UNH Marketing 550 Exam 1

Marketing
an organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
Value Proposition
The set of benefits or values a company promises to deliver to customers to satisfy their needs
Maslow’s Hierarchy of Needs
(Top to Bottom)
Self-Actualization, Self Esteem, Belonging, Security, and Physiological
Production Concept
The idea that consumers will favor products that are widely available and/or highly affordable
Product Concept
The idea that consumers will favor products that offer the most quality, performance, and features.
Organizations offering such products are expected to expend considerable energy (and funds) to continuously improve the products and/or develop the next generation of products
Selling Concept
The idea that consumers will not buy enough of the firm’s products unless it undertakes a large scale selling and promotion effort
Marketing Concept
The idea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired products/services better than competitors do.
Societal Concept
The idea that a company should make good marketing decisions by considering not only consumers’ wants and needs, but also the company’s requirements, consumers’ long term interests and society’s long term interests.
The Marketing Mix (4 P’s)
Product, Price, Promotion, Place
Mission Statement
describes the purpose of your organization- the reason for its existence
Core Values
fundamental beliefs about what’s important and what is and isn’t appropriate in conducting company activities
SWOT Analysis
Examines internal and external forces that affect the company
S – strengths
W – weaknesses
O – opportunities
T – threats
Goals
major accomplishments over long period of time
Objectives
short-term performance targets that direct efforts toward goal
Contingency Planning
Identify aspects most likely to be adversely affected by change, develop alternative courses of action
Crisis Management
Create structure to deal with emergencies
Ethical Challenges
“…arise in…business organizations [because]…multiple stakeholders…make conflicting demands.”
How to face and Ethical Dilemma
1. Define problem, collect facts
2. Identify feasible options
3. Assess the effects of each option on stakeholders
4. Establish criteria for determining the most appropriate action
5. Select the best option based on the established criteria
How to avoid Ethical Lapse?
1. is the action illegal?
2. is it unfair to some parties?
3. If I take it, will I feel badly about it?
4. Will I be ashamed?
5. Will I be embarrassed due to exposure?
Basic Situations causing Ethical Issues
1. Bribes
2. Conflict of Interests
3. Conflicts of Loyalty
4. Issues of Honesty & Integrity
5. Whistle-blowing
Conflicts of Interest
“…individuals must choose between taking actions that promote their personal interests over the interests of others.”
Interferes with best interest of Company Stakeholders and uses Private Information
Responsibilities to Consumers
1. Right to Safe Products
2. Right to Be Informed
3. Right to Choose
4. Right to Be Heard
Responsibilities to Community
1. Financial Contributions
2. Volunteerism
3. Supporting Social Causes
Marketers can obtain information from…
1. Internal data
2. Marketing Intelligence (the systematic collection and analysis of information about competitors and developments in the marketplace)
3. Marketing Research (the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization)
Exploratory Market Research
Used during beginning stages of research. Seeks to discover ideas and insight
Descriptive Market Research
Pre-planned and structured in design. Goal is to collect statistical data to infer on the population
Causal Market Research
Pre-planned and structured. Draws conclusions and explains the relationship between to variables
Basic vs Applied Research
Basic- fills knowledge we do not already have
Applied- seeks to answer questions in the real world and solve problems
Primary Data
Data collected by you, usually more costly
ex. surveys, interviews
Secondary Data
Cheaper method of discover preexisting data
ex. any available data
Steps in the Research Process
1. Define the problem and research objectives
2. Develop the research plan
3. Implement the plan (collect the data)
4. Analyze and report the findings
Research Approached
Observational (gathering data by observing relevant people, actions, situations)

Ethnographic (trained researchers watch and interact with consumers in their natural environment)

Survey research (used for collecting descriptive info – knowledge, attitudes, preferences, and buying behavior)

Experimental (used for gathering cause and effect information)

Sampling
Probability samples – each member of the defined population has a known chance of being included in the sample

Non-Probability samples – should only be used when probability sampling costs too much or takes too much time.

Ways to Survey
1. Mail questionnaires
2. Telephone interviews
3. Personal interviews
4. Focus group interviews
5. Online research (surveys, panels, experiments, focus groups)
Consumer Decision Process
Need Recognition -> Information Search -> Evaluation of Alternatives -> Purchase Decision -> Post Purchase Evaluation
Cognitive Dissonance
The customer experiences feelings of post-purchase psychological tension or anxiety.

Some companies like to engage their consumers with post-purchase communications in an effort to influence their feelings about their purchase and future purchases.

Factors Influencing Consumer Behavior
1. Psychological factors
2. Social factors
3. Situation factors
Psychological Factors
– Motives — Maslow’s Hierarchy of Needs
– Attitudes: feelings or beliefs about an object or idea
*Components of attitude:
Cognitive
Affective
Behavioral

*Perception: the meaning applied to incoming stimuli
Selective perception
Subliminal perception

*Learning: affects attitudes and perception

Social Factors
-FAMILY!! (The single most influential factor for most of us)

-Reference Groups

-Cultural factors

Situational Factors
-Purchase Situation:
*need vs. want
*value expectations
*financial situation
Shopping Situation:
*In-store
*On-line
*Presence of others
Examples of Buying Decisions
1. Limited Problem Solving
2. Extended Problem Solving
3. Habitual
4. Impulse Buying
General Economic Environment
GDP, Gross National Income, Purchasing Power Parity, Human Development Index
Real Income
income of an individual/group after taking into consideration the effects of inflation on purchasing power.
Evaluating Real Income
Firms can make adjustments to an existing product or change the price to meet the unique needs of a particular country market.
Infrastructure and Technological Capabilities
Transportation, Communication, Distribution Channels, Commerce
Government Actions
Tariffs, Quota, Exchange Control, Trade Agreement
Sociocultural Factors
Power Distance, Individualism, Masculinity, Time Orientation
Global Entry Strategies
Export, Franchising, Strategic Alliance, Joint Venture, Direct Investment
Pricing Strategies
Tariffs, Quotas, Anti-dumping Policies, Economic Conditions, Competitive Prices
Product and Service Strategies
1. sell the same product or service abroad and at home

2. sell a similar product or service abroad that;s available at home

3. sell a whole new product or service abroad

Global Communication Strategies
Adapt to language, consider religious values in different cultures, prepare for varying literacy levels
Global Distribution Strategies
Some global channels are very long and complex.

Consumer shop local small local stores.

Suppliers must be creative in delivering to these outlets

The Segmentation, Targeting, and Positioning (STP) Process
1. Break the broad market into smaller, more homogeneous segments
2. Specifically target discrete market segments
3. Position the brand to appeal to the target market
Market Segmentation
the process that companies use to divide large heterogeneous markets into smaller markets that can be reached more efficiently and effectively with products and services that match their unique needs/wants
Segmentation approaches
1. Undifferentiated
2. Differentiated
3. Concentrated
Undifferentiated
focuses on an entire target market rather than a segment of it
ex. (Model T)
Differentiated
focuses on multiple segments of the target market
ex. (Ford Motors has multiple types of cars for multiple purposes)
Concentrated
focuses is concentrated on one segment of the market
ex, (VW 1955, sold cars directed at stay at home mothers)
Segmentation methods
1. Demographic
2. Geographic
3. Psychographic
4. Behavioral
Demographic segmentation
Age Income
Gender Occupation
Family size Education level
Marital status Religion
Family life cycle Race
Ethnicity
Geographic segmentation
Regions (of the country, or of the world)
Urban/suburban/rural
City size
Population density
Climate
Psychographic segmentation
Social class
Lifestyle
Personality traits
Behavioral Segmentation
Benefit sought
Occasion
User status
Usage rate
Loyalty status
Requirements for effective segmentation
Measurable (size, purchasing power)

Accessible (segment can be effectively reached and served)

Substantial (segments are large and profitable enough to serve)

Differentiable (segments are different and will respond to different marketing mixes)

Actionable (company can design effective programs to attract and serve the segment)

Segments must…
Segments must be all-inclusive and mutually exclusive
Target markets
From the list of segments, companies choose the segment they want to go after first.

Companies usually don’t have the resources to attack all segments equally.

Select the segments that meet the company goals: i.e., the easiest to reach, the most profitable, the most accessible, etc.

Once the first target market has been successfully penetrated, move on to the next target.

Positioning
Position is determined by the consumer, not the company.

The space you want your product/brand to occupy in the consumer’s mind.

The company’s messaging/advertising tries to influence consumers to buy into a certain position, but the real test is what do the consumers actually think about the product/brand.

Example: Volvo (safety), Toyota (quality), Apple (user friendly innovation)

Effective positioning
Deliver on the brand promise

Be consistent

Make the position different from competitor’s and simple for the consumer to understand