MKTG 3433 Exam # 1 Study Guide Chapters 1, 2, 3, & 5Chapter 1: What is Marketing?- Marketing: organizational function and a set of process for creating, communicating, delivering value to customers and for managing customer relationships in ways that benefit the organization and stakeholders- Utility: the want-satisfying power of a good or service; production and marketing together create utilityo All organizations must create utility to surviveo Types of Utilities: Form: conversion of raw materials and components into finished goods and service- EX: Dinner at a restaurant Time: availability of goods and services when consumers want them- EX: UPS overnight Place: availability of goods and services at convenient locations- EX: Banks in grocery stores Ownership (Possession): ability to transfer title to goods or services from marketer to buyer- EX: Retail sales- 5 Eras in the History of Marketingo The Production Era (Prior to the 1920s) Production Orientation: stressing efficiency in producing a quality product, with the attitude toward marketing that “a good product will sellitself” This era is characterized by production shortages and intense consumer demando Sales Era(Prior to 1950s) Sales Orientation: customers will resist purchasing nonessential items Production techniques were improving, which caused output to grow from the 1920s to the 1950so Marketing Era (Since 1950s) Marketing Concept: a company-wide consumer orientation to achieve long-run success Shift from a seller’s market to a buyer’s market- Strong buyer’s market created the need for consumer orientationo Relationship Era (1990s) Relationship Marketing: developing long-term, value-added relationships over time with customers and supplierso Social Era (2000s) This Era is characterized by the accessibility to the internet and the creation of social media site- Marketing Myopia: management’s failure to recognize the scope of its businesso To overcome marketing myopia, a business should develop broader marketing-oriented business ideas focusing on customer need satisfaction- Nontraditional Marketingo Person Marketing: efforts to cultivate the attention, interest, and preferences of atarget market toward a person  EX: Celebrity endorsementso Place Marketing: efforts to attract people and organization to a particular geographic area EX: Tourism enhancementso Cause Marketing: identification and marketing of a social issue, cause or idea to selected target markets Many profit seeking firms link their products to social causes EX: Products being pink for breast cancer awarenesso Event Marketing: marketing of sporting, cultural, and charitable activities to selected target markets Event sponsorships increase brand recognition, enhancing image, and boosting purchase volume EX: McDonald’s sponsoring the Olympic Gameso Organization Marketing: intended to persuade others to accept the organization’sgoals, receive its services, and/or contribute to the organization in some way This form of marketing is adopted by mutual benefit organizations, service organizations, and government organizationsChapter 2: Strategic Planning- Strategic Planning Vs. Tactical Planningo Strategic Planning Determining an organization’s primary objectives Adopting courses of action that will achieve these objectives Provides LONG TERM direction for its decision marketerso Tactical Planning Guides the implementation of activities specified in the strategic plan Addresses shorter-term actionso Example: Planning in the airline industry Strategic: Merge because of fuel costs Tactical: Cutting the number of flights, charging for extra baggage, charging for food on plane- Porter’s Five Forceso Potential New Entrants EX: Internet reduces barriers to entryo Bargaining Power of Buyers EX: Internet shifts greater power to end consumerso Bargaining Power of Suppliers EX: Internet tends to increase bargaining power of supplierso Threat of Substitute Products EX: Internet creates new substitute productso Rivalry Among Competitors EX: Internet blurs differences among competitors- SWOT Analysis: helps planners compare internal organizational strengths and weaknesses with external opportunities and threatso Strengths These reflect the company’s core competencies Are vulnerable to threats EX: Cost advantages, financial resources, customer loyalty, patentso Weaknesses Ex: Too narrow of product line, weak market image, lack of management deptho Opportunities Planners anticipate constraints when internal weaknesses prevent an organization from taking advantage from opportunity EX: Add to product line, enter new market, acquire firms with needed technologyo Threats EX: Changing buyer taste, likely entry of new competitors, adverse government policies- Planning Methods/Toolso Marketing Mix: blending four strategy elements to fit the needs and preferences of a specific target market 4 Ps- Product Strategy: deciding what goods or services the firm should offer to a group of consumers (What should we offer our customers?)o Customer service, package design, brand names, trademarks, patents, warranties, positioning, etc.- Place (Distribution) Strategy: consumers find their products in the proper quantities at the right times and placeso Involves modes of transportation, warehousing, inventory control, order processing, and selection of marketing channelso Technology has opened new channels of distribution- Promotion Strategy: communication link between sellers and buyerso Firms may communicate messages either directly through sales people or indirectly through ads and promotionso Many companies use integrated marketing communications (IMC)- Pricing Strategy: deals with methods of setting profitable and justifiable priceso A good pricing strategy creates values for customers and builds and strengthens customer relationships with a firm and its products.Chapter 3: The Marketing Environment- Environmental Scanning VS. Environmental Managemento Environmental Scanning: the process of collecting information about the external marketing environment to identify and interpret potential trendso Environmental Management: attainment of organizational objectives by predicting and influencing the 5 different environments Competitive Political-Legal Economic Technological Culturalo Environmental scanning contributes to environmental