Midterm Flashcards
Marketing
set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships
What is marketing used for
create value in products and services
Need vs Want
need is basic necessities while want is how to fulfill that need
Creating Value
Product: brand size quality features
Transacting Value
Price: list price discounts allowances costs
Communicating Value
Promotion: advertising sales promotion public relations direct marketing
Delivering Value
Place: marketing channels distribution intensity locations: retailers, online supply chain
Product-oriented companies
focus on developing and distributing innovative products with little concern about whether the products best satisfy customers’ needs
Sales-oriented companies
view marketing as a selling function where companies try to sell as may of their products as possible rather than focus on making products consumers really want
Market-oriented companies
start out by focusing on what consumers want and need before they design, make, or attempt to sell their products and services
Value-based companies
they focus on the triple bottom line: people, profits, and planet
what is a marketing strategy?
they identify:
a firm’s target market
a related marketing mix (the 4 P’s)
the bases upon which the firm plans to build a sustainable competitive advantage
*leads to sustainable competitive advantage
sustainable competitive advantage example
Nike: strong brand, tech, strong customer base, loyal customers
Customer Value (4)
customer excellence
operational excellence
locational excellence
product excellence
having one of these is not enough to be a successful company
Customer Excellence
retain loyal customers
provide excellent customer service
Operational Excellence
efficient operations + excellent supply chain management + strong supplier relations
Product Excellence
High perceived value + effective branding and positioning
Locational Excellence
LOCATION LOCATION LOCATION
Developing a marketing plan (5)
Steps:
business mission and objectives
situation analysis
identify opportunities
implement marketing mix
evaluate performance by using marketing metrics
Step 1 in developing a . marketing plan
Define the mission
mission statement: a broad description of a firm’s objectives and the scope of activities it plans to undertake
Step 2 in developing a marketing plan
conduct a situation analysis (using SWOT)
SWOT analysis
Internal:
Strengths
Weaknesses
External:
Opportunities
Threats
Step 3 in developing a marketing plan
identify and evaluate opportunities using STP (segmentation, targeting, positioning)
Step 4 in developing a marketing plan
implement marketing mix and allocate resources
Product and value creation (4 P’s)
firms attempt to develop products and services that customers perceive as valuable enough to buy
price and value for money (4 P’s)
marketers should base price on the value that the customer perceives
place and value delivery (4 P’s)
product must be readily accessible
when and where the customer wants it
promotion and value communication (4 P’s)
marketers communicate the value of their offering, or the value proposition, to their customers through a variety of media
step 5 in developing a marketing plan
evaluate performance by using marketing metrics
Boston Consulting Group Matrix
BCG stars question marks cash cows dogs
Stars
heavy investment to finance growth, improve CA, good for brand
high market growth rate
high relative market share
Question Marks
unsure of success, heavy investment to hold market share
turn into stars
high market growth rate
low relative market share
Cash Cows
less investment; generate lots of $$; used to support other SBUs
low market growth rate
high relative market share
Dogs
investment to maintain them - may breakeven
sometimes get ousted
low market growth rate
low relative market share
Growth strategies
Market Penetration:
current product
current market
Product Development:
new product
current market
Market Development:
current product
new market
Diversification:
new product
new market
Microenvironmental Factors
company
corporate partners
competition
Microenvironmental Factors - competition
indentify and analyze direct and indirect competitors
know strengths and weaknesses
CI (competitive intelligence)
Microenvironmental Factors - corporate partners
firms are part of alliances with suppliers, corporate partners, etc.
Macroenvironmental Factors
culture demographics social/natural technology economic political/legal
Macroenvironmental Factors - culture
broadly defined as the shared meanings, beliefs, morals, values, & customs of a group of people.
Macroenvironmental Factors - demographics
Demographics are the characteristics of human populations & segments, especially those used to identify consumer markets.
generational cohorts
A generational cohort is a group of people of the same generation, that have similar purchase behaviours because they have shared experiences & are in the same stage of life.
The five major groups are: tweens, Gen Y/millennials, Gen X, baby boomers & seniors.
Macroenvironmental Factors - income
Purchasing power is tied to income
Statistics Canada tracks income
Many middle class families feel the decline in purchasing power in recent years
education is related to income, which determines spending power
Macroenvironmental Factors - technology
Technology has impacted every aspect of marketing:
New products
New forms of communication
New retail channels
Macroenvironmental Factors - economic situation
Marketers monitor the general economic situation, both domestically and abroad because this affects the way consumers buy and spend money.
inflation, exchange rates, recessions
Macroenvironmental Factors - political/legal
Competition Act
Consumer Packaging
and Labelling Act
Food and Drugs Act
Access to Information Act
Patent Act
North American Free Trade Agreement (NAFTA)
Macroenvironmental Factors - Social
Shape consumer values
These trends change over time
Greener Consumers
Privacy Concerns
Time-Poor Society
Health and Wellness Concerns
Consumer Behaviour
Consumer should drive marketing strategies
Consumer behaviour must change in order for product concepts to be successful
Founding principle: listen & learn from your customers
Feedback = improve
the consumer decision process (5)
need recognition information search alternative evaluation purchase decision postpurchase
the consumer decision process - need recognition
Functional needs
Psychological needs
the consumer decision process - information search
Internal Search for Information
External Search for Information
perceived benefit vs perceived costs
actual or perceived risk
locus of control
internal locus of control
external locus of control
some control over outcomes = engage in more search activities
Fate, external factors control all outcomes = why bother?
the consumer decision process - alternative evaluation
evaluative criteria
determinante attributes
compensatory
decision heuristics: price, brand, product presentation
non-compensatory
the consumer decision process - purchase decision
customers are ready to buy
ritual consumption
a pattern of behaviours tied to life events that affect what and how we consume
the consumer decision process - postpurchase
three potential outcomes:
customer satisfaction
postpurchase dissonance
customer loyalty
factors influencing consumer buying decisions
** one of the midterm questions posted
Psychological factors: motives, attitudes, perceptions, learning, lifestyle
Social factors:
reference groups, culture
Situational factors:
purchase situation, shopping situation, temporal state
Psychological factors: Attitude
Your evaluation or feeling towards an object or idea
Learned & long-lasting but they can change abruptly
Affective vs. behavioural components
Psychological factors: Perception
Culture, tradition, and our overall upbringing determine our perceptual view of the world.
Psychological factors: Learning
affects both attitudes and perceptions
affected by social experiences
social factors: family
decision makers and influencers
social factors: reference groups
family, friends, co-workers, famous people
provide information, rewards, and self-image
social factors: culture
Shared meanings, beliefs, morals & customs
Your culture group can be your school, country, religion
Culture greatly influences consumer behaviour
Marketers must understand differences among countries
decision heuristics
mental shortcuts that help consumers narrow down choices
Business-to-Business Marketing
Buying & selling goods or services to be used:
in the production of other goods & services,
for consumption by the buying firm, or
for resale by wholesalers & retailers
B2B markets
resellers (purchase from manufacturer and resell)
manufacturers (create their own goods from raw materials)
government (all levels of government)
institutions (schools, museums, religious organizations)
challenges of reaching B2B clients
Identify decision makers in organization who authorize or influence purchases
Understand the buying process of each potential client
Identify factors that influence the buying process of potential clients
Difference between B2B & B2C markets - market characteristics
Demand for business products is derived
Fewer customers, more geographically concentrated & orders are larger
Demand is more inelastic
Difference between B2B & B2C markets - product characteristics
Products technical in nature, purchased based on specifications
Mainly raw & semi-finished goods
Heavy emphasis on delivery time, technical assistance, after sale service, financing
Difference between B2B & B2C markets - buying process characteristics
Buying decisions more complex
Competitive bidding, negotiated pricing, complex financial arrangements
Qualified, professional buyers - more formalised buying process
Buying criteria and objective specified
Multiple participants in purchase decisions
Reciprocal arrangements common
Close long-term relationships
Online buying common
Difference between B2B & B2C markets - marketing mix characteristics
Direct selling & physical distribution often essential
Advertising more technical, promotions emphasize personal selling
Price often negotiated, inelastic, affected by trade/quantity discounts
The B2B Buying Process
need recognition
product specification
RFP process
proposal analysis and supplier selection
vendor performance assessment using metrics
Stage 1: need recognition
Can be generated internally or externally
Sources for recognizing new needs:
Suppliers
Salespeople
Competitors
Stage 2: product specification
Suppliers use to develop proposals
Can be done collaboratively with suppliers
Stage 3: request for proposal (rfp) process
Buying organizations invite alternative suppliers to bid on supplying their required components or specifications
Stage 4: Proposal analysis & supplier selection
Often several vendors are negotiating against each other
Considerations other than price play a role in final selection
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Stage 6: vendor performance assessment using metrics
taking issues into consideration, giving them importance, and then evaluating
the buying center
The buying centre is the group of people typically responsible for the buying decisions in large organizations
influencer
decider
buyer
user
gatekeeper
initiator
organizational culture
democratic
autocratic
consultative
consensus
A firm’s organizational culture reflects the set of values, traditions & customs that guides its managers’ & employees behaviour.
buying situations
New buy:
Purchasing for the first time
Likely to be quite involved
The buying centre will probably use all six steps in the buying process
Straight Rebuy:
Buying additional units or products that have been previously purchased
Most B2B purchases fall into this category
Modified Rebuy:
Purchasing a similar product but changing specifications
Current vendors have an advantage
the segmentation-targeting-position process
strategy or objectives
segmentation
evaluate segment effectiveness
select target market
identify and develop positioning strategy
Step 1: establish overall strategy or objectives
Consistent with mission statement
Derived from mission & current state
Step 2: segmentation bases
Geographic: continent, country, region, province, city, etc.
Demographic: age, gender, income, education, etc.
Psychographic: lifestyle, personality/self concept, social class, etc.
Behavioural: benefits sought, usage, loyalty
geodemographic segmentation
how consumers describe themselves using a combination of geographic, demographic, and lifestyle characteristics to segment a market
geodemographic segmentation psyte clusters (3)
Urban Lower Middle (U4): Urban Bohemia rom body piercing to tattoos, Urban Bohemia includes a diverse population by design. A neighbourhood with a youthful skew, this cluster occupies itself in a variety of artistic, retail, and generally creative employment. Men and women employed in cultural, artistic, and entertainmentrelated jobs abound. Household maintainers under age 25, many with college degrees, are also 46,000
Suburban Affluent (S1): Suburban Affluence This cluster with a flair for fine living represents both old and new wealth. Because wealth accumulates throughout life stages, this cluster exhibits an older skew with many empty nests. Suburban Affluence indexes high on managerial and technical employment and are married with children 166,000
Suburban Affluent (S1): Asian HeightsAsian ancestries combined with hard work and growing wealth create and mould these upscale neighbourhoods. Asian Heights represents the affirmation of dreams cultivated through generations of immigrants and often through hardship. These families boost local economies as well as family prospects. Asian Heights indexes high on Chinese, Korean, and Japanese immigration as well as households of six or more persons. 96,000
step 3: evaluate segment attractiveness
identifiable: who is in their market?
reachable: know the product exists, understand what it can do, recognize how to buy
responsive: react positively to firm’s offering, move toward the firm’s products/services
substantial and profitable: size matters
step 4: select target market
based on completing a SWOT analysis
step 5: identify and develop positioning strategy
positioning methods:
value: relationship of price to quality
product attributes: focus on the attributes that are most important and varies by target market
benefits and symbolism: emphasizes the benefits of the brand as well as the psychological meaning of the brand to consumers
competition: position against a specific competitor
market leadership
repositioning
refers to a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences
Marketing Research
Consists of a set of techniques and principles for systematically collecting, recording, analyzing and interpreting data that can aid decision makers involved in marketing goods, services or ideas.
The Marketing Research Process
define research problem and objectives
design the research plan
collect data
analyze data and develop insights
present action plan
Step 1: Define the research problem & objectives
what information is needed to answer specific research questions?
how should that information be obtained?
Step 2: design the research plan
identify the type of data needed
determine type fo research necessary to collect the data
project objectives drive the type of data needed
Step 3: Collect data
secondary data: pieces of information that have been collected prior to the start of the focal project (internal or external)
primary data: data collected to address specific research needs (focus groups, interviews)
Step 4: analyze data & develop insights
converting data into information to explain, predict and/or evaluate a particular situation
Step 5: present action plan
PREPARE the results: Executive summary Body of the report (objectives, methodology, findings) Conclusions Supplemental tables/appendices
PRESENT the results: Short & to the point Interesting & appropriate to style of audience No technical jargon! Recommendations
secondary data
can be free or very inexpensive to obtain
external data: census data, trade journals, books, articles, etc.
internal data: from the company/firm itself
qualitative research
reliability
validity
sampling
methods: observation, social media, in-depth interviews, focus groups, projective techniques
quantitative research
information confirms early insights
uses surveys, formal studies, scanner and panel data
testing the prediction or hypothesis
experimental research
systematically manipulates one or more variables to determine which variable(s) have a causal effect
