MAR3023—Exam 1 Review- What Marketing is and what it isn’to Marketing is the foundation of every business. It is the business function thatdevelops the products people want to buy and they know they need them and because they know they can afford them and because they can find them—the products must also be appropriately delivered to where customers are If firms perform pure marketing correctly, they don’t need to advertise much or hire a huge sales team to push their products - Marketing’s core strategieso Creating value and relationships —ex) banks that offer coffee, hotel with 24 hour check-in, offering free babysitting at places, etc.…o Segmenting Markets —when a company has many brands or products—ex) diet coke, coke with vitamins, coke lime, coke with Splenda or how Marriot hotels have different hotel brands to satisfy different customers needs (upscale, value, extended stay, suites…) o Identifying opportunities —market opportunity is where circumstances and timing meet to create strategic windows Core competencies —things a firm does well Competitive advantage = Opportunity + Competency - Know the history of Marketingo Production Era – firms produced what they could make, inward focus and technical development, sellers market where demand>supplyo Sales Era – firms pushed products using aggressive sales tactics—focus on selling what we make, aggressive promotion and short term profit maximizationo Marketing Era - focus on customer orientation—the great awakening where customers became the central focus of the organization—focus on customer is key and we make what we sello Societal Era – firms now serve three entities (present)—adds societies best interest to the mix, “green marketing”- 4 P’so Product Goods, services, ideaso Place/Distribution Available in quantities desired Minimizing costs—inventory, transportation and storageo Promotion Inform consumers about the firm and its product—advertising, PR, personal selling, promotions, street teams/ guerilla marketing, viral marketingo Price Determining product prices and the value of exchange- SWOT analysis—Strengths, weaknesses, opportunities, threatso Matching strengths to opportunitieso Converting weaknesses to strengthso Converting threats to opportunities- Strategic Business Unit – division of a parent company1o Internal Marketing : Company – employee—empowerment is keyo External Marketing : Company – customer- BCG’s matrix – Star, Cash cows, Question marks, Dogso Star —products with a dominant share of the market and good prospects for growth—however, they tend to use more cash than they generate (high product market growth, high relative market share)o Cash cow —dominant share of a market but low prospect for growth—ex) Bounty paper towels—the best selling paper towels that represent cash cow for Proctor and Gamble—another example is soda market (low product market growth, high relative market share)o Question marks —“product children”—small share of a growing market that requires lots of cash—ex) Mercedes carbon racing bikes (high product market growth, low relative market share)o Dogs —in established markets, phased out products (low product market growth, low relative market share)- Environmental Forces: o Competitive forces Brand Competitors —different brand in same market—ex) Coke v. Pepsi Product Competitors —competitors in slightly different market—ex) tea v. soda Generic Competitors —Brand name v. generic Total Budget Competitors —making a tradeoff between markets—ex) chips v. soda for the same price Oligopoly —when a few competitors control supply, usually due to entry barriers—ex) airlines, operating systems Monopolistic —when firms in competitive industries attempt to differentiate a product—‘normal’ market Pure Competition —large number of sellers with similar products and low barriers to entry—sellers wouldn’t be able to influence priceor supply—doesn’t really exist—best example would be farmers market where local growers gather to sell produceo Sociocultural – demographic/diversity, cultural values, consumerism—affects how people live and helps determine where, how and when people buy products Demographics/diversity —affects the market place—ex)more older people increases demand for health care, dating sites geared towards older people/baby boomers, etc….- Increasing multicultural nature of the U.S. society advertising in different languages, lots of younger immigrants that are having more kidsnew target market- Problems and opportunities: more diverse population meansmore diverse consumer base, and marketing practices must be modified and diversified to meet changing needs Cultural values —cultural values don’t change over night but do change at varying speeds—ex) people are now more into eating healthier foods, less smoking and drinking, exercising, protection with sexual behavior, organic foods, etc….2 Consumerism —organized efforts by individuals, groups, and organizations to protect consumer rights- Major forces: individual consumer advocates, consumer organizations and other interest groups, consumer education, consumer lawso Technological Helps markets stay in touch with clients, make appointments, and handle last minute orders or cancelations The dynamics of technology involve the constant change that often challenges the structures of social institutions, including relationships, the legal system, religion, education, business and leisure Acts as a catalyst to spur even faster development as new innovations are introduced—they stimulate need for advancement to facilitate further development To remain competitive, companies must keep up with and adapt to technological advanceso Economic – Business cycle: ProsperityRecessionDepressionRecovery In prosperity, consumers are generally willing to buy, and marketers often expand their product offerings to take advantage of increased buying power—they can sometimes capture a larger market share by intensifying distribution and promotion efforts In a recession, customers become more price and value conscious and look for basic and functional products—marketers should focus on determining precisely what functions buyers want—promotional
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