Marketing Exam 1

Chapter 1-4

What is marketing

finding out what people want and getting it to them

Customer value

hey dude, what the hell is in this for me

things that must exist to enable an exchange

-create an exceptional product

-connecting with customers

-distribution

-priced so that consumers view the trade as “fair”

Marketing mix (4 Ps)

-price

-products

-placement

-promotion

diverse elements influence marketing actions

-the organization itself and its departments

-society

-environmental forces

A marketing department relates to many people, organizations, and environmental forces

- Need to keep everyone happy

Requirements  for marketing to occur

1. Two+ parties with unsatisfied needs

2. A desire and ability to be satisfied

3. A way for the parties to communicate 

4. Something to exchange 

supply chain

distribution; different factories

benefit the other. (ex. Oil factory to Rubber

factory to shoe factory to wholesale store to

retail store to customers) - first three are the

supply chain (suppliers), the last three are the

channels. Don't piss off your partners!!

Needs vs Wants

needs- the difference between a present state and some other type of state.

Wants: how you satisfy the need

I need a car but buy a jaguar. The jaguar was not a need, the car was.

Customer relationships

are built with value strategies like best price, best service, and best product

A customers - buy a lot, predictive, reliable, you know what they are going to spend

B customers - hit or miss

C customers - difficult to work with

To improve your market, focus on A customers, they are who you want as consumers

Depth of marketing - what is marketed

• Productive (Goods)

• Services

• Ideas

environmental forces

social, economic, technological, competitive, regulatory

requirements for marketing to take place

-Two or more parties with an unsatisfied need

-A desire and ability to be satisfied - You need something, but it's what you chose to do after that.

-You need a car but you choose to get a jaguar.

-A way for the parties to communicate

- Something to exchange

 How marketing research helps marketers meet needs in the marketplace

Marketing seeks to discover consumer needs through research and then satisfy them with a marketing program

Why marketing cannot make people buy stuff they don’t want or need

it traffics in wants rather than needs, targeting emotional desires

The marketing mix (i.e., the Four P’s):

price, product, place, promotion

Consumer value proposition -

gaining loyal customers by providing unique value is the essence of successful marketing (target Nordstrom, Starbucks)

 Customer value strategies (best price, best service, and best product)

A customers - buy a lot, predictive, reliable, you know what they are going to spend

B customers - hit or miss

C customers - difficult to work with

To improve your market, focus on A customers, they are who you want as consumers

Why “everyone” is a bad target market definition

can be all things to all people

 Marketing goals and objectives including: Profit

most firms seek maximum profit, to get as high a financial return on investment (ROI) as possible

 Marketing goals and objectives including: Sales

if profits are acceptable, a firm may select to maintain or increase it sales 

 Marketing goals and objectives including: Market Share

the ratio of sales revenue on  the firm of total sales revenue of all firms in the industry , including the firm itself 

 Marketing goals and objectives including: quality

a firm may seek to offer a level of quality that meets or exceeds the cost and performance of expectations of its customers 

 Marketing goals and objectives including: customer satisfaction

customers are the reason an organization exists, so their perception and actions are of vital importance. Satisfaction can be measured by surveys or the number of customer complaints

 Marketing goals and objectives including: employee welfare

 a firm may recognize the importance of its employees by stating its goal of providing them with good employment opportunities and working conditions

 Marketing goals and objectives including: social responsibility

firms may seek to balance the conflicting goals of stakeholders to promote their overall welfare, even at the expense of profits 

  Boston Consulting Group (BCG) Matrix:

visualizing your markets/businesses you have and how they are doing 

1. Question marks: low share of high-growth market

2. Stars: High Share of High-Growth markets

3. Cash Cows: Generates large amounts of cash

4. Dogs: Low share of slow-growth markets

The strategic marketing process

1. Conduct a situation (SWOT) analysis 

2. Develop a market product focus, customer value proposition, and goals

3. Design the marketing program  

·         SWOT analysis - Strengths and Weaknesses and its external Opportunities and Threats 

How marketing professionals manage the four Ps

Product - features, brand name, packaging, service, warranty

Price - list price, discounts, allowances, credit terms, payment period

Promotion - advertising, personal selling, public relations, sales promotion, direct marketing

Place - outlets, channels, coverage, transportation, stock level

Gantt charts and planning marketing activities

shows how tasks are scheduled

1. The task

2. The person or people responsible for completing the task

3. The date to finish the task 

4. What is to be delivered  

Environmental scanning:

asks, “What trends might affect marketing in the future?” A few examples include: Brand advocates, Virtual reality, Augmented reality, “Gig” economy -social, economic, technological. competitive, regulatory 

Environmental forces and the effect on marketing organizations, customers and suppliers

organizations, suppliers, and customers

 Societal forces and how they affect marketing-

demographics, generational cohorts, cultural

 Marketing to millennials

interest in sustainability influences product offerings, colleges, and employers 

 Ethnic diversity and how marketers respond to changing demographics:

Composition trends and multicultural marketing: African Americans, Hispanics, Asian americans 

 The changing attitudes of society as a whole: gender stereotypes, careers, technology, etc):

Cultural changes in attitude and roles of men and women in the marketplace: Gender stereotypes, Fashion, Careers, Sports, Technology 

Culture, and marketing as a change agent of culture

 Values, ideas, and attitudes shared by members of a group. Values may change over time - influences buying patterns monitoring national and global cultural trends is important for marketing 

   Economic forces and the impact on Marketing

Macroeconomic Conditions

- Economy - income, expenditures, and resources

- Macroeconomics - performance of the economy based on indicators (ex. Inflatons,

deflation)

Inflation - production costs and prices increase

Recession - periods of declining economic activity

- Demand curve is estimated based on the price an item is sold for.

 Consumer incomes (gross income, disposable income, and discretionary income) 

• Gross income: the total amount of money made in one year by a person, household, or family unit 

• Disposable income: money a customer has left after paying taxes to use for necessities such as food, housing, clothing, and transportation 

• Discretionary income: money that remains after paying taxes and necessities. Used for luxuries, like a Cunard cruise 

Technological influences on marketing 

-online capabilities, electronic commerce (Facebook Workplace, Zoom, Slack, etc) 

pure competition

many sellers, and each has a similar product  

monopolistic competition

many sellers compete with sustainable products within a price range. EX. if price of coffee rises too much, consumers will switch to tea

oligopoly

a few companies control the majority of industry sales. Ex AT&T, Verizon, and T-Mobile serve more than 98%  

pure monopoly

only one firm sells the product 

Regulatory forces on marketing

protecting competition

-restrictions state and federal laws place on businesses concerning the conduct of their activities 

The Truth in Advertising Act of 2016

Ads must be truthful (no matter the medium)

- Backed up by scientific evidence

- Penalties for violations can be severe, including a federal lawsuit, and if blatantly

Misleading may result in wire fraud charges

Children’s Advertising Review Unit of the Better Business Bureau

 Look carefully at ads that are targeted towards children

Teleology

 knowing the purpose and end goal, focuses on the outcome, and the morality is based

on whether that outcome is good or bad. Whatever keeps the accounts rolling and is also legally good

Deontology

 actions based on rules and principles rather than the consequences of those actions,

pretty much based on what is fair; hard and fast rules that should not be broken

Consumer Bill of Rights

 codified the ethics of exchange between buyers and sellers. The right to safety, to be informed, to choose, and to be heard

    Women as decision-makers re: cars

Women influence 87% of car-buying decisions. Key elements include the sense of

styling, the need for speed, the substance of safety, and the shopping experience.

The decision-making process

. Problem Recognition - perceiving a need - his story: daughter realizes her car is

unreliable

2. Information Search - seeking value

3. Alternative Evaluation - assessing value

4. Purchase Decision - buying value

5. Postpurchase Behavior - realizing value - professional marketers spend a lot of time here

Silly Marketers stop at step 4, but a good marketer should see to the post purchase

Needs

the difference between a present state and some other type of state

Wants

how you satisfy the need

Information search, both internal and external

seeking value

  Consideration set

group of brands consumer considers acceptable based on all

brands in the product class

Making a purchase decision

buying value

Post-purchase behavior

realizing value - professional marketers spend a lot of time here

Cognitive dissonance

thinking about or regretting your decision after buying

   How managers manage post-purchase behavior-

maximize customer satisfaction and retention (follow-up calls, texts, or emails) 

Customer lifetime value: hint – General Motors and increasing profitability from increasing loyalty by one percentage point

retail customer is worth $276000 over a lifetime of buying cars (11 or more) , parts, and services. GM’s customer retention is 69%

 Differing levels of involvement in decision making

Consumer Involvement Affects Problem Solving

Involvement: extended problem solving (high involvement = risk of the consumer is

high, can be price related), limited problem solving (medium involvement) and routine problem

solving (low involvement)

**Dan rigged parachutes for the Navy??? Because he knew how chutes should be rolled, this

company just balled them up. Dan said no not doing it. The professor went skydiving with the

Marines?? This was a high involvement purchase, not because of price but because of what

could go wrong.

  Routinized problem solving

products like salt and milk, consumers recognize the problem , make a decision, and spend little effort seeking information or evaluating alternatives. 

 Limited problem-solving-

seek some information or rely on a friend to help them evaluate alternatives

 Extended problem solving

each of the 5 stages of the consumer purchase decision process is used and considerable time and effort are devoted to external information

Why Cheerios and Shredded Wheat have heart-healthy messages on the packaging-

advertising messages will focus on getting their brand into consumers' consideration set 

Consumer journey mapping-

 a visual representation of all touchpoints for a consumer who comes in contact with a company's products, services,a nd brands before, during, and after, a purchase 

 Maslow’s hierarchy of needs

 based on the idea that motivation comes from a need. If a need is met, it's no longer a motivator, so a higher level becomes the motivator. 

Personality’s impact on consumer choices

 a person's consistent behaviors or responses to recurring situations 

Perception

 the process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world.

Why subliminal ads don’t work, and is in fact a crock

 seeing or hearing a message without being aware of them

How consumers reduce perceived risk-

obtaining seals of approval, securing endorsements, providing free trials, giving extensive usage instructions, providing warranties and guarantees. 

 Consumer learning-

Behavioural learning develops automatic responses to situations

Drive - need that moves an individual to an action

Cue - a symbol perceived by customers

Response - action taken to satisfy the need/drive

Reinforcement - the reward

*Being hungry (drive), seeing a billboard (cue), buy a sandwich (response), it tastes great

(reinforcement)

Learning concepts

Stimulus generalization - seeing one cue and associating it with other similar cues

Stimulus discrimination - separating one cue from another even if similar

Cognitive learning: makes connections between ideas

Brand Loyalty: favorable attitude

Stimulus generalization

 seeing one cue and associating it with other similar cues

Stimulus discrimination-

separating one cue from another even if similar

Attitudes - Attitude formation:

a learned response to objects in a consistent way whether that be favorable or unfavorable (attitude, values affect attitudes, beliefs)

Attitude Change

1. Change beliefs about a brand’s attributes

2. Change perceived importance of attributes

3. Add a new product of attributes.