Marketing Management Midterm

Marketing

is about identifying and meeting human needs

* Goods
* Events
* Experiences
* Persons
* Properties
* Organizations
* Information
* Ideas

What is Marketed? 8

Segmentation

Divide market into distinct groups of customers

Target Market

determine which customer group to focus your marketing efforts on

Positioning

Determining how a brand is to be perceived to fit into the lives of its target customers

* Product
* Place
* Promotion
* Price

Marketing Mix 4 P’s

* People
* Processes
* Programs
* Performance

Modern Management Marketing 4 P’s

Simple Marketing System

Holistic Marketing Dimensions

Holistic Marketing

* concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and interdependencies.


* acknowledges that everything matters in marketing—and that a broad, integrated perspective is often necessary.

* Internal Marketing
* Integrated Marketing
* Performance Marketing
* Relationship Marketing

Holistic Marketing is composed of

* Marketing Department
* Senior Department
* Other Departments

Internal Marketing includes

* Communications
* Products & Services
* Channels

Integrated Marketing includes

* Sales Revenue
* Brand and Customer Equity
* Ethics
* Environment
* Legal
* Community

Performance Marketing includes

* Customers
* Channels
* Partners

Relationship Marketing includes

Relationship Marketing

aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business.

* customers
* employees
* marketing partners (channels, suppliers, distributors, dealers, agencies)
* members of the financial community (shareholders, investors, analysts).

Four key constituents for relationship marketing are

Marketing Network

The ultimate outcome of relationship marketing is a unique company asset called a __________, consisting of the company and its supporting stakeholders—customers, employees, suppliers, distributors, retailers, and others—with whom it has built mutually profitable business relationships.

build an effective network of relationships with key stakeholders, and profits will follow

The operating principle is simple:

Integrated Marketing

occurs when the marketer devises marketing activities and assembles marketing programs to create, communicate, and deliver value for consumers such that “the whole is greater than the sum of its parts.”

* many different marketing activities can create, communicate, and deliver value
* marketers should design and implement any one marketing activity with all other activities in mind.

Integrated Marketing two key themes are

Internal Marketing

is the task of hiring, training, and motivating able employees who want to serve customers well.

Performance Marketing

requires understanding the financial and nonfinancial returns to business and society from marketing activities and programs.

* Executive Summary
* Current Marketing Situation
* Threats and Opportunity Analysis
* Objectives and Issues
* Marketing Strategy
* Action Programs
* Budgets
* Controls

Contents of Marketing Plan

Executive Summary

presents a brief overview of the proposed plan for quick management review

Current Marketing Situation

presents relevant background data on the market product, competition, and distribution.

Threats and Opportunity Analysis

identifies the main threats and opportunities that might impact the product

Objectives and Issues

defines the company’s objectives for the product in sales, market share and profit, and the issues that will affect these objectives

Marketing Strategy

presents the broad marketing approach that will be used to achieve the plan’s  objectives

Action Programs

specifies what will be done, who will do it, when it is done, and how much it will cost.

Budgets

a projected profit and loss statement that forecasts the expected financial outcomes from the plan.

Controls

indicates how the progress of the plan will be monitored.

Internal Marketing

ensuring everyone in the organization embraces appropriate marketing principles, especially senior management

Integrated Marketing

ensuring that multiple means of creating, delivering, and communicating value are employed and combined in the best way

Relationship Marketing

having rich, multifaceted relationships with customers, channel members, and other marketing partners.

Performance Marketing

understanding returns to the business from marketing activities and programs, as well as addressing broader concerns and their legal, ethical, social, and environmental effects.

Fad

is “unpredictable, short-lived, and without social, economic, and political significance.”

Trend

* A direction or sequence of events with momentum and - durability
* is more predictable and durable than a fad
* reveals the shape of the future and can provide strategic direction.

Megatrend

is a “large social, economic, political, and technological change \[that\] is slow to form, and once in place, influences us for some time—between seven and ten years, or longer.”

* Demographic
* Economic
* Social - Cultural
* Natural
* Technological
* Political - Legal

6 Major Forces in the Broad Environment:

Demographic Environment

The main one marketers monitor is population, including the size and growth rate of population in cities, regions, and nations; age distribution and ethnic mix; educational levels; household patterns; and regional characteristics and movements.

* Worldwide Population Growth
* Population Age Mix
* Ethnic and Other Markets
* Educational Groups
* Household Patterns

Demographic Environment includes

Economic Environment

The available purchasing power in an economy depends on current income, prices, savings, debt, and credit availability.

* Consumer Psychology
* Income Distribution
* Income, Savings, Debt, and Credit

Economic Environment includes

Sociocultural

a world view that defines our relationships to ourselves, others, organizations, society, nature, and the universe

* Views of ourselves.
* Views of others
* Views of organizations
* Views of society
* Views of nature
* Views of the universe

Sociocultural Environment includes

* The high persistence of core cultural values
* The existence of subcultures.

Other cultural characteristics of interest to marketers are

Natural Environment

In Western Europe, “green” parties have pressed for public action to reduce industrial pollution. In the United States, experts have documented ecological deterioration, and watchdog groups such as the Sierra Club and Friends of the Earth carry these concerns into political and social action.

Technological Environment

It is the essence of market capitalism to be dynamic and tolerate the creative destructiveness of technology as the price of progress.

* ACCELERATING PACE OF CHANGE
* UNLIMITED OPPORTUNITIES FOR INNOVATION
* VARYING R&D BUDGETS
* INCREASED REGULATION OF TECHNOLOGICAL CHANGE

Technological Environment includes

Political-Legal Environment

consists of laws, government agencies, and pressure groups that influence various organizations and individuals. Sometimes these laws create new business opportunities

* INCREASE IN BUSINESS LEGISLATION
* GROWTH OF SPECIAL-INTEREST GROUP

Political-Legal Environment includes

* Introduction
* Growth
* Maturity
* Decline

Product Life Cycle

Introduction

A period of slow sales growth as the product is introduced in the market

Growth

A period of rapid market acceptance and substantial profit improvement

Maturity

A slowdown in sales growth because the product has achieved acceptance by most potential buyers.

Decline

Sales show a downward drift and profits erode

* Growth-Slump-Maturity Pattern
* Cycle-Recycle Pattern
* Scalloped Pattern

Common Product Life-Cycle Patterns

growth-slump-maturity pattern

characteristic of small kitchen appliances, for example, such as handheld mixers and bread makers. Sales grow rapidly when the product is first introduced and then fall to a “petrified” level sustained by late adopters buying the product for the first time and early adopters replacing it.

cycle-recycle pattern

often describes the sales of new drugs. The pharmaceutical company aggressively promotes its new drug, producing the first cycle. Later, sales start declining, and another promotion push produces a second cycle (usually of smaller magnitude and duration)

scalloped pattern

sales pass through a succession of life cycles based on the discovery of new-product characteristics, uses, or users. Sales of nylon have shown a scalloped pattern because of the many new uses—parachutes, hosiery, shirts, carpeting, boat sails, automobile tires—discovered over time

Style

is a basic and distinctive mode of expression appearing in a field of human endeavor

* homes (colonial, ranch, Cape Cod)


* clothing (formal, business casual, sporty)
* art (realistic, surrealistic, abstract).

Styles appear in

Fashion

is a currently accepted or popular style in a given field.

* distinctiveness,
* emulation,
* mass fashion,
* decline

Fashions pass through four stages:

Fads

are fashions that come quickly into public view, are adopted with great zeal, peak early, and decline very fast

Porter’s Value Chain

According to this model, every firm is a synthesis of activities performed to design, produce, market, deliver, and support its product

9 strategically relevant activities

* 5 primary activities
* 4 support activities

The value chain identifies

* inbound logistics, or bringing materials into the business;
* operations, or converting materials into final products;
* outbound logistics, or shipping out final products;
* marketing, which includes sales;
* service

5 Primary Activities

* procurement,
* technology development,
* human resource management,
* firm infrastructure.

4 Support Activities

* Connecting with customers
* Building strong brands
* Shaping the market offerings
* Delivering value
* Communicating value
* Creating successful and long-term growth

Developing Marketing Strategies and Plans

Marketing Information System (MIS)

consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. It

* Internal Records
* Marketing Intelligence System
* Marketing Decision Support System
* Marketing Research

Marketing Information System

Internal Records

To spot important opportunities and potential problems, marketing managers rely on internal reports of orders, sales, prices, costs, inventory levels, receivables, and payables.

Internal Records

which includes information on the order-to-payment cycle and sales information systems

Marketing Intelligence System

is a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment.

Marketing Decision Support System (MDSS)

MIT’s John Little define this as a coordinated collection of data, systems, tools, and techniques, with supporting software and hardware, by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action.

Marketing Intelligence System

a set of procedures and sources used by managers to obtain everyday information about pertinent developments in the marketing environment

Marketing Research System

allows for the systematic design, collection, analysis, and reporting of data

Marketing Information System (MIS)

To carry out their analysis, planning, implementation, and control responsibilities, marketing managers need this.

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Marketing Information System (MIS)

is to assess the managers’ information needs, develop the needed information, and distribute that information in a timely manner.

* Step 1: Define the Problem, the Decision Alternatives, and the Research Objectives
* Step 2: Develop the Research Plan
* Step 3: Collect the Information
* Step 4: Analyze the Information
* Step 5: Present the Findings
* Step 6: Make the Decision

Marketing Research Process

Customer Loyalty

an ongoing emotional relationship between you and your customer

* Frequency Programs
* Club Membership Programs

Developing Loyalty Programs

Frequency programs (FPs)

are designed to reward customers who buy frequently and in substantial amounts.

Club membership programs

can be open to everyone who purchases a product or service, or limited to an affinity group or those willing to pay a small fee.

Value Proposition

consists of the whole cluster of benefits the company promises to deliver

Value Delivery System

all experiences the customers will have on the way to obtaining and using the offering

* To identify prospects
* To decide which customers should receive a particular offer
* to deepen customer loyalty
* To reactivate customer purchases
* To avoid serous customer mistakes

Uses of Database

* Feud’s Theory
* Maslow’s Theory
* Herzberg’s Theory

3 Theories of Motivation in Key Psychological Processes

Sigmund Feud’s Theory

assumed the psychological forces shaping people’s behavior are largely unconscious, and that a person cannot fully understand his or her own motivations.

Abraham Maslow’s Theory

explain why people are driven by particular needs at particular times. His answer is that human needs are arranged in a hierarchy from most to least pressing—physiological needs, safety needs, social needs, esteem needs, and self-actualization needs.

1. Problem Recognition
2. Information Search
3. Evaluation of Alternatives
4. Purchase Decision
5. Post-purchase behavior

5 Stage Model of the Consumer Buying Process

Frederick Herzberg’s Theory

developed a two-factor theory that distinguishes dissatisfiers (factors that cause dissatisfaction) from satisfiers (factors that cause satisfaction).

* Food
* Water
* Shelter

Examples of Psychological Needs

* Security
* Protection

Examples of safety Needs

* Sense of Belonging
* Love

Examples of Social Needs

* Self-Esteem
* Recognition
* Status

Examples of Esteem Needs

* Self-Development
* Realization

Examples of Self-Actualization Needs

* The availability heuristic
* The representativeness heuristic

2 Kinds of Heuristics