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202 terms

Marketing 3000- exam 1

Principles of marketing. Chapters 1,2,3,5,7
STUDY
PLAY
Customer satisfaction
Extent to which a firm fulfills a customer's needs, desires, and expectations.
Marketing
The performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of needs-satisfying goods and services from producer to consumer or client.
What is the aim of marketing?
To identify a customer's needs and meet those needs so well that the product almost sells itself.
Where should marketing begin?
Trying to anticipate the needs of potential customers.
Pure subsistence economy
An economy where each family unit produces everything it consumes. Marketing is not needed.
Macro Marketing
A social process that directs an 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.
What is the emphasis of macro marketing?
THe emphasis is on how the whole marketing system works. Includes looking at how marketing effects society and vice versa.
What is the role of a macro marketing system?
To effectively match the heterogenous supply and demand and at the same time accomplish society's objectives.
Economies of scale
As a company produces larger numbers of a particular product, the cost of each product goes down.
What are the universal functions of marketing?
Buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information.
Buying function of marketing
Looking for and evaluating goods and services
Selling function of marketing
Promoting the product ( the most visible function)
Transporting function of marketing
Movement of goods from one place to another
Storing function of marketing
Holding goods till customers need them.
Standardization and grading function of marketing
Sorting products according to size and quality. ( Reduces the need for inspection and sampling)
Financing function of marketing
Provides necessary cash and credit to produce, transport, store, promote, sell, and buy products
Risk taking function of marketing
Bearing the uncertainties that are a part of the marketing process.
Market info function of marketing
Involves collection, analysis, and distribution of all info needed to plan, carry out, and control marketing activities whether in the firm's own neighborhood or overseas
What benefit do intermediaries or middlemen bring to the macromarketing system
Make it more efficient and effective
Collaborators
Firms that facilitate or provide one or more of the marketing functions other than buying or selling (advertising agencies, mktg research firms, etc)
E-commerce
Exchanges between individuals or organizations- and activities that facilitate these exchanges- based on applications of info technology
Economic system
The way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in society.
What are the 2 basic kinds of economic systems?
Command economies and market directed economies. Most economies are a mix of the two
command economy
Government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. "planned economy"
Market directed economy
The individual decisions of the many producers and consumers make the macro-level decisions for the whole economy
Simple trade era
A time when families traded or sold their surplus output to local middlemen, who sold the goods to consumers or distant middlemen
Production era
A time when companies focused on specific products- perhaps because few of these products are available in the market
Sales era
A time when a company emphasizes selling because of increased competition
Marketing department era
A time when all marketing activities are brought under control of one department to improve short-run policy planning and try to integrate the firm's activities.
Marketing company era
A time when, in addition to short-run marketing planning, marketing people develop long-range plans- sometimes for more years ahead- and the whole company effort is guided by the marketing concept.
Production orientation
Making whatever products are easy to produce then trying to sell them.
Marketing orientation
Trying to carry out the marketing concept. Offers customers what they need
Customer value
The difference between the benefits a customer sees from a market offering and the costs obtaining those benefits.
Micro-macro dilemma
Producers and consumers making free choices 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 it's positive effects on society and remove it's negative ones.
Marketing ethics
The moral standards that guide marketing decisions and actions
Marketing management process
Planning marketing activities, directing the implementation of the plans, controlling these plans. ( continuous)
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.
Target market
A fairly homogeneous ( 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. Usually includes some product, offered at a price, with some promotion to tell potential customers about the product, and a way to reach the customer's place.
Target marketing
A marketing mix is tailored to fit some specific target customers.
Mass marketing
The typical production oriented approach- vaguely aims at everyone with the same marketing mix, assuming everyone is the same and is a potential customer.
4 P's of marketing
Product, Place, Promotion, Price
4 P's- Product
Your good or service should satisfy some customer need
4 P's- Place
Concerned with all the decisions involved in getting the right product to the target place.
Channel of distribution
What a product reaches customers through. Any series of firms or individuals that participate in the flow of products from producer to final user or consumer
4 P's- Promotion
Concerned with telling the target market or others in the channel of distribution about the right product. Includes personal selling, mass selling, and sales promotion
Personal selling
Involves direct, spoken communication between sellers and potential customers
Customer service
Personal communication between seller and customer who wants seller to resolve a problem with purchase- often key to building repeat business.
Mass selling
Communicating with large numbers of customers at the same time.
Advertising
Main form of mass selling- Any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor.
Publicity
Any unpaid form of nonpersonal presentation of ideas, goods, or services
Sales promotion
Those promotion activities- other than advertising, publicity, and personal selling- that stimulate interest, trial, or purchase by final customers or others in the channel.
4 P's- Price
Price setting must consider the kind of competition in the target market and the cost of the whole marketing mix.
Marketing plan
A written statement of a marketing strategy and the time related details for carrying out the strategy
What should a marketing plan spell out, in detail?
(1) What marketing mix will be offered to whom ( the target market), and for how long. (2) What company resources ( shown as costs) will be needed at what rate (month by month?). (3) What results are expected ( sales and profits perhaps monthly or quarterly, customer satisfaction levels, and the like). The plan should also include some control variables.
After the marketing plan is developed, what should the marketing manager be concerned with?
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
Customer equity
The expected earnings stream ( profitability) of a firm's current and prospective customers over some period of time.
What is the best way to increase customer equity?
To find cost effective ways to increase earnings from current customers while bringing profitable new customers into the fold.
Breakthrough opportunities
Opportunities that help innovators develop hard to copy marketing strategies that will be 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. Can be based on any one element of the marketing mix
What can make differentiation more obvious to target customers?
When there is a consistent theme integrated across the 4 P's
S.W.O.T. Analysis
Identifies and lists the firms strengths and weaknesses and its opportunities and threats. Helps take advantage of opportunities and strengths while avoiding weaknesses and threats.
Market penetration
Trying to increase sales of a firm's present products in present markets, probably through a more impressive marketing mix.( Making it easier to repeat online orders or cross selling, like having Adobe photoshop promote Adobe reader)
Market development
Trying to increase sales by selling present products in new markets, may involve searching for new uses for product. ( McDonalds is in airports, zoos, amusement parks, etc)
Product development
Offering new and improved products for present markets. By knowing prsent market's needs a firm may see new ways to satisfy customers. ( Heinz' purple ketchup appeals to kids)
Diversification
Moving into totally different lines of business- perhaps entirely unfamiliar products, markets, or even levels in the production marketing system. Involves the biggest risk.
What might having international customers improve?
Economies of scale, lower costs and prices may give a competitive advantage both in home markets and abroad.
What might lead a firm to international marketing?
Unfavorable trends in marketing environment at home or favorable trends in other countries.
Environmental analysis ( monitoring or scanning)
An ongoing process of identifying external forces, analyzing them, and predicting their potential impact. Results often form the basis for strategic, long-term planning.
What forces are interrelated and may have a profound effect on marketing programs and future strategies?
Demographic, economic, competitive, sociocultural, political, and technological forces.
5 steps of strategic planning
Situation analysis, developing market objectives, determining product position, selecting target markets, and designing a strategic marketing mix
Conducting a situation analysis:
Analyzing current marketing programs to see what changes are needed. Highly dependent on info collected and anazlyzed in the external environmental scanning process. Major environmental changes often trigger the need for a more formal situation analysis.
Developing market objectives
Marketing objectives are developed that are consistent with larger strategic goals and the findings from the situation analysis. Objectives need to be specific, measurable, and attainable.
Determining product position
Products image in relation to competing products, based on differential advantage
Selecting target markets
Requires an assessment of potential demand from potential consumer segments. The segment must be large enough to generate enough demand to be profitable.
Designing a strategic marketing mix
A marketing mix must be designed for each target market.
Economic buyers
People who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money
Economic buyer theory says that...
Consumers decide what to buy based on economic needs( concerned with making the most of the consumer's time and money) as they see it.
Economic needs include:
Economy of purchase or use, convenience, efficiency of operation and use, dependability in use, improvement of earnings.
Discretionary income
What is left of a family's money after taxes and necessitites. What is used to purchase luxury items.
What affects buying behavior?
A number of psychological variables, social influences, and the purchase situation itself combine with economic needs.
Needs
Basic forces that motivate a person to do something.
Wants
"Needs" that are learned during a person's life. Needs are more basic than wants
Drive
Strong internal stimulus that encourages action to reduce a need. A product purchase results from a drive to satisfy some need.
4 level hierarchy of consumer behavior:
pysiological needs ( biological needs), safety ( protection and well being), Social needs ( love, friendship, status, esteem), personal needs ( individual's need for personal satisfaction- unrelated to what others think or do)
What needs are targeted by marketing efforts in advanced economies?
Higher level needs
Perception
How we gather and interpret info from the world around us
Selective exposure
Our eyes and minds seek out and notice only info that interests us
Selective perception
We screen out or modify ideas, messages, and info that conflict with previously learned attitudes and beliefs.
Selective retention
We remember only what we want to remember.
Learning
A change in a person's thought processes caused by prior experiences. Almost all consumer behavior is learned
Steps in the learning process
Cues ( products, signs, ads and other stimuli in environment), response ( An effort to satisfy a drive), Reinforcement ( occurs when the response is followed by satisfaction-reduction in drive- strengthens the relationship between the cue and the response.)
What leads to habit?
Repeated reinforcement
Attitude
A person's point of view toward something. Can affect selective processes, learning, and buying decisions
What has more action implication: Attitudes or beliefs?
Attitudes because they generally involve liking or disliking. It's possible to have a belief about something but not like or dislike it
Beliefs
A person's opinion about something
Attitudes and beliefs sometimes combine to form an expectation. What is an expectation?
An outcome or event that one anticipates. Consumer expectations often focus on the benefits or value that the consumer expects from a firm's marketing mix
Lifestyle analysis
Used because marketing managers have not found a way to use personality in marketing strategy planning. An analysis of a person's day-to-day pattern of living as expressed in the person's activities, interests, and opinions (AIO's)
What do young couples, particularly those without children, typically spend on?
Durable goods- Automobiles, furniture, etc
When young couples have kids and as they get older what do the families tend to spend their money on?
More soft goods and services- education, medical, and personal care
Empty nesters:
People who's children are grown and who are now able to spend their money in other ways. Often an attractive market because they have more money to spend on expensive things they couldn't afford before.
What are social class groupings based on in the U.S.
A person's occupation, education, and type and location of housing
Reference group
The people to whom an individual looks when forming attitudes about a particular topic. Reference group influence is strongest for products that others can "see" and which relate to status in a group.
Opinion leader
A person who influences others. May vary from subject to subject but sometimesa leader in one area earns respect in another.
Why do more marketers pay attention to ethnic groups now?
The number of ethnic consumers is growing at a much faster rate than the overall society.
3 levels of problem solving
Extensive problem solving, limited problem solving, routinized response behavior
Extensive problem solving
When consumers put much effort into deciding how to satisfy a need- as is likely for a completely new purchase or to satisfy an important need
Limited problem solving
Used by consumers when some effort is required in deciding the best way to satisfy a need. Typical when a consumer has some previous experience with a product but isn't quite sure which choice to make at the moment
Routinized response behavior
When a consumer regularly selects a particular way of satisfying a need when it occurs. Typical when a consumer has a considerable experience in how to meet a specific need and requires no new info. Also typical for low involvement purchases.
Dissonance
A feeling of uncertainty about whether the correct decision was made. The second thoughts you experience after buying.
Adoption process
The steps individuals go though on the way to accepting or rejecting a new idea. Similar to decision making process but learning plays a clearer role and promotion's contribution to a marketing mix is more visible.
Steps in adoption process
Awareness, interest, evaluation, trial, decision, confirmation
Adoption process- Awareness
The potential customer comes to know about the product but lacks details. May not know how it works or what it will do
Adoption process- Interest
If the consumer becomes interested, he will gather general info and facts about the product.
Adoption process- Evaluation
A consumer begins to give the product a mental trial, applying it to his or her personal situation
Adoption process- Trial
The consumer may buy the product to experiment with it in use. A product that is too expensive to try out or isn't available for trial may never be adopted
Adoption process- Decision
The consumer either decides on adoption or rejection. A satisfactory evaluation and trial may lead to adoption of the product and regular use. Reinforcement leads to adoption.
Adoption process- Confirmation
The adopter continues to re-think the decision and searches for support for the decision- that is further reinforcement.
Why is it important to watch out for oversimplifying stereotypes?
Consumers in a foreign culture may be bound by some similar cultural forces, but that doesn't mean they are all the same.
What are the two most common external stimuli to influence a purchase?
Having a problem with a product and the creation of new products
What is the most frequently used marketing mix stimuli?
Promotion- particularly advertising
Performance-expectations=
Level of satisfaction
Market
A group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods and services- ways of satisfying those needs
What do production oriented managers describe their markets based on?
Their prdouct
Two basic types of markets
Generic and product
Generic market
A market with broadly similar needs- and sellers offering various, often diverse, ways of satisfying those needs
Product market
A market with very similar needs and sellers offering various close substitute ways of satisfying those needs.
What does too narrow a market definition do?
Limits a firm's opportunitites
What does too broad of a market definition do?
Makes the company's efforts and resources seem insignificant.
A complete product-market definition includes a four point description:
What: Product type
To meet what: Customer ( user) needs
For whom: Customer types
Where: Geographic area
What does a generic market definition emphasize?
Any product type that satisfies the customer's needs can compete in a generic market
Market segmentation
A two step process of (1) naming broad product markets and (2) segmenting these broad product markets in order to select target markets and develop suitable marketing mixes
What is the first step in effective market segmentation?
Naming a broad product market of interest to the firm. Marketers must disaggregate all possible needs into some generic markets and broad product markets in which the firm may be able to operate profitably.
What generic market and what broad product market would a car manufacturer focus on?
" transporting people in the world"
"cars, trucks, and utility vehicles for transporting people in the world"
Segmenting
Clustering people with similar needs into market segments
Market segment
A (relatively) homogeneous group of customers who will respond to a marketing mix in a similar way
Ideally "good" market segments meet the following criteria:
homogeneous within- The customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions.
Heterogeneous between- The customers in different segments should beas different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions
Substantial- The segment should be big enough to be profitable
Operational- The segmenting dimensions should be useful for identifying customers and deciding on marketing mix variables.
3 basic ways to develop market oriented strategies in a broad product market
Single target market approach, multiple target market approach, and Combined target market approach.
Single target market approach
Segmenting the market and picking on of the homogeneous segments as the 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.
Combined target market approach
Combining two or more submarkets into one larger target market as a basis for first strategy
Segmenters
People who use either a single or a multiple target market approach
Combiners
People who use a combined target market approach. Try to increase the size of their target markets by combining two or more segments.
What benefits do segmenters believe their style gives them?
They believe that aiming at one or some of these smaller markets makes it possible to provide superior value and satisfy better.
What approach a firm should use depends on what?
Their resources, the nature of competition, and most importantly the similarity of customer needs, attitudes, and buying behavior.
Qualifying dimensions
Those relevant to including a customer type in a product market
Determining dimensions
Those that effect the customer's purchase of a specific product or brand in a product market.
How specific the determining dimensions are depend on what?
Whether you are concerned with a general product type or a specific brand. The more specific you want to be, the more particular the determining dimensions may be.
Clustering techniques
Try to find similar patterns within sets of data. Groups customers who are similar on their segmenting dimensions into homogeneous segments. The computer searches all the data for homogeneous groups of people. When it finds them, marketers study the dimensions of the people in teh groups to see why the computer clustered them together.
Customer Relationship Management (CRM)
The seller fine tunes the marketing effort with info from a detailed customer database. Usually includes data on customer's past purchases as well as other segmenting info
Why might firms that operate over the internet have a special advantage with database-focused approaches?
They are able to communicate with customers via website or email, which means that the whole effort is not only targeted but very inexpensive.
What is the reason for focusing on a specific target market by using marketing approaches or tools such as cluster analysis?
So that you can find tune the whole marketing mix to provide some group of customers with superior value. By differentiating the marketing mix to do a better job meeting customer's needs, the firm builds a competitive advantage.
Positioning
How customers think about proposed or present brands in a market. A marketing manager needs a realistic view of how customers think about offerings in the market.
What are positioning maps based on?
Customer's perceptions- The actual characteristics of the products might be different.
positioning analysis may lead a firm to combining rather than segmenting if....
managers think they can make several general appeals to different parts of a combined market.
Why is positioning analysis a product oriented approach?
Positioning analysis usually focuses on specific product features and brands that are close competitors in the product market
Marketing research
Procedures that develop and analyze new info about a market. May involve use of questionnaires, interviews with customers, experiments, and many other approaches
Marketing Information System (MIS)
An organized way of continually gathering, accessing, and analyzing info that marketing managers need to make on going decisions. Used because most marketing managers have some info needs that would take too long or cost too much to address with one at a time marketing research products.
Database Warehouse
A place where databases are stored so that they are available when needed. An MIS system organizes incoming info into a database warehouse.
Decision Support System (DSS)
A computer program that makes it easy for a marketing manager to get and use info as he is making decisions. Usually involves some sort of search engine.
What does a DSS help with when a search is focused on numerical data?
Typically helps change raw data- like product sales for the previous day- into useful info
Marketing dashboard
Like the speedometer and fuel gauge on a car, displays up to the minute marketing data in an easy to read format.
Marketing model
A statement of relationships among marketing variables. The manager can look at the sales and costs expected with different types of promotion and select the marketing mix that is best for the target market.
What helps managers understand what is happening in the market?
Detailed sales data
Sales Analysis
A detailed breakdown of a company's sales records. A sales manager might compare sales data for different salespeople, products, types of customers, or channels of distribution.
Who's job is it to ask for the right info in the right for the problems that need solving.
The manager, not the MIS or specialist
Scientific method
A decision making approach that focuses on being objective and orderly in testing ideas before accepting them. Instead of assuming their intuition is correct, managers develop hypotheses.
hypotheses
educated guesses about the relationships between things or about what will happen in the future.
Marketing research process: A 5 step approach of the scientific method:
Defining the problem
Analyzing the situation
Getting problem specific data
Interpreting the data
Solving the problem
What is often the most difficult step of the marketing research process?
Defining the problem. It's important for the objectives of the research to be clearly defined.
What is a good way to define the problem in the marketing research process?
Develop a list of research questions that includes all possible problem areas.
What is useful when the marketing manager believes the real problem has begun to surface during the marketing research process?
A situation analysis
Situation analysis
An informal study of what info is already available in a problem area. Can help define the problem and specify what additional info, if any, is needed. Usually involves informal talks with informed people.
Secondary data
Can be found by a situation analysis, info that has been collected or published already
primary data
Info specifically collected to solve a current problem
Research proposal
A plan that specifies what info will be obtained and how- to be sure no misunderstandings occur later. May include info about costs, what data will be collected, how it will be collected, who will be analyzing it and how, and how long the process will take.
What should be done after a situation analysis?
Plan a formal research project to gather primary data.
In most primary data collection, what is the researcher trying to learn?
What customers think about some topic or how they behave under some conditions.
What are the two basic methods for obtaining info about customers?
Questioning and observing
What kinds of research can questioning range from?
Qualitative to quantitative research
Qualitative research
Seeks in-depth, open-ended responses, not yes or no answers. The real advantage to this approach is depth.
What is the most widely used form of qualitative questioning in marketing research?
Focus group interview, which involves interviewing 6-10 people in an informal group setting
Quantitative research
Seeks structured responses that can be summarized in numbers, like percentages, averages, or other stats.
What is the biggest problem with questionnaires?
Many people don't complete them and a low response rate may not be representative.
mail and online surveys are useful because they are
common and convenient
telephone surveys are useful because they are
fast and effective
Mall intercept interview
To reduce the costs of locating consumer respondents, interviews are done at the store or a shopping mall
Observing
As a method of collecting data, focuses on a well defined problem. Researchers try to see or record what the subject does naturally, not trying to influence the subject's behavior.
What are some forms of observing?
Secret shoppers, computerized scanners, consumer panels, etc.
Consumer panel
A group of consumers who provide info on a continuing basis. Whenever a panel member shops for groceries, he gives an ID card to the clerk who scans the number. Then the scanner records every purchase.
Experimental method
Researchers compare the responses of two ( or more) groups that are similar except on characteristics being tested. They want to learn if a specific characteristic, which varies among groups, causes differences in some response among groups.
What type of research usually involves statistics?
Quantitative research
What are some ways of analyzing the data collected?
Statistical packages, cross tabulation,
Statistical packages
Easy to use computer programs that analyze data
Cross tabulation
One of hte most frequently used approaches for analyzing data and interpreting market research data. Shows the relationship of answers to two different questions.
Validity
Concerns the extent to which data measures what it is intended to measure.
What should the manager be able to do when the research process is finished?
Apply the findings in marketing strategy planning- The choice of a target market or the mix of the 4 P's