Chapters 1-6 Flashcards
(15 cards)
What is the definition of marketing
• AMA definition: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
Define each of the 4 P’s of marketing (the marketing mix). Provide an example of each.
• Product: two types
o Goods: items that you can physically touch (beverages, food, toys)
o Services: intangible benefits, may include the experience (tickets to a game)
- Price: everything the buyer gives up – including money, time, energy – in exchange for the product
- Place: getting the product to the right customer; supply chain management
- Promotion: communicating a product’s value to customers (advertisements on racecars, Facebook pages)
What does the acronym CRM stand for? How is it useful?
• Customer Relationship Management; database used to gather and track customer data points (Salesforce.com, Sage Software)
List and define the three macro strategies for developing customer value. What are characteristics of each strategy?
• Operational Excellence: involves a firm’s focus on efficient operations and excellent supply chain management
o Performance is “good enough”
o To lower costs (monetary, acquisition, maintenance, and supply chain costs)
o To increase convenience
o To obtain reliability
o To become easy to use
o Tradeoffs: Lower performance, lower customization, lower level of service
• Customer Intimacy (Excellence): involves a focus on retaining loyal customers and excellent customer service o Performance is “just right” o High level of customization o High levels of service o Offers a complete solution o Access to a wide selection o Feeling of an “experience” o Tradeoffs: high costs, somewhat lower performance
• Product Leadership (Excellence): involves a focus on achieving high-quality products
o Performance is “never good enough”
o Access to high performance (more features/functionality, latest technologies, complexity)
o Linked with aesthetics and style
o Portray sophistication
o Tradeoffs: higher costs, lower customization
Draw a graph of the macro strategies. Provide an example of a company at each level of the graph.
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What are the three phases of the marketing plan? List and define them.
• Marketing plan: includes an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy (the 4 P’s), action programs, and methods of evaluation
• Three Phases:
o Planning Phase: define the mission and vision of the business, evaluate the situation both inside and outside of the organization
o Implementation Phase: identify and evaluate different opportunities, using: segmentation, targeting, positioning, and the 4 P’s
o Control Phase: evaluating the performance of the marketing strategy using marketing metrics
What is a mission statement? Why is it important for a company to develop a strong mission statement?
• A broad description of a firm’s objectives and the scope of activities it plans to undertake
o What type of business are we in?
o What do we need to do to accomplish our goals and objectives?
List and define each of the components of a SWOT analysis. Which are inward focused? Outward focused?
- Strengths: (Internal/Inward Focused) what your firm does well
- Weaknesses: (Internal/Inward Focused) where you are vulnerable, what you don’t do well
- Opportunities: (External/Outward Focused) possibilities not yet realized
- Threats: (External/Outward Focused) things you can’t control, but must be aware of
List and define each of the categories of the BCG product portfolio analysis.
- Stars: occur in high-growth markets and are high market share products; often require heavy resource investment; as market growth slows, stars become cash cows
- Cash Cows: occur in low-growth markets but are high market share products; have excess resources that can be spun off to other products
- Question Marks: appear in high-growth markets but have relatively low market shares, require significant efforts to maintain and increase market share; do you increase investment, or move onto something else?
- Dogs: are in low-growth markets and have relatively low market shares; may generate enough resources to sustain themselves, but should be phased out as they will never become ‘stars’
List, define, and provide an example of the 4 E’s of social media.
- Excite: offer must be relevant to its targeted customer; relevancy can be achieved by providing personalized offers (customers who bought this item also bought, frequently bought together)
- Educate: sells the product’s value proposition and offered benefits; explains why the customer should want to purchase/use the product, how it can offer more value than competing products. (Starbucks app highlights the importance of convenience – you don’t need to carry cash, you can earn rewards, and you can find new Starbucks locations)
- Experience: provide information about a firm’s goods and services; simulating real experiences; Mini Cooper allows you to design your car without entering the dealership by selecting details and then request financing and a test drive
- Engage: the previous 3 E’s go into engage; action, loyalty, and commitment; positively engaged consumers lead to more profitability (20-40% more purchases); engagement can also backfire
List and discuss the four main generational cohorts we discussed in class. What are characteristics of each?
- Generational Cohort: a group of people of the same generation, have similar purchase behaviors because they have shared experiences and are in the same stages of life
- Gen Y: (1977-2000) 60 million Americans; also called “millennials”; tech savvy – internet, cell phones, social media; multitasking experts; expect easy access to virtually everything, prompting one observer to refer to them as the ‘entitled generation’; are incredibly proficient at tasks that overwhelm other generations; internet, cell phones, Facebook, IM, texting, tweeting, 9-11, internet bubble, housing bubble, the Great Recession, Google, Apple, YouTube, BRICs and the changing face of global competition
- Gen X: (1965-1976) 41 million Americans; they are unlikely to enjoy greater economic prosperity than their parents; population less than boomers and Gen Y, but possess spending power: delaying marriage, delaying purchase of first home; cynical, demand convenience; knowledgeable about products (less likely to trust salespeople or ad claims), more risk averse; MTV, Atari, Nintendo, Cable TV, Gulf War I, The Simpsons, Star Wars, Michael Jackson (“Thriller”), Challenger disaster
- Baby Boomers: (1946-1964) 78 million American’s born between 1946-1964 (post WW2); individualistic, self-reliant, obsession with maintaining their youth; entering their retirement years during one of the worst economic recessions in recent history; spending patterns shifting away from luxury items; lack of savings – working well beyond retirement age, reverse mortgages, becoming caregivers
- Seniors: (Before 1946) America’s fastest growing group, currently 39 million seniors in the US; tends to complain, needs special attention, and takes time browsing before purchasing, they have the time to shop and money to spend; tech averse, made in the USA, blue chip brand names, high quality, convenience, some internet use, fear of online security
- Gen Z: (2001-2014) digital natives, video games, affinity for brands (the book is rather sparse on this generation)
Define universal set, retrieval set, and evoked set.
- Universal Set: include all possible choices for a product category
- Retrieval Set: those brands that can be readily brought forth from memory (a subset of the universal set)
- Evoked Set: compromises the alternative brands that the consumer states they would actually consider when making a purchase decision
Define and provide an example of compensatory decision rules and non-compensatory decision rules
- Compensatory Decision Rules: the consumer trades off one characteristic against another – good characteristics compensate for bad characteristics
- Non-compensatory Decision Rules: selecting a product or service on the basis of one characteristic or one subset of characteristics, regardless of the values of other attributes; if a product/service lacks a certain characteristic, it is removed from the decision set
Define cognitive dissonance. Provide an example of cognitive dissonance
- An uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance; aka buyer’s remorse
- E.g. product doesn’t work the same way its advertised so buyer feels mislead and doesn’t trust the brand anymore
What are three things that a customer can do to relieve cognitive dissonance?
- Take back the item
- Only focus on the good qualities
- Seek positive feedback
- Seek negative info about the products you did not select.
