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Summary Foundations of Marketing
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Herewith a summary for the exam Foundations of Marketing in year 1. This summary includes all the key concepts needed to know. With this summary, I obtained an 8!
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Marketing an Introduction Chapters: 1,2,3,5,6,7,8,9,12,13 | IB Year 1 | Hva
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Chapter 1What is marketing?
Marketing: The process by which companies engage customers, build strong customer
relationships, and create customer value in order to capture value from customers in return
Forms of marketing:
Traditional
1. Making a sale
2. Abundance of products in the nearby shopping centers
3. Television, magazine, and direct-mail ads
Contemporary
1. Satisfying customer needs
2. Imaginative websites and mobile phone, apps, blogs, and social media
3. Reach customers directly, personally, and interactively
Marketing mix: A combination of factors that can be controlled by a company to influence
consumers to purchase its products. The marketing mix tools should be blended into a
comprehensive integrated marketing program
Product
Price
Place or distribution
Promotion or communication
Core customer and marketplace concepts: Five-step model for creating and capturing
customer value
Needs, wants, and demands
1. Needs: Physical and social needs
2. Wants: Form of human need shaped by culture and individual personality
3. Demands: Human wants that are backed by buying power
Market offering: Products, services, information, or experiences offered to a market to
satisfy a need or a want
Value and satisfaction
Exchanges and relationships: Actions taken to create, maintain, and grow desirable
exchange relationships with target audiences involving a product, service, or idea
Markets: Set of all actual and potential buyers of a product or service
Marketing myopia: The mistake of paying more attention to the specific products a company
offers than to the benefits and experiences produced by these products
Marketing management: The art and science of choosing target markets and building
profitable relationships with them. Once it fully understands consumers and the marketplace,
marketing management can design a customer value-driven marketing strategy
Market segmentation
Target marketing
Differentiate and position
Marketing management orientations: Marketing management wants to design strategies
that will engage target customers and build profitable relationships with them
Production concept: Consumers will favor products that are available and highly
affordable
Product concept: Consumers will favor products that offer the most quality, performance,
and features
1
, Selling concept: Consumers will not buy enough of the firm’s products unless the firm
undertakes a large-scale selling and promotion effort
Marketing concept: Knowing the needs and wants of target markets and delivering the
desired satisfaction better than competitors do
Societal marketing concept: Overlooks possible conflicts between consumer short-run
wants and consumer long-run welfare
Societal marketing concept:
Society: Human welfare
Consumers: Want satisfaction
Company: Profits
Chapter 1
Engaging customers
Customer satisfaction: The extent to which a product’s perceived performance matches a
buyer’s expectations
Customer lifetime value: Value of the entire stream of purchases a customer makes over a
lifetime of patronage
Share of customer: The portion of the customer’s purchasing that a company gets in its
product categories. Share of customer is increased by
Good customer relationship management
Offering greater variety to current customers
Creating programs to cross-sell and up-sell to existing customers
Customer equity: The total combined customer lifetime values of all of the company’s
current and potential customers
Chapter 2
Company’s wide strategic planning
Strategic planning: The process of developing and maintaining a strategic fit between the
organization’s goals and capabilities and its changing marketing opportunities
Strategic planning process:
1. Defining the company mission
Mission statement: A statement of the organization’s purpose—what it wants to
accomplish in the larger environment
2. Setting company objectives and goals: Corporate level
3. Designing the business portfolio
4. Planning marketing and other functional strategies: Business unit, product, and market
level
Business portfolio: The collection of businesses and products that make up the company.
The best business portfolio is the one that best fits the company’s strengths and weaknesses
to opportunities in the environment
Portfolio analysis: The process by which management evaluates the products and
businesses that make up the company. The company will want to put strong resources into
its more profitable businesses and phase down or drop its weaker ones
Growth-share matrix: A portfolio-planning method that evaluates a company’s strategic
business units in terms of market growth rate and relative market share
2
, Stars: High-growth and high-share businesses or products
Cash cows: Low-growth and high-share businesses or products
Questions marks: Low-share business units in high-growth markets
Dogs: Low-growth and low-share businesses and products
Chapter 2
Marketing strategy and mix
Marketing strategy: The marketing logic by which the company hopes to create customer
value and achieve profitable customer relationships
Customer value-driven marketing strategy:
Market segmentation: Dividing a market into distinct groups of buyers who have different
needs, characteristics, or behaviors and who might require separate marketing strategies
or mixes
Market targeting: The process of evaluating each market segment’s attractiveness and
selecting one or more segments to enter
Positioning: Arranging for a product to occupy a clear, distinctive, and desirable place
relative to competing products in the minds of target consumers
Differentiation: Actually differentiating the market offering to create superior customer
value
Marketing mix: The set of tactical marketing tools— product, price, place, and promotion—
that the firm blends to produce the response it wants in the target market
Product: Acceptability
Price: Affordability
Place: Accessibility
Promotion: Awareness
SWOT analysis: An overall evaluation of the company’s strengths (S), weaknesses (W),
opportunities (O), and threats (T)
Strengths: Internal capabilities that may help a company reach its objectives
Weaknesses: Internal limitations that may interfere with a company’s ability to achieve its
objectives
Opportunities: External factors that the company may be able to exploit to its advantage
Threats: Current and emerging external factors that may challenge the company’s
performance
Marketing implementation: Turning marketing strategies and plans into marketing actions
to accomplish strategic marketing objectives
Marketing control: Measuring and evaluating the results of marketing strategies and plans
and taking corrective action to ensure that the objectives are achieved
Chapter 3
The macro- and micro environment
Marketing environment: The actors and forces outside marketing that affect marketing
management’s ability to build and maintain successful relationships with target customers
Microenvironment: Actors close to the company that affect its ability to serve its
customers
Macroenvironment: Larger societal forces that affect the microenvironment
Actors in the microenvironment:
The company: Marketers must work in harmony with other company departments to
create customer value and relationships
3
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