marketing final exam

marketing

a set of procedures for:

• creating, communicating, and delivering value to customers

• managing customer relationships in a way that benefits the company

4 requirements of marketing

1. 2 or more parties with unsatisfied wants or needs

2. the parties in question have to have the ability to fulfill the needs or wants

3. the parties in question have to be able to communicate

4. there must be an exchange

customers

• current customers

• needs/wants

competitive advantage

a unique strength relative to competitors

direct competitors

companies that offer the same product (or service) offering as you

indirect competitors

businesses whose product (or service) offerings are different from yours, but could satisfy you customer’s needs, and possibly achieve the same goals

market penetration

selling more products in existing markets

market development

selling existing products in new markets (either geographic or new segments)

product development

selling new products in existing markets

diversification

selling a new product in new markets

planning phases (strategic marketing process)

• swot analysis

• market segmentation

• marketing program (4 p’s)

• marketing plan

strategic marketing process

1. planning phase

2. implementation phase

3. control phase

swot analysis

strengths, weaknesses, opportunities, threats

market segmentation

grouping buyers into clusters or segments that have common needs and will respond similarly to marketing actions

marketing program (4 p’s)

product, price, promotion, place

marketing plan

whatever plan that you’ve come up with is written up in the form of a marketing plan

• a road map for the marketing activities of an organization for a specified period of time, such as one year or five years

5 forces out of our control

1. social forces

2. economic forces

3. technological forces

4. competitive forces

5. regulatory forces

environmental scanning

examining the five forces for opportunities and threats

social forces

• canada’s population (baby boomers)

  • aging population because of the baby boomers, who drive trends in this country

• household composition

  • rapidly changing

  • traditional families are becoming less common

  • divorce rate increasing

  • more single parent families

  • rise in blended families

  • some always single people

• where people are living

  • shift from rural to urban areas

  • people tend to live in big cities

economic forces

• macroeconomic conditions

  • economic boom: more jobs, economic prosperity able to buy more luxuries

  • recession: less jobs, not able to buy luxuries, only able to get essentials

• consumer income

  • gross income

  • disposable income

  • discretionary income

gross income

income before taxes

disposable income

gross income - taxes

discretionary income

disposable income - necessities

technological forces

technologies impact on customers

• internet, cars, cell phones

competitive forces

4 types:

1. pure competition

2. monopolistic competition

3. oligopoly

4. monopoly

pure competition

everyone sells the exact same product

• e.g., agriculture products

monopolistic competition

many sellers who offer similar products

• e.g., restaurants

oligopoly

only a few companies control the majority of industry sales

• e.g., coke and pepsi, cell phones, oil companies

monopoly

one company that has no competition

• e.g., manitoba hydro, mpi, water and waste industries

regulatory forces

regulation consists of restrictions, provincial and federal laws placed on businesses with regard to the conduct of its activities

• protecting competition and consumers

• the competition act

the competition act

the key legislation designed to protect competition and consumers in canada

social responsibility

1. profit: companies responsible for maximizing profits for their shareholders

2. societal: obligations a company has to the public and to the environment

3. stakeholder: obligations an organization has to the people that help them reach their objectives

cause marketing

occurs when the charitable contributions of a firm are tied directly to the revenues of a certain product

sustainable development

involves running your business so that you make money AND are environmentally responsible

social audit

a systematic assessment of a firm’s performance in the domain or responsibility

greenwashing

when companies make it seem they are more environmentally responsible than they actually are

consumer purchase decision process

1. problem recognition

2. information search

3. evaluation of alternatives

4. purchase decision

5. post-purchase evaluation

problem recognition

becoming aware of, or interested in a problem

• finding out what you need or want

information search

recalling and gathering information about possible searches

• figuring out the details and the specifics

• might do an internal search (decide on our own what features we want)

• might do external search (input from others)

• most do a combination of both

evaluation of alternatives

when customers do this, they often form a consideration (evoked) set: a list of potential choices that the consumer will actually consider buying

purchase decision

deciding on the appropriate solution

post purchase evaluation

here you evaluate the decision

• cognitive dissonance if you think you may have made the wrong choice, try to deny it (anxiety, tension, debt)

buying situations

3 types:

1. extensive problem solving

2. limited problem solving

3. routine problem solving

extensive problem solving

• high involvement

• infrequently purchased

• expensive

• high risk

• much information desired

limited problem solving

in the middle of routine and extensive problem solving

routine problem solving

• low involvement

• frequently purchased

• inexpensive

• little risk

• little information

purchase situation

1. purchase task: who you’re buying the product for

2. time available

3. social surroundings

4. physical surroundings: atmosphere or ‘feel’ of a particular environment

5. antecedent states: mood or feeling present

psychological variables

1. needs

2. perception

3. learning

psychological influences (within an individual)

1. needs: necessities, things we can’t live without

2. wants: things that you would like to have

3. drives: consumers seek benefits to match needs and wants

   • an internal feeling that encourages you to satisfy a need or a want

selective exposure

we seek out and notice only the things that interest us

selective perception

how we make sense of the world around us

• might ignore or modify ideas, messages, information, that conflict with your beliefs

selective retention

we remember only what we want to remember

subliminal perception

see or hear messages without being aware of them

drive

an internal feeling that encourages you to satisfy a need or a want

• motivation

cues

things that could influence the response or action that you take

response

response to cue creates reinforcement (negative or positive)

sociocultural influences

1. reference groups

2. membership group

3. aspiration group

4. dissociative group

5. opinion leaders

6. word of mouth

7. viral marketing

reference group

people you look to, usually your peers, when making buying decisions

membership group

groups you are apart of

aspiration group

group you want to be apart of

dissociative group

a group that you want to keep away from

opinion leaders

high status people that can influence others

• e.g., athletes, musicians, politicians, actors, influencers

word of mouth

influencing people through conversation

viral marketing

influencing people through the internet/online

organizational buyers

1. producers

   • industrial firms, manufacturers, farms, mines

2. middlemen

   • wholesalers, retailers

3. governments

   • federal, state, and local

4. non-profits

   • national, local

buying centre

made up of several people in an organization who participate in the buying process

buyers

person who actually makes the purchase

users

the people who use the final product

influencers

people who supply important information for making the decision

gatekeepers

people who control the flow of information

deciders

the person who has the power to make the final decision

new task buy

• big and important purchase

• most of the times it is new, but not all the time

• extensive problem solving

• e.g,. hospital buys an MRI machine, gym buys fitness equipment

modified rebuy

buying something you’ve bought before, but there is important changes

• e.g., price different, supplier different, different product specification

straight rebuy

• routine purchase that an organization probably has made many times before

• routine problem solving

• e.g., printer paper, staplers, pens and pencils

global environmental scan

doing your homework on the foreign country you want to enter

• cultural analysis

• economic analysis

• political climate

• regulatory climate

cross cultural analysis

the study of similarities and differences among consumers in two or more nations or societies

• made up of 6 factors:

  1. values

  2. customs

  3. cultural symbols

  4. semiotics

  5. language

  6. ethnocentrism

values

individual beliefs that motivate people to act one way or another

• they serve as a guide for human behaviour

cultural symbols

important people, important monuments, lucky/unlucky numbers

customs

norms and expectation about how things are done in a country

semiotics

the study of signs and symbols and their use or interpretation

language

• blunders

• language messed up in translation

• difference in word usage

ethnocentrism

the tendency to believe that it is inappropriate or immoral to purchase foreign-made products

economic considerations

• infrastructure

  • a country’s communications, transportation, financial, and distribution systems

• consumer income

  • purchasing power

trade regulations

rules that govern business practice

• nafta: north american free trade agreement

market entry strategies

1. exporting

2. licensing

3. joint venture

4. direct investment

exporting

producing goods in one country and selling them in another country

licensing

a company offers the right to a trademark, brand, trade secret, patent in return for a fee

joint venture

a foreign company and a local firm invest together to create a local business, sharing ownership, control, and profits

• advantage: pooled resources, more decision making power, more profit potential

• disadvantage: more commitment to risk, maybe wont agree

direct investment

you are the sole owner of a business in a foreign country

• advantage: more freedom, power, profit potential

• disadvantage: more work, more risky

product extension

selling virtually the same product in other countries

product adaptation

changing a product in some way to make it more appropriate for a country’s climate or consumer preferences

• adaptation to local customs or spiritual beliefs

scientific method

decision-making approach that focuses on being objective and orderly in testing ideas before accepting them

• research should be reliable and valid

reliability

if you were to conduct the same research project again, you would get the same results

validity

did the research measure what it wanted to measure?

problem definition (marketing research process)

• usually in the form of a question

• preliminary research, does your idea make sense?

• focus groups stimulate discussion

• depth interviews

secondary data

information that has been collected or published already for another research project

primary data

information specifically collected to solve a current problem

survey

asking people questions and recording their responses, generally on a questionnaire

• e.g., mail, online, telephone, personal interview

experiments

lab experiments, field experiments

observation

trying to see or record what the subject does naturally

• mystery shoppers