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

• 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 mix – the 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? 

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

• Just “build a better mousetrap”

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

semiautonomous divisions within larger corporations, some are based on product, product line, type of market, geographic area

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

Incremental versus End-Metrics

• Incremental metrics - Monitor campaign execution and early signals of success

• end metrics - Evaluate overall success of marketing plan/business impact

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

When a company focuses on growing its market share in its existing markets

Market development

involves searching for new market segments and uses for a company’s products

Product Diversification

involves a company expanding into new products, services, or markets to grow and spread risk

Product development

strategy focuses on existing products and existing markets

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 (pets)

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

companies that offer different products or services but fulfill the same customer needs

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

a set of behavioral intentions, cognitive beliefs, and emotions regarding a product or behavior

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

mental frameworks consumers use to organize information about brands and products, influencing their perceptions and purchasing decisions

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

WHAT

• Relates specifically to product – usage, loyalty, deal proneness, occasion, BENEFITS SOUGHT, buyer stage

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

Aggregates demographic attributes along with lifestyle/psychographics and behavioral data within a specific geographic area

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

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

The matrix provides a framework for analyzing risks and planning for business expansion by considering how to increase sales of existing products in current markets, introduce new products to existing markets, find new markets for current products, or develop new products for entirely new markets.

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

• your overall approach or game plan (HOW you'll compete or succeed)

Goals

•  broad, long-term outcomes you want to achieve (WHERE you ultimately want to end up)

Tactics

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

  • Tactics explain which 4p marketing elements

Objectives

•  specific, measurable targets that your tactics need to hit to support your goals (WHAT you need to accomplish by when)

Levels of strategy

corporate, business/brand, functional

Maslow’s hierarchy

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

represents brand knowledge as a network of interconnected nodes in a consumer's memory

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 

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: Strong brand identity, technological innovations, high market share.

What are Weaknesses in a SWOT analysis?v

Internal factors that hinder a company’s ability to achieve its goals. Outdated technology, competitors with stronger brands, high employee turnover.

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.

What are Threats in a SWOT analysis?

External factors that could create barriers or challenges to performance. Rising interest rates, pending legislation.

5m framework

• 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