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MRKTNG 3000: FINAL EXAM
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
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Value |
ratio for what is given up in order to obtain something; created through marketing mix
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Marketing Mix |
Product
- Place
- Price
- Promotion |
Product |
part of marketing mix that creates value
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Price |
part of marketing mix that captures value
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Place |
part of marketing mix that delivers value
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Promotion |
part of marketing mix that communicates value
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Marketing Concept |
the idea that you should make what you can sell rather than sell what you can make
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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
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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
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Product Excellence |
one way to create a sustainable competitive advantage by putting the product at the forefront and making the best product possible
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Location Excellence |
one way to create a sustainable competitive advantage by ensuring that the location of your business are easily accessible, clean, etc.
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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
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Marketing Planning Process |
process that helps to plan out your marketing strategy; 3 phases - Planning, Implementation, & Control; 5 steps
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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
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Cash Cow |
represents a product where there is low market growth and high market share in portfolio analysis; should maintain & milk in these markets
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Question Mark |
represents a product where there is high market growth and low market share in portfolio analysis; should watch & hold in these markets
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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
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Market Penetration |
growth strategy used when you wish to expand in a current market with a current product
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Product Development |
growth strategy used when you wish to expand in a current market with a new product
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Market Development |
growth strategy used when you wish to expand in a new market with a current product
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Diversification |
growth strategy used when you wish to expand in a new market with a new product
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Marketing Environment |
consists of uncontrollable elements outside of any organization that may affect it's performance
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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
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Segment |
naturally existing groups of consumers with similar needs/wants and responses
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Target Market |
the market/segment(s) that you choose to focus your marketing efforts on
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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
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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?)
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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
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Responsive |
one way to evaluate segment attractiveness by ensuring that consumers will act and accept the value of the product
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Profitable |
one way to evaluate segment attractiveness by ensuring that the product and the venture will make money for the company
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Identifiable |
one way to evaluate segment attractiveness by ensuring that you know who is in the market
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Differentiated |
one way to select the target market; requires targeting different segments
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Concentrated |
one way to select the target market; requires targeting only one niche segment of consumers
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Micromarketing |
one way to select the target market; requires targeting individuals rather than segments
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Undifferentiated |
one way to select the target market; treat all the segments as the same
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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
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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
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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
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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
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Unstructured Questions |
type of questions asked that do not have any specific or standard response; more open; essays, fill in the blanks, etc.
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Structured Questions |
type of questions asked that do have a specific or standard response; multiple choice, matching, Likert Scale (mostly like -> mostly dislike)
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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
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Specialty Products |
type of product that consumers have a strong preference and spend a considerable amount of time shopping for (Ex. Wedding Dress, Car)
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Shopping Products |
type of product that consumers will spend some time comparing the alternatives
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Convenience Products |
type of product that consumers will use minimum effort and hardly any consideration before buying
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Unsought Products |
type of product that consumers usually do no think about buying (Ex. Fire Extinguisher)
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Product Lines |
all the products offered by a company in a market
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Breadth |
the # of product lines or types that a company has
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Depth |
the # of products in a product line or type that a company has
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Branding |
the use of name, logo symbols, characters, slogans, jingles, and even distinctive packages in order to distinguish and promote ones product
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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
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Brand Associations |
figures, events, and celebrities that people think of when they think of certain brands and products
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Brand Loyalty |
when consumers = less sensitive to price, marketing costs are lower, firm insulated from competition
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Manufacturer Brands |
more national and well known brands
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Private Label Brands |
brands sold specifically by certain stores in order to create a sense of quality (Ex. Archer Farms - Target)
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Family Brands |
brands that mention a name that connects it to other products (Ex. Kellogg's)
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Individual Brands |
brands that separate themselves from the major brand that owns them (Ex. Famous Amous is owned by Kellogg's)
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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
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Brand Dilution |
brand extensions that hurt the company's identity; when people are confused by the product and the brand's affiliation
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Co-Branding |
when two firms try and brand a certain product or location together (Ex. KFC & Taco Bell)
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Brand Repositioning |
when a brand tries to change things up in order to address new needs, markets, or fads
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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)
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Early Adopters |
13.5% of all consumers; those who wait to see what critics say but still want the product quickly
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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)
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Late Majority |
34% of all consumers; those who wait till tail end of popularity or newness
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Laggards |
16% of all consumers; those who wait until product is no longer new
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Relative Advantage |
factor that affects Diffusion of Innovation theory; how big of a deal or innovation is the product?
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Compatibility |
factor that affects Diffusion of Innovation theory; how does the product work with the markets, customers, and other products?
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Observability |
factor that affects Diffusion of Innovation theory; are their benefits easily observed and communicated with others?
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Complexity and Trialability |
factor that affects Diffusion of Innovation theory; how hard is it to use and learn how to use this product?
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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
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Concept Testing |
2nd step of Product Development Process; testing the new product ideas among a set of potential customers
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Product Development |
3rd step of Product Development Process; development of prototypes and/or the product -> alpha and beta testing
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Market Testing |
4th step of Product Development Process; testing the actual products in a few test markets
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Product Launch |
5th step of Product Development Process; full-scale commercialization of the product
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Evaluation of Results |
6th step of Product Development Process; analysis of the performance of the new product and making appropriate modifications
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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
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Intangible |
a factor that differentiates services from goods; can not be tasted, felt; not physical
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Heterogeneous |
a factor that differentiates services from goods; different from time to time
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Perishable |
a factor that differentiates services from goods; can not be produced ahead of time
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Inseparable |
a factor that differentiates services from goods; production and consumption must occur at the same time
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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
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Standards Gap |
difference between management perceptions and standards specifying the service to be delivered; establish policies and performance standards based on consumer expectations
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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
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Communications Gap |
difference between the actual delivery of the service and the service provider communications about service quality
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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
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5 C's of Pricing |
Company
- Customers
- Costs
- Competition
- Channel Members
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Company |
one of the 5 C's of Pricing; how price will change based on the different orientations businesses are thinking of
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Profit Orientation |
company that runs in order to maximize its profits
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Sales Orientation |
company that runs in order to maximize its sales revenue
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Customer Orientation |
company that runs in order to create value for consumers
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Competitor Orientation |
company that runs based on its competitors
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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
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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
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Total Cost |
Fixed Costs + Variable Costs
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Fixed Costs |
costs that are unaffected by production volume (Ex. Rent)
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Variable Costs |
costs that vary in total with production volume
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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
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Monopoly |
occurs when there is less price competition and fewer firms
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Oligopoly |
occurs when there is more price competition and fewer firms
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Monopolistic Competition |
occurs when there is less price competition and more firms
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Pure Competition |
occurs when there is more price competition and more firms
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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
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Mark-Up |
the amount added above the retailer's cost to purchase the product
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Keystoning |
100% mark-up; 2x cost of retailer is the set price
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Price Bundling |
retail level tactic where retailers combine 2+ products together for one price
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Leader Pricing |
retail level tactic where retailers set product near or below cost to generate traffic
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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
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Every Day Low Pricing |
retail level tactic where retailers will try and have the lowest price on certain objects in store
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Bait and Switch Pricing |
retail level tactic where retailers will lure customers by using false or misleading price advertising
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Elasticity of Demand |
consumers responsiveness or sensitivity to price changes
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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
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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 receiver will receive message or not; |
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
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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
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Frequency |
how many times people hear/see advertisement
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Reach |
how many people have heard or seen the ad
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Gross Rating Points |
Frequency x Reach
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Objective & Task Method |
way to set and allocate IMC budget; based on objective and tasks needed to achieve that objective
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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
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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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