MRKTNG 3000 1st EditionExam # 1 Study Guide Lectures: 2 – 5Chapters 1 & 5Lecture 2 (August 21)Marketing Context and Overview-What is marketing?o The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.Marketing = study of exchangeThe purpose of the marketing concept is to rivet the attention of marketing managers on serving broad classes of customer needs (customer orientation), rather than on the firm’s current products (production orientation) or on devising methods to attract customers to current products (selling orientation). Principles of Marketing CH. 1-Tasks of Marketingo First Task: Discovering Consumer NeedsFind potential consumers (the market) and information about needs-Create concepts for productso Second Task: Satisfying consumer NeedsFind the right combination of the four P’s-Product*-Price-Promotion-Placeo *Product is generally most important of the 4 P’s-Benefits and Costs Categorieso BenefitsFunctional-Ex. pen, chair, lawnmower, hammero Functional benefit of taking MRKTNG 3000:Learn about marketing, get course creditSocial-Ex. clubs, bars, social media, cellphoneso Social benefit of taking MRKTNG 3000:Meet friends, business partners, etc.Experiential-Ex. sports, travelingo Experiential benefit of taking MRKTNG 3000:Have fun, joy of learningPersonal-Ex. game-winning hit, make-up, a houseo Personal benefit of taking MRKTNG 3000:Feeling good about learning or excellingo What is an example of a product that has all types of benefits associated with it?A football gameThis classo CostsMonetary-$ spento Ex. tuition and book feesTemporal-Time spento Ex. time spent in class and studyingPsychological-Psychological costso Ex. stress of studying and listening to professorsBehavioral-Cost of behavioral activityo Ex. expending energy walking to classeso iPad DiscussionBenefits of iPad-Experiential -> easy to use, appso Added benefits: more colorsCosts of iPad-Monetary-> cost moreLecture 3 (August 26) Marketing Strategy and Competitive Analysis- Analyzing the Marketing Environmento $40 billion diet industryo Increased consumption of health and diet productso Businesses responding to the demand in a variety of ways Megatrend: past 20 years- Ex. Subway, Kashio Trends seen during the recession Movies, alcohol, cigarettes, dollar stores- Three Phases of a Strategic Marketing Plano Step one: Defining the Mission and/or Vision MADD Mission Statement:- The mission of MADD is to stop drunk driving, support the victims of this violent crime and prevent underage drinking Porter’s Five Forces Model- Corporate Strategyo In which industries do we want to compete?- Industry profitability dependent on:o Industry competiveness Intensity of current competitors- Low intensity = monopoly = higher profitabilityo Ex. Commercial aircraf- More firms = more intensity = lower profitabilityo Ex. Fast foodo Availability of substitute products Few or no substitutes = higher profitability- Ex. gasoline, proprietary drugs Many substitutes = lower profitability- Ex. fresh vegetables, technological products,sof drinkso Coke is NOT a substitute for pepsi Water is a substitute for pepsi Prospect of a future technology can act as a substitute- Ex. Blu-ray <new product coming outo Potential entrants (threat of new competition) High Barriers to entry = lower competitive threat = higher profitability High barriers exist when:- High capital requirements- Economies of scale are present- High product differentiation- Network externalities (technological or learning curve) Ex. automobile industry – high capital requirements, economies of scale Ex. of network barrier – word processing sofware –network externalities No barrier to entry unless you create on using network externalitieso Supplier and buyer power Lower bargaining power of suppliers/buyers = higher profitability- Lower bargaining power when:o High numbero Low information- Ex. low supplier power – computer industry (hard disk drives)- Ex. low buyer power – medical services (patients)- Which industries will be profitable now and profitable in the future?o What is Sustainable Competitive Advantage? An advantage versus competition that can be maintained consistency overtime- What do you think are the keys to McDonald’s sustainable advantage?o In India: no burgerso In France: make your own desserto Macro Strategies for Developing Customer Value Product excellence- Apple  Operational excellence Customer excellence- Virgin Atlantic (3 tiers of service)- Ritz Karltono Step two: Conduct a Situation Analysis Using SWOT Intensive growth strategies: Ansoff’s Product/Market Expansion Grid- How to increase sales?o Lower priceso Locationo IncreasePromotiono Increasedistribution- Ex. Productdevelopment: NatureValley – new sweet andsalty bars- Hypothetical Market Structure & Strategies (Beer)o Market Leader (40%): Busch Expand Market – promote beer in general Defend Market Share Expand Market Shareo Market Challenger (30%): Miller, Coors Attack Leader Status Quoo Market Follower (20%): Sam Adams Imitateo Market Nicher (10%): Boulevard Specialize- Apple Inc.o Firm’s main type of growth strategy: Product developmento Firm’s main type of macro strategy: Product excellenceo Which of the five forces most limits profitability of the tablet industry? Availability of substitutesChapter 1Strategic Planning and the Marketing Management Process- The Strategic Planning Processo What is Strategic Planning? Includes all the activities that lead to the development of a clear organizational mission, organizational objectives, and appropriate strategies to achieve the objectives for the entire organization.o 4 components of a strategic plan Mission- The mission statement, or purpose, of an organization is the description of its reason for existence. - Defines the direction in which the organization is heading and howit will succeed in reaching its desired goal- What is our business? Who is the customer? What do customers value? What will our business be?- 3 key elements in developing a mission statemento The organization’s historyo The organization’s distinctive