MRKT 1-4

Marketing seeks to

1. discover the needs and wants of customers
2. satisfy them

the key to achieving these objectives is exchange

Marketing

the activity, set of institutions, and processes for creating, communication, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Exchange

The trade of things of value between a buyer and a seller so that each is better off after the trade

What is Needed for Marketing to Occur

* Two or more parties with unsatisfied needs
* A desire and ability on their part to have their needs satisfied
* A way for the parties to communicate
* Marketing ConceptSomething to exchange

Marketing Concept

the idea that an organization should (1) strive to satisfy the needs of consumers while also (2) trying to achieve the organization’s goals

How marketing discovers and satisfies consumer needs

The first objective in marketing is discovering the needs of prospective customers

The challenge: Meeting Consumer Needs with new products


1. Focus on what the customer benefit is
2. Learn from mistakes

Need

when a person feels deprived of basic necessities such as food, clothing, and shelter

Want

a need that is shaped by a person’s knowledge, culture, and personality

The four Ps: Controllable marketing mix factors

Product- good, service, or idea

Price- something to exchange

Promotion- communication between buyer and seller

Place- gets product to consumer

Uncontrollable environemental forces

Social, competitive, economic, regulatory, technological

Potential consumers make up a Market

People with both the desire and the ability to buy a specific offering

Target market

one or more specific groups of potential consumers toward which an organization directs its marketing program

Customer Value

The unique combination of benefits receive by targeted buyers that includes quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price

Relationship Marketing

Links the organziation to its individual customer, employees, suppliers, and other partners for their mutual long-term benefit

Marketing program

a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers

Market segments

Homogeneous groups of prospective buyers that (1) have common needs and (2) will respond similarly to a marketing action

Market Orientation

The organization focuses on (1) collecting information about needs, (2) sharing this information across departments, and (3) using it to create customer value

Customer relationship Management

the process of identifying prospective buyers, understanding them, and developing favorable long-term perceptions of the organization and its offerings that that buyers will choose them

Customer experience

Internal response that customer share to all aspects of an organization and it offering

Ultimate consumers

are the people who use the products and services purchased for a household

Organizational buyers

manufacturers, wholesalers, retailers, service companies, nonprofit, and government agencies that buy products and services for their own use or resale

Marketing creates utility

the benefits or customer value received by users of the product

Four utilities

form: production of the product constitutes form

place: place means having the offering available where consumers needs it

time: means having it available when needed

possession: is the value of making an item easy to purchase

Organization

is a legal entity that consists of people who share a common mission

* This motivates them to develop offerings (goods, services, or ideas) that create value for both the organization and its customers by satisfying their needs and wants

Three types of organizations

* For-profit (business firm): privately owned organization like Target, or Nike that serves customers to earn profit
* Nonprofit: nongovernmental organization that serves its customers but does not have profit as a goal
* Government agency: a federal, state, country, or city unit that provides a specific service to its constituents

What is Strategy

Is an organization’s long term course of action designed to deliver a unique customer experience while achieving its goals

Structure of organizations

1. Board of Directors Corporate level of top management (Chief Marketing Officer)
2. Strategic Business Unit (SBU) (ex. Disney)
3. Functional level (Departments)


1. froups of specialists create value

A visionary organization

must specify its foundation Why does it exist?, set a direction What will it do?, and formulate strategies how will it do it?

* organizational foundation (why)
* organizational direction (what)
* organizational strategies (how)

Organizational purpose

Describes why an organization exists, what problems it wishes to solve, and who it wants to be to every person it touches through its work

Core Values

the fundamental, passionate, and enduring principles that guide its conduct over time

Mission

a statement of the organization’s function in society taht identifies its customers, markets, products, and technologies

Organizational Culture

Set of values, ideas, attitudes, and norms of behvaior that is learned an shared among the members of an organization

Business

What do we do? What business are we really in?

Goals

Statements of an accomplishment of a task to be achieved

* profit, sales, market share

Market share

the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry

Marketing plan

road map for the marketing actions

* Marketing dashboard: visual display of information relating to achieving a marketing objective (how we’re doing in sales)
* Marketing metric (specific statistics/measurement, profit)

Marketing metric

a measure of the quantitative value or trend of a marketing action or result

* Choosing which marketing metric to display is critical for a busy manage

Competencies

Organization’s spectial capabilities- the skills, technologies, and resources- that distinguish it from other organiations

* should be distinctive enough to provide competitive advantage- a unique strength relative to competitors that provides superior returns, often based on quality, time, cost, or innovation

Business Portfolio Analysis

Used to quantify performance measures and growth targets

* Purpose is to determine which strategic business unit (SBU) or offering generates cash and which requires cast to fund the growth opportunities

Diversification Analysis

A technique that helps a firm search for growth opportunities from among current and new markets as well as current and new products

Diversification analysis types

Market penetration: Increase sales of current product in current markets

Market development: Sell current product to new market

Product development: Sell new product to current market

Diversification: Develop new products to sell in new markets

Strategic Marketing Process

Involves the allocation of an organization’s marketing mix resources to reach its target markets and achieve a competitive advantage, divided into three phases: __**planning, implementation, and evaluation**__

Guiding principles:

* Customers are different
* Customers change
* Competitors change and react
* Organizational resources are limited

Planning Phase Step 1: Conduct a Situation (SWOT) Analysis

Internal (control): strengths, weaknesses

External (can’t control): opportunities, threats

Step 2: Develop a market-product focus, customer value proposition and goals

Market segmentation: segment the market by age, hobbies, etc (who is target market)

Customer value (more in return then what theyre giving)

Point of difference: characteristics of a product that make is superior

Step 3: Design a marketing program

Product Strategy Price Promotion Place

Step 4: Implementation Phase

Carry out the marketing plan

* Obtaining resources
* Designing the marketing organization
* Defining precise tasks, responsibilities, and deadlines (Gantt chart)
* Executing the marketing program

Step 4: Evaluation Phase

Compare the results of the marketing program with the goals using marketing metrics, and act on these deviations

* **Planning gap**: the difference between the projection of the path to reach a new sales revenue goal and the projection of the path of a plan already in place

Environmental Scanning

the process of continually acquiring information on events occurring outside the organization ot identify and interpret potential trends

5 Environmental Forces

Social- demographic shifts, cultural shifts

Economic- Macroeconomic conditions, consumer income

Technological- changing technology

Competitive- alternative forms, small businesses

Regulatory- laws protecting competition

Social Forces

Demographics (age, ethnicity, income, etc,)

Baby boomes (1946-1964)

Gen x (1965-1980)

Gen Y (Millennials) (1983-1996)

Gen Z (1997-2010)

Culture

Incoporpates the set of values, ideas, and attitudes that are learned and shared among the members of the group

Economy

Pertains to the income, expenditures, and resources that affect the cost of running a business and household

Macroeconomics

Performance of the economy (GDP, inflation, deflation)

* inflation: production costs and prices increase
* recession: periods of declining economic activity

Microeconomics

Ability of consumers to buy goods and services (gross income, disposable, discretionary)

Consumer income

A consumer’s ability to buy is related to income, which consists of gross, disposable, and discretionary components.

* gross income: The total amount of money made in one year by a person, household, or family unit (money income)
* disposable income: the money a consumer has left after paying taxes to use for necessities such as food, housing, clothing, and transportation
* discretionary income: the money that remains after paying for taxes and necessities

Technology

refers to the inventions or innovations from applied science or engineering research; each wave of innovation can replace existing products and companies

* new authentication technology
* technology creates value

Marketspace

an information and communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digital offerings

Electronic commers (e-commerce)

the activities that use electronic communication in the inventory, promotion, distribution, purchase etc.

Competition

the alternative firms that could provide a product to satisfy a specific market’s needs

Four basic forms of competition

Pure competition: many sellers and each has a similar product; little control of marketing elements (wheat, rice, and grain)

Monopolistic competition: many sellers compete with substitutable products within a price range (coffee, tea)

Oligopoly: occurs when a few companies control the majority of industry sales (wireless telephone)

Pure monopoly: occurs when only ONE firm sells the product (water, electricity)

Regulation

restrictions state and federal laws place on business with regard to the conduct of its activities

Consumerism

movement in the 1960s to increase influence, power, and rights of consumers dealing with institutions

self-regulation

where an industry attempts to police itself

* major tv networks use self-regulation to set guidelines about TV ads for children

Ethics

The moral principles and values that govern the actions and decisions of an individual group

Consumer Bill of RIghts

the (1) right to safety, (2) to be informed, (3) to choose, and (4) to be heard

Corporate culture

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

Two prominent personal moral philosophies have direct bearing on marketing practice: (1) moral idealism and (2) utilitarianism

* Moral idealism: considers certain individual rights or duties as universal
* utilitarianism: focuses on “the greatest good for the greates number”

Social responsibility

organizations are part of a larger society and are accountable to that society for their actions

Two kinds of unethical behavior

1. Economic espionage the collection of trade secrets or proprietary information about a company’s competitors
2. Corruption

Whistle Blowers

employees who report unethical or illegal actions of their employees

Social Responsibility

1. Profit responsibility: obligation to maximize profits
2. Stakeholder: Obligation to those who can affect achievement of objectives
3. Societal: obligation to preserve environment and to the general public

Triple-bottom line

focus on people, planet, profit

Sustainable marketing

Seeks to meet today’s global economic, environmental, and social needs without compromising the future

Green marketing

produce and promote and reclaim enivronmentally sensitive products

Cause marketing

charitable contributions of a firm are tied to the customer revenues

Sustainable development

Conduct business to protect the environment while making economic progress

Consumer behavior

understanding what motivates consumer to behave and how they make buying decisions

Purchase Decision Process

the stages a buyer passes through in making choices; involves five stages: problem recognition, information search, alternative evaluation, purchase decision, postpurchase behavior

Problem Recognition: Perceiving a Need

The initial step in the purchase process, perceiving a difference between a person’s ideal and actual situations big enough to trigger a decision

Information Search: Seeking Value

Scan your memory for previous experiences with products or brands called internal search

Alternative evaluation: Assessing Value

Clarifies the information gathered by suggesting criteria to use for the purchase, giving brand names that might meet the criteria, devceloping consumer value perceptions

Purchase Decision: Buying Value

Two choices remain: (1) from whom to buy and (2) when to buy

Postpurchase Behavior: Realizing Value

After purchase, consumer compares it with his or her expectations and is either satisfied or dissatisfied

Cognitive dissonance

there is a inner tension, not sure if made the right decision

Involvement

the personal,social, and economic significance of the purchase to the consumer

High involvement purchase occasions:

* (1) expensive, (2) can have serious personal consequences, (3) could reflect on one’s social image

Low-involvement: barely involve most of us (ex. Toothpaste and soap)

Situational Influences that Affect Purchase Decisions

1. The purchase task- reasoning for engaging in decision
2. Social surroundings
3. Physical surroundings- decor, music
4. Temporal effects- time of day
5. Antecedent states- consumer’s mood

Consumer journey maps

how to map touchpoints; visual representation of all the touchpoint for a consumer who comes into contact with a company’s products, services, or brands

Maslow Hiearchy of needs

Physiological needs, Safety needs, Social needs, Personal needs, Self-actualization needs (self fulfillment)

Consumer touchpoints

marketer’s product, service, or brand points of contact with a consumer from start to finish in the purchase decision process

Perception

Selective perception: Filtering

Selective exposure: paying attention

Selective comprehension: Interpreting

Selective retention: Remembering

Subliminal perception

attacking the self-conscious with messages that ocnsumers aren’t aware that they’re being marketed to

Stimulus generalization

response from one stimulus is generalized to another

Stimulus discrimination

Ability to perceive difference in stimuli

Cognitive learning

Makes connections between ideas

attitude

learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way

Three approaches to change attitudes

1. Change beliefs about a brand’s attributes
2. Change perceived importance of attributes
3. Add new product attribute

Opinion leaders

Consumers’ purchase often influence by others

Word of mouth

Buzz can be either positive or negative, influencer marketing

Reference groups

Associative group (we belong)

Aspiration group (we want to belong)

Dissociative group (we distance from)\]

Social class

People who share similar values, interests, and behavior

* occupation, income source, education
* upper, middle lower