Intro to Marketing Exam 1 – Rutgers Fall 2017

Marketing
Process by which companies create value for customers and capture value in return.
Value
Perceived benefits minus its perceived costs
Marketing Myopia
Focus on company’s needs instead of customers’ needs and wants
Customer Satisfaction
How well a market offering meets or surpasses customer expectations
Market
The set of actual and potential buyers of a product or service
LTV (Customer Lifetime Value)
The value of the entire stream or purchases a customer makes over a lifetime of patronage
Share of Customer
The % they get of the customer’s purchasing in their product categories
Customer Equity
The total combined LTV’s of the company’s current and potential customers
Butterflies vs. True Friends vs. Strangers vs. Barnacles
Butterflies- potential profit but short-term value, capture the moment but not loyal
True Friends- Both profitable and loyal
Strangers- Low profitability, low loyalty
Barnacles- High loyalty but not very profitable
Marketing Process
1) Understand the marketplace and customer needs and wants
2) Design a customer-driven marketing strategy
3) Conduct an integrated marketing program that delivers superior value
4) Build profitable relationships and create customer delight
5) Capture value from customers to create profits and customer equity
The 5 C’s
Customers, Company, Competitors, Collaborators, Context
The 4 P’s
Product, Place, Promotion, Price
Strategic Planning
Helps a firm to maintain a strategic fit between its goals and capabilities and its changing marketing opportunities
Mission/Objectives/Goals
Mission- Why we exist
Objectives- Long-term strategic state you want to achieve
Goals- Short-term milestones that build toward objectives
SMART
Specific, Measurable, Attainable, Realistic, Timely
BCG Growth-Share Matrix
Star- High growth rate, high market share
Question Mark- High growth rate, low market share
Cash Cow- Low growth rate, high market share
Dog- Low growth rate, low market share
Product/Market Expansion Grid
Market Penetration- Existing products, existing markets
Product Development- New products, existing markets
Market Development- Existing products, new markets
Diversification- New products, new markets
Downsizing
Reduces the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy
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
Financial ROI
Net return from a marketing investment divided by the costs of the marketing investment
Company Microenvironment
Actors close to the company that affect the its ability to serve its customers
Company Macro-environment
Larger societal forces that affect the microenvironment
Demography Environment
Study of human population in terms of size, density, location, age, gender, race, occupation, and other statistics
Generations: Baby Boomers, X, Y, Z
Baby Boomers- 35% of population, born in 1946-1964, and wealthiest generation
X- 15% of population, born in 1965-1976, most educated and seek success
Y- 41% of population, born in 1977-2000, digital generation
Z- 20%+ of population, born after 2000 and born in technology
Economic Environment
Economic factors that affect consumer purchasing power and spending patterns
Factors that affect Consumer Purchasing Power
-Type of economy
-Differences in income distribution
-Change in consumer spending
Natural Environment
Physical environment and natural resources needed as inputs by marketers or affected by marketing activities
Technological Environment
Most influential force, creates new markets and opportunities
Political Environment
Forces that influence and limit various organizations and individuals in a society
Cultural Environment
Institutions and other forces affect shape our basic beliefs, values, perceptions, preferences, and behaviors
Core beliefs vs. Secondary Beliefs
Core- Persistent, passed down through institutions and generations
Secondary- Cultural swings cause beliefs and values to change over time
Customer Insights
Fresh understandings of customers and the marketplace, derived from marketing information. Used to create more value for customers and difficult to obtain.
Marketing Information Systems (MIS)
Represent people and procedures for:
1) Accessing information needs
2) Developing needed information
3) Analyzing and using information
Big Data
Huge, complex data sets generated by our sophisticated info generation, collection, storage, and analysis technologies
Internal Data
Consumer and market info obtained from data sources within the company network
Marketing Intelligence
Collection and analysis of publicly available info about consumers, competitors and developments in the marketplace
Marketing Research
Design, collection, analysis and reporting of data relevant to a specific marketing situation facing an organization
Primary Date
Gathering info for the specific purpose at hand
Secondary Data
Collecting info that already exists somewhere; collected for a prior purpose
Observational Research
Gathering primary data by observing relevant people, actions, and situations
Survey Research
Asking people questions about their knowledge, attitudes, preferences, and buying behavior
Experimental Research
Selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses
Sample
A segment of the population selected to represent the population as a whole
Rational Purchase Decision Process
Trigger->Know->Feel->Do
Self-Expressive Decision Process
Trigger->Feel->Do->(Know)
Low-Involvement Decision Process
Trigger->Know->Do->(Feel)
Business Buying
Purchased goods/services used in production of other products/services that are sold, rented, or supplied to others
Business Markets
Huge markets that are different than consumer marketings in terms of:
-Market structure
-Buying Unit
-Decision Process
Straight Rebuy
Buyer routinely reorders something without any modifications
Modified Rebuy
Buyer modifies product specifications, prices, terms, or suppliers
Systems Selling
Buying a packaged solution from a single seller