Marketing 301 Exam 1 Study Guide PDF

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Margaret Kelly Marketing Exam 1 Study Guide Chapter One: Marketing: activity, set of institutions, and processes for creating, capturing, communication, delivering, and exchanging offerings that have value for customers, clients, partners and society at large Marketing Mix or 4Ps:  Product: collaborating with suppliers and customers to create an offering that has value; can be a good, service, or idea  Price: capturing value and trading it for offerings, you give up money, information, energy, and time for a product so pricing is determined by factoring in cost and hassle, [Cost + Hassle] = price  Place: delivering value to customer in a way that optimizes value; supply-chain management  Promotion: communicating value through social media, PR, description, education; learn from customers about what they like and dislike to adjust their products or promotion; Inform, Persuade, Remind: keep them coming back Profitable Exchange: Value = Benefits Received – [Cost + Hassle]; needs to be profitable to the company and the consumer Marketing Concept: the philosophy underlying everything marketers do- seek to satisfy customer needs and wants and sometimes create new needs and wants in people Value: this is the fundamental purpose of marketing, to create value and have benefits for firms, partners, customers, and society Value-based Marketing: balance benefits with costs, offer excess value in comparison to competitors, share information with customers and supply chain members, build relationships; firms can become value oriented through value cocreation: customers act as collaborators with a manufacturer or retailer to create the product or service Four Business Eras:  Product-Oriented Era: a good product sells itself  Sales-Oriented Era: capacity to produce more than customers wanted or could buy due to WW2 and Great Depression  Market-Oriented Era: the WW2 limited supply turned to plentiful supply, customers became king- focus turned to wants and needs  Value-Based Marketing: give customers greater value than their competitors do Who engages in marketing?  For-profit companies: defined by customers and by function; non-profit organizations, individuals Why is marketing important?  Expands a firms global presence  Pervasive across marketing channel members (suppliers, manufacturers, retailers, wholesales)  Enriches society  Can be entrepreneurial: new business ventures **Marketing is not just buyers and sellers exchanging money to make a profit; it’s not random- there’s a plan.

Chapter Two: Marketing strategy: a firm’s target market, marketing mix, and method of obtaining a sustainable competitive advantage. Engagers in strategic planning in a firm:  Corporate Level Plans: top executives  Business Level Plans: strategic business units- what are individual goals that will contribute to the over-arching goal  Functional Level Plans: departmental Strategic Marketing Planning Process:  Document: Marketing Plan  Function: allocate resources  Goals: accomplish objectives, deliver value, be competitive  Step One: Define the Business Mission -Mission statement: says the purpose of the organization, type of business, goals and objectives to accomplish (sustainable competitive advantage); located on the financial statement -Competitive advantage: (V- value, I- hard to imitate, R- rare, Oorganization can support it) -Customer excellence (loyalty), company culture, intellectual property (patents, trademarks…), operational excellence, product excellence, location excellence, social responsibility Step Two: Situational Analysis (SWOT Analysis) -Assessment of organizations internal and external environment, -S: strengths- about the firm and their resources W: weaknesses- trends unfavorable to the firm O: opportunities T: threats- can use strength to turn threat to opportunity Step Three: Identifying and Evaluating Opportunities Using STP -Segmentation: divide marketplace based on similar reactions -Targeting: evaluate attractiveness; cost-benefit analysis -Positioning: defining the marketing mix Step Four: Implementing Marketing Mix and Allocating Resources -The 4Ps Step Five: Evaluate Performance Using Marketing Metrics -Setting benchmarks for success: accountability, objectives and metrics (performance over time), financial metrics (everything relates together, one metric cant tell the whole story), portfolio analysis (management evaluates the firm’s various products and businesses, allocates resources accordingly; BCG). -Metrics are used to explain why things happened and to project the future; they make it possible to compare results across regions, strategic business units (SBUs), product lines, and time periods -BCG matrix: stars- require heavy resource investment in promotions and new production facilities to fuel their rapid growth; cash cows: already have gotten investment and promotion, have excess resources that can be used to help products that are question marks; question marks: require

significant resources to maintain and potentially increase their market share, either use cash cow funding or phase them out; dogs: sustainable but not destine to be a star and should be phased out unless needed to complement or boost sales of another product Strategic Planning: not sequential, actual planning processes can move back and forth among these steps, it does not follow exactly step by step Four Growth Strategies:  Market Penetration: current customers and current product but trying to sell more, going deeper into current market. Ex: loyalty card, drive thru, free Wi-Fi at starbs  Market Development: same product but finding new market, could be geographically, Ex: chick-fil-a expanding to the north  Product Development: add to products and services. Ex: fruity Starbucks drinks, put Starbucks on grocery shelves  Diversification: new products and new markets. Ex: added CDs to Starbucks store Downsizing: eliminate products or abandon markets; could be due to economy, could have grown too quickly, didn’t make payments, lack of expertise. Could look like a downsize when a company mergers with another Chapter Five: Consumers are at the center of all marketing activities; they are 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 The Immediate Environment:  Company Capabilities (core competencies): integral resources- tangible resources (financial, physical, technological), intangible resources (brand reputation, culture, intellectual property), human resources (skills and incentives), global resources (international labor, offices, distribution)  Competitors: competitive intelligence (finding and distributing intelligence about products, customers, competitors, and environment), proactive vs reactive, directsimilar products and services (Delta vs. Southwest), indirect- same basic need fulfilled (plane vs. train vs. rental car)  Corporate Partners: firms are part of alliances; align with competitors, suppliers. Parties that work with the focal firm are its corporate partners – make it all work The Microenvironment:  Culture: country culture, regional culture  Demographics: generations (Baby Boomers, X, Y, Millennials, Z), income (purchasing power), education, gender, ethnicity  Social Trends: societal issues, values, concerns that help shape culture. Ex: Green movement, security privacy concerns, time-poor society = service oriented  Technological Advances: improving value of products and services, new products, new retail channels and forms of communication  Economic situation: affects what customers buy and how much money is spent; inflation, unemployment; altruism marketing: warranty, rebates for unemployed  Political/Regulatory Environment: political parties, government organizations, legislation and laws; implications: dictates legal competitive practices, consumer

protection, industry specific regulations; Sherman, Clayton, FTC, RobinsonPatman Act Chapter Six: The study of consumer behavior: trying to understand consumer actions and why people buy products and services, then develop basic strategies Types of Buying Decisions: low- limited problem solving, impulse or habitual; highextended problem solving Consumer Decision Process:  Step One: Need Recognition -Stimuli: internal vs. external, someone else could make you aware that you have this need -Needs are on a spectrum from function (performance oriented) to psychological (personal gratification)  Step Two: Information Search -Internal is what you already know, external is when you consult other information -Factors affecting information search: perceived benefits vs. cost of search, locus of control, actual or perceived risk (financial risk, psychological risk, safety risk)  Step Three: Evaluation of Alternatives -Attribute sets: universal sets- retrieval sets: evoked (like the brand), inert (neutral), inept (dislike brands) -Determinant attributes: characteristics or features of a product or service that you deem to be different or important -Decision heuristics: Price, Brand, Package} short cut we use to make decisions  Step Four: Purchase Decision and Consume- choice is made, value  Step Five: Post-Purchase Behavior -Consumer satisfaction: meet and beat expectations. Retribution if expectations aren’t met; need to tell consumer how to use the product properly and how to get the best use out of it -Post-purchase dissonance: buyer’s remorse -Customer loyalty: goal of companies -Negative word of mouth: companies want to avoid this because it’s common and people listen to their friends and peers Factors Influencing the Customer Decision Process:  Psychological Factors: motives, perception, learning (slice of life), lifestyle (activities, interests, opinions), attitudes (cognitive: what you believe to be true, affective, behavioral) if these three don’t sync up there is buyers remorse.  Social Factors: family (what you grew up with), reference groups (friends, celebrities), culture (what other cultures use)  Situational Factors: these can override everything else. Purchasing situation: buy something you don’t usually buy, ex: wedding gifts, Shopping situation: store atmosphere- free samples = want it now, Temporal situation: state of mind, can influence purchase decisions

Chapter Seven: B2B Marketing: sell products or services to other companies or organizations that use them in their operations or resell them  Manufacturers or producers: buy raw materials and manufacture goods  Reseller: buys the goods and resells without significant alteration  Institutions: schools, religions organizations, museums  Government: largest purchaser Characteristics of Organizational Buying:  Demand characteristics: consumer demand vs. derived demand  Size and order/purchase  Number of potential buyers  Organizational buying objectives B2B Selling Process:  Stage One: Need recognition  Stage Two: Product specification  Stage Three: RFP Process: request for proposals *3*  Stage Four: Proposal analysis, vendor negotiation, and selection  Stage Five: Order specification  Stage Six: Vendor analysis Factors that Influence the Buying Process:  The Buying Center: initiator, influencer, decider, buyer, user, gatekeeper  Organizational Culture: general types of culture: -Autocratic: one person -Democratic: everyone- majority rules -Consultative: one decider with input -Consensus: everyone must come to one decision  Buying Situation: -New buy: product never bought before -Modified Rebuy: bought before, change up a little- amount/price/quantity -Straight Rebuy: continue to rebuy same standard orders...