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Marketing
organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders 
Value
ratio for what is given up in order to obtain something; created through marketing mix 
Marketing Mix
Product - Place - Price - Promotion
Product
part of marketing mix that creates value 
Price
part of marketing mix that captures value 
Place
part of marketing mix that delivers value 
Promotion
part of marketing mix that communicates value 
Marketing Concept
the idea that you should make what you can sell rather than sell what you can make 
Reasons Why Marketing is Important
- marketing enriches society - marketing is entrepreneurial - marketing expands global presence - marketing strengthens channel relationships
Market Strategy
consists of a firm's target market, marketing mix; provide a sustainable competitive advantage; developed through marketing planning 
Ways Firms Create Sustainable Competitive Advantage
- Customer Excellence - Product Excellence - Location Excellence - Operational Excellence
Customer Excellence
one way to create a sustainable competitive advantage by putting the customer at the forefront and serving them 
Product Excellence
one way to create a sustainable competitive advantage by putting the product at the forefront and making the best product possible 
Location Excellence
one way to create a sustainable competitive advantage by ensuring that the location of your business are easily accessible, clean, etc. 
Operational Excellence
one way to create a sustainable competitive advantage by ensuring that how the company runs is the most efficient and effective out of your competitors 
Marketing Planning Process
process that helps to plan out your marketing strategy; 3 phases - Planning, Implementation, & Control; 5 steps 
Steps of Marketing Planning
1. Mission Statement & Objectives - Planning Phase 2. Situation Analysis (SWOT) - Planning Phase 3. Identify Opportunities (Segment, Target, Position) - Implementation Phase 4. Implement Marketing Mix (4 P's) - Implementation Phase 5. Marketing Metrics to Analyze - Control Phase
Star
represents a product where there is high market growth and high market share in portfolio analysis; should invest & grow in these markets 
Cash Cow
represents a product where there is low market growth and high market share in portfolio analysis; should maintain & milk in these markets 
Question Mark
represents a product where there is high market growth and low market share in portfolio analysis; should watch & hold in these markets 
Dog
represents a product where there is low market growth and low market share in portfolio analysis; should drop or consolidate or maintain depending on if it effects other products 
Market Penetration
growth strategy used when you wish to expand in a current market with a current product 
Product Development
growth strategy used when you wish to expand in a current market with a new product 
Market Development
growth strategy used when you wish to expand in a new market with a current product 
Diversification
growth strategy used when you wish to expand in a new market with a new product 
Marketing Environment
consists of uncontrollable elements outside of any organization that may affect it's performance 
Macro Environmental Factors
Culture/Social - values and beliefs - Demographics - population statistics - Competition - what are other firms doing - Political/Legal - do laws limit us or help us - Economic - what is the economic climate right now - Technology - any innovation
Segmentation
identifying and serving homogeneous customers who share similar values and beliefs 
Segment
naturally existing groups of consumers with similar needs/wants and responses 
Target Market
the market/segment(s) that you choose to focus your marketing efforts on 
STP Process
Segmentation Phase 1. Establish overall strategy and objectives 2. Choose segmentation methods Targeting Phase 3. Evaluate segment attractiveness 4. Select target market(s) Positioning Phase 5. Identify and develop positioning strategy 
Segmentation Methods
how businesses will separate people into segments - Geographically - Demographically (most common) - Psychographically (self-values) - Benefits - Behavioral
Substantial
one way to evaluate segment attractiveness by ensuring that the market is the right size (is it too big? too small?) 
Reachable
one way to evaluate segment attractiveness by ensuring that consumers will know that the product exists, what it's purpose is, and how to buy it 
Responsive
one way to evaluate segment attractiveness by ensuring that consumers will act and accept the value of the product 
Profitable
one way to evaluate segment attractiveness by ensuring that the product and the venture will make money for the company 
Identifiable
one way to evaluate segment attractiveness by ensuring that you know who is in the market 
Differentiated
one way to select the target market; requires targeting different segments 
Concentrated
one way to select the target market; requires targeting only one niche segment of consumers 
Micromarketing
one way to select the target market; requires targeting individuals rather than segments 
Undifferentiated
one way to select the target market; treat all the segments as the same 
Marketing Research Process
Step 1 - define objectives and research needs Step 2 - design the research Step 3 - data collection process Step 4 - data analysis and insight development Step 5 - action plan and implementation
Primary Data
type of data used and collected in marketing research process; data collected specifically for the purpose of this experiment; any new information 
Secondary Data
type of data used and collected in marketing research process; data already collected but is used for the purpose of this experiment; any information already collected prior to research 
Qualitative Research
type of research in marketing research process that provides initial, in-depth, and unstructured information; typically comes from observations, interviews, focus groups, or social media 
Quantitative Research
type of research in marketing research process that provides large number of responses, statistically valid information; typically comes from experiments, surveys, scanner/panel data 
Unstructured Questions
type of questions asked that do not have any specific or standard response; more open; essays, fill in the blanks, etc. 
Structured Questions
type of questions asked that do have a specific or standard response; multiple choice, matching, Likert Scale (mostly like -> mostly dislike) 
Types of Questions to Avoid
Leading Questions - Double Barreled Questions - Jargon Questions - Questions consumers are unable to answer
Product
anything that is of value to a consumer; can be offered through voluntary marketing exchange; includes goods, services, ideas, organizations, people, and communities 
Specialty Products
type of product that consumers have a strong preference and spend a considerable amount of time shopping for (Ex. Wedding Dress, Car) 
Shopping Products
type of product that consumers will spend some time comparing the alternatives 
Convenience Products
type of product that consumers will use minimum effort and hardly any consideration before buying 
Unsought Products
type of product that consumers usually do no think about buying (Ex. Fire Extinguisher) 
Product Lines
all the products offered by a company in a market 
Breadth
the # of product lines or types that a company has 
Depth
the # of products in a product line or type that a company has 
Branding
the use of name, logo symbols, characters, slogans, jingles, and even distinctive packages in order to distinguish and promote ones product 
Value of Branding for Customers
Branding helps customers by - facilitating purchases - establishing loyalty - protect from competition - reduce marketing costs - become assets - impact market value
Perceived Value
how consumers see companies and the value they can receive from them 
Brand Associations
figures, events, and celebrities that people think of when they think of certain brands and products 
Brand Loyalty
when consumers = less sensitive to price, marketing costs are lower, firm insulated from competition 
Manufacturer Brands
more national and well known brands 
Private Label Brands
brands sold specifically by certain stores in order to create a sense of quality (Ex. Archer Farms - Target) 
Family Brands
brands that mention a name that connects it to other products (Ex. Kellogg's) 
Individual Brands
brands that separate themselves from the major brand that owns them (Ex. Famous Amous is owned by Kellogg's) 
Brand Extensions
products that brands come out with in order to try and expand their brand's influence and reach into new markets; needs to be logical, good quality, and come from a trusted source 
Brand Dilution
brand extensions that hurt the company's identity; when people are confused by the product and the brand's affiliation 
Co-Branding
when two firms try and brand a certain product or location together (Ex. KFC & Taco Bell) 
Brand Repositioning
when a brand tries to change things up in order to address new needs, markets, or fads 
Functions of Packaging
Contain and Protect - Promote - Facilitate Storage, Use, and Convenience - Facilitate Recycling - Provide Information
Reasons Why Firms Make New Products
Changing Customer Needs - Market Saturation - Managing Risk Through Diversity - Fashion Cycles - Improving Business Relationships
Diffusion of Innovation
a model used to describe how quickly consumers adopt products; may be affected by relative advantage, compatibility, observability, and complexity of the products 
Innovators
2.5% of all consumers; those who want to be the first to have the latest & greatest products right away (trend setters) 
Early Adopters
13.5% of all consumers; those who wait to see what critics say but still want the product quickly 
Early Majority
34% of all consumers; those who receive even more feedback and see how the early adopters feel about the product (revenue begins to drop during this period) 
Late Majority
34% of all consumers; those who wait till tail end of popularity or newness 
Laggards
16% of all consumers; those who wait until product is no longer new 
Relative Advantage
factor that affects Diffusion of Innovation theory; how big of a deal or innovation is the product? 
Compatibility
factor that affects Diffusion of Innovation theory; how does the product work with the markets, customers, and other products? 
Observability
factor that affects Diffusion of Innovation theory; are their benefits easily observed and communicated with others? 
Complexity and Trialability
factor that affects Diffusion of Innovation theory; how hard is it to use and learn how to use this product? 
Product Development Process
1. Idea Generation 2. Concept Testing 3. Product Development 4. Market Testing 5. Product Launch 6. Evaluation of Results
Idea Generation
1st step of Product Development Process; development of viable new product ideas 
Concept Testing
2nd step of Product Development Process; testing the new product ideas among a set of potential customers 
Product Development
3rd step of Product Development Process; development of prototypes and/or the product -> alpha and beta testing 
Market Testing
4th step of Product Development Process; testing the actual products in a few test markets 
Product Launch
5th step of Product Development Process; full-scale commercialization of the product 
Evaluation of Results
6th step of Product Development Process; analysis of the performance of the new product and making appropriate modifications 
Product Life Cycle
Introduction - innovators start buying - Growth - gains acceptance, demand & sales increase, competitors emerge - Maturity - industry sales reach peak - Decline - sales decline, product exits market
Service
intangible offering that involves a deed, performance, or effort that cannot be physically possessed 
Intangible
a factor that differentiates services from goods; can not be tasted, felt; not physical 
Heterogeneous
a factor that differentiates services from goods; different from time to time 
Perishable
a factor that differentiates services from goods; can not be produced ahead of time 
Inseparable
a factor that differentiates services from goods; production and consumption must occur at the same time 
Factors Differentiating Services From Goods
Intangible - Heterogeneous - Perishable - Inseparable
Dimension of Service Quality
Reliability - performed correctly - Responsiveness - performed on time - Assurance - performed like you know what you are doing - Empathy - performed with care - Tangibles - performed in a nice environment
GAPS Model
shows the different gaps that can occur in a work environment; different type of gaps - Knowledge Gap - Standards Gap - Delivery Gap - Communication Gap
Knowledge Gap
difference between customer expectations and management perceptions; need to understand the consumer's wants and needs 
Standards Gap
difference between management perceptions and standards specifying the service to be delivered; establish policies and performance standards based on consumer expectations 
Delivery Gap
difference between the standards specifying the service to be delivered and the actual delivery of the service; hire well, train, monitor, and reward employees to avoid this gap 
Communications Gap
difference between the actual delivery of the service and the service provider communications about service quality 
Service Marketing Mix
Product - Price - Place - Promotion - People - Physical Evidence - Processes
Price
the overall sacrifice a consumer is willing to make to acquire a specific product or service 
5 C's of Pricing
Company - Customers - Costs - Competition - Channel Members 
Company
one of the 5 C's of Pricing; how price will change based on the different orientations businesses are thinking of 
Profit Orientation
company that runs in order to maximize its profits 
Sales Orientation
company that runs in order to maximize its sales revenue 
Customer Orientation
company that runs in order to create value for consumers 
Competitor Orientation
company that runs based on its competitors 
Customer
one of the 5 C's of Pricing; how price will change based on whether people see the product as a necessity or luxury, are they able and willing to pay 
Costs
one of the 5 C's of Pricing; how price will change based on how much a company has to pay because of its operations 
Total Cost
Fixed Costs + Variable Costs 
Fixed Costs
costs that are unaffected by production volume (Ex. Rent) 
Variable Costs
costs that vary in total with production volume 
Competition
one of the 5 C's of Pricing; how price will change based on the number of competitors and the level of price competition 
Monopoly
occurs when there is less price competition and fewer firms 
Oligopoly
occurs when there is more price competition and fewer firms 
Monopolistic Competition
occurs when there is less price competition and more firms 
Pure Competition
occurs when there is more price competition and more firms 
Channel Members
one of the 5 C's of Pricing; how pricing is affected by the people that distribute the products as retailers normally set the final price 
Mark-Up
the amount added above the retailer's cost to purchase the product 
Keystoning
100% mark-up; 2x cost of retailer is the set price 
Price Bundling
retail level tactic where retailers combine 2+ products together for one price 
Leader Pricing
retail level tactic where retailers set product near or below cost to generate traffic 
Odd-Even Pricing
retail level tactic where retailers will set price at an odd number to imply bargain or an even number to imply quality 
Every Day Low Pricing
retail level tactic where retailers will try and have the lowest price on certain objects in store 
Bait and Switch Pricing
retail level tactic where retailers will lure customers by using false or misleading price advertising 
Elasticity of Demand
consumers responsiveness or sensitivity to price changes 
Elastic
when consumers are very price sensitive to price changes Price increase; demand decrease; revenue decrease Price decrease; demand increase; revenue increase
Inelastic
when consumers are insensitive to price changes Price increase; demand stays; revenue increases Price decrease; demand stays; revenue decreases
Factors Influencing Elasticity
Income - Tastes - Substitutes - Complementary Products (cross-elasticity)
Integrated Marketing Communications
Made up of customers, results, and communication channel 
Communication Process
. Sender (Firm) sends message to Transmitter 2. Transmitter encodes message 3. Transmitter sends message through media channel to receiver (consumer) 4. Receiver decodes message 5. Receiver sends feedback based to Sender based on how they decode message Noise affects whether receiv…
AIDA Model
Awareness -> (Think) -> Interest Interest -> (Feel) -> Desire Desire -> (Do) -> Action
Advertising
method of promotion that is paid by an identified source and distributes using the mass media; most visible element of IMC 
Public Relations
method of promotion that uses actions in order to maintain a positive relationship with community and media; not directly paid; free media attention and has become more important in the marketing field 
Sales Promotions
method of promotion that uses special incentives to try and get more consumers to purchase their product (Ex. Sweepstakes, Sales, Contests, Refunds, etc.)
Direct Marketing
method of promotion that uses delivery of promotional material individually; growing element of IMC 
Online/Social Media
method of promotion that is delivered electronically 
Frequency
how many times people hear/see advertisement 
Reach
how many people have heard or seen the ad 
Gross Rating Points
Frequency x Reach 
Objective & Task Method
way to set and allocate IMC budget; based on objective and tasks needed to achieve that objective 
Rule of Thumb Methods
way to set and allocate IMC budget; 3 ways - Competitive Parity - firms share of expenses = firms share of market - % of Sales - fixed % of forecasted sales - Available Budget - forecast sales & budget
Planning & Executing an Ad Campaign
1. Identify target audience 2. Set advertising objectives - Strategy, Type of Ad 3. Determine advertising budget 4. Convey the message - Unique Selling Proposition, appeal 5. Evaluate and select media 6. Create advertisement 7. Assess impact
Push Strategy
strategy used during ad campaigns by promoting to retailers and other channel members 
Pull Strategy
strategy used during ad campaigns by promoting to final consumers 
Personal Selling
method of promotion; two way flow of information where there is real interaction between seller and potential buyer; most costly method of promotion; makes sense with expensive items, complex items, selling to businesses

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