Marketing Exam 1: Chapter 1-3

What are the four P’s?

Product, Promotion, Place, Price

What is marketing

The activity, set of institutions, and processes for creating, capturing, communicating, developing, and exchanging offerings that have VALUE for customers, clients, and partners, and society at large

What does B2B stand for?

Business to Business

What does B2C stand for?

business to Consumer

What does C2C stand for?

Consumer-to-consumer

What does NGO stand for?

Non-for-profit organizations or Non-Governmental Organizations

What is the definiton for Needs in Marketing?

The difference between a customer’s actual state and some ideal state

What is the definition of wants in Marketing?

The desire to satisfy needs in specific ways that are culturally and socially influenced

What is the definition of Benefit in Marketing?

The outcome sought out by a customer that motivates buying behavior that satisfies a need or a want

What is the definition of Demand in Marketing?

the customers’ desire for products coupled with the resources needed to obtain them

What is the definition of Market in Marketing?

Customers who share a common need that can be satisfied by a specific product

Stakeholders

Individuals or groups that have an interest or investment in a company or organization, including customers, employees, suppliers, and shareholders. All shareholders are stakeholders!

Tripple-Bottom-Line Era

1, financial bottom line: profitability; 2, social bottom line: contributing to the community; 3, environmental bottom line: creating sustainable business practices

Value Proposition

A marketplace offering that fairly and accurately sums up the value that will be realized if the good or service is purchased

Distinctive competency

a superior capability of a firm in comparison to it direct competitors

What is Value chain?

a series of activities involved in designing, producing, marketing, delivering, and supporting a product

Consumer

The ultimate users of a good or service

Channel of distribution

The series of firms or individuals that facilitates the movement of a product from the producer to the final consumer.

Exchange

The process by which some transfer of value occurs between a buyer and a seller

Production orientation

A managerial reliance primarily on a sales force to move products out of warehouses and into the hands of customers to reduce inventory

Customer orientation

An overall business approach that prioritizes understanding customers’ needs and wants and then works holistically and consistently to meet and exceed those needs and wants

Sustainability

A design and manufacturing focus that meets present needs without compromising the ability of future generations to meet their own needs.

Return of Investment (ROI)

The direct financial impact of a firm’s expenditure of a resource such as time or money

User-generated content

Marketing content and activities created by consumers and users of a brand (Ex.: reviews, blogs, social media, etc)

Branded Content

Marketing communication developed by a brand to provide educational or entertainment value rather than sell the brand in order to develop a relationship with the consumers; may indicate the brand is a sponsor

Corporate social responsibility

A firm’s responsibility to contribute positively to society and the environment while conducting business. Doing well by doing good

Distinctive competency

a superior capability of a firm in comparison to its direct competitors

Crowdsourcing

where firms outsource marketing activities

Anticonsumption

deliberate defacements of products

Mass market

All possible consumers regardless of the differences in their specific needs and wants

Market Segment

A distinctive group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in a large market

Competitive advantage

A firm’s edge over its competitors that allows it to have higher sales, profits, and more customers, and enjoy great success year after year

Consumer goods

The goods individual customers purchase for personal or family use

Services

Intangible products that are exchanged directly between the producer and the consumer

WTO- World Trade Organization

set trade rules for its member nations and mediates disputes between nations

World Bank

international leading organization that seeks to ensure the stability of international monetary exchange by controlling fluctuations in exchange rates

Protectionism

Policies adopted to give domestic companies an advantage

Import quotas

limitations set by a government on the amount of a product allowed to enter the country

Tariffs

taxes on imported goods

External environment

the uncontrollable elements outside an organization that may affect its performance either positivley or negatively

GDP- Gross domestic product

total dollar value of goods and services produced by a nation within its borders in a year

Economic infrastructure

quality of a country's distribution, financial, and communications systems

Level of economic development

the broader economic picture in a country

Standard of living

An indicator of the average quality and quantity of goods and services consumed in a country

Least developed country

a country at the lowest stage of economic development

Developing countries

countries in which the economy is shifting its emphasis from agriculture to industry

Bottom of the pyramid (BOP)

collective name for consumers who live on less than $2 a day

BRICS countries

Brazil, Russia, India, China, and South Africa are the fastest growing of the developing countries

Competitive intelligence

process of gathering and analyzing publicly available information about rivals

Discretionary

the portion of income people have left over after paying for necessities (utilities, housing, food, clothing)

Product competition

When firms offering different products compete satisfy the same consumer needs and wants

Brand competition

When firms offering similar goods or services compete based on their brand’s reputation or perceived benefits

Monopoly

One firm (only supplier) can control the price, quality, and supply

Oligopoly

a few relatively small sellers compete with many buyers

Monopolistic competition

Many firms offer slightly different products with unique benefits

Perfect competition

many small sellers with similar products are unable to hav an impact of the quality, price, or supply of a product

Patent

A legal mechanism to prevent competitors from producing or selling an invention, aimed at reducing or eliminating competition in a market for a period of time

Nationalization

When a government seizes a business enterprise, natural resources for the best interest of the country

Demographic

statistics that measure observable aspects of a population

What thin can fall under demographics?

size, age, gender, ethnic group, income, education, occupation, and family structure

Cultural values

a society’s deeply held beliefs about the right and wrong ways to live

Collectivist cultures

goals are focused on the community over the individual

Individualistic cultures

personal goals are prioritized over community goals

Social norms

specific rules dictating what is right or what is wrong, acceptable or unacceptable

Consumer ethnocentrism

idea that products in other countries are superior to those produced at home

Consumer ethnocentrism

idea that products made in one's home country are superior

export merchants

Intermediaries a firm uses to represent it in other countries

licensing agreement

An agreement in which one firm gives another firm the right to produce and market its product in a specific country or region in return for royalties

Franchising

a form of licensing involving the right to adapt an entire system of doing business

Joint venture

a strategic alliance in which a new entity owned by two or more firms allows the partners to pool their resources for common goals

Straight extension strategy

product strategy in which a firm offers the same product in both domestic and foreign markets

Product adaption strategy

adapts the product to the culture

Product invention strategy

new products for the foreign markets

backward invention

product strategy in which a firm develops a less advanced product to serve the needs of people living in countries without electricity or other elements of developed infrastructure

Ethnocentric pricing

A pricing strategy where a firm sets a single price for a product around the globe

Polycentric pricing

A product strategy where the local partners set the prices for the product in each global market

Geocentric pricing

A pricing strategy that establishes a global price floor for a product but recognizes local conditions in setting the price in each market

Free trade zones

Designated areas where foreign companies can warehouse goods without paying taxes or customers duties until they move the goods into the marketplace

Gray market goods

items manufactured outside a country and then imported without the consent of the trademark holder

Dumping

A company tries to get a toehold in a foreign market by pricing its products lower than it offers them at home

Business ethics

basic values that guide a firm’s behavior

Code of ethics

written standards of behavior to which everyone in the organization must subscribe

Bribery

when someone voluntarily offers payment to get an illegal advantage

Extortion

when someone in authority extracts payment under distress

Green customers

those consumers who are most likely to actively look for and buy products that are eco-friendly

Fair trade supplier

Companies that pledge to pay a fair price to producers in developing countries, to ensure that the workers who produce the goods receive a fair wage, and to ensure that these manufacturers rely, where possible, on environmentally sustainable production practices

Strategy

The execution of the elements of a plan based on goals and objectives to bring about a desired future

Business planning

An ongoing process of making decisions that guides the firm both in the short term and in the long term

Business plan

A plan that includes the decisions that guide the entire organization

Marketing plan

A document that describes the marketing environment, outlines the marketing objectives and strategies, and identifies how the company will implement and control the strategies embedded in the plan

Strategic Business Unit (SBUs)

Individual units within the firm that operate like separate businesses, with each having its own mission, resources, managers, and competitors

Mission statement

A formal statement in an organization’s strategic plan that describes the overall purpose of the organization and what it intends to achieve in terms of its customers, products, and resources

Vision statement

A firm’s articulation of its vision

Organizational values

The core attributes valued by the firm that most closely reflect the firms culture

Situation analysis

An assessment of a firm’s internal and external environments

Internal environment

the controllable elements inside an organization, including its people, its facilities, and how it does things that influence the operations of the organization

External environment

SWOT analysis

an analysis of an organization’s strengths, weaknesses, operations, threats in the external environmental

BCG analysis

A portfolio analysis model developed by the Boston Consulting Group that assesses the potential of successful products to generate cash that a firm can then use to invest in new products to generate cash that a firm can then use to invest in new products

Business portfolio

The group of different products or brands owned by an organization and characterized by different income-generating and growth capabilities