MGT 103 - Midterm 1 Ehrich UCSD

What is 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

4 P’s in Marketing

• Product; what is being offered

• Price: what is exchanged

• Promotion: how the product is communicated to consumer

• Place: how the product gets to the consumer

Value Proposition

Benefits that an organization promises to the customer: There must be a belief that this promised value will be delivered and experienced

Corporate sustainability

profit + people + planet; what is needed to keep a company afloat

Organizational Structure

board of directors (oversees management) > corporate level (overall direction + resource allocation) > strategic business unit/SBU (businesses within org with its own market and competitive strategy) > functional level (specialists within businesses)

Core Values

principles that guide an org’s conduct

Organizational Culture

set of values, ideas, attitudes and norms of behavior that is learned and shared among members of the organization

Mission

what is the business, who should be served, how can firms be developed effectively

Mission Statement

A formal declaration that describes the firm's overall purpose and what it hopes to achieve in terms of its customers, products, and resources. It should be clear, concise, meaningful and inspirational.

SMART Goals

specific, measurable, achievable, relevant, and timely

BDC Matrix: Stars

products/services with high share and high growth that help a company maintain leadership

BDC Matrix: Cash Cows

products/services with high share and low growth that help a company fund stars

BCD Matrix: Question Marks

products/services with low share and high growth that help are selectively invested or divested in

BCD Matrix: Dogs

products/services with low share and low growth that help a company divests or manages for cash

Market Penetration Strategy

seeks to increase sales of existing products to existing markets

Product Development Strategy

create growth by selling new products in existing markets

Market Development Strategy

introduce existing products to new markets

Diversification Strategy

emphasize both new products and new markets to achieve growth

SWOT method

• build on strengths

• correct weaknesses

• capitalize on opportunities

• respond to threats

What are different marketing evaluation metrics?

• return on marketing investment (ROMI)

• new customer acquisition cost (CAC)

• customer retention rates

• churn rates (% loss per period and rev)

• customer satisfaction

Environmental Scan

Process of continually acquiring information of the world outside the org; identifies and interprets trends

Consumer Behavior

reflects the totality of consumers' decisions with respect to the acquisition, consumption and disposition of goods, services, activities and ideas by (human) decision-making units over time

Marketing Research

Collecting, analyzing, and interpreting data about customers, competitors, and the business environment to improve marketing effectiveness

Primary Data

Collected specifically for current purpose•Could be internally or externally collected•Examples: Experiments, Test Markets, Focus Groups, Surveys, Observations

Secondary Data

Collected for some other purpose•External (census, Gallup poll, etc.)•Internal (company records, sales data)

Observational Research

Making observations of behavior and recording those observations in an objective manner•Natural (e.g., home, store) vs. artificial (e.g., lab) settings•Most useful when investigating complex social settings; less useful for studying well-defined hypotheses under specific conditions

Survey Research

Personal Interview surveys -you can be flexible and adjust to the person you're interviewing (costly)•Mail surveys & Phone surveys•Online surveys -becoming more and more common

Experimental Research

Test hypotheses about causal relationship between variables-Look at effect of independent variable on dependent variable-Different groups of consumers get different "treatments"-Helps determine CAUSALITY

3 Factors Necessary for Causation

1)Correlation

2) Temporal antecedence

3) No third factor driving both

Requirements to Establish Causality

1.control/manipulate the cause (independent variable) and hold "everything else"constant

2.the cause has to precede the effect (dependent variable)

3.random assignment -makes experimental groups statistically equivalent

Psychographic Segmentation

dividing a market into different segments based on social class, lifestyle, or personality characteristics

Behavioral Segmentation

Segmentation based on how consumers act toward, feel about, or use a product

Example of Behavioral Segmentation

how often do they use the product

4 Types of Segmentation

demographic, geographic, psychographic, behavioral

Segmentation

Identify and describe market segments

Targeting

Evaluate segments and decide which to go after

Positioning

Develop a marketing mix that will create a competitive advantage in the minds of the selected target market

Positioning

The act of designing the company's offer and image so that it occupies a distinct and valued place in the target customer's minds

Frame of Reference

signals to consumers the goal they can expect to achieve by using the brand. It also dictates the types of associations that will function as points of parity and points of difference. Central to establishing a frame of reference is an understanding of the competitive landscape

Points of Parity

attributes that inform the consumer that you are capable of providing something that might work

4 Characteristics of Services

intangibility, inseparability, inconsistency, inventory (there is none)

intangible

can't touch it, hold it; No change of ownership -(how does marketer deal with this?)

Inseperability

can't separate services from those who "create/manufacture" the service) -Delivered and consumed at the same time; Customers must be present at the consumption of the service and cannot take the service home

Inconsistency

Difficult to standardize

No inventory

Unused service capacity from one time period cannot be stored for future use -(how does this impact the marketing of the service?)

Value Proposition

Benefits the customer will receive when buying the product (as well as the benefits that the company will receive)

Brand Equity

A brand's financial value to its organization, premium placed on the company because of brand ownership•The differential impact brand knowledge has on consumer response to an offering's marketing efforts•Brand equity can provide competitive advantage

What are some sociocultural shifts?

• Wellness & self-optimization

• Experiences > possessions

• Identity and representation

• Authenticity and transparency

• Peer influences and social proof

Economic Environment

• Gross domestic product (GDP)

• Inflation

• Unemployment

• Interest rates

• Business cycle

  • expansion → peak → contraction/recession → trough

Competitive Forces

• Perfect/pure competition

• Monopolistic competition

• Oligopoly

• Monopoly

Regulatory/Political & Legal Forces

• Legislation

• Legal decisions interpreted by courts thru civil and criminal cases

• Presidential administrations, congressional composition, state & federal law

Consumer Income & Purchasing

Gross income: total money earned → disposable income: income left after taxes → discretionary income: income left after taxes + necessities