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Final

ADMS 2200 Study Guide - Final Guide: Philip Kotler, American Marketing Association, Marketing Myopia


Department
Administrative Studies
Course Code
ADMS 2200
Professor
Alexander Rusetski
Study Guide
Final

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American Marketing Association: Process of planning and
executing the conception, pricing, promotion and distribution of
ideas, goods and services to create exchanges that satisfy
individual and organizational objectives
Malcolm McNair: The creation and delivery of a standard of living
Philip Kotler in a Marketing Article: Getting the right goods and
services to the right people at the right time at the right price
with the right communication and promotion
Armstrong, Kotler et al.: A social and managerial process by
which individuals and groups obtain what they need and want
through creating and exchanging products and value with others
Bagozzi: ANY exchange is marketing - Exchange of a drink for
consideration of a sales pitch
Myopia: short-sightedness; close objects are clear; distant objects
are blurred
Marketing Myopia: pay more attention to the product than to
the benefit/experience
Overlook that product is tool solve a problem
Arndt: aketes ole is to oe osue fo eed to want to
demand
Need: state of felt human deprivation
Physical: food, clothing, warmth, safety
Social: belonging, affection
Individual: knowledge, self-expression
Want: Needs that are shaped by society - Need food; want a Big
Mac
Demand: Wat that is backed by buying power
Maslo’s Hierarhy of Needs
Self-actualization (self-development realization)
Esteem (confidence, status, recognition, achievement, respect)
Social (belonging, love)
Safety (security, protection)
Physiological (hunger, thirst)
Market: set of actual and potential buyers of a product
Target Market: set of buyers who share common needs and
characteristics that the business decides to serve
Rationale: cannot serve all customers in every way - Hyundai
targets families with modest means
Marketing Offer: a combination of goods, services, information or
experience to satisfy need or want
Product: can be tangible good - TV or service - car insurance,
hotel
Exchange: act of obtaining desired object from someone offering
something in return
Transaction: ehage of alues; tasatio is aketigs uit
of value
Value Proposition: set of benefits or values the business promises
to deliver to target market(s) to satisfy needs
Customer Satisfaction:
Consumer selects one item or another based on perceived value
and satisfaction
Satisfied customer is more likely to purchase again, and to
recommend to others
Selling Orientation: focus on sales transaction rather than
building long-term relationship - Life isuae is sold
Production Orientation: belief that buyers favor a product that is
widely available and highly affordable - Increase production
volume and/or reduce costs
Product Orientation: build a better mousetrap - Buyers might be
looking for a better solution - Kodak initially overlooked digital
cameras
Customer Focus
-Customer focus and value are keys to sales and profits
-Experience vs. expectation determines satisfaction
-Fod: If ee ot ustoe-die, ou as ot e
- Competitive Intelligence
-Customers perceive them as an alternative
-Non-traditional competitors
Cross-Functional Coordination
-Business units work together to provide superior customer value
Societal Marketing Orientation: strategy should deliver value to
customers, but also maintain or improve well-being of society
-Fast-food
-High fat and salt = obesity = future drain on
healthcare system
-Convenient packaging = pollution
-Johnson & Johnson recalled Tylenol even though
probably only a few bottles were tainted in-store
Why pay more to patronize a local shop?
-Doing business with familiar face
-Vendor knows customers and needs
-Vedos illigess/ailit to eplai podut
Customer Value
-“iplifig ustoes life o ok
-Ongoing benefits
-Personalized service
-Customized solutions
-Personal contact
-Continuous learning (CRM)
Customer relationship management:
-The overall process of building and maintaining profitable
customer relationships by delivering superior customer value and
satisfaction
Phases of CRM
1. Acquire new customer
-By promoting product or service leadership in
convenience, innovation
2. Enhance profitability of existing customer
-Cross-sell and selling up-market products
3. Retain profitable customer
-Listen, adapt, and develop new products
Customer Lifetime Value: value of all purchases over a
ustoes lifetie
Customer Equity: total combined lifetime value of all the
opas ustoes
-1976: Cadillac had 51% share of luxury market
-Average age of Cadillac buyer was 60 i.e. looking
into the future, lifetime value of Cadillac customers was falling.
Today, Cadillac has 15% share
Customer Relationship Groups
Short-Term
Customers
Long-Term
Customers
High Profitability
Butterflies
-High profit
potential
-Good fit between
opas
offerings and
ustoes eeds
True Friends
-Highest profit
potential
-Good fit
between
opas
offerings and
ustoes eeds
Low Profitability
Strangers
-Lowest profit
potential
-Little fit between
opas
offerings and
ustoes eeds
Barnacles
-Low profit
potential
-Limited fit
between
opas
offerings and
ustoes eeds
Cutbacks in government funding = intensified competition for
donations
Alliances= World Vision, Foste Paets Pla, Chistia Childes
Fud ad “ae the Childe joied foes to eate Gil Child
Netok to aise aaeess of plight of females in Third World
Creativity: Six Myths
1. Ceatiit oes fo eatie tpes
2. Money is a creativity motivator
3. Time pressure fuels creativity
4. Fear forces breakthroughs
5. Competition beats collaboration
6. Streamlined organization is creative
Porter: A oad foula fo ho a usiess is goig to opete
Strategic Planning:
Developing and maintaining a strategic fit between the
organizations goals/capabilities and its changing market
opportunities
Boston Consulting Group (BCG): “tateg is a delieate seah
fo a pla of atio that ill deelop the usiesss pla of
advantage and opoud it
Strategy Process
Set goals
-What do we want to achieve?
-Measure performance such as Market share, relative share,
customer satisfaction, incremental sales, and customer retention
-Evaluate performance
-What is happening?
-Why is it happening?
-Take corrective action
-What should we do about it?
Fie P’s For Strategy: Mitzerg
1. Plan: Guide, course of action (intended)
2. Pattern: Consistency over time (realized)
-Always markets the highest-end products in the industry
3. Position: Locating product in a particular market
(external)
4. Perspective: Ogaizatios fudaetal a of
doing things (internal)
5. Ploy: Specific maneuver to outwit competitor
(intension)
BCG Growth-Share Matrix
High
Star
-Profit potential
-Might need heavy
investment to grow
Question Mark
-Build into star or
phase-out
-Requires cash to
maintain market
share
Cash Cow
-Established,
successful
-Produces cash
Dog
-Low profit
potential
Low
High
Low
The Boston Consulting Group's Growth-Share Matrix is a way of
summarizing a company's product portfolio or a parent-
company's subsidiaries into four quadrants.
Cash Cow: Large share of a low-growth market; excess funds to
finance other areas of the company
Star: Large share of a high-growth market; might require infusion
of funds to fuel growth
Question Mark: Small share of high-growth market; company
needs to decide whether to pull-out or to further invest (e.g. the
company was late entering the market)
Problem Child: Small share of low-growth market; there is low
profit potential; the firm should pull-out of this market
Problems with Matrix Approaches
Time-consuming
Costly to implement
Focus on present rather than future
“oe opaies …
-Expanded into areas beyond core competencies
-Rushed to abandon, sell or milk healthy mature products
Growth Strategies
Market penetration: same product and market
Product penetration: new product, same market
Market development: same product, new market
Diversification: new product and market
Reasons for international expansion:
-Global competition
-Attacks domestic market with lower prices or
better product
-Higher profit opportunities
-Shrinking domestic markets
-Larger customer base to achieve economies of scale
-Reduce dependence on only one market
International: Considerations
-Cosues peeptios ad attitudes
-Language differences
-Cultural differences
-Regulations
-Political environment
-Ability to offer competitive product
-Management experience
-Decide on desired sales volume
-Number of countries i.e. Bulova Watch expanded into 100
countries; made profit in only two countries
-Market size - Colgate saw opportunity in China - Only 20% of
people in rural China brush teeth daily
Value Chain: Definition
-Series of departments that carry out value-eatig atiities …
-To design, to produce, to market, to deliver, to suppot a fis
products
Market Segmentation
Piece(s) of total market that contain identifiable, homogenous
characteristics. Dividing a market into distinct groups with distinct
needs, characteristics, or behavior that might need separate
products or marketing mixes.
-Consumer: Income, age, personal interests,
ethnicity, occupation, geography, product usage
-Commercial: revenue, number of employees, SIC,
technical sophistication
Common need within the segment
Target Marketing
Considerations:
-Number of customers
-Custoes spedig poe
-Ability to reach and cost
-Intensity of competition
-Customer satisfaction with existing offerings
-Forecasted growth
-Potential profit
-Barriers to entry / exit
Borden's 4 P's
Product = customer solution
Price = customer cost
Place = convenience
Promotion = communication
Components of Marketing Plan
Mission statement
Financial summary
Market overview
SWOT
Assumptions
Marketing objectives
Strategies
Programs (with forecasts and budgets
Social criticisms of marketing
High prices, high pressure selling, deception, unsafe products,
planned obsolescence, web lining.
Marketig’s ipat o soiety
False wants, materialism, too few social goods, cultural pollution,
too much political power
Consumerism: organized movement of citizens, business, and
government agencies working to protect and improve the natural
environment
Environmentalism: organized movement of citizens, businesses,
and government agencies working to protect and improve the
natural environment
Marketing ethics
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