Introduction to marketing Flashcards
Starting point- Given products (production)
Methods: Expansion of
production- Production orientation
objectives: Increased sales
volume
Starting point- Given products (sales)
methods: Sales Instruments - Sales orientation
Objectives: Securing sales
volume/turnover
Starting point- Customer preferences
methods: Marketing mix- Marketing orientation
objectives: Customer satisfaction,
competitive advantage
Marketing orientation requires re-thinking-
The company thinks in..
R&D, procurement, production, distribution
The customer desires..
–> cheap products
–> Fast delivery time
–> not too many option
Characteristics of “consumer goods markets“
- Large number of potential customers.
- Large number of small individual purchases.
- Market anonymity.
- Relatively low level of information among potential customers
B-to-B-Marketing
-supports the sale of material goods, services, and rights procured by organizations (companies, authorities,
etc.)
-is directed towards other services which go beyond direct or indirect resale to end consumers.
Characteristics of business-to-business markets
- Relatively small number of potential customers.
-Strong business relations
-Direct market contacts
-Informed and formalized purchasing decisions - Multi-person decisions (e.g., buying center)
-Long-lasting purchase decision processes
B2C: private
-Pay: Growth new customers
-Finance & Invest: Growth existing
customers
-Provide: Customer retention (churn reduction))
=marketing mix
B2B2C: SMEs
-Pay: Growth new
customers
-Finance & Provide: Growth existing
customers
-Found: Customer retention
(churn reduction)
=Marketing mix
B2B: large companies and finance
Finance % Invest : Growth new
customers, Growth existing
customers, Customer
retention (churn reduction)
=Marketing mix
Goods
-Usually tangible (exception: electricity)
-Storable
-Don’t require the integration of the customer
-Don‘t require individualization
Services
-intangible
-Not storable
-Require the integration of the customer
-Require individualization
From products to services and experiences
To date, we have observed an increasing
importance of services.
Basic ideas of marketing -
In order to create value for customers and other stakeholders, it is necessary to:
1) relevant needs
2) economically interesting customer groups
3) with customised, efficient problem solutions
4) better than anyone else
5) in the opinion of customers
6) to satisfy them in the long term
Customer needs
-Emotional needs –> Continuum –> Rational needs
Market segmentation serves
to identify what?
Market segmentation serves to identify homogeneous segments from a heterogeneous mass
Basic idea: Market segmentation
The market segments should be formed in such a way that they are as similar as possible in their reactions to the company’s marketing tools and in their behaviors
Markets can be segmented, for instance, according to demographic (religion, gender, age, household size), socio economic (income, schooling,occupation) and psychographic criteria (lifestyle,
personality traits)
Example: Snowsport activities
-Heterogeneous market: Snowsport activities
-Division into homogeneous buyer groups: Skiers & Snowboarder
-Selection of segments: Snowboarder
-Differentiated addressing of segments: What do Snowboarders want?
Segment profitability
Which segments are worth investing in?
Segment Profitability =
Segment revenue: Total sales generated from one segment - (Direct costs (Costs directly attributable to serving the segment (e.g., manufacturing, marketing, and delivery costs) + Allocated Indirect Costs (Overhead costs or shared resources distributed among segments)
Slide 59
The marketing mix (extract)
Product
Price
Promotion
Place
Product
- Quality
- Features &
Packaging - Customer Service
Price
- Price
- Discounts /
Conditions - Financing
Promotion
- Advertisement
- Sales promotion
- Personal sale
- Public Relations
-influencer marketing
Place
-Online Channels
-Offline channels
Price elasticity of demand (PED)
% Change in Quantity Sold / % Change in Price
Demand is elastic
Quantity sold is highly responsive to price changes
PED > 1
Demand is unit elastic
proportionate change in demand and price
PED = 1
Demand is inelastic
PED < 1
quantity sold is less responsive to price changes
Perfectly inelastic demand
PED = 0
quantity sold does not change regardless of price
„Neither fish nor fowl“
voir graph page 73
Marketing should not be a short-term endeavour
Price-sensitive customers can be won over in the short term with discount campaigns, but Praktiker lacked a concept for retaining them in the long term.
Conclusion: This short-term campaign strategy has driven the company to ruin.
The ultimate goal is customer satisfaction
The expectation of the product was confirmed or exceeded.
AP > EP: Satisfaction above confirmation level
AP = EP: Satisfaction on confirmation level
The expectation of the product was not fulfilled.
AP < EP: Satisfaction below confirmation level
Customer lifetime value (CLV)
Average Value of Sale x Average
Number of Transaction x Average
Customer Lifespan = Customer Lifetime Value
