Marketing Exam 1 Study Guide

What is marketing?

The process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return

The five-step marketing process

1- Understand the marketplace and customers’ needs and wants

2- Design a customer driven marketing strategy

3-Build an integrated marketing program that delivers superior value

4- Build profitable relationships and customer delight

5- Capture value from customers to create profit and customer equity

The 4ps of marketing

Product, price, place, and promotion

Growth-Share Matrix

A portfolio-planning method that evaluates a company’s SBUs in terms of market growth rate and relative market share.

Product/market expansion grid

A portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification

SWOT analysis

• Strength

• Weaknesses

• Opportunities

• Threats

Company’s microenvironment

The actors close to the company that affect its ability to serve its customers–the company, supplies, marketing, intermediaries, customer markets, competitors, and publics

Company’s macroenvironment (PESTLE)

The larger societal forces that affect the microenvironment–demographic, economic, natural, technological, political, and cultural forces

• Political

• Economic

• Sociocultural

• Technological

• Legal

• Environmental

4 types of customer data

Four types of customer data: Identity, descriptive, behavioral, self-reported

Buyer persona

A semi-fictional representation of your best potential buyer based on market research and real data about your existing customers. It represents your ideal customer

Four main factors influencing consumer behavior

• Cultural: culture, subculture, social class

• Social: Groups and social networks, family, roles and status

• Personal: Age and life-cycle stage, occupation, economic situation, lifestyle, personality and self-concept

• Psychological: Motivation, perception, learning, beliefs and attitudes

Membership vs. Reference group

• Membership: Have a direct influence and to which a person belongs

• Reference: Serve as points of comparison or reference in shaping a person’s attitudes or behavior, either directly through face-to-face interactions or indirectly through media such as the internet and social networks. They expose a person to new behaviours and lifestyle. 

Consumers’ major AIO dimensions

• Activities: work, hobbies, shopping, sports, social events

• Interests: food, fashion, family, recreation

• Opinions: about themselves, social issues, business, products

Business Personality

A brand personality is the specific mix of human traits that may be attributed to a particular brands.

5 traits associated with business personality

• Sincerity: Down-to-earth, honest, wholesome, cheerful

• Excitement: Daring, spirited, imaginative, up-to-date 

• Competence: Reliable, intelligent, successful 

• Sophistication: Glamorous, upper class, charming 

• Ruggedness: Outdoorsy and tough

4 types of buyer decision behavior

• Complex: high involvement, significant different between brands

• Dissonance-reducing: high involvement, few different between brands

• Habitual: low involvement, few different between brands

• Variety-seeking buying behavior: low involvement, significant different between brands

Buyer decision process for new products

• Innovators. 2.5%. Venturesome and take many risks  

• Early adopters. 13.5%. Guided by respect. Are opinion leaders in their community and take on early but carefully 

• Early mainstream. 34%. Deliberate. Rarely leaders but adopt before average person 

• Late mainstream. 34%. Skeptical. Adopt once a majority of people do

• Lagging adopters. 16%. Tradition bound. Adopt only when something becomes tradition itself.

4 major segmentation bases for consumer markets

• Geographic: Dividing markets into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods.

• Demographic: Dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation

• Psychological: Dividing a market into different segments based on lifestyle or personality characteristics

• Behavioral: Dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product

4 market-targeting strategies

• Undifferentiated (mass) marketing: A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer

• Differentiated (segmented) marketing: A market-coverage strategy in which a firm targets several market segments and designs separate offers for each

• Concentrated (niche) marketing: A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches

• Micromarketing (local or individual marketing): Tailoring products and marketing programs to the needs and wants of individuals and local customer segments; it includes local marketing and individual marketing

5 positioning strategies

• Product differentiation: Position yourself based on specific product attributes: features, performance, or style and design. Products can be positioned against another product class 

• Services differentiation: Beyond differentiating its physical product, position yourself through outstanding customer service. Mature consumers place special value on friendly staff, guest name recognition by staff, assistance in making a product decision, opportunities to socialize, and no pressure to leave 

• Personnel/people differentiation: Gain a strong competitive advantage through hiring and retaining better people than your competitors. Company must select its customer-contact people carefully and train them well 

• Location differentiation: Location can provide a strong competitive advantage 

• Image differentiation: A company or brand image should convey a product’s distinctive benefits and positioning. Developing  a strong and distinctive image calls for creativity and hard work. Symbols can provide strong company or brand recognition and image differentiation