Principles of Marketing

What is a competitor?

• Any company that satisfies the same customers need or serves the same customer group with similar products

• Defined by needs, not by products

Competitors are not enemy’s

• They prove the market is real

• Force companies to get better

What are the benefits of competition?

• Legitimize the market

• Innovation pressure

• Give customers more choices

• Competitors can benchmark off of each other

• Collaborate

Do non-profit organizations have competitors?

Absolutely. They compete for..

• Attention

• Donations

• Trust

Layers of competition

• Product form (Same product)

• Product category (Same general category)

• Generic (Different product solving the same need)

• Budget (Compete for the same dollar)

What is a product?

Anything that can be offered to satisfy a want or need

(items, services, or experiences)

Difference between a good or a service?

Services are …

1. Intangible

2. Heterogenous

3. Inseparable

4. Perishable

(If you can’t hold it, store it, standardize it, it’s a service)

What are the consumer product categories

1. Convenience Products

2. Shopping Products

3. Specialty Products

4. Unsought Products

What are Convenience Products?

Products that don’t involve thinking (snacks)

What are Shopping Products?

Compare (clothes)

What are Specialty Products?

Must-have brands (designer bags)

What are Unsought Products

Products we don’t want to think about (Insurance)

What is a Brand?

Set of associations and experiences that exist in the minds of consumers

Are products only a single good or service?

No

What are levels of product?

1. Core (Need met; benefit)

2. Actual Product (Physical attributes)

3. 3. Augmented Product (Supporting services; the extras)

Difference between product line vs product mix

Line = same family (iPhones)

Mix = whole closet (Apple products)

What are the seven steps of New Product Development Process?

1. New Product Strategy Development

2. Idea Generation (Spark)

3. Screening and Evaluation (Is this dumb?)

4. Business Analysis (Will it make money?)

5. Development (Build it)

6. Marketing testing (Small launch)

7. Commercialization (Full send)

What is the Product life cycle?

a business model tracking a product's journey from its market introduction through growth, maturity, and eventual decline

What are the stages to Product Life Cycle?

1. Production development

2. Introduction (no one knows it)

3. Growth (Everyone wants it)

4. Maturity (Normal)

5. Decline (This is cringe now)

Products are market specific

True

What is price?

• Amount of resources a buyer gives up in exchange for the benefits of a product or service

• Is it only about money? No

• Money + time + effort + stress + risk

Why might a professional athlete consider them to be inexpensive (or faire prices) and a standard UH student consider them to be expensive

• Perceived Value = Perceived Benefits/Perceived Costs

• Value = Benefits/Costs

• Athlete: high benefit > feels cheap

• Student: low benefit > feels expensive

Psychological pricing

Tricks your brain ($9.99)

Prestige pricing

Expensive = better

Penetration pricing

Come try now (low price)

Price skimming

Exclusive = high first

What are the three pricing strategies

1. Competition Based (What others charge)

2. Value-based (What is it worth)

3. Cost-based (What does it cost)

Difference between a retailer and a wholesaler

Retailer = sells to you

Wholesaler = sells to stores

Four ways retailers add value

1. Place utility > close to you or easy access

2. Time utility > open or available when needed

3. Form utility > options, variety, and selection

4. Possession utility > easy checkout (financing options)

Types of retailers

• Specialty stores > narrow and deep (Sephora)

• Department stores  > wide categories (Macy’s)

• Superstores > Everything (Walmart)

• Category killers > One category, huge (Home depot)

What is a supply chain?

an entire system of producing and delivering a product or servic

What are the processes of supply chains?

Raw materials > Manufacturing/Production > Transportation > Distribution > Retailer > Consumer

What is promotion?

• The activities that communicate a products merits and persuade target customers to buy it

• Promotions are about managing communication:

• Deciding what message to send

• How to send it

• How to ensure its understood

What is the communication process?

1. Sender: Who is sending the message (Company or Brand) 

2. Encoding: How the sender turns the idea into a message (Words or Images)

3. Message: What is being communicated or said (The actual content; “Just Do It”)

4. Media: How the message is delivered (Billboards, Instagram)

5. Noise: Anything that interferes with the message (Misunderstanding, distractions)

6. Decoding: How the receiver interprets the message 

7. Receiver: Who gets the message (You or target customer)

8. Response: What the receiver does (Buy or ignore)

9. Feedback: Response sent back to the sender (Like or comments)

The average person is exposed to thousands of promotional messages per day

True

Why would a company use the promotional mix tool?

• Advertising > awareness

• Selling > persuasion 

• Direct Marketing > personal

• Sales Promotions > quick action

• Public Relations > trust

What are ways businesses connect with customers?

• Rational > facts

• Moral > feelings

• Emotional appeal > values

Difference between Transactional Selling and Relationship Selling

• Transactional selling (traditional) > one-time

• Relationship selling (consultative) > long-term

Stages of Personal Selling Processes

• Prospecting and qualifying > Finding potential customers and deciding if they’re worth your time.

• Pre-approach > Research before meeting the customer.

• Approach > First contact with the customer.

• Presentation & demonstration > Explain how the product solves their problem.

• Handle objections > Customer raises doubts

• Close > Getting customer to say yes

• Follow-up > Keep the relationship

In what ways has social media changed?

• Market segmentation

  • Target specific groups

  • Before: TV audiences

  • After: Micro-segments (College students who like skincare on Tiktok)

• Market research

  • Companies no longer rely on surveys

  • Comments, Reviews, Likes, and Shares

What is sustainable marketing?

Creates value for customers in a way that also supports long-term environmental and social well-being

Why would a company want to be sustainable?

• Companies go sustainable because it helps them long-term, not just morally.

• Brand reputation > positive image

• Customer care > builds trust and loyalty

• Cost savings > less waste, energy efficiency

What is the triple bottom line?

• People > social responsibility and communities

• Planet > environmental impact

• Profit > financial performance

What is greenwashing?

Greenwashing is when a company pretends to be environmentally friendly but really isn’t.