CM 217 Quiz 2

Marketing define

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers

Marketing definition (informal)

All the ways you get a product or service to people to facilitate the "exchange"

exchange

trading one thing for another thing of value
Exchanges are facilitated by marketing

Key drivers of marketing decision:

1.Establishing a Target Market(s)
2.Classifying your product
3.Setting your pricing
4.Determining Placement (Distribution) approach
5.Choosing types of Promotion

Consumer markets

Target of most advertising

Consumer segmentation

Grouping consumers based on shared characteristics to tailor messages to their needs and wants

demographic segmentation

Based on a population's statistical characteristics with quantifiable factors including: Gender, Age, Ethnicity, Occupation,

geographic segmentation

Based on geographic regions with shared characteristics: culture, traditions, lifestyles
Often combined with demographic

psychographic segmentation

Defining consumer markets based on psychological variables (psychographics) including: Values, Attitudes, Personality, Lifestyle/Activities

Behavioristic segmentation

the grouping of consumers by their purchase behavior

user status

varying degrees of loyalty to certain brands and products

User status examples

sole users, semisole users, discount users, aware nontriers, trial/rejectors, repetoire users

Sole users

are the most brand loyal and require the least amount of advertising and promotion.

Semisole users

typically use Brand A but have an alternate selection if it is not available or if the alternate is promoted with a discount.

Discount users

are the semisole users of competing brand B. They won't buy brand A at full price but perceive it well enough to buy it at a discount.

Aware nontriers

use competitive products in the category but haven't taken a liking to Brand A but aware

Trial/rejectors

tried brand A because of its advertising message, but didn't like the product.

Repertoire users

perceive two or more brands to have superior attributes and will buy at full price. These are brand switchers; therefore, they are the primary target for brand advertising.

Usage rate

defining consumers as light, medium, or heavy users of products

Purchase occasion

segmenting markets on basis of when consumers buy/use good or service

Benefits sought

segmenting consumers based on the benefits being sought such as high quality, low price, symbolism

Benefit segmentation

is prime objective of many consumer attitude studies and basis for many successful ad campaigns. Some product categories are characterized by substantial brand switching

Business markets

organizations that buy natural resources, component products, and services that they resell, use to conduct their business, or use to manufacture another product

Special characteristics of business markets

Employ professional buyers and use systematic purchasing procedures
Concentrated geographically
Small number of buyers

Business (B2B) Marketing

Marketing directed at people who buy goods and services for resale, for use in a business or organization, or for manufacturing other products

Specialized advertising types

Trade (resellers) or professional(s)

Utility

product's ability to satisfy both functional needs and/or psychological wants

Five types of functional utility

form, task, possession, time and place

form utility

provides a tangible good

Task utility

performs a task

possession utility

available for purchase

time utility

available when wanted

place utility

available where wanted

Psychologibal utility

offers symbolic or psychological desire satisfaction, such as status or sex appeal

Product life cycle

Progressive stages in the life of a product—including introduction, growth, maturity, and decline—that affect the way a product is marketed and advertised

Introduction Stage

Attract early adopters
Create primary demand
Pull strategy
Push Strategy

Pull strategy

marketing, advertising, and sales promotion activities aimed at inducing trial purchase and repurpose by consumers

push strategy

marketing, advertising, and sales promotion activities aimed at getting products into the dealer pipeline and accelerating sales by offering inducements to dealers, retailers, and salespeople

Growth stage

rapid market expansion.
Competitors jump into the market, but the company with the early leadership position reaps the biggest rewards.
Advertising expenditures decrease as a percentage of total sales.
Individual firms realize first substantial profits.

Maturity stage

Profits diminish.
Selective demand: consumer demand for the particular advantages of one brand over another
Sales increase at expense of competitors.
Market segmentation, product positioning, and price promotion become more important.

Decline stage

Cease promotions
Phase out the product

Product postion

the way it is ranked in the consumer's mind by the benefits it offers, the way it is classified or differentiated from the competition, or by its relationship to certain target markets.

Brand

combination of name, words, symbols, or design that creates that core feeling about a product.

Key Factors Influencing Price

Market demand (law of supply and demand)
Production and distribution costs
Competition
Corporate objectives

psychological pricing

using prices as a means to influence customer behavior or perceptions

Different distribution methods

direct distribution
indirect distribution
intensive distribution selective distribution
exclusive distribution

direct distribution

Direct distributors sell directly to consumers from the manufacturer, e.g., Avon. The advertising burden is carried entirely by the manufacturer without any assistance from other members of the distribution channel.

indirect distribution

Most companies market their products through a distribution channel that includes a network of resellers, that operate between the producer and the user.

intensive distribution

Distribution strategy based on making the product available to consumers at every possible location.

selective distribution

Distribution method limits the number of outlet.

exclusive distribution

This grants exclusive rights to a wholesaler or retailer in one geographic region.

Marketing communications

all planned messages that companies create/disseminate to support their marketing objectives and strategies

situational analysis

factual statement of the organization's current situation and how it got there
compiles all relevant facts about the industry and company's history, growth, products and services, etc

Industry Analysis

companies in industry
growth patterns within industry
history of industry
characteristics of industry

companies in industry

leaders in the industry, who are the players

growth patterns within industry

Primary demand (what drives purchasing, growth potential areas

history of industry

Technological advances, product expansion

characteristics of industry

Distribution patterns, pricing patterns, product patterns, promotional activity (advertising too), geographic characteristics, sales patterns

Company Analysis

History
Size/growth
Profitability
Scope of business
Reputation
Strengths/weaknesses

Product Analysis

Product or Service (story, sales features, research)
Sales History (sales, costs, profits)
Share of market (market potential, share of market)

Competition Analysis

Who are they
Strengths and weaknesses
Marketing activities

Corporate objectives

profit, return on investment, net worth, earnings ratio, growth, or corporate reputation metric - for the corporation overall

Marketing objectives

based on needs of target market; often focus on brand measurement goals (awareness, image), brand engagement or generating leads - for the brand

Need-satisfying objectives

whether consumers/customers had their needs filled, such as generating uses, increasing convenience, or creating experience satisfaction - for the consumer/product relationship

Business objectives

specific, quantitative, realistic business goals to be achieved within a time period. Such as total sales volume; sales volume by product, market segment, or customer type; market share in total or by product line; growth rate of sales volume in total or by product line - for the bottom line business

Marketing strategy

how the company is going to achieve its marketing objectives

Marketing strategy steps

Re-stating the target market
Stating the strategic positioning
Determining the marketing mix

Marketing Tactics

determine the specific short-term actions to be taken

SWOT analysis

strengths, weaknesses, opportunities, threats

Sub-strategies

Creative strategy and media strategy

creative strategy

defines the target audience, restates the objective of the advertising, specifies the key benefits to be communicated, offers support for those benefits, sets the tone.

media strategy

provides direction by defining the media objectives that must be achieved, the media target and then describes how these will be accomplished using media channels and timing

Marketing research

systematic gathering, recording, and analysis of information to help managers make marketing decisions

Advertising research

the systematic gathering and analysis of information to help develop or evaluate advertising strategies, individual ads, and entire campaigns

Advertising Strategy research informs

Brand
Target audience
Message
Creative
Media

Informing Brand

What consumers perceive about a brand
Unique positioning concept for the brand
Creative approach

Informing Target Audience

Develop a rich, deep profile
Delivered to the most prospects with the least waste

Informing Message

Which messages your audience will respond to

Informing Creative

Which concepts the target audience responds best to (pretesting)
Evaluate effectiveness (post testing)
Guidelines for future

Informing Media

Which media channels
Channel results

Steps in the Research Process

1. Analyzing the Situation
2. Conducting Secondary Research
3. Establishing research objectives
4. Conducting primary research
5. Interpreting and Reporting the findings

marketing information system (MIS)

in-house research departments

Primary data

customized information - it is proprietary and can focus on any issue the agency chooses
(often comes from the company/client)

secondary data

information previously gathered and published, usually for another purpose, by the firm or another organization
(Company records, trade publications)

Two types of primary research

qualitative and quantitative

Qualitative research

Uses in-depth studies of small, non-random samples to explore the behavior, perceptions, needs

Uses larger, representative samples and surveys to quantify hypotheses and measure specific market variables
Full breath of data

Projective techniques

involving customers in a situation where they can express feeling about the problem or product. (hypothetical scenarios)

Intensive techniques

1. In depth interview (IDI)
2. Focus group
3. Ethnographic research

Ethnographic research

going out and talking to people wherever they
are, while they're doing whatever it is they do

Quantitative research methods

Observation
Experiment
Survey

Qualitative Research Methods

Projective techniques
Intensive techniques

Universal Product Code (UPC)

scannable label that allows people to make observations electronically by using label with identifying vertical bars with scanner

test market

an isolated geographic area used to introduce/test effectiveness of a product or ad campaign.

research of consumer behavior

mental and emotional processes and the physical activities of people who purchase and use goods and services to satisfy particular needs and wants

Interpersonal influences

family, society, and culture

Nonpersonal influences

factors
often outside the consumer's
control—include time, place, and
environment.

personal processes

govern the way we discern raw data (stimuli) and translate them into feelings, thoughts, beliefs, and actions

Three personal processes

Perception process
Learning and persuasion (decision) process
Motivation process

consumer decision process

rapid evaluation run by our minds the moment a medium delivers an advertising message to us