Exam 1 Flashcards
What is marketing?
- for creating, communicating, and delivering value
- managing customer relationships in ways that benefit the organization and its stakeholders
marketing management
- an art and a science
- using 6 disciplines to create superior value
The six disciplines
1) choosing target markets
2) building brands
3) creating offerings
4) pricing offerings
4) promoting offerings
5) delivering offerings
key customer markets
- consumer markets
- government markets
- business markets
- global markets
marketing mix
product
price
place
promotion
objective for MKT 805
Integrate the six marketing disciplines in the property to make a holistic marketing strategy
role of strategic planning
- managing business as investment portfolio
- assessing the market’s growth rate and company’s market position
- establishing a strategy
role of strategic marketing
- managing the function of marketing within the business
- including the market perspective in the strategic planning process
- advocating for the voice of the consumer
Two tools for situation analysis (discussed in this class)
- GE / McKinsey matrix
- Boston Consulting Group (BCG) matrix
- SWOT
GE / McKinsey Martix
- x axis: industry attractiveness (low, med, high)
- y axis: business position (low, med, high)
BCG matrix
- x axis: market share
- y axis: market growth
BCG matrix: stars
high market growth
high market share
BCG matrix: question marks
high market growth
low market share
BCG matrix: dogs
low market growth
low market share
BCG matrix: cash cows
low market growth
high market share
marketing research definition
the function that links the consumer, the customer, and the public to the marketer through information
problem identification research
help identify problems which are not apparent but are still likely to exist or happen soon
problem solving research
help solve specific marketing problems
primary data
originated by a researcher for the specific purpose of addressing the problem at hand
secondary data
data that have already been collected for purposes other than the problem at hand (cheaper than primary)
6 steps of the market research process
- define the problem
- develop an approach to the problem
- formulating a research design
- doing field work or collecting data
- preparing and analyzing data
- preparing and presenting the final report
research design definition
a framework or a blueprint for conducting the marketing research project.
two types of research design
- exploratory research design
- conclusive research design
two types of conclusive research design
- descriptive research
- casual research
two types of descriptive research
- cross sectional
- longitudinal
two types of cross-sectional design
- single cross section design
- multiple cross section design
two types of qualitative research methods
- direct (non disguised)
- indirect (disguised)
what type of research method are projective techniques?
indirect (disguised) qualitative
what are the two types of direct qualitative research methods
focus groups
in depth interviews
disguised observation definition
respondents are unaware that they are being observed (mystery shopping)
undisguised observation
the respondents are aware that they are under observation
what is a market segment
a group of costumers who share similar needs and wants
examples of demographic segmentation
- age and life cycle
- life stage
- gender
- income
- social class
- race and culture
millennial birth years
1979 to 1994
Gen x birth years
1964 to 1978
Baby boomers
1946 to 1964
Silent Generation
1925 to 1945
list segmentation approaches from most mass market to most customization
- undifferentiated (full market coverage)
- multiple segments
- mass customization (single segments)
- niche targeting (individuals as segments)
undifferentiated markets
-one size fits all
-entire market is target market
-rarely used any more
(example model T only comes in black)
multiple segments
-multiple products for multiple segments
-optimal market fit
-traditional approach
(PNG owning tide, gain, and cheer)
mass customization
-segment of one
-each customer has a unique need
-each need can be uniquely met
(example Dell computers)
Niche targeting
-one or few products designed to meet the very focus needs of a very focused segment
-usually able to demand a premium
(example rolls royce)
STP stands for…
segmentation
targeting
positioning
market segmentation
-identify and profile distinct groups of buyers
market targeting
select one or more market segments to enter
market positioning
for each, establish and communicate benefits of offering
Ways to choose target markets
-segmentation tools such as surveys, perceptual mapping, VALS, PRIZM
Attitudinal segments example
- style seekers
- purely pragmatic
- buyers and keepers
- loyal to brand/make
- treat me right
- high maintenance
perceptual mapping
when you have a graph of two sets of opposing characteristics and place different products or brands on it
Vals segments
survivors believers strivers makers thinkers acheivers experiencers innovators
what are the two criteria that the VALS segmentation system is based on?
- resources (high or low)
- primary motivation (ideals, achievement, self-expression)
PRIZM
defines every household in terms of 66 demographically and behaviorally distinct segments
what is a brand?
a name, term, sign, symbol, or combination of them intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors
consumer benefits of brands
- identify who made it
- simplifies decision process
- reduces risk
marketer benefits of brand
- simplify product handling
- protect unique features
- create loyalty
- establish barriers to entry
what is “branding”
endowing products and services with the power of a brand
customer perceived value
the difference between perceived benefits and costs of an offering and the perceived alternatives
what is a brand promise?
the markets vision of what the brand can be and must do for consumers
brand positioning
designing a company’s offering and image to occupy a distinct place in the minds of the target market
-always relative to competitors
points of parity
associations that are shared with other brands and aren’t unique
points of difference
attributes or benefits that other brands can’t match
-must be important and worthwhile to customers
points of irrelevance
features that you have that customers don’t care about
branded house
one parent brand with many sub brands (google, google maps, google earth)
house of brands
The sub brands owned by the parent brand are more important (example: PNG)
brand equity
the value added to products because of the brand name
models of determining brand equity
- brand dynamics pyramid
- customer based brand equity model
- brand asset valuator
milliard brown brand dynamics pyramid (from weak to strong relationships)
- presence
- relevance
- performance
- advantage
- bonding
keller based brand equity model (4 steps from bottom to top of pyramid)
1) identify (who are you)
2) Meaning (what are you
3) response (what about you)
4) relationships (what about you and me?)
Young and Rubicam brand asset valuator
- differentiation
- relevance
- esteem
- knowledge
Young and Rubicam brand asset valuator power grid axis’
- x axis: esteem and knowledge
- y axis: energized differentiation and relevance
three ways to manage brand equity
brand revitalization
brand extension
brand reinforcement
brand revitalization
trying to deliver a completely new position for the brand (ie old spice the man your man can smell like)
brand extensions
new products with power of existing brand (diet coke, coke zero)
brand reinforcement
moves to reinforce what the brand already is (walmart buying jet.com)
loyalty
deeply held commitment to re-buy from a brand
customer value management (CVM) Customer lifetime value
net present value of the stream of future profits expected over the customer’s lifetime purchases
Customer relationship management (CRM)
the process of managing detailed information about individual customers to maximize customer loyalty
what happens to 95% of dissatisfied customers?
they are silent and just stop buying
product line
a company’s group of products, closely related in function, consumer group, distribution channel, or price range
-it may consist of different brands
product category
the market’s collection of various companies’ similar product lines
product mix
the variety and relative proportion of all products a company chooses to sell
new product development process
- idea generation
- screening
- research
- launch
- testing
- design
consumer research types
- portfolio research
- foundational research
- input to program execution
- market assessment
- post launch assessment
adoption
process by which a customer begins to buy and use a new product
-micro(individual) proces
diffusion
how the use of a product spreads through a population
-macro (market) process
typical adoption process
- awareness
- interest
- evaluation
- trial
- adoption/rejection
stages of the product life cycle
- introduction
- growth
- maturity
- decline
MIA construct
Methodology
Issue
Audience
setting the price: six steps
1) pricing objective
2) determine demand
3) estimate cost
4) competitor analysis
5) price method
6) select final price
Van Westendorp Analysis
- about finding the right price price
- 4 questions (too expensive, getting expensive, bargain, inexpensive)
indifference point
where the inexpensive and the expensive line meet
point of marginal cheapness
the inexpensive line meets the expensive line
point of marginal expensiveness
point where the inexpensive and the too expensive line meet
optimal price point
point where the too expensive and inexpensive lines meet
what is the most important part about managing a service
it is all about satisfaction
how to achieve service excellence
- differentiate services
- understand best practices
pricing objectives
- survival
- maximum current profit
- maximum market share
- maximum market skimming
- product-quality leadership
price elasticity
a measure of the sensitivity of the demand to changes in price
Elasticity of 0
perfectly inelastic
ex cigarettes
elasticity from 0 to -1
relatively inelastic (alcohol)
elasticity
elastic (soft drinks)
why is elasticity usually a negative integer?
it is an inversely proportional relationship
types of cost
fixed + variable = total costs
price ceiling
the highest that demand will pay for it
price floor
the minimum price to make a profit
markup pricing
the difference between the cost of a good and it’s selling price and keeping a consistent percentage
break even pricing
where costs and revenue from selling a product are equal
price skimming
set a relatively high price at first and then lower it over time
penetration pricing
set a relative low price to drive market share and value perceptions
-volume over margin
prestige pricing
setting a high price so that quality/status conscious consumer will be attracted to the product and buy it
promotional pricing
selling products at or below cots to stimulate sales of other profitable products (milk/eggs at a grocery store)
captive pricing
the razor/blade model
pricing models
- pricing model categories
- customer attitudinal models
- conjoint (choice based) experiments
- Van Westendorm Price Sensitivity analysis
two types of customer attitudinal models
- complex, multivariate techniques
- simler, price sensitivity techniques
pricing model categories
- econometric
- financial management
- production volumetric
- customer attitudinal
econometric pricing model
behavioral impact to economic changes
financial management pricing model
profit and loss simulation
production volumetric pricing model
production capacity planning
customer attitudinal pricing model
marketing research
conjoint analysis
show customers a series of hypothetical products and asked them to pick the one they like best
-use responses to estimate attribute level utilities
types of integrated communications
- mass communications
- personal communications
types of personal communications
- direct marketing
- personal selling
- interactive marketing
- word of mouth
types of mass communications
- advertising
- promotion
- experiential
- public relations
direct marketing
the use of consumer direct channels to reach/deliver products without a middleman
types of direct marketing
- telemarketing
- direct mail
- infomercials
- catelogs
interactive marketing
internet marketing
types of word of mouth
social media
buzz marketing
viral marketing
opinion leaders
sales promotion
a collection of incentive tools to stimulate short term increased demand for a product or service
experiential marketing
becoming part of the consumers lives through events and experiences
public relations
providing information about a brand to the public so that people will regard the brand in a favorable way
key PR functions
1) press relations
2) product publicity
3) corporate communications
4) lobbying
5) counseling
the 5 M’s of advertising
mission money message media measurement
advertising objectives
inform
persuade
reinforce
remind
Decision factors for advertising budget
- stage in the product life cycle
- market share and consumer base
- competition and clutter
- advertising frequency
- product substitutability
pre message advertising measurement
ad testing
post message advertising measurement
ad tracking
concept testing
evaluating broad descriptions of theme
copy testing
evaluating different executions of a theme
reach
number of different people or households exposed to an ad
rating
percentage of households in a market that are tuned into a show or a program
frequency
average number of times a person is exposed to an ad
gross rating points (GRPs)
- reference number used by advertisers
- reach x frequency
CPM
- cost per thousand
- cost of reaching 1000 individuals or households with an ad
what is the most disruptive, most evolving part of the marketing mix
Delivering offerings
channel management
how a company directs its marketing activity by invoking other parties that make up its distribution channels
supermarket intermediaries example
manufacturer wholesaler distributor retailer customer
push strategy
use manufacturer’s sales force and trade promotions to persuade intermediaries to carry and promote an product to end users
pull strategy
use of advertising, promotion, and other communication to persuade customers to demand the product from intermediaries
steps in designing a marketing channel
1) analyze customer needs
2) establish channel objectives
3) identify major channel alternatives
4) evaluate major channel alternatives
Non store retailing
- direct selling
- direct marketing
- automatic vending
direct selling
at home parties, door to door
direct marketing
1-800-flowers, lands end
franchising retailing
franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments
private label brand retailing
private label brands are store brands
showroom phenomena
visiting a physical store in order to examine a product before buying it online at a lower price
goal of private brands
to take loyalty away from manufacturer to the retailer
