MARKETING TEST 1 (CH 1-4)

CHAPTER 1: DEFINING MARKETING FOR THE NEW REALITIES

1. Definitions
a. Marketing- the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large
b. Marketing management- the art and science of choosing target markets and getting, keeping, and growing
customers through creating, delivering, and communicating superior customer value
c. Marketer- someone who seeks a response (attention, a purchase, a vote, a donation) from another party, called the
prospect
d. Prospect- a purchase, a vote, or a donation by a prospective client
e. Market- various groups of customers
f. Business markets- all the organizations that acquire goods and services used in the production of other products or
services that are sold, rented, or supplied to others
g. Value proposition- the whole cluster of benefits the company promises to deliver customers
h. Production concept- holds that consumers prefer products that are widely available and inexpensive
i. Product concept- proposes that consumers favor products offering the most quality, performance, or innovative
features
j. Selling concept- holds that consumers and businesses, if left alone, wont buy enough of the organizations products
k. Marketing concept- holds that the key to achieving organizational goals is being more effective than competitors in
creating, delivering, and communicating superior customer value to target markets
l. Holistic marketing- a concept based on the development, design, and implementation of marketing programs,
processes, and activities that recognizes their breadth and interdependencies
m. Marketing network- the company and its supporting stakeholders, with whom it has built mutually profitable
business relationships
n. Internal marketing- an element of holistic marketing; the task of hiring, training, and motivating able employees
who want to serve customers well
2. Summary
a. Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to
customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
Marketing management is the art and science of choosing target markets and getting, keeping, and growing
customers through creating, delivering, and communicating superior customer value
b. Marketers are skilled at managing demand: they seek to influence its level, timing, and composition for goods,
services, events, experiences, persons, places, properties, organizations, information, and ideas. They also operate in
four different marketplaces: consumer, business, global, and nonprofit
c. Marketing is not done only by the marketing department. It needs to affect every aspect of the customer experience.
To create a strong marketing organization, marketers must think like executives in other departments, and executives
in other departments must think more like marketers
d. Todays marketplace is fundamentally different as a result of major societal forces that have resulted in many new
consumer and company capabilities. In particular, technology, globalization, and social responsibility have created
new opportunities and challenges and significantly changed marketing management. Companies seek the right
balance of tried-and-true methods with breakthrough new approaches to achieve marketing excellence
e. There are five competing concepts under which organizations can choose to conduct their business: the production
concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept. The
first three are of limited use today
f. The holistic marketing concept is based on the development, design, and implementation of marketing programs,
processes, and activities that recognize their breadth and interdependencies. Holistic marketing recognizes that
everything matters I marketing and that a broad, integrated perspective is often necessary. Four components of
holistic marketing are relationship marketing, integrated marketing, internal marketing, and performance marketing
g. The set of tasks necessary for successful marketing management includes developing marketing strategies and plans,
capturing marketing insights, connecting with customers, building strong brands, creating, delivering, and
communicating value, and creating long-term growth.
3. Other concepts and lists
a. What is marketed?
i. Goods
vi. Places
ii. Services
vii. Properties
iii. Events
viii. Organizations
iv. Experiences
ix. Information
v. Persons
x. Ideas
b. Eight demand states
i. Negative demand- consumers dislike the product and may even pay to avoid it
ii. Nonexistent demand- consumers may be unaware of or uninterested in the product

MARKETING TEST 1 (CH 1-4)

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iii. Latent demand- consumers may share a strong need that cannot be satisfied by an existing product
iv. Declining demand- consumers begin to buy the product less frequently or not at all
v. Irregular demand- consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis
vi. Full demand- consumers are adequately buying all products put into the marketplace
vii. Overfull demand- more consumers would like to buy the product than can be satisfied
viii. Unwholesome demand- consumers may be attracted to products that have undesirable social consequences
Key customer markets
i. Consumer markets
ii. Business markets
iii. Global markets
iv. Nonprofit and Governmental markets
New consumer capabilities
i. Consumers can use the Internet as a powerful information and purchasing aid
ii. Consumers can search, communicate, and purchase on the move
iii. Consumers can tap into social media to share opinions and express loyalty
iv. Consumers can actively interact with companies
v. Consumers can reject marketing they find inappropriate
New company capabilities
i. Companies can use the Internet as a powerful information and sales channel, including for individually
differentiated goods
ii. Companies can collect fuller and richer information about markets, customers, prospects, and competitors
iii. Companies can reach consumers quickly and efficiently via social media and mobile marketing, sending
targeted ads, coupons, and information
iv. Companies can improve purchasing, recruiting, training, and internal and external communications
v. Companies can improve their cost efficiency
Changing channels
ii. Disintermediation
i. Retail transformation
Heightened competition
iii. Promotion
i. Private labels
iv. Price
ii. Mega-brands
i. Modern Marketing Management Four Ps
iii. Deregulation
i. People
iv. Privatization
ii. Processes
Marketing Mix Four Ps
iii. Programs
i. Product
iv. Performance
ii. Place

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k. CHAPTER 2: DEVELOPING MARKETING STRATEGIES AND PLANS
Definitions
a. Value chain- a tool for identifying ways to create more customer value
b. Value delivery network (supply chain)- a companys supply chain and how it partners with specific suppliers and
distributors to make products and bring them to markets
c. Core competency- attribute that
i. Is a source of competitive advantage in that it makes a significant contribution to perceived customers
benefits
ii. Has applications in a wide variety of markets
iii. Difficult for competitors to imitate
d. Marketing plan- written document that summarizes what the marketer has learned about the marketplace, indicates
how the firm plans to reach its marketing objectives, and helps direct and coordinate marketing effort
e. Strategic marketing plan- laying out the target markets and the value proposition that will be offered, based on
analysis of the best market opportunities
f. Tactical marketing plan- marketing tactics, including product features, promotion, merchandising, pricing, sales
channels, and service
g. Mission statement- a statement that an organization develops to share with managers, employees, and (in many
cases) customers
h. Strategic business units (SBU)- a single business or collection of related businesses that can be planned separately
from the rest of the company, with its own set of competitors and a manager who is responsible for strategic
planning and profit performance
i. Organization- a companys structures, policies, and corporate culture
j. Corporate culture- the shared experiences, stories, beliefs, and norms that characterize an organization
k. Scenario analysis- developing plausible representations of a firms possible future that make different assumptions
about forces driving the market and include different uncertainties
l. Marketing opportunity- an area of buyer need and interest in which there is a high probability that a company can
profitably satisfy that need
m. Market opportunity analysis (MOA)- system used to determine the attractiveness and probability of success
n. Environmental threat- a challenge posted by an unfavorable trend or development that would lead to lower sales or
profit
o. Goal formulation- the process of developing specific goals for the planning period
p. Strategy- a companys game plan for achieving its goals
q. Strategic group- firms pursuing the same strategy directed to the same target market
r. Partner relationship management (PRM)- activities the firm undertakes to build mutually satisfying long-term
relations with key partner such as suppliers, distributors, ad agencies, and marketing research suppliers
s. Marketing plan- written document that summarizes what the marketer has learned about the marketplace, indicates
how the firm plans to reach its marketing objectives, and helps direct and coordinate the marketing effort
t. Risk analysis- a method by which possible rates of returns and their probabilities are calculated by obtaining
estimates for uncertain variables affecting profitability
Summary
a. The value delivery process includes choosing (or identifying), providing (or delivering), and communicating
superior value. The value chain is a tool for identifying key activities that create value and costs in a specific
business
b. Strong companies develop superior capabilities in a managing core business processes such as new-product
realization, inventory management, and customer acquisition and retention. In todays marketing environment,
managing these core processes effectively means creating a marketing network in which the company works closely
with all parties in the production and distribution chain, from suppliers of raw materials to retail distributors.
Companies no longer competemarketing networks do
c. Market-oriented strategic planning is the managerial process of developing and maintaining a viable fit between the
organizations objectives, skills, and resources and its changing market opportunities. The aim of strategic planning
is to shape the companys businesses and products so they yield target profits and growth. Strategic planning takes
place at four levels: corporate, division, business unit, and product
d. The corporate strategy establishes the framework within which the divisions and business units prepare their
strategic plans. Setting a corporate strategy means defining the corporate mission, establishing strategic business
units (SBUs), assigning resources to each, and assessing growth opportunities
e. Marketers should define a business or business unit as a customer-satisfying process. Taking this view can reveal
additional growth opportunities
f. Strategic planning for individual businesses includes defining the business mission, analyzing external opportunities
and threats, analyzing internal strengths and weaknesses, formulating goals, formulating strategy, formulating
supporting programs, implementing the programs, and gathering feedback and exercising control

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Each product level within a business unit must develop a marketing plan for achieving its goals. The marketing plan
is one of the most important outputs of the marketing process
Other concepts
a. Core business processes
i. The market-sensing processgathering and acting upon information about the market
ii. The new-offering realization processresearching, developing, and launching new high-quality offerings
quickly and within budget
iii. The customer acquisition processdefining target markets and prospecting for new customers
iv. The customer relationship management processbuilding deeper understanding, relationships, and
offerings to individual customers
v. The fulfillment management processreceiving and approving orders, shipping goods on time, and
collecting payment
b. Corporate planning activities
i. Defining the corporate mission
ii. Establishing strategic business units
iii. Assigning resources to each strategic business nit
iv. Assessing growth opportunities
c. Good mission statement characteristics
i. Focus on a limited number of goals
ii. Stress the companys major policies and values
iii. Define the major competitive spheres within which the company will operate
iv. Take a long-term view
v. Short, memorable, and meaningful as possible
d. Porters generic strategies
i. Overall cost leadership
ii. Differentiation
iii. Focus
e. Strategic alliances
i. Product or service alliancesone company licenses another to produce its product, or two companies
jointly market their complementary products or a new product
ii. Promotional alliancesone company agrees to carry a promotion for another companys product or service
iii. Logistics alliancesone company offers logistical services for another companys product
iv. Pricing collaborationsone or more companies join in a special pricing collaboration
l.
m. CHAPTER 3: COLLECTING INFORMATION AND FORECASTING DEMAND
Definitions
a. Marketing information system (MIS)- people, equipment, and procedures to gather, sort, analyze, evaluate, and
distribute information to marketing decision makers
b. Marketing intelligence system- a set of procedures and sources managers use to obtain everyday information about
developments in the marketing environment
c. Fad- a craze that is unpredictable, short-lived, and without social, economic, and political significance
d. Trend- a direction or sequence of events that has some momentum and durability
e. Megatrend- a large social, economic, political, or technological change that is slow to form and, once in place, has
an influence for seven to ten years or longer
f. Cohorts- groups of individuals born during the same time period who travel through life together
g. Subcultures- groups with shared values, beliefs, preferences, and behaviors emerging from their special life
experiences or circumstances, such as with nationalities, religions, racial groups, and geographical regions
h. Consumerist movement- an organized movement of citizens and government to strengthen the rights and powers of
buyers in relation to sellers
i. Potential market- the set of consumers who profess a sufficient level of interest in a market offer
j. Available market- the set of consumers who have interest, income, and access to particular offer
k. Target market- the part of the qualified available market the company decides to pursue
l. Penetrated market- the set of consumers who are buying a companys product
m. Market demand- the total volume of a product that would be bought by a defined customer group in a defined
geographical area in a defined time period in a defined marketing environment under a defined marketing program
n. Market share- a higher level of selective demand for a product
o. Market-penetration index- a comparison of the current level of market demand to the potential demand level
p. Market forecast- the market demand corresponding to the level of industry marketing expenditure
q. Market potential- the limit approached by market demand as industry marketing expenditures approach infinity for
a given marketing environment
r. Production-penetration percentage- the percentage of ownership or use of a product or service in a population

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Company demand- the companys estimated share of market demand at alternative levels of company marketing
effort in a given time period
t. Company sales forecast- the expected level of company sales based on a chosen marketing plan and an assumed
marketing environment
u. Sales quota- the sales goal set for a product line, company division, or sales representative
v. Sales budget- a conservative estimate of the expected volume of sales, used for making current purchasing,
production, and cash flow decisions
w. Company sales potential- the sales limit approached by company demand as company marketing effort increases
relative to that of competitors
x. Total market potential- the maximum sales available to all firms in an industry during a given period, under a
given level of industry marketing effort and environmental conditions
y. Market-buildup method- identifying all the potential buyers in each market and estimating their potential
purchases
z. Brand development index (BDI)- the index of brand sales to category sales
aa. Forecasting- the art of anticipating what buyers are likely to do under a given set of conditions
ab. Purchase probability scale- a scale to measure the probability of a buyer making a particular purchase
Summary
a. To carry out their analysis, planning, implementation, and control responsibilities, marketing managers need a
marketing information system (MIS) to assess information needs, develop the needed information, and distribute it
in a timely manner
b. A MIS has three components:
i. An internal records system, which includes information about the order-to-payment cycle and sales
information systems
ii. A marketing intelligence system, a set of procedures to obtain everyday information about the marketing
environment
iii. A marketing research system that allows for the systematic design, collection, analysis, and reporting of
data and findings relevant to a specific marketing situation
c. Marketing find many opportunities by identifying trends (directions or sequences of events that have some
momentum and durability) and megatrends (major social, economic, political, and technological changes that have
long-lasting influence)
d. Within the rapidly changing global picture, marketers must monitor six major environmental forces: demographic,
economic, social-cultural, natural, technological, and political-legal
e. In the demographic environment, marketers must be aware of worldwide population growth; changing mixes of age,
ethnic composition, and educational levels; the rise of nontraditional families; and large geographic shifts in
population
f. In the economic arena, marketers need to focus on income distribution and levels of savings, debt, and credit
availability
g. In the social-cultural arena, marketers must understand peoples views of themselves, others, organizations, society,
nature, and the universe. Their products must correspond to societys core and secondary values and address the
needs of different subcultures within a society
h. Acknowledging the publics increased concern about the health of the natural environment, marketers are embracing
sustainability and green marketing programs
i. In the technological arena, marketers should take account of the accelerating pace of technological change,
opportunities for innovation, varying R&D budgets, and the increased governmental regulation brought about by
technological change
j. In the political-legal environment, marketers must work within the many laws regulating business practices and with
various special-interest groups
k. To estimate current demand, companies attempt to determine total market potential, area market potential, industry
sales, and market share. To estimate future demand, companies survey buyers intentions, solicit their sales forces
input, gather expert opinions, analyze past sales, or engage in market testing. Mathematical models, advanced
statistical techniques, and computerized data collection procedures are essential to all types of demand and sales
forecasting
Other concepts
a. Actions to improve the quantify and quality of its marketing intelligence
i. Train and motivate the sales force to spot and report new developments
ii. Motivate distributors, retailers, and other intermediaries to pass along important intelligence
iii. Hire external experts to collect intelligence
iv. Network internally and externally
v. Set up a customer advisory panel
vi. Take advantage of government-related data resources
vii. Purchase information from outside research firms and vendors
viii. Collecting marketing intelligence on the internet

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1. Independent customer goods and service review forums

2. Distributor or sales agent feedback sites
3. Combo sites offering customer reviews and expert opinions
4. Customer complaint sites
5. Public blogs
Six forces in the broad environment
i. Demographic
ii. Economic
iii. Social-cultural
iv. Natural
v. Technological
vi. Political-legal
Sociocultural environment-a world view that defines our relationship to ourselves, others, organizations, society,
nature, and the universe

n.
o. CHAPTER 4: CONDUCTING MARKETING RESEARCH
Definitions:
a. Marketing research- the function that links the consumer, customer, and public to the marketer through
informationinformation used to identify and define marketing opportunities and problems generate, refine, and
evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process
b. Marketing insights- diagnostic information about how and why certain effects are observed in the marketplace and
what that means to marketers
c. Ethnographic research- a particular observational research approach that uses concepts and tools from
anthropology and other social science disciplines to provide deep cultural understanding of how people live and
work
d. Focus group- a gathering of 6 to 10 people who are carefully selected based on certain demographic,
psychographic, or other considerations and brought together to discuss various topics of interest
e. Experimental research- the most scientifically valid research designed to capture cause-and-effect relationships by
eliminating competing explanations of the observed findings
f. Questionnaire- a set of questions presented to respondents
g. Deep metaphors- basic frames or orientations that consumers have toward the world around them
h. Neuromarketing- brain research on the effect of marketing stimuli
i. Marketing decision support system (MDSS)- a coordinated collection of data, systems, tools, and techniques with
supporting software and hardware by which an organization gathers and interprets relevant information from
business and the environment and turns it into a basis for marketing action
j. Marketing metrics- the set of measures that helps firms to quantify, compare, and interpret their marketing
performance
k. Marketing dashboards- a structured way to disseminate the insights gleaned from marketing metrics and
marketing-mix modeling
l. Consumer-performance scorecard- how well the company is doing year after year on particular customer-based
measures
m. Stakeholder-performance scorecard- a measure to track the satisfaction of various constituencies who have a
critical interest in and impact on the companys performance
Summary
a. Companies can conduct their own marketing research or hire other companies to do it for them. Some of ways
companies can creatively and affordably conduct research include: engage students or professors to design and carry
out projects; use the Internet; check out rivals; tap into marketing partner expertise; and tap into employee creativity
and wisdom
b. Good marketing research is characterized by the scientific method, creativity, multiple research methods, accurate
model building, cost-benefit analysis, healthy skepticism, and an ethical focus
c. The marketing research process consists of defining the problem, decision alternatives, and research objectives;
developing the research plan; collecting the information; analyzing the information; presenting the findings to
management; and making the decision
d. In conducting research, firms must decide whether to collect their own data or use data that already exist. They must
also choose a research approach (observational, focus group, survey, behavioral data, or experimental) and research
instruments (questionnaire, qualitative measures, or technological devices). In addition, they must decide on a
sampling plan and contact methods (by mail, by phone, in person, or online)
e. Two complementary approaches to measuring marketing productivity are: 1) marketing metrics to assess marketing
effects and 2) marketing-mix modeling to estimate causal relationship and measure how marketing activity affects
outcomes. Marketing dashboards are a structured way to disseminate the insights gleaned from these two approaches
within the organization

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Assessing the ROI of social media is challenging but requires a range of short-term and long-term financial and
brand-related measures. Although Facebook likes and Twitter tweets provide some sense of the engagement for a
brand, a more complete set of measures is typically needed to get a more accurate picture of social media or other
online activities
Other concepts
a. Categories marketing research firms fall under
i. Syndicated-service research firms- these firms gather consumer and trade information, which they sell for a
fee
ii. Custom marketing research firms-these firms are hired to carry out specific projects (design the study and
report the findings)
iii. Specialty-line marketing research firmsthese firms provide specialized research services
b. The Marketing Research Process
i. Step 1: Define the problem, the decision alternatives, and the research objectives
1. Exploratory- goal is to identify the problem and to suggest possible solutions
2. Descriptive- seeks to quantify demand
3. Casual- to test a cause-and effect relationship
ii. Step 2: Develop the research plan by making decision about:
1. Data sources
2. Research approaches collect primary data in five ways:
a. Observational research
b. Focus group research
c. Survey research
d. Behavioral research
e. Research instruments
i. Questionnaires
ii. Qualitative measures
1. Word associations, projective techniques, visualization, brand
personification, laddering
iii. Technological devices
f. Sampling plan
i. Sampling unit
ii. Sample size
iii. Sampling procedure
g. Contact methods
i. Mail contacts
ii. Telephone contacts
iii. Personal contacts
iv. Online contacts
1. Pros:
a. Inexpensive, expansive, fast, honest and thoughtful response,
versatile
2. Cons
a. Samples can be small and skewed, online panels and
communities can suffer excessive turnover, online market
research can suffer technological problems and inconsistencies
iii. Step 3: collect the information
iv. Step 4: Analyze the information
v. Step 5: Present the findings
vi. Step 6: Make the decision
c. Measuring Marketing Productivity
i. Marketing metrics
1. Sort-term results
2. Changes in brand equity
ii. Marketing-mix modeling
iii. Marketing dashboards