BUS ADM 360 1st EditionExam # 1 Study Guide Lectures 1-7Ch. 1 Intro to MarketingMarketing: entails exchange, promotion decisions; is performed by individuals and organizations to satisfy customer needs and wants-2 types of product: -Goods: item you can physically touch-Services: intangible benefits, may include the experience The Four P’s -Price: captures value -Place: delivers value-Product: creates value-Promotion: communicates valueTransactional vs. Relational-Transactional: each transaction is a separate event, prior knowledge not important (e.g., McDonalds)-Relational: buyers and sellers establish long-term relationship (e.g., 5-star hotel)Ch. 2 Marketing Strategy Marketing Strategy: Firm’s target market, marketing mix, and the method of obtaining a sustainable competitive advantage-Sustainable Competitive Advantage: Something that a company can persistently do better than its competitors -Can your competitor quickly match your move? Lowering prices? Introduce new products? Operational strategies? Focus on the customer? “Building a wall around its position in the market” Operational Excellence:Involves a firm’s focus on efficient operations and excellent supply chain management-To lower costs:Monetary costsAcquisition costsMaintenance costsSupply chain costsTo increase convenience-Obtain reliability-Become easy to use-Tradeoffs: Lower customizationLower level of service Customer Intimacy (excellence): Involves a focus on retaining loyal customers and excellent customer service-High level of customization-High levels of service-Offer a complete solution-Access to a wide selection-Obtain advice and consult-Feeling of an “experience”-Tradeoffs: Higher costsSomewhat lower performance SWOT Analysis: Situation analysis, assess the internal environment (STRENGTHS and WEAKNESSES) and the external environment (OPPORTUNITIES and THREATS) -know internal vs. externalBCG Portfolio Analysis: -Stars: Occur in high-growth markets and are high market share products. Often require heavy resource investment. As market growth slows, stars become cash cows.-Cash cows: Occur in low-growth markets but are high market share products. Have excess resources that can be spun off to other products.-Question marks: Appear in high-growth markets but have relatively low market shares, require significant efforts to maintain and increase market share. Do you increase investment, or move on to something else? -Dogs: Are in low-growth markets and have relatively low market shares. May generate enough resources to sustain themselves, but should be phased out as they will never become ‘starsCh. 4 Marketing Ethics Business Ethics: Moral dilemmas that might arise in a business settingMarketing Ethics: Specific to marketing, include ethics related to the product, advertising, pricing…-Can increase customer satisfaction and trust ensuring loyal customers Corporate Social Responsibility:Voluntary actions taken by a company to address the ethical, social, and environmentalimpacts of its business operations and concerns of stakeholders -Bad: Nike-sweatshops; Walmart-negatively impacts smaller local stores-Good: Tylenol recall of 1982; Toyota owning up to acceleration problems Ch. 5 Analyzing the Marketing Environment Marketing Environment: consumers are most important part and are center of analysisImmediate Environment: -Company CapabilitiesHow well they achieve the 4 P’sSWOT analysisMacro Environment-Culture: The shared meanings, beliefs, morals, values, and customs of a group of people. From family, school, town… -Country culture: Behavior, dress, symbols, physical settings, languages, food, and advertising-Regional culture:Soda vs popPie vs pizzaATM vs cash-Demographics:Ways population is segmented-Generational cohort: Group of people of the same generation, have similar purchase behaviors because they have shared experiences and are in same stages of life. Technological AdvancesAre the technology, consumers, and firm ready? Should be as convenient as possible for consumersPolitical/Regulatory EnvironmentComprises political parties, government organizations, laws, and legislation -Food and Drug Administration-Can affect entire industries. Ex: -AT&T taking over BellCh. 6 Consumer Behavior Consumer Decision Process: Need RecognitionInfo SearchAlternative EvaluationPurchasePost Purchase-Functional Needs: pertain to the performance of a product/service (food, shoes)-Psychological Needs: pertain to personal gratification consumers associate with a product/service (entertainment) Information Search: -Internal Search: buyer examines own memory and knowledge about the product/service; gathered through experience-External Search: buyer seeks info outside their personal knowledge base to make a decision-Perceived benefits vs. perceived costs-Performance risk, financial risk, social risk, physiological risk, psychological risk (combo of social and physiological) Alternatives: -Universal Sets: all possible choices for a product category-Retrieval Sets: those brands that can be readily brought forth from memory (subset of universal sets)-Evoked Set: comprises the alternative brands that consumer states they would actually consider when making purchase decisionConsumer Decision Rules: set of criteria that consumers uses (subconsciously or consciously) to quickly and efficiently select from several alternatives-Multi-attribute Model: assigning weights to attributes -Decision Heuristics: mental shortcuts that help a consumer narrow down choices- Compensatory decision rules: the consumer trades off one characteristic against another – good characteristics compensate for bad characteristics-Noncompensatory Decision Rules: selecting based on one characteristic or one subset of characteristics regardless of other factorsInfluential Factors on Decision Making: -Marketing Mix (4 P’s…Product, Price, Place, Promotion)-Psychological Factors (Motives, attitudes, perceptions, learning, lifestyle) -Situational Factors (Purchase situation, shopping situation, temporal state)-Social Factors (Culture, family, reference groups)Ch. 8 Global Marketing Globalization: process by which goods, services, capital, people, information, and ideas flow across national borders Globalization of Production/offshoring: manufacturers’ procurement of goods and services from around the globe to take advantage of national differences in the cost and quality o various factors of production Assessing Global Markets