MKTG 201 - Exam 1

BYU - Scott Rackham

Market

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

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

Strategic Triangle

Three main stakeholders for any business - Customer, Company, Competition

Components of marketing strategy

1. Corporate Strategy

2. Strategic Business Unit Strategy

3. Marketing Strategy

Marketing Mix - 4 Ps

1. Product

2. Price

3. Place (distribution)

4. Promotion

brand champions

customers who love the products and then champion the products to other people

4 marketing philosophies

1. Market penetration

2. Product development

3. Market development

4. Diversification

3 components of marketing concept

1. The exchange that takes place between sellers and buyers

2. Creates, communicates, and delivers value to facilitate exchanges

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

Corporate Strategy

Answers the question "What business should we be in"? A strategy that determines the types of businesses to include in a firm’s portfolio.

Strategic Business Unit Strategy

Answers the question "How do we compete effectively in a given business"?

Marketing Strategy

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

Stars

High market growth rate, high relative market share

Question marks

High market growth rate, low relative market share

Cash cows

Low market growth rate, high relative market share

Dogs

Low market growth rate, low relative market share

Product

Products or service - a bundle of attributes that satisfies a customer’s needs or wants

Price

The amount paid for a product

Promotion

Marketing communication activities - such as advertising, public relations, sales promotions, trade promotions, personal selling, and digital marketing

Place

Where products are purchased

Market penetration

Selling more of the existing products in existing markets

Product development

The process of creating a customized product for the target market

Market development

Introducing existing products to new markets

Diversifications

Introducing new products to new markets

Profitability Drivers

1. Customer Acquisition

2. Customer Retention

3. Sales per customer

4. Margin

Customer Acquisition

Acquire and keep customers

Customer Retention

The practice of keeping customers by building long-term relationships

Sales per Customer

The amount of sales from a particular customer.

Margin

The difference between price and costs

Production Orientation

Supply generates its own demand

Sales Orientation

Marketing's only role is to sell products once they are made

Market Orientation

Every product or service should focus on satisfying customer needs and wants at a profit

Societal Orientation

Every product or service should provide value to the customer as well as to society as a whole

Social Forces

1. Culture

2. Demographics

External Forces

1. Social

2. Economic

3. Technological

4. Competitive

5. Regulatory

SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

a tool for assessing how a company’s internal abilities and capacities are affected by external forces

Culture

Shared value, attitudes, and practices that shape human behaviors

Demographics

Statistical data that describe a population

Economic

Changes in the economy affect consumer spending and thus have a broad impact on marketing strategies

Technological

The application of science and research to accomplish a function more efficiently or to solve a problem more effectively

Competitors

Companies and organizations vying for the same customers

Regulatory

Marketers compete within the constraints of government regulation

Competitive rivalry

Rivalry among existing companies in a particular industry varies in intensity based on the type and number of competitors and on the basis of competition

Power of suppliers

Powerful suppliers can drive down industry profits by charging higher prices and/or reducing product and service quality

Power of buyers

Powerful suppliers can drive down industry profits by charging higher prices and reducing product and service quality

Threat of entrants

New entrants can shake up an industry and cause increased competition as they seek to take market share from existing companies in the industry

Threat of substitutes

Substitute products have the potential to replace existing products because they perform a similar function

3 types of geographic marketing

Domestic, International, Global

4 risks of global marketing expansion

1. Competitive

2. Economic

3. Legal

4. Political

4 market entry strategies

1. Exporting

2. Licensing

3. Joint Venture

4. Foreign Direct Investment

Standardization

The same marketing mix is used in the foreign market as is used in the domestic market

Customization

Tailoring the marketing strategy to fit the needs, tastes, and preferences of the local market

Domestic Marketing

Focuses on customers in the firm's home country

International Marketing

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

Global Marketing

Selling or licensing products for sale in countries throughout the world

Competitive Risk

risk that arises from competitors responses to the new product's entry into the local market

Economic Risk

The potential mismanagement of a country's economy as exhibited by inflation and government debt

Legal Risk

inadequate protection of contracts and intellectual property

Political Risk

Associated with regulations, demonstrations, strikes, civil strife, abrupt government changes, violence, and terrorism

Exporting

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

Licensing

A firm in one country agrees to allow a firm in another country to use its manufacturing, processing, trademark, know-how, patent, or some other skill or value

Joint Ventures

2 or more companies agree to create a new business, jointly owned by the participating companies

Foreign Direct Investment

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

Myths of unethical marketing

1. Marketers push products consumers don't want to buy.

2. Consumers are no match for the power of marketing.

3. Marketing is deceptive and not truthful or honest.

4. Marketers believe in planned obsolescence.

3 ethical norms

1. Do no harm

2. Foster trust in the marketing system

3. Embrace ethical values

Fraud triangle

opportunity, pressure, rationalization (designed to show the reasoning behind why a person commits workplace fraud)

Ethical framework

1. Personal ethical understanding

2. Application of ethic to business

3. Ethical courage

4. Ethical leadership understanding

Social Responsibility

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

Green marketing

Marketing efforts to produce, promote, and reclaim environmentally sensitive products

5 components of the marketing research process

1. Define the marketing problem

2. Design the research project

3. Collect data

4. Analyze the data

5. Take action

3 key elements to consider when designing a marketing research study

1. The type of information to be collected

2. Possible data sources

3. A procedure for collecting data

3 key differences between big data and traditional marketing research data

1. Volume

2. Velocity

3. Variety

5 problems associated with minimizing measurement error

1. Respondent characteristics (knowledge or mood)

2. Situational factors (time of day or interview environment)

3. Data collection factors (influence of the researcher)

4. Questionnaire factors (misleading questions)

5. Data analysis factors (using the wrong data analysis method)

Hypothesis testing

Uses statistics to determine the likelihood that a given belief is true

4 factors that help marketing researchers generate insights for an organization

1. Experience of the research team

2. Quality of the data sample

3. Expertness of the data analysis

4. Nature of the survey questions

Exploratory Research

Marketing research to gather preliminary information that will help define problems and suggest hypotheses

Conclusive Research

Research designed to verify insights through objective procedures and to help marketers in making decisions

Syndicated Data

Data collected for an industry and paid for by the industry

Secondary Data

Information collected for other purposes and usually readily available

Primary Data

Information collected specifically for the purpose of the investigation at hand

Ad tracking

Determining whether an ad is being seen and remembered

Buyer decision process

Marketing manager want to manage as much of the buying decision process as possible

Concept Testing

Marketing manager must sort through multiple concepts when trying to identify promising brand extensions, line extensions, and messaging

Customer satisfaction research

Customers provide valuable feedback for improving the product, introducing complementary product, or keeping the product on strategy

Marketing effectiveness and analytics

Aim to measure the dollar-by-dollar effectiveness of marketing expenditures

Sales forecasting

Estimates future sales projections

Segmentation research

Dividing a market into segments

Test marketing

Test markets are selected to determine potential success of a new product

Nominal scale

A label like male or female

Ordinal scale

Numbers ordered into an increasing size like finishers in a foot race

Interval scale

Equal distance between numbers

Ratio scale

Equal ratios

Marketing analytics

Measures the effectiveness of marketing activities, transforming data into information that will drive marketing efforts profitably forward

Consumer insights

An accurate, deep, and intuitive understanding of a customer

4 steps in Big Data analytics process

1. Data wrangling

2. Data exploration

3. Data modeling

4. Data deployment and socialization

Data Wrangling

The process of cleaning, unifying, and preparing unorganized and scattered data sets for easy access and analysis

Data Exploration

Discovery through numerical summaries and visualizations

Data modeling

The process of transforming the data to extract insights

Deployment and Socialization

Putting the data into effect

Focus groups

Asks individuals from the target market for feedback

Depth interviews

Interviews a single person