Marketing Test 1 chapters 1-5

management job
marketing decisions; planning marketing activities, direction the implementation of the plans, and controlling the plans: seek new opportunities, plans concern the whole firm
What is a marketing strategy
specifies a target market and a related marketing mix
target market
fairly homogenous group of customers whom a company wishes to appeal
marketing mix
controllable variable the company puts together to satisfy this target group
example: herbal essence shampoo: curly hair, straight hair
target marketing is not
mass marketing
marketing strategy is to a _____ target customers
particular, target marekting to distinguish from mass marketing
marketing mix is tailored to fit some specific target consumers
mass marketing
typical production orientation appraoch aims at everyone with the same marketing mis. Assumes that everyone is the same.
Shotgun approach
mass marketing – everyone is the same
rifle approach
target appraoch
Are mass marketers the same as mass marketing?
no, mass marketers like kraft foods and walmart are aiming at clearly defined targets!
developing marketing mixes
many marketing mix decisions: package, brand name, and warrange can be changed
what are the four p’s
product, place, promotion, price
product
developing the right product for the target market. physical good, service or blend. this includes branding, packaging and warranties
place
right product to the target market’s place. Where and when its wanted, reaches a customer through channel of distribution
channel of distribution
any series of firms or individuals that participate in the flow of products from producer to final user or consumer. Southwest airlines example of how american airlines uses many channels and southwest does not (ie hotel info etc expedia) and transporting, storing and handling products
promotion
telling and selling the product to the customer, this is the “right product” selling mass selling and sales promotion Markets job to blend methods of communication
types of methods of communication
personal selling, customer service, mass seling, publicity, sales promotion
personal selling
direct spoken communication between sellers and potential customers
customer service
personal communication between a seller and a customer who want the seller to resolve a problem witha purchase
mass selling
communicating with large numbers of customers at the same time USES ADVERTISING AND PAID FORM OF THINGS
PUBLICITY
UNPAID form of communication
sales promotion
those promotion activities other than advertising, publicity, and personal selling such as coupons, pop, signs, contests, events, catalogs
price
kind of competition in the target market and the cost of the whole marketing mix; if customer doesnt accept the price all things are wasted
is the customer part of the marketing mix
NO the customer is surrounded by it
Should the 4 ps be equal
yes, they are equally important all are needed and should be tied together. selecting a target market and developing a marketing mix are interrelated MUST BE DECIDED TOGETHER
EXAMPLE OF TODDLER UNIVERISTY
differnt types of customers, traditionalists, economists, fashionistas, attentive parents they used plan : what marketing mix will be offered, to whom, for how long – what company resources will be needed, what results are expected, include control procedures
implementation
puts marketing plans into operation
operational decision
short run decisions to help implement strategies that may be needed
control
analyzing and correcting what youve done,
customer equity
expected profits depend on this. expected earnings stream of a firm’s current and prospective customers over some period of time. Top management expects to identify opportunities that will lead to increase customer equity
what is the key to profit
customers
what is an attractive opportunity
breakthrough, competitive advantage , segmentation, differentiation SWOT
swot
analysis which defines the firms strengths, weakness opportunities and threats strengths and weaknesses are internal opportunities and threats are external
differentiation
means that the marketing mix is distinct from and better than what is available from a competitor
opportunities to actually pursue
marketing penetration, market development, product development, diversification
marketing penetration
increase sales of a firm present product in its present markets probably through a more aggressive marketing mix, international opportunities
market development
trying to increase sales by selling present products with new markets
product development
offering new or improved products for present market
diversification
moving into totally different lines of business
what do direct markets include
customers, the company and the competitor
external market environment is broader than direct market
it includes economic environment, political and legal environment, cultural and social environment
firm’s objects
should set firms course, responsibility of top management, look at the whole business, relate to present objectives, resources to external environment and decide what the firm wants to accomplish
three basic objectives provide guidelines
should be together!!
engage in specific activities that will perform a sociall and economically useful function
a. Businesses cant exist without approval of consumers
2. Develop an organization to carry on the business and implement its strategies
3. Earn enough profit to survive
a. It isn’t enough to just make profit.
b. Management must specific TIME PERIOD
c. Expenses in the short run matter
d. BUT – seeking only short hand can ruin things too
e. Example: fruit of the loom. Set a target rate of profit that will lead the firm into areas with promising possibilities
mission statements
sets out the organization’s basic purpose for being, should focus on few key goals rather than everything, supply guidelines that help determine which opportunities to pursue
company resources may limit opportunities
find strengths and recognize weakness such as financial stregnth you need money before a firm can make its first sale, producng capability and flexibility, smaller firms can be more flexible, marketing strengths helps analyzing current marketing resources, a familiar brand can be a strength starbucks made up own ice crea, new idea or process, collaborators help offset weakness clorox
analyze competitors
a. Competitive environment affects the number and types of competitors the marketing manager must face and how they may behave.
i. Pure competition
ii. Oligopoly
iii. Monopolistic competition
iv. Monopoly
b. Most markets lean towards pure or oligopoly, competitiors offer similar products. Marketing mix with best customer value is not necessarily the lowest price!!
c. Marketing managers cannot adopt the same good marketing strategy used by other firms bc it leads to head on comp and spiral downward in prices and profits
d. Competitior free environments are rare:
types of competition
monopoly only one firm controls a broad product, gov. commonly regulate monopolies, utility companies monopolistic # of diff firms offer marketing mixes that at least some customers see as different — most face monopolistic competition
finding competitive advantage
i. Avoid head on by new ways to satisfy customers’ needs and provide value, requires understanding not only of customers but also competitors
ii. Competitior analysis is an organized approach for evaluating the strengths and weaknesses of current or potential competitors’ marketing strategies
iii. Compare the strenfths and weaknesses of your target market and marketing mix with what competitors are currently doing or are likely to do in response to your strategy
1. Identify potential competitiors
iv. Competitive rivals → firms that will be the closest competitors and are usually easy to identify
sustainable competitive advantage
a marketing mix that some customers see as better than competitiors and cannot be easily copied , does not involve price
competitive barriers
the conditions that may make it difficult or even impossible for a firm to compete in a market, seek info about competitors, ethical issues may arise –> how far do you go to be on top
economic environment
macro economic factors including national income, economic growth and inflation that affect patterns of consumer and business spending
technological encrionment
technology is the applicaiton of science to convert an economy’s resources to output – opportunities for new products and new processes. Internet is reshaping marketing! internet is a system for linking computers around the world, changes how consumers shop and marketers market such as click thoughts. ethical issues production oriented way of thinking
political environment
nationalism, regional groupings, unification of european makrkets nafta
nationalism
limiting in international markets; it is an emphasis on a country’s interest before everything else, affects how macro marketing systems work, nationalistic feelings can reduce sales in international markets. Is it illegal for US firms to offer bribes
unification of Euripean markets
reducing conflicting laws to trade within europe – prohinition of lifetime guarantee
nafta
lays out a plan to reshape the rules of trade among US, Canada and mexico it is a free trade act. backlash that firms have moved production and jobs to mexico where labor is cheaper
legal environment
sets basic rules for how a business can operate in society, legal environment may limit some choices, trying to encourage competition — comp within small firms helps economy, anitmonopoly laws
legal environment FDA,
food and drugs are controlled i. 1906 Pure Food and Drug Act
1. unsanity meat pacing, FDA
e. product safety is controlled
i. Conumer Product safety act of 1972 , this group has broad power to set safety standards an can impose penalties fro failure to meet these
social & cultural environment
how and why people are the way they are. language, education, religion, food clothing, housing, work marriage, family change happens slowly but is important, multiculturalism is making differences
womens roles
women in the job market boosted economic growth 70% of women 35-44 are working
screening criteria
analyze firms resources, product market screening both quantitative and qualitative components, criteria should be realistic, whole plans should be evaluated ROI appoach can evaluate possible plans
quantitative
summarize the firms objectives “: sales, profits, and return on investment
qualitative
what kinds of businesses the firm wants to be in , what businesses it wants to exclude, what weaknesses it should avoid and what resources and trends it should build on
sustainability
idea that is important to meet present needs without compromising the ability of future generations to meet their own needs
multiproduct firms
have difficult strategy planning, must develp plans for different bsuiness and balance plans so the whole company reaches its objectives
what is a company’s market
group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services – not just products
generic markets t
market with broadly similar needs and sellers offering various often diverse ways of satisfying hose needs. sellers have to focus on the need the customer wants not how the sellers product is better than another!
product market
market with very similar needs and sellers offering various close substitute ways of satisfying those needs
complete product market definition
what: prodcut type
to meet what: customer needs
for whom: customer types
where: geographic areas, should meet customer needs
generic market doesnt include
product type terms NO PRODUCT TYPE
market segmentation
naming broad product markets, segmenting these broad product markets in order to select target markets and develop suitable marketing mixes
segmenting
aggregation process putting people with similar needs into a market- homogenous group of people who will respond to a marekting mix in a similar way look for similarities
segmenting broad product market
homogenous similar withi, heterogenous, different between, substantial big enough to profit, operation useful for identifying customers and deciding on marketing mix variables operational!! ages, sex, income, location and family size, moodiness is not a practical operational use
what to taget marketers aim
they aim at specific targets, three basic ways — single target market approach, multiple target market approach, combined target market approach
single target market appraoch
pick one of the homogenous segments as the firms target markets
multiple target market appraoch
segmenting the market and choosing two or more segments and then treating each as a separate target market needing a different marketing mix
combined target market approach
combining two or more submarkets into one large target market as a basis for one strategy
combiners try to satisfy pretty well
try to increase the size of their target market by combining two or more segments
1. similarities
segmenters try to satisfy very well
i. segmenters aim at one or more homogenous and try to make different mix for each
ii. really fine tune marketing mixes
iii. idea of superior value
segmenting may product bigger sales
such a close relationship with the market
profit is the balancing point
IV. what dimensions are used to segment markets
a. several dimensions at the same time
b. qualifying dimensions → are those relevant to including a customer type in a product market
c. determining dimensions → are those that actually affect the customer’s purchase f a specific product or brand in a product market page
A best approach to segmenting product markets
a. Select the broad product-market
i. Build on the firms strength
b. Identify potential customers’ needs
i. Identify and write down as many relevant needs as you can considering all f the potential customers in the broad product market
ii. Brainstorming step
c. Form homogeneous submarkets narrow product markets
d. Identify determining dimensions
e. Name the possible product markets (nickname)
i. Based off relative importance
f. Evaluate why product market segmetns behave as they do
g. Make a rough estimate of the size of each product market
h. Next…
i. Improve the marketing mix for current customers
More sophisticated techniques may help in segmenting
a. Clustering usually requires a computer
i. Try to find similar patterns with sets of data. Clustering is groups of customers who are similar on their segmenting dimensions into homogeneous segments. Clustering approaches use computers
ii. Importance of different needs
iii. Sometimes you get new marketing strategies
b. Customer database an focus the effort
i. Customer relationship management , the seller fine tunes the marketing effort with information from a detailed customer database→ customers past purchases!!
Differentiation and positioning take the customer point of view
a. Differentiate the marketing mix to serve customers better
i. Customers see your firms competitive advantage
b. Positioning → refers to how customers think about proposed or present brands in a market
i. Product space
c. Each segment may have its own preferences
d. Combining vs segmenting
i. Positioning analysis may lead a firm to combining rather than segmenting it managers they they can make several general appeals to different parts of a compbined market
positioning as a part of broader analysis
positioning helps manager understand how custoers see their market target is as visual aid to understanding a product market
concisely identifies the firms desired target market product type primary benefit or point of differentiation and the main reason a buyer should believe the firms claims.
target market focus on the
global customer to develop marketing strategies that find unsatisfied customers to whom they can offer superior value through more attractive marekting mixes
what three questions do marketers need to answer
group vs customers
how big is it
where is it
global consumer markets
literacy, population density technology
population is becoming more concentrated
population density is important, urbanization increase in , affluent big city consumers have similar lifestles and needs
there is no market when there is no
incom
measures of national income
gross domestic product
gross national income
gross national income per capital
gross domestic product
total market value of all goods and services provided in a country’s economy in a year by both residents and nonresidents of that country
does not include foreign income
gross national income
measure that is similar to GDP but this does not include income earned by foreigners who owned resources in that national
GNI per capital
is per person, is a useful figure becuase it gives some idea of the income level of people in the country
US population is shifting
population is different in parts of the country
population will keep growing but growth has slowed down
birthrate booms and busts
i. Birthrate is the number of babies born per 1,000 people
1. Post WW2 lasted until 1960’s
ii. Generation called baby boomers came from 1960’s people born between 1946-1964
iii. 1970’s called baby bust → women stayed in the workforce and waited longer to have children
iv. echo boom → when baby boomers had their own children in the 1980’s-1990’s
v. trend toward smaller families
boomers drive the
graying of america – median age rose to 37
geneartion x
i. Called Gen X refers to generation following baby boom 1965-1977
ii. Since there was a decline it was result of the baby bust!!
iii. Better educated than previous generations
iv. Women more highly educated
v. Smaller in size
generation y
Millenials 1978-1994
ii. echo boom , grew 12.1%
iii. grew up with technology
iv. digital lifestyles
income dimensions of the US market
a. More people are in middle and upper income levels
i. Family incomes generally increased with GNI
ii. The distribution of income changed drastically over time which is evne more important
iii. Started off as a pyramid most low level income is at the bottom
b. Real income growth has slowed but for how long?
i. Real income – income that is adjusted to take out the effects of inflation on purchasing power
c. Higher income groups receive a big share
i. Divides families into 5 equal sized groups from lowest to highest income
ii. Median income in 2008 was 62k top 20% made 200k
d. How much income is enough
i. Income distributon just focus on the median income
e. Can low income consumers protect themselves
i. Disposable income is what is left after taxes
ii. Discretionary income what is left of disposable income after paying for necessities
1. Necessities caries from family to family and over time
spending and family cycle
demographic dimensions are useful in understanding consumer buying: marriage, age, age of children in the family
is there a typical american household
no!! single adult households are on the rise,
young people and families
accept new ideas, single and young couple willing to try new products, spend greater amounts on discrepencies, divorce disrupts the family cycle patter
reallocation for teenagers
american teens spend almost 200 billion
selling to the empty nesters
empty nesters people who child are grown and who are not able to spend money in other ways
senior citizens are big market
people over 65
senior citizens are not only a large group but more prosperous than ever before older people have different needs
ethnic dimensions of the US market
a. Do ethnic groups buy differently
i. People from different ethnic groups may be influenced by very different cultural variables
ii. 1 out of 5 families speaks another language
iii. differences in attitudes, experiences, and values as well as where they shop and what advertising appeals they attend to, come together to shape differeneces in buying behavior
b. stereotypes are common misleading
i. this is changing, black families are still the poorest but are trying to make more money
c. ethnic markets are becoming more important
i. # of ethnic groups is growing at a much faster rate than the overall society
ii. immigration
d. Hispanic market is growing
i. Largest and fastest growing ethnic group int eh USA
e. Asian market grows fast too
i. Have the highest median family income
f. Income and population create ethnic market buying power
g. Strategy changes may be needed