BMGT 350

Marketing

managing profitable customer relationships, process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return

The Marketing Process

1. Understand marketplace/Consumer wants

2. Design a customer driven marketing strategy

3. Construct a marketing program that delivers superior value

4. Build profitable relationships and create customer delight

5. Capture value and create profits and customer equity

Need

State felt by deprivation

Want

form of human need shaped by culture and personality

Demand

Human want backed by buying power

Market offerings

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

Marketing Myopia

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

Exchange

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

Market

the set of all actual and potential buyers of a product or service

Marketing management

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

Value proposition

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

Production concept

consumers will favor products that are available and highly affordable; and therefore, the organization should focus on improving production and efficiency

Product concept

consumers will favor products that offer the most in quality, performance, and features, the organization should focus on making continuous product improvements

Selling concept

Consumers will not buy enough of the firm's products unless the firm undertakes a large scale selling and production effort

Marketing concept

achieving the organizational goals depends on knowing the needs and wants of target markets and delivering the desired transactions better than competitors do

Societal marketing concept

the idea that a company's marketing decisions should consider consumer's wants, the company's requirements, consumers' long run interests, and society's long run interests

Marketing Mix

the set of marketing tools the firm uses to implement its marketing strategy

Four Ps of Marketing

product, price, place, and promotion

Customer Relation Management

process of building and maintaining profitable customer relationships. It deals with all aspects of acquiring, keeping, and growing customers

Customer-perceived value

the customers evaluation of the difference between all the benefits and costs of a market offering relative to competing offers. They act on perceived value.

Customer Satisfaction

the extent to which a product's perceived performance matches a buyer's expectations

Customer-engagement marketing

making the brand a meaningful part of consumer's conversations and lives by fostering direct and continuous customer involvement in sharing brand conversations, experiences and community

Consumer-generated marketing

brand exchanges created by consumers themselves- both invited and uninvited-- by which consumers are paying an increasing role in shaping their own brand experiences and those of other consumers (customers suggesting ideas to Sbux, people adding video clips to Pepsi commercial)

Partner relationship management

working closely with partners in other company departments and outside the company to jointly bring greater value to customers (supply chain)

Customer lifetime value

Value of entire stream of purchases a customer makes over a lifetime of patronage

Share of customer

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

Customer equity

the total combined customer lifetime values of all of the company's customers

Strategic planning

developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities

Mission statement

Statement of the organizations purpose-- what it wants to accomplish to the larger environment

Business portfolio

the collection of businesses and products that make up the company

Portfolio analysis

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

Growth-share matrix

a portfolio-planning method that evaluates a company's SBU's in terms of market growth rate and relative market share

horizontal: market growth rate,

vertical: relative market share

Stars

high-growth, high share businesses or products. They often need heavy investments to finance their rapid growth. Eventually their growth will slow down, and they will turn into cash cows

Cash cows

low growth, high share businesses or products. These established and successful SBU's need less investment to hold their market share. They produce a lot of the cash that the company uses to pay its bulls and support other SBUs that need investments.

Question Marks

low share business units in high growth markets, They require a lot of cash to hold their share, let alone increase it.

Dogs

low growth, low share businesses and products. May generate enough cash to maintain themselves but do not promise to be large sources of cash

Problems with matrix approaches

Can be difficult, time consuming, and costly to implement. Approaches focus on classifying current business but provide little advice for future planning

Product/market expansion grid

a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification

Market 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

company growth by offering modified or new products to current market segments

Diversification

company growth through starting up or acquiring businesses outside the company's current products and marketing

Value chain

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

Value delivery network

the network made up of the company, its suppliers, its distributors, and ultimately, its customers who partner with each other to

Marketing strategy

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

Market segmentation

dividing a market into distinct group of buyers who have different needs, characteristics or behaviors and who might require separate products or marketing programs

Market segment

a group of consumers who respond in a similar way to a given set of marketing efforts

Market targeting

the process of evaluating each market segment's attractiveness and selecting one or more segments to enter

Positioning

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

Differentiation

differentiating the market offering to create superior customer value

SWOT analysis

overall evaluation of the company's strengths, weaknesses, opportunities, and threats

Marketing control

measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved

Marketing return on investment (ROI)

the net return from a marketing investment divided by the costs of the marketing investment

Marketing environment

the actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers

Microenvironment

the actors close to the company that affect its ability to serve its customers-- the company, suppliers, marketing intermediaries, customer markets, and publics

Macroenvironment

the larger societal forces that affect the microenvironment-- the demographic, economic, natural, technological, political, and cultural forces.

Marketing intermediaries

firms that help the company to promote, sell, and distribute its goods to final buyers

Public

any group that has an actual or potential interest or impact on an organization's ability to achieve its objectivces

Demography

the study of human populations in terms of size, density, locations, age, gender, race, occupation, and other statistic

baby boomers

born between World War II and lasting until 1964, value work, responsibilities, and relationships

Generation X

born between 1965 and 1976 in the "birth dearth" following the baby boom, prize experience, not acquisition, embrace new technology

Millennials (or Generation Y)

born between 1977 and 2000, struggling with jobs, tech is a way of life

Generation Z

Born after 1995, young consumers, prefer online shopping, high technology

Economic environment

economic factors that affect consumer purchasing power and spending patterns

Natural Environment

the physical environment and the natural resources that are needed as inputs by marketing or that are affected by marketing activities

Environmental

developing strategies and practices that create a world economy that the planet can support indefinitely

technological environment

forces that create new technologies creating new product and market opportunities

poltical environment

laws, gov agencies, and pressure groups that influence and limit various organizaitons and individuals in a given society

cultural environment

institutions and other forces that affect society's basic values, perceptions, preferences and behaviors

consumer insights

fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships

MIS or Marketing Information System

people and procedures dedicated to assesing info needs, developing needed information, and helping decision makers use the info to make marketing choices

Internal databases

electronic collections of consumer and market information obtained from data sources within the company network

competitive marketing intelligence

the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment. Advantages: gain insight about consumer opinions, gain early warnings of competitors strategies, new product launches etc. Disadvantages: May involve ethnical issues.

Steps of marketing research process

1. Define the problem

2. Develop research plan

3. Collect and analyze data

4. Interpret and report

Exploratory research

research that gathers preliminary information that will help define problems and suggested hypotheses

Descriptive research

research to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers

casual research

marketing research to test hypotheses about cause and effect relationships

secondary data

info that already exists somewhere, having been collected for another purpose

primary data

information for the specific purpose at hand

observational data

gather primary data by observing relevant people, actions, and situations

ethnographic research

a form of observational research that involved sending trained observers to watch and interact with consumers in their natural environments

survey research

gathering primary data through a survey

experimental research

gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses

focus group interviewing

personal interviewing that innvolves inviting 6 to 10 people to gather for a few hours with a trained interview to talk about a product, service, or organization. The interviewer "focuses" the organization

online marketing research

collecting primary data online through internet surveys, online focus groups, web based experiments, or tracking consumer's online behavior

behavioral/social targeting

Behavioral: using online consumer tracking data to target advertisements and marketing offers to specific customers. Social: Mines individual online social connections and conversations from social networking sites.

Sample

a segment of the population selected for marketing research to represent the population as a whole

Consumer buyer behavior

buying behavior of final consumer s-- individiuals and househounds that buy goods and services for personal consumption

Consumer market

all the individuals and households that buy or acquire goods and services for personal consumption

Culture

the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions

Subculture

a group of people with shared value systems based on common life experiences and situations

Cross cultural marketing

including ethnic themes and cross cultural perspectives within a brand's mainstream marketing, appealing to consumer similarities across subcultures rather than dfferences

social class

relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors

Word of mouth influences

the impact of personal words and recommendations of trusted friends, associates, and other consumers on buying behavior

opinion leader

a person within a reference group who, because of special skills, knowledge, or personality exerts social influence on others

motive (Drive)

a need that is sufficiently pressing to direct the person to seek satisfaction of the need

perception

the process by which people select, organize, and interpret information to form a meaningful picture of the world

belief

a descriptive thought that a person hods about something

attitude

a person's consistently favorable or unfavorable evaluations, feelings, and tendences towards an object or idea

buyer decision process

1. need recognition

2. information search

3. evaluation of alternatives

4. purchase decision

5. post purchase behavior