BYU Marketing 201 [Swenson] ALL TERMS-FINAL

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

Marketing Strategy

A cohesive marketing mix of product, place, price, and promotion, designed for a specific target market. Marketing strategy answers the question, "How do we orchestrate the marketing mix to deliver value to a particular market segment?"

Three important components of marketing

1) Marketing is the exchange that takes place between sellers and buyers.

2) Marketing creates, communicates, and delivers value to facilitate exchanges.

3) By delivering value, marketing satisfies customer needs and wants at a profit (marketing concept)

Marketing Concept

By delivering value, marketing satisfies customer needs and wants at a profit.

Markets

the aggregate of individuals and organizations that have (1) needs and wants and (2) the ability, willingness, and authority to purchase products and services that satisfy their needs and wants.

Business Market (business-to-business market)

individuals within organizations and companies purchasing products and services for use or consumption within their organization or for resale.

Consumer Market (business-to-consumer market)

Individuals buying products and services for personal consumption or use

Strategic Triangle

Customer, Company, Competition (customer is the central point)

Corporate Strategy

What businesses should we be in? (Marketing firm considers types of business to include in its portfolio)

Strategic Business Unit (SBU)

How do we compete effectively in a given business?

BCG Growth Model

stars, cash cows, question marks, dogs

Stars

high growth, high market share

Cash Cows

low growth markets that generate more cash than they need (high market share)

Question Marks

high growth, low market share

Dogs

low growth, low market share

Marketing Mix

Product, Price, Place, Promotion

Product

A bundle of attributes in which each attribute and combination of attributes creates value for customers

Place

Where products are purchased

Price

the amount of money made for a product

Promotion

refers to many different marketing activities, such as advertising, public relations, sales promotions, trade promotions, personal selling, and digital marketing.

Brand Champions

Customers who love the firm's products and then advocate or champion the products to others.

Market Penetration

selling more of the existing products in existing markets

Product Development

introducing new products to existing markets

Market Development

introducing existing products to new markets

Diversification

Introducing new products into new markets

Marketing Plan

a marketing strategy with a budget and a timeline

Customer Lifetime Value (CLV)

determines the economic value a customer brings over the lifetime with the business.

3 Ways marketers can boost sales per customer

(1) persuading customers to buy more of their products

(2) generating add-on sales (complementary products and services),

and (3) partnering with other firms to create add-on sales opportunities.

Customer Aquisition

how can we acquire (and keep) customers

Customer Retention

the practice of keeping customers by building long-term relationships

Margin

difference between sell price and cost to make

Marketers can increase margin by...

(1) increasing price

(2) shifting the mix of purchases toward higher-margin products

(3) changing customer behavior so customers are less expensive to serve

(4) discouraging unprofitable customer behavior.

How to Achieve Success

1) focus on solving customer problems

2) chase customers, not competitors

Product Orientation

based on the belief that supply generates its own demand

Sales Orientation

based on the belief that marketing's only role is to sell products once they are already made

Marketing Orientation

Based on the belief that every product or service should focus on satisfying customer needs and wants a profit

Societal Orientation

Based on the belief that every product or service should provide value to the customer as well as to society as a whole.

Culture

Shared values, attitudes and practices that shape human behavior

Demographics

statistical data that describe a population

Generational Cohorts

People born during the same period and who share common life experiences.

Which generational group has the highest buying power?

Baby Boomers

Gross Income

the total amount of income received by a person, family or household

Disposable Income

money available to spend or save after taxes have been paid

Discretionary Income

money left after taxes and necessities have been bought and paid for

Technology

the application of science and research to solve a problem more effectively

Five Forces Model

A model developed by Michael Porter that helps us understand the five competitive forces that determine the level of competition and profitability in an industry.

What are the five forces?

1) competitive rivalry

2) power of suppliers

3) power of buyers

4) threat of entrants

5) threat of substitutes

Regulations

Protect consumers and businesses by promoting competition and fair business practices.

SWOT Analysis

a planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats

Strengths

the firm's core competencies, abilities, and capacities that provide an advantage when meeting the needs of target customers. (play to)

Weaknesses

Limitations a firm faces when seeking to deliver value to customers. (moderate)

Opportunities

Favorable conditions and trends in the external environment (exploit)

Threats

conditions, trends, and barriers in the external environment that hinder firm performance (minimize)

Manufacturing products requires three things:

People, Knowledge, and Resources

What are the three types of geographic marketing?

Domestic, International, Global

Domestic Marketing

Focuses on customers in the home country

International Marketing

Exporting products to one or more countries outside the domestic market while remaining invested solely in the domestic country

Global Marketing

Selling or licensing products for sale in countries throughout the world

What are the four risks of global market expansion?

Competitive, economic, legal and political

Competitive Risk

competitors' responses to the new product's entry into the local market.

Economic Risk

Considers the potential mismanagement of a country's economy as exhibited in inflation and government debt

Legal Risk

inadequate protection of contracts and intellectual property.

Political Risk

demonstrations, strikes, civil strife, abrupt government changes, violence, or terrorism that influences business performance.

Market Entry Strategies

exporting, licensing, joint venture, foreign direct investment

Exporting

Shipping goods produced in the home country to a distributor or retailer in the foreign market

Licensing

A firm in one country (the licensor) agrees to allow a firm in another country (the licensee) to use its manufacturing, processing, trademark, know how, patent or some other skill or value.

Joint Ventures

Two or more businesses agree to create a new business, jointly owned by the participating companies.

Foreign Direct Investment

Companies decide to make direct investments in building up wholly owned operations in other countries.

Standardization

the firm uses the same marketing mix in the foreign market as it does in its domestic market

What are some advantages of standardization?

cost reductions, savings in product and promotion (lower production and advertising costs)

What are some disadvantages of standardization?

Standardized products might not fit the needs of the local market

Customization

adapting or modifying the marketing mix to suit the local market

Glocal

Go global, act local

Ethics

the principles of right and wrong that guide an individual in making decisions

What are AMA's three ethical norms?

1) do no harm

2) foster trust in the marketing system

3) embrace ethical values

What are the four myths of unethical marketing?

1) marketers push products customers don't want to buy

2) customers are no match for the power of marketing

3) marketing is deceptive and not truthful or honest

4) marketers believe in planned obsolesce (purposefully making sure a product becomes obsolete over time)

The Fraud Triange

Opportunity, Motivation (Pressure),

Rationalization

Opportunity

condition or situation that allows fraud to occur

Motivation (Pressure)

pressure or need felt by person who commits fraud

Rationalization

the process of reconciling or justifying fraudulent behavior

What is the framework for ethics?

Personal ethical understanding, applications of ethics to business situations,

ethical courage, and ethical leadership.

Social Responsibility

businesses and organizations are part of a larger society and that they are accountable to that society for their actions.

Sustainability

the creation of alternatives to the depletion of natural resources

Green Marketing

When companies engage in the production and promotion of environmentally safe products.

What are the five steps of the marketing research process?

1) define problem

2) design research project

3) collect data

4) analyze data

5) take action

Exploratory Research

general; identify problems and opportunities, small groups (ex: personal interviews or focus groups)

Conclusive Research

specific; confirm impressions and insights, large and objective sample (ex: surveys)

Syndicated Data

data collected for specific industries

Secondary Data

Data previously collected for any purpose other than the one at hand

Primary Data

information collected for the specific purpose at hand

Data Wrangling

the process of unifying, cleaning, and preparing unorganized or scattered data for analysis

Data Exploration

Discovery through numerical summaries and visualizations

Data Modeling

- Transform the data to extract insights

- Build a model to represent the phenomenon of interest

Deployment and Socialization

communicate the results to the users, tell your story with data

Null Hypothesis

states that "the differences we observe are due only to random error."

Random Error

error that comes about from taking a sample from the population rather than getting data from every member of the population. Chance of random error decreases when sample size increases.

Nominal Scale

classifies data into distinct categories

Ordinal Scale

uses numbers ordered into an increasing size like finishers in a foot race (1 is better than 2, 2 is better than 3)

Interval Scale

Assumes an equal distance between numbers.

Ratio Scale

have equal intervals and equal ratios.