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Marketing 305Joyce ClaterbosSpring 2014Review of Material for Test 1Chapter 1: What is Marketing?Creating Customer Value- Benefitso Tangible features and benefitso Service benefitso Personal valueo Image Value- Costso Monetary costso Timeo Energyo Psychological costsMarketing should result in an exchange- Necessary Conditions for Exchangeo At least two partieso Something of valueo Communication and deliveryo Freedom to accept or rejecto Desire to deal with other partyAmerican Marketing Association (AMA)- Marketing is the activity, set of institutions, and processes for creating, capturing, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large.Satisfying Needs, Wants, and Demands- A need is a basic human requirement for survival.- A need becomes a want when it is directed to a specific product that might satisfy the need.- A want becomes a demand when the want for a specific product is backed by an bility to pay for that product.Value-Driven Organizations- Gather and share information within the organization.- Measure customer perceptions and balance benefits against costs.- Develop relationships with customers, not transactions.- Communicate and connect with customers.Customer Relationship Management (CRM)- Using strategies, programs, and systems to identify and build loyalty among the most valued (and valuable) customers.Customer Satisfaction- The feeling that a product met or exceeded the customer’s expectations.o We delivered the benefits sought and those benefits exceeded the sacrifices made by the customer.Customer Lifetime Value (CLV)- Prediction of the profit attributed to entire future relationship with a customer.The 4 Ps of Marketing- Product: Creating Valueo Goods o Serviceso Ideas- Price: Capturing Valueo Price is everything a buyer gives up (money, time, energy) in exchange for the product.o The key to determining prices is to figure out how much customers are willing to give upand assess whether a profit can be made at that point.- Place: Delivering the Value Propositiono Place, or supply chain management, describes all activities necessary to get the product to the right customer when the customer wants it.o Showrooming- Promotion: Communicating Valueo Communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response.Criticisms of Marketing- Causes unneeded purchases- Exaggerates product benefits- Invades privacy- Wastes money- Discriminates against those with less money- Contributes to environmental waste- Some products do not need marketingEconomic Benefits of Marketing- Marketing makes buying easy for customers- Marketing creates new and improved products at lower prices- The functions of marketing add value to a product- When a product becomes popular, the number of merchants selling the product will increase, this increases competition which reduces the price.- Competition also makes manufacturers improve products to better satisfy customer wants and needs.Marketing Enriches Society- Adds value to products (5 utilities) - Increases competition- Helps lower product prices- Developing newer and better products- Provides employment opportunities- Has the ability to convey messages that change social behavior in a positive wayo Example: Anti-smoking advertisingDeveloping Marketing Strategies and a Marketing PlanBusiness Plan- Marketing Plan- Business Plano What is your business abouto Encompasses more than marketingo Includes “the vision”- Marketing Plano A map for achieving yearly goalso The ability to track success through individual tactic performance measureso An understanding of the time, and budget needed to execute the Marketing PlanMarketing Strategy- A good marketing strategy identifies:o The bases upon which the firm plans to build a sustainable competitive advantage.o A firm’s target market(s)o A related marketing mix-their 4 P’so Measures of performanceStrengths and Weaknesses: Look inside for Sustainable Competitive Advantage- Customer Valueo Customer excellenceo Occupational excellenceo Product excellenceo Locational excellenceDeveloping a Marketing Plan- Planningo The firm’s mission and vision and assess the firm’s current situation- Implementationo How it plans to implement its mission and vision- Controlo Evaluate its performance using appropriate metricsStep 1: Business Mission- What business are we in now, and what do we intend to be in the future?o “Describes the direction an organization will pursue within its chosen environment and guides the allocation of resources and effort”.- What are our competencies, our abilities, our strengths?Step 2: Conduct a Situation Analysis Using SWOT- Strengths of the company- Weaknesses of the company- Opportunities in the external environment- Threats in the external environmentStep 3: Identifying and Evaluating Opportunities Using STP- Segmentationo Dividing market into those groups of customers with different needs, wants, or characteristics who therefor might appreciate products or services geared especially toward them.- Targetingo Going after certain groups on the basis of the firm’s perceived ability to satisfy the needsof those groups better than competitors and profitability.- Positioningo Using marketing mix to communicate a clear, distinctive, and desirable understanding ofwhat the product or service does or represents relative to competing products or services.Step 4: Implement Marketing Mix and Allocate Resources- Product Value Creation- Place Value Delivery- Price Value Capture- Promotion Value CommunicationStep 5: Evaluate Performance and Make Adjustments- Control Phase- Where are we now?o Compare results to objectives- Where do we want to be?o Make necessary adjustmentsMarketing EthicsMost Customers, Employees, and Suppliers Expect…- Safe and effective products- Honestly represent the products- No misleading or confusing claims- Reasonable or fair prices- Equitable and fair treatmentEthics and Marketing- Marketers are expected to behave in a morally acceptable manner.- All exchanges are based on trust and the desire to trade with the other party.- Ethical behavior is mandatory to establish trust.- If marketers and customers don’t agree on what is ethical behavior, there will be distrust.- Marketers and customers must come to a mutual understanding of their respective ethical viewpoints.Growth of Consumerism-

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KU MKTG 305 - Test 1

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