BA 332 Final Review(each chapter)

BA 332: Final Study Guide Chapter 1: Managing Profitable Customer Relationships - Marketing ? a social and managerial process by which individuals and groups obtain what they want and need through exchanges of value - Satisfying customer needs - Goals ? new customers and grow current - Marketing Process 1) Understand wants and needs 2) Design customer driven marketing strategy 3) Construct marketing program for value 4) Build relationships and create delight 5) Capture value ? profits and customer quality - Consumers have needs, wants, demands - Demand = wants backed by buying power - Market Offerings ? combination of products, services, information, or experiences offered to satisfy need or want - Marketing Myopia ? seller focus on specific products rather than benefits - Market ? set of buyers and potential buyers that share common want - Marketing Management ? choose target markets and build relationships 1) Segmentation 2) Targeting 3) Demarketing - Value Proposition - Marketing Mix ? price, product, place, promotion - New Landscape ? digital age, globalization, ethics, non-profit marketing Chapter 2: Company and Marketing Strategy - Strategic Planning ? developing and maintaining a strategic fit between goals and capabilities and changing market opportunities - Steps of Strategic Planning: 1) Define purpose/mission ? mission statement 2) Set objectives and goals for each level of management 3) Design business portfolio 4) Planning marketing, and other functional strategies - Strategies for Growth: 1) Market penetration 2) Market development 3) Product development 4) Diversification ? new product, new market - Marketing strategy must be customer centered - Business Portfolio ? collection of SBUs, products, etc. 1) Stars ? high growth, high share ? heavy investment 2) Question Marks ? low share ? build to stars or phase out 3) Cash Cows ? low growth, high share 4) Dogs ? low growth, low share - Positioning ? arranging for a product to occupy a clear, distinctive, and desirable place relative to competition in minds of consumers Chapter 3: The Marketing Environment - Microenvironment 1) Company ? internal 2) Suppliers 3) Marketing Intermediaries 4) Customer Markets ? consumer, business, government, reseller, international 5) Competitors 6) Publics - Macroenvironment 1) Demographic ? study of people?size, density, location, age, race, etc. - Increasing diversity = Salad Bowl 2) Economic 3) Natural 4) Technological 5) Political ? more legislation 6) Cultural Customer Value Slides - Customer Value ? the customer?s perception of what they want to have happen in a specific situation with the help of product - Value is: 1) Tradeoff of benefits and sacrifices 2) Relative to competitors, individuals, and situations 3) Goal driven by customer?s desires 4) Interaction of both customer and product 5) Dynamic - Customer Value Strategy Process ? identify, choose, provide, communicate, and assess delivered value Chapter 4: Managing Marketing Information - Better, not more information - Marketing Information Systems ? people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, accurate information to decision makers - Balance what is wanted and what is feasible - Internal Databases - Marketing Intelligence ? publicly available information about he marketplace - Internal or external - Marketing Research ? data relevant to specific marketing situations facing an organization - Marketing Research Process: 1) Define problem and objectives a) Exploratory b) Descriptive c) Causal 2) Develop research plan a) Secondary data b) Primary data ? collected for purpose on hand - Observational ? ethnographic and mechanical - Survey - descriptive - Experimental ? cause and effect 3) Implement plan 4) Interpret and report findings - Customer Relationship Management ? used to manage information about individual customers - Data mining, data warehouses Chapter 5: Consumer and Business Buyer Behavior - Consumer Market ? made up only of final consumers - Influenced by culture, social, personal, and psychological factors - Buying Decision Process 1) Need recognition 2) Information search 3) Evaluation of alternatives 4) Purchase decision 5) Postpurchase behavior - Cognitive Dissonance ? ?oh my god, what did I just do?? reaction - Adoption Process ? mental process through which consumer moves from first learning of product to its final adoption 1) Awareness 2) Interest 3) Evaluation 4) Trial 5) Adoption - Some products take longer to adopt than others ? HDTV vs. DVDs - Influence of product characteristics on adoption rate 1) Relative advantage 2) Compatibility 3) Complexity 4) Divisibility ? can it be used on a limited basis 5) Communicability - Ex. Amazon Wireless Reading Device - Business Markets: 1) Fewer, larger buyers 2) Geographically concentrated 3) Business demand derived from consumer demand - Business decisions are more complex and formal - Buyers and sellers are more dependent - Buying Situations 1) Straight rebuy ? syringes in hospital 2) Modified rebuy 3) New task - Buying Center ? made up of participants in decision - Decisions influenced by environmental, organizational, interpersonal, and individual factors Chapter 6: Segmentation, Targeting, and Positioning - Market Segmentation ? geographic, demographic, psychographic, behavioral, occasions, benefit, user status, usage rate, loyalty status - Use multiple approaches to define well-targeted group - Segmenting Business Markets ? operating characteristics, purchasing approaches, situational/personal factors - Segmenting International Markets ? geographic, economic, political, legal, cultural factors - Requirements for effective segmentation: 1) Measurable 2) Accessible 3) Substantial 4) Differentiable 5) Actionable - Target Marketing Strategies - consider: company resources, product variability, product life-cycle stage, market variability, competitor strategies 1) Undifferentiated 2) Differentiated 3) Concentrated ? ?niche? ? foot in the door ? Miller High Life ? blue collar sports fans 4) Micromarketing - Local ? groups, stores - Individual - Product Position ? perceived value by customer 1) Identify possible competitive advantages - Can differentiate by product, service, image, people 2) Choose the right ones ? unique selling proposition - Important, distinct, affordable, superior, communicable, preemptive, profitable 3) Select strategy - Much More for More - More for the Same - More for Less - Same for Less - Less for Much Less - Positioning Errors: 1) Underpositioning ? no position 2) Overpositioning ? too narrow 3) Confused ? Toyota and Lexus Chapter 7: Product, Services, and Branding Strategy - Product ? anything offered to satisfy want or need - Product levels: 1) Core benefit ? Revlon sells ?hope? 2) Actual product 3) Augmented product - Types of Products 1) Consumer 2) Convenience ? Fritos 3) Shopping ? more expensive, fewer locations, comparison shop 4) Specialty 5) Unsought 6) Industrial - Product Attributes: 1) Quality 2) Features 3) Style and design - Branding, Packaging, Labeling - Product Line Length ? number of items in product line ? can stretch to upper and lower ends ? Marriot - Product Mix ? all product lines - Width ? number of lines - Depth ? number of versions in each line - Brand Equity ? positive effect on customer - Brand Positioning ? on any of 3 levels 1) Product attributes 2) Product benefits 3) Beliefs and values - Line Extension ? introduce additional items in a given category under same brand ? new flavor - Brand Extension ? using brand name to launch new product line Chapter 8: New Product Stuff - New Product Development Strategy - Stages: 1) Idea generation 2) Idea screening 3) Concept development and testing ? idea, concept, image 4) Marketing strategy development 5) Business analysis 6) Product development ? prototypes 7) Test marketing 8) Commercialization ? timing, where, etc. - Sequential Approach ? stage by stage - Simultaneous Approach ? all at once - Product Life Cycle 1) Introduction 2) Growth 3) Maturity 4) Decline - Techniques for maturity: 1) Modify market ? WD 40 2) Modify product 3) Modify marketing mix ? SPAM Chapter 9: Pricing Considerations and Strategies - Price ? amount of money or (sum of values) ? (sum of benefits) - Internal and external factors - Dynamic Pricing ? different prices for different customers - Marketing objectives relating to pricing: 1) Survival 2) Current profit maximization 3) Market share leadership 4) Product quality leadership ? Four Seasons Hotel - Types of Competition 1) Pure Competition ? buyers and sellers have little effect on price 2) Monopolistic Competition ? buyers and sellers trade over a range of prices 3) Oligopolistic Competition ? few sellers, sensitive to each other?s pricing 4) Pure Monopoly ? one seller - Types of Demand 1) Inelastic ? demand doesn?t react to price change 2) Elastic ? demand reacts to price change - Cost-Based Pricing ? standard markup, starts with product - Value-Based Pricing ? consumer ? value ? price - Going Rate - Sealed Bid - Market Skimming ? high price for new product 1) Product quality and image must support 2) Costs cannot be too high 3) Competitors can?t easily enter and undercut - Market Penetration ? low price to go deep, quickly 1) Market must be price sensitive 2) Costs must fall as volume increases 3) Low price must keep out competition, enables to keep price low - Optional and Captive Products - Bundling - Discounts and Allowances - Psychological Pricing 1) Consumers use price less when they can judge quality 2) Consumers use price more when they can?t Chapter 10: Marketing Channels - Distribution Channel ? set of interdependent organizations involved in the process of making product available - P&G needs Walmart and vice versa - Marketing Intermediaries ? results from greater efficiency, offers more than firm can achieve on its oven - Intermediaries make up channel - Functions assigned to channel member who does it best ? risk, distribution, financing, promotion, etc. - Channel Design ? what you want members to do - Product availability 1) Intensive - Coke 2) Exclusive - Rolex 3) Selective ? Nike - Promotional effort ? point of purchase, personal selling - Customer service - Market information - Minimize steps in distribution channel ? Disintermediation - Horizontal Marketing System ? same level of channel ? McDonald?s in Walmart - Hybrid Marketing System ? two or more channels to reach customer ? retailer, catalog, internet - Vertical Marketing System 1) Corporate VMS ? common ownership at different levels of channel ? Sears 2) Contractual VMS ? contractual agreement among channel members ? franchise 3) Administer VMS ? leadership assumed by a few dominant members ? Walmart - Channel Management ? getting channel members to do what you want - New products ? introductory discounts - Old ? encourage adequate inventory levels ? buy back allowances, volume discounts - Horizontal and Vertical Conflict Chapter 11: Retailing and Wholesaling - Retailing ? includes all activities involved in selling product to FINAL consumer - Classified by: 1) Amount of Service a) Self-Service ? convenience goods ? convenience store b) Limited-Service ? shopping and convenience goods ? Best Buy c) Full-Service ? specialty goods ? jewelry store 2) Breadth and Depth of Product Lines a) Specialty Stores ? Foot Locker b) Department Stores c) Supermarket d) Superstores ? includes category killers and hypermarkets e) Convenience Stores f) Category Killers ? giant specialty stores 3) Relative Prices Charged a) Discount Store ? Walmart b) Off-Price Retailer ? buys at less than wholesale, sells at less than retail ? Big Lots c) Factory Outlet d) Independent Off-Price Retailer e) Warehouse Club ? Sam?s Club 4) Organization a) Chain Stores b) Voluntary Chain c) Retail Cooperative ? set up own wholesale operation d) Franchise - Assortment/Service Decisions ? product assortment, services mix, store atmosphere - Future of Retail 1) New retail forms, shortened life cycles 2) Non-store retailing 3) Retail convergence ? retail ? convenience ? Walmart 4) Mega-retailers 5) Technology 6) Global expansion 7) Retail stores as community hangouts - Wheel of Retailing ? new types start off low margin, low price ? high margin, high price Chapter 12: Integrated Marketing Communications - Marketing Communications Mix ? advertising, sales promotion, public relations, personal selling, direct marketing - Advertising ? paid form of non-personal promotion - Sales Promotions ? buy now - Public Relations ? good ? Tylenol, bad ? Firestone - Integrated Marketing Communication ? uses all of marketing mix to communicate clear, consistent, compelling message - Push ? channel partner based - Pull ? consumer based - PDBN ? Pretty Damn Big Number ? amount spent on advertising - Decisions in advertising: 1) Set objective ? inform, persuade, compare, remind - Mac during Super Bowl ? inform and compare 2) Set budget 3) Develop advertising strategy a) Create message ? Big Idea ? meaningful, believable, and distinctive b) Execution ? testimonial, personality symbol, musical, slice of life 4) Select Media a) Reach - % of people exposed to ad b) Frequency ? number of times exposed c) Media Impact 5) Media Timing ? continuity or pulsing - Evaluation ? ?Copy Testing,? increasing sales? - Sales Promotions ? sample, coupons, premiums 1) Consumer 2) Trade ? to get shelf space, brand promotion, etc. 3) Sales Force ? more support - 99% of Americans use coupons Chapter 13: Personal Selling and Direct Marketing - Salespeople ? work to build long-term customer relationships - Order taker and order getter - Personal selling is paid form of personal promotion - Involves two way communication between salesperson and customer - Role of Salespeople 1) Probe customers about problems 2) Adjust market offerings 3) Negotiate terms 4) Long-term relationships - Role of Sales Force 1) Represent company to customers 2) Represent customers to company - Steps in Sales Force Management 1) Design sales strategy and structure, structure: a) Territorial b) Product ? only certain lines c) Customer d) Complex ? combination 2) Recruit and select salespeople a) Intrinsic motivation b) Disciplined work style c) Ability to close d) Ability to build relationships 3) Train ? goals: a) Learn about company b) Learn about products c) Learn customer and competitor characteristics d) Learn how to make effective presentations e) Learn field procedures and responsibilities 4) Compensate 5) Supervise - Direct ? identify customers and set call norms - Specify time to be spent prospecting 1) Annual Call Plan ? which customers to call on in which months 2) Time-and-Duty Analysis ? assessment of time spent selling, waiting, paperwork, etc. 3) Sales Force Automation Systems ? computerized sales force operations - Motivating 1) Organizational climate 2) Sales quotas 3) Positive incentives ? meetings, contests, recognitions, profit sharting 6) Evaluate - Personal Selling Process 1) Prospecting 2) Preapproach ? learn about customer 3) Approach ? salesperson meets customer 4) Presentation 5) Handle objections 6) Closing ? ask for order 7) Follow-up - Direct Marketing ? direct connection with individual customers ? LT relationships - New Model 1) Some use as supplemental medium 2) For some it is new and complete model for business 3) Some firms employ direct model as only approach 4) Some see this as marketing of new millennium - Benefits to Buyers ? convenient, easy, private, ready access to information, immediate and interactive - Benefits to Sellers ? relationships, target small groups, able to tailor, right time, access to buyers they couldn?t otherwise reach, low-cost - Forms of Direct Marketing ? online, face to face, telemarketing, catalog, mail, tv, kiosk - Direct-Mail Marketing ? offer, announcement, reminder - Personal and flexible - Catalog ? paper and electronic - Direct-Response TV Marketing ? direct-response, infomercials, home shopping channels - Kiosk - Integrated Direct Marketing ? use of coordinated multi-media, multi-stage campaigns - Public Policy and Ethics 1) Irritation 2) Take advantage of less sophisticated buyers 3) Targeting TV addicted shoppers 4) Deception, fraud 5) Invasion of privacy Chapter 15: The Global Marketplace - Global Marketing ? 21st Century 1) World) is shrinking with faster communication 2) International trade is booming 3) Global competition intensifying 4) Higher risks with globalization - International Marketing Decisions 1) Looking at global environment a) International Trade System ? restrictions ? tariffs, embargos, etc. b) World Trade Org. and GATT ? helps trade ? reduces barriers and tariffs c) Regional Free Trade Zones d) Industrial environment e) Political environment f) Cultural environment 2) Deciding whether to go international ? reasons to consider: a) Foreign attacks on domestic markets b) Foreign markets with higher profit opportunities c) Stagnant or shrinking domestic markets d) Need larger customer base for economies of scale e) Reduce dependency on single market f) Follow customers who are expanding 3) Deciding which markets to enter a) What volume? b) How many countries? c) What types of countries? 4) Deciding how to enter a) Exporting - Indirect ? working through independent marketing intermediaries - Direct ? company handles own exports b) Joint Venturing ? joining with foreign companies c) Approaches ? licensing, contract manufacturing, management contracting, joint ownership d) Direct Investment ? development of foreign manufacturing facilities 5) Deciding on the global marketing program a) Standardized Marketing Mix ? largely same products with same approaches everywhere b) Adapted Marketing Mix ? adjusts to each target market c) Global product strategies 1) Straight Extension ? no change 2) Product Adaptation ? adapt product 3) Product Invention ? new product d) Global Promotion Strategies 1) Standard theme 2) Communication adaptation e) Global Pricing Strategies - international prices higher because of price escalation 1) Uniform price 2) Adapted price 3) Standard markup f) Dumping ? foreign subsidiary charges less than its costs or less than in home market 6) Deciding on global marketing organization a) Organize export department b) Create international divisions - Geographic - World product groups - International subsidiaries c) Become a global organization Demand Forecasting and Sales and Operations Planning - Demand Forecasting ? future projection of expected demand, given a stated set of assumptions - Is not a plan to meet or exceed demand forecast - Keeps customers and channel partners happy - Keeps operations, logistics, and purchasing happy - Forecasting Level ? point in corporate hierarchy where forecast is needed 1) Product forecast ? how much beer? 2) Brand forecast ? how much Bud Light? 3) SKU forecast ? how much Bud Light in 6 pack longnecks? - Forecasting Time Horizon ? time frame for the forecast ? annual, monthly, weekly - Forecasting Time Interval ? coincides with how often the forecast is updated - Demand Forecasting Management Approaches 1) Independent ? every department 2) Concentrated ? one department does theirs and dictates to everyone else 3) Negotiated ? every department does one, then a common forecast is agreed upon 4) Consensus ? all departments work together to create one common forecast - Management Questions: 1) Customer base ? narrow or broad? 2) Data characteristics ? age, detail, outside data, quality 3) Number of forecasts ? number of time horizons, time intervals, products, channels, and locatioins 4) Number of new products 5) Regional differences 6) Seasonality 7) Sophistication of personnel and systems 8) Accuracy needed - 2 real functions accomplished by forecasting systems 1) Statistical engine ? software that does the statistics 2) Communication ? integration with other corporate systems, ability to share information up and downstream - Demand Forecasting Techniques 1) Quantitative or statistical techniques a) Time Series b) Regression or other causal modes 2) Qualitative techniques a) aka subjective or judgmental forecasting b) Process of turning the experience, judgments, and intuition of experienced people into formal forecasts c) Use when you have reason to believe future will not look like past - New products ? no historical data - New conditions d) Advantages 1) Can predict changes in sales patterns 2) Can incorporate very rich sources of data e) Problems 1) Limited by availability of information 2) Large amounts of complex information 3) Subject to game playing 4) Expensive, time consuming 5) Individuals may fail to see patterns or see imaginary ones f) Techniques and Tools - Expert evaluation techniques 1) Jury of executive opinion 2) Sales force composite ? most common - Use when they have insights into changing demand patterns at their large customers - Use when they have insights into the probabilities of securing large orders 3) Quantitative and qualitative should be coordinated and used - Demand Forecasting Performance Measurement - What gets measured, gets rewarded, and what gets rewarded, gets done - Dimensions of performance 1) Accuracy 2) Bias 3) Costs 4) Customer Satisfaction - Impact on customer satisfaction 1) Dissatisfy by: a) Making products consumers don?t want b) Not making products they do want c) Not having right quantities at the right place - Keys to Effective Forecasting Management 1) Forecasting is not planning 2) Forecast demand, not supply 3) Communicate, coordinate, collaborate 4) Use tools wisely 5) Make it important 6) Measure, measure, measure - Sales and Operations Planning ? the process by which a company matches its supply and demand plans - Creates demand for products that can be produced - Ensures operations will supply products for which there is demand - Both sides of company on same page - S&OP Meetings - Who should come? - Empowered managers representing supply and demand - Marketing, sales, logistics, manufacturing, purchasing, finance - What should go on? - Discussion of unconstrained demand, followed by discussion of operational constraints - What should result? - Supply plan ? what to make and when - Demand plan ? what should we sell and when