BMKT 2601

1 MIDTERM CHAPTER REVIEW for Kerin & Hartley; 14th edition

st

Marketing
CHAPTERS 1, 3, 7, 2, 8
Dr. Gary Kritz

CHAPTER 1: What is Marketing?

What is Marketing?
 Is the process of planning and executing the conception, pricing, promotion and distribution of ideas,
goods, and services to create exchanges that satisfy individual and organizational objectives.
 You Are a Marketing Expert Already. Involved in Thousands of Buying Decisions. Involved in Some
Selling Decisions. Marketing Is NOT Easy.
 Marketing as the activity, set of institutions and process for creating, communications, delivering and
exchanging offerings that have
 Far more than simply advertising or personal selling.
 Stresses the need to deliver genuine value in the offerings of goods, services and ideas marketed to
customers
 Organization’s marketing activities should also create value for its partners and for society
 Serve both buyers and sellers, marketing seeks to:
1. Discover the needs and wants of prospective customers
2. To satisfy them
 Prospective customers include both individuals, buying for themselves and their households, and
organizations, buying for their own use (manufacturers) or for resale (wholesalers and retailers).
 Key to achieving two objectives is idea of exchange.

Concept of Exchange (SEE PDF FILE on my webpage)

“the trading of things of value between a buyer & seller so that each is better off after
the trade.”

Exchange – trade of things of value between a buyer and a seller so that each is better off after the
trade.
 The Diverse Elements Influencing Marketing Actions
o Marketing activity focuses on assessing and satisfying consumer needs, countless other people,
groups and forces interact to shape the nature of its actions.
o Foremost is the organization itself, whose mission and objectives determine what business it is
in and what goals it seek.
o Mgt. is responsible for establishing these goals
o Marketing department works closely with a network of other departments and employees to help
provide the customer satisfying products required for the organization to survive and prosper.
o Marketing department is responsible for facilitating relationships, partnerships and alliances
with the organization’s customers, its shareholders, its suppliers and other organizations
o Environmental forces involve social, economic, technological, competitive and regulatory
considerations also shape an organizations marketing actions
o An organizations marketing decision are affected by and in turn often have an important impact
on society as whole.
 What is needed for marketing to occur? – PAGE. 6 – 7
 DOMINOS Example.
o 1. Two or more parties with unsatisfied needs
o 2. Desire and ability on their part to have their needs satisfied
 o 3. A way for the parties to communicate
o 4. Something to exchange
How marketing discovers and satisfies consumer needs
Discovering consumer needs
 First objective in marketing – discover the needs of prospective customers
 Use of customer surveys, concept tests, and forms of marketing research to better understand customer
ideas
 LEGO – ideas are submitted to LEGO ideas and receive 10,000 votes from site visitors are considered to
be added to the product line.
The challenges: meeting consumer needs with new products
 Takes 3,000 raw ideas to generate one commercial success
 1. Focus on what the customer benefit, 2. Learn from past mistakes.
 Think about the potential benefits to customers and possible “showstoppers” – factors that might doom
the product.
 Products that did not succeed.
o Smart Glasses, Coca – Cola Stevia, Universal Yums Subscription
Consumer Needs and Consumer Wants
 Marketing tries to satisfy both needs and wants
 Need occurs when a person feels deprived of basic necessities such as food, clothing, and shelter
 Want is a need that is shaped by a person’s knowledge, culture, personality.
What a market is.
 Potential consumers make up a market, people with both the desire and the ability to buy a specific
offering.
Satisfying Consumer Needs
 Organization can not satisfy all consumer needs, must concentrate its efforts on certain needs of a
specific group of all potential consumers
 Target mix – one or more specific groups of potential consumers toward which an organization directs
its marketing program.

 needs vs. wants (Also see Chapter 5, p. 136); Maslow’s Hierarchy of Needs:

1* Maslow’s hierarchy of needs…

2* physiological
3* safety
4* social/belongingness
5* esteem
6* self-actualization

 customer value: benefits/costs

 customer satisfaction
 target market

 Marketing Management Philosophies/Characteristics of them

 Production: products should be available & affordable

 Product Concept: customers favor products that offer the most in quality,
performance, and innovation
 Sales: consumers won’t buy unless lots of selling & promotion occur
Used for unsought goods or when excess inventory exists
 Marketing Concept: customer focus to needs and wants of target markets
  Societal Marketing: marketing concept must also benefit society as a whole (See Chapter 1: p. 15)
 See these links for more details on the marketing eras:
 https://yourbusiness.azcentral.com/five-eras-marketing-3411.html
 https://www.reference.com/business-finance/four-eras-history-marketing-b31e4c107579e0b1

 What is consumerism? What are the consumer rights? How does Ralph Nader fit into this?

 What are the 4 P’s? Define each one/give an example of each.

Products: good, service, or idea to satisfy the consumer’s needs
Price: what is exchanged for the product
Promotion: a means of communication between the seller and buyer
Place: a means of getting the product into the consumer’s hands
 What is the Marketing Mix?
 The four Ps are the elements of marketing mix.
 The four Ps are controllable factors
Uncontrollable Factors
 Force’s marketing people do not have in their control
 These forces are called the environmental forces:
o Social, economic, technological, competitive and regulatory forces
o Want consumers want and need, changing tech., the state of the economy, competitors actions,
and gov’t restrictions
o Serve as accelerators or brakes
o These forces could help expand an organizations marketing opportunity and at times restricting
them.
How customer relationships are built.
 Customer values, customer relationships and relationship marketing.
 Customer value is the unique combination if benefits received by targeted buyers that includes quality,
convenience, on – time delivery, and both before sale and after sale service at a specific price.
 Building long term relationships with customers by providing unique value to them
 Best product, best price or best service.
 Hallmark of developing and maintaining effective customer relationship is today called relationship
marketing, links the organization to its individual customers, employees, suppliers, and other partners
for their mutual long-term benefit.
 Relationship marketing involves personal, ongoing relationship between the organization and its
individual customers that begins before the sale and may evolve through different types of relationships
after the sale.
The marketing program and market segments.
 Effective relationship marketing strategies help marketing managers discovers what prospective
customers need and convert ideas into marketable products.
 Converted into tangible marketing program. Plan that integrates the marketing mix to provide a good,
service, or idea to prospective buyers.
 Formed into market segments – homogenous groups of prospective buyers that,
o Common needs
o Respond similarly to a marketing action
 Action may have a product feature, promotion or price.
 Consumer needs trigger product concepts that are translated into actual products that simulate further
discovery of consumer needs.
3M strategy and marketing program to help students study. Case pgs. 13 – 15.
How marketing became so important?
  Look into the evolution of the market orientation, ethics and social responsibility in marketing, and the
breadth and depth of marketing activities.
 4 distinct stages in the life of their firms
o First stage – product era.
 Covers the early years of the United States up until the 1920s.
 Goods were comparatively scare and buyers were willingly to accept virtually any goods
that were available and make do with them.
o Second stage – sales era.
 From the 1920s to 1960s
 Manufacturers found they could produce more goods than buyers could consume.
Competition grew.
 Firms hired salespeople to find new buyers
o Third stage – marketing concept era
 Idea that an organization should (1) strive to satisfy the needs of consumers while also (2)
trying to achieve the organizations goals.
 Firms like Southwest airlines, Marriott, and Facebook have achieved great success by
putting huge effort into implementing the market concept, given their firms what has
been called a market orientation.
 Market orientation – focuses efforts on continuously collecting information about
customer needs, sharing this information across departments, and creating customer
value.
o Fourth stage – customer relationship era.
 Started in the 1980s and continues today as firms seek to satisfy the high expectations of
customers.
 Important outgrowth of this focus on the customer is the recent attention place on
customer relationship management (CRM), process of identifying prospective buyers,
understanding them intimately and developing favorable LT perceptions of the
organizations and its offerings so that buyers will choose them in the marketplace and
become advocates after their purchase.
 Foundation of customer relationship mgt. is customer experience, which the internal
response that customers have to all aspects of an organization and its offering.
 Internal response includes both direct and indirect contacts of the customer with
the company.
 Direct contacts include customer contacts with the seller through buying, using
and obtaining services.
 Indirect contacts involve unplanned touches with the company with the company
through word of mouth from other customers, reviewers and news reports.
 TRADER JOES EXAMPLE.
 Is Marketing different for Non-Profit Organizations?
Ethics and social responsibility in Marketing: Balancing the Interests of Different Groups.
Ethics
 Companies, industries, and professional associations have developed codes of ethics, policies, and
guidelines to assist managers. Facebook’s stance on “fake news”.
Social Responsibility
 Reduce the social cost of individual purchases today, many organizations use a variety of strategies that
range from pure philanthropy, environmentally friendly and sustainable practices to creating “shared”
value.
 Illustrate the issue of social responsibility, idea that organizations are accountably to larger society.
 Well – being of society at large should be recognized in an organizations marketing decision.
 Marketing experts stress the societal marketing concepts, view that organizations should satisfy the
needs of consumers in a way that provides for the society’s well-being.
  PATAGONIA – Worn Wear program. Recycling.
Breadth and Depth of Marketing.
Marketing affects every person and organization:
1.) Who markets?
a. Every organization markets. Business firms involved in whatever industry market their offerings
b. Nonprofits like museums, hospitals, cities, and special causes like the American Red Cross
Association also engage in marketing
c. Political candidates market as well.
2.) What is marketed?
a. Goods, services, and ideas are marketed
b. Goods – physical objects, toothpaste, smartphones, or cars satisfy consumer needs.
c. Services – intangible items, airline trips, financial advice or art museums.
d. Ideas – thoughts about concepts, actions, or causes.
e. Product – is a good, service, or idea consisting of a bundle if tangible and intangible attributes
that satisfies consumer needs and is received in exchange for money ore something else of value.
3.) Who buys and uses what is marketed?
a. Ultimate consumers are people who use products and services purchased for a household.
b. Organizational buyers are those manufacturers, wholesalers, retailers, service companies, non
profit organizations, and gov’t agencies buy products and services for their own use or for resale.
4.) Who benefits from these marketing activities?
a. 3 specific groups benefit in effective marketing.
i. Consumer who buys
1. Providing choices leads to the consumer satisfaction and quality of life that we
expect from our economic system.
ii. Organizations that sell
1. Organizations that provide need – satisfying products with effective marketing
programs have blossomed.
iii. Society as a whole
1. Enhances competition, both improves the quality and services and lowers their
prices.
5.) How consumers benefit?
a. Creates utility – the benefits or customer value received by users of the product. Result of the
marketing exchange process and the way society benefits from marketing.
b. Four different utilities:
i. Form utility
1. Production of the product or service constitutes form utility
ii. Place utility
1. Having the offering available where consumers need it.
iii. Time utility
1. Having it available when needed
iv. Possession utility
1. Value of making an item easy to purchase through the provision of credit cards or
financial arrangements.
v. Marketing creates utilities of by bridging space (place utility) and hours (time utility) to
provide products (form utility) for consumers to own and use (possession utility).
What is a Target Market? Why do marketers use them?

Satisfying the Consumer Needs

 Marketing does not stop at satisfying the consumer needs
 Organization can not satisfy all consumer needs, must concentrate its efforts on certain needs of a
specific group of potential consumers
  Called the target market – one or more specific groups of potential consumers toward which an
organization directs its marketing program.

 One or more specific groups of potential consumers toward which an organization directs its
marketing program.

 Ranked according to profitability, present and future sales volume, and the match between what
it takes to appeal successfully to the segment and the organizations capabilities. Those with the
greatest potential are selected.

1. What do customers need?

2. What must be done to satisfy these needs?
3. What is the size of the market?
4. What is the growth profile?

CHAPTER 2: Successful Marketing & Organizational Strategies/Strategic Planning

 Ben and Jerry’s Example.

 Product Mission: To make, distribute, and sell the finest quality all – natural ice cream.
 Economic Mission: To operate the company for sustainable financial growth
 Social Mission: To operate the company in ways that make the world a better place.
 Why is marketing planning important? (for order, direction, guidance for the whole organization)
 What is a mission statement? What does it do?
 Mission statement guides the entrepreneurs decisions related to many aspects of the business,
including purchasing prices, ingredient sourcing, manufacturing, and involvement in the
community.
 Ben and Jerry’s Mission Driven Approach: Eliminate Single – Use Plastic. Free Cone Day.
Fairtrade. B – Corp. Certification.
 Chapter 2 sets out how organizations create goals to provide an overall direction to their
organizational and marketing strategies. Marketing department of an organization converts these
strategies into plans that must be implemented and then evaluated so deviations can be exploited or
corrected based on the marketing environment.
Todays Organizations
 Important to recognize the kinds or organizations that exist, strategy is used, and how strategy is
related to the three levels of organizations.
 Organization – legal entity that consists of people who share a common mission. Motivates them to
develop offers (good, services, or ideas) that creates value of organizations and customers and
satisfying their needs and wants
 Three types of organizations
o For Profit Organization.
 Business firm. Privately owned organization like Nike, Target, Microsoft, etc.
 Serves customer to earn a profit. Profit, money left after a for profit organization minus
its total expenses from total revenues and is the reward for the risk it undertakes in
marketing its offerings.
o Non-Profit Organizations
 Non-governmental organization that serves its customers but does not have profit as an
organizational goal.
 Goals may be operational or client satisfaction. Must receive sufficient funds above its
expenses to continue operations.
o Government Agency.
  Federal, state, county or city unit that provides a specific service to its constituents.
Census Bureau, a unit of the U.S. department of Commerce, a federal gov’t agency that
provides population and economic data.
o Industry.
 Organizations that develop similar offerings create an industry. Computer industry or
automobile industry.
 Organizations make strategic decisions that reflect the dynamics of the industry to create
a compelling and sustainable advantage for their offerings relative to those competitors
and achieve a high level of performance.
 What is Strategy?
o Organization must develop a strategy to help focus and direct efforts to accomplish goals
o Strategy is an organization’s long-term course of action designed to deliver a unique customer
experience while achieving its goals.
o Organizations set a strategic direction – marketing help to set the direction and move the
direction there.
 Three organizational levels.
o Corporate level
 Top management directs overall strategy for the entire organization
 Means the Board of Directors and senior mgt. officers with a variety of skills and
experiences in establishing the organizations overall strategy.
 President or CEO – highest ranking office, member of the BOD.
 Vice president of Marketing to Chief Marketing Officer (CMO)
o Strategic Business Unit Level
 Prada and J&J manage s portfolio or group of business
 Each group is a strategic business unit (SBU), subsidiary, division or unit of an
organization that markets a set of related offerings to a defined target market.
 Strategic business unit level – mgrs. Set a strategic direction for their businesses to
exploit value creating opportunities
o Functional level.
 Each SBU unit has a functional level.
 Groups of specialists create value for the organization
 Department – refers to specialized functions such as marketing and finance.
 Functional Level we have – IT, Finance, R&D, Marketing, Manufacturing Operations,
and HR.
 Organizations strategic direction becomes most specific and focused.
 When developing marketing programs for new or improved offerings an organization’s
senior mgt. may form cross – functional teams. Consist of a small number of people from
different departments who are mutually accountable to accomplish a task or set of goals.
 Strategy in visionary organizations.
o To be successful, organizations must be forward – looking.
o A visionary organization must specify its foundation (why does it exist?), set a direction (what
will it do?) and formulate strategies (how will it do it?)

Organization foundation (why): core values, mission (vision), organizational culture.

+
Organizational direction (what): Business, Goals (objectives) – LT and ST.
=
Organizational strategies (how). By Level: Corporate, SBU, Functional. By Product: Good, Service, Idea.

 Organizational Foundation – Why does it exist?

 Organizations exist to create value for someone.
  Guide and inspire employees through 3 elements: core values, mission and organizational
culture.
o Core Values – fundamental, passionate, and enduring principle tjay guide its conduct over
time
 Founders or senior mgt. develop core values which are consistent with essential beliefs
and character
 Capture the firm’s heart and soul and serve to inspire and motivate its stakeholders –
employees, shareholders, BOD, suppliers, distributors, creditors, unions, gov’t, local
communities, and customers
 Core values are timeless and guide the organization’s conduct.
o Mission.
 Understand the core values, organization take the steps to define its mission.
 Mission – statement of the organizations functions in society that often identifies its
customers, markets, products and technologies. Statement should be clear, concise,
meaningful, inspirational and long term.
 Southwest Airlines: “Dedication to the highest quality of Customer Service delivered
with a sense of warmth, friendliness, individual pride and company spirit.”
 Mission statement should exhibit the qualities of a good mission and provide a
compelling picture of an envisioned future. Recently, organization has added a social
element to their mission statement reflecting a moral ideal.
o Organizational culture
 Organizations must connect with their stakeholders
 Important corporate level marketing function is communicating its core values and
mission to them.
 Activities send clear messages to employees and other stakeholders about organizational
culture.
 Set of values, ideas, attitudes, and normal behavior that is learned and shared
among the members of an organization
 Organizational Direction: What will it do?
 Enables an organization’s foundation to set a direction in terms of the business and goals.
o Business
 A business describes the clear, broad, underlying industry or market sector of an
organization’s offering
 What do we do?
 What business are we really in?
 Business Model – strategies an organization develops to provide value to the customers it
serves.
 Uber, well known car transportation service, continuing to redefining its business. Started
as a limo service called UberCab, and pivoted to UberX and UberPool. UberRush was
added and than Uber Eats. Uber Jump.
o Goals: goals or objectives are statements of an accomplishment of a task to be achieved, often by
a specific time.
 Goals convert an organization’s mission and business into LT and ST performance
targets. Firms go after different types of goals.
 Profit, Sales, Market Share, Quality, Customer Satisfication, Employee Welfare, and
Social Responsibility.
 Organizational Strategies– How will it do it?
o Organization sets they why of organizations and the direction sets the what.
o Convert these into actual results, organizational strategies are concerned with the how.
o Vary in at least two ways: depending on a strategy’s level in the organization and the offerings
an organization provides to its customers.
 o Variation by Level
 Corporate level, top mgrs. Create a portfolio of market product business (SBUs) that is
consistent with the mission statement.
 At the SBU, mgrs. Focus on the specific value creation activities such as improving
quality, lower costs, or add services.
 Functional level – issue who makes tomorrow’s sales call.
o Variation by product
 Organizational strategies also vary by the organization’s product.
 Strategy will be far different when marketing a very tangible physical good, service, or an
idea.
 Marketing plan – road map for the marketing actions of an organization for a specified
future time period. One year or 5 years. Planning phase of the strategic marketing process
results in a marketing plan that directs the marketing actions of an organization.
 Tracking strategic performance with marketing analytics.
o Growing field of data analytics or big data, enables data driven decisions by collecting and
presenting them in a visual format such as a marketing dashboard.
o Marketing Dashboard – the visual computer displays of the essential information related to
achieving a marketing objective.
 Today’s BI and AI tools provide real time data to allow marketing mix changes,
personalization and evaluation of customer satisfaction
 Idea comes from the display of information found on a car’s dashboard.
 Marketing mgr. reviews at a graph or table to monitor key metrics and makes a decision
to take action or analyze the problem further.
o Marketing Metric. – measure of the quantitative value or trend of a marketing action or result.
o Today marketers use data visualization, presents information about an organization’s marketing
metrics graphically so marketers can quickly spot deviations from plans during the evaluation
phase and take corrective action.
 Website traffic sources, Sales Performance by SBU, Website Visits by State
Setting Strategic Directions.
o Setting a direction an organization needs to answer two difficult questions: where are we now, and
where do we want to go?
o Where are we now?
o Competencies. What do we do best? Assessment of the organization’s core competencies,
special capabilities – skills, technologies and resources that distinguish it from the organizations
and provide customer value
 Should be distinctive enough to provide a competitive advantage, unique strength relative
to competitors that provides high returns, based on quality, time, cost or innovation.
o Customers - Lands’ End communicates a commitment to customers and product quality with
their statement – Guaranteed Period.
 On the website, Lands’ End points out this guarantee has always been an unconditional
one. “if you are not satisfied with any item, simply return it to us at any time for an
exchange or refund od its purchase price”.
o Competitors – today’s global marketplace, distinctions among competitors are increasingly
blurred. Lands’ End started as a catalog retailer. Today they compete with other clothing retailers
such as LL. Bean. But also, department stores, mass merchandisers, and specialty shops.
Growth Strategies: Where Do We Want to Go?
o Business Portfolio Analysis and diversification analysis.
o Boston Consulting Group (BCG) – Business Portfolio Analysis
o a technique that managers use to quantify performance measures and growth targets to analyze
their firms ‘strategic business units (SBUs) as though they were a collection of separate
investments.
 o Requires an organization to locate the position of each of its SBUs on a growth share matric.
Vertical axis is the market growth rate, annual rate of growth on SBU’s industry. Horizontal axis
is the relative market share, defined as the sales of the SBU divided by the sales of the largest
firm in the industry.
1. Question Marks:
a. Low Share of High-Growth Market. Require large injections of cash just to maintain their market
share, much less increase it.
2. Stars:
a. High Share of High-Growth Markets. May need extra cash to finance their own rapid future
growth. Growth slows, likely become cash cows.
3. Cash Cows:
a. Generates Large Amounts of Cash. Far more than they can use. Dominant shares of slow –
growth markets and provide cash to cover the organization’s overhead and to invest in other
SBUs.
4. Dogs:
a. Low Share of Slow-Growth Markets, may generate enough cash to sustain themselves, may no
longer be or may not become real winners for the organization. Dropping SBUs that are dogs
may be required if they consume more cash than they generate, except when relationships with
other SBUs, competitive considerations or potential strategic alliances exits.

Diversification Analysis: technique that helps a firm search for growth opportunities from among current and
new markets as well as current and new products.
Market Penetration:
o Increase Sales of Current Product in Current Markets
Market Development:
o Sell Current Products to New Markets
Product Development:
o Sell New Products to Current Markets
Diversification:
o Develop New Products to Sell in New Markets
Strategic Marketing Process – is an approach whereby an organization allocates its marketing mix resources
to reach its target markets.
o Process is guided by underlying principles and divided into 3 phases, planning, implementation, and
evaluation.
1. How do we allocate - our resources to get to, where we want to go?
2. How do we convert - our plans into actions?
3. How do our results compare - with our plans and do deviations require new plans?

Principles underlying the strategic marketing process?

1. Customers are different
2. Customers change
3. Competitors change and react
4. Organizational resources are limited

Planning Phase of the Strategic Marketing Process

1. Conduct a SWOT Analysis
2. Develop a market product focus, customer value proposition and goals.
3. Design the marketing program

Step 1: Conduct a SWOT Analysis

 A situation analysis involves taking stock of where the firm or product has been recently, where it
is now, and where it is headed in terms of the organization’s marketing plans and the external forces
and trends affecting it.
 A SWOT analysis is an acronym describing an organization’s appraisal of its internal Strengths and
Weaknesses and its external Opportunities and Threats.
 SWOT Analysis Actions
 Build on a Strength
  Correct a Weakness
 Exploit an Opportunity
 Avoid a Disaster-Laden Threat
 SWOT Analysis Study
o Identify Industry Trends
o Analyze Competitors
o Assess the Organization
o Research Present and Prospective Customers

Step 2: Market – Product Focus and Goal Setting.

o Market segmentation – involves aggregating prospective buyers into groups, or segments, that (1) have
common needs and (2) will respond similarly to a marketing action.
o Developing a clear customer value proposition, which is a cluster of benefits that an organization
promises customers – or segments - to satisfy their needs.
o Points of difference are those characteristics of a product that make it superior to competitive
substitutes
Step 3: Marketing Program
o Product Strategy
o Price Strategy
o Promotion Strategy
o Place (Distribution) Strategy
Implementation Phase of the Strategic Marketing Process (Page 44. – 46.)
 Obtaining Resources
o A key task in the implementation phase of the strategic marketing process is obtaining and
assembling sufficient human and financial resources to execute the marketing program
successfully.
 Designing the Marketing Organization
 Defining Precise Tasks, Responsibilities, and Deadlines
o Action Item List:
 The Task
 The Person Responsible for Task
 Date to Finish Task
 The Deliverable
o Gantt Chart – Graph of a Program Schedule (Chart is on page 46.)
 Executing the Marketing Program
o Marketing Strategy - is the means by which a marketing goal is to be achieved, usually characterized
by a specified target market and a marketing program to reach it.
o Marketing Tactics - are the detailed, day-to-day operational marketing actions for each element of
the marketing mix that contributes to the overall success of marketing strategies.
The Evaluation Phase of the Strategic Marketing Process.
Marketing manager to
1. Compare the results of the marketing program with the goals in the written plans to identify the presence
and causes of deviations
2. Act on these deviations exploiting positive deviations and correcting negative ones.
Comparing Results with Plans to Identify Deviations
 Planning Gap
Acting on Deviations
 Exploiting a Positive Deviation
 Correcting a Negative Deviation

What are organizational objectives? Examples?

 Committed team
 delighted customers
 great stockholder return
 public favorability

 What is a SWOT analysis? Why do we do it?

 Strengths, weaknesses, opportunities, threats: general examples of each?

 What is portfolio analysis?

 What is an SBU?

 Identify the BCG matrix; what is it? Why do we use it? What do the axes mean? What are the four
quadrants (question marks/problem child, stars, cash cows, dogs.) What are the characteristics of
each? (See pp. 38-40)

Allocation strategies:

Build
Hold: co. invests just enough in the business to maintain the SBU’s current market share
Harvest
Divest

Competitive advantage: what is it?

Product Development Strategies:

Market Penetration: increase sales of existing products in existing markets by modifying products, improving product
quality or promoting new and different ways to use the products; often used to boost market share for mature products in
mature markets

Market Development: find new markets for existing products

Product Development: introduction of new products into established markets

Product Diversification: develop new products for new markets

CHAPTER 3: Scanning the Market Environment:

What is environmental scanning?
o Is the process of continually acquiring information on events occurring outside the organization to
identify and interpret potential trends.

o
o 5 factors that affect environmental scanning: social, economic, technological, competitive and regulatory
forces.
 o
o Social Forces – are the demographic characteristics of the population and its culture.
o Demographics – describe a population according to selected characteristics such as age, gender,
ethnicity, income, and occupation.
o General Cohorts
o Baby Boomers - include the generation of 76 million children born between 1946 and 1964.
They are the wealthiest generation in U.S. history, accounting for an estimated 50% of all
consumer spending.
o Generation X - includes the 50 million people born between 1965 and 1976. Also called the
baby bust. This generation of consumers are self-reliant, supportive of racial and ethnic diversity,
and better educated than any previous generation.
o Generation Y (millennial) – includes the 72 million Americans born between 1977 and 1994.
Also called the echo-boom. Members are interested in distinctive, memorable, and personal
experiences. The term millennials is often used to refer to this generation.
o Generation Z – includes those born between 1995 and 2010. They embrace the broadest
definitions of diversity and inclusivity to include race, ethnicity, the LGBT community, different
body types, and those with physical challenges. Values were formed by the Great Recession,
ISIS, Sandy Hook, marriage equality, first black president, growing interest in populism.
o Each generation are distinctive in their attitudes and consumer behavior, marketers have been
studying many groups or cohorts that make up the market place and have developed generational
marketing programs for them
o Blended Family – one formed by merging two previously separated units into a single household.
o Expect Brands and Companies to Embrace Social Change, Corporate Social Responsibility, and
Environmental Stewardship
o Net Impact – a Nonprofit for Students Who Want to “Use Business to Improve the World”
Population Shifts
o American Household Structure Has Changed
o Regional Shift Toward Southern and Western States
o Shifting Within States (30% in Cities, 50% in Suburbs, 20% in Rural)
o Metropolitan Statistical Area: at least one urbanized area of 50,000+ People, and adjacent
territory that has a high degree of social and economic integration
 o Micropolitan Statistical Area: has at least one urban cluster of at least 10,000 to 50,000 People
and adjacent territory that has a high degree of social and economic integration.
Racial and Ethic Diversity
 Composition
 Trends
o African Americans spends more than $1.3 trillion
o Hispanics spend more than $1.5 trillion
o Asian Americans spend more than $1 trillion
 Multicultural marketing consists of combinations of the marketing mix that reflect the unique
attitudes, ancestry, communication preferences, and lifestyles of different races.
Culture
 Culture incorporates the set of values, ideas and attitudes that are learned and shared among the
members of a group.
 consists of the set of values, ideas, and attitudes that are learned and shared among the members of a
group.
 Values, Ideas, and Attitudes Shared by Members of a Group. Values May Change Over Time
Notable Cultural Changes in Attitudes and Roles of Men and Women in the Marketplace
 Careers
 Sports
 Technology
 A lot of companies are moving away from traditional gender norms to avoid gender stereotypes. Calvin
Klein introduced fragrance CK2 for women and men.
Changing Values
 Culture also includes values that may differ over time and between countries. Today’s commonly held
values are personal control, continuous change, equality, individualism, self – help, competition, future
orientation, and action.
 Value consciousness is the concern for obtaining the best quality, features, and performance of a
product or service for a given price that drives consumption behavior.
Economic Forces
 Economy - The economy pertains to the income, expenditures, and resources that affect the cost of
running a business and household.
 Macroeconomics – Performance of the Economy based on Indicators (Example: GDP, Inflation,
Deflation, etc.)
 Inflation – Production Costs and Prices Increase
 Recession – Periods of Declining Economic Activity
 Microeconomics – Ability of Consumers to Buy
 Gross income is the total amount of money made in one year by a person, household, or family unit.
Also known as money income at the Census Bureau.
 Disposable income is the money a consumer has left after paying taxes to use for necessities such as
food, housing, clothing, and transportation.
 Discretionary income is the money that remains after paying for taxes and necessities

Technological Forces
 Technology consists of the inventions or innovations from applied science or engineering research.
 Artificial Intelligence Capabilities
 Automation (Drones, Cars, Robots, etc.)
 Internet of Things (IoT)
 Wearable Technology
Tech’s impact on customer value
 Plummeting Costs
  New Focus on Quality, Service, Relationships
 Thousands of New Products
 Changes Production of Existing Products
 Recycling
Marketspace is an information- and communication-based electronic exchange environment mostly occupied
by sophisticated computer and telecommunication technologies and digitized offerings.
Electronic commerce is any activity that uses some form of electronic communication in the inventory,
exchange, advertisement, distribution, and payment of products and services.
Internet of Things (IoT) is the network of products embedded with connectivity-enabled electronics.

Competitive Forces
Competition consists of the alternative firms that could provide a product to satisfy a specific market’s needs.
Types of competition
 Pure Competition – Many Sellers each has a similar product.
 Monopolistic Competition – Many Sellers with Substitutable Products within a price range.
 Oligopoly – Few Sellers control the majority of the industry sales. wireless telephone industry, four
carriers serve more than 95% of the U.S. market. Verizon, AT&T, T – Mobile, and Sprint.
 Pure Monopoly – Only One Seller
Components of Competition
 Entry – considering the competition, firm must assess the likelihood of new entrants
o Barriers to Entry - are business practices or conditions that make it difficult for new firms to
enter the market.
 Power of Buyers and Suppliers
o Powerful buyers exist when they are few in number, there are low switching costs, or the product
represents a significant share of the buyer’s total costs.
o Supplier gains power when the product is critical to the buyer and when it has built up the
switching costs
 Existing Competitors and Substitutes
o Competitive pressures among existing firms depend on the rate of industry growth.
o Slow growth settings, competition is more heated for any possible gains in market share
o High fixed costs also create competitive pressures for firms to fill production capacity.
 Small Businesses as Competitors
o Small business make up the majority of the competitive landscape for most businesses.
Regulatory Forces
Regulation - consists of the restrictions state and federal laws place on business with regard to the conduct of its
activities.
Protecting Competition
 Sherman Antitrust Act (1890) – major federal legislation has been passed to encourage competition,
deemed desirable because it permits the consumer to determine which competitor will succeed and
which will fail. Lobbying by farmers in the Midwest against fixed railroad shipping prices led to the
passage of this act, which forbids (1) contracts, combinations, or conspiracies in restraint of trade and
(2) actual monopolies or attempts to monopolize any part of trade or commerce.
 Clayton Act (1914) – Sherman Act was supplemented with the Clayton Act (1914). Act forbids certain
actions that are likely to lessen competition, although no actual harm has yet occurred.
 Robinson Patman Act (1936) – 1930s, fed. Gov’t had to ensure fair competition. Large chain stores like
Great Atlantic & Pacific Tea Company (A&P). small businesses were threatened lobbied for Robinson
Patman Act. Makes it unlawful to discriminate in prices charged to different purchasers of the same
product, where the effect may substantially lessen competition or help to create a monopoly
Product-Related Legislation:
 Patent Law
 o Company can protect its competitive position in new and novel products under the patent law,
which gives inventors the right to exclude others from making, using or selling products that
infringe that patented invention.
 Copyright Law
o Another way for a company to protect its competitive position in a product
o Gives the author of a literary, dramatics, musical or artistic work te exclusive right to print,
perform, or otherwise copy that work.
o Secured automatically when the work is created.
o The published work should bear an appropriate copyright notice, including the copyright symbol,
first year of publication, and the name of the copyright owner and it must be registered under the
federal copyright law.
 Digital Millennium Copyright Act (1998)
o Digital technology has necessitated additional copyright legislation, called the Digital
Millennium Copyright Act to improve protection of copyrighted digital products.
 Infant Formula Act (1980)
 Nutritional Labeling and Education Act (1990)
o These three laws are consumer oriented federal laws regarding products. Various laws include
more than 30 amendments and separate laws relating to food, drugs, and cosmetics.
 Child Protection Act (1966)
 Consumer Product Safety Act (1972) – established the Consumer Product Safety Commission to
monitor the product safety and establish uniform product safety standards.
 Fair Packaging and Labeling Act (1966)
o Several states have proposed new legislation that would require the labeling of genetically
modified food.
Consumerism - is a grassroots movement started in the 1960s to increase the influence, power, and rights of
consumers in dealing with institutions.
Trademarks – intended to protect both the firm selling a trademarked product and the consumer buying it.
 Lanham Act (1946) – provides registration of a company’s trademarks. Registration provides
advantages to a trademark owner that has a trademark in interstate or foreign commerce. Does not
confer ownership. Lose trademark if it becomes generic, means that is has primarily come to be a merely
common descriptive word for the product.
 Trademark Law Revision Act (1988) – resulted in major change to Lanham Act, allows a company to
secure rights to a name before actual use by declaring an intent to use the name.
 Madrid Protocol Treaty (2003) – U.S. agreed to participate in this treaty, facilitates the protection of
U.S. trademark rights throughout the world. 95 nations are members. U.S., Australia, China, EU, France,
Germany, Japan, and the United Kingdom.
 Federal Trademark Dilution Act (1995, 2006) – prevent someone from using a trademark on a
noncompeting product. (example the “Cadillac” brushes)

Pricing-Related Legislation:
 Price Fixing – Illegal. Courts view this this behavior as per se illegal, per se means through or of itself.
Courts sees this as illegal.
 Price Discounting – Certain Forms Are Allowed. Quantity discounts are acceptable, buyers can be
charged different prices for a product provided there are differences in manufacturing or delivery costs.
Promotional allowances or services may be given to buyers on an equal basis proportionate to volume
purchase. Firm can meet a competitor’s price in good faith.
Distribution-Related Legislation:
 Exclusive Dealing – an arrangement a manufacturer makes with a reseller to handle only its products
and not those of competitors. practice is illegal under the Clayton Act.
  Requirement Contracts – requires a buyer to purchase all or part of its needs for a product from one
seller for a time period. Contracts are not always illegal but depend on court’s interpretation of their
impact or distribution.
 Exclusive Territorial Distributorships – third distribution issue often under regulatory scrutiny. A
manufacturer grants a distributor the sole rights to sell a product in a specific geographical area.
 Tying Arrangement – fourth distribution strategy. A seller requires the purchaser of one product to also
buy another item in the line. Contracts may be illegal when the seller has such economic power in the
typic product that the seller can restrain trade in the tied product.
Advertising- and Promotion-Related Legislation:
 Advertising Is Closely Monitored By the FTC. FTC is concerned with deceptive or misleading
advertising and unfair business practice and has the power to issue cease and desist orders and order
corrective advertising.
 Cease and desist order – FTC orders a company to stop practices they consider unfair
 Corrective advertising – FTC comes in and require a company to spend money on advertising to correct
the prior misleading ads.
 FTC Act of 1914
 Deceptive Mail Prevention and Enforcement Act (1999). Regulate promotion practices. Provides
specifications for direct mail sweepstakes such as the requirements that the statement “No purchase is
necessary to enter” be displayed in mailing, in the rules, and on entry form.
 Telephone Consumer Protection Act (1991) – provides requirements for telemarketing promotions,
including fac promotions. Subject to a law called National Do Not Call Registry.
 National Do Not Call Registry – list of consumer phone numbers of people who do not want to receive
unsolicited telemarketing calls.
Advertising- and Promotion-Related Legislation:
 Children’s Online Privacy Protection Act (1998)
 European Union Data Protection Act (1998)
 Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act (2004)
Three laws are designed to restrict information collection and unsolicited email promotions and specify simple
opt – out procedures on the Internet.
 Internet Tax Freedom Act – permanent provision in the Trade Facilitation and Trade Enforcement Act
(2015)

Self-Regulation - is an alternative to government control where an industry attempts to police itself.

 Major TV Networks Use Self-Regulation to Set TV Ads for Children Guidelines

Better Business Bureau (BBB)

 Voluntary Alliance of Companies
 Maintain Fair Practices

 Company’s microenvironment
a) other departments
b) suppliers
c) marketing intermediaries
d) customers
e) competitors: I disagree …should be in macroenvironment
f) publics
 Macroenvironment
a) demographic
Baby Boomers: 1946-1964
Generation X: 1965-1976
 Echo Boomers: 1977-1994 (Generation Y) Millennials
Generation Z (post-millennials): Born between 1995 & 2010
Geographic shifts in population
Changing family structure/values
Diversity
b) cultural
c) economic
changes in income (by recession, depression, unemployment, inflation, boom)
changes in consumer spending patterns
d) technological
e) competitive
f) political/legal/regulatory

 Are these areas/categories within the control of the marketer?

 Identify examples in several industries for a product/service

CHAPTER 7: GLOBAL MARKETING

 Amazon investing toward operations in India.
 Amazon’s Indian Operation:
 Amazon Spends $1 Billion Annually in India
 2nd Most Populous Country
 2nd Largest English-Speaking Country
 Fast-Growing Economy
 2nd Largest Internet User Base in the World
 But, Many Challenges: Trade, Payment, Competition
Global Perspective
 U.S., China, Japan, West. Europe, Canada Account for Two-Thirds of World Trade
 Products and Commodities: 80 Percent of World Trade, Services: 20 Percent
 Exports and Imports Have Complementary Economic Flow
 A country’s imports affect its exports and a country’s exports affect its imports
 As exports of one country increase, national output and income rise, leads to an increase in the demand
for imports
 Nations greater demand for imports stimulates the exports of other countries.
 Increased demand for exports of other nations energizes their economic activity, resulting in higher
income, stimulates the demand for imports

 Trade Feedback Effect – imports affect exports and vice versa.

 Countertrade – is the practice of using barter rather than money for making global sales
United States perspective on World Trade.
 Over time U.S. exports has decreased
 U.S, World Imports have increased.
 Gross Domestic Product (GDP) – monetary value of all products and services produced in a country
during one year.
 Balance of Trade – difference between the monetary value of a nation’s exports and imports.
 Exports > Imports, Trade Surplus.
 Imports > Exports, Trade Deficit.
 Largest Importers of U.S. Products: Canada, Mexico, China, Japan
Globalization – focus on creating economic, cultural, political and technological interdependence among
individual national institutions and economies.
5 developments
 1. Protectionism
2. Economic integration among countries
3. Global competition among global companies for global consumers
4. Prescence of a networked global marketspace
5. Growing prevalence of economic espionage

Protectionism – is the practice of shielding one or more industries within a country’s economy from foreign
competition through the use of tariffs or quotas.

Tariffs - is the practice of shielding one or more industries within a country’s economy from foreign
competition through the use of tariffs or quotas.

Quota - a restriction placed on the amount of a product allowed to enter or leave a country. Can be mandated or
voluntary and may be legislated or negotiated by governments. Import quotas guarantee domestic industries
access to a certain percentage of their domestic market.
Economic Protectionism by Countries

World Trade Organization (WTO) – is a permanent institution that sets rules governing trade between its
members through panels of trade experts who decide on trade disputes between members and issue binding
decisions.

Trade War – situation in which countries try to damage each other’s trade, by imposing a tariff and quota
restrictions.

 Number of countries with economic goals have formed transnational trade groups or signed trade
agreements for the purpose of promoting free trade among member nations and enhancing individual
economies.
 European Union (EU), United States – Mexico – Canada Agreement (USMCA)

European Union (EU)

 28 Countries Eliminated Barriers to Trade (750 Million Consumers)
 Eliminated barriers to the free flow of products, services, capital and labor across their borders
  16 countries have the EURO currency
 Creates marketing opportunities because firms do not need to market their products and services on a
nation – by – nation basis
 Pan – European marketing strategies are possible due to greater uniformity in product and packaging
standards; fewer regulations restrictions on transportation, advertising, and promotion imposed by
countries; and removal most tariffs that affect pricing practices.
 2019 UK voted to formally withdraw from the EU.

United States – Mexico – Canada Agreement

 Recently this agreement was renegotiated aspects of the North America Free Trade Agreement
(NAFTA) established in 1994
 Created to govern trade relationships among member nations as well as cross – border retailing,
manufacturing, and investment.
 NAFTA gave Walmart to enter into Mexico.
 Mexico supergiant and bakery giant moved operations to the United States
 Whirlpool Canadian Operations stopped making machines in Canada and moved to the United States
 USMCA modernized NAFTA by updating trade practices pertaining to each country’s regulatory
practices, advances in cross – border electron commerce, labor practices, protection of intellectual
property, environmental issues, and mechanisms for resolving trade disputes.
 Changed tariff policies between the U.S., Canada, and Mexico for selected products.
North American Free Trade Agreement (NAFTA)
 Lifted Trade Barriers Between Canada, Mexico, and U.S. (475 Million Consumers)

46 Percent of U.S. Exports Are to Free Trade Partners

Global Competition among Global Companies for Global Consumers

 Global Competition – exists when firms originate, produce, and market their products and services
worldwide
 Global companies – three types of companies populate and compete in the global marketplace: 1.
International firms, 2. Multinational firms, 3. Transnational firms.

1. International Firms –
a. engage in trade and marketing in different countries as an extension of the marketing strategy in
its home country. The firms market their existing products and services in other countries the
same way they do in their home country.
2. Multinational Firms –
a. Views the world as consisting of unique parts and markets to each part differently.
 Multidomestic Marketing Strategy –
o involves multinational firms that have as many different product variations, brand names, and
advertising programs as countries in which they do business.
3. Transnational Firms –
a. Views the world as one market and emphasizes cultural similarities across countries or universal
consumer needs and wants rather than differences.
 Global Marketing Strategy –
o involves transnational firms that employ the practice of standardizing marketing activities
when there are cultural similarities and adapting them when cultures differ.
 Global Brand –
o a brand marketed under the same name in multiple countries with similar and centrally
coordinated marketing programs. Have the same product formulation or service concept,
 deliver the same benefits to consumers and use consistent advertising across multiple
countries and cultures.
Global Consumers –
 are consumer groups living in many countries or regions of the world who have similar needs or seek
similar features and benefits from products or services.
 Consumer Groups in Different Countries with Similar Needs
 Ex: Middle-Class, Youth Market, Elite Segment, etc.
 Companies Benefit from Similarities in Markets
1* How does International Marketing differ from domestic marketing? Does it?

Prevalence of Economic Espionage

 Clandestine Collection of Trade Secrets or Proprietary Information about Competitors
 Costs U.S. Firms $400+ Billion/Year
 23 Nations Routinely Target U.S. Firms
 Economic Espionage Act (1996) Makes Theft a Federal Crime

Global Environment Scan

 Marketers must be sensitive to the cultural underpinnings of different societies if they are to initiate and
consummate mutually beneficial exchange relationships with global consumers.
 Cross Cultural Analysis –
o involves the study of similarities and differences among consumers in two or more nations or
societies.
o Involves an understanding of and an appreciation for the values, customs, symbols, and language
of other societies.
 Values –
o are a society’s personally or socially preferable modes of conduct or states of existence that tend
to persist over time.
o McDonald’s does not sell beef hamburgers in India because the cow is sacred by almost 85% of
the population sell the Maharaja Mac and McAloo Tikki burger.
 Customs –
o What is considered normal and expected about the way people do things in a specific country.
o Japanese women give Japanese men chocolates on Valentine’s day.
 Foreign Corrupt Practices Act (1977)
o A law, amended by the International Anti-Dumping and Fair Competition Act (1998), that makes
it a crime for U.S. corporations to bribe an official of a foreign government or political party to
obtain or retain business in a foreign country.
 Cultural Symbols – are things that represent ideas and concepts.
o Evoke deep feelings
o North America feels superstitious about the number 13.
o “thumbs up” positive in the U.S., however in Russia and Poland, seen as an offensive gesture.
 Language
o 100 Official Languages in the World
o But Experts Estimate 3,000 Languages are Spoken
o Unintended Meanings
 Vicks is used in the United States, very common. In Germany “Vicks” is a slang for
sexual intimacy, therefore called “Wicks”.
o Back Translation –
 is the practice where a translated word or phrase is retranslated into the original language
by a different interpreter to catch errors.
  Kit Kat bars, pronounced “kitto katsu” in Japanese, means “surely to win”. Students eat
Kit Kat bars for good luck for crucial exams.
o Best language use to communicate with consumers is their own.

 Cultural Ethnocentricity – Belief that One Culture Is Superior to Another. Tendency for people to view
their own values, customs, symbols and language favorably and is well known.
 Consumer Ethnocentrism – Believe It Is Wrong to Purchase Foreign-Made Products. The expression,
“Buy American Made Goods”.

Global Marketing Affected by Economic Considerations:

 Assessment of Economic Infrastructure
o Economic Infrastructure – country’s communications, transportation, financial and distribution
systems, critical consideration in determining whether to try to market to a country’s consumers
and organizations
o Financial and Legal Systems Understanding
 Private Property
 Payment Systems
 Measurement of Consumer Income and Purchasing Power
o Global marketer selling consumer products must also consider what the average per capita or
household income is among a country’s consumers and how the income is distributed to
determine a nation’s purchasing power
o Per capita income varies greatly between nations
 Recognition of Currency Exchange Rates
o Fluctuations in exchange rates among the world’s currencies are of critical importance in global
marketing
o Such fluctuations affect everyone, from tourists to global companies
o Currency exchange rate is the price of sone country’ currency expressed in terms of another
country’s currency, such as the U.S. dollar expressed in Japanese Yen, Euros, Swiss Francs or
the British Pound.
o Failure to consider exchange rates when pricing procedures for global markets can have dire
consequences.
Political – Regulatory Climate
 Assessing the political and regulatory climate for marketing in a country or region of the world involves
not only identifying the current climate but also determining how long a favorable or unfavorable
climate will last.
 Political stability in a country
Political Stability
 Trade among nations or regions depends on political stability.
 Political stability in countries is affected by numerous factors, gov’t orientation toward foreign
companies and trade with other countries
 Factors combined to create a political climate that may be favorable or unfavorable for marketing and
financial investment in a country or region of the world
 Measure political stability through various metrics and tracked by agencies such as the PRS group, Inc.
 Impacts of Political Stability
o Billions in Lost Trade
o Favorable/Unfavorable Conditions
 Political Climate in Countries Regularly Changes
  Risk Analysis Includes Variables such as Risk of Internal Turmoil, External Conflict, Government
Restrictions, and More
 Political Stability Is Monitored and Tracked
Trade Regulations.
 Impact on Economy from Trade Regulations
o Restrictions on How Trade Is Conducted and Products/Services Sold to Consumers
 Countries have rules that govern business practices within their borders
 Rule often serve as trade barriers.
 Malaysian Government has advertising regulations stating “advertisements must not project or promote
an excessively aspirational life style”.

Comparing Global Market Entry Strategies

 Company has decided to enter the global marketplace, must select a means of market entry.
 Four general options:
1.) Exporting – produce products in one country and selling them in another country. Allows a company to
make the least number of changes in terms of its product, its organization and corporate goals.
a. Indirect Exporting – when a firm sells its domestically produced products in a foreign country
through an intermediary. Least amount of commitment and risk and ideal for a firm with no
overseas connection but wants to market abroad. Intermediary is often a distributor that has the
marketing know how and resources necessary for this effort to succeed.
b. Direct Exporting – when a firm sells its domestically produced products in a foreign country
without intermediaries. Belief volumes of sales will be large and easy to obtain. Exporter may be
approached by foreign buyers that are willing to contract for a large volume of purchases.
Involves risk but opens the door for increased profits.
2.) Licensing
a. Offers Right to a Trademark, Patent, Trade Secret, or Intellectual Property for a Royalty or Fee
b. Advantages: company granting the license are low risk and a capital free entry into a foreign
country. License gains information that allows it to start with a competitive advantage, foreign
country gains employment by having the product manufactured locally.
c. Disadvantages: licensor forgoes control of its product and reduces potential profits gained from
it. May be creating its own competition. If the license turns out to be a poor choice, name or
reputation of the company may be damaged.
d. Franchising is a variation of licensing. Fastest growing market entry strategies. McDonald’s.
3.) Joint Venture –
a. Foreign company and local firm invest together to create a local business.
b. Sharing Ownership, Control, and Profits
c. Strauss Group joint venture with PepsiCo to market Frito Lay’s Cheetos, Doritos, and other
snacks in Israel and the Strauss Group’s Sabra Hummus in North America.
d. Disadvantages: when two companies disagree about policies or course of action for the joint
venture. Or governmental bureaucracy bogs down the effort. For example, U.S. wants to reinvest
earnings gained where foreign companies spend those earnings. And vice versa.
4.) Direct Investments –
a. Biggest Commitment to Enter Global Market
b. Entails a domestic firm actual’s investment and owning a foreign subsidiary or division.
c. FedEx and UPS have entered China through Joint Ventures with Chinese companies.
d. Advantages are cost savings, better understanding of the local market conditions and fewer local
restrictions. Firms entering foreign markets using direct investment believe these advantages
outweigh the financial commitments and risks involved
e. Disadvantages are sometimes the advantages may not work out. Uber and China departed China
in 2016 and 2019 posting significant losses.
Possible Marketing Strategies:
Product may be sold globally in three ways.
1. Product Extension
 Same Product, Different Countries. Selling products virtually the same way in other countries.
2. Product Adaptation
 Change Product for Different Countries. Changing a product in some way to make it more
appropriate for consumer preferences or a country’s climate is a product adaption strategy.
3. Product Invention
 New Product for Different Countries. Companies can invent totally new products designed to satisfy
the needs across the countries.
Communication Adaption Strategy:
 Global companies may also adapt their promotion message
 “put a tiger in your tank” sold in one country but advertised differently
 Same Product but Different Advertising
Dual Adaption Strategy:
 Modifying Both Products and Promotion Messages
 Modify their products and promotion messages. Nestle does this with Nescafe coffee.
 Nescafe is marketed using different coffee blends ad promotional campaigns to match consumer
preferences in different countries.
 Nescafe in one part of the world advertises taste, aroma and warmth. Nescafe in Thailand is advertised
as a way to relax from the pressures of daily life.

Distribution Strategy
Distribution Is Critical in Global Marketing:
 Availability and Quality of Retailers, Wholesalers, and Transportation
  First step involves the seller, headquarters is the starting points and responsible for the successful
distribution to the ultimate consumer
 Second step is the channel between two nations, moving the product from one country to another.
Intermediaries that can handle this responsibility include resident buyers in a foreign country,
independent merchant wholesalers who buy and sell the product or agents who bring buyers and sellers
together.
 Once the product is in, the country’s distribution channels take over.

Pricing Strategy
 Global companies face challenges in determining a price as part of their worldwide marketing effort.
 Individual countries may impose considerable competitive, political, and legal constraints on the pricing
latitude of global companies. Ex: Germany limited Walmart from selling some items below cost of lure
shoppers. Eventually Walmart left Germany.
 Countries Impose Pricing Constraints:
o Prices May Be Too High or Too Low
o When prices are too low in one country, companies can be charged with dumping.
o Dumping – occurs when a firm sells a product in a foreign country below its domestic price or
below its actual cost. Often done to build a company’s share of the market by pricing at a
competitive level. Products being sold may be surplus or cannot be sold domestically and
therefore are already a burden to the company. Firm may be glad to sell them at almost any price.
o When companies price their products very high in some countries but competitively in others,
face a gray market problem.
o Gray Market - a situation where products are sold through unauthorized channels of distribution.
Also called parallel importing.
o Gray market comes about when individuals buy products in a lower – priced country from a
manufacturer authorized retailer, ship them to higher priced countries, and then sell them below
then manufacturers suggested retail price through unauthorized retailers.
o Parallel importing is legal in the United States, illegal in the European Union

2* What types of environmental scanning are most important to “global” marketing?

3* How do culture, exchange rates, trade barriers, tariffs, import/export laws, embargoes, quotas,
and dumping affect doing global business? Can you define these terms, cite examples…

4* What are GATT, NAFTA, and EU?

5* What were they supposed to do?
6* How do they affect your life directly or indirectly?

7* What are the key things to do when entering an international market?

8* (Joint ventures, consultants, licenses, strategic alliances, licensing, franchises come to mind.)

9* Define and give examples of four international product/promotional strategies.

10* straight extension/one product-one message

11* product adaptation
12* promotion adaptation
13* dual adaptation
 product invention

CHAPTER 8: MARKETING RESEARCH

 14* Who conducts market research?

15* What are the 6 steps in the MARKETING RESEARCH PROCESS?

16* defining the problem

conducting exploratory research
17* formulating a hypothesis
18* creating a research design
19* collecting data (which type: primary, secondary, both)
20* analyze the results
21* interpreting and presenting the results

22* What is the iceberg principle?

23* What are types of exploratory research methods? (see PDF files)

24* focus groups

25* sentence completion
26* word association
27* TAT

28* internal vs. external data

29* research design questions: survey, experiment, observational? What are they?

30* What are the advantages/disadvantages of primary vs. secondary data?

31* types of sampling – Why use any of them or one method over another?

32* population/universe vs. census

33* probability vs. non-probability samples: examples of each…

34* simple random sample

35* stratified sample
36* cluster sample
37* convenience sample
38* judgment sample
39*
40* Survey methods:
41* personal interviews
42* mail
43* phone
44* Internet

What are the advantages/disadvantages of each? (see handouts &

45*
textbook)https://www.youtube.com/watch?v=HADYWbSGQKE
CHAPTER 8: MARKETING RESEARCH

1. Identify the reason for conducting marketing research.

2. Describe the five-step marketing research approach that leads to marketing actions.
3. Explain how marketing uses secondary and primary data
 4. Discuss the uses of observations, questionnaires, panels, experiments, and newer data collection
methods.
5. Explain how data analytics and data mining lead to marketing actions.
6. Describe three approaches to developing a company’s sales forecast.
A Film Industry Secret: Research
 Movie Title Testing
 Concept Testing & Script Assessment
o Used to assess early ideas for proposed new films
 Test Screening
o 300 to 400 prospective moviegoers are recruited to attend a “sneak preview” of a film before its
release
o After watching a movie, they complete a survey to critique its title, plot, characters, music, and
ending to identify improvements to make in the final edit.
 Tracking Studies
o Before a film release, studios will ask prospective moviegoers in target audience in three
questions.
 Are you aware of the film?
 Are you interested in seeing the film?
 Will you see the film?
 Social Listening
o To understand what potential moviegoers are saying on social media platforms. Use data to
monitor a promotional campaign, forecast the movie’s opening weekend box – office sales, and
if necessary, add additional marketing activities to promote the film.
 Marketing Research - is the process of defining a marketing problem and opportunity, systematically
collecting and analyzing information, and recommending actions. Can be imperfect, marketers conduct
marketing research to reduce the risk of and thereby improve marketing decisions.
 Challenges in doing good marketing research
o how can marketing research determine if consumers will buy a product they have never seen,
never though about, before?
o How can marketing research obtain answers that people know but are reluctant to reveal?
o How can marketing research help people accurately remember and report their interests,
intentions and purchases?
 Five step marketing research approach
o A decision is a conscious choice from among two or more alternatives. As consumers we choose
from alternatives.
o Decision making is a structured approach used by managers and researchers to improve the
outcomes of decisions by using more formal, structured approaches. The act of consciously
choosing from alternatives


o 1. Define the problem
  Every marketing problem faces its own research challenges.
 Set the research objectives:
 Specific, measurable goals the decision maker seeks to achieve in conducting the
marketing research.
 Setting objectives, marketers have to be clear on the purpose of the research that
leads to marketing actions. 3 main types of research.
1. Exploratory research – provide ideas about a vague problem or question.
Interviews and focus groups are used.
2. Descriptive research – trying to find the frequency which something occurs or
the extent of a relationship between two factors.
3. Casual research – tries to determine the extent to which the change in one
factor changes another one.
 Measures of success – are criteria or standards used in evaluating proposed
solutions to the problem.
 Different research outcomes, based on the measure of success, lead to
different marketing actions
 Defining a problem is a difficult task
 Objectives are too board; problem may not be researchable.
 Too narrow, value of the research may be diminished.
 Time is spent heavily to define a marketing problem precisely and writing
a formal proposal that describes the research to be done.
 Measure of Success: Playtime
 Children Spend More Time Playing with New Design
o Possible Marketing Actions
 Introduce New Design
 Drop Old Design
o 2. Develop the research plan
 Requires the researcher to specify the constraints on the marketing research activity,
identify the data needed for marketing actions, and determine how to collect the data.
 Specify Constraints – in a decision are the restrictions placed on potential solutions to a
problem. Are, in a decision, the restrictions placed on potential solutions to a problem.
 Identify data needed. Effective marketing research studies focus on collecting data that
will lead to effective marketing actions.
 Determine how to collect data: how to collect useful marketing research data
often as important as actually collecting the data. Two key elements to consider
how to collect data: concepts and methods.
 Concepts – ideas about products or services. Marketing researchers frequently develop a
new product concept, picture or verbal description of a product or service the firm might
offer for sale.
 Methods – approaches that can be used to collect data to solve all or part of a problem.
When Lego Group collects data by observing the behavior of MINDSTORMS users and
asks users questions about their opinions of the MINDSTORMS kits. Observing people
and asking them questions, two main data collection methods.
 Special methods vital to marketing are sampling and statistical inference.
 Sampling – selecting a group of distributors, customers, or prospects; asking them
questions; and treating their answers as typical of all those in whom they are
interested.
 Statistical inference – generalize the results from the sample to much larger
groups of distributors, customers, or prospects to help decide on marketing
actions.
o 3. Collect relevant information
  Collecting enough relevant information to make a rational, informed marketing decisions
sometimes simply means using your knowledge to decide immediately. Can be a great
expense.
 Data - are the facts and figures related to the project that are divided into two main parts:
secondary data and primary data.
 Primary data - are the facts and figures that are newly collected for the project. Divided
into observational data, questionnaire data, and other sources of data.
 Secondary data - are the facts and figures that have already been recorded prior to the
project at hand.
Secondary data internal: internal records of a company generally offer the most easily accessible marketing
information. Divided into two parties.
 Marketing inputs data – data relate to the effort expended to make sales. range
from marketing budget reports, include advertising expenditures, salespeople’s
call reports. Effort Expended to Make Sales.
 Marketing outcome data – results of marketing efforts. Relate to the results of the
marketing efforts. Accounting records on shipments and include sales and repeat
sales, often broken down by sales rep., industry, and geographic region. Emails,
phone calls, social media posts from customers can reveal both complaints and
what is working well.
 Secondary data external: published data from outside organizations are external
secondary data. The U.S. Census Bureau publish a variety of useful reports. Census 2020,
recent count of the U.S. population that occurs every 10 years. Syndicated panel data
economically answer questions using paper or electronic diary. Answers the question that
require consistent data collection over time, such as “How many times did our customers
buy our products this year compared to last year”. Trade associations, universities, and
business provide detailed data of value to market researchers and planners.
 Advantages and disadvantages of secondary data.
 Advantages of secondary data:
1. Tremendous time savings, data has already been collected and published
or exists internally
2. Low cost, free or inexpensive.
 Disadvantages of secondary data:
a. Secondary data may be out of date. U.S. census is collected every 5 to 10
years
b. Definitions or categories may not be right for a project. Ex. Age groupings
or product categories might be wrong for the project
c. Data has been collected for another purpose, may not be specific enough
for the project you are conducting.
Primary Data: Watching People – observing people and asking them questions are two principal ways to collect
new or primary data for a marketing study. Facts and figures obtained by watching how people actually behave
is the way researchers collect observational data.
 Observational data – are the facts and figures obtained by watching, either mechanically or in person,
how people actually behave.
 Mechanical Methods –
o Nielsen’s People Meter
o Nielsen’s TV Ratings
o This device measures what channel and program are tuned in and who is watching.
o The people meter is a box that is attached to a television, DVR, cable box or satellite dish in
30,000 houses across the country, has a remote-control unit that is used to indicate when a view
begins and finishes the program, and stores then transmits viewing the information to Nielson
each night.
 o
 Personal Methods –
o Mystery Shopper – companies pay researchers to shop at their stores, outlets, or showrooms to
obtain the point of view of actual customers. Can check on availability and pricing of products
and services and on the quality of the customer service provided by employees. Customer
experience mgt. efforts, thus evaluating customer service, store cleanliness, and staff appearance
and conduct.
o Observation
o Ethnographic Research – specialized observational behavioral in which trained observers seek to
discover subtle behavioral and emotional reactions as consumers encounter products in their
natural use environment. Best Buy’s study toward in home use of fitness equipment and
conducted shop a long to better understand purchase decisions and preferences. Discovered
consumers wanted integration of consumer electronics with fitness equipment that provide
feedback on health and fitness
o Personal observation – both useful and flexible, however can be costly and unreliable if different
observers report different conclusions when watching the same event. Observers watch what
people do; they can’t determine why they do it.
 Neuromarketing methods – marketers use this method to overserve people response to nonconscious
stimuli. Merge’s technology used to study the brain with marketing’s interest in understanding
consumers. Provide insights for many elements of a marketing program, includes media options,
advertising content, packaging and label.
Primary Data: Asking People.
 Responding to a questionnaire
 Asking consumer questions and recording their answers is the second principal way in gathering
information
Divide primary data task into –
1. Idea generation methods
2. Idea evaluation methods, although they sometimes overlap and each has a number of special techniques
 Survey method results in valuable questionnaire data, facts and figures obtained by asking people about
their attitudes, awareness, intentions and behaviors.
Idea generation methods – coming up with ideas
 Individual interview – involves a single researcher asking questions of one respondent. Advantages,
being able to probe for additional ideas using follow up questions to a respondent’s initial answers.
 Depth interviews – ask lengthy, free – flowing kinds of questions to probe for underlying ideas and
feelings. Hamburger Helper Case Study – Discover the consumers did not think it contained enough
meat and did not want the hassle of cooking in different pots.
  Focus Groups – informal sessions of 6 to 10 past, present or prospective customers in which a discussion
leader, or moderator, asks for opinions about the firm’s products and those of its competitors, including
how they use products and special needs they have that these products don’t address.
Idea Evaluation Methods – Testing an Idea:
 Personal Interview Surveys – enable the interviewer to be flexible in asking probing questions or getting
reactions to visual materials but are very costly.
 Telephone Interviews – allow flexibility, unhappy respondents may hang up on the interviewer, even
with the efficiency of computer – assisted telephone interviewing (CATI).
 Mail Surveys – usually biased because those most likely to respond have had especially positive or
negative experiences with the product or brand.
 Online (E-Mail/Internet) Surveys – online methods can reach most audiences while telephones landlines
and mail offer declining access. Embed a survey in an email sent to targeted respondents. Open the
email, consumers can either see the survey or click on a link to access it from a website. Also ask
consumers to complete a “pop – up” survey in a separate browser window when they access an
organization ‘s website. Use this method to have consumers access their products and services or
evaluate the design and usability of their websites.
 Mall Intercept Interview Surveys
Question formats:
1. Open-Ended Questions (Question 1.)
o Allows respondents to express opinions, ideas, or behaviors in their own words without being
forced to choose among alternatives that have been predetermine by a marketing researcher.
2. Closed-End or Fixed Alternative Questions
o Requires respondents to select one or more response options from asset of predetermine choices.
o Fixed alternative with three or more choices uses a “scale”
3. Dichotomous Questions (Question 2.)
o Simplest form of closed end questions, allows only a “yes” or “no”.
4. Semantic Differential Questions (Question 5.)
o A 5-point scale in which the opposite ends have one- or two-word adjectives that have opposite
meanings.
5. Likert Scale Questions (question 6.)
o Which the respondent indicates the extent to which he or she agrees or disagrees with a
statement.
6. Mall intercept interviews
o Personal interviews of consumers visiting shopping centers. These face-to-face interviews reduce
the cost of personal visits to consumers in their homes while providing flexibility to show
respondents visual cues such as ads or actual product samples. Disadvantage – mall intercept
interviews, people interviewed may not be representative of the consumers targeted, giving a
biased result.
Wendy’s Surveys
Primary Data – Other Sources:
Social Media
o Social Media Can Provide Ideas for New Products and Services
o Use Social Media Listening Tools
o Instagram, Facebook, Twitter and other social media are revolutionizing the way today’s marketing
research is done.
o Conversation, Velocity, Share of Voice, Sentiment
Panels and Experiments
 o Panels: Sample of Consumers to Be Measured
Experiments: involves obtaining data by manipulating factors under tightly controlled conditions to test cause
and effect.
o Independent Variable: The Cause (Drivers)
o Dependent Variable: The Result
o Test Markets – Used in Small Geographies to Evaluate Marketing Actions
Big Data, Data analytics and Artificial Intelligence.
o Big Data – Describes Large Amounts of Data Collected from Variety of Sources
Information Technology - involves operating computer networks that can store and process data.
o Transform Data into Useful Information
o Data Visualization
o Intelligent Enterprise
Data mining –
o Extracting Hidden Predictive Information to Find Patterns and Links
o Reveals Personal Information
o Collected via Tracking Devices (Examples: Cookies and Apps)
o Enables Personalization and Targeting

Advantages of Primary Data:

o More Flexible
o More Specific to the Problem
Disadvantages of Primary Data:
o Expensive
o Time Consuming to Collect
Developing Cross Tabulations:
o Cross Tabs - is a method of presenting and analyzing data involving two or more variables to discover
relationships in the data. Also known as a “cross tab.”
o Can Show Raw Data to Answer Questions
o Can Show Percentage Responses to Questions
Interpreting Cross Tabulations:
o Look for Heavy Users
 o Develop Marketing Actions to Reach Them
Pros and cons of using data.
Advantages:
o Simple Format
o Direct Interpretation of Data
o Easy Communication of Results
o Flexible – Summarizes Data Generated
Disadvantages:
o Misleading if Too Few Observations
o Can Hide Some Relationships Due to Only Showing 2 to 3 Variables

4. Develop Findings
Analyze the Data
1. How Are Sales?
2. What Factors Contribute to Sales Trends?
Present the Findings

5. Take marketing actions

o Make Action Recommendations
o Implement the Action Recommendations
o Evaluate the Results
o Evaluate the Decision Itself
o Evaluate the Decision Process Used