MKTG1001 Marketing Principles key terms and definitions

Marketing

Managing profitable customer relationships, creating value for customers and capturing value from customers in return
build and maintain desirable exchange relationships with target audiences

The Marketing Process

1. Understand the marketplace and customer needs and wants 

2. Design a customer value-driven marketing strategy 

3. Construct an integrated marketing program that delivers superior value 

4. Engage customers, build profitable relationships and create customer delight 

5. Capture value from customers to create profits and customer equity 

Needs

states of felt deprivation
physical needs = food, clothing, safety
social needs = belonging and affection
individual needs = knowledge and self expression

Wants

the form human needs take shaped by culture and individual personality

Demands

wants backed by buying power

Market Offerings

some combination of goods, services, information and experiences offered to a market to satisfy a need or a want

Marketing Myopia

the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by the product

Value and Satisfaction

expectations of value and satisfaction contribute to how customers decide which product to buy and share experiences of

Exchange

the act of obtaining a desired object from someone by offering something in return

transaction

trade between two parties that involves at least two things of value, agreed upon conditions and a time and place of agreement

Market

the set of actual and potential buyers of a product

Market management

the art and science of choosing target markets and building profitable relationships with them

market segmentation

dividing the total market into segments of similar characteristics

demarketing

task to temporarily or permanently reduce demand

Value proposition

the set of benefits or values it promises to deliver to consumers to satisfy their needs

Production concept

consumers will favour products that are available and highly affordable and that the organisation should therefore focus on improving production and distribution efficiency

product concept

consumers will favour the products that offer the most quality, performance and innovative features therefore devotion to continuous product improvements is needed

selling concept

consumers will not buy enough of the firms products unless the firm undertakes a large scale selling and promotion effect

Marketing concept

philosophy that holds achieving organisational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors

Societal marketing concept

a company’s marketing decisions should consider consumers’ wants, the company requirements, consumers’ long. run interests and society’s long run interests

Customer relationship management

process of managing detailed information about individual customers and carefully managing customer touch points in order to maximise customer loyalty

customer perceived value

the customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers

customer satisfaction

the extent to which a product’s percieved performance matches or exceeds a buyer’s expectations

customer relationship tools

• brand building advertising

• social media presence

• frequency marketing programs

• sposor club marketing programs

customer engagement marketing

direct and continuous customer involvement in shaping brand experiences

customer generated marketing

brand exchanges created by consumers themselves

Partner relationship management

Partners: suppliers, channel partners and others outside the company, all departments within the company, distributors, retailers

supply chain management

Customer loyalty and retention

• loyal customers spend more and stay longer

• 5x cheaper to keep an old customer than acquire a new one

Share of customer

portion of the customer’s purchasing that a company gets in its product categories

Customer Equity

total combined customer lifetime values of the company’s current and potential customers

Strangers (customer relationships)

low potential profitability and little projected loyalty (don’t invest)

Butterflies (customer relationships)

potentially profitable but not loyal (enjoy for the moment

True friends (customer relationships)

profitable and loyal (continuous investments to retain and grow)

Barnacles (customer relationships)

highly loyal but not profitable (selling them more, raising fees or reducing service to improve profitability)

major trends changing the marketing landscape

1. the digital age

2. the growth of not-for profit marketing

3. rapid globalisation

4. call for more corporate social responsibility

The Digital Age

• social media marketing

• mobile marketing

• Big Data and Artificial intelligence

• brand websites provide information and promote products

Strategic Planning

The process of developing and maintaining a strategic fit between the organisation’s goals and capabilities and its changing marketing opportunities

Mission Statement

organisation’s purpose, what it wants to accomplish in the larger environment

Strategic Business Units (SBU’s)

the key businesses that make up the company

• different brands, different objectives, marketing strategy

• own customer value proposition

• form the business portfolio

Portfolio Analysis

process by which management evaluates the products and businesses that make up the company.

Growth Share Matrix - Stars

High Market growth and High relative market share - high profits and long-term potential

Growth Share Matrix - Cash Cows

Low Market growth and High relative market share - high profits

Growth Share Matrix - Question marks

High market growth and low relative market share - low profits but potential for higher profits

Growth Share Matrix - dogs

Low Market growth and low relative market share - low profits and low potential

Marketing penetration

company growth by increasing sales of current products to current market segments without changing the product  

Market development

company growth by identifying and developing new market segments for current company products 

Product development

offering modified or new products to current markets

Diversification

starting up or buying business outside of its current products and markets

Marketing role in strategic planning

• guiding philosophy

• identifies market opportunities

• designs strategies

• partner relationship management

Value Chain

series of internal departments that carry out value-creating activities to design, produce, market and deliver and support a firm’s products

Customer value delivery network

the network made up of the company, suppliers, distributors and customers who partner with each other to improve performance of the entire system

Marketing strategy

marketing logic by which the company hopes to create this customer value and achieve these profitable consumer relationships

market segmentation

Analysing and dividing a market into distinct groups of buyers who have different needs, characteristics or behaviours, and who might require tailored products or marketing programs 

Market targeting

Evaluating each market segment's attractiveness and selecting one or more segments to serve 

Positioning

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

Differentiation

differentiating the company’s market offering from that offered by competitors so that it gives consumers more value

Marketing mix

set of controllable, tactical marketing tools that the company blends to produce the response it wants in the target market 

Price

amount of money customers must pay to obtain the product

Place

company activities that make the product available to target customers and end-consumers

Promotion

activities that communicate the merits of the product and persuade target customers to buy it

People

deliver services and encounters

Process

the way in which a service is delivered to the customer

Physical evidence

any tangible elements that facilitate the service delivery or provide information about the service

SWOT Analysis

• Strengths - internal capabilitues that may help a company reach its objectives
  * Weaknesses - internal limitations that may interfere with a company's ability to achieve its objectives 

• Opportunities – external factors that the company may be able to exploit to its advantage 

• Threats – current and emerging external factors that may challenge a company's performance 

Marketing plan

• executive summary

• situational analysis

• objectives

• marketing strategy

• action programs

• budgets

• controls