Exam 1: Chapters 1-5 Flashcards
Marketing
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.
You see it from when you wake up to when you go to bed
Exchange
Desired outcome of marketing. People giving up something in order to receive something else that they would rather have
Production orientation
A philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace.
Does whatever he wants without consulting consumer
Henry Ford, Levi’s, coke, Pepsi
“You can have whatever you want as long as its black” -Henry ford
All examples of production orientation
Sales orientation
The belief that people will buy more goods and services if aggressive sales techniques are used and high sales result in high profits.
Birth of salesmen when people stopped buying as much
Milkman, encyclopedia man, tidy diaper service, etc
Examples of sales orientation
Market concept
The idea that social and economic justification for an organizations existence is the satisfaction of customer wants and needs while meeting organizational objectives
-focus on customer wants and needs so -companies can distinguish their products
Integrating all the organizations activities, including production to satisfy customer wants
-achieving long term goals for organization by satisfying customer wants and needs legally and responsibly
Market orientation
Philosophy that assumes that a sale does not depend on aggressive sales force but rather on a customers decision to purchase a profit; it is synonymous with the marketing concept
Predefined Kennedy making money back guarantee, holding companies accountable for injuries caused by its product.
Market orientation example
Coke bottles used over and over, sometimes glass would get in drink. So they switched to cans, people disposed of pop tops ok the floor and kids would get hurt. People put them in drink, swallowed them. Resulted in companies asking “what do you want? How can I make it for you?
Example of market orientation
Societal marketing orientation
The idea that an organization exists not only to satisfy customer wants and needs and meet organizational needs, but also to preserve or enhance individuals’ and society’s long term best interests
Recycling, donating money to charity, don’t use chemicals. Sustainability. Ex: if two products are identical but one company donates to charity, you’re more likely to buy from the one who donates
Societal marketing orientation
Customer value
The relationship between benefits and the sacrifice necessary to obtain those benefits
How to show customer value:
- offer products that perform
- earn trust
- avoid unrealistic pricing
Value
Doesn’t have to be cheap. Could be quality, engineering, etc. just has to satisfy you, it is different for everyone
Relationship marketing
It will focus on improving relationships with existing/current customers.
RFM
how RECENT, how FREQUENTLY, how much MONEY do they spend.
Ex) sending out mailer saying “we noticed you bought this from us name, you’re one of our best customers, please enjoy 20% off”
Empowerment
Delegation of authority to solve customers problems quickly, usually by the first person the customer notifies regarding the problem
Ex: giving employees authority to solve problems on their own as they see fit
Teamwork
Collaborative efforts of people to accomplish common objectives
Customer relationship management(CRM)
A company wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups
-every 80% you buy goes to 20% of your shoppers
Market oriented firms business;
- should always encourage innovation and creativity by reminding people that there are many ways to satisfy customer wants
- stimulate awareness of changes in customer desires, make sure people are aware of demographic changes
On demand marketing
On demand marketing delivers relevant experiences throughout the consumers decision and
Buying process that are integrated across both physics and virtual environments
What is the firms primary goal
To make money
Why study marketing?
-Marketing plays an important role in society
-marketing is important to business
-marketing offers outstanding career opportunities
-marketing is everyday life.
Teacher said : it’s communication. Companies are communicating what they have, the benefit, warnings about how to use and stay safe, how a product will last, help, etc. we need it in society.
Strategic planning
The managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities
Examples of strategic planning:
-Computer manufacturer won’t suddenly start producing bowling balls. Pick your core competency and focus on that.
-coke owned paramount studies and had no idea how to run it
-you should look
For something compatible with what you do,
Ex: Tuna industry invented cat food. They took something they already did and made a new market
Ex: kraft uses same ingredients for mayo and salad dressing
Strategic business units (SBUs)
A subgroup of a single business or collection of related businesses within larger organization.
Example of SBUs
General Electric makes: airplane parts, light bulbs, appliances, etc. they have different divisions
Characteristics of SBUs
-specific target market
-control over resources
-it’s own competitors
-single business or collection of related businesses
Ex) coke makes Dasani water, other soft drinks, Minute Maid, etc.
-plans independent of other SBUs in total organization
Ansoffs strategic opportunity matrix
4 options
1) market penetration
2) market development
3) product development
4) diversification
Market penetration
Saturate existing market wherever you are. A firm using market penetration will try to increase market share among existing customers
You will logically expand until you fill maker
Chris’s burgers. Best step is to open up another Chris’s burgers.
Example of market penetration
Market development
Attracting new customers to existing products. Develop a new market
You expanded as much into California as you could, you should leave the area. Ex) in n out expanding to Texas
Example of market development
Product development
Entails creation of more products for present markets
Develop new products.
Starbucks having Christmas drinks, McDonald’s changing their menu and introducing healthier profits and getting rid of cheaper/unhealthier products
Example of product development
Diversification
Strategy of increasing sales by introducing new products into new markets
Doing something they don’t normally do
Starbucks selling mugs and CDs, in n out having t shirts
Example of diversification
Boston consulting group model portfolio matrix
Portfolio matrix: a tool for allocating resources among products or strategic business unit on the basis of relative market share and growth rate
Four categories of portfolio matrix
Stars
Cash cows
Problem children/question mark
Dogs
Star
Fast growing market leader, ex: iPad is apples current star., handheld computers, tablets
Cash cow
SBU that generates more cash than it needs to maintain it’s market share. In low growth market but has dominant market share
Ex: Heinz: ketchup and weight watchers frozen dinners
Ex: laptops
Problem child/question mark
Shows rapid growth but poor profit margins. Low market share in high growth industry. Require a lot of cash.
Ex: palm device/blackberry smartphones
Dogs
A dog has low growth potential and small market shares most dogs eventually leave the marketplace.
Ex: mainframe computers
Marketing plan
A written document that acts as a guidebook of marketing activities for the marketing manager
Elements of a marketing plan
- Business mission statement
- SWOT analysis
- Objectives
- marketing strategy
- implementation, evaluation, control
Mission statement
-foundation of Amy marketing plan, answers “what business are we in”
Is usually generic
-coca cola: to put a can of coke within arms reach of every citizen on the planet -
SWOT analysis
Strengths, Weaknesses, Opportunities, Threats
Strengths and Weaknesses- internal
Opportunities and Threats- external
Should do every 6-12 months
Competitive advantage
Set of unique festers of company and its products that are perceived by target market as significant and superior to those of the competition
Cost competitive advantage
Being the low cost competitor in an industry while maintaining satisfactory profit margins
Cost competitive advantage ways:
- experience curve
- efficient labor
- no frills goods and service
- government subsidies
- product design
- reengineering
- production innovation
Experience curve
Curve that show costs declining at a predictable rate as experience with product increases
Over years you get better at what you do, everyone well trained, used to their job, saves you money due to less injuries/shutdowns
Efficient labor
Labor costs can be important component of total costs in low-skill, labor intensive industries such as product assembly and apparel manufacturing