1 st Exam Study Guide Chapter 1 5 conditions of an exchange doesn t mean exchange will take place 1 Must be at least 2 parties 2 Each party has something of value to other party 3 Each party is capable of communication and delivery 4 Each party is free to accept or reject the offer 5 Each party believes it is appropriate to deal w other party 4 Marketing philosophies 1 Production focuses on capabilities of firm not desires of marketplace 2 Sales focuses on aggressive sales techniques and high sales 3 Market focuses on the satisfaction of customers what they desire 4 Social Marketing focuses on products that benefit society as a whole Sales vs Market orientation Organization s Focus Sales inward looking focusing on selling what org makes not market wants Market focuses on customer value satisfaction and building relationships Firm s Business Sales defined in terms of goods services Market defined in terms of the benefits its customers seek Target Market Sales everybody or the average customer Market specific groups of people Primary Goal Sales achieve profitability through high sales volume aggressive selling Market Make profit by creating customer value satisfaction relationships Tools to Achieve Goals Sales intense promoting Market 4 P s product place promotion and pricing Chapter 3 Ethics are generally legal acts that go against what people consider being moral 3 levels of ethical development 1 Preconventional morality self centered selfish behavior 2 Conventional morality is something legal What society expects 3 Postconventional morality mature adult is something ethical or not Code of ethics help employees understand what is ethical and what is not FCPA prohibits U S corporations from making illegal payments for business Pyramid of Corporate Social Responsibility lowest to highest Economic responsibilities be profitable Legal responsibilities obey the law Ethical responsibilities be ethical Philanthropic responsibilities be a good citizen contribute to community Chapter 4 Environmental management company implements strategies to shape external environment within which it operates very difficult to do this must adapt instead Social Factors Broader range of interests component lifestyles More women into workforce more men are shopping Dual career families never have enough time to shop Demographic Factors Population increasing at slow rate market is not expanding much Tweens and teens becoming more knowledgeable about shopping Population growing older baby boomers marketers must appeal to older consumers Growing Ethnic markets Hispanics are fastest growing followed by African Americans then Asian Americans Ethnic markets are NOT homogeneous Economic Factors Incomes have risen at slow pace recently Purchasing power rising income doesn t mean higher standard of living it is determined by income minus cost of living which is discretionary income Inflation marketers try to maintain same price even with inflation Recession Marketers try to lower prices and increase production efficiency Technological factors Research basic vs applied U S has excelled at both Stimulating Innovation very necessary stimulated by upper management Political Legal Factors Agencies CPSC protect health safety of consumers FDA regulations over misbranded adulterated or hazardous food drug products FTC prevents people or corporations from using unfair methods of competition Laws Sherman Act 1890 prohibits monopolies and price fixing Clayton Act 1914 prohibits tying contracts pooling ownership of stocks by competing firms FTC Act 1914 creates FTC to monitor unfair business practices Robinson Patman Act 1936 price discrimination illegal prohibits promotional allowances that are unequal lets FTC set limits on quantity discounts Wheeler Lea Act 1938 prohibits practice that harm public w o affecting competition advertising of food drugs under FDA jurisdiction Lanham Trademark Act 1946 establish protection for trademarks including before a company is even used Chapter 8 Market segmentation grouping based on similar product needs Has become very important since the 1960 s to appeal to consumers needs 4 criteria for successful segmentation 1 substantial large enough to warrant segmentation 2 identifiable measurable 3 accessible be able to be reached by marketers 4 responsive respond to a marketing effort that makes the segment different Bases for Segmenting Consumer Markets Geographic region size density climate Demographic age gender income level ethnicity family life cycle Psychographic personality motives lifestyles neighborhood lifestyle geodemographic segmentation Benefits sought types of benefits consumers seek from a product Usage rate amount of product purchased or consumed Bases for Segmenting Business Markets Company characteristics geographic location size type product use Buying processes satisficers vs optimizers Steps in Segmenting a Market 1 Select a market or product category 2 Choose a basis or base for segmenting 4 basic criteria 3 Select segment descriptors ex age occupation income 4 Profile Analyze segments so they can be ranked 5 Select target markets 6 Design implement maintain appropriate marketing mixes 4 P s Strategies for selecting target markets Undifferentiated targeting one big market no segments one marketing mix Adv savings on cost Dis not creative susceptible to competition Concentrated selects one segment to target Adv meet needs better strong positioning smaller firms compete w big firms Dis segments too small large competitors market effectively to niche Multisegment two or more well defined market segments Adv greater financial success economies of scale Dis high costs cannibalization sales of 1 product cut into existing product sales One to one marketing building long term profitable relationships w customers Positioning is very important in terms of how one product is viewed compared to others Types of positioning attribute price quality use application user class competitor emotion Chapter 9 DSS are extremely important to marketing managers to provide them data 4 characteristics of DSS 1 Interactive immediate results direct control 2 Flexible sort regroup total manipulate date in every way 3 Discovery oriented ask what if questions 4 Accessible don t need to be a computer expert Marketing research helps managers be proactive rather than reactive Marketing Research Project Steps Identify problem Marketing research problem objective Plan research design Secondary data Internet
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