Lehigh University BUS 001- Test #1 Marketing

What is marketing?
Process of exchange whereby consumers seek to maximize utility and the firm seeks to maximize profits
Role of Marketing Firm
Analyze potential consumer needs and wants and make recommendations on product development and delivery to the marketplace
Role of Marketing Manager
Allocate scarce resources, identify competitive issues/ challenges, set strategy, think global- plan regional- act local
Marketing Mix: 4 P’s of Marketing
Product, Price, Place, and Promotion
Marketing Mix: Product
Ideas, physical product, design, safety, customer service, return policy
Marketing Mix: Price
Competition, max profit
Skimming price: high initially then lowered
Penetrative price: low price ensure many people are using the product, very accessible
Marketing Mix: Place
Where to exchange for purchase, distribution, storage, efficiency vs effectiveness
Marketing Mix: Promotion
Communication, advertisement, personal selling, coupons, celebrity endorsements
Target Markets
Segmentation: demographic, geographic, behavioral, benefit, lifestyle
Market Segmentation
Identifying meaningfully different groups of customers
Push vs Pull
Push: Availability and in-store attractiveness/ visibility
Pull: Preference and resistance-to-compromise;
Combined they drive Market Share
Allocating Resources
Marketing investment in stimuli that supports the business strategy (i.e. R&D, Advertising platforms, Promotion Platforms)
BCG Growth-Share Matrix
Tool for mapping resource allocation priorities based on the brand category growth rate and the relative market share of the brand vs competitors
BCG Growth-Share Matrix: Cash Cows
Fuel for growth
BCG Growth-Share Matrix: Stars
Situation: Cash using
Strategy: Build
Tactics: Highest Investment
BCG Growth-Share Matrix: Question Marks
Situation: Cash using or cash traps
Strategy: Build, Harvest or Divest
Tactics: New Venture R&D Investment
BCG Growth-Share Matrix: Dogs
Situation: Cash traps
Strategy: Harvest or Divest
Tactics: Selective Pruning or Rejuvenation
Product Life Cycle
Stages: Introductory, Growth, Maturity, Declining
Product Life Cycle: Sales per Stage
Introductory: Low
Growth: Fast-rising
Mature: Stable
Decline: Declining
Product Life Cycle: Competitors per Stage
Introductory: Few
Growth: Increasing
Mature: Many
Decline: Decreasing
Product Life Cycle: Price per Stage
Introductory: High
Growth: Lower
Mature: Lowest
Decline: Rising
Product Life Cycle: Marketing Support per Stage
Introductory: High
Growth: High
Mature: Decreasing
Decline: Lowest
Product Life Cycle: Strategic Implications per Stage
I: Expand Market (Trials)
G: Market Penetration (Gain brand loyalty)
M: Defend Share (Attract brand switchers)
D: Max Productivity (Promote new uses)
Marketing Myopia
Failure to recognize the broad scope of the business due to lack of marketing orientation
Branding
Combining the use of a name, design, and symbol to identify a product or service; differentiate to avoid a commodity position
Blue Ocean Strategy
Creating uncontested/ untapped market space and making competition irrelevant; no price wars, high profit margins
Blue Ocean Strategy: Six Principles
1. Reconstruct market boundaries (avoid competition)
2. Reach beyond existing boundaries (attract new customers)
3. Overcome organizational hurdles (foster new thinking)
4. Build execution into strategy (slaughter sacred cows)
5. Get strategic sequencing right (avoid early/costly failures)
6. Focus on Big Picture (shift focus to long-term)
Red Ocean
“Blood bath”, a lot of competition is present in a specific market; to be avoided; prone to price wars and low margins