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

determining the needs/wants of consumers and satisfying those needs through the use of the 4 Ps to create an exchange of value and a long-term relationship

marketing plan

A written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or pro forma income (and other financial) statements.

value

ratio of what is given up for what is being obtained

Product, Price, Place, Promotion

what are the 4 Ps?

exchange

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

marketing mix

the controllable set of activities that a firm uses to respond to the wants of its target market - 4 Ps

goods

items that can be physically touched; ultimate value is what they provide and how they are marketed

services

any tangible offering that involves a deed, performance, or effort that cannot the physically possessed; intangible customer benefits that are produced by people or machines and cannot be separated from the producer

ideas

Intellectual concepts—thoughts, opinions, and philosophies.

price

everything a buyer gives up (money, time, energy) in exchange for the product

place

all activities needed to get the product to the right customer when the customer wants it

supply chain management

A set of approaches used to integrate the functions of operations management, logistics management, supply management, and marketing channel management so products are produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize system wide costs while satisfying the service levels their customers require

promotion

Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response

Business-to-consumer (B2C)

the process in which businesses sell to consumers

Business-to-business (B2B)

the process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, or for resale by wholesalers and retailers

Consumer-to-consumer (C2C)

the process in which consumers sell to other consumers

Value Based Marketing Orientation

Purpose of the organization is to satisfy the customer's needs/wants, while meeting organizational objectives- Want to provide more value than competitors Key Question: what does the customer want?

Social Market Orientation

Focus is on enhancing benefits to society Key Question: How do I meet customer needs and benefit society?

marketing strategy

a firm's target market, marketing mix, and method of obtaining a sustainable competitive advantage

sustainable competitive advantage

something the firm can persistently do better than its competitors

1. Customer Excellence

2. Operational Excellence

3. Product Excellence

4. Locational Excellence

what are the 4 macro strategies in marketing?

1. business objectives and mission statement

2. conduct a situation analysis

3. identifying and evaluating opportunities

4. implement marketing mix and allocate resources

5. evaluate performance using marketing metrics

what are the 5 steps of marketing planning?

mission statement

A broad description of a firm's objectives and the scope of activities it plans to undertake; attempts to answer two main questions: What type of business is it? What does it need to do to accomplish its goals and objectives?

situation analysis

uses a SWOT analysis that assesses both the internal environment with regard to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats.

SWOT analysis

A method of conducting a situation analysis within a marketing plan in which both the internal environment with regard to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats are examined.

CDSTEP analysis

Cultural, Demographic, Social, Technological, Economic, and Political forces

segmentation, targeting, and positioning (STP)

firms use these processes to identify and evaluate opportunities for increasing sales and profits

• firms first divide the marketplace into segments, determines which of those segments it should pursue or target, and finally decide how it should position its products and services to best meet the need of the chosen targets

market segment

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

Market Segmentation

the process of dividing the market into groups of customers with different needs, wants, or characteristics - who therefore might appreciate products or services geared especially for them

market positioning

The process of defining the marketing mix variables so that the target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products

Product value

Creation

• Firms attempt to develop products and services that customers perceive as valuable enough to buy

Price Value

Capture

• Value-based marketing requires that firms charge a price that customers perceive as giving them a good value for the product they receive

• Have to find the right price to bring in revenue

Place Value

Delivery

• Firm must be able to make the product or service readily accessible when and where the customer wants it

Promotion Value

Delivery

• communication by a marketer that informs, persuades, and reminds potential buyers about a product to influence their opinions and get a response

Integrated Marketing Communication (IMC)

a technique that combines all the promotional tools into one comprehensive, unified promotional strategy

Metric

a measuring system that quantifies a trend, dynamic, or characteristic

portfolio analysis

• Method to classify current business units/products

• Helps determine how to allocate resources

• Boston consulting group growth matrix

Boston Consulting Group (BCG) Matrix

A portfolio planning approach that examines strategic business units based on their relative market shares and growth rates. Businesses are classified as stars, cash cows, question marks (problem children), or dogs.

Question Mark (Q1)

• watch/hold

• appear in high-growth markets but have relatively low market shares; thus, they are often the most managerially intensive products in that they require significant resources to maintain and potentially increase their market share

Dog (Q2)

• Drop-consolidate

• Keep a close eye on

• Low market share and market share is not growing

• No potential to grow

• Although they may generate enough resources to sustain themselves, ___ are not destined for stardom and should be phased out unless they are needed to complement or boost the sales of another product or for competitive purposes

Cash Cow (Q3)

• Maintain and milk

• ex) laundry detergent

• ______ are in low-growth markets but are high market share products

• Because these products have already receives heavy investments to develop their high market share, they have excess resources that can be spun off to those products that need it

Star (Q4)

• Invest and grow

• High growth area

• Product has high share of market

• Invest more resources

• Occur in high growth markets and are high market share products

• ___ often require a heavy resource investment in such things as promotions and new productions and new production facilities to fuel their rapid growth

• As market growth slows, ___ will migrate from heavy users of resources to heavy generators of resources and become cash cows

growth or consolidation

what does portfolio analysis indicate?

strategic business unit (SBU)

a division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives

product line

group of associated items, such as those that consumers use together or think of as part of a group of similar products

market share

percentage of a market accounted for by a specific entity

relative market share

a measure of the product's strength in a particular market, defined as the sales of the focal product divided by the sales achieved by the largest firm in the industry

market growth rate

the annual rate of growth of the specific market in which the product competes

• Measures how attractive a particular market is

1. market penetration

2. product development

3. diversification

4. market development

what are the 4 parts of growth strategies?

market penetration strategy

a growth strategy that employs the existing marketing mix and focuses the firm's efforts on existing customers

Market Penetration (Q1)

• Current current

• Sell more of products that we have to the current target markets we are already serving

Product Development (Q2)

• Current new

• Same customers but offering new products

product development strategy

a growth strategy that offers a new product or service to a firm's current target market

Diversification (Q3)

• New New

• New set of products and new set of customers

diversification strategy

a growth strategy whereby a firm introduces a new product or service to a market segment that it does not currently serve

related diversification

a growth strategy whereby the current target market and/or marketing mix shares something in common with the new opportunity

unrelated diversification

• a growth strategy whereby a new business lacks any common elements with the present business

• Do not capitalize on core strengths associated with markets or with products

Market Development (Q4)

• New Current

• Current products new market

market development strategy

a growth strategy that employs the existing marketing offering to reach new market segments, whether domestic or international

harvesting and divestment

what are the two ways to consolidate?

harvesting strategy

cut back on resources devoted to product/market

Divestment Strategy

eliminate entire product line or division (pruning- eliminate specific product, retrenchment- cut back geographically)

conscious marketing

An approach to marketing that acknowledges four key principles: a higher purpose, stakeholders, conscious leadership, and a conscious culture

1. recognition of marketing's greater purpose

2. Consideration of stakeholders and their interdependence

3. The presence of conscious leadership, creating a corporate culture

4. The understanding that decisions are ethically based

what are the 4 overriding principles of conscious marketing?

Recognition of marketing's greater purpose

When the marketing function recognizes that the purpose of business should be more than just making profits

consideration of stakeholders and their interdependence

Conscious marketers consider how their actions will affect the expandable range of potential stakeholders

stakeholders

the broad set of people who might be affected by a firms actions, including not just corporate shareholders and customers but also employees and their families, supply chain partners, government agencies, the physical environment, members of the communities in which the firm operates

The presence of conscious leadership, creating a corporate culture

• implies that the firm's leaders are dedicated to the proposition of being conscious at all levels of the business, throughout its entire culture

• Every member of the firm embodies the ideas of conscious marketing, and every stakeholder affected by that marketing can recognize the higher principles involved

the understanding that decisions are ethically based

Conscious marketers must make decisions that are based on sound marketing ethics

business ethics

refers to a branch of ethical study that examines ethical rules and principles within a commercial context, the various moral or ethical problems that might arise in a business setting, and any special duties or obligations that to persons engaged in commerce

marketing ethics

refers to those ethical problems that are specific to the domain of marketing

Corporate Social Responsibility (CSR)

refers to voluntary actions taken by a company to address the ethical, social and environmental impacts of its business operations and the concerns of its stakeholders

• These responsibilities are not mandated by any law or regulation but are associated with the demands, expectations,requirements, and desires of various stakeholders

economic performance

make money ethically

social performance

what do our choices mean to society

environmental performance

how do our choices affect the planet

triple bottom line

a means to measure performance according to economic, environmental, and societal criteria

1. identify issues

2. gather information and identify stakeholders

3. brainstorm and evaluate alternatives

4. choose a course of action

what are the 4 steps to ethical decision making?

An issue might be whether results will be used in a way that might mislead or even harm the public, such as selling the information to a firm to use in a soliciting the respondents

what happens in the "identifying issues" step of ethical decision making?

• Firm focuses on gathering facts that are important to the ethical issue, including all relevant legal information

• To get a complete picture, the firm must identify all the individuals and groups that have a stake in how the issue is resolved

what happens in the "gather information and identify stakeholders" step of ethical decision making?

All parties relevant to the decision should come together to brainstorm any alternative courses of action

what happens in the "brainstorm and evaluate alternatives" step of ethical decision making?

The objective of this last step is to weigh the various alternatives and choose a course of action that generates the best solution for the stakeholders, using ethical practices based on a conscious marketing approach

what happens in the "choose a course of action" step of ethical decision making?

marketing environment

uncontrollable elements outside of any organization that may affect its performance

environmental scanning

Systematic monitoring of the major external forces influencing the organization

1. Company capabilities

2. competitors

3. corporate partners

4. physical environment

what are the 4 components of the immediate environment?

Company Capabilities

successful marketing firms focus on satisfying customer needs that match their core competencies

competitors

firms operating in the same market, offering similar products, and targeting similar customers

corporate partners

Few firms work in isolations - parties that work with the focal firm

physical environment

the land, the water, the air, and living organisms (flora and fauna)

green marketing

strategic effort by firms to supply customers with environmentally friendly merchandise

greenwashing

exploiting consumers by disingenuously marketing products or services as environmentally friendly, with the goal of gaining public approval and sales

macroenvironmental factors

aspects of the external environment that affect a company's business, such as the culture, demographics, social trends, technological advances, economic situation, and political/regulatory environment

culture

shared meanings, beliefs, morals, values, and customs of a group of people

country culture

Similar to culture in general, but at a country level. Entails easy-to-spot visible nuances that are particular to a country, such as dress, symbols, ceremonies, language, colors, and food preferences, and subtler aspects, which are trickier to identify.

regional culture

Similar to culture in general, but at a regional level. The influence of the area within a country in which people live.

demographics

information about the characteristics of human populations and segments, especially those used to identify consumer markets such as by age, gender, income, and education

• provides an easily understood snapshot of the typical consumer in a specific target market

generational cohort

a group of people of the same generation - typically have similar purchase behaviors because they have shared experiences and are in the same stage of life

Gen Z

generational cohort of people born between 1997-2009. Also known as digital natives because people in this group were born into a world that already was full of electronic gadgets and digital technologies, such as the internet and social networks

Gen Y (Millennials)

Generational cohort of people born between 1977 and 2000; biggest cohort since the original postwar baby boom.

Gen X

• generational cohort of people born between 1965 and 1976

• First generation of latchkey children - those who grew up in homes in which both parents worked

• focuses on children

• value education

• convenience is important