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MKT 320F - 1st exam
Marketing Strategy Formation
set the overall long term goals and basic approach to the marketplace. This typically involves making choices about specific customer groups to serve, customer wants to address, and the best way to create value for customers.
Programming, allocating, and budgeting
set near-term objectives and detailed plans (typically once a year), including how resources will be allocated to the necessary activities
Implementation
execute the programs and plans that were planned in teh marketing process
analysis and research
gather necessary data from inside and outside the company to support the four action steps (1-4). Should happen before each of the 4 steps.
Aspiration process and all its parts
represents the process of deciding what value will the company give to what kind of customer.
Segmenting: the market to identify possible groups to serve
Targeting a specific group or groups to address, excludes some customers served
Positioning in the mind of the selected customers, the wants of that customer and the key benefit provided to that customer.
The four P’s and what each means
Part of the action plan and marketing mix decision.
3 elements of plan create value for customers: product offered, commnication to customer about product, and mechanisms to distribute product to customer.
Price is offered as a way to generate revenue -> should be higher than unit cost .
product (centerpiece of marketing mix), promotion (most difficult, includes advertising, catalogs, contests, public relations, and personal selling), place (point of sale and distribution of product or service), price (what a buyer must give up in exchange for service or product, cant be too high or low of that leds to customer loss or profit loss).
the major roles in a buying situation
Intiators: recognize value of solving a particular issue so they stimulate search for a product
Gatekeepers: act as problme or product experts and control information and access to other members of the DMU
Deciders: make purchasing choice
Influencers: do not make final decision, have input into it
Purchasers: consummate transaction
Users: consume product
5 C’s and what each means
Customer is in center of analysis -> try to understand how potential customers make a purchase decision in a product category
Who is involved in decision (individual or group) aka the decision making unit
Decision making process is understanding the buying criteria of targeted segment.
Company naalysis is more about its strengths and weaknesses
Understand its finances, research and development capability, manufacturing capability, ITS CORE COMPETENCY
Make a significant contribution to creation of perceived customer value in products
Be difficult for competitors to imitate.
Collaborator analysis involves analyzing set of external assets that may be accessed to complement those of the company.
Competitive analysis looks at creating more value for customers than any other options known to them.
Identifying competitors and their offerings, how they address market, their strengths and weaknesses
Context analysis takes into account cultural trends, politics, regulation, law, and social norms.
Product orientation
started first from industrial revolution in late 1800s, companies striving to move product creation into a more efficient form of mass production
Sales orientation
started in the 1920s as more active and aggressive tactics were needed to convince customers to part with hard earned money to drive purchase transactions
Products more than what customers really needed
Market orientation
started in 1960s driven by companies competing for sales with same customer base. Companies became more interested in the hollistic needs of customers, creating more reliable streams of revenue from satisfied customers
Lowers costs and raises profitability over time
Societal Marketing
started in 1980s when customers became more interested in purchasing from organizations that wanted to make their community a better place.
Developing longer term customer relationships.
Customer/Consumer Percieved value
What a customer thinks is the value of a product/brand/service. they want the greates benefit from the lowest possible cost. Can increase this value by raising benefit offerings, lowering costs, or both.
Value = benefit - cost
resonance focus model
involves demonstrating a deep understanding of customer needs and differentiating or highlighting offerings on the few elements that matter most ot target customers
touch point
Each intersection of customer interaction with the product/service/brand
customer relationship management
the process of collecting and using the detailed information about individual customers at all of the touch points
Selective relationship management
when companies examine their customer bases in great detail, perform profitability analyses to target fewer but more lucrative customers
net promoter score
categorizes customers into 1 of 3 groups: promoters, passives, and detractors
Helps us see whether the customer experience was a success or failure and why.
Was customer experience a success or not?
% promoters - % detractors
What does building a customer centric culture require?
Coordination - entails establishing structural mechanisms and processes that allow employees to improve their focus on the customer by harmonizing information and activities across units
Cooperation - encouraging people in all parts of company to work together in interest of customer needs
Capability: ensuring enough people in org have skills to deliver customer focused solutions as well as defining a clear career path for employees with those skills
Connection: involves developing relationships with external partners to make increasing value of solutions more cost effective.
False loyalty
the result of loyalty promotions, high switching costs, and proprietary technology.
Customer lifetime value
what each customer means for their entire relationship with a company. This CLV calculation is built on:
Margin that a customer generates from purchases with us
Time period durign which customer makes regular purchases.
Total periods of time they are customers with us
Total customer lifetime value is customer equity
7 Directives about brand management practice and how to serve customers
Make brand decisions subservient to decisiosn about customer relationships
Build brands around customer segments
Make brands as narrow as possible
Plan brand extensions based on customer needs, not component similarities
Develop capability and mindset ot hand off customers to other brands in company
Take no heroic measures
Change how you measure brand equity.
2 elements of core competency
Make signficant contribution to creation of perceived customer value in products
Be difficult for competitiers to imitate.
What are the types of customers/customer value
star customers: get high value and provide high value
vulnerable customers: get low value but provide high value
free riders: get high value and provide low value
lost causes: get low value and provide low value
What is a marketing plan and what do they mostly include?
lays out a campaign that aims to fulfill a company's market strategy.
Aims to transform a product or service concept into a successful offering that meets the needs of target customers and fulfills the company's expectations for sales, market share, and so forth.
Most marketing plans include:
An executive summary
Table of contents
Summary of current situation containing relevant data and SWOT analysis
Focused assessment of market opportunity including a statement of target market segments, a customer and needs assessment, and competitive challenges faced by company and products
Financial and marketing goals
Financial goals are like revenue improvements
Marketing goals are like unit sales or market share
Summary of company's marketing strategy
Identifies target market and indicates how product or product line will be positioned, distributed, and priced.
Enumerates specific actions that will be taken to achieve the stated goals, including reorganization of sales force, use of customer rebates, a national ad campaign, direct mail programs, and so forth.
Month-month marketing budget
Forecast month-moth unit sales and revenues
Plan for monitoring and evaluating action plans in progress and at the end f the plan period
5 stages of the consumer decision making process
Recognition: where, when, and how consumers' needs arise and the situational, social, or marketing triggers that cause consumers to realize they have a problem that needs to be solved.
Information search: understanding sources of information consumers use to learn more about available options
Evaluation of alternatives: understanding which attributes or features of the product are most important to consumers when choosing among brands or products.
Purchase decision: where do consumers go to purchase product and what situational and social influences do they encounter during the purchase.
Post purchase evaluation: how consumers assess whether they have purchased the right product and how it is used in everyday life.
The different environments to analyze in context
Demographic environment: understanding current state and future direction of population in market, interpreting census and other demographic data to discern trends that may affect business.
Break down total population by age, cohort, family structure, race, ethnicity, social class, gender, educational levels, geographic location
Economic environment: understand microeconomic and macroeconomic conditions facing consumers in market
Socio-cultural environment: understanding prevailing worldviews, political and social ideologies, value systems, traditions and rituals, fashion and taste system.
Political/Legal Environment: make sure company is operating within law and common business practice, understand how political practices can enable growth or hinder company's potential in various markets.
Technological environment: understand how tech is affecting consumers and their purchasing needs and habits.
Natural environment: understanding consumers' connection to and concern for natural world and how your operations and product are reliant on that.
Five forces that determine the intrinsic long run attractiveness of an industry
Industry competitors
Less competition better for firms
Potential entrants
Less entrants more appealing
Availability of substitutes
Less substitutes more appealing
Buyer power
Less buyer power more appealing
Supplier power
Less supplier power more appealing
SWOT analysis and what each part means
Opportunities: art of finding, developing, and profiting from opportunities that arise in the external environment.
Creating new customer needs, opening access to new customer markets, or offering new technologies that can save costs and enhance profits
Favorable trends or developments in external environment which may lead to higher sales or profits or which may open doors to new business opportunities for the firm.
Threats: unfavorable trends or developments that threaten current sales or profits or preclude the firm from pursuing new business opportunities.
Closing access to markets, increasing competition in an industry, decreasing customer desire for and value of a product
Strengths: focuses on strengths that are customer relevant, serve as a distinctive competence for the firm compared to its competition
Unique resources or circumstances that can be used to take advantage of opportunities
Core competencies and company capabilities that are superior to the competition and relevant to consumers.
Weaknesses: core competencies and company capabilities that are inferior to the competition -> where firm is deficient
Should improve their capabilities in areas important to customers and need to understand all that customers require of firms in competition.
The market research process steps
Formulate the problem or question
Determine the sources of information and design a research process
Choose the most appropriate data collection method
Collect the data
Analyze and interpret the data
Internal secondary data
data that will be readily available to a company through employees and records.
saves time and money
aids in determining direction for primary data collection
pinpoints kinds of people to approach
serves as a basis of comparison for other data
may not give adequate detailed information
may not be on target with research problem
quality and accuracy of data may pose a problem.
external secondary data
data that is publically available and can provide important background in marketing decision making
saves time and money
aids in determining direction for primary data collection
pinpoints kinds of people to approach
serves as a basis of comparison for other data
may not give adequate detailed information
may not be on target with research problem
quality and accuracy of data may pose a problem.
primary data
data that a company collects at that time from customers first-hand
answers a specific research question
data is current
source of data is known
secrecy can be maintained
expensive
quality declines if interviews are lengthy
reluctance to participate in lengthy interviews
experimental research
researcher manipulates environment, exposing some people to condition A and some people to condition B.
Can take place in real life and online
Laboratory settting has advantages of lower cost, quicker results, confidentiality, and internal validity - trade off is external validity.
Field tests and test markets are expensive to set up, field experiments are useful because they assess what people do and allow causal inferences to be made.
Nonexperimental research
seeks data only by observing or interacting with market participants.
Qualitative data research is more oriented to fundamental open ended questions (interviews, focus groups, direct observation)
Interviews engage in convos with customers
Focus groups rely on group interaction for discussion (less interviewer effect for these) -> are more expensive
Quantitative data research collects numeric data suitable for statistical analysis.
Usually surveys administered online, in person, over the phone, or by mail.
Most reliable way is a census of the entire population.
Possible sources of error: insufficient sample size, nonresponse from participants, poorly constructed survey tool, influence of interviewer biases, lack of truthfulness from respondents.
Empathetic design
direct observation of people using a product or in the act of routine activities at home or at work.
Look for pain points or user frustrations that could be eliminated through improved product or service design.
Observe and discover what people really care about
Learning from extremes, think beyond assumptions
Interview to get more honest responses
Immersive empathy - walk in someone elses shoes
Sharing insights - craft compelling insights that will inspire innovation.
Conjoint analysis
a marketing research technique designed to determine how consumers value the different attributes or features that make up a product and trade-offs they are willing to make among those different attributes or features.
Defining a product
Study design
Used to determine overall importance and consumers' willingness to pay for a proposed new product attribute or feature
Trade-off analysis: quantify trade-offs that potential customers are willing to make among the various product features under consideration in product design
Market share forecasting: predict market share of proposed new product given current offerings of competitors
Cost-benefit analysis: weight customer preference of product design features against their incremental costs.
Perceptual mapping
aims to develop an informative picture of how consumers perceive a brand and its competitors
Descriptive role of marketing research
simply describe what is happening with customers and/or within a market environment.
Diagnostic role of marketing research
go further than just describe what is happening, also tries to explain prediction of what is happening.
Predictive role of marketing research
attempt to provide a best estimate for what might happen when we create a launch a marketing program in to the marketplace.
Often leveraging data we have previously gathered from descriptive and diagnostic forms of research to then look forward and anticipate what might happen next.
Cognitive vs. Emotional decision making
Many purchases are cognitive in nature but some are emotional
Cognitive decision making is slower and more systematic
Emotional decision making is faster
High involvement purchases
allow buyer to be fully engaged, decision making is effortful, and time frame is relatively long.
Consequences of making a good vs. bad choice are significant
Low involvement purchases
involvement purchases tend to require far less effort, happen quickly, and have far lower risk.
Optimizing decision makign
when consumers want the best alternative purchase for a product
Satisficing decision making
is more common, when customers choose to sacrifice for an alternative that is not good enough, that passes some acceptable threshold.
Compensatory decision making
when a product's shortcomings on a particular attribute can be compensated for by its strengths on another attribute.
Often done when there are a limited number of choices
noncompensatory decision making
is when a product's failure to reach an acceptable threshold on one attribute cannot be compensated for by high performance on another attribute.
Decision making process and 3 parts
Pre-purchase
Recognition of need, search for viable alternatives to satisfy that need, collection of information about those alternatives
Companies can try to influence how consumers narrow down their set of options by explaining or magnifying the importance of attributes on which a product does well.
Purchase
Making choices about which brand to buy, from whom to buy it, how many items of offering to buy, when to buy, and how to pay.
Post-purchase
People who are happy about their purchase are more likely to buy again and spread positive word-of-mouth to others.
Difference between B2B markets and B2C Markets
Business markets have fewer customers, want customized products, and purchase volumes can differ between different business customers.
B2B marketing involves:
Market selection
Pricing
Distribution
Distributers are resellers who deal in goods from many producers.
Communication: advertising and trade shows (online advertising growing daily) and content marketing
B2B strategy involves:
Objectives: goals or ends strategy hopes to achieve
Scope: where firm plans to operate
Advantage: what firm does differently or better
Organizational buying center - different types of involvement
Lateral involvement refers to number of departments or other work related groups involved in purchase decision
Vertical involvement indicates number of management levels involved in decision
Relative influence refers to which participants take a lead role in this decision.
Types of purchases from an OBC
Straight rebuys are routine reorders from current vendors of low or no risk items like office supplies - made with almost no consultation to other OBC members
Modified rebuys occur when org decides to alter purchasing terms for a product - may include negotiation with vendor
New task is when org wants to buy something new and this can have some risk.
Buying Process for B2B
Recognizing a need and identifying the benefits the organizations seeks
Establishing specifications and potential sources of supply
Request for proposals to vendors on qualified list, require highly detailed information about vendor's product, terms, and conditions
Post purchase evaluation
Types of noneconomic and economic tangible and intangible benefits
Economic tangible benefits can be readily measured, verified, and quantified in terms of price performance
Noneconomic tangible benefits include vendor reputation, scale of operation, or specialized capabilities that can command premium prices and brand preference.
Economic intangible benefits are those that the vendor claims to be quantifiable, but nonetheless seem unverifiable by the customer, at least in the short term.
Noneconomic intangible benefits include qualities such as trustworthiness or conscientousness
3 general rules that help organizations prioritize buyer-benefit types across various business marketing opportunities
Focus on economic tangible benefits when pursuing orders. Noneconoimc intangible benefits like brand equity
To acquire customers, first establish competitive parity on economic, tangible benefits. Use noneconomic, tangible benefits to differentiate offerings
Build and strengthen customer relationships over time by migrating customer focus from economic and noneconomic, tangible benefits towards noneconomic, intangible benefits.
product managers
responsible for managing tasks required to take an offering to market - makign plans and monitoring budgets and programs, spend more time on product design and development and less on advertising and promotion.
sales representatives
represent buying organization to groups in seller's organization, represent their company and capabilities to customer.
Negotatie boundary between vendor and potential customer accounts.
customer service personnel
responsible for providieng pre and post sale support activities like product demonstration or application support
resonating focus model
focuses on small number of benefits that motivate customer and that are superior compared with next best alternative provided by competitor
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