Final Flashcards
the activity for creating, communicating, delivering and exchanging offerings that benefit he organization, it’s stakeholders and society at large
marketing
For marketing to occur, at least four factors are required
Two or more parties (individuals or organizations) with unsatisfied needs
A desire and ability on their part to be satisfied
A way for the parties to communicate
Something to exchange
You with a need for technology-related information and your bookstore owner, needing someone to buy a copy of computer world
Two or more parties (individuals or organizations) with unsatisfied needs
You have the money to buy the item and the time to get to the bookstore and the stores owner has the desire to sell but also the ability to do so since it is stocked on the shelves
A desire and ability on their part to be satisfied
When you receive a free sample in the mail or see the magazine on display in the bookstore, the communication barrier between you and your bookstore is overcome
A way for the parties to communicate
You exchange your money for the bookstore’s magazine and both have gained something and also given up something
Something to exchange
people with the desire and ability to buy a specific product
market
marketing designed to influence the behaviour of individuals in which the benefits of the behaviour accrue to those individuals or to the society in general and not to the marketer
social marketing
Anti smoking campaigns
social marketing
people who use the goods and services purchased for a household
ultimate consumers
those manufacturers, wholesalers, retailers and government agencies that buy goods and services for their own use or for resale
organizational buyers
one or more specific groups of potential customers toward which an organization directs it’s marketing program
target market
create value by developing a variety of offerings, including goods, services and ideas, to satisfy customer needs
product
everything a buyer gives up in exchange for the product. The key to determining it is to figure out how much customers are wiling to pay and assess whether a profit can be made at that point
price
communication by a marketer that informs, persuades and reminds potential buyers about a product or service to influence their opinions or elicit a response
promotion
all activities necessary to get the product to the right customer when the customer wants it
place
the marketing managers controllable factors: the marketing actions of product, price, promotion and place that he or she can take to create, communicate and deliver value
marketing mix
a plan that integrates the marketing mix to provide a good, service or idea to prospective buyers
marketing program
Six different orientations in the history of North American business
Production era → 1840s -1930s
Sales era → 1920s - 1960s
Marketing concept era → 1950s - 1990s
Market orientation era → 1990s on
Customer experience management era → 2000s on
Social media marketing era → 2010s on
Customers resist nonessential goods and services
Personal selling and advertisings task is to convince them to buy: sell, sell, sell
Rebates, 0% finance, ‘free’ stuff
sales era
Company wide consumer orientation
Objective is long run success
Satisfying customer needs
marketing concept era and marketing orientation era
the idea that an organization should strive to satisfy the needs of consumers, while also trying to achieve the organizations goals
marketing concept
the unique combination of benefits received by the customer that include quality, price, convenience, on-time delivery and both before-sale and after-sale service
customer value
the match between customer expectations of the product and the products actual performance
customer satisfaction
the process of building and developing long term relationships with customers by delivering customer value and satisfaction
customer relationship management (CRM)
the profit generated by the customers purchase of an organizations product or service over the customers lifetime
customer lifetime value (CLV)
a web centric, personalized approach to managing long term customer relationships electronically
eCRM
involves two way buyer seller electronic communication in which the buyer can control the kind and amount of information received from the seller
interactive marketing
managing the customers interactions with the organization at all levels and at all tough points (direct and indirect contacts of the customer with an organization) so that the customer has a positive impression of the organization, is satisfied with the experience, and will remain loyal to the organization
customer service management (CEM)
the customer is the focus and the company’s brands, products and services, finances, leaders and marketers are in tune and in time with the customers needs, expectations, aspirations and budgets
customer centric marketing organization
consumer generated online marketing efforts to promote brands and companies for which they are fans (or conversely, negatively promoting brands and companies for which they are non fans), and the use by marketers of online tools and platforms to promote their brands or organizations
social media marketing
the use of social media to enable organizations to engage customers in collaborative conversations for mutually beneficial value
social CRM
the moral principles and values that govern the actions and decisions of an individual or group
ethics
individuals and organizations are part of a larger society and are accountable to that society for their actions
social responsibility
the view that an organization should discover and satisfy the needs of its consumers in a way that also provides for society’s well being
social marketing concept
the aggregate flow of a nations goods and services to benefit society. Addresses such broad issues as whether marketing costs too much, whether advertising is wasteful and what resource scarcities and pollution side effects result from the marketing system
macroeconomics
how an individual organization directs it’s marketing activities and allocates its resources to benefit it’s customers
micromarketing
the performance of business activities designed to plan, price, promote and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit
international marketing
simple exchanges
transaction-based marketing
convert new customers to advocates, lifetime value of customer and identify best customers and increase their loyalty
relationship/value marketing
a legal entity of people who share a common mission
organization
privately owned organization that serves its customers in order to earn a profit
business firm
the money left after a business firms total expenses are subtracted from its total revenue; the reward for the risk it undertakes in marketing its offerings
profit
an organizations long term course of action designed to deliver a unique customer experience while achieving its goals
strategy
Three organizational levels whose strategy is linked to marketing
corporate level
strategic business unit level
functional level
level at which top management directs overall strategy for the entire organization
corporate level
a subsidiary division, or unit of an organization that markets a set of related offerings to a clearly defined group of customers
strategic business unit level
the level in an organization where groups of specialists actually create value for the organization
functional level
the responsibility for the systematic management of marketing resources and processes to achieve measurable gains in return on marketing investment and increased marketing efficiency, while maintaining quality and increasing the value of the corporation
marketing accountability
a business unit level where managers set a more specific strategic direction for their businesses to exploit value creating opportunities
strategic business unit level
the level in an organization where groups of specialists actually create value for the organization
functional level
a small number of people from different departments in an organization who are mutually accountable to accomplish a task or common set of performance goals
cross functional teams
core values
mission (vision)
organizational culture
organizational foundation (why)
the fundamental, passionate and enduring principles that guide its conduct over time
core values
a statement of the organizations function in society, often identifying its customers, markets, products and technologies
mission
a set of values, ideas, attitudes and norms of behaviour that is learned and shared among the members of an organization
organizational culture
business
long and short term goals (objectives)
organizational direction (what)
the clear, broad, underlying industry or market sector of an organizations offering
business
statements of an accomplishment of a task to be achieved, often by a specific time
goals
Corporate, strategic business unit or functional level
Product, service, idea or experience offering
organizational strategies (how)
the strategies an organization develops to provide value to the customer it serves
business model
Useful criteria for writing effective goals
specific
measurable
attainable
relevant
time based
be a precise description of what is to be achieved
specific
be a quantitative value to show attainment
measurable
be achievable, but challenging
attainable
be pertinent to the organizations mission
relevant
have a deadline for completion
time based
the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself
market share
an organizations special capabilities, including skills, technologies and resources, that distinguish it from other organizations and provide value to its customers
competencies
a unique strength relative to competitors, often based on quality, time, cost, innovation, customer intimacy or customer experience management
competitive advantage
those features and characteristics of a product that influence its ability to satisfy customer needs
quality
discovering how others do something better than your own firm so that you can imitate or leapfrog competition
benchmarking
uses quantified performance measures and growth targets to analyze a firms business units as though they were a collection of separate investments
business portfolio analysis
Provides a measure of market attractiveness based on the annual rate of growth of the SBU’s industry
business portfolio analysis vertical axis
market growth rate
Serves as a measure of the organizations strength in the market
business portfolio analysis horizontal axis
relative market share
The growth share matrix reveals four types of SBUs
cash cows
stars
question marks
dogs
low growth, high share businesses that require less investment to maintain market share → they generate large amounts of cash that cover the organizations overhead and to invest in SBUs
cash cows
high growth, high share businesses that require heavy investment to finance their rapid growth. When their growth slows, they are likely to become cash cows
stars
low share businesses in high growth markets that require major investments to hold share, and even more investment to increase it. management needs to make decisions about which question marks to build into stars and which ones to phase out or eliminate
question marks
low growth, low share businesses. They may generate enough cash to maintain themselves but do not hold promise to become real winners for the organization
dogs
Market-product strategies (4)
market penetration
market development
product development
diversification
selling more products in existing markets
market penetration
selling existing products in new markets (either geographic or new segments)
market development
selling new products in existing markets
product development
selling a new product in new markets
diversification
when new products and new markets have something in common with the firms existing operations
related diversification
the new products and new markets have nothing in common with existing operations
unrelated diversification
a measure of the quantitative value or trend of a marketing activity or results
marketing metric
the strategic marketing process (6)
Planning phase
Step 1 → situation (SWOT) analysis
Step 2 → market-product focus and goal setting
Step 3 → marketing program
implementation phase
evaluation phase
Identify industry trends
Analyze competitors
Assess own company
Research customer
situation (SWOT) analysis
Set market and product goals
Select target markets
Find points of difference
Position the product
market-product focus and goal setting
Develop the programs marketing mix
Develop the budget, by estimating revenues, expenses and profits
marketing program
Obtain resources
Design marketing organization
Develop schedules
Execute marketing program
implementation phase
Compare results with plans to identify deviations
Act to correct negative deviations; exploit positive ones
evaluation phase
process whereby an organization allocates its marketing mix resources to reach its target markets
strategic marketing process
a road map for the marketing activities of an organization for a specified future period of time, such as one year or five years
marketing plan
taking stock of where the firm or product has been recently, where it is now and where it is headed in terms of the organizations plans and the external factors and trends affecting it
situational analysis
an acronym describing an organizations appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats
SWOT analysis
aggregating prospective buyers into groups or segments that have common needs and will respond similarly to a marketing action
market segmentation
characteristics of a product that make it superior to competitive substitutes
points of difference
the means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it
marketing strategy
detailed day to day operational decisions essential to the overall success of marketing strategies
marketing tactics
Relative advantage
Superior quality
Observable, compatible and user friendly
product excellence
Competing with intangibles
Deep understanding of customer expectations
Ability to create a memorable customer experience
consumer excellence
Market by location
Ability to target impulse buying behaviour
High visibility
locational excellence
Quality at an affordable price, targeting middle class
Efficiency and ability to maintain quality
Lower waste to minimum
operational excellence
SWOT analysis vertical axis
External origin → attribute of the environment
Internal origin → attribute of the organization
SWOT analysis horizontal axis
Helpful → to achieving the objective
Harmful → to achieving the objective
the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends
environmental scanning
Environmental forces (5)
social
economic
technological
competitive
regulatory
forces of the environment that include the demographic characteristics of the population and its values
Demographic shifts
Cultural changes
social
pertains to the income expenditures and resources that affect the cost of running a business and household
Macroeconomic conditions
Consumer income
economic
inventions or innovations from applied science or engineering research
Changing technology
Technology’s impact in customer value
Electronic business technologies
technological
alternative firms that could provide a product to satisfy a specific markets needs
Alternative forms of competition
Small businesses
competitive
restrictions that provincial and federal laws place on business with regard to the conduct of its activities
Laws protecting competition
Laws affecting marketing mix actions
Self regulation
regulatory
the study of the characteristics of a human population. These characteristics include population size, growth rate, gender, marital status, ethnicity, income and so forth
demographics
the generation of those born between 1946 and 1964
baby boomers
the population of those born between 1965 and 1967
generation x
those born between 1977 and 1994
generation y (millennials)
combinations of the marketing mix that reflect the unique attitudes, race or ancestry, communication preferences, and lifestyles of ethnic Canadians
ethnic marketing
the set of values, ideas and attitudes that are learned and shared among the members of a group
culture
the concern for obtaining the best quality, features and performance of a product or service for a given price
value consciousness
the total amount of money made in one year by a person, household or family unit
gross income
the money a consumer has left after paying taxes to use for such necessities as good, shelter, clothing and transportation
disposable income
the money that remains after paying for taxes and necessities
discretionary income
an Internet/web based network used within the boundaries of an organization
intranet
an internet based technology that permits communication between a company and its suppliers, distributors and other partners
extranet
an information and communication based electronic exchange environment
marketspace
all electronic based company activities both within and outside the company
e business
specific buying and selling processes on the Internet
e commerce
also called online marketing, the marketing component of e commerce
e marketing
four basic forms of competition
pure competition
monopolistic competition
oligopoly
monopoly
every company has a similar product
pure competition
many sellers compete with their products on a substitutable basis
monopolistic competition
when a few companies control the majority of industry sales
oligopoly
when only one firm sells the product or service
monopoly
Factors that drive competition
entry
bargaining power of buyers and suppliers
existing rivalries
substitution possibilities
business practices or conditions that make it difficult for new firms to enter a market
barriers to entry
few in number, low switching costs, product represents a significant share of the buyers total costs
powerful buyers
competition is more heated for any possible gains in market share
slow growth settings
the key legislation designed to protect competition and consumers in Canada
competition act
an alternative to government control where an industry attempts to police itself
self regulation
a grassroots movement started in the 1960s to increase the influence, power and rifts of consumers in dealing with institutions
consumerism
Porters 5 competitive forces
Competitive rivalry within an industry
Bargaining power of suppliers
Bargaining power of customers
Threat of new entrants
Threat of substitute products
High entry barriers = low threat of new entrants
Suppliers and buyers have weak positions
Few threats from substitute products
Moderate rivalry among competitors
attractive industry
Low entry barriers
Suppliers and buyers have strong positions
Strong threats from substitute products
Intense rivalry among competitors
unattractive industry
the relatively homogeneous groups of prospective buyers that result from the market segmentation process
marketing segments
strategy that involves a firm using different marketing mix activities, such as product features and advertising, to help consumers perceive the product as being different from and better than competing products
product differentiation
a framework to relate the market segments of potential buyers to products offered or potential actions by the firm
market-product grid
targeting strategies (4)
One product and multiple market segments
Multiple products and multiple market segments
One product and one market segment
Segments of one: mass customization
the increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently
organizational synergy
new products or new chain stealing customers and sales from the older, existing ones
cannibalization
The five key steps in segmenting and targeting markets
Group potential buyers into segments
Group products to be sold into categories
Develop a market-product grid and estimate size of markets
Select target markets
Take marketing actions to reach target markets
Criteria to use in forming segments (5)
Potential for increased profit
Similarity of needs of potential buyers within a segment
Difference of needs of buyers among segments
Potential of a marketing action to reach a segment
Simplicity and cost of assigning potential buyers to segments
Ways to segment consumer markets (4)
geographic
demographic
psychographic
behavioural
where are the customers?
geographic segmentation
what kind of customers?
demographic segmentation
who are the customers?
psychographic segmentation
how customers spend/use
behavioural segmentation
quantity consumed or patronage - store visits - during a specific period; varies significantly among different customer groups
usage rate
a concept that suggests 80 percent of a firms sales are obtained from 20 percent of its customers
80/20 rule
Targeting criteria (5)
market size
expected growth
competitive growth
cost or reaching the segment
compatibility with the organizations objectives and resources
the place an offering occupies in consumers minds on important attributes relative to competitive products
product positioning
changing the place an offering occupies in a consumers mind relative to competitive products
product repositioning
competing directly with competitors on similar product attributes in the same target market
head to head positioning
Dollar competes directly with Avis and Hertz
head to head positioning
seeking a less competitive, smaller market niche in which to locate a brand, usually stressing the unique aspects of the product
differentiation positioning
Positioning TrueBlue blueberry drink to the health-conscious consumer
differentiation positioning
a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands relative to its own and then take marketing actions
perceptual map
the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firms
market (industry) potential
the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts
sales (company) forecast
Three main sales forecasting techniques often used
Judgments of the decision maker
Surveys of knowledgeable groups
Statistical methods
estimating the value to be forecast without any intervening steps
direct forecast
making a forecast using the last known value and modifying it according to positive or negative factors expected in the future
lost horse forecast
asking prospective customers if they are likely to buy a product during some future time period
survey of buyers intentions forecast
asking the firms salespeople to estimate sales during a coming period
salesforce survey forecast
extending a pattern observed in past data into the future
trend extrapolation
Positioning steps (5)
Determine consumers perceptions and evaluation in relation to competitors
Identify competitors positions
Determine consumer preferences
Select the position
Monitor the positioning strategy
the actions that a person takes in purchasing and using products and services, including the mental and social processes that precede and follow these actions
consumer behaviour
the stages a buyer passes through in making choices about which products and services to buy
purchase decision process
Five stages of purchase decision process
problem recognition
information search
alternative evaluation
purchase decision
post-purchase behaviour
Perceiving a difference between a persons ideal and actual situation that is big enough to trigger a decision
problem recognition
Remembering previous purchase experiences (internal search) and external search behaviour, such as seeking information from other sources
information search
Clarifies the problem for the consumer by (a) yielding brand names that might meet the criteria, (b) suggesting the evaluative criteria to use for the purchase, and (c) developing consumer value perceptions
alternative evaluation
The choice of an alternative, including from whom to buy and when to buy
purchase decision
The comparison of the chosen alternative with a consumers expectations, which leads to satisfaction or dissatisfaction and subsequent purchase behaviour
post-purchase behaviour
factors that represent both the objective attributes of a brand (such as display screen) and the subjective ones (such as brand prestige) you use to compare different products and brands
evaluative criteria
the group of brands that a consumer would consider acceptable from among all the brands of which he or she is aware
consideration set
feeling of post purchase psychological tension or anxiety
cognitive dissonance
the personal, social and economic significance of the purchase to the consumer
involvement
Consumer involvement (3)
Extended problem solving
Limited problem solving
Routine problem solving
consumers typically seek some information or rely on a friend to help them evaluate alternatives
limited problem solving
Influences on the consumer purchase decision process (4)
Situational influences
Psychological influences
Socio-cultural influences
Marketing mix influences
Situational influences (5)
purchase task
social surroundings
physical surroundings
temporal effects
antecedent states
Whether the purchase is a gift or for buyers own use
purchase task
Other people present when a purchase decision is made
social surroundings
Décor, music and crowding in retail stores
physical surroundings
Time of day or the amount of time available
temporal effects
Consumers mood or the amount of cash on hand
antecedent states
Psychological influences (5)
motivation and personality
perception
learning
values, beliefs and attitudes
lifestyle
the energizing force that causes behaviour that satisfies a need
motivation
a persons consistent behaviours or responses to recurring situations
personality
a distinct set of personality characteristics common among people of a country or society
national character
the way people see themselves and the way they believe other see them
self concept
the process by which an individual selects, organizes and interprets information to create meaningful picture of the world
perception
Four stages of selective perception
selective exposure
selective attention
selective comprehension
selective retention
Consumers are not exposed to all information or messages in the marketplace
selective exposure
Consumers will pay attention only to messages that are consistent with their attitudes and beliefs and will ignore those that are inconsistent
selective attention
Interpreting information so that it is consistent with ones attitudes and beliefs
selective comprehension
Consumers do not remember all the information they see, read or hear, even minutes after exposure to it
selective retention
means that you see or hear messages without being aware of them
subliminal perception
the anxiety felt because the consumer cannot anticipate the outcomes of a purchase but believes that there may be negative consequences
perceived risk
those behaviours that result from (1) repeated experience, and (2) thinking
learning
The process of developing automatic responses to a situation built up through repeated exposure to it
behavioural learning
Four variables central to how consumers learn from repeated experience
drive
cue
response
reinforcement
Being hungry (drive), a consumer sees a billboard (cue), buys a hamburger (action) and it tastes great (reinforcement)
A need that moves an individual to action
drive
Stimulus or symbol perceived by consumers
cue
The action taken by a consumer to satisfy the drive
response
The reward
reinforcement
Occurs when a response elicited by on stimulus is generalized to another stimulus
stimulus generalization
Using the same brand name for different products
stimulus generalization
A persons ability to perceive differences in stimuli
stimulus discrimination
Consumers tendency to perceive all light beers as being alike led to Budweiser Light commercials that distinguished among many types of “lights” and Bud Light
stimulus discrimination
Learn through thinking, reasoning and mental problem solving without direct experience
Involves making connections between two or more ideas, or simply observing the outcomes of others behaviours and adjusting your own accordingly
cognitive learning
Through repetition in advertising, such messages as “Advil is a headache remedy” attempt to link a brand (Advil) and an idea (headache remedy) by showing someone using the brand and finding relief
cognitive learning
a favourable attitude toward and consistent purchase of a single brand over time
brand loyalty
personally or socially preferable modes of conduct or states of existence that are enduring
values
a consumers subjective perception of how well a product or brand performs on different attributes
beliefs
a learned predisposition to respond to an object or class of objects in a consistently favourable or unfavourable way
attitude
a mode of living that is identified by how people spend their time and resources, what they consider important in their environment and what they think of themselves and the world around them
lifestyle
evolve from a consumers formal and informal relationship with other people
socio-cultural influences
socio-cultural influences (4)
Personal influence
Reference groups
Family
Culture and subculture
those knowledgeable about uses of particular products and services, and so their opinions influence others choices
opinion leaders
the influencing of people during conversations
word of mouth
popularity created by consumer word of mouth
buzz marketing
the online version of word of mouth, involving the use of messages “infectious” enough that consumers wish to pass them along to others through online communication
viral marketing
people to whom individual looks as a basis for self appraisal or as a source of personal standards
reference groups
the process by which people acquire the skills, knowledge and attitudes necessary to function as consumers
consumer socialization
the distinct phases that a family progresses though, from formation to retirement, each phase bringing with it identifiable purchasing behaviours
family life cycle
the relatively permanent, homogeneous divisions in a society into which people sharing similar values, lifestyles, interests and behaviour can be grouped
social class
subgroups within the larger or national culture with unique values, ideas and attitudes
subcultures
Marketing-mix influences (4)
product
price
promotion
place
Consumer behaviour principles (6)
Consistency and commitment principle
Authority principle
Liking principle
Social validation principle
Scarcity principle
Reciprocity principle
Hofstede’s 5 dimensions of national culture
Individualism vs collectivism
Masculinity vs femininity
Power distance
Uncertainty avoidance
Long term vs short term orientation
measures the extent to which the less powerful members of organizations and institutions accept and expect that power is distributed unequally
power distance
find societies in which the ties between individuals are loose: everyone is expected to look after themselves and their immediate family
individualism
people form birth onwards are integrated into strong, cohesive in-groups, often extended families which continue protecting them in exchange for unquestioning loyalty
collectivism
avoids conflict, low tolerance of deviant people and ideas, respect for laws and rules, experts and authorities are usually correct and consensus is important
uncertainty avoidance
clear definitions of gender roles, men are assertive and decisive, support for machismo, work is priority and growth, success and money are important
masculinity
motivation and concern for others, collaborative society, compromise and negotiation and more equality between men and women
femininity
value saving and preparation for the future, encourage perseverance, adaptability, see their life as a very short moment in history and leisure time is not too important
long term orientation
Michael Porter’s “diamond” of national competitive advantage
factor conditions
demand conditions
related nd supporting industries
company strategy, structure and rivalry
Natural resources
Education and skill levels
Wage rates
factor conditions
Size of market
Sophistication of consumers
Media exposure of products
demand conditions
Existence of supplier clusters
related and supporting industries
Number of companies in an industry
Intensity of competition
Public or private ownership
company strategy, structure and rivalry
the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas
protectionism
government taxes on goods or services entering a country, which primarily serve to raise prices on imports
tariffs
a restriction placed on the amount of a product allowed to enter or leave a country
quota
exists when firms originate, produce and market their products and services worldwide
global competition
agreements among two or more independent firms to cooperate for the purpose of achieving common goals, such as a competitive advantage or customer value creation
strategic alliances
Three types of companies that populate and compete in the global marketplace
international firms
multinational firms
transnational firms
Engages in trade and marketing in different countries as an extension of the marketing strategy in its home country
Market their existing products and services in other countries the same way they do in their home country
international firms
Views the world as consisting of unique parts and markets to each part differently
multinational firms
Views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants more than differences
transnational firms
use of as many different product variations, brand names and advertising programs as countries in which they do business
multidomestic marketing strategy
the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ
global marketing strategy
a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs
global brand
consumer groups living in many countries or regions of the world that have similar needs or seek similar features and benefits from products or services
global consumers
Means of market entry (4)
exporting
licensing
joint venture
direct investment
producing goods in one country and selling them in another country. Allows a company to make the least number of changes in terms of its product, its organization and even its corporate goals
exporting
offering the right to a trademark, patent, trade secret or other similarly valued items of intellectual property in return for a royalty or a fee
licensing
an arrangement in which a foreign company and a local firm invest together to create a local business, sharing ownership, control and profits of the new company
joint venture
a domestic firm actually investing in and owning a foreign subsidiary or division
direct investment
occurs when a firm sells a product in a foreign country below its domestic price or below its actual cost
dumping
a situation where products are sold through unauthorized channels of distribution
grey market
Benefits of being an international player (4)
Increased market size
Greater returns on major capital investments or new products or processes
Greater economies of scale, scope or learning
A competitive advantage through location
an unconscious reference to ones own cultural values, experiences and knowledge as a basis for decisions
self reference criterion
the notion that people in ones own company, culture or country know best how to do things
ethnocentrism
Five product and promotion strategies for global marketing
Product extension strategy
Communication adaption strategy
Product adaption strategy
Dual adaption strategy
Product invention strategy
the process of defining a marketing problem and opportunity, systematically collecting and analyzing information and recommending actions to improve an organizations marketing activities
marketing research
Three different types of marketing research
exploratory
descriptive
casual
Preliminary research conducted to clarify the scope and nature of the marketing problem
exploratory
Dairy Farmers of Canada wanted to discover why milk consumption was declining in Canada
exploratory
Research designed to describe the basic characteristics of a given population or to profile particular marketing situations
descriptive
Dairy Farmers of Canada conducted descriptive research to determine the demographic character tics of milk consumers, current usage patterns and consumer attitudes toward milk consumption
descriptive
Research designed to identify cause-and effect relationships among variables
casual
Dairy Farmers of Canada discovered that many believed milk was too fattening and too high in cholesterol
casual
the ability to replicate research results under identical environmental conditions
reliability
involves the notion of whether the research measured what was intended to be measured
validity
Four basic stages of marketing research
Defining the problem
Determining the research design
Collecting and analyzing data
Drawing conclusions and preparing the report
facts and figures that have been recorded before the project at hand
secondary data
facts and figures that are newly collected for the project
primary data
integrated information from multiple sources that allows marketers to examine customers household demographics and lifestyles, product purchases, media habits and responses to sales promotions
single source data
an informal session of six to ten customers - past, present or prospective - in which a discussion leader, or moderator, asks their opinions about the firms and its competitors products
focus groups
detailed, individual interviews with people relevant to a research project
depth interviews
Basic methods for descriptive and casual research
survey
experiment
observation
a research technique used to generate data by asking people questions and recording their responses on a questionnaire
survey
obtaining data by manipulating factors under tightly controlled conditions to test cause and effect
experiment
watching, either mechanically or in person, how people behave
observation
the extraction of hidden predictive information from large databases
data mining
Benefits of good research (5)
Lowers costs
Effective use and allocation of time and resources
Better understanding of the products, consumers and markets
Internal development of the workforce
Selling of the idea will be easier
a good, service or idea consisting of a bundle of tangible and intangible attributed that satisfies consumers and is received in exchange for money or some other unit of value
product
a group of products that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range
product line
a specific product as noted by a unique brand, size or price
product item
the number of product lines offered by a company
product mix
Four types on consumer goods
convenience goods
shopping goods
specialty goods
unsought goods
items that the consumer purchases frequently and with a minimum of shopping effort
convenience goods
items for which the consumer compared several alternatives on such criteria as price, quality, or style
shopping goods
items that a consumer makes a special effort to search out and buy
specialty goods
items that the consumer either does not know about or knows about but does not initially want
unsought goods
no new barriers must be learned
continuous innovation
only minor changes in behaviour are required
dynamically continuous innovation
making he consumer learn entirely new consumption patterns in order to use the product
discontinuous innovation
Critical marketing factors that often separate new product winners and losers (7)
Insignificant “point of difference”
Incomplete market and product definition before product development starts
Too little market attractiveness
Poor execution of the marketing mix
Poor product quality
Bad timing
No economical access to buyers
a statement that, before product development begins, identifies (1) a well defined target market; (2) specific customers needs, wants and preferences; and (3) what the product will be and do
protocol
Organizational problems for new product failures
Not really listening to the “voice of the consumer”
Skipping steps in the new product process
Pushing a poorly conceived product into the market to generate quick revenue
“Groupthink” in task force and committee meetings
Not learning critical takeaway lessons from past failures
the stages a firm uses to identify business opportunities and convert them to a saleable good or service
new product process
Stages in the new product process (7)
New product strategy development
Idea generation
Screening and evaluation
Business analysis
Development
Market testing
Commercialization
the first stage of the new product process, providing the necessary focus, structure, approach and guidelines for pursuing innovation
new product strategy development
developing a pool of concepts as candidates for new products
Screening and evaluation → the stage of the new product process that involves internal and external evaluations of the new product ideas to eliminate those that warrant no further effort
idea generation
the stage of the new product process that involves internal and external evaluations of the new product ideas to eliminate those that warrant no further effort
screening and evaluation
the stage of the new product process that involves specifying the product features and marketing strategy and making financial projections needed to commercialize a product
business analysis
the stage of the new product process that involves turning the idea on paper into a prototype
development
exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy
market testing
the stage of the new product process that involves positioning and launching a new product in full scale production and sales
commercialization
number of product lines
breadth
number of categories within a product line
depth
seeks to explain how innovations are taken up in a population. What kind of consumer are buying the product?
diffusion of innovation
Factors affecting product diffusion (5)
Relative advantage
Compatibility
Observability
Complexity
Trialability
the stages a new product goes through in the marketplace: introduction, growth, maturity and decline
product life cycle
Product life cycle stages
introduction stage
growth stage
maturity stage
decline stage
occurs when a product is first introduced to its intended target market
introduction stage
rapid increases in sales
growth stage
a slowing of total industry sales or product class revenue
maturity stage
sales and profits begin to drop
decline stage
dropping a product from a company’s product line
deletion
a company retains the product but reduces marketing support costs
harvesting
Important aspects of product life cycle (4)
Length
Shape of their curves
product level
life cycle and consumers
Five categories and profiles of product adopters
innovators
early adopters
early majority
late majority
laggards
2.5%
Venturesome; higher educated; use multiple information sources
innovators
13.5%
Leaders in social setting; slightly above average education
early adopters
34%
Deliberate; many informal social contracts
early majority
34%
Sceptical; below average social status
late majority
16%
Fear of debt; neighbours and friends are information sources
laggards
Three ways to manage a product through its life cycle
product modification
market modification
product repositioning
altering a products characteristics, such as its quality, performance, appearance, features or package to try and increase and extend the products sales
product modification
strategy in which a company tries to find new customers, increase a products use among existing customers or create new use situations
market modification
changing the place a product occupies in a consumers mind relative to competing products
product repositioning
activity in which an organization uses a name, phrase, design, symbols or combination of these to identify its products and distinguish them from those of competitors
branding
any word, device (design, shape, sound or colour) or combination of these used to distinguish sellers goods or services
brand name
a set of human characteristics associated with a brand name
brand personality
the added value that a given brand gives to a product beyond the functional benefits provided
brand equity
a contractual agreement whereby a company allows another firm to use its brand name, patent, trade secret or other property for a royalty or fee
brand licensing
Branding strategies
multiproduct branding
multibranding
private branding
mixed branding
use by a company of one name for all its products in a product class
multiproduct branding
a manufacturers branding strategy giving each product a distinct name
multibranding
when a company manufactures products but sells them under the brand name of a wholesaler or retailer
private branding
a firm markets products under its own name and that of a reseller because the segment attracted by the reseller is different from its own market
mixed branding
Combines a corporate or family brand with a new brand
sub branding
the practice of using a current brand name to enter a completely different product class
brand extension
the pairing of two or more recognized brands on a single product or service
co-branding
multi brand companies introduce new product brands as defensive moves to counteract competition
fighting brands
the building of one company’s multiple brands into a single marketing effort aimed at a common consumer group
cohort branding
brands that have a special added value in terms of their core environmental or social benefits that they provide to the customer
social benefit brand
any container in which a product is offered for sale and on which label information is communicated
packaging
an integral part of the package that typically identified the product or brand, who made it, where and when it was made, how it’s is to be used, and package contents and ingredients
label
Create demand
Targeting innovators and early adaptors
Set precedent for the next stage
High cost and inability to benefit from volume sales; therefore, hard to make a profit until later stage
introduction
Targeting early adopters and early majority
Most products die before reaching this stage but once they make it the product becomes profitable
Critical mass is when the product reaches a tipping point for consumer acceptance
growth
Targeting late majorities, price sensitive customers who have choices
Intense price competition - with little product differentiation
Good timing for launching new products at this stage
maturity
“unprofitable” market as cost of business often surpasses the benefit of sales
Laggards buy at this stage
Valuable for product research
Products get discontinued (deleted) or get no attention (harvested)
decline
Value of branding for the customer and the marketer (6)
Facilitate purchasing
Establish loyalty
Protect from competition
Reduce marketing costs
Are assets
Impact market value
Four components of brand equity
awareness
perceived value
loyalty
associations
intangible activities, benefits, or satisfactions that an organization provides to consumers in exchange for money or something else or value
services
Four Is of services
intangibility
inconsistency
inseparability
inventory
the tendency of services to be a performance that cannot be held or touched
intangibility
they depend on people to deliver them and people vary in their capabilities and in their day to day performance
inconsistency
the difficulty in separating the deliverer of the service from the service itself
inseparability
the need to have service production capability when there is service demand
inventory
a range from the tangible to the intangible or goods-dominant to service-dominant offerings available in the marketplace
service continuum
an evaluation tool that compares expectations about a service offering to the actual experience a consumer has with the service
gap analysis
Consumers judge service quality along five key dimensions
tangibles
reliability
responsiveness
assurance
empathy
appearance of physical facilities, equipment, personnel and communications materials
tangibles
ability to perform the promised service dependably and accurately
reliability
willingness to help customers and provide print service
responsiveness
respectful, considerate personnel who listen to customers and answer their questions
assurance
knowing the customer and understanding their needs. Approachable and available
empathy
Seven Ps of services marketing
product
price
place
promotion
people
physical evidence
process
Increase service recovery
Listen to customer
Resolve problems quickly
Provide a fair solution
individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users
marketing channel
Marketing channel functions performed by intermediaries (3)
transactional function
logistical function
facilitating functions
involves buying, selling and risk taking because they stick merchandise in anticipation of sales
transactional function
gathering, storing and dispersing of products
logistical function
assist producers in making foods and services more attractive to buyers
facilitating functions
Four most common marketing channels for consumer goods
Direct channel to consumer
Retailer to consumer
Wholesaler to retailer to consumer
Agent to wholesaler to retailer to consumer
a marketing channel where a producer and ultimate consumers deal directly with each other
direct channel
marketing channels where intermediaries are inserted between the producer and consumers and perform numerous channel functions
indirect channel
Four most common channels for business goods and services
Direct channel to user
Industrial distributed to user
Agent to user
Agent to industrial distributed to user
performs a variety of marketing channel functions, including selling, stocking, delivering a full product assortment and financing for business goods and services
business distributer
allows consumers to buy products by interacting with various advertising media without a ace to face meeting with a salesperson
direct marketing channels
Mail-order selling, direct mail sales, categories sales, telemarketing, interactive media, social media, televised home shopping
direct marketing channels
an arrangement whereby a firm reaches buyers by employing two or more different types of marketing channels
multichannel distribution
a practice whereby one firms marketing channel is used to sell another firms products
strategic channel alliances
Kraft distributes Starbucks coffee in supermarkets
strategic channel alliances
independently owned firms that take title to the merchandise they handle
merchant wholesalers
carry a broad assortment of merchandise and perform all channel functions
general merchandise wholesalers
offer a relatively narrow range of products but have an extensive assortment within the product lines carried
specialty merchandise wholesalers
work for several producers and carry non competitive, complementary merchandise in an exclusive territory
manufacturers agents
represent a single producer and are responsible for the entire function of that producer
selling agents
independent firms or individuals whose principal function is to bring buyers and sellers together to make sales
brokers
Factors affecting channel choice and management (4)
Environmental factors
Consumer factors
Product factors
Company factors
These alliances offer benefits (4)
Complementary strategic alliances
Competition response strategy
Uncertainty reducing strategy
Competition reducing strategy
Three degrees of distribution density
intensive
exclusive
selective
a firm tries to place its products and services in as many outlets as possible
intensive
only one retail outlet in a specified geographical arear carries the firms product
exclusive
a firm selects a few retail outlets in a specific geographical area to carry its products
selective
Four categories of buyer interests
information
convenience
variety
pre and post sale services
