MGMt 324 Exam 1

What is Marketing

Satisfying customer needs to Capturing customer value

What is a need

state of felt deprivation

What is a want

Form of human need shaped by culture, society, and individual personality

What is a desire

Human wants backed by buying power

Marketing Myopia

the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products

Customer perceived value

Customer evaluation of the difference between the costs of a product and the benefits given by it.

Customer lifetime value

The value of the entire stream of purchases a customer makes over a lifetime of patronage

Customer equity is the sum of all of these

Blockbuster versus Netflix

Blockbuster failed to adapt to the times with streaming services and with customer preferences

Netflix met customer needs by adapting to customer wants and desires

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

Customer relationship management

The process of building and retaining customer relationships by delivering superior value and satisfaction

Customer engagement marketing

Becoming a meaningful part of a customer's life by fostering direct and continuous customer involvement through conversations, experiences, and community

Market-oriented mission statement

defines the business in terms of satisfying basic customer needs

product-oriented mission statement

defines the business in terms of product or technology

strategic business unit (SBU)

Key businesses that are important to the business

Boston Consulting Group (BCG ) approach

evaluates SBUs in terms of market share and market growth rate

1. Stars (High growth, high market share): Large investment, large dividends

2. Cash Cows (Low growth, high market share): Less investment needed but still pay well

3. Question Marks (High growth, low market shate): Risk is high, may not sustain

4. Dogs (Low growth, low market share): Sustain themselves and that's it

Market Penetration (growth strategy)

Existing products in existing markets

increasing sales of current products to current market segments

Market Development (growth strategy)

Existing products in new markets

Bringing current products to new markets such as new demographics or pyschographics

Product Development (growth strategy)

New products in existing markets

Offering new products to current segments

Diversification (growth strategy)

New products in new markets

Growth by acquiring businesses outsside current markets

Value Chain

The series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products.

Only as strong as the weakest link

Value Delivery Network

a network composed of the company, suppliers, distributors and customers who partner with each other to improve the performance of the entire system and in hand drive up customer value

Marketing Mix

Price, Place, Product, Promotion

4A's of marketing

acceptability, affordability, accessibility, awareness

customer-centric approach to marketing

SWOT analysis

strengths, weaknesses, opportunities, threats of an organization

Strengths and weaknesses are internal

Opportunities and threats are external

Marketing control

measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved

Operating Control: Checking ongoing performance

Strategic Control: Deciding if company strategies match company opportunties

Marketing ROI

The net return from a marketing investment / the costs of the marketing investment

Marketing Microenvironment

Immediate external forces affecting a company

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

Marketing Intermediaries

firms that help the company to promote, sell, and distribute its goods to final buyers (Resellers, Physical Distribution firms, Marketing service agencies)

Customer

most important actor to the marketing microenvironment

Marketing Macroenvironment

The larger societal forces that affect a company's strategy —demographic, economic, natural, technological, political, and cultural forces.

Baby Boomers

Oldest and wealthiest generation

"A Marketers dream"

Value experience and brand's that reflect their lifestyle

Fastest growing demographic online

Generation X

Overlooked consumer group

Value practicality and balance

Prefer quality

Millenials

Very strong digitally but poorer generation

Seek authenticity

Generation Z

Largest influence of family spending power

mobile first, enjoy personalization and online shopping

Social responsibility is key

Generation alpha

Largest generation, very tech savy

Geographic shifts

People are moving more south or out west, less in midwest or north

Economic environment

factors that affect a consumer's purchasing power and spending patterns

- Recessions and Booms

- Income Distribution (Rich getting richer, middle class shrunk, poor getting poorer)

- Inflation and Cost of Living (BAD)

Natural Environment

The physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities.

- raw materials are decreasing

- Sustainability key

-Gov more involved than ever

Technological environment

-E-commerce has grown greatly

-People are worried about digital privacy

-Technology is continously changing

Political Environment

Laws, government agencies, and pressure groups that affect marketing

- Consumer protection laws prevent misleading ads

- Antitrust laws ensure fair competition

- Data Privacy laws control data usage

Core vs Secondary beliefs (Cultural Environment)

Core values are passed on beliefs and values that are deeply ingrained and slow to change

Secondary beliefs are beliefs and values more open to change

Corporate Social Responsibility

the notion that corporations are expected to go above and beyond following the law and making a profit, taking a stand on social issues

Reactive versus Proactive approach

Reactive approach adjusts strategies after changes occur in the marketing environment

Proactive approach anticipates trends or changes in marketing environment and takes action early and often

Customer Insights

fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships

Big Data

a broad term for datasets so large or complex that traditional data processing applications are inadequate.

Marketing Information Ecosystem components

-Internal Data: Customer Transaction, CRM data, sales reports

- Competitive Intelligence: Data on competitors from public sources

- Marketing Research: collection of primary and secondary data

Types of Research

-Exploratory research is used to gather preliminary information used for the hypothesis

-Descriptive research is used to better describe marketing problems or solutions or markets

-Casual research is to test the hypothesis for cause-and-effect relationships

Types of Data

Secondary data is data that already exists somewhere, having been collected for other purposes. Found on search engines

Primary data is data that is collected for a specific purpose on hand

Ways to collect data

- Surveys

- Observational research: sit back and observe

- Ethnographic research: Deep dive into the research population

-Experimental Research: Tests in controlled setting

Customer Relationship Management (CRM)

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

Marketing Analytics

a group of technologies and processes such as AI and Machine Learning that allow marketers to analyze customer behavior

Ethical Issues of Marketing Research

- Consumer privacy: How data is collected

- Behavioral Targeting: Using personalized ads to to track users

- Misuse of research findings: Presenting misleading data or biased conclusions

Consumer buying behavior

the buying behavior of final consumers - individuals and households that buy goods and services for personal consumption

marketing stimuli and more

Marketing Stimuli: 4 P's

Others are economic, technological, and social factors

Cultural Factors

-culture

-subculture: groups with shared values and beliefs

-social class

Social Factors

-Reference Groups: influencing attitudes and behavior

- Opinion Leaders: Individuals who influence buying behavior

- Family Influence: Most important consumer-buying organization

- Roles and Status: Position in group influences

Social identity priming

If an individual thinks they are a part of a social group, they will be more likely to align themselves with the values or behaviors typical of that group

Personal factors

age and life-cycle stage, occupation, economic situation, lifestyle, personality and self-concept

Psychological factors

Motivation, Perception, Learning, and beliefs and attitudes

Motivation

a need that is sufficiently pressing to direct the person to seek satisfaction of the need

- Drive is a state of tension that drives action

Perception

the process of organizing and interpreting sensory information

Selective distortion

the tendency of people to interpret information in a way that will support what they already believe

Selective Attention

the tendency for people to screen out most of the information to which they are exposed- marketers have to work harder

Selective retention

Consumers are more likely to remember good points made about a brand, forgetting bad points

Step 1 of Buying Decision Process: Need for Recognition

Buyer recognizes a want or need, influenced by internal or external stimuli

Step 2 of Buying Decision Process: Information search

Consumers search for information through

- Personal Sources

- Commercial Sources (Ads)

- Public Sources (Reviews, media)

- Experential Sources (trying it out)

Step 3 of Buying Decision Process: Evaluation of Alternatives

Consumers use information to evaluate alternatives

Step 4 of the Buying Decision Process: Purchase Decision

The buyer's decision about what brand to choose. Attitudes of others (friend telling you something) and unexpected situational factors (economy gets worse) factor into purchase intention

Step 5 of the Buying Decision Process: Post purchase behavior

buyers take further action after purchase, dependent on their satisfaction or dissatisfaction. Their satisfaction is dependent on consumers' expectations for the product and its perceived performance

-Cognitive dissonance is discomfort caused by a postpurchase conflict

Market Segmentation

The process of dividing a market into relatively similar segments based on needs, behaviors, and characteristics.

Market Targeting

Evaluating market segments' attractiveness and selecting one or more to enter that are most attractive

Differentiation

developing a unique marketing offering to provide superior value

Positioning

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

Positioning statement

Summarizes the company or brand positioning using this form:

-To (target segment) our (brand) is (concept) that (point of difference)

Demographic segmentation

dividing the market by age, gender, income, education, or occupation

Pyschographic segmentation

Best form of segmentation

Segmentation based on lifestyle, beliefs, and values

Behavorial Segmentation

Segmenting a market base on the way customers use a product or behave toward a product.

Business Market Segmentation

Uses similar forms of segmentation (Geographic, demographic etc.) But also utilizes

- Customer operating characteristics

- Purchasing approaches

- Situational factors

International Market Segmentation

geographic location

economic factors (GDP, development factor)

political and legal factors (form of government and gov policy)

cultural factors (religion, values etc.)

A Market Segment must be

Unique but Large enough to be profitable, so that companies can be actionable in having their purchasing power be quantified

measurable, accessible, substantial, differentiable, actionable

Undifferentiated Marketing

a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer

Differentiated Marketing

a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each

Concentrated Marketing

A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches

Micromarketing

An approach to market segmentation in which organizations focus precise marketing efforts on very small geographic markets

Local marketing

tailoring brands and marketing to the needs and wants of local customer segments - cities, neighborhoods, and even specific stores

Individual Marketing

tailoring products and marketing programs to the needs and preferences of individual customers

Value Proposition

the full positioning of a brand - the full mix of benefits on which it is positioned