regulatory agencies

Better Business Bureau (BBB)

A system of nongovernmental, independent, local regulatory agencies supported by local businesses that helps settle problems between customers and specific business firms

National Advertising Review Board (NARB)

A self-regulatory unit that considers challenges to issues raised by the National Advertising Division (an arm of the Council of Better Business Bureaus) about an advertisement

WHY IS 'CUSTOMER FOCUS' HARD TO DO IN REAL LIFE?

“Disclosing

information about the

self is intrinsically

rewarding”

What role do mission statements have in a company?

It drives the companies goals

Why should companies state their mission statement often?

so that customers, employees, and other stakeholders know what they may expect

The 4 sections of the BCG

Star

Question Mark

Cash Cow

Dog

Star

Use more cash than they generate to finance growth, add capacity, increase market share

Cash Cow

Generate more cash than is required to maintain market share

Dog

Subordinate share of the market

Question Mark

Require a large amount of cash to build market share

Where the practical "sweet spot" of trust

range: 4.2-4.5

Mission Statements sounds the same why?

They use the same words

Customer-focused marketing

Defining companies by the benefits they offer rather than products

Sweet spot of trust

Range of customer ratings that lead to more sales

Qualitative research

Research methods that provide descriptive insights

Quantitative research

Research methods that provide numerical data

Exploratory research

Research to gather preliminary insights and inform conclusive research

Conclusive Research

Designed to verify insights through objective procedures and to help marketers in making decisions

Two types of conclusive research are:

descriptive research and experimental research

Descriptive research

Research conducted to clarify the characteristics of certain phenomena to solve a particular problem

Experimental research

Research that allows marketers to make causal inferences about relationships between variables

What are the three elements that determine cause and effect?

A statistical relationship

Time order

Rule out other factors

What are the 5 steps to the market research process?

Locating the problem

Designing the research project

Collecting data

Interpreting research findings

Reporting research findings

Hypothesis

An informed guess or assumption about a certain problem or a certain set of circumstances

Reliability

A condition that exists when a research technique produces almost identical results in repeated trials

Validity

A condition that exists when a research method measures what it is supposed to measure

Primary data

Data observed and recorded or collected directly from respondents

Secondary data

Data compiled both inside and outside the organization for some purpose other than the current investigation

Population

All the elements, units, or individuals of interest to researchers for a specific study

Sample

A limited number of units chosen to represent the characteristics of a total population

Sampling

The process of selecting representative units from a total population

Probability sampling

A type of sampling in which every element in the population being studied has a known chance of being selected for study

Nonprobability sampling

A sampling technique in which there is no way to calculate the likelihood that a specific element of the population being studied will be chosen

What went wrong with the Drake University survey?

only surveying High School Seniors, only ask them a couple of questions, did not take into account other stakeholders

Market

is a group of individuals and/or organizations that have:

A desire or need for products in a product class

A desire or need for products in a product class

What are the 5 steps to finding a target market?

Identify the perfect target market

Determine which segmentation variables to use

Develop Market segment profiles

Evaluate relevant market segments

Select Specific target market

Perpetual Mapping

to evaluate how consumers evaluate their product or brand