Principles of Marketing MAR1011 (Chapters 1-3)

Marketing

The set of strategies and activities by which companies acquire and engage customers

Needs

States of felt deprivation

Wants

The form human needs take as they are shaped by culture and individual personality 

Demands

Established when wants are backed by buying power 

Market Offerings

Some combination of products, services, information, or experiences offered to a market to satisfy a need or want

Marketing Myopia

When a company becomes overly focused on its own products, it risks losing sight of customer needs, concentrating instead on the product itself rather than the benefits and experiences it provides to customers

Exchange

The act of obtaining a desired object from someone by offering something in return

Market

The set of actual and potential buyers of a product 

Marketing Management

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

Production Concept

Belief that consumers will favor products that are available and highly affordable

Product Concept

Belief that consumers will favor products that offer the most in quality, performance, and innovative features 

Selling Concept

Belief that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort 

Marketing Concept

Belief that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do

Societal Marketing Concept

Questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare

Customer Relationship Management

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction

Customer-Perceived Value

Customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers

Customer Satisfaction

Product's perceived performance relative to a buyer's expectations 

Customer-Engagement Marketing

Goal to make the brand a meaningful part of consumers' conversations and lives 

Customer-Generated Marketing

Brand exchanges created by customers themselves-both invited and uninvited-by which customers play a role in shaping their own brand experiences and those of other customers. 

Partnership Relationship Management

Working closely with others inside and outside the company to jointly bring value to customers 

Customer Lifetime Value

The entire stream of purchases a customer makes over a lifetime of patronage 

Share of Customer

The portion of the customer's spending in its product categories that a company captures 

Artificial Intelligence

Technology that mimics the way humans think and learn to perform tasks that typically require human intelligence but much faster and with greater analytical capacity 

Customer Equity

The total combined customer lifetime values of all the company's current and potential customers

Sustainable Marketing

Socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs 

Strategic Planning

The process of developing and maintaining a profitable long-term fit between the organization's goals and capabilities and its changing marketing opportunities

Mission Statement

A statement of the organization's purpose-what it wants to accomplish in the larger environment

Business Portfolio

The collection of businesses and products that make up the company 

Portfolio Analysis

The major activity in strategic planning. Management evaluates the products and businesses making up the company

Stars

High-growth, high-share businesses or products. They will turn into cash cows 

Cash Cows

Low-growth, high-share businesses or products. They produce a lot of cash that the company uses to pay its bills and support other SBUs that need investment 

Question Marks

Low-share business units in high-growth markets. They require a lot of cash to hold their position

Dogs

Low-growth, low-share businesses and products 

The Four Ps of Marketing

Product, Price, Place, and Promotion.

Product

Captures the offering from the company to the target market.

Price

The amount of money customers must pay to obtain the product.

Place

Includes company activities that make the product available to consumers.

Promotion

Refers to activities that communicate the benefits of the product and persuade target customers to buy it.

Product/Market Expansion Grid

Used in identifying growth opportunities. Segments include Market Penetration, Market Development, Product Development, and Diversification 

Market Penetration

Making more sales to current customers without changing its products 

Market Development

Identifying and developing new markets for its current products 

Product Development

Offering modified or new products to current markets

Diversification

Starting up or buying outside of its current products and markets

Internal Value Chain

Chain composed of links representing the contribution of an organization's departments working to produce value for consumers 

Growth-Share Matrix

Defines 4 types of Strategic Business Units (SBUs) - Stars, Cash Cows, Question Marks, Dogs 

Value Delivery Network

When a company partners with members of its supply chain to improve value for consumers 

Marketing Strategy

The broad logic under which a company attempts to develop profitable relationships

Market Segment

Consists of consumers who respond in a similar way to a given set of marketing efforts 

Market Segmentation

The process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate products or marketing programs 

Market Targeting

Involves evaluating each segment's attractiveness and selecting one or more segments to enter 

Differentiation

Distinctive characteristics between a company's market offering and others available 

Positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers 

Marketing Mix

The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. Comprised of the 4P's - product, price, place, and promotion 

SWOT Analysis

Used to evaluate a company's strengths (S), weaknesses (W), opportunities(O), and threats (T) 

Weaknesses

Internal limitations that may interfere with a company's ability to achieve its objectives

Strengths

Internal capabilities that may help a company reach its objectives

Opportunities

External factors that the company may be able to exploit to its advantage

Threats

Current and emerging external factors that may challenge the company’s performance

Marketing Implementation

Turns plans into actions 

Marketing Control

Involves evaluating the results of marketing strategies and plans, and taking corrective action to ensure that objectives are attained 

Marketing Return on Investment

The net return from a marketing investment divided by the costs of the marketing investment

Marketing Environment

Consists of the actors and forces outside marketing that affect management's ability to build and maintain successful and profitable relationships with target markets 

Microenvironment

Consists of the actors close to the company that affect its ability to service its customers 

Macroenvironment

Consists of larger societal forces that affect the microenvironment 

Marketing Intermediaries

Help the company to promote, sell, and distribute its products to final buyers. Include resellers, physical distribution firms, marketing services agencies and, financial intermediaries 

Resellers

Distribution channel firms that help the company find customers or make sales to them. Includes wholesalers and retailers. 

Physical Distribution Firms

Help the company to stock and move goods from their points of origin to their destinations

Marketing Services Agencies

The marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its products to the right markets

Financial Intermediaries

Includes banks, credit companies, insurance companies, and other businesses that help finance or insure against the risks associated with the buying and selling of goods 

Public

Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. Include financial publics, media publics, government publics, citizen-action publics, Internal publics, general public, local publics. 

The 5 types of Customer Markets

Consumer, Business, Reseller, Government, and International 

Demography

The study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics 

Baby Boomers

The approximately 69 million Americans born between 1946 and 1964. Account for over half of total consumer spending despite being only 21% of the population. Fastest growing shopper demographic online, outspending younger generations 2 to 1 

Gen X

U.S. generation born between 1965 and 1976, comprised of 65 million people. Generally, prefer quality to quantity and research heavily prior to purchasing 

Millennials

73 million Americans born between 1981 and 1996. Technology is a way of life, engaging with brands using mobile devices and social media. Seek authenticity and opportunities to shape their own brand experiences and share them with others. 

Gen Z

80 million Americans born between 1997 and 2012. Utter fluency and comfort with digital technology. Spend $143 billion annually of their own money and influence up to $360 billion of their parents' spending. More than ½ of Gen Z uses social media to do product research. 

Generation Alpha

Born after 2012. Will be the most formally educated generation ever, the most technologically supplied generation, and the wealthiest ever.

Economic Environment

Consists of factors that affect consumer purchasing power and spending patterns 

Natural Environment

Involves the physical environment including the natural resources that affect or is affected by marketing activities

Environmental Sustainability

Using natural resources responsibly so that they are available for future generations 

Technological Environment

The state of science and technology in a given context, encompassing the tools, techniques, and knowledge used to create and improve products and processes. The most dramatic force now shaping our destiny. 

Political Environment

Consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society 

Cultural Environment

Made up of institutions and other forces that affect a society's basic values, perceptions, preferences, and behaviors