Intro to Marketing - Guskey - Exam 1

Market Segmentation

Process of dividing the market up into groups

Target Markets

Homogenous segment of the market to which a marketer directs a specific marketing program

Why Segmentation?

Everyone has different needs, you can't satisfy everyone, and it gives you a competitive edge

Mass Marketing

Hardly any product EVERYBODY would buy. There are no UNIVERSAL products

Five Ways to Segment a Market

Geographically, Demographically, Psychographically, Beneficially, and Niche

Niche Marketing/Micro Marketing

Focuses on one individual's needs such as custom suits, beds, and custom shoes

Benefit Segmentation

Consumers grouped on their reasons for using product; people use toothpaste for fresh breath, whiter teeth, fighting cavities, etc.

Psychographic Segmentation

Focuses on the Values, Importance, Attitude, and Interest of a consumer

VALS I

Focuses on the Value and Lifestyles of a consumer

Three types of consumers

Outer driven, inner driven, and need driven

Outer Driven

Belongers, Emulators, and Achievers

Inner Driven

I-am-me's, Experiential, Societally Conscious

Need Driven

Survivors and Sustainers

Demographic Segmentation

Separates market into 8 different markets

Demographic Variables

Age, Gender, Occupation, Educational level, marital status, religion, race/ethnicity, and income

Why marketers use Demographic Segmentation

It's easy to measure, use of product is related to a variable, and media schedules are calculated to demographics

Why marketers use Geographic Segmentation

It's easy, different regions use/prefer different products, and climate and seasonality play a factor

Geographic Segmentation

Dividing a market by geographic region

Marketing Concept

All of marketing revolves around the consumer; The consumer is #1

AMA- 1960 Marketing Definition

Performance of business activities that direct the flow of goods and services to the consumer

Flaws in 1960 Definition

Business- non-profits market but are not businesses; Flow- Implies it is one-way, when it is back-and-forth; Goods and Services- Ideas and concepts are marketed as well

AMA- 1985 Marketing Definition

Marketing is a process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individuals and organizational objectives.

Importance of 1985 Definition

Defined Marketing as an EXCHANGE

AMA- 2004 Marketing Definition

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Flaw in 2004 Definition

It puts too much focus on the organization rather than the concept

AMA- 2007 Marketing Definition

Marketing is the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and for society at large.

Exchange Concept

Consumer provides information, money, or credit to a company in exchange for information, goods, or services

Four conditions for an Exchange

Need 2 or more parties, each parties must have something of value, each must be willing to give up thing of value, and there must be some type of communication

Marketing Eras

Self-Sufficient era, Production Era, Sales Era, Marketing Era, and New Era

Self-Sufficient era

Took place from beginning of time up to the 1800s; consumers farmed, bartered, grew, or hunted

Production era

Took place from 1800s-1920s; known for Industrial Revolution, it gave consumers an opportunity to buy stuff made by others

Sales Era

Took place from 1920s-1950s; Because of depression and war, inventory stocked up and companies tried hard to sell to consumers

Marketing era

Took place from 1950s-2000s; Known for marketing concept; determine who the consumer is and what they want

New Era

Present day; unknown if in it or not, but is characterized by major Social, Technological, and Service changes

Environmental Scanning

The process by which a firm gathers information about environmental changes in order to identify opportunities and determine threats

Three Types of Environmental Scanning

Irregular Model Reactive, Regular Model Proactive, Continuous Model

Irregular Model Reactive

Worst; Reaction to a crisis. Something happens unexpectedly and you must start collecting info

example of Irregular model

Worst; Reaction to a crisis. Something happens unexpectedly and you must start collecting info

Regular Model Proactive

will be collecting information on a regular basis/periodically

example of Regular Model

Once a year, interview customers and check on competition

Continuous Model

Best; Collect data all the time and from all types of environments

examples of Continuous Model

Social, legal, and ecological studies

Downsides of continuous model

It's expensive, takes a lot of time, not always easy

Microenvironment - Internal

Groups/individuals that have a vested interest in the product

examples of microenvironment

The supplier, distributor, stockholder, company, general public, and competition

Microenvironment -External

Deals with people, lifestyles, values, etc. as a society

Types of macroenvironments

Political, Ecological, economic, technological, etc.

Macro vs Micro Environment

In a micro, the company has some control over the groups interested in it; in a macro, the company has little to no control

Utilities

Satisfaction; Value added;

Utility values

Form showcases features and design, time gets product to consumer when they want it, place gets product to consumer where they want it, and possession allows consumer to buy/own product

Strategic Marketing

Planning according to the consumer's desires

Three ends of the marketing triangle

fit, objective, and company resources; environmental opportunities lies between company resources and objective

Company Resources

Differential advantage; what the company is good at, its specific strengths, and how it's better than competition

Environmental Opportunities

Trends; what is hot in the marketplace today?

Strategic Business Units (SBU) goals

Single or related business with its own competitors, goals, and resources

Mission statement

How a company broadly defines itself to its employees, consumers, and the public

Marketing Strategy P's

Product, Price, Promotion, and Distribution (Price/Placement)

Growth-share matrix

Star

Sustains differential advantage despite rising competition; Uses its own financing to grow; HIGH market share and HIGH growth

Question Mark

LOW Market Share but HIGH growth; could do well or bad, unknown how it will perform

Cash Cow

HIGH market share but LOW growth; has loyal customers but don't tend to grow

Dogs

LOW market share and LOW growth; not performing well and not expected to do well anytime soon

Growth Opportunities Model

Market Penetration

Sell the same product to the same consumer, albeit with different uses

Product Development

New product, but sell to the same consumers as original product

Market Development

Same product, but sell to new people

Diversification

New product sold to an entirely new market