Marketing 3000Joel Poor, Fall 2011Exam 1 Study GuideKrista RademeyerChapter 1: Overview of MarketingLearning Objective 1: What is the role of marketing in organizations? WHAT IS MARKETING?- Marketing- the activity set of institutions, and processes for creating, capturing, communicating, and delivering value to customers, clients, partners, ad society at large.- 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 is about Satisfying Customer Needs and Wants Marketing Entails an Exchange- Exchange- the trade of things of value between the buyer and the seller so that each is better of Marketing Requires Product, Price, Place and Promotion Decisions- Marketing Mix (The Four Ps)- Product, Price, Place and Promotiono Product- creating valueo Price- capturing valueo Place- delivering value Supply Chain management- integrating all the companies involved in the process from creating the product to getting it to the customero Promotion- communicating value Marketing Can Be Performed by Both Individuals and Organizations- B2C (business-to-consumer) Marketing (i.e. retail stores)- B2B (business-to-business) Marketing (i.e. Leggett & Platt)- C2C (consumer-to-consumer) Marketing (i.e. online auctions like eBay)- Customers also market themselves to businesses (i.e. interviews, resumes) Marketing Impacts Various Stakeholders- Supply chain partners, employees and society at large are all afected- Marketing Helps Create Value- Production-oriented era (early 1900s)- Sales-oriented era (1920-1950)- Market-oriented era (after WWII, 1950-1990)- Value-based marketing-era (1990-today)o Value- relationship of benefits to costs (what you get for what you give)o Value co-creation- allowing customers the opportunity to help create product or serviceLearning Objective 2: How do marketers create value for a product or service? WHAT IS VALUE-BASED MARKETING?- Customers seek the greatest benefits at lowest costs- Firms attempt to find the most desirable balance between providing benefits to customers and keeping their own costs down- Firms must understand what customers view as key benefits, and how to improve them- Increase value by increasing benefits or decreasing costs How firms Compete on the Basis of Value- Must decide which products/services to provide for whom (i.e. Wal-Mart is for customers searching for convenience and low prices) How Do Firms Become Value Driven?- Sharing information- within organization and supply chain- Balancing benefits with costs- Building relationships with customerso Transactional orientation- the buyer-seller relationship is a series of individual transactions. Everything else is of little importance (i.e. used car sales)o Relational orientation- the lifetime profitability of the buyer-seller relationship is what matters, not individual transactions (i.e. UPS)o Customer relationship management (CRM)- focus on identifying and building loyalty among the firm’s most valued customers. Collect info on customer needs, then target best customers with that info.Learning Objective 3: Why is marketing important both within and outside the firm? WHY IS MARKETING IMPORTANT? Marketing Expands Firms’ Global Presence Marketing Is Pervasive across the Organization- The marketing department works closely with many areas of the company to design, promote, price and distribute the product Marketing Is Pervasive across the Supply Chain- Supply Chain- the group of firms that make and deliver a given set of goods and services- The marketing dept. must work with all members of supply chain- They must share data, make joint forecasts, and coordinate shipments Marketing Makes Life Easier and Provides Employment Opportunities- It provides consumers with choices, information, reasonable prices and policies, and convenience.- It creates jobs for both creative/artistic people and for analytical people. Marketing Enriches Society Marketing Can Be Entrepreneurial- Entrepreneurs recognize marketing opportunities (i.e. unfilled needs)Chapter 2: Developing Marketing Strategies and a Marketing PlanLearning Objective 1: What is a marketing strategy? WHAT IS MARKETING STRATEGY?- Marketing strategy- a firm’s target market, marketing mix, and method of obtaining a sustainable competitive advantage- Sustainable competitive advantage- something the firm can persistently do better than its competitors Building a Sustainable Competitive Advantage- Just because a firm implements an element of the marketing mix better than competition, it doesn’t necessarily mean it is sustainable- Establishing a sustainable competitive advantage is the key to positive long-term financial performance- Four macro strategies that focus on marketing mix to create and deliver value: Customer excellence- focuses on retaining loyal customers and excellent customer service Operational excellence- achieved through efficient operations, excellent supply chain management, strong relationships with suppliers, and excellent human resource management Product excellence- having products with high perceived value and efective branding and positing Locational excellence- having a good physical location and Internet presenceLearning Objective 2: How does a firm set up a marketing plan? THE MARKETING PLAN- Three major phases: planning, implementation, and control (and 5 steps)- Planning phase- marketing executives and top managers:o Step 1: define the mission/vision of the businesso Step 2: evaluate the situations by assessing how various players (inside and outside org) afect the firm’s potential success- Implementation phase- marketing managers:o Step 3: identify and evaluate diferent opportunities by engaging in a process known as segmentation, targeting and positioning (STP)o Step 4: implement the marketing mix using the four Ps- Control phase- managers:o Step 5: evaluate the performance of the marketing strategy using marketing metrics and take any necessary corrective actions Step 1: Define the Business Mission- Mission statement- broad description of a firm’s objectives and the scope of activities it plans to undertake. It attempts to answer 2 questions:o What type of business are we?o What do we need to do to