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MKT 305: EXAM 1
Marketing |
The process of creating, pricing, distributing and promoting goods, services and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment
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AMA's Mark Def |
Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders
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Product |
Goods, service or ideas that satisfy customer needs
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Pricing |
Decisions and actions that establish pricing objectives and policies and set product prices
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Distribution |
The ready, convenient and timely availability of products
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Promotion |
Activities that inform customers about the organization and its products
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Marketing Mix |
Customer
Product
Place
Price
Promotion
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Conditions for Exchange
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Two or more participants have something of value that the other party desires
exchange provides mutual benefit/ satisfaction
Each party has confidence in the exchange value of the other party's offering
Each party must meet the expectations of the exchange to become trusted by other parties
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Components of Strategic Marketing |
Customer
product
price
distribution
promotion
1. Economic Forces
2. Political Forces
3. Competitive Forces
4. Socio-Cultural Forces
5. Technological Forces
6. Legal and Regulatory Forces
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Product Orientation |
Late 19th Century- efficient production of goods allowed firms to meet strong customer demand
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Sales Orientation |
Mid 20s- early 50s- weakened demand required that products would have to be "sold" (personal selling, advertising and distribution was the focus)
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Marketing Orientation |
Early 50s- 2000s- adopting a customer focus means a commitment to researching and responding to customer needs
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Stakeholder Orientation |
2000s-Today- oriented towards stakeholders and their wants
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Contact Points |
Successful marketing requires managing and coordinating marketing messages at every contact point
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Planned Contact |
Rude contact employees
Antiquated buildings
long service delays
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Unplanned Messages |
Dirty parking lot
Poor store hrs
unfriendly employee
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Core Competencies |
Things a firm does extremely well (strengths) which sometimes give it an advantage over its competition
Financial and human resources
Reputation, goodwill and brand names
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Market Opportunity |
A combination of circumstances and timing that permits an organization to reach a target market
Core competencies are matched to opportunities
Strategic windows- temporary periods of optimal fit between the key requirements of a market and the particular capabilities of a firm
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Comparative Advantage |
the result of a company's matching a core competency (superior skill or resources) to opportunities in the marketplace
Manufacturing skills
Technical Skills
Marketing Skills
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SWOT Analysis |
An assessment of the organization's strengths, weaknesses, opportunities and threats
Strengths- competitive advantages or core competencies
Weaknesses- limitations on competitive capability
Opportunities- favorable condition in the environment
Threats- conditions or barriers to reaching objectives
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Mission Statement |
a long-term or vision of what the organization want to become
Mission statement answers two questions
what are our customers? target market?
What are our core competency? Strengths?
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Market Objective |
a statement of what is to be accomplished through marketing activities to match strengths to opportunities, or to provide for the conversion of weaknesses to strengths
should be stated in clear, simple terms
should be accurately measurable
should specify a time frame for accomplishment
should be consistent with business-unit and corporate strategy
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Market-Growth Market-Share Matix |
Strategic planning tool based on the philosophy that a product's market growth rate and market share are important in deterring marketing strategy
Factors determining SBU/ product's position within a matrix
product-market growth rate
Relative market share
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Star |
High- Product-Market Growth
High- Relative market Share
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Cash Cow |
Low- Production Market Growth
High- Relative market Share
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Question Mark |
High- Product Market Growth
Low- Relative Market Share
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Dog |
Low- Product Market Growth
Low- Relative Market Share
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Target Market Selection |
Focusing on specific profitable customer groups/ market segments
Recognizing changes occurring in the market
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Creating the Marketing Mix |
Analyze customer needs, preferences and behavior
Have the skills and resources required for product design, pricing, distribution and promotion
Maintain strategic consistency and flexibility in marketing mix decisions
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Marketing Planning |
the process of assessing opportunities and resources, determing objectives, defining strategies and establishing guidelines for implementation and control of the marketing program
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Progression of Marketing Strategy |
Machiavelli- intimidation and force
Fred Taylor (1911)- Piece Rate System; Paid based on items made
Gilbreath's- Cut down on time to save $
Hawthorne- subtle changes to environnement
Deming- Total Quality Management
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Total Quality Management (TQM) |
a philosophy that uniform commitment to quality in all areas of the organization will promote a culture that meets customers perceptions of quality
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Benchmarking |
Comparing the quality of the firm's goods, services or processes with that of the best-performing competitors
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Empowerment |
Giving customer-contact employees authority and responsibility to make marketing decisions on their own
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TQM 2 Points
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Cease dependence/ Reliance mass inspection (each step)
End Practice of rewarding of rewarding business on price tag alone (sole sourcing, Find the best & give all business to them, quality driven)
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Monopoly |
one player
Utilities
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Oligopoly |
Few companies with similar products
Airlines
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Monopolistic Competition |
Many players & are differentiated
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Pure Competition |
Unlimited # of suppliers
Hair stylists
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Economic Forces |
Buying Power
total amount of exchanges a consumer can make
resources; $, G/S/I that can be traded in an exchange
Income
Disposable Income- after taxes
Discretionary income- after DI & Taxes
Credit
Wealth
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The Pyramid of Corporate Social Responsibility
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Economic
be profitable
the foundation upon which all others rest
2. Legal
Obey the Law
law is society's codification of right and wrong
play by the rules of the game
3. Ethical
be ethical
Obligation to do what is right, just and fair
avoid harm
4. Philanthropic
be a good corporate citizen
contribute resources to the community; improve quality of life
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Social Responsibility Issues |
The Natural Environment- Green
Consumerism- Raulph Nader (seat belt); JFK (4 rights; safety, informed, choices, heard)
Community Relations- Give back
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Ethics |
The principles of conduct governing an individual or a group
car dealerships
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Ethical Issues in Marketing |
Product- just noticeable difference
Price- collusion (company working together)
Place- not setting up correctly
Promotion
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Government Agencies |
Federal Trade Commission (FTC)- controls unfair competition regarding advertising, credit claims, labeling, and packaging
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Amendments |
1938- Wheeler-Lea Amendment
Gave FTC more power to force an ad to cease & desist
1971- Advertising Substantiation Act
Make prof available to consumers
endorsers
users of product
expert
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FTC Legal Powers |
Created to prohibit unfair methods of competition
Advertising's effect on competition
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Government Agencies |
Federal Communications Commissions (FCC)
prohibits obscenity, fraud and lotteries on radio and TV
Food and Drug Administration (FDS)
Regulates ads of food, drug, cosmetic & medical products
Securities and Exchange Commission (SEC)
regulates advertising of securities
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Deception and Unfairness |
False testimony- endorsors
Bait and Switch
"Free Offers"
Puffery- bold statements with out justification
Misleading demonstrations/ Deceptive Advertising
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Deceptive Advertising |
Miscomprehension- the meaning conveyed to the hearer (perceived reality) is different from the literal content of the message
receiver extracts the incorrect meaning, not companies fault
Deceptiveness- conveyed meaning is inconsistent with the facts about the product, regardless of what the ad states
meaning is inconsistent
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Consumers deceived by ad when...
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the impression left by the claim is false
the false claim is believed by consumers
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FTC determis deception based on...
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Misleading
Reasonable Consumer- targeting correct consumer
Material- Relevant
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Deceptive Advertising |
Miscomprehend w/out being deceived- literally falsely not interoperated literally (Red Bull gives you wings)
True-But-Deceptive Ads(Induced Miscomprehension)- Literally true but people miscomprehend; (Mouthwash fights germs)
Elliptical Causation- Standard of compares w/out substance (Budlight gives you more)
Implied Causation-Infur that were superior but aren't (if we do the taxes we will accompany you to your audit)
Pseudoscience- incomplete info, #s (3/4 doctors recommend)
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Regulation of Direct Marketing & E-Commerce |
Privacy
Contest & Sweepstakes- no purchase necessary (3X)
Telemarketing
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Regulation of Sales Promotion |
Premium Offers
Contests and Sweepstakes
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