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Study Guide: Exam 1
Marketing |
Process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment |
Customers |
Marketing focuses on _________, the purchasers of orgs' products; focal point of all marketing activities |
Essence of marketing |
________ is to develop satisying exchanges from which both customers and marketers benefit. |
Target Market |
A specific group of customers on whom an org focuses its marketing efforts. Can be relatively small or large, some companies have diff. target markets for each individual product. |
Marketing mix |
The four marketing activities/variables [products, distribution, promotion, and pricing] that a firm can control to meet the needs of customers within its target market |
Marketing mix |
Before developing a ________ ___, marketers must collect specific, up-to-date info about their target market. This determines what type and how much of each element is used. |
Product variable |
The aspect of the marketing mix that deals with researching customers' products wants and designing a good, service, or idea that satisfies those wants. |
Product |
A good, a service, or an idea |
Good |
A physical entity you can touch |
Service |
Application of human or mechanical effort to provide an intangible benefit |
Idea |
Concepts, images, philosophies, and issues |
Product variable |
Modifying packaging and brand names and decisions regarding warranty and repair services |
Distribution variable |
To reach and keep customers, products must be available at the right time and in convenient locations; make products available in desired quantities to as many customers as possible; internet access and e-commerce have greatly affected this |
Promotion variable |
Relates to activities used to inform individuals or groups about an org and its products; can be used to increase awareness about a new or existing product; can educate people about product usage or features or to take a stance on a political or social issue |
Pricing variable |
Relates to decisions and actions associated with establishing pricing objectives, policies, and determining product pricing; often used as a competitive tool; higher prices can establish a products reputation/image |
Exchanges |
The provision or transfer of goods, services, or ideas in return for something of value |
Exchanges |
In order for ________ to take place, these 4 conditions must exist:
1. 2+ individuals or groups must participate
2. each party must possess something of value
3. each party must be willing to ""give up""
4. must be able to communicate |
Alternative |
A customer will look for a/an ________ product or organization if dissatisfied with one's goods and services. |
Relationship marketing |
Establishing long-term, mutually satisfying buyer-seller relationships; customer becomes reliant on the company which increases confidence; company benefits from new, deeper understanding of customers needs |
Marketing concept |
A managerial philosophy that an org should try to satisfy customers' needs through a coordinated set of activities that also allows the org to achieve its goals; an org must satisfy its customers objectives and its own; important to consider current customers needs and long-term needs of society |
Marketing orientation |
An org wide commitment to researching and responding to customer needs; orgs found they must first determine what customers want and then produce it rather than make products and persuade customers they need it. |
Product orientation |
The Industrial Rev was in full force, electricity, rail transportation, mass production made it possible to manufacture products more efficiently; consumer demand for manufactured goods was strong |
Sales orientation |
Business people believe the most important marketing activities were personal selling, advertising, and distribution |
Implement |
To ________ the marketing concept, an org must accept some general conditions and recognize/deal with several problems;
Demands support from top management, managers, and staff at all levels;
First establish an info system to discover customer's needs and coordinate its activities w/in the org |
Value |
A customers' subjective assessment of benefits relative to costs in determining the worth of a product; marketing mix can be used to enhance perceptions of _____.
customer _____ = customer benefits - customer costs |
Benefit |
Anything a buyer receives in an exchange |
Cost |
Anything a buyer must give up to obtain the benefits provided by the product |
Marketing management |
Process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently. |
Planning |
Systematic process of assessing opportunities and resources, determining marketing objectives, and developing a marketing strategy and plans for implementation and control
(one part of marketing management) |
Organizing |
__________ marketing activities involves developing the internal structure of the marketing unit
(one part of marketing management) |
Control |
Marketing process that consists of establishing performance standards, comparing actual performance w/ established standards, and reducing the diff. bt desired and actual performance
(one part of marketing management) |
Costs |
About one-half of a buyers' dollar goes toward marketing _____. |
Importance of marketing to business and the economy |
Businesses must sell products to grow and survive, and marketing can help sell products. In turn, financial resources generated from sales can be used to develop innovative products.
Marketing activities are essential to the health ad ultimate survival of the global economy. |
Global economic growth |
Advances in technology, along with falling political and economic barriers and the universal desire for higher standard of living, have made marketing across national borders commonplace. |
Responsible marketing |
Can promote the welfare of customers and society; By managing concern about the impact of marketing on society, a firm can protect the interests of the general public and the natural environment. |
Dynamic |
Environment is always changing |
Environmental scanning |
The process of collecting info about forces in the mktg environment; observation, secondary sources (business, trade, govt, and general interest publications, and mktg research); internet very useful tool for this, must know how to use info obtained |
Environmental analysis |
The process of assessing/interpreting the info gathered through environmental scanning; should be able to identify threats and opportunities linked to environmental changes |
Passive and reactive |
Responding to environmental forces by accepting forces as uncontrollable
(org type and situation determines which response is better) |
Proactive |
Responding to environmental forces by attempting to influence and shape the environment
(org type and situation determines which response is better) |
Competition |
Orgs mktg products that are similar to or can be substituted for a marketer's product in the same geographic area |
Brand |
One type of competition where firms that market products with similar features and benefits to the same customers at similar prices (most significant) |
Product |
One type of competition where firms that compete in the same product class, but whose products have diff. features, benefits, and prices |
Generic |
One type of competition where firms that provide very diff. products that solve the same problem or satisfy the same basic customer need |
Total budget |
One type of competition where firms that compete for limited financial resources of the same customers |
Monopoly |
A market structure in which an org offers a product that has no close substitutes, making the org the sole source of supply
(Type of competitive structure)
Ex: local cable and utilities |
Oligopoly |
A competitive structure in which a few sellers control the supply of a large proportion of a product; each seller considers the reaction of the other sellers to changes in mktg activity
(Type of competitive structure)
Ex: General Mills |
Monopolistic competition |
A market structure in which a firm has many potential competitors attempt to develop a mktg strategy to differentiate its product in order to compete
(Type of competitive structure)
Ex: Levi Jeans, well known and recognizable |
Pure competition |
A market structure characterized by an extremely large number of sellers, none of them strong enough to significantly influence price or supply; easy entry into market, homogeneous products
(Type of competitive structure)
Ex: unregulated farmers market with local growers |
Monitoring |
_________ competition guides marketers in developing competitive advantages and aids them in adjusting current market strategies and planning new ones; price is most commonly (watched) variable |
Business cycle |
A pattern of economic fluctuations that has 4 stages related to economic conditions |
Prosperity |
A stage of the business cycle characterized by:
low unemployment
relatively high total income
high buying power (if inflation rate stays low) |
Recession |
A stage of the business cycle characterized by:
unemployment rises
total buying power declines
consumer and business spending stifling |
Depression |
A stage of the business cycle characterized by:
extremely high unemployment
very low wages
total disposable income is at a minimum
consumers lack confidence in economy |
Recovery |
A stage of the business cycle characterized by:
economy moving from Recession toward Prosperity |
Buying Power |
Resources such as money, goods, and services that can be traded in an exchange situation |
Inflationary Period |
Buying power is low because prices are rising |
Income |
Amount of money received through wages, rents, investments, pensions, and subsidiary payments for a given period |
Disposable Income |
After-tax income; determined by:
total amt of income, wage levels, rate of unemployment, interest rates, dividend rates, and *when taxes rise, this declines - when taxes fall, this increases |
Discretionary Income |
Disposable income available for spending and saving after an individual has purchased the basic necessities of food, clothing, and shelter. |
Wealth |
Accumulation of past income, natural resources, and financial resources |
Economic Forces |
Economic conditions, buying power, willingness to spend |
Political Forces |
-Legal and regulatory forces
-Procompetitive legislation (Clayton Act, Sherman Antitrust Act, Wheeler-Lea Act, Robinson-Patman Act)
-Consumer protection legislation (prohibits sale of flammable fabrics, consumer safety)
-Self-regulatory forces (BBB, Nat'l Advertising Review Board)
-Regulatory agencies (Federal Trade Commission, Food and Drug Admin) |
Marketing Environment |
Economic, political, technological, sociocultural, competitive, examining/responding |
Willingness to buy |
An inclination to buy because of expected satisfaction from a product, influenced by the ability to buy, and numerous psychological and social forces;
Other affecting factors: expectations about future employment, income levels, price, family size, general economic conditions, and expectations of rising prices in the future |
Self-regulatory forces |
"Businesses try to regulate themselves by establishing ethic codes
Advantages: establishment and implementation usually less expensive and guidelines generally more realistic and operational; effective programs reduce need to expand govt bureaucracy
Limitations: lack tools to enforce guidelines; guidelines are less strict than programs est. by govt agencies; when a trade assoc. creates a set of industry guidlines for its members, nonmember firms do not have to abide by them" |
Technology |
Application of knowledge and tools to solve problems and perform tasks more efficiently;
Impact helps marketers become more productive, lower prices, and improve ability to deliver |
Technology Assessment |
A procedure for anticipating the effects of new products and processes on a firm's operation, other business orgs, and society |
Sociocultural Forces |
The influences in a society and its cultures that change people's attitudes, beliefs, norms, customs, and lifestyles;
Determines what, where, how, and when people buy products |
Demographic and diversity characteristics |
age, gender, race, income, martial status, ethnicity;
number of elderly and singles is rising - buy smaller amt of food, where as families buy in bulk;
multicultural nature is increasing and the young are having kids (another baby boom) |
Culture values |
The way society views themselves affects the way a product is branded, priced, promoted, and distributed
-more casual workplace, more concern with health/exercising, major source is family, concerns for natural environment, whether 1 or 2 parents are working, single parent families |
Consumerism |
Organized efforts by individuals, groups, and orgs to protect their rights;
To achieve their objectives, consumers and their advocates write letters to companies, lobby govt agencies, broadcast public service announ., and boycott companies whose activities they deem irresponsible |
Social responsibility |
An org's obligation to maximize its positive impact and minimize its negative impact on society; total affect of all mktg decisions on society |
Dimensions of Social Responsibility |
Mktg citizenship, pyramid of corporate social resp. (economic, legal, ethical, and philanthropic), mktg ethics, cause-related mktg |
Marketing citizenship |
The incorporation of economical, legal, ethical, and philanthropic concerns into a firm's mktg strategies;
Describes how one company's efforts to improve its performance affected its relationship with stockholders and employees |
Pyramid of Corporate Social Responsibility |
1. Economic - to be profitable is the foundation on which everything else rests
2. Legal - to obey the law, law is society's codification of right and wrong, company must play by the rules
3. Ethical - company must have obligation to do what is right, just, and fair, and must avoid harm
4. Philanthropic - peak, to be a good corporate citizen, company must contribute resources to the community and improve quality of life |
Marketing Ethics |
Principles and standards that define acceptable mktg conduct as determined by various stakeholders |
Cause-related marketing |
The practice of linking products to a particular social cause on an ongoing or short-term basis |
Social Responsibility Issues |
Natural environment, consumerism, diversity, community relations |
Natural Environment |
Consumers insist not only quality of life, but also healthful environment so they can maintain high standard of living during their lifetimes;
Marketers demonstrate social responsibility through programs designed to protect and preserve the _______ ___________. |
Diversity |
Employees and consumers pressing for greater awareness and acknowledgement of demographic and lifestyle ________ issues, which are increasing in importance for orgs as ________ in the work force and guerilla population grows
The more closely the workforce matches the population, the better it understands consumer needs and wants |
Community Relations |
society anxious to have marketers contribute to its well-being, wishing to know what marketers do to help solve social problems |
Green Marketing |
The specific development, pricing, promotion, and distribution of products that do not harm the natural environment;
Marketers believe orgs should work together to protect and preserve this by implementing goals such as:
1. eliminate the concept of waste
2. reinvent the concept of a product - reduce to only 3 types (consumables, durable goods, and unsalables)
3. make prices reflect the cost
4. make environmentalism profitable |
Consumer bill of rights |
Right to safety, right to be informed, right to choose, right to be heard |
Marketing Ethics |
Principles that define acceptable conduct in mktg;
The study of ________ _____ helps us recognize, understand, and resolve conflicts of ethical nature;
Legal ramifications of some issues and problems must be resolved through litigation |
Ethical Issue |
An identification problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong |
Product Issue |
Mktg mix ethical issue that arises when marketers fail to disclose risks associated with product or info regarding the function, value, or use of product |
Promotion Issue |
Mktg mix ethical issue that arises when marketers use false and misleading advertising and manipulative or deceptive sales promos, tactics, or publicity efforts |
Marketing Strategy |
Selection and analysis of a target market and the creation and maintenance of an appropriate mktg mix that will satisfy the people in the target market |
Pricing Issue |
Mtkg mix ethical issue that arises when orgs employ such tactics as price fixing, predatory pricing, and failure to disclose the full price associated with a purchase |
Distribution Issue |
Mktg mix ethical issue that involves relationships among producers and mktg middlemen or intermediates;
Manipulating a products availability for purposes of exploitation and using coercion to force intermediates to behave in a specific manner are serious ___________ _____(s). |
Ethical Decision-Making Process |
Individual factors, organizational factors, and opportunity |
Individual factors |
People try to resolve ethical conflicts in their daily lives, they often base their decision on their own values and principles of right or wrong |
Organizational factors |
Corporate culture (set of values, beliefs, goals, etc shared by members of an org);
Chief executive officer or mktg sets the ethical tone for entire org;
Org pressure plays a key role in creating ethical issues |
Codes of Conduct |
Formalized rules and standards that describe what the company expects of its employees; provide guidelines that enable employees to achieve organizational objectives in an ethical, acceptable manner |
Ethics officer |
"High-ranking person in the org who is known to abide by legal and common ethical standards;
Job includes: provide advice about issues and identify potential ethical risks, draft code of conduct, trainemployees, create and maintain confidential system to answer questions about issues, take action on possible violations, research and gain info on how to manage ethic and compliance programs effectively" |
Steps to Ethical Compliance |
1. establish codes of conduct
2. appoint high level compliance manager (ethics officer)
3. take care in delegating authority
4. institute training program and communication system
5. monitor and audit for misconduct
6. enforce and discipline
7. revise program |
Marketing Performance |
Long-term value of conducting business in a socially responsible manner far outweigh short-term costs which improves _________ ___________;
Being socially resp. and ethical provides good benefits: enhance public reputation, increase in market share, cost savings, profits |