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Midterm

MGMA01H3 Study Guide - Midterm Guide: Brand Equity, Customer Satisfaction, Marketing Myopia


Department
Management (MGM)
Course Code
MGMA01H3
Professor
Cindy Chan
Study Guide
Midterm

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WEEK 1 AND WEEK 2
CHAPTER 1
The Marketing Process:
1. Understand the marketplace and customer needs/wants
2. Design a customer-driven marketing strategy
3. Construct a marketing program that delivers superior value
4. Build pro%table relationships and create customer delight
5. Capture value from customers to create pro%ts and customer equity
Market O+ering: some combination of products, services, information, or
experiences, o+ered to a market to satisfy a need or a want
Marketing myopia: the mistake of paying more attention to the speci%c products a
company o+ers than to the bene%ts and experiences produced by these products
Marketing Management: the art and science of choosing target markets and
building pro%table relationships with them
To have a perfect marketing strategy, the marketing manager must answer two
questions:
- What customers will we serve(target market)
- How can we serve these customers the best
The Marketing Mix are: Place, Product, Promotion, and Price
Customer Relationship management: the overall process of building and
maintaining pro%table customer relationships by delivering superior customer
value and satisfaction
Customer-perceived value: the customer’s evaluation of the di+erence between all
bene%ts and all costs of a marketing o+er relative to those of competing o+ers
Customer satisfaction: the extent to which a products perceived performance
matches with the buyers expectations
Customer Lifetime value: the value of the entire stream of purchases that the
customer would make over a lifetime of patronage
Share of a customer: the portion of the customers purchasing that a company gets
in its product categories
Customer equity: the total combined customer lifetime values of all of the
company’s current and potential customers
Four relationship Groups for building the right relationships:
- Strangers
oShow low potential pro%tability and little loyalty
- Butter8ies
oPotentially pro%table but not loyal; they are a good %t for short
o+erings but like butter8ies, they come and then they go

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- True Friends
oBoth pro%table and loyal; true believers
- Barnacles
oHighly loyal but nor pro%table; most problematic customers as they
only have a limited %t between their needs and the company’s
o+erings
CHAPTER 2
Strategic planning: the process of developing and maintaining a strategic %t
between the organizations goals and capabilities and its changing opportunities
Steps in Strategic Planning:
1. De%ning the company’s mission
2. Setting company objectives and goals
3. Designing the business portfolio
4. Planning, marketing, and other functional strategies
Mission statement: a statement of the organizations purpose; what it wants to
accomplish in a larger environment
Business portfolio: the collection of businesses and products that make up the
company
- Involves 2 steps: analyzing its current business portfolio and determine
which businesses should receive, more, less, or no investment and second, it
must shape the future portfolio by developing strategies for growth and
downsizing
Portfolio analysis: the process by which management evaluates the products and
businesses that make up the company (major activity in strategic planning)
Product/market expansion grid: a portfolio planning tool for identifying the
company growth opportunities through market penetration, market development,
product development, or diversi%cation
Market penetration: company growth by increasing sales of current products to
current market segments without changing the product
Market development: company growth by identifying and developing new market
segments for current company products
Product development: company growth by o+ering modi%ed or new products to
current market segments
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Diversi%cation: company growth through starting up or acquiring businesses
outside the company’s current products and markets
Companies also must be able to implement strategies to downsizing as there are
many reasons to abandon products or markets:
- The %rm grew too fast or entered areas in which they lack experience
- The market environment may change, making some products or markets
less pro%table
- Some products simply age and die
SWOT Analysis: an overall evaluation of the company’s strengths, weaknesses,
opportunities, and threats.
CHAPTER 3
Marketing environment: the actors and forces outside marketing that a+ect
marketing management’s ability to build and maintain successful relationships
with target markets (consists of micro-and-macro environment)
Microenvironment: the actors close to the company that a+ect its ability to serve
its customers – the company, suppliers, marketing intermediaries, customer
markets, competitors, and publics
Macroenvironment: the larger societal forces that a+ect the microenvironment –
demographic, economic, natural, technological, political, and cultural forces
Marketing intermediaries: %rms that help the company promote, sell, and
distribute its products to %nal buyers
Public: any group that has an actual or potential interest in or impact on an
organization’s ability to achieve its objective (7 types: %nancial, media,
government, citizen-action, local, general, internal publics)
Demography: the study of human populations in terms of size, density, location,
age, gender, race, occupation, and other statistics
Generation X: the 7 million Canadians born between 1967 and 1976 in the birth
dearth, following the baby boom
Millennials (or Generation Y): the 10.4 million children of the Canadian baby
boomers, born between 1977 and 2000
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