MARKETING 300 DWYER LATECH EXAM 2

Target Market

a group of similar people who respond to the marketing mix in a similar manner

what do organizations build in order to meet the needs of that specific group?

marketing mix

as ___________ changes, the large markets needs may change and so will the marketing mix

environment

what does the external environment involve?

-environmental scanning of the external environment in order to plan for the future

-understanding current customers and how they make decisions (what they buy, when they buy, why they buy)

-identifying the most valuable customers and understanding their need (loyalty programs are incentives on using their product)

-understanding the competition

socio cultural factors

includes attitudes, values, and lifestyles

what is the most difficult external variable to forecast, influence, or integrate into marketing plans

social change

what influences social factors?

-products people buy

-price paid

-effectiveness of specific promotions

-where and when people expect to purchase products

what has changed the way information is obtained?

social media

what are the 6 influences on values of buying habits?

-reliability

-durability

-easy maintenance

-ease of use

-brand name

-low price

what are the 4 ways firms use social media?

-monitor

-respond

-engage (create conversations and connect)

-amplify/support a promotional campaign

what are the 4 secrets of influencing marketing?

-know your influencers

-influencer costs

-influence marketing should be done like actual marketing

-influencer marketing is people management not digital advertising

what is the basis for any market?

people

vital statistics

individual characteristics of a market

what is the most basic statistic in marketing?

population

tweens

-age 8-12

-population of 20 million

-fastest growing teen market is mobile games

-$180 billion is spent on tweens each year

teens

-population of 25 million

-teens seek affirmation

-72 hr/week on electronics

-90% into social networking

millennials (generation y)

-born between 1979 & 1994

-surpassed population of baby boomers

-37% in workforce

-spend more than $200 billion annually

generation x

-born between 1965 & 1978

-independent, resilient, and adaptable

-saving money is a major priority

-women's liberation

baby boomers

-born between 1946 & 1964

-75 million

-incomes are low but wealth is high

-tempting target market bc of their sheer numbers and wealth

-influenced by traditional advertising

how big is the minority population

120 million

who is the largest group to use mobile devices for any type of transaction?

hispanic market

african americans

-make up 14% of the nation

-high growth and increasing purchasing power resulting in more firms creating products for the african american market

asian americans

-are younger, better educated, and have higher incomes than average

what are the 4 economic factors?

-consumers' incomes

-purchasing power

-inflation

-recession

what is the primary determinant of earning potential?

education

discretionary income

income left over after "necessities" have been paid

disposable income

income left over after paying taxes

inflation

measure of the decrease in the value of money

hyperinflation

prices are 100-200% (doubled)

recession

-period of economic activity characterized by negative growth

-reduces demand for goods and services

-when the gross domestic product falls for two consecutive quarters

gross domestic product

total market value of all final goods and services produced during a period of time

technology and innovation

technological success is based upon innovation

research

-underlies innovation

-can provide a competitive advantage

basic research

pure research that aims to confirm an existing theory or to learn more about a concept or phenomenon

applied research

research that attempts to develop new or improved products

laws

the rules by which business is played

federal laws

-apply to competitive environment, pricing, advertising and promotion, and consumer privacy

-apply across the US

state laws

-legislation that affects marketing varies state by state

-many states and cities are attempting to fight obesity by regulating fast food chains and other restaurants

consumer product safety commission (CPSC)

-protect the health and safety of consumers in and around their homes

-does recalls

-can set mandatory safety standards

food and drug administration (FDA)

enforces regulations against selling and distributing adulterated, misbranded, or hazardous food and drug products

federal trade commission (FTC)

prevents persons or corporations from using unfair methods of competition in commerce

global competition

-intense and growing

-more foreign firms are entering US markets

-foreign firms in the US now compete on product quality

-markets abroad opening opportunities too

-must track competition continually

what are the 3 types of competitive analysis and scanning?

-immediate competition: product (fax machines)

-immediate competition: need/benefit (email)

-potential competition

global marketing

-targeting markets throughout the world

-the foundation of a successful global business is corporate structure that provides a continual flow of fresh ideas

-individuals and organizations using a global vision to effectively market goods and services across national boundaries

global vision

-recognizing and reacting to international marketing opportunities and monitoring

-using effective global marketing strategies

-being aware of threats from foreign competitors in all markets

outsourcing

-sending US jobs abroad highly controversial for several decades

-lowers expenses but also costs american jobs

inshoring

returning production jobs to the united states

multinational corporations (MNCs)

-heavily engaged in international trade

-moves resources, goods, services, and skills across national boundaries

standardization

-production of uniform products that can be sold the same way all over the world

-same product, sold everywhere

adaptation

-subsidiaries allowed to compete independently in domestic markets

what are the 5 factors of a global external environment?

-culture

-economic and technological

-political/legal

-demographic

-natural resources

culture

common set of values shared by the citizens of a society that determines what is socially acceptable

language

-english to spanish = translated by spanish born person

-spanish to english = translated by and american born person

economic-developed countries

-have more complex and sophisticated industries

economic-less developed countries (LDCs)

-basic industries

-lower income and purchasing power

global economy

"if america sneezes, then the rest of the world catches a cold." (everyone is tied together)

high economic freedom

-no private ownership

-minimal individual freedom

-much regulation

low economic freedom

-little central government

-maximum personal freedom

-less regulation

tariff

tax levied on goods entering a country

quota

limit on the amount of a specific product that can enter a country

boycott

exclusion of all product from certain countries or companies

exchange control

law compelling a company earning foreign exchange from its exports to sell it to a control agency

market grouping

several countries work together to form a common trade area that enhances trade opportunities

trade agreement

an agreement between nations that stimulates international trade

North American Free Trade Agreement (NAFTA)

Agreement that created a free-trade area among the United States, Canada, and Mexico.

european union

created highest form of market grouping

why do firms "go global"?

-saturated domestic markets (microwaves)

-excess capacity

-utilize economies of scale

-leverage a unique product or technological advantage

-earn additional profits

what are the 5 methods of entering the global marketplace?

-exporting

-licensing and franchising

-contract manufacturing

-joint venture

-direct investment

export

sell domestically produced products to buyers another countries (standardization)

licensing and franchising

legal process allowing use of manufacturing/patents/knowledge

contract manufacturing

private label manufacturing by a foreign country

joint venture

-domestic firm buys/joins a foreign company to create new entity

-A+B=C

-only works if different skills are brought in

direct investment

active ownership of a foreign company/manufacturing facility

direct foreign investment

-active ownership of a foreign company or of overseas manufacturing or marketing facilities

-start with a green field

-foreign direct investment

floating exchange rates

when prices of different currencies move up and down based on the demand for, and supply of, each currency

dumping

-the sale of an exported product at a price lower than that charged for the same product in the "home" market of the exporter

-goals: sell excess inventory, gain foothold in new market, and achieve economies of scale

countertrade (barter)

a form of trade in which all or part of the payment for goods or services is in the form of other goods or services

value

-assessment of the net worth one obtains from a purchase

-what you get - what you give up

what are purchases based upon?

perceived value - what you expect to get

utilitarian

-value is gained when consumers solved problems and accomplish tasks with product

-usefulness/purpose

hedonic

-value is an end in itself rather than as a means to an end

-emotional based

need recognition

an imbalance between actual and desired states

want

an unfulfilled need/product that will meet the end

stimuli

-recognize a need through a stimulus affecting one or more of the 5 senses

-internal stimuli: hunger or thirst

-external stimuli: tv ad or billboard

want got gap

-imbalance between actual and desired states

-gap must be large enough to drive the consumer to take some action

market managers objective

get consumers to recognize the want got gap

internal information search

recall information in memory

external information search

seek information in outside environment

-non marketing controlled: social media recommendations

-marketing controlled: mass media (newspaper, TV)

involvement

the amount of time and effort a buyer invests in the search, evaluation, and decision processes in buying a product

-economic: how much money is to be spent

-psycho social: how important to social life

-performance: how important it is to perform its purpose

evoked set (consideration set)

group of brands resulting from an information search from which a buyer can choose

cognitive dissonance (buyers remorse or post purchase doubt)

inner tension that a consumer experiences after recognizing an inconsistency between their values or opinions and their behavior

how do consumers reduce dissonance?

-seek information that reinforces the purchase decision

-avoid information that contradicts the purchase decision

-revoking the original decision by returning the product

routine response behavior

the type of decision making exhibited by consumers buying frequently purchased, low-cost goods and services; requires little search and decision time (ex. buying bread)

extensive decision making

the most complex type of consumer decision making, used when buying an unfamiliar, expensive product or an infrequently bought item; requires use of several criteria for evaluating options and much time for seeking information (ex. buying a new truck)

limited decision making

the type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category (ex. buying a new computer)

social class

a group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms

why are marketers interested in social class?

indicates which medium to use for advertising and helps identify which product appeals to certain people so it is easier to know where to distribute these products

what are the social class components?

occupation, income, education, wealth, and other variables

capitalist class

-1%

-people whose investment decisions shape the national economy; income mostly from assets, earned or inherited; university connection

upper middle class

-14%

-upper-level managers, professionals, owners of medium sized businesses; well to do, stay at home homemakers who decline occupational work by choice; college educated; family income well above national average