An organizational function and a set of process for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders
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Working definition of Marketing
Anticipating and determining the needs/wants of consumers and satisfying those need through the use of the 4P's to create long term exchanges of value.
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Exchange
The trade of things of value between the buyer and the seller so that each is better off as a result
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Value
Reflects the relationship of benefits to costs, or what the consumer gets for what they give.
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Marketing Mix
The controllable set of activates that a firm uses to respond to the wants of its target. Product, Price, Promotion, and Place.
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Product - Creating Value Price - Capturing Value Promotion - Communicating Value Place - Delivering Value
How does value apply to all of the 4P's?
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Product -Creating Value
Happens through a variety of offerings, including goods, services, and ideas.
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Price - Capturing Value
Everything a buyer gives up in exchange for the product. Must be an amount customers are willing to pay and which gives a profit
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Place - Delivering Value
All activities needed to get the product to the right customer when the customer wants it.
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Promotion - Communicating Value
Informs, persuades, and reminds potential buyers about a product or service. To influence their opinions or elicit a response.
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Goods
Items that can be physically touched
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Services
Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed. Intangible customer benefits that are produced by people or machines and cannot be separated from the producer
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Ideas
Intellectual concepts - thoughts, opinions, and philosophies.
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B2C(Business to consumer)
The process in which businesses sell to consumers
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B2B(Business to Business)
The process of selling merchandise or services from one business to another
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C2C(Consumer to Consumer)
The process in which consumers sell to other consumers
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Value Cocreation
Customers act as collaborations with a manufacturer or retailer to create the product or service.
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Production Orientation Era
Focus is on internal capability and technology. Key question: What does the firm do best?
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Sales Orientation Era
Focus is on aggressive sales techniques. Worries more about transaction numbers Key question: how can we sell more of what we have?
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Value Based Marketing Orientation
Purpose of the organization is to satisfy consumer needs/wants, while meeting organizational objectives. Key question: What does the customer want?
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Make what you can sell Make what there is a demand for Make what customers want
Marketing Concept
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Societal Marketing Orientation
Focus is on enhancing the benefits to society Key question: How can I meet consumer needs and benefit society?
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Enriches Society Can be Entrepreneurial Expands global presence Strengthens channel relationships
Why is marketing important?
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Relational Orientation
A method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long term relationship
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Customer Relationship Management
A business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty amount the firm's most valued customers.
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Marketing Channel
The set of institutions that transfer the ownership of and move goods from the point of production to the point of consumption; consists of all institutions and marketing activities in the marketing process.
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Ethics
Moral Principles and values that govern actions
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Laws
Society's values which are enforceable in court
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Marketing Ethics
Refers to those ethical problems that are specific to the domain of marketing
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Corporate Social Responsibility
Refers to the voluntary actions taken by company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders.
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1: Identify Issues 2: Gather Info and Identify Stakeholders 3: Brainstorm 4: Choose a course of action
Framework for Ethical Decision Making
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General Business Norms
Consumer has right to safety, to be informed, to choose, and to be hear.
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Moral Idealism
If any bad occurs, then action is unethical
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Utilitarianism
Balance good versus bad Make sure that the good outweighs the bad, then they are good.
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Profit Responsibility
Companies are responsible only to stockholders and investors Companies have just one duty: Maximize profit with the law
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Stakeholder Responsibility
Companies are responsible to owners and to customers, employees, and suppliers.
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Marketing Environment
Uncontrollable elements outside of any organization that may affect its performance.
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Macro - Environmental factors
Aspects of the external environment that affect a company's business, such as the culture, demographics, social issues, technological situation, and political regulatory environment.
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Culture
The set of values, guiding beliefs, understandings, and ways of doing things shared by members of society.
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Country Culture
Entails easy to spot visible nuances that are particular to a country, such as dress, symbols, ceremonies, language, colors, and food preferences and more subtle aspects which are trickier to identify.
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Demographics
Information about the characteristics of human populations and segments especially those used to identify consumer markets such as by age, gender, income, and education.
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Thrift Health and wellness concerns Greener Consumers Privacy Concerns Time poor society
Examples of Social Trends?
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Generation Cohort
A group of people of the same generation - typically have similar purchase behaviors because they have shared experiences and are in some stages of life
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Generation Z
Digital Natives Group of people who were born into a world that already was full of electronic gadgets and digital technologies such as the internet and social networks
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Generation Y or Millennials
Generation cohort of people born between 1977 and 1995; biggest cohort since the babyboomers
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Generation X
Generational cohort of people born between 1965 and 1976
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Green Marketing
Involves a strategic effort by firms to supply customers with environmentally friendly merchandise
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Greenwashing
Exploiting a consumer by disingenuously marketing products or services as environmentally friendly, with the goal if gaining public approval and sales.
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Direct Competition
Similar or same product
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Indirect Competition
Substitute items - perform the same functions
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Competitive for discretionary spending
Other possible uses for the money
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Need Recognition
Information Search
Alternative Evaluation
Purchase
Post Purchase
The Consumer Decision Process
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Low Involvement Purchases
Low cost, standardized, not important, low risk. Routine response behavior and habitual
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In store promotions Link to high involvement issue
How do marketers influence low involvement purchases?
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High Involvement Purchases
Important to consumer Risk is present Consumer spends effort and time purchasing
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Psychological Needs
Pertains to the personal gratification consumers associate with a product or service
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Internal Search for information
Occurs when the buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences
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External Search for information
Occurs when the buyer seeks information outside his or her personal knowledge base to help make the buying decision
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Universal Sets
Includes all possible choices for a product category
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Retrieval Sets
Includes those brands or stores that the consumer can readily bring forth from memory
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Evoked Sets
Comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase.
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Universal Sets Retrieval Sets Evoked Sets
What are the three attribute sets?
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Determinant Attributes
Product or service features that are important to the buyer and on which competing brands or stores are perceived to differ
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Compensatory Decision Rule
At work when the consumer is evaluating alternatives and trade offs one characteristics against another, such that good characteristics compensate for bad ones.
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Non-Compensatory Decision Rule
At work when consumers choose a product or service on the basis of a one characteristics or a subset of its characteristics, regardless of the values of it other attributes.
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Conversion Rate
Percentage of consumers who buy product after viewing it
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Postpurchase cognitive dissonance
The psychologically uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance buyers remorse.
A need or want that is strong enough to cause the person to seek satisfaction
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Maslow's Hierarchy of Needs
A paradigm for classifying people's motives. It argues that when a lower level, more basic need are fulfilled, people turn to satisfying their higher level human needs.
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Physiological Safety Love Esteem Self-actualization
Maslow Hierarchy of Needs from lower levels to higher levels
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Physiological Needs
Those relating to basic biological necessities of life. Food, drink, rest, and shelter
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Safety Needs
Pertains to protection and physical well being
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Love Needs
Needs expressed through interactions with others
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Esteem Needs
Needs that enable people to fulfill inner desire
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Self Actualization
Occurs when a person feels completely satisfied with their life and how they live.
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Attitude
A persons enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea.
Refers to those others against whom one would like to compare oneself.
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Dissociative Reference Group
Includes people that the individual would not like to be like.
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Membership Reference Group
A group that people belong too and in agreement with regards to attitudes, norms, and behaviors.
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Situational Factors
Factors affecting the consumer decision process; those that are specific that may override, or at least influence psychological and social issues.
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Extended problem solving and limited problem solving
The two types of buying decisions consumers make depending on their level of involvement?
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Involvement
The consumer's degree of interest in the product or service.
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Extended Problem Solving
A purchase decision process during which the consumer devotes considerable time and effort to analyzing alternatives; often occurs when the consumer perceives that the purchase decision entails a lot of risk.
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Limited Problem Solving
Occurs during a purchase decision that calls for, at most, a moderate amount of effort and time.
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Impulse Buying
A buying decision made by customers on the spot when they see the merchandise
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Habitual Decision Making
A purchase decision process in which consumers engage with little conscious effort.
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Segmentation
Identifying and serving homogenous groups of consumers
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