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.
