Principles of Marketing Chapters 1-4

Commitment Selling
A strategy that focuses on keeping and improving relationships with current customers
Customer Value
The relationship between benefits and the sacrifice necessary to obtain those benefits, when firms offer products that perform, attractive pricing, great service and after sale support, give the buyer facts and information, and Co create with customers
Sales Orientation
Marketing philosophy that focuses on “How can we sell more aggressively?”, disregards consumers needs and wants, often cannot convince people to buy what is unwanted or unneeded
Production Orientation
Marketing philosophy that focuses on “What can we make or do best?”, internal capabilities, the firm “knows” what’s best for the customer, doesn’t consider needs it wants
Market Organization
Marketing philosophy that focuses on “What do customers want and need?”, provides customer value, focuses on customer satisfaction, and establishes customer relationships, obtain information, examine the information, develop a plan to deliver superior customer value and distinguish offerings from competitors, and implement those actions
Customer Satisfaction
The customer’s evaluation of a good or service in terms of whether that good or service has met their needs or expectations
Do research on its customers, determine how to deliver superior customer value, establish and maintain mutually satisfying relationship s with customers, and implement actions that provide value to customers
A company that wants to implement a market orientation would need to
Situation Analysis
A study conducted by an organization to identify its internal strengths and weaknesses
Stars, Cash Cows, Dogs, and Problem Children (question marks)
Parts of the Boston Consulting Group portfolio
The marketing mix, the target market strategy, situation analysis, the business mission statement
Elements of the marketing plan
Product Development
Marketing strategy that creates new products for present markets
Market Penetration
Increasing market share for present products in existing markets
Diversification
Increasing sales by introducing new products into new markets
Sustainable Advantage
An advantage that cannot be copied by the competition
Corporate Social Responsibility
The concern of business for the long-range welfare of both the company and its relationships to the society within which it operates
Sustainability
The idea that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as opportunities to build profit and help the world at the same time
Ethics
The moral principles or values that generally govern the conduct of an individual or a group
Morals
The rules people develop as a result of cultural values and norms
Conventional Morality
The stage of ethical development where loyalty and obedience to the organization or to society become paramount
Postconventional Morality
The stage of ethical development of the mature adult
CSR can be a profitable
An argument used to support Corporate Social Responsibility
Social Factors
Environmental factors that include our attitudes, values, and lifestyles
Technology, economic conditions, the competition, political and legal factors
External marketing factors
Inflation
The measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year
Purchasing power
Measured by comparing income to the relative cost of a set standard of goods and services in different geographical areas
Recession
A period of economic activity characterized by negative growth, which reduces demand for goods and services
Demography
The study of people’s vital statistics, such as age and location
Component Lifestyle
The practice of choosing goods and services that meet one’s diverse needs and interests rather than conforming to a single, traditional lifestyle
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
What does marketing do?
Increase demand
Societal Orientation
Satisfying customers needs and wants while enhancing individual and societal well-being, such as less toxic products, more durable products and products with reusable or recyclable materials
Relationship Marketing
Focuses on establishing, keeping and improving relationships with customers, effective strategies are effective training programs, empowered employees, teamwork, and customer-oriented employees
Marketing Relationship Benefits
Customer focus, more aware of changes in customer preferences, and encourages innovation and creativity, essential to compete, the customer is in the driver seat
Technology
Customers can ship from and location and shop smarter by doing research
Focus of Sales Orientation
Inward, selling goods and services to everyone for maximum sales volume and primarily uses promotion
Focus of Marketing Organization
Outward, satisfying needs and wants for a specific group of people for customer satisfaction through coordinated use of marketing activities
Evolution of Marketing Management Philosophy
Production to Sales to Marketing to Social Marketing
Why study Marketing?
Important to society, important to business and good career opportunities
Strategic planning
The managerial process of creating and maintaining a fit between the organization’s resources and objectives and evolving market opportunities, ask Who are we? Where are we going? How are we reaching our goal?
Strategic Planning Example
Building a desk, what are you trying to build, what tools do you need to build it, and what steps must you complete to build it
3 opportunity evaluation models
Ansoff’s Opportunity Matrix, Boston Consulting Group Portfolio Matrix and the GE Model
Ansoff’s Strategic Opportunity Matrix
Evaluate based on whether the product and market is new or existing
Boston Consulting Group Matrix
Base on Market Growth High or Low and Market Share high or low
Star
Build. A fast growing market leader stars usually have large profits but need cash to finance growth. A marketing tactic is to protect market share by reinvesting earnings in product improvement, distribution, promotion, and production efficiency. Strive to capture new users as they enter the market
Cash Cow
Hold. Generates more cash than it needs to maintain market share. It’s a low growth market, but the product has dominant share. The marketing strategy is to maintain market dominance by being the price leader and by marketing technological improvements. Allocate excess cash to Hugh growth
Problem Child
Hold/Build/Divest Shows rapid growth but poor profit margins. It has low market share in a high growth industry. It needs a great deal of cash to prevent conversion to dog status. Strategies are to invent to gain better market share, acquire competitors, or drop the SBU
Dog
Divest. A dog has low growth potential and a small market share. Most dogs leave the market. The strategy are to divest or harvest
General Electric Model
Based on How attractive the market is, low medium or high, positioning of firm to capitalize on opportunity, low medium or high
Marketing Plan
A written document that acts as a guidebook of marrying activities for the marketing major. The basis for all marketing strategies and decisions. Issues such as product lines, distribution channels, marketing communications, and pricing are all delineated
Elements of a marketing plan
Business mission statement, SWOT or situation analysis, objectives, target market strategy, marketing mix, (production distribution promotion price) and implementation evaluation control, budgets, implementation timetables, required marketing research efforts, elements of advanced strategic planning
Business mission
Why are we in business? And what business are we in?
Situation Analysis
Unless the world is ready you may not succeed, timing and conditions are important
SWOT
Strengths Weaknesses Opportunities Threats
Competitive Advantage
A set of unique features of a company perceived as significant and superior to those of the competition
Cost Competitive Advantage
The low cost competitor while maintaining satisfactory profit margins
Product Service Differentiation Competitive Advantage
Providing something unique and valuable
Niche Competitive Advantage
Serve a single segment of a market
Marketing objectives
A statement of what is to be accomplished through marketing activities, should be reasonable, measurable, time specific, and compared to a benchmark
Target Market Selection
Segment Analyze and Select the market
The Marketing Mix
Product Price Promotion and Place Strategies
Product Strategy
Adjust physical unit, packaging, warranty, service brand, image, value
Place Strategy
Distributing product where and when customers want it, all activities from supplying raw materials to deliver of finished products
Promotion Strategy
Integration of advertising, public relations, sales promotion, and personal selling, adjust the product’s message, by informing, educating, entertaining, persuading, and reminding
Price strategy
Adjusting the cost of the product, competitive weapon, quickest to change
Implementation
Process that turns marketing plans into actions
Evaluation Control
Monitoring to ensure proper implementation
Marketing Audit
Formal review that determines if marketing results achieved the firm’s goals, should be comprehensive, systematic, independent, and periodic
Post Audit tasks
Develop recommendations, communicate the recommendations, make someone accountable for implementation
Deontology
Do what the rules say
Utilitarianism
do what benefits the most people
Casuist
Do what was done in similar situations
Moral relavists
Do what is right at that moment
Virtue Ethics
Do what is good, right, or virtuous
Preconventional Moraloty
Based on rewards and punishments, concerned about yourself