Grantham test 1

Marketing (By the books)

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

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.

Exchange

The trade of things of value between the buyer and the seller so that each is better off as a result

Value

Reflects the relationship of benefits to costs, or what the consumer gets for what they give.

Marketing Mix

The controllable set of activates that a firm uses to respond to the wants of its target.
Product, Price, Promotion, and Place.

Product - Creating Value
Price - Capturing Value
Promotion - Communicating Value
Place - Delivering Value

How does value apply to all of the 4P's?

Product -Creating Value

Happens through a variety of offerings, including goods, services, and ideas.

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

Place - Delivering Value

All activities needed to get the product to the right customer when the customer wants it.

Promotion - Communicating Value

Informs, persuades, and reminds potential buyers about a product or service.
To influence their opinions or elicit a response.

Goods

Items that can be physically touched

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

Ideas

Intellectual concepts - thoughts, opinions, and philosophies.

B2C(Business to consumer)

The process in which businesses sell to consumers

B2B(Business to Business)

The process of selling merchandise or services from one business to another

C2C(Consumer to Consumer)

The process in which consumers sell to other consumers

Value Cocreation

Customers act as collaborations with a manufacturer or retailer to create the product or service.

Production Orientation Era

Focus is on internal capability and technology.
Key question: What does the firm do best?

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?

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?

Make what you can sell
Make what there is a demand for
Make what customers want

Marketing Concept

Societal Marketing Orientation

Focus is on enhancing the benefits to society
Key question: How can I meet consumer needs and benefit society?

Enriches Society
Can be Entrepreneurial
Expands global presence
Strengthens channel relationships

Why is marketing important?

Relational Orientation

A method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long term relationship

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.

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.

Ethics

Moral Principles and values that govern actions

Laws

Society's values which are enforceable in court

Marketing Ethics

Refers to those ethical problems that are specific to the domain of marketing

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.

1: Identify Issues
2: Gather Info and Identify Stakeholders
3: Brainstorm
4: Choose a course of action

Framework for Ethical Decision Making

General Business Norms

Consumer has right to safety, to be informed, to choose, and to be hear.

Moral Idealism

If any bad occurs, then action is unethical

Utilitarianism

Balance good versus bad
Make sure that the good outweighs the bad, then they are good.

Profit Responsibility

Companies are responsible only to stockholders and investors
Companies have just one duty: Maximize profit with the law

Stakeholder Responsibility

Companies are responsible to owners and to customers, employees, and suppliers.

Marketing Environment

Uncontrollable elements outside of any organization that may affect its performance.

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.

Culture

The set of values, guiding beliefs, understandings, and ways of doing things shared by members of society.

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.

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.

Thrift
Health and wellness concerns
Greener Consumers
Privacy Concerns
Time poor society

Examples of Social Trends?

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

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

Generation Y or Millennials

Generation cohort of people born between 1977 and 1995; biggest cohort since the babyboomers

Generation X

Generational cohort of people born between 1965 and 1976

Green Marketing

Involves a strategic effort by firms to supply customers with environmentally friendly merchandise

Greenwashing

Exploiting a consumer by disingenuously marketing products or services as environmentally friendly, with the goal if gaining public approval and sales.

Direct Competition

Similar or same product

Indirect Competition

Substitute items - perform the same functions

Competitive for discretionary spending

Other possible uses for the money

1. Need Recognition
2. Information Search
3. Alternative Evaluation
4. Purchase
5. Post Purchase

The Consumer Decision Process

Low Involvement Purchases

Low cost, standardized, not important, low risk.
Routine response behavior and habitual

In store promotions
Link to high involvement issue

How do marketers influence low involvement purchases?

High Involvement Purchases

Important to consumer
Risk is present
Consumer spends effort and time purchasing

Psychological Needs

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

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

External Search for information

Occurs when the buyer seeks information outside his or her personal knowledge base to help make the buying decision

Universal Sets

Includes all possible choices for a product category

Retrieval Sets

Includes those brands or stores that the consumer can readily bring forth from memory

Evoked Sets

Comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase.

Universal Sets
Retrieval Sets
Evoked Sets

What are the three attribute sets?

Determinant Attributes

Product or service features that are important to the buyer and on which competing brands or stores are perceived to differ

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.

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.

Conversion Rate

Percentage of consumers who buy product after viewing it

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.

Customer Satisfaction
Postpurchase Dissonance
Customer Loyalty

Three components of post purchase outcomes?

Motives

A need or want that is strong enough to cause the person to seek satisfaction

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.

Physiological
Safety
Love
Esteem
Self-actualization

Maslow Hierarchy of Needs from lower levels to higher levels

Physiological Needs

Those relating to basic biological necessities of life.
Food, drink, rest, and shelter

Safety Needs

Pertains to protection and physical well being

Love Needs

Needs expressed through interactions with others

Esteem Needs

Needs that enable people to fulfill inner desire

Self Actualization

Occurs when a person feels completely satisfied with their life and how they live.

Attitude

A persons enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea.

Cognitive Component
Affective Component
Behavioral Component

Attitude consists of what three components?

Cognitive Component

Component of attitude that reflects what a person believe to be true

Affective Component

A component of attitude that reflects what a person feels about the issue at hand.
His or her like/dislike of something
Involves emotion

Behavioral Component

A component of attitude that comprises the actions a person takes with regards to the issue at hand based on what they feel and know.

Perception

The process by which people select, organize, and interpret information to form a meaningful picture of the world

Our perceptual screens, exposure, attention, distortion, and retention.

Perception must be processed through...

Learning

A change in a person's thought process or behavior that arises from experience and takes place throughout the consumer decision process.

Lifestyle

A component of psychographics
Refers to the way a person lives his/her life to achieve goals

Reference group

One or more persons whom on individual uses as a basis for comparison regarding beliefs, feelings, and behaviors

Consumer Socialization

We learn how to buy and what to buy from our family/parents.

By offering information
Providing rewards for specific purchasing behaviors
Enhancing a consumer's self image

How can reference groups affect buying decisions?

Membership
Aspirational
Dissociative
Opinon Leaders(Oprah effect)

Types of reference groups?

Aspirational Reference Group

Refers to those others against whom one would like to compare oneself.

Dissociative Reference Group

Includes people that the individual would not like to be like.

Membership Reference Group

A group that people belong too and in agreement with regards to attitudes, norms, and behaviors.

Situational Factors

Factors affecting the consumer decision process; those that are specific that may override, or at least influence psychological and social issues.

Extended problem solving and limited problem solving

The two types of buying decisions consumers make depending on their level of involvement?

Involvement

The consumer's degree of interest in the product or service.

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.

Limited Problem Solving

Occurs during a purchase decision that calls for, at most, a moderate amount of effort and time.

Impulse Buying

A buying decision made by customers on the spot when they see the merchandise

Habitual Decision Making

A purchase decision process in which consumers engage with little conscious effort.

Segmentation

Identifying and serving homogenous groups of consumers