Marketing exam 1 notes

marketing

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

The 4 Ps

• product, what do customers need/want

• price, how should we ask customers to pay

• place, how will we get it to the customers

• promotion, how will we communicate with the customers

marketing concept

market - customer needs - integrated marketing - profits through customer satisfaction

selling concept

factory - existing products - selling and promoting - profits through sales volume (end goal)

How is the marketing concept different from the selling concept

marketing is outward, selling sells a lot of volume

societal marketing concept

balances 3 factors: company profits, consumer satisfaction, and society’s long term interests

marketing process model

understand the market place

design a customer value driven marketing strategy

construct an integrated marketing program that delivers superior values

engage customers and build profitable relationships

capture value from customers in return

Butterflies

low loyalty, high profitability (thrifting many places but spending a lot of money)

true friends

high loyalty high profitability (buying phones from one place a lot)

strangers

low loyalty low profitability (buying fast food from many places)

barnacle

high loyalty low profitability (buying same car every 9 years)

customer lifetime value

= total revenue a customer generates for your company - the cost to acquire that customer - what it takes to keep them

major forces in microenvironment

1. the company

2. suppliers

3. intermediaries

4. competitors

5. publics

6. customer

the company

all departments must think about the customer

cooperate inter-functionally to provide superior customer value and satisfaction

intermediaries

• help the company promote, sell, and distribute the products to end users

• physical distribution firms

• marketing services agencies

• financial intermediaries

competitors

• who might the customer choose instead

• provide reasonable substitutes to customers

• law of color

  • a brand should use a color that is opposite its major competitors

publics

• any group that has an interest in or impact on an organizations ability to achieve its objectives

• types of publics

  • financial - banks

  • media - newspapers

  • government - agencies and legal groups

  • citizen action - consumer organizations that could change decisions

  • local - neighborhood residents near business

  • general - everyday consumers

  • internal - workers, managers, board of directors

customer

who buys our products

• consumer

• business

• reseller

• government and non profit

• international markets

major forces in macroenvironment

demographic

economic

natural

technological

political

cultural

demographic

measurable, census type data on consumers

Economic

factors that affect consumer purchasing power and spending patterns

treasure hunter tradeoffs

changed in income distribution

natural forces

natural resources that are needed as inputs by marketers or that are affected by marketing activities

technological forces

factors that create new technology

political forces

laws, regulations, and pressure groups that influence and limit various organizations and individuals in a given society

• parodies and exaggeration are LEGAL

cultural forces

the forces that affect a society’s basic values, perceptions, preferences, and behavior

hypertasking

multitasking in overdrive

egonomics

craving recognition of individuality

mass mingling

digital technologies affect offline mingling

cocooning

spending more time at home

down aging

comfort in familiar pursuits and products from decades past

clanning

validating one’s own belief system by belonging to a group that shares common beliefs or ideals

lohad

general concern for natural world

renewed spirituality

less materialism, greater meaning of life

baby boomers

the most affluent generation

digitally active

Gen X

weigh up decisions

self reliant

care about experiences over materialism, environment

Gen Y

interdependent

largest buying power

Gen Z

seamless fluent with digital

cautious spenders

creating own brand experiences

Gen Alpha

take tech for granted

marketing gateway to reach parents

Marketing information system

Internal databases → ←marketing intelligence → ← marketing research

asks: what information do we already have, and what public information is available

marketing research process

starts by defining the problem and research objectives

develop the research plan for collecting information

implement the research plan - collection and analyzing the data

interpreting and reporting the findings

primary data

collect specific info

directly applicable

costly

secondary data

rely on existing info

not as applicable

less expensive

Exploratory research

gathers preliminary information that will help define the problem and suggest hypotheses

Descriptive research

describes things (market potential for a product, demographics, attitudes)

casual research

tests hypotheses about cause and effect relationship

sampling plan

a strategic framework that outline how to select a representative subset of a target population to gather accurate data

sampling plan flow

sampling unit, sampling size, sampling procedure —> simple, random, convenience, judgement, QUOTA

Observational research

gathering of primary data by observing relevant people, actions, and situations

ethnographic research

• observation in a “natural world”

Mechanical observation - checkout scanners, eye cameras

survey research

most widely used method

best for descriptive information

personal interview

used for surveys and experiments

• highly flexible

• good control of sample

• high cost per respondent

• highly subject to bias and peer pressure

• quantity of data collected is smaller

mail surveys

mostly used for questionnaires

• least expensive way to gather information

• flexible

• saves time on data processing

• spam

• people might not respond

experimental research

best for gathering casual

process

• select matched groups of subjects

• give different treatments

• control for unrelated factors

• check differences in responses between groups

culture factors

culture is the most basic cause of a persons wants and behaviors

ex. Coke “share a coke”

subculture

a culture of a group of people who share value systems based on common life experiences. smaller groups more niche

ex. red bull advertising to extreme sports

social classes

societies relatively permanent and ordered divisions whose members share similar values, interests and behaviors

ethnic subcultures

• Hispanic Americans - use twitter MORE, brand names sell WELL

• Black americans - Buy apparel MORE, spend MORE

• Asian Americans - More likely to use the internet, MORE trend follower

Culture Shifts

• Marketers try to spot cultural shifts to determine what new products may be wanted 

  • Own personal water bottles, fitness equipment at home through covid

Social factors

• Reference groups include groups that a person wants to identify with (aspirational) , or does not want to be identified with (disassociative)

• Family/househouse, MOST IMPORTANT “group” for most consumer buying

Roles and status

• Role = expected activities

• Status = esteem given to role by society

Personal factors

age and life cycle stage, occupation, economic situation, lifestyle, personality and self conflict, psychological factors

Buyer decision process

need recognition - information search - evaluation of alternatives

purchase decision, post purchase behavior

Hierarchy of needs

(top) Self-actualization, self-esteem, social belonging, safety and security, physiological (bottom)

marketing intermediate

helps us promote sell and distribute products, (walmart)

production concept

consumers will prefer products that are widely available and inexpensive

product concept

consumers prefer product of highest quality, performance and features