MAR3023: PRINCIPLES OF MARKETING Exam 3 Chapter 17-22,7

Consumer-Channel Consumer

online consumer who shop onlnine but buy offine or shop offline buy online

online: online: exlcusive online consumer

Offline:Offline: exclsuvie offline consumer

Webrooming

practice of examining products online & then buying them in a store

Showrooming

practice of examining products in a store & then buying them online for a cheaper price

Market Development

sells current products to new markets

Product Development

selling new products to current markets

Diversifcation

develping new product & selling them in new markets

Implementing MultiChannle MArketing

* document cross channel consumer beahvior
* lok at the touchpoints in detail/time & place
* custoemr journey map for delviery/communcations
* monitor/measure through
* marketing attribution: practice & techqiues used to creit or value a particualr channel & consumer touch point

Organization

legal entity that consist of ppl who share a common mission

Profit-Organization

privately owned to serve itcustomers to earna profit to survive

Non-Proftit Organization

nongovernmet org that serves customer but doesn’t have prfit as a goal

Gov’t Agencies

federal,state,country or city unitl that provides a specific service

Strategy

org’s long term course of action designed to delvier unique customer experiecnes

Strcuture of Org

1. Boarad of Directors
2. Corporate Level: top managemnt directs overall strategy for the entire organization = top management
3. Strategic Business Level: subsidairy divsion that markets a set of related offereing
4. Departments = functional level


1. finance or marketing

Purpose

describes why an org’s exists, what probilems it wishes ot solve & who wants to be every person it touches through its works

Core Value

fundamental, passionate, enduring pricniples that guide it conduct over time

Organizaitonal Culture

the values, ideas, attitudes & norms of behavior that are learned/shared among the members of an org

Business

clear, broad, underlying industry or market sector of an org’s offering

Corporate Mission

a clear statement of the markets in whcih the firm copmetes & seeks to delivery customer value

* Why do I exist? Purpose?

Marketing Myopia

avoid this because is is shortsighted & you beleive that you are the best person that does this best thing

Corporate Goal

specific,measureable objective that organizatin seeks to acheve & by which it can measure its performance

* you want to increase market share bc it creates barriers of entry for otheres
* this gives up some wiggle room for mistakes
* production costs decrease due to economcies of scale
* more Q, cost of total units decrease
* must be measurable, based on facts, open communcation, simple, feasible

Marekting Dashbaords

visual displays of the essenital info related to acheiveing a marketing objective

MArketing Plan

road map for amrketing actions of an organization for specfiic future time of period

Marketing Metric

measure of quantiative or trends of a marketing action

Data visualization to present info aboit the marketing metric in order to devise strategies

Growth Rate of the PLC from the Boston Consulting Group

Above 10%: Star & Question Mark

below 10%: Cash Cow & Dog

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Star: you the market leader/own the share/high share of high growth

Question Mark: big growth but you are not the leader/ low share of high growth markets/need a lot of cash to maintain market share

Cash Cow: market is mature but there is slow growth but, you are the top player/generate cash

Dog: market is declining & copmeitors are doing better/ not much oppourtnitiy/low share of slow growth markets

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Start as a Question Mark & end as Dog

Org’s have to answer

1. Where are we now?: compentisies, special skills, & compeition
2. Were do we want to go? business portfolio analysis

Success Sequence

When the industry is ho/everyone is battling it out, you starts as the question mark but you want to be the market share leader

Failure Sequenece

you start as the question mark but you go straight into the dog

Diversification Analysis

techqnqiue that helps a firm search for growth opportunties from among current & new amrketes as well as curret & new products

Market Penetration

incerease sales by selling mroe products/productline

(preferred method)

Guiding Principles of the Marketing Process

1. customer are differnet
2. customer’s change
3. copmeitors chagne & react
4. organizaitonal resources are limited

Relative Market Share

firms raw market share/ market share of largest compeitors

* if >1x, you are comparing yourself to the second biggest competors
* Looks at how am I doing compared to the market?
* want to focus on growth bc it is more dynamic & gives a better picture of where the market is going

Marketing Strategy Formulation

1. Planning
2. Implemenation
3. Evaluation

Planning of the Market Strategy Formulation

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1. __Situational Analysis (SWOT)__ → strengths weakness opportunity threats


1. Putting context around the situations, defeine where it is now/headed
2. Result of environmental scanning → start w/ O.T to understand the challenges


1. Regulation or tech innovation
3. Then focus on your assets


1. Whatever you identify, you need to see whether this is feasible in reaching a new market but also does this tactic match the firm’s branding or customer’s expectations


1. Ex: Conflict with prestige pricing of a luxury brand that trying to market development but through affordable prices
2. __Remember identification of product/market segments__


1. STP


1. MAarket segementation & customer value proposition
2. can do this w/ points of difference: chararcteritists of product/service that make it supeerior to copmeitive subsittues
3. __Objectives = goal__


1. Sales Revenue
2. Profit
3. Market Share
4. Quality:
5. ustomer satisification
4. __Strategy Formulation Based on Market Share__


1. Need it to relate it back to the customers → expand customers
2. Introduction: gain awareness through all sales promotion, advertising
3. Grow: advertising & differentiate from competitors
4. Mature/Maintain: retain/reminding ppl to be buying from your


1. __To maintain or make profit, you want to use:__


1. Personal Selling → maintaining /reminding of customer’s relationships


1. allows the customer to know what the product is,why you should invest in it/
2. New Product


1. Investment in the next best thing as you phase out the product that is declining
2. Enter into a new PLC
3. Product Quality:


1. Don’t try to skip on quality bc no one will continue to buy it
4. Advertising
5. Price


1. This is the last resort
2. Lowering the price shows that things are not better
5. Harvest/Divest


1. Decline & leave the market/industry
2. harvest
3. divest = sell
5. __Marketing Program Formulation: Blend of Strategy and Tactics → 4P’s & budget


1. Product


1. Product Quality → good quality
2. New Products
2. Price
3. Promotion


1. Sales Force:


1. Make sure it is optimize bc a lot of time can be wasted through travel
2. then, there is administrative work of analysis
2. Advertising


1. This will work when you have great product quality
3. Sales Promotion
4. Place


1. __Tactics__


1. I'm going to implore this type of product to appeal to this demographic


1. More advertising , etc
2. __Budget__ → resources/finances or how much/how long


1. Affordable:
2. Percentage of Sales:
3. Optimization
4. Objective & Task
5. Competitive Parity
3. __Timing__
4. __Contingency plans__


1. Good to have backups for account for the unpredictability of ppl/the market

Situational Analysis (SWOT)

1. Favorable & Internal: Strengths → build on
2. Unfavorable: Internal: Weakness → correct on


1. High turnover rate
3. Favorable: External: Opportunities → exploit


1. Expanding into new markets
4. Unfavorable:External: Threats→ avoid


1. From competition

Affordable Budget

type of budgeting that looks at what they can afford

Percentage of Sales Budget

this percent of sales is dedicated for X

Optimization Tasks Budget

1. Taking the objectives &  goals & doing and ROI 
2. May take a long time or able to measure it

Objective & Task Budgeting

If you want X, then I need this to complete this


1. Probably best option 

Compeitive Parity

1. If you want to maintain the market share the same from the previous year, then you need to maintain share of voice 
2. Challenge is to calculate that everyone else is spending on their marketing activities 


1. Trickle to measure it but also difficult for you to grow it 
2. Because there is a lot of noise, some of may be lost 


1. 1.5 Rule: Desired Market Share Gain x 1.5 = necessary share of voice gain 

Implementation of the Marekting Strategy

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1. __Establishing the marketing organization__


1. define & Responsibilities


1. Gantt Cahrt: grpahg of a scheudle to show the concurrent work/tasks enables teams
2. \
2. Human Resource Deployment
2. Obtainin resoucres,
3. __Phase__:


1. Developing timetables


1. __Critical Analysis: PERT__
2. Planning for Success: take it one step at a time
2. Obtaining & allocating budgets


1. __Share Point Analysis__
3. Executing the marketing program


1. Improving Implementation


1. Communicate
2. Leadership (Champion)
3. Reward Performance
4. Schedule tasks
5. “Just Do It”
6. Seek/Feedback

Program Evaluation & Review Technqiue (PERT)

* Program Evaluation & Review Technique


1. Ex: Phase A → (5 weeks) Market Research B → Develop Ad → Launch


1. Numbers = time it is going to take to get from one phase to another
2. Or Prototype → Build Factory → Redesign Product → Launch
2. Bottleneck = going to take it the longest
3. A company may say that you are going to be launch on X


1. You would use the PERT to see which path is the shortest but, effective to deliver on the quality
2. Critical path: the longest path of PE
4. Copmaring te reuslts of the marketing program w/ the goals of the metrics


1. act on the deviations
2. planning gap is btw the metris & deviations
3. Positive deviations: success enalbed new products ot be released
4. Neg Deviation: phase out old products

Share Point Analysis

1. There are two sides on a ledger: amount that you spent & revenue 


1. Estimate industry sales
2. Estimate firm’s market share 
2. Computer gross margin per share point  


1. **Gross Margin= sales revenue - cost of goods so**ld 


1. Variable cost= cost of goods sold 


1. Gross margin = contribution: covering selling, administration, expenses & as well as profit
2. Key decision: how much is the company willing to spend in additional marketing expenses to increase sales by 1 sharepoint?


1. Ex: Industry Sales = 39
2. Firms sale= 12 
3. Market Share= 12/39 = 31%
4. Gross Margin: (Revenue side)


1. Given 3.1 M of firm’s gross margin 
2. Gross: 3.1M/31% (market share) = 100,000
5. Total industry marketing effort= 5M
6. One share of voice: 5M(industry)/100(total industry of market share)= 50,000 per pt/share
7. In order to gain a market share/ earn 1% of the 100%, you must spend 50K per point= share of voice 
3. Assue firm wish to expand its market share by 2 points, to a total of 33%


1. 1.5 x (2) = 3 points 


1. Use 1.5 bc of the noise
2. 50K per share of voice point (3 points)=$150K to increase the market share from 31% to 33%
3. If successful, the firm’s market share expands by 2 share points 


1. Since each share point = 100K. 
2. (2)(100K)=200K in gross margin 
4. 200K-150K=50K → profitable since its pos.
3. May not worth it to invest in a costly marketing campaign to break through noise

Sales Response Function

expensive of marketing effort ot marketing reuslts to obtain max incremental rev-incremtial costs

* goal to allocate sufficient funds
* s shaped w/ greatest profit in the middle
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Plnning Phase of Strategtic MArketing Process: Strategies

1. Input/output metrics


1. output metrics: measure reuslts
2. input marker: measure effort/expenditure
2. time


1. Long Range: 2-5 yrs
2. Annual delveoped by manger fo STP, amrketing mix, rev or expensive projections
3. Strategies


1. Generic Business
2. blue Ocean Strategies

problems w/ planning of marketing process

1. plans based on presumed knowledge/poor assumpotions
2. lost focus on customers need
3. too much time/effort on data colelction & formal plans
4. line operating mangers feel no sense of ownership

Parakysis by Analsysis

excessively analyse hte problem instead of taking action

* do it, fix it try it

Ways to Improve the Implementation

1. **Communicate**


1. if there is an issue
2. **Leadership (Champion)**


1. Product Champion: aiblity to cut the red tape to move the program forward
3. **Reward Performance → rewarded**


1. Companies have to put on their website of the salary ranges
4. **Schedule tasks**


1. Helps with the next step
5. **“Just Do It”**


1. Bc of data, you can be overwhelmed w/ data
2. You have to make the call
6. **Seek/Feedback**


1. Internal
2. External

Evaluation (Control) of the Marketing Strategy

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1. Measuring results


1. Identify deviations from plan= managemnet by exception


1. If you have contingency plans from the beginning, you will be prepared to handle the deviations
2. Sales analysis
3. Profitability analysis
4. Marketing ROI


1. marketing metrics & dashboards
2. Marketing audit


1. You done the plan & go back to it
3. Corrective action


1. Contingency plans

Online Customers

subsegement of all internet users who employ this tech to research products & service & make purchases

E-commerce offers

Promotion & place

* Promotion: you talk about the product on the website
* Place: you can prucahse products online

Internet Trends

1. B2B


1. Domiant player
2. EDI: way for copmanries into the maufautucering systems to get the roder really fast


1. china is growing
2. B2C


1. this is growing
2. part of retailer sales but main focus is on brick & mortart

Uses of the Internet

1. Facilitating Sales → info source to compare quality/prices
2. Virtual Communities: SM
3. Brand Building
4. Selling Merch

Why Do People Visit “Brick& Mortar Retailers”?

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1. Merchandise assortments 


1. At brick & mortar stores, you would buy all the products at once 


1. Ex: Groceries: Laundry detergent, bread, etc
2. Service 


1. Convenicenet (Location) → rightway
2. Information to make good selections → compare products/ ask a sales rep
3. Price-Total Cost to Consumer 


1. Go to store, find right merch, return merch 
4. Entertainment 
5. Social interaction → hang out w/ friends

E-Commerce Qualities

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1. Merch assortment 


1. Amazon: 75 M products available → books, shoes, clothes, etc
2. Convenience 


1. Amazon makes it to have Amazon Prime → delivery for the next day
3. Info for selection 


1. You can chat, see reviews 
4. Price transparency 


1. You can compare prices from different websites or products 
2. Dynamic Pricing: based on demand but pricing fluctuates
3. Customized Dynamic Pricing: you set the price but then you customize the price 


1. Achieved through the cookies & price changes due to the behavioral trends  
5. Free Return for merch return 


1. Apple was the first 
6. Entertainment


1. Content providers 
2. The way the website is built or there are games to buy things 
7. Social Interactions


1. On linkedin, they are advertising classes 
2. SM about influencing their day/products 
3. Facebook Marketplace to buy/exchange products

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Top categories: fashion, electornics

Why Customers Buy Online?

1. Conveience


1. Pplcan visit 24 hrs to find products online
2. Eight Second Rule: customer will abandned efforts to enter & navigate a website if download > 8 seconds
2. Choice


1. a lot of choice in products/service
2. choiceboards & personallization tech to engage in dialogue
3. Customization


1. arises from tech to be interactives & individualized
4. Communications:


1. communite via emial
2. consumer to consumer or customer to producter
3. Pro: increase conveince, decrease search costs → word of mouht
4. Con: Spam
5. Virutal MArketing: promotions indidvuals to forward messages
5. Costs:


1. Dynamic Pricing: practice of changing prices for producs/ service sin real time in response to supply & demand


1. flexible priing in lower prices
2. time sensitive
6. Control


1. gives customers power


1. cookies: copmuter files that a market can download onto the copmuter of an online shopper
2. behvaiorral targeting: info produved by 3rd aprty cookies to dirrect online adveritiing from amrkets to thos online shoppers
3. \

Social Commerce:

use of social netowkrs for browsing/buying

Subscription Commerce

payment of a fee to have products & service delivered on recurring scheedule

Potiential Customer Benefits by Electronic Retailing

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1. Vast number of alternatives (online & shop on Amazon vs. Target)
2. Info tailored to individual consumer to help them make easier & better purchases decisions 


1. Ex: Netflix for streaming  by browsing history 
3. Super sales associate 


1. Live chat w/ an associate 
4. Side by side comparison of products 
5. Full motion video 


1. For products & services in action

Fears that never came true

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1. Death of retailers: 


1. Disintermediation (manufacturers selling directly to consumers & bypassing retailers
2. but , retailers can offer more services like loyalty programs/ giving a reason why to shop w/ others 
3. Also there is that need for wanting the product now 
2. Price becomes the only differentiator 


1. wrong bc ppl look for quality 
3. Not secured enough to grow


1. Leaks of privacy info 
2. However, ppl keep buying even though our data can looked up

Current Issues of E-commerce

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1. Security Transactions 


1. Phishing: clicking on things that don’t look legit 
2. Phaming: misrepresenting a website 
3. Evil twin: compromise the access points 


1. Able to redirect you to another website
4. “Man-in-the-middle” attack: compromise of access points & it is reading of what you are doing in the moment 


1. Google uses https which is more secure 
2. Privacy:3rd-Party Cookies  


1. 3rd-party cookies would advertising on the page
3. Bandwidth


1. We are doing more things on internet 
2. This is why carriers want to lock you w/ 5G to lock you in their network 
3. Goal: build intelligence on the product 
4. M-commerce → shopping done on the phone

Prescene of Netowrked Global Marketspce

internet as tool for exchange

* exchage products, service, infro from sellers anwyehre
* global commgerce from B2B

Economic Espionage

collection of trade secrets or prioerity info about a copmany’s copmeitors

* economic Espionage Act: makes theft of trade secret by foregin entities a federal crime

Future Tech of E-commerce

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1. Artificial Intelligence (AI)


1. Applicable for food & retailers 
2. Personalized product recommendations 
3. Pricing optimization 
4. Enhanced customer service 
5. Customer segmentation 


1. More info on you → get into your behavior → determine if you fit in my segment 
6. Smart logistics 
7. Sales & demand forecasting 
2. Metaverse (Web 3.0)


1. Mark Zuckberg sees investment on meta 
2. Backlash is you lost money & have to do layoffs 
3. Augmented/ Virtual Reality (AR/VR)


1. AR: looks at what exist in front of you & add new elements 


1. Adding furniture  in a room on the screen 
2. Doing that w/ “trying” products on 
2. VR: 
4. Cryptocurrency 


1. There is not a lot security → risky
2. It is growing & prevalent that is benign accepted by starbucks, microsoft, coca-a-cola
5. Non-fungible Tokens (NFTs)

Seven Habits of Highgly Effective People

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1. Be proactive 
2. Begin with the end in mind ( have an end goal)
3. Put first things first (know how to prioritize/add value)
4. Think win/win (for long term relationships)
5. Seek first to understand- then to be understood 
6. Synergize 
7. Sharpen the saw (continue to learn/invest in yourself)

International Trade

* most is manufactured products then services
* china is biggest exporter then US & Germany
* China is leading in importer
* Countertrade: practice of using barter than money

Balance of Trade

exports-imports

exports: you produce it then ship it

imports: you ship it in

Trade deficit: imports > exports

surplus: exports>imports

Trends of Internatioanl Environment

* we are more interconnected/communication for exchange of goods/ideas → globalization
* foreign compeition

Globalization

ocus on creating econmic,cultural , polticial & technolgoical interdepdence maong indidvual national insutitons & economcies

Types of International Policies?

1. Protectionalism: practice of shielding one or more indsutries iwhtin a country’s economy from froeign compeition throguh use of tariffs or quotas


1. protects jobs
2. tariffs: govt tax on imports
3. uotas: restriction placed on amount of product allowed to enter or leave
4. WTO: world tradeorganizaiton: address array of world trade issues


1. set rules & settle disputes
2. Trade War: situaiton in whic coutnries try to damage each other’s trade
2. Economic Integration


1. group of ocuntries that form transaitonal trade groups or signed trade agreements to pomote free trade


1. EU, NAFTA
3. Global Compeition: firms orginate,product & market products & services worlf wide


1. have subsidiraites around the world
2. international firm that are extensions of amrketing strategy in home country

Cross Country Analysis

is conducted when a firm tries to have market development in a foregin country bc you would need to learn the cultural differences/disparities in order for the firm to be successful

Types of Aspects when conducting a cross-country analysis

1. Demographic
2. social/cultural


1. customs: normals/expected way ppl do in specfiic country
2. Foregin Corrupt PRcatices: illegal for coporation to bribe foreign/poltical party to be retain business in froegin country
3. Symobls: represents ideas/concepts
4. Language: need to know the tongue


1. Back Trnaslation: where a tasnalted word or prhase is translated into the OG by different interpretor
5. Cultural Ethncoentrisms: belief that aspects of one culture is superior to others
3. economic


1. infrastructure: transportriona, fianical systems: phones, cables, computers
2. consumer income: middle class gives pciture in antional’s purcahsing power
3. subssize things offered by the gov’t allow low income ppl to buy a TV/more costly goods
4. currnecy exchagne rate: price of one coutrny’s currency epressed in terms of another currency
4. technological
5. natural
6. legal/regualtory
7. Political (not according to Odile)


1. poltical stability: $$$ due to stfie, war,
2. Trade regualtions

Global Marketing Approaches: International

marketing strategy utlized in the home country is applied to a enw country

Pro: lower costs, faster to set up

Con: cultural differences in vlaues/laws

Global Marketing Approaches: Multinational

marketing strategy that adapts t the cutlural differneces of the new foregin market

* use mutldomestic marketing strategy: differnt proeuct variants, brand names & programs

Global Marketing Approaches: Transnational

marketing strategy that identifies how the cultures are similair & market to segments w/ similair needs in domestic or foregin country

* global amrketing strategy: standardiing marketing activties when ther are cultural similaities
* Glboal brnad: sma ename, muplie countries

Global Consumers

consumers groups living in many coutnries or regions of the world have similair needs or seek simliar featyres & benefit from products or services

* middle class
* young
* affluent

Pure Standarization

marketing strategy is the same/consistent

* succesful marketing mangers strive for this

Mixed Glolocalization

company adapts ot the culture

* disney shanghai’s
* McDonald’s in many different countries

Pure Non-standarizarion

you are going into the country & then starting from scratch

Product Extension

marketing utilzinig the same product

Product Adoption

adapt product but utilzied same promotion

Communication Adaption

Product is the same but adapt promotion/ adveritisng campaign is differnet

Dual Adaption

adapt both product & promotion

Product Invention

new product

Global Marketin Entry Strategies: Export

export: producting products in one coutnry & selling tem ina nother country

Indriect: firm sellng domestiaclly prodct in a coutnry throguh an intermeditary

* less risk /commitment/ no overseess contract

Direct Exporting: there is no intermediaries

* part of pure standarization
* produce in domestically but ship it abroad
* Risk over whether the product is successful but control over the marketing strategy

Global Marketin Entry Strategies: Licensing

you have intellectual property you license/permit but the exeuction is on the 3rd party

Pro: there is a base, handle the local customer

Con: $$$

* Less risky of it appealing to the locals
* Loss of control through the 3rd party

Global Marketin Entry Strategies: Joint Venture

partner w. a company oversees

Pro: partner may have the expertise to pentrate a new market, may not have resources

Cons: actions of politices

Global Marketin Entry Strategies: Direct Invetsment

You go into & set everything up throguh a subsidiary

Pro: cost savings, udnerstnaidn glocal market conditions

Con: Risky/Costly

Generic Business Strategies

adopted by any firm regardless of industry


1. cost leadership
2. differnetiation strategy
3. cost focus
4. differentiaiton focus strategy

Cost Leadership

focuses on reducing cost but produce low prcied products while targeting broad array of amarket segements

Differentiaiton Stratgey

reqiures products to have sign points of difference, brand, higher tech, charge a higher price

Cost Focus

controlling expenses/low lproducts but in a narrow market

Differnetiation Focus Strategy

products to have significanct points of different in order to target one or few segments

Blue Ocean Strategies

empahsis the simualtenous pursuit of product or makreting program differnetiaiton & lower cossts in enw industries/market

* goal is to look beyond traditional marketplace, combine complementary products & creeate new buyer & user experiences for the purpose
* Four Action Grid:
* differientationed: increase product/marketing program by creating/training industry factors
* want to decrease cost or remove factors
* allow new customer value

Line Positions

senoir marketing mangers have authority ot issue orders to people who report them

Staff Positions

have the autority to advise ppl in line positions but cannot issue direct orders

Types of Groupings

1. Staff Positions
2. Geographicaly groupings: sales territories are subdivided
3. AMrekt-based gorupings: utlizing specfiic custmomer segemnts
4. matrix organization combine product groupings