MKT 3013-002 Exam 1 Study Guide
o Vocab words with this bullet are from the study guide ∙ Vocab words with this bullet are from the end of each chapter powerpoints
o Customer Value: The relationship between benefits and the sacrifice necessary to obtain those benefits.
o Strategic Planning: The managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities.
∙ Marketing: The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
∙ Exchange: People giving up something in order to receive something else they would rather have.
∙ Production Orientation: A philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace.
∙ Sales Orientation: The belief that people will buy more goods and services of aggressive sales techniques are used and that high sales result in high profits. Selling goods/services for everybody. Primary goal: Max sales volume
∙ Marketing Concept: The idea that the social and economic justification for an organization’s existence is the satisfaction of customers wants and needs while meeting organizational If you want to learn more check out What happened in Indian wars?
∙ Market Orientation: A philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a We also discuss several other topics like What is Sender?
customer’s decision to purchase a product; it is synonymous with the marketing concept.
∙ Societal Orientation
∙ Societal Marketing Orientation: The idea that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance
individuals’ and society’s long-term best interests.
∙ Customer Satisfaction: Customers’ evaluation of a good or service in terms of whether it has met their needs and
∙ Relationship Marketing: A strategy that focuses on keeping and improving relationships with current customers.
∙ Empowerment: Delegation of authority to solve customers’ problems quickly-usually by the first person the customer notifies regarding a problem. Don't forget about the age old question of What is the meaning of Ecumene?
∙ Teamwork: Collaborative efforts of people to accomplish common objectives.
∙ Customer Relationship Management (CRM): Allows companies to prioritize their marketing focus on different customer groups according to each group’s long-term value to the company.
∙ On-Demand Marketing: Delivering relevant experiences, integrated across both physical and virtual environments, throughout the consumer’s decision and buying process.
o Strategic Business Unit (SBU): A subgroup of a single business or collection of related businesses within larger organization. We also discuss several other topics like What is Surface Tension?
∙ Star: In the portfolio matrix, a business unit that is a fast-growing market leader.
∙ Cash Cow: In the portfolio matrix, a business unit that generates more cash than it needs to maintain its market share.
∙ Problem Child (Question Mark): In the portfolio matrix, a business unit that shows rapid growth but poor profit margins.
∙ Dog: In the portfolio matrix, a business unit that has low growth potential and a small market share.
∙ Planning: The process of anticipating future events and determining strategies to achieve organizational objectives in the future.
∙ Marketing planning: Designing activities relating to marketing objectives and the changing marketing environment.
∙ Marketing plan: A written document that acts as a guidebook of marketing activities for the marketing manager.
∙ Mission statement: A statement of the firm’s business based on a careful analysis of the benefits sought by present and potential customers and an analysis of existing and anticipated If you want to learn more check out Why must the sovereign have absolute power?
∙ Marketing myopia: Defining a business in terms of goods and services rather than in terms of the benefits customers seek. ∙ Market Penetration: A marketing strategy that tries to increase market share among existing customers.
∙ Market Development: A marketing strategy that entails attracting new customers to existing products.
∙ Product Development: A marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products.
∙ Diversification: A strategy of increasing sales by introducing new products into new markets.
∙ Portfolio Matrix: A tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate.
∙ Niche Competitive Advantage: The advantage achieved when a firm seeks to target and effectively serve a small segment of the market.
∙ Sustainable Competitive Advantage: An advantage that cannot be copied by the competition.
∙ Marketing Objective: A statement of what is to be accomplished through marketing activities.
∙ Marketing Strategy: The activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets. We also discuss several other topics like Why do you vote?
∙ Market Opportunity Analysis (MOA): The description and the estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments.
∙ Marketing Mix (four Ps): A unique blend of product, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.
∙ SWOT Analysis: Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T).
∙ Environmental Scanning: Collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan.
∙ Competitive Advantage: A set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition. -One or more unique aspects of an organization that cause target consumers to patronize that firm rather than competitors.
∙ Cost Competitive Advantage: Being the low-cost competitor in an industry while maintaining satisfactory profit margins. ∙ Experience Curves: Curves that show costs declining at a predictable rate as experience with a product increases. ∙ Product/Service Differentiation Competitive Advantage: The provision of something that is unique and valuable to buyers
beyond simply offering a lower price than that of the
∙ Implementation: The process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes that plan’s objectives.
∙ Evaluation: Gauging the extent to which the marketing objectives have been achieved during the specified time period.
∙ Control: Provides the mechanisms for evaluating marketing results in light of the plan’s objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines.
∙ Marketing Audit: Is the use of data to optimize marketing decisions.
o Code of Ethics: A guideline to help marketing managers and other employees make better decisions.
o Convention Morality: “Moves from an egocentric viewpoint toward the expectations of society. Loyalty and obedience to the organization become paramount. A marketing decision maker would only be concerned with whether a proposed action is legal and how it will be viewed by others.” (In chapter definition)
o Preconventional Morality: “The most basic level, childlike. Calculating, self centered, and even selfish, based on what will be immediately punished or rewarded. Most businesspeople have progressed beyond this.” (In chapter definition)
o Postconventional Morality: “Represents the morality of the mature adult. At this level, people are less concerned about how others might see/judge themselves over the long run.” Ex. “Might it do more harm than good in the long run?”. (In chapter definition)
o Self Regulation: “Involves the voluntary acceptance of standards established by nongovernmental entities, such as the American Association of Advertising Agencies (AAAA) or the National Association of Manufacturers. Other associations have regulations relating to child labor or environmental issues”. (In chapter definition)
o Foreign Corrupt Practices Act(FCPA): A law that prohibits U.S. corporations from making illegal payments to public officials of foreign governments to obtain business rights to enhance their business dealings in those countries.
∙ Virtue: A character trait valued as being good.
∙ Morals: The rules people develop as a result of cultural values and norms.
∙ Corporate Social Responsibility(CSR): A business’s concern for society’s welfare.
∙ Stakeholder theory: Social responsibility is paying attention to the interest of every affected stakeholder in every aspect of a firm’s operation.
∙ Social Control: Any means used to maintain behavioural norms and regulate conflict.
∙ Behavioural Norms: Standards of proper or acceptable behaviour. Several modes of social control are important to marketing. ∙ Ethics: The moral principles or values that generally govern the conduct of an individual or group.
∙ Deontological Theory: Ethical theory that states that people should adhere to their obligations and duties when analysing an ethical dilemma.
∙ Utilitarianism Ethical Theory: Ethical theory that is founded on the ability to predict the consequences of an action.
∙ Casuist Ethical Theory: Ethical theory that compares a current ethical dilemma with examples of similar ethical dilemmas and their outcomes.
∙ Moral Relativism: An ethical theory of time-and-place ethics; that is, the belief that ethical truths depend on the individuals and groups holding them.
∙ Pyramid of Corporate Social Responsibility: A model that suggests corporate social responsibility is composed of
economic, legal, ethical, and philanthropic responsibilities and that a firm’s economic performance supports the entire
∙ Sustainability: The idea that socially responsible companies will outperform their peers by focusing on the world’s social
problems and viewing them as opportunities to build profits and help the world at the same time.
∙ Green Marketing: The development and marketing of products designed to minimize negative effects on the physical
environment or to improve the environment.
∙ Cause- Related Marketing: The cooperative marketing efforts between a for-profit firm and a non-profit organization.
o Inflation: A measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year. ∙ Basic Research: Pure research that aims to confirm an existing theory or to learn more about a concept or phenomenon.
∙ Applied Research: Research that attempts to develop new or improved products.
∙ Consumer Product Safety Commission (CPSC): A federal agency established to protect the health and safety of consumers in and around their homes.
∙ Food and Drug Administration (FDA): A federal agency charged with enforcing regulations against selling and distributing
adulterated, misbranded, or hazardous food and drug products. ∙ Federal Trade Commission (FTC): A federal agency empowered to prevent persons or corporations from using unfair methods of competition in commerce.
∙ Target Market: A group of people or organizations for which an organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs.
∙ Component Lifestyles: The practice of choosing goods and services that meet one’s diverse needs and interests rather than conforming to a single, traditional lifestyle.
∙ Demography: The study of people’s vital statistics, such as age, race and ethnicity, and location.
∙ Millennials: People born between 1979 and 1994.
∙ Generation X: People born between 1965 and 1978.
∙ Baby Boomers: People born between 1946 and 1964.
∙ Purchasing Power: A comparison of income versus the relative cost of a standard set of goods and services in different
∙ Recession: A period of economic activity characterized by negative growth, which reduces demand for goods and services.
Texts like this are from the textbook
Texts like this are from my own notes
1.1 What is Marketing?
∙ Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
Marketing is the study of the exchange relationship, it begins with satisfying buyer “needs”.
1-2b Sales Orientation
∙ Primary goal: Max sales volume.
∙ To sales-oriented firms, marketing means selling things and collecting money.
“What we can do/change to meet your needs so you buy it.” ∙ Fundamental problem with sales orientation is that there is a lack of understanding needs/wants of the marketplace. No matter how good of quality a product is, the company cannot force anyone to buy a product that is not needed/wanted.
Ex: Apple product being $49 causes a lot of backlash, so they reduce the price to $39 and introduce a new product but slightly different version for $29.
1-2c Market Orientation
∙ Primary goal: Customer satisfaction.
∙ Focusing on customer wants and needs so that the organization can distinguish its products from competitors’ offerings.
Achieving long-term goals for the organization.
Satisfying wants/needs for specific groups/people.
∙ A critical component of market orientation is understanding your competitors’ strengths and weaknesses.
∙ Involves gaining information about competitors, markets, customers and analyzing the information to learn how to deliver superior customer satisfaction and learn what can be done to provide value to the customers.
1-3b The Firm’s Mission
∙ Sales oriented firm defines their mission in terms of goods and services
∙ Market oriented firm defines their mission in terms of the benefits its customers seek.
o Differences between sales and market orientations are compared in 5 characteristics; the organizations focus, the firm’s business, who the product will be directed to, the firm’s primary goal, and tools used to achieve these goals.
-Focus/Primary Goal: Max sales volume
-Directed to: Everybody
-Achieving the goal: Lowering/Raising the price
-Focus/Primary Goal: Customer satisfaction
-Directed to: Specific groups of people
-Achieving the goal: Obtaining info on customers wants/needs, and
Competitors’ offerings to customers
o A sales-oriented firm can miss many opportunities to serve customers whose wants can be met through a large range of products because they focus on offering specific products.
o Customer Relationship Management (CRM): a company-wide business strategy created to optimize profitability, revenue, and customer satisfaction through focusing on highly defined and specific customer groups. CRM marketers focus on how to effectively communicate with each customer. Companies that use CRM strategies are usually always market oriented.
2-2 Strategic Business Units
∙ Every SBU has its own rate of return on investment, growth potential, and associated risks, and also requires its own
strategies and funding.
o Characteristics of SBUs
-Distinct mission and specific target market
-Control over resources
-Its own competitors
-Single business/collection of related businesses
-Plans separate from other SBUs in the total organization
∙ There are strategic alternative tools SBUs can use to and they include; Ansoff’s strategic opportunity matrix, the Boston
Consulting Group model, and the General Electric model.
∙ Ansoff’s Opportunity Matrix
-Market Penetration: Increase market share to existing
-Market Development: Attract new customers to existing
-Product Development: Create new products for present markets -Diversification: Introduce new products into markets
∙ Innovation Matrix
-Core Innovation: Decisions implement changes using existing assets to provide more convenience to existing customers and potentially new customers.
-Adjacent Innovation: Decisions designed to take company strengths into new markets.
-Transformational Innovation: Decisions result in brand-new markets, products, and often new businesses.
∙ Boston Consulting Group Model
-Using the portfolio matrix to determine the future cash contributions and cash requirements expected for each SBU.
∙ General Electric Model
-Developed by General Electric (GE), the market attractiveness and company strength used in this model are more complex but harder to quantify. The grid of the model is divided into three overall attractiveness zones for the three dimensions: high, medium, low.
2-3e The Marketing Plan
∙ Planning is the process of anticipating future events and determining strategies to achieve organizational objectives in the future.
Ex: Where will the economy be? Where will technology be?
∙ Marketing planning is designing activities related to the environment. It is the basis of marketing strategies and decisions similar to a guidebook.
Ex: Who companies use in their ads for cigarettes in fear of grasping the attention of the wrong audience
2-3f Why Write a Marketing Plan?
∙ It is one of the most important and complicated business activities
∙ Provides a basis for comparison of actual and expected performance
∙ Provides clearly stated activities to work toward common goals ∙ Provides examination of the marketing environment
∙ Serves as a reference for the success of the future activities ∙ Allows entry into the market place with awareness
2-3e Marketing Plan Elements
∙ Defining the business mission statement
∙ Performing SWOT
∙ Defining objectives
∙ Describe a target market
∙ Establish components of the marketing mix
2-3h Writing the Marketing Plan
∙ “The creation and implementation of a complete marketing plan will allow the organization to achieve marketing objectives and succeed”.
∙ Creativity and effort must be implemented into creating the market plan
2-4 Defining the Business Mission
∙ Mission statement is the foundation of any marketing plan ∙ It should focus on the market(s) the organization is trying to serve rather than on the goods/services offered
∙ It is based on analysis of benefits sought by present/potential customers
2-5 Conducting a Situation Analysis
∙ SWOT Analysis: situational analysis by which firms should identify their internal strengths (S) and weaknesses (W) and also examine external opportunities (O) and threats (T).
∙ Internal: Strengths and weaknesses of a company
∙ External: Opportunities and threats
∙ Examining Internal Strengths/Weaknesses
∙ Helps Identify Opportunities/Threats
∙ Based on 6 major environmental forces
2-6b Productive/Service Differentiation Competitive Advantage ∙ Exists when a firm provides something that is unique and valuable to buyers.
2-6c Niche Competitive Advantage
∙ Many companies using this serve only a limited geographic market
∙ When a company specializes in a small segment.
∙ Seeks to target and effectively serve a single segment of the market.
∙ Effective for market segments with good growth potential but not crucial to the success of competitors.
2-8 Describing the Target Market
∙ Marketing Strategy involves the activities of selecting/describing one or more target markets and developing/maintaining a marketing mix that will produce mutually satisfying exchanges with target markets.
2-9 The Marketing Mix
∙ Refers to a unique blend of product, place (distribution), promotion, and pricing strategies (often referred to as the Four
Ps) created to produce mutually satisfying exchanges with a target market.
o Product Strategies
-The marketing mix begins with the product
-Not only includes the physical unit but also its package,
warranty, after-sale service, brand name, company image, value, and many other factors.
o Place (Distribution) Strategies
-Concerned with making products available when/where
customers want them.
-The goal is to make sure the products arrive in good
condition at the designated places.
-Involves transporting and storing
o Promotion Strategies
-Includes advertising, public relations, sales promotion, and personal selling.
-Informing, educating, persuading, and reminding them of benefits of the organization or a product.
-Each element of this strategy is coordinated and managed with others to create a promotional blend or mix.
o Pricing Strategies
-What a buyer must give up to obtain the product
-Most flexible between the Four Ps and the quickest
element to change
-Important competitive weapon
2-11 Effective Strategic Planning
∙ Requires continual attention, creativity, and management commitment.
∙ Should be an ongoing process because the environment is always changing and the resources and capabilities are always evolving.
∙ Based on creativity
∙ Most critical element in successful strategic planning is the top management’s support and participation.
3-3b Ethical Decision Making
∙ The following factors influence ethical decision making and judgements
o Extent of ethical problems within the organization: The healthier the ethical environment, the more likely it is that marketers will take a strong stand against questionable
o Top management’s actions on ethics: Can influence the behavior of marketing professionals y encouraging ethical
behavior and discouraging unethical behavior. When there is a strong ethical culture, there is reduced pressure to
perform unethical acts, fewer unethical acts are performed, and unethical behavior is reported more frequently.
o Potential magnitude of the consequences: The greater the harm done, the more likely marketing professionals will
recognize a problem as unethical.
o Social consensus: A strong ethical culture among
coworkers decreases observation of ethical misconduct
o Probability of a harmful outcome: The greater the likelihood of an action will result in a harmful outcome, the more
likely that marketers will recognize a problem as unethical. o Length of time between the decision and the onset of
consequences: The shorter the length of time between the action and consequences, the more likely that marketers
will perceive a problem as unethical.
o Number of people to be affected: The greater the number of personas affected by a negative outcome, the more
likely marketers will recognize the problem as unethical.
3-3c Ethical Guidelines and Training
∙ A code of ethics helps employees identify what their firm sees as acceptable business practices.
∙ A code of ethics can be effective internal control of behavior, which is more desirable than external controls (ex: government regulation)
∙ A written code helps employees avoid confusion when
determining whether their decisions are ethical (ex: rule book) ∙ The process of formulating a code of ethics and determining what is right/wrong among employees ultimately leads to better decision
∙ Ethics training is an effective way to help employees put good ethics into practice.
3-3d Ethics in Other Countries
∙ Ethical beliefs vary little from culture to culture
∙ Foreign Corrupt Practices Act (FCPA) was enacted because congress was concerned about U.S. corporations’ use of illegal payments and bribes in international business dealings. This prohibits U.S. corporations from making illegal payments to public officials of foreign governments to obtain business rights or to enhance their business dealings in those countries.
∙ This act has been criticized for putting businesses at a
3-5 Arguments for and against Social Responsibility
∙ Analysts believe that a business should focus on making a profit and leave social/environmental problems to nonprofit organizations and government.
∙ Recent research has found that being socially responsible and training front line employees about social responsibility can have positive impact on the firm.
∙ Social Responsibility activities can raise customer trust and identification with the firm.
∙ Social responsibility can produce a direct profit
∙ Corporate Social Responsibility: Business’s concern for society’s welfare.
∙ Stakeholder Theory: Ethical theory stating that social responsibility is paying attention to the interest of every affected stakeholder in every aspect of firm’s approach.
∙ A business’s function is to meet consumer needs and make profit to invest in other things, not to take care of society’s ills.
-Right thing to do
-Takes focus away from making profits
-Management spends the shareholder money on
-Businesses have resources to devote fixing
-Helps prevent govt. regulation and potential
-Can be profitable
*Is it businesses jobs to fix social problems?
-It’s govt.’s job to fix social problems, that’s why they tax us, that’s why we have non-profit organizations
3-6 Cause-Related Marketing
∙ “Cause Marketing” is the cooperative efforts of a for-profit firm and a nonprofit organization for mutual benefit.
∙ The for-profit hopes to generate extra sales, and the nonprofit in turn hopes to receive money, goods, and/or services
∙ Any marketing effort that targets social or other charitable causes can be referred to as cause-related marketing.
4-2a American Values
∙ Self-sufficiency: Every person should stand on his or her own two feet.
∙ Upward mobility: Success will come to anyone who gets an education, works hard, and plays by the rules.
∙ Work ethic: Hard work, dedication to family, and frugality are moral and right.
∙ Equality: No one should expect to be treated differently from anybody else.
∙ Individualism: Each person is unique and special.
∙ Achievement orientation: People should get things done by setting goals, planning, and measuring results.
4-2c How Social Media Have Changed Our Behavior
∙ Social media are making profound changes in the way we obtain, and consumer information-consumers are interacting; sharing beliefs, values, ideas, and interests; and, of course, making purchases at a dizzying rate.
∙ Marketers can use social media to engage customers in their products and services.
∙ It enables firms to create conversations with customers and establish.
∙ Social media advertisers are now able to drill down not just by age and gender, but by interests, location, company affiliation, and role. This way, the ads a person sees are more likely to be ones that her or she actually want to see.
∙ A number of firms use social media to build goodwill for their products instead of trying to stimulate immediate sales.
4-3 Demographic Factors
∙ Demography is another uncontrollable variable in the external environment-also extremely important to marketing managers. ∙ It is the study of people’s vital statistics, such as age, race and ethnicity, and location.
∙ Demographic characteristics are strongly related to consumer buying behavior in the marketplace.
4-4a Marketing to Hispanic Americans
∙ With a population of more than 57 million, Hispanics make up the largest U.S. minority.
∙ Hispanic millennials in the U.S. are more prone to taking a bilingual, bicultural approach to their media consumption.
∙ Largest group to use mobile devices for any type of transactions ∙ Nearly 60% are of Mexican descent
∙ Hispanics will choose brands that are similar to their culture
4-4c Marketing to Asian Americans
∙ Asian American growth has been fueled primarily by immigration ∙ 23% more likely to evaluate the nutrition of foods, 31% more likely to eat organic, 22% less likely to allow junk food in their homes
∙ Called a “marketers dream” because they are younger, better educated, and have higher incomes than the average American citizen.
∙ Hold onto their cultural values
∙ Prefer to shop at stores owned/managed by other Asian Americans.
4-5a Consumers’ Incomes
∙ U.S. incomes rose after 8 years of stagnant/declining earnings, due to sustained job growth across the country.
∙ Over a lifetime, an individual with a bachelor’s degree will earn two times more total income as a non-degree holder.
∙ Education is the primary determinant of earning potential. ∙ Stores that have done well, cater to lower-income consumers
∙ Negative growth in economic activity
∙ Reduces demands for goods/services
∙ When gross domestic product falls for two consecutive quarters
4-7 Political and Legal Factors
∙ Businesses need regulation from govt. to protect innovators ∙ Govt. needs businesses to generate taxes
Ch. 1 Sales vs. Market Orientation
Ch.2 Marketing Objective
∙ Statement of what is to be accomplished through marketing activities
∙ Should be:
-Compared to a benchmark
Ch. 3 Ethical Decision Making
*** Professor’s Advice***
Read over all the chapters before the exam