SS22 - FOUNDATIONS OF MARKETING - ASSESSMENT #1 REVIEW - Chapters 1, 2 & 3

You are strongly encouraged to use the notes you took in class, the textbook and the materials
(including lecture slides) posted on Moodle. This Review Document is simply to lay out and
assist in preparation for the Assessment, as it is not meant to be the sole document for review
and Assessment Preparation – Good Luck!!

Chapter 1: What is Marketing?

Marketing is about understanding the needs of the customer. No other aspect of business has
this focus. Marketing helps to shape the firm's products and services based on an
understanding of what the customer is looking for. Marketing is about engaging in conversation
with that customer and guiding the delivery of what is required to satisfy those needs. 
Marketing is the study and management of exchange relationships. It is the business process
of identifying, anticipating and satisfying customers' needs and wants. Because marketing is
used to attract customers, it is one of the primary components of business management and
commerce.

Marketers believe in choice. Consumers have the choice to buy what they need or want to buy.
If a consumer purchases a higher priced or higher end product, they ascribe value beyond just
the what the product is. The intangible benefits of a product are endowed through marketing
(name, advertising, packaging, etc.) but come at a cost. Consumers have the choice to pay extra
to have these intangible benefits.

4 P’s of Marketing – Product, Price, Promotion, Place

4 C’s of Marketing – Customer, Cost, Convenience, Communication

Chapter 2: Organizing and Planning for Marketing Strategy

Learning Outcomes

2.1 Explain the importance of strategic planning.

2.2 Develop an appropriate business mission statement.
2.3 Describe how to conduct a business portfolio analysis.
2.4 Summarize how business planning is used for competitive advantage.
2.5 Discuss marketing planning and identification of target markets.
2.6 Conduct a SWOT analysis and review the benefit of the process.
2.7 Explain why implementation, evaluation, and control of the marketing plan are necessary.
2.8 Identify techniques that help make strategic planning effective .
SS22 - FOUNDATIONS OF MARKETING - ASSESSMENT #1 REVIEW - Chapters 1, 2 & 3

Marketing Strategy and the Role of Marketing in an Organization: Key Terms

•Strategy: A plan of action used to achieve a goal

•Marketing strategy: The managerial process of creating and maintaining plans of action that
facilitate exchanges that have value to both the customer and the company in an evolving
market environment
•Strategic business unit (SBU): A subgroup within an organization that decides its own strategy
and has its own customers
•Marketing department: A staff that collectively makes the decisions needed to facilitate
exchanges with customers
•Marketing Myopia, first expressed in an article by Theodore Levitt in Harvard Business Review,
is a short-sighted and inward looking approach to marketing which focuses on fulfilment of
immediate needs of the company rather than focusing on marketing from consumers’ point of
view. When a company focuses more on sales than on marketing or consumers’ needs, that’s
when marketing myopia strikes in.

Establishing a Competitive Advantage: Two Related Questions:

The most successful companies offer something others don’t, which suggests that a key goal of
marketing strategy is to differentiate the company from its competitors (product
differentiation). Specifically, marketing strategy at this level involves two related questions:

1.How will we be different from our competitors?

2.How will the difference help us offer more value to the customers we target?

Establishing a Competitive Advantage: Key terms

•Product differentiation: Differentiate the company from its competitors
•Unique selling proposition: The single most important point of differentiation from
competitors
•Competitive advantage: An advantage over competitors gained by offering greater customer
value
•Brand name: Identifies a company's products from others and will typically be accompanied by
visual elements such as a logo, trademark, and the brand name spelled out in a specific font
and colour, but it can also be linked to jingles, sounds, or other elements

SWOT Analysis

To set an organization’s strategic direction, businesses must thoroughly understand their

current environment and any potential environment in which they will be operating. This is
accomplished by completing a SWOT analysis—a review of Internal - strengths, weaknesses,
and External - opportunities, and threats. The process of environmental scanning is how
external opportunities and threats are identified.
SS22 - FOUNDATIONS OF MARKETING - ASSESSMENT #1 REVIEW - Chapters 1, 2 & 3

Conducting a SWOT analysis requires extensive research, fact-checking, business auditing, and
being honest about your liabilities. After learning how to conduct a SWOT analysis for your
business, the process may seem easy on paper but can be hard to actualize when trying to do it
yourself.

SWOT Analysis Example: The Home Depot

Strengths Weaknesses

 Largest in the industry

 Highly profitable  Mostly based in the US
 BOPIS strategy  Aging infrastructure
 Value for money  Late adoption to eCommerce
 Wide variety of products

Opportunities Threats
 Expanding the market more to countries  Growing competition
 Increasing online sales  Recession
 Focus on the home decor section  Price deflation

Chapter 3 – The Marketing Environment

The Marketing Environment

To get through life, you adjust to your immediate environment, try to control what you can,
and try to understand and predict how uncontrollable elements of environment might affect
you so you can manage your situation for the best outcomes. Companies are no different.

A company also has an immediate environment that affects it. It can influence or control certain
aspects of the environment but will also be affected by broader environmental forces that it
cannot control, and the company must adapt in some way to these forces.

The combination of controllable and uncontrollable forces that affect a marketing decision:

•Micro-Environment - the internal environment

Anything that directly affects or is directly affected by the marketing managers decision

•Macro-Environment - the external environment

Have more indirect impact on the company’s marketing strategy
Less controllable than the Micro-environment
SS22 - FOUNDATIONS OF MARKETING - ASSESSMENT #1 REVIEW - Chapters 1, 2 & 3

Micro-Environment

•Company: most directly controllable of all potential influences

•Customers: the most important micro-environment element
•Competitors: three types of competitors in any given market
•Suppliers: companies are increasingly choosing suppliers who echo or enhance their marketing
goals for strategic advantage.
•Intermediaries: the most common intermediaries offer marketing support, providing financing
support to customers or logistic services including transportation or warehousing.
•Publics: for example, investors don’t have an immediate role in the business, but they do have
an influence since the company must take into consideration how their actions will impact
investors.

Macro-Environment

The components of the macro-environment include: nature and physical forces, technological

factors, social and cultural forces, demographic forces and political and legal forces.

•Culture: The shared beliefs, values, perceptions, preferences and behaviours of a group.
•Cohabitation: Households with unmarried partners.
•Consumer Packaging and Labelling Act (CPLA): Regulates packaging and labelling of pre-
packaged food and non-food consumer products.
•Canadian Code of Practice for Consumer Protection in Electronic Commerce: Establishes
benchmarks for good business practice for merchants conducting commercial activities with
consumers online.
•Canada’s Anti-Spam Legislation (CASL): Prohibit unsolicited or misleading commercial
electronic messages and to deter other forms of online fraud.
•Personal Information Protection and Electronic Documents Act (PIPEDA): Governs how
companies collect, use, and disclose personal information for commercial activities.
•Subsistence economics: Economies that consume virtually all of what they produce, which are
primarily agricultural and basic manufacturing products.
•Developing economies: Economies that produces more than it consumes and offers
opportunities for certain product categories but does not have the advanced service economy
of a mature economy.
•Mature economies: An economy that has transitioned into a service economy; has stable
industry, established banking and financial institutions; and offers many marketing
opportunities across a wide variety of sectors.
SS22 - FOUNDATIONS OF MARKETING - ASSESSMENT #1 REVIEW - Chapters 1, 2 & 3

Direct Competitors

A direct competitor is “someone that offers the same products, with the same end game,” Paul
said. “They make money from the same thing you do.” A direct competitor is probably what
most commonly comes to mind when you think of the word “competition.” An example is the
Apple iPhone versus Samsung.

Indirect Competitors

Indirect competition is competition between companies that make slightly different products
but target the same customers. ... Apart from targeting the same group of customers, they also
aim to satisfy the same needs. A hamburger fast food restaurant is in indirect competition with
a pizza restaurant or Subway.

Unexpected (Replacement) Competitors

“A replacement competitor is something someone could do instead of choose your product,”

Replacement competitors (also called “phantom competitors”) are the businesses that sell a
product or service that's both different in category and type than you, but one which your
customers could choose to spend their money instead. An example is Digital Cameras and
Mobile Phones.