Marketing Exam 1 Study Guide

CHAPTER 1 Describe the purpose of marketing - The purpose of marketing is to create, communicate, and deliver value to customers in order to build a strong customer relationship. Understand the concepts of marketing mix and demographics/psychographics - The marketing mix or the tools for positioning are o 4P’s: Product, Place, Price, and Promotion - Demographics o Are grouping variables according to age, gender, race, ethnicity, religion, and etc. - Psychographics o Are the AIO: Activities, Interests and Opinions, which help make stronger connections Compare and contrast the different marketing management philosophies of the evolution of the marketing concept - Seller’s Market o Production Orientation Focuses on efficiency of internal operations What can we make or do best? o Sales Orientation Focuses on aggressive techniques for overcoming customer resistance How can we sell more aggressively? - Buyer’s Market o Marketing Orientation Focus on satisfying customer needs and wants What do customers want and need? o Societal Orientation Focus on satisfying customer needs and wants while enhancing individual and societal well-being Extension of marketing orientation which includes additional benefits What do customers want and need, and how can we benefit society? Explain and examine the different facets of the market orientation construct - Market Orientation is an organizational perspective that puts the philosophy of the marketing concept into practice o Gathering market intelligence; Communicate with the people to gather information o Disseminating knowledge; Share the information to businesses/organizations o Coordinated response; Create the product itself - Marketing Concept is a consumer oriented philosophy dedicated to understanding and fulfilling consumer needs through the creation of value o Value  Customer Relationships  Customer Loyalty Apply the marketing concept to real-world business situations CHAPTER 10 Thoroughly explain the STP process - Segmenting - - o Identifying a group of customers in your market who share a similar set of needs and wants Targeting o The process of evaluating the various segments and then selecting the most viable segment/s who share a similar set of needs and wants Positioning o Act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market Compare and contrast the four different segmentation bases - Demographics o Ex. age, family size, occupation, family life cycle, ethnicity, and etc. - - Psychographics o Values, Lifestyle, Personality and AIO: Activities, Interests, and Opinions Behavioral o Based on the usage rate o Dividing a market by the amount of product bought or consumed Needs o Process of grouping customers into market segments according to the benefits they seek from the product Explain the pros and cons of the four primary targeting strategies - Undifferentiated o One size fits all o Marketing approach that views the market as one big market with no individual segments and thus requires a single marketing mix o Advantage: Potential savings on production and marketing costs o Disadvantages: Unimaginative product offerings; Company more susceptible to competition - Differentiated o A strategy that choose 2 or more well-defined market segments and develops a distinct marketing mix for each o Advantages: Greater financial success; Economies of scale o Disadvantages: High costs; Cannibalization: the reduction of sales for creating/introducing a new product - Niche o A concentrated strategy of focusing on a narrow market o Advantages: Concentration of resources; Meets narrowly defined segment; Small firms can compete; Strong positioning o Disadvantages: Segments too small, or changing; Large competitors may market to niche segment - Micromarketing o One-to-one marketing which is individualized, information intensive, with long-term perspective and goal of increasing customer loyalty Describe the value proposition, and positioning statement concepts - Value Proposition o The brand’s full mix of benefits on which a brand is differentiated and positioned o An innovation, service, or feature intended to make a company or product attractive to customers o Answers the question: “Why should I buy your brand?” - Positioning Statement o Age trends, generation characteristics, ethnic trends Explain the types of business products - Major equipment, Accessory Equipment, Raw Materials, Component Parts, Processed Materials, Supplies, and Business Services Explain the business market demand categories - Derived Demand ** o Demand for industrial products that stems from the demand for consumer products o Demand for piece components that are combined to create a final product o Ex. aluminum cans + high-fructose corn soda = coke - Inelastic Demand o Demand that is not significantly altered by a price increase or decrease - Joint Demand ** o Demand involving the use of 2 or more items in combination to produce a product o Demand for complimentary goods/ finished goods that are consumed together o Ex. milk and cereals; salsa and chips; peanut butter and jam - Fluctuating Demand o Demand for business products varies disproportionately as consumer demand varies Explain the buying situations - Straight Rebuy o Original product is reordered o Routine purchase of the same products - Modified Rebuy o Changes are desired in the original product o When requirements of a straight rebuy are modified - New Task o Product is purchased for the first time o An initial item purchase to be used to perform a new job or solve a new problem Compare and contrast business markets and consumer markets Characteristic Demand Volume # of Customers Location Promotion Buying Influence Negotiations Business (B2B) Organizational Larger Fewer Concentrated Personal Selling Multiple More Complex Consumer (B2C) Individual Smaller Many Dispersed Advertising Single Simpler CHAPTER 3 Differentiate between Market Strategy and Market Tactics - Market Strategy - o A plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market o Choose the value Market Tactics o An action you take to execute the market strategy o Provide the value and communicate the value Understand Strategic Planning Elements - SWOT o Strengths, Weaknesses, Opportunities, and Threats Helpful Harmful Internal Strengths Weaknesses External Opportunities Threats - Strategic Business Units (SBUs) o Is an organizational subunit that acts like an independent business in many major respects, including the formulation of its own strategic plans and its own marketing strategy o Characteristics are as follows: A distinct mission and specific target market Control over their resources Their own competitors Plans independent of other SBUs - BCG Matrix o A strategic planning tool based on the philosophy that a product’s market growth rate and market share are important in determining marketing strategy PRODUCT MARKET SHARE High Low High Star Question Mark PRODUCT Low Cash Cow Dog MARKET GROWTH Star  high market growth and high market share; is a market leader Cash Cow  low market growth and high market share; is a market leader Question Mark  high market growth and low market share Dog  low market growth and low market share Compare and contrast Competitive Advantage strategies - Operational Excellence o Focus on efficiency of operations and processes o Lower cost operations leads to lower prices for customers - Product Leadership o Excellence in technology and product development o Most advanced, highest quality product offering - Customer Intimacy o Understanding customers better than the competition o Develop long-term customer relationships Comprehend the growth strategies from the Strategic Opportunity Matrix - Market Penetration