Midterm Exam 1 Study Guide Chapter 1 Need State of felt deprivation including physical social and individual needs Wants form that a human need takes as shaped by culture and individual personality Wants Buying Power Demand Needs wants are fulfilled through a marketing offer Marketing Offer combination of products services information or experiences offered to a market to satisfy a need or want The Marketing Concept a marketing management philosophy that holds the achieving organizational goals depends on knowing the needs wants of target markets and delivering the desired satisfaction better than competitors Customer equity the total combined customer lifetime values of all the company s current and potential customers managed by classifying customers by projected loyalty and potential profitability Short term Customers Long Term Customers Butterflies True Friends Strangers Barnacles Profitability High Low Profitability Customer lifetime value the value of the entire stream of purchases that the customer would make over a lifetime of patronage Chapter 2 Opportunities Steps in strategic planning Balance Goals Capabilities and Changing Marketing Mission Statement statement of organization s purpose o What it wants to accomplish in the larger environment o Market oriented not product oriented Business Portfolio collection of businesses and products that make up the company Strategic Business Unit SBU a unit of the company that has a separate mission and objectives that can be planned independently from other company businesses o Example Company division a product line or a single product brand Portfolio Analysis evaluates SBUs on attractiveness of SBUs market industry and strength of SBUs position with that market or industry Evaluated using o BCG Growth Share Matrix Ansoff s Product Market Expansion Matrix Existing Products New Products Existing Markets Market Penetration Product Development New Markets Market Development Diversification SWOT Analysis o Strengths internal capabilities that help company reach goals o Weaknesses internal limitations that hinder company achievements o Opportunities external factors that company can use to its advantage o Threats current and emerging external factors that challenge company achievements Segmentation process of dividing a market into distinct groups of buyers who have different needs characteristics or behaviors and who might require separate products Targeting involves evaluation each market segment s attractiveness and selecting one or more segments to enter Positioning arranging for a product to occupy a clear distinctive and desirable place relative to competing products in the minds of target consumers Differentiation creating superior customer value by actually differentiating the market The Marketing Mix set of controllable marketing tools to respond to wants in the target offer Perceptual mapping market 4 P s o Product o Promotion o Place o Price Chapter 3 Microenvironment environmental factors have direct influence over o Actors close to marketing department that affect its ability to serve its customers o The company suppliers intermediaries resellers retailers competitors publics investors media and customers Macroenvironment larger societal forces that affect the microenvironment indirectly influence o Demographic economic natural technological political and cultural forces o Changing age structure of US population most important demographic trend increasing income game and consumer frugality o Baby Boomers 1946 1964 25 of the population controls 80 of the wealth and 50 of consumer spending targets for financial retirement services o Gen Xers 1965 1976 less materialistic more experience driven most educated spend carefully but have increasing economic pressures o Millennials 1977 2000 83 million people largest population 733 Billion in purchasing power ethnically diverse fluent with technology market towards personalization and customization Chapter 4 Primary data collected for a specific purpose at hand Secondary data information that already exists somewhere which has been collected for another purpose o Internal sales data o External government and commercial data o Quicker and cheaper but not as accurate and current Quantitative data number based collected through descriptive or causal techniques Qualitative data in terms of quality or categorization informal or subjective through Exploratory research survey generating information to better describe marketing exploratory techniques problems situations or markets Causal research experiment testing hypotheses about cause and effect relationships Observational research gathering primary data by observing relevant people actions and Ethnographic research trained observers watch and interact with consumers in their Probability samples random order everyone has the same chance of being picked Nonprobability samples non random no sampling error situations natural habitat Chapter 5 Consumer decision making model Input Process Output o Input marketing stimuli or other environmental factor o Process 1 3 of buyer decision process 1 Recognize Need 2 Information Search 3 Evaluate Alternatives Evoked set considered alternatives o Output 4 5 of buyer decision process 4 Purchase Decision 5 Post Purchase Behavior Cognitive dissonance doubtful od decision Subculture group of people with shared value systems based on common life experiences o Nationalities religions races geographic regions Social factors ordered divisions whose members share similar values interests and behaviors o Marketers aim for opinion leaders within groups important to target market Personal factors influence consumer decision making o Age life cycle stage occupation economic situation lifestyle o Pattern of living expressed in activities interests opinions Maslow s Hierarchy of Needs o Physiological Safety Social Esteem Self Actualization Buying center a group of people making decisions rather than just one person Chapter 6 Segmentation to the product Targeting o Psychographic divided based on lifestyle characteristics o Behavioral divided based on consumer knowledge attitudes uses or responses o Undifferentiated mass ignores segmentation Example Post Office o Differentiated Segmented targets segments o Concentrated niche targets one or few small segments Example Nike Example Vans o Micromarketing local individual specific group or just one customer Example Alter Hall at Temple University targeted single donor