BMGT 350 Exam 1

UMD BMGT 350

Marketing

the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return

5 step marketing process

1. understand the marketplace and customer wants and needs

2. design a customer value driven marketing strategy

3. construct an integrated marketing program that delivers superior value

4. engage customers, build profitable relationships and create customer delight

5. capture value from customers to create profit and customer equity

Market offerings

combination of products, services, information, or experiences offered to a market to satisfy a need or want

marketing myopia

refers to a narrow focus on a company's products or services rather than understanding and meeting the needs of customers. It is a concept in marketing that emphasizes the importance of customer-centric strategies and a broader market orientation.

5 core customer and market place concepts

1. needs, wants, demands

2. market offerings

3. value and satisfaction

4. exchange and relationships

5. markets

marketing management

design customer value driven marketing strategy

art and science of choosing target markets and building profitable relationships w them

1. selecting customers to serve

2. chose value propositions

3. marketing management orientations

Marketing management orientations concepts

production, product, selling, marketing, societal

production concept

consumers will favor products that are available and highly affordable

managers should focus on improving production and distribution efficiency

product concept

consumers will favor products that offer the most in quality, performance, and innovative features

selling concept

consumers will not buy enough of the firms product unless it undertakes a large scale selling and promotion effect

marketing concept

achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactory better than competitors do

societal marketing concept

questions whether the pure marketing concept overlooks possible conflicts between consumer short run wants and consumer long term welfare

4 Ps of marketing

product, price, place, promotion

customer relationship management

overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction

customer perceived value

customers evaluation of the difference between all the benefits and all the costs of a market offering relative to those competing offers - high is good

new - customer engagement marketing

fostering direct and continuous customer involvement in shaping brand conversations, experience, and community

customer brand advocacy

satisfied customers initiate favorable interactions with others about brand - no longer rely on marketing by intrusion, not be attraction

customer generated marketing

consumers play roles in shaping their own brand experiences and those of others through consumer exchanges in social media - time consuming and costly

Partner relationship management

working w others inside and outside the company to jointly engage and bring more value to their customers

capturing value from customers

form of sales, market share, advocacy, and profit - results in loyalty and retention

Customer lifetime value

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

How to increase customer lifetime value

offer variety, create programs to cross-sell and up-sell

customer equity

total combined customer lifetime values of all of the company’s current and potential customers - may be better measure of firms performance bc suggests future

projected loyalty v potential loyalty

butterflies (short, high), true friends (long, high), strangers (short, low), barnacles (long, low)

4 major developments changing landscape and strategy

1. digital age

2. growth of not-for-profit marketing

3. rapid globalization

4. call for sustainable marketing practices

Marketing process

1. understand the marketplace and customer needs and wants

2. design a customer value driven marketing strategy

3. construct an integrated marketing program that delivers superior value

4. engage customers, build profitable relationships, and create customer delight

SWOT analysis

1. strengths

2. weakness

   Internal, controlled by firm

3. opportunity

4. threat

   external, non controllable

strategic planning

process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunities

Mission statements

statement of the organizations purpose

market oriented vs product oriented

business portfolio

collection of businesses and products that make up the company - involves 2 steps

what are the two steps of business portfolio?

1. analyze current business portfolio to invest

2. shape future portfolio by developing strategy

Portfolio analysis

management evaluates the products and business that make up the company

step 1: identify key businesses (strategic business units SBU)

growth share matrix

BCG growth share matrix - a company classifies all its SBUs according to it

Start as ? star is success, then cash cow as growth, turns into dog

difficult, time consuming, costly

Market penetration

increase sales to current customers without changing products

market development

identifying and developing new markets for current products

product development

offering modified or new products to current markets

diversify

starting up or buying business beyond current products or markets

marketing strategy

the marketing logic by which the company hopes to create this customer value and achieve these profitable relationships

Market segmentation

process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors who might require separate marketing strategies or mixes

market targeting

involves evaluating each market segment attractiveness and selecting one or more segments to enter

Positioning

arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target customers

4 As

acceptability, affordability, accessibility, and awareness

concepts of marketing plan

1. executive summary

2. current marketing situation

3. threats and opportunity analysis

4. objectives and issues

5. marketing strategy

6. action programs

7. budgets

8. controls

marketing implementation

the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives

Chief marketing officer (CMO)

heads up the entire marketing operation and represents marketing on the company’s top management team

Marketing control

evaluating results and taking corrective action to ensure that the objectives are obtained

4 steps of marketing control

1. specific marketing goal

2. measures performance

3. evaluates causes of difference between expected and actual

4. management takes corrective actions to close gaps

marketing return on investment

net return from a marketing investment divided by the costs of the marketing investment - measures profit generated by investments in marketing activities

GOST approach in marketing planning

goals → objectives → strategies → tactics

marketing environment

actors and forces outside marketing that affects marketing managements ability to build and maintain successful relationships w target customers

micro environment

consists of actors close to the company that affects its ability to engage and serve customers

actors in micro environment

company, supplies, marketing intermediaries, competitors, publics, customers

marketing intermediaries

helps company promote, sell, and distribute its products to final buyers

Macro environment

consists of the larger societal forces that affect the micro environment

major forces of company’s macro environment

demographic, economic, natural, technological, political, cultural

economic environment

consists of economic factors that affect consumer purchasing power and spending patterns

natural environment

involves the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities

environmental sustainability

developing strategies and practices that create a world economy that the planet can support indefinitely

technological environment

forces that create new tech, creating new products and market opportunities

political environment

consists of laws, gov, agencies and pressure groups that influence or limit various organizations and individuals in a given society

cultural environment

consists of institutions and other forces that affect a society’s basic value, perceptions, preferences, and behaviors

Core beliefs

passed from parent to children and reinforced by schools, business, etc.

secondary beliefs

more open to change

big data

refers to the huge and complex data sets generated by today’s sophisticated information generation, collection, storage, and analysis tech

customer insights

data understanding of customers and the marketplace that becomes the basis for creating customer value, engagement, and relationships

marketing information systems (MIS)

consists of people procedures dedicated to assessing info needs, developing the needed info, and helping decision makers

(obtain info from internal database, marketing intelligence, marketing research)

internal databases

collections of consumer and market info obtained from data sources within company network

accessible, cheap, may be incorrect

competitive marketing intelligence

systematic monitoring, collection, and analysis or publicly available info about consumers, competitors, and developments in the marketplace

marketing research

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

marketing research process

1. defining the problem and research objectives

2. developing the research plan for collecting info

3. implementing research plan, collecting and analyzing data

4. interpreting and reporting the findings

defining the problem and research objectives

exploratory (suggest hypothesis), descriptive (demographic), casual (cause and effect)

developing the research plan for collecting info

primary and secondary data

Primary Data collection

research approach (observation, survey, experiment), contact methods (mail, phone, personal, online), sampling plan (unit, size, procedure), research instruments (questionnaire, mechanical instruments)

consumer buyer behavior

refers to the buying behavior of final consumers that buy goods for personal consumption

consumer market

sum of the final consumers

model of buyer behavior

environment → buyers black box → buyer response

buyer black box = characteristics and decision process

factors influencing consumer behavior

1. cultural (culture, subculture, social class)

2. Social (groups and social networks, family, roles and status)

3. personal (age and lifecycle stage, occupation, economic situation, environmental situation, lifestyle, personality and self concept)

4. psychological (motivation, perception, learning, beliefs and attitudes)

membership reference groups

serve as direct or indirect points of comparison or reference informing a persons attitude or behavior - expose to new lifestyle, influence, and create pressure to conform

opinion leaders

people within reference groups who (bc or special skills/knowledge) exert social influence on others

word-of-mouth influence

powerful impact on consumer buying behavior

influencer marketing

involves enlisting established influencers or creating new influences to spread the word ab brand

brand personality

specific mix of human traits that may be attributed to a particular brand

maslows hierachy

physiological needs, safety needs, social needs, esteem needs, self actualization needs

buyer decision process

1. need recognition

2. information search

3. evaluation of alternatives

4. purchase decision

5. postpurchase behavior

cognitive dissonance

discomfort caused by postpurchase conflict

customer journey

the sum of the on going experience consumers have w a brand

adoption process

mental process through which an individual passes from first learning about an innovation to final adoption

stages in adoption process

1. awareness

2. interest

3. evaluation

4. trial

5. adaption

influence of product characteristics on rate of adoption

1. relative advantage

2. compatibility

3. complexity

4. divisibility

5. communicability

business buyer decision process

1. problem recognition

2. general need description

3. product specification

4. supplier search

5. proposal solicitation

6. supplier selection

7. order-routine specification

8. performance review

e procurement

online purchasing → reverse auctions, trading exchanges, company buying site, extranet, B-B (business to business)

shaves transaction costs, time, and paperwork

STP

segmentation, targeting, positioning

how to select customers to serve?

segmentation and targeting

how to decide on a value proposition?

differentiation and positioning

differentiation

involves actually differentiating the firms market offering to create superior customer value

positioning

consists of arranging for a markets offering to occupy a clear, distinctive and desirable place relative to competing products in the minds of target customers

segmentation variables

geographic, demographic, psycho graphic, behavioral

geographic segmentation

calls for diving the market into diff geographic units such as nations, regions, states, counties, cities, neighborhoods, population density, climate

demographic segmenation

divides the market into segments based on variables such as age, life cycle stage, gender, income, occupation, education, religion, ethnicity, generation

age and life cycle segmentation

offers diff products or using diff marketing approaches for diff age and life cycle groups - must be careful around stereotypes