Marketing Principles

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have VALUE for customers, clients, partners, and society at large.

What is Marketing

What is Customer Value?

The relationship between the benefits of something and the sacrifice it takes to get the benefits.

B > S

Customer Value, benefit is greater than sacrifice

B < S

No customer value, benefit is not enough for sacrifice.

Before the purchase.

When is customer value determined?

What is exchange?

Giving up something in order to get something.

2 or more parties, something of value, communication and delivery, freedom to accept or reject, and desire to deal with the other party

5 Conditions for Exchange

Benefit vs. Sacrifice

Customer Value : Compares what?

Before Purchase

Customer Value : Occurs when?

Traditional

Customer Value :What type of purchase?

Yes

Customer Value : Compared to other brands??

Expectations vs. Performance

Customer Satisfaction: Compares what?

After Purchase

Customer Satisfaction: Occurs when?

Emotional

Customer Satisfaction: What type of process?

No

Customer Satisfaction: Compared to other brands??

Dissatisfied customers, expectations vs. performance

E > P

Satisfied customers, expectations vs. performance

E < P

Satisfied customers, expectations equal performance

E = P

What is relationship Marketing?

Focused on making and maintaining relationships with current customers

Production, Sales, Market, Societal

What are the 4 marketing philosophies?

Production : Internal Capabilities

What is the MMP where it is focused on “What can we make best?”

Sales : High sales result in profits

What MMP is focused on “How can we sell more aggressively?”

Market : Satisfying customer needs

What MMP is focused on saitsfying customers?

Societal : Customers and society

What MMP is focused on Customers and Societal well-being?

Strategic Business Units

What is a smaller unit inside of a business called?

Yes

Does and SBU have it’s own mission statement, competitors, target market and resources?

Igor Ansoff

Who came up with the idea that we should focus on products and custoemers?

Market Penetration, Market Development, Product Development, and Diversification

What are the 4 different marketing strategies?

Market Penetration

Which marketing strategy is about current customer buying current products?

Market Development

Which marketing strategy is about new customers buying current products?

Product Development

Which marketing strategy is about current customers buying new products?

Diversification

Which marketing strategy is about new customers buying new products?

What is the BCG Matrix?

A matrix that is used to categorize SBUs into 4 categories based on Relative Market Share and Market Growth Rate?

Market Growth rate

What is on the side of the BCG Matrix?

Relative Market Share

What is on the bottom of the BCG matrix?

Star, Cash Cow, Problem Child, Dog

What are the 4 categories of the BCG matrix?

Star

Which BCG is high market share and high growth?

Cash Cow

What BCG is high market share and low growth market?

Problem Child

What BCG is low market share and high growth market?

Dog

What BCG is low market share and low growth market?

Your sales / total industry sales = RMS

How to find Relative Market share?

Cash Cow

What BCG is the best place to be?

Dog

What BCG is the worst place to be?

Cash Cow

What BCG brings in more money than it needs?

Problem Child

What BCG is unpredictablle?

Build, Hold, Harvest, and Divest

What are the 4 strategies for BCG?

Hold

Keeping the SBU in it’s place?

Cash Cows and Stars

What two BCG can we use Hold on?

Build

Take money from an SBU and put it into this one?

Problem Child and Stars

What BCGs can we use Build on?

Harvest

Take money from this SBU and put it in another?

Cash Cow, Problem Child, and Dog

What BCGs can we use Harvest with?

Divest

Selling off an SBU?

Dogs, Problem Child

What BCG can we use Divest with?

What is a marketing plan?

A written document that acts as a guide or marketing activities for marketing manager

Mission statment

Meant to answer the question “What business are we in?”

Product

What can a mission statement not focus on?

What is SWOT analysis?

Strength, Weakness, Opputunities, Threats

What is competitive advantage?

A company or products set of unique features that make it seem superior in the eyes of the target market

Cost, Product, Niche

What are the three types of competitive advantage?

Cost

Competitive advantage about being the cheapest?

Product / Service Differentation

Competitive advantage with brand names, product reliability, or service?

Niche

Competitive advantage with limited geographic area, specific product, or small customer group?

Marketing Objective

A statement of what is to be accomplished my marketing activities

Specific, Measurable, Achievable, Realistic, Time-Specific

What are the parts of a SMART marketing objective?

Price, Product, Place, Promotion

What are the 4 Ps of Marketing?

Product

4 Ps : Physical Unit, Tangible good, Ideas or Services

Promotion

4 Ps : Communication, advertising, and Promoting

Price

4 Ps : What customers give up for the Product, most flexible

Place

4 Ps : Distribution, getting product at the right place at the right time

Ethics

The moral principles or values that generally govern the conduct of an individual or group

Preconventional, conventional, and postconventional

What are the 3 Levels of Morality?

Preconventional

Morals based on what will be punished or rewarded

Conventional

Morals based on societal expectations

Postconventional

Morals based on own moral compass

Extent of Problems, Top management actions, potential consequences, social consensus, probability of harm, time until consequence, number affected

Factors that influence Ethical decision making

Code of Ethics

A guideline that helps marketing managers and other employees make better decisions

Corporate Social Responsibility

A businesses concern for societal welfare

Philanthropic, Ethical, Legal, Economic

What are the levels in the pyramid of corporate social responsibility?

Price, Promotion, Place, Product

What are the internal business factors?

Demographics, social change, economic conditions, competition, technology, political and legal factors.

What are the external business factors?

Attitudes, values, and lifestyles

What are the social factors that affect marketing?

Learned, directed at something, is positive or negative, varies in intensity

What is an attitude?

Self sufficiency, upward motion, work ethic, equality, individualism, achievement orientation, helping others and the environment

What are the American Values?

Lifestyles, Activities, interests, and opinions

What is the acronym AIO for and what does it mean?

Basic descriptors of people

What are demographics?

They give marketers and idea of who they are marketing to

How do demographics impact marketing?

Consumer income, purchasing power, inflation and recession

What economic factors influence marketing?

87,000 household

What is consumer income average?

purchasing power

How much income is left over after the household has paid for essentials

Income - Taxes

Disposable income

Income - Taxes - Living expenses

Discretionary Income

Decrease in the value of money over time

Inflation

How does technology affect marketing?

Basic and Applied research, and stimulating innovation

Basic (Pure) Research

Disinterested search for knowledge

Applied Research

Research to develop or improve products

Laws and regulations, Federal vs. State Law, and Consumer Privacy

How does political environment affect marketing?

New tech, society, businesses, and consumers

Laws and regulations protect?

Industry Rival, Threat of Substitutes, Bargaining power of suppliers, bargaining power of consumers, and Barriers to entry,

What are the 5 basic competitive factors?

Industry rivals, threat of substitutes, bargaining power of supplier and consumers, and barriers to entry

What are Porters 5 sources?