MAR 3023 Study Guide Exam 1
What is marketing?
Marketer’s view: “The aim of marketing is to know and understand customers so well the product or service fits them and sells itself.” –Peter Drucker
Teacher’s view: Marketing is the answer to the question of why you buy a product.
What makes a Starbucks a good product?
Benefits: Taste, caffeine, great service, convenient locations, quality, consistent, variety. Although the price is expensive, people are less cost sensitive when it comes to coffee drinks, the right price is not always the low price.
It maximizes profit for the firm, so it’s a good product.
Product Development is a core marketing function.
Firms don’t get very far without a good product to sell
This warrants repeating: there would be no firms without marketing
The first goal of marketing is to identify unmet customers needs and then develop a product that fills those needs. You can’t simply make a good product and be done; there are other levers to consider in the marketing aspect.
Identifying the price that maximizes revenue is also part of marketing
Coke: Location also a lot to do with marketing because you wouldn’t drive to Atlanta to get a coke. That’s why they make the price cheap and a convenient location for everyone. With Jimmy Johns, they might know their product isn’t the best but the location and fast delivery helps the company overall.
Don't forget about the age old question of What is the difference between primary and secondary tumor?
1. Develop products that people want or need
2. Price them at a level that maximizes profits
3. Distribute them to where consumers are
Some “GAME CHANGER” products have the answer to the question of what consumers need/want
iPhone, iPod, etc it has everything on one simply phone, solved all wants and needs
Redbox replaced Blockbuster not product but distribution and pricing
If marketers hit their mark with the product, price, and distribution, there’s little need to advertise
No advertisements for Siracha, Lulu Lemon, Krispy Kreme because they get the product component so right Marketing is the foundation of every business.
What is the visible side of marketing? Why is it so needed and so prominent?
Starbucks vs. McDonaldswhy pay $3 for a coffee in a low price place
People are less costsensitive when it comes to coffee drinks
Over time, the market reacts with competitor products that have similar benefits
Over time the market becomes crowded because companies imitate success
SO than the dominant firm has to convince customers why their product is superior If you want to learn more check out What is the social class of siddharta gautama?
Going from telling people about the product to WHY they should buy it We also discuss several other topics like What are the fields of psychology?
2. Advertising and Branding are VERY powerful
Difference between generic brands
Bayer vs. Aspirin: Nothing is different because it’s a formula
You believe in the brand you’re familiar with
Decorated mass produced beer? Bud Light but no it’s Ole Milwaukee Lite Don't forget about the age old question of What is a uta?
Not in top 20. Its not because product isn’t any good, its because you don’t believe the product is any good. And you don’t believe tat because their branding and advertising isn’t as good as dominant company
3. Advertising and Branding: It works…really well
Driving on interstate and there’s Waldo’s Burgers and McDonalds, which do you choose
McDonalds even if you don’t like it because it’s familiar to you We also discuss several other topics like What are the philosophical issues in social pyschology?
Over time, competitors imitate great ideas (coke zero)
This creates a need to convince and remind customers that our product is different, better, and more socially acceptable than other, similar products
Consumer reports rates all of the products you saw as objectively the same asor better thanthe branded products Brands and Marketing are POWERFUL
History of Marketing
Simple Trade Era (Pre1860s)
Products were made by hand, grown or traded in small quantities
Production Era (Pre1920s)
”As long as it’s black”
Sales Era (1920s)
”Changing their minds”
People used to come to your door and try to sell you a vacuum
FOCUS: shortterm profit maximization, selling what we make, aggressive promotion
Marketing Era (1940s1990s)
The “great awakening” where customers became the central focus of the organization
Began with development of marketing departments then transferred to the rest of the firm
Focus: Make what we sell, customer is key
Clues to Market Orientation:
Customer Centric Marketing collaborative relationships based on customers individual needs/concerns Don't forget about the age old question of What is marlyn frye's contribution in women's studies?
Relationship Marketing longterm, mutually satisfying, buyer seller relationships
Customer Relationship Management using info about customers to develop and sustain relationships
Green Marketing meaningful longterm relationships while maintaining an supporting environment
Relationship Marketing Era (1990s2010)
The focus is on longterm relationships and customer retention
Engaged customers generate 1.7 times more revenue than normal customers
Repeat customers generate twice as much revenue
Societal Marketing Era (1960spresent)
Focus: adding society’s best interest to mix, corporate social responsibility, firm now serves 3 entities
The Four P’s/Marketing Mix
Product Goods, services, ideas
Place make products available in quantities desired, minimize costs (inventory, transportation), retail (airports retail market 5 billion) Promotion inform individuals or groups about the organization and its products/services
(Guerilla marketing, advertising, public relations etc.)
PriceDecisions and actions associated with establishing pricing objectives and policies, determining product prices, determine value of the exchange
Popular MacroMarketing Strategies
Value completely subjective to the individual
Weighing all the benefits versus all the costs
Creating Value: Increasing Benefits
Some serve starbucks coffee
Offer babysitter while applying for a loan
Sheraton Five Points in LA offers 24hour checkin where room is always available and guaranteed
Valuedifference between what you have to pay vs. what you’re getting in return
What does Disney sell? Memories, they sell life experiences, relationships
How do you do that with a brand like Charmin? They put a kiosk of bathrooms in the middle of Times Square, NY, concerts, sporting events.
Establishing long term mutually satisfying, buyer seller relationships
EX. Going to Disney
Relationships in Action
ChickfilA trains its employees to “go the extra mile”
Cokeappeals to a specific type of customer
“We can create a product that is much like our core product but taps into a different segment of the population”
Market Opportunity where circumstances and timing meet to create strategic windows
recognizes great opportunity
Starbucks offers a second place, a comfortable environment
Core competencies things a firm does well
McDonald's core competency affordable, familiar with it, consistency (this helps create strategic plan)
Through the process of strategic planning, a firm establishes an organizational mission and goals, corporate strategy, marketing objectives, marketing strategy, and finally, a marketing plan.
People you should know
**Warren Buffetthird wealthiest in the world $66 billion, very humble, “It can take 20 years to build a reputation and 5 minutes to ruin it.”
Firms you should know:
Berkshire HathawayInsurance Company, started out as textile (owns Geico)
Pepsi created by Caleb Bradham to be sold in his drug store in New Bern, NC, was a medication at first “pepsin”, owns Mountain Dew, Amp, SoBe, Quaker, Tropicana, Frito Lay, they diversify
Internal Environmentimpact the firm within its own walls
Market Opportunitieswhere circumstance and timing meet to create strategic windows
eBaybefore it existed, how did people buy? Ads, garage sale
Recession and WalMart less about experience and more about cost savings, stock went up
Core CompetencyThings a firm does well
Competitive Advantage opportunity + competency
SWOT AnalysisStrengths, Weaknesses, Opportunities and Threats
Strategic Business Units (SBUs) a division or unity within a larger parent company
FSU has 15 SBUs basically separate colleges (arts and sciences, business, criminology etc.)
Market Share the percentage of a market that actually buys a specific product
Marketing Strategy chartbold mission statement, corporate strategies
Chick Fil A Employees happy to be there, so it makes service better, great internal marketing, efficient operations Southwest Number 1 overall for internal marketing, they like their job, treat employees well
KEY to Internal Marketing: Empowerment giving employees the power to act immediately, decisively, and without fear in order to attain satisfaction and delight. EX. Ritz Carlton gives employees a $ limit to make something right if a customer is unhappy.
External Environmentwhat happens outside walls that impact marketing force
Six forces Economic, Technological, Political, Sociocultural, Competitive, Legal/Regulatory
Types of Competitors Brand, product, generic, total budget
Monopolywhen an organization has no competitors so that it is the sole source of supply (rare)
Oligopolywhen a few sellers control supply because of barriers to entry aka very expensive to get involved in (airlines, auto industry) Monopolistic when firms in competitive industries attempt to differentiate a product (most common)
Pure Competition farmers market, cheap, everyone sells own products (rare)
ECONOMIC:: Business cycleprosperity, recession, depression and recovery
TECHNOLOGICAL:: In music industry and how much it has evolved, changes the way products are sold POLITICAL:: Politics influence business a lot, companies invest in certain political views, Federal Trade Commission (FTC) –most heavily influences marketing activities, large portion of its resources spent on curbing, false advertising aka Duncan Hines vs. Betty Crocker (misleading pricing)
SOCIOCULTURAL:: Demographic (factors that describe a population) & Diversity Characteristics>Sociocultural Forces> Consumerism and Cultural values (examples: informality, equality, work etc.)
Consumerismmarketing critics think consumers are being exploited in the marketplace
Ex: Jet Blue airline they left passengers on plane, people went crazy, toilets overflowed, were given alcohol to keep them preoccupied
Ralph Nader “Father of consumerism,” a well known consumer advocate
TOPIC 1: Corporate Social Responsibility
Tidechildren were eating the pods because they thought they looked like candy
What should Tide do? Maybe change the way they look
Maximize positive impact, minimize negative impact
Can generate positive publicity and promotes goodwill, attracts customers, increased financial performance
∙ Socially responsible firms strive for marketing citizenship
∙ Marketing citizenship is accomplished when a firm fulfills the economic, legal, ethical, and philanthropic social responsibility expected by stakeholders
Dimensions of Social Responsibility
Legal Responsibilitymarketers expected to follow all laws and regulations for fair competition
Marketing Ethics principles and standards defining acceptable conduct in marketing as determined by various stakeholders Philanthropic Responsibilities
Causerelated marketing: practice of linking products to a particular social cause on an ongoing or short term basis Strategic Philanthropy synergistic use of organizational core competencies and resources to address key stakeholder’s interests and achieve both organization al social benefits
MAIN DIFFERENCE cause related is a shortterm project
Social Responsibility Issues
Sustainability consumers insist not only on good quality of life but a healthy environment (water and land pollution) Consumerism protecting the consumer’s rights (right of safety or to be informed)
Community relationseager to have marketers contributes to its well being (equality issues, safety and health)
Elon Muskfounder of Tesla (Sustainability)
TOPIC 2: Marketing Ethics what is acceptable conduct in marketing
Has a lot to do with WHO is defining it: stakeholders, ethical climate, consumers and the public
Violations in accepted marketing ethics can negatively influence the exchange process by: Violating trust, increasing customer dissatisfaction, lawsuits
Uber was caught tracking users somewhere other than their homes (violated trust) Facebook manipulating news feeds to adjust mood from comment
Identifiable problem, situation that will require a choice as to whether or not its right or wrong, ethical or not
Product Ethical Issues
Marketers fail to disclose risks associated with a product
Fail to disclose info regarding the function, value or use of a product
Marketers fail to inform customers about existing conditions or changes in product quality
Promotion Ethical Issues
False or misleading advertising
Manipulative sales promotions, tactics and publicity
Green washingproducts are promoted as being more environmentally friendly than they really are Huggies organic cotton only included in the outer cover
Pricing Ethical Issues
Price fixing, predatory pricing, failure to disclose the full price of a purchase
Place Ethical Issues
Most pirated productliquor, manipulating products availability for purposes of exploitation