MKTG 360 EXAM 1 Study Guide PDF

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Outline of everything covered on Exam 1...

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MKTG 360 EXAM 1 STUDY GUIDE Chapter 1: Overview of Marketing Marketing: the activity, set of institutions, and processes used for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large.  Is a process and philosophy Value= What you get/what you give Exchange: giving something and getting something in return. Customer Satisfaction: an experience that meets a consumer’s expectations Four Marketing Management Philosophies:  Production o Consumer favors products widely available and low in cost o Standardized products. o Focuses on internal capabilities of the firm o What do we do best?  Sales o Aggressive sales techniquespeople need to be persuaded to buy o Maximizing sales at any cost  Market o Satisfying customer needs and wants while meeting objectives o Focus: how the company can provide value to customers o Defines business in terms of what benefits the company provides to customers o Entire company needs to be involved and work together.  Societal o Satisfying customer needs and wants while meeting objectives o Enhancing individual ad societal well-being o Satisfying consumer needs AND caring for individual and societal long-term wellbeingpossible conflict between goals? Four P’s of Marketing:  Product-creating value  Place-delivering value  Promotion-communicating value  Price-Capturing value Relationship marketing: goal is to maintain existing customerscustomer satisfaction is key to keeping customers. *What can be marketed?  Products

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Services Experiences People Causes Chapters 2 & 4: Strategic Planning and the Environment

Strategic Planning: the process of creating and maintaining a fit between the organization’s objectives and resources and its evolving market opportunities.  Purpose: set overall goals for business and develop a plan to reach them marketing plan: will structure the company’s planning process  Should include mission, situation analysis, objectives, strategy, and implementation/control procedures.  Purpose: set the company on a specific course in marketing to reach goals. Mission Statement: declares organizations purpose/ why it exists.  Includes: general description of organization, its function, and its objectives.  Example: ‘Inspire and develop the builders of tomorrow’ Our ultimate purpose is to inspire and develop children to think creatively, reason systematically and release their potential to shape their own future - experiencing the endless human possibility. Objective: gives direction for the strategic plan and provides a yardstick for follow-upwhere are we going and how do we know when we get there?  Should be: o Realistic o Measurable o Time specific o Compared to a benchmark  Example: Toyota aims for 15% of the global automobile market by 2010.” Marketing Myopia: when a company views marketing strictly from the standpoint of selling a specific product rather than from the standpoint of fulfilling customer needs.  Example: Railroad industry  railroad business vs transportation business  Example: kodak lost to Sony cameras when digital cameras boomed and kodak didn’t plan for it. SWOT (situation) Analysis:  Internal: resources/assets/capabilities of the company o Strengths-favorable o Weaknesses-unfavorable  External: factors the company does not control o Opportunities-favorable o Threats-unfavorable

Competitive Advantage: advantage over competitors by offering higher value by means of lower prices or better benefits/service that justify higher prices.  Strategies for achieving a competitive advantage: o Cost: offering the same products/services as competitors, but at a lower cost. o Differentiation: deliver a message to the target market that their product is positively different from all other similar products available. o Niche strategy: company selects one segment or target market to market to.  “all eggs in one basket”  When would each be most appropriate? Sustainable competitive advantage: an advantage that can be maintained in the long run. Strategic Opportunity Matrix: used to identify growth opportunities.  Existing products: o Existing customers/markets: market penetration o New customers/markets: market development  New Products o Existing customers/markets: product development o New customers/markets: Diversification Marketing Environment: six environmental factors:  Social/Cultural Factors: o Values: strongly held and enduring beliefs.  Example-environmentalism o Attitudes: position towards specific objects/issues  Example: Fast food is bad o Lifestyles: how we live our lives  Example: active outdoors lifestyle  Demographic Factors: vital statistics describing people like age, gender, race, ethnicity, occupation, and location. o Good but not perfect predictors of buyer behavior  Trends: minorities are growing; population is aging; more single person households.  Economic Factors: how much are consumers willing to spend? o State of Economy (GDP) o Employment levels o Income levels o Purchasing Power  Technology Factors: new technology can o Improve or enable new products o Make products obsolete o Improve the consumer/marketer interaction (social media)  Political/Legal Factors: Enforce and make rules

Food and Drug Administration (FDA): enforces regulations against selling hazardous food and drug products o Consumer Product Safety Commission (CPSC):  Protects consumers around their homes  Can set mandatory safety standards  Can fine companies and ban products o Federal Trade Commission: goal is to prevent unfair methods in competition. o State and Federal Legislation:  Example: child protection act  Example: NYC ban on trans fats.  Competitive Factors: companies need to analyze competitors from the consumer viewpoint o Competitive analysis: should include both direct and indirect competitors (substitutes) o What are each competitor’s strengths, weaknesses, growth rate, and competitive edge? o

CHAPTER 5 & 6: UNDERSTANDING THE BUYER Decision Making Process: shows how we buy Need Recognition: why we buy  Need: imbalance between actual and desired states o Example: I am tired  Want: a particular product or service you think will fill the need. o Example: I want a double shot latte  Hirarchy of needs model: physiologicalsafetysocialesteemself-actualization Information Search:  External Sources: o Marketer sponsored  Ads, websites, sales people o Other sources  Friends, consumer reviews  Internal Sources: things we already know. Evaluation of Alternatives:  Begins with Evoked (consideration) set: group of relevant brands that a possible consumer is favorably familiar with when they consider making a purchase.  Then: different strategies are used for eliminating options o Example: price cutoff  Final choice. Choice Strategies:  Attribute based evaluation: o Consumer identifies important product attributes—how the brand performs on these attributes will determine choice. o Decision Heuristics: example: people’s Brand loyalty, or people who buy the one on sale.

Post-Purchase Behavior:  Satisfied: o Repeat purchases o Positive word-of-mouth  Dissatisfied: o Complaints/returns o Negative word-of-mouth  Not sure: Cognitive Dissonance: conflicting beliefs about a product/service o Consumers will seek information to make up their mind. Involvement:  What affects involvement: o Previous experience o Interest o Perceived risk of negative consequences (financial, social, psychological)  Beliefs: descriptive thought a person has about something. o Not necessarily based on facts o Example: Eco Friendly products are expensive  Attitudes: persons consistent like or dislike about an object o Example: do I like or dislike this company? Selective Distortion: people may change or distort info that’s inconsistent with their beliefs. Selective Retention: we tent to remember what already fits with what we know or our belief system Consumer Buying influence:  Culture and Consumption o Culture: learned set of values, norms, attitudes that guide our behavior and preferences. It changes over time and influences consumption behavior.  Reference Group o Point of comparison for attitudes, beliefs, and behaviors. o Individual can but doesn’t need to be a member of the group. o Can be positive or negative o Membership primary or secondary o Non-Membershipaspirational or non-aspirational.  Opinion Leaders: leaders of reference groups that influence others o Often early adopters of new trends or products o Its challenging to identify opinion leaders o Often celebrities/bloggers take on these roles.  Families and Consumption: o Family—our most important social group.  Socialization process—children learn from observing their parents.

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Decision making roles: initiator, influencer, decision maker, purchaser, and user/consumer.

Consumer vs Business Markets Consumer market:  Everyone buys small amounts  Large number of buyers  Consumers are everywhere  Demand is based on what consumers want and can pay for. Business Markets: follow same process as consumers, but:  Many customers buy large amounts  Small number of buyers  Buyers often geographically concentrated  Demand derived, inelastic, joint, and fluctuating.  More formalized and involve more people Derived Demand: consumer demands product/service provider demand for supplies/materialssupplier sales. Buying Situations:  New buy: organization buys the product for the first time—consuming process  Modified Rebuy: purchaser wants some change in the original product/service  Straight Rebuy: an order is placed based on previous orders—often regulated by long term contracts. Business buying Center: purchase decision is based on:  Initiator  Influencers  Gatekeepers  Decider  Purchaser  Users CHAPTER 8: TARGETING AND REPOSITIONING: Segmentation: separating consumers into groups that differentiate them.  Why? o Consumers have different wants and needs -it’s not possible to satisfy everyone with the same product/service. o Many markets are becoming more competitivemore competitive=more focus on consumer needs

Successful Segmentation:  Responsiveness- consumers in segments must react differently to marketing mix than consumes outside the segment  Identifiability and measurability-can we tell who belongs to the segment and how many they are? (most easily identified by demographic data)  Accessible- segment must be reachable  Substantiality-segments are large enough to serve profitability, what’s “large enough” depends on the product.

Major Segmentation Variables for Consumer Markets:  Demographic: age, gender, income, ethnicity, family life cycle. o Family Life Cycle  Geographic: location, climate, market density. o Wouldn’t market winter jackets to people who live in Florida.  Psychographic: Lifestyles, motive, personality  Usage: e.g. light, medium, and heavy users.  Benefits: what are consumers looking for in a product? o Market based on the benefits sought. o Example: divide cereal market based on what consumers find most important.  Nutrition  Sweetness  Fiber content. o Develop profiles of the benefit segments to make it easier to identify segment members. Targeting Strategies: i. Undifferentiated 1. Marketing the same product the same way to the entire market. ii. Concentrated (niche) 1. Company selects one segment (niche) for its marketing efforts. a. “all eggs in one basket” iii. Multi-segment Company targets two or more segments with a different marketing mix for each. Difference can range from new promotion to entirely new product. a. Pros: i. Satisfy larger share of total market ii. Increased total sales volume compared to concentrated strategy b. Cons: i. More Costly ii. Cannibalization- company’s products may “steal” market share from each other. (Stealing sales from your existing products to go to your new ones) Positioning: statement for formalizing the positioning strategy.

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Example: To [target market/need], [brand] is [concept] that [point of difference]. To busy, mobile professionals who need to always be in the loop, the Blackberry is a Wireless business connectivity solution that gives you an easier, more reliable way to stay connected to data, people, and resources while on the go. Positioning Bases:  Attributes: what the company offers o BMWluxury o Jimmy John’sfast  Price/Quality o Walmartcheap o Tiffany’shigh end, luxury  Emotion o Coca-Colabears-open happy o Disney  Typical Use(s) o Wine/beer o Apparel Perceptual Map: tool to understand consumers’ perceptions of how your brand is positioned on important features relative to competing products.  Based on information about: o What attributes consumers consider important for this product. o Consumers judgements on how your brand, and other brands perform. Repositioning: changing the way a product is perceived is sometimes a good or even necessary approach for targeting new markets and growing sales.  Example: blackberry. How could they differentiate themselves? o Battery life? o Pricing? o Data Safety Features?...