Essentials of Marketing Ch 1-4

The marketing concept
a philosophy to guide the whole firm toward satisfying customers at a profit
marketing
the performance of activities that seek to accomplish an organizations objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client
customer value concept
the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits
macro marketing concept
a social process that directs an economy’s flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society
pure substance
when each family unit produces everything it consumes no need to exchange goods and services no marketing involved
economies of scale
company produces larger numbers of a particular product, the cost of each unit of the product goes down
universal functions of Marketing
buying, selling, transporting, storing, standardization, and grading, financing, risk taking, and market information
command economy
government officials decide what and how much is to be produced and distributed by whom, when, and why. Part of an over gov’t plan “planned economy”. producers have little choice about what goods and services to produce. Main goal-meet production quotas.
ex. soviet union, north korea, cuba, iran
market-direct economy
individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. they decide what is to be produced and whom-through their dollar “votes”
simple trade era
a time when families traded or sold their “surplus” output to local distributers (sell)
production era (industrial rev)
company focuses on production of a few specific products-perhaps because few of these products are available in the market
sales era (1930s)
a time when a company emphasizes selling because of increased competition. Beat competition and win customers
marketing department era (1950s)
time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firms activities
marketing company era (1960)
time when, in a addition to short-run marketing planning, marketing people develop long range plans sometimes fiver or more years ahead and the whole company effort is guided by the marketing concept
marketing ethics
the moral standards that guide marketing decisions and actions. based on his or her values. honesty, responsibility, fairness, respect, transparency, citizenship
marketing strategy
the job of planning strategies to guide a whole company. The managerial process of developing and maintaining a match between an organizations resources and it market opportunities. specifies a target market and a related marketing mix
target market
a fairly similar group of customers to whom a company wishes to appeal
marketing mix
the controllable variables the company puts together to satisfy this target group
target marketing
says that a marketing mix is tailored to fit some specific target customers
mass marketing
typical production-oriented approach- vaguely aims at “everyone” with the same marketing mix. assumes that everyone is the same- considers everyone as potential customer
4 P’s
product, place, promotion,price
product
concerned with developing the right “product” for the target market. This offering may involve a physical good, a service, or a blend of both
place
concerned with all the decisions involved in getting the “right” product to the target market’s Place. a product isn’t much good to a customer if it isn’t available when and where its wanted. Distribution
promotion
concerned with telling the target market or others in the channel of distribution about the “right” product. sometimes promotion is focused on acquiring new customers, and sometimes its focused on retaining current customers. it includes personal selling, mass selling, and sales promotion. its the marketing managers job to blend these methods of communication.
mass selling
communicating with large numbers of customers at the same time. Main form is advertising-any paid form of non personal presentation of ideas, goods, or services by and identified sponsor. Publicity- unpaid form of non personal presentation of ideas, goods, or services-include favorable coverage in newspapers or on TV
price
consider the kind of competition in the target market and the cost of the whole marketing mix. a manager must also try to estimate customer reaction to prices. must know current practices as to markups, discounts, and other terms of sale
marketing plan
a written statement of a marketing strategy and the time-related details for carrying out the strategy
customer equity
is the expected earnings stream (profitability) of a firms current and prospective customers over some period of time. Customers keep coming back to you can’t take advantage
Breakthrough
opportunities that help innovators develop had to copy marketing strategies that will be very profitable for a long time
competitive advantage
that a firm has a marketing mix that the target market sees as a better than a competitors mix. Increase its chances for profit or survival
SWOT analysis
identifies and lists the firms strengths, weaknesses, opportunities, and threats. Strengthened and weaknesses come from dressing the companys resources and capabilities. opportunities an threats emerge from an examination of coauthors, competition, and the external market environment. a marketing manager can begin to identify strategies that take advantage of the firms strengths and opportunities while avoiding weaknesses and threats
market penetration
means trying to increase sales of a firms present products in its present markets probably through a more aggressive marketing mix. come up with strategy, strengthen its relationship with customers to increase their rate of use or repeat purchases, or to attract competitors customers or current nonusers. i know where the business is lets maximize! new promotion get more sales
Market development
trying to increase sales by selling present products in new markets. may involve searching for new uses for a product. try advertising in different media or add channels of distribution or new stores in new areas
The Firms Objectives
a company must decide where its going, or it may fall into the trap expressed by “having lost significant of our obj. we redouble our efforts”. Top management must look at the whole business, relate its present objectives and resources to the external environment and then decide what the firm wants to accomplish in the future
mission statement
Each firm needs to develop its own obj. based on its own situation it sets out the organizations basic purpose for being. Focus on few key goals! may need to be revised as new market rise
competitive environment
affects the number and types of competitors the marketing manager forces and how they behave. Although marketing managers usually can’t control these factors, they can choose strategies that avoid head-on competition.
pure competition (oligopoly)
competitors offer very similar marketing mixes, and customers see the alternative as close substitutes. managers just compete with lower prices and profit margins shrink.
monopoly situations
in which one firm completely controls a broad product market, are are in market-directed economies. Govt commonly regulate monopolies.
competitor analysis
organized approach for evaluating the strengths and weaknesses of current or potential competitors market strategies
competitive rivals
closest competitors. Rivals offering similar products are usually easily to identify ex. pandora, iheart radio
competitor matrix
an organized table that compares the strengths and weaknesses of a company with those of its competitive rivals
economic environment
refers to macro-economic factors, including national income, economic growth, and inflation, that affect patterns of consumer and business spending. the rise and fall of the economy in general, within certain industries, or in specific parts of the world can have a big impact on what consumers buy. changes in the economy are often accompanied by changes in INTEREST RATE-the charge for borrowing money. The economies of the world are connected and changes in one economy can quickly affect others. changes in EXCHANGE RATE-how much one countrys money is work in another countrys money.
technology environment
technology is the application of science to convert an economy’s resources to output. Technology affects marketing in 2 basic ways; creates opportunities for new products and new processes. advances shake up markets. changes in marketing process. challenges, dilemmas
Political environment
the attitudes and reactions of people, social critics, and governments all affect the political environment. Nationalism-an emphasis on a country’s interests before everything else can affect Marketing. nationalistic feelings can reduce sales or even block marketing activity. ex china has made it difficult for outside firms to do business there- inspire of the fact that the chinese economy has experienced explosive growth as its factories have turned out larger portions of goods sold in the US, Europe and other parts of the world. Regional groupings. unification of European markets. NAFTA
NAFTA
North American Free Trade Agreement- lays out a plan to reshape the rules of trade among the US, Canada, and Mexico. Basically enlarges the free trade pact that had already knocked down most barriers to US-Canada trade and eliminated most such barriers with Mexico
Legal environment
try to encourage competition-american economic and legislative thinking is based on the idea that competition among many small firms help the economy.
*consumer protection laws-pure food and drug act-bans shipment of unsanitary and poisonous products and requires much testing of drugs
FDA (food and drug administrative)- controls manufacturers of these products
consumer product safety act- set up consumer product safety commission that had broad powers to set safety standards and can impose penalties for failure
sherman act (1890)
monopoly or conspiracy i restraint of trade
clayton Act (1914)
substantially lessens competition
Federal trade Commission Act (1914)
unfair methods of competition
Robinson Patman Act (1936)
tends to injure competition prohibits “fake” advertising allowances or discrimination
Wheeler Lea Amendment (1938)
unfair or deceptive practices
anti merger act (1950)
lessens competiton
magnuson moss act (1975)
unreasonable practices
cultural and social environment
affects how and why people live and behave as they do- which affects customer buying behavior and eventually the economic, political, and legal environments
market
a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services-that is ways of satisfying those needs
generic market
a market with broadly similar needs- and sellers offering various, often diverse, ways of satisfying those needs. many different. (1. customer needs, 2.customer type, 3. geographic area)
product market
a market with very similar needs and sellers offering various close substitute ways of satisfying those needs(1.product type 2.customer needs 3.customer type 4. geographic area)
product type
describes good and/or services that customers want
customer (user) needs
refer to the needs the product type satisfies for the customer
customer type
refers to the final consumer or user of a product type
market segmentation
a two step process of (1) naming broad product-markets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mix
segmenting
clustering people with similar needs into a “market segment”
market segment
a (relatively) homogeneous group of customers who will respond to a marketing mix in a similar way
homogeneous within
the customers in a market segment should be as similar as possible
heterogeneous between
customers in different segments should be as different as possible
substantial
segment should be big enough to be profitable
operational
the segmenting dimensions should be useful of identifying customers and deciding on marketing mix variables
single target market approach
segmenting the mkt and picking one of the homogeneous segments as the firms target mkt
multiple target mkt
segmenting the mkt and choosing two or more segments, and then treating each as a separate target mkt needing a different marketing mix
combined target mkt
combining 2 or more submarkets not one larger target mkt as a basis for one strategy
combiners
try to increase the size of their target Mkts by combining two or more segments. Look for similarities
segmenters
aim at one or more homogeneous segments and try to develop a different marketing mix for each segment
clustering techniques
try to find similar patterns within sets of data. put everyone in a garner group like toothpaste user, entertainment user.
CRM
(customer relationship management) where the seller fine-tunes the marketing effort with information from a detailed customer database. The database stores information that is useful for segmentation. Customers aren’t just a number they are people keep in touch send gifts to keep them don’t let them wander
positioning
refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offering in the market, its hard for the marketing manager to differentiate.
Putting you in a position so you know more about the company
consumers attitudes and beliefs and needs