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Principles of Marketing Management > The Basics > Flashcards

The Basics Flashcards

Foundation Basic Terms & Concepts

1
Q

The Marketing Mix

A

The combination of factors that a business or service uses to carry out its Marketing Strategy; to influence the transfer of value and meet customers’ needs

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2
Q

The Four P’s

A

Product, Price, Place, Promotion

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3
Q

Basic Product Concepts

A

“The Offering”

  • Development
  • Design
  • Features
  • Improvement
  • Decisions in Product Line (Assortment, Varieties)
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4
Q

Basic Price Concepts

A

“The Exchange”

  • Reference Price (How much are customers willing to pay?)
  • Uniform Pricing (Same price across markets) vs Price Discrimination (Differentiated prices according to the specific market conditions: Target group, time, demand, etc)
  • Competitor Prices comparisons
  • Consumer prices vs. Reseller prices
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5
Q

Basic Place Concepts

A

“The point of availability”

  • Geographical Areas (Region)
  • Specific Locations (Malls, Stores, Your mom’s house, etc)
  • Utilization of the Channels of Distribution
  • Directly selling or through intermediaries
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6
Q

Basic Promotion Concepts

A

“Communication, Information and Persuasion”

  • Utilization of the Channels of Communication (Advertising, promotions, social media..etc)
  • Message behind your offering
  • Publicity (Mass response)
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7
Q

The Needs of a Human Being

A

Popularly defined by Abraham Maslow’s “Hierarchy of needs”

  1. Physiological Needs: Food, Sex, Water, Rest, Sex
  2. Security Needs: Shelter, Personal Security Financial Security
  3. The Need to Belong, to love or be loved: Friendships, Family, Sexual Intimacy
  4. Esteem: Respect of others, Respect by others, Self- Confidence, Ego…etc
  5. Self-Actualization: Morality, Creativity, Generosity, Problem Solving,Acceptance of facts
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8
Q

The 5 types of Consumer Needs

A
  • Stated Needs – “I need an inexpensive car”
  • Real Needs – “The customer wants a car whose operating cost is low; What does the customer REALLY need?”
  • Unstated Needs – “The customer expects good service from the dealer; Common Sense”
  • Delight Needs – “The customer would like the dealer to include onboard systems; Luxury” (GPS, Mobileye).
  • Secret Needs – “Want to be seen as a sophisticated person, or sensitive to the environment; True motivations”
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9
Q

The Wants of a Human Being

A

Needs that were actively shaped by culture and personality over time (e.g. eating at a specific brand such as McDonalds

Calories is what you need, the brand/type of food is what you want)

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10
Q

The Value of Marketing

A

Marketers influence people wants, not needs.

Marketers seek:

  • Attention
  • A purchase
  • A donation
  • A vote
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11
Q

The Things Marketers Promote

A

Goods, Services, Events, Experiences, Persons, Places, Property, Orgs, Information, Ideas…Basically anything

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12
Q

Demand/Supply

A

You should know this shit

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13
Q

Demand States

A

Describes various consumer behaviors and requires specific marketing actions to said behaviors .

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14
Q

(Demand State) Negative Demand

A

Created if the product is disliked in general or if customers avoid it

Example: Going to a dentist. Some people dislike dental work so they try to improve their daily hygiene

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15
Q

(Demand State) Non-Existent Demand

A

Lack of awareness/interest or limitations that prevent a consumption

Example: New brand that is overshadowed by dominant brand, New technology that is unsupported by current platforms

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16
Q

(Demand State) Latent Demand

A

A shared need that cannot be satisfied by any existing product

Example: The pill from the movie Limitless.

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17
Q

(Demand State) Declining Demand

A

Consumers inclined to buy products less frequently or not at all

Example: pocket-calculator, CD’s

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18
Q

(Demand State) Irregular Demand

A

Consumer needs vary on a seasonal basis

Example: Ski jackets, Christmas trees.

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19
Q

(Demand State) Full Demand

A

Demand = Supply

Example: Spacecraft, Made to order products, Fresh produce

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20
Q

(Demand State) Overfull Demand

A

More consumers would like to buy the product than can be satisfied

Example: Taking the train in Israel on a Sunday morning (fckn nightmare)

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21
Q

(Demand State) Unwholesome Demand

A

Consumers may be attracted to products that have undesirable social consequences

Example: Red Light District in Amsterdam

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22
Q

A Market

A

A collection of buyers and sellers that share needs/wants, often regarding a specific product

Sometimes referred to as this way:

Industry - Sellers

Market - Buyers

23
Q

Market Offerings

A

A combination of goods/services presented to a market to satisfy needs and wants

24
Q

The 4 Market Flows

A
  1. Sellers provide goods and services to buyers
  2. Buyers provide sellers with money
  3. Sellers communicate product to buyers
  4. Marketers provide information to sellers.
25
Q

Types of Markets

A
  1. Consumer
  2. Business
  3. Global
  4. Non-Profit/Governmental
26
Q

Consumer Markets

A

Individual end-users who purchase and consume the product themselves

  • A strong brand image is required for success
  • Developing superior brand
  • Packaging design
  • Ensure product availability
27
Q

Business Markets

A

Businesses, organizations, professionals and resellers that buy goods to make or resell products to others at a profit.

  • Facing well informed professional buyer not consumers
  • Marketers demonstrate how product helps increase revenue or lower costs (business, not personal interest) -
  • Key factors: sales force, price, reputation
28
Q

Global Markets

A

Buyers may be anywhere in the world; Large international network

  • Globalization, World trade
  • Needs high technology
  • Marketers strategic decisions: which countries to enter and how?
  • Adaptation, product features, pricing in different countries and regions, design communications for different cultures
  • Environmental factors, income, language, legal and political implications must be accounted for
29
Q

Non-Profit/Governmental Markets

A
  • Customers have limited purchasing power
  • More limitations
  • Need to price carefully

Example: Charitable organizations, universities, churches etc.

30
Q

Marketing Channels

A

A marketing channel is the people, organizations, and activities necessary to transfer the ownership of goods or services from the point of production to the point of consumption.

  1. Communication
  2. Distribution
  3. Service
31
Q

Communication Channels

A

Send/Receive information to/from your consumers

  • Deliver and receive messages from target buyers
  • Newspapers, magazines, radio, TV, billboards etc.
  • Facebook fan pages, twitter and blogs
  • Design or retail stores, and websites
32
Q

Distribution Channels

A

Send/Receive goods/services to/from your consumers

  • Display, Sell or Deliver products to buyers
  • Can be Direct – with no middleman at all. Done through the internet, mail, mobile devices
  • Can be Indirect – with distributors, wholesalers, retailers and agents as intermediaries
33
Q

Service Channels

A

Send/receive solutions and provide logistics to/from your consumers

  • Support delivery and transaction
  • Includes warehousing, packaging, logistics and transportation (such as FedEx)
  • Banks, financing and insurance companies
  • Payment processing, clearing services
34
Q

The Supply Chain Process

A

Step 1: Raw Materials : Fat Cows

Step 2: Components : Killing them and harvesting their meat

Step 3: Finished Products : Converting into ground meat, shaping them into form and packaging them

Step 4: Delivery : Distribution to retail locations in refrigerated trucks

Step 5: Final Buyers : On-site customization to consumer preferences, sold with marketable service.

35
Q

Customer Profitability

A

A customer is profitable when the revenue is greater than the costs

  • Costs include but are not limited to: attracting, selling or serving to said customer
  • The relationship between revenue and cost is much more valued over time, not on the profit from one particular transaction (Long Term/Short Term).

This concept consumes at least 40% of this class’s curriculum and it’s advanced concepts are in another flashcard deck

36
Q

The Value Chain

A

“A set of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market.”

  • The relationship between PRIMARY and SUPPORT activities of a given firm/industry IS the value chain
  • The value chain can be improved based on baseline market data & proven practices; Usually to cut costs/increase profit.
  • The firm will need to research intelligently in order to achieve peak state of value chain
37
Q

Primary Activities

A
  • “Inbound Logistics” – Bringing raw materials/components/services into business for production
  • “Operations”– Activities that process/convert materials into final products
  • “Outbound Logistics” – Shipping out final products produced by operations
  • “Marketing; Sales” – Potential customers targeted
  • “Service” – Set of functions that ensures that the customer can use the product properly after the transaction has been completed
38
Q

Support Activities

A
  • “Procurement (Acquisition)” – Involves purchasing raw materials and supplies, and sourcing certain functions the organization carries out
  • “Technology and Development” – Responsible for creating new products. Usually more important for innovative companies
  • “HR Management” – Recruiting people/performance
  • Firm Infrastructure” – Planning, legal, finance, accounting etc.
39
Q

Outsourcing

A
  • Creating parts of the Value Chain “outside” of the company; instead of having an in-house department or employee handle them.
  • These functions can be outsourced to either a company or an individual.
  • Companies should make sure that every single function in the chain creates value.
  • If someone else can perform this more effectively, the company may consider outsourcing.
40
Q

Benefits of Outsourcing

A

“Costs”

  • Consolidating expensive practices in value chain - Perhaps lower wages exist elsewhere
  • Legal/pension fees may be lower
  • Contractual basis - Less company commitment to employee

“Flexibility”

  • Product development range
  • Product capability
  • Product Mix

“Quality”

  • Higher quality suppliers
  • Timely supply

Example: Every technology company in America

41
Q

Downsides of Outsourcing

A

“Less Control”

  • Supplier commitment
  • Employment Policy

“Public Criticism”

  • Can be hurt due to inhumane conditions or unethical policy
  • Common critique

“Political Criticism”

  • More jobs could have been created in base country
  • Government political pressure
42
Q

The Eight Dimensions of Quality (of a product)

A
  1. Performance
  2. Features
  3. Reliability
  4. Conformance - The degree to which the actual quality of production/design translates to the quality of production that have been marketed to public; Think ‘big macs’ they never look as good as advertised
  5. Durability
  6. Serviceability – Related to how often service is required.
  7. Aesthetics – Products appearance, smell, taste 8. Perceived – Customers indirect evaluation of quality aka “Reputation”
43
Q

PLC Model (Product Life Cycle)

A

The life course of a product in the market from life to death

Stages:

  1. Development
  2. Introduction
  3. Growth
  4. Maturity
  5. Decline
44
Q

(PLC) Development Stage

A
  • NPD – new product development
  • R&D - Lengths depend on advancement of technology, regulation, market research
  • Requires significant resources
  • Long lead time before product launch
45
Q

(PLC) Introduction Stage

A
  1. New product is launched at the right time
  2. Product awareness is low
  3. Competition is low
  4. Cash flow usually negative

Strategy:

  • Encourage product adoption and optimize the search for the target market
  • Utilize Communication Channels – create awareness , communicate benefits
  • Pricing – Skimming (start high) vs penetration (start low)
  • Release Basic version of the product, and expand line as sales increase
  • Distribution – limited, focused, selective
46
Q

(PLC) Growth Stage

A
  • Product indicated as success or potential for success
  • Sales/interest increase steeply
  • Customer base expanding fast
  • Competition intensifies, replications of products among competitors production cost
  • Economies of scale (Produce more, cost less), additional units lower costs
  • Cash flow is positive

Strategy:

  1. Sustain growth
  2. Intensive, maximized product distribution
  3. Reach wider target audiences
  4. Market penetration (expand market share)
  5. Improve product/line (launching new version, features)
47
Q

(PLC) Maturity Stage

A
  • Sales growth is in recline or stagnation
  • Competition is intense, new rivals, multiple competitors, many substitutes
  • Price decreases

Strategy:

  1. Maximize ROI
  2. Maximize operational efficiency, lowering costs
  3. Influence weaker competitors to leave market
  4. Employ extension strategies such as rebranding, redesigning, discounts etc.
48
Q

(PLC) Decline Stage

A
  • Falling Sales and Profit
  • Market in Decline
  • Product Withdrawal

Strategy:

  1. Decide if it is economically sound/beneficial to produce product; liquidate stock?
  2. Continue sales at much cheaper Production
  3. Take advantage of cheaper markets
49
Q

Market Segment

A

A group of customers or people who share one or more common characteristics, needs or wants. These individuals are lumped together for marketing purposes.

  • Demographic
  • Psychographic
  • Behavioral
50
Q

Target Market

A

A market segment to which the marketer aims its marketing efforts (to which he believes offers the greatest opportunities)

Example:

  • Volvo – develops cars around consumers who are most concerned with safety
  • Porsche – Cars with driving experience (positions itself as the car that provides the ultimate driving pleasure)
51
Q

Bottom Line

A

Net profits

52
Q

Customer defection

A

The rate customers stop using products at a given time​

Customer defection also known as: Attrition, turnover or churn

Retention rate = 1 – Attrition rate

53
Q

Product Proliferation

A

Product proliferation occurs when organizations market many variations of the same products.

  • This can be done through different colour combinations,product sizes and different product uses.
  • Done to capitalize more market share

Principles of Marketing Management (3 decks)

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