MKTG. 351 EXAM 1 (CH'S 1-5) |116 QUESTIONS AND ANSWERS|GUARANTEED SUCCESS

marketing The process of creating, distributing, promoting, and pricing goods, services and ideas to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment customers The purchasers of organizations' products; the focal point of all marketing activities target market A specific group of customers on whom an organization focuses its marketing efforts marketing mix Four marketing activities--product, pricing, distribution, and promotion--that a firm can control to meet the needs of customers within its target market product good, service, or an idea *The product variable also involves creating or modifying brand names and packaging and may include decisions regarding warranty and repair services. value A customer's subjective assessment of benefits relative to costs in determining the worth of a product exchanges The provision or transfer of goods, services, or ideas in return for something of value stakeholders Constituents who have a "stake," or claim, in some aspect of a company's products, operations, markets, industry, and outcomes marketing environment The competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surround the consumer and affect the marketing mix marketing concept A managerial philosophy that an organization should try to satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals market orientation An organizationwide commitment to researching and responding to customer needs customer relationship management (CRM) Using information about customers to create marketing strategies that develop and sustain desirable customer relationships relationship marketing Establishing long-term, mutually satisfying buyer-seller relationships customer lifetime value A key measurement that forecasts a customer's lifetime economic contribution based on continued relationship marketing efforts green marketing A strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment For an exchange to take place, four conditions must exist: First, two or more individuals, groups, or organizations must participate, and each must possess something of value that the other party desires Second, the exchange should provide a benefit or satisfaction to both parties involved in the transaction. Third, each party must have confidence in the promise of the "something of value" held by the other. Finally, to build trust, the parties to the exchange must meet expectations. The development of marketing has been reduced to three time periods: Production, Sales, and Market Orientation At the most basic level, profits can be obtained through relationships in the following ways (1) by acquiring new customers, (2) by enhancing the profitability of existing customers, and (3) by extending the duration of customer relationships Premium pricing vs price competition Mont Blanc pens, Bentley automobiles Walmart strategic marketing management The process of planning, implementing, and evaluating the performance of marketing activities and strategies, both effectively and efficiently strategic planning The process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, and marketing strategy mission statement A long-term view, or vision, of what the organization wants to become. This answers two very important questions: Who are our customers? and What is our core competency? corporate strategy A strategy that determines the means for utilizing resources in the various functional areas to reach the organization's goals strategic business unit (SBU) A division, product line, or other profit center within the parent company market A group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase those products market share The percentage of a market that actually buys a specific product from a particular company market growth/market share A helpful business tool, based on the philosophy that a product's market growth rate and its market share are important considerations in determining its market strategy core competencies Things a company does extremely well, which sometimes gives it an advantage over its competition market opportunity A combination of circumstances and timing that permits an organization to take action to reach a particular target market strategic windows Temporary periods of optimal fit between the key requirements of a market and the particular capabilities of a company competing in that market competitive advantage The result of a company matching a core competency to opportunities it has discovered in the marketplace SWOT analysis Assessment of an organization's strengths, weaknesses, opportunities, and threats first-mover advantage The ability of an innovative company to achieve long-term competitive advantages by being the first to offer a certain product in the marketplace late-mover advantage The ability of later market entrants to achieve long-term competitive advantages by not being the first to offer a certain product in a marketplace marketing objective A statement of what is to be accomplished through marketing activities marketing strategy A plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market sustainable competitive advantage An advantage that the competition cannot copy marketing implementation The process of putting marketing strategies into action centralized organization A structure in which top-level managers delegate little authority to lower levels decentralized A structure in which decision making authority is delegated as far down as the chain of command as possible strategic performance evaluation Establishing performance standards, measuring actual performance, comparing actual performance with established standards, and modifying the marketing strategy, if needed performance standard An expected level of performance against which actual performance can be compared sales analysis Analysis of sales figures to evaluate a firm's performance marketing cost analysis Analysis of costs to determine which are associated with specific marketing efforts marketing plan A written document that specifies the activities to be performed to implement and control the organization's marketing strategies The Growth Share Matrix classifies a company's products into four basic types: STARS are products with a dominant share of the market and good prospects for growth. However, they use more cash than they generate to finance growth, add capacity, and increase market share CASH COWS have a dominant share of the market, but low prospects for growth. They typically generate more cash than is required to maintain market share. DOGS have a subordinate share of the market and low prospects for growth. Dogs are often found in established markets. QUESTION MARKS, sometimes called "problem children," have a small share of a growing market and generally require a large amount of cash to build market share. Marketing objectives should possess certain characteristics: First, a marketing objective should be expressed in clear, simple terms so all marketing and non-marketing personnel in the company understand exactly what they are trying to achieve. Second, an objective should be measurable, which allows the organization to track progress and compare outcomes against the beginning benchmarks Third, a marketing objective should specify a time frame for its accomplishment, such as six months or one year. Finally, a marketing objective should be consistent with both business-unit and corporate strategies. Most companies have their own unique format and terminology, but typical plan contains: 1. Executive summary (one or two pages) 2. Environmental Analysis 3. SWOT analysis (strengths, weaknesses, opportunities, and threats) 4. Marketing objectives 5. Marketing strategies 6. Marketing Implementation 7. Performance evaluation environmental scanning The process of collecting information about forces in the marketing environment environmental analysis The process of assessing and interpreting the information gathered through environmental scanning competition Other organizations that market products that are similar to or can be substituted for a marketer's products in the same geographic area brand competitors Firms that market products with similar features and benefits to the same customers at similar prices product competitors Firms that compete in the same product class but market products with different features, benefits, and prices generic competitors Firms that provide very different products that solve the same problem or satisfy the same basic customer need total budget competitors Firms that compete for the limited financial resources of the same customers monopoly A competitive structure in which an organization offers a product that has no close substitutes, making that organization the sole source of supply oligopoly A competitive structure in which a few sellers control the supply of a large proportion of a product monopolistic competition A competitive structure in which a firm has many potential competitors and tries to develop a marketing strategy to differentiate its product pure competition A market structure characterized by an extremely large number of sellers, none strong enough to significantly influence price or supply business cycle A pattern of economic fluctuations that has four stages: prosperity, recession, depression, and recovery prosperity A stage of the business cycle characterized by low unemployment and relatively high total income, which together ensure high buying power (provided the inflation rate stays low) recession A stage of the business cycle during which unemployment rises and total buying power declines, stifling both consumer and business spending depression A stage of the business cycle when unemployment is extremely high, wages are very low, total disposable income is at a minimum, and consumers lack confidence in the economy