Ch. 1: Foundations of Marketing
This is the official AMA definition's term for the activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
What is marketing?
This statement describes an organization's long-term purpose — what it does and for whom — while a related statement describes what it aspires to become in the future
What is a mission statement (and vision statement)?
This is the center of every marketing environment analysis — every other factor in the Immediate Environment and the macroenvironment is ultimately studied in terms of its effect on this group.
What is the consumer?
Need recognition, information search, alternative evaluation, purchase and consumption, and postpurchase are the five steps of this model
What is the consumer decision process?
Segmentation, targeting, and positioning together make up this three-phase process marketers use to identify and reach the right customers.
What is the STP process?
Define objectives and research needs, design the research, collect the data, analyze and interpret the data, and develop and implement an action plan are the five steps of this process.
What is the marketing research process?
Product, price, place, and promotion together make up this controllable set of tools marketers use to respond to a target market's wants
What is the marketing mix (the 4Ps)?
Strengths, weaknesses, opportunities, and threats make up this four-part framework used to evaluate a firm's internal and external position.
What is a SWOT analysis?
The firm itself, competitors, corporate partners, and the physical environment are the four factors that make up this closer-in layer of a firm's environment.
What is the Immediate Environment?
A shopper walks into Goodwill specifically looking for a coat because their old one no longer fits. This is the first step of the consumer decision process.
What is need recognition?
Geographic, demographic, psychographic, and behavioral are four examples of this — the methods marketers use to divide a broad market into smaller groups.
What are segmentation bases (methods)?
Information that already exists, originally collected by someone else for another purpose, is called this — as opposed to data gathered fresh for the specific question at hand.
What is secondary data?
A Goodwill donor drops off a bag of clothes expecting nothing in return, while a shopper pays $5 for a used sweater. Both represent this basic concept — a transfer of value between two or more parties.
What is an exchange?
This process helps management decide where to invest resources by evaluating a firm's mix of products and businesses according to their growth and profit potential — the BCG matrix is one common tool for it.
What is portfolio analysis?
A new for-profit resale chain opens three stores within a mile of an existing Goodwill location. In the Immediate Environment, this new chain is best classified as one of these.
What is a competitor?
Motives, attitudes, perceptions, learning and memory, and lifestyle are sub-factors of this broader category influencing consumer decisions.
What are psychological factors?
Self-values, self-concept, and lifestyle are the three components marketers examine under this segmentation base.
What is psychographic segmentation?
Instead of running a brand-new survey, Goodwill's marketing team pulls U.S. Census data on household income across its 45-county service area. This is an example of using this type of data.
What is secondary data?
The benefits a customer receives from an offering, weighed against what it costs to obtain it, together define this core marketing concept.
What is value?
If Goodwill opened its first online resale storefront to sell its existing donated inventory to new online customers it doesn't currently reach, this Ansoff growth strategy would describe the move.
What is market development?
Culture, Demographics, Social trends, Technological advances, Economic situation, and Political/regulatory environment make up this six-factor acronym describing the broader macroenvironment.
What is CDSTEP?
Family, reference groups, and culture make up this broader category of influence on a consumer's decisions — distinct from a person's own internal psychology.
What are social factors?
Identifiable, substantial, reachable, responsive, and profitable are the five criteria used to evaluate this — how worthwhile a given segment is to pursue.
What is segment attractiveness?
Observation, social media monitoring, in-depth interviews, and focus groups are four methods used to collect this type of primary data, focused on depth of understanding rather than numbers.
What is qualitative data?
Rather than chasing one-time transactions, a firm that invests in building long-term bonds with its customers is practicing this type of marketing.
What is relationship marketing?
Market penetration, market development, product development, and diversification are the four growth strategies in this named matrix.
What is the Ansoff (growth strategy) matrix?
Sustainability, health and wellness, and the efficient utilization and distribution of food are the three trends the textbook highlights under this CDSTEP factor
What are social trends?
A longtime Goodwill volunteer says nothing makes them prouder than representing their community, even with no pay or formal recognition involved. This behavior most directly appeals to this level (or levels) of Maslow's hierarchy.
What is esteem (or self-actualization)?
Rather than trying to serve every possible client, Goodwill's Career Service Centers focus specifically on people re-entering the workforce after a long absence. This is an example of this targeting strategy.
What is differentiated (niche) targeting?
Surveys, scanner data, panel data, and experiments are four methods used to collect this type of primary data, focused on numbers that can be statistically analyzed.
What is quantitative data?
Goodwill's retail stores, its donations program, and its Career Service Centers are three distinct examples of this — the different offerings one organization markets to different audiences.
What is a product (offering) portfolio?
This broader document covers an organization's entire operation — finance, HR, operations — while the marketing plan is just one piece nested inside it.
What is a business plan?
A local trucking company agrees to haul donated furniture between Goodwill's stores and its donation centers at a discount. In the Immediate Environment, this company is an example of this
What is a corporate partner?
Purchase situation, sensory situation, and temporal state are sub-factors of this category of influence, which can override or influence a consumer's psychological and social factors.
What are situational factors?
Undifferentiated, differentiated, concentrated, and micromarketing are the four strategies marketers choose from during this phase of the STP process.
What is targeting?
A Goodwill career counselor has a long, open-ended conversation with a recent program graduate about their job search experience. This qualitative data collection method is called this.
What is an in-depth interview?
This document lays out a firm's marketing objectives and the strategy for reaching them, typically including a situation analysis, segmentation/targeting/positioning decisions, and an implementation plan built around the marketing mix.
What is a marketing plan?
If Goodwill launched a brand-new furniture-repair service inside its existing stores for its current shoppers, this growth strategy — a new offering sold to an existing market — would describe the move.
What is product development?
Generation Alpha, Gen Z, Millennials, Gen X, and Baby Boomers are generational cohorts used as examples of this CDSTEP factor — measurable population characteristics like age, income, and education
What are demographics?
A consumer who buys the same brand repeatedly, without comparing alternatives, out of pure habit is engaging in this lowest-effort type of decision making.
What is habitual decision making?
Target market, offering name or brand, product/service category or concept, and unique point of difference are the four components of this statement, which communicates the benefits a customer will receive from an offering.
What is a value proposition?
Volume, velocity, variety, veracity, and value are known together as this, describing the defining characteristics of large, fast-moving datasets.
What are the 5 Vs of big data?
Form, place, time, and possession are four types of this benefit that marketing creates for customers beyond just the physical product itself.
What is utility (value)?
Specific, measurable, achievable, relevant, and time-bound targets that flow from a firm's mission are called this
What are (SMART) marketing objectives?
This CDSTEP factor, also called the Political/Legal Environment, covers legislation, government organizations, and the laws and regulations that constrain how a business can operate.
What is the political/regulatory environment?
When a decision matters a lot to a consumer and leads to extensive comparison of alternatives, this high-involvement type of problem solving is taking place.
What is extended problem solving
Goodwill and a corporate resale chain both offer low prices on used goods — a point of parity — but only Goodwill reinvests its proceeds into local job training. In the Circles for a Successful Value Proposition framework, this point of difference sits in this shaded overlap
What is the overlap between customer needs/wants and the company's own offerings, excluding competitors?
Descriptive, predictive, prescriptive, and active are the four types of tools used in this field, which turns raw data into actionable marketing insight.
What is marketing analytics?
Although many people picture marketing only at for-profit companies, organizations like Goodwill prove it applies just as much to this kind of organization
What is a nonprofit?
In the BCG matrix, a business unit with low market growth but high market share — one that generates more cash than it needs — is given this dairy-themed nickname.
What is a cash cow?
Goodwill notices more of the 45 counties it serves are shifting toward an older population as younger residents move away for work. This observation falls under this CDSTEP factor.
What are demographics?
After donating a box of books, a donor starts second-guessing whether they should have kept their favorite novel instead. This uneasy feeling, which can follow any decision, is called this.
What is postpurchase (cognitive) dissonance?
Determining perceptions versus competitors, identifying ideal points, and determining consumer preferences are three of the six steps in this final phase of the STP process.
What is positioning?
Before designing any survey, Goodwill's marketing team first asks what decision the research actually needs to inform. This corresponds to this often-skipped first step of the research process.
What is define objectives and research needs?
Creating, capturing, communicating, and delivering value are four of the five core activities named in the official definition of marketing. Name the fifth.
What is exchanging (offerings)?
Using the existing marketing mix to sell more of the same offering to the same existing customers — for example, encouraging current Goodwill shoppers to visit more often — describes this, the lowest-risk of the four growth strategies.
What is market penetration?
Shared values, beliefs, morals, and customs that shape how a group of people thinks and acts make up this CDSTEP factor.
What is culture?
Physiological, safety, love/belonging, esteem, and self-actualization are the five levels, lowest to highest, of this famous hierarchy.
What is Maslow's hierarchy of needs?
Sending one specific program graduate a personalized follow-up email about that graduate's exact job search goals, rather than a broad campaign to everyone, is an example of this extreme, individual-level form of targeting.
What is micromarketing?
Gaining permission, using data solely for the stated research purpose rather than selling or fundraising, and protecting the information collected are the three conditions the textbook gives for this.
What is the ethical use of consumer information?