Marketing Part 1 and 2 Flashcards
What is Marketing?
Process of creating or directing an organization to be successful in selling a product or service that people not only desire, but are willing to buy. This includes the planning and executing of the product, price, place and promotions* to create exchange between individuals and organizations
What are examples of promotions?
Promotions include advertising, distribution and selling
What does marketing do?
Anticipates customers’ future needs and wants, which are often discovered through market research
What is the market strategy process?
Consumer analysis Market analysis Review of competition Distribution channel analysis Marketing mix Economics of plan Revision
what is consumer analysis?
Examines buyer needs Identifies groups (segments) of population with similar needs to be targeted
What questions are asked in consumer analysis?
- What is need?
- Who is buying; who is using?
- How is purchase made?
- High or low involvement?
- How can market be segmented?
What is need?
Examines (potential) product and determines why people would buy it?
Understanding of need helps figure out everything else
Who is buying; who is using?
Determines who buys product AND who uses product
How is purchase made?
Market Research Observation Intuition Determine best routes to buyer: - Stores - Internet - Catalogue
What are the steps to making a purchase?
Awareness Information Sources Evaluate Purchase Post-Purchase Assessment
Awareness
Desired response is i need that
provoked through advertisement
Information Sources
Desired response is how can i learn about this
provoked through articles, displays, and demonstrations
Evaluate
Desired response which is best for me
provoked through sales person/ experts
Purchase
desired response is i want that one
provoked through availability, trial and warranty
Post purchase assessment
Consumer reaction to avoid did i make a mistake
positive reinforcement though advertisement
Risk Vs. Ease of involvement
is it low or high involvement
high involvement product
Higher risk Higher price Higher psychological reward (status, love) Difficult to compare Reliability Planned purchase
Examples of a high involvement product
Automobile
- New technology equipment - Professional services (attorney) - Fine jewelry
Low involvement product
Lower/no risk Lower price Little/no need for comparison No psychological component Minimum level of performance required Impulsive purchase
What to high involvement products require?
Consumer information
Guarantees, rebates, warranties
Experts, demos, hand-holding
Dedicated, trained salespeople
Who is your customer?
Everyone? (mass market)
Vs.
Specific segment:
homogeneous groups of similar consumers with similar needs
Marketing varies based on segment
Why segment market?
Identifies specific groups to serve profitably
Efficiently reach buyers
Develop targeted marketing programs
To yield the most sales and profit
What are some types of Segmentation?
Geographic
Demographic (age, gender, income, education, occupation, family status, etc.)
Psychographic (lifestyle, personality)
Behavioral (amount of use, brand loyalty, purchase use, etc.)
What is the difference between market analysis and consumer analysis?
Consumer analysis focuses on consumers as individuals
Market analysis focuses on markets and trends, competition and regulatory environment.
What questions are asked for market analysis?
What is the relevant market?
Where is the product in its life cycle?
What are the key competitive factors?
Relevant market
Determines if identified market segment is:
- large enough
- accessible enough
Done through research or test markets
What are the stages of the Product Life cycle ?
Stage 1 – introduction
Stage 2 – Growth
Stage 3 – Maturity
Stage 4 - Decline
Stage 1 - Introduction
Product awareness and education
Trials, samples are important
High advertising costs
“Innovators,” “Early Adopters,” risk-takers tend to buy
Pricing decisions are difficult
Exclusive distributors are sometimes a strategy
Stage 2 - Growth
Education still important Competition intensifies “Early majority” become buyers Copy cat products introduced Selective distribution becomes a strategy Reduce costs to boost market share
Stage 3 - Maturity
People become accustomed to the product
“Late majority” of the mass market buys
Differences are fewer - standardized
“Brand loyalty” becomes a marketing technique
Price competition becomes very intensified
Broader advertising
Product variations introduced to capture market segments
Stage 4 - Decline
“Laggards” become buyers Considered “safe to buy” Consumers view all products the same Price reduction, sales are marketing strategies Decline is not end of product
What are competitive factors when analyzing the competition?
Quality Price Advertising Research and Development Service
What is marketing mix?
Action plan to sell product focusing on 4 elements to create a workable plan
What are the 4 P’s of marketing?
Product
Place
Promotion
Price
what is Product in marketing mix?
- Does the product blend with our other products (synergy) and image of our products?
- How can we distinguish our product from others – through new features, style, reliability, package design, size variety, level of service, labeling (brand naming)?
- How does the product life cycle (PLC) affect marketing the product?
What is Place in marketing mix?
- Choice of where to sell the product (distribution channel
- Is it Selective, exclusive or mass market
- Choice of place affects perception/image of product
What are the factors impacting place of market?
level of attention
need for control
profit margins
What is promotion in marketing mix?
Promotion = Choice of advertising and sales efforts
pull and push strategies
What is a pull strategy?
gets people to place of sale
What is a push strategy?
convince place of sale to stock product
What are types of promotion?
Advertising – television, radio, print media, billboards, internet, keyword pop-ups, direct mail
Personal selling - dedicated sales force, telemarketing (declining), retail sales force
Sales promotion to complement advertising – coupons, discounts sales (10% off), rebates, tie-ins, point-of-purchase displays, in-store demos
Publicity (Tiger Woods wearing Nike logo), products in movies/TV
Public relations – press releases
What is Price in the marketing mix?
Helps differentiate products from competitors and influences profit margins.
What are strategies to determine price?
skimming
Penetration
price/quality relationship
meet competition’s price
What is price skimming?
taking low profit to reduce cost of promotion (Introduction
What is price penetration?
– low price to gain more customers (Introduction and Growth)
What is price/quality relationship?
pricing based on perceived value
What is Break even?
point at which fixed costs and advertising/promotion are recovered without profit
What is the difference between variable cost and fixed costs?
Variable costs – change with volume of sales
- - Labor
- materials
Fixed costs – generally remain the same regardless
of sales volume
- Rent
- Management costs
- Advertising/promotion (sunk costs, not retrievable)
