exam 1 Flashcards
marketing
engaging customers n managing profitable customer relationships
what is marketing’s prime focus
satisfying customers’ needs n wants
Maslow hierarchy of needs
- physiological
- safety
- love/belong
- self esteem
5/ self actualization
production philosophy
consumer want products that are widely available and inexpensive
- belief product sells itself through low price
- only works if supply > demand
product philosophy
consumers want expensive product
selling philosophy
consumers only buy if hard selling is involved
- “hard selling” = aggressive promo
marketing philosophy
focuses on needs/wants of consumers n delivering value better than competitors
societal philosophy
focuses on needs/wants while delivery value better than competitors n GOOD FOR SOCIETY
satisfaction
person’s feeling of pleasure or disappointment resulting from comparing product perceived performance in relation to their expectation
strategic planning
process of developing and maintaining a viable fit between org objective, skills, n changing market opportunities
market penetration
same market, same product
- deals w how they do things that gain them more customers n profits
- going deep in n building ur product
market development
different market same product
- expanding into a different segment of the market w same product
product development
same market different products
- developing new products in the same market to increase revenue
diversification
new market different products
- seek to spread/expand while reducing risks
strategic business units
have their own mission, org, n market n maintain themselves as independent profit centers
boston consulting groups
try to asses a balanced portfolio
- growth share matrix (GSM)
question marks (GSM)
new products enter the market where they are less dominant in the beginning
- ? = uncertain future
stars (GSM)
promising future but does not generate profits
- company may invest in them
cash cows (GSM)
high market shares while operating in a low market
- product remains strong, market growth rate decrease
dogs (GSM)
product tend for themselves and do not require investments and eventually leaves
- cash cows turn into dogs when they lose investments
electric model
see if firm has the resources n technology to penetrate the market
- nuanced model n less attractive but take much more consideration
business mission
clear statement that outlines what business the firm is in
situation or SWOT analysis
asses SWOT (mainly OT) of the company, look outward market environment and evaluate both +/- elements that may impact operation
business objectives
specify quantifiable goals that may be measured
- used as benchmark
marketing strategy
segmented (products)
products that are tweaked to tailor to various customers
- ex: organic lemon, lemon, farm based lemon
- the only product that is unsegmented is chili
ethic
moral principles n values taht govern the conduct of an individual or group
ethic vs law
ethic = beliefs that are different for everyone
law = rules of the land
sustainability
ability to sustain or have capacity to endure
3 elements of sustainability
- economic
- ability to sustain us as a society
- sustain the environment and its natural resources
corporate social responsibility (CSR)
idea that corporations are responsible for their owners and shareholders
CSR pyramid (bottom to top)
- economic
- required by society + profitable - legal
- required by society + obey law/regulations - ethical
- expected by society + do what is just and fair + avoid harm - philanthropic
- desired + be good corporate citizen + give back
green marketing
company create products that support recyclable n contribute to a better environment
cause related marketing
parts of profits from customers go to a beneficial cause
- ex: buy 1 shoe = 1 donated
charitable donation
no strings attached, give for free
marketing environment
a study the market to gain a better understanding of the market n be prepared to respond to it
market environment 2 conditions
- has little significant impact on company
- marketer has very little control over market
7 environmental factors
- social factors
- demographic
- growing ethnic
- economic
- technological
- politcal and legal
- competitive
social factors
how we function as a society
american values (social factors)
- self-sufficiency
- upward mobility
3, work ethics - conformity and equality
self sufficiency
everyone should stand on their own
upward mobility
work hard + play by the rule = move up the social ladder
work ethics
hard work = admired + rewarded
conformity n equality
everyone should be treated w equality
green (social factors)
consumers seek for environmental green so company try to conform to the ideal
social media (social factors)
people are interconnected online so ppl who utilizes it are more likely to be successful
demographic factors
significant influence environmental factor as demographic increase would increase demand for goods
- age, income, gender, household… = US pop growth
list of generations
- baby boomers
- gen x
- gen y
- gen z
- gen alpha
growing ethnic markets
US has rapid minority growth where different minority groups have different demands for different goods
economic factors
has significant impact on consumer demands
- income
- purchasing power
- inflation
- recession
technological factors
research and stimulating innovation
political n legal factors
involves
- federal legislation: regulates markets n protect consumers
- state law: varies from states
- regulatory agencies: FDA n FTC
competitive factors
competition for market share n profits
- immediate: org close in proximity
- global competition: different countries
benefits of global vision
- bigger markets
- cheaper labor
- access to efficient productions
multinational
operate out of several countries
- bulk of global marketing is done by multi- companies
- well positioned to take adv of globalization through decreasing costs n growing markets
3 environmental factors in global markets
- cultural
- economic n currency exchange
- political/leal/trade agreements
culture (global markets)
- significant variations
- marketers must understand cultural differences to deliver products accordingly
- lack of cultural appreciation leads to blunder
economic n currency exchange (global markets)
- marketers must design n price products accordingly
- avg annual capital varies
political (global markets)
varies from fairly flexible to extremely restrictive
- companies must work between limited lines
legal (global markets)
- tariffs: taxes on goods entering
- quotas: limits quantity
trade agreements (global markets)
ensure fluid n efficient trading
type if trade agreements
- north american free trade agreement: trade treaties between cananda, US, n mexico
- mercosur: treaties between several latin american countries
- european union: free trade zone encompassing most of europe
- G20: plays significant role in influencing international trade
4 steps to enter global market
- entering involves increase risks n returns (move down)
1. exporting
2. licensing/franchising
3. joint venture
4. direct investment
exporting (entering GM)
company selling goods to foreigners
- no additional investment
- obtaining sales through existing products to foreigners w little marketing
licensing (entering GM)
domestic company allow another company access to its manufacturing know-how n IP
- includes patents n trademarks
- licensee take all responsibility n pay licensing fees
franchising
franchisor (comoany) sells rights/trademarks to market to produce a franchisee
joint venture (entering GM)
company seek partners that can provide complementary strengths while sharing investments, financial, risks, and rewards
what are complementary strengths
- investments
- manufacturing capabilities
- access to distribution network
- good understanding of foreign markets
direct investment (entering GM)
companies invest on their own n keeps profits to themselves
- riskiest
- low success
global marketing mix
- standardized: same product, same promo
- product adaption: modified product, same promo
- promotion adaption: same product, modified promo
- product invention: modified product n promo
GM mix pricing
adjust price according to the markets n exchange rate fluctuations
GM mix place
choose channels appropriate to markets
consumer behaviors
describe how consumers make purchase decisions
- consumers consider attributes n evaluation of product
4 steps of consumer decision making
- need recognition
- information search
- evaluation of alternatives
- purchase & post-purchase behavior
1st CDM
need recognition - gap between desired state n actual state
- wants
can be shaped by culture or individual preferences - needs
can triggered internally n externally
2nd CDM
information search - how consumers learn of/about the product
- internal search - access to info stored in memory
- external search - used of external sources for info
- experience w product is more important
- marketers aim to get into evoked set of buyers
evoke set
group of alternative brands that consumers will consider buying
3rd CDM
evaluation of alternatives - w gathered info, buyers evaluated options
- fishbein n disjunctive model
fishbein model
buyers evaluate all brands in evoked sets on varieties of attributes
disjunctive model
only consider brands that meet certain criteria
- ex: only consider hybrid cars
- ends w 1 final decisions
4th CDM
purchase & post purchase behaviors
- purchase: planned or spur of the moment buying
- post-purchase behavior
include cognitive dissonance and repeat purchase
cognitive dissonance
occurs when buyers have doubts or are dissatisfied, leading to no repurchase
repeat purchase
marketers try to reinforce buyers
types of consumer buying decisions
- extensive decision making
- limited decision making
- routine responsive behaviors
- Involvement cost
- Lack of experience
- Social visibility
Bottom to top because with more social visibility and lack of experience, it moves consumers to more elaborate decisions
extensive decision making
Thorough n lengthy process of evaluating options before buying
limited decision making
usually followed when consumers have experience w product but unfamiliar w new brands
- new brands = re-evaluation
- shows continuum from routine to extensive
routine response behavior
product becomes less involced..
- buyers see products as commodities n become price sensitive
3 Factor influencing consumer decision making
- culture/subculture/social class
- social influences
- individual influence
1st influence on CDM
Culture / Subculture / Social Class
culture
set of values, norms, n attitudes
values
beliefs shares by a society
conservative values
more religious + patronize products that match their beliefs.
subcultures
exists due to demographic characteristics, geographic regions, nations/ethnic background
social class
defined by the status or esteem in the community
- Factors of social class:
1. Income
2. Professional status
3. Educational background - Upper / middle / lower class
- Strong influence on consumers’ purchasing power and preferences
2nd influence on CDM
Social Influences
reference groups
- aspirational groups: groups a person would like to be identified w
- non-aspirational groups: groups a person would like to stay away from
opinion leaders: can influence consumptions behaviors of others due to their standings in society or knowledge
family: children are influenced by parents n vice versa
3rd influence on CDM
individual influence
- age n family, life-cycle stage
- gender, personality, n self-concept
4th influence on CDM
psychological influences
perceptions
in marketing, perceptions are more important than reality
- gap between the two, where consumers base purchasing decisions on perceptions
motivation
learning or experiential learning
beliefs n attitudes
selective perception
interpreting info in ways that fit beliefs
selective exposures
actively seek info that fit beliefs/ignoring messages
- distort info
selective retention
only retaining information you want
producers purchase
produce G/S in varieties of industry
- OEM
original equipment manufacturer
includes purchase items in FG
- buys components
resellers purchase
buy G/S w intent of selling down the chain
governement purchase
buy wide variety of items
- include all group of gov
- BIGGEST BUYERS
other institutions
- not for profits
- ex: health care/ school/ church
business market/institutional/industrial
- make purchase to serve other (not self-consumption)
- involves business, resellers, governments, other institutional
- fewer # in buyers but buy large Q
- Geographical concentrated
- shorter channels (less # of ppl that G/S go through before reaching consumers)
- Demand can be derived, inelastic, n fluctuating
- NAICS
derived demand
Demand for a product affects demand of related product
inelastic
change in price cause little change in demands
fluctuating
Unpredictable demand for a product over time
north americans industrial classifications
identifies each business w 6-digits hierarchical code
- use by all 3 NA Free Trade Agreement
(USA, Canada, Mexico)
major equipments
expensive + large items to create products
- machines, building, computers
accessory equipments
cheap + short lived equipment
- power tool, pc, fax machines
raw + processed materials
RM = natural goods that haven’t been altered
Processed = undergone changes
systematic purchase process
- new, modified, straight buy
new buy
major purchase being done for the first time
modified buy
previous purchase but needs changes or specifications
straight buy
reordering the same product in same Q as previous purchase
initiators and users
suggest purchase, often one who use product
influencers
influence purchase decisions using knowledge/expert about the product
- specialist
gate keepers
control/limit the informations
- ex: joe accountant, role to determine if bid meets financial terms
purchasers
person who negotiates details of the deal
decision makers
person w formal/informal power to make choice
