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The process of creating, distributing, promoting and pricing goods, services,and ideas to facilitate satisfying exchange relationship with customers and develop and maintain favorable relationships with stakeholders in a dynamic environment.
What branch of social sciences does marketing come from?
The provision or transfer of goods, services, or ideas I'm return for something of value
Marketing requires 4 things:
two or more parties with unsatified needs desire and ability to satify the needs a way for the parties to communicate something to exchange
The goal of marketing and exchange is _____ for both parties.
The _____ is the person who pays everyone's salary and who decides if a business is going to succeed or fail.
3 components of Strategic marketing:
1) Focus 2) Marketing Mix 3) Environmental forces
Strategic Marketing - The Marketing Mix
1) Price 2) Promotion 3) Product 4) Distribution (Place)
Strategic Marketing - The Focus
The customer
Strategic Marketing - Environmental Forces (6)
1) economic 2) political 3) competitive 4) socio-cultural 5) technological 6) legal and regulatory
Strategic Marketing - Distribution (place)
- Making products available at the right time int he right place - Involves making products available in the quantities and locations desired by customers
The Marketing Mix - Promotion
- Activities to inform individuals or groups about the organization and its products - Consists of the specific blend of advertising, public relations, personal selling, sales promotion, and direct-markeitng tools that the company uses to persuasively communicate customer value and build…
The Marketing Mix - Price and Product
What the product is (goods, services, or ideas) and the value that is exchanged for that product.
The Marketing Concept
a management philosophy that an organization should try to provide products that satisfy customer needs through a coordinated set of activities that also allows the org to achieve its goals
The evolution of the Marketing Concept (3)
1) Price Orientation 2) Sales orientation 3) Marketing Orientation
Marketing Orientation - evolution of the marketing concept
An organization-wide commitment to researching and responding to customer needs
Sales Orientation - The evolution of the marketing concept
- Business people believed the most important marketing activities were personal selling, advertising and distribution to increase profits as their main goal. - Ex: "I love Lucy"...pushy salesman video.
Product Orientation - The evolution of the marketing concept
- Related to the industrial revolution - mass production and assembly lines made it possible to produce products more efficiently - products poured into the marketplace where demand for manufactured goods was strong
Customer Relationship Management (CRM)
Using information about customers to create marketing strategies that develop and sustain desirable customer relationships
80/20 rule of CRM
80% of business profits come from 20% of customers.
Customer lifetime value (CLV)
May include: - Customer's tendency to engage in purchases, and word-of-mouth communication about the company's products. - The net present value of all estimated future profits from the customer.
Reasons to study marketing:
1) Company success - marketing fuels our global economy 2) Marketing is important to businesses and Economic growth 3) Marketing is used in Nonprofits and other areas 4) Marketing is over half the cost of most products 5) Build skills - marketing offers many career prospects 6) Marke…
OrganizationalGoals - Mission Statement
- Statement of what the organization wants to be. - Clear, concise, meaningful, inspirational, and long-term - Internal more than external - Guides business strategies - Video of Southwest Airlines mission - funny rapper flight attendant
Strategic Planning
The process of establishing an 1) organizational mission and formulating goals 2) corporate and business-unit strategies 3) marketing objectives and marketing strategy - identification of organization's opportunities and threats.
(4) Competitive Growth Strategies
Strategies 1) Market Penetration 2) Product Development 3) Market Development 4) Diversification
Core Competencies
Things that a company does best
Market Penetration
Attempt to gain additional share of existing markets using existing products - Get more people to drink orange juice - New Ad campaigns
Market Development
- Find new customers for an existing product - Mane N' Tail Shampoo - originally only used for horses, but people can use it too.
Product Development
Sell a NEW product to existing markets - Quaker oats made a new product (rice cakes) and sold it in the existing market.
Increase sales volume from NEW products in NEW markets. - Google Glasses - completely different products to new customers.
SWOT Analysis
An analysis of Strengths, Weaknesses, Opportunities, and Threats to determine how well the company's skills and resources match the predicted market opportunities. - Strengths and Weaknesses are Internal - Opportunities and Threats are external - The SWOT Analysis is Changing and Dyna…
Environmental Scanning and Analysis
1) Scanning - the process of collecting information about forces in the marketing environment 2) Analysis - Making sense of the information collected in scanning the environment and then applying it. - NOT considered marketing research!
Competitive Advantage
Strengths that are unique to a company and are extremely hard or impossible to copy. - These advantages are valuable to customers. - Example: SW Airlines corporate culture
Marketing decisions should ____ from strategies
Flow from, or come from
Managing company growth involves ______.
Responding to environmental forces can be either ____ or ____.
1) Uncontrollable - you can be Passive or Reactive to uncontrollable environmental forces 2) Controllable - you can be Active or Reactive to the controllable environmental forces
Brand Competitor
simular products that are advertised to the same target group at a similar price. EX: Diet Coke Vs. Diet Pepsi
Product Competitor
Firms that compete in the same product class but market products with different features, benefits, and prices EX: Diet Coke Vs. Milk or Tea
Generic Competitors
Firms that provide very different products that solve the same problem or satisfy the same basic customer need EX: Diet Pepsi Vs. a water fountain
Total Budget Competitor
Firms that compete for the limited financial resources of the same customer EX: Diet Coke is not bought because there person decides they need to spend the money on something else that is more important
Monopoly - Competitive structure
- Only one competitor - Product that has no close substitutes - Organization is the only source of supply - Many barriers to enter the market - EX: Water utilities
Oligopoly - Competitive structure
- Only a few sellers control the supply of a large proportion of a product - Some barriers to enter the market - products are homogeneous or differentiated with real or perceived differences - EX: UPS, FedEx, US Postal Service (package delivery services)
Monopolistic Competition - Competitive structures
- Many other competitors - only a few barriers to enter the market - Product differentiation with many substitutes - EX: Wrangler, Levi, Big Star (jeans)
Pure competition - competitive structures
- Unlimited number of competitors - no barriers to enter the market - homogeneous products - EX: Agricultural Corn
4 stages of the business cycle:
1) Prosperity 2) Recession 3) Depression 4) Recovery
a stage of the business cycle characterized by low unemployment and relatively high total income, which together ensure high buying power (provided the inflation rate stays low)
A stage of the business cycle during which unemployment rises and total buying power declines, stifling both businesses and consumer spending
A stage of the business cycle when the unemployment level is extremely high, wages are very low, total disposable income is at a minimum, and consumers lack confidence in the economy
A stage of the business cycle in which the economy moves from recession or depression toward prosperity
Buying Power:
money, goods, and services, that can be traded in an exchange
economic gain derived from wages, salaries, income transfers, and ownership of property for a given period
Disposable Income
Income earned minus net taxes. The greater a household's disposable income, the greater is its saving
discretionary income
disposable income available for spending and saving after an individual has purchased necessities (food, clothing, shelter) - buy what you want not just what you need
the accumulation of past income, natural resources, and financial resources - inheritance
Willingness to spend
An inclination to buy because of expected satisfaction from a product, influenced by the probability to but and numerous psychological and social forces.
5 political, legal, and regulatory forces
1) Pro-competitive 2) consumer Protection Legislation 3) Encouraging Compliance with laws and regulations 4) Regulatory Agencies 5) Self-regulatory Forces
Pro Competitive Legislation
Preserves competition, protects businesses from one another, prevents monopolies
Consumer protection legislation
- Protect people from harm - prohibit hazardous products - information disclosure - particular marketing activities
Sherman Antitrust Act
Prohibits contracts, combinations, or conspiracies to retrain trade; - establishes as a misdemeanor monopolizing or attempting to monopolize
Clayton Act
Prohibits specific practices such as price discrimination, exclusive-dealer arrangements, and stock acquisitions whose effect may noticeably lessen competition or tend to create a monopoly.
Federal Trade Commission Act
Created the FTC - gives the FTC investigatory powers to be used in preventing unfair methods of competition
Robinson-Patman Act
- Prohibits price discrimination that lessens competition among wholesalers or retailers - Prohibits producers from giving disproportionate services or facilities to large buyers
Wheeler-Lea Act
Prohibits unfair and deceptive acts and practices regardless of whether competition is injured - places advertising of foods and drugs under jurisdiction of the FTC
Lanham Act
Provides protections for and regulation of brand names, brand marks, trade names, and trademarks
Federal Trade Commission
Enforces laws and guidelines regarding business practices - takes action to stop false and deceptive advertising, pricing, and labeling - most heavily influences marketing activities (false advertising, misleading pricing, deceptive packaging and labeling - EX: Mazda's "one penny down"…
Food and Drug Administration (FDA)
Enforces laws and regulations to prevent distribution of adulterated or misbranded foods, drugs, medical devices, cosmetics, veterinary products, and potentially hazardous consumer products
Comsumer Product Safety Commission (CPSC)
Ensures compliance with the Consumer product safety act - Protects the public from unreasonable risk of injury from any consumer product not covered by other regulatory agencies
Federal Communications Commission
Regulates communication by wire, radio, and television in interstate and foreign commerce
EnvironmentalProtection Agency (EPA)
Develops and enforces environmental protection standards and conducts research into the adverse effects of population
Self-Regulating companies
Regulate themselves and join groups to help prevent unnecessary regulations on their companies and products
Adoptions and Use of Technology
Firms must keep up with technology to keep their status as market leaders - Technology assessments foresee the effects of new products and processes
Technology impacts marketing in 6 ways:
1) Products offered 2) manufacturing processes 3) Prices 4) Distribution Processes 5) Communication Porcesses 6) General Ability to do business (ease) - Amazon Drones Video
Sociocultural forces are _____ to change
Slow and difficult
3 sociocultural forces:
1) demographic and diversity characteristics 2) Cultural Values 3) Consumerism
demographic and diversity characteristics
age, gender, race, ethnicity, marital and parental status, income, and education; changes in a population's demographic characteristics lead to changes in how people live and ultimately in their consumption of certain products
Cultural Values
cultural values shapes consumer preferences of products, promotions, prices, and distribution
- Organized efforts by individuals, groups, and organizations to protect consumers' rights - EX: Watchdog groups - Marketing critics think that consumers are being exploited in the marketplace.
Better Business Bureau (BBB)
system of nongovernmental, independent, local regulatory agencies supported by local businesses that help settle problems between customers and specific business firms
National advertising review board (NARB)
A self regulatory unit that considers challenges to issues raised by the NAD about ads
Marketing Research
The systematic and objective process of generating information for aid in making marketing decisions - Helps us to solve a problem and make a decision.
What is marketing research about? (5 things)
1) Decisions Making 2) Making predictions 3) making future uncertainty more certain 4) dealing with uncertainty 5) understanding how data can be manipulated (to someone's advantage)
Why study marketing research?
- know if a study is flawed and how - understand a study's limitation - know if a study is interpreted correctly - Decide if you should make a decision based on a study - use it in your personal and business daily life
Total quality movement (TQM)
continuous, customer-centered, employee driven improvement
Marketing Research should be ___, ___, and ____, but not all three at the same time.
Fast, Accurate, and Inexpensive
Consider 4 things when conducting marketing research.
1) Time constraints (can you use previously collect data to decrease time?) 2) Availability of data 3) Nature of the decision 4) Benefits vs. Costs (AT&T Example)
2 Types of Data
1) Primary - you collect it yourself 2) Secondary - Data that already exists on your topic
4 characteristics of valuable information
1) Relevant info 2) High Quality Data 3) Timely 4) Complete
5 Steps of the marketing research process
1) Locating and defining issues or problems 2) Designing the research project 3) Collecting data 4) Interpreting research findings 5) Reporting research findings
Designing the research project involves ____ and a ____
research design and a hypothesis
Research design
- Stage 2 - overall plan for obtaining the information needed to address a research problem or issue
- Stage 2 - An informed guess or assumption about a certain problem or set of circumstances - can accept of reject, and acts as a convulsion for research effort
Research technique produces almost identical results (survey questions and study results)
When a research method measures what it intended to measure - did we really measure what we wanted to?
2 types of marketing research are ___ and ___.
Exploratory and Conclusive
Exploratory marketing research
- investigate a little - to clarify ambiguous situations, discover ideas, or make hypotheses - searching for what customers really want
Conclusive marketing research (2 types)
To clarify characteristics or verify insights though objective procedures 1) Descriptive - demographic characteristics like age, gender 2) Experimental/Causal - is there a cause and effect situation?
- a causal relationship is impossible to prove (especially in social sciences) - Association does not imply causality
Evidence of Causality (3)
1) Temporal sequence - appropriate order of events (timing) 2) Concomitant variation - two phenomena vary together - events occur at the same time, but do they really cause each other? 3) Nonspurious association - absence of alternative plausible explanations - Could there be something …
Differences between exploratory and conclusive research
Exploratory - general, vague, ill-defined, open-ended and rough, small sample size, flexible, no set procedure, informal, typically non-quantitative, more tentative than final Conclusive - Specific, clear, well-defined, structured data collection, large sample size, rigid, formal, typica…
Research design is based on (4):
1) Problem statement 2) Hypothesis 3) Type of data needed 4) Availability of data - Exploratory or experimental/causal study type helps define the research design
Collecting data: Qualitative Research Data
- Exploratory - small samples - subjective - unstructured - characteristics of the sample, not just numbers
Collecting data: Quantitative research data
- Conclusive - Assigns numbers - Tests hypotheses - statistical analysis - measurable
Qualitative data collection methods
- Interviews - in depth, open-ended questions - Focus groups - useful for product feedback (Dodge commercial) - Observation - watching behaviors or objects - no direct interaction - Methods are subjective and open to interpretation give deep insights but no conclusions
Quantitative data collection methods
- Surveys - most widely used, very flexible - Experiments - find consumer preferences or opinions, text markets - observation - observing to measure preference or opinion (observation can be qualitative and quantitative)
means of measuring target market's attitudes, feelings, preferences, or other relevant information to make marketing decisions - EX: professor evaluations
Manipulating an independent variable and measuring the resulting changes in a dependent variable to make causal inferences about marketing phenomena. - Which is most effective? - Not saying that one thing causes another
Quantitative observation
- Measuring by observing rather than asking - observing behaviors - counting numbers, activities, traffic counters) - Examining content - social media discussions - see what customers are writing or saying about products - EX: checkout scanners, eye cameras, neuromarketing
Defining and Measuring constructs
- a construct is a concept of interest - the first step - must be clear and valid - measurement - how are you going to measure the construct? - scale of 1-10? - avoid bias by clearly asking the question - EX: do you eat healthy? - What is "healthy"?
Leading question
- customer is led to make a statement favoring Wendy hamburgers. - suggests a certain response - EX: why do you like Wendy's fresh meat hamburgers better than those of competitors?
Ambiguous question (Vague)
- What is meant by "regularly"? - can mean different things to different people - EX: yes or no? Do you eat fast food regularly?
Unanswerable question
- Who can remember the answer to this question? Does is matter? - EX: When did you eat your first hamburger?
Two questions in one (Double-Barreled question)
How would you answer the question if you eat Wendy's hamburgers but not their chili? - EX: yes or no? Do you eat Wendy's hamburgers AND chili?
Non-exhaustive question
- There is no answer choice for your answer - What do you check if you live in an apartment? - EX: Where do you live? Home or dorm? - No "other" choice is available
Non-mutually exclusive answers
EX: What is your age? under 20? 20-40? 40 and over? - What does a 40 year old choose? - You could choose two of the available answers ( answers overlap)
Sampling for data collection
- you don't have to talk to every single person in the population - Selecting representative units from a total population - Sample - a limited number of units chosen to represent the total population. - avoid bias by choosing units randomly
- Elements, units, or individuals of interest to researchers for a specific study - EX: Aggies, Blacks only, Whites only
The Sea Snapper Case
- Talked about bias - didn't ask the questions properly, food was presented differently, prepared differently, offered incentives to participants, small sample size, could have been a demographic bias - biased the results in favor of Sea Snapper Frozen Fish
Locating and Defining Problems or Research issues
- first step in the marketing research process - focuses on uncovering the nature and boundaries of a situation - first sign of a problem is a departure from normal or expected results - what is the aim of the research - how will this research be used? - Marketers must define the nat…
- combines the words crowd and outsourcing and calls for taking tasks usually performed by a marketer or researcher and outsourcing them to a crowd, or potential market, through an open call. - Inviting broad communities of people - customers, employees, independent scientists and resear…
interpreting research findings
-allow for continual evaluation -for drawing conclusions display data in table format and cross-tabulate -present statistical interpretation
Reporting research findings
take an objective look at survey findings and report deficiencies and reasons for them, prepare a formal written document including a summary and recommendations that are short, clear and simply expressed for executives, write a technical report that contains more detailed info about rese…
Marketing information systems (MIS)
a framework for managing and structuring information gathered regularly from sources inside and outside the organization
A collection of information arranged for easy access and retrieval - used by CRM to develop specific strategies for interacting with each customer.
Single-source data
information provided by a single marketing research firm on household demographics, purchases, TV viewing behavior, responses to promotions such as coupons and free samples.
Marketing decision support system (MDSS)
Customized computer software that aids marketing managers in decision making
a group of people who, as individuals or organizations, have needs for products, in a product class and the ability, willingness and authority to purchase such products
Target Market
A group of people or organizations which a business creates and maintains a marketing mix specifically designed to satisfy the needs of group members (a concentrated effort)
2 types of markets are ____ and ____.
Consumer markets and business markets
Consumer Markets
- purchasers and household members who intend to consume or benefit from purchased products - don't but products to make a profit
4 variables for segmenting Business Markets
1) Geographic location 2) type of organization 3) Customer size 4) Product Use
Business Markets
individuals or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations
Target market selection process (5 steps)
1) Identify the appropriate targeting strategy 2) Determine which segmentation variables to use 3) Develop market segment profiles 4) Evaluate relevant market segments 5) Select specific target markets
Undifferentiated Targeting strategy
Strategy in which an organization designs a single marketing mix and directs it at the entire market for a particular product - all consumers are treated the same - no difference in how the product is used by customers (EX: Salt) - pretty much everyone NEEDS the product
homogeneous market
a market in which a large proportion of customers have similar needs for a product
Concentrated Targeting strategy
market segmentation strategy in which an organization targets a single market segment using one marketing mix (income, age, location of customers)
Heterogeneous market
a market made up of individuals or organizations with diverse needs for products in a specific class
market segmentation
the process of dividing a total market into groups with relatively similar product needs to design a marketing mis that matches those needs
Market segment
individuals, groups, or organizations sharing one or more similar characteristics that use them to have similar product needs
Differentiated targeting strategy
A strategy in which an organization targets two or more segments by developing a marketing mix for each segment - prices, distribution methods, product features - tailored to reach each segment properly and most effectively - EX: Toyota markets their minivans to families and their truc…
Reason for market segmentation
firms are better able to develop a marketing mix that satisfies a small portion of a heterogeneous market
Segmentation variables
Characteristics of individuals, groups, or organizations used to divid a market into segments - these variable should make sense EX: male/female differences - bad example would be eye color
Segmentation variables: demographic variables
- age - gender - race - ethnicity - income - education - occupation, family size, religion, social class, life cycle
Segmentation variables: Geographic variables
Region - urban, suburban, rural, City size, County size, State Size, Market density, Climate, Terrain - EX: Walmart offer more cold-weather clothes in walmart stores in the North
Segmentation variables: Psychgraphic variables
- personality attributes - motives - lifesytles - EX: ads for certain types of liquor, beer, or lifestyle choice like hiking or biking
Segmentation variables: Behavioristic variables
- volume usage, end use, benefit expectations, brand loyalty, price sensitivity - EX: loyalty to Apple products because you know the software and how to use the phone
5 characteristics of successful market segmentation
1) Product needs are heterogeneous - meaning everyone has the same basic product need 2) Segments are identifiable and divisible 3) Segment can be efficiently reached 4) Segments can be compared - are males more likely to buy than females? 5) At least one segment has potential
Benefit segmentation
the division of that market according to benefits that consumers want from the product. EX: those that buy hybrid cars are looking for different benefits from a car than those who buy SUVs
Developing market segment profiles
- Describe the similarities among potential customers within a segment - Explain the differences among people and organizations in different segments - Assist marketers in determining which segment is most attractive
Market Potential
The total amount of a product that customers will purchase in a specific time frame at a specific level of marketing activity.
Company Sales Potential
The maximum percentage of market potential that an individual firm within an industry can expect to obtain for a specific product
breakdown approach
measuring company sales potential based on a general economic forecast for a specified period and the market potential derived from it
Buildup approach
measuring company sales potential by estimating how much of a product a potential buyer in a specific geographic area will purchase in a given period, multiplying the estimate by the number of potential buyers, and adding the totals of all the geographic areas considered
3 ways to evaluate relevant market segments
1) Cost Estimates - how much will it cost? 2) Competitive assessment - does competition already have the segment locked? 3) Sale estimates - what are you potential revenues from this segment?
sales forecast
the amount of a product the company expects to sell during a specific period at a specified level of marketing activities
Selecting specific target markets
- part of the organization's adoption and use of the marketing concept - key to a successful marketing strategy - Better service to customer's needs - Achieve objectives - Must consider whether customers' needs differ enough to warrant the use of market segmentation - Must also inves…
Product Positioning
creating and maintaining a certain concept of a product in customer's minds - Creating an 'image' of a product - a products position results from customers' perceptions of a product's attributes relative to those of competing products EX: Papa Jon's Pizza are sports guys, Domino's is in…
Campbell's Go Soup video focused on:
Segmentation and trying to find a new segment for the young people who like soup - Product repositioning
Perceptual Mapping
- trying to figure out where to position the product in the market - Ask customers for their perceptions - is this where you want to be? - Compare to competitors - what do you think about our toothpaste? - factors can include: price, quality of service or product, variety, speed of se…
- evaluating to ensure proper positioning of precepts - solutions can include: changing the price, distribution methods, image (through promotions), packaging, benefits of the product

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