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Chapter 3
Marketing Test One
20
Marketing
Undergraduate 4
09/23/2013

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Term
Environments
Definition
1) Direct market environments
- Customers, company (resources and objectives of the firm), competitors
2) External market environments
- Economic, technological, political & legal, cultural & social
Term
3 basic objectives
Definition
1) Engage in a socially and economically useful function
- triple bottom line = people, planet, profit
2) Develop an organization to carry on business and implement strategies
- even after original leadership steps down
3) Earn enough profit to survive
Term
Mission statement
Definition
- Purpose statement (why that organization exists)
- Focused on markets, not products
- Marketing myopia: product focused, not market focused
Term
Competitive environment
Definition
- Competitive situations
- Competitive barriers (keeping competition out)
- Competitive analysis (who is my competition and what are they doing)
- Competitor matrix (comparing strengths and weaknesses)
- Competitive advantage (USP: unique selling proposition)
- Ethical issues
Term
Economic environment
Definition
- Business cycles (recessions vs. stability)
- Inflation and interest rates
- Unemployment
- Global economy
Term
Technological environment
Definition
- Advancements and predicting the future
- Economies of scale (technological advances can push price per unit down because cost to produce goes down)
- The internet
- Emerging industries
- Ethical issues (cookies, selling info to other companies)
Term
Political environment
Definition
- Nationalism (you put the interests of your country above other countries, which may hinder commerce)
- EU and NAFTA (European Union and North American Free Trade Agreement)
Term
Legal environment
Definition
1) Sherman Act (broke up monopolies)
2) Clayton Act (made things illegal that substantially lessened competition)
3) FTC Act (Federal Trade Commission responsible for overseeing businesses)
4) Robinson-Patman Act (makes price discrimination illegal)
5) Wheeler-Lea Amendment (unfair/deceptive practices)
6) Magnuson-Moss Act (deals w/ product warranty)
7) Foreign Corrupt Practices Act (American companies held to US law no matter where they are)
8) State and local laws
Term
US Agencies
Definition
1) FTC: federal trade commission
- in charge of business laws
2) FDA: food and drug administration
- in charge of recalling food and regulating
3) Consumer product safety commission
- Governs unsafe products
Term
Changes in political/legal environment
Definition
- Deregulation
- less emphasis on antitrust laws
- maturing of consumerism (more emphasis on keeping consumer informed)
- more attention to governing international trade
- change in labeling requirements
Term
Cultural and social environment
Definition
- better educated
- more single adults
- less free time
- marrying and children delayed, smaller families
- changing family roles
- health consciousness
- environmental awareness
Term
Questions to answer about a potential market
Definition
1) relevant segmenting dimensions?
2) size?
3) where?
Term
GDP
Definition
Gross Domestic Product
- total market value of goods and services produced by a country's economy in a year by both residents and nonresidents
Term
GNI
Definition
Gross National Income
- similar to GDP, but excludes income earned by nonresidents
Term
US population issues
Definition
1) shifts
- between states (south and west)
- rural, urban, suburban
2) Mobility of Americans (we move a lot)
3) MSA (Metropolitan Statistical Area)
4) CMSA (Consolidated Metropolitan Statistical Area)
5) Teen cycle
- 2nd baby boom
6) "graying" of America
- baby boomers are getting old
7) Birthrates
- number of babies born per 1,000 people declining
Term
PRIZM
Definition
- People who live in a certain area tend to be similar
- PRIZM can give demographic profile based on zip codes
- Clusters
- Demographic data (avg. household income, etc.)
- Media habits
- Lifestyles
- Purchase behaviors
Term
Age Dimensions
Definition
1) Generation Z (youth)
2) Generation Y
- successful brands, hip, racially diverse
3) Generation X
- Skeptical of marketing, cynical
- Personal style rather than designer brands
4) Baby boomers
- traditional marketing, changes over the years
5) Older
- silent generation OPALS, WOOFS
Term
Evaluating Strategies
Definition
1) Quantitative/qualitative criteria (to earn a certain profit)
2) Profit
3) ROI (return on investment as best way to evaluate success of a company)
4) Other (sustainability)
Term
Evaluating multi-product firms
Definition
1) SBU (strategic business unit)
- organizational unit within a larger company which is a profit center
2) Portfolio management
3) GE strategic planning grid
- Business strength vs. Industry attractiveness
- compare SBU's
Term
Continuum of Environmental Sensitivity
Definition
- Products and international markets (do we have to make change for international markets?)
- Industrial products vs. consumer products (industrial products are insensitive while consumer products are more sensitive and might need modifications)
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