BUAD301 Exam 1 Study Guide Chapters 1 2 3 4 Chapter 1 Notes 1 Marketing important to you a Affects almost every aspect of your daily life b Encourages research and innovation i Plays a part in economic growth and development ii Marketing performance of activities that seek to accomplish an organization s objectives by anticipating customer or client needs and direction flow of need satisfying goods and services from producer to customer or client c Drives organization to focus on what it takes to satisfy us the customers 2 Characteristics of marketing a Aim of marketing is to identify customer s needs and meet those needs so well that the product almost sells itself b Should begin with potential customer needs i Try to anticipate needs ii Then develop product based on those needs iii Marketing occurs only if two or more parties are willing to exchange something for something else 1 Pure subsistence economy each family unit produces whatever they need no marketing is involved bc nothing is exchanged iv Creates relationships with consumers keeps them coming back 3 Role of Marketing in Economic Systems a Command economy government decides what and how much of each product is to be produced and who distributes it i Planned economy ii Prices controlled iii Eventually breaks down because uses too simple of an economic model 1 Soviet Union 2 North Korea Cuba have these right now b market directed economy consumers make the macro level decisions for the whole economy individual decisions of the many producers and 4 Macro Marketing a Macro marketing social process that directs an economy s flow of gods and services from producers to consumer in a that effectively matches supply and demand and accomplishes the objectives of society b Emphasis on how the whole system works i Effectively match heterogeneous supply and demand and accomplish society s objectives c Economies of scale product the cost of each unit of the product goes down as a company produces larger numbers of a particular i Discrepancies of quantity quantities and consumers buy and consume in small quantities assortment consumers want large assortment producers want to produce narrow producers want to produce and sell large ii Discrepancies of assortment d there is great separation between producers and consumers i makes effective marketing difficult e universal functions of marketing in notes aim to overcome discrepancies i buying and selling ii transporting and storage iii standardization and grading iv financing v risk taking 1 how much of each type you make based on research 1 even after going through this process 8 10 fail vi market researching vii not every firm needs to perform every function plane rides pure service don t need storing etc viii from the macro view though all functions must be performed by someone service f price is measure of value how much the customer values the product g marketing has changed a lot over the years ii Production Era i Simple trade era families traded or sold their surplus to local distributors who then resold them from industrial revolution until 1920s when company focuses on production of a few specific products because few of these products are in the market 1 if we can make it it will sell 2 economies with economic shortages have this still competition marketing activities were brought together under one department to improve short run policy and try to integrate firms activities concept when a company emphasizes selling bc of increased whole company effort is guided by marketing iv Marketing department era v Marketing company era iii Sales era 5 Marketing concept a Means an organization aims all its efforts at satisfying the customer at a profit i Customer satisfaction ii Total company effort iii Profit not just sales as objective b Production orientation then trying to sell them c Marketing orientation customers what they need making whatever products are easy to produce and trying to carry out the market concept offer d Profit difference between a firm s revenue and total cost is the bottom line measure of the firm s success and ability to survive e Producers of steel coal and chemicals are usually production oriented because customers see little difference in product f Limited competition industries electric utilities cable providers also slow to adopt marketing concept 6 Marketing Concept and customer value a Customer value marketing offering and the costs of obtaining those benefits the difference between the benefits a customer sees from a b Firms that offer superior customer value will get and keep more customers c Trying to get new customers is more costly than retaining old ones i Want to create long lasting relationships d Firms need to provide customer value before and after the purchase 7 The marketing concept social responsibility and marketing ethics a Micro macro dilemma in notes what is good for some firms and consumers may not be good for society as a whole i Bottled water but cities provide water society and reduce its negative effects actions i Most firms have codes of ethics b Social responsibility a firm s obligation to improve its positive effects on c Marketing ethics the moral standard that guides marketing decisions and 8 Oligopoly market situation that develops when a market has essentially the same products relatively few sellers and fairly inelastic industry curves Chapter 2 Notes 1 Management job in marketing a Marketing management process i Planning marketing activities 1 Set objectives evaluate opportunities create marketing strategies and plans develop marketing program ii Directing the implementation of the plans iii Controlling these plans 1 Measure results evaluate progress b Strategic management planning maintaining a match between an organization s resources and its market opportunities i Strategy planning marketing strategy planning the managerial process of developing and a Specifies a target market and a related marketing mix b Target market a fairly homogeneous group of customers to whom a 2 Marketing strategy company wishes to appeal satisfy this target group c Marketing mix the controllable variables the company puts together to d Target market is at the center of the marketing mix 3 Selecting a market oriented strategy is target marketing b Mass marketing a Target marketing a marketing mix is tailored to fit some specific target customers with the same marketing mix i Considers everyone a potential customer ii Mass marketers Kraft Foods