Revision everything Flashcards
The marketing process: Creating and Capturing Customer Value
(Create value for customers and build customer relationships)
Understand the marketplace and customer needs and wants -> Design a customer value-driven marketing strategy -> Construct an integrated marketing program that delivers superior value -> Build profitable relationships and create customer delight ->
(Capture value from customers in return) Capture value from customers to create profits and customer equity
Customer needs - Maslow pyramid
Basic needs:
- Physiological needs: food, water, warmth, rest
- Safety needs: security, safety
Psychological needs:
- Belongingness and love needs: intimate relationships, friends
- Esteem needs: prestige and feeling of accomplishment
Self-fulfillment needs:
- Self-actualization: achieving one’s full potential, including creative activities
Understanding the marketplace
- Needs: basic human requirements (Maslow pyramid) e.g. deprivation: I’m hungry
- Wants: desires + culture + personality e.g. solution to fulfill the needs: I feel like caviar or sushi
- Demand: want + buying power e.g. power to buy the solution. student -> hotdog in cafeteria
- Market: number of people with the same demand. e.g. potential clients: how many students on campus
Marketing Management Orientations
- Production concept: What can we make easily?
- Product concept: What can we make that’s special
- Selling concept: What can we convince people to buy
- Marketing concept: What can we make that satisfies a need?
- Societal Marketing concept: What can we make that will make people like us?
4 factors affecting Consumer Behavior
- Cultural: Culture, Subculture, Social class
- Social: Groups and social networks, Family, Roles and status
- Personal: Age and life-cycle stage, Occupation, Economic situation, Lifestyle, Personality and self-concept
- Psychological: Motivation, Perception, Learning, Beliefs and attitudes
- > Buyers
The Buyer Decision Process - Purchase Path
- Need recognition: consumer recognizes a problem or need triggered by: Internal and External stimuli
- Information search: consumer is motivated to search for more information: Personal sources, Commercial sources, Public sources, Experiential sources.
- Evaluation of alternatives: consumer uses information to evaluate alternative brands in the choice set
- Purchase decision: buyer’s decision about which brand to purchase. not purchase intention
- Postpurchase behavior: consumers take further action after purchase, based on their satisfaction or dissatisfaction
Cognitive dissonance
buyer discomfort caused by post purchase conflict
the purchase intention
may not be the purchase decision due to attitudes of others or unexpected situational factors
Moments of Truth
any episode in which a customer comes into contact with any aspect of the organization and gets an impression of the quality of service
Perceived value - expectations = satisfaction level
1. Stimulus = Need recognition
2. ZMOT = information search
3. first MOT = evaluation of alternatives
4. second MOT + first MOT + ZMOT (becomes the next person’s ZMOT) -> Postpurchase behavior
Types of Buying Decision Behavior
- Involvement
- Differences between brands
High involvement - Significant differences: Complex buying behavior
high involvement - few differences: Dissonance Reducing buying behavior
low involvement - significant differences: variety-seeking buying behavior
low involvement - few differences: habitual buying behavior
Influence of product characteristics on rate of adoption
- Relative advantage
- Compatibility
- Complexity
- Divisibility
- Communicability
Strategic planning
the process of developing and maintaining a strategic fit
- between the organization’s goals and capabilities, and its changing marketing opportunities
Corporate Strategy
interlocks and aligns all aspects of a firm’s activities from the top downward including:
- choice of business activities/ how the company will grow / competitive strategy/ operations; strategy (functional: marketing,. production, finance, Human Resources, etc)
IN HOSPITALITY: hotel level for independent hotels, Chain level for multi-units hotel brands
Strategic Planning - 4 steps
Defining the company mission (broader company strategy must be customer focused) -> Setting company objectives and goals -> Designing the business portfolio -> Planning marketing and other functional strategies - guides marketing strategy and planning
Mission statement
statement of the organization’s purpose - what it wants to accomplish in the larger environment
- shaped by history and traditions
- management should avoid making a mission too narrow or too broad
- best when they are guided by a vision - almost impossible dream
- should stress major policies the company wants to honor
- provide a vision and direction for the next 10 YEARS
The business portfolio
the collection of businesses and products that make up the company
Portfolio analysis
major activity in strategic planning whereby management evaluates the products and businesses that make up the company
Growth-share matrix
- analyzing the current business portfolio
- portfolio-planning method
- evaluates a company’s SBUs in terms of market growth rate and relative market share
The BCG Growth-Share Matrix (Boston Matrix)
Star: high market growth rate, high relative market share
Question mark: high growth rate, low market share
Cash cow: low growth rate, high market share
Dog: low market growth, low market share
Ansoff Growth Strategy Matrix
markets vs. products and services
- Market Development: new markets, existing products
- Diversification: new markets, new products
- Product development: existing market, new products
How companies are organised
- Corporate = headquarters
- Division = expertise (B2B and B2C, research, information)
- Strategic business unit (SBU) = specialized in a certain business
- Brands = products/ services with the same customer promise
- Products/ services
Value chain
series of departments that carry out value-creating activities to design, produce, market, deliver and support a firm’s products
- internal
Value Delivery Network
- made up of the company, suppliers, distributors and customers who partner with each other
- improve performance of the entire system
- internal and external
Managing the Marketing Effort
Analysis
- > Planning (Develop strategic plans -> Develop marketing plans)
- > Implementation and Organization (Carry out the plans)
- > Control (Measure results -> Evaluate results -> Take corrective action)
Marketing strategy
marketing logic by which the company hopes to create customer value and achieve profitable customer relationships
Market segmentation
- division of a market into distinct groups of buyers
- who have different needs, characteristics or behaviors and who might require separate products or marketing mixes
Market segment
a group of consumers who respond in a similar way to a given set of marketing efforts
Market targeting
the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter
Market positioning
the arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
Differentiation
begins the positioning process by identifying those attributes that can be used to set the company’s product apart from the competition
Marketing mix
the set of controllable, tactical marketing tools - product, price, place and promotion - that the firm blends to produce the response it wants in the target market
Target customers and Intended positioning
features not benefits
- Acceptability = Product: Variety, quality, design, features, brand name, packaging, services
- Affordability = Price: list price, discounts, allowances, payment period, credit terms
- Awareness = Promotion: advertising, personal selling, sales promotion, public relations
- Accessibility = Place: channels, coverage, locations, inventory, transportation, logistics
Marketing Return on Investment
Marketing investments -> Marketing returns (improved customer value and engagement -> increased customer attraction + retention -> increased customer lifetime values and customer equity) + cost of marketing investment = marketing ROI
Net return
from a marketing investment divided by the costs of the marketing investment
Marketing Plan
- Executive summary
- Marketing situation
- Threats and opportunities
- Objectives and issues
- Marketing strategy
- Action programs
- Budgets
- Controls
Total population
- Nonconsumers
- Qualified Consumers: potential new customers
- Present consumers: customers we already have
- Relative consumers: customers we could steal
2 + 3 + 4 = Potential market
3 + 4 = Actual market demand
3 = Current market
Nonconsumers
Do not have the need or not interested or do not have the money to buy our product or service
Qualified Consumers
interested but not buying yet
Present consumers
actually buy product or service of company
Relative consumers
buy competitors’ products or services
Market Share
- indicates the % of the market the specific company holds
- calculated by taking the company’s sales over a specific period of time/ total sales of the industry or selected set of competitors over the same period
- provides an indication of the size of the company in relation to its market and its competitors
- closely monitored for signs of change in the competitive landscape
- frequently drive strategic / tactical action
- main adv: less dependent on outside variables like economic conditions, seasonality, or changes in legal environment
- marketers need to be able to translate and incorporate sales targets into market share since this demonstrates weather forecasts will be attained by growing with the market or capturing share from competitors
- INCREASING MARKET SHARE = one of the most important objectives of business
- 67% dollar market share metric very useful, 61% unit market share very useful
Potential market, demand and market share
- without analyzing three metrics -> business is unable to estimate its performance and adjust its marketing strategy
- important to understand a company’s business beyond current market demand in order to drive innovation
- intelligent analysis of market and demand will allow the business to identify and pursue untapped market opportunities
- estimate the actual demand within a given market, a business has to evaluate both potential market and market share.
STR Report - Benchmark KPI’s
- derived based upon the aggregated raw data for each separate hotel that is a member of the comp set
- balanced Occupancy and add Index strategy will yield the best results
- year over year change is also key, it indicates how gains/ losses of the recent strategy
Index numbers
- calculated for Occupancy, ADR, RevPAR
- compare the performance of the subject property to the comp set by dividing the hotel perf by the comp set performance
Fair share
Why the market gives us -> fair share -> what we have to steal
- indicted by 100%
- greater than 100% -> the subject property outperformed the comp set and vice versa
- may not be an appropriate goal if measuring against “non-like” competitors
Average Daily Rate (ADR)
The average (mean) selling price of guest rooms during a specific time periods (day, week, month, year) Total room revenue/ Total rooms sold
Occupancy %
Total room sold/ Total rooms available for sale
Revenue per Available Room (RevPAER)
total room revenue/ total rooms available for sale
or ADR X Occupancy %
Key Performance Indicators
ADR
Occupancy
RevPAR
Market Share’s KPI’s
MPI, OCC index (Unit Market Share)
ARI, ADR index ($$$ Market Share)
RGI, RevPAR index ($$$ Market Share)
Market Penetration Index
Hotel occupancy/ Market Occupancy
- Our quantity of business vs. theirs
Average Rate Index
Hotel ADR/ Market ADR
- our overall quality of business vs. theirs
Revenue Generation Index
Hotel RevPAR/ Market RevPAR
- Our yield vs. theirs
Service Marketing - Unique Challenges
- Perishability
- Intangibility
- Inseparability
- Variability
Perishability
Services cannot be stored for later sale or use
Intangibility
Services cannot be seen, tasted, felt, heard, or smelled before purchase
Inseparability
Services cannot be separated from their providers
Variability
Quality of service depends on who provides them and when, where, and how
Hospitality Challenge - a fixed offer
- hotel or restaurant basic product is fixed
- location
- capacity
- long-term fixed intense capital investment in building and facilities
Hospitality Challenge - a dynamic marketplace
demand is always fluctuating
variety of customers
demand is always fluctuating
- general environment - especially economical, political influences
- segment behavior
- seasonal, midweek, weekend
- holidays, professional requirements, religions
- changing demographics, psychographics
Variety of customers
- multiple market segments
+ different personal experiences and knowledge
+ different expectations to satisfy
Service marketing
- service-profit chain
- external marketing
- internal marketing
- interactive marketing
- managing:
+ service differentiation
+ service quality
+ service productivity
service-profit chain
links service firm profits with employee and customer satisfaction
Internal marketing
- the service firm must prepare its customer-contact employees and supporting service people to work as a team to provide customer satisfaction
+ orientation
+ training
+ motivation
Interactive marketing
- the service quality depends heavily on the quality of the buyer-seller interaction during the service encounter
+ service differentiation
+ service quality
+ service productivity
Managing service differentiation
allows the firm to divert the focus on price, by developing a unique offer, delivery, or image
Managing service quality
enables a service firm to differentiate itself by delivering consistently higher quality than its competitors provide
Managing service productivity
refers to the cost side of marketing strategies for service firms.
- primary tools for impacting it:
+ employee hiring and training - people doing more and better
+ service quantity and quality - adjusting the product
+ adopting technology - new tools to help
The marketing environment
includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers
Microenvironment
consists of the actors close to the company that affect its ability to serve its customers 1. company 2. suppliers 3. marketing intermediaries 4. customer markets 5. competitors 6. publics individuals have no influence on macro, but can somewhat influence micro
Macroenvironment
consists of the larger societal forces that affect the microenvironment
- demographic
- economic
- natural
- technological
- political
- cultural forces
Environmental sustainability
- involves developing strategies and practices that create a world economy that the planet can support indefinitely \+ increased government intervention \+ lacking raw material \+ increasing pollution \+ energy costs
Corporate social responsibility (CSR)
a business approach that contribute to sustainable development by delivering economic, social, environmental benefits for al stakeholders
Greenwashing
the use of marketing to portray an organization’s products, activities or policies as environmentally friendly when they are not
Research
the systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions
Marketing research
the process of identifying and defining marketing opportunities and problems, evaluating marketing actions, and monitoring and improving marketing performance
Qualitative research
primarily exploratory research
- used to gain an understanding of underlying reasons, opinions, and motivations
- provides insights into the prob or helps to develop ideas or hypotheses for potential quantitative research
- methods emphasize objective measurements
- the statistical, mathematical, or numerical analysis of data collected through polls, questionnaires, surveys, or by manipulating pre-existing statistical data using computational techniques
Primary data
information collected for the specific purpose at hand
Secondary data
information that already exists somewhere, having been collected for another purpose
Types of competition
- Direct competition
2. Indirect competition
Direct competition
- situation in which 2 or more businesses offer products or services that are essentially the same
- the businesses are competing for the same potential market
Indirect competition
- targets and attracts the same customers
- using different products or services, and are considered as viable alternatives by customers
Competition: Porter’s 5 forces
- Threat of new entry
- Buyer power
- Threat of substitution
- Supplier power
- > Competitive Rivalry
Threat of new entry
- time and cost of entry
- specialist knowledge
- economies of scale
- cost advantages
- technology protection
- barriers to entry
Buyer power
- number of customers
- site of each order
- differences between competitors
- price sensitivity
- ability to substitute
- cost of changing
Threat of substitution
- substitute performance
- cost of change
Supplier power
- number of suppliers
- size of suppliers
- uniqueness of service
- your ability to substitute
- cost of changing
Competitive rivalry
- number of competitors
- quality differences
- other differences
- switching costs
- customer loyalty
Market information system (MIS)
- the people and procedures dedicated to assessing information needs
- developing the needed information
- helping decision makers to use the information to generate and validate actionable customer and market insights
- provides info to the company’s marketing and other managers and external partners (suppliers, resellers, marketing service agencies)
The Marketing Information System
- Marketing managers and other info users: obtaining customer and marketing insights from marketing information
- Marketing system:
- Developing needed information
+ Internal databases
+ Marketing intelligence
+ Marketing research
- Assessing info needs
- Analyzing and using info - Marketing environment
- Target markets, marketing channels, competitors. publics, macro forces
Internal databases
collections of consumer and market information obtained from data sources within the company network
Competitive marketing intelligence
the systematic collection and analysis of publicly available information about consumers, competitors and developments in the marketing environment
Marketing research
systematic design, collection, analysis, and reporting of data relevant to a specific market situation facing an organization
Defining the problem and research objectives
- Exploratory
- Descriptive
- Casual
Exploratory research
gather preliminary information that will help define problems and suggest hypothesis
Descriptive research
better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of customers
Casual research
test hypothesis about cause and effect relationship
Collecting primary data - research approaches
- observational
- ethnographic
- survey
- experimental
Observational research
involves gathering primary data by observing relevant people, actions, and situations
Ethnographic research
involves sending trained observers to watch and interact with consumers in their natural environments
Survey research
involves gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior
Experimental research
involves gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses
Customer Relationship Management (CRM)
involves maintaining detailed information about individual customers and carefully managing customer touch points to maximize customer loyalty
CRM Touch Points
- customer purchases
- sales force contacts
- service and support calls
- web and social media sites
- satisfaction surveys
- credit and payment interactions
- marketing research studies
Internal Analysis
a process of identifying in evaluating an organizations specific characteristics including its resources, capabilities and core competencies
Capabilities
the organizational routines and processes that determine how efficiently and effectively the organization transforms its inputs (resources) into outputs (products and services)
Distinctive Organizational Capabilities
the special and unique capabilities that distinguish the organization from its competitors
Core competencies
the organizations major value creating skills and capabilities that are shared across multiple product lines for multiple businesses
Value Chain (again)
the systematic way of examining all of the organizations functional activities and how well they create customer value
SWOT analysis
- Strengths: internal capabilities that may help a company reach its objectives
- Weaknesses: internal limitations that may interfere with a company’s ability to achieve its objectives
- Opportunities: external factors that the company may be able to exploit to its advantage
- Threats: current and emerging external factors that may challenge the company’s performance
PESTLE Analysis
- framework/ tool used by marketers to analyze and monitor the macro-environmental factors
- result used to identify Threats and Opportunities
Politics
Economy
Social
Technology
Legal
Environment
