BUS101 Study Guide
Unit 3: Marketing
3a. Identify the major components of the marketing mix
A. Businesses need to market their product or service to generate revenue. Marketing your product or service to a potential customer involves many more steps and is much more complicated than simple advertising.
- Name the four Ps of marketing.
- List the main components of each of these four marketing strategies, and what makes each one different from the other.
- Name some examples of different marketing strategies.
- Match the marketing strategies that correspond with each of the four Ps of marketing.
3b. Describe how segmentation and research foster an understanding of consumer behavior
A. Businesses often conduct research to understand their customers: so they are sure to design products that will meet the needs of their customers, and they know how to reach their customers to market their products or services.
- Define primary and secondary research.
- Define demographic and psychographic data
- List the ways a business might use geographic data to market its product or service.
3c. Describe the marketing concept
A. Marketing involves more than reaching as many people as possible through advertising. It is a process that begins with finding market opportunities.
- Name the five steps of the marketing process.
- In what step does a business conduct market research?
- Does a business have an obligation to protect its customers?
- What step of the marketing process refers to a responsibility to customer safety?
3d. Describe the evolution of marketing
A. Marketing practices have changed since the days of bartering when the person who created something met and sold it to their customers in the town square. Often a skilled craftsman was the only supplier of the product to a large region. Demand was high, but supply was low. During the industrial revolution, manufacturers began incorporating mass production techniques. While societal demand had increased, consumers could buy what they needed from a much larger pool of manufacturers. Demand was still high, but supply was much higher.
Since customers had more items to choose from, manufacturers had to think of ways to increase demand for their products. For example, they could build better-quality products, lower their prices, make their products look better (even if they weren't!), and convince customers they had to have that particular gadget or product. Manufacturers also had to find ways to let their customers know about the wonderful products they had available and where they could buy them.
- Define and describe four approaches to marketing: production, product, selling, and marketing.
- Why do customers buy products that are of lesser quality?
- Define a selling approach and customer-oriented approach to marketing.
Review this material in The History of the Marketing Concept.
3e. Differentiate among the components of a marketing strategy
A. Businesses often focus their marketing efforts on customers who are most likely to buy their product, to save resources, such as time, personnel, and money. Note that a significant part of creating a marketing strategy for a business involves conducting market research which we review in learning outcome 3g below.
- Define and explain the difference between segmentation, targeting, and positioning.
- Name some strategies a marketer can use to identify their target market.
- Define the dimensions of segmentation: demographics, geographic, behavioral, and psychographics.
B. Business owners conduct a SWOT analysis to identify and gain an understanding of the strengths, weaknesses, opportunities, and threats for their business. This examination helps them: minimize and find solutions to their internal weaknesses or limitations, identify ways to respond appropriately to external threats or competitors, build on their internal strengths, and take advantage of any outside opportunities that come their way.
- Define the four elements of a SWOT analysis.
- What is the best way for a business manager to perform a SWOT analysis?
- Describe what each element would look like for different types of businesses.
Review this material in "SWOT Analysis" on pages 184-185 of Introduction to Business.
3f. Analyze consumer decision-making processes to predict buying behavior
A. In addition to knowing who their target market is, business owners also need to identify the factors that influence whether their customers will buy their product. They need to understand their customer's decision-making process. Businesses use this information to convince consumers to buy their products. Knowing why consumers dislike their product provides an opportunity to make improvements.
- Define the five stages of the consumer decision-making process.
- Is the consumer decision-making process different for buying an expensive luxury item vs. a candy bar?
- Does the purchase represent a social function, routine response, limited decision making, or extensive decision making purchasing behavior?
Review this material in Consumer Purchasing Behavior.
3g. Identify the implications of marketing research on marketing strategy
A. We have looked at how to determine market segmentation based on demographics (age, gender, education level, and so on) but marketing strategies can also be based on other research results.
- Define and explain the difference between market size and market share.
- How does a marketer cater to their target market's culture or behavior?
- How does geography influence marketing strategies?
3h. Describe elements of customer relationship management, including customer life cycle and customer value proposition
A. Customer relationship management is an integral part of any successful business. Many business managers use computer software (called a CRM) to keep track of each of their customers, such as to document when someone shows interest in their product, makes a purchase, has not made a purchase in a while, and when they are a repeat customer. Online shopping can make it easier for companies to keep track of this information since customers provide their contact information when they visit their website. These contact points describe the customer life cycle.
- Name the four concepts related to customer relationship management (CRM).
- Define customer value proposition.
- Identify and explain three customer benefits and four customer costs in the customer value proposition.
- Define customer life cycle.
- Explain how businesses can use this tool to maintain a productive relationship with their customers.
Review "Customer Value Proposition" and "Customer Life Cycle" on page 191 of Introduction to Business.
3i. Identify the marketing implications of customer relationship management
A. Marketing involves building relationships with your customers. Since most people like to feel special, customers who feel valued as individuals are more likely to feel a sense of loyalty to a company they like and make additional purchases. Most companies rely on this repeat business to succeed. For example, if a sales department knows a customer buys a car every three years, it could use customer-relationship management software to be sure its staff contacts them every three years to remind them to stop by their dealership.
- List some goals of customer relationship management (CRM).
- In what other departments Is customer relationship management important to a company?
3j. Describe brand, product development, technology adoption cycle, and product life cycle
A. Are you more likely to buy something that has a familiar name brand or do you prefer to buy a generic brand, such as the brand of the pharmacy or grocery store you visit? What does the term "brand" really mean and how is the concept important to marketers and customers?
- Define brand and the concept of branding.
- Why is purchasing something that has a familiar brand important to some consumers?
- How does branding help or hinder marketing?
Review "Brand" on page 190 of Introduction to Business.
B. It is great for a business to have a brand everyone recognizes, but to create that brand, they need to have a product. Remember that a product is a good or service a business offers to meet the needs of society.
There are four major categories of product development:
- New to the market: a business creates a new product never seen in the market before;
- New to the company: a business decides to produce and sell a product similar to something another business is marketing;
- Improvement of existing products: a business makes an improvement to a product they already sell, perhaps due to market research or customer input; and,
- Extension of product line: a business creates a variation of products they already sell.
- How is a product that is new for a company different from a product that is new to the market?
- If a business sells refrigerators and they want to start selling freezers which category of product development would that fall under?
C. Manufacturers of computer-based technologies (including phones and the latest audio equipment) should be familiar with their consumers' technology adoption cycle. This theory calls consumers who buy the latest technology, as soon as it becomes available "innovators" and those who like to wait "laggards". The "early majority" and "late majority" are in between those two extremes.
A technology business wants to target the innovators in the introduction phase of its product life cycle because they can influence both majorities, who will influence the laggards. Marketing influences the product development process, as businesses determine what their customers will be willing to buy. Stages of product development include screening ideas, feasibility and analysis, creating a prototype, product testing, and commercial application.
- Define the four stages of the product life cycle: innovators, early majority adopters, late majority adopters, and laggards.
- Define the technology adoption cycle.
- What effect does marketing have on consumers who purchase technology equipment?
- How do the early and late majority adopters influence the laggards?
- Define prototype.
- How does a business' effort to meet consumer needs influence how it tests and develops future products, or product development?
Review "Product" on page 187 of Introduction to Business.
3k. Use product life cycles to determine marketing strategy
A. The product life cycle is an important concept for businesses and marketers. Businesses may not need to implement extensive marketing campaigns for products that have been around for a while, since customers know they exist and will seek them out. However, businesses usually need to create marketing campaigns to introduce new products to generate interest and let customers know where to buy them.
Businesses should know where their product falls within its life cycle. This position within the product life cycle and technology adoption cycle will help its marketing department determine the best marketing strategy to use.
- During what stage of the product life cycle should businesses focus their marketing efforts?
- During what stage of the product life cycle should businesses focus on branding?
Review "Product" on page 187 of Introduction to Business.
B. Businesses use the position its product has in the product life cycle and technology adoption cycle to inform its pricing strategy. For example, a gaming system manufacturer that plans to introduce a new gaming system, typically lowers the sales price of the older models to reduce its inventory. A business that begins selling its product to innovators may be able to offer a high price, because these individuals may be willing to pay more to be the first ones in their community to have the latest gadget.
- Define skimming pricing, penetration pricing, cost-based pricing, demand-based pricing, target costing, prestige pricing, and odd-even pricing.
- Identify other pricing strategies marketers use during different phases of the product's life cycle.
Review Pricing a Product.
3l. Identify the marketing implications of e-business
A. Consumers expect to find the information about a business and the products it offers, whether a business is completely online or only has an electronic presence. Businesses should understand their e-business and e-commerce goals, so can control how their customers perceive their online presence.
- Define and describe the difference between e-commerce and e-business.
- List seven categories of e-business.
- List seven reasons businesses decide to offer their services online.
Review Introduction to Electronic Commerce and E-Business, and these definitions of e-commerce and e-business. Then, review Categories of Electronic Commerce and Key Motivators behind Taking a Business Online.
B. Today, most businesses also use social media to market their product or services.
- Name seven reasons businesses use social media to market their goods or services.
- Do the goals for social media marketing differ from other types of business marketing?
Review "Social Media Marketing" in Interacting with Your Customers.
Unit 3 Vocabulary
Be sure you understand these terms as you study for the final exam. Try to think of the reason why each term is included.
- Content marketing
- Customer relationship management (CRM)
- Customer life cycle
- Customer orientation
- Customer value proposition
- e-mail marketing
- Early majority adopter
- Four P's of marketing
- Geographic data
- Late majority adopter
- Lead generation
- Market culture
- Market share
- Market size
- Marketing orientation
- Personal selling
- Primary data and research
- Product life cycle
- Product orientation
- Production orientation
- Public relations
- Sales promotion
- Search engine optimization
- Secondary data and research
- Selling orientation
- Social media
- SWOT analysis
- Target market
- Technology adoption cycle