MARK Textbook Notes Test 1 PDF

Preview

Summary

intro to marketing...

Description

MARK Textbook Notes: Test 1 ●

Chapter 1 ○ What is marketing? ■ 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. ■ Marketing plan: specifies the marketing activities for a specific period of time. ● Broken down into various components by how the product or service will be conceived or designed, how much it should cost, where and how it will be promoted, and how it will get to the consumer. ● Core aspects of marketing ○ Marketing helps create value. ○ Marketing affects various stakeholders. ○ Marketing can be performed by both individuals and organizations. ○ Marketing requires product, price, place, and promotion decisions. ○ Marketing entails an exchange. ○ Marketing is about satisfying customer needs and wants. ○ Marketing is about Satisfying Customer Needs and Wants ■ Marketplace ● Can be divided into groups of people who are pertinent to an organization for particular reasons. ● Ex: Coke and Pepsi divide the global population into a host of categories: men vs. women, calorie conscious or not, carbonated vs. non carbonated, as well as flavor preferences. ○ Companies need to know which marketplace segments their product is most relevant, then make sure the marketing strategy targets those groups. ● Good marketers carefully seek out potential customers who have both an interest in the product and an ability to buy it. ○ Marketing Entails an Exchange ■ Exchange: the trade of things of value between the buyer and the seller so that each is better off as a result. ■ Sellers provide products or services, then communicate and facilitate the delivery of their offspring to consumers. Buyers complete the exchange by giving money and information to the seller. ○ Marketing Requires Product, Price, Place, and Promotion Decisions ■ Marketing Mix: the controllable set of decisions or activities that the firm uses to respond to the wants of its target markets. ● Product: Creating Value

○

○

○

Marketing’s fundamental purpose is to create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs. ○ Goods: items you can physically touch. ○ Services: intangible customer benefits that are produced by people or machines and cannot be separated from the producer. Ex: ticket to a concert, a person is not paying for the ticket itself but for the experience. ○ Ideas: thoughts, opinions, and philosophies. ● Price: Capturing Value ○ Everything the buyer gives up - money, time, and energy in exchange for the product. ○ Marketers must determine the price of a product carefully on the potential buyer’s belief about its value. ● Place: Delivering the Value Proposition ○ Represents all the activities necessary to get the product to the right customer when that customer wants it. ○ Deals specifically with retailing and marketing channel management, supply chain management. ○ Supply chain management: the set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and other firms involved in the transaction into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, while minimizing systemwide costs and satisfying consumers. ● Promotion: Communicating the Value Proposition ○ Communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions and elicit a response. ○ Promotion can enhance a product’s or service’s value. Marketing Can Be Performed by Both Individuals and Organizations ■ Business to Consumer Marketing: the process by which businesses sell to consumers. ■ Business to Business Marketing: process of selling merchandise or services from one business to another. ■ Consumer to Consumer Marketing: consumers sell to other consumers. Marketing Affects Various Stakeholders ■ Partners in the supply chain include wholesalers, retailers, or other intermediaries such as transportation or warehousing companies. ■ Manufacturers sell merchandise to retailers, but the retailers often have to convince manufacturers to sell to them.

■

○

○

Marketing can aim to benefit an entire industry or society at large. ● Ex: Milk life campaigns create a high awareness of the benefits of drinking milk. Marketing Helps Create Value ■ Production-Oriented Era ● Around the turn of the 20th century most firms were production oriented and believed that a good product would sell itself. ● Manufacturers were concerned with product innovation, not with satisfying the needs of individual customers. ■ Sales-Oriented Era ● Between 1920 and 1950. ● Production and distribution techniques became more sophisticated and the Great Depression and WW2 conditioned customers to consume less or manufacture items themselves. ● Firms depended on heavy doses of personal selling and advertising. ■ Market-Oriented Era ● After WW2. ● Manufacturers turned from focusing on the war effort toward making consumer products. ● Manufacturers and retailers began to focus on what consumers wanted and needed before they designed, made, or attempted to sell their products and services. ■ Value-Based Marketing Era ● Firms attempt to discover and satisfy their customers needs and wants. ● Have to give their customers greater value than their competitors. ■ Value: reflects the relationship of benefits to costs, or what you get for what you give. ● Customers seek a fair return in goods and services for their hard earned money and scare time. ● Value co creation: customers can act as collaborators to create the product or service. Ex: Nike allows customers to design their own shoes. ● Marketing firms become more value driven by... ○ Sharing their information about their customers and competitors across their own organization and with other firms that help them get the product or service to the marketplace. ○ Strive to balance their customer’s benefits and costs. ○ Concentrate on building relationships with customers. Marketing Analytics ■ Balancing benefits with costs

●

■

■ ●

Value oriented marketers constantly measure the benefits that customers perceive against the cost of their offsprings. Building relationships with customers ● Marketers have developed a rational orientation as they have realized that they need to think about their customers in terms of relationships rather than transactions. ● Consumer relationship management: a business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firms most valued customers. ○ Systematically collect information about their customers needs and then use that information to target their best customers with the products, services, and special promotions. Connecting with customers using social media ● Allows firms to serve customers needs more effectively.

Chapter 4 ○ The Scope of Marketing Ethics ■ Business ethics: refers to the moral or ethical dilemmas that might arise in a business setting. ■ Marketing ethics: examines those ethical problems that are specific to the domain of marketing. ■ Unethical marketing can cause societal issues such as the sale of products or services that may damage the environment, global issues (child labor), and consumer issues (deceptive advertising or marketing of dangerous products). ■ Deceptive advertising: a representation, omission, act, or practice in an advertisement that is likely to mislead consumers acting reasonably under the circumstances. ○ Influence of Personal Ethics ■ To avoid unethical decisions, the short term goals of each employee must be aligned with the long term goals of the firm. ■ To align personal and corporate goals, firms need to have a strong ethical climate, explicit rules for governing transactions including a code of ethics, and a system for rewarding and punishing inappropriate behavior. ■ The American Marketing Association provides a detailed, multipronged “Statement of Ethics” that can serve as a foundation for marketers. ● “As marketers we not only serve our organizations but also act as stewards of society in creating, facilitating and executing the transactions that are part of the greater economy.” ○ Ethics and Corporate Social Responsibility ■ Corporate social responsibility: entails voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders.

●

○

AMA definition: the serious consideration of the impact of the company’s actions and operating in a way that balances short-term profit needs with society’s long-term needs, thus ensuring the company’s survival in a healthy environment. ■ For a company to act in a socially responsible manner, the employees of the company must also first maintain high ethical standards and recognize how their individual decisions lead to optimal collective actions of the firm. ■ Firms with strong ethical climates tend to be more socially responsible. ■ Firms should implement programs that are socially responsible and its employees should act in an ethically responsible manner. ● Ex: Dannon yogurt supports research into healthy eating (ethical commitment) and donates food and money to hunger relief (socially responsible). ■ Being socially responsible means going above and beyond the norms of corporate ethical behavior. Framework for Ethical Decision Making ■ Step 1: Identify Issues ● Investigate the use or misuse of data collected from consumers by a marketing research firm. ● Issues: the way the data is collected and if the results will be used in a way that might mislead or harm the public. ■ Step 2: Gather Information and Identify Stakeholders ● The firm focuses on gathering facts that are important to the ethical issue, including all relevant legal information. ● The firm must identify all the individuals and groups that have a stake in how the issue is resolved. ● Stakeholders include the firm’s employees, suppliers, the government, customer groups, stockholders, and members of the community ● Many firms now also analyze the needs of the industry and the global community as well as future generations and the natural environment ■ Step 3: Brainstorm Alternatives ● After the marketing firm has identified the stakeholders and their issues and gathered the available data, all parties relevant to the decision should come together to brainstorm any alternative courses of action. ■ Step 4: Choose a Course of Action ● Objective is to weigh the various alternatives and choose a course of action that generates the best solution for the stakeholders, using ethical practices.

● ● ●

●

Management will rank the alternatives in order of preference, clearly establishing the advantages and disadvantages of each. It is also crucial to investigate any potential legal issues associated with each alternative. Marketers use the Ethical Decision Making Metric to evaluate each alternative. ○ Decision makers must consider the relevant ethical issues, evaluate alternatives, and then choose a course of action that will help them avoid serious ethical lapses.

Chapter 5 ○ Understanding the Marketing Environment ■ The centerpiece of the marketing environment is always consumers. ■ Consumers may be influenced directly by the immediate actions of the focal company, the company’s competitors, or corporate partners that work with the firm to make and supply products and services to consumers. ■ Macro Environment: includes various impacts of culture, demographics, and social, technological, economic, and political/legal factors. ● Firms monitor the macroenvironment to determine how factors influence consumers and how they should respond to them. ■ Value based marketing aims to provide greater value to consumers than competitors offer. ○ Immediate Environment ■ Company Capabilities ● The first factor that affects the consumer is the firm itself. ● Successful marketing firms focus on satisfying customer needs that match their core competencies. ■ Competitors ● Competition significantly affects consumers in the immediate environment. ● It is critical that marketers understand their firms competitors, including their strengths, weaknesses, and likely reactions to the marketing activities that their own firm undertakes. ■ Corporate Partners ● Parties that work with the focal firm. ● Few firms operate in isolation. ○ Macro-environmental Factors ■ Definition: operate in the external environment which include culture, demographics, social trends, technological advances, economic situation, and political/regulatory environment. ■ Culture ● Shared meanings, beliefs, morals, values, and customs of a group of people.

●

■

Transmitted by words, literature, and institutions passed down from generation to generation and learned over time. ● Marketers must take into account the culture of the country and that of a region within a country as they develop their marketing strategies. ● Country culture: visible nuances of a country’s culture are artifacts, behavior, dress, symbols, physical settings, ceremonies, language differences, colors and tastes, and food preferences. ○ The best answer for marketers is to establish a universal appeal within the specific identities of country culture. Ex: Disney. ● Regional culture: affects many aspects of people’s lives where they live. ○ Ex: soda vs. pop Demographics ● The characteristics of human populations and segments, especially those used to identify consumer markets. ● Typical demographics such as age, gender, race, and income are readily available from market research firms. ● Demographics provide an easily understood snapshot of the typical consumer in a specific target market. ○ Generational Cohorts: a group of people of the same generation that have similar purchase behaviors because they have shared experiences and are in the same stage of life. ■ Generation Z (Digital Natives) ● People in this group were born into a world that already was full of electronic gadgets and digital technologies such as the internet and social networks. ■ Generation Y (Millennials) ● 1977-2000 ● Varies the most in age. ■ Generation X ● 1965-1976 ● First generation of children who grew up with two working parents. ● 50% have divorced parents. ■ Baby Boomers ● 1946-1964 ● Largest population of consumers.

○

○

○

○

■

Income: distribution has become more polarized - the highest income groups are growing, whereas many middle and lower income groups decline. ■ Broad range in incomes creates marketing opportunities at both the high and low ends of the market. Education ■ Higher levels of education lead to better jobs and higher incomes. ■ Employment that requires a college or secondary degree accounts for nearly half of all projected job growth in the future. ■ Marketers can combine education level with other data such as occupation and income to predict purchase behavior. Gender ■ More firms are careful about gender neutrality in positioning their products and attempt to transcend gender boundaries. Ethnicity ■ Minorities represent one-quarter of the population and continue to grow making marketers shift attention toward them.

Social Trends ● Various social trends shape consumer values in the US. ● Health and Wellness Concerns ○ Health concerns pertaining to children are prevalent, critical, and widespread. ○ New advertising guidelines require marketers to produce food in reasonably proportioned sizes. ○ Advertised food must provide basic nutrients, have less than 30% of their total calories from fat, and include no added sweeteners. ○ Advertising cannot be aired during children’s programs and companies cannot link unhealthy foods with cartoon and celebrity figures. ○ Consumers interest in improving their health has opened up several new markets and niches focused on healthy living. ● Greener Consumers ○ Green marketing: involves a strategic effort by firms to supply customers with environmentally friendly, sustainable merchandise and services.

○

■

■

■

Sustainability is a critical ethical consideration for marketers. ○ New markets have emerged for recycled building products, packaging, paper goods, clothing, appliances, lighting, and heating & cooling systems. ○ Green products and initiatives suggest a complicated business model because some green operations are more expensive than traditional products. ○ Greenwashing: exploiting a consumer by marketing products as environmentally friendly, with the goal of gaining public approval and sales. ● Privacy Concerns ○ Consumers worldwide sense a loss of privacy. ○ The marketing industry has sought to find solutions and self-regulations that would calm customers, satisfy cautious regulators, and still enable marketing firms to gain access to invaluable information about consumer behaviors. Technological Advances ● Advanced technology has made consumers increasingly dependent on the help they receive from the providers of the technology. ● Mobile devices enhance the customer’s experience by making it easier to interact with the manufacturer, retailer, or other customers, and they add a new channel of access, which makes customers more loyal and more likely to spend more with a particular retailer. Economic Situation ● Affects the way consumers buy merchandise and spend money, both in marketers home country and abroad. ● Inflation: refers to the persistent increase in the prices of goods and services. ● Foreign country fluctuations: influences consumer spending. ● Interest rates: represent the cost of borrowing money. ● Shifts in the three economic factors make marketing easier for some and harder for others. Political/Regulatory Environment ● Comprises political parties, government organizations, and legislation and laws. ● Organizations must fully understand and comply with any legislation regarding fair competition, consumer protection, or industry specific regulation.

●

■

●

The government has enacted laws that promote both fair trade and competition by prohibiting the formation of monopolies or alliances that would damage a competitive marketplace, fostering fair pricing practices for all suppliers and consumers. ● 1890 Sherman Antitrust Act: prohibits monopolies and other activities that would restrain trade or competition and makes fair trade within a free market a national goal. ● 1914 Clayton Act: prohibits the combination of two or more competing corporations through pooling ownership of stock and restricting pricing policies such as price discrimination, exclusive dealing, and tying clauses to different buyers. ● 1936 Robinson-Patman Act: outlawed price discrimination toward wholesalers, retailers, or other producers and requires sellers to make ancillary services or allowances available to all buying on equal terms. Responding to the Environment ● In a constantly changing marketing environment, the marketers that succeed are the ones that respond quickly, accurately, and sensitively to their consumers.

Chapter 6 ○ The Consumer Decision Process ■ Need Recognition ● The consumer decision process begins when consumers recognize they have an unsatisfied need, and they would like to go from their actual, needy state to a different, desired state. ● The greater the discrepancy between these two states the greater the need recognition will be. ● Wants: goods or services that are not necessarily needed but are desired. ● Functional needs: pertain to the performance of a product or service. ● Psychological needs: pertain to the personal gratification consumers associate with a product and/or service. ● Successful marketing requires determining the correct balance of functional and psychological needs that best appeal to the firm’s target market. ■ Search for Information ● After a consumer recognizes...