Marketing Midterm

Marketing

an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

Production concept marketing

that consumers are interested primarily in product availability at low prices; Cheap, efficient production, Intensive distribution, Market expansion

Product concept marketing

that consumers will buy the product that offers them the highest quality, the best performance, and the most features; Quality improvement, Addition of features. Tendency toward Marketing Myopia

Selling Concept Marketing

that consumers are unlikely to buy a product unless they are aggressively persuaded to do so; Sell. Lack of concern for customer needs and satisfaction

Societal Marketing Concept

Marketers adhere to principles of social responsibility in the marketing of their goods and services; that is, they must endeavor to satisfy the needs and wants of their target markets in ways that preserve and enhance the well

Marketing Concept

to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition; Make what you can sell, Focus on buyer’s needs. Consumer research, segmentation, targeting, positioning.

Positioning

Developing a distinct image for the product in the mind of the consumer. Communicating the benefits of the product. Communicating a unique selling proposition (Why→How→What).

Stakeholders

people and organizations that have an investment or other interest in the business

Marketing mix

combination of marketing tools that a firm uses to offer customers value and pursue its sales and profitability goals.

Marketing Mix 2

Price, product, promotion, place (4 p’s).

Product

Variety, features, brand name, quality, design, packaging, and services.

Promotion

Advertising, sales promotion, public relations, and personal selling.

Place

Channels, coverage, logistics, locations, transportation, assortments, and inventory.

Price

List price, discounts, allowances, payment period, and credit terms.

Microenvironment

the set of forces close to an organization that have a direct impact on its ability to serve its customers.

Microenvironment 2

The company itself, Suppliers and intermediaries, Customers, Competitors, And various publics

Macroenvironment

a collection of uncontrollable forces and conditions. Companies must be aware of these and react to conditions and changes

Macroenvironment 2

social forces, technological forces, economic forces, political forces and legal and natural forces

Value

Benefits/Cost

Consumer Marketing

The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

Marketing myopia

Occurs when sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products.They focus on the “wants” and lose sight of the “needs.”

Market segmentation

The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs.

Target marketing

Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter.

Differentiation

Creating superior customer value by actually differentiating the market offering.

Demarketing

Temporarily or permanently reducing the number of customers or shifting their demand.

Value Proposition

The set of benefits or values a company promises to deliver to consumers to satisfy their needs.Dictates how firms will differentiate and position their brands in the marketplace.

Customer Relationship Management (CRM)

Deals with all aspects of acquiring, keeping, and growing customers. Customer value and satisfaction are key.

Corporate social responsibility (CSR)

Ethical principles weighed against profits

Strategic Planning

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

Strategic Business Unit

A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses. Can be a company division, a product line within a division, or sometimes a single product or brand.

BCG (Boston Consulting Group) Growth (Share Matrix)

Stars, cashcows, question marks, dogs

Stars

High-share of high-growth market. Build into cash cow via investment. Hot/trendy items.

Question marks

Low-share of high-growth market. Build into STAR via investment if warranted, or reallocate financing and let slip into DOG status.

Cash cows

High-share of low-growth market. Maintain or harvest for cash to build STARS. The basics go to. Usually redesigned to become a star for the following season.

Market penetration

Existing markets, existing products. How well you’re selling product year to year

Market development

New markets, existing products

Product development

Existing markets, new products

Diversification

New products, new markets. Creativity.

Modification

Quality (Material), Functionality, Aesthetics. Less Risky than product development. Should be inclined with the customer's wants and needs.

Penetration Pricing

Charging a low price in order to penetrate the market quickly.

Market Skimming

Charging a premium price. May occur in the introduction phase of the product life cycle.

EPRG Model Merchandising and Marketing

Ethnocentric, polycentric, regiocentric, geocentric.

Ethnocentric

Evaluating other countries/culture’s standards to one’s own country.

Polycentric

Country/culture specific. Uniqueness

Regiocentric

Relates to regions within a country/culture 

Geocentric

Total standard by all countries.

Global Pricing Policy Alternatives

1. Extension or ethnocentric 2. Adaption or polycentric 3. Geocentric

SWOT Strengths

Internal capabilities that may help a company reach its objectives.

SWOT Weaknesses

Internal limitations that may interfere with a company’s ability to achieve its objectives.

SWOT Opportunities

External factors that the company may be able to exploit to its advantage.

SWOT Threats

Current and emerging external factors that may challenge the company’s performance.

Marketing Strategies

Market segmentation, targeting & market mix selection, differentiation, and positioning

Consumer Buying Behavior

Cultural factors, Social factors, Personal factors, and Psychological factors

Adoption Process of a New Product

1. Awareness 2. Interest 3. Evaluation 4. Trial 5. Adoption

Awareness

Consumer becomes aware of the new product, but lack information about it.

Interest

Consumer seeks information about new products.

Evaluation

Consumer considers whether trying the new product makes sense.

Trial

Consumer tries new product on a small scale to improve his or her estimate of its value. Adoption

Adoption Phase Categorization

1. Innovators 2. Early Adopters 3. Early Majority 4. Late Majority 5. Laggards

Innovators

Younger consumers willing to take risks. First to interact with a new product.

Early Adopters

Younger consumers who try to market innovative products. More discreet rather than risk takers. Highest degree of opinion leadership.

Early Majority

Where fashion conscious consumers lie. Slower in the adoption process.

Late Majority

The average member of society. Approach innovations with a high degree of skepticism.

Laggards

Older consumers with little to no opinion leadership. Focused on tradition rather than innovation.

Rate of adoption characteristics

Relative advantage, compatibility, complexity, divisibility, communicability

Demographics

Age, sex, marital status, income, economics (education and occupation)

Psychographic

Lifestyle

Psychological

Behavioral (learn, attitude, motivation, perception)

Physiological

Physicality

Sociocultural

Culture, religion, ethnicity, class, family

Trait Theory

seeing a product and seeing yourself in it and how it relates to your character

Product Lifestyle

Introduction, rise, peak, decline, obsolescence

Marketing research

process by which businesses collect and analyze information specifically related to a marketing question, problem, or opportunity.

Quantitative

objective information that focuses on numbers and facts interpreted statistically. Ex. experiments and survey observations

Qualitative

subjective information that focuses on attitudes, opinions and feelings. Ex. depth interviews, focus groups, metaphor analysis, collage research, and projective techniques.

Secondary research

is the process of exploring existing sources of data. Saves time and money. Information is plentiful and often free. Includes internal and external data.

Internal Data

Data generated in-house. May include analysis of customer files. Useful for calculating customer lifetime value

External data

Data collected by an outside organization. Includes federal government, periodicals, newspapers, books, and search engines. Commercial data is also available from market research firms

Primary research

is conducted directly by marketers

Positivism Research

Researchers investigate consumer behavior using measurable evidence, such as surveys, sales figures, and statistical data. Enables marketers to “predict” consumer behavior.

Interpretivism Research

Helps researchers understand why consumers choose particular clothing styles, brands, or fashion trends, rather than simply measuring how many people buy them

Undifferentiated Target Marketing

a company targets the entire market with one product offering and one marketing strategy, rather than creating separate strategies for different customer segments. The goal is to reach as many consumers as possible.

Differentiated Target marketing

a company targets two or more market segments and develops different products/collections or marketing strategies to meet the needs of each segment.

Concentrated Target Marketing

a company focuses its resources on one specific market segment or niche instead of trying to serve the entire market.

Bases of Market Segmentation

geographic, demographic, psychological, psychographic, sociocultural, use-related, usage-situation, benefit sought, and hybrid

Routine Response

rebuying from the same brand (convenient products)

Limited Problem Solving

Accept what a brand gives. Requires minimal research (shopping products)

Expanded Problem Solving

Aspirational buying. Requires more research (specialty product)

Impulse Buying

Looking at new styles, seeing what attracts your eye without research (unsought products)

Value Delivery Network

Made up of the company, suppliers, distributors, and ultimately customers who “partner” with each other to improve the performance of the entire system in delivering customer value.

Marketing intermediaries

individuals or businesses that help a company promote, sell, distribute, and deliver its products to consumers. Wholesalers, retailers, e-commerce, distribution/logistics companies, and marketing agencies

Horizontal conflict

occurs among firms at the same level of the channel (e.g., retailer to retailer)

Vertical conflict

occurs between different levels of the same channel (e.g., wholesaler to retailer).

Hybrid marketing system

when a company uses two or more different types of distribution channels to reach customers and sell its products. Ex. A fashion brand sells directly and supplies independent retailers

Multichannel Marketing System

Uses multiple channels to reach and sell to customers. Ex. A fashion retailer sells through stores, an app, and a website

Corporate VMS (Corporate Vertical Marketing System)

One company owns and controls multiple stages of production and distribution, from making a product to selling it to customers.

Contractual VMS (Contractual Vertical Marketing System)

A system where independent businesses at different stages of production and distribution sign agreements to work together so they can save money and operate more efficiently.

Customer-orientated marketing

the company should view and organize its marketing activities from the consumers POV

Customer-value marketing

A company should put most of its resources into value-building marketing investments

Innovative marketing

requires that a company seek real product and marketing improvement