CHAPTER 1

What is marketing?

o 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.

Requirements for Marketing to Occur

o Two or More Parties with Unsatisfied Needs

o Desire and Ability to Satisfy These Needs
o A Way for the Parties to Communicate
o Something to Exchange

Market: People with both the desire and the ability to buy a specific product.

The Four P’s: Controllable Marketing Mix Factors

o Product
o Price
o Promotion
o Place

The Uncontrollable, Environmental Factors

Marketing Program: A plan that integrates the marketing mix to provide a good, service, or idea to
prospective buyers.

Production Era: In the early days of this country, goods were scarce, and consumers were willing to
accept virtually any goods that were produced and make do with them as best they could. The major
concern of business was production, not marketing.

Sales era: As production capacity and manufacturing ability increased, firms found that they could
produce more than their regular buyers could consumer. Competition increased, and companies began
to hire sales people to go out and find more buyers for their products.

Marketing Concept era: In the 1960’s marketing began to dominate the thinking of most American firms.
Travel and communication became easier and more common. Consumers had more choices and more
money to spend. Firms began to realize that they needed to solve the needs of their customers.

Customer Relationship Era: Firms such as GE, Toyota, Marriott, and others began to collect information
on their customers, shared that information across departments, and used it to create customer value.
Societal Marketing: the concept that organizations should satisfy the needs of consumers in a way that
provides for society’s well-being.

Macromarketing: the study of the aggregate flow of goods and services to benefit society.

Micromarketing: how an individual organization directs its marketing activities and allocates its
resources to benefit its customers.

Utilities

o Form: The value that comes from the production or alteration of a good or service.
o Place: The value to consumers that derives from having the product or service available where
it’s needed.
o Time: The value to consumers that derives from having the product available when it’s needed.
o Possession: Making the product available and easy to purchase so that consumers can buy it.

CHAPTER 2

Profit: the money left after paying expenses…the reward for risk.

Strategic Business Unit (SBU): a subsidiary, division, or unit of an organization that markets a set of
related offerings to a clearly defined set of customers.

Functional Level: where a group of specialists actually create value for the organization.

Core Values: the fundamental, passionate, and enduring principles that guide an organization over
time.

Mission or Vision: a statement of the organization’s function in society.

Organizational Culture: a set of values, ideas, attitudes, and norms of behavior that is learned and
shared within an organization.

Stakeholders: Anyone who is directly affected by a company

Business: describes the clear, broad, underlying industry category or market sector of an organization’s
offering.

Goals or Objectives: S.M.A.R.T

o Specific
o Measurable
o Attainable
o Relevant
o Time-based
Market Share: The ratio of sale revenue of the firm to the total sales revenue of all the firms in the
industry, including the firm itself.

Cash Cows: generate large amounts of cash, more than is needed for themselves…dominant share of
slow-growth markets.

Stars: high share of high growth markets…may need cash to finance their own rapid growth.

Question marks: (problem children)…SBU’s with low share of high-growth markets.

Dogs: SBU’s with low shares of low-growth markets.

Strategy: an organizations long-term course of action designed to deliver a unique customer experience
while achieving its goals.

Strategy: the means by which a marketing goal will be achieved, usually characterized by a specified
target market and a marketing program to achieve it.

Tactics: detailed, day-to-day operational decisions essential to the success of marketing strategies.

SWOT analysis: is an acronym describing an organization’s appraisal of its internal Strengths and
Weaknesses and its external Opportunities and Threats.

o Strengths
o Weaknesses
o Opportunities
o Threats

CHAPTER 3

Suburbs: A usually residential area or community outside of a city.

Exurbs: more remote suburbs .

Penturbia: smaller towns outside of a city.

Multicultural Marketing: Combinations of the marketing mix that reflect the unique attitudes, ancestry,
communication preferences and lifestyles of different races.

Culture: values, ideas, and attitudes that are shared among members of a group.

Consumerism: A grassroots movement started in the 60’s to increase the influence, power, and rights of
consumers in dealing with institutions.

Demographics: describe a population according to selected characteristics such as age, gender,

ethnicity, income, and occupation.

Gross income: the total amount of money made in one year by a person, household, or family unit.
Disposable Income: This money a consumer has left after taxes to use for food, shelter, clothing, and
transportation.

Discretionary Income: The money that remains after paying for taxes and necessities.

Baby Boomers: (1946 – 1964) generally respond to anything that makes them feel younger.

Generation X: (1965 – 1976) tech savvy, better educated, self-reliant, supportive or racial and ethnic
diversity, not prone to extravagance.

Generation Y: (1977 – 1994) Also called echo-boom or baby boomlet.

CHAPTER 4

Ethics: the moral principles and values that govern actions and decisions of an individual or group.

Laws: are society’s values and standards that are enforceable in the courts.

Caveat Emptor: “Let the buyer beware!”

Consumer Bill of Rights: In 1962, championed by President John F. Kennedy…says that consumers have
a right:

1. To safety

2. To be informed

3. To choose

4. To be heard

Economic Espionage: The clandestine collection of trade secrets or proprietary information about a
company’s competitors.

Schools of thought regarding ethics:

o Moral Idealism: A personal moral philosophy that considers certain individual rights or duties as
universal, regardless of the outcome.
o Utilitarianism: A personal moral philosophy that focuses on the “greatest good for the greatest
number” by assessing the costs and benefits of the consequences ethical behavior. If the
benefits exceed the cost, the behavior is ethical. If not, then the behavior is unethical.

Social responsibility: is the idea that organizations are part of a larger society and are accountable to
that society for their actions.
CHAPTER 5

Consumer behavior: consists of the actions a person takes in purchasing and using products and
services, including the mental and social processes that come before and after these actions.

Purchase decision process: consists of the five stages a buyer passes through in making choices about
which products and services to buy:

o problem recognition
o information search
o alternative evaluation
o purchase decision
o postpurchase behavior.

Consideration set: is the group of brands that a consumer would consider acceptable from among all the
brands in the product class of which he or she is aware.

Cognitive dissonance: the feeling of postpurchase psychological tension or anxiety consumers may
experience when faced with two or more highly attractive alternatives.

Motivation: is the energizing force that stimulates behavior to satisfy a need.

Cognitive dissonance: is the feeling of postpurchase psychological tension or anxiety consumers may
experience when faced with two or more highly attractive alternatives.

Perception: is the process by which an individual selects, organizes, and interprets information to create
a meaningful picture of the world.

Family life cycle: consists of the distinct phases that a family progresses through from formation to
retirement, each phase bringing with it identifiable purchasing behavior