Principles of marketing Flashcards
Define marketing in simple terms
Promoting and selling products or services, including market research and advertising.
What is the goal of marketing
- Focus on customer and changing needs.
- Goal is long term customer satisfaction.
What is customer orientated marketing?
Corporate activities focus on customer needs.
What is integrated effort marketing?
All staff accept responsibility for creating customer satisfaction.
What is goal achievement marketing?
Corporate goals achieved through customer satisfaction.
What is the difference between market focus and internal focus?
Market: customer wants
Efficiency: Doing things well
Effectiveness: Doing the right things (operating in attractive markets)
Define customer value
Consumers overall assessment of the utility of the product.
Define perceived value
Perceived benefits minus perceived sacrifices.
(Get - give)
What are the 4 main P’s of the marketing mix?
Promotion
Product
Place
Price
Define marketing environment
Actors and forces that affect a company’s capability to operate effectively in providing products and services to its customers.
Define microenvironment
Actors in firm’s immediate environment - firm has influence over these
Define macroenvironment
Actors outside firm’s immediate environment - firm has little control over these
What is PEEST
Factors in macroenvironment
Political, ecological, economic, social, technological.
Define environmental scanning
Monitoring and analyzing the marketing environment of a company,
How do companies respond to environmental change?
Change -> ignorance to change -> delay -> gradual strategic repositioning/retrenchment/radical strategic repositioning
Define retrenchment
Reduction of spending/costs in response to environmental change
What needs to be understood about consumers?
- Who is important
- How do they buy
- What criteria
- When do they buy
- Where do they buy
What is the Fishbein-Ajzen model?
Theory of reasoned action
Personal beliefs and normative beliefs come together to form purchase intentions and then a purchase.
Who takes part in the buying process?
initiator -> influencer -> decider -> buyer -> user
What is the consumer decision making process?
1) Inhibitors (needs stimulation).
2) Recognition/problem awareness:
- Importance - Difference between current and desired situ.
3) Info search:
Internal - Own mind
External - Other sources
4) Evaluation of alternatives & the purchase.
5) Post purchase evaluation:
- expectations compared to perceived performance.
- Cognitive dissonance: uncertainty about making the right decision.
What is the theory of planned behaviours?
Behavioral, normative and control beliefs come together to form an intention and then behaviour.
What is the Ehrenberg and Goodhart model?
For low involvement purchases:
Awareness -> trial -> repeat purchase
What is market segmentation?
Dividing market into groups of customers with similar requirements
What is a disaggregated market?
Characteristics of ind. customers understood
What is a segmented market?
Customers are grouped into similar characteristics
What is a target market?
Designed for target market
What are the 3 parts of consumer segmentation?
Behavioral
Psychographic
Profile
What is meant by behavioural segmentation?
Based on actions in market place.
- Benefits: why they need it
- Purchase behaviour: innovators, brand loyalty
- Purchase occasion: emergency, gift etc
- Usage: heavy, light, non users
- Perceptions/beliefs/values
What is meant by psychographic segmentation?
Based on interests and lifestyle
- Lifestyle
- Personality: reflect on their self expressions
What is meant by profile segmentation?
Detailed description of the market segment across a range of factors and measures:
- Demographic
- Socioeconomic
- Geographic
What are the steps of segmenting?
1) Segmentation
2) Targeting (evaluate and decide which segment to go after)
3) Positioning (Design a good service)
Targeting depends on evaluating market attractiveness and company’s capability to compete in segment.
What are the 4 targeting strategy’s?
Undifferentiated - whole market targeted
Concentrated - e.g. Ferrari
Differentiated - e.g. hotels
Customised - e.g. tailoring
Define mass customisation
Modify a basic service/good to meet the needs of an individual.
Steps of positioning
Determine brand position in market:
1) Identify competitors
2) Identify how consumer chooses between brands (qualitative)
3) Quantitative market research
4) Plot onto map
What is an industrial market?
Producer buy to help them manufacture goods e.g. raw materials
What is a reseller market?
Companies buy products and services to resell e.g. retailers
What are government and institutional markets?
Government agencies and organisations buy goods and services to carry out activities e.g. schools, hospitals
What are the characteristics of B2B purchases?
- Nature & size of customers
- Complexity of buying
- Economic & technical criteria
- Risks & uncertainty
- Buying to specific requirements
Who makes the buying decisions?
DMU (decision making unit) or buying centre
Initiator -> gatekeeper (intercepts sales expert before they speak to company leader) -> influencer -> buyer -> user -> decider
What is the buying process?
1) Problem recognition
2) Determine specification & quantity
3) Search for sources
4) Analyse proposals
5) Evaluate proposals & suppliers
6) Select order routine
7) Performance feedback & evaluation
What are the 3 types of buy class?
- Straight rebuy: same goods, same terms
- Modified rebuy: terms change
- New task: buying for first time
What are the 3 product types?
- Product constituents (all components or products)
- Product facilities (facilities)
- MROs (maintenance repair & operations)
What is CCCV
Customer co-creation of value
How to build value through the customers. Need to know how they co-create (knowledge, skills etc) and why they want to co-create (passion, trust etc)
How can B2B create value via relationships
- Info sharing to aid supplier learning (market demand, competitors)
- Supplier development (up product quality)
- Strategic knowledge sharing (joint projects)
What are the 2 conditions to building and managing customer relationships?
- Mutually rewarding for 2+ parties
- Commit to relationship over time and need to adapt own behaviour to maintain continuity
What are the benefits of CCCV to an organisation?
- Increase purchases
- Decrease costs
- Lifetime customer value
- Word of mouth
- Sustainable comp adv
- Employee satisfaction & retention
What are the benefits of CCCV to a customer?
- Decrease risk & stress
- Improve quality of service
- Avoidance of cost switching
- Social and status benefits
What are the 6 parts of customer retention?
- Bonding
- Internal marketing (keep employees happy)
- Trust building
- Service recovery
- Promise fulfilment
- Targeting customers for retention
What are the 3 levels to customer retention via bonding?
Lvl 1 - financial incentives
Lvl 2 - Social bonds
Lvl 3 - Structural bonds
Define corporate strategic planning?
Aims to provide direction to meet high level corporate objectives.
What are the 4 stages of market planning?
1) Where are we now
2) Where do we want to be
3) How do we get there
4) Are we on course
What are the 3 ways of knowing where your business currently stands?
1) Business mission - statement distinguishing business
2) Marketing audit - examining business market environment, objectives, strats & activities. Internal or external.
3) Swot analysis - internal :(strengths and weakness)
external: (opportunities and threats)
How do you figure out where you want your business to be?
Strategic thrust objectives: which markets for spec products
Market penetration
Product development: better product 4 more sales
Strategic objectives: build, holds, harvest, divest
How do you gain a competitive advantage?
Differentiation and cost leadership
How do you evaluate results of a marketing plan?
Short term - plot results against objectives
Long term - does plan line up with capabilities + environment
What are the triggers for global expansion?
Find opportunities:
-Saturated domestic markets
- Small domestic markets
- Low growth domestic markets
- Customer drivers
- Cost factors
- Competitive forces
- Portfolio balance
How to select a foreign marekt
Macroenvironment (economic, sociocultural, political-legal) and microenvironment (market attractiveness, company capability profile) -> foreign market selection.
How do you enter a new market?
- Exporting:
Indirect: domestic based export agents Direct: Foreign based agents - Cooperative: licensing, joint ventures
- Direct investment: new facilities, acquisitions
What is a standardised system?
Undifferentiated
Where you can, stay local
What are the 3 parts of sustainable marketing?
1) Environmental - highlights sustainability.
2) Social - need for change in society.
3) Economic - focuses on strong economic performance.
Define ethics
Moral principles & values that govern actions of an individual or group.
Difference between ethics and laws?
Laws are enforceable principles.
What are the 2 societal issues?
Materialism: overemphasise material possessions - say status depends on material possessions.
Short-termism: immediate consumers interest > society long term interest
What are the ethical issues with marketing and the environment?
- Consumers wants vs environment.
- Sustainable resources
- Efficient manufacture of goods
What are the ethical issues with marketing and the political side?
- Globalisation: companies exert power in host countries
(Power is concerning)
What is a marketing information system?
Info gathered/stored/analysed & distributed to managers.
What is internal continuous data?
- Financial data
- With sales force mgmt
Ongoing data
What is internal adhoc data?
Adhoc - when necessary
What is environmental scanning
- PEEST (Political Economic Environmental Social and Technological)
- Longer term view
What is research planning (steps of market research no.1)
-Initial contact (problem)
-Research brief (what, why, who)
-Research proposal (promise to do)
What is exploratory research (steps of market research no.2)
Sources:
Ethnography
Focus group
Experts
- Sin of omission (Not enough detail)
- Sin of admission (Irrelevant info, too much)
What is main data collection (steps of market research no.3)
Approach, methods, design
What are steps 4 & 5 of market research?
4) Data analysis & interpretation
5) Report writing & presentation
What is the sampling process?
Define pop ->
Search for sampling frame ->
Specify sampling method & determine sampling size ->
Select sample
What are the 3 conditions for data collection?
Respondents must:
1) Understand question
2) Be able to provide info
3) Be willing to answer
How do you develop a questionnaire?
1) Define problem
2) Info required
3) Design (order of Q’s, topics, layout, coding)
4) Pilot testing
5) Final Q
How do you write a report & presentation?
-Title page
-Contents
-Preface (outline)
-Conclusion summary
-Method
-Findings
Conclusions
-Appendices
-Previous related research
