Midterm 1 Flashcards by Mallory Reese

BCG Growth Model

Cash cows (low market growth, high market share

Stars (high market growth, high market share)

??? (high market growth, low market share)

Dogs (low market growth, low market share)

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“Path to Profitability”

market environment (company, customers, competition)-->
marketing mix (product, price, place, promotion: segmentation, targeting, positioning)-->
capture value (Sales per customer: acquire/retain customers)-->
PROFITABILITY

(SPECIALISTS PERFORM BETTER THAN GENERALISTS!)

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Brand Champions/Love Group

Customers who love the firm’s products and then advocate or champion the products to others

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Product Market Expansion Matrix

Market Penetration (existing product, existing market)

Market Development (existing product, new market)

Product Development (new product, existing market)

Diversification (new product, new market)

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Consumer Lifetime Value

How much is a customer worth over a lifetime? Lets you know how much you should spend to keep a customer.

short term/low profitability: satisfy transaction/no investment

short term/high profitability: satisfy transaction/cross sell

long term/low profitability: cross sell/up sell

long term/high profitability: build loyalty

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Marketing creates VALUE by…

meeting functional and emotional needs. (Value = benefits-costs)

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Corporate strategy

What businesses should we be in?

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Business strategy

How do we compete effectively in our chosen business?

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Marketing Strategy

how do we design a marketing mix that will attract/reach our target market?

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SWOT

Internal: play to strengths, moderate weaknesses; External: exploit opportunities, minimize threats

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External Environment

controllable: marketing mix
uncontrollable: social, economic, regulatory, competitive, technological

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Porter’s 5 Forces

substitutes, entrants, power of buyer, power of supplier, competitive rivalry

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Gross Income

total money received by an entity before taxes

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Disposable Income

money after taxes used for necessities

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Discretionary Income

money after taxes and necessities used for luxury products and services

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Standardization

Standard product, All markets= production/cost efficiency

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Customization

Custom product, Select markets=market suitability

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Glocalization

Standard platform adapted to local requirements.

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Domestic Marketing

Focus only on customers in home country; ex: concrete suppliers

International Marketing

exporting products to one or more countries outside the domestic market and remaining invested solely in the domestic country. Little or no investment outside home country. Joint ventures. Ex: BMW international supplier

Global Marketing

selling or licensing products for sale across the world. Offer the possibility of adapting services and product characteristics to local markets.

Global Risks

competitive, economic, legal, political

Market Entry strategies

Export: selling products produced in the company’s home country, often with little modification. (low risk, low return)

License: company in foreign country buys right to make and produce product/brand. Original company receives royalties. (medlow risk, med low return)

Joint Venture: company in foreign country joins with original company to create a local business, share joint ownership and control. (med risk, med return)

Direct Investment: Develop foreign-based manufacturing or assembly facilities. (high risk, high return)

Fraud Triangle

opportunity, pressure, rationalization

Marketing myths

#1: Marketers push products consumers don't want to buy. #2: Consumers are no match for the power of marketing (social media, service reviews, consumer power). #3 Marketing is deceptive and not truthful or honest (most firms know truth in advertising is important to build trust). ``` #4 Marketers believe in planned obsolescence. (backlash from consumer groups, risk of global competitors that offer longer lasting/higher quality products). ```

Social Responsibility

Organizations are a part of a larger society and are accountable to that society for their actions.

Ethics

moral principles and values that govern the actions and decisions of an individual or group.

Sustainability

Organizations will focus on the world’s social problems and view them as opportunities to build profits and help the world.

Green Marketing

The development and marketing of products designed to minimize negative effects on the environment.

Consumer behavior

Process customer uses to purchase, use and dispose of products. Remember.... 1) person variability 2) situation variability

Market

PEOPLE. Individuals with needs/wants & ability/authority to purchase. B2C, B2B.

Decision Process

1) Problem recognition >perceive need (discrepancy between actual and desired state) 2) Information search >seek value (internal vs external) 3) Evaluation of alternatives >asses value (routine, limited, extensive) 4) Purchase >buying value 5) Post product evaluation >consume, experience, use, and evaluate value

Habitual Buying Disruptions

1) technology--> rethink old products 2) sampling--> ex. costco, let them try your product to break the habitual products 3) advertising-->peripheral route, no logic/little thinking, good feelings towards a brand or product

Factors Influencing Consumer Behavior

Cultural Social Psychological Individual

Buying Process

= marketing mix + buying situation + factors influencing behavior

Buying Center

``` Initiators Influencers Deciders Buyers Users Gatekeepers ```

Multi-attribute Attitude Model

(Ao )attitude toward the brand = sum of [ belief strength that the brand can deliver on a particular attribute x evaluation of importance assigned to a particular attribute ]

Psychological

perception (selective attention: what to let in, distortion: support beliefs, retention: what to keep in) motivation (hierarchy of needs) learning (information/experience) beliefs/attitudes

Individual

Gender, age, family life-cycle

Social

family, reference groups, opinion leaders (famous people)

Cultural

culture (broadest, deepest influence), sub-culture (mormon), social class

Initiators

suggest purchasing a product or service (KIDS 62%)

Influencers

affect the outcome decision with their opinions (KIDS 62%)

Deciders

have the final decision to buy

Buyers

purchaser

Users

ones who use the product or service

Gatekeepers

control the flow of information (Purchasing agents, administrative assistants, and secretaries )