Exam 1 Study Guide
Exam 1 Study Guide BADM 3401
Popular in Basic Marketing Management
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This 23 page Study Guide was uploaded by Camille Duarte on Sunday September 20, 2015. The Study Guide belongs to BADM 3401 at George Washington University taught by Sung Ham in Summer 2015. Since its upload, it has received 89 views. For similar materials see Basic Marketing Management in Business Administration at George Washington University.
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Date Created: 09/20/15
Exam 1 Study Guide Creating Customer Value and Engagement Marketing 0 A process by which companies create value for customers and build strong customer relationships to capture value from customers in return Understanding the Marketplace and Customer Needs 0 Customer needs wants and demands 0 Needs states of deprivation 0 Physical food clothing warmth safety 0 Social belonging and affection 0 Individual knowledge and selfexpression o Wants 0 Form that needs take as they are shaped by culture and individual personality Demands o Wants backed by buying power Designing a CustomerDriven Marketing Strategy 0 Market offerings combination of products services information or experiences offered to a market to satisfy a need or want 0 Exchange act of obtaining a desired object from someone by offering something in return 0 Markets set of actual and potential buyers Selecting which customers to serve 0 Market segmentation refers to dividing the markets into segments of customers 0 Target marketing refers to which segments to go after 0 Value proposition set of bene ts or values a company promises to deliver to customers to satisfy their needs Marketing Management Orientations Production concept 0 ldea that consumers favor products that are available or highly affordable Product concept 0 ldea that consumers favor products that offer the most quality performance and features 0 Selling concept 0 ldea that consumers will not buy enough of the rm s products unless it undertakes a large 0 Marketing concept 0 ldea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors Societal marketing concept company should make good marketing decisions by considering consumers wants the company s requirements consumers long term interests and society s long run interests 0 The marketing mix set of tools four Ps the firm uses to implement its marketing strategy Building Pro table Relationships and Creating Customer Delight Customer Relationship Management CRM the overall process of building and maintaining pro table customer relationships by delivering superior customer value and satisfaction 0 Customer lifetime value value of the entire stream of purchases that the customer would make over a lifetime of patronage Share of customer portion of the customer s purchasing that a company gets in its product The Marketing Environment Microenvironment Consists of the actors close to the company that affect its ability to serve its customers 0 Company suppliers marketing intermediaries competitors publics customers The Company 0 Top management nance RampD purchasing operations and accoun ng Suppliers 0 Provide resources to produce goods and services Competitors 0 Firms can gain strategic advantage by positioning their offerings against competitors offerings Marketing Intermediaries Help the company to promote sell and distribute its products to nal buyers 0 Resellers physical distribution rms marketing service agencies nancial intermediaries PubHcs 0 Any group that has an actual or potential interest in or impact on an organization s ability to achieve its objectives 0 Financial publics in uences ability to obtain funds banks investment analysts stockholders Media publics news features editorial opinion Government publics lawmakers and enforcers Citizenaction publics various interest groups Local publics neighborhood residents and community organizations 0 General public 0 Internal publics workers volunteers board of directors Customers Consumer markets OOOO Business markets Reseller markets Government markets International markets Macroenvironment Forces that affect the actors in the microenvironment Demographics Age Trends Baby Boomers 19461964 35 percent of the population with 70 of the nations disposable income 78 miion Generation X 19651976 sometimes overlooked due to small size 49 million Skeptical consumers Iess materialistic family comes rst embraces new technology Generation Y Millennials 19772000 these are the children of the boomers 83 million Financially strapped comfortable with digital technology twoway brand conversations interact with company Generation Z 2000 tweens 812 20 million and spend 43 billion individually and in uence 200 B of self and parent s spending Demographics Family Structure Out of 122 million households 0 19 married with kids 0 28 married without kids 0 18 single parents 0 34 nonfamily households Increasing number of working women 58 of women and 40 are breadwinners Increasing number of dualincome households 58 and decline of men only work households 28 Increasing number of stayathome dads 18 increase since 1994 158000 dads at home Other Demographics Geographic shifts o Toward sunbelt states 0 Toward suburbs and micropolitan areas empty nesters o More working from home Better educated more white collar more professional population Increasing diversity 0 64 Caucasian 17 Hispanic 13 African American 5 Asian American 0 Gay and lesbian disabled adults Economic Environment Are the factors that affect consumer purchasing power and spending patterns Changes in consumer spending Income distribution 0 Top 5 earn more than 22 of income 0 Top 20 earn 51 of income 0 Bottom 40 earn 115 of income Natural environment 0 Include shortages of raw materials increased pollution increased government intervention and a greater attention to environmentally sustainable strategies Technological environment 0 Most dramatic force in changing the marketplace It creates new products and opportunities and kills off older products Political and Legal environment 0 Increasing legislation legislation affecting business around the world has increased steadily over the years 0 Business legislation has been enacted for a number of reasons protect companies from each other Protect consumers from unfair business practices Protect the interests of society against unrestricted business behavior 0 Increased emphasis on ethics such as socially responsible behavior and causerelated marketing Cultural Environment 0 Core cultural values persistent and are passed on from parents to children and are reinforced by schools churches business and gov 0 Secondary Cultural Values people s view of themselves others of organizations of society of nature of the universe 0 Ex Natural and organic food industry Whole foods Responding to the Marketing Environment Views on Responding Uncontrollable react and adapt to forces in the environment Proactive aggressive actions to affect forces in the environment Reactive watching and reacting to forces in the environment How has restaurant industry been affected by the environment Competitive Marketing Strategies How companies analyze their competitors and develop value based strategies for pro table customer relationships Identifying Competitors Firms offering similar products or services to the same customers at similar prices All rms with the same product or class of products All rms making products that supply the same service All rms competing for the same consumer dollar Who are McDonald s competitors Burger King KFC subway pizza hut dominos Competitor Analysis Assessing competitors 0 Determining competitors objectives 0 Current pro ts market share growth technological leadership service leadership ldentifvind competitor s strategies 0 Strategic group uses the same strategy and offers strongest competition 0 Understand how each rm delivers value to its customers 0 Product quality features and mix customer services pricing distribution coverage sales force strategy advertising and sales promotion strategy RampD manufacturing purchasing nancial and other strategies Assessing competitors strengths and weaknesses What can our competitors do 0 Benchmarking comparing your rm to leading rms 0 Estimating competitors reactions o What will our competitor s do 0 Selecting Competitors to Attack and Avoid 0 Strong versus weak Weak competitors require fewer resources and less time but little to gain Strong competitors help sharpen abilities and succeeding against them often provides greater returns but high risk Android vs Apple vs Blackberry 0 Close versus distant Subway Firehouse subs JimmyJohns Potbelly 0 Good versus bad Good competitors play by the rules 0 O 3900 Bad competitors break the rules by buying market share rather than earning it taking large risks and playing by their own rules 0 Finding Uncontested Market Spaces Blue Ocean Strategy Basic Competitive Strategies Overall cost leadership strategy company achieves the lowest production and distribution costs and allows it to lower its prices and gain market share Differentiation strategy company concentrates on creating a highly differentiated product line and marketing program so it comes across as an industry class leader Focus strategy company focuses its effort on serving few market segments well rather than going after the whole market Middle of the road strategy usually the worst do everything but nothing well Competitive Positions and Strategies Market Leader the rm with the largest market share and leads the market price changes product innovations distribution coverage and promotion spending Market challenges rms ghting to increase market share Market followers runnerup rms that want to hold onto their market share Market nichers rms that serve small market segments not being pursued by other rms Market Leader Strategies Expand total demand by developing 0 New users 0 New uses 0 More usage of its products Protect current market by 0 Fixing or preventing weaknesses that provide opportunities to competitors 0 Ful ll its value promise 0 Maintain consistent prices that provide value 0 Keep strong customer relationships 0 Continuous innovation 0 Expand market share by O O O 0 Increasing pro tability with increased market share in served markets Producing highquality products Creating good service experiences Building close relationships Challenger and Follower Strategies 0 Market Challenger Strategy 0 0 Challenge the leader with an aggressive bid for more market share Second mover advantage challenger observes what has made the leader successful and improves on it 0 Market Follower Strategy 0 O O 0 Play along with competitors and not rock the boat Copy or improve on leaders products and programs with less investment Brings distinctive advantages Keep costs and prices low or quality and services high to fend off competitors 0 Market Nicher Strategies 0 0 Ideal market niche is big enough to be pro table with high growth potential and has little interest from competitors Key to market niching is specialization of market customer product or marketing mix Balancing Customer and Competitor Orientations 0 Companies need to continuously adapt strategies to changes in the competitive environment Competitorcentered company spends most of its time tracking competitor s moves and market shares and trying to nd ways to counter them Customercentered company spends most of its time focusing on customer developments in designing strategies Marketcentered company spends most of its time focusing on both competitor and customer developments in designing strategies Global Marketing Today 0 Global rm 0 O O O Operates in more than one country Gains marketing production RampD and nancial advantages not available to purely domestic competitors The global rm sees the world as one market CocaCola only two countries where it is not legally sold North Korea and Cuba 0 International Trade System 0 O O O 0 Trade restrictions Tariffs taxes on imports Quotas limits on the amount of foreign imports a country will accept Exchange controls limit on the amount of foreign exchange and the exchange rate against other currencies Nontarrif trade barriers biases against bids restrictive product standards or excessive hostcountry regulations Trade Assistance World Trade Organization WTO and General Agreement on Tariffs and Trade GATT Trade free zones European Union EU North American Free Trade Agreement NAFTA Central American Free Trade Agreement CAFTA Union of South American Nations UNASUR Economic Environment 0 Industrial structure Subsistence economies vast majority engage in simple agriculture consume their output and barter the rest Raw material exporting economies rich in one or more natural resources but poor in others lndustrializing economies high manufacturing growth Industrial economies major exporters of manufactured goods services and investment funds US and Japan 0 Income Distribution Low Middle High 0 Political Legal Environment 0 Country s attitude toward international buying 0 Government bureaucracy 0 Political stability 0 Monetary regulations 0 Cultural environment 0 Business norms bribes 0 Cultural preferences traditions behaviors Deciding which markets to enter 0 De ne international marketing objectives and policies 0 Foreign sales volume 0 How many countries to market to 0 Types of countries to market based on attractiveness geography income and population political climate 0 Rank potential global markets on 0 Market size 0 Market growth 0 Cost of doing business 0 Competitive advantage 0 Risk level Deciding how to enter market 0 Exporting Joint venture 0 Direct investment Deciding on the Global Marketing Program Standardized marketing mix 0 Involves selling the same products and using the same marketing approaches worldwide Adapted marketing mix 0 Involves adjusting the marketing mix elements in each target market bearing more costs but hoping for a larger market share and ROI 0 Most rms today engage in some adaptation when going global but differ in degree 0 Price and channels Managing Marketing Information to Gain Customer Insights Developing Marketing Information 0 Big Data analytics Internal databases 0 Electronic collections of consumer and market information obtained from data sources within the company network 0 Competitive Marketing Intelligence 0 Systematic collection and analysis of publicly available information about consumers competitors and developments in the marketing environment 0 Marketing Research 0 Systematic design collection analysis and reporting of data relevant to a speci c marketing situation facing an organization Research Objectives Step 1 Exploratory research 0 Objective is to de ne the problem and re ne research questions This preliminary information also helps suggest hypotheses Focus groups qualitative interviews 0 Descriptive research 0 Describes things markets environment competition Secondary data literature review nonexperimental surveys Casual research 0 Tests hypothesis about cause and effect relationships experiments Groupon Living Social Developing the Research Plan Step 2 Data Sources 0 Secondary Data 0 Advantages already existent easy to obtain cheap 0 Disadvantages could have been collected for a different purpose risks of inaccurate old or irrelevant data 0 Sources trade associations government and grocery scanner databases commercial databases online 0 Primary Data 0 Advantages collected for a speci c research plan 0 Disadvantages costly takes time to obtain results Primary Data Approaches Observational research o Involves gathering primary data by observing relevant people actions and situations 0 Ethnography Netnography behavioral targeting and social targeting Survey research 0 The most widely used method and is best for descriptive information knowledge attitudes preferences and buying behavior 0 Advantage exible o Disadvantage people can be unable or unwilling to answer give misleading or pleasing answers may be busy or unwilling to respond 0 Experimental research 0 Best for gathering casual information cause and effect relationships Marketing Research Contact Methods 0 Focus Groups 0 Group of participants trained moderator 0 Challenges expensive difficult to generalize from small group consumers not always open and honest risk of group think 0 Online method 0 Internet surveys online panels online experiments online focus groups 0 Advantages low cost speed higher response rates good for hard to reach groups Sample 0 A segment of the population selected for marketing research to represent the population as a whole Implementing the research plan Step 3 0 Collecting and analyzing the data Interpreting Step 4 o Interpreting and reporting the ndings Recent SpongeBob Research 0 6O 4 year olds randomly assigned to one of three conditions manipulation lasted 9 minutes measured delay of grati cation different toys physical exercises 9 min of viewing fastpaced TV cartoon had negative effects on executive function of 4 year olds Temporarily impairs young children s executive function Market Information and Research 0 A powerful tool for managers 0 Enhance persuasion 0 Improve decision making 0 Enable realtime implementation of marketing strategies Concerns 0 Consumer privacy 0 Misuse research ndings Consumer Markets and Consumer Buyer Behavior Consumer buyer behavior 0 Buying behavior of nal consumers individuals and households who buy goods and services for personal consumption 0 Marketing stimuli 4 Ps Product Price Place Promotion Buyers black box Buyers response Factors in uencing consumer behavior 0 Cultural 0 Culture set of basic values perceptions wants and behavior from family and other important institutions 0 US culture achievement and success individualism freedom hard work Subculture group of people with shared value systems 0 Ethnic Subculture O Hispanic Americans family oriented older brand loyal younger price sensitivity and willing to buy store brands very active on mobile and social networks African Americans price conscious motivated by quality and selection brands important Asian Americans ercely brand loyal most brand conscious high value conscious 0 Social Class Income occupation education wealth Upper class 3 middle class working class 44 working class 38 lower class 16 0 Social 0 Reference group direct or indirect points of comparison or reference in forming a person s attitudes or behavior Aspirational groups group that individual wishes to belong Wordofmouth in uence and buzz marketing Opinion leaders persons within a reference group who because of special skills knowledge personality or other characteristics exerts social in uence on others Online social networks 0 Family is the most important consumer buying organization in society Men as grocery purchasers and laundry handlers Women purchasers of technology Children in uences purchases 0 Roles and status de ne a persons position in the group Family clubs organizations and online communities 0 Personal 0 O O O 0 Age and life cycle stage Economic situation Occupation Lifestyle a person s pattern of living as expressed in hisher activities interests and opinions Personality unique psychological characteristics that distinguish a person or group Self con dence dominance sociability autonomy defensiveness adaptability and aggressiveness Self concept idea that people s possessions contribute to and re ect their identities Characteristics Affecting consumer behavior 0 Motive need that is sufficiently pressing to direct the person to seek satisfaction Maslow s Hierarchy of needs 0 Physiological needs hunger thirst safety needs security protection social needs sense of belonging love esteem needs selfesteem recognition status selfactualization needs selfdevelopment and realization Perception process by which people select organize and interpret information to form a meaningful picture of the world form three perceptual processes 0 Selective attention tendency for people to screen out most of the information to which they are exposed o Selective distortion tendency for people to interpret information in a way that will support what they already beHeve o Selective retention tendency to remember good points made about a bran they favor and forget good points about competing brands o Subliminal messages in advertising message drives you to make decisions without you being aware of it Other Psychological Factors 0 Learning 0 Classical conditioning o Reinforcement o Beliefbased Belief descriptive thought that a person holds about something Attitude a person s consistently favorable or unfavorable evaluations feelings and tendencies toward an object or idea What Motivates Consumers to Consume the Following 0 NFL 0 Cultural50 0 Social 25 0 Personal 20 o Psychological 5 Poo Pourri 0 Cultural 5 0 Social 10 0 Personal 35 o Psychological 50 Types of Buying Decision Behavior 0 Habitual buying behavior low involvement few differences between brands milk 0 Varietyseeking buying behavior low involvement signi cant differences between brands cereal Dissonancereducing buying behavior high involvement few differences between brands car tires 0 Complex buying behavior high involvement signi cant differences between brands car computer Buyer Decision Process 0 Need recognition 0 Occurs when the buyer recognizes a problem or need triggered by internal or external stimuli Information search 0 Personal sources family and friends 0 Commercial sources advertising Internet 0 Public sources mass media consumer organizations 0 Experiential sources handling examining using the product Evaluation of alternatives 0 How the consumer processes information to arrive at brand choices Purchase decision 0 The act by the consumer to buy the most preferred brand 0 The purchase decision can be affected by attitudes of others andor unexpected situational factors Pose purchase behavior 0 Satisfaction or dissatisfaction that the consumer feels about the purchase 0 Relationship between consumer s expectations product s perceived performance 0 Cognitive dissonance is the discomfort caused by a postpurchase con ict Avoid information that will lead them to think they made a bad decision 0 Buyers remorse regret making purchase Customer satisfaction key to building pro table relationships with consumers to keeping and growing consumers and reaping their customer lifetime value Adoption process mental process an individual goes through from rst learning about an innovation to final regular use Business Markets and Business Behavior Business buyer behavior refers to the buying behavior of the organizations that buy goods and services for use in production of other products and services that are sold rented or supplied to others Business buying process the process where business buyers determine which products and services are needed to purchase and then nd evaluate and choose among alternative brands Business Market Structure and Demand Fewer and larger buyers Derived demand 0 Demand for a particular product derived in sense that it depends on demand for another product 0 Inelastic o Fluctuating Bull whip effect small changes at retail level in demand have huge implications for change in demand at supply level 0 Buyer and seller dependency High degree of customization and service Business Markets Decision Process 0 More complex 0 More decision participants 0 More professional purchasing effort The Model of Business Buyer Behavior 0 The environment 0 The buying organization buying center 0 Buyer response Types of Buying Situations Straight rebuy routine purchase decision such as reorder without any modi cation printer paper for office 0 Modi ed rebuy purchase decision that requires some research where the buyer wants to modify the product speci cation price terms or suppliers 0 New task purchase decision that requires thorough research such as a new product 0 Systems selling involves the purchase of a packaged solution from a single seller Participants in Business Buying Process 0 Buying center all of the individuals and units that participate in the business decision making process 0 Who participates in the process their relative authority what evaluation criteria each participant uses informal participants 0 Users those that will use product or service 0 ln uencers help de ne speci cations and provide information for evaluating alternatives 0 Buyers have formal authority to select supplier and arrange terms of purchase 0 Deciders have formal or informal power to select and approve nal suppliers 0 Gatekeepers control the ow of information Major In uences on Business Buyer Behavior 0 Environmental Organizational Interpersonal 0 Individual Problem recognition 0 Can result from internal or external stimuli Internally company may decide to launch a new product that requires new production equipment and materials Externally the buyer may get some new ideas at a trade show see an ad or receive a call from a salesperson who offers a better product or a lower price Need description Describes the characteristics and quantity of the needed item Product speci cation 0 For standard items this process presents few problems For complex items the buyer may have to work with others engineers users consultants to de ne the item Supplier search Involves compiling a list of quali ed suppliers Proposal solicitation Requesting proposals from quali ed suppliers Supplier selection Desired supplier attributes and negotiates with preferred suppliers for favorable terms and conditions Order routine speci cation 0 Lists all of the speci cations and terms of the purchase Performance review Involves a critique of supplier performance to the purchase terms Business Buyer Behavior 0 EProcurement 0 Online purchasing companybuying sites extranets 0 Advantages access to new suppliers lowers costs speeds order processingdelivery frees employees from paperwork o Disadvantages can erode relationships as buyers search for new suppliers security Auctions EBay Auctions 0 Reverse auctions 0 An auction but instead of a seller offering a product and buyers bidding a buyer offers a contract and sellers bid 0 Instead of prices rising they fall as sellers compete to win the sale Exam 40 MC 2 points each 3 short answer 20 points total ch 1 6 MC questions ch 3 6 MC ch 18 6 MC ch 19 2 MC ch 4 7 MC ch 5 7 MC ch 6 6 MC Textbook has examples understand concepts De nitions applications identi cations of concepts Short Answers 1 question from todays material 6 points Ch 6 Lecture slide questions asked related to questions or discussions in class Groupon consumption of NFL etc
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