Marketing Chapters 1-8

5 Step Process Creating and Capturing Customer Value
Understand Marketplace, Design a marketing strategy, construct an integrated marketing program, build profitable relationships, capture value from customers to create profits and equity
The Marketing Concept
Understand the marketplace and customer needs and wants
Exchange
Obtaining desired object by offering something in return
How to build strong relationships
Delivering consistent superior customer value
Marketing Myopia
Focusing too much on customer existing wants and not underlying needs
Production Concept
Customers choose highly available and affordable products
Product Concept
Customers favor high quality products with the most features and best performance
Selling Concept
Customers will not buy products unless the firm undertakes large scale selling and marketing efforts
Marketing Concept
The company must understand market needs/wants then delivering customer satisfaction better than the competition
Societal Marketing Concept
Marketing decision include consumer and company requirements but also consumer and sustainable societal long term interests
Customer Relationship Management
Delivering superior customer value and satisfaction to build and maintain profitable customer relationships
Customer-Perceived Value
Customer’s evaluation of the difference between all the benefits and costs of a marketing offer relative to those of competing offers.
Customer Satisfaction
Extent to which a product’s perceived performance matches a buyer’s expectations.
The 4 P’s of the Marketing Mix
Turns marketing strategy into customer value in the exchange relationship
Product, Price, Place, Promotion
The major mix tools the firm uses to implement its marketing strategy and create real value for customers
Product
Variety, Quality, Design, Features, Brand Name, Packaging, Services
Price
List price, Discounts, Allowances, Payment period, Credit terms
Promotion
Advertising, Personal selling, Sales promotion, Public relations
Place
Channels, Coverage, Locations, Inventory, Transportation, Logistics
Star
High growth rate share and investment
Cash Cow
Low growth rate, High share, Less investment, fund other priorities
Question Mark
Low share, high growth rate, high investment
Dog
Low growth rate share and return
Market Segmentation
Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs
Market Segment
Group of consumers who respond in a similar way to a given set of marketing efforts
Market Targeting
Evaluating each market segment’s attractiveness and selecting one or more segments to enter
SWOT Analysis
A comprehensive marketing plan which also includes
the 4 Ps of marketing mix, segmentation and target market strategy, and a business mission statement
Strengths
Internal capabilities, resources, and positive situational factors that may help the company serve its customers and achieve its objectives
Weaknesses
Internal limitations and negative situational factors that may interfere with the company’s performance
Opportunities
External favorable factors or trends that the company may be able to exploit to its advantage
Threats
Unfavorable external factors or trends that may present challenges to performance
Strategic Planning
Defining company mission, Setting objectives/goals, Designing business portfolio, Planning marketing strategies
Marketing Plan
Summary of goals, Current marketing situation, SWOT, Objectives and issues
Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
Actors in Microenvironment
Company, Suppliers, Marketing intermediaries, Competitors, Publics, Customers
Major Forces in Macroenvironment
Demographic, Economic, Natural, Technologies, Political, Cultural
A good MIS balances…
What users really need and what is feasible to offer (Too much info can be as harmful as too little)
(Assess user info needs->Develop needed info->Helps users analyze and use info)
Information Users
Marketing managers, internal and external partners, and others who need marketing information
Competitive Marketing Intelligence
Systematic collection and analysis of publically available info regarding the market, customers, and competitors – observation, employee input, competitive bench marking, social media and internet. Used for strategy and hypothesis creation often in conjunction with Market Research.
Internal Databases
consumer and market info derived from data sources within the company – cheap (not free) and fast.
Marketing Research
Systematic design, analysis, collection and reporting of data developed for a SPECIFIC marketing situation affecting the company
Secondary Data
Info that already exists and has been collected for another purpose. Often comes from the Marketing Info System or the Internal Data system. Used for strategy and hypothesis
Primary Data
Typically associated with formal market research and is collected/developed for a specific purpose and to address a specific customer or market issue
CRM System
Different from the marketing concept of Customer Relationship Management. The CRM is an actual data system that stores all of the company’s marketing information so it is organized, and easy to retrieve and analyze for decision making purposes. These system are called CRM because they facilitated the entire marketing process of building value for the customer and the exchange inherent in the Mktg process
Online Contact Method
Cheapest, fastest way to reach target market
Marketing Research Process
Defining problem & research objectives, develop research plan, implement research plan, interpret findings
Buyer Decision Process
Need Recognition, Info search, Evaluate alternatives, Purchase decision, postpurchase behavior
Culture CIF
Culture, subculture, social class
Social CIF
Groups and social networks, family, roles and status
Personal CIF
Age and life-cycle stage, Occupation, Economic situation, Lifestyle, Personality and self-concept
Psychological CIF
Motivation, perception, learning, beliefs and attitudes
Innovators
Risk takers
Early Adopters
Opinion leaders in their communities and adopt new ideas early but carefully
Early Mainstream
Adopt new ideas before the average person
Late Mainstream
Adopt an innovation only after a majority of people have tried it (skeptical)
Lagging Adopters
Adopt the innovation only when it has become something of a tradition itself
Business Buying Behavior
Marketing and other stimuli affect the buying organization and produce certain buyer responses
Buying Center
Made up of a variety of people and inputs and is NOT a structured organizational element
Buying Decision Maker
Can be a variety of company managers or execs
Business Buying Behavior Stages
Problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification, performance review
Differentiation
Refers to the actual components of the product that distinguishes it from competing products
Positioning
Creates the image of the product in the consumers mind relative to the competition
Market Targeting Strategies
Mass marketing, segmented marketing, niche marketing, local/individual marketing
Undifferentiated (Mass) Marketing
Sees the market as all the same; sees only one big market to be reached with one marketing mix
Micromarketing (Local/Individual Marketing)
Focuses products and programs on individuals in specific locations. Tries to capture a large share of a small market.
Winning Value Propositions
(Look on phone)
Perceptual Positioning Map
Compares consumer perception among competitive brands along important buying dimensions
Consumer Products
Convenience, shopping, specialty, unsought (LOOK ON PHONE)
Industrial Products
Materials and Parts (Raw materials), Capital (Offices, factories), Supplies and Services (Lubricants, coal)
Product and Service Decisions
Individual product decisions, product line decisions, and product mix decisions
Individual product decisions
Product Attributes->Branding->Packaging->Labeling-> Product Support Services
Product Lines
Represent closely related products that have similar functions and customer groups and are sold through similar outlets or fall within given price ranges
Product Line Length
The number of items in the product line and can be expanded by product line filling and stretching
Product Line Filling
Adding more items within the present range of the line
Product Line Stretching
When a company lengthens its product line beyond its current range
Product Mix
Set of all product lines and items that a particular seller
offers for sale (Drink, Simple, Baked)
Width, Length, Depth, Consistency
Number of different product lines the company carries, Total number of items a company carries within its product lines, Number of versions offered for each product in the line, Relativity of the various product lines in end use, production requirements, distribution channels, or some other aspect
Intangibility
Services cannot be seen, tasted, felt, heard, or smelled before they are bought
Inseparability
Services cannot be separated from their providers
Variability
The quality of services depends on who provides them as well as when, where, and how they are provided
Perishability
Services cannot be stored for later sale or use
3 Types of Service Marketing
Internal (company+employees), External (company+customers), Interactive (employees+customers)
Positive/Negative Brand Equity
When consumers react more/less favorably to the brand than to an unbranded version of the same product
Brand Valuation
The estimated total financial value of a brand
Customer Equity
The value of customer relationships that the brand creates
Major Brand Strategy Decisions
(Look on Phone)
Stages in New Product Development
Idea Generation(need/wants/demand), Idea Screening, Concept Development and Testing, Marketing strategy development, Business analysis, Product development($$$), Test marketing($$$), Commercialization
3 sources of idea generation (#1)
INTERNAL (employees), External (customer, competitor), Crowdsourcing (Internal and external communities)
(#2) Idea Screening
Simply screening new product ideas to spot good ones and drop poor ones as soon as possible
(#3) Concept Development and Testing
Create alternative product concepts, find attractive ones, choose best
(#4) Marketing Strategy Statement
Describing
Target market, value proposition, sales, market-share, and profit goals
Price, distribution, and initial marketing budget
Plan for long-run sales, profit goals, and marketing mix strategy – 4Ps
(#5) Business Analysis
Transitions the marketing strategy statement into a
detailed review of the new product sales, costs, and
profit projections
(#6) Product Development
The new product only exists as a word description and analysis. Product Development turns it into something physical. (Prototypes)
(#7) Test Marketing
The product and its proposed marketing program are introduced into realistic market settings ($$$ + time)
(#8) Commercialization
Launching new product into market
(Time – economics, business cycle, competitive releases, other company news)
(Place – single location, region, national market, or international market)
Managing New Product Development
Holistic approach, customer-centered, team-based, and systematic effort
Product Life Cycle
(Look on Phone)
Style
basic of distinctive form of expression – timeless; come in and out of favor
Fashion
Currently accepted or popular style in a given field; slow rise; slow decline
Fad
Temporary period of high consumer enthusiasm; fast growth and fast decline