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chapters 1-6 test

by: Lia Pearson

chapters 1-6 test MKT1211K

Lia Pearson

GPA 4.0
Mrs. Halftown

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About this Document

this includes all notes from chapters 1,2,5 and 6 for the test!
Mrs. Halftown
Study Guide
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This 23 page Study Guide was uploaded by Lia Pearson on Wednesday September 23, 2015. The Study Guide belongs to MKT1211K at Jamestown Business College taught by Mrs. Halftown in Summer 2015. Since its upload, it has received 76 views. For similar materials see PRINCIPLES OF MARKETING in Marketing at Jamestown Business College.


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Date Created: 09/23/15
Chapter 1 Guided Notes 1 Provide a detailed de nition for the term Marketing Marketing is the activity set of institutions and processes for creating capturing communicating delivering and exchanging o erings that have value for customers clients partners and society Marketing is the bridge that allows potential customers to be introduced to the sellers product or services 2 Explain in detail each of the core aspects of marketing a Marketing is about satisfying customer needs and wants In order to be successful with marketing you have to know who you are marketing to your target market and what their needs and wants are When marketing it is imperative to success that you target a population that not only has the want for the product but the means to purchase the product For example if you market a 100000 dollar car in a poor target market you would not make as many sales as you would if you were to market to a wealthier set of people b Marketing entails an exchange Proper marketing leads to an exchange of goods or services from the seller to the buyer Marketing draws the potential buyer in which is good news for the seller Not only is the exchange good for the seller because he is making a profit but it is good for the consumer as well as they are receiving something at a fair value Once a customer has purchased a product or service the seller can then use the information given to them by the client and their purchase history to form a bond with the client which can serve as a useful marketing tool Forming relationships with consumers inspires loyalty which is good for sales as well c Marketing requires product price place and promotion decisions a Product In order for someone to purchase something it has to have value to the buyer In marketing value is created by developing a variety of o erings and di erent options to the potential buyer This includes goods services and ideas All three of these things can work together to increase the value of the product in the eyes of a potential buyer When a product has a high perceived value in the eyes of consumers it translates into sales which translate into more money for the firm Goods things you can touch Example baseball Services intangible customer benefits produced by people or machines Example concert tickets Ideas concepts philosophies and opinions Example a biker safety sign b Price Price does not always translate directly to money In fact price is everything that the buyer gives up in exchange for the seller s product or service These things include money time and energy all things that have value Therefore the price of the good or service must align with the buyer s perception of value of the good or service in order to make sales c Place Place represents all of the activities necessary to get the product to the right consumer when that consumer wants it Place more commonly deals specifically with retailing and marketing channel management Marketing channel management also known as supply chain management is the set of approaches and techniques that firms use to e iciently and e ectively integrate their suppliers manufacturers warehouses stores and other firms involved in the transaction such as s transportation company into a seamless value chain in which merchandise is produced and distributed in the right quantity to the right location and at the right time while also minimizing costs and satisfying service quality d Promotion Promotion is communication by a marketer that informs persuades and reminds potential buyers about a product or service to in uence their opinions and elicit a response Promotion generally can enhance the initial value of the product or service that is being promoted d Marketing can be performed by both individuals and organizations a B2C business to consumer i Provide an example I see an advertisement on TV for a new pair of designer sunglasses b B2B business to business i Provide an example The manufacturer of the designer sunglasses contacts several retail stores informing them of their newest design c C2C consumer to consumer i Provide an example I purchase the pair of designer sunglasses from the store I love them so much that I decide to tell five of my closest friends about the sunglasses why they are so great and why they should purchase a pair for themselves e Marketing impacts various stakeholders Although marketing is a way to facilitate the sale of products or services to customers or clients it is also much more Marketing can affect many other stakeholders such as supply chain partners and even society as a whole Partners in the supply chain which include wholesalers retailers and other firms such as transportation or warehouse companies are all effected by marketing Marketing can also aim to benefit society at large For example ads for milk sell more milk and encourage a healthier society one with more calcium and stronger bones f Marketing helps create value a ProductionOriented Era In the beginning of the 20th century most firms were production oriented and they believed that a good product would sell itself Manufacturers focused on product innovation and not with satisfying the needs of individual consumers Retail stores were considered places to hold merchandise until a consumer wanted it b SalesOriented Era In the 1920s to the 1950s production and distribution techniques became more sophisticated Because World War Two conditioned customers to consume less and manufacture items themselves manufacturers had the capacity to produce more than consumers wanted and were able to buy Overproduction was resolved by firms becoming more salesoriented and depending on heavy personal selling and advertisement c MarketOriented Era After World War Two was over manufacturers focused more on making consumer products Suburban communities began to pop up and shopping centers began to replace central business districts Products that were once limited in World War Two became more plentiful The United States entered a buyers market and when consumers again had choices they could make purchasing decisions based on factors such as quality convenience and price As a result manufacturers and retailers focused on consumer wants and needs before designs and prices were set d ValueBased Marketing Era Value re ects the relationship of bene ts to costs In marketing customers want fairness Value can be increased by introducing value cocreation a process where a consumer can personalize a product therefore increasing its value When the value of a product or service is increased a consumer is more likely to purchase resulting in more sales for the firm 3 Explain in detail how Marketing Firms Become More Value Driven Marketing firms become more value driven by focusing on four main activities 1 Sharing information about customers and competitors across their own organization and events with other firms 2 Striving to balance fairly the customers benefits and costs 3 Concentrating on building and maintaining relationships with customers 4 Taking advantage of new technologies and connecting with consumers using social media and mobile media Building relationships with customers uses a process called customer relationship management a business s philosophy and set of strategies programs and systems that focus on identifying and building loyalty among a firms most valued consumers 4 Explain in detail each of the reasons marketing is important a Marketing expands a rms global presence Marketing especially marketing through the use of social media and other online presences allows for a firms product or service as well as information regarding it to travel the globe at incredible speeds Not only does marketing through these paths help to expand a firms global presence but it enhances global career opportunities for marketing professionals as well b Marketing is pervasive across marketing channel members Firms do not work in isolation They use a marketing channel in order to achieve success Marketing channels allow for the expansion of career opportunities to marketing professionals Effectively managing supply chainmarketing channel relationships is important to success and customer satisfaction Without customers that are satisfied firms cannot grow c Marketing enriches society Socially responsible rms recognize that including a strong social orientation in business is a sound strategy that is in both its own and its customer s best interest It shows the consumer marketplace that the firm will be around for the long run and can be trusted with their business In a volatile market investors view firms with high levels of corporate responsibility and ethics as a safe investment d Marketing can be entrepreneurial Entrepreneurs are people who organize operate and assume the risk of a business venture Great and distinguished entrepreneurs have visions of how certain combinations of products and services can satisfy unfulfilled needs They find and understand a marketing opportunity conduct a thorough examination of the marketplace and develop and communicate the value of their product or service to the potential consumers similar to what marketing professionals do Chapter 2 Guided Notes 1 Explain the various components of a marketing strategy A marketing strategy has three basic components 1 The firms target market 2 The four P s The marketing mix 3 The bases on which the firm will be competitive on a long term basis The marketing mix is an important component as it sets the basis for the future and for more complex components A good marketing strategy helps a firm to be successful 2 Describe in detail the four macro strategies that are used to create and deliver value and to develop sustainable competitive advantages a Customer Excellence Customer excellence focuses on keeping as well as gaining long term loyal customers by providing them with excellent customer service Example A firm having a customer loyalty program b Operational Excellence Having efficient operations and having excellent supply chain management and strong relationships with the firms suppliers Example Keeping in touch with all the firms in the supply chain warehouses etc c Product Excellence Providing products to consumers that have a high perceived value effecting branding and effective positioning as well as maintaining and improving product quality Example a software update 1 Locational Excellence Location is perceived to be the most important aspect of a company Firms who wish to be successful have to be accessible to all consumers Example A McDonalds being across the street from a shopping mall 3 Describe the 5 stages of a marketing plan a Step 1 Define the Business Mission The business mission also known as the mission statement is a broad description of what the firm plans to so activities it plans to take part in as well as the main goals of the company Almost all businesses big or small have a mission statement A mission statement helps to show the consumers and potential investors what the company is all about b Step 2 Conduct a Situation Analysis After the mission statement is established a situation analysis is then performed The firm uses SWOT as a guide to analyze Strengths Weaknesses Opportunities and Threats After SWOT has been examined the firm then uses CDSTEP Cultural Demographic Social Technological Economic and Political factors to consider any uncertainties and unexpected changes c Step 3 Identify and Evaluate Opportunities Using STP Companies use STP Segmentation Targeting and Positioning as a way to increase sales and profits The firm first divides the markets into different groups or segments and then decides which one is most beneficial for the firm to target Finally the firm decides how their products should be positioned to best meet the needs of the target market group that the firm has chosen d Step 4 Implement Marketing Mix and Allocate Resources In the fourth step the firm takes all of the information learned four P s market etc and puts it into action At this point marketers make decision on how to spend their limited resources in order to best benefit the firm e Step 5 Evaluate Performance Using Marketing Metrics The final step of this process is to evaluate the results of the strategy and implementation program using marketing metrics A metric is a measuring system that quantifies a trend By understanding the causes of performance the firm can then use that information to better the firm making adjustments where they are needed 4 Explain the concept of Market Share A market share is a percentage representing how much of a specific market any particular rm accounts for 5 Explain each quadrant in the Relative Market Share Matrix a Stars Stars are rapid growing yet usually short lived market share products Stars then usually turn into cash cows b Cash Cows Cash cows grow slowly over time and are high market share products c Question Marks Question marks are in high growth markets but are low in value Companies often turn them into cash cows or stars d Dogs Dogs are in low growth markets and have a fairly low market share value 6 Explain in detail each of the different growth strategies and provide an example for each a Market Penetration A market penetration strategy employs the existing marketing mix and focuses the firms efforts on existing customers An example of this strategy would be encouraging customers to purchase more when they visit b Market Development A market development strategy uses its existing marketing tactics to reach new market segments An example of this would be a show broadcasting on air in a new country c Product Development A product development strategy creates new products on a regular basis to keep consumers interested in and buying their products An example of this would be the IPhone 5 which upgraded to the IPhone 6 then the 6 Plus d Diversification Diversification strategy is implemented by marketing to a market segment that was previously untouched which opens up more doors to make a profit An example of this would be building a hospital in a place where there are no hospitals such as in the middle of the desert or the rainforest Chapter 5 Guided Notes Outline how a company s immediate environment their customers company capabilities competitors and corporate partners affects their marketing strategy Customers firms use information about consumers such as purchase history etc as well as consumer trends to make informed decisions when marketing in order to increase factors such as sales customer loyalty and consumer creation Company capabilities The opportunities placed in front of a firm can either make or break a marketing strategy It is Vital for the success of a firm to properly assess and choose opportunities that will best suit the wants and needs of the firms target market Competitors Competitors will always be a concern for firms and therefore it is critical to understand their competitors strengths weaknesses and possible reactions to the firms marketing strategies Firms try very hard to impress potential customers because without them the firm would not have two legs to stand on and would most certainly fail Corporate partners Most all firms operate in sync with other firms that help them to keep business running smoothly The firms that work together to produce end goals are corporate partners Corporate partners use information that they learn and share it with other firms in the partnership which in turn helps all firms in the chain to succeed and grow L02 Explain how marketers use each element of their macroenvironment to make decisions Culture Culture is broadly defined as the shared meanings beliefs morals values and customs of a group of people Culture gets passed down through generations over time using words literature and institutions There are two basic forms of culture including countrv culture and regional culture Regional culture the way consumers make purchasing decisions based on where they live EX Marketing CocaCola as soda or pop depending on the area the consumers are living and what they commonly used for lingo Country culture visible nuances such as artifacts behavior dress symbols physical settings ceremonies language differences colors tastes and food preferences Demographics Demographics indicate the characteristics of human populations and segments In marketing demographics are used to identify consumer markets Some demographics include age gender race and income All of these demographics are very important when it comes to marketing if you do not know who your target market is a firms marketing strategy is less likely to have a successful end result Generation Z Digital Natives People who are categorized as generation Z were raised in a world where technologies such as social networks laptops and the internet were commonplace Because of this familiarity with technologies generation Z is much more globally connected than the generations previous to them This generation has more exposure to threats such as crime or terrorism because of this as well and tend to have more in common with their generation X parents Generation Y Millennial This set of people was born between 1977 and 2000 and consists of over 60000 Americans This cohort is post world war two and most are children of baby boomers Generation Y varies the most in age from teens all the way to adults who are starting their own families This generation puts strong emphasis on balance in life and breaks previous marriage standards having more single parents and partners who coparent Millenials are very tech savvy due to exposure to various technologies since birth Generation X This generation includes people born between 1965 and 1976 and represents around 41 million Americans Generation X people grew up in homes where both parents worked and faced the 50 percent possibility of having parents that ended up getting a divorce Because of this upbringing most generation X people attempt to shield their own children from threats or disappointments Generation X people possess higher spending power because they tend to get married later in life as well as purchase homes later in life as well They somewhat dislike shopping and are more cynical than their counterparts making them astute difficult customers Generation X people are very shopping savvy Baby Boomers This group of people consists of people who were born after world war two between the years of 1946 and 1964 This group accounts for 78 million Americans the largest group in the United States This group produces many consumers who are 50 plus years of age which effects marketing strategies Many baby boomers are now collecting social security which puts stress on the economy Baby boomers tend to be very individualistic and pride themselves in selfcare This group greatly in uences trends especially in the workplace Marketing adjusts to the needs of this group An example of this would be offering larger print books for those who are losing their vision Social Trends Social trends are ideas that trend within a population such as being price conscientious trying to be healthier greener or retaining consumer privacy Price sensitivity Also known as thrift this is when people embrace the idea of spending less and actively search out ways to better do so As the economy suffers more and more people become price sensitive causing them to buy more small purchases and sacrificing the larger ones An example of this would be sacrificing a big vacation and spending the money you saved on expensive Chanel lipsticks Health and Wellness Concerns Health and wellness concerns especially those for children are becoming more and more prevalent This trend has a lot to do with the doubling of teenage obesity over the past twenty years This has effected marketing by regulating marketers to produce food in more reasonably proportioned sizes Greener Consumers Green marketing involves a strategic effort by firms to supply customers with environmentally friendly merchandise Many consumers are becoming more and more concerned with the environment and this concern fuels their spending habits Marketers can combat this by offering greener options to consumers Privacy Concerns Do to the steady increase in identity theft and theft in general consumers are becoming more and more concerned about their privacy when purchasing items Marketers can combat this by offering a higher level of privacy for consumers A TimePoor Society With more and more people working full time jobs and sometimes multiple jobs for that matter it is becoming harder for consumers to find leisure time for themselves Therefore marketers must give consumers time appropriate products in order to make sales Technological Advances In the past decade the value of both products and services has increased due to technological advances Because of the increased internet use and availability and dependability on mobile devices increases sales in those areas and marketers use that information to better target consumers to purchase from them rather than from other firms Economic Situation Marketers monitor the general economic situation both in their home country and abroad because it effects the way consumers purchase merchandise and spend money Some factors that in uence the state of an economy include the rate of in ation foreign currency exchange rates as well as interest rates PoliticalRegulatory Environment The politicalregulatory environment compromises of political parties government organizations legislation and laws Organizations must fully understand and comply with any legislation regarding fair competition consumer protection or industry specific regulation The government enacts laws focused on ensuring that companies compete fairly With one another Chapter 6 Guided Notes Think about the last expensive product that you purchased Le a laptop iPhone tablet sporting equipment etc Explain the purchase to me in steps using the consumer buying process Need recognition The consumer decision process begins when consumers recognize they have an unsatis ed need and they would like to go from their actual needy state to a different desired state The greater the discrepancy between these two states the greater the need recognition will be Information search After a consumer recognizes a need for something they seek out information on various options out there that satisfy their needs Consumers do this through both internal and external searches for information Alternative evaluation After the consumer has done the research on which products are available to suit their need they evaluate all of the options available to them and choose which one of the options is best suited to ful ll their wants and needs Purchase After evaluation of the alternatives and deciding on which one best suits their needs the consumer is ready to purchase that particular product or service The customer then purchases the product or service in order to ful ll their need Post purchase After a customer purchases and item it is valuable information for the company to know if the product or service that was purchased ful lled the needs of the customer or not Step 1 Need Recognition Functional Needs Functional needs pertain to the performance of a product or service Psychological Needs Psychological needs pertain to the personal grati cation that consumers associate with a product or service How can getting a college education ful ll a functional need and a psychological need Getting a college education can allow a person to get a highpaying job which serves as something that many people need in order to be successful and it is also something that people want in life therefore getting a college education can ful ll both a functional need as well as a psychological need Step 2 Information Search The second step after a consumer recognizes a need is to search for the information about the various options that exist Internal search for information An internal search for information is when the buyer examines his or her own memory and knowledge about the product or service gathered through past experiences External search for information In an external search for information the buyer seeks information outside of his or her personal knowledge base to help make the buying decision After freshman year Veronica wants to decide on a major What internal and external sources of information will she use in help her in making a decision Veronica may remember the major her older sister chose and how happy and successful she is now internal and also ask her guidance counselor for any advice on an appropriate major for her external Factors that affect information search The Perceived Bene ts versus Perceived Costs of Search Is it worth the time and effort to search for information about a product or service That is the question consumers ask about before researching a product or service time is of value to consumers The Locus of Control People who have an internal locus ofcontro believe they have some control over the outcomes of their actions and in turn they engage in more search activities With an external locus ofcontrol consumers believe that fate or other external factors control all of the possible outcomes Actual or Perceived Risk There are ve types of risk 1 Performance risk involves the perceived danger inherent in a poorly performing product or service 2 Financial risk the risk associated with a monetary outlay and includes the initial cost of the purchase as well as the costs of using the item or service 3 Social risk includes fears that consumers suffer when they worry others might not regard their purchases positively 4 Physiological risk also known as safety risk is the risk that involves what might happen if a product does not perform as expected 5 Psychological risk risk associated with the way people will feel if the product or service does not convey the correct image that the consumer was expchng Step 3 Alternative Evaluation Using automobiles as an example explain the differences between universal retrieval and evoked sets and identify the one that is most important to marketers Universal Set Universal sets include all possible choices for a product category Retrieval Set Brands or stores that can be readily brought to memory that may in uence purchasing decisions Evoked Set Compromises the alternative brands or stores that the consumers state they would consider when making a purchase decision sometimes due to good lick or loyalty in the family to a speci c brand Step 4 Purchase Conversion rate How well a retailer turns interest in a product into the sale of that speci c product Step 5 Post Purchase Customer Satisfaction Setting unrealistically high consumer expectations can lead to dissatis ed customers Marketers can take several steps to ensure postpurchase satisfaction such as Building realistic expectations Demonstrating correct product use Standing behind the company39s products Encouraging customer feedback PWF 5 Making contact with the customers after the purchase thanking them for the support Post Purchase Cognitive dissonance An internal con ict that arises from an inconsistency between two beliefs and behaviors An example of this would be buyer39s remorse Customer Loyalty In the post purchase stage of the decision making process if customers are happy with the product they may become a loyal customer Loyalty is attempted through CRM programs Customer Relationship Management Undesirable Consumer Behavior Assume you are the manager of a resort property that is close to the mountains to several recreational sites and to a few luxury restaurants and stores How would you manage customer expectations to enhance post purchase satisfaction Be speci c I would research the surrounding businesses in the area paying speci c attention to the variety and quality of the services that they offer After I have determined the variety and quality I would do my best to exceed those factors in my own resort Some examples of going beyond would be offering customer discounts At a convenience store Brian bought a bag of chips he had never tried before Driving down the road Brian opened the bag took a bite and realized he had purchased pork rinds by mistake Being a vegetarian Brian tossed the chips away Brian felt very little buyer39s remorse and soon forgot about the experience Why Brian did not feel buyer39s remorse from that purchase because it was inexpensive and it was a simple mistake on his part Buyer39s remorse is felt when the consumer spends a lot of money on something and is not pleased with the results they thought they would get Factors that affect the consumer decision process Psychological Factors Motives needs or wants that is strong enough to cause the person to seek satisfaction Attitude a persons enduring evaluation of his or her feelings about the behavioral tendencies toward an object or idea Perception the process by which we select organize and interpret information to form a meaningful picture of the world Learning refers to a change in a person39s thought process or behavior that arises from experience and takes place throughout the consumer decision process Lifestyle refers to the way consumers spend their time and money to live Social Factors Family many purchase decisions are made about products or services that the whole family will use or will consume Reference Groups one or more persons whom an individual uses as a basis for comparison regarding beliefs feelings and behaviors Culture shared meanings beliefs morals values and customs of a group of people Situational Factors factors speci c to the situation override psychological and social issues Purchase Situation customers may be predisposed to purchase certain products or services because of some underlying psychological trait or social factor Shopping Situation customers might be ready to purchase a product or service but he completely derailed by the shopping atmosphere once they arrive Temporal State our state of mind and how it effects the purchasing decisions we make L06 Describe how involvement in uences the consumer decision process Extended Problem Solving the process that consumers go through when making a purchase 5 STEPS Limited Problem Solving Occurs during a purchase decision that calls for at most a moderate amount of effort as well as a moderate amount of time Impulse Buying a buying decision made by customers on the spot when they see something they want Habitual Decision Making describes a purchase decision process in which consumers engage in little conscious effort Using examples describe the difference between impulse buying and habitual decision making An example of an impulse buy would be buying a pack of gum while waiting in the checkout line An example of a habitual decision would be purchasing a home after researching the neighborhood schools etc impulse buying does not require much deep thought while a habitual decision does require some deep thinking as well as some research Chapter 5 Terms Country Culture Artifacts behavior dress symbols physical settings ceremonies language differences colors and tastefood preferences based on an area that people live Foreign Currency Fluctuations How certain currencies change in relation to one another over time Generational Cohort A group of people who were born in the same generation sharing common characteristics because of this Green Marketing A strategic effort by rms to supply customers with environmentally friendly merchandise Green washing A strategy of pretending to have green and healthy products that some rms use in order to boost sales In ation The persistent increases in the prices of goods and services making the purchasing power of the dollar consistently decline Interest Rates An interest rate represents the cost of borrowing money usually seen as a percentage of an amount Macro environmental Factors CDSTEP Regional Culture The region in which a person resides and the cultural effect the area has on the person who lives there


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