fundamentals of business finals

Marketing

The planning and the execution of a strategy of a product. Create an exchange that satisfies both the buyers and the sellers

Customer Relationship Management

Process of acquiring customer base

Customer behaviour

Studying how people buy, use and discard a product

Segmentation

Dividing the whole population in different groups of potential customers based on similar traits

Target market

Select the group that is most likely to buy your product

Production era (early 1900's)

Consumers didn't have the overwhelming number of choices that are currently available = most products were purchased as soon as they were produced and distributed; the top business priority was to produce a large quantities of goods efficiently

Production Era (early 1900's)

You can have your model T any colour you want as long it's black

Selling Era (early 1920's)

Production capacity increased dramatically; first time supply exceeded demand = emergency hard sell; Depression and WWII made consumers reluctant to part with their limited funds

Marketing era (early 1950's)

Market flooded with choices in almost every product category; As soldiers returned to war = +++ marriage and babies ; debut of marketing concept

Relationship era (today)

Values customer satisfaction; acquiring a new customer = more expensive than keeping an existing one

Social Era (Today)

Internet is another communication tool and enabler of e-commerce; can facilitate promotion, online business, marketing research and relationship building

What is marketing?

Ability of goods and services to satisfy customers want

Different form of utility

Place, Ownership, Form, Time

Place utility

Making goods or services available in locations that allow consumers to easily access products and services.

Ownership utility

Ability to change ownership

Form utility

Ability to turn raw material to final product

Time utility

having a product available at a certain time of year or a convenient time of day

Consumers goods

tangible products purchased by individuals for their use

Industrial goods

products purchased by companies to use directly or indirectly to produce other products

Services

intangible products to serve user's needs

Types of customer relationship management

Limited relationships, full partnership, value

Limited relationships

Providing value to an existing consumer base does not guarantee an increase in repetitive sales

Full Partnerships

If you have a high-ticket product and a smaller customer base, you're much more likely to pursue a full partnership with each of your key client

Value

Perceive VS actual; what we think we are getting vs what we are actually getting

Customer satisfaction

The good and service delivered has a value above customer expectations; overpromising = if product falls short of overly high expectations

Customer Loyalty

When customers choose your product over and over again

Marketing environment (Competitive environment)

Brand competition; Substitute products; International Competition

Marketing Plan

Formal document outlining marketing objectives and plan to achieve these objectives

Market segmentation categories

Behavioural variable, demographic, psychographics, geographic

Marketing mix (4Ps)

Price, Promotion, Place, Product

Factors influencing consumer behaviour

Psychological, Personal, Social, Cultural

Cognitive Dissonance

Discomfort about the purchasing decision made

Positive Data

New data that marketers compile for a specific research project; more expensive

Secondary Data

Existing data that marketers gather or purchase for a research project; less expensive

B2B

Business to business; used indirectly to produce other products; one business makes a commercial transaction with another

B2C

Business to consumer; for personal consumption

Consumer behaviour buying process

1) Problem recognition 2) Information search 3) Evaluation of alternative 4) Purchase decision 5) Post purchase evaluation

Problem recognition

Perceiving a need

Information search

Seeking value and start with an internal search

Evaluation of alternative

Assessing the value, based on evaluation criteria and evoked set

Purchase decision

Buying value

Post purchase evaluation

Value in consumption use, cognitive dissonance

Product classification

Convenience , Shopping, Specialty, Unsought

Convenience

inexpensive goods and services that consumers buy frequently with limited consideration and analysis. Distribution
tends to be widespread, with promotion by the
producers. Examples include staples, toothpaste and shampoo

Shopping

more expensive products that consumers buy less frequently. Typically, as consumers shop, they search for the best value and learn more
about features and benefits through the shopping process. Distribution is widespread but more selective. Both producers and retailers tend to promote shopping products. Examples include cars and computers.

Specialty

much more expensive products that consumers seldom purchase. Most people perceive these products as being so important that they are unwilling to accept substitutes. Because of this, distribution tends to be highly selective. Both producers and retailers are apt to promote specialty products but to a highly targeted audience. Examples: high-end sports cars and branded jewelry.

Specialty

Consumers are willing to go far out of
their way for the"right"brand

Unsought

Goods and services that hold little interest (or even negative interest) for consumers. Price and distribution vary wildly, but promotion tends to be aggressive to drum up consumer interest. Example: life insurance and fire extinguisher

What are the differences between product and services?

Intangibility, Inconsistency, Inseparability, Inventory

Product life cycle

1) Product development 2) Introduction 3) Growth 4) Maturity 5) Decline

Product layers

Actual product, core customer value, Augmented product

Core customer value

Contains the basic values, the pure benefits that each product/service brings to satisfy a certain need of the customer.

Actual product

Refers to the tangible object and relates to the physical quality, product, including quality level, features, brand name and packaging and the design.

Augmented product

Enhanced by its seller with added features or services to distinguish it from the same product offered by its competitors by including intangible benefits or add-ons that go beyond the product itself.

Product differentiation

Product quality, feature, style and design

Brand

A product identity that sets it apart from other businesses. Represent a combination of elements such as product name, symbol, design, reputation, and image. Project compelling group identity that creates brand fanatics.

Brand equity

The extra money that consumers will spend to buy this brand; the overall value of a brand to an organization.

Brand name

One of the most powerful element of your brand; catchy and memorable name

Brand extension

Involve launching a product in a new category under an existing brand name

Cobranding

When established brands from different companies join forces to market the same product. One of its advantages is they leverage their strengths to enter new markets and gain more exposure, but if one partner makes a huge mistake, the fallout can damage the reputation of the other partner as well.

What is promotion?

How to persuade customers to go and buy your product by
using variety of tools (advertising, websites, salespeople...) to communicate with customers and integrated Marketing Campaign

Integrated marketing campaign

The coordination of marketing messages through every
promotional vehicle to communicate a unified impression about a product. Consistent messaging

Traditional tools

Public relations, advertising media, sales promotion, personal selling

Emerging tools

Product placement, advergaming, sponsorship, social media, internet advertising, buzz marketing

Advertising media

Paid, non personal communication, designed to influence a target audience with regard to a product service, organization, or idea; brands use it to drive sales and build their reputations. Television is the top advertising medium with newspapers and radio after.

Sales promotion

Marketing activities designed to stimulate immediate sales activity through specific short-term programs aimed at either consumers or distributors)
Falls into 2 categories:
Consumer promotion and trade promotion

Consumer promotion

Use premiums, promotional products, samples, coupons, rebates and displays

Trade promotion

Stimulate wholesalers and retailers to push specific products more aggressively over the short term; special deals and contests

Public relations

Ongoing effort to create positive relationships with all of a firm’s different “publics”

Personal selling

Person-to-person presentation of products to potential buyers

Sales process

1) prospect and quality 2) Prepare 3) Present 4) Handles and objections 5) Close sale 6) Follow up)

Personal selling trends

Consultative selling and team selling

Consultative selling

Shifting focus from the products to the customers; involves
deep understanding of customer needs

Team selling

Uncover opportunities and respond to needs that would be beyond
the capacity of a single salesperson

Internet advertising

Paid search advertising, search engine optimization, online video advertising

Product placement

Paying to integrate branded products into movies and TV, offers marketers huge sales potential in creditable environment; cost is high and growing = increase financial risk

Advergaming

Video games created as a marketing tool, usually with brand awareness as the core goal

Buzz maketing

Word-of-mouth marketing/guerilla marketing/viral marketing; the active stimulation of word of mouth via unconventional and often relatively low-cost tactics.

Sponsorship

Deep association between a marketer and a partner which involves promotion of the sponsor in exchange for either payment or the provision of goods

Positioning Statement

How the marketer would like the target market to envision the product

Types of positioning statements

Humour, emotional appeal, rational appeal

Distribution strategy

Getting the product to the right person, at the right time and place

Distribution channels

Direct and indirect

Channel lenght

Number of intermediaries or levels in the channel of distribution

Channel width

The number of intermediaries at any one level of one channel of distribution

Dual distribution

A system of marketing channel in which a manufacturer uses two approaches simultaneously to get products to end-users

Strategic alliance

Partnering with another company's marketing channel.

Distribution intermediaries

Retailer, wholesalers, agents

Retailer

Selling directly to consumers typically in small quantities that are stored and merchandised on the premises

Types of distribution in store retailers (intensity of distribution)

Intensive, selective and exclusive distribution

Types of nonstore retailers

Online retailing, direct response retailing, direct selling, vending

Wholesaler

Distributors that buy products from producers and sell them to other businesses

Independent wholesaling businesses

Independent distributors that buy products from a range of different businesses and sell those products to a range of different customers

Types of independent wholesalers

Merchant wholesalers and agents/brokers

Merchant wholesalers

Take legal possession, or title, of titles the goods they distribute

Types of merchant wholesalers

Full-service and limited-service

Services provided by full service merchant wholesalers

warehousing, shipping, promotional assistance, product repairs, and credit

Services provided by limited service merchant wholesalers

Drop shippers, cash and carry wholesalers, truck jobbers

Agents/Brokers

Perform few functions and never take title of goods

Agents

Represent either the buyer or seller, usually on a permanent basis