Margins Study Assistant

Chapter 1

Marketing and Customer Value

Summary

Marketing begins with strategy and relies on creating and delivering value to customers. The marketing mix—product, price, place, and promotion—has traditionally comprised the marketer’s toolbelt. It is crucial for marketers to understand exactly what customers value and determine how to deliver the value while also meeting company goals

Key terms

customer value: the ratio of the perceived benefits relative to the costs incurred by the customer in acquiring the product or service
value: the difference between a customer’s evaluation of the benefits and costs of one product when compared with others
marketing: the activities a company undertakes to promote the buying or selling of a product or service
customer: a person who purchases a product or service
suppliers: sometimes also called vendors , these are partners from whom we receive the parts and products necessary for our business
marketing process: the series of steps that assist businesses in planning, analyzing, implementing, and adjusting their marketing strategy
promotion: any type of marketing communication used to inform audiences of the relative merits or a product, service, or brand
marketing mix: the set of actions or tactics that a company uses to promote its brand or product in the market

Chapter 2

Strategic Planning in Marketing

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Summary

The foundation of who a company is established based on the vision, mission, values, and goals and objectives of the organization In this chapter, we explore tools such as SWOT analysis and the BCG matrix that can help a company organize and analyze its portfolio Strategy starts with understanding where a company is, where it wants to go, what the operating environment looks like, and what tools it has to work with or could acquire.

Key terms

SWOT analysis: identification of internal strengths and weaknesses and external opportunities and threats impacting a business
BCG matrix: Boston Consulting Group’s framework for analyzing an organization’s strategic business units
strategy: set of plans, actions, and goals that outlines how a business will compete
objectives: specific targets to be achieved within a specified period of time
goals: the outcomes one intends to achieve
conglomerate diversification: the development and addition of new products or services that are significantly unrelated to a company’s current offerings
marketing metrics: what marketers use to monitor, record, and measure progress over time; are varied and can change from platform to platform

Chapter 3

Consumer Markets and Purchasing Behavior

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Summary

Finally, it examined the role of ethics in consumer buying behavior and discussed ethical consumerism

Key terms

consumer market: a market where consumers purchase products and/or services for consumption
consumer decision process: the process through which consumers become aware of and identify their needs, collect information on how to best solve those needs, evaluate alternative options, make a…
consumer buying behavior: the actions taken by consumers before buying a product or service
buyer’s black box: a model used in the study of the buying behavior of consumers
complex buying behavior: the consumer buying behavior that occurs when the consumer is highly involved with the purchase and perceives significant differences between brands
occupation: an activity or task with which one occupies oneself, usually the productive activity, service, trade, or craft for which one is regularly paid
variety-seeking buying behavior: the buying tendencies of consumers who do not have a high involvement with a product when there are significant differences between brands
perception: the manner in which sensory information is organized, interpreted, and consciously experienced

Chapter 4

Business Markets and Purchasing Behavior

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Summary

We discussed the types of buyers in B2B transactions—producers, resellers, governments, and institutions—and identified the different types of buy classes in the B2B market, as well as the roles of those in the buying… Finally, we explored some ethical issues with respect to the B2B buying process, including Transparency International’s Corruption Perceptions Index and the Foreign Corrupt Practices Act (FCPA) In this chapter, we defined business-to-business (B2B) markets and buying behavior and explored the differences between business-to-consumer (B2C) and B2B markets. We also reviewed the eight stages of the B2B buying process: problem recognition, need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification, and…

Key terms

buy classes: buying situations that are distinguished on four characteristics: newness to decision makers, number of alternatives to be considered, uncertainty inherent in the buying…
B2B buying process: encompasses 8 stages: problem recognition, need description, product specification, supplier search, proposal selection, supplier selection, order-routine specification…
institutions: organizations, establishments, foundations, societies, or the like devoted to the promotion of a particular cause or program, especially one of a public, educational, or…
resellers: companies or individuals (merchants) that purchase goods or services with the intention of selling, leasing, or renting rather than consuming or using them
producers: those individuals or businesses who buy raw goods to use in the creation of goods or services
Foreign Corrupt Practices Act (FCPA): a US statute that prohibits firms and individuals from paying bribes to foreign officials
buyers: the people in the buying center who handle the paperwork of the actual purchase
business-to-business (B2B): a transaction or business conducted between one business and another

Chapter 5

Market Segmentation, Targeting, and Positioning

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Summary

In this chapter, market segmentation is defined and the differences between segmenting B2C, B2B, and international markets are explored. Segmentation, plus targeting and positioning, are the major elements of a customer-driven marketing strategy. Smart marketers know they can’t reach and serve every buyer, so they approach the broader market with tools that help them identify, select, and position their products for consumers who are most likely to need the… Better understanding B2C or B2B markets also helps marketers better understand unmet needs, assisting in the development of new products and services.

Key terms

market segmentation: the process of dividing a broad consumer or business market into subgroups based on shared characteristics
ADAMS: the essential factors in effective market segmentation—accessible, differentiable, actionable, measurable, and substantial
concentrated marketing: marketing segmentation strategy in which the firm concentrates its efforts and resources on serving one segment of the market
demographic segmentation: grouping customers and potential customers together by focusing on certain traits such as age, gender, income, occupation, and family status
differentiated marketing: marketing strategy that involves creating marketing campaigns that appeal to two or more different target audiences, demographics, or marketing segments
differentiation positioning: product/service positioning based on the differentiating characteristics or qualities that make an organization better than its competitors in the mind of the target audience
firmographics: a grouping of B2B customers based on shared company attributes; includes five categories: industry, location, size, legal structure, and performance
product positioning: the process of deciding and communicating how an organization wants its market to think and feel about a product or service

Chapter 6

Marketing Research and Market Intelligence

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Summary

In this chapter, we discovered the critical nature of marketing research on the success of a business. Next, we learned about the seven steps of the marketing research process and how each step builds toward an actionable plan by management.

Key terms

marketing research: the function that links the consumer, customer, and public to the marketer through information
primary data: unique information that is collected by the researcher with the current project in mind
big data: the countless number of records that continues in an increasing capacity and at a faster rate; often described as volume, velocity, and variety of data generated
marketing information: also known as business intelligence, competitive intelligence, or marketing intelligence; information about the market that helps to identify opportunities available
marketing information system: a system used to collect, analyze, and report interesting findings from internal and external data of the company
convenience sample: a nonprobability sample type where potential respondents to the research are selected by convenience rather than through any scientific method
focus group: a small group, typically 8 to 12 people, who are asked several questions by a moderator and encouraged to build upon each other’s responses
judgment sample: a nonprobability sample type where the potential participants are selected based on a perceived match to the sample frame

Chapter 7

Marketing in a Global Environment

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Summary

As outlined in this chapter, transportation, technological developments, and business landscape and cultural considerations go hand in hand with globalization. Some companies decide to export products, some determine a joint venture is the best approach, and others elect to invest in building manufacturing facilities. An additional and vital concern is whether the company will standardize its product offerings or shift products to adapt to cultural differences. Marketers must develop competitive marketing strategies in a realm far different than they’re accustomed to.

Key terms

additional and vital concern: whether the company will standardize its product offerings or shift products to adapt to cultural differences
joint venture: a business arrangement whereby two or more companies create a single enterprise or project
business landscape: everything internal and external to the business, its industry, and its environment
discretionary income: the money individuals and households are left with after paying taxes and other living expenses, such as food and shelter
ethnocentrism: an assumption that the business landscape or culture of an international market is the same as the home country or personal culture
customs: mannerisms or behaviors that are considered characteristics within a social system
global market opportunities: conditions that are favorable for a company to expand into the global marketplace
disposable income: the money individuals and households are left with after paying taxes

Chapter 8

Marketing in a Diverse Marketplace

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Summary

Marketers have learned to adjust over time to changes in the marketplace, especially as technology, the environment, politics, culture, and demographics have evolved and altered customer needs, wants, and demands. Marketers must be constantly aware of demographic trends, especially in multicultural identities, generational differences, consumers with disabilities, and changes in spending. Marketing reflects an organization’s ethics and values as it communicates, especially with current and prospective customers.

Key terms

consumers with disabilities: sociodemographic group living with some type of disability related to mobility, learning, intellectual, or other types of functions; a very diverse group because disabilities…
culture: objective and subjective elements like social norms, beliefs, behaviors, accomplishments, customs, arts, language, foods, and skills that characterize a particular group of…
marginalized consumers: populations of consumers that have been pushed to the margins of society and are often excluded in mainstream advertising
Native American, Alaska Native population: multicultural group of individuals of a single race and mixed races who are native to the United States and its territories including American Indians, Alaska Natives, Native…
acculturation: the process by which a person’s family cultural patterns change because of direct and constant contact with a different culture
adaptation: the process of adjusting a company’s work efforts, goods, or services in response to specific needs, tastes, or expectations—whether real or perceived—from different groups of…
Asian population: third largest multicultural group in the United States; made up of 22 different subethnicities from the Asian continent, Hawaii, and islands of the Pacific; can belong to a…
Black population: second largest multicultural group in the United States; made up of three different subethnicities: single race, Black Hispanic, or Black mixed with another race (White or Native…

Chapter 9

Products: Consumer Offerings

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Summary

Meanwhile, business and industrial products are classified by materials, parts, capital items, and supplies/services Products and services differ but are inextricably linked through experiences. Rather, products are sold in product lines and mixes to maximize consumer choice and profitability. They are the reason that the customer is making a value exchange.

Key terms

products: tangible items that are part of an exchange between a buyer and a seller
services: intangible solutions that are an exchange between buyer and seller
product line: a set of products that are similar or complementary
product life cycle: the stages a product goes through, tracking its sales and profitability
capital items: assets valuable to a business that also have tangible value
shifting loyals: customers who are loyal to one product or service for a time, then turn their loyalty to a different product or service at another time
introduction stage: part of the product life cycle when consumer awareness is building and sales are starting to grow

Chapter 10

Maintaining a Competitive Edge with New Offerings

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Summary

There are seven stages to developing new products that include idea generation, idea screening and evaluation, concept development and testing, marketing strategy development, business analysis, product development… The stages are followed by commercialization and evaluation of results In this chapter we discussed the different forms of innovation as applied to new product development. Metrics are used to evaluate such things as R&D spending as a percentage of sales, return on investment (ROI), the percentage of sales due to the new product release, and other key concepts

Key terms

commercialization: the eighth step in the new product development process, in which the product is launched with full-scale production, distribution, advertising, and sales promotion
idea screening and evaluation: the second step in the new product development process, in which ideas are filtered to those most likely to turn a profit
concept development and testing: the third step in the new product development process, in which a product concept is developed into a detailed idea
idea generation: the first step in the new product development process, in which many new ideas for a product are developed
business analysis: the fifth step in the new product development process, in which a potential new product is evaluated
evaluation of results: the ninth and final step in the new product development process, in which a company evaluates product launch performance based on predetermined metrics
product development: the sixth step in the new product development process, in which a potential new product undergoes development; may include the creation of a prototype
return on investment (ROI): a metric formula used to evaluate the profitability of an investment and, in marketing, the measurement of the profitability of a new product launch

Chapter 11

Services: The Intangible Product

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Summary

One of the first concepts is that services are intangible, meaning that they cannot be felt, tasted, heard, or smelled before purchase. Service goes a long way in building customer satisfaction and loyalty; without returning customers, a business is doomed to struggle and fail Customer satisfaction is dependent upon many factors, the first one being the communication of what can be expected by the customer and the actual customer experience.

Key terms

intangible: unable to be seen, tasted, felt, smelled, or heard
services: nonphysical, intangible economic activities
communication gap: in the Gap Model of Service Quality, the variance between what is communicated to the customer and their actual experience
customer satisfaction: a measurement that determines how happy customers are with a company’s products, services, and capabilities
first concepts: that services are intangible, meaning that they cannot be felt, tasted, heard, or smelled before purchase
GAP Model of Service Quality: theoretical marketing model that helps to identify the gaps between the perceived service and the expected service
second point: based on the perception of service received versus customer expectations
business: doomed to struggle and fail

Chapter 12

Pricing Products and Services

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Summary

The new-product pricing strategies of price skimming and penetration pricing were defined, explaining common practices used based on the product type and placement in the market. Techniques include odd-even pricing, prestige pricing, and artificial time constraints In this chapter, we explored the process of setting pricing for products and services and the importance of pricing to the profitability of a business. We defined fixed and variable costs and how they factor into the break-even equation in initial pricing decisions.

Key terms

price skimming: pricing strategy in which a company initially sets a high price for a product or service and lowers it over time as new segments of the market are reached
penetration pricing: new product or service strategy that sets the lowest price possible in order to reach the majority of the market in the introduction stage
prestige pricing: a strategy marketers use to set high prices knowing that demand will increase with higher prices because the higher price increases the perceived value of the product
odd-even pricing: psychological pricing strategy that uses prices that end with odd or even numbers to attract customers
artificial time constraints: pricing strategy that creates a sense of urgency in buyers’ minds
price: the exchange of something of value between a buyer and seller
variable costs: costs that vary based on the number of units produced
profit: the financial gain of a company

Chapter 13

Integrated Marketing Communications

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Summary

Throughout the chapter we explore the various promotional methods: advertising, personal selling, sales promotion, public relations, direct marketing, and internet and digital marketing. The communication process has multiple steps: sender, receivers, message, medium, encoding, decoding, feedback, and noise. To reach the target audience and build value for an organization, the marketer typically sends a consistent message through multiple promotional methods; this is called integrated marketing communications (IMC) After the marketer has facilitated all the other marketing mix variables, they are ready to communicate with their intended target audience.

Key terms

integrated marketing communications: development and execution of multiple promotional methods that include a coordinated message
sales promotion: promotion that creates an incentive to purchase; provides for a fairly immediate increase in sales in the short term
medium: various methods of communicating with a target audience; may include broadcast, print, outdoor, and other forms
direct marketing: method of promotion that directly connects with the customer and generally requires a response or transaction
personal selling: one-to-one communication between the seller and the buyer; used to inform and persuade the buyer
noise: unplanned distractions that interfere with the communication between a sender and a receiver
advertising: a paid form of nonpersonal communication about a product, service, or idea
encoding: process of putting ideas and thoughts into a transmittable form

Chapter 14

The Promotion Mix: Advertising and Public Relations

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Summary

In this chapter, we discuss the importance of advertising and public relations in the promotional mix. The use of metrics to measure the success provide key information to marketers and include brand recognition and/or awareness, ad views, conversion rates, and return on ad spend

Key terms

advertising: paid communication messages that identify a brand or organization and are intended to reach a large number of recipients
public relations: any actions that help to create and maintain a favorable public image
brand recognition: the ability of a campaign audience to recognize and identify a specific brand
impact: how quickly members of the audience receive an advertising message
conversion rate: the percentage of an audience that has completed a desired action
publicity: notice or attention given by the media
all-you-can-afford approach: advertising budget approach that ensures everything else in the organization is budgeted for and then sets aside the remaining funds for advertising
frequency: how many times someone is exposed to an advertisement in a given time period or how many times an advertisement is shown in a time period

Chapter 15

The Promotion Mix: Personal Selling and Sales Promotion

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Summary

Personal selling involves inside and outside order takers and their primary responsibility to create a relationship with the buyer. Order getters are the highly trained salespeople, and missionary salespeople are the ones that facilitate experiences such as samples in the store. Consider inside order takers as the clerks employed by a company to assist the customer and complete the final sale. Outside order takers are out making calls on customers and delivering inventory.

Key terms

personal selling: communication between a buyer and seller. The primary responsibility is to build a relationship with the buyer
sales promotion: a short-term way of enticing the consumer to purchase a product or service
order takers: sales personnel that are responsible for taking orders from customers by identifying the customer and finding the right product fit
inside order taker: a salesclerk or order clerk that is employed for a company that address questions and complete the final sale
samples: providing consumers with a free sample of a product is a form of promotion
outside order takers: salespeople out in the trenches, visiting customers and delivering inventory to retailers and wholesalers
order getters: highly trained salespeople who know their products, services involved, and competition across the street
missionary salespeople: individuals who have the power to influence the customer to purchase a product or service

Chapter 16

Direct, Online, Social Media, and Mobile Marketing

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Summary

Direct, online, and social media marketing include a mix of useful tools that help marketers engage with targeted consumers in a way that is personalized and is designed to drive the audience to follow through on the… With the explosion in internet and mobile device usage coupled with advancements in digital technology, online marketing tools have been developed to help marketers meet consumers in the digital space. These tools are capable of connecting online marketers to carefully targeted individuals. With the development of these tools come ethical issues related to privacy.

Key terms

mobile marketing: using multiple digital marketing channels that are designed to reach consumers on their smartphones and tablets
social media marketing: using social media platforms, such as Facebook, Instagram, LinkedIn, and Twitter, to deliver content that drives engagement with your brand
catalog marketing: also known as direct mail order and is one of the oldest forms of promotion, which typically includes a variety of products often vividly displayed in a high-gloss magazine-like…
cost per click (CPC): the cost companies pay search engines for each click that a search advertisement receives, which is based on the keywords a company bids on
direct-response television marketing: a type of direct marketing that is designed to compel viewers to take some immediate action such, as calling a phone number or visiting a website presented during a television…
online video marketing: involves creating videos that tell a story about a product, company, or brand that is designed to drive consumer engagement through activities such as liking, sharing, and…
podcasts: often free, on-demand, downloadable audio recordings that cover a variety of topics and are typically made available on a weekly or monthly basis
responsive web design: designing a website that is configured to adapt to any device, making it easy for visitors to read and interact with its features

Chapter 17

Distribution: Delivering Customer Value

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Summary

Channel members can include manufacturers, wholesalers, distributers, retailers, agents, brokers, and ultimately final consumers Marketing channels play an important role in moving products from manufacturers to final consumers. They also help with the logistical distribution of products by sorting, storing, and bulk-breaking so consumers can purchase what they want in the desired quantity. In this chapter, the functions and benefits of marketing channels are explored.

Key terms

distribution: the process of making products and services available and accessible to consumers to purchase
retailer: a type of intermediary where retailers take ownership of the product and their sole focus is on reaching the end user or customer directly
bulk-breaking: occurs when an intermediary takes a large bundling of a manufacturer’s product and breaks it down into single units to be distributed to retailers based on the retailer’s order
marketing channel: system of people, organizations, and activities that work together to make goods and services available to consumers for use
wholesaler: similar to distributors in that they take ownership of products; buys products in large quantities for the purpose of distributing an assortment of products to retailers
agent: a type of intermediary who acts as an extension to the manufacturer
final consumer: the end user of a good or service

Chapter 18

Retailing and Wholesaling

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Summary

Retailers may have a storefront; non-store retailers usually sell through direct mail and catalogs, vending machines, direct selling, online sites, TV home shopping, and telemarketing. Both add value to the product by ensuring assorted merchandise is available when and where customers want it and at an acceptable price. Retailers buy products from manufacturing firms or wholesalers and provide them for sale to the consumer

Key terms

wholesaling: the business of buying goods in bulk at a discount from a manufacturer or other distribution channel member and selling them retailers for a higher price
retailing: the process of selling goods and services to consumers
store retailer: a traditional brick-and-mortar establishment where products are displayed for customers to purchase
merchandise: the goods that are being offered for sale by a retailer
direct selling: a marketing strategy that involves selling products and services directly to the consumer in a non-retail setting
direct mail: solicited or unsolicited advertising of products and services to prospective customers through the mail
telemarketing: the attempted sale, or marketing, of goods and services to potential customers via telephone
non-store retailers: retailers that operate outside of traditional brick-and-mortar locations

Chapter 19

Sustainable Marketing: The New Paradigm

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Summary

Sustainable marketing is an effort by companies to run their business to serve the customers of today while preserving the world for the customers of tomorrow. Sustainable marketing uses the main drivers of traditional marketing such as customer satisfaction, but it considers a broader set of impacted groups. There are myriad benefits to sustainable marketing as it relates to brand equity, financial measures, and government compliance. Companies are increasingly following an ESG, or environmental, social, governance, structure to bring transparency to their sustainability efforts.

Key terms

sustainable marketing: a marketing strategy that infuses purpose into socially conscious products and services
corporate social responsibility (CSR): sustainable business strategy where companies use their platform to do good, improve the world, and be socially accountable to their customers and other interested parties
purpose-driven strategy: strategy in which companies work to make a difference in their communities through their decisions and support of environmental programs
innovative marketing: marketing strategies that use media as the method for capturing prospects’ attention and converting them into customers
societal marketing: a marketing strategy focused on fulfilling social responsibility obligations while also satisfying customer needs
customer-value marketing: marketing strategies in which a company works to provide the customer with maximum value compared to competitors
mission-driven marketing: marketing strategies that align purpose and brand by using the corporate core mission and purpose as their focus
ESG pillars: the three pillars of environmental, social, and governance that guide corporate sustainability work