MKTG Test 1

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MKTG Test 1
2014-09-15 01:16:23
Marketing Business Entrepreneurship
Marketing test 1
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  1. 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. 
    • (Creating and communicating VALUE to customers and satisfying their needs.)
  2. Conditions for Exchange to occur:
    • -At least 2 parties.
    • -Something of value.
    • -Communication and delivery.
    • -Freedom to accept or reject.
    • -Desire to deal with other party.
  3. A _____ may not take place even if conditions are met but no agreement is reached, but ______ occurs regardless.
    • Exchange
    • Marketing
  4. Common exchanges:
    • -$ for food.
    • -$ for place to live.
    • -Time and $ for learning.
    • -Privacy for apps.
  5. Marketing Management Orientations:
    • -Production: What can we make efficiently?
    • -Sales: Aggressive sales techniques and belief that high sales result in high profits.
    • -Market: Satisfying customer needs and wants while meeting objectives.
    • -Societal: Satisfying customer needs and wants while enhancing individual and societal well-being.
  6. Differences between Sales and Market orientations' focus:
    • Sales: Inward looking, emphasizes what the firm makes.
    • Market: Outward looking, emphasizes what the market wants.
  7. Customer value requirements:
    • -Offer products that perform.
    • -Earn trust.
    • -Avoid Unrealistic pricing.
    • -Give the buyer facts.
    • -Offer oragnization-wide commitment in service and after-sales support.
    • -Co-Creation with customers.
  8. Perceived Value=
    Perceived Benefits - Perceived Costs.
  9. Customer Satisfaction-
    Customer's evaluation of a good/service in terms of whether that good or service is valuable.
  10. A market-oriented firm will use ______ rather than ______ to describe what business they are in.
    • benefits
    • goods/services
  11. Marketing Plan
    Business Mission Statement: 
    Attempts to succinctly define a firm's business.
  12. What do Marketing people need to know how to do?
    • 1. Assess the wants and satisfaction of customers.
    • 2. Design and manage product offerings.
    • 3. Determine prices and pricing policies.
    • 4. Develop distribution strategies.
    • 5. Communicate with the present and potential customers.
  13. Strategic Planning-
    The managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities.
  14. A Strategic Business Unit (SBU) has...
    • -A distinct mission and specific target market.
    • -Control over its resources.
    • -Its own competitors.
    • -A single business or a collection of related businesses.
    • -Plans independent of other SBUs.
  15. Ansoff's Opportunity Matrix:
    • -Market Penetration: Increases market share among existing customers.
    • -Market Development: Attract new customers to existing products.
    • -Product Development: Create new products for present markets.
    • -Diversification: Introduce new products to new markets.
  16. Boston Consulting Group (BCG) Matrix is used to...
    • Help managers evaluate and manage business units within the company and help determine what should be done with them in the long run.
    • Suggests appropriate cash flow patterns between units. (What market to get into).

  17. The BCG Matrix:
    • -Stars: High market share of a fast-growing market. (must invest a lot)
    • -Cash Cows: High market share in a slow-growing market. (Don't need to invest much)
    • -Dogs: Low share of a low-growth market. (Probably shouldn't invest, but can serve a purpose)
    • -Problem Child: Low market share in a high growth market. (Will take a lot of $ to make star. Maybe will work out, maybe not.)
  18. Marketing Plan
    Situational Analysis:
    • -Strengths: Things the company does well.
    • -Weaknesses: Things the company does not do well.
    • -Oppurtunities: Conditions in the external environment that favor strengths.
    • -Threats: Conditions in the external environment that do not relate to existing strengths or favor areas of current weaknesses.
  19. Which components of the SWOT analysis are internal or external?
    • Strengths and Weaknesses: Internal
    • Opportunities and Threats: External
  20. Environmental Scanning-
    Continually monitoring the external environment for opportunities and threats.
  21. Competitive Advantage-
    A set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition.
  22. Cost Competitive Advantage-
    Being the low-cost competitor in an industry while maintaining satisfactory profit margins.
  23. Product/Service Differentiation-
    A firm provides something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition.
  24. Niche Competitive Advantage-
    Target and effectively serve a single segment of the market.
  25. Sustainable Competitive Advantage-
    An advantage that cannot be copied by the competition.
  26. Marketing Objectives should be...
    • -Realistic
    • -Measurable 
    • -Time specific
    • -Compared to a benchmark
  27. Types of Target Market Strategy:
    • -Undifferentiated (Mass) Marketing: Appeal to the entire market with one marketing mix.
    • -Concentrated Targeting: Concentrate on one marketing segment.
    • -Differentiated Targeting: Appeal to multiple markets with multiple mixes.
  28. The Marketing Mix (The Four P's):
    • -Product
    • -Place: Product Availability (where and when customers want the product.)
    • -Promotion: Role is to bring about exchanges with target markets by educatingpersuading, and reminding.
    • -Price
  29. Modes of Social Control:
    • -Ethics 
    • -Laws
    • -Formal and informal groups
    • -self-regulation
    • -the media
    • -an active civil society
  30. Ethical Development Levels:
    • -Preconventional Morality: Based on what will be punished or rewarded.
    • -Conventional Morality: Moves toward the expectations of society. Concerned over legality and opinion of others.
    • -Postconventional Morality: Concern about how they judge themselves. (Right or wrong).
  31. A Code of Ethics:
    • -Helps identify acceptable business practices.
    • -Helps control behavior internally.
    • -Avoids confusion in decision making.
    • -Facilitates discussion about right and wrong.
  32. Foreign Corrupt Practices Act (FCPA)-
    Prohibits U.S. corporations from making illegal payments to foreign officials.
  33. Corporate Social Responsibility-
    • A business' concern for society's welfare.
    • Paying attention to the interest of every affected stakeholder in every aspect of a firm's operation.
  34. Corporate Social Responsibility Pyramid:
  35. Sustainability-
    Socially responsible companies will outperform their peers.
  36. Green Marketing-
    • The development and marketing of products designed to minimize negative effects on the environment or improve the environment.
    • Environmentally aware customers are willing to pay more.
  37. Cause-Related Marketing-
    Customer Cause Fatigue-
    • Happens when For-profit and non-profit organizations cooperate to generate funds.
    • Generates about $7 billion annually.

    Too many causes lead to customer cause fatigue.
  38. Environmental Management-
    When a company implements strategies that attempt to shape the external environment.
  39. 6 areas making up the External Marketing Environment:
    • -Social factors
    • -Demographic Factors (including growing ethnic markets)
    • -Economic Factors 
    • -Technological Factors 
    • -Political and Legal Factors
    • -Competitive Factors
  40. External Marketing Environment

    Social Factors

    Core American Values:
    • -Upward Mobility 
    • -Conformity
    • -Self-sufficiency 
    • -Work ethic
  41. External Marketing Environment

    Social Factors

    Emerging Value Trends:
    • -Getting off the grid.
    • -Meaningful green.
  42. External Marketing Environment

    Demographic Factors

    Tweens (8-12)
    • -Population of 20 million.
    • -Directly spend about $30 billion annually.
    • -Parents spend $180 billion on tweens annually.
    • -Respond very favorably to having control over their own experiences.
  43. External Marketing Environment

    Demographic Factors

    • -Population of about 25 million.
    • -95% of U.S. teens are on the internet.
    • -View shopping as a social sport.
    • -75% of teens are into social networks.
    • -On average, just over $156 is spent on or by every American teen each week.
  44. External Marketing Environment

    Demographic Factors

    Generation Y (Born between 1979-1994):
    • -Surpassed population of baby boomers.
    • -Two stages: 1.) those born in 1994 fit closer to the teen cohort. 2.) Those born in 1979 have established careers and started families.
    • -Purchasing power of $200 billion annually.
  45. External Marketing Environment

    Demographic Factors

    Generation X (born between 1965-1978):
    • -Population of 50 million.
    • -Independent, resilient, adaptable, cautious, and skeptical
    • -Face a 59% decline in net worth from 2005 to 2010.
    • -Spend 62% more on housing, 50% more on apparel, and 27% more on entertainment.
  46. External Marketing Environment

    Demographic Factors

    Baby Boomers (born between 1946-1964):
    • -Carry substantial financial burdens, including their children's educations, mortgages, and health care.
    • -Spend $1.8 trillion annually on food, cars, personal care, and other personal products.
    • -Willing to change brands and try new things.
  47. External Marketing Environment

    Demographic Factors

    Growing Ethnic Markets:
    African American:
    Asian American:
    -About 1/3 U.S. residents is a member of a minority group.

    • -The U.S. Hispanic consumer market is now larger than all but 13 world economies.
    • Nearly 60% of Hispanics in U.S. are of Mexican descent. 

    • -African American buying power increased 73% between 2000 and 2012.
    • 47% are between 18-49 years old.

    • -Asian American buying power increased 165% between 2000 and 2012.
    • Fastest growing minority group.
  48. External Marketing Environment

    Economic Factors

    Consumers' Income:
    • -Median U.S. Household income in 2012 was approx. $50,000.
    • -Average family incomes, when adjusted for inflation, fell around 8% between 2007 and 2011.
    • -Education is the primary determinant of earning potential.
  49. External Marketing Environment

    Economic Factors

    Purchasing Power-
    -A measure comparing income relative to the cost of living in different geographic areas.

    -A measure of the decreasing value of money compared to the previous year.
  50. External Marketing Environment

    Economic Factors 

    Gross Income-
    Disposable Income-
    Discretionary Income-
    -Total $ earned during year.

    -Income after taxes.

    -Income left after paying taxes/expenses.
  51. External Marketing Environment

    Technological Factors

    Research (Basic vs. Applied):

    Basic- Pure research.

    Applied- Develop new/improved products.
  52. External Marketing Environment

    Political and Legal Factors

    In the U.S., laws and regulations are designed to protect:

    • -New tech.
    • -Society
    • -Business
    • -Consumers
    • -Corporations
  53. External Marketing Environment

    Political and Legal Factors

    Consumer Privacy Acts:
    • -CAN-SPAM Act
    • -Children's Online Privacy Protection Act
  54. External Marketing Environment

    Competitive Factors

    Pure Competition:
    • a.) Many buyers, many sellers.
    • b.) Homogeneous
    • c.) Assumes perfect information
    • D.) Price competition is fierce
  55. External Marketing Environment

    Competitive Factors

    Monopolistic Competition:
    Has many buyers and sellers, but each seller's offering is somewhat different in the consumer's mind.
  56. External Marketing Environment

    Competitive Factors

    -Few large, interdependent firms account for the bulk of sales in market. Cooperate on price to avoid price wars.

    -One firm sells product for which there are no substitutes.
  57. Importance of Global Marketing to the U.S.:

    -The United states derives ___% of gross domestic product (GDP) from world trade.

    -More than ______ Americans hold jobs that are supported by exports.

    -U.S. businesses export over $______ in goods and services annually.

    -10 million

    -$2.1 trillion
  58. Stages of Global Business Development:
    • 1.) Companies operate in one country and sell into others.
    • 2.) Set up foreign subsidiaries to handle sales.
    • 3.) Operate an entire line of business in another country.
    • 4.) Virtual operation.
  59. Are Multinationals Beneficial?

    Account for ___% of U.S. private jobs.
    -Provide ___% of private wages.
    -___% of R&D spending
    -___% percent of total exports.
    • -19%
    • -25%
    • -74%
    • -48%
  60. Are Multinationals Beneficial?

    • -Technology is capital intensive and does not necessarily increase employment.
    • -Support governments that benefit the company, not necessarily the country and its people.
    • -May take away more wealth than they generate from developing countries.
  61. Global Marketing Standardization-
    Production of uniform products that can be sold the same way all over the world.
  62. Multi-domestic Strategy-
    Subsidiaries of multi-national firms are allowed to compete independently in domestic markets.
  63. Developed Countries vs. Developing Countries:
    • Developed- Complex, sophisticated industries.
    • Developing- Basic industries.
  64. Tariff-
    Exchange Control-
    Market Control-
    Trade Agreement-
    -A tax on imports.

    -Limit on the amount of a product entering a country

    -Exclusion of products from a country.

    -Foreign exchange must be sold to a control agency.

    -Common trade alliance.

    -An agreement to stimulate international trade.
  65. Trade agreements include:
    NAFTA, CAFTA, and EU.
  66. Entering the Global Marketplace- Possible modes of entry:
    • -Export: Sell domestically produced products to buyers in other countries.
    • -Licensing and Franchising: Legal process allowing use of manufacturing/patents/knowledge.
    • -Contract Manufacturing: Private-label manufacturing by a foreign country.

    -Joint Venture: Domestic firm buys/joins a foreign company to create new entity.

    -Direct Investment: Active ownership of a foreign company/manufacturing facility.
  67. Risk/Reward levels for 5 methods of entering the international marketplace (Low to Hgih)
    • -Exporting: Low risk/low return
    •     -Licensing/Franchising
    •          -Contract Manufactoring
    •             -Joint Venture
    •                 -Direct Investment: High risk/high return 
  68. Licensing-
    Allows a company in the foreign country to use your brand name, trademarks, patents, proprietary, tech., etc... in exchange for a royalty.
  69. Export Intermediaries

    Buyer For Export-
    Export Broker-
    Export Agent-
    -Assumes all ownership risks and sells globally for its own account

    -Plays the traditional brokers role by bringing buyer and seller together.

    -Acts like a manufacturer's agent for the export.
  70. Product and Promotion strategic options:

    -One Product, One Message:
    -Product Adaptation:
    -Promotion Adaptation:
    -Product Invention:
    • -Same product, same message
    • -Change product, same message
    • -Same Product, change message
    • -Change product, change message
  71. Dumping-
    The sale of an exported product at a lower price than its price at home.
  72. Counter-trade-
    All or part of the payment for goods or services is in the form of other goods/services.