MAR 2023 Exam 1

Four thing that must be present for marketing to occur

1. Two or more individuals or organizations with needs that are unsatisfied

2. Both the desire and the ability to satisfy those needs

3. A manner in which the parties can communicate

4. Something that the parties can exchange

Market

A group of people with both the desire and ability to buy a specific product

Target market

one or more specific groups of potential consumers toward which the organization directs its marketing program

Marketing mix

the marketing manager's controllable factors that can be used to solve a marketing problem

4 elements of the marketing mix

Product

Price

Promotion

Place

Consumer value proposition

the cluster of benefits that an organization offers to consumers to satisfy their needs

ex Walmart involves low prices, wide variety of products, and convenient locations

environmental factors

uncontrollable factors involving social, economic, technological, competitive, and regulatory forces

A forward looking marketing effort can affect some _______ _____

environmental factors

Consumer value

the unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-time delivery, and both before and after sale service

Relationship marketing

involves linking the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefits

Marketing program

a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers

Market segments

relatively homogeneous groups of prospective buyers that have common needs and will respond similarly to a marketing action

Four stages in manufacturing

the production era (-1920s)

the sales era (1920s-60s)

the marketing concept era (1950s-1990s)

the customer era (1990s-today)

the production era

products sold themselves because goods were scarce and customer demand was high, focus on production not marketing

the sales era

competition grew and firms produced more than their consumers could consumer, hired more salespeople to find more buyers

the marketing concept era

the idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organization;s goals

W/ this Marketing is introduced at the beginning of the production cycle and integrated into every phase of business

the consumer era

a firm with a market orientation focuses on continuously collecting information about consumers needs, sharing this information across departments, and using it to create customer value - firms are continuously attempting to satisfy consumers' high expectations

Consumer relationship management (CRM)

the process of identifying prospective buyers, understanding them ,and fostering favorable long-term perceptions of the organization and its offerings so buyers will choose them in the marketplace

Customer experience

internal response customers have to all aspects of an organization, dependents on direct contacts and indirect contacts

direct contacts

occurs when the customer buys or uses the product or gets it serviced

indirect contacts

in the form of word-of-mouth from news reports, reviewers, and customers

societal marketing concept

the view that organizations should satisfy the needs of consumers in a way that provides for society's well-being

ultimate consumers

the people who use the goods and services purchased for a household

organizational buyers

manufacturers, wholesalers, retailers, and gov agencies that buy goods and services for their own use of for resale

4 different kinds of utility

form, place, time, possession

form utility

value from the production or alteration of a good or service

place utility

value of having a good or service available where needed

time utility

value of having a good or service available when needed

possession utility

value of making an item easy to purchase so customers can use it

environmental scanning

the process of continually acquiring information on events occurring outside of the organization to identify and interpret potential trends

five environmental forces that give rise to env trends

social, economic, technological, competitive, regulatory

Demographics

social force, refers to describing a population according to selected characteristics such as age, gender, ethniciity, income, and occupation

culture

social force, associated with value consciousness based off the set of values, ideas, and attitudes that are learned and shared among the members of a group

two major macroeconomic conditions

economic forces

inflationary periods and recessionary periods (decreased production) (5 since 1970)

three components of income

gross income, disposable income (money after paying taxes), discretionary income (money after paying for taxes and necessities)

marketspace

growth exemplifies technological progress

an information and communication based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings

pure competition

each company has a similar product

monopolistic competition

many firms compete with each other by selling substitutable products (coffee and tea)

oligopoly

a few companies control the majority of industry sales (cell companies)

pure monopoly

product is sold by one firm only

factors that drive competition

entry, power of buyers and suppliers, existing competitors and substitutions

power of buyers and suppliers

if there are just a few buyers, switching costs are low, and the product is a significant share of the buyer's total costs, buyers are more powerful and can exert more pressure for price competition. Suppliers gain power when the product is important to the buyer or when switching costs are high

Sherman Antitrust Act (1890)

Prevents monopolies, but vague wording made Congress enact the Clayton Act (1914) to get the job done

Robinson-Patman Act (1936)

makes price discrimination unlawful if it substantially lessens competition or helps to create a monopoly

price fixing

when two firms agree to set their prices, per se illegal

four concerns that the gov has with distribution

exclusive dealing, requirement contracts, exclusive territorial distributorships, tying arrangements

exclusive dealing

when a manufacturer gets a reseller to agree to distribute only its products and not competitors products (may violate Clayton Act if lessens competiton)

Requirement contracts

contracts that require a buyer to purchase all or part of its needs from one seller over a period of time, soemtimes illegal

exclusive territorial distributorships

a distributor acquires the sole right to sell a product in a specific geographical area, courts are reluctant to find these arrangements illegal

tying arrangements

when a seller requires a purchaser to buy another item in the line to buy a given product, sometimes illegal

Federal Trade Commission powers

case-and-desist orders: orders a company to stop an ad or an unfair business practice

Corrective advertising: the ftc orders a company to buy advertising to correct previous misleading ads

Better Business Bureau

best-known example of self-regulation, made up of companies that voluntarily join and uses moral persuasion to get members to comply with rulings

Caveat emptor

the legal concept of "let the buyer beware: - reigned supreme in business culture prior to the 1960s

Consumer Bill of Rights

JFK, 1962

The right to be safe

The right to be informed

The right to choose]

The right to b heard

Economic espionage

the clandestine colection of trade secrets or proprietary info about a company's competitors (incl illegal trespassing, theft, fraud, wiretapping, searching competitor's trash)

Second form of unethical behavior

bribery

Moral idealism

personal moral philosophy that considers a certain individual's rights or duties as universal, regardless of the outcome

Utilitarianism

a personal moral philosophy that focuses on the "greatest good for the greatest number"

Three concepts of social responsibility

profit responsibility, stakeholder responsibility, societal responsibility

profit responsibility

means that companies must maximize profits for their owners or stockholders, attributed to ya boy Milton Friedman

Stakeholder responsibility

means that the organization has an obligation to those who can affect the achievement of its objectives, incl consumers, employees, suppliers, and distributers

societal responsibility

the organization has an obligation to the general public and to the preservation of the ecological environment

triple-bottom line

three areas that organizations should be concerned about if they want to achieve and maintain long-term growth: people, the planet, and profits

Cause marketing

direct linking of a firm's charitable contributions to the customer revenues generated by the promotion of its products

Social audit & 5 steps

systematic assessment of a firm's objectivesand strategies in terms of social responsibility

1. Recognize a firm's social expectations and the rationale for socially responsible endeavors

2. Identify causes or programs consistent with the company's mission

3. Determine organizational objectives and priorities for programs that it will undertake

4. Specify the type and amount of resources that are necessary to achieve those objectives

5. Evaluate the programs and activities implemented and assess future involvement

Motivation for consumer unethical behavior

they can get away with it and that "everybody does it"

Three general decision-making variations in the consumer purchase decision process (highest involvement to lowest)

Extended problem solving, limited problem solving, routine problem solving

Situational influences (5)

purchase task (reason for making the deciions in the first place),social surroundings (people around when making decision), physical surroundings (decor, music), temporal effects (time of day and amount of time you have), antecedent states (consumer's mood, amount of cash on hand)

Psychological concepts on consumer behavior (8)

motivation, personality, perception, learning, values, beliefs, attitudes, lifestyles

Hierarchy of needs

Physiological needs (basic to survival), safety needs (involve physical well-being), social needs (love and friendship), personal needs (need for achievement, status, prestige, and self-respect), self-actualization needs (personal self-fulfillment)

Perception/types of selective

selective exposure (pays attention to messages that are consistent with his or her beliefs and ignore others), selective comprehension (when a person interprets info to be consistent with their attutides and beliefs), selective retention (when a person remembers only a portion of all the info seen)

Perceived risk

related to perception, the anxiety felt because the consumer cannot anticipate the outcomes of a purchase

Behavioral learning

developing automatic responses to a situation through repeated exposure to it

two concepts:

stimulus generalization: ex Tylenol brand name used to refer to mltiple medicines

stimulus discrimination: ex bud light started to distinguish its light beer from others

Cognitive learning

making connections between two or more ideas or observing the outcomes of others' behaviors and adjusting your own behavior accordingly

attitude

learned predisposition to respond to an object or class of objects in consistently favorable or unfavorable way

Beliefs

a consumer's subjective perception of how a product or brand performs on different attributes

Psychographics

refers to the analysis of consumer lifestlye

VALS system (8)

framework that identifies eight consumer segments based on a person's main motivation for buying certain products

thinkers, believers, achievers, strivers, experiencers, makers, innovators, survivors

Ideals-motivated groups

thinkers: people who value order, knowledge, responsiblity, durable products

believers: people who have concrete beliefs based on traditional codes such as family, religion, community, national values, familiar products

Achievement-motivated groups

Achievers: busy and goal-oriented, with deep career and family commitments (want prestigous products and time saving devices)

Strivers: fun and trendy, stylish products and impulsive

Self-expression motivated groups

experienceers: young and impulsive, fashion items entertainment and socializing

makers: practical and constructive, fewer resources inumpressed with material posssessions

High and low resource groups

innovators: abundant resources and high self-esteem, new ideas and tech

surviros: few resources, brand loyal and look for discounts

Sociocultural influences on consumer behavior (6)

personal influence, reference groups, the family, social class, culture, subculture

Personal influence (2 and describe)

opinion leaders: individuals who exert direct or indirect social influence over others

word of mouth: influencing of people through conversaitions, driving force behind the majority of consumer product sales in the US

reference groups (3)

people to whom an individual looks to as a basis for self-appraisal or as a source of personal standards

membership group: person already a member

aspiration group: group that a person wishes to join or be identified with

dissociative group: group from which a person wishes to distance him or her self

family influences (3 sources)

consumer socialization (process by which people acquire the skills, knowledge, and attitudes necessary to function as consumers)

family life cycle (steps from formation to retirement)

family decision making (spouse dominant or join decision

family members play five roles: information gatherer, influencer, decision maker, purchase, user)

sustainable procurement

integrates environmental concerns into the manufacturers buying process

buying center

group of people in an organization who participate in the buying process and who share common goals, risks, and knowledge important to a purchase decision

5 different roles in the buying center

users, influencers, buyer, deciders (power to select or approve the recipient of the contract), gatekeepers

three buy classes

straight rebuy: buyer reorders from a list of acceptable suppliers ithout checking with influencers or users

modified rebuy: users, influencers, or deciders want to change product specifications, price, etc

new buy: lots of risk involved

organizational buying behavior

decision-making process that organizations use to establish the need for products and services and to identify, evaluate, and choose among alternative brands and suppliers

Stages in the organizational buying process

problem recognition, information search (incl value analysis), alternative evaluation, purchase decision, postpurchase behavior

Organizations buy more/less products online than consumers

more

two forms of emarket places

independent trading communities (neutral third parties)

private exchanges (central market and represent interests of their owners)

Decision steps (5)

Define the problem

Develop the research plan

Collect relevant information by specifying

Develop findings

Take marketing actions

Exploratory research

deals with relatively vague problems

Descriptive research

involves an investigation into the relationship between two factors or the frequency with which something occurs

Casual research

the most sophisticated, attempting to predict the impact on one factor resulting from a given change in another factor

Steps to develop market research plan

specify constraints, identify data needed for marketing actions, determine how to collect the data: concepts and methods

Concepts

ideas about products or services