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Flashcards in Notes Deck (116):

Social responsibility

Conerns a firm's obligation to improve its positive effects on society and reduce its negative effects


_______________ are the moral standards that guide marketing decisions and actions

Marketing ethics


Micro-macro dilema

What is good for some producers and consumers may not be good for society as a whole



What is marketing?

Marketing is much more than selling and advertising

Provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers


Why is marketing important to you?

1. Important to every consumer

- You pay for the cost of marketing

2. Marketing will be important to your job

- many opportunities, evey résumé is marketing

3. Marketing affects innovation and standard of living

- marketing encourages research and innovation



Production vs. Marketing

Marketing: Make sure right goods and services are produced

Production: Making goods, performing services

=> create customer satsifaction


Differences between micro and macro marketing

Micro-Marketing: view as a set of activities performed by an organization

- when people talk about marketing, they are talking about micro

Macro-marketing: A social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society

emphasis: how the marketing system works- looking at how marketing affects society and vice versa

- delivers goods and services that consumers want and need

- role: effectively match this heterogeneous supply and demand and at the same time accomplish society's objectives


Universal functions of marketing

Buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information

They must be performed in all macro-marketing systems

How these functions are performed may differ among nations but they are needed


How has the marketing function changed over time?

1. Simple trade era - a time when families traded or sold their "surplus" output to local distributors

2. Production era - a time when a company focuses on production of a few specific products - perhaps because few of these products are available in the market

- if we can make it, it will sell

-Eastern Europe continue to operate with this because of production shortages

3. Sales era - A time when a company emphasizes selling becaused of increased competition

-continued to about 1950

4. Marketing department era - a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm's activities

5. Marketing company era - a time when in addition to short-run marketing planning, marketing people develop long-range plans and the whole company effort is guided by the marketing concept


What is meant by the marketing concept?

Means that an organization aims all its efforts at satisfying its customers---at a profit


1. Customer satisfaction

2. Total Company effort

3. Profit (or another measure of long-term success) as an objective

*Total Company effort

**says we are going to look at customer needs and match our product with that need to make a profit


What is the customer value equation?

Satisfied customer: Benefit - Cost = +

Dissatisfied customer: Benefit - Cost = -

Customer value: the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits

*when customer value is higher => consumer more satisified


How is customer satisfaction linked to profit?

Sometimes it may cost more to satisfy some needs than any customers are willing to pay

Profit is the bottom-line measure of the firm's success and ability to survice

The balancing point that helps the firm determine what needs it will try to satisfy with its total effort


Strategic (management) planning

What is marketing strategy planning?

The managerial process of developing and managing a match between an organization's resources and its market opportunities

Top-management job

Includes planning not only for marketing but also for production, finance, human resources, and other areas


Marketing strategy

Specifies a target market and a related marketing mix

It is a big picture of what a firm will do in some market

two parts are needed: a target market and a marketing mix


What is the relationship between a target market and a marketing mix?

Target market - a fairly homogeneous (similar) group of customers to whom a company wishes to appeal

Marketing mix - the controllable variables the company puts together to satisfy this target group

The customer is surrounded by the controllable variables that we call the marketing mix

*target market in middle of circle and marketing mix on the outside of the circle



What is the difference between mass marketing and a mass marketer?

Mass marketing - typical production-oriented approach

- vaguely aims at "everyone" with the same marketing mix

- everyone is the same => considers everyone to be a potential customer

"shotgun approach"

Mass marketers - are aiming at clearly defined target markets

- their target markets usually are large and spread out

ex. Kraft Foods and Wal-Mart


What are the components of each of the 4 "p's"

Product - concerned with developing the right "product" for the target market

Place - concerned with all the decisions involved in getting the "right" product to the target market's place

Promotion - concerned with telling the target market or others in the channel of distribution about the "right" product

- includes personal selling, mass selling, and sales promotion

Price - must consider the kind of competition in the target market and the cost of the whole marketing mix


Which of the 4 p's is most important?

All 4 P's are needed in a marketing mix

In fact, they should all be tied together

They all contribute to a whole, decisions about Ps should be made at the same time


Product examples

Physical good




Quality level





Product lines






Channel type market exposure

Kinds of intermediaries

Kinds and locations of stores

How to handle transporting and storing

Service levels

Recruiting intermediaries

Managing channels




Promoiton blend

Sales people: kind, number, selection, training, motivation

Advertising: targets, kinds of ads, media type, copy thrust, prepared by whom

sales promotion






Level over product life cycle

Geographic terms




Marketing plan

A written statement of a marketing strategy and the time-relatd details for carrying out the strategy

Should spell out:

1. What marketing mix will be offered, to whom, and for how long?

2. What company resources will be needed at what rate

3. What results are expected


Marketing program

Blends all of the firm's marketing plans into one "big" plan

This program, is the responsibilty of the whole company 

Typically, the whole marketing program is an integrated part of the whole-company strategic plan


Firm's marketing program = 

Marketing plan (marketing strategy + time related details and control procedures) + other marketing plans


Breakthrough opportunities

Opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time

It is hard to provide superior value to target customers if competitors can easily copy your marketing mix



4 basic types of opportunities

Present prodcuts vs. present markets: market penetration

new products vs. present markets: product development

present products vs. new markets: market development

new products vs. new markets: diversification


SWOT analysis

Identifies and lists the firm's strengths and weaknesses and its opportunities and threats

Helps managers focus on a strategy that takes advantage of the firm's strengths and opportunities while avoiding its weaknesses and threats to its success

A useful aid for identifying relevant screening criteria and for zoning in on a feasible strategy



4 types of market opportunities

1. Market penetration

2. Market development

3. Product development

4. Diversification


Market development

Trying to increase sales by selling present products in new markets

*could involve searching for new uses for a product

Firms may also try advertising in different media to reach new target customers

ex. Dunkin Donuts now sells its popular coffee at grocey stores and not just at its own outlets


Prodcut development

Means offering new or improved products for present markets

Firms seek new ways to satisfy customers

ex. Campbell's came out with a new line of soups

ex.. ski resports have develpped trails for hiking and biking for the summer



Means moving into totally different lines of business - perhaps entirely unfamilar products, markets, or even levels in the production-marketing system

ex. Mcdonald's opening hotels in switzerland



Market penetration

Means trying to increase sales of a firm's present products in its present markets - probably through a more aggressive marketing mix

Try to strengthen its relationship with customers to increase their rate of use or repeat purchases, or try to attract competitors customers or current nonusers

ex. Coleman increased its sale of outdoor equipment by promtoinal displays at outdoor events


well defined business and marketing objectives must be:




Relevant to the target




Direct/internal marketing environment





Know the market situation: competitive environment


Monopolistic competition


Pure competition


External marketing assessment






Marketing mix is used to _________________________

address the target market


Good market plan:

Specific, measurable, attainable to the target and timely

Strategies (broad)

Tactics (specific)


Breakthrough opportunities are difficult without _________________



Planning helps define:

competitive advantage


Hit or miss marketing

Not planning, just reacting to the market


Gross Domestic Product (GDP) = 

Gross National Income (GNI)

+ Income earned by foreginers who own resources in the nation


Total income

- taxes

- necessities

Discretionary income


Big Three American Subcultures

Hispanic population is now the largest ethnic subculture (12.5%)

African American subculture is at 12.3%

Asian Americans fastest growing racial group 3.6%


Characteristics of the Hispanic Market

Looking for spirituality, stronger family ties, more color in lives

Spend more on groceries

shopping is afamily affair

clothing children well as a matter of pride

conveince not importan


Key Trends in the U.S. Consumer Market

Graying of America

Generation X - fewer in number

Generation Y - tech savy


Gray Market

Traditionally neglected by marketers

People are now living longer/healthier lives

Zoomers = active, intieresed in life, enthusiastic consumers with buying power - fasterst growing group of internet users


Strategy for Strategy

Exploit your strengths and opportunities

Mitigate your weaknesses and threats

Go with your strenths

Attack your competitor's weaknesses


4 major areas of the external marketing environment:

1. Economic environment

2. Technological environment

3. Political and legal environment

4. Cultural and social environment


Mission statement

Sets out the organization's basic purpose for being - should focus on a few key goals rather than embracing everyything

Company objectives - provides bguidance in screening possible opportunities

- guide managers as they search and evaluate opportunities

marketing objectives - should be set within the framework of larger company objectives


3 main categories of company resources:

1. Financial strength

2. Producing capability and flexibilty

3. Marketing strengths


4 types of classifications of the competitive enviornment:

1. Pure competition - most products head toward pure competition. Customers see the different available products as close substitutes, managers just compete with lower and loweer prices, and profit margins shrink, sometimes they cut prices too quickly

2. Oligopoly - very similar to pure competition

3. Monopolistic competition - A number of different firms offer marketing mixes that at least some customers see as different. Each competitor tries to get control in its own target market but competition exists

ex. clorox bleach uses same chemicals but marketing managers help seperate it by using improved poourg spout

4. Monopoly - firm completely controls a broad product market, are rare in market-directed economies.

 - governments regulate monopolies


Competitive barrier

The conditions that may make it difficult, or even impossible, for a firm to compete in a market

Such barriers may limit your plans or, alternatively, block competitors responses to an innovative strategy



Sherman Act 1890

Monopoly or conspiracy in restraint of trade

- Monopoly or conspiracy to control a product

- Monopoly or conspiracy to control distribution channels

 - monopoly or conspiracy to fix or control prices


Clayton Act 1914

Substantially lessens competition

- Forcing sale of some products with others - tying contracts

Exclusive dealing contracts (limiting buyers' sources of supply)

Price discrimination by manufacturers

Anti trust


Federal Trade Commission Act 1914

Unfair methods of competition

- Unfair policies

- Deceptive ads or selling practices

- Deceptive pricing

*if you put ads out, they have to review them


Robinson-Patman Act 1936

Tends to injure competition

Prohibits "fake" advertising allowances or discrimination in help offered

Prohibits price discrimination on goods of "like grade and quality" without cost justification, and limits quanity discounts

*price discrimination legal if you meet basic criteria


Wheeler-Lea Amendment 1938


Unfair or deceptive practices

Deceptive packaging or branding

Deceptive ads or selling claims

Deceptive pricing


Antimerger Act 1950

Lessens competion

Buying competitors

Buying producers or distributors


MAguson-Moss Act

Unreasonable practices

Product warranties


Consumer Products Safety Commission

Recall products


Food and Drug Administration

Deal with labeling laws

If you make health claims, better justify them or FDA gets involved

*FDA has not improved vitamins or cosmetics


Changing social and cultural environment:

Role of women

More people live in urban areas


Difference between GDP and GNI

GDP - total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country

GNI - Does not include income earned by foreigners who own resources 


Population trends by region

Greatest growth: western states like Nevada, arizona, idaho, and utah, sun belt

Texas, georgia, north carolina and virgina arre also growing rapidly

Senior Citizen group is increasing quickly


What are three key criteria to be used when determining which opportunities to pursue?

Growth potential

competitive superiority

Fit with company resources


4 components of a product market

What: Product type (type of good and type of service)

To meet what: Customer (user) needs

For whom: Customer types

Where: Geographic area


How does a product market different from a generic market?

Generic market - a market with broadly similar needs - and sellers offering various, often diverse, ways of satsifying those needs

Product market - a market with very similar needs and sellers offering various close substitute ways of satisfying those needs



Marketing-oriented managers think of segmenting as an aggregating process - clustering people with similar needs into a "market segment"

market segment - a relatively homogeneous group of customers who will respond to a marketing mix in a similar way


4 key features of a good segment:

1. Homogeneous (similar) within - the customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions

2. Heterogeneous (different) between - the customers in different segments should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions

3. Substantial - the segment should be big enough to be profitable

4. Operational - the segmenting dimensions should be useful for identifying customers and deciding on marketing mix variables


3 key market oriented strategies with respect to segmentation:

1. single target market approach - segmenting the market and picking one of the homogeneous segments as the firm's target market

2. multiple target market approach - segmenting the market and choosing two or more segments, and then treating each as a seperate target market needing a different marketing mix

3. combined target market approach - combining two or more submarkets into one larger target market as a basis for one strategy


Combined tarket market approach

MAy help achieve some economies of scale and require less investment than developing different marketing mixes for different segments


Cons: makes it harder to develop marketing mixes that best satisfy potential customers


Segmenters pros and cons

Pros: usually fine tune their marketing mixes for each target market - perhaps making basic changes in the product itself - because they want to satisfy each segment very well

Cons: may not be effective for a smaller firm with more limited resources

*they would use single target market approach



Why is it important to segment?

Hoping to increase sales by getting a much larger share of the business in the markets they target

They can provide superior value and satisfy their customers better

Provides greater profit potential for the firm



How does a product market differ from a generic market?

Generic market does not include the product type


Potential Target Market Dimensions

Behavioral needs, attitudes and how present and how potential good/services fit into customers consumption patterns

Urgency: to get need satisfied and desire and wilingness to seek information, compare, and shop

Geographic location: and other demographic characteristics of potential customers


WHy is it important to segment?

Segmenting can help better meet the needs of the target



How do you know when to stop segmenting

Steop when profits are too low - less sales lower economies


Qualifying dimensions

Those relevant to including a customer type in a product market


Determining dimensions

Those that actual affect the purchase of a specific product or brand in the product market

Determining can vary over time 


Steps of Market Segmentation

1. Naming broad product markets

2. Segmenting these head product markets in order to select target markets and develp marketing mixes



How customers think about proposed brands

Without positioning it would be hard to differentiate


Negative Word of Mouth (WOM) and Power of Rumors

We weight negative WOM more heavily than we do positve comments

-Negative WOM is easy to spread, especially online

-determined detractors

-information/rumor distortion


Cutting-Edge WOM Influences

Social Networking

Crowd Power

Guerilla Marketing

Viral Marketing (pyramid scheme)


PSSP Hierarchy of Needs

Personal Needs

Social Needs

Safety Needs

Physiological Needs


Selective Exposure


We notice things via our senses: sight, sound, touch, smell, taste


Stimulus generalization:

tendency for stimuli similar to a conditioned stimulus to evoke similar, unconditioined responses

ex. family branding, pdouct line extensions, licensing, look alike packagin


There are more purchases to:

There are more purchase to businesses and organizationla customers


4 types of business customers

1. Producers of goods and services

2. Intermediaries

3. Government units

4. Non Profit Organizations


Driving motivation in the business purchases:

Focus on economic factors - less emotional

Look at total cost of ownership


Key roles in the business buying process

Users - people who use the product

Influences - people who write specifications   R&D, and engineers

Buyers - purchasing managers

Deciders - people with approved - top management

Gatekeepers - control flow of info (secretary)



Purchase Order Request

Request for management to approve a buy

extensive, routinized, limited


3 types of business buying processes

New task buying - new needs and wants info

Straight rebuy - routine purchase made before

modified rebuy - the in-between

*opportunities with a new rask


Benefits of exclusive vendor relationship

Lower costs

Less likely to lose order/get cut


Disadvnatage of exclusive vendor relationships

Reduce flexibility

Joint Problems

Shared information


Role of E-Commerce in Business to Business

Search engines

Online forums

Competitive bids

Post requirements and invite bids

Case studies

Social networking


Firmagraphics of manufactuerers, services,govnt, retailers,and wholesalers?

Manufactuers - not many big ones, clustered in certain areas,

services - smaller and more fragmented

government - very big and a lot of GDP

retailers and wholesalers - buying committee, reorders are straight rebuys, inventory replenishment



Foregin Corrupt Practice Act



Prohibits U.S. firms from paying bribes to foreign officials


True or False: Marketing research provides "the answer"



Advantages/Disadvantages of in house vs. outside Market Research

In house - more control

Outside - costly - they know the info


True or False: Marketing Managers do not need to ve involved in the decision and scope of market research



Five-Step Approach to Marketing Research Process

1. Defining the problem

2. Analyzing the situation

3. Getting problem-specific data

4. Interpreting the data

5. Solving the problem

*most important step is defining the goal/problem



A good market researcher is a "consulting partner"

Can successfully translate the numbers into actionable results


Quantitative research

Research involving the use of structured questions in which response options have been predetermined and a large number of respondents involved

If properly structured, results are projectable to the total population

Open ended, covers more

Not projectable


Qualitative research

Research involving collecting, analyzing, and interpreting data by observing what people do and say

Results are not projectable

Structured, numbers, easier to analyze


Key to projectability

Random sample

Every respondent has an = chance to particpate in the survey

Therefore, your sample will accurately reflect teh population


Ken Concerns in Data Interpretation




Confidence Intervals


Sampling error

Concerns how the sample was drawn and the size of the sample

Non-sampling error is everything else that can affect the results



Are you asking the right questions to measure what you want to measure?

Are you missing a critical question?

Are the questions worded propertly?

Is the question order appropriate?

- sensitive should be last

Are you asking the right people and the right number of people?



What determines methodology?

The nature of the problem

The time available to conduct the research

The budget available for the research

The risk of wrong information


Qualitative techniques

Focus group interview, telephone surveys, personal


Quantitative technique

surveys, questionaires


Difference between a population and a sample

Population - total group of interest

Sample - part of the population (less costly)



Concerns the extent to which data measure they were intended to measure


Confidence Interval

A range around a measurement that conveys how precise the measruement is

Often seen on the news when the results of polls are released