MRKT 341 Test #1 (Chapters 1-4)

Marketing
Managing profitable customer relationships & creating value for the customers in order to get value in return
The 5 Steps of the Marketing Process
1. Understand the marketplace and customer needs & wants
2. Design a customer-driven strategy
3. Construct an integrated marketing program that delivers superior value
4. Build profitable relationships
5. Capture value from customers in return to create profits & equity
Needs
States of felt deprivation
Wants
Needs shaped by culture and individual personalities
Demands
Wants backed by purchasing power
Market Offerings
Combination of products, services, information, or experience offered to a market to satisfy a need or want
Marketing Myopia
Loss of sight of customer needs due to over-focus on products themselves
Market
Set of actual and potential buyers of a given product or service
Marketing Management
Choosing target markets and building profitable relations
Value Proposition
Set of beliefs or values a company promises to deliver to customers to satisfy their needs
Production Concept
Consumers will favor products that are available and highly affordable
Product Concept
Consumers favor products that offer the most in quality, performance, and innovation
Selling Concept
Consumers will not buy enough of the firm’s product unless it undertakes a large-scale selling and promotion effort
Marketing Concept
Achieving organizational goals depends on knowing the market better than competitors
Societal Marketing Concept
Marketing strategy should deliver value to customers that improves both consumer’s and society’s well-being
Customer-Relationship Management (CRM)
Building and maintaining profitable relations through customer value and satisfaction; Management of detailed information about individual customers & touch points to maximize customer loyalty
Customer Perceived Value
Customer’s evolution of the difference between all benefits and costs of a market offering to another
Frequency Marketing Programs
Programs rewarding customers who purchase frequently or in large amounts
Customer Engagement Marketing
Fostering direct and continuous customer involvement
Customer-Generated Marketing
Customers themselves play a larger role in shaping their brand experiences
Partner Relationship Management
Working closely with others inside and outside the company to jointly bring more value to customers
Customer Lifetime Value
Monetary potential value a customer could spend over a lifetime of patronage
Share of Customer
Monetary share business receives from customers purchasing in the business’s product categories
Strategic Planning
Developing and maintaining strategic fit between an organization’s goals and capabilities and market opportunities
Steps of Strategic Planning
1. Defining the Company Mission
2. Setting Company Objectives & Goals
3. Designing the Business Portfolio
4. Planning Marketing and Other Functional Strategies
Mission Statement
Statement of the organization’s purpose
Business Portfolio
Collection of businesses and products that comprise the company
Steps For Developing Business Portfolios
1. Analyze Current Business Portfolio
2. Shape Future Portfolio By Developing Strategies For Growth &/or Downsizing
Market Penetration
Making more sales to current customers without changing original products
Market Development
Identifying and developing new markets for current products
Product Development
Offering new or modified products to current markets
Diversification
Starting up or buying businesses beyond current products and markets
Value Chain
The process of adding value to a firm’s products
Parts of the Value Chain
• Design
• Production
• Marketing
• Distribution
• Support
Value Delivery Network
Joint efforts of supplier, distributers, and ultimately customers
Marketing Strategy
Marketing logic by which the company hopes to create value for the customer and achieve profitable relationships
Market Segmentation
Grouping customers based on geographic, demographic, psychographic, and behavioral factors
Market Segment
Group of customers who are likely to respond in a similar way
Market Targeting
Evaluating each market segment’s attractiveness and selecting one or more to enter
Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place in a market relative to competitor products
Differentiation
Creating a unique market offering in an effort to provide customers more value
Marketing Mix
Set of tactical marketing tools the firm blends to elicit their desired response from customers
The 4 P’s of Marketing Mix
1. Product (Customer Solution)
2. Price (Customer Cost)
3. Place (Convenience)
4. Promotion (Communication)
The 4 Marketing Management Functions
1. Analysis
2. Planning
3. Implementation
4. Control
Marketing Analysis
Complete analysis of the company’s situation in any given market
SWOT Method
1. Strengths
2. Weaknesses
3. Opportunities
4. Threats
Marketing Planning
Deciding what to do with each business unit
Marketing Implementation
Turning marketing plans into marketing actions
CMO
Chief Marketing Officer
Functional Organization
Different marketing activities headed by various managerial heads
Geographic Organization
Sales and marketing people are assigned to specific countries, regions, and districts
Product Management Organization
A product manager develops and implements a complete strategy and marketing program for a specific product or brand
Customer Management
Focusing on customer profitability and equity
Marketing Control
Evaluating the results of implemented marketing strategies and taking corrective action
Operating Control
Comparing ongoing performance against the annual plan and taking corrective actions
Marketing ROI
(Net return from marketing initiative)/(Cost of marketing investment)
Marketing Environment
The actors and forces outside marketing that affect management’s ability to build and maintain successful customer relationships
Parts of the Microenvironment
1. Company
2. Suppliers
3. Intermediaries
4. Customer Markets
5. Competitors
6. Publics
Forces of the Macrovironment
1. Demographic
2. Economic
3. Natural
4. Technological
5. Political
6. Cultural
Marketing Intermediaries
Entities that help company promote, sell, and distribute product to customers
Publics
Any group with actual or potential interest in a company’s ability to achieve it’s objectives
Examples of Publics
• Media
• Government
• Citizens-Action
• Local
• General
• Internal
Demography
Study of human population in terms of size, density, location, age, gender, race, etc.
Economic Environment
Economic factors that affect customer purchasing power and spending patterns
Natural Environment
Physical environment and natural resources needed as inputs by marketers or that are affected by marketing activities
Examples of Environmental Trends
o Increased Pollution
o Increased Government Intervention
Purposes of Government Regulation
1. Protect companies from each other
2. Protect consumers from unfair business practices
3. Protect the interests of society against unrestrained business behavior
Cultural Environment
Institutions and other forces affecting a society’s basic values, perceptions, preferences, and behaviors
Marketing Information System (MIS)
People and procedures dedicated to assessing information needs, developing the needed information, and using the information to generate and validate actionable customer and market insights
Internal Databases
Electronic collections of consumer and market information obtained from data sources within the company’s network
Competitive Marketing Intelligence
Systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketplace
Marketing Research
Systematic design, collection, analysis, and reporting of relevant data to a specific marketing situation
The Marketing Research Process
1. Define the problem and research objectives
2. Develop a research plan for collecting information
3. Implement the plan and collect and analyze data
4. Interpret and report the findings
Exploratory Research
Gathering preliminary information to define problem and suggest hypothesis
Descriptive Research
Describing things such as market potential for a product or the demographics and attitudes of potential customers
Causal Research
Testing hypothesis and cause-and-effect relationships
Secondary Data
Information that already exists and is available for use
Primary Data
Information newly collected for a specific purpose at hand
Secondary Data Must Be
1. Relevant
2. Accurate
3. Current
4. Impartial
Observational Research
Gathering primary data by observing people, actions, and situations
Ethnographic Research
Sending observers to watch and interact with customers in their natural environment
Experimental Research
Selecting matched groups of subjects, giving them different treatments, controlling unrelated factors, and checking for differences in response
Behavioral Targeting
Using online data to target ads and offers to specific consumers