Marketing Exam 1

• What is the science of marketing: For customers to be satisfied
• What ideas does marketing encompass: Selling, advertising, promotion
• Promotion examples: advertising, personal selling, public relations, sales promotion, and social media
• Philosophy of marketing: Customer is king. Their satisfaction brings you money. Know who your customers are and please them
• Target market: A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of the group
• What is marketing: defined by the 4 Ps, which are product, price, promotion, and place
• Product: Anything perceived as valuable to the customer. Can be tangible, intangible, or an experience
• Place: Ease of getting the product, which is how you deliver value to the customer
• Promotion: Communicates value. In order to communicate value, you need to know everything about the customer
• Price: Dependent on product, place, and promotion. Based on your target market and how they perceive the value of the product
• Four marketing management philosophies: Production based, sales based, market based, and societal market based
• Production based marketing: Focused on what is easiest to produce and what they are best at producing. Efficient production but adapt poorly to customer's changing needs and wants
• Sales based marketing: Based on the philosophy of aggressive sales technique and that sales equal high profits. Inventory goes away fast, but could backfire by having the customer's needs and wants below sales. This method also has negative stigma of deception associated with it
• Market based marketing: Focused on satisfying customer needs and wants while meeting objectives. A sale depends on customer's decision to buy. Customer value is the expected quality of a good and acceptable price to pay for it. You have to know both customers and competitors for this to work
• Societal market: Focused on satisfying customer needs and wants while enhancing individual and societal wellbeing. Supports causes target market cares about, since you can't please everyone. Emphasis on using less toxic inputs and recyclable materials to produce more durable products.
• What are the three things a societal market focuses on to survive: Society (Human Welfare), Consumers (wants and satisfaction), Company (profits)
• Sales vs market orientation: A sales orientation's focus is primarily inward, their business is selling goods and services to everybody, their profit goal is to maximize sales volume and they use primarily promotion to achieve it. A Market orientation's focus is outward, their business is satisfying wants and needs for specific groups of people, their profit goal is customer satisfaction and they utilize the 4 Ps to achieve it.
• What is the point of a marketing plan: Since marketing is all about the highest probability of profit, a marketing plan tells you where you are right now, where your destination is, and every step in between. A marketing plan has to be in concrete numbers to help firms achieve their goals.
• Marketing plan elements: Business mission statement, Situation analysis/SWOT, objectives, and a target market strategy that uses the 4 Ps
• Business mission statement: Answers why the business exists and what value it creates, which is to satisfy customers. It sets boundaries for subsequent decisions
• What happens if a business statement is too narrow: It causes marketing myopia, which is the overfocus of the product. This can trap the company in a place where it can't progress. TO solve this, focus on what the market wants rather than the product
• Situation analysis: Definition is to identify strategic alternatives to achieve profits. The point is to find new ways for businesses to earn profits
• SWOT: Stands for strengths, weaknesses, opportunities and threats, all of which need to be analyzed
• Strengths and weaknesses in a SWOT: They are internal, which includes things like facilities and company finances. You can use company strengths to seize opportunities and defend against threats. To deal with weaknesses, you shore them up to exploit opportunities and minimize threats
• Opportunity and threats in a SWOT: They are external, which requires environmental analysis. The reason you observe environment is to seek opportunities, which involves seeing customers with unserved needs and using your strengths to serve them. Threats make it hard for your company to grow.
• Agoff's strategic opportunity market: Includes concepts like Market penetration, Market development, Product development, and Diversification.
• Market penetration: Increase market share among existing customers, optimal if you're focusing on the present product and present markets
• Market development: Attract new customers to existing product, optimal if you're focusing on the present products and new markets.
• Product development: Creating new products for present markets, optimal if you're focused on new products and present markets
• Diversification: Introducing new products into new markets, also self explanatory. inherently the most risky
• BCG portfolio matrix: A tool used to compare the performance of SBUs by evaluating their market share and market growth. SBUs fit in the category of star, cash cow, question mark/problem child, and dog.
• Market share: tells you your status in the market. A high market share means you're a marketing leader, Low means you're being dominated by the competition.
• Market growth: How fast your market size is increasing
• Star goods: When your SBU has a huge market share but your market growth is also fast. Generates lots of profits but needs loads of money to maintain market growth
• Question Mark (problem child) goods: When your SBU has a low market share but high market growth. You should invest into it if it has star good potential, if not give up
• Dog goods: When your SBU has low market growth and low marketing share. Bad for business so its not worth keeping
• Cash cow: When your SBU has high market share and low market growth. This is the best situation, since you're in control of a stable market. Generates loads of profits
• 4 basic strategies for the SBUS:

  1. Build: Pour money into the SBU
  2. Hold: Keep things the way they are
  3. Harvest: Maximize profits with minimal investment
  4. Divest: Sell off or close down
• How the 4 basic strategies are applicable for the BCG matrix:

  1. For star goods: you should build or hold
  2. For problem child/question mark goods: you build or divest
  3. For dog goods: You divest or harvest
  4. For cash cows: You hold or harvest
• Competitive advantage: Comes from Perceived superiority, which is the reason consumers choose you over your competitors.