207 exam Flashcards
What is marketing
Marketing is the activity, set of institutions, and process for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
Describe how marketing is a social process
Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and have with others
What is the new important term of marketing
The new important term of marketing is VALUE
What is marketed
Persons, Services, Goods, Experiences, Events, Properties, Organizations, Information, Places, and Ideas are all things that are marketed
Who markets?
The Marketer markets to receive a response from the prospect. A response can be attention, purchase, donation, or a vote
Key customer markets
Key customer markets: global markets, business markets, consumer market, government market
Differences between consumer, customer, client
Consumer - person who uses/consumes the product
Customer - person who bought the product
Client - person who used the service
Differences between needs and wants
Needs - necessary for survival and when a person feels deprived of basic life necessities
Wants - not necessary for survival, shaped by a person’s knowledge, culture, and personality
Core Marketing Concepts
- Offerings and Brands
- Needs, Wants, and Demands
- Target Markets, Positioning and Segmentation
- Value and Satisfaction
- Marketing Channels
- Supply chain
- Competition
- Marketing Environment
Explain how marketing entails an exchange
Goods/Services Produces (Sellers) communicate/delivery to customers/consumers (buyers)
Buyers provide money and information to sellers
4 P’s of marketing
Price - list price, discounts, bundling, credit terms
Place - channel, inventory, logistics, distribution
Promotion - advertising, sales force, publicity, sales promotion
Product - functionality, brand, packaging, services
These decisions are all surrounded by the target market
Marketing Engineering
Marketing Engineering involves developing and using interactive, customizable, computer-decision models for analyzing, planning, and implementing marketing tactics and strategies
Analytics
Analytics leverage data in a particular functional process (or application) to enable context-specific insight that is actionable.” Analytics is not the same as business intelligence.
Analytics and their competitive implications
Standard reports - what happened
Ad hoc reports - how many, how often, where?
Query/drill down - where exactly is the problem?
Alerts - what actions are needed?
Statistical analysis - why is this happening?
Forecasting/extrapolation - what if these trends continue?
Predictive modeling - what will happen next?
Optimization - what is the best that can happen
cycle of marketing engineering
marketing environment
Data
information
insights
decisions
implementation into the marketing enviornment
what is a model
- Models are stylized representations of reality that structure our thinking about how the world works;
- Models indicate which factors should be considered and which factors can be ignored;
- By focusing on the relevant factors and their interrelationship reality can be simplified;
- Models are useful because they facilitate top-down processing (as opposed to bottom-up processing);
what are the issues in using models
- assembling an arsenal of models for a domain of interest;
- retrieving relevant mental models in a given situation;
- being aware of the limitations of mental models (they may overrepresent and underrepresent, or even malrepresent, things);
“No model is true, but some models are useful.”
types of models
- verbal
- box and arrow
- graphical
- mathematical
ATAR Model
Awareness, Trial, Availability, Rebuy or Repeat
Number of owners (potential buyers)
x Percent awareness after one year
x Percent of aware owners who will try product
x Percent availability at electronics retailers
x Measure of repeat (1+20% of customers buy a second mini 3D printer)
x Price per unit ($100) minus unit cost at the intended volume ($50)
= Profits
STP
STP = Segmentation, Targeting, Positioning
- STP is a core business process
- STP is a decision process to identify and select groups of potential customers (organizations, buying centers, individuals)
- (S) whose needs within groups are similar and who’s needs between groups are different
- (T) who can be reached profitably
- (P) with a focused marketing program
STP Approach - Segmentation
Segmentation
Phase 1: Segment the market using basis variables
Phase 2: Describe the market segments identified using variables that help the firm understand how to serve those customers
STP Approach - Targeting
Targeting
Phase 3: Evaluate the attractiveness of each segment using variables that quantify the demand levels and opportunities associated with each segment
Phase 4: Select one or more target segments to serve on the basis of their profit potential and fit with the firm’s corporate strategy
Phase 5: Find and reach targeted customers and prospects within targeted segment in a variety of ways
What is a market segment
A market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.
What is market segmentation
Market segmentation is the process of dividing a market into meaningful, relatively smaller and identifiable segments or groups. The purpose is to enable marketers to tailor marketing mixes.
Examples of Segmentation Bases
- Geographic (ex. country, urban, climate, region) – ex. coca cola is different in China vs. America
- Demographic (ex. age, gender, income, education, family life cycle) – ex. sport car vs pickup truck caters to two different lifestyles
- Psychographic (ex. lifestyles, values, personality, self-concept) – ex. women’s watches vs men’s watches
- Behavioral (ex. benefits sought, usage rates, user status, loyalty) – ex. crest products only for dental
8 customer segments identified by Values, Attitudes, and Lifestyles for psychographic market segmentation
- Achievers
- Experiencers
- Makers
- Survivors
- Strivers
- Believers
- Thinkers
- Innovators
Criterion for effective segmentation
Size and growth
1. Size - market potential, current market penetration
2. Growth - growth forecasts of adopting new technologies
Structural Characteristics
3. Competition - barriers to entry, barriers to exist, position of competitors, ability to retaliate
4. Segment Saturation - gaps in the market
5. Protectability - patentability of products, barriers to entry
6. Environmental Risk - economic, political, and technological change
Product-Market Fit
7. Fit - coherence with company’s strengths and image
8. Relationships with other segments - synergy, cost interactions, image transfers, cannibalization
9. Profitability - entry costs, margin levels, return on investment
Managing segmentation for marketing analytics
Managing segmentation for Marketing Analytics
1. Define segmentation problem,
2. Identify data needs
3. Conduct market research
4. Build segmentation database
5. Define market segments
6. Describe market segments
7. Implement results
Target Market
Target Market is a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges
Targeting strategies
Targeting strategies:
Undifferentiated Targeting Strategy, or Mass Marketing (ex. bakery)
Multisegmented (Differentiated) Targeting Strategy (ex. Vanilla Coca Cola)
Concentrated (Niche) Targeting Strategy (Clinique Cosmetics)
Micromarketing (Mariposa which makes custom bikes for racers)
Mass Market Segmentation Strategy
Everyone might be considered as a potential user
Not a common strategy
i.e. a neighbourhood bakery
There are very few mass market products. Even commodity goods such as flour now get differentiated. For different products, consumers fall in different segments.
Multisegment (differentiated) segmentation strategy
A firm targets several market segments with a different offering for each
i.e. Adidas Reebok (athletic shoes), Rockport (comfortable shoes), TaylorMade-Adidas golf lines
Concentrated (Niche) segmentation strategy
A marketing strategy of selecting a single primary target market and focusing all energies on providing a product to fit that market’s needs
Micromarketing
One-to-one marketing
An extreme form of segmentation that tailors a product or service to suit an individual customer’s wants or needs
i.e. Nike’s online make-your-own-shoe
Undifferentiated targeting advantages and disadvantages
Advantages:
- potential savings on production/marketing costs
Disadvantages:
- unimaginative product offerings
- company more susceptible to competition
Concentrated targeting advantages and disadvantages
Advantages:
- concentrates resources
- can better meet the needs of a narrowly defied segment
- allows some small firms to better compete with larger firms
- provides strong positioning
Disadvantages:
- segments too small or changing
- large competitors may more effectively market to niche segment