Marketing 351 Sam Cousley Test 1
Terms in this set (84)
1. Visual defect in which distant objects appear blurred because their images are focused in front of the retina rather than on it; nearsightedness. Also called "short sight"
2) Lack of discernment or long range perspective in thinking or planning.
Marketing Myopia Theme
The vision of most organizations is too constricted by a narrow understanding of what business they are in.
Shadow of Obsolescence
It is impossible to mention a single major industry that did not grow at one time qualify for the magic appellation of "growth industry"
The failure is at the top. Executives responsible for it are those who deal with broad aims and policies.
1) "The error is to define an industry or a product or a cluster of know-so narrowly as to guarantee its premature decline"
2) "Time and time again, successful company's and industry's assumed strength lay in the apparently unchallenged superiority of its product."
3) "There appears to be no effective substitute for the superior product."
4) "It was itself a runaway substitute for the product it so triumphantly replaced."
5) "Yet one after another of these celebrated industries has come under a shadow."
- There is no such thing as a growth industry.
- There are only companies organized and operated to create and capitalize on growth opportunities.
- Industries that assume themselves to be riding some automatic growth escalator invariably descend into stagnation.
Growth is assured by an expanding and more affluent population.
The Idea of Indispensability
There is no substitute for the product. Automatic wishful thinking. Denial of the reality that there could be a substitute for your product.
Too much faith in declining costs with growth. Results in pressure to sell what is produced.
Dangers of R&D
Focus too much on products instead of markets. The company focuses on making products rather than satisfying customer needs.
The Beginning and End
The view that an industry is a customer satisfying process, not a goods-producing process, is vital for all top managers to understand.
No organization can achieve greatness without a vigorous leader who is driven onward by a strong will to succeed.
END MARKETING MYOPIA
END MARKETING MYOPIA
The Better Mousetrap
"Build a better mousetrap and the world will beat a path to your door"
- If you come up with a great product idea, you will be successful without having to try very hard.
Why is The Better Mousetrap bad Marketing Advice
-Definition of better
-Effort of "Beating the path"
-It's easy to get caught up in the latest technology.
-Value=Customer's perceived benefits - Cost.
Marketing Myopia and the Better Mousetrap
-Don't focus on the needs of the firm, focus on the needs of the market.
-The mousetrap fallacy is the error of thinking that your "superior" product will be in high demand.
-Product oriented, not market (or customer) oriented.
The process of creating, distributing, promoting, and pricing products to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment.
Marketing Focuses on Customers
-Customers are the focal point of all marketing activities,
-Both marketers and customers must benefit from a sale.
Specific group of customers that a company focuses on. We may know a company's strategy, but we can speculate based on visible marketing activities. (Name, Advertising, etc.)
Includes; Product, Price, Promotion, and Distribution.
A physical entity that you can touch. Sunglasses, jeans, dial soap.
The application of human (or mechanical) efforts to people or objects to provide intangible benefits to consumers. Air travel, education, haircut, banking, medical care, automobile repair.
Concepts, philosophies, images, and issues. Marriage counselors give ideas to help improve relationships. Includes political parties, churches and schools. Also includes researching consumer needs and designing a product that profitably satisfies needs.
-Decide how to make products available at the right time and in the right place.
-Keep total inventory (carrying), transportation and storage systems.
-Internet has dramatically influenced distribution. Make products available almost anywhere in the world.
-Inform people about the organization and its products.
-Advertising, personal selling, sales promotion, publicity.
-Internet is widely used.
-Educate about product features.
-Create Brand Image.
-Sustain interest in established products.
-Major part of the concept of "Value".
-Includes establishing pricing objectives and specific prices.
-Often used as a competitive tool.
Has direct impact on sales revenue and profit.
Marketing Creates Value
Value= Customers Perceived Benefits- Cost
-Cost includes things like price, time, effort, risk, and stress.
-Value is influenced by both benefits and cost.
-Fast delivery, technical advice, retail atmosphere, ease of navigating website, social status, prestige, and convenient location.
-An important part of marketing is understanding the target markets desired benefits.
Marketing Builds relationships
Marketing is used to facilitate exchanges (the transfer or products in return for something of value). Both parties expect to benefit.
How is Value created?
By building shareholder relationships EX:
Competitive, economic, political, legal, regulatory, technological, and sociocultural forces surround the customer and affects the marketing mix. Can change quickly and dramatically.
-An organization that should try to provide products that satisfy customers needs through a coordinated set of activities that also allows the organization to achieve its goals.
-Customer satisfaction is the major focus.
Marketing orientation implements the marketing concept.
Implementing the Marketing Concept
-This is not easy, and not all companies do a good job with it.
-Develop information system to discover customers real wants.
-Use the information to create satisfying products.
-Without a good info system, you cannot get by using the marketing concept.
-Coordinate all activities.
Customer Relationship Management
-Goal is to achieve full profit potential of each customer relationship.
-Based on information about your customers.
-Relationship profit can be increased by finding new customers, make existing customers more profitable, extending the duration of customer relationships.
This deals with ways to achieve "long-term, mutually beneficial arrangements in which both the buyer and seller focus on value enhancement through the creation of more satisfying exchanges.
Customer Lifetime Value
-The net present value (profit or loss) for the future with a customer.
-Focus on the most promising and profitable customers.
-80/20 rule is at work here.
-There are things you can do to lengthen the customer relationship but it normally costs the company to accomplish this. Part of the analysis is to make sure it makes sense financially.
The Importance of Marketing
-A lot of money is invested in marketing (half of what you spend)
-Use by all organizations (for profit and not for profit)
-Important to the economy (provides products, profits, jobs)
-Global economy (important if a company wants to grow)
-Career prospects (25 to 33% of civilian workers in the U.S.)
END CHAPTER 1
The Strategic Planning Process
This process develops its:
-Overall goals it wants to reach
-Departmental objectives, including marketing
-Departmental strategies, including marketing.
A long-term view or vision of what the organization wants to become.
Starts at the top and moves down the business unit and marketing levels.
How to use resources in marketing, production, finance, research, and development.
A strategic business unit is a division, product line, or other profit center within the parent company.
Strategic Business Units
-Business within a business
-Each SBU faces its own market growth rates, opportunities, competition, and profit potential.
A dominant share of the market; good prospects for growth.
A dominant share of the market; low prospects for growth.
Low market share; low prospects for growth.
Small share of a growing market.
The right combination of circumstances and timing permits an organization to take action to reach a particular target market.
Examines organizations strengths, weaknesses, opportunities, and threats. (Strengths and weaknesses are internal factors, opportunities and threats are external factors.
States what is to be accomplished in clear simple terms, it must be measurable, specify a time frame, and be consistent with business-unit and corporate strategies.
Selection of the target market and creation of the marketing mix.
Selecting Your Target Market
-Potentially most important decision in the strategic planning process
-If you select the wrong market all other marketing decisions will be in vain
-Defines your competition
-Comes before designing the marketing mix
Selecting Target Market PT. 2
Creating a Marketing Mix
Managing Marketing Implementation
-Put the marketing strategy into action
-Organizing the market unit
-Degree of centralization
Top managers make most of the decisions. May be ineffective if you have to respond quickly to changes in the market.
Decision making is delegated far down the chain of command as possible. Deal with adapt more rapidly to customer needs and complaints. This may "empower" customer personnel to make decisions as soon as an issue arises.
Creating the Marketing Plan
Strategic Planning --> Marketing Strategy --> Marketing Plan.
Written document specifies the marketing activities to be performed.
Marketing Plan Typically Contains
END OF CHAPTER 2
External Forces in the Marketing Environment
Examining and Responding to the Environment
-Sometimes changes are hard to predict, but this is certain: companies modify their marketing strategies and plans in response to the changing environment.
-Failure to recognize changes leave you unprepared to seize opportunity or to cope with threats.
-Observation, secondary data, internet, consulting firms fill needs.
-Assess and interpret information.
-Identify the most serious threats and most attractive opportunities,
Accepting Opportunities as Uncontrollable
-This is a "reactive" approach
-Adjust marketing strategy in response to the environment
-Depends on managerial philosophies, financial and other resources.
Attempting to Influence and Shape Opportunities
-This is a "proactive" approach
-Apply economic, political, and promotional skills.
Most firms have competition; when you decide on your target market, you are electing to compete with other firms targeting the same customers.
Similar product features, similar prices, same customers (Ford vs Chevy)
Same product class but different features, benefits, prices, and customers. (Ford vs Ferrari)
Very different products that satisfy the same customer need (Coke vs Water)
Total Budget Competitors
Competing for the financial resources of the same customer. (Coke vs Bread)
Many potential competitors try to differentiate themselves using their marketing strategy.
Large number of sellers who cannot influence price.
Try to understand what marketing strategy the competition is using. Price is the one variable almost everyone tries to monitor.
Affected by wage levels, unemployment, dividends, and taxes.
After the basic necessities of food, clothing, and shelter. Used for entertainment, vacations, automobiles, education, pets, furniture, appliances.
Increases current buying power at the expense of future buying power. Affected by interest rates. Homes, appliances, automobiles.
Based on past income and financial resources (cash, savings, real estate). Increases buying power.
-Political, legal, and regulatory forces are interrelated.
-Many marketers view political forces as beyond their control.
-Laws passed to end various non competitive actions.
-Stealing trade secrets, obtaining confidential information, trademark infringement, etc.
Consumer Protection Legislation
-Consumer safety (food, drugs, hazardous products, automobile safety)
-Information disclosure (loans, labeling, marketing to children and other "vulnerable customers")