MKTG 2301 Final Exam Review/Open-Book NotesChapter 1

1. Marketing- activity for creating and delivering offerings that benefit the organization, its stakeholders, and society Marketing seeks to: 1) discover needs and wants of consumer 2) satisfy them

i. Key to achieving the “objectives” is to create an exchange. Exchange is the trade of things of value between buyer and seller so each is better off

The marketing department is responsible for creating relationships, partnerships, and alliances. Shaped solely by its relationship with internal and external groups.

Influences on marketing activities: Society, organization/departments, environmental forces:1. Social 2. Economic3. Technological4. Competitive5. Regulatory

Discovering consumer needs and wants requires vital marketing researcho Needs – when a person feels deprived of basic necessitieso Wants – a need shaped by a person’s knowledge, culture, and personality

2. What is a Market? A market is people with both the desire and the ability to buy a specific offering

3. Definition of a target market A target market is one or more specific groups of potential consumers toward which an organization directs its

marketing program 4. The “4 P’s” – elements a part of marketing mix

Someone in the organization’s marketing program, often the marketing manager, must develop a complete marketing program to reach consumers by using a combination of these “4 P’s”

After finding a “market” and “target market”, reflect on the “4 P’s”i. Product: good, service, or idea to satisfy consumer needs

ii. Price: what is exchanged for the productiii. Promotion: means of communication between seller and buyeriv. Place: means of getting the product to the consumer

Marketing mix – controllable factors (similar to the 4 P’s) that the marketing manager can use to solve a marketing problem

Example: putting a product on sale---altering product price5. Definition of customer value

Customer value is the buyers’ benefits including quality, convenience, on-time delivery, and before-and-after sale service at a specific price

6. Definition of relationship marketing Relationship marketing is the link to the organization to its individual customers, employees, suppliers, and

other partners for their mutual long-term benefit7. What is a marketing program?

A marketing program helps discover prospective customers by planning to integrate the marketing mix to provide a product, service, or idea

8. The marketing concept is the idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organizations goals

From implementing a strong marketing concept, it leads to market orientation:i. An organization that has a market orientation focuses its efforts on 1) continuously collecting info

about customers’ needs 2) sharing this info across depts. 3) Using it to create customer value9. Ethics and Responsibility

The societal marketing concept is the view that organizations should satisfy the needs of consumers in a way that also provides for society’s well being

10. Who buys and how are they benefited? Ultimate consumers: people who use the goods and services purchased for a household Organizational buyers: manufacturers, wholesales, retailers, and government agencies that buy goods and

services for their own use or for resale Consumers are benefited because marketing creates “utility”, benefits or customer value received by users of

the product. Chapter 2

1. Definition of profit Profit: the reward to a business firm for the risk it undertakes in marketing its offerings

o Business Firms – privately owned organizations that serves its customers to earn a profit so that it can survive

o Nonprofit organization – nongovernmental organization that serves its customers but does not have profit as an organizational goal (goals may be operational efficiency or client satisfaction)

2. What is strategy? Strategy – (to help develop, focus, and direct its efforts to accomplish its goals) an organizations long-term

course of action designed to deliver a unique customer experience while achieving goals 3. Structure of Organizations

Corporate Level – where top management directs overall strategy for the entire organization (CEO, CMO, etc.)

Strategic Business Unit Level – managing a group of businesses which is a subsidiary, division, or unit of an organization that markets a set of related offerings to a clearly defined group of customers

Managers set a more specific strategic direction for their businesses to exploit value-creating opportunities

Functional Level – groups of specialists actually create value for the organization. Jobs are divided and the term “department” generally refers to these specialized functions such as marketing and finance

4. Today’s visionary organization uses key elements to: Establish a foundation (Why?)

Organizations guide and inspire their employees through three elements: core values (fundamental passionate and enduring principles that guide an organization), mission (the mission is a statement or vision of an organization’s function in society), and organizational culture (set of values, ideas, attitudes, and behavioral norms that is learned and shared among the members of an organization)

Set a direction (What?) Business: the underlying industry or market sector of an organization’s offering Goals: targets of performance to be achieved often by a specific time (Profit, sales, market share,

quality, customer satisfaction, employee welfare, social responsibility) Market share is the ratio of a firm’s sales to the total sales of all firms in the industry

Organizational strategies to develop and market successfully (How?) Variation by level: moving from the corporate to the strategic business unit to the functional level

involves creating increasingly detailed strategies and plans Variation by offering: the strategy will be far different when marketing a very tangible physical

product, service, or idea5. Figure 2-3/Tracking strategic performance with Marketing Dashboards

An effective marketing dashboard helps managers asses a business situation at a glance Marketing metric is a measure of the value or trend of a marketing activity or result Marketing plans are road maps for the marketing activities of an organization for a specified future time period

6. Setting Strategic Directions Asking an organization where it is at the present time involves identifying its competencies, customers, and

competitorso Competencies – a response to “what do we do best?”, they are special capabilities, skills, technologies,

and resources that distinguish it from other organ. And provide customer valueo Customers – who are they? Who is loyal? New customers? o Competitors – businesses and organs. that have similar goals and aims as well as similar

products/services7. Growth Strategies: Where do we want to go?

Definition of business portfolio analysis Business portfolio analysis is a technique that managers use to quantify performance measures and

growth targets of their firms strategic bus. Units

8. Diversification analysis Diversification analysis is a technique a firm uses to search for growth opportunity from among current, new

products and markets Market penetration: to increase sales of current products in current markets Market development: marketing strategy to sell current products to new markets Product development: marketing strategy to sell new products in current markets Diversification: developing new products and selling in new markets

9. Strategic Marketing Process (allocating its marketing mix resources to reach its target market) Step 1: SWOT/Situation Analysis (Strengths, Weaknesses, Opportunities, Threats)

Identifies trends Analyzes competitors Assess organization Research present and prospective customers

Step 2: Market Segmentation – sorting of potential buyers into groups that have common needs and will respond similarly to a marketing action

Step 3: Marketing Program i. Product strategy

ii. Product price strategiesiii. Promotion strategyiv. Place distribution

10. Executing the Marketing Program Marketing strategy – means by which a marketing goal is to be achieved Marketing tactics – detailed day-to-day operational decisions essential to the overall success of marketing

strategiesChapter 3

1. Environmental Scanning: the process of acquiring information on events outside the organization to identify and interpret potential trends (social, economic, technological, competitive, regulatory)

The social forces of the environment include the demographic characteristics of the population and its values. 2. Example: Generational cohorts

Baby boomers: the generation of children born between 1946-1964o Retiring at a rate of 10,000 every 24 hourso 65 and older by 2030o Wealthiest generation of the USo Interests: health, wellness, and appearance

Generation X: members of the US population born between 1965-1976o Also known as baby busto Self-reliant, supportive of racial and ethnic diversity, and better educated than any previous generationo Lifestyles: blend of caution, pragmatism, and traditionalismo Dominant force in many markets. Largest segment of business travelers

Generation Y: 72 million Americans born between 1977-1994o Echo boom or baby boomleto Influence on music, sports, computers, video games, and cell phones

STARS: SBUs with high-growth

markets that may need extra cash to finance their own

rapid growth

QUESTIONS MKS?: SBUs with a low

share of high-growth markets

CASH COWS: SBUs that generate high

cash flow, far more than they

can invest, slow-growth

DOGS: SBUs with low shares and

low growth shares

o Strong-willed, passionate about the environment, and optimistic3. Definition and uses of demographics

Demographics: description of a population according to characteristics such as age, gender, ethnicity, income, and occupation

4. Racial/Ethnic Diversity Multicultural marketing: marketing programs that reflect unique aspects of different races Culture: set of values, ideas, and attitudes that is learned and shared among the members of a group

5. Economic Forces Economy refers to the income and resources that affect the cost of running a business or household

o Gross income: total amount of money made in 1 year before taxes o Disposable income: total amount AFTER taxeso Discretionary income: money that remains after paying taxes and necessities; how you are going to

spend the rest of your money6. Technological Forces

Technology refers to inventions, or innovations from applied science or engineering researcho Technological change leads to new products, replacing old ones. o Technology has a large impact on customer values

1. Marketspace – information-and-communication-based electronic exchange environment occupied by digitized offerings

7. Competitive Forces Competition refers to alternative firms that could provide a product to satisfy a specific markets needs

o Pure competition – there are many sellers and have similar producto Monopolistic competition – competing with substitutable products within a price range (example:

coffee buyers switch to tea, which is cheaper)o Oligopoly – few companies control majority of saleso Pure monopoly – 1 firm sells certain product

8. Regulatory Forces Regulation refers to restrictions that state and federal laws place on business

o Consumerism – a movement started to increase the influence, power, and rights of consumers in dealing with institutions

o Self-Regulation – an alternative to government control, whereby an industry attempts to police itself9. Trademarks

Trademarks are intended to protect both the firm selling a trademarked product and the consumer buying it Laham Act (1946): prices for registration of a company’s trademarks Trademark Law Revision Act (1988): allowing a company to secure rights to a name before actual use by

declaring an intent to use the name Madrid Protocol: treaty that facilitates the protection of US trademark rights throughout the world Federal Dilution Act: prevents someone from using a trademark on a noncompeting product

Chapter 4 1. Ethics Vs. Laws in Marketing

Law: society’s standards and values that are enforceable in the courts Ethics: the moral principles and values that govern the actions and decisions of an individual or a group

2. Societal Culture and Norms – societal values and attitudes affect ethical and legal relationships among individuals, groups, and business institutions

Consumer Bill of Rights – codified the ethics of exchange between buyers and sellers, including rights to safety, to be informed, to choose, and to be heard

Corporate Culture – the set of values, ideas, and attitudes that is learned and shared among the members of an organization

Definition of a whistle blower Employees who report an employer’s unethical and illegal actions

Code of Ethics – a formal statement of ethical principles and rules of conduct 3. Moral Philosophies

Moral Idealism: a personal moral philosophy that considers certain individual rights or duties as universal regardless of the outcome

Utilitarianism: a personal moral philosophy that focuses on the “greatest good for the greatest number” 4. Social Responsibility in Marketing

Social Responsibility is the idea that organizations are part of a larger society and are accountable to that society for their actions

1. Profit Responsibility: holds that companies have a simple duty; to maximize profits for their owners or stockholders. (Owners, Stockholders)

2. Stakeholder Responsibility: focuses on the obligations an organization has to those who can affect achievement of its objectives. (Consumers, employees, suppliers, and distributors

3. Societal Responsibility: an even broader concept of social responsibility has emerged which refers to obligations that organizations have 1) to the preservation of the ecological environment and 2) to the general public

a. Emphasis is placed on what is termed the “triple-bottom line”, recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth

b. Green Marketing refers to marketing efforts to produce, promote, and reclaim environmentally sensitive products

c. Socially responsible efforts on behalf of the general public are becoming more common. Formally, this is called cause marketing, which occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products.

Chapter 51. Consumer Purchase Decision Process: the stages a buyer passes through in making choices about which products or

services to buy Steps:

o Problem Recognition-perceiving a needo Information Search-seeking valueo Alternative Evaluation-assessing valueo Purchase Decision-buying valueo Post-Purchase Decision-value/disvalue in consumption or use

2. Consumer Involvement and Problem-Solving Variations Involvement is the term that refers to the personal, social, and economic significance of a purchase to the

consumer Extended Problem Solving – each of the five stages of the consumer purchase decision process is used, with

considerable time and effort devoted to the external information search and the identification and evaluation of alternatives. Exists in high-involvement purchase situations for items such as automobiles and audio systems

Limited Problem Solving – consumers typically seek some information or rely on a friend to help them evaluate alternatives. (Example is choosing a toaster, restaurant for lunch, and other purchase situations in which the consumer wants to spend little time or effort)

3. Opinion Leaders Opinion leaders are individuals who have social influence over others

4. Psychological Influences on Consumer Behaviour: psychology helps marketers understand why and how consumers behave as they do.

Motivation – the energizing force that stimulates behaviour to satisfy a need o Individual’s needs are boundless and people possess physiological needs for basics.

Psychological needs are basic to survival and must be satisfied first. Safety needs involve self-preservation as well as physical and financial well

being. Social needs are concerned with love and friendship. Personal needs include the need for achievement, status, prestige, and self-respect

Perceived Risk – the anxiety felt when a consumer cannot anticipate possible negative outcomes of a purchase 5. Learning: Behaviours that result from repeated experience or reasoning

Behavioral Learning is the process of developing automatic responses to a situation built up through repeated exposure to it (drive, cue, response, and reinforcement)

Cognitive Learning involves making connections between two or more ideas or simply observing the outcomes of others behaviours and adjusting your own accordingly.

o Brand Loyalty – a favorable attitude toward and consistent purchase of a single brand over time 6. Reference Groups

People to whom an individual looks as a basis for self-appraisal or as a source of personal standards are considered reference groups

Types?o Membership groups: one to which a person actually belongso Aspiration group: one that a person wishes to be a member or wishes to be identified with

o Dissociative group: one that a person wishes to maintain a distance from because of differences in values or behaviours

Chapter 61. Nature and Size of Organizational Markets

Business Marketing – marketing of products and services to firms, governments, or not-for-profit organizations Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy goods

and services for their own use or for resale NAICS – North American Industry Classification System provides common industry definitions for Canada,

Mexico, and the USo Six-digit coding system is used:

First two digits: sector of the economy Third digit: designates a subsector Fourth digit: industry groups Fifth digit: designates a specific industry and it is most the detailed level at which comparable

data is available for Canada, Mexico, and the US Sixth digit: designates individual country-level national industries

Definition of psychographicso Lifestyle: mode of living that is identified by how people spend their time and resources, what they

consider important, and what they think of themselves and the worldo Psychographics: the practice of combining psychology, lifestyle, and demographics to uncover

consumer motivations for buying and using products and services. It is the analysis of consumer lifestyles that provides insights to consumer needs and wants

Characteristics of organizational buyers…o Organizational buying behaviour – the process by which organizations determine the need for goods

and then choose among alternative suppliers (objectives: increase profits by reducing costs, buying from minorities, environmental initiatives)

o Derived Demand – a demand for industrial products and services is driven by demand for consumer products and services

Size of order/purchase is much larger than consumer buying Require review after certain amount Reaches a large number of potential buyers

o Market characteristics: demand for industrial products and services. Few customers typically exist and their purchase orders are large

o Buying center – group of people in an organization who participates in the buying process Roles in the Buying Center

a. Users – people in the organization who actually use product or serviceb. Influencers – affect buying decision, help define specifications for what is boughtc. Buyers – formal authority and responsibility to select supplier and negotiated. Deciders – formal/informal power to select or approve the supplier that receives

contracte. Gatekeepers – control flow of information in buying center

2. Types of Auctions Traditional auction: occurs when a seller puts an item up for sale and would-be buyers bid in competition with

each other Reverse auction: when a buyer communicates a need for something and would-be suppliers bid in competition

with each otherChapter 7

1. Dynamics of world trade Trend 1: Gradual decline of economic protectionism by individual countries

o Protectionism is the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas

o Tariff is a tax on goods or services entering a country (imports)o Quota is a restriction placed on the amount of a product allowed to enter or leave a countryo WTO (World Trade Organization) – institution that sets rules governing trade between its members

through a panel of trade experts Trend 2: formal economic integration and free trade among nations

o Euro: adoption of the euro has been a boom to electronic commerce in the EU by eliminating the need to continually monitor currency exchange rates

o EU: 27 member countries that have eliminated most barriers to the free flow of goods, services, capital, and labor across their borders

o NAFTA: lifted many barriers between Canada, Mexico, and US and created a marketplace with more than 450 million consumers

o CAFTA-DR: agreement is viewed as a step toward a 34 country Free Trade Area of the Americans for the Western Hemisphere

Trend 3: global competition among global companies for global customerso Global competition: exists wen firms originate, produce, and market their products and services

worldwide o International firm: engages in trade and marketing in different countries as an extension of the

marketing strategy in its home countryo Multinational firm: views the world as consisting of unique parts and markets to each part differentlyo Multi-domestic marketing strategy: a multinational firm’s strategy of offering as many different

product variations, brand names, and advertising programs as countries in which it does businesso Global marketing strategy: the practice of standardizing marketing activities when there are cultural

similarities and adapting them when cultures differo Global brand: a brand marketing under the same name in multiple countries with similar and centrally

coordinated marketing programs o Global consumers: consumer groups living around the world who have similar needs or see similar

benefits from products or services Trend 4: development of networked global market space

o The use of Internet technology as a tool for exchanging goods, services, and information on a global scale is the fourth trend affecting world trade.

2. Global Environmental Scan Cultural Diversity

o Cross-cultural analysis: the study of similarities and differences among consumers in two or more nations or societies

o Values: a society’s personally or socially preferable modes of conduct or states of existence that tend to persist over time

o Customs: norms and expectations about the way people do things in a specific countryo Cultural symbols: things that represent ideas or concepts in a specific culture

Foreign Corrupt Practices Act (1977) – a law that makes it a crime for US corporations to bribe an official of a foreign government or political party to obtain or retain business

3. Global Market-Entry Strategies Exporting – producing goods in one country and selling them in another

o Indirect export – firm sells domestically produced goods in a foreign country through an intermediaryo Direct export – when a firm sells its domestically produced goods in a foreign country without

intermediaries Licensing – a company offers the right to a trademark, patent, trade secret, or other similarly valued item of

intellectual property in return for a royalty or fee Joint Venture – foreign company and local firm invest together to create a local business haring ownership,

control, and the profits of new company Direct investment – domestic firm actually invests in and owns a foreign subsidiary or division

4. Product and Promotion Strategies Product Extension – virtually same product Product Adaptation – changing to appropriate for country Product Invention – brand new product to accommodate across countries

Chapter 81. Role of Marketing Research: which is the process of collecting and analyzing info in order to recommend actions

Step 1: define problem – set research objectives and identify possible marketing actions Step 2: develop research plan – specify constraints (restrictions place on potential solutions to a problem),

identify the data needed for marketing decisions, and determine how to collect the data Step 3: collect relevant info – obtain secondary data (facts and figures previously recorded), obtain primary

data (facts and figures newly calculated) Step 4: develop findings – analyze data and present findings Step 5: take marketing options – make action recommendations, implement actions, and evaluate results

2. Definition and purpose of mystery shoppers

They check on the quality and pricing of their products and the integrity of and customer service provided buy their employees

3. Purpose of focus groups – informal sessions of 6-10 pas, present, or prospective customers in which a discussion leader asks their opinions about the firm’s and competitors products, how they use these products, and special needs they have that these products don’t address

4. Test markets – a small geographic area that is offered a product to help evaluate potential marketing actions