Midterm Flashcards
What is the definition of Marketing
The activity for creating, communicating, delivering ad exchanging offerings that benefit the organization, its stakeholders, and society at large.
what is “the Marketing Concept”?
The idea that a company should focus on satisfying the needs of the customer while at the same time trying to achieve the goals of the company.
- Customer Satisfaction
- Total company effort
- Profit is an objective
How does marketing influence our economic system, and consumers’ standard of living?
Managers view people as either production oriented (viewing everyone as the same, mass marketing), or Marketing oriented (views everyone as different, focuses on target marketing)
What is the difference between a “planned economic system” and a “market-directed economic system?”
- Planned economic system- Government officials decide what and how much is to be produced and distributed by whom, when, and why. Government officials make all the decisions regarding production and the distribution of goods and services.
- Market Directed Economic System- Individual decisions of the many producers and consumers make the macro- level decisions for the whole economy. Consumers pay what they think things are worth instead of the government telling them what to play.
Be able to provide examples of the “micro/macro dilemma”.
Micro/ Macro dilemma- Consumers and producers making free choices can cause conflicts and difficulties. What is good for some firms and a few consumers may not be good for society as a whole. Ex: E-cigarettes and Legalized marijuana.
Why has Target-Marketing become more important over time?
Target Marketing- A particular group of consumers at which a product or service is aimed. It has become important because if you have the right product for the right group of people it will sell.
What is “customer equity”?
The expected earnings stream (profitability) of a firm’s current and prospective customers over some period of time. The lifetime values of all your current and future customers- the sum total of all the value you’ll ever realize from customers. More customers you have= more money.
Customer lifetime value?-
A prediction of the net profit attributed to the entire future relationship with a customer.
Know the definition of, and examples of the four “Growth Strategies”
market penetration- Trying to increase sales of a firm’s present product in present markets. SAME PRODUCT, SAME MARKET, NEW DEALS. Ex. Lowering the price of a product or service with the aim of increasing sales.
market development- Trying to increase sales by selling current product in new markets. SAME PRODUCT, NEW MARKET. Ex. Leading footwear like adidas entering in international markets for expansion. Or a small
a company sees they are not doing well selling to elderly so they market towards the elderly through advertisement strategies.
Product development- NEW PRODUCTS IN THE SAME MARKET, including brand extension. Ex.
Diversification – NEW PRODUCT, NEW MARKET. Ex.
What is a SWOT analysis and how is it helpful to businesses?
Strength, Weaknesses, Opportunities, and Threats.
- Gives high level view of a company’s current status.
- An indicator of a company’s health in the current moment.
- Strengths and weakness exist currently; opportunities and threats are probabilities in the future.
What is a “competitive advantage”
A condition or circumstance that puts a company in a favorable or superior business position in its market.
how does an organization create competitive advantages for itself?
The organization identifies what it is performing well at, and what they are not doing well with. They see what they are doing well at and see that they a producing surplus profits greater than its competitor- due to unique product pricing or resource advantages.
What are the various “environments” a business must contend with:
- Economic Environment- Refers to macro- economic factors that affect consumer and business spending patterns: GDP.
- Competitive environment- Particularly harsh these days due in large part to rapid advances in technology, such as online shopping. EX. Amazon vs. Craigslist vs. other online retailers.
- Technological environment- One of the fastest changing, making many products and services now obsolete. Ex.
- Political and Legal Environment- Refers to nationalism, religion, etc. Ex.
- Cultural and Social Environment- Effects how and why people live the way the do. Ex.
What are the four different types of market situations in the Competitive Environment?
- Monopoly- One firm completely controls a broad product or market. Ex. Electric Companies like PG&E.
- Monopolistic Competition- The most common environment in the U.S. with many sellers of substitutable products within a certain price range. Ex. Jewelry, Hotels, restaurants, coffee shops.
- Oligopoly- Market controlled by few companies. Ex. Airline industry, cell phone providers.
- Pure Competition- Many sellers of the same product. Due to the commonality of the product and the vast supply, no one seller is able to affect the price of the product. Ex. Agriculture industry.
Know the general mission of these Governmental Consumer Protection Agencies–FTC, FDA, and CPSC.
Federal Trade Commission (FTC)-
A federal government agency that policies antimonopoly law. The promotion of consumer protection and elimination and prevention of corrupt or false business practices. Ex. Charging more at a grocery store when worker scans product. Or loading a scale when weighing product.
Food and Drug Administration (FDA)
Monitors the safety of the food supply and introduction of new drugs, setting higher quality standards and initiating recalls when deemed necessary. Food and drugs are controlled by this agency. One Major initiative currently is development of standards for nutritional labeling.
Consumer Product Safety Commission (CPSC)-
The consumer product safety act of 1972 empowers this commission to remove unsafe products from the market.
Define the four major areas of “segmenting” and what dimensions fall under each.
- Demographic- According to U.S. census: Age and Gender, occupation, wealth.
- Geographic- Physical location.
- Psychographic- Lifestyle.
- Behavioral- Past purchasing behavior.
What is The 80/20 Rule and how can marketers use this information in their own firms?-
80% of a company’s business comes from 20% of your customers. Companies use this rule as a reminder to keep customers happy while searching for new markets.
What is company “positioning”?
A marketing concept that outlines what a business should do to market its product or service to its customers. The marketing department creates an image for the product based on its intended audience.
How and why are “perceptual maps” created?
A visual representation of the perceptions of customers or potential customers about specific attributes of an organization, brand. Product, service, or idea.
What is the difference between disposable and discretionary income? What is “Real” income?
Disposable Income- Income after taxes. Can be spent or saved as one wishes.
Discretionary Income- Disposable Income left over after necessities (such as food, clothing, etc.)
Real Income- Money after inflation. Income of individuals or nations after adjusting for inflation.
What is the importance of the “Hierarchy of Needs” in understanding consumer behavior?
The levels of needs that can be used in this hierarchy:
Psychological needs- Basic level requirements for survival. Ex. Food, water, shelter, clothing.
Safety needs- 2nd level needs for safety and security- ex. Life insurance, alarm systems, etc.
Social needs- The desire for love, friends, belonginess, esteem/ status, clubs, entertainment, status products.
self- actualization- Realization of one’s full potential, personal fulfilment- independence, philanthropy, higher learning.
^^^^Applying the above to consumer behavior can help target products.
What are “reference groups”?
A group to which an individual or another group is compared. Those one looks to when forming attitudes.
What are the three largest ethnic subcultures in the U.S. today? Percentage of the U.S. population of each?
- Hispanics 17%
- African Americans 13%
- Asian 4%
What is the Family (or “Household”) Life Cycle and what are the various stages of the family or household cycle?
Process of family formation and dissolution. A family’s progression from its formation to retirement or dissolution. Just basically growing up. The stages from infancy to elderly. Various Stages:
-Young Single -Young married w/o Children -Young Married w/ children -Middle-aged with Children -Middle aged married w/o children -Older married -Older unmarried
What is the “Birthrate” and how is it calculated?
Number of live births per one thousand people in the population.
Know the U.S. population percentages and some of the behavioral characteristics of Boomers, Gen X, & Gen Y.
Baby Boomers- 1946- 1964. 78 million (25% of the population). Characteristics: Want to look and act young. Spend money on adventure travel. Maintain their health.
Gen X- Mid 1960s- early 1980s. 49 million (16% of population). Values experiences over material things.
Generation Y- Millennials. Those born in the late 1980’s and 1990’s. 80 million. (26% of the population). Technologically savy.
What are the characteristics used to determine social class?
OCCUPATION NOT INCOME. Occupation is the most important characteristic. Income, occupation, education, and wealth.
What are the five steps of the “Consumer Decision-Making Process?
- Need recognition
- Information search
- Evaluation of alternatives
- Purchase decision
- Post purchase behavior
What are the stages in the “New-Product Adoption Process”?
- Awareness- Consumer becomes aware of the new product but lacks information about it.
- Interest- The consumer seeks information about the new product.
- Evaluation- The consumers considers whether trying the new product makes sense.
- Trial- The consumer tries the new product on a small scale to improve his or her estimate of its value.
- Adoption- The consumer decides to make full and regular use of the new product.
What are the major categories of Business and Organizational buyers?
- Producers- Manufactures.
- Government- Federal, state, and local.
- Nonprofit Organizations- Act in the public interest or to serve a cause and do not seek financial profits.
What criteria might be included on a “Vendor/Supplier Analysis” form?
Definition: Formal rating of suppliers on all relevant areas of performance. Ex. Product quality, price, delivery, requirements, supports, sales staff training, advertising allowances.
Know the difference between a manufacturer, a wholesaler, and a retailer
Manufacturer- Produces the product. Sells to the wholesaler.
Wholesaler- Buys from the manufacturer. Sells manufactured product at wholesale (actual) cost. Does not do final sale.
Retailer- Buys from wholesaler. Makes the final sale. Buys whole sale goods, adds margin (to make a profit), sells to public customers.
What are “purchasing (or product) specifications”
Detaileddescriptionof the measurable characteristics desired in an item to be purchased, such as quality, size, weight, performance parameters, safety requirements, etc.
“competitive bids”?-
Terms of sale offered by different suppliers in response to the buyers purchase specifications.
What is “derived demand”?
Business demand derives from the demand for final consumer products. Ex. Car manufacturers buy about 1/5 of all steel products.
What is “outsourcing”; what are the benefits and disadvantages of outsourcing?
Obtain (goods or service_ from an outside supplier, especially in place of an internal source.
Benefits: Can save cost. Greater competitive advantage. Higher return on investment. More management time.
