223 terms

BA370 Exam 1

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Marketing
Determining Customer needs and satisfying them with a product

Book definition: is the activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners and society at large
Positioning
In the mind of the consumer
Value Proposition
What unique value does this product bring to customer?
Demographics
Indicate the characteristics of human populations and segments, especially those used to identify consumer markets

(gender, age, education, income, geography), segmentation -> separation / targeting / positioning
Psychographics
lifestyle of consumers - soccer moms, NASCAR dads
Unique Selling Propositions (USPs)
Mcdonald's fries, animal fries at In-n-out
Integrated Marketing
when all marketing communications unified with same key message
4 Ps of Marketing
Product: product / service / idea
Price: what the customer pays for product
Place: where customer can buy product
Promotion: Communicating value
1) Advertising 2) public relations 3) Sales promotion 4) Direct sales force
Sales promotion
incentive for someone to buy today
Market Research
Planning out what customers want

Primary: 1st person used in research (primary recipient)

Secondary: Company wants primary's research
Social Responsibility example
Kapernick and Nike
Lifetime value of a customer
How much will the customer spend with company?
Technology
How has technology impacted the music and the movie biz? Cutting cable?
Legal
Which businesses impacted by the legalization of marijuana / restriction of liquor sales?
Social
acceptance of online dating... 1/3 of recent marriages come from online dating
Economic
how does the price of oil impact the price of computers?
Political / regulatory
TV advertising of tobacco banned in U.S. What about BREXIT?
Environmental
tsunami in Japan prevented ford from getting a key ingredient of its black paint
- ford had to reformulate their black paint to continue production
What is the Product Life Cycle
Introduction, growth, maturity, decline
Marketing Definition
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
Core aspects of Marketing
-helps create value
-is about satisfying customer needs and wants
-entails in exchange
-requires product, price, place, and promotion decisions
-can be performed by both individuals and organizations
-affects various stakeholders
Marketing is about satisfying customer needs and wants
How does Hershey offer value?
-bite size
-in expensive
-Nostalgia: gave a bunch of Hershey's bars to WW2 vets
Product
creating value;
The fundamental purpose of marketing is to create value by developing a variety of offerings, include goods, services, and ideas to satisfy customer needs
Price
capturing value
-Price is everything a buyer gives up (money, time, energy) in exchange for the product
-How much are customers willing to pay and can a profit can be made at that point?
Place
Delivering the value proposition
-Place, or supply chain management; describes all activities necessary to get the product to the right customer...

Represents all the activities necessary to get the product to the right customer when that customer wants it
Promotion
Communicating the value proposition
-Promotion is communication by a marketer that informs, persuades, and reminds potential buyers about a product or service so as to influence their opinions or elicit a response
Marketing impacts various stakeholders
society, customers, employees, supply chain
How do firms become value driven
-sharing information
-balancing benefits with costs
-building relationships with customers
-connecting with customers using social and mobile media
Why is marketing important
-cane be entrapenuor
-expands global practice
-enrich society
Marketing is Pervasive across marketing channel members
Raw materials -> manufacturer -> retailer -> consumer
Marketing Enriches Society:
Product, Marketing practices, communities and environment.
Sustainable Competitive Advantage
-customer excellence
-operational excellence (In-N-Out)
-Product excellence (Apple Iphone)
-Locational excellence (Mcdonalds everywhere)
Product and Value Creation
Successful products and services are those that customers perceive as valuable enough to buy
Place and Value Delivery
The product must be readily accessible. why is sephora growing?
Macroenvironmental changes
when targeting audiences, consider if they can afford it and if they can afford it more than once
Indra Nooyi
believes she's known for making simple look complex
PepsiCO
If your'e a manager you have to manage down your employers
Product Development
Revolutionary product that no one had thought of before
-Swiffer
Diversification
Combining new products with new markets
stickiness
the longer you stay on a website the more interested they think you are
Fat Cats
Big industrials who made all the money
Consumer behavior
why do we buy what we buy when we buy it
Consumer Decision Process
1. Need Recognition
2. Information Search
3. Alternative Evaluation
4. Purchase
5. Post Purchase
Buyer's remorse
Regretting a purchase soon after making it.

aka cognitive dissonance
Need Recognition
Functional needs: ......
Psychological needs: needs to be special...
The Locus of Control
internal locus of control: more search activities
External locus of control: fate, external factors
Performance risk example
buying a Harley D and it won't start
Financial Risk
risk associated with monetary outlay
Social Risk
What if your friends don't like, will they make fun of you
Physiological risk
Being injured or damaged in one way

example: airbags
what are the three Attribute sets
universal, retrieval, evoked
universal attribute set
all the info in the world
Retrieval attribute set
knowing only what you can remember
Evoked attribute set
small # of choices (ex: we'd choose for Pizza); to make product from universal to retrieval to evoked
Determinant Attributes
features that are important to a buyer
Purchase and Consumption
Increase Conversion Rate
-Reduce real or virtual abandoned carts
-Merchandise in stock
-Reduce the actual wait time
Postpurchase customer satisfaction
1. Build realistic expectations
2. Demonstrate correct product use
3. Stand behind the product or service
4. Encourage customer feedback
5. Make contact with customers and thank them for their support
Postpurchase customer loyalty
marketers attempt to solidify a loyal relationship
Postpurchase undesirable consumer behavior
negative word of mouth, rumors
Factors influencing the consumer decision process
1. Marketing Mix
2. Psychological Factors
3. Social Factors
4. Situational Factors
Marketing mix
-product
-price
-place
-promotion
Psychological factors
-motives
-attitudes
-perceptions
-learning
-lifestyle
Social Factors
-family
-reference groups
-culture
3 types of Situational factors
purchase situation, shopping situation, temporal state
what are the three types of Psychological Factors: attitude
cognitive, affective, behavioral
Psychological factors: perception
How has society's perception of people with tattoos changed in recent years
Psychological factors: Learning and Lifestyle
-Learning affects both attitudes and perceptions
-Lifestyle involves decisions in spending time and money
Social factors: Reference Groups
Groups:
-Family
-Friends
-Coworkers
-Famous people
Provide:
-Information
-Rewards
-Self-image
Social factors: culture
Cultural group might be as small as reference group at school or as large as control or religion
****Situational factors
-purchase situation
-shopping situation
who are the B2Bs?
resellers,
institutions,
government, manufacturers/service providers
Manufacturers and Service Providers
Buy raw materials, components, or parts
Manufacture their own goods
Institutions
schools, museums, and religious organizations
Government
The U.S govt. spends $4 trillion annually on procuring goods and services
State and local governments also make significant purchases
Firms specialize in selling to government
B2B buying process
1. need recognition
2. product specification
3. RFP process
4. proposal analysis and supplier selection
5. order specification
6. vendor/performance assessment using metrics
Stage 1: Need Recognition
Can be generated internally or externally
Sources for recognizing new needs:
Suppliers
Salespeople
Competitors
The Buying Center
influencer, decider, buyer, user, gatekeeper, initiator
What are the types of Organizational Culture
Buying culture
-consultative
-democratic
-consensus
-autocratic
3 types of Buying Situations
new buy, straight rebuy, modified rebuy
New buy
purchasing something for the first time
Straight rebuy
Buying additional units or products that have been previously purchased
Most B2B purchases fall into this category
Modified rebuy
purchasing a similar product but changing specifications, current vendors have an advantage
Marketing plan
specifies the marketing activities for a specific period of time
What does the market place refer to
world of trade
exchange
the trade of things of value between the buyer and the seller so that each is better off as a result
The four Ps
controllable set of decisions or activities that the firm uses to respond to the wants of its target markets
Goods
items you can physically touch
Services
intangible customer benefits that are produced by people or machines and cannot be separated from the producer
Ideas
thoughts, opinions, and philosophies; intellectual concepts such as these also can be marketed
Supply Chain Management
the set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and other firms involved in the transaction into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, while minimizing systemwide costs and satisfying the service levels required by the customers
B2C Marketing
The process by which businesses sell to consumers
B2B Marketing
the process of selling merchandise or services from one business to another
C2C marketing
when consumers sell to other consumers
Production Oriented era
Turn of the 20th century when most firms were production oriented and believed a good product would sell itself

Henry Ford: " Customers can have any color they want so long as it's black"
Sales Oriented Era
1920-1950 production and distribution techniques became more sophisticated, and the Great Depression and World War II made customers consume less or manufacture items themselves. As a result, manufacturers had the capacity to produce more than customers wanted or were able to buy. Firms responded to their overproduction in becoming sales oriented; they depended on heavy doses of personal selling and advertising.
Marketing Oriented Era
After world war two, soldiers returned home, got new jobs, and started families. At the same time, manufacturers turned from focusing on the war efforts towards making consumer products. This was when the United States turned into a buying market-customers had a say on what types of products they want. This was during the period marketing was discovered.
Value based marketing
generally have transcended a production or selling orientation and attempt to discover and satisfy their customers' needs and wants.

They have to give their customers greater value than their competitors did
Value
reflects the relationship of benefits to costs, or what the consumer gets for what he or she gives
Value cocreation
customers can act as collaborators to create the product or service

Example: Nike allowing customers to custom design their sneakers
How do firms become more value driven?
-Sharing information about their customers and competitors across their own organization and with other firms

-Balance customer's benefits and costs

-Build relationships with customers

-Use technology to connect with customers
relational orientation
a method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship
Customer Relationship Management (CRM)
a business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm's most valued customers
supply chain / marketing channel
the group of firms that make and deliver a given set of goods and services
Entrepreneurs
people who organize, operate, and assume the risk of a business venture

The key to the success of many such entrepreneurs is that they launch ventures that aim to satisfy unfilled needs
Marketing strategy
identifies (1) a firm's target market(s), (2) a related marketing mix (its four Ps), and (3) the bases on which the firm plans to build a sustainable competitive advantage
sustainable competitive advantage
an advantage over the competition that is not easily copied and can be maintained over a long period of time
macro strategies for developing customer value
1. Customer Excellence
2. Operational Excellence
3. Product Excellence
4. Locational Excellence
Customer excellence
Focuses on retaining loyal customers and excellent customer service
Operational excellence
Achieved through efficient operations and excellent supply chain and human resource management
Product excellence
Having products with high perceived value and effective branding and positioning
Locational excellence
Having a good physical location and Internet presence
Customer Excellence
achieved when a firm develops value-based strategies for retaining loyal customers and provides outstanding customer service
Loyalty is more than simply preferring to purchase from one firm instead of another. it means.......
that customers are reluctant to patronize competitive firms
Marketing Plan
A written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or pro forma income (and other financial) statements.
Marketing plan steps
1) Define the Business Mission
2) Conduct a Situation Analysis
3) Identify and Evaluate Opportunities Using STP
4) Implementing the marketing mix and Allocate Resources
5) Evaluate Performance Using Marketing Metrics
Planning phase
marketing executives, in conjunction with other top managers, define the mission and/or vision of the business
Implementation phase
marketing managers identify and evaluate different opportunities by engaging in a process known as segmentation, targeting, and positioning (STP)
Control phase
entails evaluating the performance of the marketing strategy using marketing metrics and taking any necessary corrective actions
Mission Statement
A broad description of a firm's objectives and the scope of activities it plans to undertake; attempts to answer two main questions: What type of business is it? What does it need to do to accomplish its goals and objectives?
SWOT analysis
strengths, weaknesses, opportunities, threats
CDSTEP
Cultural, Demographic, Social, Technological, Economic, and Political forces
Marketing Segmentation
dividing the market into groups of customers with different needs, wants, or characteristics - who therefore might appreciate products or services geared especially for them
target marketing/targeting
evaluates each segment's attractiveness and decides which to pursue
Market positioning
The process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.
Integrated Marketing Communications (IMC)
represents the promotion P of the four Ps. It encompasses a variety of communication disciplines—advertising, personal selling, sales promotion, public relations, direct marketing, and online marketing including social media—in combination to provide clarity, consistency, and maximum communicative impact
value proposition
the unique value that a product or service provides to its customers and how it is better than and different from those of competitors
Metric
a measuring system that quantifies a trend, dynamic, or characteristic

used to explain why things happened and also project the future
Commonly used metrics to assess performance
revenues, sales, profits
portfolio analysis
management evaluates the firm's various products and businesses and allocates resources according to which products are expected to be the most profitable for the firm in the future
Strategic Business Unit (SBU) or product line
a division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives
Market share
is the percentage of a market accounted for by a specific entity, and is used to establish the product's strength in a particular market
Relative Market share
provides managers with a product's relative strength, compared with that of the largest firm in the industry
Market Growth rate
the annual rate of growth of the specific market in which the product competes
Stars
occur in high-growth markets and are high market share products
Cash Cows
are in low-growth markets but are high market share products
Question marks
appear in high-growth markets but have relatively low market shares
Dogs
low-growth markets and have relatively low market shares
market penetration strategy
employs the existing marketing mix and focuses the firm's efforts on existing customers

Such a growth strategy might be achieved by attracting new customers to the firm's current target market or encouraging current customers to patronize the firm more often or buy more merchandise on each visit
market development strategy
employs the existing marketing offering to reach new market segments, whether domestic or international

Ex: Marvel enhancing the viewing of its movies in global markets
Product development strategy
offers a new product or service to a firm's current target market

Ex: marvel launching successful netflix series
Diversification strategy
introduces a new product or service to a market segment that currently is not served
related diversification
the current target market and/or marketing mix shares something in common with the new opportunity
unrelated diversification
the new business lacks any common elements with the present business

ex: Marvel venturing into the child day care service industry
macroenvironmental factors
culture, demographics, social trends, technology advances, economic situation, political/regulatory environment
culture
the shared meanings, beliefs, morals, values and customs of a group of people

culture is passed down from generation to generation and learned over time
country culture
Artifacts, behavior, dress, symbols, physical settings, ceremonies, language differences, colors and tastes, and food preferences
generational cohort
a group of people of the same generation—have similar purchase behaviors because they have shared experiences and are in the same stage of life
Generation z
Also known as the Digital Natives, because people in this group were born into a world that already was full of electronic gadgets and digital technologies, such as the Internet and social networks.
generation y
Millennials
children of baby boomers
generation x
includes people born between 1965 and 1976 and represents some 41 million Americans
Green marketing
involves a strategic effort by firms to supply customers with environmentally friendly, sustainable merchandise and services
Greenwashing
exploiting a consumer by disingenuously marketing products or services as environmentally friendly, with the goal of gaining public approval and sales
RFID
enables the firm to track an item from the moment it was manufactured, through the distribution system, to the retail store, and into the hands of the final consumer
economic situation
affects the way consumers buy merchandise and spend money

factors that influence the state of an economy include the rate of inflation, foreign currency exchange rates, and interest rates
Inflation
refers to the persistent increase in the prices of goods and services
foreign currency fluctuations
can influence consumer spending
Interest rates
represent the cost of borrowing money
Political/regulatory environment
comprises political parties, government organizations, and legislation and laws
The Consumer Decision Process
1. Need Recognition
2. Information Search
3. Alternative Evaluation
4. Purchase
5. Post Purchase
need recognition
The consumer decision process begins when consumers recognize they have an unsatisfied need, and they would like to go from their actual, needy state to a different, desired state.
Functional Needs
pertain to the performance of a product or service

doesn't need to be special, just needs to work
Psychological needs
pertain to the personal gratification consumers associate with a product or service

needs to be special
Internal search for information
the buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences
External search for information
the buyer seeks information outside his or her personal knowledge base to help make the buying decision
internal locus of control
believe they have some control over the outcomes of their actions, in which case they generally engage in more search activities
External locus of control
consumers believe that fate or other external factors control all outcomes
Performance risk
involves the perceived danger inherent in a poorly performing product or service
Financial risk
risk associated with a monetary outlay and includes the initial cost of the purchase as well as the costs of using the item or service
Social risk
involves the fears that consumers suffer when they worry others might not regard their purchases positively
physiological risk
AKA Safety Risk; refers to the fear of actual harm should the product not perform properly
psychological risks
risks associated with the way people will feel if the product or service does not convey the right image
Universal sets
includes all possible choices for a product category
retrieval sets
those brands or stores that can be readily brought forth from memory
evoked set
comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision
evaluative criteria
consists of salient, or important, attributes about a particular product
determinant attributes
product or service features that are important to the buyer and on which competing brands or stores are perceived to differ
Consumer decision rules
the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives
compensatory decision rule
assumes that the consumer, when evaluating alternatives, trades off one characteristic against another, such that good characteristics compensate for bad characteristics
multi-attribute model
A compensatory model of customer decision making based on the notion that customers see a product as a collection of attributes or characteristics. The model uses a weighted average score based on the importance of various attributes and performance on those issues.
noncompensatory decision rule
consumers choose a product or service on the basis of one characteristic or one subset of a characteristic, regardless of the values of its other attributes
conversion rate
measure how well they have converted purchase intentions into purchases
Postpurchase cognitive dissonance
an internal conflict that arises from an inconsistency between two beliefs or between beliefs and behavior
Negative word of mouth
occurs when consumers spread negative information about a product, service, or store to others
motive
is a need or want that is strong enough to cause the person to seek satisfaction
Maslow's Hierarchy of Needs
-physiological (food, water, shelter),
-safety (secure employment, health)
-love/belonging (friendship, family)
-esteem (confidence, respect)
-self-actualization (people engage in personal growth activities and attempt to meet their intellectual, aesthetic, creative, and other such needs)
attitude
A person's enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea; consists of three components: cognitive, affective, and behavioral.
Cognitive component
reflects our belief system, or what we believe to be true
affective component
involves emotions, or what we feel about the issue at hand, including our like or dislike of something
behavioral component
pertains to the actions we undertake based on what we know and feel
perception
the process by which we select, organize, and interpret information to form a meaningful picture of the world
Learning
refers to a change in a person's thought process or behavior that arises from experience and takes place throughout the consumer decision process
Lifestyle
refers to the way consumers spend their time and money to live
reference group
one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors
situational factors
factors specific to the situation, override or at least influence psychological and social issues
crowding
customers can feel crowded because there are too many people, too much merchandise, or lines that are too long.
In-store demonstrations
The taste and smell of new food items may attract people to try something they normally wouldn't.
Promotions
-retailers employ various promotional vehicles to influence customers once they have arrived in the store.
Involvement
the consumer's degree of interest in the product or service
Extended problem solving
common when the customer perceives that the purchase decision entails a lot of risk
limited problem solving
occurs during a purchase decision that calls for, at most, a moderate amount of effort and time
impulse buying
A buying decision made by customers on the spot when they see the merchandise
habitual decision making
describes a purchase decision process in which consumers engage in little conscious effort
Resellers
marketing intermediaries that resell manufactured products without significantly altering their form
wholesalers and distributors
resellers
Product specification
buying organization decides on and specifies the best technical product characteristics for a needed item
RFP process (request for proposal)
a common process through which organizations invite alternative vendors or suppliers to bid on supplying their required components or specifications
Proposal Analysis
evaluates all the proposals
Order specification
the firm places its order with its preferred supplier
Vendor Performance Assessment Using Metrics
Firms analyze their vendors performance so they can make decisions about their future purchases
buying center
range from employees who have a formal role in purchasing decisions to members of the design team who will specify the equipment or raw materials needed for employees who will be using a new machine that is on order
Initiator
the person who first suggests buying the particular product or service
influencer
the person whose views influence other members of the buying center in making the final decision
Decider
the person who ultimately determines any part of or the entire buying decision
buyer
the person who handles the paperwork of the actual purchase
User
the person who consumes or uses the product or service
Gatekeeper
the person who controls information or access, or both, to decision makers and influencers
organizational culture
reflects the set of values, traditions, and customs that guide its employees' behavior
autocratic buying center
one person makes the decision alone
democratic buying center
majority rules
Consultative buying centers
use one person to make a decision but solicit input from others before doing so
consensus buying center
all members of the team must reach a collective agreement that they can support a particular purchase
new buy
a customer purchases a good or service for the first time
modified rebuy
the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, options, or so forth
straight rebuy
occurs when the buyer or buying organization simply buys additional units of products that had previously been purchased