Marketing 360

Value
the benefits a customer receives from buying a good or service
Marketing Fields
supply-channel management
brand management
advertising
new product planning
Consumer
Ultimate user of a brand or service
Marketing
the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
Exchange
Delivering value to everyone who is affected by a transaction
Stakeholders
The buyers, sellers, investors, and community residents in a company
Need
When a gap exists between a consumer’s actual state and some idea or desired state the consumer has a
Want
A desire for a particular product a consumer uses to satisfy a need in a specific way that is culturally and socially influenced
Benefit
The outcome that motivates a customer’s buying behavior
Demand
A customer’s desire for a product coupled with the buying power or resources to obtain the product is called
Marketplace
For a product, consumers must share a common need that can be satisfied by the product and have the resources, willingness, and authority to purchase the product to be a part of this
Utility
Types of Utility
Sum of benefits we receive when we use a good or service:
Form
Place: Products are available when consumers want them. Shipping a dress from New York
Time
Possession: allows you to own, use, and enjoy the product- bridal stores have a variety of styles and colors a woman could not get on her own
Form Utility
The benefit marketing provides by transforming raw materials into finished products as a manufacturer does by combining silk, thread, and a zipper to create a bridesmaids gown
Time Utility
Women who rent their wedding gowns instead of buying them and wearing them only once are taking advantage of this utility
Exchange
For this to occur, at least two people or organization must be willing to make a trade and each must have something the other wants
In which kind of market would a Production orientation be most successful?
A seller’s market in which demand is greater than supply
Companies that have this type of orientation tend to be more successful at making one time sales than at repeat business
Selling
Consumer
This type of orientation is a management philosophy that focuses on ways to satisfy customers needs and wants
Total Quality Management
Focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement
Triple Bottom Line Orientation
A business orientation that looks at financial profits, The community in which the organization operates, and creating sustainable business practices
Companies that focus on a triple bottom line orientation are likely to place a priority on this
Production Orientation
EX: Walmart cutting back on emissions and improving the quality of their production
List the 3 components of the triple bottom line orientation
Financial bottom line
social bottom line
environmental bottom line
Customer Relationship Management (CRM)
involves systematically tracking consumers preferences and behaviors over time in order to tailor the value proposition as closely as possible to each individuals unique wants and needs
EX: Internet can personalize messages and products to better meet the needs of consumers
Social Marketing Concept
Maintains that marketers must satisfy customers needs in ways that will also benefit society and are profitable to the firm
EX: satisfying environmental and social needs for a cleaner, safer environment by developing recyclable packages, adding safety features to cars etc.
Sustainability
A company that focuses on this is concerned with meeting present consumer needs without compromising the ability of future generations to meet their needs
EX: Walmart uses recyclabe cardboard to ship goods, baseball players wore jerseys made out of plastic retrieved from taiwan and japan
Green Marketing
A marketing strategy that supports environmental stewardship by establishing an environmentally founded differential benefit in the minds of consumers
Services
Intangible products that we pay for and use but never own
Consumer Goods
Tangible products that individuals purchase for personal or family use
Business to Business Marketing
the marketing of goods and services from on organization to another
Industrial Goods
Goods individuals or organizations buy for further processing or for their own use when the do business
EX: Automakers buy tons of steel to use in the manufacturing process, and they buy computer systems to track manufacturing costs and other essential information to operations
E-Commerce
The buying and selling of products over the internet
EX: books, CDs, cars etc.
Companies look at this when they calculate the lifetime value of a customer
How much profit they expect to make from a particular customer, including each and every purchase she will make from them now and in the future
Value Chain
A series of activities involved in designing, producing, marketing, delivering, and supporting any product
In addition to marketing activities, this includes business functions such as human resource management and technology development
Value Chain
Web 2.0
Social networking is an integral part of this
Marketing
A decision process in which marketing managers determine the strategies that will help the firm meet its long term objectives and then execute those strategies using tools they have at their disposal
Marketing Plan
A document that describes the marketing environment, outlines the marketing objectives and strategy, and indentifies who will be responsible for carrying out each part of the marketing strategy
Marketing Planning
Process of thinking strategically about the big picture and where the firm and products fit within it
Market Segment
A distinctive group of consumers within a large market who are similar to one another in some way and whose needs differ from other customers in the larger market
EX: ford, general motors, and BMW have different cars for different market segments
Target Market
A market segment on which an organization focuses its marketing plan toward which it directs its marketing efforts.
Market Position
How the target market percives a product in relation to competitors products
Name the 4 P’s
Price: used as a signal of quality
Product: design and packaging (free delivery)
Place: places product is available
Promotion: how firm communicates with consumers
Marketing Mix
The tools the organization uses to create a desired response among a set of predefined consumers
What is part of the product element of the marketing mix
The packaging
EX: Virgin cola came out in distinct packaging to stand out among competitors
Price
The assignment of a product’s value, or the amount the consumer must exchange to receive the offering
EX: Adidas 1 computerized running shoe got a lot of attention but it was very expensive so it made buying the shoe a state statement for a hardcore runner
Promotion
Element of the marketing mix that communicates the value proposition using forms such as personal selling, advertising, coupons, and publicity
Place
Element of the marketing mix that is most closely associated with a companys supply chain
A business Plan
includes the decisions that guide the entire organization or its business units
Marketing Plan
A document that describes the marketing environment, outlines the marketing objectives and strategies, and identifies how the company will implement the control those strategies
Product Cannibalization
when a new product takes sales away from original brand
Economies of Sale
If we make more of a product, we can make it at a lower cost per item
Line Extension
another product under the same brand
EX: new flavors, package differences, same product category
Brand Extension
new product category under same brand name
Different product class
EX: shoes, toys, sunglassses
Relationship Marketing
The concept of a long term continuous partnership focused on problem solving
Code of ethics
A firms set of written standards of behavior to which everyone in the organization must subscribe and which establish standards for how the organization interacts with its stakeholders
Strategic Planning
The managerial decision process that matches the organizations resources and capabilities to its market opportunities for long-term growth
EX: firms strategic planner might set objective to increase total revenue by 20% in the next 5 years
SBU stands for
Strategic business units
EX: Disney’s SBU’s include the theme parks, tv network, cruise line divisions
The marketing plan it a type of
Functional Plan
Functional planning
decision process that concentrates on developing detailed plans for strategies and tactics for the short term supporting an organizations long term strategic plan
EX: Jay Minkoff at first flavor set an objective by introducing three new products during the coming year
Operational Planning
A decision process that focuses on developing detailed plans for day to day activities that carry out an organizations functional plans
EX: first flavor may develop plans for a marketing campaign to promote the product by creating buzz via social media
Strategic Planning Step 1:
Mission Statment:
formal document that describes organizations overall purpose and what it hopes to achieve in terms of its competitors, products, and resources
Strategic Planning Step 2:
Asses the organizations internal and external environments
Situational Analysis
An assessment of a firms internal and external environment
Analysis of a firms internal environment identifies the firms
strengths and weaknesses
Internal environment
Employees, technologies, facilities, finances
A firms internal business environment does NOT include
elements of the legal environment
External Environment
consumers, competitors, economy etc.
Within a larger corporation, each SBU
has its own business portfolio
EX: if disney loses money at a theme park, they hope to make up for it with at homers who are watching disneys television programs
Portfolio analysis
a tool management uses to assess the potential of a firms business portfolio. It helps management decide how to allocate resources among the firms current SBU’s
The growth market share matrix developed by the Boston consulting group is a type of
portfolio analysis
Stars
SBU’s with products that have a dominant market share in high growth areas
EX: disney invested a lot into its tv operations seen as stars in Hannah Montana and Narnia. Also the re-release of toy story
cash cows
strategic business units that have a dominant market share in a low growth potential market
EX: Disney’s theme parks because sales have been steady or only slightly increasing/decreasing over time
Question Marks
SBU’s with products that have low market shares in fast growing markets
EX: disney stores retail market has lagged in recent years
Dogs
SBU’s with products that have a small share of slow-growth market
EX: when disney announced shutting down pluto and goofy
Category of BCG model when sales have been steady and the firm has a large market share
Star
A limitation of the BCG matrix
It doesnt tell managers the best ways to make growth happen
Strategic Plan Step 3
Set organizational or SBU objectives
identify what firm hopes to accomplish within the general time frame of the business plan
Strategic Plan Step 4
Establish Business Portfolio
strategic planning includes making decisions about how to best allocate resources across these businesses to ensure growth for the total organization
Strategic Plan Step 5
Develop growth strategies
BCG matrix helps managers decide which SBU’s they should invest in for growth
Marketing strategies:
market penetration, market development, product development, and diversification
Marketing Penetration Strategy
A growth strategy that attracts users of competitive brands
Market Development Strategy
introduce existing products to new markets
EX: nintendos WII has become popular with older consumers because its active functionality during the game provides an opportunity for a light and fun physical workout
When mcdonalds purchased donato’s pizza and a controlling interest in Chipotle Mexican Grills, the company was pursuing this strategy
Diversification- emphasize both new products and new markets to achieve growth
Product development strategies
create growth by selling new products in existing markets
This provides managers with 4 different fundamental marketing strategies: market penetration, market development, product development, and diversification
BCG growth market share matrix
when general mills urged consumers to lower their cholesterol by eating cheerios twice a day over the course of six weeks, the aim was to increase usage among current customers. What strategy did General mill use
Market Penetration
Strategy that emphasizes both new products and new markets to achieve growth
Diversification
First step of the marketing planning process involves closely examining this
marketing environment
What step in developing a marketing plan includes an analyses of the marketing environment?
Situation Analysis
Second Step of the marketing planning process is to
Set marketing objectives
EX: Jay Minkoff- decide what to accomplish in terms of first flavors marketing mix
In a marketing plan, these state what the marketing function must accomplish to achieve overall business objectives
Marketing objectives
In this step of the marketing planning process, decisions are made concerning what markets to target and what marketing mix strategies to use
Develop marketing strategies
In this stage of marketing planning process, marketing must determine how they want consumers to think of their product in comparison to competing products
Develop marketing strategies
Southwest Airlines used this strategy to target customers who could not previously afford air travel
Pricing strategy
Marketers communicate a products value proposition to the target market by implementing a
promotional strategy
Product strategy
Decision such as product design, packaging, branding support services etc.
EX: jetblue airways included in seat video games and television as a key product feature during the flight
Target market strategy
Advertising, sales, promotion, public relations, direct marketing and personal selling
Many airlines now encourage customer to purchase online “ticketless” flight reservations by charging a fee to those who purchase tickets as ticket counters. What kind of strategy is this
distribution (how, when and where firm will make the product aviailable to targeted customers
After marketing strategies are developed, the next step in the marketing planning is
Implementation
can make or break plan
Control
the formal process of monitoring progress toward meeting marketing objectives
1. measure performance
2. compare this performance to the established marketing objectives or strategies
3. make adjustments to the objectives or strategies on the basis of the analysis
Making adjustments to the marketing plan is part of
implementation and control
Marketers need to understand this environment of a country from two perspectives : the overall level of development of a country and the current stage of its business cycle
Economic
gross domestic product (GDP)
the most commonly used measure of economic health of a country
gross national product (GNP)
measures the value of all goods and services produced by a country’s individuals or organizations, whether within the country’s borders or not
What is true about a least developed country (LDC)?
it has an economy based on agriculture
Business cycle
a severe recession, a period in which prices fall but there is little demand because few people have money to spend and many are out of work. This condition is a part of it
Inflation
Occurs when prices and the cost of living rise while money is lost
Discretionary income
the amount of money an individual has left to spend after paying for necessities such as housing, utilities, food and clothing
The YMCA and gold gym engage in this competition when they both try to attract customers to buy their fitness center services
Brand
Monopoly
one seller controls a market
Ogliopoly
a structure where there are a relatively small number of sellers, each holding substantial market share, in a market with many buyers
EX: airlines
Monopolistic Competition
a structure where there are many sellers, each having slightly different products and each having only a small share of the market
EX: athletic shoe manufacturers such as nike, new balance compete with one another to offer consumers some unique benefit.
perfect competition
a structure where there are many small sellers each having similar products, and each unable to have a significant impact on the quality price or supply of a product
EX: farmers markers
Technological Environment
firms are constantly scanning this environment in search of ideas and trends that can spark their own research efforts. Sometimes an idea can transform an industry, such as transistors revolutionizing the file of consumer electronics.
Sherman Antitrust Act
Developed to eliminate monopolies and to guarantee free competition
Fair Packaging and Labeling Act
created the regulatory body that enforces laws against deceptive advertising and product label regulations.
Food and Drug Administration
A US regulatory agent that enforces laws and regulations on foods, drugs, cosmetics, and veterinary products. Markets of pharmaceuticals must get approval from this agency before introducing products to the market
Sociocultural environment
refers to the characteristics of a society, the people who live in the society, and the culture that reflects the values and benefits of the society
Collectivist culture
people tend to subordinate their personal goals to those of a stable community
EX: try selling someone a product that is “sure to make you stand out” to someone trying to “fit in”
Individualistic culture
people tend to attach more importance to personal goals than to the needs of the larger community
Ethnocentrism
the belief that ones own norms and the products made in ones own country are superior
EX: french evaluate food products from other countries very critically
EX: british store called marks and spencers in france is selling english style sandwiches
After exporting, the next level of commitment a firm can make to a foreign market is a contractual agreement. What are two of the most common types of such agreements?
Licensing and franchising
Licensing Agreement
When a firm gives another firm the right to produce and market its product in a specific country or region in return for royalties sold on goods
EX: sesame street is licensed to many countries
Franchising
A form of licensing that gives the franchise the right to adopt an entire way of doing business in the host country
What is true about the market entry strategy of a direct investment?
It allows a foreign firm to take advantage of a domestic company’s political savvy and market position
EX: Mcdonald’s purchases lettuce and pickes from local farms