Introduction to Marketing

marketing

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

product

A tangible good, service, idea, or some combination of these that satisfies consumer or business customer needs through the exchange process; a bundle of attributes including features, functions, benefits, and uses.

price

The amount of money exchanged for a good or service

promotion

Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response

distribution

the process of getting products from production to final distribution

needs

states of felt deprivation. The difference between an actual and desired state; can be physiological or psychological.

wants

desire to satisfy a need in a particular way; these are influenced by personality, history, past experience, and culture.

benefits

advantage or profit gained from something. Consumers receive benefits when their needs are satisfied.

desire

Customers' desires for products coupled with the resources needed to obtain them.

utility

the sum of the benefits we receive from using a product or service.

form utility

the value producers add to materials in the creation of finished goods and services

place utility

Adding value to products by having them where people want them.

Time Utility

the increase in customer satisfaction gained by making a good or service available at the appropriate time

possession utility

Usefulness created when ownership of a product is transferred from the seller to the user

marketing concept

the idea that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives

societal marketing concept

the idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests

Corporate Social Responsibility

the notion that corporations are expected to go above and beyond following the law and making a profit

social marketing

the use of commercial marketing concepts and tools in programs designed to influence individuals' behavior to improve their well-being and that of society

wisdom of crowds

under the right circumstances, groups are smarter than the smartest people in them, meaning that large numbers of consumers can predict successful products

Consumer-generated marketing

brand exchanges created by consumers themselves - both invited and uninvited - by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers

user-generated content

Internet messages that originate with an individual to communicate directly with a mass audience

Folksonomy

similar to taxonomy except that crowdsourcing determines the tags or keyword-based classification system

haul videos

a genre of YouTube video that consists of a shopper who describes in detail apparel he or she has just purchased

social media influencers

consumers who have a large following and credibility within a certain market segment

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

Anti-consumerism

movement that rebels against consumerism or the equation of happiness with consumption of goods and services)

consumer addictions

a physiological or psychological dependency on products or services

Market Segmentation

the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

market fragmentation

the creation of many consumer groups due to a diversity of distinct needs and wants in modern society

market

any arrangement that allows buyers and sellers to exchange things

consumer markets

The markets for products and services purchased by individuals or households to satisfy their specific needs.

business markets

the institutional buyers who purchase items to be used in other products and services or to be resold to other businesses or households

geographic segmentation

segmenting markets by region of a country or the world, market size, market density, or climate

product use segmentation

users of a particular product or brand generally have some characteristics in common; at the very least, they have a shared experience with a product or brand.

Type of Organization

Marketers may separate customers based on whether they are government contracts, other businesses, or not-for-profit organizations.

demographics

statistical data relating to the population and particular groups within it.

generational cohort

A group of people of the same generation—typically have similar purchase behaviors because they have shared experiences and are in the same stage of life.

motives

the needs, wants, interests, and desires that cause people's behaviors

lifestyles

a component of psychographics; refers to the way a person lives his or her life to achieve goals

Personality

an individual's characteristic pattern of thinking, feeling, and acting

Concentrated Strategy

A marketing strategy in which a marketer selects one specific group of consumers and designs a marketing mix specifically for that group.

mass customization

a strategy that uses technology to deliver customized services on a mass basis

customized marketing

also called one-to-one marketing, it is when a company strives to meet the needs of very small segments by customizing their offering to fit the individual customer's needs, arose due to availability of detailed data on customers, only used by large firms (extreme version of differentiated marketing)

multi-segment strategy

A strategy that recognizes different preferences of individual market segments and develops a unique marketing mix for each

Mass-Market Strategy

Captures sufficient volume to gain economies of scale and a cost advantage. Requires:

Substantial resources, Production capacity,

Good mass-marketing capabilities

Positioning

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

perceptual map

displays, in two or more dimensions, the position of products or brands in the consumer's mind

level of economic development

the broader economic picture of a country

Gross Domestic Product (GDP)

A measurement of the total goods and services produced within a country.

business cycle

Fluctuations in economic activity, such as employment and production

prosperity

High levels of employment lead to higher demand for products. Increased demand and purchasing power lead to higher prices in the market; eventually, prices become inflated to the point that an economy's customer base can no longer afford to buy as ma

Recession

A slowdown in a nation's economy

Depression

A long-term economic state characterized by unemployment and low prices and low levels of trade and investment

recovery

A period of renewed economic growth following a recession or depression.

Monopoly

A market in which there are many buyers but only one seller.

Oligopoly

A market structure in which a few large firms dominate a market

perfect competition

a market structure in which a large number of firms all produce the same product

monopolistic competition

market in which producers sell products differentiated from one another (e.g., by branding or quality) and are not perfect substitutes.

discretionary income

the amount of money an individual has left to spend after paying for necessities - housing, utilities, food, and clothing.

disposable income

Income remaining for a person to spend or save after all taxes have been paid

competition for discretionary income

"total brand" competition. All businesses compete for the consumer's limited resources/discretionary income (what remains after taxes and necessities).

brand competition

when firms offering similar goods or services compete on the basis of their brand's reputation or perceived benefits

Product Compeititors

compete in the same product class, but with products that are different in features, benefits, and price (ex. Beer, Phones)

FTC (Federal Trade Commission)

Protects consumers from misleading and fraudulent advertising. Reviews advertising claims. Can order a company to change their ad

FDA

Food and Drug Administration. The agency that is responsible for determining if a food or drug is safe and effective enough to be sold to the public.

FCC (Federal Communications Commission)

Independent regulatory agency that oversees electronic media.

technology

environmental conditions

clude soil, water, climate, natural vegetation, and landforms,etc

culture

customary beliefs, social forms, and material traits of a racial, religious, or social group, or the characteristic features of everyday life shared by people in a place or time.

Values

the ideas, beliefs, and attitudes about what is important that help guide the way you live

Norms

rules and expectations by which a society guides the behavior of its members

Cultural Dimensions

fairly permanent and enduring sets of related norms and values

Quota

A limit placed on the quantities of a product that can be imported

tariff

A tax on imported goods

Embargo

an official ban on trade or other commercial activity with a particular country.

Standardization

This type of marketing strategy conforms to work across different cultures and countries to promote a product

Localization

he process of adapting all elements of your global marketing campaign to your target markets, so it can reflect the needs, interests, and context of customers in that specific area.

Exporting

selling domestically produced products to buyers in other countries

contractual agreement

pact made between two persons or parties for the achievement of mutually set goals

direct investment

expands internationally through ownership, usually by buying a business in the host country outright.

Sales Era

a time when a company emphasizes selling because of increased competition

Production Era

a time when a company focuses on production of a few specific products - perhaps because few of these products are available in the market

Marketing Era

After WWII, businesses began to develop brands to help consumers understand the differences among products

Individualistic cultures (hofstede)

strongly value personal achievement and focus on individual needs, whereas in collectivist societies, achievements and decisions are made with the group in mind

Motivation towards Achievement and Success

A high score (Decisive) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the winner / best in field - a value system that starts in school and continues throughout organisational life

power distance

This dimension deals with the fact that all individuals in societies are not equal - it expresses the attitude of the culture towards these inequalities amongst us. Defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally

Uncertainty avoidance

has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways. The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the score

long term vs. Short term orientation

This dimension describes how every society has to maintain some links with its own past while dealing with the challenges of the present and future, and societies prioritise these two existential goals differently. Normative societies. which score low on this dimension, for example, prefer to maintain time-honoured traditions and norms while viewing societal change with suspicion. Those with a culture which scores high, on the other hand, take a more pragmatic approach: they encourage thrift and efforts in modern education as a way to prepare for the future.

Indulgence

This dimension is defined as the extent to which people try to control their desires and impulses, based on the way they were raised