mktg1001 final

Marketing

managing profitable customer relationships

Aim of marketing

create value for customers in order to capture value from customers in return

Marketing Mix

A set of marketing tools that work together to engage customers, satisfy customer needs and build customer relationships.

Needs

things that are required in order to live

Wants

the form human needs take as they are shaped by culture and individual personality

demand

Human wants backed up by buying power

Market offering

some combination of products, services, information, or experiences offered to a market to satisfy a need or want

Product

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need

Exchange

the act of obtaining a desired object from someone by offering something in return

Transaction

A trade of values between two parties that involves at least two things of value, agreed conditions and a place of agreement

Marketing management

the art and science of choosing target markets and building profitable relationships with them

Value proposition

the unique value that a product or service provides to its customers and how it is better than and different from those of competitors

Production concept

the idea that consumers will favor products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency

Product concept

the idea that consumers will favor products that offer the most quality, performance, and features; therefore, the organization should devote its energy to making continuous product improvements

Marketing myopia

defining a business in terms of goods and services rather than in terms of the benefits customers seek

Selling concept

the idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort

Marketing concept

a philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do

societal marketing concept

the idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests

Mission Statement

a statement of the organization's purpose - what it wants to accomplish in the larger environments

Business portfolio

the collection of businesses and products that make up the company

portfolio analysis

the process by which management evaluates the products and businesses that make up the company

Strategic Business Unit (SBU)

a subgroup of a single business or collection of related businesses within the larger organization

BCG Matrix

a means of evaluating strategic business units on the basis of (1) their business growth rates and (2) their share of the market

Stars

SBUs with products that have a dominant market share in high-growth markets

Cash cows

SBUs with a dominant market share in a low-growth-potential market

Question marks

SBUs with low market shares in fast-growth markets

Dogs

low growth, low market share

Strategic plan

The businesses the company will operate and its objectives for each

Marketing strategy

the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships

Positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Marketing segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs

Market segment

a group of consumers who respond in a similar way to a given set of marketing efforts

Market Targeting

the process of evaluating each market segment's attractiveness and selecting one or more segments to enter

product

Combination of goods and services that the company offers to the target market

Price

The amount of money exchanged for a good or service

Placement logistics

Company activities that make the product available to the target market and end consumers.

Promotion

Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response

Management functions of marketing

Analysis, planning, implementation and control

SWOT analysis

identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)

Marketing budget

An outline of the controls used to monitor progress, measure return on marketing investment and take corrective action.

Marketing Implementation

is the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives

Functional Organization

Departmentalization around specialized activities such as production, marketing, and human resources.

geographic organization

Useful for companies that sell across the country or internationally.

Product management

Useful for companies with different products or brands.

market management organization

Suits companies that sells one product line to many different types of markets and customers that have varying needs and preferences.

return on marketing investment (ROMI)

The net return from a marketing investment divided by the costs of the marketing investment

Microenvironment

the actors close to the company that affect its ability to serve its customers - the company, suppliers, marketing intermediaries, customer markets, competitors, and publics

Macroenvironment

the larger societal forces that affect the microenvironment - demographic, economic, natural, technological, political, and cultural forces

natural environment

natural resources that are needed as inputs by marketers or that are affected by marketing activities

environmental sustainability

developing strategies and practices that create a world economy that the planet can support indefinitely

Technological Environment

forces that create new technologies, creating new product and market opportunities

Political Environment

laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society

Business Legislation

Law that is set to ensure businesses and consumers are regulated as well as protecting the interests of society

Competition and consumer act 2010

A federal law that specifies what business behaviour is acceptable on a wide range of issues, from product safety and pricing to the way in which a business competes in the marketplace

cultural environment

institutions and other forces that affect society's basic values, perceptions, preferences, and behaviors

Transaction

A business deal or action; exchange of money, goods, or services

Relationship marketing

the process of creating, maintaining, and enhancing strong, value-laden relationships with customers and other stakeholders.

unique selling proposition (USP)

a strategy of differentiating a product by communicating its unique attributes; often becomes the common theme or slogan in the entire advertising campaign

New Customers

Potential customers

Repeat customers

Existing customers

Negative Demand

A large segment of the market dislikes a product and would pay to avoid it

No Demand

When a target market is unmotivated or uninterested in purchasing a product.

Latent demand

Consumers may share a strong need that cannot be satisfied by an existing product

Declining demand

consumers begin to buy the product less frequently or not at all

Irregular demand

Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis.

Full demand

ideal state of demand, current levels of consumption and prices are satisfactory

Overfull demand

demand that exceeds capacity or desired production level

unwholesome demand

Consumers may be attracted to products that have undesirable social consequences.

Demarketing

Process of reducing consumer demand for a good or service to a level that the firm can supply.

Corporate Strategy

Focus on shareholder value

Business strategy

Focus on business value

marketing strategy

Focus on customer value

market leader

the firm in an industry with the largest market share

Market niche

a firm that serves small segments that the other firms in an industry overlook or ignore

market challenger

a runner-up firm that is fighting hard to increase its market share in an industry

market follower

A firm that follows developments of the market leader and market challenger but does not threaten either of them.

Ansoff Matrix

An analytical tool to devise various product and market growth strategies, depending on whether businesses want to market new or existing products in either new or existing markets.

market penetration

company growth by increasing sales of current products to current market segments without changing the product

Product development

company growth by offering modified or new products to current market segments

Diversification

a strategy of increasing sales by introducing new products into new markets (high risk)

market development

company growth by identifying and developing new market segments for current company product sales

Strategy

a plan of action

Michael Porter

Harvard Business School professor who is said to be "the single most important strategist working today, and maybe of all time," by Kevin Coyne of consulting firm McKinsey & Co. Developed 3 strategies (overall cost leadership, differentiation, focus)

First mover

a firm that takes an initial competitive action in order to build or defend its competitive advantages or to improve its market position

Second mover

a firm that responds to the first mover's competitive action, typically through imitation

Marketing Environment

The competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surround the customer and affect the marketing mix

Generational marketing

marketing to members of a generation, who tend to share the same outlook and priorities

Marketing research

the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization

Qualitative Research

informal research methods, including observation, following social media sites, in-depth interviews, focus groups, and projective techniques

Quantitative Research

research that collects and reports data primarily in numerical form

Touch point

Customer purchases, sales force contacts, service and support calls, website and social media visits, satisfaction surveys - every contact between the company and the customer.

Customer relationship management

managing detailed information about individual customers and carefully managing customer touch points to maximize customer loyalty

Consumer buying behaviour

Refers to the decisions and actions of consumers when they purchase goods and services for personal or household use.

Consumer market

All the people who acquire goods and services for personal consumption

Cultural groups

people sharing the same way of life, including customs, beliefs, and language

Social class

Permanent and ordered divisions in society whose members share similar values, interests and behaviours

Groups

two or more people who interact to accomplish individual or mutual goals

Opinion leader

a person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others

Online social networks

Online social communities - blogs, social networking Web sites, and other online communities - where people socialize or exchange information and opinions