Study Guide for the Exam on Chapters 1 to5
Study Guide for the Exam on Chapters 1 to5 MKT 241N
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This 10 page Study Guide was uploaded by Lindsay Fialli on Tuesday October 4, 2016. The Study Guide belongs to MKT 241N at Salem State University taught by Timothy Goehlert in Fall 2016. Since its upload, it has received 50 views. For similar materials see Principles of Marketing in Business at Salem State University.
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Date Created: 10/04/16
MKT 241N : Principles of Marketing Study Guide for test on Chapters 1-5 Chapter 1: Overview of Marketing Marketing is the activity, set of institutions, and process for creating, capturing, communicating, delivering, and exchanging offering that have value for customers, clients, partners, and society at large. Exchange is the trade of things of value between the buyer and the seller so that each is better off as a result. The Marketing Mix comprises the controllable set of decisions or activities the firm uses to respond to the wants of its target market. o Product is the goods, services, or ideas you are selling to your customer. Remember that the difference between a good and a service is that a good is something you can touch while a service is intangible o Price is what the buyer gives up (money, time, or energy) in exchange for the product Key is figuring out what a consumer is willing to pay for your goods or service so that they are satisfied and the seller receives a reasonable benefit. o Place represents all the activities necessary to get the product to the right customer when they want it. o Promotion is how the marketer informs, persuades, and reminds potential buyers about their goods or service. Supply Chain Demand is the set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and other firms involved in the transaction. B2B is business-to-business marketing. B2C is business-to-consumer marketing. C2C is consumer to consumer marketing. The Production-Oriented Era was the early 1900s and believed that a good product would sell itself. The Sales-Oriented Era was from 1920 to 1950, which included the Great Depression and WWII, which had conditioned customers to consume less and manufacture items themselves. The Market-Oriented Era, taking place after WWII, is when manufacturers began making consumer products. o It is during this time that marketing was discovered and manufacturers began to compete to sell their products. The Value-Based Marketing Era, which began with the 21 century, is when firms try to give their customers greater value than their competitor. Value is what you get for what you give. It is important for marketers to think of customers in terms of relationships rather than transactions (relational orientation). Customer Relationship Management is a business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm's most valued customers. o Firms do this by collecting info on their customers and use it to target them for particular products or promotions that would be relevant to them The Supply Chain is a group of firms that make and deliver a given set of goods and services. Raw Material -> Manufacturers -> Retailer -> Consumer Entrepreneurs are people that organize, operate, and assume the risk of a business venture. Chapter 2: Developing the Marketing Strategy and the Marketing Plan The Marketing Strategy identifies a firm’s target market(s), a related marketing mix, and the bases on which the firm plans to build a sustainable competitive advantage. A Sustainable Competitive Advantage is an advantage a firm has over the competition that can be maintained over a long period of time. o Imagine a firm building a wall around their target market that no one can tear down for a long time. Macro (overreaching) Strategies focus on aspects of the marketing mix to create and deliver value and to develop sustainable competitive advantages. 1. Customer Excellence is achieved when a firm develops value-based strategies for retaining loyal customers and provides outstanding customer service. Build customer loyalty by providing the target market with something unique. 2. Operational Excellence is achieved through a sustainable competitive advantage, through their efficient operations, excellent supply chain management, and strong relationships with their supplier. Offer better service than competitors and form good relationships with your vendors 3. Product Excellence is achieved through a sustainable competitive advantage by providing products with high perceived value and effective branding and positioning. Investing in their brand 4. Locational Excellence is having a good physical location and Internet presence. The Marketing Plan The Marketing Plan is 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 or pro-forma income statements. Steps of the Marketing Plan 1. Planning Phase defines the mission and/or vision of the business. 2. Implementation Phase identifies and evaluates different opportunities for the firm. 3. The process of segmentation, targeting, and positioning (STP). 4. Control Phase entails evaluating the performance of the marketing strategy using marketing metrics and taking necessary corrective steps. A Mission Statement is a broad description of a firm's objectives and the scope of activities it plans to undertake. A Situation Analysis uses SWOT analysis to assess internal and external environments so that firms can anticipate and interpret change in the environment. o Strengths: positive internal attributes of the firm o Weaknesses: negative internal attributes of the firm o Opportunities: positive aspects of the external environment o Threats: negative aspects of the company’s external environment STP Process The STP process is used to identify and evaluate opportunities for increasing sales and profit. o Market Segmentation is the process of dividing the market into groups of customers with different needs, wants, or characteristics- who therefore might appreciate products or services geared toward them A Market Segment is a group consisting of customers who respond similarly to a firm's marketing efforts- with how the market satisfies everyone's needs o Target Marketing (targeting) is the process of evaluating the attractiveness of various segments and then deciding which to pursue as a market o Market Positioning is the process of defining the marketing mix variables so that the target customers have a clear, distinctive, desirable understanding of what product does or represents in comparison with the competing products Integrated Marketing Communications (IMC) is the promotion of the four Ps. o Include advertising, personal selling, sales promotion, public relations, direct marketing, and online marketing using social media Provides clarity, consistency, and maximum communicative impact Value Proposition is the unique value that a product or service provides to its customers and how it is better than and different from those of competitors Metric is a measuring system that quantifies a trend, dynamic, or characteristic Portfolio Analysis evaluates the firm's various products and businesses and allocating resources according to which products are expected to make the most profit Strategic Business Unit (SBU) is a division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives o Where portfolio analysis is performed 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 a market accounted for by a specific entity and is used to establish the product's strength in a particular market Relative Market Share is a product's relative strength compared with that of the largest firm in the industry Market Growth Rate is the annual rate of growth of the specific market in which the product competes Relative Market Share X Market Growth Rate High Low Stars Question Marks Cash Dogs Cows Stars occur in high-growth market and are high market share products. Cash Cows are low growth markets but high market share products. Question Marks are high growth rate market but low market shares. Dogs are low growth markets and low market shares. Marketing Strategies Market Penetration Strategy involves existing customers and an existing product. Market Development Strategy involves new customers and an existing product. Product Development Strategy involves a new Product to existing customers. Diversification Strategy introduces a new product or service to a market segment that currently is not served. o Related Diversification is the current target market or marketing mix shares something in common with the new opportunity. o Unrelated Diversification is when the new business lacks any common elements with the present business. Chapter 3: Social and Mobile Marketing Social Media is content distributed through online and mobile technologies to facilitate interpersonal interactions. o Marketers rely on social media to: Members promote themselves to gain more friends The sites promote to get more members Outside companies promote their products and services to appeal to the potential consumers who are active on the sites 4E Framework for Social Media Excite customers with relevant offers Educate them about the offering Help them experience products, whether directly or indirectly Give them opportunity to engage with their social network Excite o An offer must be relevant to its targeted customer Educate o Remind them of what they already know Experience o Customers can experience part of the product or service before they buy Engage o With engagement comes action, the potential for a relationship, and possibly even loyalty and commitment Social Media Social Network Sites Not only assures individual users a way to connect with others, but also gives marketers the ability to target their customers carefully Company can post content and information regarding products, events, news, or promotions Examples are Facebook, LinkedIn, and Google+ Media Sharing Sites Enable users to share content they have generated Firms use such sites to highlight how customers can experience their goods and services and encourage consumers to engage with the firm Examples are YouTube, Instagram, Flickr, and other photo sites Thought Sharing sites A Blog is a web page that contains periodic posts: corporate blogs are a new form of marketing communications Corporate Blogs are created by the company themselves and has the highest level of control because they control the content. Professional Blogs are those written by people who review and give recommendations on products and services. A "Mommy Blog" is a particular professional blog featuring advice and product recommendations between mothers. Personal Blogs are written by people who receive no products or remuneration for their efforts. Microblogs differ from a traditional blog in size-short sentences, videos, and individual images. Seven Primary Motivations for Mobile App Usage 1 Need for Me-time: seeking relaxation or entertainment (46%) Videos, games, shopping, reading 2 Need to Socialize: interacting with other people (19%) 3 Need to Shop: seeking a product or service (12%) Can compare prices and create lists Showrooming is a process enabling customers to scan a product in a store and instantly compare prices online to see whether a better deal is available 1 Need to Accomplish: managing finances, health, and productivity (11%) Help manage activities and goals 2 Need to Prepare: planning for upcoming events (7%) Need to keep organized in a busy life Calendars, trip planners File or image storage 3 Need to Discover: seeking news and information (4%) Know what's going on around us Open our minds to new ideas 4 Need to Self-Express: participating in hobbies and interests (1%) App Pricing Models Ad Supported Apps are free to download but place adds on the screen when using the program to generate revenue. Freemium Apps are apps that are free to download but include in-app purchases. In-App Purchases are when a game or app prompts or allows customers to make small "micropurchases" to enhance an app or game. Paid Apps charge the customer an up-front price to download the app, but offer full functionality once downloaded. Sentiment Analysis allows marketers to analyze data form these sources to collect consumer comments about companies and their products (attitudes and preferences). Hits measure the amount of visits to a particular site or page. Page Views are the number of times any page gets viewed by any visitor The Bounce Rate is the percentage of times a visitor leaves the site almost immediately, or only viewing one page Determines which pages are more popular and which are the least popular Click Paths shows how users proceed through information. Firms can provide easier navigation from this Conversion Rates are a measure that indicates what percentage of visitors or potential customers acts as a marketer hopes, whether by clicking, buying, or donating Keyword Analysis determines what keywords people use to search on the Internet for their products or services. How to do a Social Media Marketing Campaign 1 Identify strategy and goals What does the firm hope to promote or achieve with the campaign 2 Identify target audience Marketers aim to find a big enough audience to reach those who might adopt their product without being so big that they end up trying to appeal to someone way outside of their target audience 3 Develop the campaign: experiment and engage Develop the communications There should be a clear and compelling call to action Strong, eye catching images and designs Must appeal to the right customers Needs to be updated constantly 4 Develop the budget Budgets demand nearly constant review 1 Monitor and change Review the success of the campaign Makes changes if necessary Chapter 4: Marketing Ethics Business Ethics are the moral or ethical dilemmas that might arise in a business setting. Marketing Ethics examines those ethical problems that are specific to the domain of marketing. Deceptive Advertising is a representation, omission, act, or practice in an advertisement that is likely to mislead consumers acting reasonably under the circumstances. Ethical Climate is the set of values within a marketing firm, or, in the marketing division of any firm, that guide decision making and behavior. Corporate Social Responsibility (CSR) generally entails voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders. A Framework for Ethical Decision Making Step 1: Identify Issues Step 2: Gather information and Identify Stakeholders Step 3: Brainstorm Alternatives Step 4: Choose a Course of Action Integrating Ethics in the Market Strategy 1 Planning Phase Include ethical statements in the firm's mission or vision statements 1 Implementation Phase Sometimes a firm's choice of target market and how it can lead to changes of unethical behavior Once the strategy is implemented, controls must be in place to be certain that the firm has actually done what it set out to do 1 Control Phase Systems must be in place to check whether each potential ethical issue raised in the planning process was successfully addressed Systems used in the control phase must also react to change Ethical vs Social Responsibility Socially Responsible Socially Irresponsible Ethical Both ethical and socially Ethical firm not involved with the responsible larger community Unethical Questionable firm practices, yet Neither ethical nor socially donates a lot to the community responsible Key CSR Stakeholders Employees o Employees o Their families Customers o Current customers o Potential customers Society o Community o Environment Marketplace o Partners o competitors Chapter 5: Analyzing the Marketing Environment Macroenvironment Factors are aspects of the external environment that affect a company's business, such as the culture, demographics, social trends, technological advances, economic situation, and political/regulatory environment. Culture is the shared meanings, beliefs, morals, values, and customs of a group of people. o Country Culture entails easy-to-spot visible nuances that are particular to a country, such as dress, symbols, ceremonies, language, colors, and food preferences, and subtler aspects, which are trickier to identify. o Regional Culture is the influence of the area within a country in which people live. Demographics indicate the characteristics of human populations and segments, especially those used to identify consumer markets. o A Generational Cohort is a group of people of the same generation. Have similar purchase behaviors because they have shared experiences and are in the same stage of life o Generation Z (Gen Z) is people born into a world that was full of electronic gadgets and digital technologies such as the Internet and social networks. Also known as Digital Natives (2001-2014) o Generation Y (Gen Y) is a generational cohort of people born between 1977 and 2000; biggest cohort since the original Baby Boomers. Also known as Millennials o Generation X (Gen X) is people born between 1965 and 1976 to Baby Boomers; first generation who grew up in homes in which both parents worked. o Baby Boomers are Americans born between 1946 and 1964 after World War II; largest population of 50+ in US. Social Trends o Green Marketing involves a strategic effort by firms to supply customers with environmentally friendly merchandise. o Greenwashing is exploiting a consumer by disingenuously marketing products or services as environmentally friendly, with goal of gaining public approval and sales. Technological Advances are a macroenvironmental factor that has contributed to the improvement of the value of both products and services in the past few decades. Economic Situation is a macroeconomic factor that affects the way consumers but merchandise and spend money, both in the marketer's home country and abroad. o Inflation is the persistent increases in the prices of goods and services. o Foreign Currency Fluctuations are changes in the value of a country's currency relative to the currency of another country, and can influence consumer spending. o Interest Rates represent the cost of borrowing money. Political/Regulatory Environment comprises of political parties, government organizations, and legislation and laws. Macroenvironment Culture Demographi Compan cs y Political/Leg Social al Consum ers Competitio Corpora n te Economic Technology
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