MARK3000 Test 01 Page 1 of 9 Chapter 1 An Overview of Marketing LO1 What is marketing Marketing the activity set of institutions and processes for creating communicating delivering and exchanging offerings that have value for customers clients partners and society at large Exchange people giving up something in order to receive something they would rather have Five conditions of exchange o There must be at least two parties o Each party has something that might be of value to the other party o Each party is capable of communication and delivery o Each party is free to accept or reject the exchange offer o Each party believes it is appropriate or desirable to deal with the other party LO2 Marketing management positions Four competing philosophies strongly influence an organization s marketing processes Production Orientation o Production orientation a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace o Field of Dreams if I build it they will come if I make it they will buy it o Falls short because it does not consider whether the goods and services that the firm produces most efficiently also meet the needs of the marketplace Sales Orientation o Sales orientation the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits o Has a lack of understanding of the needs and wants of the marketplace Market Orientation o Marketing concept the idea that the social and economic justification for an organization s existence is the satisfaction of customer wants and needs while meeting organizational objectives o Marking concept includes Focusing on the customer wants and need so that the organization can distinguish its product s from competitor s offerings Integrating all of the organization s activities including production to satisfy customer wants Achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly o Market orientation a philosophy that assumes that a sale does not depend on an aggressive dales force but rather on a customer s decision to purchase a product it is synonymous with the marketing concept Social Marking Orientation o Social marketing orientation the idea that an organization exists not only to satisfy customer wants and needs but also to preserve or enhance individuals and society s long term best interests MARK3000 Test 01 Page 2 of 9 o Environmentally friendly stores and products demanded has increased even through recession LO3 Differences between Sales and Market Orientation The differences between sales and market orientations are substantial The Organization s Focus o Customer Value Customer value the relationship between benefits and the sacrifice necessary to obtain those benefits Offer products that perform Earn trust Avoid unrealistic pricing Give the buyer facts Offer organization wide commitment in service and after ales support Co creation o Customer Satisfaction Customer satisfaction customers evaluation of a good or service in terms of whether it has met their needs and expectations Coming back from customer dissatisfaction can be tough o Building Relationships Relationship marketing a strategy that focuses on keeping and improving relationships with current customers Customer oriented personnel happy employees make happy customers The Role of Training Empowerment delegation of authority to solve customers problems quickly usually by the first person the customer notifies regarding a problems Teamwork collaborative efforts of people to accomplish common objectives LO4 Why study marketing Marketing plays an important role in society marketing is important to business marketing offers outstanding career opportunities and marketing affects your life every day Fundamental objectives of businesses survival profits and growth Marketing activities o Assessing the wants and satisfactions of present and potential customers o Designing and managing product offerings o Determining prices and pricing policies o Developing distribution strategies o Communication with present and potential customers Chapter 4 The Marketing Environment LO1 The external marketing environment MARK3000 Test 01 Page 3 of 9 Marketing mix is under the firm s control and is designed to appeal to a specific group of potential buyers or target market Target market a group of people or organizations for which an organization designs implements and maintains a marketing mix intended to meet the need of that group resulting in mutually satisfying exchanges Environmental management when a company implements strategies that attempt to shape the external environment within which it operates LO2 Social factors Social change is the most difficult external variable for marketing managers to forecast influence or integrate into marketing plans Value a strongly held and enduring belief Four basic American values o Self sufficiency o Upward mobility o Work ethic o Conformity U S consumers rank characteristics of product quality o Reliability o Durability o Easy maintenance o Ease of use o Trusted brand name o Low price Component lifestyles the practice of choosing goods and services that meet one s diverse needs and interests rather than conforming to a single traditional value LO3 Demographic factors Demography is another uncontrollable variable in the external environment Demography the study of people s vital statistics such as age race and ethnicity and location Population o Tweens o Home d cor market growing Teens o Two keys to effectively market to teens Make the product modern and convenient Engage teens through promotion that gets them involved Generation Y o Generation Y people born between 1979 and 1994 o Characteristics Inquisitive Opinionated Diverse Time managers MARK3000 Test 01 Page 4 of 9 Quick shoppers Want fulfillment Multitaskers Brand besotted Generation X o Generation X people born between 1965 and 1978 o Biggest spenders at mass merchandisers Baby Boomers o Baby boomers people born between 1946 and 1964 o Big toy store spenders grandchildren o Control 80 of personal wealth LO4 Growing ethnic markets 2015 Estimated that Hispanics will wield 1 5 trillion in purchasing power African Americans will have 1 3 trillion Asian Americans will have 775 billion Minorities are starting to preserve their culture more Marketing to Hispanic Americans o Prefer goods from native country o Import goods