MKT 390 Midterm Notes
Chapters 1 and 3
Marketing: activity, set of instructions, and processes for creating, capturing, communicating, delivering,
and exchanging offerings that have value for clients, partners, and society at large
iTunes 2003- .99 songs.
Exchanging, value- customers deem something to be of good value.
Exchanging goods and services in exchange for money, info, time, energy
Customer vs consumer- can be used interchangeably, but customer is person actually buying product
while consumer is person using the product.
Marketing: understand marketplace, consumer needs and wants. Not random, requires thoughtful
planning.
Question 1: customers only give up money to sellers in exchange for goods or service. A. False
Marketing about satisfying customer needs and wants. Generate new products by uncovering consumer
needs. Unrealistic to sell products to everyone. Few successful products target everyone.
Ex. Lexus high in hybrid sedan: target? Not youth or people trying to save gas money? No.
Q 2. Marketing is about satisfying _ and _? A. Needs and wants
Marketing Concept:
Business to Business, Business to Customer, Customer to Customer.
Marketing impacts various stakeholders: Society, customers, employees, supply chain
Phases of marketing: Production- what can we do or make best? Sales- how can we sell more
aggressively? Marketing- What do customers want and need? Value Based marketing- What do
customers want and need while providing more value than the competition?
Q1: What marketing management philosophy focuses solely on what manufacturers can make? A.
Production
Strong connections- create a relationship with customers. Key to long-term success. Can be disconnect
between company and employee. Ex. Ford- ford wants a long term customer, salesman might just want
commission.
Lifetime customer value- prediction of all the value business will earn from entire relationship of
customer. New customers cost a lot of money, important value of loyal customers. Average car is 31k,
average person keeps a car 6.1 years, average person buys 9 cars in lifetime. Potential lifetime
revenue=279k. Ex 2. Average family 239 a week on groceries, 186.5k a year. Credit card- three big
sources of revenue for CC companies? Fees to consumer, interest, fees to merchant. Cancel card?
Customer service gives perks to keep you so they don’t lose that revenue. Gas, dry cleaning, coffee, all
have the same strategy.
Cost to get new customers- 5 to 8x to get new customer vs existing. 90% profit from repeat purchases.
Reducing defections by 5% can increase profits by 25-85%.
Build relationships with customers- do you feel like you have a relationship w/ favorite brands? How?
Loyalty card, credit card on file, barriers that might make you think twice about leaving?
Value of loyal customers: longer customers are more willing to: pay premium prices, make referrals,
increase annual buying, demand less “hand-holding”
Q2: LTCV helps marketers determine a cusomter’s short term worth with their company. False- lifetime
value
Marketing Mix: 4Ps- Product, price, promotion, place.
Product: creating value, good, services, ideas. Price is everything the buyer gives up. Place: supply chain
management. All activities necessary to get product to customer. Placement strategy assesses what
channel is most suited to a product. Intensive, selective, exclusive distribution. Intensive- available
anywhere. Selective- available only in certain stores. Exclusive- only available at 1 or 2 stores.
Promotion- communicating value. Informs, persuades, and reminds customers why they want to buy a
product
Q1. The primary purpose of marketing is to: A. Create value
4 Ps need to be in Sync. Example: Big mac, inexpensive, could come in value packs, available
everywhere, had a mascot. All 4 P’s in sync. Ex 2. Louis Voitton- expensive price, designer brand, no
sales, exclusive distribution. In sync but in a different way. Keep themselves as a luxury brand, having
sales would remove some of that luxury.
Q2. Most successful companies marketing mix are done randomly so long as the customer is happy? A.
False.
Situational Analysis: Portfolio Analysis- look at customers, and look at product. Ex. Chocolate croissant vs
chocolate candy.
BCG portfolio analysis: Boston consulting group. Divides products into 4 categories: Cash cows (low
growth but high share), stars (high share, high growth), question marks (high growth, low share), dogs
(low growth, low share). Relative market share- absolute portfolio market share divided by leading
competitor absolute portfolio market share.
Q1: We calculate relative market share by dividing the firms absolute portfolio market share by the
portfolio market share of the leading competitor? A. True
Marketing planning: organizations are a set of people, capabilities, and strategies.. Target marketing ,
segmentation, targeting, positioning (stp)- marketing mix. Creates sustainable competitive advantage.
Marketing focused on customer excellence- current customer satisfaction, current customers spend
more, encourages new customers.
Resource-based view of organization: resources, distinctive competencies, capabilities. Resouceses and
capabilities build and shape competencies that create strategies, give competitive advantage, and
superior profitability.
VIRO- Value, inimitability, rarity, org leverages. Value- do customers care/value/do you have it.
Inimitability- easy to copy? Costly to copy. Rarity- unique? Who else has it. Org leverage- is it used
Ambidextrous organization: touchman, oreilly. Exploit current capabilities and create new ways of doing
things. Easy to create new possibilities, challenging to exploit current capabilities.
The value system. Suppliers value chains-> org value chain->Channel value chain->customer value chain
Q1. The marketing strategy identifies a firm’s target market, its marketing mix, and the bases of a
sustainable competitive advantage. A. True
Plans and strategy: identify target market, marketing mix, competitive advantage. Outcome: sustainable
advantage. Customer excellence- unique offerings, emotional attachments, outstanding customer
service. Operational excellence- Amazon prime. Product excellence- starbucks. Locational excellence.
Step 1: business mission and objectives. 2: situational analysis. 3: STP 4. Marketing mix. 5. Evaluation of
marketing metrics. Business mission and objectives: mission statement- what type of business. Vision
statement- what they need to do to achieve goals and operations. Ex. Ritz Carlton- “we are ladies and
gentlemen serving ladies and gentlemen” “slam the clam”- BP. Clam- royal dutch Shell. Driving
motivation is to slam Shell.
Q1. There are potentially 4 types of overarching strategies built around the marketing mix, to create and
deliver value and to develop sustainable competitive advantages. They are customer excellence,
operational excellence, ____, and locational excellence. A. Product
Q2. Questions to be answered in the mission and objective sections of the marketing plan include
statements about the ‘why’ and ‘what’ of the firm. A. True
Situational Analysis: organization, competitors, business environment.. Use value delivery sequence.
Choose the value->provide the value->communicate the value. Final 2 steps= marketing mix. Choose
value- explore customers, competitors, and the company. Ecosystem- bigger picture of business
environment. Current and future trends. SWOT= strengths, weaknesses, opportunities, threats. SW=
internal environment. OT= External environment. Strengths- firms sources of competitive advantages.
Weaknesses- compare unfavorably to competitors. Opportunities- match firms strengths. Threatsenvironmental developments that threaten firms market share.
Q1. Firms can attempt to gain a marketing advantage by dominating their competitors in terms of
advertising, sales force, and channel coverage. A. True
Macro trend analysis: Economic, demographic, environmental, political legal, technological, social and
cultural.
Q1. Socio-cultural trends are not relevant to home builders in the US because most target markets want
to aspire to largely the same issues. A. False
5 forces analysis- Michael porter. Competitive rivalry: Buyer power, threat of substitutes, supplier
power, threat of entry. Both about future and current situation.
Q1. The five forces that determine the level of competition within an industry are the number and
rivalry of present competitors, threat of new entrats, threat of substitute products, bargaining power,
and the _____ . A. Bargaining power of buyers
Competitive advantage analysis: sources of competitive advantage, how the firm stacks up, other firms
strengths and weaknesses. Relative competitive advantage: Cost- production/marketing/operating,
differentiation, marketing.
Competitive benchmarking: helps firm evaluate successes of its efforts to gain a competitive advantage
Q1. Firms should only benchmark their poducts and competitors products against operating metrics. A.
False.
Chapter 2
Why global marketing: globalization, convergence, divergence. Technology, financial system, accessglobalization. Financial transactions are easier. Convergence- as economies grow, peoples wants
become more and more similar. Divergence- as we learn about other cultures/ travel. Convergence and
Divergence take place at the same time. All driven by money and financial ability. Domestic marketing:
focus on near/dear, tried/true. Direct and indirect exporting. Indirect- other means of exporting like
piggybacking (amazon). International marketing: customize marketing to other countries. Multinational
marketing: operations on the ground in other countries. Global marketing: world as a unified
marketplace, overall uses same positioning/marketing/pricing for different marketplaces.
Q1. Convergance happens as people become more similar in their wants and desires as wealth
increases. A. True.
Q2. Global marketers use three main ways to achieve their goals; they standardize, they ___, and they
focus on global integration. A. Coordinate across markets.
Types of Markets: mature or emerging. Mature- industrial economies, purchasing power, developed
infrastructure, growth. G7- represents mature markets. Emerging markets- low per capita income, rapid
growth, limits on purchase ability, income inequality. Emerging markets- 40% of world GDP in 2016. Can
also group markets into big emerging markets- growth, gdp, middle classes, competitive capabilities.
BRICS- brazil, india, Russia, china, south Africa. Large differences in infrastructure.
Q1. Mature markets are attractive because they have wealthy consumers, good infrastructure, and
developed legal systems. A. True
Q2. With higher disposable income levels, convergent and divergent pressures start to change consumer
buying behavior. A. True
Market Selection: Identify attractive markets- economic: GDP, purchasing power parity, economic
power, size and growth. Purchasing power parity- value of one currency and purchasing power in a
different country. Infrastructure and technology- communication, distribution, transport, media, global
channels. Social and consumer- culture and customs. 6 enduring principles- power distance, uncertainty
avoidance, individualism, masculinity, time orientation, indulgence. Government policies- tariffs, quotas,
exchange control, trade agreements
Q1. Marketers can use 4 categories of analysis to identify attractive markets for their products and
services to help with decisions. They are economic analysis, infrastructure and technology, ___,
government policy/analysis. A. Social and consumer analysis
Q2. Marketers use geert hofstede’s cultural grid to understand some of the basics of cultures and to
design advertising campaigns and other elements of the marketing mix. These include: A. individualism,
masculinity, and time orientation
Entry Strategies: resources needed and firm’s commitment, risk willing to take, level or degree of
control, experience and capabilities. Leads to global capability. Licencee, franchise, wholly owned
subsidiary, greenfield operation (built from scratch in home market).
Q1. Exporting is the most popular way for companies to become international A. True
Q2. Joint ventures are formed when the business enters a new market and shares its resources with a
business in a host market. Ownership, control, and profits are shared. A. True
Global Marketing strategies- benefits: cost reduction, profit, better products and services, distribution
methods, marketing strengths.
Macrosegmentation- level of development, region, average income, climate.
Q1. In global marketing, relationships are often with other business in the host market who then deal
with consumers in the marketplace. A. True
Q2. A host countries ____ shape ad campaigns. A. culture and communication infrastructure
Ethics: ethical issue- identifiable problem, situation, or opportunity requiring a choice that must be
evaluated as right or wrong, ethical or unethical. Ethical decision making- choice: probability of harm,
personal morals, social consensus, potential consequences, time until consequences, top management
actions, extent of problems, number affected.
Q1. The time until the consequences will affect the type of choice we make in an ethical dilemma. A.
True
Social responsibility: organizations responsibility to maximize positive and reduce negative impacts.
Must be economically viable-> focus on legal obligations->fulfill ethical obligations->philanthropic
obligations. Strategic philanthropy- cause-related marketing, green marketing.
Marketing citizenship: adoption of strategic focus for fulfilling the economic, legal, ethical, and
philanthropic social responsibilities expected by stakeholders (customers, firms, marketing channel
members, employees)
Marketing environment: economic forces, political, sociocultural, technological, legal, competitive
Q1. I m considering buying a new sports car like a ford mustang. Another sports car that would not likely
compete head to head like audi r8, which is at a significantly higher price point, best represents which
type of competition. A. industry
Q2. The _____ environment consists of factors that affect consumer purchase ability and buying
behavior. A. economic
Q3. Your marketing department is currently researching the age, race, and household structures of your
target market. Which environment is being researched? A. Sociocultural forces.
Marketing research- problem recognition. Systematic design, collection, interpretation, and reporting of
info to help marketers solve specific marketing problems. 3 purposes- descriptive, diagnostic, predictive.
Step 1: problem definition, step 2: design research. Step 3: data collection. Primary and secondary
(collected for purposes not for this research). Step 4: data analysis and interpretation. Step 5:
presentation of results. Step 6: Decision/ follow up
Primary data: sampling. Simple random- every participant is randomly chosen. Systematic random- first
is chosen randomly, others chosen at intervals. Stratified- divide population into groups then randomly
select from subgroups. Nonprobability sampling: convenience sampling- easy to access, purposive
sampling- selecting participants that meet specific criteria, quota- grouped and elements are arbitrarily
chosen. Design: focus groups, surveys, experiments, observation, ethnography
Q1. True or false: exploratory research collects data from a larger sample, whereas conclusive research
uses a smaller sample. A. False
Q2: True or false: using survey data, I can conclusively determined that one thing causes another thing.
A. False
Data analysis and interpretation: executive summary, recommendations, tech report, limitations, next
steps
Q1. The executive summary should give enough info that reading the rest of the report should not be
completely necessary. A. True
Consumer behavior- Situational, social, psychological influences. Situational- physical surroundings, time
perspective, reason for purpose, mood/condition, social surrounding.
Q1. If one is influenced in a positive manner by a group by which they are not a member, that group to
this person is an: A. Aspirational group