Marketing Exam 1

What is the definition of marketing?

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

What is customer value?

The perceived benefits, both monetary and nonmonetary, that customers receive from a product, compared with the cost associated with obtaining the product.

How does supply chain management deliver value to consumers?

The linked set of companies that perform or support the delivery of a company’s goods or services to customers.

Describe what happened in the different marketing eras – production orientation, sales orientation, marketing concept.

Production orientation: quality products will sell themselves.

Sales orientation: personal selling and advertising were used to persuade consumers to buy products.

Marketing concept: company success relies on satisfying customer wants and needs

When is relationship marketing most successful?

When a company focuses on attracting, maintaining, and enhancing customer relationships

Understand the difference between a need and a want.

Needs: states of felt deprivation when lacking things like food, clothing, shelter, transportation, safety.

Wants: How needs are presented and appealed to based on your environment

What is the marketing mix?

Product, price, place, promotion.

What are marketing analytics?

The practice of measuring, managing, and analyzing market performance.

What is social media?

Internet-based applications that enable users to create their own content and share it with others who access the sites

How are consumer wants different from consumer needs?

A consumer need is the basic, fundamental problem that needs to be solved. A consumer want could be one of many solutions to the problem. Marketers need to convince consumers that their product is the best solution.

What is a marketing plan?

The guide to an organization’s marketing strategy.

What is a marketing strategy

It lists the actions the firm must take to accomplish the marketing objectives it established in its mission statement and strategic planning

What is a break-even analysis?

Combines the data from the sales and expense forecasts in the financials section to give an estimate for how much the company needs to sell to cover its expenses

What two elements are measured by the four categories of the BCG matrix?

Market growth and relative market share.

What are the characteristics of a quality marketing objective?

Specific, measurable, realistic.

Know the differences in the four growth strategies.

Market penetration: existing products to existing customers.

Product development: new products to existing customers.

Market development: existing products to new customers.

Diversification: new products to new customers

What is promotion?

How the firm communicates the value of the product

What is franchising?

A contractual arrangement in which the franchisor provides a franchisee the right to use its name and marketing and operational support

What is profit?

The positive gain from a business operation after subtracting all expenses.

What are the components of a SWOT analysis?

Strengths, weaknesses, opportunities, threats.

What are the components of the marketing plan?

Executive summary, situational analysis, marketing strategy, financials section, controls section.

Know the difference between direct and indirect competition.

Direct: products in the same category that satisfy the same need as your product.

Indirect: products in a different category that satisfy the same need as your product.

What are the factors in the marketing environment?

Economic, demographic, sociocultural, technological, legal, and political

What is consumer confidence?

How confident consumers are in the health of the economy

Know examples of demographics.

Age, generation, gender, ethnicity, etc.

What is disposable income?

The amount of spending money available to households after paying taxes

What is ethnocentrism?

A belief by residents of a country that it is inappropriate or immoral to purchase foreign-made goods and services.

What is currency fluctuation?

Currency exchange rate. Important in marketing because products may need to be cheaper in other countries if purchasing power is lower.

What is consumer behavior?

The processes individuals, groups, or organizations use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs

What are the two main categories of information searches in the consumer decision-making process?

Internal (past experiences, emotional connections) and external (friends, reviews, advertisements).

What are evaluative criteria?

When consumers consider which product attributes are the most important

What are unplanned purchases?

Purchases made in a retail outlet that are different from those the consumer planned before entering the store

What is cognitive dissonance?

Consumer feelings of unease after purchasing a product; buyer’s remorse

What is culture?

The broad set of knowledge, beliefs, laws, morals, customs, and any other capabilities or habits acquired by humans as members of society

What is one of the greatest influences on consumer behavior?

Family members

What is the family life cycle?

Developmental stages a family unit moves through.

Know examples of psychological processes that can influence consumer behavior.

Sensation, Maslow’s hierarchy of needs.

How does motivation affect consumer behavior?

Motivation is the inward drive to get what one wants or needs. Harnessing consumer motivation is a great way to sell your product.

What are examples of situational influences on the consumer decision-making process?

Physical surroundings, social surroundings, time, task definition.

What are the three general categories of B2B buying situations?

New buy, straight rebuy, modified rebuy

List the five steps of the consumer decision-making process.

Problem recognition, information search, alternative evaluation, outlet selection and purchase, post-purchase process.

How do low-involvement and high-involvement products differ?

High-involvement: significant purchases that carry a greater risk to consumers if they fail.

Low-involvement: inexpensive products that can be purchased without much forethought and that are purchased with some frequency.

Market Research

an organizational activity that links the consumer, customer, and public to the marketer through information

Research Process

define the problem, develop a research plan, collect data, analyze the data, present results and take actiom

Net Promoter Score (NPS)

calculated by percentage of 9s and 10s minus percent of 0-6s

Types of research

Exploratory Research = seeks to discover new insights.

Descriptive Research = ask the questions: who, what, where, how.

Causal Research = attempts to understand the cause and effect relationship between variables

Research Methodology

Quantitative = expressed in numbers and graphs, used to test or confirm theories and assumptions.

Qualitative = expressed in words, used to understand concepts, thoughts, experiences

Sampling

the process of selecting a subset of the population that is representative of the whole

Types of data

Primary Data = data collected specifically for research problem at hand.

Secondary Data = information collected for alternative purposes prior to the study, usually by another person or organization, that may be useful in answering or helping to answer research objective

Product

The specific combination of goods, services or ideas that a firm offers to customers

Categories of New Products

new to market products: inventions that have never been seen and create a new market.

new category entries: products that are new to a company but not new to the market.

product line extensions: products that extend and supplement a company's established product lines.

revamped products: product that has new packaging, different features, and updated designs and functions

New Product Development Process

new product strategy development, idea generation, idea screening, business analysis, product development, test marketing, product launch

Idea Generation/Insight Generation

truth, motivation, tension

Product Adoption Curve

innovators adopt immediately

Product Life Cycle

The series of stages a product goes through from the time it is launched into the market until the time it is removed.

Introduction: few competitors, slow sales.

Growth: increases in sales, production and profit.

Maturity: profitability/maintain market share.

Decline: decrease sales and profits

Alternative Product Life cycles

Fad: rapid adoption then abandonment.

Fashion: comes in and out of favor.

High-learning: slower start.

Low-learning: fast start, more success

Segmentation

helps firms define needs and wants of customers, design specific marketing strategies, decide how to allocate marketing resources

Criteria for Segmentation

substantial, measurable, differentiable, accessible, actionable

Types of segmentation

demographic, geographic, psychographic, behavioral