Midterm 1 Flashcards
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)
“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!)
Brand Champions/Love Group
Customers who love the firm’s products and then advocate or champion the products to others
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)
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
Marketing creates VALUE by…
meeting functional and emotional needs. (Value = benefits-costs)
Corporate strategy
What businesses should we be in?
Business strategy
How do we compete effectively in our chosen business?
Marketing Strategy
how do we design a marketing mix that will attract/reach our target market?
SWOT
Internal: play to strengths, moderate weaknesses; External: exploit opportunities, minimize threats
External Environment
controllable: marketing mix
uncontrollable: social, economic, regulatory, competitive, technological
Porter’s 5 Forces
substitutes, entrants, power of buyer, power of supplier, competitive rivalry
Gross Income
total money received by an entity before taxes
Disposable Income
money after taxes used for necessities
Discretionary Income
money after taxes and necessities used for luxury products and services
Standardization
Standard product, All markets= production/cost efficiency
Customization
Custom product, Select markets=market suitability
Glocalization
Standard platform adapted to local requirements.
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.
#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 orservice (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 )
