Midterm Review- BA 311
CHAPTER 1: An overview of Marketing
CHAPTER 2: Strategic Planning for Competitive Advantage
CHAPTER 3: Social Responsibility, Ethics
CHAPTER 4: Developing A Global Vision
CHAPTER 5: Consumer Decision Making
CHAPTER 6: Business Marketing
CHAPTER 7: Segmenting and Targeting Market
CHAPTER 8: Marketing Decision Support Systems
1. Know the 4 P’s and how they are used to design a marketing mix.
The 4ps represent Product, Promotion, Place and Price.
Marketing Mix- a unique blend of 4Ps designed to produce mutually satisfying exchanges
with a target market. The strategies for all four components must be blended to achieve
optimal results.
Product- product offering and product strategy and it is impossible to create a
promotional plan, place strategy and set the price without knowing about the product to
be marketed.
Place (strategies)
Making products available when and where customers want them.
Physical distribution, business activities involved with storing and transporting r. m. or
finished products.
The goal is to make sure products arrive in usable condition at designated places when
need.
Promotion includes advertising, public relations, sales promotion, and personal selling.
To create mutually satisfying exchanges with target markets by informing, educating,
persuading, and reminding them of the benefits on an organization or a product.
Pricing (strategies)
The most flexible of 4ps-quickest element to change, price X unit sold = total revenue.
Marketing mix typically starts with the Product.
Product= physical unit, its package, warranty, after-sale service, brand name, company
image, value, and many other factors. Can be tangible goods, ideas or services, and it
should also offer customer value.
2. Be familiar with different types of problem solving that occur in purchase decisions,
such as limited and extensive problem solving vs. routine behavior. Also understand
the levels of involvement with different kinds of purchases.
5 steps in consumer decision making process:
Need recognition , information search, evaluation, of alternative, purchase and post
purchase behavior.
In routine response behavior is when frequent purchased occurs, cost of goods and
services are low. Level of involvement= Low to moderate
Limited decision solving describes how consumer had prior product experience but is
not familiar with the current brands. Level of involvement= Short to moderate
Extensive problem solving: is when the consumer is unfamiliar and rarely buys the item,
plus the product is typically expensive. Level of involvement= High
3. Understand market and product development strategies, like diversification,
market penetration, product development, mass marketing, and market
development.
Market Penetration: A firm would use this alternative to try to increase market share
among existing customers.
Diversification: This is another strategy to increase sales by introducing new products
into new markets.
Market development: This strategy is put into place to attract new customers to existing
products.
Product development: This strategy focuses on creating new products for the current
markets.
Mass marketing:
4. Understand how competitive strategies are used in various industries, such as price-
competition vs. product differentiation.
Price Competition:
Product differentiation: A positioning strategy a company uses to make the products
stand out from other competitors.
5. Know environmental factors that can affect markets, such as economic, political,
social, cultural, and technological. Also understand how these factors affect the
decisions of marketing managers, such as the product offerings they create.
Economic: there are three areas in Economic factors: consumers’ income, inflation and
recession.
Consumers’ income: 45k average, as income raises more families and individuals can buy
more items, and vice versa.
Inflation: decrease value of money comparing to prior year.
Recession: period of reducing demand for goods and services due to a negative growth in
the Economic activity.
Political: Laws and regulations established by Fed/State/regulatory agencies can be
major troubles for if the company do not follow and comply to laws and restrictions.
Social: most difficult, social factors include our attitudes, values, and lifestyles.
Cultural:
Technological: 2 reasons that technological factors are important: 1. new technology =
company can be more efficient and create better product. 2. As a result of new
technology your old products would become obsolete.
Marketing Managers’ decisions based on these factors:
6. Understand the history of marketing and different company orientations, such as
production, sales, and the modern marketing concept
Production orientation: This orientation approaches on focuses on internal capabilities
of the company instead of the wants/needs of consumers/marketplace.
Sales orientation: Main philosophy for this orientation is that aggressive sales
techniques will result in more products/services sold to consumers, and high sales
result=high profit.
Modern marketing concept: (def: of m.c.= the idea that the social and economic
justification for an organization’s existence is the satisfaction customer wants and needs
while meeting organizational objectives.)
Market Orientation: focuses on customers wants and needs, integrating all company’s
activities: including production to satisfy wants, achieve long-term goals= satisfy
customers wants/needs.
Social marketing orientation: M.O + also preserve and enhance individuals’ and
society’s long-term best interests.
7. Review the marketing concept and make sure you understand how to apply it.
Marketing Concept: Mainly emphasizing on the idea that social&economic justification
for an organization’s existence is the satisfaction of customer wants and needs while
meeting organizational objectives.
Marketing concept-“is a part of Market Orientation” includes the following:
• Focusing on customer wants and needs so that the organization can distinguish its
product(s) from competitors’ offerings.
• Integrating all the organization’s activities, including production, to satisfy these
wants.
• Achieving long-term goals for the organization by satisfying customers ants and
needs legally and responsibly
8. Be familiar with the various strategies for target marketing and segmentation.
Strategies for Market Segmentation:
Select a Market to study
Choose bases for segmentation
Select descriptors
Profile and analyze segments
Select target markets
Design implement, maintain marketing mix.
Geography-region
Demographics-
Psychographics- personality, motives
Benefits- identify benefits sought by customers seek in products
Usage Rates- product purchase/consume.
Strategies for Target Markets:
Target strategy:
Undifferentiated targeting: adapts a mass- market perspective.
Concentrated targeting: Find a niche market and focus on that one segment for marketing
materials.
Multisegment Targeting: Have a marketing approach of more than one market segment
and present a unique marketing mix for each segment.
9. Understand what positioning is and the use of perceptual maps.
Development of marketing mix depends on positioning, a process that influences possible
customers overall perception of the brand, product line or organization.
Perceptual mapping illustrates in two or more dimensions, the location of
products/brands or group of products in customers’ mind. We can reposition the products
into a different dimension via modifying the current product to adapt to capture new
market.
10. Be familiar with market and demographic trends in the U.S., such as main age
groups, their approximate size, and relative growth rates.
Tweens: ages: 8-15, population 29 million. Spending power= 39 bil +126 parents
spending in 2007, expected to rise to 150 billion in 2008.
Generation Y: born between1979 – 1994, population 60 million. Spending power=200
bil/annually, lifetime = 10 trillion.
Generation X: born between 1965-178, pop=40 million. Spending power=?
Baby Boomer: born between 1946 -1964, population=77 million. Spending power= 1
trillion, age 50-60.
13. Be familiar with the steps in the market research, the types of research that are
done and the goals of marketing research. Are there situations where it is unnecessary
to do it?
7 steps= 1. identify and formulate the problem/opportunity, 2.plan the research design
and gather primary data, 3. Specify the sampling procedures, 4. Collect the data, 5.
Analyze the data, 6. Prepare and present the report, 7. Follow up.
The goals of marketing research: maximizes chance of getting accurate and meaningful
results, and the main objective is to provide insightful decision-making information.
Unnecessary:
14. Know what reference groups are and the types of influence they exert.
Reference groups: Informal & formal groups that affects an individual’s buying
behavior. They serve as information sources and influence perceptions, affect an
individual’s aspiration levels, and their norms either constrain or stimulate consumer
behavior.
Opinion leaders: their actions influence opinion of others: celebrities, politicians,
athletes..etc.
Family:
16. Consider the role of ethics in a variety of marketing situations, such as issues
involving consumer protection, privacy, and corrupt practices.
17. Understand how organizational buying differs from consumer purchases.
Specifically, know terms like new buy, modified rebuy, and straight rebuy.
A new buy is when the company decided to buy the new item for the first time.
Modified buy is when the company requests the suppliers to make changes to the
original products/goods.
Straight buy is a situation in which the purchase for the product requires no new
information or new suppliers, basically a reorder of prior products.
18. Be familiar with types of business purchases which are made for resale or use in a
final product.
Major equipment, accessory equipment, raw materials, component parts, processed
materials, supplies, and business services.
Raw materials: unprocessed, mineral ore, timber, wheat, corn, fruit, fish. They become
part of finished products.
Made for resale:
Resellers: markets are retail and wholesale businesses, they buy finished goods and resell
them.
19. Know how the purchase situation affects buyers and the importance of variables like
purchase reason, time, and surroundings.
20. Understand key variable that affect buyer behavior, such as selective exposure,
selective retention, selective perception, drive, cue, responses and reinforcement.
Selective exposure: Consumer decides which stimuli to notice and which to ignore.
Selective retention: a process that consumer use to retain information that supports
his/her personal beliefs.
Selective perception:
Drive:
Cue:
21. Understand the scientific approach to the market research process, how data is
interpreted and measured in terms of sampling accuracy and confidence levels.
Marketing Research is process of planning, collecting, and analyzing data relevant to a
marketing decision.
22. Be familiar with the concept of “stickiness” as it relates to measures of success for
websites at getting a visitor’s attention.
Stickiness measures the effectiveness of the website.
Stickiness = Frequency (of visits) X Duration (visit times) X Site Reach (viewed during
each visit)
23. Know what a NAICS code is and how it is used.
NAICS- The North American Industry Classification System: a detailed numbering
system developed by US/CA/MEx to classify N.A. business establishments b their main
production processes.
The more digits in a code = the more homogeneous the group is.
Typical 6 digits >>>>>4 NAICS levels.
First 2digits=sector (information)
Plus 3rd digit=subsector ( broadcasting&tele)
Plus 4th digit= industry group (Telecom.)
Plus 5th digit= Industry (wireless telecom.)
Plus 6th digit= Subdivision of industry (Paging)
24. Understand the various types of and reasons for strategic alliances.
Strategic alliances (partnership)= cooperative agreement between businesses.
Licensing, distribution agreements, joint ventures, research and development together,
and partnerships.
In cooperative environment one business can gain others technology, financial
resources, and access to the markets. Competitors often join together to increase
productivity and lower costs.
25. Understand economic terms like derived demand, and inelasticity.
Derived Demand: demand for business products because of results from demand for
consumer products.
Inelasticity: Demand for the product will not be affected as much even if there is an
increase or decrease in the price of the product.
