Marketing Midterm 2024

Intro to Marketing 201

Why are you here to study marketing?

Why are you here to study marketing?

1. Marketing is everywhere

   1. we are all consumers

   2. consumer behaviors

   3. products

   4. marketing is useful for all majors

2. Marketing is important

   1. Joshua Bell example

      1. no marketing = only 1 recognized him

         1. article feature won the 2008 Pulitzer Prize

      2. good marketing = caught many eyes and was made known

      3. key takeaway => Even the best product needs good marketing

3. Marketing is FUN!

   1. fun marketing

      1. creativity

      2. communication

Which one(s) of the following activities involve marketing?

a. shop on amazon

b. watch Netflix show

c. interview for a job

d. all of the above

d. all of the above

What is Marketing?

Old world view VS. New world view

• Old world : product-oriented

  • making a sale “ telling and selling”

• New world : customer-oriented

  • satisfying customer’s needs & wants

  • more demands

  • know who are customers are

Definition : Marketing?

Create, capture, communicate, and deliver value to customers to satisfy their needs and wants

Keys to Marketing

1. satisfy customers’ needs & wants

2. don’t build products that nobody wants

3. customer driven

The Failure of Technology 

• Ex: 

  • Victor wooden mouse trap vs. plastic capture mouse trap

• It was a failure

• Why was it a failure?

• What triggers the decision to buy a mousetrap? 

  • If there is a mouse. 

• What features do users want in a mousetrap?

  • User friendly, cleanliness, and efficient to catch the mouse.  

  • Cheap ; reusable ; small ; environment friendly, clean/hygienic  

• Why didn’t the “better” plastic mousetrap meet sales expectations? 

  • Education costs 

  • Hassle to free the mouse

  • More expensive 

  • Promotion 

  • Product value DOES NOT = customer needs & wants

The Marketing Plan [Steps] 1 to 5 steps

1. Business mission & objectives

2. Situation analysis SWOT

   1. strengths (internal)

   2. weakiness (internal)

   3. opportunities (external)

   4. threat (external)

3. Identify opportunities

   1. segmentation

   2. targeting

   3. positioning

4. Implement marketing mix (4s Ps)

   1. product

   2. price

   3. place

   4. promotion

5. Evaluate performance using marketing metrics

The Marketing Plan: Step 1 Mission Statement

• Organization’s purpose

  • what it wants to accomplish in the larger environment

• Questions

  • What’s our business?

  • Who is the customer?

  • What do consumers value?

  • What should our business be?

The Marketing Plan: Mission Statement for Google

1. Product-oriented: NO

   1. Google provides the world’s best online search engine

2. Customer-oriented: YES!!!!

   1. google helps you organize the world’s information and makes it universally accessible and useful

The Marketing Plan: Step 2 SWOT Analysis

• look at our example for the SWOT analysis for 7-Eleven

• detailed assessment of “where we are now”

• situation analysis for strategic planning

• internal: strengths and weakness

  • strengths: good now, maintain, enhance

  • weakness: bad now, remedy, stop

• external: opportunities and threats

  • opportunities: good future, pursue, leverage

  • threats: bad future, be cautious

The 7 Letters you need to remember for this course!!

1. S T P

   1. Segmentation targeting positioning

2. P P P P (4Ps)

   1. Product

   2. Price

   3. Promotion

   4. Place

What is S T P?

S T P = Segmentation targeting positioning

Why segment?

S T P = Segmentation targeting positioning

—> no single marketing mix can satisfy everyone!

The Marketing Plan: Steps 3 / The Market regarding the need of segmentation

• People with sufficient purchasing power, authority, and willingness to buy

• different

  • ages, genders, lifestyles, interests, cultures, incomes, locations, buying patterns, backgrounds, and needs

• segmented by genders, etc…

• segmentation, targeting, and positioning

The Market regarding the need of segmentation: Gendered Products; COKE

• Ex:

  • toothpaste for heroes and princesses

  • Nivea for women and men chapsticks

  • snuggie for boys and girls

• COKE

  • regular coke = health unconscious

  • diet coke = women health conscious

  • coke zero = men health conscious

The Marketing Plan: Steps 4 / What is the 4 Ps in Marketing Mix?

1. Product

   1. creating value

2. Price

   1. capturing value

3. Place

   1. delivering value

4. Promotion

   1. communicating value

The Marketing Plan: Steps 5 Evaluation

—> Evaluate performance using marketing metrics

The essence of marketing is to match your product value with customers’ needs & wants

1. figuring out what customers want

2. go find your customers STP [segmentation targeting positioning]

3. tell them how good you are at meeting their needs (4Ps: Product, Price, Place, and Promotion)

Consumer Behavior: look back at the class exercise about the gamble chances of winning with question 1 and question 2. Why would most people take the gamble choice that present the safest choice to earn money instead of the risk choice?

Most people choose the less-risk gambling choice that provides them with a 100% chance to win an amount of money but is less than the other gambling choice BECAUSE people likes to see the positive.

Why Study Consumer Behavior? Gain VS. Loss

—> If you don’t understand WHY consumers might want your product you can’t accurately POSITION it or develop a unique MARKETING MIX that helps convince them to BUY IT!

Definition: Consumer Behavior?

an ongoing process that starts long before the consumer purchases a product or service and continues long after he or she consumes it

Kahneman & Tverskv 1979: Prospect Theory

PEOPLE LOVE GAIN, HATE LOSS!

• won nobel prize in economic sciences in 2002

• Gain Domain = people are risk averse

  • Loss Domain = people are risk seeking

• Quality of service or product 

Marketing Implications on Prospect Theory: People Loves GAIN, Hates LOSS!

• Frame loss as gain

  • Ex: Amazon makes the price stand out in red color and shows “you save $20.00”

  • in reality, you loss money bc you brought the item and they are framing the price as you saved money!!

• Quality of service or product 

Prospect Theory: people preferences with gain and loss

1. people prefer to segregate gains

   1. sale up to 70% PLUS 10% at checkout, etc

2. people prefer to combine losses

   1. 6-months subscriptions

Definition: Asymmetric Dominance / Apple 3 options of the iPhone

• adding a third option that is dominated by [ inferior to] one [but not both] of the original two alternatives, increases the attractiveness of the dominating option  

• A vs. B (>C) increase the attractiveness of B 

Did Apple forget 34GB? 

• 16GB = $199

• 64GB = $299 

• 128GB = $399

• No, bc they make the option 64GB look very attractive compared to the other options. Seems like a deal for consumers. Benefit to both parties, more storage for consumers and more revenue for Apple. 

The Consumer Decision Process : 5 steps

1. need recognition

2. information search

3. alternative evaluation

4. purchase decision

5. post-purchase behavior

The Consumer Decision Process: 1. Need Recognition

1. Functional needs

2. Psychological needs

As a marketer, you want to encourage need recognition and of course, offer a solution. example : “4 out of 5 women don’t get enough calcium” for TUMS E-X

The Consumer Decision Process: 2. Information Search

Information Sources

• Personal

  • family, friends, neighbors, casual or work acquaintances

• Public

  • mass media articles or news programs, internet searches, consumer rating organizations 

• Commercial

  • advertising, salespeople, dealers, websites, packaging, and displays 

• Experiential

  •  using, handling, examining or sampling the product 

The Consumer Decision Process: 3. Alternatives Evaluation

• Evaluates the different options of products or services in the market 

• Total set —> awareness set —> consideration set —> choice set —> decision 

• multi-attribute model example 

  • computer vs. attribute ( memory capacity, graphics capability, size and weight, and price)

The Consumer Decision Process: 4. Purchase Decision

• intentions to purchase are sometimes interrupted

• Potential “Interrupters”

  • attitude of others

  • unexpected situational factors (ex. sold out)

The Consumer Decision Process: 5.Post-Purchase Customer Satisfaction ; example of the United Breaks Guitars

• satisfaction can spread positive word of mouth and lead to repeat business 

• dissatisfaction could become a disaster to a company 

  • Dave Carroll’s story went viral and in 4 days United stocks price fell 10%

  • United contacted Caroll to apologize and compensate

  • Later Caroll published a book to detail his experience

The Consumer Decision Process:

5. Post-Purchase Customer Satisfaction; Managing Dissatisfaction

• listen to the squeaky wheel

• look for complaints — make complaining easy

• accept responsibility

• quick action

  • replacement

  • repair

  • refund

  • exchange

• empower employees

Factors Affecting the Decision Process

1. Marketing Mix

   1. the 4Ps: product, price, place, and promotion

2. Psychological Factors

   1. motives

   2. attitudes

   3. perceptions

   4. learning

   5. lifestyle

3. Social Factors

   1. family

   2. reference groups

   3. culture

4. Situational Factors

   1. purchase situation

   2. shopping situation

   3. temporal state

Definition: Motives: Maslow’s hierarchy

• a need or want that is strong enough to cause people to seek satisfaction

• Maslow’s hierarchy of needs explain why people are driven by needs at particular times

• The role of Marketing 

  • stimulate the need and offer a solution — the product/service 

  • identify need based on the ad presented 

Abraham Maslow 1908-1970

• Father of humanistic psychology and creator of Maslow’s hierarchy of needs

Motives —> Maslow’s hierarchy of needs

in order of top of the pyramid to the base

1. self actualization needs

   1. self-development and realization 

2. esteem needs

   1. self esteem, recognition, status 

3. social needs

   1. sense of belonging, love 

4. safety needs

   1. security protection 

5. physiological needs

   1. hunger, thirst