MARK 3000 Test 1 Study Guide
MARK 3000 Test 1 Study Guide 3000
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This 14 page Study Guide was uploaded by Chandler Darden on Monday September 14, 2015. The Study Guide belongs to 3000 at University of Georgia taught by McManus in Fall 2015. Since its upload, it has received 198 views. For similar materials see Principles of Marketing in Marketing at University of Georgia.
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Date Created: 09/14/15
MARK 3000 Study Guide Test 1 Ch1 Overview of Marketing Marketing the activity set of institutions and process for creating capturing communicating delivering and exchanging offerings that have value for customers clients partners and society at large 0 It requires thoughtful thinking with an emphasis on ethical implications of any of those decisions in society in general Marketing Plan a written document composed of an analysis of the current marketing situation opportunities and threats for the rm marketing objectives and strategy speci ed in terms of the four Ps action programs and projected or pro forma income and other nancial statements Core Aspects of Marketing 0 Helps create value Satis es customer needs and wants Entails an exchange Requires product price place and promotion decisions Can be performed by individuals or organizations 0 Occurs in many settings Exchange the trade of things of value between the buyer and the seller so that each is better off as a result Marketing mix Four PS 0 Product 0 Price 0 Place 0 Promotion Price is everything the buyer gives up money time energy etc Place represents all the activities necessary to get the product to the right customer when that customer wants it 0 Place more commonly deals with retailing and marketing channel management aka supply chain management B2C businesstoconsumers the process in which businesses sell to consumers B2B businesstobusiness the process of selling merchandise or services from one business to another C2C consumertoconsumer the process in which consumers sell to other consumers Most rms today are market oriented 0 They attempt to satisfy their customers needs and wants Value re ects the relationship of bene ts to costs 0 What the consumer gets for what he or she gives Value Cocreation customers act as collaborators with a manufacturer or retailer to create the product or service 0 Ex Nike allows customers to custom design their sneakers How marketing rms become more value driven 0 Sharing information 0000 o Balancing bene ts with costs 0 Building relationships with customers I Relational orientation need to establish a relationship with a customer rather than just a simple transaction I Customer relationship management CRM a business philosophy and set of strategies programs and systems that focus on identifying and building loyalty among the rm s most valued customers 0 Connecting with customers by using social and mobile media Supply chainmarketing channel the group of rms that make and deliver a given set of goods and services Firms have come to realize that good corporate citizenship through socially responsible actions should be a priority because it will help their bottom line in the long run Entrepreneurs people who organize operate and assume the risk of a business venture Marketing Ethics Companies must have a balance between maximizing pro ts and bene tting society 0 Pleasing shareholders and meeting the needs of society 0 If you are only focused on pro t then that can lead to short term success but long term failure For marketers the rm s ability to build and maintain consumer trust by conducting ethical transparent clear transactions must be of paramount importance Business ethics the moral or ethical dilemmas that might arise in a business setting Marketing ethics examines those ethical problems that are speci c to the domain of marketing Ethical Climate the set of values within a marketing rm or in the marketing division of any rm that guide decision making and behavior The American Marketing Association developed a general guide for ethical behavior which ows from the universal norms of conduct to the speci c values to which marketers should aspire 0 Need to aspire to be honest responsible fair respectful open and good citizens 0 Each subarea of marketing advertising pricing etc has it s own code of ethics To align personal and corporate goals rms need to have a strong ethical climate explicit rules for governing transactions including a code of ethics and a system for rewarding and punishing inappropriate behavior Corporate social responsibility refers to the voluntary actions taken by a company to address the ethical social and environmental impacts of its business operations and the concerns of its stakeholders o Balancing shortterm pro t needs with society s longterm needs 9 ensures the company s survival in a healthy environment Firms with strong ethical climates tend to be more socially responsible 0 Ex Dannon yogurt I Brings health food to as many people as possible and also donates money and food to the hungerrelief charity Feeding America I Socially responsible generally means going above and beyond corporate responsibility A Framework for Ethical Decision Making 0 1 Identify Issues 0 2 Gather Information and Identify Stakeholders I Stakeholders typically include the rm s employees and retired employees suppliers the government customer groups stockholders and members of the community in which the rm operates I Sometimes it also includes the environment as well 0 3 Brainstorm Alternatives I Create alternatives then management reviews and re nes these options leading to the nal step 0 4 Choose a Course of Action I Choose the course of action that generates the best solution for the stakeholders using ethical practices I Must investigate any potential legal issues associated with each alternative Analyzing the Marketing Environment Consumers are at the center of the marketing environment Factors that affect consumers immediate environment 0 The company s capabilities competitors and corporate partners 0 Company Capabilities I The rm itself has the ability to affect the consumers I EX Pepsi saw the demand for more bottled water due to an increasing healthy environment so Aqua na became one of their main drinks 0 Company Competitors I Marketers must understand their rm s competitors Strengths weaknesses and likely reactions to their marketing strategies 0 Company Corporate Partners I Parties that work with the rm suppliers manufacturers etc Macroenvironmental Factors aspects of the external environment that affect a company s business culture demographics social issues political environment technological advances etc o CDSTEP I Culture Demographics Social Issues Technological Advances Economic Situation PoliticalRegulatory Environment 0 Culture the shared meanings beliefs morals values and customs of a group of people Two dimensions of culture that marketers must take into account as they develop their marketing strategies are the culture of the country and that of a region with a country Country Culture entails easytospot visible nuances that are particular to a country such as dress symbols ceremonies language colors and food preferences and more subtle aspects which are trickier to identify Regional Culture the in uence of the area within a country in which people live 0 Demographics information about the characteristics of human populations and segments especially those used to identify consumer markets such as by age gender income and education Many stores who have reward cards use those to capture certain demographics and use those to sell more products you would like to you EX CVS targets to young female consumers with cosmetics Generation cohurt a group of people of the same generation They have similar purchase behaviors because they have shared similar experiences and are in the same stage of life Generation Z 0 Digital natives 0 Better appreciation for diverse cultures since they are connected with people around the world 0 Born into a world confronted by both national and international terrorism often facilitated by technology Generation Y Milennials 0 Includes more than 60 million people in the US 0 19772000 0 Want to balance work and life 0 Consider marriage secondary and not necessary to being good parents Generation X o 1965 l976 0 First generation of kids where both their parents worked latchkey kids 0 50 have divorced parents Baby Boomers 0 19461964 o Oldest Baby Boomers are now collecting social security 0 More focused on quality over price 0 Tend to research the products more online before purchasing Income 0 In the US there is a trend of wealthy households outpacing the poor and middle class I The wealthiest 1 control 346 of Americans total net worth 0 Families income has stayed slightly above in ation but their health care costs property taxes and tuition bills have risen much faster than in ation Education 0 Higher levels lead to a better job and higher income 0 Average annual salaries for each education level I No high school diploma 23000 I High school diploma 32500 I Bachelor s degree 54000 Gender 0 More rms are careful about gender neutrality Ethnicity o Minorities represent approximately one quarter of the US population I Tend to concentrate in metropolitan areas NYC LA Boston etc 0 Cannot market the same to the overall minority group I EX Asians are not usually marketed to as a whole but rather as a Chinese group Japanese group Korean group etc Social Trends 0 Greater emphasis on thrift health and wellness concerns greener consumers privacy concerns and timepoor societies 0 The recession has encouraged consumers to thrift shop more I More people read blogs and figure out how to save money with alternatives I Groupon and Living Social have become popular 0 Health and wellness concerns have increased dramatically I Obesity rates rising Americans wanting to live healthier lifestyles to prevent this Approximately 13 of adults are obese I Companies can no longer link popular kid cartoon characters with eating healthy EX Burger King cannot use Sponge Bob as its promotional character I The yoga market has been a very popular trend 0 Consumers wants greener products I Green marketing involves a strategic effort by firms to supply customers with environmentally friendly merchandise I New markets have emerged for recycled building products packaging paper goods and even clothes I Some green products are more expensive so companies must balance how much consumers are willing to pay extra for an environmentally friendly product I Greenwashing exploiting a consumer by disingenuously marketing products or services as environmentally friendly with the goal of gaining public approval and sales Do Not Call Registry registered phone numbers of consumers who do not want telephone solicitations A Time Poor Society 0 Many people spend much more time working and have much less leisure time I Younger people tend to multitask and do not pay as much attention to advertisements 0 Many marketers rely on technology to help them aid time poor consumers I Ex Self check out stations at grocery stores Marketing via Mobile Phone vs Laptop 0 Marketing on phone must be much more clear and concise because there is less ad space on a phone than there is on a laptop or desktop The economic situation affects the way companies market to their consumers Factors that in uence the state of an economy 0 Inflation the persistent increase in the prices of goods and services I Causes the purchasing power of the dollar to decrease 0 Foreign currency uctuations changes in the value of a country s currency relative to the currency of another country I As the euro becomes more expensive compared with the dollar merchandise made in Europe and other countries tied to the euro becomes more costly to Americans whereas US products become cheaper for Europe 0 Interest rates the cost of borrowing money PoliticalRegulatory Environment comprises political parties government organizations and legislation and laws 0 Organizations must understand and comply with any legislation regarding fair competition consumer protection or industryspecific legislation I Sherman Antitrust Act Clayton Act and RobisonPatman Act In a constantly changing marketing environment the marketers that succeed are the ones that respond quickly accurately and sensitively to their consumers Ch6 Consumer Behavior Consumer Decision Process 0 1 Need recognition 2 Information search 3 Alternative evaluation 4 Purchase 5 Post purchase 0000 1 Need recognition occurs when consumers recognize they have an unsatis ed need and want to go from their actual needy state to a different desired state 0 Ex When your stomach is hungry and you need to eat 0 Functional Needs pertain to the performance of a product or service I Shoes 0 Psychological Needs pertain to the personal grati cation consumers associate with a product or service I A pair of Louboutin shoes 0 A vast majority of goods and services are likely to satisfy both functional and psychological needs 2 Information search 0 lntemal Search for Information the buyer examines his or her own memory and knowledge about the product or service gathered through past experiences I Going to get a burrito at Chipotle because you remember it being so good rather than Moe s 0 External Search for Information the buyer seeks information outside his or her personal knowledge base to help make the buying decision I Talking with friends family or a salesperson I Looking at consumer reports or blogs 0 Factors affecting consumers search processes I l The perceived bene ts vs perceived costs of search Buying a house would require lots of searching time compared to buying a dollhouse I 2 The locus of control lntemal locus of control when consumers believe they have some control over the outcomes of their actions 0 They generally engage in more search activities External locus of control when consumers believe that fate or other external factors control all outcomes 0 They cannot control a poor or wise decision I 3 Actual or perceived risk Performance risk involves the perceived danger inherent in a poorly performing product or service 0 Ex Dress shrinking when getting dry cleaned Financial risk risk associated with monetary outlay and includes the initial cost of the purchase as well as the costs of using the item or service 0 Analyzing the purchase price of a dress plus the dry cleaning needed for maintenance Social risk the fears that consumers suffer when they worry others might not regard their purchases positively Physiological risk also called safety risk the fear of an actual harm should a product not perform properly 0 Car recalls Psychological risks associated with the way people will feel if the product or service does not convey the right image 0 Buying a dress to convey your professionalism 3 Evaluation of Alternatives 0 0 Universal sets includes all possible choices for a productcategory Retrieval sets those brands or stores that the consumers can readily bring forth from memory Evoked set comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision Evaluative criteria consist of a set of salient or important attributes about a particular product I Dress price style fit materials brand etc Determinant attributes product or service features that are important to the buyer and on which competing brands or stores are perceived to differ I Could be rational nutrition in food or psychological red soles on a pair of heels Consumer decision rules the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives I Compensatory decision rule at work when the consumer is evaluating alternatives and trades off one characteristic against another such that good characteristics compensate for bad ones Increased nutrition in cereal offsets the expensive price Multi attribute model a compensatory model of customer decision making based on the notion that customers see a product as a collection of attributes or characteristics 0 Allows the tradeoff between various factors to be incorporated explicitly into a consumer s purchase decision I Noncompensatory decision rule at work when consumers choose a product or service on the basis of a subset of its characteristics regardless of the values of its other attributes Only considering one factor ex taste for cereal 4 Purchase 0 Conversion rate percentage of consumers who buy a product after viewing it I One method of measuring it is the number of real or virtual abandoned carts in the retailer s store or website 5 Postpurchase O O Marketers are particularly interested in postpurchase behavior because it involves actual customers rather than potential customers Three possible positive postpurchase outcomes I 1 Customer Satisfaction Setting customer expectations too high via marketing and advertising could lead to loss of future sales when they become disappointed 0 Must build realistic expectations Marketers can stand behind their product 0 Offer guarantees or warranties Need to also get feedback and thank customers for their purchase I 2 Postpurchase Cognitive Dissonance an internal con ict that arises from an inconsistency between two beliefs or between beliefs of behavior Question the appropriateness of the purchase 0 Ex If you buy an expensive dress then go home and ask yourself if it was really worth it Especially likely for products that are expensive infrequently purchased do not work as intended and are associated with high levels of risk I 3 Customer Loyalty Loyal customers are very valuable to companies and marketers have designed customer relationship management CRM programs specifically to retain them 0 Passive customers those who do not repeat the purchase or recommend it to other 0 Negative word of mouth occurs when consumers spread negative information about a product service or store to others Factors in uencing the consumer decision process 0 1 Psychological factors I Motives a need or want that is strong enough to cause the person to seek satisfaction Maslow s Hierarchy of Needs a paradigm for classifying people s motives 5 needs 0 1 Physiological needs I Basic biological necessities of life food drink rest and shelter 2 Safety needs I Protection and physical wellbeing Ex Airbags smoke alarms etc o 3 Love needs I Our interactions with others Ex Haircuts deodorant etc o 4 Esteem needs I Inner desires Ex Yoga meditation books gyms Maintaining a happy and healthy outlook on life 5 Selfactualization O O I When you feel completely satis ed with your life and how you live EX Driving a Hyundai because you personally like it rather than caring what others think about your car I Attitude a person s enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea Consists of 3 components 0 1 Cognitive Component I Re ects what a person believes to be true 0 2 A ective Component I Emotions or what a person feels about the issue at hand I Includes the dislike or like of something 0 3 Behavioral Component I The actions a person takes with regard to the issue at hand I Perception the process by which we select organize and interpret information to form a meaningful picture of the world I Learning a change in a person s thought process or behavior that arises from experience and takes place throughout the consumer decision process I Lifestyle the way consumers spend their time and money to live 0 2 Social Factors I Consumer decision process is also affected by family reference groups and culture I Reference group one or more persons whom an individual uses as a basis for comparison regarding beliefs feelings and behaviors EX Family friends celebrities coworkers etc They affect buying decisions by offering information providing rewards for specific purchasing behaviors and enhancing a consumer s selfimage 0 Can provide information through conversation or observation I Culture shared meanings beliefs morals values and customs of a group of people 0 3 Situational Factors I Factors speci c to the situation Who are you buying it for What is the occasion I Store atmosphere salespeople crowding in places instore demonstrations promotions and packaging I Our temporal state affects whether we buy something too Shopping while in a grumpy mood may deter you away from buying a product you may have bought in a more pleasant mood Involvement the consumer s degree of interest in the product or service 0 The impressions of the lowinvolvement consumer are likely to be more super cial 0 Extended Problem Solving a purchase decision process during which the consumer devotes considerable time and effort to analyzing alternatives Often occurs when consumers perceive a lot of risk 0 Limited Problem Solving occurs during a purchase decision that calls for at most a moderate amount of time and effort Impulse Buying a buying decision made by customers on the spot when they see merchandise Habitual Decision Making a purchase decision process in which consumers engage with little conscious effort Occurs with strong brands and store loyalty Consumers do not even consider other brands or stores Ch 9 Segmentation Targeting and Positioning The Segmentation Targeting and Positioning Process 0 1 Establish Overall Strategy or Objectives Segmentation strategy must be consistent with the firm s mission and objectives as well as its current situation strengths weaknesses opportunities and threats 9 SWOT o 2 Segmentation Methods Use a particular method or combination of methods to segment the market Develops descriptions of the different segments which helps firms better understand their customers Geographic segmentation organizes consumers into groups on the basis of where they live Demographic segmentation groups consumers according to easily measured objective characteristics such as age gender income and education Psychographics how consumers actually describe themselves Involves knowing and understanding three components selfvalues selfconcept and lifestyles Selfvalues goals for life Selfconcept the image people ideally have of themselves Lifestyle the way we live Value and Lifestyle Survey VALS a psychographic tool that classifies consumers into 8 segments innovators thinkers believers achievers strivers experiencers makers or survivors The 3 primary motivators of US consumers are ideals achievement and selfexpression Psychographics are more expensive as a means to identify potential customers I Bene t Segmentation groups consumers on the basis of the bene ts they derive from products or services I Behavioral Segmentation divides customers into groups on the basis of how they use the product or service Occasion segmentation behavioral segmentation based on when a product or service is purchased Loyalty segmentation behavioral segmentation that strategizes in investing in loyalty initiatives to retain the rm s most pro table customers I Marketers often blend many of the segmentation methods Geodemographic segmentation the grouping of consumers on the basis of a combination of geographic demographic and lifestyle characteristics 0 3 Evaluate Segment Attractiveness I Marketers rst must determine whether the segment is worth pursuing Is the segment identi able substantial reachable responsive and pro table o Identi able 9 who is within their market 0 Substantial 9 measure the size of the market I Must be large enough to gain pro ts 0 Reachable 9 market must be able to be reached through persuasive communications and product distributions 0 Responsive 9 must react similarly and positively to the rms offering 0 Pro table 9 need market to bring revenues I Consider current size and expected growth rate market competitiveness and market access I Segment pro tability segment size segment adoption percentage purchase behavior pro t margin percentage xed costs o 4 Select Target Market I Undifferentiated targeting strategy everyone might be considered a potential user of its products Used for many basic commodities like sugar or salt I Differentiated targeting strategy several market segments with a different offering for each EX Conde Nast has many different magazines for many different segments such as Vogue The New Yorker Golf Digest etc I Concentrated targeting strategy a single primary target market and focuses all its energies on providing a product to t that market s needs Micromarketing onetoone marketing an extreme form of segmentation that tailors a product or service to suit an individual customer s wants or needs EX Nike ID 9 customize your own sneakers Cookies Small text les a website stores in a visitor s browser Provides a unique identi cation of each potential customer who visits and details how the customer has searched the site o 5 Develop Positioning Strategy Process of de ning the marketing mix variables so that target customers have a clear distinctive desirable understanding of what the product does or represents in comparison with competing products Value proposition communicates the customer bene ts to be received from a product or service and thereby provides reasons for wanting to purchase it Intersection of what the customer needs and what the rm offers Maintaining a unique value proposition can be sustained in the long term only in monopoly situations or possibly monopolistic competition situations Main value proposition components 0 Target market 0 Offering name or brand 0 Product service category or concept 0 Unique point of differencebene ts o Positioning Methods Value re ects the relationship of bene ts to costs or what the consumer gets for what he or she gives Very popular positioning method because the relationship of price to quality is among the most important considerations for consumers when they make a purchase decision o Positioning Using Perceptual Mapping Perceptual Map displays in two or more dimensions the position of products or brands in the consumer s mind Ideal Points the position at which a particular market segment s ideal product would lie on a perceptual map Marketers follow 6 steps to derive a perceptual map 1 Determine consumers perceptions and evaluations of the product or service in relation to competitors 0 EX What makes consumers choose one brand over the other 2 Identify the market s ideal points and size 3 Identify competitors positions 4 Determine consumer preferences 5 Select the position 6 Monitor the positioning strategy
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