Test 1 Ch 1-5 Flashcards
What is marketing?
Activity for creating, communicating, delivering and exchanging offerings that benefit the organization, stakeholders and society at large
Market vs Target Market
Market: people with both the desire and the ability to buy a specific offering
TM: one or more specific groups of potential consumers toward which an organization directs its marketing program
What are the 4 Ps and explain how to identify each.
Product: Good or service to satisfy a need
Price: Exchange for the product/service
Promotion: Communicating the product
Place: Getting the product to consumer (distribution)
What is CREST?
This references environmental forces.
Competitive Regulatory Economic Social Technological
Relationship Marketing
Links the organization to its individual customers, suppliers, employees and other partners for their mutual long-term benefits
Societal Marketing Concept
: satisfying customers’ needs in a way that provides for society’s well being
Ultimate and Organizational Buyers
Ultimate: Consumer who actually uses the product
Called “B2C”
Food, clothes, music, education…
Organizational: Intermediate customer that ultimately resells the product
Called “B2B”
Computer chips sold to laptop manufacturer; car batteries sold to a hybrid car manufacturer
Value
Unique combination of benefits received by buyer
Beneficial exchanges
“Win-Win” between buyer and seller
Strategic Business Analysis
Subsidiary, division, or unit of an organization that markets a set of related offerings to a clearly defined target
Allows:
Focus strategic efforts
Exploit opportunities
Triple Bottom Line
Measures company’s financial, social and environmental performance over time
Market Share
Sales revenue of a firm divided by total sales revenue of all firms in industry
Business Portfolio Analysis
STARTS AT QUESTION MARK
Question Mark: Low share, high growth
Stars: High share, high growth
Cash Cows: High share, low growth
Dogs: Low share, low growth
Diversification Analysis
Market Penetration: Sell current product to current market
Market Development: Sell current product to new market
Product Development: Sell new product to current market
Diversification: Sell new product to new market
SWOT
Build on a strength
Correct a weakness
Exploit an opportunity
Avoid a threat
CREST
Competitive Forces
Regulatory
Economic Forces
Social Forces
Technological Forces
Baby Boomer
1946 – 1964
71.6 million (U.S. Census Bureau 2021)
Were the largest U.S. generation until overtaken by Millennials in 2019
Interested in finance, health, wellness, appearance
Still have substantial buying power
Gen X
1965 – 1980: The “Baby Bust”
Fewer in number than Boomers
65 million (U.S. Census Bureau 2021)
Largest set of travelers
Casual, tech-friendly
Self-reliant
Supportive of diversity
Pragmatic
Gen Y/Millenials
1981 – 1996
72.1 million (U.S. Census Bureau 2021)
Huge spending block: beat Boomers as largest cohort in 2019 (Pew Research)
Oldest Millennials remember a world before mobile tech/being dependent on family laptop
For the most part grew up experiencing good economy, but now have fewer financial resources than their parents
Those who graduated college in late 2000s and early 2010s faced tough employment market and many owe thousands in student debt
Environmental, expect sustainability
Optimistic
Sometimes seen as having been overly protected by parents
Attracted to purposeful work
As teens, preferred conspicuous
consumption of brands
Gen Z
1997 – 2010
67 million (U.S. Census Bureau 2021)
Have always had mobile in their lives
Learned frugality by growing up in global financial crisis
Interested in other cultures and seek entertainment from outside U.S.
See college/college debt as not worth it, seeking less expensive alternatives
Less brand friendly than Millennials
Social-justice oriented
Less likely to conform to gender norms
Value conciousness
concern for obtaining the best quality, features and performance of an offering for a given price.
Changes in marketing to men and women
1970s: Distinctive Lines
Laundry: women
Golf: men
1990s: Address New Challenges
Women: Balance career and family
2000s: Blurred Lines
Beer marketed to all
Men = Caregiver
Four Basic Types of Competition
Pure Competition: Distribution (Place) is critical
Monopolistic Competition: Promotion often focuses on price (coupons)
Oligopoly: Do consumers lose because companies hesitant to compete on price?
Pure Monopoly: One firm to rule them all
Technological forces
Artificial Intelligence (AI)
Many important applications for marketers
Social Networks
Functionality, community, identity
Natural User Interfaces
Gesture, touch, voice interaction
Hands-free technology
Wristwatch monitors
Green Technologies
Smart homes, The Internet of Things
Precycling: Reduced packaging/long-lasting products
Biotechnology
Genetically modified crops for improved farm output
Macroeconomic Conditions
Recessionary: Slow economic activity
Inflationary: Prices rise faster than income => selective purchasing
Consumer Confidence Index (CCI) important for marketers to watch
Social Factors
World population is growing. Go with the growth.
World
Africa, Asia, Latin America population growing, especially China and India
People 60+ years will more than triple by 2050
U.S.
Larger, older, more diverse
Impact of Hispanic market, esp in Texas
Multicultural marketing
Largest growing ethnic group: mixed race
Gross Income
Gross: Total pay before taxes.
Consumer Bill of Rights
JFK.
The right:
To Safety
To Be Informed
To Choose
To Be Heard
Sherman Anti Trust
Forbids restraint of trade that harms competition
Difficult to prove restraint of trade
American Sugar Refining Co: 98% of US sugar
Supreme Court: Not a violation/no definite restraint
Clayton Act: Potential Restraint of Trade
Beefed up Sherman; said even if no harm has yet occurred, certain actions may be illegal if comp likely lessened
Robinson-Patman Act
Forbids different prices for different consumers for same product where it may negatively impact competition
Patent
Inventors can exclude others from making, selling their invention
Consumerism (2 Acts, 1 Commission)
Fair Packaging & Labeling Act
Consumer Product Safety Act
CPS Commission: monitor product safety & set standards
Foreign Corrupt Practices Act
United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests
Ethics vs Law
Ethics: personal moral principles and values
Law: society’s values enforceable in court
Culture’s Impact on Ethics
Upbringing, Societal, Business, and Corporate Ethics dictate personal moral philosophy and ethics
Bribery
Illegal in US and unethical
US: Foreign Corrupt Practices Act
China/Russia: bribery commonplace
Some countries: tax deductible
US may lose international business to other countries
Economic Espionage
Clandestine collection of proprietary information about a company’s competitors
Illegal and unethical
$300 billion in lost sales/year
Includes everything from “dumpster diving” to wiretapping to violations of noncompete agreements
Ethics of Exchange
Both buyer and seller should be better off after an exchange
Profit Responsibility
The social responsibility of business is to increase its profits.
Stakeholder Responsibility
Companies must consider effect on consumers, employees, suppliers, and distributors (all of whom help achieve the firm’s objectives)
Responsible:
Perrier recalls 160 million after trace amounts of toxic chemical found in 13 bottles, even though not harmful to humans in tiny amount.
Not Responsible:
Toyota’s sticky gas pedals (sudden acceleration); recall only after pressure from NTSA.
GM: Ignition shuts off (24 deaths)
Societal Responsibility
Organizations have an obligation to preserve the ecological environment and to the general public
Research on socially responsible companies shows they:
Benefit from WOM among consumers
Outperform less-responsible companies financially
Green Marketing
Efforts to promote and produce environmental products. DO NOT GREEN WASH
3M: “Pollution Prevention Pays” project
Cause marketing
Ties revenues to charity
Yoplait: “Save Lids to Save Lives”
Consumer Purchase Decision Process
Problem Recognition/Information Search/Assess Value/Purchase Decision/Postpurchase Behavior
Problem Recognition
Perceiving a Need
Information Search
Seeking Value
Personal sources: Friends and family
Public sources: ConsumerReports.com
Marketer-dominated sources: POP/POS in cell phone carrier stores
Assess Value
Consumers evaluate alternatives on important attributes
Post Purchase Behavior
Value in Consumption
Cognitive Dissonance
Post-purchase doubt
Satisfied customers tell 3
Dissatisfied customers tell 9!!
Reducing Cognitive Dissonance
Share success stories
“You’re one of 1,000s enjoying your new phone”
Respond to questions/concerns
Training and tech help available
Ongoing communication
Make client feel part of the culture
Extended Problem Solving
High-Involvement Purchases
Real Estate
Phones, Laptops
Cars
Limited Problem Solving
Less Involvement than Extended
Restaurant for lunch
Coffee machine
Routine Problem Solving
Low-Involvement Purchases
Milk
Kitchen cleaner
Paper towels
High-Involvement Purchase Strategies
Advertising
Personal selling
Blogs
Branded sites
Low-Involvement Purchase Strategies
Maintain product quality
Avoid stock outs
Repetitive ad messages
Link purchase to high-involvement issues
Maslow’s Hierarchy of Needs
Physiological/Safety/Social/Esteem/Self Actualisation
Perceived Risk
The anxiety felt when a consumer cannot anticipate the possible negative outcomes of a purchase
Disposable Income
$ left over after paying taxes (we pay for housing, food, etc. with this).
Discretionary
$ left over after paying taxes and necessities (we buy vacations, fancy cars, etc. with this)
Digital Millennium Copyright Act
protect copyright of digital material
