Exam 1 Study Guide

Marketing Management

Disclaimer: This review does not necessarily cover all questions on the exam. It is simply an additional tool to assist students in preparing for the exam. Students are still responsible for all material from assigned textbook and Wall Street Journal readings, lecture/class discussions, and videos.

Required Materials: (2) #2 Pencils

Format: The exam will consist of 36 multiple choice questions and 5 matching questions worth two points each, and four short answer questions worth five points each.

Customer-Driven Strategic Marketing

• Marketing defined

Marketing – the process of creating, distributing, promoting, pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment.

• Needs, wants, and demands—what are the differences

• Understand the different stages, in order, in Maslow’s Hierarchy of Needs model

Physiological needs (food)

Safety needs (security of body, health)

Love and belonging

Esteem (confidence, achievement, respect of others)

Self-actualization (morality, creativity)

• Understand how consumers determine value

• Understand how consumers determine satisfaction (or dissatisfaction)—what part of the satisfaction model do marketers have more control over?

• What is an exchange and why do we engage in this activity (vs. solicitation, power, etc.)

Exchange – the provision or transfer of goods, services, or ideas in return for something of value.

• Understand the components of the marketing mix (also called 4Ps)—what activities or decisions occur in each area (Ex. Branding is a product decision.)

Marketing mix 4Ps:

• Product (Customer needs and wants)

• Price (cost)

• Place (Convenience)

• Promotion (Communication)

• Understand the differences among the alternatives types of products (goods, services, ideas)

• Marketing management defined

Marketing management – the process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently.

• What is demarketing?—see lecture notes

Demarketing involves reduce or shifting demand, does not involve demand eliminating.

• Four marketing management philosophies (production concept, the product concept, etc…)—what are the assumptions about the consumer and how does a company respond

Marketing concept – a managerial philosophy that an organization should try to satisfy customer’s needs through a coordinated set of activities that also allows the organization to achieve its goals.

The production orientation – with new technology and new ways of using labor , products poured into the marketplace where demand for manufactured goods was strong.

Product orientation – add features, assume what u want.

The sales orientation - businesspeople believed that the most important marketing activities were personal selling, advertising, and distribution.

The marketing orientation – and organizationwide commitment to researching and responding to customers needs.

Planning Marketing Strategies

• Steps in the strategic planning process (assessing organization resources and opportunities, etc…)

Strategic planning – the process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, and a marketing plan.

1. Assessing recourses and opportunities

2. Establishing an organizational missions and goals

3. Developing corporate, business-unit, and marketing strategies.

4. Creating the marketing plan

5. Implementing marketing strategies

6. Controlling marketing activities

• Be able to explain core competency, competitive advantage, market opportunity, and strategic window

1. Assessing recourses and opportunities

• Core competencies – things a firm does extremely well, which sometimes give it an advantage over its competition.

• Competitive advantage – the result of a company’s matching a core competency to opportunities in the marketplace.

• Market opportunity – a combination of circumstances and timing that permits an organization to take action to reach a target market.

• Strategic windows – temporary periods of optimal fit between the key requirements of a market and a firm’s capabilities.

• Understand the components of a SWOT analysis and they relate to one another; how is it used to make strategic marketing decisions?

SWOT analysis – a tool that marketers use to assess an organization’s strengths, weaknesses, opportunities and threats.

Main goal – to convert weaknesses into strengths, threats into opportunities and then match them.

• What is marketing myopia?

Marketing myopia - Short sighted and inward looking approach to marketing that focuses on the needs of the firm instead of defining the firm and its products in terms of the customers' needs and wants.

• What are the two primary questions to be answered in a mission statement?

Mission Statement—A long-term view of what the organization wants to become

Who are our customers?

What is our core competency?

• The qualities of “good” objectives (specify a time frame, etc.)

1. Should be clearly expressed

2. Should be in written form

3. Should specify a time frame

4. Should be consistent with both business-unit strategy and corporate strategy.

• What is a strategic business unit?

Strategic Business Unit (SBU)—a division, product line, or other profit center within a parent company

• Boston Consulting Group Matrix or growth-share matrix (dogs, cash cows, etc…)—understand the four types of SBUs in this matrix; how does money or resources flow among the different types?; what is the typical path an SBU will follow through the matrix?

Market growth/ market share matrix – a strategic planning tool based on the philosophy that a product’s market growth rate and market share important in determining marketing strategy.

Stars are products with a dominant share of the market and good prospects for growth. They use more cash than generate to finance growth, add capacity, and increase market share.

Cash cows have a dominant share of the market but low prospects for growth, typically they generate more cash than required to maintain market share.

Dogs have subordinate share of the market and low prospects, these products are often found in established markets.

Questions mark sometimes called problem children, have small share of market and usually require a large amount of cash to build market share.