MKT 301 Exam 1 Notes
MKT 301 Exam 1 Notes 80302 - MKT 3010 - 002
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80302 - MKT 3010 - 002
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Popular in Marketing
80302 - MKT 3010 - 002
verified elite notetaker
This 23 page Study Guide was uploaded by Nicole Dunne on Tuesday September 15, 2015. The Study Guide belongs to 80302 - MKT 3010 - 002 at Clemson University taught by Carter Willis McElveen in Summer 2015. Since its upload, it has received 88 views. For similar materials see Principles of Marketing in Marketing at Clemson University.
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Date Created: 09/15/15
Chapter 1 Overview of Marketing What Is Marketing 0 Marketing is 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 Good marketing requires thoughtful planning with an emphasis on the ethical implications of any of those decisions on society in general Firms develop a marketing plan that specifies the marketing activities for a speci c period of time The marketing plan also is broken down into various componentshow the product or devices will be conceived or designed how much it should cost where and how it will be promoted and how it will get to the customer 0 Marketing Helps create value ProductionOriented Era 20th century most rms were production oriented and believed that a good product would sell itself SalesOriented Era 19201950 manufactures produced more than customers really wanted to buy so they became sale oriented Depended on heavy doses of personal selling and advertising 0 MarketOriented Era buyer s market consumers had choices they were able to make purchases on decisions on the basis of factors such as quality convenience and price Manufactures and realtors focused on what consumers wanted and needed 0 Value Bases Marketing Era value re ects the relationship it costs or what you get for what you give Value Coe creation customers can act as collaborates to create the product or service Nike customs Occurs in many settings Can be performed by both individuals and organizations BZC business to consumer marketing 0 Internet auctions and social media 0 Consumers to consumers C2C Requires product place price and promotion decisions 0 Product creating value by developing a variety of offerings including goods services and ideas to satisfy customers needs Goods are items that you can physically touch 0 Services are intangible customer bene ts that are produced by people or changes and cannot be separated from the producer hotels stub hub ldeas include concepts opinions and philosophies intellectual concepts such as these also can be marketed talks about wearing helmets 0 Price Capturing Value 0 Everything has a pricedoesn t have to be monetary Everything the buyer gives uptime money energy in exchange for the product 0 Place Delivering the Value Proposition 0 Place represents all activities necessary to get the product to the right customer when that customer wants it 0 Marketing channel management supply chain management is the set of approaches and techniques that rms employ to efficiently and effectively integrate their supplies manufactures warehouses stores and other rms involved in the transaction into a seamless value chain in which merchandise is produced and distributed in the right quantities to right location in right time 0 Promotion Communicating the Value Proposition 0 Promotion is communicating by a market that informs persuades and reminds potential buyers about a product or service to in uence their opinions and elicit a response Entails an exchange 0 Exchange the trade of things of value between the buyer and the seller so that each is better off as a result 0 Apple recommendations Satisfying customer needs and wants 0 Knowing who wants zero calorie drinks Marketing Affects Various Stokeholds 0 Partners in the supply chain include wholesalers retailers or other intermediaries such as transportation or warehousing companies How does Marketing Firms Become More Value deen 0 Sharing Information 0 Marketers share info about customers and competitors and integrate it across the rm s various departments 0 Balancing Bene ts with Costs 0 Value oriented markets constantly measure the bene ts that customers perceive against the cost of their offerings satisfy customer s needs keep cost low and develop long term loyalties Building Relationships with Customers o Relational orientation rms focus on their lifetime pro tability of the relationship not how much money is made during each transaction 0 Apple makes its innovations compatible with existing products 0 Customer relationship management a business philosophy and set of strategies programs and systems that focus on identifying and building loyalty among the rm s most valued customers Connecting with consumers by using Social and Mobile Media 0 Why is Marketing Important 0 Marketing Expands Firms Global Presence 0 Marketing is Pervasive across Marketing Channel Members Firms do not work in isolation Manufactures buy raw materials and components from suppliers which they sell to whole sellers retailers or other business after they have turned the material into products 0 Marketing Enriches Society Greener products healthier food options and safer products 0 Marketing Can Be Entrepreneurial Entrepreneurs launch ventures that aim to satisfy un lled needs Chapter 2 Developing a Marketing Strategy and a Marketing Plan 0 A marketing strategy identi ed a rm s target markets a related marketing mix 4 P s and the bases on which the rm plans to build a sustainable competitive advantage 0 A sustainable competitive advantage is an advantage over the competition that is not easily copied d thus can be maintain over a long period of time 0 Customer excellence focuses on retaining loyal customers and excellent customers service Nordstrom Retaining loyal customers strong brand unique merchandise and superior customers service View customers with a lifetime value perspective rather than a transactionbytransaction Customer Service once a marketer has earned a good service reputation it can sustain this advantage for a long time because a competitor is hard pressed to develop a comparable reputation 0 Operational excellence achieved through ef cient operations and excellent supply chain and human resource management Firms with strong relationships may gain exclusive rights to sell merchandise in a particular region obtain special terms of purchase that are not available to competitors or receive popular merchandise hat may be in short supply Net ix 0 Product excellence having products with high perceived value and effective branding and positioning Investing in their brand itself positioning their product or service using a clear distinctive brand image and constantly reinforcing that image Google McD Coke o Locational excellence having a good physical location and Internet presence Location location location Starbucks 0 Multiple Sources of Advantage needed to build a sustainable competitive advantage 0 The marketing plan written document composed of analysis of the current marketing situation opportunities and threats for the rms marketing objectives and strategy speci ed in terms of the four P s action programs and projected or proforma income statements 0 Planning Phase Step 1 o The mission statement a broad description of a rm s objectives and the scope of activities it plans to undertake o Attempts to answer two questions What type of business are we What do we need to do to accomplish our goals and objectives 0 These fundamental questions must be answered at the highest corporate levels before marketing executives can get involved 0 Maximize stockholders wealth by increasing the value of rms stock and playing dividends 0 Marketing myopia de ning a business in terms of goods and services rather in terms of the bene ts that customers seek Planning Phase Step 2 o Firm should perform a situation analysis using a SWOT analysis that assesses both the internal environment with regard to its Strengths things company does well Weaknesses things company does not do well Opportunities conditions in the external environment that favor strengths Threats conditions in the external environment that do not relate to existing strengths or favor areas of current weakness 0 Environmental Scanning helps identify opportunities and threats 0 Guidelines for designing marketing strategy based on 6 macroeconomic forces cultural demographic social technological economic and political Planning Phase Step 3 Identifying and Evaluating Opportunities using STP o STP segmentation targeting and positioning the processes of segmentation targeting and positioning that rms use to identify and evaluate opportunities for increasing sales and pro ts Segmentation 0 Market segment consisting of consumers who respond similarly to a rm s marketing efforts 0 Market segmentation the process of dividing the marketing into groups of customers with different needs wants or characteristicswho therefore might appreciate products or services geared especially for them Which segments of customers can you satisfy Evaluation of each segments attractiveness How are you positioning the product within the target segments Targeting Target marketingtargeting the process of evaluating the attractiveness of various segments and then deciding which to pursue as a market Positioning Marketing positioning involves the process of de ning the marketing mix variables so that target customers have a clear distinctive desirable understanding of what the product does of represents in comparison with competing products Firms are most successful when they focus 0 opportunities that build on their strengths relative to those of their competition 0 Planning Phase Step 4 Implement Marketing Mix and Allocate Resources 0 Implement the 4 P s 0 Product and Value Creation Products which include services constitute the rst of the four P s Because the key to the success of any marketing program is the creation of value rms attempt to develop products and services that customers perceive as valuable enough to buy Costbased pricing Competitor based pricing Valuebased pricing 0 Price and Value Capture Value based marketing requires rms to charge a process that customers perceive as giving hem a good value for the product they receive 0 Place and Value Delivery 0 Must be able to make the product or service readily accessible when and where the customer wants it 0 Promotion and Value Communication 0 Communicate to their customers through mediaTV radio magazines sales forces and daily internet 0 Planning Phase Step 5 Evaluate Performance Using Marketing MetricsMake Adjustments o A metric is a measuring system that quanti es a trend dynamic or characteristic 0 Metrics are used to explain why things happened and to project the future 0 Who is accountable for Performance At each level of an organization the business unit and its manager should be held accountable only for the revenues expenses and pro ts that they control The metrics sued to evaluate a rm vary depending on 1 the level of organization which the decision is made and 2 the resources the manager controls Performance Objectives and Metrics Compare a rm s performance over time or to competing rms sing common nancial metrics such as sales and pro ts View the rm s products or services as a portfolio Financial Performance Metrics Commonly used metrics to assess performance include revenues sales and pro ts Sales are a measure of a rm s activity level Portfolio Analysis Management evaluates the rm s various products and businesses its portfolioand allocates resources according to which products are expected to be the most pro table for the rm in the future Strategic business unit SBUproduct line division of the rm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives Goodyear tires are organized by NA Europe Middle East Africa Latin America and AsiaPaci c A product line is a group of products that consumers may use together or perceive as similar in some way Goodyear s ling of product could be a car van SUV and light truck while another line could be racing tires or aviation tires Market share is the percentage of market accounted for by a speci c entity and is used to establish the product s strength in a particular market Usually discussed in units revenue or sales Relative market share a measure of the product s strength in a particular market de ned as the sales od the focal product divided by the sales achieved by the largest rm in the industry Market growth rate the annual rate of growth of the speci c market in which the product competes HIGH Growth Strategies RELATIVE MARKET SHARE O 0 High market growth high market share Cash neutral require a heavy resource investment in such things as promotions and new production facilities to fuel their rapid growth Ex MySpace Start off great then can t maintain Cash Cows O O O 0 Low market growth low market share Cash generating Received heavy investments Ex tooth paste Problem Child Question Mark O 0 00000000 High market growth low market share Most managerially intensive products in that they require signi cant resources to maintain and potentially increase their market share Cash absorbing Ex coke fuze Low market growth low market share Cash neutral Losing money lnvest money doesn t do anything Dogs are not destined for stardom and should be phased out unless they are needed to complement or boost the sales of another product or for competitive purposes i Hz at Existing Pmde lHlew Hindualts Existing M lll REE Product Development Penetration Development Mafke t Diversification Market Penetration 0 O O Employs the existing marketing mix and focuses the firm s efforts on existing customers Requires greater marketing efforts Ex Rewards card Market Development 0 O O Employs the exiting marketing offering to reach new segments whether domestic or international Riskier because they must deal with government regulations cultural traditions supply chains and language Ex going international Product Development 0 0 Offers a new product or service to a firm s current target market Ex stay open later Diversi cation O O Introduces a new product or service to a market segment that currently is not served Related diversification the current target market andor marketing mix shares something in common with the new opportunity Unrelated diversification a growth strategy where by a new business lacks any common elements with the present business Chapter 5 Analyzing the Marketing Environment 0 Target Market de ned group most likely to buy a product 0 Changes as consumers age 0 External elements change consumers desires o A Marketing Environment Analysis Framework 0 The centerpiece is the consumers may be in uenced directly by the immediate actions of the focal company the company s competitors or corporate partners that work with the rm to make and supply products and services to consumers 0 Consumers are indirectly in uenced by macroeveoment which includes various impacts of culture demographics and social technological economic and politicallegal factors 0 Look at chart in notesbook pg 97 o The Immediate Environment 0 Company capabilities Focus on satisfying customer needs that match their core competencies Existing knowledge facilities patents etc applies to new markets new products 0 Competitors Critical that the marketers understand their rm s competitors including their strengths weaknesses and likely reactions to the marketing activities that their own rms undertakes Competitive intelligence Cl Proactive rather than reactive strategy 0 Corproate Partners Firms are part of alliances Align with competitors supplies etc Just in time systems JIT From factory to retailer o Macroenviromental Factors 0 Aspects of their external environment that affect a company s business such as the culture demographics social issues technological advances economic situation and politicalregulatory environment 0 Culture Country s 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 how people refer to coke 0 Demographics information about the human characteristics of human populations and segments especially those used to identify consumers markets such as by age gender income and education People are the basis for any market Demographic characteristics have their own needs values and consumption patterns General Cohorts a group of people of the same generationtypically have similar purchase behaviors because the have shared experiences and are in the same stage of life 0 Generation Z digital natives people in this group were born into a world that already was full of electronic gadgets and digital technologies such as the internet and social network 20012014 0 O O O O O 0 Ages 013 Purchasing power of 43 billion annually Parent spend 600 billion on them annuaHy Realistic amp savers View tv adds as quotjust advertisingquot Aspire to be olderbut are still children Want to be uniquebut also t in o Millennia39sGeneration Y generational cohort of people born between 1977 and 2000 biggest cohort since the original postwar baby boom O 0000 00 Strong emphasis on balancing work and lifethese young adults want a good job but also want to live in location that supports their lifestyle 733 billion in pushing power Ethically diverse Fluent with digital technology personalization and product customization are key to marketing success Birthdays take an entire week openminded and multicultural job satisfaction over money or opportunity why they will be the generation to save us all believe they can change the world don t believe in hierarchy resourceful and adaptable sense of mission think before they act 0 Generation X 19651976 O 0000 O O OOOOltO O O 0 Most educate generation to date Less materialistic than other groups Skeptical of marketing Careful spending Independent value autonomy and freedom Helicopter parents Enjoy greater prosperity than their parents Tend tog et marries later and buy house later in life considerable spending power Astute customers Demand convenience and tend to be less likely to believe advertising First generation to fully embrace the internet Most socially liberal than baby boomers Boomers 19461964 Wealthiest generation in history Born after WWII lndividualistic Leisure time represents a high priority for them Believe they will always be able to take care of themselves Obsession with maintaining their youth Retailers recognize the immense buying power of the aging baby boomers so they cater directly to them with larger fonts in signage staff available to read the small pricing on product packing and seating options in stores Targeted them with healthiest food oonns Levi jeanscausal dress Heavy internet users and tend to do research before buying o Represent strong targets for nancial services 0 See work as more central to their live than later generations 0 50 of customer spending 0 Holds 34 of nations nancial assets 0 Seniors 0 quotGreatest Generationquot 0 born in before 1946 0 most likely of complain needs special attention when shopping 0 pay in cash 0 not into designer labels lncome Has grown more polarized the highest income groups are now growing whereas many middle and lower income groups real purchasing power keeps declining Purchasing power is tied to income Census bureau tracks income Many middle class families feel the decline in purchasing power in recent years Educa on Higher levels of education lead to better jobs and higher incomes Related to income which determined spending power High school graduatescollege students spend money differently Gender Malesfemales roles have been blurred More rms are careful about gender neutrality Ethnicity US continues to grow diverse due to immigration Spending power of ethnicity markets in 2013 o Hispanics 1 trillion 0 African Americans 713 billion 0 Diversity can result in bottomline bene ts to companies Growth of these groups are outpacing Caucasian market Marketing to Hispanic markets 0 Diversity creates challenges for targeting this grouphyperlcoal is critical 0 Very brand loyal not aware of many US brands o Ambicultural groups ability to switch between Z cultures seamlessly Marketing to African Americans 0 More aggressive consumers of media and show more frequently Favor smaller retail outlets like drug stores dollar stores and convenience stores Marketing to Asian Americans Younger better educated have highest average income of all groups 0 Fastestgrowing minority population 0 Leading segment of online shopping 77 made internet purchases in 2013 compared to 61 of general population 0 Cultural diversity within Asian American market complicates promotional efforts Social Trends 0 Th rift O 0000 0 Recession and housing crash have prompted many people to embrace the idea of spending less as virtuous pursuit Attempting to save more Spend less on luxuries try not to dip into their savings like the thrill of treating themselves to a small luxury lipstick effect groupon living social 0 Health and Wellness Concerns O O O O obes y advertising proportionate sizes of food consumers interest are improving their health yoga workout clothes widespread pandemics or epidemics 0 Greener consumers 0 Green marketing involves a strategic effort by firms to supply customers with environmentally friendly merchandise Customers appreciate rms efforts to supply them with environmentally friendly merchandise Green washing the idea of marketing a product as green when it may not actually be Privacy Concerns 0 People feel their privacy is being compromised 0 Security breaches in systems A TimePoor Society 0 Both parents work and kids are busier than ever 0 Consumers have many more choices regarding leisure time 0 Many consumers multitask divided attention can t focus on advertising 0 Retailers are making their products available to customers whenever catalogs internet shopping options Technological advances Constant access to the internet everywhere Increasingly dependent on help they can provide especially in terms of making decisions and communicating with others New products new forms of communication and new retail channels Net ix recommendations Economic Situation ln ation the persistent increase in the prices of goods and services Increasing prices cause the purchasing power of the dollar to decline dollar buys less than it use to Foreign currently uctuations changes the value of a country s currency relative to the currency of another country can in uence consumer spending Combined with in ation and interest rates affect rms ability to market goods and services Interest rates represent the cost off borrowing money PoliticalRegulatory Environment Politicalregulatory environmental comprises political parties government organization and legislation and laws Must comply with government regulations Competitive practice and trade legislation Responding to the Environment o The marketers that succeed are the ones that respond quickly accurately and sensibly to their customers Chapter 6 Consumer Behavior The consumer Decision Process 0 The consumer decision process represents the steps that consumers go through before during and after taking purchases 1 Need Recognition O The beginning of the consumer decision process occurs when consumers recognize they have an unsatis ed need and watch to go from their actual needy state to a different desired state Ex stomach tells you are hungry and you would rather not have that particular feeling eat food Wants are goods or services that are not necessary needed but are desired Functional Needs pertain to the performance of a product or services Psychological Needs pertain to the personal grati cation consumers associate with a product of service buying 1000 pair of shoes 2 Search for Information Search for information about the various opinions that exist to satisfy that need lnternal search for information the buyers examines his or her own memory and knowledge about the product or service gathered through past experiences External search for information the buyer seeks information outside his or her personal knowledge base to help make the buying decision Ex talking with friends family or salesperson 0 Can scour commercial media for unsponsored and unbiased information consumer reports 0 Magazines TV radio internet Factors Affecting Consumers Search Process 0 The perceived bene ts vs perceived cost of search Is it worth the time and effort to search information about a product or service Ex house vs doll house 0 The Locus of Control lnternal locus of control refers to when consumers believe they have some control over the outcomes of their actions in which case they general engage in more search activities External locus of control refers to when consumers believe that fate or other external factors control all outcomes 0 Actual of Perceived Risk Performance risk involves the perceived danger inherent in a poorly performing product or service ex dress is prone to shrinking in the wash Financial Risk rise associated with a monetary outlay includes the initial cost of the purchase as well as the costs of using the item or service Ex easytocare for wash Social Risk the fears that consumers suffer when they worry others might not regard their purchases positively Physical risk safety risk the fear of an actual harm should a product not perform properly ex buying a car Psychological risks associated with the way people will feel if the product or service does not convey the right image 3 Evaluation of Alternatives Occurs while the consumer is engaged in the process of information search 0 He or she must sift trough the choices available and evaluate the alternatives Attribute Sets 0 Universal sets include all possible choices for a product category but because it would be unwieldy for a person to recall all possible alternatives for every purchase decision marketers tend to focus on only a subset of choices Retrieval sets those brands or stores that can be readily brought forth from memory Evoked set which comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision Actually make the purchase Evaluative criteria consists of salient or important attributes about a particular product Price brand reputation t Determinant attributes product or service features that are important to the buyer and on which competing brands or stores are perceived to differ health bene ts or psychologically based ones that will make your decision 0 Consumer Decisions Rules 0 The set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives o Compensatory decision rue assumes that the consumer when evaluating alternative trades off one characteristic against another such that good characteristics compensate for bad characteristics 0 Multiattribute model a compensatory model of customer decision making based on the notion that customers see a product as a collection of attributes or characteristics The model uses a weighted average score based on the importance of various attributes and performance of those issues 0 Noncompensatory decision rue they choose a product or service on the basis of one characteristic or one subset of a characteristic or one subset of a characteristic regardless of the values of its other attributes 4 Purchase and Consumption Conversion rate measure how well they have converted purchase intentions into purchases ex number of real of virtual abandoned carts in the retailer s store or website 0 Opening more check outlines having a lot in stock 0 Build realistic consumption 0 Alert customer when their product in their cart is almost sold out Ritual consumption make on regular basis 5 Post purchase Customer satisfaction 0 O O O 0 Build realistic expectations not too high and not too low Demonstrate correct product useimproper can cause dissatisfaction Stand behind the product or service b producing money back guarantees and warranties Encourage customer feedback which cuts down on negative word of mouth and helps marketers adjust their offerings Periodically make contact with customers and thanks them for their support Post purchase Cognitive Dissonance o The psychologically uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduced the dissonance buyer s remorse Likely for products that are expensive are infrequently purchases do not work as intended and re associated with high levels of risk Customer Loyalty o Marketers attempt to solidify a loyal relationship with their customers Undesirable Consumer Behavior 0 Negative word of mouth occurs when consumers spread negative information about a product service or sore to others 0 Internet is productive and effective method to spread negative word of mouth 0 Firms provide customer services representatives Factors In uencing the Consumer Decision Process Psychological Factors 0 Motives A motive is a need or want that is strong enough to cause to person to seek satisfaction Maslow s Hierocracy of Needs a paradigm of classifying people s motives It argues that when lowerlevel more basic needs physiological and safety are ful lled people turn to satisfying their highlevel human needs social and personal Physiology needs those relating to the basic bioogica necessities of life food drink rest and shelter Safety needs pertains to protection and physical well being Ex airbags Love needs needs expressed through interactions with others Ex makeup haircuts deodorant Esteem needs needs that enables people to ful ll inner des es Selfactualization when a person is completely satis ed with his or her life 0 Attitude a person s enduring evaluation of his or her feelings about and behavioral tendencies towards an object or idea Cognitive component re ects a person s belief system or what we believe to be true Affective component re ects what a person feels about the issue at hand his or her like or dislike of something Behavioral component comprises the actions a person takes with regard to the issue at hand 0 Perception the process by which people select organize and interpret information to form a meaningful picture of the world Selective exposure consumer notices certain situations and ignores others Selective distortion consumer changes or distorts information that con icts with feelings of beliefs Selective retention consumer remembers only that information that supports personal belief 0 Learning a change in a person s thought process of behavior that arises form experience and takes place throughout the consumer decision process Learning affects both attitudes and perceptions Experiential an experience changes behavior Conceptual not learned through direct experience 0 Lifestyle refers to the ay a person lives his or her life to achieve goals Lifestyles involves decisions in spending time and money SociaIFactors 0 Family What the entire family will use 0 Reference Groups one of more persons whom an individual uses as a basis for comparison regarding beliefs feelings and behaviors Family friends coworkers famous people Offer information Provide rewards for speci c purchasing behaviors Enhance a consumer s selfimage 0 Culture shared meanings beliefs morals values and customs of a group of people 0 Individual GenderageIife cycle personality selfconcept Situational Factors factors affecting the consumer decision process those that are speci c to the situation that may override or at least in uence psychological and social issues 0 Purchase situation For a friend or yourself 0 Shopping Situation Store atmosphere sales people crowding instore demonstrations promotions packaging 0 Temporal state Mood swings Involvement and Consumer Buying Decisions lnvolvement consumer s interest in a product or service 0 Extended problem solving a purchase decision process during which the consumer devotes considerable time and effort to analyzing alternatives often occurs when the consumer perceived that the purchase decisions entails a lot of risk 0 Limited problem solving occurs during a purchase decision that calls for at most a moderate amount of effort and time o lmpulse buying a buying decision made by customers on the spot when they see the merchandise 0 Habitual decision making a purchase decision process in which consumers engage with little conscious effort
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