Intro to Marketing Exam 1 - Rutgers Fall 2020

Marketing

Process by which companies create value for customers and capture value in return.

Value

Perceived benefits minus its perceived costs

Marketing Myopia

Focus on company's needs instead of customers' needs and wants

Customer Satisfaction

How well a market offering meets or surpasses customer expectations

Market

The set of actual and potential buyers of a product or service

LTV (Customer Lifetime Value)

The value of the entire stream or purchases a customer makes over a lifetime of patronage

Share of Customer

The % they get of the customer's purchasing in their product categories

Customer Equity

The total combined LTV's of the company's current and potential customers

Butterflies vs. True Friends vs. Strangers vs. Barnacles

Butterflies- potential profit but short-term value, capture the moment but not loyal

True Friends- Both profitable and loyal

Strangers- Low profitability, low loyalty

Barnacles- High loyalty but not very profitable

Marketing Process UDCBC

1) Understand the marketplace and customer needs and wants

2) Design a customer-driven marketing strategy

3) Conduct an integrated marketing program that delivers superior value

4) Build profitable relationships and create customer delight

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

The 5 C's

Customers, Company, Competitors, Collaborators, Context

The 4 P's

Product, Place, Promotion, Price

Strategic Planning

Helps a firm to maintain a strategic fit between its goals and capabilities and its changing marketing opportunities

Mission/Objectives/Goals

Mission- Why we exist

Objectives- Long-term strategic state you want to achieve

Goals- Short-term milestones that build toward objectives

SMART

Specific, Measurable, Attainable, Realistic, Timely

BCG Growth-Share Matrix

Star- High growth rate, high market share

Question Mark- High growth rate, low market share

Cash Cow- Low growth rate, high market share

Dog- Low growth rate, low market share

Product/Market Expansion Grid MPMD

Market Penetration- Existing products, existing markets

Product Development- New products, existing markets

Market Development- Existing products, new markets

Diversification- New products, new markets

Downsizing

Reduces the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company's overall strategy

SWOT Analysis

Strengths- internal capabilities 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 the company's performance

Financial ROI

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

Company Microenvironment

Actors close to the company that affect the its ability to serve its customers

Company Macro-environment

Larger societal forces that affect the microenvironment

Demography Environment

Study of human population in terms of size, density, location, age, gender, race, occupation, and other statistics

Generations: Baby Boomers, X, Y, Z

Baby Boomers- 35% of population, born in 1946-1964, and wealthiest generation

X- 15% of population, born in 1965-1976, most educated and seek success

Y- 41% of population, born in 1977-2000, digital generation

Z- 20%+ of population, born after 2000 and born in technology

Economic Environment

Economic factors that affect consumer purchasing power and spending patterns

Factors that affect Consumer Purchasing Power TDC

-Type of economy

-Differences in income distribution

-Change in consumer spending

Natural Environment

Physical environment and natural resources needed as inputs by marketers or affected by marketing activities

Technological Environment

Most influential force, creates new markets and opportunities

Political Environment

Forces that influence and limit various organizations and individuals in a society

Cultural Environment

Institutions and other forces affect shape our basic beliefs, values, perceptions, preferences, and behaviors

Core beliefs vs. Secondary Beliefs

Core- Persistent, passed down through institutions and generations

Secondary- Cultural swings cause beliefs and values to change over time

Customer Insights

Fresh understandings of customers and the marketplace, derived from marketing information. Used to create more value for customers and difficult to obtain.

Marketing Information Systems (MIS) ADA

Represent people and procedures for:

1) Accessing information needs

2) Developing needed information

3) Analyzing and using information

Big Data

Huge, complex data sets generated by our sophisticated info generation, collection, storage, and analysis technologies

Internal Data

Consumer and market info obtained from data sources within the company network

Marketing Intelligence CA

Collection and analysis of publicly available info about consumers, competitors and developments in the marketplace

Marketing Research DCAR

Design, collection, analysis and reporting of data relevant to a specific marketing situation facing an organization

Primary Date

Gathering info for the specific purpose at hand

Secondary Data

Collecting info that already exists somewhere; collected for a prior purpose

Observational Research

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

Survey Research

Asking people questions about their knowledge, attitudes, preferences, and buying behavior

Experimental Research

Selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses

Sample

A segment of the population selected to represent the population as a whole

Rational Purchase Decision Process

Trigger->Know->Feel->Do

Self-Expressive Decision Process

Trigger->Feel->Do->(Know)

Low-Involvement Decision Process

Trigger->Know->Do->(Feel)

Business Buying

Purchased goods/services used in production of other products/services that are sold, rented, or supplied to others

Business Markets MBD

Huge markets that are different than consumer marketings in terms of:

-Market structure

-Buying Unit

-Decision Process

Straight Rebuy

Buyer routinely reorders something without any modifications

Modified Rebuy

Buyer modifies product specifications, prices, terms, or suppliers

Systems Selling

Buying a packaged solution from a single seller

Buying Center

All the individuals and units that play a role in the purchase decision-making process

E-procurement

Purchasing by using electronic support

Reference Group

Understands and makes purchases causing others to do the same

Opinion Leaders

Influence others

Demand in Business Markets

Derived from demand

Recognition

First step in both business and buying process

Market Segmentation Variables GDPB

Geographic, demographic, psychographic, behavioral

Geographic

Location/ population density

Demographic

Age, race, gender, income, education

Psychogrpahic

Social class, lifestyle, personality

Behavioral

Occasions, benefits, user status, usage rate, loyalty status

Smaller Segments

Equals more tailoring

Variables for Segmentation OPSP

Operating characteristics, purchasing approaches, situational factors, personal characteristics

International Segmentation Variables GEPC

Geographic, economic, political, cultural

Intermarket (Cross-Market)

Grouping segments with similar needs or behaviors

Requirements for Effective Segmentation MASDA

Measurable, accessible, substantial, differentiable, actionable

Factors in Targeting CPPMC

Company resources, product variability, product life cycle, market variability, competitive market strategies

Differences to Promote IDSCPAP

Important, distinctive, superior, communicable, preemptive, affordable, profitable

Measurable

Size, purchasing power

Unattractive Segments

New entrants find it easy to enter

Concentration

A website for left handed people only

Micromarketing

Customized to fit customer

Perceptual Positioning Maps

Show consumer perceptions of their brands versus those of competing products (circles)

Unique Selling Proposition

Aggressively selling on one advantage or aspect of a product

Preemptive

Not easily copied

Touch Points

Areas of a business where customers have contact with the company and data might be gathered

Observation

Surveys

Experiments

Exploratory

Descriptive

Casual

Secondary Information

Relevant, accurate, impartial

Primary and Secondary Information

Paint full picture of data

Big Data Causes

Overwhelmed marketing managers

Competitive Marketing

Early insight into competition

ROI

No consistent definition

Valid Concern of 4 P's

Omit or underestimate important information

Purpose of Mixed Marketing

Influence demand

Internet

Allows consumers to share marketing content

Aim of Customer Relationship Management

Produce high customer equity

Customer Equity is

Opinion based

Societal

Satisfaction and sustainability

Goal of Marketing Process

Receive value from customers

Selling & Advertising

Work in tandem with building customer relationships

Marketing Mix

Large set of marketing tools