intro to marketing Flashcards
what is marketing?
a set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships
requires thoughtful planning with an emphasis on the ethical implications of any of those decisions on consumers and society in general
what are the components of a marketing plan?
how the product/ service will be conceived or designed, how much it’ll cost, where and how will it be promoted, and how it will get to the consumer
what is a need?
one of the basic necessities of life (food, clothing, shelter, safety)
what is a want?
a particular way in which people choose to fulfill their need, which is shaped by their knowledge, culture, and personality
how does a company understand the needs and wants of consumers?
the company has to identify the target market/ customers
the market can be segmented or divided into groups of people who are pertinent to an organization for particular reasons
what does it mean by marketing entails an exchange?
the trade of things of value between the buyer and seller so that each is better off as a result
sellers provide goods or services, then communicate and facilitate the delivery of their offering to consumers
buyers complete the exchange by giving money and information to the seller
what are the 4 components of the marketing mix (4 p’s)?
product, price, place, promotion
what is a marketing mix?
the controllable set of activities that the firm uses to respond to the wants of its target markets
what does product do for value?
create value
describe product in the 4 p’s
fundamental purpose of marketing is to create value by developing a variety of offerings - including goods, services, ideas - to satisfy customer needs
goods primarily function to fulfill some need, but their ultimate value stems from what they provide and how they are marketed
just creating the product
what is a good?
items you can physically touch
what is a service?
intangible customer benefits that are produced by people or machines and cannot be separated from the producer
what is an idea?
thoughts, opinions, philosophies, and intellectual concepts that also can be marketed
what does price say about value?
price captures value
describe price in the 4 p’s
price is everything that the buyer gives up, including money, time, energy
marketers must determine the price of a product carefully on the basis of the potential buyer’s belief about its value
the key is to determine how much customers are willing to pay so that they are satisfied with their purchase and the seller achieves a reasonable profit
what does place say about value?
place delivers value
describe place in the 4 p’s
describes all the activities necessary to get the product from the manufacturer or producer to the right customer when the customer wants it
place deals specifically with retailing and distribution management
aka supply chain management
how you get the product in the hands of the consumers
what is supply chain management?
a set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and other firms involved in the transaction into a seamless value chain
within this chain, merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, while minimizing systemwide costs and satisfying the service levels required by the customers
what does promotion say about value?
communicating value
describe promotion in the 4 p’s
communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response
promotion generally can enhance a product’s or service’s value
product must be promoted in a way that is consistent with the target consumers
what is B2C marketing?
business to consumer
the process in which businesses sell to consumers
what is B2B marketing?
business to business
process of selling merchandise or services from one business to another
what is C2C marketing?
consumer to consumer
consumers market their products and services to sell to consumers
what are the two main things required for successful marketing?
should be mutually beneficial - for both the consumer (satisfied needs and wants) and the producer (adequate compensation)
should be driven by value - balances benefits and costs, build long-term relationships with customers
what are the four orientations of marketing?
product, sales, market, value-based
what is product orientation?
these companies focus on developing and distributing innovative products with little concern about whether the product best satisfy customers’ needs
these companies generally start out by thinking about the product they want to build; they try selling the product they want to build; they try selling the product after it is developed rather than starting with an understanding of the customers’ needs and then developing a product to satisfy those needs
what is sales orientation?
view marketing as a selling function where companies try to sell as many of their products as possible rather than focus on making products consumers really want
typically depend on heavy doses of personal selling and advertising to attract new customers
tend to focus on making a sale or a transaction rather than building long term customer relationships
focus on sales rather than consumer needs and wants
profits come from sales rather than repeat business from satisfied customers
what is market orientation?
start out by focusing on what consumers want and need before they design, make, or attempt to sell their products and services
believe that customers have choice and make purchase decisions based on several factors, including quality, convenience, and price
marketers’ role is to understand and respond to the needs of consumers and to do everything possible to satisfy them
satisfied customers become long-term loyal customers, contributing to bottom-line profitability
what is value-based orientation?
to compete successfully, they need to focus on the triple bottom line: people (consumer needs and wants), profits (long-term profitable relationships with consumers and suppliers), and planet (do all this in a socially and environmentally responsible way)
provide their customers with greater value than their competitors
value reflects the relationship of benefits to cost
every value based marketing firm must implement its strategy according to what its customers value (could include speed, convenience, size, accuracy, price, cost savings, or user-friendliness)
maximize value, focus on long term relationships, think in terms of relationships rather than transactions, beyond just consumers, and evolve over time
what should a company do if they want to expand to a global presence?
analyze new customers’ needs and wants on a segment by segment, region by region basis in order to expand globally
how does marketing enrich society?
a strong social orientation is in both the company’s and consumers best interest
shows the consumer that the firm can be trusted with their business
investors view firms that operate with high levels of corporate responsibility and ethics as safe investments
firms have come to realize that good corporate citizenship through socially responsible actions should be a priority because it will help their bottom line in the long run
what does a marketing strategy identify?
1) a firm’s target market(s)
2) a related marketing mix (4 p’s)
3) the bases upon which
what is a sustainable competitive advantage?
an advantage over the competition that is not easily copied and thus can be maintained over a long period of time
what is a marketing plan?
a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, the marketing objectives and strategy specified in terms of the four p’s, action programs, and projected income statements
what are the 5 steps in the marketing plan?
1) business planning
2) situation analysis
3) develop strategy
4) implement strategy
5) monitor and control
describe step one in the marketing plan
business planning: define the business mission and objectives
create a mission statement
what is a mission statement?
a broad description of a firm’s objectives and scope of activities it plans to undertake
describes:
1) what type of business are we?
2) what do we need to do to accomplish our goals and objectives
another key goal embedded in a mission statement is how the firm is building a sustainable competitive advantage
describe step two in the marketing plan
situation analysis: swot analysis
conduct a SWOT analysis - SWOT assesses both the internal environment (strengths and weaknesses) and the external environment (opportunities and threats)
step two also includes analyzing the micro and macro-environment (CDSTEP)
describe step three in the marketing plan
discusses what to do and how to do it
look at the marketing mix
use STP (segmentation, targeting, and positioning)
what is segmentation?
divide the market or customers into distinct subgroups or segments
what is a market segment?
a group of consumers who respond similarly to a firm’s marketing efforts
what market segmentation?
the process of dividing the market into distinct groups of customers where each individual group has similar needs, wants, or characteristics
what is targeting?
evaluate each segment’s attractiveness and decide which to pursue by using a process known as target marketing or targeting
the bulk of the marketing efforts will be towards that group
what is positioning?
determine how it wants to be positioned within those segments
market positioning involves the process of defining the marketing mix variables so that target customers have a clear, distinct, desirable understanding of what the product does or represents in comparison with competing products
what are the four overarching marketing strategies?
1) customer excellence
2) operational excellence
3) product excellence
4) locational excellence
what is the customer excellence strategy?
focuses on retaining loyal customers and excellent customer service
ex. loyalty programs
companies that have a good service rep
what is the operational excellence strategy?
achieved through efficient operations and excellent supply chain and human resource management
strong relationships with suppliers
what is the product excellence strategy?
having products with high perceived value and effective branding and positioning
brands need to have a clear position in the market
what is the locational excellence strategy?
having a good physical location and internet presence
particularly important for retailers and service providers
this is sustainable as its not easily duplicated
describe step four in the marketing plan
implement marketing mix and allocate resources
marketers implement the marketing mix for each product and service on the basis of what the company believes its target markets will value
describe how the company will allocate its scarce resources to its various products and services
launch product & implement strategy from step 3
describe step five in the marketing plan
evaluate performance by using marketing metrics
evaluate performance : how good is it, what do we need to change?
what is a product with high relative market share and high market growth rate?
perfect product - 3 stars
what is a product with high relative market share and low market growth rate?
cash cow
what is a product with low relative market share and high market growth rate?
question mark
what is a product with low relative market share and low market growth rate?
dog
what are some methods to compare a firm’s performance over time to competing firms?
1) financial metrics: revenue, sales, and profits
2) view the firm’s products or services as a portfolio
what do the metrics used to evaluate a firm depend on?
1) the level of organization at which the decision is made
2) the resources the manager controls
what is portfolio analysis?
management evaluates the firm’s various products and businesses and allocates resources according to which products are expected to be most profitable for the firm in the future
typically performed at the strategic business unit (SBU) or product line level of the firm, though managers can also use it to analyze brands or even individual items
what is a growth strategy?
a method of examining which segments to pursue
what are the four different growth strategies?
1) market penetration
2) market development
3) product development
4) diversification
what is market penetration growth strategy?
employs the existing marketing mix and focuses the firm’s efforts on existing customers
can be achieved by encouraging current customers to patronize the firm more often or buy more merchandise on each visit
requires greater marketing efforts
easiest to implement
what is market development growth strategy?
employs the existing marketing offering to reach new market segments, whether domestic or international
marketers have experience with one element and must learn the other element
what is product development growth strategy?
offers a new product/ service to a market segment that is currently not serviced
marketers have experience with one element and must learn the other
what is diversification growth strategy?
introduces a new product or service to a market segment that is currently not served
requires marketers to go outside both their current products and markets, and the risks of making mistakes is substantially greater
can be related or unrelated
what is related diversification?
the current target market/ targeting mix shares something in common with the new opportunity
firm might be able to purchase from existing suppliers, use same distribution/ management info systems, etc
what is unrelated diversification?
the new business lacks any common elements with the present business
do not capitalize on core strengths associated with markets or products
they would be viewed as very risky
