Exam 1

Question 1

What is commoditization?

Answer 1

The result of mature industries where goods and services lack any real means of differentiation and price becomes the driving force in consumer decision making causing prices to drop to the floor. It allows discount providers of goods and services to steal customers away from full-service providers.

Question 2

What are the challenges and opportunities in today’s economy? (8 of them)

Answer 2

• Power shift to customers – it’s a buyer’s market
• Massive increase in product selection
• Audience and media fragmentation
• Changing value propositions: The speed and efficiency of commerce today has changed the way customers view value.
• The lesson for marketers is clear: In situations where customers see goods and services as commodities, customers will turn to the most convenient, least expensive alternative.
• Shifting demand patterns: In some cases, changes in technology have shifted customer demand for certain product categories. The challenges faced by the movie rental industry bear this out.
• Privacy, security, and ethical concerns: Changes in technology have made our society much more open than in the past. As a result, these changes have forced marketers to address real concerns about security and privacy, both online and offline.
• Unclear legal jurisdiction: This issue concerns the conflicting perspectives over legal jurisdiction when a company does business in more than one country. Another important issue with this involves the collection of sales tax for online transactions.

Question 3

Definitions of marketing and find out critical success factors of each.

Answer 3

• Marketing (2005 American Marketing Association definition)
• “… organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders”
• Marketing (2007 American Marketing Association definition)
• “… activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”

In 2005, the definition of marketing stressed two critical success factors in marketing today: value and customer relationship. However, in 2006, the revised definition of marketing related to meeting human and social needs. This broad view links marketing with our standard of living, not only in terms of enhanced consumption and prosperity, but also in terms of society’s well-being.

Question 4

Market

Answer 4

Group of individuals or institutions with similar needs that can be met by a specific product (at its most basic level, a market is collection of buyers and sellers).

Question 5

Marketspace

Answer 5

• Electronic marketplaces unbound by time or space
• Marketspaces are electronic marketplaces

Question 6

Metamarket

Answer 6

• Cluster of closely related goods and services that center around a specific consumption activity
• Examples of metamarket are automotive, home ownership, and parenting. Or assume for example that you are engaged to be married. How many different buying decisions will you and your fiancé have to make in the coming months? How many newspaper ads, websites, and magazines will you explore? Although the businesses and decisions are diverse, they all converge on the single theme of “wedding planning.” This is the driving principle behind a metamarket.

Question 7

Metamediary

Answer 7

• Provides a single access point where buyers can locate and contact many different sellers in the metamarket
• Metamediary: Metamediaries fulfill a vital need by offering quick access and “one-stop shopping” to a wide variety of information, goods, and services (e.g., automotive: www.edmunds.com; home ownership: www.zillow.com; parenting: www.babycenter.com).

Question 8

Exchange

Answer 8

Process of obtaining something of value by offering something in return

Question 9

Conditions of exchange (5 of them)

Answer 9

• There must be at least two parties for the exchange.
• Each party should have something that the other party values.
• Each party must be capable of communication and delivery.
• Each party must be free to accept or reject exchange.
• Each party must believe it is desirable to exchange with the other party.

Question 10

Product

Answer 10

Something acquired through an exchange to satisfy a need or want

Question 11

Product examples (10 of them)

Answer 11

1. Goods: Tangible items ranging from canned food to fighter jets, from sports memorabilia to used clothing.
2. Services: Intangible products consisting of acts or deeds directed toward people or their possessions. Banks, hospitals, lawyers, package delivery companies, airlines, hotels, repair technicians, nannies, housekeepers, consultants, and taxi drivers all offer services.
3. Ideas: Including issues aimed at promoting a benefit for the customer (e.g., cause-related or charitable organizations such as the Red Cross, the American Cancer Society, Mothers Against Drunk Drivers, or the American Legacy Foundation’s campaign against smoking.
4. Information: Including websites, magazine and book publishers, schools and universities, research firms, churches, and charitable organizations (e.g., Wikipedia, TED Talks). In the digital age, the production and distribution of information has become a vital part of our economy.
5. Digital products: Including software, music, and movies. Advancements in technology have also wreaked havoc in these industries because pirates can be easily copy and redistribute digital products in violation of copyright law. Digital products are interesting because content producers grant customers a license to use them, rather than outright ownership.
6. People: Including athletes or celebrities. The exchange and trading of professional athletes takes place in a complex system of drafts, contracts, and free agency. Other professions, such as politicians, actors, professional speakers, and news reporters, also engage in people marketing.
7. Places: Cities, states, and nations market themselves to tourists, businesses, and potential residents.
8. Experiences and events: Marketers can bring together a combination of goods, services, ideas, information, or people to create one-of-a-kind experiences or single event.
9. Real or financial property: Exchange of stocks, bonds, and real estate.
10. Organization: All organizations strive to create favorable images with the public – not only to increase sales or inquiries, but also to generate customer good will.

Question 12

Utility

Answer 12

• Ability of a product to satisfy a customer’s need or want

Question 13

Form utility

Answer 13

Products high in form utility have attributes or features that set them apart from the competition. Often these differences result from the use of high-quality raw materials, ingredients, or components, or from the use of highly efficient product processes. In many product categories, higher priced product lines offer more form utility because they have more features or bells-and-whistles. Luxury cars are a good example.

Question 14

Time utility

Answer 14

Products high in time utility are available when customers want them. Typically, this means that products are available now rather than later. Restaurants, grocery stores, and other retailers that are open around the clock provide exceptional time utility. Many customers are willing to pay more for products available in a shorter time frame or for products available at the most convenient times.

Question 15

Place utility

Answer 15

Products high in place utility are available where customers want them, which is typically wherever the customer happens to be or where the product needs to be at that moment. Home delivery of any product, convenience stores, vending machines, and e-commerce are examples of good place utility.

Question 16

Possession utility

Answer 16

Possession utility deals with the transfer of ownership or title from marketer to customer. Products higher in possession utility are more satisfying because marketers make them easier to acquire. Marketers often combine supplemental services with tangible goods to increase possession utility (e.g., furniture stores + home delivery services).

Question 17

Psychological utility

Answer 17

: Products high in psychological utility deliver positive experiential or psychological attributes that customers find satisfying. For example, sporting events provide customers with atmosphere, energy, and excitement associated with being at the game, which create psychological benefits for customers.

Question 18

Strategic planning

Answer 18

If an organization is to have any chance of reaching its goals and objectives, it must have a game plan or road map for getting there (i.e., strategy). A strategy outlines the organization’s game plan for success.

Question 19

Tactical planning

Answer 19

concerns itself with specific markets or market segments and the development of marketing programs that will fulfill the needs of customers in those markets.

Question 20

The marketing plan

Answer 20

provides the outline for how the organization will combine product, pricing, distribution, and promotion decisions to create an offering that customers will find attractive. The marketing plan also addresses the implementation, control, and refinement of these decisions.

Question 21

Internal analysis

Answer 21

analysis involves the objective review of internal information pertaining to the firm’s current strategy and performance, as well as the current and future availability of resources. Used as part of the situational analysis.

Question 22

Competitive intelligence

Answer 22

involves analyzing the capabilities, vulnerabilities, and intentions of competing businesses. Used as part of the situational analysis.

Question 23

Environmental scanning

Answer 23

involves the analysis of economic, political, legal, technological, and cultural events and trends that may affect the future of the organization and its marketing efforts. Used as part of the situational analysis.

Question 24

Product positioning

Answer 24

Establishing a mental image of the product in the minds of target buyers

Question 25

Positioning

Answer 25

establishes preference over competitors

Question 26

Branding

Answer 26

makes the promise of good user experiences and requires a good understanding of how all elements of the marketing program work together

Question 27

Marketing implementation

Answer 27

the process of executing the marketing strategy, is the “how” of marketing planning.

Question 28

control of marketing activities

Answer 28

essential to ensure that the strategy stays on course and focused on achieving its goals and objectives.

Question 29

What are the elements that make up a marketing program?

Answer 29

Successful marketing programs depend on a carefully crafted blend of the four major marketing mix elements.

1. Product: the importance of product decisions hinges on the connection between the product and the customers’ needs.
2. Price: the only element of the marketing mix that leads to revenue and profit, has a direct connection with customer demand, is the easiest element of the marketing program to change, and is a major quality cue for customers.
3. Place: distribution and supply chain issues are among the least apparent decisions made in marketing, particularly with customers. The goal of distribution and supply chain management is essentially to get the product to the right place, at the right time, in the right quantities, at the lowest possible cost. Supply chain decisions involve a long line of activities—from the sourcing of raw materials, through the production of finished products, to ultimate delivery to final customers.
4. Promotion: modern marketing has replaced the term promotion with the concept of integrated marketing communication (IMC), or the coordination of all promotional activities (media advertising, direct mail, personal selling, sales promotion, public relations, packaging, store displays, website design, personnel) to produce a unified, customer-focused message.
5. People

Question 30

A marketing strategy can be composed of

Answer 30

one or more marketing programs; each program consists of two elements—a target market or markets and a marketing mix (sometimes known as the four Ps of product, price, place, and promotion). Successful marketing programs depend on a carefully crafted blend of the four major marketing mix elements.

Question 31

What are the requirements of the marketing planning process (study the flow chart on Slide #4)?

Answer 31

The marketing planning process typically requires the coordination of broad-based decisions at the top of the corporate hierarchy with more narrowly defined actions at the bottom:

1. At the top are important corporate decisions dealing with the firm’s mission, vision, goals, and the allocation of resources among business units.
2. Planning at this level also involves decisions regarding the purchase or divestment of the business units themselves.

Question 32

mission statement seeks to answer…

Answer 32

“What business are we in?” It is a clear and concise statement (a paragraph or two at most) that explains the organization’s reason for existence.

Question 33

vision statement seeks to answer…

Answer 33

“What do we want to become?” An organization’s vision tends to be future oriented, in that it represents where the organization is headed and where it wants to go.

Question 34

What are elements of a mission statement? (5 basic questions to be answered)

Answer 34

• Who are we?
• Who are our customers?
• What is our operating philosophy?
• What are our core competencies or competitive advantages?
• What are our responsibilities with respect to being a good steward of our human, financial, and environmental resources?

A mission statement that delivers a clear answer to each of the above questions installs the cornerstone for the development of the marketing plan. If the cornerstone is weak, or not in line with the foundation laid in the preliminary steps, the entire plan will have no real chance of long-term success. The mission statement is the one portion of the strategic plan that should not be kept confidential. It should tell everyone-customers, employees, investors, competitors, regulators, and society in general. Therefore, the mission statement should be included in annual reports and major press releases, framed on the wall in every office, and personally owned by every employee of the organization.

Question 35

Mission width

Answer 35

• Broad statements can help establish plans in areas with limited strength
• Narrow mission can limit a firm’s vision

Question 36

Mission stability

Answer 36

depends on the frequency of modifications

Question 37

Customer-focused mission statements

Answer 37

In recent years, mission statements have become much more customer oriented. People’s lives and businesses should be enriched because they have dealt with the organization. A focus on profit in the mission statement means that something positive happens for the owners and managers of the organization, not necessarily for the customers or other stakeholders.

Question 38

All organizations need a ___________, the central scheme or means for utilizing and integrating resources in the areas of production, finance, research and development, human resources, and marketing, to carry out the organization’s mission and achieve the desired goals and objectives.

Answer 38

corporate strategy

Question 39

Larger firms often find it beneficial to devise separate strategies for each strategic business unit (SBU), subsidiary, division, product line, or other profit center within the parent firm. Business-unit strategy determines…

Answer 39

the nature and future direction of each business unit, including its competitive advantages, the allocation of its resources, and the coordination of the functional business areas.

Question 40

competitive, or differential, advantage

Answer 40

When a firm possesses capabilities that allow it to serve customers’ needs better than the competition.

Question 41

Competitive advantages cannot be fully realized unless…

Answer 41

customers see them as valuable. The key issue is the organization’s ability to convince customers that its advantages are superior to those of the competition.

Question 42

Functional strategy decisions must

Answer 42

1. fit the needs and purposes of the functional area with respect to meeting its goals and objectives.
2. be realistic given the organization’s available resources and environment.
3. be consistent with the organization’s mission, goals, and objectives.

Integrates efforts focused on achieving the area’s stated objectives. Should be evaluated to determine its effect on sales, costs, image, and profitability

Question 43

What is evaluation and control?

Answer 43

• Designed to keep planned activities on target with goals and objectives
• Coordination among functional areas can be maintained with an open line of communication
• Serve as an ending and a beginning
• Occurs after a strategy has been implemented
• Serves as the beginning point for planning in the next cycle In some ways, the evaluation and control phase of the planning process is an ending and a beginning.

On one hand, evaluation and control occur after a strategy has been implemented. On the other hand, evaluation and control serves as the beginning point for the planning process in the next planning cycle. Because strategic planning is a never-ending process, managers should have a system for monitoring and evaluating implementation outcomes on an ongoing basis.

Question 44

What is the purpose of a marketing plan?

Answer 44

• Good marketing plans:
• Explain the present and future situations of the organization
• Specify expected outcomes
• Describe specific actions that should take place
• Identify required resources
• Permit monitoring of each action and its results
• Communicating the strategy to top executives

Provides a detailed formulation of the actions necessary to carry out the marketing program. Think of the marketing plan as the handbook for marketing, implementation, evaluation, and control.

Question 45

SWOT analysis internal factors

Answer 45

strengths and weaknesses

Question 46

SWOT analysis external factors

Answer 46

opportunities and threats

Question 47

SWOT analysis is derived from

Answer 47

the situation analysis

Question 48

SWOT analysis focuses on…

Answer 48

the internal factors (strengths and weaknesses) and external factors (opportunities and threats) that give the firm certain advantages and disadvantages in satisfying the needs of its target market(s).

Question 49

Opportunities and threats

Answer 49

external issues that exist independently of the firm conducting the analysis.

Question 50

At the conclusion of the SWOT analysis, the focus of the marketing plan shifts to…

Answer 50

to address the strategic focus and competitive advantages to be leveraged in the strategy.

Question 51

Structure of a marketing plan

Answer 51

• Marketing goals and objectives – This section of the marketing plan sets the performance targets that the firm seeks to achieve, and it defines the parameters by which the firm will measure actual performance in the evaluation and control phase.
• Marketing goals • Goals are broad, simple statements of what will be accomplished through the marketing strategy.
• Marketing objectives • Marketing objectives are more specific and are essential to planning.
• Marketing strategy – The strategy section of the marketing plan outlines how the firm will achieve its marketing objectives. In its broadest sense, marketing strategy refers to how the firm will manage its relationships with customers in a manner that gives it an advantage over the competition.
• Primary (and secondary) target market
• Overall branding strategy
• Product strategy
• Pricing strategy
• Distribution/supply chain strategy
• Integrated marketing communication (promotion) strategy
• Marketing implementation
• Structural issues
• Tactical marketing activities

* The implementation section of the marketing plan describes how the marketing program will be executed.

This section also answers several questions:

1) What specific marketing activities will be undertaken?
2) How will these activities be performed?
3) When will these activities be performed?
4) Who is responsible for the completion of these activities?
5) How will the completion of planned activities be monitored?
6) How much will these activities cost?

Without a good plan for implementation, the success of the marketing strategy is seriously jeopardized. For this reason, the implementation phase of the marketing plan is just as important as the marketing strategy phase.

• Evaluation and control

1. Marketing control
2. Financial assessment
3. Marketing audit

* This final section of the marketing plan details how the results of the marketing program will be evaluated and controlled.

1. Marketing control involves establishing performance standards, assessing actual performance by comparing it with these standards, and taking corrective action if necessary to reduce discrepancies between desired and actual performance.
2. The financial assessment of the marketing plan is also an important component of evaluation and control. Estimates of costs, sales, and revenues determine financial projections.
3. A marketing audit—a systematic examination of the firm’s marketing objectives, strategy, and performance—can be used to pinpoint potential causes for discrepancies.

Question 52

Marketing goals and objectives (section of marketing plan)

Answer 52

This section of the marketing plan sets the performance targets that the firm seeks to achieve, and it defines the parameters by which the firm will measure actual performance in the evaluation and control phase.

• Marketing goals • Goals are broad, simple statements of what will be accomplished through the marketing strategy.
• Marketing objectives • Marketing objectives are more specific and are essential to planning.

Question 53

Marketing strategy (section of marketing plan)

Answer 53

This section of the marketing plan outlines how the firm will achieve its marketing objectives. In its broadest sense, marketing strategy refers to how the firm will manage its relationships with customers in a manner that gives it an advantage over the competition.

• Primary (and secondary) target market
• Overall branding strategy
• Product strategy
• Pricing strategy
• Distribution/supply chain strategy
• Integrated marketing communication (promotion) strategy

Question 54

Marketing implementation (section of marketing plan)

Answer 54

• Structural issues
• Tactical marketing activities

* The implementation section of the marketing plan describes how the marketing program will be executed.

This section also answers several questions:

1) What specific marketing activities will be undertaken?
2) How will these activities be performed?
3) When will these activities be performed?
4) Who is responsible for the completion of these activities?
5) How will the completion of planned activities be monitored?
6) How much will these activities cost?

Without a good plan for implementation, the success of the marketing strategy is seriously jeopardized. For this reason, the implementation phase of the marketing plan is just as important as the marketing strategy phase.

Question 55

Evaluation and control (section of marketing plan)

Answer 55

• Evaluation and control

1. Marketing control
2. Financial assessment
3. Marketing audit

* This final section of the marketing plan details how the results of the marketing program will be evaluated and controlled.

1. Marketing control involves establishing performance standards, assessing actual performance by comparing it with these standards, and taking corrective action if necessary to reduce discrepancies between desired and actual performance.
2. The financial assessment of the marketing plan is also an important component of evaluation and control. Estimates of costs, sales, and revenues determine financial projections.
3. A marketing audit—a systematic examination of the firm’s marketing objectives, strategy, and performance—can be used to pinpoint potential causes for discrepancies.

Question 56

What are organizational aspects of the marketing plan?

Answer 56

• Plans are often prepared by marketing managers, brand managers, or product managers
• Authority to approve the plan is vested in the upper-level executives
• Final approval of the plan lies with the President, Chairperson, or CEO The authority to approve the marketing plan is typically vested in upper-level executives.

These top managers ask:

a) Will the proposed marketing plan achieve the desired marketing, business unit, and corporate goals and objectives?
b) Are there alternative uses of resources that would better meet corporate or business unit objectives than the submitted marketing plan?

In most cases, final approval of the marketing plan lies with the president, chairman, or CEO of the organization.

Once a marketing plan has been approved, however, it still faces many obstacles before its marketing programs can come to fruition (e.g., inadequate communication, harmonizing difficulties across sites/countries, marketing environment forces, inadequate information, failure to see the whole picture, etc.).

Question 57

Market-oriented firms

Answer 57

successfully generate, disseminate, and respond to market information. These firms focus on customer analysis, competitor analysis, and integrating the firm’s resources to provide customer value and satisfaction, as well as long-term profits. it must instill a corporate culture that puts customers first. By creating organizational cultures that put customers first, market-oriented firms tend to perform at higher levels and reap the benefits of more highly satisfied customers.

Question 58

The internal environment (collecting and analyzing data)

Answer 58

• Review of current objectives, strategy, and performance
• Availability of resources
• Organizational culture and structure

Question 59

The customer environment (collecting and analyzing data)

Answer 59

• Who are our current and potential customers?
• What do customers do with our products?
• When do customers select our products?
• Why (and how) do customers select our products?
• Why do potential customers not purchase our products?

Question 60

The external environment (collecting and analyzing data)

Answer 60

• Competition
• Economic growth and stability
• Political trends
• Legal and regulatory issues
• Technological advancements

Question 61

How can we conduct a situation analysis?

Answer 61

• It is a challenging exercise
• Analysis should be organized, systematic, supported by sufficient resources, and an ongoing effort
• The analysis should not only take place in the days and weeks immediately preceding the formation of strategies and plans; the collection, creation, analysis, and dissemination of pertinent marketing data and information must be ingrained in the culture of the organization.
• It is necessary to simultaneously track internal, customer, and external environments
• Tracking all three environments (internal, customer, and external) at the same time is challenging due to their interconnectedness. Changes in one portion of the external environment can cause subsequent shifts in the customer environment or the internal environment.

Question 62

The purpose of the situation analysis is…

Answer 62

to describe current and future issues and key trends as they affect three key environments: the internal environment, the customer environment, and the external environment.

Situation analysis should not replace a manager in the decision-making process. Its purpose is to empower the manager with information for more effective decision making. A thorough situation analysis empowers the marketing manager because it encourages both analysis and synthesis of information.

Situation analysis involves taking things apart: whether it is a customer segment, a product, or competitors. The purpose of taking things apart is to understand why people, products, or organizations perform the way they do. After this dissection is complete, the manager can then synthesize the information to gain a big picture view of the complex decisions to be made.

Question 63

Data

Answer 63

Collection of numbers or facts that have the potential to provide information

Question 64

Information

Answer 64

Data transformed or combined with other data in a manner that makes them useful to decision makers

Question 65

How can we analyze the internal environment?

Answer 65

• Involves a review of:
• Current marketing objectives, strategy, and performance
• Consistency of marketing goals with corporate goals
• Reasons behind improving or declining performance
• Current and anticipated organizational resources
• Current state of organizational resources
• Measures required to use resources more effectively
• Current and anticipated cultural and structural issues
• Positive and negative aspects of current and anticipated organizational structure
• Internal politics or management challenges that may affect marketing activities

Current and anticipated organizational resources: This review includes an analysis of financial, human, and experience resources, as well as any resources the firm might hold in key relationships with supply chain partners, strategic alliance partners, or customer groups. It is also important to gauge whether the availability or level of these resources is likely to change in the near future.

Current and anticipated cultural and structural issues: One of the most important issues in this review involves the internal culture of the firm. In some organizations, marketing does not hold a prominent position in the political hierarchy. The internal culture also includes any anticipated changes in key executive positions within the firm. Other structural issues to be considered include the overall customer orientation of the firm (or lack thereof), issues related to employee motivation and commitment to the organization (particularly among unionized employees), and the relative emphasis on long- versus short-term planning. For most firms, culture and structure are relatively stable issues that do not change dramatically from one year to the next.

Question 66

How can we analyze the customer environment? What is analysis method (e.g., 5W model)?

Answer 66

• Involves examining:
• Firm’s current and potential customers
• Prevailing needs of current and potential customers
• Basic features of the firm’s and competitor’s products that meets customers’ needs
• Anticipated changes in customer-needs
• Analysis method – In assessing a firm’s target markets, the marketing manager must attempt to understand all relevant buyer behavior and product usage characteristics. One method that the manager can use to collect this information is the 5W model.
• 5W model – (1) Who; (2) What; (3) Where; (4) When; and (5) Why (and How)

(1) Who Are Our Current and Potential Customers?: Answering the “who” question requires an examination of the relevant characteristics that define target markets, such as demographic geographic, and psychographic characteristics. The analysis must also assess the viability of potential customers or markets that may be acquired in the future.
(2) What Do Customers Do with Our Products?: The “what” question entails an assessment of how customers consume and dispose of the firm’s products. In the case of derived demand—where the demand for one product depends on (is derived from) the demand of another product—the marketer must also examine the consumption and usage of the complementary product. Marketers have become increasingly interested in how customers dispose of products, such as whether customers recycle the product or its packaging. Another post-consumption issue deals with the need for reverse channels of distribution to handle product repairs.
(3) Where Do Customers Purchase Our Products?: The “where” question is mainly one of distribution and customer convenience. The fastest growing form of distribution today is nonstore retailing—which includes vending machines; direct marketing through catalogs, home sales, or infomercials; and electronic merchandising through the Internet, interactive television, and video kiosks.
(4) When Do Customers Purchase Our Products?: The “when” question refers to any situational influences that may cause customer purchasing activity to vary over time. The “when” question also includes subtler influences that can affect purchasing behavior, such as physical and social surroundings, time perceptions, and the purchase task.
(5) Why (and How) Do Customers Select Our Products?: The “why” question involves identifying the basic need-satisfying benefits provided by the firm’s products.
(a) The potential benefits provided by the features of competing products should also be analyzed.
(b) The answer to the “why” question can also aid in identifying unsatisfied or under satisfied customer needs.
(c) During the analysis, it is also important to identify potential changes in customers’ current and future needs. The “how” part of this question refers to the means of payment that customers use when making a purchase. The availability of credit makes it possible for customers to take possession of high-priced products.
(6) Why Do Potential Customers Not Purchase Our Products?: There are many potential reasons why customers might not purchase a firm’s products.
(a) Noncustomers have a basic need that the firm’s product does not fulfill.
(b) Noncustomers perceive that they have better or lower-priced alternatives, such as competing substitute products.
(c) Competing products actually have better features or benefits than the firm’s product.
(d) The firm’s product does not match noncustomers’ budgets or lifestyles.
(e) Noncustomers have high switching costs.
(f) Noncustomers do not know that the firm’s product exists.
(g) Noncustomers have misconceptions about the firm’s product (weak or poor image).
(h) Poor distribution makes the firm’s product difficult to find. The potential for converting noncustomers into customers must also be assessed. Once the marketing manager has analyzed the firm’s current and potential customers, the information can be used to identify and select specific target markets for the revised marketing strategy.

Question 67

Marketing goals

Answer 67

Broad, simple statements of what will be accomplished through the marketing strategy.

Indicate the direction in which the firm attempts to move, as well as the set of priorities it will use in evaluating alternatives and making decisions.

Question 68

Marketing objectives

Answer 68

Marketing objectives are more specific and are essential to planning.

Question 69

What are basic types of competition ?

Answer 69

• Brand competitors – Brand competitors rightfully receive the greatest attention because customers see different brands as direct substitutes for each other. For the reason, strategies aimed at getting customers to switch brands are a major focus in any effort to beat brand competitors.
  
  • Market products with similar features and benefits to the same customers at similar prices
• Product competitors
  
  • Compete in the same product class, but with products that are different in features, benefits, and price
• Generic competitors
  
  • Market very different products that solve the same problem or satisfy the same basic customer need
• Total budget competitors
  
  • Compete for the limited financial resources of the same customers

Question 70

Brand competitors

Answer 70

Market products with similar features and benefits to the same customers at similar prices

Question 71

Product competitors

Answer 71

Compete in the same product class, but with products that are different in features, benefits, and price

Question 72

Generic competitors

Answer 72

Market very different products that solve the same problem or satisfy the same basic customer need

Question 73

Total budget competitors

Answer 73

Compete for the limited financial resources of the same customers

Question 74

What are corporate affairs?

Answer 74

Collection of strategic activities that are aimed at marketing a firm, its issues, and its ideals to stakeholders (e.g., consumers, general public, shareholders, media, government, etc.)

Question 75

Key corporate affairs strategic activities

Answer 75

1. Corporate communication: activities aimed at telling the organization’s story and promoting goodwill among a variety of stakeholders. It includes activities such as public relations, employee relations, corporate image advertising, public affairs, and media relations.
2. Government relations: activities aimed at educating and influencing elected officials, government officials, and regulatory agencies with respect to key issues that are pertinent to the firm. The most visible form of government relations is lobbying.
3. Investor relations: activities designed to promote investment in the organization through the sale of financial instruments such as stocks and bonds. It includes activities such as developing the annual report, planning shareholders’ meetings, and other customer service activities directed at corporate shareholders.
4. Corporate philanthropy: activities aimed at serving the needs of the community at large through product or cash donations, volunteerism, or support of humanitarian initiatives.
5. Corporate sustainability: activities aimed at reducing the organization’s impact on the environment. It includes activities such as reducing the organization’s carbon footprint, recycling of its products, and promoting environmental stewardship.
6. Policy analysis: activities designed to influence the national or international dialogue with respect to public or economic policy in an industry-related area. It includes research and analysis designed to provide needed information for making policy decisions.

Question 76

What are secondary information sources?

Answer 76

1. Internal data sources: The firm’s own records are the best source of data on current objectives, strategy, performance, and available resources. One of the biggest problems with internal data is that it is often not in a readily accessible form for planning purposes.
2. Government sources: The sheer volume of available information on the economy, population, and business activities is the major strength of most government data sources. Government sources are also easily accessible and low in cost.
3. Book and periodical sources: The articles and research reports available in books and periodicals provide a gamut of information about many organizations, industries, and nations.
4. Commercial data sources: These sources are almost always relevant to a specific issue because they deal with the actual behaviors of customers in the marketplace.

Question 77

The situation analysis should always begin with an examination of _________________ due to their availability and low cost. Since each secondary data source has its advantages and disadvantages, the best approach is one that blends data and information from a variety of sources. Primary marketing research has the major advantages of being relevant to the specific problem, as well as trustworthy due to the control the manager has over data collection.

Answer 77

secondary data sources

Question 78

What are benefits of SWOT analysis?

Answer 78

​SWOT analysis is considered to be one of the most effective tools in the analysis of marketing data and information.

SWOT analysis has many benefits (simplicity, lower costs, flexibility, integration and synthesis, and collaboration), and is so useful and logical that many underestimate its value in planning.

• SWOT
  
  • Widely used framework for organizing and utilizing pieces of data and information gained from situation analysis
  • Includes both internal and external environments
  • Effective in the analysis of marketing data and information
  • Helps uncover competitive advantages that can be leveraged
• Criticisms
  
  • Allows firms to create lists without serious consideration of issues
  • Becomes a sterile academic exercise of classifying data and information

Question 79

What are the directives for a productive SWOT analysis?

Question 80

The synthesis of information gathered from the _________ is critical in developing competitive advantages and the strategic focus of the marketing plan.

Answer 80

situation analysis

Question 81

What are potential issues of each component to consider in a SWOT analysis (strengths, weaknesses, opportunities, and threats)?

Question 82

Developing and Leveraging Competitive Advantages is based on one of the following strategies:

Answer 82

1. Operational excellence: focusing on efficiency of operations and processes, lower costs, and delivering good value to customers.
2. Product leadership: focusing on technology, product development, and delivering the most advanced, highest quality goods and services in the industry.
3. Customer intimacy: focusing on knowing customers, understanding their needs better than the competition, and developing long-term customer relationships.

Question 83

Operational excellence

Answer 83

focusing on efficiency of operations and processes, lower costs, and delivering good value to customers.

Question 84

Product leadership

Answer 84

focusing on technology, product development, and delivering the most advanced, highest quality goods and services in the industry.

Question 85

Customer intimacy

Answer 85

focusing on knowing customers, understanding their needs better than the competition, and developing long-term customer relationships.

Question 86

What are aggressive, diversification, turnaround, and defensive strategic efforts?

Answer 86

• Directions for strategic efforts
  
  • Aggressive (many internal strengths/many external opportunities) – firms in this position can develop marketing strategies to aggressively take on multiple opportunities. Expansion and growth, with new products and new markets, are the keys to an aggressive approach. These firms are often so dominant that they can actually reshape the industry or the competitive landscape to fit their agenda.
  • Diversification (many internal strengths/many external threats) – Firms in this position have a great deal to offer, but external factors weaken their ability to pursue aggressive strategies. To help offset these threats, firms can use marketing strategy to diversify their portfolio of products, markets, or even business units.
  • Turnaround (many internal weaknesses/many external opportunities) – Firms in this position pursue turnaround strategies because they find themselves in the situation of having too many internal problems to consider strategies that will take advantage of external opportunities. In these cases, firms typically have to put their own house back in order before looking beyond their current products or markets.
  • Defensive (many internal weaknesses/external threats) – Firms in this position take a defensive posture when they become overwhelmed by internal and external problems simultaneously.

Question 87

Aggressive

Answer 87

(many internal strengths/many external opportunities) – firms in this position can develop marketing strategies to aggressively take on multiple opportunities. Expansion and growth, with new products and new markets, are the keys to an aggressive approach. These firms are often so dominant that they can actually reshape the industry or the competitive landscape to fit their agenda.

Question 88

Diversification

Answer 88

(many internal strengths/many external threats) – Firms in this position have a great deal to offer, but external factors weaken their ability to pursue aggressive strategies. To help offset these threats, firms can use marketing strategy to diversify their portfolio of products, markets, or even business units.

Question 89

Turnaround

Answer 89

(many internal weaknesses/many external opportunities) – Firms in this position pursue turnaround strategies because they find themselves in the situation of having too many internal problems to consider strategies that will take advantage of external opportunities. In these cases, firms typically have to put their own house back in order before looking beyond their current products or markets.

Question 90

Defensive

Answer 90

(many internal weaknesses/external threats) – Firms in this position take a defensive posture when they become overwhelmed by internal and external problems simultaneously.

Question 91

strategic focus

Answer 91

The firm’s overall concept or model that guides the firm as it weaves various marketing elements together into a coherent strategy. It is typically tied to its competitive advantages, or it can be geared toward compensating for the firm’s weaknesses or defending against its vulnerabilities.

Question 92

Characteristics of marketing goals

Answer 92

All marketing goals should have these characteristics.

1. Attainability: goals should be realistic and capable of being achieved
2. Consistency: goals must be consistent with each other and with the goals of other functional areas
3. Comprehensiveness: marketing goals should relate to the organization’s goals and help to clarify the roles of all parties in the organization
4. Intangibility: marketing goals should be somewhat ambiguous and open-ended to motivate employees by promoting comparisons with rival firms

Question 93

Each marketing program consists of 2 elements. What are they?

Answer 93

A target market (or markets) and a marketing mix (sometimes known as the 4 P’s… product, price, place, promotion)