marketing ch 1, 2, 5, 6

Marketing

An organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

What is marketing

The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

Marketing research

Focus groups, depth interviews, observational research, test markets.

Marketing myopia

Focusing only on existing wants and losing sight of underlying consumer needs.

Marketing management

The art and science of choosing target markets and building profitable relationships with them.

Brand value proposition

Set benefits or values the brand promises to deliver to consumers to satisfy their needs.

Product

Creating value

Price

Capturing value

Place

Delivering the value proposition

Promotion

Communicating value

Market oriented

Discover and satisfy customers wants and needs.

Value

What you get vs what you give

Value based marketing

Gives greater customers greater value than competitors

Value cocreation

Customers act as collaborators to create product/service

A marketing strategy identifies:

A firms target market, a related marketing mix, the bases on which the firm plans to build a sustainable competitive advantage.

Customer excellence

Retaining loyal customers and excellent customer service

Operational excellence

Achieved through efficient operations and excellent supply chain management

Product excellence

Having products with high perceived value and effective branding

Locational excellence

Having a good physical location and internet presence

The marketing plan

Planing phase: step 1 business mission and objectives, step 2 situation analysis

Implementation phase: step 3 identify opportunities, step 4 implement marketing mix (4 P’s)

Control phase: step 5 evaluate performance using marketing metrics.

Marketing segmentation

The process of dividing the market into groups of customers with different wants, needs, or characteristics

Market segment

Consumers who respond similarly to a firms marketing efforts

Targeting

After a firm identifies the various marketing segments that it might pursue it evaluates each segments attractiveness, and decides which to pursue using target marketing

Positioning

The process of defining the marketing mix variables so that target customers have clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products

Related diversification

Opportunity where the current target market shares something or relates to whatever you’re doing that’s new

Competitors

knows strengths and weaknesses. Proactive rather than reactive strategy

Corporate partners

Firms are a part of alliances. Align with competitors suppliers, etc. Just in time delivery systems.

Macro environmental factors

Culture, social, economic, technology, political/legal, demographics

Culture

Shared meanings, beliefs, morals, values, and customs of a group of people transmitted by words, literature, and institutions.

Demographics

Provide an easily understood snapshot of the typical consumer in a specific target market

Income

Purchasing power is tied to income. Marketing opportunities exist across the broad range of income distribution.

Education

Related to income, which determine spending power

Gender

Male/female rule shift, marketing has changed to reflect these shifts

Social trends

Sustainability, health and wellness, efficient, utilization, and distribution of food

Technological advances

Technology impacts every aspect of marketing. New technology, privacy concerns

Economic situation

Affects the way, consumers, byproducts and services and spend money. Monitor the economic situation and home country and abroad. Major factors to monitor; inflation, foreign currency fluctuation, interest rates.

Political/ legal environment

Compromises, political parties, government, organization, and legislation laws. Firm must understand and comply with legislation regarding fair competition, consumer protection, industry, specific regulation.

Consumer buyer behavior

The buying behavior of final consumers, individuals and households who buy goods and services for personal consumption.

The consumer decision process

Need recognition, information search, alternative evaluation, purchase and consumption, post purchase

Need recognition

Occurs when a consumer recognizes a difference between their current state and their ideal state

Search for information

Internal or external. Personal sources commercial sources, public sources, experiential sources are all external.

Information search

The length and intensity of the search are based on the degree of perceived risk associated with purchasing the product or service. Perceived benefits versus perceived costs. Internal locus of control equals more research activities, external locus of control equals fate or external factors.

Actual or perceived risk

Performance risk, financial risk, social risk, psychological risk, physiological risk or safety risk

Evaluation of alternatives

Universal → retrieval → evoked

consumer decision rules

The set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from several alternatives

Compensatory

Trades off one characteristic against another (good compensate for bad)

Non compensatory

Based off one characteristic, regardless of values of other attributes

Purchase and consumption

Increase conversion rate. Reduce real or virtual abandoned carts, expand product line, enhance customer service.

Post purchase customer satisfaction

Develop realistic expectations→ demonstrate correct product use→standards behind the product or service→encourage customer feedback→periodically make contact with customers and thank them for their support.

Post purchase cognitive dissonance

Most likely for products that are infrequently purchased, expensive, don’t work as intended, associated with high levels of risk

Post purchase customer loyalty

Markets attempt to solidify a loyal relationship

Factors that influence customer decision process

Psychological: motives, attitudes, perceptions, lifestyle. Social: family, culture, reference groups. Situational: purchase situation, sensory situation, temporal state. Marketing mix: product, price, place, promotion.