MARK 3001 Exam 1

marketing

marketing

the activity, set of institutions, and processes for creating, communicating, and exchanging offerings that have value for customers (at least 2 parties with something of value that want to deal and can accept or reject offers)

most important thing in marketing (marketing is...)

value

4 P's

product
price
place
promotion

product (4 P's)

goods = item you can physically touch
services = intangible benefits / experience

price (4 P's)

everything a buyer gives up in exchange for product
Ex. money, time, energy

place (4 P's)

getting the product to the right customer, supply chain

promotion

communicating a product's value to customers

transactional relationship

each transaction is a separate event, prior knowledge not important
Ex. McDonalds

relational relationship

buyers and sellers establish long term relationships
Ex. 5 star hotel

marketing strategy

a firms target market, marketing mix, and method of obtaining a sustainable competition advantage

sustainable competitive advantage

something that a company consistently can persistently do better than its competitors

3 Macro strategies for developing customer value

1. Operational excellence
2. Customer intimacy
3. Product leadership

operational excellence

focus on efficient operations and excellent supply chain management ( good enough )

customer intimacy

focus on retaining loyal customers and excellent customer service ( just right )

product leadership

focus on high quality products ( never good enough)

operational excellence goals

lower costs
increase convenience
obtain reliability
become easy to use

customer intimacy goals

customization
offer complete solutions
wide selection
advise and consult
create a feeling and experience

product leadership goals

high performance
linked with aesthetics
portray sophistication

operational excellence survival

volume strategy
"street fight" - dirty and ugly

customer intimacy survival

capture a customer
"boxing" - can get hurt but ref and gloves

product leadership survival

product development and always creating new product lifestyles
"fencing" - gentle and well protected

strategy map

identifying and evaluating opportunities

segmentation, targeting, positioning

SWOT analysis

Strengths - what your firm does well

Weaknesses - where you are vulnerable

Opportunities - possibilities not yet realized

Threats - cant control but must be aware

SWOT internal

strengths and weaknesses

SWOT external

opportunities and threats

market segment

consumers who respond similarly to a firms marketing efforts

target market

evaluating each segments attractiveness and deciding which to pursue

market positioning

process of defining the market mix variables (4 P's) so the target customers have a clear desirable understanding of what the product does / represents in comparison with competing products

identifying and evaluating opportunities

segmentation, targeting, positioning

segmentation

who will you target

targeting

how will you target them

positioning

where ( with consumers in mind )

Strategic Business Unit (SBU)

division of a firm that can be managed and operated independently from others with different objectives
Ex. LG produces washing machines, fridges, and TVs --> different product categories under one roof

BCG production portfolio

stars - products occur in high growth market rates and have high market shares
cash cows - occur in low growth market rates and have high market share
question marks - high growth market rates and have low market share
dogs - low growth market rates and low market share

growth strategies

market penetration
market development
product development
diversification

market penetration

employs existing marketing mix focused on existing customers

market development

employs existing marketing to reach new market segments

product development

new products / services to current target market

diversification

new products / services to new market segments

the immediate MICRO environment

company capabilities, competitors, suppliers / partners

company capabilities

how they achieve the 4 P's
where they are on the strategy map
SWOT analysis

competition

where they are on the strategy map
SWOT analysis

marketing myopia

define market so narrowly they miss opportunities to grow
short term goals over long term goals

demographics

characteristics of human population used to identify consumer markets
Ex. race, age, income, education, gender, location

4 generational cohorts

baby boomers
gen x
gen y - millennials
gen z

baby boomers

self-reliant, individualistic
shift away from luxury items spending patterns
lack of savings - work well beyond retirement

gen x

spending power
delaying marriage and purchase of first home
cynical, demand connivence

gen y - millennials

tech savvy
first digital natives

gen z

purchasing power
brand loyalty
media, fit in but unique

3 technological advances questions

1. the technology - is it ready?
2. the consumer - are they ready?
3. the firm - are we ready?

functional needs

pertain to the performance of a product or service

psychological needs

pertain to the personal gratification consumers associate with a product or service

internal searches

the buyer examines their own memory and knowledge about the product / service gathered through past experience
Ex. memories good and bad

external searches

buyer seeks knowledge outside their personal knowledge base to help them make the buying decisions
Ex. internet, reports, friends, family

evaluation levels

universal - all possible choices for a product category
retrieval - brands that readily come to memory
evoked - brands the consumer would actually consider buying from

compensatory decision rules

the consumer trades off one characteristic for another
-good ones compensate for the bad

non compensatory decision rules

selecting one product / service on the basis of one characteristic regardless of the others
Ex. brand loyalty, Ford vs. Chevy

decision heuristics

rules of thumb, mental shortcuts that help a consumer narrow down choices
Ex. price, brand, cheap, product presentation

cognitive dissonance

an uncomfortable state produced by an inconsistency between beliefs and behaviors that evokes a motivation to reduce the dissonance
Ex. buyers remorse

relieve cognitive dissonance by....

take back the item
only focus on the good qualities of the decision
seek positive feedback to justify the purchase
seek negative feedback on what you did not buy

reference groups

people/groups that a person uses as a basis of comparison

primary data

data collected to address specific research needs
-question then data
Ex. focus groups, interviews, surveys

secondary data

information collected prior to the start of the research project
-data then conclusion/question
Ex. US Census data, info gathered by brokers

5 segmentation methods

1. geographic = continent

2. demographic = age, gender, income

3. psychographic = lifestyle, self-concept, self values

4. geodemographic = urban, sophisticated town houses, retirees, bohemians, established

5. behavioral = occasion, loyalty

3 approaches to segmentation

1. micro marketing = 1 to 1 marketing
2. differentiated / multi-segmented marketing = different customers, different strategies
3. niche marketing = focus exclusively on one target market

5 ways to measure the effectiveness of market segmentation

identifiable = identify different groups and be able to distinguish between them

measurable = know how many customers are in each segment

substantial = must be large enough to meet a marketing objective

accessible = can i market to them and how will I connect with them

responsive = how will the customer respond to the marketing messages

IMSAR

2 ways to position a brand

1. the brand is the primary association with the category itself
Ex. Google, Kleenex, Band aid
2. the brand stands for a simple concept
Ex. Rembrandt - teeth whitening
close up - sex appeal

how to write a positioning statement for a brand

Brand is positioned as keep it simple

Ex. Godiva is positioned as luxury chocolate

perceptual map

displays in two or more dimensions the position of products/brands in the consumers mind