Unit 7 - Marketing Flashcards
Marketing
The creation and satisfaction of demand for a product or service
Strategy
A set of ideas that outline how a product line or brand will achieve its objectives
Tactic
A specific action or method that contributes to achieving a goal
Marketing Tasks
- Analyze Needs
- Predict Wants
- Estimate Demand
- Determine Where
- Estimate Price
- Decide Promotion
- Estimate Competition
- Provide Service
Marketing Functions
- Buying
- Selling
- Transporting
- Storing
- Standardization & Grading
- Financing
- Risk Taking
- Market Information
Customer Value
Benefits vs. Costs
Strategy 5 Cs
- Customers
- Competitors
- Company
- Collaborators
- Context
Customers
Potential buyers with wants and needs that the company aims to fulfill with its offerings
Consumers vs. Customers
Business buyers vs. Non-business buyers
Company
Organization or business unit providing certain goods or services
SWOT
Strengths
Weakenesses
Opportunities
Threats
Competitors
Organizations that offer products or services that aim to fulfill the same wants and needs of the same customers as the company’s offering
Competitive Matrix
Analysis tool that captures the features and benefits provided by an organizations competitors
Porter’s Five Forces
Framework that attempts to capture competitive analysis attributes
Collaborators
External business entities that work with the company to create value for customers
Examples of Collaborators
- Raw material suppliers
- Distributors
- Marketing Agencies
- 3rd Party Retailers
Context
Environment in which the company operates and it’s associated elements:
- Regulations or laws
- Economic conditions
- Cultural norms
- Technological factors
PESTEL Analysis
Political Economic Social Technological Environmental Legal Factors
Marketing Strategy
Target Market
Marketing Mix
Target Market
Group of customers a company wishes to reach
Marketing Mix
Controllable variables the company uses to satisfy the target group
Customer Marketing Model
- Awareness
- Interest/Engagement
- Acquisition
- Customer Segmentation
- Customer Retention
- Support and Advocacy
Awareness
Customer knows a company exists
Interest/Engagement
Informing the customer about company’s offerings
Encouraging them to interact and learn more
Acquisition
Converts potential customer to customer
Customer Segmentation
Differentiation between customer segments and marketing accordingly
Customer Retention
Convincing consistent customers to purchase again
Support & Advocacy
When customers become vocal advocates for your brand
Customer Profiling
- Demographic profiling
- Geographic variables
- Psychographic profiling
- Behavioral Variables
- RFM
Demographic Profiling
- Age
- Gender
- Marital Status
- Education
Geographic Variables
- State
- Population
- Climate
Psychographic Profiling
- Lifestyle
- Values
- Attitudes
- Personally
Behavioral Variables
- Usage Rate
- Brand Loyalty
- Benefit Sought
RFM
- Recency
- Frequency
- Monetary
Buyer Journey
- Loosening of the status quo (Discovery) - Committing to change - Expiring possible solutions (Consideration) - Committing to a solution - Justifying the decision (Decision) - Making the Selection
Comprehensive Approach
- Total company effort to satisfy customers
- Offer superior customer value
- Attract Customers
- Satisfy Customers
- Retain Customers
- Increase Sales to Customers
- Build Profitable customer relationships
Marketing Plan
- Marketing Strategy
- Time-Related Details
A Firm’s Marketing Program
- Marketing Plan
- Other Marketing Plans
Marketing Management Process
- Marketing Planning
- Implement Marketing Plans & Program
- Control Plans & Program
Marketing Planning
- Set objectives
- Evaluate opportunities
- Create strategies
- Prepare plans & program
Control Plans & Program
- Measure results
- Evaluate progress
Marketing Strategy Planning Process
- External Market Environment
- Customers, Company, Competitors
- SWOT
- Segmentation and Targeting, Differentiation and Positioning
- Target Market (Product, Place, Price, Promotion)
Marketing-Oriented Manager
Sees everyone as different and practices “target marketing”
Production-Oriented Manager
Sees everyone as basically similar and practices “mass marketing”
Attractive Opportunities
Breakthrough Opportunities
Competitive Advantage
Avoid Hit or Miss Marketing
Breakthrough Opportunities
- Difficult to Copy
- Profitable for a long time
Competitive Advantage
A Marketing Mix the target customer sees as better than the competition’s mix
Avoid Hit-or-Miss Marketing
- Marketing Strategy planning
- Sound market research
Market Penetration
- Drive increased sales of current product in existing markets
- Enhance customer relationship (LTV)
Product Development
- New/Unique Benefits
- Create new markets
Customer Lifetime Value (LTV)
Relationships that Develop Satisfied Customers + Time = Return Business
International Opportunity Considerations
- Risks Involved
- Better Trends
- Smaller World
- Competitive Advantage
- Early Start
Marketing Mix
- Product
- Place
- Price
- Promotion
Product
- Physical Characteristics
- Warranties
- Application benefits
Place
Right:
- Product
- Consumer
- Place
- Time
- Quantity
- Condition
3 Types of Promotion
- Personal Selling
- Mass Selling
- Sales Promotion
Personal Selling
- Direct to consumer
- Customer Service
Promotion
Informing and Selling the Customer
Mass Selling
- Advertising- paid
- Publicity- unpaid
Sales Promotion
- Stimulate Interest
- Encourage trial or purchase
Price Factors of Marketing Mix
- Objectives
- Flexibility
- Price of the Life Cycle
- Discounts and Allowances
- Geographic Pricing Terms
- Competition
Marketing Strategy Planning Process
- Narrowing down to the best opportunities
- Develop a strategy (Competitive advantage, superior customer value)
Strategy Planning: Company
- Objectives
- Resources
Strategy Planning: Competitors
- Current
- Prospective
Strategy Planning: External Market Environment
- Economic
- Technological
- Political and Legal
- Cultural and Social
Evaluating Opportunities
- Screening criteria
- Planning grids
- Planning for multiple products
Direct Marketing Environment
- Resources and Objectives of the Firm
- Customers
- Competitive Environment
External Marketing Environment
- Cultural and Social Environment
- Political and Legal Environment
- Technological Environment
- Economic Environment
Company Objectives
- Production
- Finance
- Marketing
- HR
- R&D
- IT
Marketing Objectives
- Product
- Place
- Promotion
- Price
Promotion Objectives
- Personal Selling
- Mass Selling
- Sales Promotion
Key areas that limit the search for opportunities
- Financial Strength
- Producing Capability and Flexibility
- Marketing Strengths
Types of Market Situations
- Monopoly
- Monopolistic Competition
- Oligopoly
- Pure Competition
Key Economic Forces
- Global Economy
- Rapid Change
- Interest Rates
Political Environment
- Political Stability
- Trade Policy
- Labor Law
Legal Environment Examples
- FDA
- Consumer Product Safety Commission
Changes in Cultural and Social Environment
- Health Consciousness
- Demographic Data
Planning Grid
- Industry Attractiveness
- Business Strenghts
Industry Attractiveness
- Market size
- Growth
- Competitive Structure
Business Strenghts
Resources of the organization
- People skills
- Technological position
- Growth within own environment
- Market Share
Grid Areas
High- Growth
Med- Borderline
Low- No growth
Total Profit Approach
Delayed profits can lead to greater overall profits
Segmentation
- Defining markets
- Dimensions to use
- Identifying segments
- Identifying segments to target
- Segmentation approaches
Strategy Planning is a…
narrowing down process
Generic Market
Broadly similar needs, sellers offering diverse ways of satisfying those needs
Product Market
Very similar needs, sellers offering similar ways of satisfying those needs
Generic Market Definition=
Customer needs + Customer Types + Geographic Area
Product Market Definition=
Customer needs + Customer Types + Geographic Area + Product Type
When determining customer needs:
1) Narrow down to specific product market
- Break apart all customer needs
- Determine Generic Market
- Define Market Broadly
2) Segment into possible target markets
- Homogeneous Product Markets
3) Select Target Market approach & Strategy
- Single target market
- Multiple Target Markets
- Combined Target Markets
Segmentation (Definition)
An aggregating process that clusters people with similar wants and needs into a market segment
Effective Market Segmentation Process
- Define the broad product market (Bicycle Riders)
2. Segment it into sub-markets (Types of Bicycle riders)
Single Target Market Approach
Marketer segments the market and picks one of the homogeneous segments as the firm’s target market
Multiple Target Market Approach
Marketer segments the market and picks 2 or more segments, then treats each as a separate target market needing a different marketing mix
Combined Target Market Approach
Combines 2 or more submarkets with the same marketing mix
Criteria for Determining Segments
- People in segment are roughly alike, along some important consumer dimensions.
- People in the segment are different from people in other segments.
- The segment is large enough to be profitable.
- The segmenting dimensions should be useful for identifying customers and designing the marketing mix.
- If chosen to pursue: the company has the resources available to adjust its marketing mix to appeal to each segment.
Demographic Dimensions
- Income
- Sex and age
- Family size or family life cycle
- Occupation or education
- Ethnicity or social class
Geographic Dimensions
- Region of world, country
- Region in a country
- Size of city
Behavioral Dimensions
- Needs
- Benefits sought
- Thoughts
- Rate of use
- Purchase relationship
- Brand familiarity
- Kind of shopping
- Type of problem-solving
- Information Required
Segmenting Dimensions for Business Markets
- Kind of relationship
- Type of customer
- Demographics
- How customers will use the product
- Type of buying situation
- Purchasing methods
Qualifying Dimensions
Relevant to including a customer type in a product market
- Help identify “core benefits”
Determining Dimensions
After the customer’s purchase of a product or brand
- Can be further segmented
Clustering Techniques
Find similar patterns within sets of data
Customer Relationship Managements (CRM)
Sophisticated modeling techniques can predict the types of products or services an individual customer might want based on the information stored in the database.
Best Practice Approach for Segmenting Product Markets
- Select the broad product market
- Identify potential customers’ needs
- Form initial homogeneous submarkets
- Identify determining dimensions
- Name the possible product markets
- Evaluate product-market segment behaviors
- Estimate the size of each product-market segment
