Exam #1 Flashcards
AMA Marketing Definition
The activity, set of institutions and processes for creating, communicating, and exchanging offerings that have value for customers, clients, partners, and society at large.
Relationship between Marketing and the key functions of a firm:
Marketing may be the most important function.
Marketing’s role:
to understand the organizations customers and markets in an effort to develop strategies to sell products or services that produce profit.
Meeting customer needs
Aim of marketing is to provide customer value by conducting research to understand needs
Marketing environment
Internal and external factors that affect a firm’s ability to succeed and formatted to identify SWOT
Strategic planning
the process of thoughtfully defining a firm’s objectives and developing a method for achieving those objectives; shifting conditions requires modification
Marketing Strategy
the set of actions taken to accomplish organizational objectives
Marketing Mix
a combination of activities that represent areas a firm can adjust to influence demand for its good, service, or idea (known as the 4P’s).
Marketing manager
responsible for short and long term marketing operations and strategy. Can be considered brand manager or segment manager.
Strategy activity
How to achieve objectives by developing product value propositions, marketing objectives, forecasts, and budgets, and monitoring results.
Operational activity
included implementing promotional campaigns, graphic design, social media, and marketing research.
Selling Concept
Marketing belief that customers will not buy enough; focuses on transactions and use large-scale selling and promotions.
Marketing Concept
Holds that achieving organizational goals depends on knowing the needs/wants of customers and delivering the desired satisfaction better than competitors.
Marketing Myopia
Focusing on the specific products rather than the benefits/experiences produced.
Customer Value
Perceived benefits that customers received form a product compared to its cost.
Value
an equation of benefits that meet needs/wants minus costs
Actual Costs
Often more than the initial price.
Value Creation
Occurs when customers use products or services that satisfy their wants and needs.
Exchange
the act of obtaining a desired object from someone by offering something of value in return.
With more value…
firms can gain a competitive advantage.
Product
Central element around which all others revolve. A specific combination of goods, services, and ideas that a firms offers to customers.
Price
The amount of something that a buyer exchanges with a seller to obtain a product.
Place
Includes the activities of the firm to make its product available to customers.
Promotions
What most people think of when they think of marketing; successful promotion involves the firm’s ability to integrate its promotional activities in a way that maximizes the value of each.
Needs
State of felt deprivation; marketers do not create needs
Wants
the form human needs take; something you would like to have
Value proposition
the set of benefits it promises to deliver to customers to satisfy their needs/wants; successful propositions include the applications of technology (Customer needs, technology, target market, benefits)
Capturing Value
For firms to capture value, they must identify ways in which they can gain in some way through the exchange; primary way is price
Ethics
Moral standards expected by society
Marketing Ethical Issues
Clearly understand norms/values expected, act in a positive manner, consequences of not adhering can be serious, unethical practices hurt customers, employees and society.
AMA Code of Ethics
Six core values: honesty, responsibility, fairness, respect, transparency, citizenship
Decision Making framework
- Determine the facts unbiasedly
- Identify the ethical issues
- Identify stakeholders impacted
- Consider all available alternatives
- Consider how decision affects stakeholders
- Discuss the pending decision with stakeholders
- Make the decision
- Monitor
Corporate Social Responsibility
Refers to an organization’s obligation to maximize its positive impact and minimize its negative impact on society
Four dimensions of CSR
Economic, Legal, Ethical, Philanthropic
Sustainable Marketing
The process of creating, communicating, and delivering value to customers through the preservation and protection of the natural systems that provide the natural resources upon which our society and economy depend.
Tactical Greening
Involves implementing limited change within a single area of the organization.
Quasi-Strategic Greening
Usually involves more substantive changes throughout the organization.
Strategic Greening
Requires a holistic approach that integrates and coordinates all the firm’s activities on environmental issues across every functional area.
Social Criticism of Marketing
Materialism, high prices, deceptive pricing, deceptive packaging, deceptive promotions, high-pressure selling, shoddy/unsafe products, planned obsolescence, marketing to children
Strategic planning
the process of thoughtfully defining the firm’s objectives and developing an approach for achieving those objectives. Conducted on a continual basis as conditions change. One of the most important marketing tasks.
Chain of Events in Strategic Planning:
Define company mission, set company objectives and goals, design a collection of businesses and products, marketing plan (strategies guided by mission, goals, objectives, and portfolio)
Firms work to perfect their strategic plan so…
they can form a sustainable competitive advantage.
Strategy
Set of actions undertaken to accomplish organizational objectives
Objectives
Specific, realistic results marketers aim to achieve consistency with company goal and objectives
Mission
the organizations purpose - what it wants to accomplish in the larger environment; should be market oriented (defined in terms of satisfying basic customer needs).
Vision
Road map indicating what the company wants to become
Values Statement
word, phrase, or sentence that conveys the core values of the company (what is important).
Company goals
desired result you want to achieve, typically broad and long-term
Company objectives
defines the specific, measurable, realistic actions that must be taken to achieve the overall goal
Marketing objectives
objectives for a functional area (marketing)
Competitive environment
direct and indirect competitors
Direct Competitiors
firms that compete with products designed around the same or similar interests
Indirect competitors
firms that compete with products that have different characteristics but serve a similar function.
Sustainable competitive advantage
the superior position a product enjoys over competing products if customers believe it has more value than other products. Valuable, rare, costly to imitate, and non-substitutable.
Customer Excellence
Strategy designed to put the customer at the center of all marketing activities; marketing goal is consistent delivery of value, satisfaction, and quality resulting in loyalty
Product Excellence
strategy that focuses on the importance of high-quality and value-adding products
Operational Excellence
Focusing on operational principles, systems, and tool on improving customer satisfaction with the firm’s products and services
Locational Excellence
focus on having strong physical location and/or internet presence
Market penetration
Increase of sales of existing products to existing customers without product changes
Product development
creating new or modified products for an existing market
Market development
selling existing products to new customers
Diversification
developing new products to new markets unrelated to an existing product
Using data analysis for Strategic Planning
Establishing Systematic data collection processes, ID direct and indirect competitors (market scanning), and set objectives based on SWOT analysis
SWOT drives the…
marketing mix
Situation analysis
the process of gathering information on the internal and external environments to assess the firm’s SWOT and to guide its goals and objectives
Segmentation, targeting, and positioning
selecting target market, identifying target market needs and positioning the new product v. competition
Macro environment
the act of monitoring developments that influence the marketing plan but outside of the firm’s control with the goal of responding to threats and opportunities
Demographic
the statistical characteristics of human populations (population growth, gender distribution, income distribution, age, education, family structure)
The Cohort effect
tendency of members of a generation to be influenced and bound together by significant events in their formative years (17 to 22)
Economic
trends in these factors have a direct or indirect impact on a company since it affects the purchasing power of consumers, affecting pricing policy
Social-Cultural
trends in these factors are the larger scale forces that affect the thoughts, feeling and behaviors of consumers
Core Beliefs and Values
Beliefs and values are persistent and are passed on from parents to children
Secondary beliefs and values
beliefs and values are more open to change and include other’s views of themselves including people, organizations, society, nature, and the universe
Legal/Political
trends in these factors overlap and are about how and to what degree a government intervenes in the economy, industry, or market
Competitive
how a business is affected by its competition and how it adapts its businesses practices to enable it to compete effectively
Technological
trends in these factors pertain to innovations in technology influencing industry operations and the market conditions. these may affect decisions to enter and industry, launch new products, or outsource abroad
Micro Environment
the current internal environment where marketing is influenced by the firm’s choices and firms may alter them
Organizational Structure
degree to which the organizational structure facilitates market driven strategic planning
Corporate Culture
shared values and beliefs that characterize members of the organization, define its nature and govern how people behave
Human resources
role played in workforce planning, employee and labor relations, training and development, etc.
Leadership
people in the organization that make major decision
Marketing Research
Act of collecting, interpreting, and reporting information concerning a specific, clearly defined marketing problem
Steps in Marketing Research Process (11)
- Establish need
- Understand Problem
- Define problem and establish objectives*
- Determine research design
- Identify information sources
- Methods to access data
- Design data collection form
- Sampling plan and sample size
- Collect data
- Analyze data
- Prepare final report**
“Every process is perfectly designed…
to achieve the results it gets.”
Purpose of marketing research
to provide information the reduce uncertainty associated with decision making
When is marketing research needed?
when manager must make a decision and if benefits outweigh costs
Failure to meet objective (actual v. planned)
Control system: Key performance indicators
Failure to identify opportunities (actual v. potential)
Control system: environmental scanning
Symptoms
change in control system that alert managers to problems
Problem statement defined
summarizes the problem (what decision maker needs to accomplish) Most Important!
Research objectives defined
tell the researcher exactly what must be done to obtain the information necessary to solve the problem
Research design
set of advanced decision specifying methods and procedures used to answer research questions or solve the research problem
Exploratory
Unaware of the problem; to learn more about the problem (mostly qualitative)
Descriptive
Aware of the problem; describe problem (quantative)
Causal
Problem defined; experiments isolate cause and effect (quantative)
Protocol Analysis
placing a person in decision making situation and asking them to verbalize everything considered in the decision
Pluralistic
combination of quantitative and qualitative research methods
Causal (experiments)
investigating how a change in an independent variable might cause changes in one or more dependent variables
Internal Validity
the extent to which changes in the outcome variable were actually caused by manipulations of the independent variable conditions
External Validity
the extent to which the results of the experiment can be generalized beyond the study sample
Form Design
used to request and record information gathered in marketing research; regardless of method, standardized forms called questionnaires record information
Sampling plan
process of selecting a predetermined number of elements from a population; sampling plan determines if sample is representative
Probability Sample
member of the population have a known changes of being selected (random); representative
Simple Random
every member of population has equal chance of selection
Systematic random
skip interval
Nonprobability sample
Convenience, referral, quota; not representative
Sampling error
any error that occurs because a sample is used that can be measured
Nonsampling error
all errors that are not due to sampling error, cannot be measured
Data analysis
entering data into computer files, inspecting data for errors, tabulating and analyzing data
Coding
the process of assigning a word, phrase, or number to a selected portion of data so that it can later be easily sorted and summarized
Descriptive statistics
used to describe characteristics of research data and study sample
Final report
second most important step; must be communicated in a way that will be understood, should solve the marketing problem and answer questions, report limitations, and include a current report and historical document
Consumer behavior
the way individuals make decisions to spend resources
Aspects of consumer behavior
complex, understanding processes, collect information, ethical issues
Consumer decision process
- Problem/need recognition
- Information search
- Evaluation of alternatives
- Purchase
- Post-purchase behavior
Internal information search
consumers use past experiences with items from the same brand or product class as sources or information
External information search
consumers seek information beyond their personal knowledge and experience
Evoke set
consists of those brands which the consumer is aware of and considers for purchase
Cognitive dissonance
a mental conflict that occurs when consumers acquire new information that contradicts their beliefs or assumptions about the purchase
Attitudes
a consumer’s overall evaluation of a product, which involves general feelings of like or dislike; brand switching requires changing attitudes
Situation and personal influences on consumer behavior
time, personality, lifestyle, culture, surroundings
Reference groups
made up of people to whom a consumer compares himself or herself
Opinion leaders
individuals who exert an unequal amount of influence on the decisions of others
Purchase involvement
the level of concern for or interest in the purchase process; triggered by need to consider particular purchase; soap v. a house
Noncompensatory decision making
used for routine problem solving; consumers buy whatever they did before
compensatory decision making
used for novel problems that involve some level of risk; consumers assign weights to various criteria and the sum of these weights (weighted preference) will be used to make a purchase decision
