Marketing midterm take two

Marketing Definition

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

Exchange

people giving up something in order to receive something else they would rather have.

Customer Value

the relationship between benefits and the sacrifice necessary to obtain those benefits

Production Orientation

A philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace (what firms already have)

Sales Orientation

The belief that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits

Marketing Orientation

a philosophy that assumes a sales does not depend on an aggressive sales force but rather on a customer's decision to purchase a product; it is synonymous with the marketing concept

Societal Marketing

The idea that an organization exists not only to satisfy a customer's wants and needs and to meet organizational objectives but also to preserve or enhance individual's and societies long-term best interests

Purple Cow Video

Consumers have little time and too many choices, this is why consumers ignore stuff. SO, how do we get market things to be noticed? Be Remarkable!

Mousetraps

only a handful of companies are successful, because a company must think of consumer behavior, usage, and disposition

The four activities the firm controls to meet needs of the target market

The 4 P's of Marketing:
Product, Pricing, Place (distribution), Promotion

Strategic Business Unit

a subgroup of a single business or collection of related businesses within the larger organization

Mission Statement

statement of the firm's business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions. NOTE: focus on market, not product

Target Market

a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the need of that group, resulting in mutually satisfying exchanges. Very important.

Competitive Advantage

unique features of a company/product that are perceived by the target market as significant and superior to those of the competition

Sustainable Competitive Advantage

Advantage that cannot be copied by the competition (ex. trademarks) *people are willing to pay more

Taco Bell Breakfast

"Breakfast War", directly takes on McDonald's

Market Opportunity Analysis

description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments

Green Marketing

the development and marketing of products designed to minimize negative effects of the physical environment or to improve the environment

Green Washing

deceptive practices used to promote the perception that an org's product, aims or policies are environmentally friendly

Code of Conduct

a guideline to help marketing managers and other employees make better decisions

Sustainability

the idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profits and help the world at the same time

Corporate Social Responsibility (CSR)

a business's concerns for society's welfare.

Stakeholder Theory: ethical theory stating that societal responsibility is paying attention to the interest of every affected stakeholder in every aspect of a firm's operation

Product and Promotion adaptation

Characteristics of an SBU

Need to have a distinct mission and a specific target market, control over its resources, its own competitors, a single business, and plans independent from other SBUs in the organization.

South Korea questions - From Young Kim's lecture

went from poor country to Aisa's 4th largest economy
- well educated
- lots of IT infastructure
- long commute
- long working hours
- highest sucide rate

Oreo Video

Traditionally, dunk like your parents taught you

In new markets, kids teaching parents how to dunk. Also, too sweet for Asia's taste, more bitter cookie.

Paradox of Choice

Video \-- Hoodies
Lots of choices, making us miserable. Spend too much time making seemingly simple choices.

WHY MORE IS LESS

Consumer Decision Journey

Classic Journey: extended consideration and evaluation before entering the loyalty loop

New Journey: compress and maybe even take out the consideration and evaluation phase and enter right into the loyalty loop

Self Concept

actual self vs. real self

extended self (us and our stuff)

Need Recognition

result of an imbalance between actual and desired states

Nature of Information Search; internal and external

Evoked or Consideration Set

a group of brands resulting from an information search from which a buyer can choose

Post Purchase (cognitive) Dissonance

inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions

Internal Influences

Perception/selective exposure/distortion/selective perception
Motivation

External Influences

Culture/subcultures
Demographics
Social Class
Family - Roles in Family decision-making
Processes in Family decision-making
Reference groups, aspirational, non-aspirational, member/non-member

Information does what to risk?

reduces risk

Customer Relationship Management (CRM)

Maintaining existing customers is easier than getting new customers
Data mining and program creation
Analysis

Customer Lifetime Value (CLV)

(average customer spending per visit * frequency per week) \= X * (1 - COGS) \= X * 52 \= X * (customer buying years) \= X * (discount/rewards) \= REVENUE

Decision Making Process: First Step

Recognize a Problem

Decision Making Process: Second Step

Search for Information

Decision Making Process: Third Step

Evaluation of Alternatives

Decision Making Process: Fourth Step

Decision

Decision Making Process: Fifth Step

Usage and Disposition

Product (Marketing Mix)

Consumers require the right product. This might be an existing product, an adaptation of an existing product or a newly developed one.

Price (marketing mix)

If too low, then consumers may lose confidence in the product's quality; if too high, then many will be unable to afford it.

Promotion (Marketing Mix)

Telling consumers about the product's availability and convincing them that 'your brand' is the one to choose. Packaging is often used to reinforce this image.

Place (marketing mix)

Refers to how the product is distributed to the consumer. If it is not available at the right time in the right place, then even the best product in the world will not be bought in the quantities expected.

Market Penetration (Ansoff)

Try to increase the market share among existing customers.

Market Development (Ansoff)

Attracting new customers to existing products

Product Development (Ansoff)

Creation of new products for present markets

Diversification (Ansoff)

Introducing new products into new markets

Stars (BCG Matrix)

SBUs with products that have a dominant market share in high-growth markets

Cash Cows (BCG Matrix)

Low growth, high market share. Income finance stars and question marks

Question Marks (BCG Matrix)

High growth in a low market share

Dogs (BCG Matrix)

Low growth and a low market share

Strengths

Something that a company can make, do, or perform better than its competitors. Also its internal decision-making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs.

Weaknesses

Things we can't do or have no knowledge to do.

Opportunities

Situations that present possibilities for exceeding existing goals

Weaknesses

Things you cannot do or have no knowledge to do.

Social Control

Attempts by society to regulate people's thoughts and behavior

Routine Decision Making

The type of decision making exhibited by consumers buying frequently purchased, low-cost g/s; requires little search and decision time

Extended Decision Making

The most complex type of consumer decision making, used when buying an unfamiliar, expensive product or an infrequently bought item; requires use of several criteria for evaluating options and must time for seeking information

Limited Decision Making

The type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar category

Threats

Competitive moves or changes in technology that could make business obsolete.

Maximizers

individuals who attempt to evaluate every option for every choice until they find the perfect fit

Satisficers

business customers who place an order with the first familiar supplier to satisfy product and delivery requirements

Automation (Consumer Decision Making)

The use of technology to ease human labor making it easier to make decisions.

Proactive Personalization (Consumer Decision Making)

Uses information- either based on past interactions or collected through external sources- to instantaneously customize the customer experience

Contextual Interaction (Consumer Decision Making)

Use knowledge about where the consumer is in the journey to deliver them to the next set of interactions.

Journey Innovation

Extends customer interactions to new sources of value, such as related products or partnered businesses.

5 conditions of exchange

1. There must be at least two parties.
2. Each party has something that might be of value to the other party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the exchange offer.
5. Each party believes it is appropriate or desirable to deal with the other party.

Achieving a Marketing Orientation

1 obtain information about customers, competitors, and markets
2 examine the information from a total business perspective
3 determine how to deliver superior customer value
4 implement actions to provide value to customers

Product Oriented Companies

Ashley's Furniture or Haverty's Furniture

Sales Oriented Companies

Door-to-door Sales and Internet Marketing

Market Oriented Companies

Kellogg's "Open for Breakfast" and Jaguar

Societal Marketing Companies

Unilever because they are very sustainable driven

Cost Leadership

a strategy that aims to provide a product or service at as low a price as possible to a broad audience

Product Differentiation

a positioning strategy that some firms use to distinguish their products from those of competitors

Niche Competitive Advantage

a company's ability to target and effectively serve a single segment of the market within a limited geographic area

Factors in Ethics

Magnitude of Consequences
Social Consensus
Probability of Harm
Temporal Immediacy
Number Affected

Magnitude of Consequences

the total harm or benefit derived from an ethical decision

Social Consensus

agreement on whether behavior is bad or good

Probability of Harm

How likely is it that this action will cause harm?

Temporal Immediacy

the time between an act and the consequences the act produces

Concentration of Effect

the total harm or benefit that an act produces on the average person

Ethics, Self-Regulation, Laws/Business Rules/Codes of Conduct, Formal and Informal Groups, The Media, an Active Civil Society

Modes of Social Control

Economic External Factor

-The level of business activity, based on the direction of the economy
-Many companies try and use statistics to predict what the economy will look like in the future to try and gain an idea on what to do business wise. These statistics are often wrong and lead to poor choices being made.

Technological External Factor

-Refers to all the knowledge, tools, and techniques that will eventually go in to the final product.
-Companies must find ways to use new technology to help improve products or cut costs or else they will fail

Sociocultural External Factors

Refers to the demographic characteristics, general behavior, attitudes, and beliefs of people in a particular society

Political and Legal External Factors

Laws and regulations that govern and regulate the businesses behavior

Lowest Risk of Global Expansion

Export or Imports Level of Risk

Second Lowest Risk of Global Expansion

Licensing Level of Risk

Third Lowest Risk of Global Expansion

Contract Manufacturing Level of Risk

Fourth Lowest Risk of Global Expansion

Joint Venture Level of Risk

Riskiest Global Expansion

Wholly Owned Affiliate Risk Level