MARK 3000 Final Exam Chapter 1 What is marketing? An organizational function and a set of processes For creating, capturing, communicating, and delivering value to customers For managing customer relationships in ways that benefit the organization and its stakeholders Corporate strategy Anticipating (research) and determining the needs & wants of consumers (target marketing) and satisfying those needs through the use of the 4 P’s (product, promotion, place, price) to create long-term exchanges to value Exchanges of value Value = ratio what is given up for what is obtained • Both parties must believe they are getting value for exchange to take place MARKETING MIX: THE 4 P’S Value is created through the 4 P’s 1. What are the 4 P’s? a. Product b. Place c. Promotion d. Price Product – creating value Through a variety of offerings, including goods, services, and ideas to satisfy customer needs Place – delivering value Place, or supply chain management All activities needed to get the product to the right customer when the customer wants it Promotion – communicating value Communication that informs, persuades, and reminds potential buyers about product To influence their opinions or elicit a response Price – capturing value Price is everything a buyer gives up in exchange for the product Must be amount customer willing to pay and which gives profit 2. What are the 5 orientations (eras)? a. Product Orientated Era: Good product sells itself (do what the firm does best) b. Sales Orientated Era: Relied heavily on selling/advertising (sell more) c. Market Oriented Era: Provide more value than competitors d. Societal Market Orientation: Enhancing benefits of society e. Value-based Era: Satisfy consumer needs/wants while meeting company objectives (what does the customer want?) Corporate orientations Production - focus is on internal capability and technology *** Key question – what does the firm do best? Sales - focus is on aggressive sales techniques *** Key question – how can we sell more of what we have? Market orientation Value-based concept Purpose of the organization is to satisfy consumer needs &/or wants, while meeting organizational objectives Provide more value than competitors *** Key question – what does the customer want? Societal market orientation Focus is on enhancing benefits to society *** Key question – how do I meet customer needs and benefit society? “Make what you can sell, rather than sell what you can make.” Ex. Ford’s market share decline The market for Ford, Lincoln, and Mercury brands decreased 17.2% in 2005 ???? There was a shift towards fuel-efficient cars in the market Old saying: “if you build it, they will buy it” IS FALSE: new productions will reflect upon the customers’ demands for now and in the future (New strategy is contingent on customer needs in the market) & Ford increased their sales Why is marketing important? Marketing enriches society, can be entrepreneurial, expands global presence, and strengthens channel relationships What is the marketing concept? Make what you can sell rather than sell what you can make Chapter 2 Marketing strategy includes firm’s target market, related marketing mix (4 P’s), designed to provide sustainable competitive advantage, developed through market planning 1. What are the 4 things that make up sustainable competitive advantage? a. Customer Excellence: So much customer loyalty that they are reluctant to competitors b. Operational Excellence: Strong relationships with vendors c. Product Excellence: Distinctive product image, brand image d. Locational Excellence: Easily accessible 2. Describe the steps of the marketing plan (goes from corporate level to marketing level) a. Planning Phase i. Step 1: Business mission and objectives 1. Executives create mission statement ii. Step 2: SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) 1. Executives evaluate internal and external factors b. Implementation Phase (Marketing strategy) i. Step 3: Identify Opportunities 1. Segmentation, Targeting, Positioning ii. Step 4: Implement Marketing Mix 1. 4 P’s c. Control Phase i. Step 5: Use marketing metrics to make decisions 3. Describe the elements of the BCGGM Portfolio Analysis a. Star: High market growth rate, High market share i. Invest and grow b. Cash Cow: Low market growth rate, High market share i. Maintain and milk c. Question Mark: High market growth rate, low market share i. Watch/hold d. Dog: Low market growth rate, Low market share i. Drop/consolidate 4. What are the 4 growth strategies? a. Market Penetration: Current market, Current product/service b. Market Development: New market, Current product/service c. Product development: Current market, New product/service d. Diversification: New market, New product/service Chapter 4 1. What are ethics? a. Moral principles and values that govern actions 2. What are laws? a. Society’s values which are enforceable by law 3. What are the 4 steps in ethical decision making? a. Identify issues b. Gather information and identify stakeholders c. Brainstorm and evaluate alternatives d. Choose a course of action 4. How do you choose a course of action (make a decision)? a. Societal Norms: Basic set of values of the society i. Publicity test/transparency test: How would you feel if your decision made front page news? ii. Moral mentor/Admired observer test: Would your hero make this decision? How would they feel if I make this decision? b. General Business Norms: What is the standard practice in business, basic business values i. Consumer has the right to safety, to be informed, to choose, and to be heard ii. No longer caveat emptor (buyer beware) iii. Industry standards 1. AMA code of ethics: a. Generally accepted code of ethics b. Flows from general norms of conduct to specific values c. Subareas within marketing have their own code of ethics d. First, do no harm e. Second, foster trust and consumer confidence in the marketing system f. Values honesty, responsibility, fairness, respect, openness, and citizenship c. Company Norms: Values, rules, controls d. Personal Norms: Family, religion, values 5. What is Moral Idealism? a. If any bad occurs, then the action is unethical 6. What is Utilitarianism? a. Balance good versus bad b. Do most good for most people 7. What is the Golden rule test? a. Do you want the action done to you? 8. What is the person in the mirror test? a. Are you ok with yourself for making the decision? 9. What are the 3 levels in the responsibility model for companies? a. Profit Responsibility: Investors only i. Companies are responsible only to stockholders and investors ii. Companies have just one duty: maximize profits within the law b. Stakeholder Responsibility: All stakeholders i. Companies are responsible to owners, customers, employees, and suppliers c. Corporate Social Responsibility: Society in general i. Companies are responsible to owners, stakeholders, and society in general ii. Cultural diversity iii. Environmental stewardship iv. Cause related marketing Chapter 5 Marketing environment: uncontrollable elements outside an organization that may affect performance.Environmental scanning: systematic analysis of those elements Immediate environment: competitors, company, corporate parters External/macro: culture, demographics, social, technology, economy, political/legal Cultural – shared meanings, values, beliefs - EX: UK vs. France; GA vs. CA Demographic – population statistics - Age - Gender - Income - Ethnicity - Education - ***Generational cohorts (gen z, gen y & millennials, gen x, baby boomers) Social – trends that customers value - Greener customers - Health and wellness - Privacy concerns - Thrift Technological – innovations/new products Economic – income and business - Recession vs. recovery vs. prosperity vs. depression Political/legal – laws - fda, tfc, spam law, etc 1. Describe Gen Z a. 2001-2014 b. Socially connected, cynical towards ads 2. Describe Gen Y and Millennials a. 1977-2000 b. Biggest cohort c. Inquisitive, diverse, identify with brands 3. Describe Gen X a. 1965-1976 b. Focus on children c. Convenience is key 4. Describe Baby Boomers a. 1946-1964 b. Postponing retirement, contain 80% of the wealth Chapter 6 Consumer behavior: process of buying/why we buy what we do High involvement purchase (car/laptop/etc.)Vs. Low involvement purchase (groceries/gum/etc.) Compensatory vs. Decision based - Compensatory: allow other things to compensate ex: 2 cars one with 30 mpg and one with 25 mpg, but one is $10k cheaper Consumer Decision Rules (cereal chart in PowerPoint) Customers decide what they want by weighing many different factors Important to buyer: negotiation, payment method, delivery Important to seller: conversion rate (ex: stuff left in amazon online shopping cart – they will try to get you to come back and complete the purchase) *Goal is for post-purchase behavior to be a decrease cognitive dissonance, increase satisfaction, and increase loyalty 1. What is the High Involvement Decision-Making Process? a. Need recognition b. Information search i. Universal, retrieval, evoked c. Evaluation of alternatives d. Purchase e. Post purchase behavior i. Increase customer satisfaction, increase loyalty, decrease cognitive dissonance 2. What are the 5 hierarchy of needs? a. Psychological b. Safety c. Social d. Esteem e. Self-actualization Chapter 8 1. What is Globalization? a. Process by which goods, services, capital, people, information, and ideas flow across national borders 2. What are the 4 components of assessing global markets? a. Economics b. Infrastructure and technology c. Government actions d. Sociocultural factors 3. Describe economics a. Gross Domestic Product (GDP): what we sell b. Gross National Product (GNP): what we sell overseas plus GDP c. Purchasing power parity: “The big mac index” – compare cost of goods from 1 country to another i. If the exchange rates of 2 countries are in equilibrium, a product purchased in one will cost the same in the other d. Market size and population growth rate: More people = more $ 4. Describe Infrastructure/technology a. Transportation, communication, distribution channel, commerce 5. What are the 4 types of gov’t action? a. Quota: Max limit, reduce availability of imported goods b. Tariff: Import tax, artificially raises price, lowers demand c. Trade agreements: Promotes and makes trade easier (EU, NAFTA) d. Exchange control: Regulation of exchange rates 6. What are the 5 parts of culture (sociocultural factors)? a. Power distance: Willingness to accept social inequality as natural b. Uncertainty avoidance: How comfortable are you with not knowing the future? c. Individualism: Independence? d. Masculinity: Is it a male dominated market? e. Time orientation: Is the culture/society patient or impatient? 7. What are the 5 choices when choosing a global entry strategy? (going from low control, low risk to high control, high risk) a. Export: Sending domestic products to foreign countries b. Franchising: Owner has ultimate say, but allows franchisee to handle day-to-day operations (Ex: McDonalds) c. Strategic Alliance: Two companies come together, but don’t invest in one another, just work together d. Joint venture: Same as strategic alliance, but invest in each other e. Direct investment: Going to the country and setting up shop 8. What are the 3 options for the global marketing mix? (product or service strategy?) a. Sell the same product or service in both markets b. Sell similar product with some modification c. Sell totally new products or services 9. Describe the 4 product strategies combined with promotional strategies a. Global market standardization: Same product, same message (Ex: Gillette site is the same no matter the country) b. Message adaptation: Same product, different message (Ex: bike in U.S is for recreation, bike in UK is for transportation) c. Product adaptation: Different product, same message (Ex: McDonalds India – No beef, but still McDonalds) d. Innovation/Reverse innovation: Different product, different message (Ex: Heinz has different products and purposes for different countries) 10. What is glocalization? a. Taking same product and adjusting the flavors based on market preferences (Ex: Pringles) 11. What are the 5-global marketing mix pricing strategies? a. Tariffs b. Quotasc. Anti-dumping policies: Can’t make product in bulk and then dump them for cheap in another country d. Economic conditions e. Competitive factors Chapter 9 1. Describe the segmentation, targeting, positioning process a. Segmentation – homogenous groups of consumers i. Step 1: Strategy or objectives 1. Comes from the mission statement and current state ii. Step 2: Segmentation methods 1. Geographic, demographic, psychographic, benefits, behavioral b. Targeting i. Step 3: Evaluate segment attractiveness 1. Substantial, reachable, responsive, profitable, identifiable Substantial: don’t chase too small or too big of a market Reachable: know & understand & recognize the group Responsive: willing to accept product ii. Step 4: Select target market 1. Differentiated, Concentrated (niche), Micromarketing (one-to one), Undifferentiated (mass marketing) c. Positioning i. Step 5: Identify and develop positioning strategy 1. Value proposition ***Cannibalization – new product sales cuts into sales of old product No point in creating new product if it doesn’t get new customers - Concentrated/niche marketing - One to one marketing or micromarketing (increases loyalty) o M&M’s w/ pictures & personalized stuff Chapter 10 1. What are the 5 steps in the Research Process? a. Defining objectives and research needs b. Designing the research c. Data collection process d. Analyzing data e. Action plan and implementation Describe Step 1: Defining Objective and Research Needs What information is needed to answer specific research questions? Did people watch, what % of people watched, attitudes? How should that information be obtained? Surveys, polls What do we need, ho do e plan on getting it? Describe Step 2: Designing the Research What type of data do we need? Secondary vs. Primary What type of research do we need to collect data? Qualitative vs. Quantitative Describe Step 3: Data Collection Process Data is collected from Secondary data or primary data. Must choose a Sample: A group of customers who represent the customers of interest Describe Step 4: Analyzing Data Where you come to conclusions Converting data into information to explain, predict, and/or evaluate a particular situation. Describe Step 5: Action Plan and Implementation Presenting what you found Analysts prepares the results and presents them to the appropriate decision makers Includes a Marketing Research Presentation: (What are the parts of it?) Executive Summary: Brief summary for the execs of the company Body: This is what we did/tried to do Conclusions: Analyze/conclude Limitations: What happened? Did the data support our hypothesis? Did you choose the right sample type? Supplements (tables, figures, appendices): Chart, figures, summary of data Chapter 11 1. What are the 4 main product types that are sold to consumers? a. Specialty: Customers show such a strong preference that they will expend considerable effort to search. i. Wedding dress, highly involved purchase b. Shopping: Consumers will spend a fair amount of time comparing alternatives. i. Clothes, shoes, medium involved purchases c. Convenience: Consumer is willing to spend minimum effort to evaluate prior to purchase. i. Shampoo, crackers, very little involvement d. Unsought: Consumers either do not normally think of buying or do not know about. i. Fire extinguishers, dictionary, no involvement What is the difference between Breadth and Depth? Breadth: Number of different product lines. Ex: Pepsi max, Diet Pepsi, Pepsi Depth: Number of categories within a product line. Ex: Pepsi includes, Water, Soda, Sports Drinks 2. What are the 6 values of branding for the customer? a. Facilitate Purchasing b. Establish Loyalty c. Protect Competitiond. Reduce Marketing Costs e. Are Assets f. Impact Market Value 3. What are the 5 functions of packaging? a. Contain and Protect b. Promote c. Facilitate storage, use, and convenience d. Facilitate recycling e. Provide information Chapter 12 1. What are the 5 stages of Diffusion of Innovation? a. Innovators (2.5%) b. Early Adopters (13.5%) c. Early Majority (34%) d. Late Majority (34%) e. Laggards (16%) 2. Describe Innovators a. Don’t fear risk b. Get product as soon as it is released 3. Describe Early Adopters a. Generally, don’t like to take a much risk ass innovators do but instead wait and purchase the product after careful review. 4. Describe Early Majority a. Don’t like to take much risk and therefore tend to wait until bugs are worked out b. Need this group to buy in to have a successful and profitable product/service 5. Describe Late Majority a. Last group of buyers to enter a new product market b. When they enter, the product has achieved its full market potential 6. Describe Laggards a. Consumers who like to avoid change and rely on traditional products until they are no longer available b. Buy when product is at the end of its life 7. What are the 4 factors affecting product diffusion? a. Relative Advantage b. Compatibility c. Observability d. Complexity and Trialability 8. What are the 6 steps of the Product Development Process? a. Idea Generation b. Concept Testing c. Product Development d. Market Testing e. Product Launch f. Evaluation of Results 9. What are the 4 stages of the Product Lifecycle?Introduction Growth Maturity Decline
Negative or low
Peak to declining
Early adopters and early majority
Competitors (number of firms and products)
One or few
Few but increasing
High number of competitors and competitive products
Low number of competitors and products
*** Key question – what does the firm do best?
Value-based Era: Satisfy consumer needs/wants while meeting company objectives (what does the customer want?
What are the 5 orientations (eras)?
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Don't forget about the age old question of How does this affect polarity?
a. Introduction b. Growth c. Maturity d. Decline Chapter 13 1. What 4 factors differentiate Services Marketing from Product Marketing? a. Intangible: Can’t touch or hold. b. Heterogeneous: Can vary in result. c. Perishable: Can’t store them up. d. Inseparable: Consuming when exchange happens. 2. What are the 5-Dimensions of Service Quality? a. Reliability: Performing the service correctly. b. Responsiveness: Performed on time and as promised. c. Assurance: Convey trust and confidence, “perform like you know what you’re doing” d. Empathy: Performed with care (attitude). e. Tangibles: Your environment matches up with what your service is about. 3. What are the 5 parts of the gaps model and where are the gaps? a. Gaps are between 1 and 2, 2 and 3, 3 and 4, 4 and 5 i. Customer expectations for service quality. ii. Management perceptions of customer expectations. iii. Standards specifying service to be delivered (how you as an employee meet customer needs). iv. Actual service delivered. v. Service provider communications about service quality (Anything we promised about the service). 4. Describe the Knowledge Gap (Gap 1) a. First gap between part 1 and 2. b. What do we want vs. What the company thinks we want. c. Do not assume customers to be happy. d. Use research to understand consumers’ needs. 5. Describe the Standards Gap (Gap 2) a. Second gap between part 2 and 3. b. Employee not giving the consumer what management thinks they need (not following standards). c. Based upon consumer needs. d. How to eliminate: i. Establish policies, performance standards, educate employees. 6. Describe the Delivery Gap (Gap 3) a. Third gap between part 3 and 4. b. Employees do not perform correctly. c. How to avoid: i. Hire well, train, monitor, and reward. 7. Describe the Communication Gap (Gap 4) a. Fourth gap between part 4 and 5. b. We have told them what to expect but the results (what they actually received) are different. c. Must reflect actual service. d. Commercials, comments from sales people. Chapter 14 1. Describe the 4 Company objectives a. Profit orientation: Reach a target level (often a set percentage) i. Ex: We want 18% return b. Sales orientation: Max sales volume, even if it cuts into profit i. Good for brand-new products if you want to capture innovators and early adopters before the competition c. Competitor orientation: Measure against competitors i. Base prices off of the competition d. Customer orientation: Create value i. Put customer first Chapter 15 1. What is Pull Inventory? a. Orders based on sales data b. More accurate inventory c. Better when demand is uncertain d. Targets consumer 2. What is Push Inventory? a. Merchandise allocated based on forecast b. Does not need sophisticated IS system c. Good for steady demand items d. Better for things served in certain quantities at a set price 3. What is the Making Merchandise Flow? a. Manufacturer → Distribution Center b. Manufacturer → Store c. Distribution Center → Store d. Store → Customer 4. What are the 6 responsibilities of the Distribution Center? a. Management of inbound transportation b. Receiving and checking using UPC and RFID c. Storing and Cross-Docking d. Getting merchandise floor ready e. Preparing to ship f. Shipping to store Chapter 17 1. What is the AIDA Model? a. Awareness: Must complete first i. Think b. Interest c. Desire: Want the product i. Feel d. Action i. Do 2. What are the 6 methods of promotion? a. Advertising i. Paid from identified source, mass media b. Public Relations i. Actions to maintain positive relationship with community and media, Not directly paid c. Personal Selling i. Two-way flow of info d. Sales Promotion i. Special incentives e. Direct Marketing i. Sending directly to consumer ii. Delivery of promotional materials individually f. Online/Social Media i. Delivered electronically 3. What are the 2 methods of setting and allocating the IMC budget? a. Objective-and-task method: This is what we want, this is how we do it i. Ex: Is what we are trying to accomplish increasing sales? An increase in sales is best achieved through what? b. Rule of Thumb Methods: Use prior sales and communication activities to determine the present communication budgetChapter 18 1. What are the 7 steps in planning and executing an Ad campaign? a. Identify target audience b. Set advertising objectives c. Determine the advertising budget d. Convey the message e. Evaluate and select media f. Create advertisements g. Assess impact 2. Describe a Pull strategy a. Aimed at final consumers b. Done through advertising, consumer sales promotions, online c. Goal: Stimulate our interest and demand d. Consumer demand pulls the brand through the channel i. The Channel: Manufacturer promotes to consumer → Consumer demands product from retailer → Retailer demands product from wholesaler → Wholesaler demands product from manufacturer 3. Describe a Push strategy a. Aimed at channel members (wholesaler, retailer) b. Opposite of pull strategy c. Primarily done through personal selling and secondarily done through trade sales promotion Chapter 19 1. What are the 5 steps of the personal selling process? a. Generate and qualify leads b. Pre-approach (doing your homework) c. Sales presentation and overcoming reservations d. Closing the sale e. Follow-up 2. Describe Step 1: Generate and qualify leads a. What are the 4 sources of leads? i. Current customers ii. Networking events iii. The internet iv. Trade shows b. What are the 3 qualifications of a customer? i. Need for item or service ii. Ability to buy iii. Willingness to buy 3. Describe Step 2: Pre-approach a. Extends the qualification procedure b. Done before interacting with customer c. Doing homework d. Goal: Determine specific needs and range of options4. Describe Step 3: Sales presentation and overcoming reservations a. The presentation b. Handling reservations c. Listen over pitching 5. Describe Step 4: Closing the sale a. Getting the order b. Often most stressful part of sales process c. A “no” might be the foundation for a later “yes” 6. Describe Step 5: Follow-up a. Make sure customer is satisfied → causes good word of mouth b. Very important for high involvement items 7. What are the 5 Service Quality Dimensions? a. Reliability b. Responsiveness c. Assurance d. Empathy e. Tangibles 8. What is the value added by personal selling? a. Salesperson provide information and advice b. Sales people act as business consultants c. Sales people are often entrepreneurs 9. Describe Professional Selling as a career a. Flexibility b. Variety c. Lucrative d. Visible results = good for promotions 10. What are the 3 areas of ethical and legal issues in personal selling? a. The sales manager and sales force i. Sales manager needs to be fair and not discriminate b. The sales force and corporate policy (*Biggest area in ethical dilemmas*) i. The firm may have a policy to sell goods or services to people who cannot afford them or to people who should not have them c. Sales person and customer