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

Value Proposition

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

Organizational Culture

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

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.

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

Environmental Scan

Process of continually acquiring information on events occurring outside the organization. This is done to identify and interpret potential trends that might impact the business.

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

Product Repositioning

Changing the target market's perception of a product by altering its image, features, or marketing mix.

Brand Extensions

Using an existing brand name to launch a new product in a different category.

Umbrella Branding

Marketing several related products under one brand name.

Individual Branding

Giving each product its own unique brand name separate from the company's other products.

Brand Storytelling

Using narratives and emotional connections to communicate brand values and build consumer relationships.

Brand Name Awareness

The extent to which consumers can recognize or recall a brand.

Perceived Brand Quality

Consumers' judgment about a product's overall excellence compared to competitors.

Brand Loyalty

The degree to which customers consistently purchase the same brand over time.

Brand Associations

Mental connections consumers make between a brand and attributes, emotions, or experiences.

Brand

A name, symbol, or design that identifies and differentiates a product from competitors.

Relative Advantage

The perceived superiority of a new product over existing options.

Compatibility

How well the innovation fits with consumers' existing values, habits, or lifestyles.

Complexity

How difficult the innovation is to understand or use.

Trialability

The ability to test or try a product before fully adopting it.

Observability

How visible the product's benefits are to others.

Innovation

The introduction of a new idea, product, or process that provides value to consumers.

Continuous Innovation

A minor modification of an existing product that doesn't significantly change consumer behavior.

Dynamically Continuous Innovation

A new product that changes how people use something but doesn't require completely new behavior.

Discontinuous Innovation

A completely new product that creates a major change in consumer behavior.

New Product Development (NPD)

The process of designing, creating, and bringing a new product to market.

Product Item

A specific version of a product identified by a unique SKU.

Product Line

A group of closely related product items sold under one brand.

Product Mix

The complete set of all product lines and items a company offers.

Convenience Products

Inexpensive, frequently purchased items that require minimal effort to buy (e.g., snacks).

Shopping Products

Products that consumers compare on price, quality, and style before purchase (e.g., clothing, electronics).

Specialty Products

Unique items with strong brand preference that consumers will make special efforts to obtain (e.g., luxury goods).

Unsought Products

Goods that consumers do not normally think of buying or know about until a need arises (e.g., life insurance, emergency repairs).

Marketing Mix (4 Ps)

The combination of product, price, place, and promotion strategies used to satisfy customer needs.

Product Life Cycle

The stages a product goes through: introduction, growth, maturity, and decline.

Differentiation

Creating meaningful distinctions between a product and competing offerings

Positioning Statement

A concise description that explains how a brand meets customer needs and differs from competitors

Marketing Concept

Considering a customer's needs, using integrated marketing in order to profit through customer satisfaction.

Sales Era

A managerial view of marketing as a sales function, or a way to move products out of warehouses to reduce inventory.

Relationship Era

A business approach that prioritizes the satisfaction of customers' needs and wants.

Production Era

A management philosophy that emphasizes the most efficient ways to produce and distribute products.

Triple Bottom Line

Profit, People, Planet: financial, social, and environmental consequences of business decisions.

For-Profit Organization

A privately owned organization that serves customers to earn profit (e.g., Nike, Target).

Non-Profit Organization

A non-governmental organization focused on service rather than profit.

Government Agency

Provides a specific service to its constituents (e.g., Census Bureau).

Corporate Level

Top management directs overall strategy for the entire organization.

Strategic Business Unit (SBU)

A subsidiary of an organization targeting a specific market.

Functional Level

A more specific group of specialists serving particular functions (e.g., marketing, finance).

Strategy

An organization's long-term course of action to deliver a unique customer experience and achieve goals.

Core Values

Fundamental, enduring principles that guide an organization's behavior.

Competencies (Strategic Direction)

What the organization does well.

Customers (Strategic Direction)

Who the organization serves.

Competitors (Strategic Direction)

Who else serves those customers similarly.

Stars (BPA)

High market share in high-growth markets.

Question Marks (BPA)

Low market share in high-growth markets.

Cash Cows (BPA)

High market share in low-growth markets.

Dogs (BPA)

Low market share in low-growth markets.

Situational Analysis (Internal)

Identifies strengths and weaknesses.

Situational Analysis (External)

Identifies opportunities and threats.

Social Environment

Cultural values, ideas, and attitudes that shape consumer behavior.

Economic Environment

Factors affecting consumer purchasing power and spending.

Gross Income

Total income earned in a year by a person or household.

Disposable Income

Income remaining after taxes, used for necessities.

Discretionary Income

Income left after paying taxes and necessities.

Technological Forces

New methods for transforming resources into goods and services.

Competitive Forces

Alternative products that satisfy similar needs.

Regulatory Forces

Laws and self-regulation that affect marketing activities.

Ethical Responsibility

Obligation to conduct business according to accepted moral principles.

Sustainability Strategy

Working with government and interest groups to achieve sustainability goals.

Green Marketing

Promoting environmentally friendly products or production processes.

Greenwashing

Misleading consumers by falsely marketing a product as eco-friendly.