Chapter 5 Flashcards
The foundation of marketing is …
Exchange
Marketing consists of all activities
designed to generate or facilitate an exchange intended to satisfy need.
Market definition
Aggregate demand of potential buyers for a product/service
The essence of marketing is…
transaction/exchange
Philip Kotler definition of marketing
a social and managerial process by which an individual or group obtain what they need and want through creating, offering and exchanging of product
Core concepts of marketing
- Needs, Wants and Demands
- Products, Value, Cost and Satisfaction
- Exchange and Transaction
- R/ships and Networks
- Market, Marketers and Prospects
is a state of deprivation of some basic satisfaction
Need
are desires for specific satisfiers of needs
Wants
are wants for specific products that are backed by ability and willingness to buy them
Demands
anything that can be offered to satisfy a need or want
Product
is the consumer’s estimate of product to satisfy their need
Value
DeRose definition of Value
the satisfaction of customer requirement at the lowest cost of acquisition, ownership and use.
amount of money that are going to be expended or already incurred to acquire a product
cost
trade of values between parties
transaction
something that makes a product capable of satisfying a want
utility
Kinds of utility that marketing provides
- Form utility
- Place Utility
- Time Utility
- Information Utility
- Possession Utility
Form utility
associated primarily with production- the physical or chemical changes that make a product more valuable.
Marketing research aides in making the product more appealing
Place utility
exists when a product is readily accessible to potential customers
Time utility
having a product available when you want it
Information utility
is created by informing prospective buyers that a product exists
special type of information utility that describes the emotional/physical values a person attaches to a product based on its reputation
Image utility
Possession utility
created when a customer buys the product-that is, ownership is transferred to the buyer.
Marketing activities should be carried out under a well-thought out philosophy of
- Efficient
- Effective
- Socially Responsible
5 main competing concepts of marketing activities
- Production
- Product
- Selling/Sales
- Marketing
- Societal/Relationship Marketing
Production concept
holds that consumers will favor products that are widely available and low in cost
Two places where the assumption that consumers are primarily interested in product availability and low price holds
- Demand > Supply (developing countries for example
- Product cost is high and has to decrease to expand the market
Product concept
holds that consumers will favor those products that offer the most quality, performance or innovative features.
Selling/Sales concept
holds that consumers, if left alone, will ordinarily not buy enough of the organization product. products must be promoted.
Marketing concept
- challenges the above three concepts
- holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets
Difference of Selling and Marketing concepts
Selling starts at factory, marketing at market place.
Selling focuses on exisiting product, marketing on the customers need.
Selling uses selling and promotion, marketing uses integrated marketing
Selling targets profit through volume, marketing targets profit through satisfaction
Societal Marketing concept
holds that the organization should determine the needs, wants and interests of target markets. should deliver the satisfaction effectively and efficiently that competitors in a way that improves consumer’s well being
Relationship Marketing
practice of building long term satisfying relations with key parties-customers, suppliers, distributors- in order to retain their long term preferences and business.
Marketing information system consists of…
People
Equipment and Procedure to gather, sort, analyze, evaluate and distribute information to decision makers
Marketing Research
systematic and objective identification, collection, analysis and dissemination of information for assisting in decision making
Marketing research is subjective
False
Three functional roles of marketing research
Descriptive function - presentation of facts
Analytical function - explanation of data
Predictive function - predict the result
Marketing research components
Market size
Market share
Market penetration
Brand equity research
Buyer decision processes research
Part of marketing research that is used to determine that motivates people to buy
Buyer decision processes research
Marketing Research Process
Define the research purpose or objectives
Research Design Formulation
Gather Secondary Data
Gather Primary Data
Data processing and analysis
Report preparation/presentation
Marketing Intelligence
is the systematic process of gathering, analyzing, supplying and applying information (both qualitative and quantitative) about the external market environment
Evaluated information is called…
Intelligence
Importance of marketing intelligence
- Identification of new opportunities
- Smart segmentation
- Minimize investment risks…
Ways to undertake marketing intelligence
- Unfocused scanning - any info gathered with no purpose
- Semi-focused scanning - no purposed but range is narrowed
- Informal search - limited and unstructured attempt to obtain information for a specific purpose.
- Formal search - this is a purposeful search for information in some systematic way.
Refers to determining strength / weakness of competitors
Competitive analysis
Defined as any business that provides similar service in the same market
Competition
Steps in competitive analysis
- Identify competitors
- Gather info about competitors
- Analyze competition
- Develop pricing
The 4P’s of Marketing
Product - goods/service for sale
Pricing - process of setting price
Place - distribution
Promotion - informing customers
Marketing strategy
process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve competitive advantation
Pricing strategies
- Price skimming - charge a lot for premium users
- Penetration pricing - similar products have their price reduced inorder to penetrate the market
- Cost-plus pricing - any amount above unit cost
- Mark-up pricing - % of selling price added to unit cost
- Competition Oriented Pricing - consider competitors price
- Odd-even pricing(49.99 instead of 50)
Communication of the company and products to customerrs
Promotion
Promotional Strategy
choosing a target market and formulating the most appropriate promotion mix to influence
Promotional strategy may consist of
- Advertising
- Personal selling
- Public relations
- Sales promotion
Form of comms that seeks to change perception
Public relations
Promotion type that involves short-term incentives to arouse interest
Sales promotion
Most important actors for effective and efficient distribution of products
Marketing channels
Two types of marketing channels
Direct - produces and consumers directly interact
Indirect - intermediaries exist between seller and buyer
Factors to consider to select the best marketing channel
Company factors - capability of the company
Market chx - market geography, size, density
Product attirbutes - perishability, value
Env’t forces - competition, tech, culture
Any activity undertaken to fulfill customers need
Service
Distinctive features of servicce
Intangibility
Inseparability
Variability
Perishability
- Situational
- Difficulty to measure
- Subjective
- Influenced by service provider
Activities need for quality customer service
- Establishing a clear customer service strategy.
- Ensuring that correct people are in place, with the correct skills to deliver outstanding personal service.
- Establishing clear material service delivery processes.
- Improving in terms of process improvement, quality monitoring and recovery continuously.
- Participatory Management.
