Marketing 3401 Study Guide Exam 1 Chapter 1 Overview of MKT Five Conditions of MKT 1 There must be at least 2 parties 2 Each party has something that might be of value to the other party 3 Each party is capable of communication and delivery 4 Each party is free to accept or reject the exchange offer 5 Each party believes its appropriate or desirable to deal with the other Exchange people giving up something in order to receive something they party would rather have Exchange doesn t have to have money barter trade Exchange will not necessarily take place even if conditions exist All conditions are necessary for exchange to take place Marketing Management Philosophies 1 Production Orientation 2 Sales orientation 3 Market orientation o Internal capabilities of the firm rather than on the desires and needs of the marketplace o Does not consider whether the goods and services that the firm produces meet the needs of the marketplace o Based on the idea that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits o Lack of understanding of the needs and wants of the marketplace o Marketing oriented Assumes a sale does not depend on an aggressive sales force but rather on a customer s decision to purchase a product o Marketing concept social and economic justification for an organization s existence is the satisfaction of customer wants and needs while meeting organizational objectives o Focusing on customer wants and needs so that the organization can distinguish products from competitors o Integrating all the organization s activities including production to satisfy customer wants o Achieving long term goals for the organization by satisfying the customer wants and needs legally and responsibly 4 Societal marketing orientation o Extends marketing concept by acknowledging that some products that customers want may not really be in their best interests or in the best interests of society as a whole o Preserve or enhance individuals and society s best interest Differences between Sales and Marketing Orientation Organization s focus o Customer value relationship between benefits and the sacrifice necessary to obtain those benefits Value is more than price Marketers interested in customer value Offer products that perform Earn trust Avoid unrealistic pricing Give the buyer facts Offer organization wide commitment in service and after sales support Cocreation o Customer satisfaction customer s evaluation of a good or service in terms of whether that good or service met their needs and expectations o Relationship marketing strategy that focuses on keeping and improving relationships with current customers o Customer oriented Personnel Employee IS the firm o Employee training o Empowerment problems on the spot o Teamwork Give employees more authority to solve customer Emphasize cooperation instead of competition Firm s Business o Sales orientated defines business in terms of goods and services o Market oriented defines it business in terms of the benefits its customers seek Whom the product is directed to o Sales oriented targets its products at everybody or the average o Market oriented target specific group of people Different customer groups want different benefits o Customer relationship management develop deeper understand of consumer customer o Business strategy designed to optimize profitability revenue and customer satisfaction by focusing on specific customer groups Firm s primary goal o Sales oriented seeks to achieve profitability through sales volume and tries to convince potential customers to buy even if the seller knows that the customer and product are mismatched o Market oriented goal is to make a profit by creating customer value providing customer satisfaction and building long term relationships with customers Chapter 2 Strategic Planning for Competitive Advantage Strategic Business Unit Large companies may manage a number of different businesses SBU has the following characteristics o A distinct mission and specific target audience o Control over its resources o It s own competitors o A single business or a collection of related businesses o Plans independent of other SBUs in the total organization Strategic Alternatives Ansoff s strategic opportunity matrix Boston consulting group matrix General Electric model The Marketing Planning Process Planning Process of anticipating future events and determining strategies to achieve organizational objectives in the future Why write a Marketing Plan o Provide basis by which actual and expected performance can be compared o Provides clearly stated activities that help employees and managers understand and work toward common goals o Allows you to examine the marketing environment in conjunction with the inner workings of the business o Serves as a reference point for the success of future activities o Allows the marketing manager to enter the marketplace with an awareness of possibilities and problems Marketing planning designing activities relating to marketing objectives and the changing marketing environment o Basis for all marketing strategies and decision Marketing plan written document that acts a guidebook of marketing activities for the marketing manager o Elements of a marketing plan Defining the business mission The foundation of any marketing plan is the firm s mission statement which answers the question what business are we in o Should focus on the market rather than the good service o State in terms of the benefits that customers seek Marketing myopia defining a business in terms of goods and services rather than in terms of benefits customers seek SWOT analysis identifying internal strengths and weaknesses and also examining external opportunities and threats o Focus on resources such as marketing skills production costs financial resources company or brand image employee capabilities and available technology Environmental scanning collection and interpretation of information about forces events and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan o Most often studied are Social demographic technological political and legal and competitive Competitive Advantage Competitive advantage set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition o Three types of competitive advantage