Marketing 10th Edition by Lamb/Hair/McDaniel. Course Notes PDF

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Textbook: Marketing 10th Edition by Lamb/Hair/McDaniel.

Chapter 1 - What is Marketing - Exchange, Sales Orientation, Market Orientation (marketing concept), Comparing Sales/Marketing Orientations, Customer Value Requirements, Chapter 2 - Strategic Planning for Competitive Advantage, M...

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Marketing 1001 Text: Marketing 10th Edition by Lamb/Hair/McDaniel

1/20/17 Marketing – discovering an unfulfilled needs and wants of customers and satisfying those needs and wants, entails processes that focus on delivering value and benefits to customers, not just selling goods or services  1. 2. 3. 4.

Marketing Mix (4 P’s) Product Price Promotion Place

1/27/17 Ch1 What is *marketing? – a philosophy, an attitude, a perspective or a management orientation that stresses customer satisfaction -

An organizational activity, set of institutions and processes Activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large Occurs even if an exchange doesn’t occur

*Exchange -

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Has 5 conditions 1. At least 2 parties 2. Something of value 3. Communication and delivery 4. Freedom to accept or reject 5. Desire to deal with other party Even if all 5 conditions are met, an exchange may not occur. An agreement must be reached 4 Marketing Management Philosophies

Production – internal capabilities of the firm Sales – aggressive sales techniques and belief that high sales result in high profits Market – satisfying customer needs and wants while meeting objectives

Societal – satisfying customer needs and wants while enhancing individual and societal wellbeing Sales Orientation: Marketing = selling things & collecting money. Disregards market needs and consumer demand. Despite the quality of sales force, often cannot convince people to buy the product. How can we sell more aggressively? Market Orientation (marketing concept) – focusing on customer wants and needs to distinguish products from competitors offerings. Integrating all the organization’s activities to satisfy these wants. Achieving the organizations long term goals by satisfying customers wants and needs legally and responsibly. What does the customer want? Achieving a marketing orientation -

Obtain info about customers competitors and markets Examine the info from a total business perspective Determine how to deliver superior customer value Implement actions to provide value to customers

Societal Marketing Orientation: organization exists not only to satisfy customer wants but also to preserve or enhance individuals and society’s long term best interest (ex. less toxic products, more durable products, and recyclable products). How can we benefit society?,, -

Customers are in charge. Increased availability of comparative research enables customers to shop smarter, putting the customer in the driver seat

Production Orientation: how many can make? What can we do best or make better? Comparing Sales/Marketing Orientations. 5 characteristics: Firm’s business- ensures customer focus, innovation and creativity Those to whom the product is directed- directed to avg customer or direct group of people Firm’s primary goal – to achieve profit through sales or customer value and satisfaction Tools the organization uses to achieve its goals- through intense promotions Customer Value Requirements Offer products that perform Earn trust Avoid realistic pricing Give the buyer facts Offer organization wide commitment in service an after sales support Co-creation with customers *Customer Satisfaction – Customer’s evaluation of a good or service

*Relationship Marketing- strategy that focuses on keeping and improving relationships with customers. Successful strategies need effective training programs, teamwork, empowered employees, and customer oriented personnel Why study marketing? – Important to society, important to business, affects everyone daily, good career opportunities

1/31/17 Chapter 2 - Strategic Planning for Competitive Advantage Tariff- taxes NAFTA – North American Free Trade Agreement, tariff trade agreement between Mexico, United States, and Canada Strategic Planning- the managerial process of creating and maintain a fit between the organizations objectives and resources and the evolving market opportunities – asks 2 questions: What is the organizations main activity at a particular time? How will it reach its goals? SBU- Strategic Business Unit: has distinct mission and specific target market, control over its resources, has its own competitors, has a single business or a collection of related businesses and it plans independent of other SBU’s Ansoff’s Opportunity Matrix - Market penetration: increase market share among existing customers - Market Development – attract new customers to existing products - Product development – create new products for present markets - Diversification- introduce new products into new markets Market Share - the portion of a market controlled by a particular company or product. (ex. Apple has 70% of all downloadable music)

Portfolio Matrix – mixture of different SBU’s, different companies that can be classified as star(high growth rate and high market share), cash cows(high market share, low market growth rate), question marks(high market growth rate but low share dominance), or dog (low growth rate, low market share) Portfolio Matrix Strategies – Build, Hold, Harvest, Divest

What is a marketing plan? Planning – the process of anticipating future events and determining strategies to achieve organizational objectives in the future Marketing planning- designing activities relating to marketing objectives and the changing marketing environment Marketing plan- a written document that acts as a guidebook of marketing activities for the marketing, Business bible A marketing plan will allow the organization to achieve marketing objectives and succeed. However it is only as good as the effort, creativity and thought that goes into it Elements of a market plan: - business mission statement - Situation or SWOT analysis, both the same thing. S,W- internal. O, T- external - Objectives - Marketing Strategy (target marketing strategy) - Marketing Mix (product, place, Promotion, Price) - Implementation Evaluation Control Marketing MYOPIA- not looking at marketing from a strategic standpoint, near-sited marketing vision Synergy- sum of the combined parts is greater than that of each individual independently Business Mission: profoundly affects the firm’s long-run resource allocation, profitability, and survival. Ones that are stated too narrowly are bad S-strengths W- Weaknesses O- Opportunities T- Threats Organizational resources- production cost, marketing skills, financial resources, company brand, employee capabilities, and modern technology N ***Environmental scanning- designing a market strategy helps identify opportunities and threats. Based on 6 major environmental forces, flip side to marketing mix. Marketing manager has no control over these forces 1. Social 2. Demographic 3. Economic 4. Technological 5. Political/legal 6. Competitive

2/3/17 Competitive advantage 1. 2. 3. 4.

Cost Product/service differentiation Niche Sources of cost reduction 1. Experience curves 2. Efficient labor 3. No frills product 4. Government subsidies 5. Product design 6. Reengineering 7. Product innovations 8. New services delivery methods 5. A product differentiation competitive advantage exist when a firm provides something that is unique and valuable to buyers beyond simply offering a lower price than that of the competitions 6. A niche competitive advantage- seeks to target and reach a single segment of the market. 7. Building sustainable competitive advantage- occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors. These attributes can include access to natural resources or access to highly trained and skilled personnel human resources. 8. Sources of sustainable competitive advantages 1. Patents 2. Copyrights 3. Locations equipment 4. Technology 5. Customer service 6. Promotion 9. Marketing objective is a statement of what is to be accomplished through marketing activities. To be useful, stated objectives should be: 1. Realistic 2. Measurable 3. Time specific 4. Compared to a benchmark 10. Criteria for good marketing objectives 1. Communicate marketing management philosophy 2. Provide management direction 3. Motivate employees 4. Force executives to clarify their thinking

5. Form a basis for control 11. Target marketing strategies 1. Segment the market based on groups with similar characteristics 2. Analyze the market based on attractiveness of market segments 3. Select one or more target markets 1. Appeal to the entire market with one marketing mix 2. Concentrate on one marketing segment 3. Appeal to multiple markets with multiple marketing mixes

2/7/17 Chapter 3 Ethics Ethics and Social Responsibility ***6 Modes of Social Control- maintain order and keep people and organizations from being abusive  Ethics  Laws  Formal and informal groups  Self-regulation  Media  Active Civil Society Ethical Theories – people usually base their individual choice of ethical theory on their life experiences  Deontology  Utilitarianism  Casuist  Moral relativists  Virtue Ethics Ethical Behavior in Business Ethics- moral principles or values that generally govern the conduct of an individual Morals- rules people develop as a result of cultural values and norms; Ethical Development Levels  Pre-conventional Morality- based on what will be punished or rewarded, self-centered, calculating, selfish (more childlike)  Conventional Morality- moves toward the expectations of society. Concerned over legality and the opinion of others  Post-conventional Morality- concern about how they judge themselves, concern if it is right in the long run (more mature)

Influential Factors (ethical decision making)  Extent of Problems  Top Management Actions  Potential Consequences  Time until Consequences  Social consensus  Probability of Harm  Number affected Code of Ethics: Helps identify acceptable business practices, helps control behavior internally, avoids confusion in decision making, and facilitates discussion about right and wrong Ethics on other countries: Foreign Corrupt Practices Act (FCPA) - Prohibits US corporations from making illegal payments to foreign officials - Has been criticized for putting US businesses at a disadvantage - Has encouraged some countries to implement their own anti-bribery laws Corporate Social responsibility – business’s concern for society’s welfare Stakeholder theory says that social responsibility is paying attention to the interest of every affected stakeholder in every aspect of a firm’s operation (stakeholders can include customers, employees, bankers, employees, suppliers, shareholders, etc.) - For- right thing to do, businesses have the resources to devote to fixing the social problems, prevents regulation and fines, can be profitable - Against- takes focus away from profits, business executives spend shareholder money on individual concerns - Economic, Legal, Ethical, Philanthropic Green Marketing- development and marketing of products designed to minimize negative effects on the environment or improve the environment - Environmentally aware customers pay more for products - Companies must try to educate customers of environmental benefits Cause-related marketing – for profit and non-profit organizations cooperate to generate funds (about 7billion annually), too many causes lead to customer cause fatigue

2/10/17 Ch. 10 Presentation, Turn in HW #3 Article

Next Tuesday cover chapter 4

2/14/17 Chapter 4 The Marketing Environment Marketing Manager can control Marketing MIX (4 P’s) and understand external environment Target Market – group of people for which an organization designs, implements, and maintains a marketing mix intended to meet the need of that group, resulting in mutually satisfying exchanges Environmental Management is…when a company implements strategies that attempt to shape the external environment within which it operates Social factors- attitudes, values, lifestyles of people in market place - American Values: self-sufficiency, upward mobility, work ethic, conformity

Influence of Values on Buying Habits Ranked characteristics of product quality - Reliability - Durability - Easy maintenance - Ease of use - Trusted brand name - Low price Component Lifestyles – practice of choosing goods and services that meet one’s diverse needs and interests rather than conforming to a single, traditional lifestyle. Today’s consumers want multifunctional products no longer defined by occupation Role of Social Media…. Social networking has changed the game when it comes to opinion sharing. Teenagers and young adults are more likely to view social networks as a valuable source of information How firms use social media Starting point for a firm using social media is to monitor what is being said about the brand Demographic factors- people are the basis for any market Demographic characteristics relate to buyer behavior Demographic cohorts have their own needs, values, and consumption patterns

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Tweens Teens : 25million, 95% US teens on internet, 90% are into social networking Millenials: born between 1979 and 1994, purchasing power of 200$ Billion annually Generation X: born 1965-1978: 31% of total income dollars, saving money is major priority, population of 50 million Baby Boomers: born 1946-1964, Control 67% of country’s wealth, outspend younger adults 2:1, willing to change brands and try new things

Growing Ethnic Markets - Minority population is about 118 million, as America evolves the marketing mix evolves too - Marketing to Hispanic Americans: encompasses people of many backgrounds, prefer products of their native country - Marketing to African Americans: 1. 53% are under the age of 35 2. 44% of black households earn $50k or more and 23% earn more than $75k - Marketing to Asian Americans: 19million in 2015, fueled by immigration, hold cultural values of their particular group, likely to support businesses by other Asian Americans  -

Economics Factors Consumers income: median household income $52k, education is big factor Purchasing power: cost of living Inflation: increased prices Recession: negative growth in economic activity, reduces demands for goods/services

Technological Factors: Basic Research: pure research to confirm an existing theory Applied research: attempt to develop new or improved products Stimulating innovation: build scenarios, enlist the web, talk to early adopters, use marketing research, create an innovative environment, and cater to entrepreneurs Political and Legal Factors Laws and regulations protect: new technology, society, businesses, consumers Federal Legislation: Regulate competitive environment (Sherman act, clayton act, FTC act, etc ) Regulate pricing practices: robinson-patman act Control false advertising: wheeler-lea act State Laws Legislation that affects marketing state by state Regulatory agencies

Consumer product safety commission: protects consumer safety in homes FDA: enforces safety regulations for food and drugs FTC: prevents unfair methods - Bureaus: - 1. Of competition: reviews mergers and acquisitions, challenges anti-competitive conduct, promotes competition, provides info - 2. Of consumer protection: enforces federal laws, empowers consumers with info, communicates with consumers about fraud and identity theft Competitive Factors: how many? How big are they? How interdependent is the industry? - Market share and profits- firms work harder to maintain profits - Global competition – foreign firms entering US market and now compete on product quality

2/17/17 Substitute, no class Chapter 5 – Global Marketing Global marketing brings rewards and helps countries generous profits Outsourcing- sending jobs to foreign countries. Saves money but hurts American jobs (inshoring- bring jobs back to US)  Benefits of Globalization: - expands economic freedom - spurs competition - raises productivity and living standards - offers access to foreign capitals and advanced technology - promotes higher labor and environmental standards - acts as a check on government power  1. 2. 3. 4.

Stages of Global Business Development Companies operate in one country and sell in others Set up foreign subsidiaries to handle sales Operate an entire line of business in another country Virtual operation

Pros (multinationals) – 19% of US jobs, provide 25% of private wages, 74% of R&D spending, 48% total exports and goods Cons (multinationals) – support governments that benefit companies not people, take away more wealth than generate, technology doesn’t necessarily increase employment

Global Marketing standardization: production of uniform products that can be sold the same way all over the world Multidomestic strategy: subsidiaries of multinational firms are allowed to compete independently in domestic markets  -

External Environment Facing Global Marketers Culture- common set of values shared by citizens (language, customs, values/expectations) Natural resources Economic development Political structure Demographic makeup

Global economy: understanding and forecasting growth and demand globally requires understanding countries around the world BRIC countries (Brazil, Russia, India, and China)- countries to have global economic influence in upcoming years Uruguay Round- made changes in world trading practices Entertainment, pharmaceuticals, integrated circuits, and software Financial, legal, and accounting services Agriculture Textiles and apparel Created new trade organization: World Trade Organization (WTO) GATT- general agreement on trades and tariffs made in 1948 after WW2 which later became the World Trade Organization Doha Round: 2001, stalemate over lowering tariffs on industrial goods in exchange for cutting US farm subsidies - Dumping: when manufacturers export a product to another country at a price either -

below the price charged in its home market or below its cost of production Protectionism: the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports, an effort to prevent trade

G-20: top 20 economies in the world, meet once a year to discuss global economies Marketing Considerations: population density, age, urban or rural Natural Resources. Shortages create shifts of wealth, inflation or recession, military intervention Why do people “GO Global”? - Earn additional profits - Excess capacity - Utilize economies of scale - Possess exclusive market information

- Leverage a unique product or technological advantage - Saturated domestic markets 5 methods of entering the Global Marketplace 1. Exporting 2. Licensing and franchising 3. Contract manufacturing 4. Joint venture 5. Direct investing Exchange rates- reflect the price of ones currency in terms of another country’s currency Countertrade- form of trade in which all or part of the payment for goods or services is in the form of other goods or services Impact of the Internet Opening an e-commerce site puts a company in the international marketplace. Internet based economy remains hindered by brick and mortar rules, regulations, and habits Global marketers use social media to understand customers, for global branding, etc.

3/7/17 Chapter 6 – Consumer Decision Making Process  -

Value – is a personal assessment of the net worth one obtains from making a purchase Purchases are made based upon perceived value, which is what you expect to get Utilitarian value- derived from a product or service that helps the consumer solve problems and accomplish tasks - Hedonic value- end in itself rather than as a means to an end 5 step process (consumer making decision process) 1. Need recognition 2. Information search 3. Evaluation of alternatives 4. Purchase 5. Post-purchase behavior

Stimulus – any unit of input affecting one or more of your 5 senses (sight, sense, taste, touch, hearing) Needs and Wants - If marketers don’t ...