Marketing Exam 1

Marketing

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

Exchange

trade of things of value between buyer and seller where both are better off

4 P’s

Product, price, place, promotion

Product

creating value (physical goods, intangible services, intellectual property, etc)

Price

capturing value (what the buyer gives up)

Place

delivering value (activities necessary to get the product to the right customer at right time)

Promotion

communicating the value proposition (informing, persuading, reminding)

Supply Chain Management

set of approaches to efficiently and effectively integrate suppliers/manufacturers/warehouses/stores/transport into a seamless operation with right time/quantities/locations/costs

Marketing Channel Management

developing and maintaining partners and relationships within supply chain (more specific than SCM)

Business to Consumer Marketing (B2C)

process of business selling to consumers

Business to Business (B2B)

process of selling merch/services between business

Consumer to Consumer (C2C)

eBay and online sales (charge seller % of selling price)

Marketing Eras

Production-oriented, sales-oriented, market-oriented, value-based, technology-augmented

Product-oriented era

20th century, good product sells itself, concerned with innovation not satisfying needs of individual consumers

Sales-oriented era

1920-1950, Great Depression and WWII, manufacturers ahead of customers buying power and depended on selling and advertising

Market-oriented era

Post WWII, soldiers home with new jobs and families, consumer products big, suburbs, shopping centers, customer is king, focus on needs and wants before making products

Value based marketing era

today, find the needs and wants first, value = relationships of benefits to costs (get and give)

Relationship orientation

think about customers in terms of relationships rather than transactions (warranties, strong relationships)

Customer relationship management (CRM)

identifying and building loyalty among most valued consumers

Tech-augmented era

AI, robots, internet, mobile, digital, COVID-19 pandemic, digital tech

Value cocreation

customers collaborate with firms to create products/services with optimal value

Value creation (4 steps)

Build relationships, marketing analytics, social and mobile marketing, ethical and societal dilemmas

Build relationships

with partners and customers so timing and placement is optimized

Marketing analytics

and vast info about customers and competitors and analysis

Social and mobile marketing

Geotargeting/segmenting: current and past physical locations

Ethical and societal dilemmas

benefits and costs of offerings for all stakeholders

Marketing strategy

identifies the target market(s), the marketing mix (4 Ps), and how the firm will create a sustainable competitive advantage

Sustainable competitive advantage

an advantage that is difficult to copy and can be maintained over time; helps keep customers, reduce competitive pressure, increase profits, and support long

Four strategies for creating customer value

Customer excellence, operational excellence, product excellence, locational excellence

Customer excellence

retain loyal customers + provide outstanding service. Loyalty programs and customer data support retention/personalization. Customer Lifetime Value (CLV) = total value a customer provides over the entire relationship. Disney uses MagicBands and customer information to personalize experiences.

Operational excellence

efficient operations, supply chains, suppliers, distribution, information systems, and HR so customers get the right products when they want them. Example: Amazon Prime.

Product excellence

high perceived value, strong branding, effective positioning, innovation, unique products, and a consistent brand image

Locational excellence

strong physical location or Internet presence; especially important for retailers, restaurants, and service providers. Example: a strong Starbucks location is hard to copy.

The marketing plan

current situation, opportunities/threats, objectives, strategy, 4 P’s, action programs, financial projections

Mission statement

a broad description of the firm’s objectives and scope; answers what business the firm is in and what it needs to do to achieve its goals

3 phases of marketing plan

Planning, implementation, control

5 Steps of marketing plan

1. Define mission/objectives

2. Conduct situational analysis

3. Identify/evaluate opportunities using STP (segmentation, targeting, positioning)

4. Implement marketing mix

5. Evaluate performance using marketing metrics

Situational Analysis

5 c framework, competitive benchmarking, SWOT analysis, STP

Five C’s

Company, customers, competitors, climate/context, collaborators/complimenters

Company

. This examines internal factors, including your brand reputation, product lines, cost structure, and unique selling propositions (USPs)

Customers

This area focuses on who buys your products, what they need, how they behave, and what drives their willingness to pay

Competitors

This looks at direct and indirect rivals to see where your business has an edge or where you are vulnerable

Collaborators/Complimenters

Indeed. These are the external partners, vendors, and supply chain entities that help you build, market, and deliver your product

Climate/Context

Political, Economic, Social, Technological, Environmental, and Legal.” according to Product Marketing Alliance. This covers the macro

SWOT components

Strengths, weaknesses, opportunities, threats

Strengths

positive and internal

Weaknesses

negative and internal

Opportunities

positive and external

Threats

negative and external

Segmentation

divide the market into groups with different needs/wants/characteristics

Targeting

evaluate segments and choose which to pursue

Positioning

how the company wants consumers to think about its product compared with competitors. Defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.

Integrated Marketing Communications (IMC)

coordinates promotional methods to communicate a consistent message

Value proposition

the unique value a product provides and why it is better than competitors

Marketing metrics

compare actual performance with planned performance and help managers identify problems, determine causes, adjust strategies, and reallocate resources.

Common marketing metrics

sales, profits, customers, revenue, market share, customer behavior, and advertising effectiveness. Use multiple metrics because one measure rarely tells the full story.

Accountability

managers should be evaluated on factors they can control (employees, expenses, store operations), not factors they cannot control (economic downturns, competitors, major consumer

Financial metrics

revenue = money from sales; profit = money left after expenses; gross margin = selling price minus product cost; relative metric = performance compared with another number.

Portfolio analysis

evaluates products/businesses and allocates resources: more investment, less investment, or elimination.

Product line

related products consumers may use together or perceive as similar.

Stars

High growth + high share. Successful in growing markets; usually need investment; can become cash cows.

Question marks

High growth + low share. Growing market but uncertain position; requires investment decisions.

Cash cows

Low growth + high share. Established products; need less investment; generate cash for other products.

Dogs

Low growth + low share. Limited growth; often phased out unless strategically useful.

Apple examples of stars, question marks, cash cows, and dogs

apple watch = star, ipad = cash cow, ipod = dog

4 Growth strategies

Market penetration, market development, product development, diversification

Market penetration

same product, same market, sell more existing products to existing customers (promos, repeats)

Market development

same product, new market, Take existing products to new customers/geographic areas.

Product development

new product, same market, Create new products/services for existing customers.

Diversification

new product, new market, Enter a new market with a new product; generally the riskiest.

Related diversification

shares customers, distribution, management skills, or brand capabilities with the current business

Unrelated diversification

little/nothing in common and generally riskier.

Marketing environment overview

consumers, immediate environment, macroenvironment

Immediate environment definition

Factors directly affecting consumers and a firm’s ability to serve them

Immediate environment components

company capabilities, competitors, corporate partners, physical environment

Company capabilities

A firm’s strengths, resources, and expertise shape what it can offer customers. Marketers assess capabilities to identify attractive opportunities and determine whether the company can compete successfully.

Competitors

Firms must understand competitors’: Strengths and weaknesses, Marketing strategies and activities, Target markets and positioning. Competition can lead firms to respond creatively and differentiate themselves. Example: Wendy’s responded to McDonald’s Egg McMuffin promotion with the #WendysBreakfastBattle campaign

Corporate partners

work with suppliers, distributors, transportation firms, retailers, and other partners. Partners help create, produce, and deliver value efficiently. Close partnerships can support sustainability, innovation, and lower production costs. Example: outdoor company Nau works with sustainable

Physical environment

Includes land, water, air, and living organisms. Environmental concerns affect products, services, and consumer expectations: Climate change, pollution, resource depletion, habitat loss, emissions, and waste. The UN’s 17 Sustainable Development Goals encourage environmental and social progress

Macroenvironment definition

External factors marketers cannot fully control but must monitor and adapt to

Macroenvironment components

culture, demographics, social trends, tech, economics, political and legal

Culture

shared meanings, beliefs, morals, values, customs, and traditions passed through generations.

Country culture

broad cultural differences among nations.

Regional culture

preferences within areas of the same country

Demographics definition

characteristics of human populations used to identify and understand markets.

Demographics components

generational cohorts, income, education, gender, race/ethnicity

Gen alpha

2010-2025, grew up during the information age, don’t know life without tech, 21st century

Gen y/millenial

1981-1996, are a large consumer group, often delayed marriage/homeownership compared with earlier generations, largest cohort after boomers, born during the great recession

Gen z

1997-2009, also known as digital natives.Grew up with internet and digital technology, Uses social media heavily and values personalized communication, Is entrepreneurial and responsive to brands connected to meaningful social causes

Gen x

1965–1980, often has high purchasing power and is balancing work with care for children and aging parents, latchkey children (kids grew up without parents home and let themselves into empty homes)

Baby boomers

1946–1964, are a large aging segment with major needs in healthcare, retirement, and related services

Gender trends

Traditional gender roles are becoming less distinct. Women increasingly earn college degrees and hold higher paying jobs. Marketers are paying more attention to gender neutral positioning and inclusive advertising

Education implications

Higher education levels generally lead to better jobs and higher income. Education can help marketers predict consumer behavior when combined with income and occupation

Income implications

U.S. income distribution has become more unequal: Higher income groups are growing while, middle and lower income groups have less purchasing power. During inflation, consumers may trade down to less expensive products or stores. Marketers can target affluent consumers or create value for lower and middle

Race implications

U.S. population growth is becoming increasingly diverse. Marketers must avoid treating racial or ethnic groups as one identical market. Important consumer segments include Hispanic, African American, and Asian American consumers. Effective marketing recognizes cultural differences and creates authentic representation

Social trends components

sustainability, energy, greener practices, health and wellness, food usage

Social trends deeper

Sustainability: Consumers increasingly care about ethical production, worker treatment, environmental impact, and product sustainability. Social concerns can hurt a brand when consumers view its practices as unethical

Energy Trends: Firms are adopting more sustainable energy and transportation options, Consumers and governments are shifting from oil and natural gas toward electricity, These shifts create new market opportunities while helping reduce greenhouse, Greener Practices and Greener Consumers

Green marketing: marketing environmentally friendly and sustainable products/services

Health and wellness: Consumers are increasingly concerned with healthy lifestyles, obesity, nutrition, and disease prevention, Example: Subway promotes active lifestyles through the “Sun Bum” campaign

Efficient utilization and distribution of food: Food waste and food access are major social issues

Food deserts: areas where residents have limited access to healthy, affordable food

Greenwashing

when a company exaggerates environmental benefits rather than making meaningful improvements

Technological advances definition

Consumers expect faster, easier, more personalized, and connected experiences

Technological advances components

AI, Gen AI, Marketing analytics, Robotics, IoT, Privacy