Study Marketing Guide Exam 1 Chapter 1 Production actually making goods or performing services Customer satisfaction the extent to which a firm fulfills a customer's needs, wants, and desires Utility the power to satisfy human needs Form utility when something tangible is produced (ex. a bicycle) Task utility when a task is performed for someone else Time utility having the product available when the customer wants it (provided by marketing) Place utility having the product available where the customer wants it (provided by marketing) Possession utility obtaining a good or service and having the right to use or consume it (provided by marketing) Innovation the development and spread of new ideas, goods, and services Micro-marketing the performance of activities that seek to accomplish and organizations objectives by anticipating customer/ client needs and directing a flow of goods from producer to customer (set of activities, performed by organizations) Key characteristics more than persuasion, begins with needs, builds relationships, profit/non-profit, doesn't go alone, focus of text Macro-marketing a social process that directs and economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society (social process, matches supply with demand) Key characteristics every economy needs it, efficiency, effectiveness, emphasis on whole system, fairness Economies of scale companies produce larger amounts of particular products so that the cost of these products goes down Universal functions of marketing Buying looking for and evaluating goods and services Selling promoting the product Transporting the movement of goods from one place to another Storing holding goods until customers need them Standardization and grading - sorting products according to size and quality Financing provides the necessary cash and credit to produce, transport, store, promote, sell, and buy Risk taking - bearing the uncertainties that are part of the marketing process Market information the collection, analysis, and distribution of all the info needed to plan, carry out, and control marketing activities Intermediary (or middleman) someone who specializes in trade rather than production Facilitators firms that provide one or more of the marketing functions other than buying or selling
e-commerce exchanges between individuals/organizations and activities that facilitate those exchanges based on applications of information technology (ex. internet intermediaries such as Amazon or eBay) Economic system the way an economy organizes to use scarce resources to produces goods and services and distribute them for consumption Planned economic system government planners decide what and how much is to be produced and distributed by whom, when, to whom, and why. (Can work well if the economy is simple and there are adverse conditions) Market-directed economic system the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy (adjusts itself, price is a measure of value, freedom of choice, macro-micro dilemma, limited government role) Simple trade era when families traded or sold their "surplus" output to local middlemen (sell surplus) Production era when a companies focuses on production of a few specific products (increase supply) Sales era- when companies emphasized selling because of increased competition (beat competition) Marketing department era when all marketing activities are brought under the control of one department to improve short-run policy planning and to integrate the firm's activities (coordinate and control) Marketing company era when marketing people developed long-range plans and whole company effort is guided by the marketing concept (long run customer satisfaction) current era. Marketing concept an organization aims all its efforts at satisfying its customers at a profit Takes customers point of view, customers may not dwell on value, where does competition fit, customer value builds relationships Customer value the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits (builds relationships!) Micro-macro dilemma when producers and consumers make free choices it can cause conflicts and difficulties. What is "good" for some firms and consumers may not be good for society as a whole. Social responsibility a firm's obligation to improve its positive effects on society and reduce its negative effects Marketing ethics the moral standards that guide marketing decisions and actions Market Central Market help exchange Tariffs & Quotas control flow Countertrade WTO world trade organization develops rules
Chapter 2 Marketing management process the process of 1) planning marketing activities, 2) directing implementation of the plans, and 3) controlling these plans
Strategic (management) planning the managerial process of developing and maintaining a match between an organization's resources and its market opportunities Marketing strategy specifies a target market and a related marketing mix. The big picture of what a firm wants to do. Target market a similar group of customers to whom a company wishes to appeal Marketing mix the controllable variables the company puts together to satisfy this target group Target marketing marketing a mix is tailored to fit some specific target customers Mass marketing aims at "everyone" with the same marketing mix, assumes that everyone is the same and considers everyone to be a potential customer Product concerned with developing the right "product" for the target market Place concerned with all the decisions involved in getting the "right" product to the target markets Place. (making sure it's available where its wanted) Promotion concerned with telling the target market about the "right" product Price must consider the kind of competition in the target market and the cost of the whole marketing mix o Price setting pricing objectives, price flexibility, price changes over the life cycle, discounts and allowances, geographic pricing terms, legal environment, cost and demand, price sensitivity, competition and substitutes, price of other products in the line Channel of distribution any series of firms that participate in the flow of products from producer to final user Personal selling involves direct spoken communication between sellers and potential customers Mass selling communicating with large numbers of customers at the same time. Advertising any paid form of non-personal presentation of idea, goods, or services by an identified sponsor Publicity any unpaid form of non-personal presentation of ideas, goods, or services Sales promotion the promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase (ex. coupons, samples, contests, etc...) Marketing plan a written statement of a marketing strategy and the time-related details for carrying it out 1. what marketing mix will be offered, to whom, and for how long 2. what company resources will be needed and at what rate 3. what results are expected Implementation putting marketing plans into operation Operational decisions short-run decisions to help implement strategies Marketing program blends all of the firm's marketing plans into one "big" plan (an integrated part of the whole-company strategic plan) Breakthrough opportunities opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time Competitive advantage a firm has a marketing mix that the target market sees as better than a competitor's mix
Differentiation the marketing mix is distinct from and better than what is available from a competitor S.W.O.T analysis identifies and lists the firm's strengths and weaknesses and its opportunities and treats (s-strengths, w-weaknesses, o-opportunities, t-threats) Market penetration trying to increase sales of a firm's present products in its present markets Market development trying to increase sales by selling present products in new markets Product development offering new or improved products for present markets Diversification moving into totally different lines of business Present Products Market Penetration Market Development New Products Product Development Diversification
Present Markets New Markets
Chapter 3 Market a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services Generic market a market with broadly similar needs and sellers offering various, often diverse, ways of satisfying those needs (looks at markets broadly and from a customer's viewpoint) Product-market a market with very similar needs and sellers offering various close substitute ways of satisfying those needs Market segmentation a 2 step process 1. naming broad product-markets 2. segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes Segmenting clustering people with similar needs into a market segment Market segment a homogeneous (similar within) group of customers who will respond to a marketing mix in a similar way Homogeneous (similar) customers should be as similar as possible Heterogeneous (different) customers should be as different as possible Substantial segment should be big enough to be profitable Operational should be useful for identifying customers and deciding on marketing mix variables Single target market approach segmenting the market and picking one of the homogeneous segments as the firm's target market Multiple target market approach segmenting the market and choosing two or more segments, then treating each as a separate target market needing a different marketing mix Combiners try to increase the size of their target markets by combing two or more segments Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment (usually adjust their marketing mixes for each target market)
Qualifying dimensions those relevant to including a customer type in a product-market Determining dimensions those that actually affect the customer's purchase of a specific product or brand in a product-market Clustering techniques try to find similar patterns within sets of date (clustering groups of customers who are similar on their segmenting dimensions into homogeneous segments) Customer relationship management (CRM) the seller fine-tunes the marketing effort with information for a detailed customer database (ex. customers past purchases) Positioning how customers think about proposed or present brands in a market