Ba 311 Mkt Midterm Notes

Midterm Review- BA 311 CHAPTER 1: An overview of Marketing CHAPTER 2: Strategic Planning for Competitive Advantage CHAPTER 3: Social Responsibility, Ethics CHAPTER 4: Developing A Global Vision CHAPTER 5: Consumer Decision Making CHAPTER 6: Business Marketing CHAPTER 7: Segmenting and Targeting Market CHAPTER 8: Marketing Decision Support Systems

1. Know the 4 P’s and how they are used to design a marketing mix. The 4ps represent Product, Promotion, Place and Price. Marketing Mix- a unique blend of 4Ps designed to produce mutually satisfying exchanges with a target market. The strategies for all four components must be blended to achieve optimal results. Product- product offering and product strategy and it is impossible to create a promotional plan, place strategy and set the price without knowing about the product to be marketed. Place (strategies) Making products available when and where customers want them. Physical distribution, business activities involved with storing and transporting r. m. or finished products. The goal is to make sure products arrive in usable condition at designated places when need. Promotion includes advertising, public relations, sales promotion, and personal selling. To create mutually satisfying exchanges with target markets by informing, educating, persuading, and reminding them of the benefits on an organization or a product. Pricing (strategies) The most flexible of 4ps-quickest element to change, price X unit sold = total revenue. Marketing mix typically starts with the Product. Product= physical unit, its package, warranty, after-sale service, brand name, company image, value, and many other factors. Can be tangible goods, ideas or services, and it should also offer customer value.

2. Be familiar with different types of problem solving that occur in purchase decisions, such as limited and extensive problem solving vs. routine behavior. Also understand the levels of involvement with different kinds of purchases. 5 steps in consumer decision making process: Need recognition , information search, evaluation, of alternative, purchase and post purchase behavior. In routine response behavior is when frequent purchased occurs, cost of goods and services are low. Level of involvement= Low to moderate Limited decision solving describes how consumer had prior product experience but is not familiar with the current brands. Level of involvement= Short to moderate

Extensive problem solving: is when the consumer is unfamiliar and rarely buys the item, plus the product is typically expensive. Level of involvement= High

3. Understand market and product development strategies, like diversification, market penetration, product development, mass marketing, and market development. Market Penetration: A firm would use this alternative to try to increase market share among existing customers. Diversification: This is another strategy to increase sales by introducing new products into new markets. Market development: This strategy is put into place to attract new customers to existing products. Product development: This strategy focuses on creating new products for the current markets. Mass marketing:

4. Understand how competitive strategies are used in various industries, such as pricecompetition vs. product differentiation. Price Competition: Product differentiation: A positioning strategy a company uses to make the products stand out from other competitors.

5. Know environmental factors that can affect markets, such as economic, political, social, cultural, and technological. Also understand how these factors affect the decisions of marketing managers, such as the product offerings they create. Economic: there are three areas in Economic factors: consumers’ income, inflation and recession.

Consumers’ income: 45k average, as income raises more families and individuals can buy more items, and vice versa. Inflation: decrease value of money comparing to prior year. Recession: period of reducing demand for goods and services due to a negative growth in the Economic activity. Political: Laws and regulations established by Fed/State/regulatory agencies can be major troubles for if the company do not follow and comply to laws and restrictions. Social: most difficult, social factors include our attitudes, values, and lifestyles. Cultural: Technological: 2 reasons that technological factors are important: 1. new technology = company can be more efficient and create better product. 2. As a result of new technology your old products would become obsolete. Marketing Managers’ decisions based on these factors:

6. Understand the history of marketing and different company orientations, such as production, sales, and the modern marketing concept Production orientation: This orientation approaches on focuses on internal capabilities of the company instead of the wants/needs of consumers/marketplace. Sales orientation: Main philosophy for this orientation is that aggressive sales techniques will result in more products/services sold to consumers, and high sales result=high profit. Modern marketing concept: (def: of m.c.= the idea that the social and economic justification for an organization’s existence is the satisfaction customer wants and needs while meeting organizational objectives.) Market Orientation: focuses on customers wants and needs, integrating all company’s activities: including production to satisfy wants, achieve long-term goals= satisfy customers wants/needs. Social marketing orientation: M.O + also preserve and enhance individuals’ and society’s long-term best interests.

7. Review the marketing concept and make sure you understand how to apply it. Marketing Concept: Mainly emphasizing on the idea that social&economic justification for an organization’s existence is the satisfaction of customer wants and needs while meeting organizational objectives. Marketing concept-“is a part of Market Orientation” includes the following: • Focusing on customer wants and needs so that the organization can distinguish its product(s) from competitors’ offerings. • Integrating all the organization’s activities, including production, to satisfy these wants. • Achieving long-term goals for the organization by satisfying customers ants and needs legally and responsibly

8. Be familiar with the various strategies for target marketing and segmentation. Strategies for Market Segmentation: Select a Market to study Choose bases for segmentation Select descriptors Profile and analyze segments Select target markets Design implement, maintain marketing mix. Geography-region DemographicsPsychographics- personality, motives Benefits- identify benefits sought by customers seek in products Usage Rates- product purchase/consume. Strategies for Target Markets: Target strategy: Undifferentiated targeting: adapts a mass- market perspective. Concentrated targeting: Find a niche market and focus on that one segment for marketing materials. Multisegment Targeting: Have a marketing approach of more than one market segment and present a unique marketing mix for each segment.

9. Understand what positioning is and the use of perceptual maps. Development of marketing mix depends on positioning, a process that influences possible customers overall perception of the brand, product line or organization.

Perceptual mapping illustrates in two or more dimensions, the location of products/brands or group of products in customers’ mind. We can reposition the products into a different dimension via modifying the current product to adapt to capture new market.

10. Be familiar with market and demographic trends in the U.S., such as main age groups, their approximate size, and relative growth rates. Tweens: ages: 8-15, population 29 million. Spending power= 39 bil +126 parents spending in 2007, expected to rise to 150 billion in 2008. Generation Y: born between1979 – 1994, population 60 million. Spending power=200 bil/annually, lifetime = 10 trillion. Generation X: born between 1965-178, pop=40 million. Spending power=? Baby Boomer: born between 1946 -1964, population=77 million. Spending power= 1 trillion, age 50-60.

13. Be familiar with the steps in the market research, the types of research that are done and the goals of marketing research. Are there situations where it is unnecessary to do it? 7 steps= 1. identify and formulate the problem/opportunity, 2.plan the research design and gather primary data, 3. Specify the sampling procedures, 4. Collect the data, 5. Analyze the data, 6. Prepare and present the report, 7. Follow up. The goals of marketing research: maximizes chance of getting accurate and meaningful results, and the main objective is to provide insightful decision-making information. Unnecessary:

14. Know what reference groups are and the types of influence they exert. Reference groups: Informal & formal groups that affects an individual’s buying behavior. They serve as information sources and influence perceptions, affect an individual’s aspiration levels, and their norms either constrain or stimulate consumer behavior.

Opinion leaders: their actions influence opinion of others: celebrities, politicians, athletes..etc. Family:

16. Consider the role of ethics in a variety of marketing situations, such as issues involving consumer protection, privacy, and corrupt practices.

17. Understand how organizational buying differs from consumer purchases. Specifically, know terms like new buy, modified rebuy, and straight rebuy. A new buy is when the company decided to buy the new item for the first time. Modified buy is when the company requests the suppliers to make changes to the original products/goods. Straight buy is a situation in which the purchase for the product requires no new information or new suppliers, basically a reorder of prior products.

18. Be familiar with types of business purchases which are made for resale or use in a final product. Major equipment, accessory equipment, raw materials, component parts, processed materials, supplies, and business services. Raw materials: unprocessed, mineral ore, timber, wheat, corn, fruit, fish. They become part of finished products. Made for resale:

Resellers: markets are retail and wholesale businesses, they buy finished goods and resell them.

19. Know how the purchase situation affects buyers and the importance of variables like purchase reason, time, and surroundings.

20. Understand key variable that affect buyer behavior, such as selective exposure, selective retention, selective perception, drive, cue, responses and reinforcement. Selective exposure: Consumer decides which stimuli to notice and which to ignore. Selective retention: a process that consumer use to retain information that supports his/her personal beliefs. Selective perception: Drive: Cue:

21. Understand the scientific approach to the market research process, how data is interpreted and measured in terms of sampling accuracy and confidence levels. Marketing Research is process of planning, collecting, and analyzing data relevant to a marketing decision.

22. Be familiar with the concept of “stickiness” as it relates to measures of success for websites at getting a visitor’s attention. Stickiness measures the effectiveness of the website. Stickiness = Frequency (of visits) X Duration (visit times) X Site Reach (viewed during each visit)

23. Know what a NAICS code is and how it is used. NAICS- The North American Industry Classification System: a detailed numbering system developed by US/CA/MEx to classify N.A. business establishments b their main production processes. The more digits in a code = the more homogeneous the group is. Typical 6 digits >>>>>4 NAICS levels. First 2digits=sector (information) Plus 3rd digit=subsector ( broadcasting&tele) Plus 4th digit= industry group (Telecom.) Plus 5th digit= Industry (wireless telecom.) Plus 6th digit= Subdivision of industry (Paging)

24. Understand the various types of and reasons for strategic alliances. Strategic alliances (partnership)= cooperative agreement between businesses. Licensing, distribution agreements, joint ventures, research and development together, and partnerships. In cooperative environment one business can gain others technology, financial resources, and access to the markets. Competitors often join together to increase productivity and lower costs.

25. Understand economic terms like derived demand, and inelasticity. Derived Demand: demand for business products because of results from demand for consumer products. Inelasticity: Demand for the product will not be affected as much even if there is an increase or decrease in the price of the product.