Marketing chapter 2

Marketing

The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return ex, A tech firm building strong online communities and personalized product offerings to secure long-term customer loyalty.

Marketing process

The structured multi-step framework through which organizations analyze market opportunities, build strategies, implement plans, and evaluate results ex, Moving sequentially from market research to strategy formulation, campaign implementation, and performance evaluation.

Marketing cycle

The continuous, iterative four-stage process comprising Analysis, Strategy, Implementation, and Evaluation to create and capture customer value ex, Analyzing consumer data, defining target segments, running targeted campaigns, and measuring return on investment.

Marketing environment

The actors and forces, both inside and outside the company, that determine the extent to which marketing management can successfully establish and maintain relationships with target customers ex, A coffee chain monitoring internal efficiencies, local competitor openings, and macro-economic trends.

External marketing environment

The actors, forces, and conditions operating outside the company where the primary focus is on identifying opportunities and threats ex, Tracking a growing societal demand for sustainable packaging and the entry of new competitors.

External (marketing) analysis

The systematic examination of forces and actors outside the organization to identify key market opportunities and potential threats ex, Analyzing industry growth rates and competitor pricing strategies before launching a new product line.

Internal marketing environment

The controllable factors, resources, and departments inside the company where the primary focus is on identifying organizational strengths and weaknesses ex, Assessing internal employee capabilities, operational efficiencies, and brand reputation.

Internal (marketing) analysis

The systematic evaluation of factors inside the organization to identify internal strengths and vulnerabilities ex, Evaluating whether a retail chain's logistics and inventory management systems are functioning efficiently.

Marketing analysis

The process of gathering and analyzing data that translates the needs and wants of customers and stakeholders, as well as contextual factors, into actionable marketing insights ex, Conducting surveys and examining sales data to understand why customer preferences are shifting.

Marketing intelligence

Insights generated by gathering and analyzing market data that serve as a crucial foundation for making effective decisions about marketing strategy and implementation ex, Data-driven insights revealing that younger demographics prefer short-form video content over traditional ads.

Three levels of the marketing environment

The framework categorizing the marketing environment into micro, meso, and macro levels based on their field of influence relative to the organization ex, Differentiating between internal departments, immediate industry competitors, and broad macro-environmental legal trends.

Micro-environment

The internal environment directly inside the organization, including company departments and management structures ex, Assessing communication and collaboration between a firm's marketing and sales departments.

Meso-environment

The immediate external industry environment consisting of actors such as suppliers, competitors, consumers, and distributors that directly interact with the firm ex, A coffee chain monitoring three new competitor stores opening in the same neighborhood.

Macro-environment

The broad external context encompassing demographic, economic, social-cultural, technological, ecological, and political-legal forces ex, A government introducing new legislation requiring food companies to display nutritional information more prominently.

Customer centricity

A strategic philosophy centered on putting the customer's best interests first, serving customer needs, and driving long-term value and relationships rather than short-term transactions ex, A firm focusing on building lasting customer relationships and continuous value creation.

Marketing orientation (or marketing concept)

A philosophy holding that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do ex, An enterprise using a sense-and-respond strategy to design products that specifically fit identified consumer preferences.

Needs

States of basic human deprivation, including physical needs for food and safety, social needs for belonging, and individual needs for self-expression ex, A human requiring basic physical nourishment and shelter.

Wants

The specific form human needs take as they are shaped by culture, society, and individual personality ex, An American needing food but wanting a burger and a soft drink.

Customer needs & wants: Heterogeneity - Dynamics

The core marketing principles that all customers differ from one another (heterogeneity) and that customer needs and wants change over time (dynamics) ex, Recognizing that teenage shoppers have vastly different preferences than older adults, and that these preferences shift across seasons.

Jobs-to-be-done perspective/framework

A framework stating that consumers do not simply buy products or services, but instead "hire" them to accomplish specific tasks, goals, or problems in a given context ex, Commuters buying a milkshake not just for its taste, but to make their morning commute less boring and keep them full until lunchtime.

Functional, emotional & social needs

The three distinct categories of customer needs within the jobs-to-be-done framework, relating to practical tasks, feelings, and social status respectively ex, Minimizing travel time to a gym (functional), feeling confident (emotional), and being perceived as someone who leads an active lifestyle (social).

Marketing analysis at the individual level (individual context)

Analyzing the specific steps, behaviors, and individual differences that customers experience when trying to get a job done ex, Examining how a customer's prior DIY experience influences the specific steps they take to hang a painting.

Consumer job journey

The sequence of goal-directed actions and steps that consumers undertake across various situations to accomplish a specific job-to-be-done ex, Checking a wall, selecting equipment, buying tools, and hanging a painting.

Consumer job journey mapping

The process of visually depicting the actions and steps that come along with the consumer's process of getting a job done ex, Creating a flowchart mapping out every action a student takes when choosing a university program.

Heterogeneous consumer job journeys

The variation in paths and actions different consumers take to accomplish the same job due to differences in knowledge, skills, or resources ex, An experienced DIY expert completing a home repair project quickly compared to a novice who must watch multiple tutorial videos.

Marketing analysis at the social level (social context)

Examining how family members, friends, peers, and online communities influence customers' decisions and journey paths ex, Analyzing how peer pressure and friendship groups influence student choices of clothing brands or university courses.

Secondary customers

Other actors or beneficiaries involved in or impacted by the customer journey and product usage experience ex, Parents buying a tablet or educational software intended for their children's use.

Marketing analysis at the organizational level (organizational context)

Analyzing the specific role, interactions, strengths, and weaknesses an organization holds along the customer's journey ex, Evaluating whether a DIY retailer provides better employee advice and customer support than rival stores.

Customer journey

The complete series of interactions and touchpoints a customer experiences with a specific organization across pre-purchase, purchase, and post-purchase stages ex, Browsing a retailer's website, buying a laptop in-store, and contacting customer support afterward.

Pre-purchase - Purchase - Post-purchase

The three distinct sequential phases of the customer experience journey during which value is evaluated ex, Researching smartphones online, purchasing the chosen model, and evaluating camera quality while using it.

Customer journey mapping

Visually charting out the touchpoints, interactions, and experiences a customer has with a specific company across pre-purchase, purchase, and post-purchase phases ex, Mapping out customer touchpoints when buying flights and booking hotel rooms through an app.

Strenghts

Controllable internal capabilities and positive attributes that an organization can use to achieve its strategic objectives ex, A company having a highly sophisticated customer recommendation algorithm and strong brand loyalty.

Weaknesses

Internal limitations, vulnerabilities, or resource constraints that interfere with an organization's performance or strategic execution ex, A retailer having limited store opening hours or high production costs for original content.

Value Chain of Michael Porter (primary + support activities)

A strategic framework dividing a company's internal operations into primary activities (inbound logistics, operations, outbound logistics, marketing & sales, service) and support activities (infrastructure, HR, technology, procurement) to analyze value creation ex, Assessing how inbound logistics and technology infrastructure contribute to a firm's overall cost advantage.

Marketing analysis at the product market level (product market context)

Analyzing competitors, substitutes, and broader industry structures to understand opportunities and threats in the competitive environment ex, Assessing market shares, growth rates, and the positioning of major coffee retailers in a specific city.

Competitors

Rival organizations offering similar products or solutions targeting the same customer needs and market segments ex, Other manufacturers of premium noise-cancelling headphones competing for consumer attention.

Substitutes

Alternative products or solutions from different industries that can satisfy the same underlying customer job-to-be-done ex, Meditation apps or quiet workspaces serving as a substitute for noise-cancelling headphones by providing relaxation and focus.

Porter's Five Forces Framework

A model analyzing industry attractiveness and profit potential based on five competitive forces: rivalry among existing firms, threat of new entrants, bargaining power of suppliers, bargaining power of buyers, and threat of substitutes ex, Evaluating how easy it is for new firms to enter the airline market and how much bargaining power component suppliers hold.

Rivalry among existing organizations

The intensity of competition between current firms operating within the same industry market ex, Multiple smartphone brands engaging in aggressive price wars and frequent advertising campaigns.

Threat of new entrants

The likelihood and ease with which new competitor firms can enter an industry and erode existing market shares ex, Low capital requirements allowing many new independent coffee shops to open in a popular district.

Bargaining power of suppliers

The amount of leverage and control suppliers hold over an industry, allowing them to drive up input prices or demand favorable terms ex, A single dominant microchip manufacturer dictating high prices and strict supply contracts to computer makers.

Bargaining power of buyers

The amount of leverage customers possess to demand lower prices, higher quality, or extra services from firms in an industry ex, Large supermarket chains forcing food manufacturers to accept lower wholesale margins.

Threat of substitutes

The risk that customers will switch to alternative products from outside the industry that fulfill the same underlying functional or emotional job ex, Consumers switching from traditional printed newspapers to free digital news websites.

Ecosystem analysis

Examining the broader network of interconnected organizations, platforms, and partners that customers interact with to fulfill their needs ex, Analyzing how smartphone operating systems, app developers, and hardware accessory vendors form an interconnected ecosystem.

Ecosystem-based value system

A collaborative network of multiple companies combining offerings to co-create comprehensive value for end-users ex, Smart home device manufacturers partnering with voice assistant platforms and energy utilities to offer integrated home automation.

Marketing analysis at the environmental level (environmental context)

Gathering and analyzing data regarding macro-environmental event triggers and trends that impact both organizations and their customers ex, Tracking long-term demographic shifts and climate change regulations affecting supply chains.

External event triggers

Specific occurrences or shifts in the macro-environment that initiate changes in market conditions, consumer behavior, or business operations ex, Sudden regulatory changes, economic recessions, or unexpected technological breakthroughs.

DESTEP (analysis)

A macro-environmental scanning framework examining Demographic, Economic, Social-cultural, Technological, Ecological, and Political-legal factors ex, Analyzing aging population trends, inflation rates, and environmental sustainability laws affecting a retail business.

PESTLE (analysis)

A strategic macro-environmental analysis tool evaluating Political, Economic, Social, Technological, Legal, and Environmental factors ex, Assessing tax policy changes, consumer lifestyle shifts, and data privacy regulations for a tech startup.

Opportunities

Favorable trends, conditions, or external factors in the market environment that a company can leverage to grow and secure a competitive advantage ex, A growing consumer demand for plant-based foods and digital streaming entertainment.

Threats

Unfavorable external conditions, trends, or challenges in the market environment that could negatively impact an organization's performance or survival ex, Rising raw material costs, tightening government regulations, and aggressive new market entrants.

SWOT analysis

A strategic planning tool that categorizes key insights from internal and external analyses into Strengths, Weaknesses, Opportunities, and Threats ex, Aligning a firm's strong recommendation algorithm with a growing market demand for online entertainment while mitigating cost threats.

Primary data

Data collected directly by researchers for the specific purpose of addressing a current marketing research problem or study ex, A supermarket chain conducting custom customer interviews or focus groups on breakfast cereal choices.

Secondary data

Data that were previously collected and assembled for purposes other than the immediate marketing research project at hand ex, Using official demographic census reports published by government statistical agencies or pre-existing market research reports.

Quantitative data

Numerical data that can be measured, counted, and analyzed using statistical techniques ex, Sales revenue figures, website traffic counts, and numerical ratings on a customer satisfaction survey.

Qualitative data

Non-numerical, descriptive data capturing subjective opinions, language, behaviors, or motivations ex, Verbatim transcripts from in-depth consumer interviews or open-ended text feedback from online reviews.

Behavioral data

Objective data reflecting what people actually do and how they act in real-world or digital settings ex, Website clickstream tracking, store foot traffic patterns, and scanner purchase records.

Attitudinal data

Subjective data reflecting people's internal beliefs, opinions, perceptions, and attitudes toward a brand or product ex, Survey responses measuring customer satisfaction scores or brand preference rankings.

Marketing research

The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization ex, Executing a structured study to determine why weekday lunchtime sales are declining at a food market.

The GIGO effect

The fundamental principle in data analysis standing for "Garbage In, Garbage Out," meaning that flawed or biased data input leads directly to worthless insights and poor decisions ex, Making major product development decisions based on poorly worded survey questions answered by an unrepresentative sample.

The marketing research process (including its steps)

The structured six-step framework guiding research: (1) Identify purpose, (2) Develop research questions, (3) Formulate research plan, (4) Collect data, (5) Analyze data and interpret findings, and (6) Prepare and present report ex, Systematically moving from defining a sales drop problem to formulating questions, collecting data, analyzing results, and presenting conclusions to management.

Problem statement

A clear, concise definition of the specific marketing issue or opportunity that needs to be addressed through research ex, Defining why visitor numbers and revenue during weekday lunchtime are substantially lower than evening hours.

Exploratory, descriptive and causal research questions

The three types of research questions used to discover background insights (exploratory), measure frequency or characteristics (descriptive), or test cause-and-effect relationships (causal) ex, Asking what motivates EV buyers (exploratory), how often people use food apps (descriptive), and whether free delivery increases app usage (causal).

Desk research

The collection, analysis, and interpretation of secondary data that already exists inside or outside the organization ex, Reviewing published industry market reports and internal company sales archives before starting new fieldwork.

Field research

The collection, analysis, and interpretation of primary data gathered directly by researchers for the specific purpose of the current study ex, Running customer surveys, observational experiments, or focus groups to collect firsthand insights.

Eye-tracking

A specialized research technique and instrument used to record and measure visual attention and eye movements when consumers view stimuli like packaging or ads ex, Investigating whether shoppers physically notice a new promotional banner placed on store product packaging.

Synthetic data

Artificially generated computer data created using algorithms to simulate real-world consumer behavior or survey responses without compromising individual privacy ex, Generating simulated customer purchase datasets to train predictive machine learning models securely.

AI-human hybrids for marketing research

Collaborative research systems combining the computational speed and data processing power of artificial intelligence with human contextual judgment, ethics, and critical expertise ex, Using AI tools to process massive sets of online customer reviews while human researchers interpret cultural nuances and ethical implications.