MKTG 301 1st Edition Exam 1 Study Guide Market groups of people who have common needs and are willing able to exchange for need satisfaction Value 1 Costs Monetary Energy Time Opportunity Psychological 2 Benefits Marketing Mix Product Distribution Pricing Promotion Product Core need satisfier goods services experiences and or ideas Distribution Providing access and availability 1 Utility time utility place utility form utility possession utility 2 Direct Distribution manufacturer market consumer 3 Indirect Distribution manufacturer retailer market consumer Pricing Monetary Valuation 1 Cost Oriented Approach total fixed cost total variable cost profit unit 2 Demand Oriented Approach Elasticity of demand change in Quantity demand change in price Demand is elastic if 1 lower the price Demand is inelastic if 1 raise the price 3 Competition oriented approach Price skimming charge more than others promote quality Penetration pricing charge less than others sales volume increases Parity pricing price along with others stay on par Promotion giving information and persuasion value Major Promotion Methods 1 Advertising mass communication non personal one way indirect feedback low cost high control overall 2 Personal selling one on one personal 2 way direct feedback high cost low control 3 Sales Promotion Techniques incentives to form habits and brand loyalty Ex coupons free samples combination offers point of purchase POP displays continuity programs frequent flyer punch cards rebate offers games contests premium offers t shirts keychains ect 4 Public Relations Publics Ex employees financial stockholders community groups suppliers channel members regulatory agencies news media trade industry professional organizations Public Relation Methods Publicity placing information in news media ex press release Difference b w publicity and advertising is that publicity is free with little control Institutional advertising ad about company in general rather than specific product Publications links to specific information ex brochures magazines ect Tours open houses inside view of a company Lobbying pay people to be on their side Speaker bureaus representatives to give presentations Community involvement programs help maintain relationship with the public 5 Other Packaging Permanent Media Mcdonalds arches UPS brown Product Placement product placed in movies brands named in songs Buzz Marketing word of mouth Value market perception that exchange benefits are greater than costs Quality market perception of performance on most important attributes Ex speed taste health convenience Satisfaction market perception that performance exceeds expectations Marketing Concept 1 Marketing Definition of the Business rather than a product definition Example apple computer apple envelope company drill bit hole needed 3M surface to surface Practice target market market segmentation Demographic age sex income occupation education social class family life cycle Geographic climate terrain urban suburban rural buying power index of national population of national income of national retail sales people with money who spend it geographic subculture ex the fan shotgun pickups Psychographic values lifestyles personality traits VALS ex titanic or ritualistic drinkers Volume based on volume of purchase or consumption ex heavy medium light non and ex users Benefit taste price brand it is what you seek when purchasing or consuming Institutional beyond household consumers hotels hospitals restaurants Develop extended product strategies marketing of coordinating solutions to product needs Ex airlines hotel car Verizon alliance trailer service Establish relationship marketing programs Lifetime value of a customer Ex real estate thanksgiving card vcu alumni Nordstrom tire return 2 Coordination Integration of the Marketing Effort The HRM process Human Resource Management Job Description Recruiting selecting Orientation Training Programs Evaluation Reward Cross functional coordination bring different departments together Ex brand development Internal Marketing 3 Social Responsibility Obey Laws Ethical Codes JFK s Consumer Bill of Rights Right to safety ex FDA CPSC EPA Right to be informed deceptive acts and practices Deception capacity to deceive on a material point or influential to purchase Permissible puffery harmless exaggerations Ex visual distortion bait switch incomplete disclosure uniqueness of claim Right to choose anti competitive acts and practices FTC regulates Ex price fixing with competitors predatory pricing walmart price discrimination business to business lower prices Right to be heard where customers can express concerns ex better business bureaus Cause Related Marketing mix profit with a cause Ex Mcdonald s Ronald Mcdonald house Yoplait lids for a cure or sponsorships Green Marketing environmentally friendly packaging or production Ex Walmart 4 Environmentally Responsive Marketing Planning Function 4 Steps in Marketing Planning 1 2 3 4 Situation analysis Where are we now Objectives Where do we want to be Strategy How do we get there Evaluation Control How did we do Situation Analysis SWOT Strength Weakness Opportunities Threats look at internal strengths and weaknesses Ex financial people employees structure departments facilities strategy Look at external environmental opportunities and threats External Environment uncontrollable a Social demographic psychographies are they opportunity or threat b political legal c economic changes d technological innovations e Competition ex hotels 1 Brand level same product same market needs 2 Product level similar product similar market needs 3 Generic level very different product similar market needs Situation Analysis Continued Demand States a b c d e Negative boosting image after crisis No company has to increase awareness Latent demand for something that doesn t exist Faltering gradual decline Irregular fluctuating demand Marketing Tasks Conversional marketing Stimulational marketing Developmental marketing Re marketing Synchro marketing ex airline after crash ex new restaurant ex pringles ex classic coca cola ex hotels in season Objectives priorities realistic measurable consistent Profit ROMI Return on marketing investment Sales revenue units sold Market Share percent of market you desire Brand Equity total financial value of a brand brand awareness brand associations quality loyalty Efficiency Input output relationships ex Low CPM is desired Strategy Planned actions