MKTG 2301 Final Exam Review/Open-Book Notes Chapter 1 1.

Marketing- activity for creating and delivering offerings that benefit the organization, its stakeholders, and society Marketing seeks to: 1) discover needs and wants of consumer 2) satisfy them i. Key to achieving the objectives is to create an exchange. Exchange is the trade of things of value between buyer and seller so each is better off The marketing department is responsible for creating relationships, partnerships, and alliances. Shaped solely by its relationship with internal and external groups. Influences on marketing activities: Society, organization/departments, environmental forces: 1. Social 2. Economic 3. Technological 4. Competitive 5. Regulatory Discovering consumer needs and wants requires vital marketing research o Needs when a person feels deprived of basic necessities o Wants a need shaped by a persons knowledge, culture, and personality 2. What is a Market? A market is people with both the desire and the ability to buy a specific offering 3. Definition of a target market A target market is one or more specific groups of potential consumers toward which an organization directs its marketing program 4. The 4 Ps elements a part of marketing mix Someone in the organizations marketing program, often the marketing manager, must develop a complete marketing program to reach consumers by using a combination of these 4 Ps After finding a market and target market, reflect on the 4 Ps i. Product: good, service, or idea to satisfy consumer needs ii. Price: what is exchanged for the product iii. Promotion: means of communication between seller and buyer iv. Place: means of getting the product to the consumer Marketing mix controllable factors (similar to the 4 Ps) that the marketing manager can use to solve a marketing problem Example: putting a product on sale---altering product price 5. Definition of customer value Customer value is the buyers benefits including quality, convenience, on-time delivery, and before-and-after sale service at a specific price 6. Definition of relationship marketing Relationship marketing is the link to the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit 7. What is a marketing program? A marketing program helps discover prospective customers by planning to integrate the marketing mix to provide a product, service, or idea 8. The marketing concept is the idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organizations goals From implementing a strong marketing concept, it leads to market orientation: i. An organization that has a market orientation focuses its efforts on 1) continuously collecting info about customers needs 2) sharing this info across depts. 3) Using it to create customer value 9. Ethics and Responsibility The societal marketing concept is the view that organizations should satisfy the needs of consumers in a way that also provides for societys well being 10. Who buys and how are they benefited? Ultimate consumers: people who use the goods and services purchased for a household Organizational buyers: manufacturers, wholesales, retailers, and government agencies that buy goods and services for their own use or for resale Consumers are benefited because marketing creates utility, benefits or customer value received by users of the product. Chapter 2 1. Definition of profit Profit: the reward to a business firm for the risk it undertakes in marketing its offerings

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Business Firms privately owned organizations that serves its customers to earn a profit so that it can survive o Nonprofit organization nongovernmental organization that serves its customers but does not have profit as an organizational goal (goals may be operational efficiency or client satisfaction) What is strategy? Strategy (to help develop, focus, and direct its efforts to accomplish its goals) an organizations long-term course of action designed to deliver a unique customer experience while achieving goals Structure of Organizations Corporate Level where top management directs overall strategy for the entire organization (CEO, CMO, etc.) Strategic Business Unit Level managing a group of businesses which is a subsidiary, division, or unit of an organization that markets a set of related offerings to a clearly defined group of customers Managers set a more specific strategic direction for their businesses to exploit value-creating opportunities Functional Level groups of specialists actually create value for the organization. Jobs are divided and the term department generally refers to these specialized functions such as marketing and finance Todays visionary organization uses key elements to: Establish a foundation (Why?) Organizations guide and inspire their employees through three elements: core values (fundamental passionate and enduring principles that guide an organization), mission (the mission is a statement or vision of an organizations function in society), and organizational culture (set of values, ideas, attitudes, and behavioral norms that is learned and shared among the members of an organization) Set a direction (What?) Business: the underlying industry or market sector of an organizations offering Goals: targets of performance to be achieved often by a specific time (Profit, sales, market share, quality, customer satisfaction, employee welfare, social responsibility) Market share is the ratio of a firms sales to the total sales of all firms in the industry Organizational strategies to develop and market successfully (How?) Variation by level: moving from the corporate to the strategic business unit to the functional level involves creating increasingly detailed strategies and plans Variation by offering: the strategy will be far different when marketing a very tangible physical product, service, or idea Figure 2-3/Tracking strategic performance with Marketing Dashboards An effective marketing dashboard helps managers asses a business situation at a glance Marketing metric is a measure of the value or trend of a marketing activity or result Marketing plans are road maps for the marketing activities of an organization for a specified future time period Setting Strategic Directions Asking an organization where it is at the present time involves identifying its competencies, customers, and competitors o Competencies a response to what do we do best?, they are special capabilities, skills, technologies, and resources that distinguish it from other organ. And provide customer value o Customers who are they? Who is loyal? New customers? o Competitors businesses and organs. that have similar goals and aims as well as similar products/services Growth Strategies: Where do we want to go? Definition of business portfolio analysis Business portfolio analysis is a technique that managers use to quantify performance measures and growth targets of their firms strategic bus. Units o

STARS: SBUs with high-growth markets that may need extra cash to finance their own rapid growth

QUESTIONS MKS?: SBUs with a low share of highgrowth markets

CASH COWS: SBUs that generate high cash flow, far more than they can invest, slowgrowth

DOGS: SBUs with low shares and low growth shares

Diversification analysis Diversification analysis is a technique a firm uses to search for growth opportunity from among current, new products and markets Market penetration: to increase sales of current products in current markets Market development: marketing strategy to sell current products to new markets Product development: marketing strategy to sell new products in current markets Diversification: developing new products and selling in new markets 9. Strategic Marketing Process (allocating its marketing mix resources to reach its target market) Step 1: SWOT/Situation Analysis (Strengths, Weaknesses, Opportunities, Threats) Identifies trends Analyzes competitors Assess organization Research present and prospective customers Step 2: Market Segmentation sorting of potential buyers into groups that have common needs and will respond similarly to a marketing action Step 3: Marketing Program i. Product strategy ii. Product price strategies iii. Promotion strategy iv. Place distribution 10. Executing the Marketing Program Marketing strategy means by which a marketing goal is to be achieved Marketing tactics detailed day-to-day operational decisions essential to the overall success of marketing strategies Chapter 3 1. Environmental Scanning: the process of acquiring information on events outside the organization to identify and interpret potential trends (social, economic, technological, competitive, regulatory) The social forces of the environment include the demographic characteristics of the population and its values. 2. Example: Generational cohorts Baby boomers: the generation of children born between 1946-1964 o Retiring at a rate of 10,000 every 24 hours o 65 and older by 2030 o Wealthiest generation of the US o Interests: health, wellness, and appearance Generation X: members of the US population born between 1965-1976 o Also known as baby bust o Self-reliant, supportive of racial and ethnic diversity, and better educated than any previous generation o Lifestyles: blend of caution, pragmatism, and traditionalism o Dominant force in many markets. Largest segment of business travelers Generation Y: 72 million Americans born between 1977-1994 o Echo boom or baby boomlet o Influence on music, sports, computers, video games, and cell phones

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o Strong-willed, passionate about the environment, and optimistic Definition and uses of demographics Demographics: description of a population according to characteristics such as age, gender, ethnicity, income, and occupation 4. Racial/Ethnic Diversity Multicultural marketing: marketing programs that reflect unique aspects of different races Culture: set of values, ideas, and attitudes that is learned and shared among the members of a group 5. Economic Forces Economy refers to the income and resources that affect the cost of running a business or household o Gross income: total amount of money made in 1 year before taxes o Disposable income: total amount AFTER taxes o Discretionary income: money that remains after paying taxes and necessities; how you are going to spend the rest of your money 6. Technological Forces Technology refers to inventions, or innovations from applied science or engineering research o Technological change leads to new products, replacing old ones. o Technology has a large impact on customer values 1. Marketspace information-and-communication-based electronic exchange environment occupied by digitized offerings 7. Competitive Forces Competition refers to alternative firms that could provide a product to satisfy a specific markets needs o Pure competition there are many sellers and have similar product o Monopolistic competition competing with substitutable products within a price range (example: coffee buyers switch to tea, which is cheaper) o Oligopoly few companies control majority of sales o Pure monopoly 1 firm sells certain product 8. Regulatory Forces Regulation refers to restrictions that state and federal laws place on business o Consumerism a movement started to increase the influence, power, and rights of consumers in dealing with institutions o Self-Regulation an alternative to government control, whereby an industry attempts to police itself 9. Trademarks Trademarks are intended to protect both the firm selling a trademarked product and the consumer buying it Laham Act (1946): prices for registration of a companys trademarks Trademark Law Revision Act (1988): allowing a company to secure rights to a name before actual use by declaring an intent to use the name Madrid Protocol: treaty that facilitates the protection of US trademark rights throughout the world Federal Dilution Act: prevents someone from using a trademark on a noncompeting product Chapter 4 1. Ethics Vs. Laws in Marketing Law: societys standards and values that are enforceable in the courts Ethics: the moral principles and values that govern the actions and decisions of an individual or a group 2. Societal Culture and Norms societal values and attitudes affect ethical and legal relationships among individuals, groups, and business institutions Consumer Bill of Rights codified the ethics of exchange between buyers and sellers, including rights to safety, to be informed, to choose, and to be heard Corporate Culture the set of values, ideas, and attitudes that is learned and shared among the members of an organization Definition of a whistle blower Employees who report an employers unethical and illegal actions Code of Ethics a formal statement of ethical principles and rules of conduct 3. Moral Philosophies Moral Idealism: a personal moral philosophy that considers certain individual rights or duties as universal regardless of the outcome Utilitarianism: a personal moral philosophy that focuses on the greatest good for the greatest number 4. Social Responsibility in Marketing Social Responsibility is the idea that organizations are part of a larger society and are accountable to that society for their actions 3.

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Profit Responsibility: holds that companies have a simple duty; to maximize profits for their owners or stockholders. (Owners, Stockholders) Stakeholder Responsibility: focuses on the obligations an organization has to those who can affect achievement of its objectives. (Consumers, employees, suppliers, and distributors Societal Responsibility: an even broader concept of social responsibility has emerged which refers to obligations that organizations have 1) to the preservation of the ecological environment and 2) to the general public a. Emphasis is placed on what is termed the triple-bottom line, recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth b. Green Marketing refers to marketing efforts to produce, promote, and reclaim environmentally sensitive products c. Socially responsible efforts on behalf of the general public are becoming more common. Formally, this is called cause marketing, which occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products.

Chapter 5 1. Consumer Purchase Decision Process: the stages a buyer passes through in making choices about which products or services to buy Steps: o Problem Recognition-perceiving a need o Information Search-seeking value o Alternative Evaluation-assessing value o Purchase Decision-buying value o Post-Purchase Decision-value/disvalue in consumption or use 2. Consumer Involvement and Problem-Solving Variations Involvement is the term that refers to the personal, social, and economic significance of a purchase to the consumer Extended Problem Solving each of the five stages of the consumer purchase decision process is used, with considerable time and effort devoted to the external information search and the identification and evaluation of alternatives. Exists in high-involvement purchase situations for items such as automobiles and audio systems Limited Problem Solving consumers typically seek some information or rely on a friend to help them evaluate alternatives. (Example is choosing a toaster, restaurant for lunch, and other purchase situations in which the consumer wants to spend little time or effort) 3. Opinion Leaders Opinion leaders are individuals who have social influence over others 4. Psychological Influences on Consumer Behaviour: psychology helps marketers understand why and how consumers behave as they do. Motivation the energizing force that stimulates behaviour to satisfy a need o Individuals needs are boundless and people possess physiological needs for basics. Psychological needs are basic to survival and must be satisfied first. Safety needs involve self-preservation as well as physical and financial well being. Social needs are concerned with love and friendship. Personal needs include the need for achievement, status, prestige, and self-respect Perceived Risk the anxiety felt when a consumer cannot anticipate possible negative outcomes of a purchase 5. Learning: Behaviours that result from repeated experience or reasoning Behavioral Learning is the process of developing automatic responses to a situation built up through repeated exposure to it (drive, cue, response, and reinforcement) Cognitive Learning involves making connections between two or more ideas or simply observing the outcomes of others behaviours and adjusting your own accordingly. o Brand Loyalty a favorable attitude toward and consistent purchase of a single brand over time 6. Reference Groups People to whom an individual looks as a basis for self-appraisal or as a source of personal standards are considered reference groups Types? o Membership groups: one to which a person actually belongs o Aspiration group: one that a person wishes to be a member or wishes to be identified with

Chapter 6 1. Nature and Size of Organizational Markets Business Marketing marketing of products and services to firms, governments, or not-for-profit organizations Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale NAICS North American Industry Classification System provides common industry definitions for Canada, Mexico, and the US o Six-digit coding system is used: First two digits: sector of the economy Third digit: designates a subsector Fourth digit: industry groups Fifth digit: designates a specific industry and it is most the detailed level at which comparable data is available for Canada, Mexico, and the US Sixth digit: designates individual country-level national industries Definition of psychographics o Lifestyle: mode of living that is identified by how people spend their time and resources, what they consider important, and what they think of themselves and the world o Psychographics: the practice of combining psychology, lifestyle, and demographics to uncover consumer motivations for buying and using products and services. It is the analysis of consumer lifestyles that provides insights to consumer needs and wants Characteristics of organizational buyers o Organizational buying behaviour the process by which organizations determine the need for goods and then choose among alternative suppliers (objectives: increase profits by reducing costs, buying from minorities, environmental initiatives) o Derived Demand a demand for industrial products and services is driven by demand for consumer products and services Size of order/purchase is much larger than consumer buying Require review after certain amount Reaches a large number of potential buyers o Market characteristics: demand for industrial products and services. Few customers typically exist and their purchase orders are large o Buying center group of people in an organization who participates in the buying process Roles in the Buying Center a. Users people in the organization who actually use product or service b. Influencers affect buying decision, help define specifications for what is bought c. Buyers formal authority and responsibility to select supplier and negotiate d. Deciders formal/informal power to select or approve the supplier that receives contract e. Gatekeepers control flow of information in buying center 2. Types of Auctions Traditional auction: occurs when a seller puts an item up for sale and would-be buyers bid in competition with each other Reverse auction: when a buyer communicates a need for something and would-be suppliers bid in competition with each other Chapter 7 1. Dynamics of world trade Trend 1: Gradual decline of economic protectionism by individual countries o Protectionism is the practice of shielding one or more industries within a countrys economy from foreign competition through the use of tariffs or quotas o Tariff is a tax on goods or services entering a country (imports) o Quota is a restriction placed on the amount of a product allowed to enter or leave a country o WTO (World Trade Organization) institution that sets rules governing trade between its members through a panel of trade experts Trend 2: formal economic integration and free trade among nations o Euro: adoption of the euro has been a boom to electronic commerce in the EU by eliminating the need to continually monitor currency exchange rates

Dissociative group: one that a person wishes to maintain a distance from because of differences in values or behaviours

EU: 27 member countries that have eliminated most barriers to the free flow of goods, services, capital, and labor across their borders o NAFTA: lifted many barriers between Canada, Mexico, and US and created a marketplace with more than 450 million consumers o CAFTA-DR: agreement is viewed as a step toward a 34 country Free Trade Area of the Americans for the Western Hemisphere Trend 3: global competition among global companies for global customers o Global competition: exists wen firms originate, produce, and market their products and services worldwide o International firm: engages in trade and marketing in different countries as an extension of the marketing strategy in its home country o Multinational firm: views the world as consisting of unique parts and markets to each part differently o Multi-domestic marketing strategy: a multinational firms strategy of offering as many different product variations, brand names, and advertising programs as countries in which it does business o Global marketing strategy: the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ o Global brand: a brand marketing under the same name in multiple countries with similar and centrally coordinated marketing programs o Global consumers: consumer groups living around the world who have similar needs or see similar benefits from products or services Trend 4: development of networked global market space o The use of Internet technology as a tool for exchanging goods, services, and information on a global scale is the fourth trend affecting world trade. 2. Global Environmental Scan Cultural Diversity o Cross-cultural analysis: the study of similarities and differences among consumers in two or more nations or societies o Values: a societys personally or socially preferable modes of conduct or states of existence that tend to persist over time o Customs: norms and expectations about the way people do things in a specific country o Cultural symbols: things that represent ideas or concepts in a specific culture Foreign Corrupt Practices Act (1977) a law that makes it a crime for US corporations to bribe an official of a foreign government or political party to obtain or retain business 3. Global Market-Entry Strategies Exporting producing goods in one country and selling them in another o Indirect export firm sells domestically produced goods in a foreign country through an intermediary o Direct export when a firm sells its domestically produced goods in a foreign country without intermediaries Licensing a company offers the right to a trademark, patent, trade secret, or other similarly valued item of intellectual property in return for a royalty or fee Joint Venture foreign company and local firm invest together to create a local business haring ownership, control, and the profits of new company Direct investment domestic firm actually invests in and owns a foreign subsidiary or division 4. Product and Promotion Strategies Product Extension virtually same product Product Adaptation changing to appropriate for country Product Invention brand new product to accommodate across countries Chapter 8 1. Role of Marketing Research: which is the process of collecting and analyzing info in order to recommend actions Step 1: define problem set research objectives and identify possible marketing actions Step 2: develop research plan specify constraints (restrictions place on potential solutions to a problem), identify the data needed for marketing decisions, and determine how to collect the data Step 3: collect relevant info obtain secondary data (facts and figures previously recorded), obtain primary data (facts and figures newly calculated) Step 4: develop findings analyze data and present findings Step 5: take marketing options make action recommendations, implement actions, and evaluate results 2. Definition and purpose of mystery shoppers They check on the quality and pricing of their products and the integrity of and customer service provided buy their employees o

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Purpose of focus groups informal sessions of 6-10 pas, present, or prospective customers in which a discussion leader asks their opinions about the firms and competitors products, how they use these products, and special needs they have that these products dont address Test markets a small geographic area that is offered a product to help evaluate potential marketing actions