Study guide 1 - Summary Principles Of Marketing PDF

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MKT 3013 Principles of Marketing Prof. Pravin Nath Study Guide for Exam 1 [Chpts. 1, 2, 3, 5 and 6] What is marketing? The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large What is the role of Marketing? What are needs and wants? How does marketing discover and satisfy customer needs and/or wants? What is a market? What is a target market? Market—consists of people with both the desire and ability to buy a specific product Target market—one or more specific groups of potential customers toward which an organization directs its marketing program What are the 4Ps (marketing mix)? Product, Price, Promotion, and Place What are the conditions necessary for exchange to take place? 1. Two or more social units are voluntarily involved 2. Each must have wants to be satisfied 3. Each party must have something of value to exchange 4. The parties must believe they will benefit from the exchange What are the types of utilities provided to customers? Form utility— Possession Utility— Time Utility— Place Utility— What are the three types of customer value? Best Price Best Product Best Service What is a marketing program? A plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers How and why did marketing became important? What were the eras in which it was not important?

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What is the marketing concept? What is market orientation? What is customer relationship marketing? Marketing Concept—the idea that an organization should (1) strive to satisfy the needs of customers (2) while also trying to achieve the organization’s goals Marketing Orientation—focuses its efforts on (1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and (3) using it to create customer value What are the levels of organization and strategy? The corporate level is the level in an organization where top management directs overall strategy for the entire organization A business unit is an organization that markets a set of related products to a clearly defined group of customers The functional level is where groups of specialists actually create value for the organization What is the role of a Chief Marketing Officer? What are an organization’s business, mission, culture, and goals and objectives, and why are they important? Organizations culture is their set of values, ideas, and attitudes that is learned and shared among the members of an organization What are the two important questions that firms must ask of themselves when setting strategic directions? 1. Where are we now? (Customers, Competencies Competitive Advantage, Competitors) 2. Where do we want to go? (Growth Strategies) What is a competitive advantage? What is the Boston Consulting Grid Matrix? What are cash cows, question marks, dogs and stars? What are their implications for strategic planning? What are the strategic alternatives, market penetration, market development, product development and diversification? Explain the components of a situation analysis (SWOT) Strengths—Build on it Weaknesses—Correct them Opportunities—Exploit it Threats—Avoid it What is environmental scanning? Why is it important? The process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends What are the various elements of the external environment?

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What are the aspects of social environment that impact marketing? What makes up demographics? What are the generational cohorts? What is cross-cultural analysis? The social forces of the environment include the demographics characteristics of the population and its values Demographics describes a population according to select characteristics such as age, gender, ethnicity, income and occupation Culture—changing values, tend to change with age Most important for all age groups: Protecting family, honesty #3 for under 20 years old=friendship, for 20-29 = self esteem, for 3039=health and fitness How does the economic environment affect marketers? What are the three types of household income? The economy pertains to the income, expenditures, and resources that affect the cost of governing a country, carrying out a business and running a household. Gross Income—the total amount of money made in one year by a person, household or family unit. Disposable income—the money a consumer has left after paying taxes to use for food, shelter, clothing, and transportation. Discretionary income—the money that remains after paying for taxes and necessities 17% of income spent on food and clothing 33% on housing 36% on transportation, health care, and insurance 14% is a consumer’s discretionary income How can changes in the technological environment affect marketers? Competition—the alternative firms that could provide a product to satisfy a specific market’s need What are directly and indirectly competing products and services? How do all consumer purchases compete with each other? Directly Competitive Products—the most direct form of competition; products are similar (fast food chains) Indirectly Competitive Products—a less direct form of competition; involves products that can be substituted (business documents can be sent via FedEx, Fax, Email) All Consumer Purchases—the least direct form of competition; share of wallet (a soft drink, candy bars, chewing gum) What types of competition does a firm face? How does it affect marketers?  Potential entrants  Buyers  Suppliers  Substitutes  Industry Competitors

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Government establishes the operating rules for businesses. What are the general categories of regulation and how do they impact on marketing? What are some of the key laws in the various categories? Regulation—restrictions state and federal laws place on business with regard to the conduct of its activities Regulatory Forces— Protecting Competition Product-Related Regulation Company Protection Consumer Protection Pricing-Related Legislation Distribution-Related Legislation Advertising-and promotion related legislation Control through self regulation Protecting Competition Sherman Antitrust Act Clayton Act Robinson-Patman Act 6 publishers accused of favoring 3 large retailors price discounts that disfavored independent stores Cost benefit ratio of serving a large chain What are the steps in the consumer purchase decision process? Decision Process: Stage 1 Problem Recognition: Perceiving a need Perceiving a difference between a person’s ideal and actual situations big enough to trigger a decision, can be triggered, can be triggered by ads or salespeople Decision Process: Stage 2 Information Search: Seeking Value Internal Search External Search Personal resources—relatives, friends. Public resources—consumer reports Decision Process: Stage 3 Alternative Evaluation: Assessing Value Evaluative Criteria Decision Process: Stage 4 Purchase Decision: Buying Value Decision Process: Stage 5 Cognitive Dissonance

What is problem or need recognition and how does it occur? What is the difference between internal and external information search? What are evaluative criteria and what is a consideration set? How is elimination (of alternatives) by aspects different from the Fishbein multiattribute model of alternative evaluation?

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What is cognitive dissonance? How can it be reduced? What are the components of the hierarchy of effects (AIDA) model of consumer purchase decision making? What is involvement and what are the factors that affect involvement level? What is routine, limited and extensive problem solving? What is Maslow’s hierarchy of needs? What is its relevance to marketing? How does self-concept impact marketing? What are selective exposure, selective comprehension, and selective retention? What is perceived risk and how do firms address it? How does learning have an impact on marketing? What is culture? What are customs? What are reference groups and what affect do they have on consumer behavior? What are beliefs and attitudes and their importance to marketing? How can marketing change attitudes? What does VALS stand for? How do opinion leaders and word-of-mouth influence our decision processes? What are the types of reference groups of consumers and why is it important for marketing to be aware of them? How does the family impact consumer behavior? What is the family life cycle? What roles do family members play in purchase decision processes? What are some of the situational influences on purchase decisions? How does business marketing differ from consumer marketing? What are the major categories of organizational buyers? What is NAICS? How is it useful for marketers?

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What is derived demand? What are the steps in organizational buying? What is the make-buy decision? What is a bidder’s list? What is a buying center? What are the roles in the buying center? What are the some of the important evaluative criteria in business marketing? What is the difference between a new buy, a modified rebuy, and a straight rebuy? What are some of the characteristics of e-marketplaces?

Generally, there will be three types of questions on the exam: 1. Definition: Answering the question requires recall of a simple definition, text statement, lecture statement, or other piece of factual information presented (note there is no need to memorize word for word definitions – see e.g. of definition question below) 2. Conceptual: Answering the question requires some understanding of concepts on the part of the student. Comprehension questions typically ask the student to relate different concepts and draw conclusions. 3. Application: Answering the question calls for students to apply their knowledge to a marketing situation or to analyze and interpret data.

Sample definitional, conceptual, and application, questions (in that order): 1. A strategic business unit refers to an organization that: a. directs overall strategy for the organization. b. markets a set of related products to a clearly defined group of customers. c. always develops new products d. also has a comparable non-business unit. e. is usually non-profit. Answer: b Rationale: Key term definition—Strategic Business Unit (SBU)

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2. To serve both buyers and sellers, the marketing department seeks to discover the needs and wants of prospective customers and to: a. b. c. d. e.

change them take advantage of them satisfy them manipulate them define real and artificial buying situations

Answer: c Rationale: The marketing department works closely with a network of other departments and employees to help provide the customer-satisfying products required for the organization to survive and prosper

3. Nascar tries to grow by expanding into foreign markets. This strategy is called : a. b. c. d. e.

Market development Diversification Product development Market penetration None of the others

Answer: a Rationale: Product-Market matrix

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