Download Marketing I Review Guide

Marketing I Review Guide
1.1
Marketing Definition - Marketing is 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. (American
Marketing Association)
Simplified - What is the activity and processes for creating, communicating, delivering, and exchanging goods and
services that have value for customers.
Seven Functions of Marketing –
1. Market Planning
2. Marketing Information Management
3. Pricing
4. Product/Service Management
5. Promotion
6. Channel Management
7. Selling
Channel Management – Process of deciding how to get goods into customers hands.
Marketing Information Management – Gathering, storing, and analyzing information, customers, trends, and competing
products
Marketing Planning – Understanding concepts and strategies used to develop and target specific marketing strategies to
a select audience
Pricing – Determine how much to charge for goods and services in order to make a profit
Product/Service Management – Obtaining, developing, maintaining, and improve a product or a product mix in response
to market opportunities
Promotion – The effort to inform, persuade, and remind current and potential customers about a business’s products or
services.
Selling – Responding to consumer needs and wants through planned, personalized communication in order to influence
purchase decisions and ensure satisfaction.
1.2
1. Definition of free enterprise
Market, Capitalism, and Free Enterprise and similar terms
Traditional, Command, Market, Mixed
Pillars of free enterprise – Private Property, Price System, Competition, Entrepreneurship
1.3
Marketing Mix – The four basic marketing strategies: Product, Price, Place, Promotion
Product- Strategies for deciding what products to make and sell
(Product design, product features, packaging, warranties, labeling, brand name)
Price- Strategies used to price products for sale
Place- Strategies used to determine how and where a product will be distributed
Promotion- Strategies for communicating information about a product to customers
2.1
Marketing Definition
Market - the group of consumers or organizations that is interested in the product, has the resources to purchase the
product, and is permitted by law and other regulations to acquire the product. (NetMBA)
Market – All people who share similar needs and wants and who have the ability to purchase a given product.
(Marketing Essentials, 2012)
Target Market Definition
Target Market - The particular segment of a total population on which the retailer focuses its merchandising expertise to
satisfy that submarket in order to accomplish its profit objectives. (American Marketing Association)
Target Market – The group of people most likely to become customer, identified for a specific marketing program.
(Marketing Essentials, 2012)
Target Market – a group of people that an organization has decided to aim its marketing efforts towards. Wikipedia
B2B – “Business to Business” A business that markets its products or services to other businesses. (American Marketing
Association)
B2C – “Business to Consumer” A business that markets its products or services to consumers. (American Marketing
Association)
The situation analysis is the foundation of the strategic planning process. The situation analysis includes an examination
of both the internal factors (to identify strengths and weaknesses) and external factors (to identify opportunities and
threats). It is often referred to by the acronym SWOT. (American Marketing Association)
Situation Analysis – The study of the internal and external factors that affect marketing strategies. (Marketing Essentials,
2012)
2.2
Market Segmentation – The process of subdividing a market into distinct subsets of customers that behave in the same
way or have similar needs. (American Marketing Association)
Market Segmentation – The process of classifying people who form a given market into even smaller groups. (Marketing
Essentials, 2012)
Customers can be segmented into groups based on demographics, geographics, psychographics, and behavioral
characteristics. (Marketing Essentials, 2012)
2.3
ROMI - Return on marketing investment (ROMI) is the contribution attributable to marketing (net of marketing
spending), divided by the marketing 'invested' or risked.
ROMI - the profit from a particular activity compared with the amount spent on marketing it in a particular period.
(Cambridge Dictionaries Online)
ROMI – A measurement organizations calculate that helps them evaluate their marketing investment
The following are possible methods or metrics to evaluate marketing plansAnalyze sales
Analyze profit
Market Share
Growth vs. previous year
Compare to a competitor
3.1
Marketing Research - Marketing research is the systematic gathering, recording, and analysis of data about issues
relating to marketing products and services. (American Marketing Association)
3.2
Primary Data – Data obtained for the first time and used specifically for the particular problem or issue under study.
Examples of methods to collect primary data – Three main methods to collect primary data (Survey, Observation,
Experiment)
Survey – Internet, telephone, in-person, focus groups, panels etc.
Observation – Secret shoppers, tracking the path customers walk in a store, etc.
Experiment – Taste tests, test marketing, etc.
Secondary Data – Data already collected for some purpose other than the current study. (Marketing Essentials, 2012)
Examples of sources of secondary data – internal company records (customer sales, geographic distribution of
customers), Internet sources, U.S. & State Government (Census, Department of Commerce), Data from research
companies, Professional and Trade Organizations (Wall Street Journal, National Restaurant Association).
Problem definition occurs when a business clearly identifies a problem and what is needed to solve it. (Marketing
Essentials, 2012)
3.3
Marketing Strategy – A marketing strategy identifies target markets and sets marketing mix choices that focus on those
markets. (Marketing Essentials, 2012)
Marketing Strategy - A statement (implicit or explicit) of how a brand or product line will achieve its objectives. The
strategy provides decisions and direction regarding variables such as the segmentation of the market, identification of
the target market, positioning, marketing mix elements, and expenditures. A marketing strategy is usually an integral
part of a business strategy that provides broad direction to all functions. (American Marketing Association)
Marketing Plan – A formal, written document that directs a company’s activities for a specific period of time (Marketing
Essentials, 2012)
4.1
Pricing decisions dictate how much to charge for goods and services in order to make a profit. Pricing decisions are
based on costs and one what competitors charge for the same product or service. To determine price, marketers must
also determine how much customers are willing to pay. (Marketing Essentials, 2012)
4.2
Supply – The amount of goods producers are willing to make and sell. (Marketing Essentials, 2012)
Demand – Consumer willingness and ability to buy products. (Marketing Essentials, 2012)
Law of Demand – As the price of a good or service increases, the quantity demanded will decrease.
Law of Supply – As the price of a good or service increases, the quantity supplied will increase.
Examples of factors that affect a business’s profits –
Demand for product
Costs and Expenses
Competition
State of the economy
Competition – A business relation in which parties compete to gain customers. (Marketing Essentials, 2012)
5.1
Product life cycle – Introduction, Growth, Maturity, Decline
Market Share – A company’s percentage of the total sales volume generated by all companies that compete in a given
market.
Market Position – The relative standing a competitor has in a given market in comparison to its other competitors.
5.2
Idea generation methods – brainstorming, screening, crowd sourcing, mind mapping.
Product Mix - The assortment of goods and services a company sells
6.1
Elements of the Promotional Mix – Advertising, Publicity, Personal Selling, Sales Promotion
Promotional Plan - The combination of various advertising, public relations, sales promotion, and personal selling
activities used by the marketer over a period of time to achieve predetermined goals.
6.2
Advertising – TV, Radio, Newspaper, Magazine, Billboards, Internet, etc.
Public Relations – Press Releases, News Feature, Press Conference, etc.
Personal Selling – Inside Salespeople, Outside Salespeople, Telemarketers, etc.
Sales Promotion – Coupons, Games, Trade-Shows, Give-a-ways, Sales, etc.
Social Media – Facebook, Twitter, Instagram, Google+, etc.
7.1
Sales Channel – A way of bringing products or services to market so that they can be purchased by consumers.
Examples of members of a sales channel- company sales force, channel partners, door-to-door marketing, wholesalers,
distributors, telemarketing, internet marketing, and retail channels.
7.2
Channel of distribution – The path a product takes from its producer or manufacturer to the final user.
Explain how intermediaries add value during the distribution process.
Exclusive Distribution involves distribution of a product in protected territories in a given geographic area.
Selective Distribution means a limited number of outlets in a given geographic area sell a manufacturer’s product.
Intensive Distribution involves the use of all suitable outlets to sell a product.
8.1
Selling – Responding to consumer needs and wants through planned, personalized communication in order to influence
purchase decisions and ensure satisfaction.
Explain the concept of Customer Service and how it builds selling relationships
8.2
Help students understand the relationship between features (Physical/tangible features of a product) and benefits
(intangible benefits received). An airbag is the feature, the benefit is my car is safe.
“Consumers buy benefits NOT features.”
8.3
Sales Process – Approach, determining needs, product presentation, overcome objections, close, suggestions selling,
follow-up. (On the state exam the students will NOT have to put the steps of the sales process in order or even
remember every step, but they should be away of the general process to conduct a sale.)
Sale Close – Obtaining a positive agreement for a customer to purchase a product. Most important step of the sales
process.
Buying Motives
Emotional – Feeling experienced by a customer through association with a product
Rational – Conscious, logical reasons for purchasing a product
Patronage – Purchasing a product/service because of loyalty to a company