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MKT 301- Foundations of Marketing Exam 1 Studyguide Ch. 1,2,5,9, 10, 11

by: Aileen Guenoun

MKT 301- Foundations of Marketing Exam 1 Studyguide Ch. 1,2,5,9, 10, 11 MKT 301

Marketplace > University of Miami > Marketing > MKT 301 > MKT 301 Foundations of Marketing Exam 1 Studyguide Ch 1 2 5 9 10 11
Aileen Guenoun

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This study guide covers textbook material of the relevant chapters, and in class powerpoints.
Marketing Foundations
Professor Agramonte
Study Guide
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This 18 page Study Guide was uploaded by Aileen Guenoun on Thursday September 22, 2016. The Study Guide belongs to MKT 301 at University of Miami taught by Professor Agramonte in Fall 2016. Since its upload, it has received 78 views. For similar materials see Marketing Foundations in Marketing at University of Miami.


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Date Created: 09/22/16
Marketing Test 1 Chapter 1 Marketing is an organized function and a set of processes for creating, capturing, communicating, and delivering value to costumers for managing costumer relationships in ways that benefit the organization and its stakeholders. Marketing Plan: Firms develop this that specify the marketing activities for a specific period of time. What else is marketing?  Marketing helps create value  Marketing is about satisfying customer needs and wants  Marketing occurs in many settings  Marketing can be performed by both individuals and organizations  Marketing requires product, price, place, and promotion decisions  Marketing entails an exchange: The trade of things of value between the buyer and the seller so that each is better off as a result. Marketing entails an exchange  Between buyers and sellers  Goods and services for money and information  Who are buyers? Who are sellers  What are the range of exchanges? 4P’S  Product o Creating value  The fundamental purpose of marketing is to create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs.  A product or service that doesn’t create value won’t last (though people still buy extended warranties).  Goods, services, ideas  Price o Capturing value  Price is everything a buyer gives up (money, time, energy) in exchange for the product  The key to determining prices is to figure out how much customers are willing to pay and assess whether a profit can be made at that point  Not leaving money on the table, while not scaring away  Place o Delivering value  Place, or supply chain management, describes all activities necessary to get the product to the right customer when the customer wants it  Where would you find this product in the store?  Getting the product to the right customer when that customer wants it.  Promotion o Communication value  Promotion is communication by a marketer that informs, persuades and reminds potential buyers about a product or service to influence their opinions or elicit a response  Also reminds consumers of the brand and image associated with products and service  This is what people usually associate with Marketing. Marketing can be performed by individuals and organizations:  B2C marketing (business to consumer): The process by which businesses sell to consumers  B2B marketing (business to business): Selling merchandise or services from one business to another  C2C marketing (consumer to consumer): Consumers sell to consumers  Individuals can also undertake activities to market themselves. Manufacturer (makes monitors)  B2B retailer (sells pcs & monitors)  B2C consumer A  C2C consumer B Marketing Impacts Various Stakeholders o Society o Customers o Employees o Supply Chain  Partners in the supply chain include wholesalers, retailers, or other intermediaries such as transportation or warehousing companies. All of these entities are involved in marketing to one another. Manufacturers sell merchandise to retailers, but the retailers often have to convince manufacturer to sell to them.  Marketing also can aim to benefit an entire industry or society at large. Marketing helps create value  Production Oriented Era  Sales- Oriented Era  Market Oriented Era  Value based marketing era o Production Oriented Era: Around the turn of the 20 th century, most firms were production oriented and believed that a good product would sell itself. o Sales Oriented Era: Between 1920 and 1950, production and distribution techniques became more sophisticated and the Great Depression and WW II conditioned customers to consume less or manufacturer items themselves, so they planted victory gardens instead of buying produce. They would produce more than could sell so they depended on heavy doses of personal selling and advertising. o Market Oriented Era: Manufacturers turned from focusing on the war effort toward making consumer products. Consumers began to have more choices, so manufacturers focused on what consumers really needed and wanted before they designed, made, or attempted to sell their products. o Value based marketing Era: Firms have transcended a productions or selling orientation and attempt to discover and satisfy their customers’ needs and wants. They would need to give their customers greater value than their competitors did. Value: Reflects the relationship of benefits to costs, or what you get for what you give. They want products or services that meet their specific needs or wants and that offered at a price that they believe is a good value. Value Concretion: A creative way to provide value to customers- Customers can act as collaborators to create the product or service. Selling vs. Marketing The selling concept Factory  existing products  selling and promoting  profits through sales and volume The marketing concept Marketing  costumer needs  integrated marketing  profits through customer satisfaction How do firms become Value-Driven?  Sharing information (information orientation): They share information about their customers and competitors across their own organization.  Balancing benefits with costs (transaction orientation): Constantly measure the benefits that customers perceive against the cost of their offerings.  Building relationships with customers (relational orientation): Need to think about their customers in terms of relationships rather than transactions. Loyalty. Customer Relationship Management: a business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm’s most valued customers.  Connecting with customers using social and mobile data (connection orientation): Marketers are constantly embracing new technologies, likes social media, to allow them to connect better with their customers and thereby serve their needs more effectively. Why is marketing important?  Expands Global Presence: As marketing helps expand firms’ global presence, it also enhances global career opportunities for marketing professionals.  Pervasive across channel members  Enriches society: Increasing social responsibility  Can be entrepreneurial Societal marketing concept  Society (wants human welfare)  Company (wants profit)  Consumers (want satisfaction) Product, marketing practices, communities, environment Chapter 2 Developing marketing strategies and a marketing plan Marketing strategy - What’s in it? 1) Target markets(s) 2) Marketing mix (4ps) for target markets 3) Identify a sustainable competitive advantage An advantage over the competition that is not easily copied and thus can be maintained over a long period of time. Sustainable competitive advantage: is an advantage over the competition that is not easily copied and can be sustained over time.  Location excellence  Consumer excellence Four macro strategies that focus on aspects of the marketing mix to create or deliver value and to develop sustainable competitive advantages:  Customer excellence: Focuses on retaining loyal customers and excellent customer service. - Viewing customers with a lifetime value perspective - To build customer loyalty provide your target market something unique - Customer loyalty creates an emotional attachment through loyalty programs - Good customer service must be instilled in the employees over a long period of time so it becomes part of the organization system (needs a good service reputation)  Operational excellence: Achieved through efficient operations and excellent supply chain and human resource management - Enables firms either to provide their consumers with lower priced merchandise, or, even if their prices are not lower than those of the competition, to use the additional margins they earn to attract customers away from competitors but offering even better service, merchandise assortments, or visual presentations.  Product excellence: Having products with high perceived value and effective branding and positioning - Positioning their product or service using clear, distinctive brand image, and enforcing that image Locational excellence: Having a good physical location and internet presence. – not easily duplicated Firms need multiple sources of advantage to build a “wall” around their position that stands as high as possible. The marketing plan: a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives, and strategy specified in terms of the four Ps action programs, and projected preform income statements. Planning phase Step 1: Business mission & objectives Step 2: Situation analysis SWOT Implementation phase: Marketing managers identify and evaluate different opportunities by engaging in a process known as segmentation, targeting, and positioning Step 3: Identifying opportunities Step 4: implementing marketing mix Control Phase: entails evaluating the performance of the marketing strategy using marketing metrics and taking any necessary corrective actions. Step 5: evaluating performance using marketing Step 1: define mission/vision - Mission statement: a broad description of a firm’s objectives and the scope of activities it plans to undertake, attempts to answer two main questions: What type of business are we? What do we need to do to accomplish our goals and objectives? MADD strives to stop drunk driving, support the victims of this violent crime and prevent underage drinking.  Core values to which the firm is committed  Core purpose of the firm  Visionary goals the firm will pursue to fulfill its mission Step 2: SWOT analysis Internal o Strengths  Internal capabilities that may help a company reach its objectives o Weaknesses  Internal limitations that may interfere with a company’s ability to achieve its objectives External o Opportunities  External factors that the company may be able to exploit to its advantage o Threats  Current and emerging external factors that may challenge the company’s performance In addition, they should asses the opportunities and uncertainties of the market place due to changes in cultural, demographic, social, technological, economic, and political forces. Step 3: Identifying and evaluating opportunities using STP The firm divides the marketplace into subgroups or segments, determines which of those segments it should pursue or target, and finally how it should position its products and services to best meet the needs of those chosen targets.  Segmentation o Identifying meaningful different groups of customers o Market segment: consisting of consumers who respond similarly to a firm’s marketing efforts.  Targeting o Selecting which segment to pursue  Positioning o Implementing choosing images and appel to chosen segment o Market positioning is the process of defining the marketing mix variables so that the target costumers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products. Step 4: Implement Marketing Mix and Allocate Resources Product value creation  Variety, quality, design, features, brand name, packaging, services  Firms attempt to develop products and services that customers perceive as valuable enough to buy Price value capture  Competitor-based pricing / cost-based pricing / value-based pricing  Price should be based on the value that the customer perceives Place value delivery  The product must be readily accessible when and where customers want it Promotion value communication  Television, radio, magazines, sales force, new media  Integrated marketing communications represents the promotion of the marketing mix Step 5: Evaluate Performance Using Marketing Metrics  Metric: is a measuring system hat quantifies a trend, dynamic, or characteristics.  Comparing results, and seeing if it was successful or not  Making adjustments  Evaluate product line: analyze brands or individual items  Product line: is a group of products that consumers may use together or perceive as similar in some way.  Market share: is the percentage of market accounted for by a specific entity, and is used to establish the product’s strength in a particular mark A special type of market share metric, relative market share, is used in this application because it provides managers with a product’s relative strength, compared with that of the largest firm in the industry. The vertical axis is the market growth rate, or the annual rate of growth of the specific market in which the product competes. Market growth rate measures how attractive a particular market is. What tools help a marketer conduct a situation analysis? - Strategic business unit: product line - Market share: percentage of market account - Relative market share: application because provides managers and relative - Market growth rate: annual growth of the specific market in the product completes. Four quadrants of Portfolio Analysis:  Stars (upper left quadrant): high-growth markets and are high market share products.  Cash Cows (lower left quadrant): In low-growth markets but are high market share products.  Question Marks (upper right quadrant): high-growth markets but have relatively low market share; thus, they are often the most managerially intensive products in that they require significant resources to maintain and potentially increase their market share.  Dogs (lower right quadrant) low-growth markets and have relatively low market shares. Growth strategies  Market penetration: employs that existing marketing mix and focuses on the firm’s efforts on existing customers.  Product development: Employs the existing marketing offering to reach new market segments, whether domestic or international  Product Development: Offers a new product or service to a firm’s current target market.  Diversification: Introduces a new product or service to a market segment that currently is not served. o Related diversification: The current target market or marketing mix shares something in common with the new opportunity. o Unrelated diversification: The new business lacks any common elements with the present business. Chapter 5  Illustrates factors that affect the marketing environment o Centerpiece: Consumers- may be influenced directly by the immediate actions of the focal company, the company’s competitors, or corporate partners that work with the firm to make and supply products and services to consumers. o The firm and therefore consumers indirectly, is influenced by the macro environment, which includes various impacts of culture, demographics, and social, technological, and political/legal factors o Firms monitor their macro environment to determine how such factors influence consumers and how they should respond to them, sometimes they can anticipate trends The Immediate Environment Factors that affect the consumer  Company Capabilities: Successful marketing firms focus on satisfying customer needs that match their core competencies.  Competitors: Marketers must understand their firm’s competitors (strengths and weaknesses) and reaction to the marketing activities that their own firm undertakes.  Corporate Partners: Parties that work with the focal firm are its corporate partners Macroenvironmental Factors  Culture: Shared meanings, beliefs, morals, values and customs of a group of people. Marketers need to have products or services identifiable by and relevant to a particular group of people. Cultures that a marketer must take into account- culture of the country and that of a region within a country.  Demographics: Indicate the characteristics of human populations and segments, especially those used to identify consumer markets. o Generational Cohort: A group of people of the same generation- have similar purchase behaviors because they have shared experiences and in the same stage of life o Income o Education o Gender o Ethnicity  Social Trends: Various social trends appear to be shaping consumer values in the US and around the world, including a greater emphasis on health and wellness concerns, greener consumers, and privacy concerns. o Health and Wellness Concerns o Greener Consumers: Green marketing involves a strategic effort by firms to supply customers with environmentally friendly merchandise  Greenwashing: deceptive use of marketing in order to promote a misleading perception that a company's goods or service are environmentally friendly o Privacy Concerns  Technological Advances: Have accelerated during the past decade, improving the value of both products and services such as Wifi, mobile hotspots, LTE. These examples of advanced technology make consumers increasingly dependent on the help they receive from the providers of the technology.  Economic Situation: Marketers monitor the general economic situation, both in their home country and abroad, because it affects the way consumers buy merchandise and spend money. Some major factors that influence the state of an economy include the rate of inflation, foreign currency, and interest rates.  Political/Regulatory Environment: Compromises political parties, government organizations, and legislation and laws. Organizations must fully understand and comply with any legislation regarding fair competition, consumer protection, or industry-specific regulation. - also in place to protect consumers (false advertisement, hazardous materials, etc)  Responding to the Environment: Many companies engage in tactics and marketing strategies that attempt to respond to multiple developments in the wider environment. - In a changing environment that marketers that succeed are the ones that respond quickly, accurately, and sensitively to consumers. Chapter 9 STP Process: Segmentation 1. Establish the overall strategy or objectives- SWOT 2. Use segmentation methods o Geographic segmentation: organizes customers into groups on the basis of where they live o Demographic segmentation: groups consumers according to easily measured, objective characteristics such as age, gender, income, and education o Psychographic: delves into how consumers actually describe themselves- lifestyle, self-concept, self-values o Benefits: Groups consumers on the basis of the benefits they derive from products or services- convenience, economy, prestige o Behavioral: Divides customers into groups on the basis of how they use the product or service- occasion, loyalty o Geodemographic: Uses a combination of geographic, demographic, and lifestyle characteristics to classify consumers. Targeting 3. Evaluate segment attractiveness: Marketers first must determine whether the segment is worth pursuing using several descriptive criteria: o Identifiable: Who is in the market? Are the segments unique? Does each segment require a unique marketing mix? o Substantial: Needs to measure its size- too small and it is insignificant, too big and it might need its own store o Reachable: Know the product exits- understand what it is- recognize how to buy it o Responsive: Customers must act positively to a firms offering, move toward the firm’s products/services, accept the firm’s values proposition o Profitable: market growth, market competitiveness, market access 4. Select target market Targeting strategies: o Differentiated: Target several market segments with a different offering for each o Concentrated: When an organization selects a single, primary target market and focuses all its energies on providing a product to fit that market’s needs o Unidfferentiated/ mass marketing: When everyone might be considered a potential user of its product o Micromarketing or one to one: When a firm tailors a product or service to suit an individual customer’s wants or needs Positioning 5. Identify and develop positioning strategy o Market positioning: Involves a process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understand of what the product does or represents in comparison with competing products o Value proposition: Communicates the customer benefits to be received from a product or service and thereby provides reasons for wanting to purchase it o Positioning methods:  Value: popular positioning method because the relationship of price to quality is among the most import considerations for consumers when they make a purchase.  Salient Attributes  Symbol  Competition  Perceptual Mapping: Displays the positions of products or brands in the consumer’s mind Positioning Steps: 1. Determine consumers’ perceptions and evaluations of the product or service in relation to competitors’ 2. Identify the market’s ideal points and size 3. Identify competitors’ positions 4. Determine consumer preference 5. Select Position 6. Monitor the positioning strategy Chapter 10 Marketing Research: is a prerequisite of successful decision making. It consists of techniques and principles for systematically collecting, recording, analyzing and interpreting data that can aid decision makers involved in marketing goods. The Marketing Research Process 1. Defining the objectives and research needs  What information is needed to answer specific research questions?  How should that information be obtained? 2. Designing the research  Type of data o Secondary data  Data that already exists and is available  Advantage: is available, cheap, fast  Disadvantage: this data was produced for another reason so is not so exact for the firm purpose and is more general. o Primary data  Interviews, surveys…  Type of research 3. Date collection process  Exploratory research (Quality or Quantity)  Qualitative: used to understand the phenomenon of interest through broad, open-ended responses. i. Observation ii. In depth interviews iii. Focus groups iv. Projective techniques v. Social Media  Conclusive Research  Quantitative: structured responses that can be statistically tested. ii. Experiments iii. Survey iv. Scanner v. Panel 4. Analyzing data and developing insights  Converting data into information to explain, predict and/or evaluate a particular situation  Data: raw numbers or other factual information that, on their own, have limited value to marketers.  When the data is interpreted it becomes information, which results from organizing, analyzing, and interpreting data and putting them into a form that is useful to marketing decision makers. 5. Action and Implementing an Action Plan  Prepares the results and presents them to the appropriate decision makers, who undertake appropriate marketing strategies.  Executive summary  Body  Conclusions  Limitations  Supplements including tables, figures, appendices External Secondary Data  Syndicated data: available for a fee from commercial research firms such as IRI, the National Purchase Diary Panel, and Nielsen.  Panel Research: are information collected from a group of consumers, organized into panels, over time. – tells about total weekly consumption by a particular person or household  Scanner Research: Used in quantitative research obtained from scanner readings of Universal Product Code labels at checkout counters- tells about the product Internal Secondary Data  Data Warehouse: One of the most valuable resources such firms have their disposal is their rich cache of customer information and purchase history. It can be difficult to make sense of the millions and even billions of pieces of individual data, which are stores in large computer files (data warehouse)  Data Mining: Uses a variety of statistical analysis tools to uncover previously unknown patterns in the data or relationships among variables Secondary Research Examples  Census data  Sales invoices  Internet information  Books  Journal articles  Syndicated data Advantages  Saves time in collecting data because they are readily available  Free or inexpensive (except for syndicated data) Primary Research Examples  Observed consumer behavior  Focus group interviews  Surveys  Experiments Advantages  Specific to the immediate data needs and topic at hand  Offers behavioral insights  Generally, not available from secondary research Disadvantages  Costly  Time consuming  Requires more sophisticated training and experience to design study and collect data The Ethics of Using Customer Information  Strong ethical orientation  Adhere to ethical practices Chapter 11 Product: anything that is of value to a consume and can be offered through a voluntary marketing exchange. Complexity of Products:  Core customer value: defines the basic problem- solving benefits that consumers are seeking  Actual product: Marketers convert core customer value into an actual product  Associated service: include the nonphysical aspects of the product, such as warranties, financing, product support, and after sale service. Types of products:  Two primary categories of products and services that reflect who buys them: consumers or businesses.  Consumer products: are products and services used by people for their personal use o Specialty products/services: are those for which customers express such a strong preference that they will expend considerable effort to search for the best supplies o Shopping products/services: are products or services for which consumers will spend a fair amount of time comparing alternatives such as furniture, apparel, fragrances, appliances, and travel alternatives o Convenience Products/services: are those products or services for which the consumer is not willing to expend any effort to evaluate prior to purchase. o Unsought products/services: are products or services that consumers either do not normally think of buying or do not know about.  Product mix: the complete set of all products and services offered by a firm  Product lines: The product mix typically consists of various product lines, which are groups of associated items that consumers tend to use together or think of as part of a group of similar products or services.  Product breadth: represents a count of the number of product lines offered by a firm  Product depth: equals the numbers of products within a product line Branding What makes a brand: o URLs o Brand Name o Jingles/Sounds o Slogans o Characters o Logos and symbols Value of Branding for the Customer: o Facilitate Purchasing o Establish Loyalty o Protect from competition o Are assets o Impact market value Brand Equity: The value of a brand translates into brand equity, or the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or services. How do we know how much equity a brand has? o Brand Awareness: measures how many consumers in a market are familiar with the brand and what it stands for and have an opinion about it o Perceived Value: is the relationship between a product’s or service’s benefits and its cost o Brand associations: reflect the mental and emotional links that consumers make between a brand and its key product attributes, such as logo and its color, slogan, or famous personality o Brand Loyalty: occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buy from multiple suppliers within the same category  Consumers are often less sensitive to price  Marketing costs are much lower  Firm insulated from the competition Branding Strategies Brand Ownership  Manufacturer brands: also known as national brands, are owned and managed by the manufacturer. With these brands the manufacturer develops the merchandise, produces it to ensure consistent quality, and invests in a marketing program to establish an appealing brand image  Retail/store brands: are also called private label brands, are products developed by retailers. They develop or design it and contact manufacturer to produce it. o Premium o Generic o Copycat o Exclusive co-branded Naming Brands and Product Lines  Family brands: a firm can use its own corporate name to brand all its product lines and products (Kellogg’s). The individual brands benefit from the overall brand awareness associated with the family name.  Individual bands: Banes for each of its products.  Brand extension: refers to the use of the same brand name in a different product line. It is an increase in the product mix’s breath.  Line extension: is the use of the same brand name within the same product line and represents and increase in a product line’s depth. Not all brand extensions are successful- Some can dilute brand equity. Brand Dilution occurs when the brand extension adversely affects consumer’s perceptions about the attributes the core brand is believed to hole.  Evaluate the fit between the product class of the core brand and the extension.  Evaluate consumer perceptions of the attributes of the core brand and seek out extensions with similar attributes.  Is the brand extension distanced enough from the core brand?  Refrain from extending the brand name to too many products. Cobranding: is the practice of marketing two or more brands together on the same package, promotion or store. Brand Licensing: is a contractual arrangement between firms whereby one firm allows another to use its brand name, logo, symbol, and / or characters in exchange for a negotiated fee- toys, apparel, video games Brand repositioning or rebranding: refers to the strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences. Packaging  Primary Package: is the one the consumers uses, such as the toothpaste tube. Seek convenience, in terms of storage, use and consumption  Secondary package: is the wrapper or exterior carton that contains the primary packs and provides the UPC label used by retail scanners. They add customer value by facilitating convenience of carrying, using and storing the product.  Packaging attracts consumers’ attention  Promotional tool  Stands out from competitors  Allows for the same product to appeal to different markets with different sizes Product Labeling:  Labels on products and packages provide information the consumer needs for his or her purchase decision and consumption of the product  They identify the product and brand, labels are also an important element of branding and can be used for promotion.


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