BUS INST 302 MIDTERM #1

Marketing (fully defined)

Marketing is a process that involves devising and carrying out a strategy to:

• Create something of value

• Communicate effectively with customers

• Help customers obtain the value offering

• Maintain ongoing profitable relationships with customers

Utility FTPP

• Form utility - how well an organisation can increase the value of its product by changing appearance

• Time utility - customers can buy when it’s most convenient

  • Late nights, 24/7

• Place utility - when goods or services are physically available and accessible

• Possession utility - product is easy to acquire

Value proposition

What makes your product or service desirable to potential customers, helps them understand why they should buy it, how your company’s product or service differs from those of its competitors, and how your offerings are superior to similar offerings from your competitors.

Customer equity

Potential profits a company earns from its current and potential customers

Marketing myopia

when a company is so focused on quick sales and mass production of goods they lose sight of their long-term goals and customer needs

Production orientation

• Efficient mass production

• Economy of scale

• cost cutting

Product orientation

• Innovation focus

• A great product sells itself

• having a slightly better solution to a problem can itself be a very valuable discovery

Selling orientation

• Mindset: convince people to buy whatever you are selling

• often through aggressive tactics, short-term goals, and heavy promotion, rather than on understanding and meeting customer needs

Marketing orientation

• A marketing orientation starts with customers. What is the underlying benefit they seek? How can the company best meet that need?

• Marketing is an essential function, not an afterthought

• successful businesses put consumer needs at the forefront and foster lasting relationships with them

Societal orientation

• Sometimes a company’s focus on meeting customers’ short term needs is harmful in the longer term

• A societal marketing approach balances consumers’ wants and needs with their, and society’s, long-term interests

  • Replacing zipper instead of entire sweater

Customer relationship management (CRM)

• the systematic process of managing a business's interactions and relationships with current and potential customers, aiming to build long-term, profitable relationships 

  • Know your birthday, anniversary, send reminders, text alerts, customize relationship

Customer retention

the process of encouraging customers to continue to buy from or use a company's products or services

SBU

Strategic Business Unit is a fully-functional, semi-autonomous division of a larger company that operates as an independent business, own strategy

EX. P&G

Vision statement

a concise, aspirational declaration of an organization's future goals and aspirations, typically set 5-10 years ahead

Mission statement

a formal summary of the aims and values of a company, organization, or individual.

KPIs

key performance indicators, directly tied to business objectives and have targets and specific time frames for achieving those targets

 It indicates the company’s ability to convert sales revenue into profits

Incremental versus End-Metrics

• Incremental metrics - Ongoing signals of how a company is doing early on

• end metrics - overall success and long-term business impact of a complete marketing plan

Strategic moats

a company's long-term competitive advantages that make it difficult for rivals to take market share

• Core product - expert at this, which allows for more products with that at core

Portfolio analysis

Assessing relative performance, analyzes SBU’s relative to one another

Market penetration

Existing Product, Existing Market (growing market share)

Market development

Existing Product, New Market.

product development

New Product in Existing Market

Product development

New Product, Existing Market

Divest

Eliminate to protect rest of portfolio (pets)

Harvest

Reducing all necessary expenses to retain remaining revenue, allows brands to invest cash in their more profitable products

Direct competitors

businesses that offer the same or very similar products or services to the same target market and compete for the same customers

Indirect competition

offer different products or services that satisfy the same customer need but in different ways

Benchmarking

measuring your marketing performance and strategies against those of competitors or industry leaders to identify areas for improvement and adopt best practices COMPARING KPIs to refine strategy

Consumer attitudes

an individual’s position, ranging from positive to negative, towards a product or object, guiding their behavioral responses

Hi vs Low involvement

• High-involvement marketing targets expensive, complex, or emotionally significant purchases, using strategies like building strong brand connections,

• low-involvement marketing focuses on routine, low-risk items like groceries, using strategies like simplifying the buying process, brand loyalty through habit

Post-purchase

the phase of the customer journey after a purchase is made, involving all interactions a customer has with a brand until the relationship is completed or renewed

Dissonance

the mental discomfort consumers experience when they encounter conflicting information about a product or service after making a purchase decision

Life cycle stage

• a distinct period within the lifespan of a person

Perception process

the manner in which sensory information is organized, interpreted, and consciously experienced

Reference groups

groups that consumers compare themselves to or associate with

Subculture

a cultural group within a larger culture, often having beliefs or interests at variance with those in the larger culture

Selective attention

the process of directing one’s awareness to relevant stimuli while ignoring irrelevant stimuli in the environment

Subliminal priming

Influence on some level, but much more subtle than driving us to make a brand purchase - truly unconscious

Supraliminal priming

If it can be seen with effort

Cognitive schemas

memory-stored cognitive structure of prior knowledge that shapes new information

Atmospherics

Scientifically designed multisensory shopping experiences

AIO

activities, interests, and opinions

• daily routine

• passions - target consumer

• opinions on products

VALS

Groups customers based on their (Values, Attitudes, and Lifestyles)

• If you know what consumers are thinking, you will know which promotions or marketing messages will attract them to your product or service

Differentiated marketing

Company identifies several target markets and designs separate, concentrated strategies for each target market

Concentrated/niche marketing

• Company chooses not to serve all target markets, focuses on just one target market with a single marketing mix - strong brand loyalty

Behavioral segmentation

PURCHASE BEHAVIOR - Usage, loyalty, Benefit Segmentation (benefits sought).

Benefit segmentation

(Subtype of behavioral) - focuses on which benefits or features of a product or service are most applicable to the customer, what they want to gain

Psychographic segmentation

• Attitudes, interests, activities, lifestyle, opinions, values

  • AIO - groups of people who share activities, interests, opinions

  • VALS - groups customers based on their (Values, Attitudes, and Lifestyles)

Multi-segment marketing

company using all or a mix of segmentations to appeal to multiple target markets

Geodemographic Segmentation

combines geographic and demographic data to categorize consumers into groups based on shared characteristics and location

Buyer persona

semi-fictional representation of your “ideal customer” that helps you understand and relate to the audience to which you want to market your product and/or services

3C

• (consumers, competition, company)

  • The focal company

  • Its competitors

  • Potential customers

The 4-stage marketing process

1. Analyze the marketing environment, macro/micro environment factors, 3 C’s

2. Devise a customer-driven strategy, segmentation, strong value proposition

3. Decide which actions to take (marketing mix), 4 P’s

4. Capture value and grow customer relationships, CRM, customer retention, customer equity

PESTEL

MACRO ENVIRONMENT

a strategic framework that helps businesses understand the external macro-environmental factors affecting them, standing for Political, Economic, Social, Technological, Environmental, and Legal

S.M.A.R.T

• strategic, measurable, achievable, relevant, time-bound

S-T-P Process

• segmentation, targeting, positioning

A.D.A.M.S criteria

• Accessible - capabilities to effectively reach the group w/ marketing communications

• Differentiable - is this group clearly defined, differences between market segments

• Actionable - profitable to market to them?

• Measurable - can we estimate market size and profit potential

• Substantial - is this group large enough to justify the resources needed

Porter’s 5 Forces

• Threat of new entrants - height of entry barriers

• Competitive rivalry - how tense is existing competition

• Bargaining power of suppliers - breathing room of relying on suppliers

• Bargaining power of customers - are they reliant on the product

• Threat of substitutes

SWOT

Strengths, Weaknesses, Opportunities, and Threats — a strategic tool used to evaluate a company’s internal and external environment.

BCG

Simpler 2x2 matrix categorizing products into Stars, Cash Cows, Question Marks, and Dogs based on market growth and market share

Ansoff Matrix

what type of market strategy to use based off of product and market

Perceptual mapping

visual diagram that shows how the average target market consumer perceives your product versus those of your competitors

Strategic groups map

a visualization tool for capturing the essence of the competitive landscape in an industry

Strategy

how will we make ourselves stand out, compete, High-level game plan: differentiate through ___, remain leading brand

Goals

broad, longer-term outcomes that include end metrics - YEARS AHEAD

Tactics

•  the specific actions and tools you'll use (the day-to-day WHAT you'll do)

  • Tactics explain which 4p marketing elements

Objectives

• shorter tactical aims that are towards a larger goal within months vs years ahead

Levels of strategy

corporate, business/brand, functional

Maslow’s hierarchy - 5 why

Physiological, Safety, Love/Belonging, Esteem, and Self-Actualization.

Marketers use this model to understand the "why" behind a customer's purchase, allowing them to create emotionally resonant messages

Associative network model

Explains how creative marketing can link a brand to desired Cognitive Schemas (mental frameworks).

Positioning statement template / components

For (target segment), we are the only brand among all (competitive frame) that (value proposition) because (reasons)

Classic 5-Step Decision Making Model

1. Problem Recognition,

2. Information Search,

3. Evaluation of Alternatives,

4. Purchase Decision, and

5. Post-Purchase Evaluation

Marketing Funnel (6)

1. awareness

2. familiarity/interest

3. consideration

4. intent/desire

5. purchase

6. loyalty

Consumer Decision Journey Model

1. Consider initial set

   1. Trigger + loyalty loop

2. add/substract brands during evaluation

3. Moment of purchase

4. Experience shapes our expectations and future decision-making

• Undifferentiated marketing

• Aiming to reach as many people as possible, high market appeal, advertises to entire market 

• Micromarketing

• Targets a specific group of individuals within a niche market based on specific information that has been collected

Corporate strategy

• How will the overall company succeed? (What businesses should we be in?)

  • Portfolio analysis - Assessing relative performance, analyzes SBU’s relative to one another

Business/Brand strategy

• How will this particular business unit or brand succeed within its market?

Functional strategy

• How will marketing (or finance, or operations) contribute to business’s overall success?

What are Strengths in a SWOT analysis?

Internal capabilities that help a company reach its objectives.

Examples: well-established, high market share, leading brand

What are Weaknesses in a SWOT analysis?

Internal factors that hinder a company’s ability to achieve its goals.

ex. perception problems with certain groups

What are Opportunities in a SWOT analysis?

External factors a company can exploit for advantage. Competitor going out of business, low interest rates, favorable exchange rates.

• UNTAPPED MARKETS (demographic)

What are Threats in a SWOT analysis?

External factors that could create barriers or challenges to performance.

• intense competition

5m framework

INTERNAL

• Minds (staffing) - people who ensure the rest of the M’s are productive towards goals 

• Minutes (time) - formulating new strategy

• Machinery - equipment used to process materials

• Materials - inputs needed

• Money - acquire resources 

Internal interested parties

entities that reside within the organization and that affect—or are affected by—the actions of the company. These entities include employees, owners, managers, and investors (shareholders).

External interested parties

include those outside the company, such as customers, creditors, suppliers, distributors, and even society at large, no direct say

What is demographic segmentation?

Dividing the market based on who the customer is. Examples: Age, income, education level, profession, ethnicity

What is geographic segmentation?

Dividing the market based on where the customer lives. Location, region, city, climate

B2B Market

• marketing transaction or business conducted between businesses

Types of Buyers in the B2B Market

producers, resellers, retailers, wholesalers, brokers

Producers

• companies that purchase goods and services that are transformed into other products, and they include both manufacturers and service providers 

Resellers

• sell goods and services produced by other companies without any material change

Retailers

 businesses that sell goods to consumers in relatively small quantities

Wholesalers

 purchase larger quantities from producers and then resell them to retailers

Brokers

they bring buyers and sellers together and they represent many producers of noncompeting products

3 targeting criteria areas

segment attractiveness, company fit, ability to compete

Marketing Mix 4ps

• Product -Are product changes needed? Improvements?

• Price - what should we charge?

• Promotion - how can we effectively communicate with consumers?

• Place - are changes needed in distribution? 

Needs

stated, real - what feature is driving stated need, unstated - what would make more desirable, delight, secret - status symbol

4p vs. 5m

• 4p focuses on customer-facing marketing strategy

• 5m focuses on internally managing business resources

gap analysis

compare a company's current performance with its desired goals to identify gaps and create an action plan to bridge them