Marketing Fundamentals: 5Ps, Market Segmentation, and Consumer Behavior

Value

Benefits ÷ Costs

Form Utility

Product features that meet customer needs

Time Utility

Products available when customers want them

Place Utility

Products available where customers want them

Possession Utility

Easy ownership transfer via pricing, financing, or credit options.

What are the 5ps

Product, price, place, promotion, people

Relationship Marketing

Building long-term relationships with customers

Customer Relationship Management (CRM)

Using data to strengthen connections

Substitute Products

products that meet same need

Brand Competition

Between similar products, based on perceived benefits

International Competition

Domestic vs. foreign products

Place (Distribution)

How and where products reach customers

Tools of Promotion

advertising, personal selling, sales promotions, and public relations (PR).

Target Market

specific group marketers want to focus on

Market Segmentation

dividing a market into distinct groups

Product Positioning

communicating a products identity to the target segment

Five ways to segment a market

Geographic, demographic, geo-demographic, psychographic, behavioral

Geographic Segmentation

Dividing markets based on location

Demographic Segmentation

Dividing markets by population traits

Geo-Demographic Segmentation

Uses a combination of geographic and demographic traits

Psychographic Segmentation

Divides markets based on lifestyle

Behavioral Segmentation

Divides consumers based on actual behaviors and usage patterns

Primary Data

Newly collected data from original research, e.g., surveys, interviews, experiments.

Secondary Data

Information already available from prior research, e.g., Census Bureau, Dept. of Labor.

Step 1 of market research process

study the current situation

step 2 of market research process

select a research method

step 3 of market research process

collect data

step 4 of market research process

analyze the data

step 5 of market research process

prepare a report

What are some market research methods

Observation, survey, focus group, experimentation

What are the four influences on consumer behavior

psychological, personal, social, cultural

5 steps of consumer buying process

identity problem, research, find alternatives, purchase decision, post purchase evaluation

Organizational Marketing

marketing to businesses

Services Companies Market

Firms that provide services to the public but must buy things to operate.

Industrial Market

use goods to convert into other goods

Reseller Market

buy finished goods and resell to others

Government and Institutional Market

governments/institutions that buy things

how are industrial buyers different from consumers

buy in bulk, have expert knowledge, formal negotiations, specialization

What are the three types of consumer goods

convenience, shipping, specialty

Convenience Goods and Services

Inexpensive, purchased frequently and quickly with little effort (e.g., Milk, bottled water, fast food).

Shopping Goods and Services

Moderately expensive, purchased less often; consumers compare brands and attributes (e.g., TVs, appliances, hotel reservations).

Specialty Goods and Services

Expensive, rarely purchased; consumers know exactly what they want and won't accept substitutes (e.g., Luxury jewelry, wedding dress, health insurance).

What are the 3 types of industrial products?

production, expense, capital

Production Items

Goods or services used directly in making other products.

Expense Items

Goods/services consumed within a year by firms producing other goods or services.

Capital Items

Expensive, long-lasting products or services used for several years.

Rapid Prototyping

3d models

Speed to Market

Strategy of quickly introducing products to meet changing demand.

what is the 7 step product development process

product ideas, screening, concept testing, business analysis, prototype development, product testing, commercialization

what is the 7 step service development process

service ideas, screening, concept testing, business analysis, service process design, product testing, commercialization

What are the stages of product life cycle

introduction, growth, maturity, decline

Ways companies extend product life

product extension, product adaptation, reintroduction

Types of brand names

national, licensed, private

Cost-Oriented Pricing

Pricing that considers the firm's desire to make a profit and its need to cover operating costs

Markup Percentage Formula

Markup % = (Markup ÷ Sales Price) × 100%.

Breakeven Point Formula

Breakeven Point (units) = Total Fixed Costs ÷ (Price − Variable Cost)

Price Skimming

Setting a high initial price to recover development costs and maximize early profits

Penetration Pricing

Setting a low initial price to attract customers quickly and build market share

Fixed Pricing

A consistent, non-negotiable price for all buyers. Common in both traditional and online retail.

Dynamic Pricing

Prices fluctuate based on real-time supply and demand.

Price Lining

Offering all products within a category at a limited number of predetermined price points

Psychological Pricing

Tactic leveraging consumer perception rather than rational evaluation of prices.

Odd-Even Pricing

set at .99

Discount Pricing

Temporary or seasonal price reductions

Affordability-Based Pricing

tailoring products to what people in that region can afford

Dumping

Selling goods in foreign markets below cost or domestic price levels to gain market share

5 steps of a marketing plan

define objectives, market research, develop strategy, create action plan, monitor and adjust

Four aspects of brand reputation

brand awareness, perceived quality, brand loyalty, brand associations

Brand Positioning

How a brand wants to be seen

elements of brand positioning

target audience, competitive frame of reference, unique selling proposition, brand promise

Segmentation Targeting Positioning

Model divides market into distinct segments and tailors marketing campaigns to that group.

Market Segments

Products and services cannot be all things to all people

Competitive Frame of Reference

The context in which a brand competes against others in the market.

The Shed at Dulwich

A fake restaurant created by Oobah Butler that became the #1 restaurant on TripAdvisor despite serving frozen supermarket food.

AI in Advertising

AI can mimic target audiences, create product shots, and generate focus groups, making expensive ideas feasible.

Color and Credit Study

Examines how race and regulation affect the quality of financial services offered by banks.

Community Reinvestment Act (CRA)

Quantity-focused regulations that push banks to increase lending in low-income areas, often reducing loan and service quality.

Negative Effects in Minority-Dominant Neighborhoods

Poor and minority communities experience higher rates of fraud, misselling, and poor service.

Price setting - Cost oriented pricing

A pricing strategy where the selling price is determined by adding a markup to the selling costs.

Mixed costs

Costs that have both fixed and variable components

utility bill might have a fixed base rate plus a variable charge

Step costs

Costs that remain fixed up to a certain level of activity but increase in steps once that level is exceeded

aditional staff members hired once production level is reached

Time frame costs

classification of costs can depend on time frame

salaries may be fixed in the short term but variable long term

Cost allocation

allocating indirect costs like administration

Revenue linked costs

Costs that are tied to revenue rather than production levels

sales commisions

Price setting - Market approach

A pricing strategy that uses existing market prices as a reference

Price fixing

An illegal agreement between parties to set prices at a certain level.

Predatory pricing

Setting prices low with the intent to eliminate competition.

Bookkeeping

The recording of accounting transactions such as taxes paid and income received.

Accounting Information System (AIS)

produce for recording financial data

Controller

The person who manages all of a firm's accounting activities

Financial Accounting

external

Managerial Accounting

internal

Noncertified Public Accountants

provide basic accounting

Private Accountant

firms day to day

Management Accountant

supports managers with financial data for planning and control

Sarbanes-Oxley Act

requires executives to sign off on financial reports

CPA Vision Project

Initiative redefining the accountant's role with new core competencies for modern practice.

Accounting Equation

Assets = Liabilities + Owners' Equity.

Current assets

cash or asssets convertible to cash within a year

Fixed Assets

Long-term resources (land, buildings, equipment) minus depreciation.