MKT 3013 Principles of Marketing EXAM 1 STUDY GUIDE
MKT 3013 Principles of Marketing EXAM 1 STUDY GUIDE MKT 3013
Popular in Intro to Marketing
Popular in Business
This 13 page Study Guide was uploaded by EMOJI on Monday April 18, 2016. The Study Guide belongs to MKT 3013 at University of Oklahoma taught by Pravin Nath in Spring 2016. Since its upload, it has received 50 views. For similar materials see Intro to Marketing in Business at University of Oklahoma.
Reviews for MKT 3013 Principles of Marketing EXAM 1 STUDY GUIDE
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 04/18/16
MKT 3013 Principles of Marketing Prof. Pravin Nath Study Guide for Exam 1 [Chpts. 1, 2, 3, 5 and 6] Chapter 1 What is marketing? The activity for creating, communicating, delivering, and exchanging offerings that benefit customers, the organization, its stakeholders, and society at large. p. 5 What is the role of Marketing? The aim of marketing is to make selling superfluous What are needs and wants? A need occurs when a person feels deprived of basic necessities such as food, clothing, and shelter. A want is a need that is shaped by a person's knowledge, culture, and personality. How does marketing discover and satisfy customer needs and/or wants? Discover consumer needs by researching what consumer needs are, then satisfy consumer needs by designing a marketing program having the right combination of product, price, promotion, and place. What is a market? What is a target market? Market: People with both the desire and the ability to buy a specific offering Target market: one or more specific groups of potential consumers toward which an organization directs its marketing program What are the 4Ps (marketing mix)? Product: a good, service, or idea to satisfy the consumer's needs. Price: what is exchanged for the product Promotion: a means of communication between the seller and buyer. Place: a means of getting the product to the consumer. What are the conditions necessary for exchange to take place? 1. Two or more parties (individuals or organizations) with unsatisfied needs 2. A desire and ability on their part to have their needs satisfied 3. A way for the parties to communicate 4. Something to exchange What are the types of utilities provided to customers? 1 1. Form: the production of the product or service 2. Place: having the offering available where consumers need it 3. Time: having the offering available when consumers need it 4. Possession: the value of making an item easy to purchase through the provision of credit cards or financial agreements What are the three types of customer value? Best price, best product, and best service What is a marketing program? A plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers How and why did marketing become important? What were the eras in which it was not important? Marketing wasn’t as important during the production era (early years of U.S. until the 1920s). During the sales era (1920s1960s) manufacturers found they could produce more goods than buyers could consumer and competition grew. Marketing became the motivating force among many American firms in the late 1950s. What is the marketing concept? The idea that an organization should 1. Strive to satisfy the needs of consumers while also 2. Trying to achieve the organization’s goals What is market orientation? Focuses its efforts on 1. Continuously collecting information about customers’ needs 2. Sharing this information across departments 3. Using it to create customer value What is customer relationship marketing? The process of identifying prospective buyers, understanding them intimately, and developing favorable longterm perceptions of the organization and its offerings so that buys will choose them in the marketplace. What are the levels of organization and strategy? Corporate level: the level in an organization where top management directs overall strategy for the entire organization Strategic Business unit: an organization that markets a set of related products to a clearly defines group of customers Functional level: an organization where groups of specialists actually create value for the organization 2 What is the role of a Chief Marketing Officer? The highest ranking officer in the organization and usually a member of the board of directors. They must possess leadership skills ranging from overseeing the organization’s daily operations to spearheading strategy planning efforts that may determine its very survival. What are an organization’s business, mission, culture, and goals and objectives, and why are they important? Business: describes the clear, broad, underlying industry or market sector of an organization’s offering Mission: inspirational statement of organization’s scope Organizational culture: a set of values, ideas, and attitudes that are learned and shared among the members of an organization Goals/objectives: convert the mission into targeted levels of performance (tasks) to be achieved, often by a specific time These create the foundation for an organization—its philosophical reason for being. What are the two important questions that firms must ask of themselves when setting strategic directions? Where are we now? Where do we want to go? What is a competitive advantage? A unique strength relative to competitors that provide superior returns, often based on quality, time, cost, or innovation What is the Boston Consulting Grid Matrix? What are cash cows, question marks, dogs and stars? What are their implications for strategic planning? Compares market growth rate and relative market share Stars: high growth, high share Cash cows: low growth, high share Question marks: high growth, low share Dogs: low growth, low share What are the strategic alternatives, market penetration, market development, product development and diversification? Market penetration: increase sales of current products in current markets. There is no change in either the basic product line of the markets serves. Increased sales are generated by selling either selling more product (through better promotion or distribution) or the same about at a higher price Market development: sell current products to new markets 3 Product development: selling new products to current markets (risky) Diversification: developing new products and selling them in new markets (highrisk) Explain the components of a situation analysis (SWOT) Strengths Weaknesses Opportunities Threats What is environmental scanning? Why is it important? The process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends What are the various elements of the external environment? Social Economic Technological Competitive Regulatory What are the aspects of social environment that impact marketing? What makes up demographics? What are the generational cohorts? What is crosscultural analysis? What are the shifts taking place in these and other demographics in the US? Demographics describe a population according to selected characteristics such as age, gender, ethnicity, income, and occupation. Generational Cohorts: Baby Boomers (19461964), Generation X (19651976), Generation Y (19771994), Millennials (1995present) Shifts: regional shift in the U.S. population toward Southern and Western states; increase in blended families; shift from cities to suburbs, and then to remote suburbs (exburbs), recently reversed. Crosscultural analysis involves the study of similarities and differences among consumers in two or more nations or societies. A thorough one involves an understanding of and an appreciation for the values, customs, symbols, and language of other societies. How does the economic environment affect marketers? What are the three types of household income? The economy pertains to the income, expenditure, and resources that affect the cost of governing a country, carrying out a business and running a household. In an inflationary economy, cost to produce and buy goods rises. If prices rise faster than consumer income, the number of items they can buy decreases. Activity is slow in a recession. 4 Gross income: the total amount of money made in one year by a person, household, or family unit Disposable income: the money a consumer has left after paying taxes to use for food, shelter, clothing, and transportation Discretionary income: the money that remains after paying for taxes and necessities 17% of income spent on food & clothing 33% housing 36% transportation, health care, and insurance 14% discretionary income How can changes in the technological environment affect marketers? Technology affects marketing with new products and new processes. The rate of technological change is very fast. Tech advances create new market opportunities. Tech transfer is rapid from one country to the next. Internet technologies are reshaping the market. What are directly and indirectly competing products and services? How do all consumer purchases compete with each other? Direct competition: goods are similar (fast food) Indirect competition: products can be substituted (FedEx vs. fax or email) What types of competition does a firm face? How does it affect marketers? Pure competition o Large number of sellers o Similar products o Distribution is important Monopolistic competition o Large number of sellers o Unique but substitutable o Pricing is important Oligopoly o A few large competitors o Similar products o Promotion is key to achieve perceived product differences Monopoly o Single producer o Unique and substitutable o Unimportant Government establishes the operating rules for businesses. What are the general categories of regulation and how do they impact on marketing? What are some of the key laws in the various categories? Protecting competition 5 Productrelated regulation o Company protection o Consumer protection PricingRelated legislation Distributionrelated legislation Advertising and promotionrelated legislations Control through self regulation What are the steps in the consumer purchase decision process? Problem recognition: perceiving a need Information search: seeking value Alternative evaluation: assessing value Purchase decision: buying value Postpurchase behavior: realizing value What is problem or need recognition and how does it occur? This is perceiving a difference between a person’s ideal and actual situations big enough to trigger a decision. What is the difference between internal and external information search? Internal search: scanning your memory for previous experiences with products or brands External search: needed when past experience is insufficient, risk of making a wrong purchase decision is high and the cost of gathering info is low. There are personal sources (friends, fam), public sources (consumer reports), and marketerdominated sources (advertising). What are evaluative criteria and what is a consideration set? Evaluative criteria: Factors that represent both the objective attributes of a brand and the subjective ones a consumer uses to compare different products and brands. Consideration set: The group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or she is aware. How is elimination (of alternatives) by aspects different from the Fishbein multiattribute model of alternative evaluation? 6 What is cognitive dissonance? How can it be reduced? Cognitive dissonance is the feeling of postpurchase psychological tension or anxiety. It can be reduced by consumers attempting to applaud themselves for making the right choice. What are the components of the hierarchy of effects (AIDA) model of consumer purchase decision making? 1. Problem recognition: perceiving a need 2. Information search: seeking value 3. Alternative evaluation: assessing value 4. Purchase decision: buying value 5. Postpurchase behavior: realizing value What is involvement and what are the factors that affect involvement level? Involvement relates to the personal, social, and economic significance of the purchase to the consumer What is routine, limited and extensive problem solving? Routine: purchasing is a habit (salt, milk) Limited: seek some info; not much time or effort (toaster, lunch) Extended: uses each of the 5 stages; considerable time and effort (car, sound system) What is Maslow’s hierarchy of needs? What is its relevance to marketing? Selfactualization needs: selffulfillment Personal needs: status, respect, prestige Social needs: friendship, belonging, love Safety needs: freedom from harm, financial security Physiological needs: food, water, shelter, oxygen This related to marketing because these are the kinds of needs that people realize. How does selfconcept impact marketing? The way people see themselves and the way they believe others see them. These are reflected in the products and brands a person buys. “The notebook market is getting more like cars. The car you drive reflects you, and the notebooks are becoming a form of self expression as well”. What are selective exposure, selective comprehension, and selective retention? Selective exposure: occurs when people pay attention to messages that are consistent with their attitudes and beliefs and ignore messages that are inconsistent with them 7 Selective comprehension: involves interpreting information so that in is consistent with your attitudes and beliefs Selective retention: means that consumers do not remember all the information they see, read, or hear, even minutes after exposure to it. Selective perception: a filtering of exposure, comprehension, and retention What is perceived risk and how do firms address it? Represents the anxiety felt because the consumer cannot anticipate the outcomes of a purchase but believes there may be negative consequences How does learning have an impact on marketing? Consumers learn which information sources to consult for information about products and services, which evaluative criteria to use when assessing alternatives, and, more generally, how to make purchase decisions. Learning refers to those behaviors that result from (1) repeated experience and (2) reasoning. What is culture? What are customs? Culture refers to the set of values, ideas, and attitudes that are learned and shared among the members of a group (American culture, Latin American culture) Customs are what is considered normal and expected about the way people do things in a specific country. What are reference groups and what affect do they have on consumer behavior? Reference groups are people to whom an individual looks as a basis for selfappraisal or as a source of personal standards. Reference groups affect consumer purchases because they influence the information, attitudes, and aspiration levels that help set a consumer’s standards. What are beliefs and attitudes and their importance to marketing? How can marketing change attitudes? Beliefs are a consumer’s subjective perception of how a product or brand performs on different attributes based on personal experience, advertising, and discussions with other people. Attitudes are learned predispositions to respond to an object of class of objects in a consistently favorable or unfavorable way, shaped by our values and beliefs (learned). These are both important because they create favorable or unfavorable feelings toward a product. Marketing can change attitudes by: 1. Changing beliefs about the extent to which a brand has certain attributes 2. Changing the perceived importance of attributes 3. Adding new attributes to the product 8 What does VALS stand for? Values and lifestyles How do opinion leaders and wordofmouth influence our decision processes? Personal influence. Opinion leaders are considered to be knowledgeable about or users of a certain product/service, so their opinions influence others’ choices. Word of mouth is the most powerful and authentic info source because it typically involves friends who are viewed as trustworthy. What are the types of reference groups of consumers and why is it important for marketing to be aware of them? These are the people to whom an individual looks as a basis for selfappraisal or as a source of personal standards. Associative group: one to which a person belongs (frat, srat) Aspiration group: one a member wishes to be in (professional society, sports team) Dissociative group: one that a person does NOT want to be like How does the family impact consumer behavior? Consumers learn which information sources to consult for information about products and services, which evaluative criteria to use when assessing alternatives, and, more generally, how to make purchase decisions. Learning refers to those behaviors that result from (1) repeated experience and (2) reasoning. What is the family life cycle? What roles do family members play in purchase decision processes? Consumers act and purchase differently as they go through life (young, young adult, adult w kids, old…) Roles: 1. Information gatherer 2. Influencer 3. Decision maker 4. Purchaser 5. User What are some of the situational influences on purchase decisions? 1. The purchase task 2. Social surroundings 3. Physical surroundings 4. Temporal effects 5. Antecedent effects 9 How does business marketing differ from consumer marketing? Business marketing is the marketing of goods and services to companies, governments, or notforprofit organizations for the use in the creation of goods and services that they can produce and market to others. Size is bigger in organizational buying, number is bigger in customer buying. What are the major categories of organizational buyers? 1. Industrial: reprocess a product or service they buy before selling it again to the next buyer. 2. Reseller: wholesalers and retailers that buy physical products and resell them again without any reprocessing. 3. Government: the federal, state, and local agencies that buy goods and services for the constituents they serve. What is NAICS? How is it useful for marketers? North American Industry Classification System. It provides common industry definitions for Canada, Mexico, and the U.S., which makes it easier to measure economic activity in the three member countries of the North American Free Trade Agreement (NAFTA). What is derived demand? The demand for industrial products and services is driven by, or derived from, demand for consumer products and services. (Ex. Demand for paper based on demand for newspaper) What are the steps in organizational buying? 1. Problem recognition a. Makebuy decision 2. Information search a. Value analysis 3. Alternative evaluation a. Bidder’s list 4. Purchase decision 5. Postpurchase behavior What is the makebuy decision? An evaluation of whether components and assemblies will be purchased from outside suppliers or built by the company itself. What is a bidder’s list? A list of firms believed to be qualified to supply a given item. 10 What is a buying center? Several people in the organization participate in the buying process. They share common goals, risks, and knowledge important to a purchase decision. Sometimes highly formalized and called a “buying committee”. What are the roles in the buying center? Users: the people who actually use the product or service Influencers: effect the buying decision, usually by helping define the speculations for what is bought Buyers: (initiator?) have formal authority and responsibility to select the supplier and negotiate the terms of the contact Deciders: have the formal or informal power to select or approve the supplier that receives the contract. In routine orders the decider is usually the buyer or purchasing manager; in important technical purchases it is more likely to be someone from R&D, engineering, or quality control. The decider for a key component being incorporated in a final manufactured product might be any of these three people. Gatekeepers: control the flow of information in the buying center. Purchasing personnel, technical experts, and secretaries can all keep salespeople or information from reaching people performing the other roles. What are the some of the important evaluative criteria in business marketing? 1. Price 2. Ability to meet the quality specifications required for the item 3. Ability to meet required delivery schedules 4. Technical capability 5. Warranties and claim policies in the event of poor performance 6. Past performance or previous contracts 7. Production facilities and capacity What is the difference between a new buy, a modified rebuy, and a straight rebuy? New buy: firsttime buyer of a product or service. This involves greater risk, so the buying center in enlarged to include all those who have a stake in the purchase. Straight rebuy: reordering an existing product of service from the list of acceptable suppliers, probably without checking with users and influencers from the various departments. Modified rebuy: users, influencers, or deciders in the buying center want to change the product specifications, price, delivery schedule, or supplier. Although the item purchased is largely the same as with the straight rebuy, the changes usually necessitate enlarging the buying center to include people outside the purchasing department. What are some of the characteristics of emarketplaces? Online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products, and services. 11 Generally, there will be three types of questions on the exam: 1. Definition: Answering the question requires recall of a simple definition, text statement, lecture statement, or other piece of factual information presented (note there is no need to memorize word for word definitions – see e.g. of definition question below) 2. Conceptual: Answering the question requires some understanding of concepts on the part of the student. Comprehension questions typically ask the student to relate different concepts and draw conclusions. 3. Application: Answering the question calls for students to apply their knowledge to a marketing situation or to analyze and interpret data. Sample definitional, conceptual, and application, questions (in that order): 1. A strategic business unit refers to an organization that: a. directs overall strategy for the organization. b. markets a set of related products to a clearly defined group of customers. c. always develops new products d. also has a comparable nonbusiness unit. e. is usually nonprofit. Answer: b Rationale: Key term definition—Strategic Business Unit (SBU) 2. To serve both buyers and sellers, the marketing department seeks to discover the needs and wants of prospective customers and to: a. change them b. take advantage of them c. satisfy them d. manipulate them e. define real and artificial buying situations Answer: c 12 Rationale: The marketing department works closely with a network of other departments and employees to help provide the customersatisfying products required for the organization to survive and prosper 3. Nascar tries to grow by expanding into foreign markets. This strategy is called : a. Market development b. Diversification c. Product development d. Market penetration e. None of the others Answer: a Rationale: ProductMarket matrix 13
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'