MKTG 2201 Flashcards
What is marketing?
marketers figure out what customers want,
Maslow’s hierarchy of needs
physiological needs, safety needs, belongingness and love, esteem needs, self-actualization
physiological needs
food, water, warmth, rest
Safety needs
security, safety
Belongingness and Love
intimate relationships, friends
esteem needs
prestige and feeling of accomplishment
self-actualization
achieiving ones full potential, including creative activities
wants are..
needs shaped by culture, individual personality and preference
demands are..
wants backed by buying power (financial resources)— if a customer demands a product it means they are ready to buy it
Equation for value…
Value/utility= benefit- price
value is
differnce between the price you are willing to pay and the price you actually pay (Value/surplus= WTP-price)
market offering
combination of products, services, information, and experiences offered to a market to satisfy a need or a want
utlitarian product
purely functional, necessary, and practical (ex plain bar of soap)
hedonic products
for pleasure, fun, excitement (ex. perfum/sports cars)
misson statment
statement of the organizations purpose
product-oriented missions
in terms of product or technology
market oriented missions
satisfying basic customer needs (ex. amazon)
strategic planning steps
defining mission–> setting company objectives/goals–> desiging the business portfolio–>planning marketing and other functional strategies
business portfolio
collection of busineses and products that make up the company
market
abstractly refers to a group of customers who may potentially pay for your product/offering
total market
maximum prodcut demand in a given market
available/served market
customers with interest and access to the product
target market
customers the company intends to pursue
penetrated market
companies current customers
4 ps of marketing
product, price, promotion, place
4Ps w/ 4 As
product=acceptability, price=affordability, place= accessibility, promotion= awareness
microenvironment
consists of the actors close to the company that affect its ability to serve its customers (company, suppliers, marketing intermediaries, customers, competitors, and publics)
public (microenvironment)
any group with a actual or potential interest in the company or an actual or potential impact on it (general, local, internal, government, citizen action)
Marketing intermediaries (Microenvironment)
help the company to promote, sell, and distribute its products to final buyers (financial intermediaries, resellers, physical distribution)
Competitors
gain strategic advantage by positioning products strongly against competitors
value delivery network (Microenvironment)
the company, its suppliers, its distributors, and its customers
Macroenvironment
forces that a company cannot control, companies must anticipate and adapt to changes, larger societal forces that affect the macroenvironment
Political Environment (Macroenvironment)
legal and regulatory forces that influence or limit various organizations and individuals in a society
Natural Environment (Macroenvironment)
involves the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activites
cultural environment (Macroenvironment)
persistance of cultural values, core beliefs and values have a high degree of persistence– secondary beliefs and values are more open to change
consumer behavior
refers to the processes we use to select, purchase, use and dispose of goods, services, ideas, or the experiences used to satisfy our needs/desires
search good
product or service that is easy to evaluate before you buy
experience good
product or service that is hard to evaluate before you buy
customer search
consumers searching for products and information about these products before buying
simultaneous search
first makes a list of all the relevant options and then selecting one option
sequential search
discover options, one after another, at some point the purchase is made and the search stops
simultaneous vs sequential
all kinds of search processes have both elements, buying a car is simulaneous whereas house hunting is sequnetial
when to stop searching
cost outweighs benefits
sticky choice
consumer tends to buy same brand/product repeatedly before switching, harder to acquire consumers than to keep them
why is sticky choice important for marketing?
helps marketers design solutions to prevent customers from switching to a competitor and acquire customers
forward looking behavior
when consumers make decsions based on the impact on their pockets or happiness in the future
compromise effect
tendency for consumers to prefer middle options
decoy effect
tendency for consumers to prefer options that are easily seen to dominate some other option
conditions to search more
if there are many products with lots of different qualities/a lot of differentiation
if people are likely to find bad news
they search more
if they are likely to find good news
encourage searching/search more
customer heterogeneity
consumers are different (ex age, gender, education level, income)
market segmentation
thus a group of consumers who respond in a similar way to given marketing efforts, groups are called segments
Geographic segmentation
Dividing a market into different geographical units
Demographic segmentation
Dividing a market into segments based on easily observable, individual-level variables
Psychographic segmentation
Dividing a market based on social class, lifestyle, and personality characteristics
Behavioral segmentation
Using consumer behavior (rather than specific characteristics) to distinguish consumer segments
usage segmentation
how often they use the product (light, medium, heavy product users)
user status segment
non-users, ex-users, potential users,
first-time users, regular users.
Loyalty status segmentation:
completely, somewhat, less loyal
criteria for effective segment
Measurable: The size, purchasing power, and profiles of the
segments can be measured.
* Accessible: The market segments can be effectively reached and
served.
* Substantial: The market segments are large or profitable enough
to serve.
* Differentiable: The segments are conceptually distinguishable
and respond differently to different marketing mix elements and
programs.
* Actionable: Effective programs can be designed for attracting and
serving the segments. Segments are not actionable because:
* The company has limited resources.
* The segments are not responsive to the company’s marketing efforts.
positioning
a company or product has a strong position in the market when customers can easily identify why their value proposition is better than others
More for more
providing the most
upscale product or service and
charging a higher price to cover the
higher cost
more for the same
A company can
attack a competitor’s value proposition
by positioning its brand as offering
more for the same price.
more for less
Many companies
claim to do this. And, in the short run,
some companies can actually achieve
such lofty positions.
same for less
Offering the same
for less can be a powerful value
proposition—everyone likes a good
deal.
less for much less
In many cases,
consumers will gladly settle for less than-optimal performance or give up
some of the bells and whistles in
exchange for a lower price.
choosing a position
customer, competition, company
Differentiation
more precisely refers to what makes the product
stand out from other products on the market
positioning
more precisely refers to the product’s location on the
attribute space.
targeting
evaluating each market segments attractiveness and selecting one or more target segments to serve
target segment
group of customers who the company intends to pursue
types of targeting strategies (from broad to narrow)
undifferentiated, differentiated, concentrated, micromarketing
Undifferentiated (mass marketing)
focuses on what is common with consumer needs
Differentiated (segmented)
targets several market segments and designs separate marketing mixes for each other
concentrated (niche marketing)
instead of going after a small share of a large market, a firm goes after a larger share of one or a few smaller segments in the market
micromarketing
method of marketing consists of tailoring products and marketing programs to suit the tastes of specific individuals and locations
Individual marketing
tailoring products and marketing programs to the needs and preferences of individual customers
local marketing
tailoring to small geographic segments
undifferentiated (pros and cons)
Pro: low cost and low risk
Con: weak value proposition
Differentiated (pros and cons)
Pro: low risk and stronger value proposition than undifferentiated
Con: higher cost than undifferentiated
Concentrated (pros and cons)
Pro: efficient and high growth potential
choosing a targeting strategy
Company resources: few resources–> undifferentiated or concentrated
product/market variability: moderate to high product variability–> differnetiated, concentrated, or micro
competition: more competition–> differentiated, concentrated, or micro
segment profitability: fewer profitable segments= concentrated, the segments are less profitable–> undifferentiated
