Chapter 7 Packet Notes Flashcards
Business activities that direct the creation, development, and delivery of a bundle of satisfaction from the creator (producer) to the targeted user and that satisfy the targeted user or consumer.
Small Business Marketing
- Identification of a target market
- Determining a target market’s potential
- Preparing, communicating, and delivering a bundle of satisfaction to the target market.
Small Business Marketing Activities
- Core product/service
- Actual prodcut/service
- Augmented product/service
The Levels of Product/Service
- Production-oriented
- Sales-oriented
- Consumer-oriented
Marketing Philosophies
Emphasizes development of the product and production effciencies over other activities.
Production-Oriented
Favors product sales over production efficiencies and customer preferences.
Sales-Oriented
- The right choice
- All marketing efforts begin and end with customers
- The focus is on customers’ needs, which is most consistent with long-term success of the firm.
Consumer-Oriented
- Market analysis
- Developing the marketing mix
Marketing Research Activities
An evaluation process that encompasses market segmentation, marketing research, and sales forcasting.
Market Analysis
The combination of product, pricing, promotion, and distribution activities.
Developing the Marketing Mix
- Market Analysis
- The competition
- Marketing Strategy
The Formal Marketing Plan
- State of the competition
- Production focus
- Focus on the present
Reasons for not adopting a consumer orientation
With no competition or high demand, firms focus on production.
State of Competition
Entrepreneurs may have strong production skills and weak marketing skills.
Production Focus
Entrepreneurs tend to focus on current success which is the result of an overemphasis on selling.
Focus on the Present
- Marketing research
- Outside sources
- Steps in the marketing research process
The Nature of Marketing Research
The gathering, processing, reporting and interpreting of market information.
Marketing Research
- Hiring professional marketing researchers
- Using the Internet for web-based surveys and online focus groups.
Outside Sources
- Identifying the informational need- Why do we need to know this?
- Searching for secondary data- Who has researched this topic already?
- Collecting primary data- Who do we ask and what do we ask them?
- Interpreting the data- Got the information, now what does it mean?
Steps in the Marketing Research Process
- Observational methods
- Questioning methods
Methods for Collecting Primary Data
- Human
- Mechanical
Observational Methods
- Surveys
- Telephone
- Personal interviews
- Experiments
Questioning Methods
- Market Ingredients
- Market Segmentation
- Focus Strategy
Understanding Potential Target Markets
A group of:
- Customers or potential customers who have:
- Purchasing power
- Unsatisfied needs
Market Ingredients
The division of ar market into several smaller customer groups with similar needs.
Market Segmentation
A type of competitive strategy which cost and differentiation-based advantages are achieved within narrow market segments.
Focus Strategy
- Segmentation variables
- Benefit variables
- Dempgraphic variables
Market Segmentation and its Variables
The parameters used to distinguish one form of market behavior from another for the purpose of market segmentation.
Segmentation Variables
Specific characteristics that distinguish market segments according to the benefit sought.
Benefit Variables
Specific characteristics that describe customers and their purchasing power.
Demographic Variables
- Unsegmented Strategy (Mass Marketing)
- Multisegment Strategy
- Single-Segment Strategy
Types of Market Segmentation Strategies
A strategy that defines the total market as the target market.
Unsegmented Strategy (Mass Marketing)
A strategy that recognizes different preferences of individual market segments and develops a unique marketing mix for each. (Taylors to each group).
Multisegment Strategy
A strategy that recognizes the existence of several distinct segments but focuses on only the most profitable segment.
Single-Segment Strategy
A prediction of how much (in units and/or dollars) of a product or service can be sold within a market in a defined period of time.
- Assesses the new venture’s feasibility
- Assists in planning for product scheduling, setting inventory levels, and personnel decisions.
The Sales Forecast
- Unique new business circumstances
- Lack of familiarity with quantitative methods
- Lack of familiarity with the forecasting process.
Limitations to Forecasting (for Entrepreneurs)
- Breakdown process (chain-ratio method)
- Buildup process
Two Dimensions of Forecasting
Forecasting begins with a macro-level variable and works down to the sales forecast (top-down)
Breakdown Process (Chain-Ratio Method)
All potential buyers in various submarkets are identified and then the estimated demand is added up (bottom down).
Buildup Process
- Direct forecasting
- Indirect forecasting
Forecasting and Predicting Variables
Use of sales as the predicting variable.
Direct Forecasting
Use of variables related to sales as proxies to project future sales.
Indirect Forecasting
