Midterm Flashcards
What is marketing
is the activity, set of
institutions, and processes for creating, capturing, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at
large.”
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What does this definition really mean? Good marketing is not a random activity; it requires thoughtful planning with an emphasis on the ethical implications of
any of those decisions on society in general. Firms
Marketing Plan
is a written
document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms
of the four Ps, action programs, and projected or pro-forma income (and other financial) statements.
The three major phases of the marketing plan are planning,
implementation, and control.
Idea of exchange in marketing
—the trade of things of
value between the buyer and the seller so that each is
better off as a result.
Marketing Mix/ the 4 P’s
Product, Price, Place, Promotion
The four Ps are the controllable
set of decisions/ activities that the firm uses to respond to the wants of its target
markets. But what does each of these activities in the marketing mix entail?
Product (4p’s)
Creating value with the product
- by creating a variety of options (ice cream example)
- creating abetter product
Price (4p’s)
is about capturing value
everyting the cutstomer is willing to give up to get the product (time/money/energy etc)
Place(4p’s)
Delivering the value proposition
all the activities necessary to get the product to the right customer when that customer
wants it.
Promotion(4’p’s)
Communicating the value to the customer
Production oriented era
Around the turn of the twentieth century, most firms
were production oriented and believed that a good product would sell itself.
Henry Ford, the founder of Ford Motor Co., once famously remarked, “Customers
can have any color they want so long as it’s black.”
concerned with product innovation, not with satisfying the needs of individual consumers,
Sales oriented era
the ability to produce outgrew the ability to need or want to consume (great depression and technology in manufacturing) you now had to sell to customers to get them to buy your product
Market oriented era
buyers’
market—the customer became king! When consumers again had choices, they were
able to make purchasing decisions on the basis of factors such as quality, convenience, and price. Manufacturers and retailers thus began to focus on what consumers wanted and needed before they designed, made, or attempted to sell their
products and services. It was during this period that firms discovered marketing.
Value based marketing era
(modern era) giving greater value to their customers then their competitors did not just finding out what they needed or wanted and giving it to them
Value
The benefit to the cost what a customer is willing to give up to get the product
relational marketing
Think of you customers in terms of their relationship to the firm
Supply chain/ marketing channel
there is marketing along the whole way each company has to market to the ones down the supply chain
Marketing Strategy
identifies (1) a firm’s target market(s), (2) a related marketing
mix—its four Ps—and (3) the bases on which the firm plans to build a sustainable
competitive advantage.
Sustainable competitive advantage
A competitive advantage that a company can maintain over the long term with out being copied
Acts as a wall around the company
4 macro strategies to sustainable competitive advantage
• Customer excellence: Focuses on retaining loyal customers and excellent
customer service.
• Operational excellence: Achieved through efficient operations and excellent
supply chain and human resource management.
• Product excellence: Having products with high perceived value and effective
branding and positioning.
• Locational excellence: Having a good physical location and Internet presence.
Planning Phase of markteting plan
define
the mission and/or vision of the business. For the second step, they evaluate the
situation by assessing how various players, both in and outside the organization,
affect the firm’s potential for success (SWOT)
Implementation Phase of Marketing Plan
marketing managers identify and evaluate different opportunities by engaging in a process
known as segmentation, targeting, and positioning (STP) (Step 3). They then are responsible for implementing the marketing mix using the four Ps (Step 4).
Determine allocation of resources
Control Phase of Marketing Plan
entails evaluating the performance of the marketing strategy using
marketing metrics and taking any necessary corrective actions (Step 5).
SWOT
In addition, it should assess the opportunities and uncertainties of the marketplace due to changes in C ultural, D emographic, S ocial,
T echnological, E conomic, and P olitical forces (CDSTEP).
STP
Segmentation -dividing up the market in to different segments
Targeting - choosing which segment you would like to persue
Positioning - determine how you would like to be positioned in those markets (defining the marketing mix for your segment)
Types of metrics
Performance Objective Metrics- using metrics like sales and profits compare the companies performance overtime or to other companies
Financial Performance Metrics
Portfolio analysis
Portfolio analysis
In portfolio analysis, management evaluates the firm’s various
products and businesses—its “portfolio”—and allocates resources according to
which products are expected to be the most profitable for the firm in the future.
Portfolio analysis is typically performed at the strategic business unit (SBU) or
product line level of the firm,
Boston Consulting Group Matrics
Stars, Dogs, Cash Cows, Question Marks (compares market share and market growth rate)
Growth Strategies
Market Penetration
Product Development
Market Development
Diversification
Market Penetration Strategy
employs the existing
marketing mix and focuses the firm’s efforts on existing
customers. Such a growth strategy might be achieved by
attracting new consumers to the firm’s current target
market or encouraging current customers to patronize
the firm more often or buy more merchandise on each
visit.
Market Development Strategy
strategy employs the existing marketing offering to reach
new market segments, whether domestic or international.
Product Development Strategy
offers a new
product or service to a firm’s current target market.
Diversification Strategy
, the last of the growth strategies from Exhibit 2.7, introduces a new product or service to a market segment that currently is not served.
Can be related or unrelated diversification
Ethical Decision Making Framework
Identify issues-> Gather informantion and identify stakeholders->Brainstorm and evaluate alternatives->Choose course of action
Tests for ethical Decision making
Publicity Test
Moral Mentor Test - would someone I admire do this
Admired Observer Test- would I them to see me do this
Transparency Test - could I explain why I did this (honestly)
Person in the mirror test - would I respect myself for this
Golden rule test- do onto others rule
Key CSR stakeholders
Employees
Customers
Society
Market Place
Marketing Environment Framework (factors that influence the marketing environment)
shows what impacts the customer the most (immediate environment first starting with the company and how they satisfy the customers needs)
Customers at the center
Surrounded by Immediate environment(Competition, Corporate Parteners, Company)
Surrounded By the MacroEnvironment(Culture, Political, legal, social, economic, etc)
The Immediate Environment
The companies capabilities and core competencies
The competitors
Corporate Parterners
Macroenvironmental factors
CDSTEP
Generational Cohorts
Baby Boomers (people born after World War II, 1946–1964) and Generation Yers (people born between 1977 and 2000) both gravitate toward products and services that foster a casual lifestyle; however, they tend to do so for different reasons. The aging Baby Boomers, who grew up with jeans and khakis and brought casual dressing into the business arena, are often trying to maintain their youth. Yers, in contrast, typically wear jeans for status.
Generation Z
“Digital Natives”
Grew up with technology so deep understanging of it
Gen Y
“millennials”
Children of the Baby Boomers,
this group is the biggest cohort since the original postwar
World War II boom. It also varies the most in age, ranging
from teenagers to adults who have their own families.
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Now that Gen Y is entering the workplace, it is becoming apparent that its members have different expectations and requirements than those of other cohorts.
Gen Y puts a strong emphasis on balancing work and
life—these young adults want a good job, but they also
want to live in a location that supports their lifestyle.
They also consider marriage secondary, and not obviously necessary, to being
good parents themselves.
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Gen X
First generation that grew up with both parent working
Although fewer in number than Generation Y or Baby Boomers,
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Gen Xers possess considerable spending power because they tend to get married later and buy
houses later in life. They’re much less interested in shopping than their parents
andfar more cynical, which tends to make them astute consumers.
convenience and tend to be less likely to believe advertising claims or what salespeople tell them. Because of their experience as children of working parents, who had little time to shop, Xers developed shopping savvy at an early age and knew how to make shopping decisions by the time they were teenagers. As a result, they grew more
knowledgeable about products and more risk averse than other generational cohorts.
Baby Boomers
largest population of 50-plus consumers the United
States has ever seen. Although the Baby Boomer generation spans 18 years, experts
agree that its members share several traits that set them apart from those born before
World War II. First, they are individualistic. Second, leisure time represents a high
priority for them. Third, they believe that they will always be able to take care of themselves, partly evinced by their feeling of economic security, even though they are a
little careless about the way they spend their money. Fourth, they have an obsession
with maintaining their youth. Fifth and finally, they will always love rock ’n roll.
Social Trends in America
American society has become a consumer society, and yet the economic impacts of a recession and housing crash have prompted many people to embrace the idea of spending less as a virtuous pursuit.
health concerns increasing
Going Green
Privacy concerns
Time Poor society
The Consumer Decision Process
Need Recognition->Information Search->Alternative Evaluation->Purchase-> Post Purchase
Functional Needs
Pertains to the performance of the product shoes for protecting feet
Psychological Needs
pertains to the personal gratification the product gives you heels for feeling good about the way you look
Internal Search for information
the
buyer examines his or her own memory and knowledge about the product or
service, gathered through past experiences.
External Search for information
the
buyer seeks information outside his or her personal knowledge base to help
make the buying decision.
Locus of control on information gathering
If a person has an external locus of control they are likely to do less research because they feel that they can’t affect the outcome of their decision
Internal locus of control would tend to have more of an information search
Five types of risk associated with purchase decisions
can that delay or discourage a purchase:
Performance-the risk of buying a product that doesn’t work
Financial- is risk associated with a monetary outlay and includes the
initial cost of the purchase, as well as the costs of using the item or service.
Social- the risk of how others might perceive their purchase
Physiological- Safety risk with the purchase
Psychological-is risk associated with a monetary outlay and includes the
initial cost of the purchase, as well as the costs of using the item or service.
Attribute Sets
Universal- all possible options
Retrieval-ones you think of
Evoked- all the alternatives you would consider when makeing a purchase decision
Determinate Attributes
The attributes a consumer uses to consider purchase decisions that are important to the buyer
Consumer decision rules
are the set of criteria that
consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives. These rules are typically either compensatory or
noncompensatory.
Compensatory decision rules
assumes that the consumer, when
evaluating alternatives, trades off one characteristic against another, such that
good characteristics compensate for bad characteristics.
noncompensatory decision rules
in which they choose a product or service on the basis of one characteristic or one subset of a characteristic, regardless of the values of its other
attributes.
Multi-Attribute model
Assigning characteristis of products weights and ranks and making decisions based on the weights and ranks of each characteristic (cheerio example)
Three possible post-purchase outcomes
Customer Satisfaction-
Post-Purchase cognitive dissonance- is an
internal conflict that arises from an inconsistency between two beliefs, or between
beliefs and behavior. For example, you might have buyer’s remorse after purchasing an expensive TV because you question after all whether a high-price TV is
appreciably better quality than a similar size TV at a lower price
Customer Loyalty-
Things that affect the consumer decision process (4)
marketing mix
social factors
situational factors
psychological factors
Maslow’s hierarchy
- self actualization
- *esteem- confidence/ respect
- **love
- ***Safety
- **Physiological- food water shelter
components of an attitude
cognigive- what we believe to be true
affective- emotions or what we feel about the issue at hand
behavioral-the actions we take based on what we know and feel
Reference Groups
is one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors.
Situational Factors
Purchase Situation - where an what they usually shop for
Shopping Situation -factors about what the store might be like (promotions, crowding, lines, etc)
Temporal State - state of mind of the consumer
Involvement
Is the consumers degree of interest in the product or service
Extended Problem Solving
putting a lot of time and effort into making a purchase decision
Limited Problem solving
putting a moderate amount of time and effort into a purchase decision (relies more on past experience)
Impulse buying
a buying decision made by customers on the spot when they see the merchandise.
Derived Demand
the link between consumers demand for a product and the demand that reflects on suppliers for necessary inputs
B2B market types
Resellers/wholesalers/distributors
Manufacturers/Service providers
Institutions
Government
B2B Buying Process
Need Recognition-> Product specification-> RFP process-> Proposal analysis and supplier selection-> Order specification->Vendor performance assessment using metrics
Buying Center
The people responsible for making buying decisions within a company
Buying Center ROles
Initiator- person that suggest buying a particular product or service
Influencer-people who influence others views in the buying center
decider-person that ultimately makes the decision
buyer- person that actually handles the purchase
user- person that consumes or uses the product
gatekeeper- person that controls information or access to decision makers and influencers
Organizational culture/ Buying Culture types (4)
autocratic- one person makes decision
Democratic- majority rules
consensus - reaching a collective agreement
consultative- one decision maker that consults with the others
Economic analysis using metrics
general economic enviromnet
market size and population growth
real income
Infrastructure and technology analysis
transportation
channels
communication
commerce
sociocultural analysis
power distance uncertainty avoidance individualism masculiinity time orientation
Government actions analysis
tarrifs
quotas
exchange control
trade agreement
PPP
Purchasing power parity
a theory that states that if the exchange rates of two countries
are in equilibrium, a product purchased in one will cost the same in the other, if
expressed in the same currency.
Exchange Control
refers to the regulation of a country’s currency
.
Trad agreements
EU NAFTA etc
BRIC
Brasil Russia India China (growing powerful countries)
Global entry strategies
(in order)
Export - Low control low risk
Franchising
Strategic alliance
joint venture (required in some places for entry)
direct investment (high control high risk)
Reverse Innovation
companies initially develop products for niche or underdeveloped markets, and then expand them into their original or home markets.
Glocalization
, some firms also standardize their products globally
but use different promotional campaigns to sell them.
STP Process
Segmentation{
define strategy and objectives->
pick segmentation methods->
}
Targeting{
Evaluate segment attractiveness
select target market
}
Positioning{
Identify and develop positioning strategy
}Psychographic Segmentation
one that delves into how consumers actually describe themselves. Usually marketers determine (through
demographics, buying patterns, or usage) into which segment an individual consumer falls. Psychographics studies how people self-select, as it were, based on the characteristics of how they choose to occupy their time (behavior) and what underlying psychological reasons determine those choices.
Benefit Segmentation
Benefit segmentation groups consumers on the basis of
the benefits they derive from products or services. Because marketing is all about
satisfying consumers’ needs and wants, dividing the market into segments whose
needs and wants are best satisfied by the pro d uct benefits can be a very powerful
tool.
Behavorial Segmentation
divides customers into groups on the basis of how they
use the product or service. Some common
Occasion Segmentation
Behavioral segmentation based on when a
product or service is purchased or consumed
Geographic segmentation
uses a combination of geographic, demographic, and
lifestyle characteristics to classify consumers.
Evaluating Segment Attractiveness
Idnetifiable Substantial Reachable Responsive (reacting similarly and positivly to firms offering) Profitable
Differentiated targeting strategy vs un differentiated
Differentiated (makes different offering to multiple market segments
Undifferentiated (everyone is considered a user not used much except for things like basic comodities salt and sugar
Concentrated Marketing
When an organization selects a single, primary
target market and focuses all its energies on providing a product to fit that market’s
needs, it is using a concentrated targeting strategy
Micro Marketing
a firm tailors a product or service to suit an individual
customer’s wants or needs, it is undertaking an extreme form of
segmentation called micromarketing or one-to-one marketing (personalized belt)
Value Proposition
communicates the customer benefits to be received from
a product or service and thereby provides reasons for wanting to purchase it.
Perceptual map
A chart or map that positions a product based on characterists that a consumer percieves with 2 or more dimensions
and you can include ideal points on the map where product would like to be for key market segments
Marketing Research Process
Define research and objective needs-> Design the research-> Data Collection Process-> Analyze data and develop insight-> Action Plan and Implementation
Syndicated Data
Purchased secondary data
Survey Research Structured vs Unstructured
Structured ex(rate on a scale of one to 10) unstructured (open ended "tell us about your experience with this product")
Scanner research
Data collect though transactions ex the scanner at the grocery store
