Exam 1 Complete Study Guide - MGM
Exam 1 Complete Study Guide - MGM 301
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This 13 page Study Guide was uploaded by Alex on Wednesday March 2, 2016. The Study Guide belongs to 301 at University at Buffalo taught by Dr. Dick in Spring 2016. Since its upload, it has received 257 views. For similar materials see Marketing in Business, management at University at Buffalo.
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Date Created: 03/02/16
MGM Exam 1 Study Guide The Four P’s: Product, Price, Place, & Promotion – Regarding advertising Advertising Age’s Top 5 “Marketers of the Century”: o Proctor & Gamble Multiple Branding – Many brands in many market segments; focusing on individual brands, giving them individual identity. Family Branding – Name on every product o McDonald’s Target audience are tweens (10-12) b/c they are young, and can be longer lasting customers Transformational advertising o Coca Cola Coca Cola is one of the largest brand equities in the country Brand Equity – value in brand name Value of Company ($) – Tangible Assets Value = Brand Equity o Anheuser Busch o Nike Family Branding Competing on price is “lazy” & generally unsustainable lose $$ Intro. To Marketing: o Marketing – “The activity of creativity, communicating, delivering, and exchanging offerings that benefit the organization, its stakeholders, and society at large.” Creating ideas, goods and services, and being able to communicate and deliver what they are about. It is the profitable establishment of Consumer Value; from either high quality or low price o Purpose of business: to obtain & keep customers o Customer Value – “A unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-time delivery & both before and after sale service.” Consumer’s individual benefits of the product including quality, price, convenience, & punctuality o Synonyms for Value: Utility (4 Types): Time – customers appreciate things on their schedule (convenience – fast & now) Place – people want the product where they want it o E.g. – beer at the game way more expensive than in a liquor store, yet people purchase it because it’s convenience an experience is sold with the product (atmospherics) Form – product comes in multiple forms o (E.g. – Apple v. Apple Juice) Possession – The use of a product before actually owning it (E.g. – mortgage) Satisfaction – are people satisfied with the product Benefit o The Exchange Process – the trade of things of value between buyer and seller so that each is better off after the trade We trade in different products, money for something of worth to us. Both benefit. Diminishing Marginal Utility – trading two things of value, but if you keep getting that something it becomes of less worth to you o Marketing Mix – make decisions based on the mass, not the few Controllable Factors (the 4 P’s) Product – Variety, quality, design, features, brand name, packaging, services, warranties Price – List price, discounts, allowances, payment period, credit terms Promotion – Channels, location, inventory, transportation, atmospherics Place – Sales promotion (coupons/rebates), advertising, sales force, public relations, direct marketing, e-commerce o Bring product from one place to another o Market Share – ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself Market Share % = Sales $/Total Market $ o STP Marketing: Segmentation – How do we think of the market place? Identify all relevant segments if the market Different consumers/customers, provide different marketing mix Break up market into groups Targeting – different purposes & different prices for different audiences. Choose 1 or more of the segments to concentrate on Positioning – positioning compared to competitors. Position the products in the minds of the consumer Marketing & Corp. Strategy: o Mission Statements – indication of the company’s values. Information about products, customers, technology, etc. o Avoid Marketing Myopia Myopia – cannot see the big picture. Many companies view themselves in production process as supposed to from what the consumer wants o Corporate Goals: must be specific & measurable Sales Revenue Profit Return on Investment Quality Social Responsibility o Relative Market Share (RMS) – Firm’s raw market share divided by the raw market share of a firm’s largest competitor RMS > 1, RMS is the highest/one of the highest in market RMS < 1, fast growing market, does not create profit immediately (?-products) Star products are often still not profitable, but they produce & learn more from competitors so cost of production is less Dog Products are in a slow market Cash Cow products are slow in growth market with highest market share & low production costs Cash cow invests in all 3 (?, star, & dog products), which is known as a success sequence RMS ≥ 10% = fast growth market o Focus on market growth rate instead of market size because it is more dynamic & future oriented When market power increases, production costs decrease & entry barriers increase When you have the highest market share, you have more power (deters competition) o Core Competencies – capabilities resulting from personnel, resources, or functional units that determine the means of achieving sustainable competitive advantage and marketplace success Sustainable Competitive Advantage – unique strength from consumer’s perspective relative to competitors (quality, service, time, cost, etc.) o SWOT: Strengths, Weaknesses, Opportunities, & Threats of an organization Determines where business is now, & where it is going o Return on Investment: Larger market share has greatest influence on ROI Costs go down discourages competition If market is lousy, so is market share The faster a company moves along the cost curve, the better of In the short-run they give up profit, but in the long-run they will make profit need to spend $$ to make $$ o Product Growth Strategies: Market Penetration – same product & customers, but try to sell more Market Development – same product with new customers Product Development same customer, different product Diversification – new product & new markets o Budgeting: must be affordable, percentage of sales, optimized, with an objective and task that is competitive Promotion is necessary to drive sales up Take a % & put it towards next year’s promotions/advertising What you do v. what you need to do Share of Marketing Effort – appropriate market share with budget Spend more to make more in order to grow To maintain just balance the budget 1 ½ Rule – amount of market share growth, take market share % X 1.5 Marketing Environment: o Constraining – understanding the environment & how it’s changing (where it is going) o Perspectives: Control: Adapt – most often because environment is out of our control Modify – approach for goal Threat/opportunity – company can either take advantage of or get rid of the rumors o Environmental Levels: Marketing Department – 4 P’s with regards to environment Internal – Top Management personnel & other departments Micro – customers, competitors, stakeholders, suppliers, channels Macro – Social, economic, technological, regulatory Social: Micro-cultures & Diversity – core set of beliefs Demographics: population size, geographic distribution, age distribution, & household consumption o Population size increased with baby boom which led to greater thinking Echo Boom followed baby boom, smaller, but still large growth of people Had to relate old age with younger age Population shifted from rural to urban (early 1900s), urban to suburban (1930s-80s), & suburban to exurbs (1990s-2000s) Fewer babies now because we are focused on careers 50% of families were “traditional” back in 70s now 25% Divorce rate is now ~50% Economic Environment: o Size of Economy Gross Domestic Product (GDP) – directed towards inflation o Consumer Ability & Willingness to Buy Ability to Buy: Gross Income (Taxes) Disposable Income Disposable Income (necessities) Discretionary Income o Necessities are different for everyone Taxes & necessities – impact what we do with money in the future; almost like ‘fixed costs’ Environmental Levels: o It is easy to do business when things are good, but it is important to keep chugging when things are bad (E.g. – Hyundai) Hyundai gave their cars out during the recession and if customers couldn’t be paid back, they could just return them no charge. Big return for Hyundai o Macro Levels: Social (slower), Economic (faster), Technological (much faster), & regulatory Regulatory: Protecting Consumers Consumerism Protecting Competition Political Pressure Technological Environment (issues): Television – HD/Digital, TiVo; cuts advertisements bad for marketing; method of delivery now can just use web Telephone – went from only phone calls Basically everything (portable computer) & ads. Can be delivered based on consumer location Genetic Engineering – drugs made for specific individuals in the future Computer & WorldWideWeb – retail and advertising has changed due to social media Smart Products – integrate more technologies into individual products Consumer Behavior & Marketing: o Consumer Decision Making: How do consumers decide what to buy? Influences on Decision Making Process: Psychological – motivation, personality, learning, values, beliefs & attitudes Sociocultural – Personal influence, reference groups, family influence, social class, culture, etc. Situational – Purchase task, social surroundings, physical surroundings, temporal effects, & antecedent states Marketing Mix – Product, Price, Place, & Promotion Basic Decision Making Concepts: Goal Directed Low Involvement/Unimportant Banded Rationality Selective (in information we listen to) Adaptive (if we decide we don’t like, don’t buy again) Decision Making Unit: the different roles people play in DM Information gatherer Influencer Decision Maker Purchaser User Managing Customer Satisfaction: Managing Customer Satisfaction: o Measurement, service after sale, website/phone number, & consumer advocate all assist in keeping customers satisfied even with complaints Alternative Evaluation: o Evaluative Criteria – what is important to you when you purchase a product o Multi-Attribute Model – use eval. Criteria to predict purchases & ratings on criteria Tells why “we,’ the company, are getting beat Developing a Customer Profile: o Demographic examples: gender, age, marital status o Socio econ. examples: income, education, occupation o Psychographic examples: Lifestyle (Activities, Interests, & Opinions) Lifestyle variable research Customer Profile Specificity: o General individual differences – no matter what happens, those characteristics remain the same o Brand specific individual differences – characteristics that change from each purchase Symbolic Consumer Behavior: meanings we give to products o We are what we wear, drink, drive, etc. o Self Concept – consumers are conscious of their view of themselves & how they would like to be viewed o Hedonic Consumption/consumption experiences o Product enthusiasts
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