Exam 1 Study Guide – Marketing 360

Chapter 1 Overview of grocerying * Inertia to Passion * * 80/20 Rule * 80% of profits come from 20% of consumers * Economies of home plate * The more than you make of roundthing, the less it costs per unit * i. e. smallsoft Office 2014 * Wholesale Costco * Understand Marketing Mix (4 Ps)/From Customer Perspective 4 Cs * Marketing Mix A combination of the product itself, the scathe of the product, the place where it is made available, and the activities that introduce it to consumers that creates a desired response among a set f predefined consumers * Marketing Mix consists ofMarketer Consumer Product Customer Solution Price Customer Cost Promotion Communication Place Convenience * Exchange * Pg. 12 Occurs when a person gives something and gets something else in return. The buyer receives an object, service, or idea that satisfies a essential, and the seller receives something he or she feels is of equivalent value * pot currency * Trade services * Trade behaviors * Exchang e Value * Criteria for a Market A commercialize consists of all the consumers who share a common need that can be satisfied by a specific product and who suck in the resources, willingness, and authority to make a purchase * returns Time, Place, Possession, Form, Info * Utility The usefulness or benefit consumers receive from a product * Time Utility Storing products until they are needed * Place Utility Making products available where customers want them * Possession Utility Allowing the consumer to won, use, and enjoy the product * Form Utility Transforming raw materials into finished products * What is Value?Comp one(a)nts of Value * Value Benefits a customer receives from buying a good or service * Value from the customers perspective Price and benefits * Value from the sellers perspective Is the exchange profitable to them, has it made capital * framing Value Goal is to satisfy customer all over and over again so that they can build a long-term relationship rather than conscionable having a one night stand * Customers have value Firms recognize that it can be very costly in terms of some(prenominal) money and human effort to do whatever it takes to keep some customers loyal to the company.Samsung Distribution ChannelVery often these actions pay off, but there are cases in which care a customer is a losing proposition * Lifetime value of a customer How much profit they expect to make from a particular customer * Provide value through matched advantage Distinctive competency- a firms capability that is superior to that of its competition * Value from societys perspective * Customer Satisfaction Model * Customer Equity * Combined customer lifetime value of all customers Firing Customers * Sustainable competitory wages * Competitive Advantage Ability of firm to outperform competition, providing customers with benefit competition cant * Identify distinctive competency (firms capability superior to competition) * turn back distinctive competency into distinguishableial benefit (important to customers) * Sustainable Competitive Advantage * Distinctive Competencies Differential Benefits * The Value Proposition * Philosophies (eras) Societal Marketing Orientation (New Era) multiply Bottom Line * Emphasis on satisfying broader needfully of society (employees, stockholders, etc. ) This is like market orientation by there is a niggling something more * Being concerned with social issues doing things better for society and being genuinely concerned * Building long-term relationships * Also referred to as the triple bum line * purlieual, social and financial bottom line * Building long-term relationships, not just satisfying a one time need * i. . McDonalds * Ronald McDonald note firm * Using paper hamburger cases vs. * If the bottoms (financial, social, environmental) become the norm, it becomes the merchandising orientation * Marketing (customer) Orientation * A company that practices the merchandise concept. Determinin g and then satisfying consumer needs and wants at a profit * Selling Orientation * Getting the product out the door Reducing inventories.Product supply is greater than demand * Getting extra products out the door, the decisions you make will reflect on what orientation you will use * One time purchases, do not establish relationship with the customer * Competitor Orientation * Focus is on competitor intelligence. Learning and reacting to what the competition is doing * i. e. Lowes Wherever there was a Home Depot, they would place a Lowes * Product Orientation * Emphasis is on making the product better, production efficiencies.Best when demand surpasses supply * How is this different from a merchandise orientation? NOT asking what the customers want, making what they want. (Its going to be cool and youre going to want it) Chapter 2 Strategic Planning * Mission, Marketing Myopia * Mission line of reasoning describes organizations overall purpose * How should we develop firms cap abilities? * What products and benefits can we create for customers? * What business are we in? * What customers should we serve? Avoid marketing Myopia Having a really narrow mission statement, or being short sided * SWOT ANALYSIS Assessment of Organizations internal and impertinent environment SWOT Analysis, SWOT interactions * * External Environment Identify opportunities and threats to firm from consumers, competitors, scrimping, etc. Internal Environment Identify strengths and weaknesses in firms employees, technologies, facilities, finances, etc. Leverage Strengths + Opportunities * photograph Strengths + Threats * Constraint Weaknesses + Opportunities * Problem Weaknesses + Threats * Portfolio Analysis Portfolio Analysis a management tools for evaluating a firms business mix and assessing the effectiveness of its SBUs * Individual units inside a company Nike Swimming within Nike * SBUs (Strategic Business Units) Individual units within a firm, each having its own missi on, objectives, resources, managers and competitors * BCG Matrix Star, Dog, Question Mark, Cash scare * Boston Consulting collection (BCG) Growth Matrix Analyzes the potential of products to generate cash for a firm. Tells managers which products they should grow * i. . Different Products Owned by Larger Firm * Strategies for each(prenominal) Portfolio * Business Portfolio Stars * High industry growth * High relative market share * Consider potential to stay star * Requires much investment * Generates relatively high revenues * Cash Cows * Low industry growth * High relative market share * They are not disbursement a percentage of money to communicate with consumers, they are just bringing in business * Economies of scale and high profit margins * Requires less investment * Generates relatively high revenues Helps you tolerate other businesses and launch other business/ventures * Question Marks * High industry growth * Low relative market share * Consider potential to be sta r * Requires too much investment * Generates relatively low revenues * i. e. Samsung Galaxy how to move it over to get more money? * Spending more money with less or a market share in comparison to other products * Dogs * Low industry growth * Low relative market share * Generates little profits * Fish or cut bait * Either get rid of it or reinvent it determine a bare-ass use for it.Find a way that it has never been used before * **Exam Question** Selling cutting boards, more pot are cooking at home, market for cutting boards (market growth rate) is high. Company makes bamboo cutting boards, has 10% market share * Relative to competition * Product-Market Growth Matrix * Marketers use the product-market growth ground substance to analyze different growth strategies pg. 52 (the left of the table would read MARKET EMPHASIS with New Markets on the bottom left and Existing Markets on the top left) PRODUCT EMPHASIS Existing Products New ProductsMarket Penetration StrategySeek to incr ease sales of existing products to existing markets Product Development StrategyCreate growth by change new products in existing markets Market Development StrategyIntroduce existing products to new markets Diversification StrategyEmphasize both new products and new markets to achieve growth * Strategic Alternatives Market Penetration Market Development Product Development Diversification * Market Penetration Growth strategies numbered to increase sales of existing products to current customers, nonusers, and users of competitive brands in served markets * Market Development Introduce existing products to new markets (geographic area, or it may mean reaching new customer segments within an existing geographic area) * Product Development Strategies Create growth by selling new products in existing markets.May mean extending the firms product line by developing new variations of the item, or it may mean altering or improving the product to provide enhanced performance * Diversific ation Strategies Emphasize both new products and new markets to achieve growth. Chapter 3 Marketing Environment * frugal Environment * Marketers must understand economy and business cycle * Level of Economic Environment LDC, Developing Country, Developed Country * Level of economic environment the broader economic picture of a country * Deciding whether or not a country will be a good prospect * LDC Least Developed Country A country at the lowest stage of economic development * In most cases, its economic base is agriculture * Africa and South Asia * Standard living is low and so are literacy levels * Developing Country When an economy shifts its emphasis from agriculture to industry, standards of living, education, and the use of technology rise * The future market for consumer goods like skin care products and mobile phones * Developed Country * Boasts sophisticated marketing systems, strong private enterprise, and bountiful market potential for many goods and services * Econom ically advanced and they offer a wide rand of opportunities for international marketers * Competitive Environment Marketers must know what competitors are doing (Competitive Intelligence) * Micro vs. Macro Competition * Macro Overall industry, big picture Monopoly one seller controls market, some companies sued for owning a monopoly * Oligopoly junior-grade number of sellers, each with large share of market, i. e. cars * Monopolistic Competition (we often see this as consumers) Many different sellers each offering a different benefit and each having a small share of market, i. e. soaps * Perfect Competition Many small firms all offering similar products, no influence (rare) * Micro environmental competition Competition for $s with products in the same class, what product alternatives will consumers choose * Competes on 3 levels * For discretionary income how are people spending disposable income * Product competition different products meeting the same need, i. e. ravel * Br and competition same product trying to meet the same need, i. e. treadmills * Competitive Market Structures Perfect Competition, Monopolistic Competition, Oligopoly, Monopoly * See Competitive Environment * Levels of Competition Brand (Direct), Product, Total Market Competition (Discretionary Income) * See Competitive Environment * technological Environment how does this change industry? * Understanding the impact of technology on all aspects of the business * Distribution * Inventory Control * Communication, etc. * Political/ good Environment/federal official Legislation (Acts) * Legislation that influences business. Make sure people compete fairly. Sherman Antitrust Act (1890) mean to eliminate monopolies by prohibiting price fix or predatory pricing * Vertical price fixing When a manufacturer tells a retailer to sell at a fixed price * Vertical price fixing overturned by supreme court 2007 * Horizontal price fixing When companies get together at the same level and agree to sell a product at the same price (Illegal) * Predatory price fixing setting prices low to drive others out of business (Illegal) * Clayton Act (1914) Prohibits tying contacts, take one product must take others * Nike Violation of this act, LeBron shoes Florida sued Nike for not delivering the shoes on time for withholding * Federal Trade Commission Act (1914) * Created the Federal Trade Commission to monitor unfair practices * Socio cultural Environment * Refers to the characteristics of the society, the people who live in that society, and the culture that reflects the value and beliefs of the society * Whether at home or in global markets, marketers need to understand and adapt to their customs, characteristics and practices * Ethnocentrism The belief that ones own norms and the products made in ones country are superior * Bias occurs because we tend to use our own cultural frame of reference to judge other people * Ethnography Researcher lives with people they are studying * D emographics * Statistics that measure observable aspects of a population * Population size * Age * Gender * Ethnic Group * Income * Education * Occupation * Family structure * Social Norms * Specific rules dictating what is right or wrong, acceptable or unacceptable * What ways to dress, how to speak, what to eat and how to behave * Cultural value * Deeply held beliefs about right and wrong ways to live, that it imparts to its ingredients * Talking about sex in public * Product Standardization vs. Localization Advocates of normalization argue that the world has become so small that basic needs and wants are the same everywhere * A focus on the similarities among cultures is certainly sympathetic * Realize large economies of scale because it could spread the costs of product development and promotional materials over many markets * Consistent exposure also helps create a global brand because it forges a strong, unified image all over the world * Advocates for localization feel tha t the world is not that small you need to run up products and promotional messages to local environments * Marketers feel that each culture is remarkable, with a distinctive set of behavioral and personality characteristics Chapter 4 Market Information/Research * go in Conducting Market Research (this bullet will answer almost every bullet in this section, so just read over this one its in detail) 1.Define the Research Problem a. Specify the research objectives i. Symptom or problem? ii. Selling the wine for too much money indication problem is the event of cap What is the trustworthy issue? b. Identify your population of interest iii. Look at surrounding environment iv. Whats happening in the environment, is it a symptom or a problem? 2. Determining Research Design c. Research Design Specifies what cultivation will be collected and what type of study will be done d. Must determine if we are collecting primary or secondary selective randomness v. base We collect selecti ve information ourselves 1. Finding exactly what you want vi. Secondary Someone else collects the data . Quality may be cheaper, but not as precise 3. Often out-of-date e. Determining Specific Information Needs vii. Primary information selective information specifically collected and organized for a particular marketing information need. victor viii. Secondary information Data gathered for some purpose other than the current marketing information need (i. e. f. Primary Data 3 types ix. explorative (problem identification) 4. Qualitative technique used to generate insights for future, more rigorous studies a. Interviews (1 on 1) b. Focus Groups (8-10) c. Ethnographies (researcher lives with people they are studying) d.Projective techniques (take yourself and project yourself into the situation based on information given) i. i. e. Folgers instant coffee regarded women ii. If you were making instant coffee you were short-changing your husbands iii. Benefits and features x. Descrip tive (problem solving) 5. Quantitative technique that probes more systematically and with more respondents e. How to quantify a qualitative data use a scale 6. Think frequencies f. Identifying numbers (how many people walk by the mall on campus) 7. Helps identify attitudes of consumers that buy the products g. Satisfaction survey xi. Casual (problem solving) 8.Quantitative techniques that attempt to understand the cause-and-effect relationships h. Test hypotheses i. Independent variable manipulation j. leechlike variable measureable outcome 9. Experiments lab 10. Field Studies real world 11. causative Research Example k. I work for Nestle and I believe that chocolate country of origin has an impact on satisfaction with the chocolate iv. Dependent = satisfaction v. Independent = country of origin vi. Independent variable with 5 choices (USA, Mexico, Canada, etc) 1. The more conditions you add, the more subjects you need to have vii. Lets add an additional IV nuts or no nuts 2.Cou ntry of origin (5 choices) x Nuts (2 choices) = 10 conditions 12. You can have as many IVs as you want, but this increases the number of subjects you need 13. To determine causality you look to see if there is a difference Exploratory Problem-Solving Purpose Investigation actionable information Research Problem Not well defined Specific Type of data Qualitative Quantitative Sample Small Large 3. Primary Data Collection Methods g. Communication, surveys xii. Mail questionnaires xiii. Telephone interviews xiv. Face-to-face interviews xv. Online questionnaires h. Observation xvi. Personal 14. Stores hire researchers to watch people xvii. Mechanical 15.Device that tracks behaviors (black strip that measures how many cars pass a street) * Different Research Study Designs * A plan that specifies what information marketers will collect and what type of study they will do * Cross-sectional design A type of descriptive technique that involves the systematic collection of quantitative infor mation * Longitudinal Design A technique that tracks the responses of the same sample of respondents over time * Types of Data Qualitative, Primary, Secondary * Primary We collect data ourselves * Finding exactly what you want * Secondary Someone else collects the data * Quality may be cheaper, but not as precise Often outdated * Qualitative You cannot put a number on it i. e. are you happy? Yes or no * Quantitative You can put a value/scale number on it * Validity and Reliability * Validity The extent to which research actually measures what it was intended to measure * Reliability The extent to which research measurement techniques are free of errors * Construct did we measure what we intended to measure? * Internal can you identify the true causal relationship (most important) * External generalizability does this hold true for my population of interest? * Sampling * The offset of selecting respondents for a study Probability sample Each member of the population has some know n chance of being included * Nonprobability sample The use of personal judgment to select respondents (some cases, they just ask whoever they can find, some members of the population may not be included at all) * Convenience Sample Nonprobability sample composed of individuals who just happen to be available when and where data is being collected * Independent/Dependent Variables * Independent manipulation * Dependent measureable outcome * Advantages/Disadvantages of Primary Data Collection Techniques * Advantages of primary data collecting * headmaster * Gathering information for a particular need * Disadvantages of primary data collecting * Expensive * Advantages of secondary data collecting * Cheaper, saves time * Disadvantages of secondary data collecting * Outdated * Data Mining Process in which analysts sift through data to identify unique patterns of behavior among different customer groups * Data mining has 4 primary applications for marketers 1. Customer Acquisition Many firms include demographic and other information about customers in their database 2. Customer Retention and subjection Firm identifies big-spending customers and then targets them for special offers and inducements other customers wont receive 3. Customer Abandonment A firm wants customers to take their business elsewhere because serving them actually costs the firm too much 4. Market Basket Analysis Develop focused promotion strategies based on the records of which customers have bought certain products * Data Collection in Other Countries and Cultures Market conditions and consumer preferences vary worldwide and there are major differences in the sophistication of market research operations and the amount of data available to global marketers * Some countries may not have phones, literacy levels may affect mail surveys * Understanding local customs and cultural differences can affect the responses * Solve this problem by including local researchers in decisions about the design * Language To overcome language barriers, researchers use the process of back-translation the process of translating material to a foreign language and then back to the original language Additional Topics * Stealth Marketing * When youre being marketed to, and you dont realize youre being marketed to * i. e.Camera phones Nokia, having employees ask people to take pictures with their camera phones (w/o launching a campaign) * Guerilla Marketing * Doing something in a non-conventional, unique way * i. e. shooting someone from behind a tree * First time using QR codes * Buzz vs. Hype * Whats the difference? Guerilla marketing is all about creating boil (goal is to get people to talk about us) * Buzz people talking about it * As a consumer, we believe buzz over hype * Hype comes from the company * i. e. television commercial * Hulls drive theory * As humans, we are wired to know what we need which drives us * Homeostasis - equilibrium * i. e. shivering when youre cold Study in 70s (rise of mini theories) claim there are many contributors to consumers * Darwins biological determinism * What motivates us * Cowbird lays eggs in another species nest * When that egg hatches, it automatically knows the cowbird song * BORN with what motivates us * Cannibalization * When a new product takes sales away from original (existing) product * i. e. Apple 4S to 5, or Coca cola to diet coke * Can be good and can be bad, depending on the situation * When you introduce a new product and it isnt good It can motivate people to move away from the brand as a whole * Negative- having to sell whats in inventory * Traditional vs. non-traditional media types * Traditional vs.Nontraditional * Subliminal messaging * Self-help cassette tapes * Lose weight label people got the stop ingest message * Stop smoking people got the lose weight message * Placebo * All of the Knuffs Knuggets * Syphilis study KNUGGET * Testing the spread of syphilis crossways the spread of African Americans * Infected some people with syphilis, some were given treatment, some were told they would be given treatment but werent * Unethical, U. S. Government approve this study and eventually was sued for millions by families * Milgrim Shock Study * Why we have the IRB * Institutional Review Boards * QR Codes Measures the effectiveness of the ad * Allows a large amount of information to be displayed in a small space * Part of technological environment * Internal validity is necessary, but not sufficient for establishing external validity *KNUGGET * We have to have internal validity, otherwise its garbage * Just because we have internal validity, does not mean we can generalize or say that we have external validity * Heiders Balance Theory is one explanation * Suggests that we need to keep triangle in balance * or NIKE GOLF tiger WOODS YOU All positives around the outsides, or two negatives and one positive