Commerce 1MA3

What is marketing?

marketing is a set of business practices designed to plan for and present an organization's products or services in ways that build effective customer relationships

What are target markets?

- customer segment to whom the firm is interested in selling its products and services

What is a market?

- group of people who need or want products or services AND have the ability and willingness to buy

What are the 4Ps of marketing?

- Product

- Price

- Promotion

- Place

What is the first P of marketing, product?

- product = creating value

= can be through goods, services, ideas, people, places

What is the second P of marketing, promotion?

- ideas = include thoughts, opinions, philosophies, and intellectual concepts that also can be marketed

- the communication activities of marketing, used to inform, persuade and remind potential buyers, used to influence their opinions of elicit a response

What is another P of marketing, price?

- price is everything the buyer gives up in exchange for the product

= ie money, energy, time

What is another P of marketing, place?

- all activities necessary to get the product to the right customer when they want it

- supple chain management is the field for this

What are the 3 types of ways marketing can be performed?

- B2B: wholesaling is often only business to business

- B2C: all retailing is business to consumer selling

- C2C: Swap meets, Ebay, yard sales

What are the 4 orientations of marketing?

- product orientation

- market orientation

- sales orientation

- value based orientation

What is one orientation of marketing, product orientation?

- product oriented companies focus on developing and distributing innovative products with little concern about whether the products best satisfy customer's needs

What is another orientation of marketing, sales orientation?

- view marketing as a selling function where companies try to sell as many of their products as possible rather than focus on making products consumers really want

What is another orientation of marketing, market orientation?

- market oriented companies start out by focussing on what consumers want and need before they design, make or attempt to sell their products and services

What is another orientation of marketing, value-based orientation?

- the tripple bottom line: people (consumer needs and wants), profits (long-term profitable relationships), planet (social and environmental responsibility)

How do firms become more value driven?

- sharing information

- balancing benefits with costs

- building customer relationships

- connecting with customers via social media

Why is marketing important?

- expands firms global presence

- marketing is pervasive across channel members

- marketing enriches society

- marketing can be entrepreneurial

What is a marketing strategy?

Marketing strategy identifies:

- a firm's target market

- a related marketing mix - the 4P's

- the bases upon which the firm plans to build a sustainable competitive advantage

What are the components of a sustainable competitive advantage?

- strong brand

- innovative capabilities

- extensive distribution network

- loyal customers

What are the 4 components of developing customer value?

- customer excellence: retain loyal customers, provide outstanding customer services

- operational excellence: efficient operations, supply chain management, supplier relationships

- product excellence: high perceived value and effective branding and positioning

- locational excellence: LOCATION IS IMPORTANT

What are the 5 steps to develop a marketing plan?

1. define the business mission and objectives

2. conduct a situation analysis (using swot)

3. Identify and Evaluate opportunities by using STP

4. Implement a marketing mix and allocate resources

5. evaluate performance by using marketing metrics

What are the 4 growth strategies?

- market penetration: existing marketing mix, existing customers

- product development: new product/service, current target market

- market development: existing marketing offering, new market segmenets (domestic, international) not currently being served

- diversification: new product/service, new market segment not currently being served

What are the 3 microenvironmental factors to marketing? (3 C's)

- company

- corporate partners

- competition

What are corporate partners?

- firms are part of alliances, few work in isolation

- align with suppliers, corporate partners, etc

What are the 6 macroenvironmental factors to marketing?

- culture

- demographics

- social/natural

- technology

- economic

- political/legal

What is culture, one of the 6 macroenvironmental factors to marketing?

- ie the movie example, or pepsi in quebec, marketed towards that culture

What is demographics, one of the 6 macroenvironmental factors to marketing?

- ie race, age, generation

What is technology, one of the 6 macroenvironmental factors to marketing?

- ie netflix, just tech innovation

- AI = solutions which rely on computer systems to perform tasks that require human intelligence such as speech recognition, decision making, translation

- robotics: applications typically perform work that previously was the responsibility of human workers

- IoT: emerges when multiple smart devices with internet connected snesors such as refridgetators, dishwashers, etc, combine the data they have collected to help both consumers and companies consume more efficiently

What is economic situation, one of the 6 macroenvironmental factors to marketing?

- foreign currency fluctuations

- combined with inflation and interest rated affect a firm's ability to market goods and services

What is the political/legal environment, one of the 6 macroenvironmental factors to marketing?

- competition act (ie windows cant buy apple)

- consumer packaging and labelling act

- food and drugs act

- access to information act

- patent act

- north american free trade agreement

What is social and natural trends, one of the 6 macroenvironmental factors to marketing?

- shape consumer values, these trends change over time: greener consumers, privacy concerns, time-poor society, health and wellness concerns

What is market research?

- consists of techniques and princicples for systematically collecting, recording, analyzing and interpreting data that can aid decision makers involved in marketing goods, services or ideas

What are the 5 steps in the marketing research process?

1. Define research problem and objectives

2. Design the research plan (type of data needed, type of research, project objectives)

3. Collect data (primary and secondary data)

4. Analyze data and develop insights

5. present action plan

What is the difference between primary and secondary data?

- primary: data collected to address specific research needs (focus groups, interviews, surveys)

- secondary data: pieces of info that have been collected prior to the start of the focal project (can be internal or external data)

What are some internal and external sources of secondary data? And what are their downsides?

- internal: from the company itself (invoices, customer lists), firms use data mining techniques to decipher large amounts of data

downside: may not be the data you need or the right data

- external: census data, books, articles, reports, can also be purchased from specialized research firms

downside: may not be specific or timely enough to solve the research needs

What is scanner data and what type of data is it?

- external source of secondary data

- type of quantitative research that uses data obtained from scanner readings of UPC codes at checkout counters

What are qualitative and quantitative ways of collecting primary data?

- qualitative: projective techniques, observation, in-depth interviews, focus groups, social media

- quantitative: experiments, survey, scanner, panel

What are the 4 types of qualitative research methods?

- observation (or ethnography): examines purchase and consumption behaviour through personal of video camera observance

- social media: provides valuable information that could aid their marketing research and strategy endeavours

- in-depth interview: trained researchers ask questions, listen to and record answers

- focus groups: a small group of people come together for in depth discussion, gruided by trained moderator, unstructured method of inquiry is used

What are the 4 types of quantitative research?

- questionaire/surveys: structured (questions with numbers and chosen answers) or unstructured (blank box answers)

- experiments: systematically manipulates one or more variables to determine which variables have a causal effect

- scanner data: obtained from scanner readings of UPC codes at checkout

- panel data: info collected from a group of consumers (the panel), ie what they purchased, responses to surveys, etc.

What are the 5 steps in the consumer decision process?

1. need recognition: does it solve a functional need (like product or service) or psychological need (personal gratification of when you get that product or service)?

2. information search: internal (thinking in your brain of things you know like cultures for food) or external search for information (online, social media, for new places/things)

3. alternative evaluation (usually happens during info search, ie vegan yoghurt): evaluative criteria, determinant attributes, copensatory (one characteristic make up for another?) and non-copensatory (not willing to budge for another characteristic)

4. purchase decision: customers are ready to buy

5. post-purchase: 3 potential outcomes (customer satisfaction, postpurchase dissonance, customer loyalty

What are the 3 factors affecting consumer's search process?

- perceived benefit vs perceived costs of search (is it worth the time and effort?)

- actual or perceived risks (performance, financial, social, physiological, psychological)

- locus of control: internal (some control over outcomes = engage in more search activities), external (fate, external factors control all outcomes = why bother?)

What are the 3 ways of alternative evaluation, decision rules? (mental shortcuts to narrow down your choices)

- price

- brand

- product presentation

What are the 3 factors that influence consumer buying decisions?

- psychological factors: motives, attitudes, perceptions (culture, tradition, upbringing determine our perceptual view of the world) learning, lifestyle

- social factors: family, reference groups, culture

- situational factors: purchase situation, shopping situation, temporal state

What are 4 types of categories that are B2B?

- resellers (from the manufacturer to them to the retailer) = wholesalers, distributors, retailers

- manufacturers

- instritutions (schools, museums, religious organizations)

- government

What are 2 key challenges of reaching B2B clients?

- identify decision makers in organizations who authorize or influence purchases

- understand the buying process of each potential client

- identify factors that influence the buying process of potential clients

What are 4 ways B2B differs from B2C markets?

- market characteristics = demand for business products is derived, fewer customers, more geographically concentrated and order are larger, demand is more inleastic

- product characteristics = technical products, purchased based on specifications, mainly raw and semi-finished goods, heavy emphasis on delivery time, technical assistance, after sale service, financing

- buying process characteristics = buying decisions more complex, competitive bidding, negotiated pricing, qualified buying, buying criteria and objective specified, close long-term relationships

- marketing mix characteristics = direct selling and physical distribution often essential, advertising more technical, price often negotiated, inelastic, affected by trade/quantity discounts

What is the 6 step process for B2B?

1. need recognition = can be generated internally or externally, sources for recognizing new needs (suppliers, salespeople, competitors)

2. product specification = suppliers use to develop proposals, can be done collaboratively with suppliers

3. RFP (request for proposal) process = buying organizations invite alternative suppliers to bid on supplying their required components or specifications

4. proposal analysis and supplier selection = often several vendors are negotiating against each other, considerations other than price play a role in final selection

5. order specification (purchase) = firm places the order, the exact details of the purchase are specified, all terms are detailed including payment

6. vendor performance assessment using metrics

What is organizational culture?

- reflects the set of values, traditions, and customs that guides its managers and employees behaviour

What are the 4 aspects of buying culture?

- democratic = majority rules

- autocratic = multiple participants but one person makes decision alone

- consultative = one person to make a decision but will get input from others first

- consensus = all team must reach collective agreement

What are the 3 aspects of buying stations?

- new buy = purchasing for the first time, likely to be quite involved, buying centre will prob use all 6 steps in buying process

- modified rebuy = purchasing similar product but changing specifications, current vendors have an advantage

- straight rebuy = buying additional units or products that have been previously purchased, most B2B purchases fall into this category

What are the 5 steps in the segmentation/targetting position process?

1. stragery or objectives = consistent with mission statement, derived from mission and current state

2. segmentation bases = geographic, demographic, psychographic, behavioural, etc

3. evaluate segment attractiveness = identifiable, reachable, responsive, substantial and proftiable

4. select target market = based on competing a SWOT analysis

5. identify and develop positioning strategy = value, product attributes, benefits, competition, market leadership

What is VALS? What is VALS categories?

- Values and Lifestyles Survey (for psychographic segmentation), classified into one of 8 segments

- innovators, thinkers, believers, achievers, etc

What is psychographic segmentation? (how they live)

- how consumers define themselves:

- self-values, slef-concept, lifestyles

(conservative, innovators, outgoing, fitness-conscious)

What is behavoural segmentation and its 4 aspects?

- benefits = benefits they are looking for for products or services

- usage rate = how often you use the product or service, can get coupons to make you use it more for ex

- loyalty = investing in loyal customers

- occasion = when a product is purchased or consumed

What is geodemographic segmentation?

- how consumers describe themselves using a combination of geographic, demographic, and lifestyle characteristics to segment a market

What are 4 targeting strategies?

- mass or undifferentiated = product or service is perceived to provide the same benefits to everyone, no need to develop sperate strategies for different groups

- differentiated = target several market segments with a different offering for each

- concentrated (niche) = when an organization selects a single tarket market and focuses all its energies on providing a product to fit that market's needs

- one-to-one = form of segmentation that tailors a product or service to suit an individual customers' wants or needs (ie build a bear)

What is repositioning?

refers to a strategy in which marketers change a brands focus to target new markets or realign the brands core emphasis with changing market preferences

What are some reasons that firms create new products?

- changing customer needs

- market saturation

- managing risk through diversity

- fashion cycles

- improving business relationships (ie w suppliers)

What is diffusion of innovation?

- process by which the use of an innovation, whether a product or service, spreads throughout a market group over time and over various categories of adopters

What are pioneers?

- new product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market .... aka breakthroughs

What are first movers?

- product pioneers that are the first to create a market or product category, making them readily recognizable to consumers and this establishing a commanding and early market share

How much does each group of the adaptation of innovation take? percentage wise?

- innovators = 2.5% = first ones to get in, will wait overnight

- early adopters = 13.5% = will be okay with some risk, so will buy but after innovators, will wait until a product review

- early majority = 34% = will wait until movie is available for streaming

- late majority = 34% = when movie available on netflix or cable

- laggards = 16%

What are the 4 factors affected product diffusion?

- compatibility = to make the product more compatible with needs in diff cultures, it is made in various sizes

- observability = when products are easily observed, their benefits or uses are easily communicated to others, which enhances the diffusion process

- complexity and trialability = the more complex the product the longer it takes to diffuse, products that can be sampled will diffuse faster

- relative advantage = if a product is perceived to be better than substitutes, the diffusion will be relatively quick

What are the 6 steps to how firms develop new products?

1. idea generation

2. concept testing = concept with brief discription of product, customers reactions determine whether it goes forward

3. product development = ie prototypes

4. market testing = pre-market or test marketing (introduces it to limited geographical area)

5. product launch

6. evaluation of results

How much of new B2B products come from customer input?

- 85%%!!!

What are the 4 factors of a product launch?

- promotion

- place

- price

- timing

What are the 4 stages of the product life cycle?

- introduction = low sales, neg or low profits, innovators are the consumers, one or few competitors

- growth = rising sales, rapidly rising profits, early adopters or early majority, few but increasing competitors

- maturity = peak sales, peak to declining profits, late majority, high number of competitors

- decline = declining sales, declining profit, laggards, low competitors

What are some strategies to extend the product life cycle?

- develop new uses

- modify product

- increase frequency of use

- increase # of users

- find new users

- reposition product

- tweak marketing strategy

What are the 4 types of consumer products?

- specialty

- shopping

- convinience

- unsought = products we do not think to buy or dont know about (funeral services, fire extinguishers)

What is the product mix?

- complete set of all products offered by a firmq

What are product lines?

- groups of associated items, such as those that consumers use together or think of as part of a group or similar products

What is a product category?

- an assortment of items that the customer sees as reasonable substitutes for one another

What are brands?

- names, terms, designs, symbols or any other features that identif that one seller's good or service as distinct from those of other sellers

What is product breadth

- increase breadth = add new product lines

- decrease breadth = delete entire product lines

What are the 3 divisions of branding?

- brand equity

- brand ownership strategies

- brand name strategies

What are the 4 categories in brand equity?

- brand awareness = ie how well ppl know your product

- perceived value = how does it create value?

- brand associations = how do people associate your brand to its products?

- brand loyalty

What are the 3 brand ownership strategies?

- manufacturer or national brand (owned and managed by the manufacturer) = nike, kitchenaid, mariott

- store or private label (owned and managed by retailers) = President's choice,

- generic = sold without brand names like salt, produce, nuts

What are 3 brand name strategies?

- corporate or family brand = names, terms, symbols, etc that identify that one seller's good or service as distinct from those other sellers

- corporate and product line brand

- individual = an assortment of items that the customer sees as reasonable substitutes for one another (Jell-O, Febreeze)

What ia a brand extension?

What are some negative consequences?

- the same brand name for new product

Consequences:

- too many extensions results in brand dilution

- ensure the brands can be distance from one another if need be

- core and new brand may not fit together

- brand associations between the 2 may not be similar

How to prevent against brand dilution?

- evaluate the fit between the product class and core brand and the extension

- evaluate consumer perceptions of the attitubutes of core brand and seek out extensions with similar attributes

- refrain from extending the brand name to too many products

What is cobranding?

- marketing 2 or more brands together, on the same package or promotion

- like TD Aeroplan Visa card and Airlines

What is brand licensing?

- contractual arrangement between firms where one firm allows another to use its brand name, logo, symbols etc for a negotiated fee

What are the 3 results of post-purchase outcome when buying something?

- consumer satisfaction

- post-purchase dissonance = regretting your purchase decision for one reason or the other, cognitive dissonance

- customer loyalty

What is extended problem solving vs limited problem solving?

- extended = common when the consumer perceived the purchase decision is a big risk, so she's come up with a lot of answers and info before making her decision of all the 5 types of risk

- limited = a purchase decision that calls for at most, a moderate amount of time. they use this type when they have some prior experience with the product or service, perceived risk is moderate.

What are the 6 different buying roles?

- initiator = who person who suggest buying product or service (doctor)

- influencer = person whose views influence other members to make final deicion (pharmacy)

- decider = person who determines any part of or the entire buying decision (hospital)

- buyer = person who handles paperwork of the purchase (hospital material manager)

- user = person who consumes or uses the product or service (patient)

- gatekeeper = person who controls information access to decision makers and influencers (purchasing department)

What are 5 positioning methods used?

- value = how much value a product has will make you want to buy in like kind bar using all natural ingredients vs another random bar

- product attributes

- benefits and symbolism

- competition (head-to-head positioning) = can go head to head against a competitor. ie saying "we try harder" than the competitive brand.

- market leadership = instead of going head to head, companies may emphasize their leadership position within their industry, like RBC, Loblaw, Amazon, etc.

What are the 6 values of branding?

- branding facilitates purchasing

- branding establishes loyalty

- brands protect from competition

- brands impact market value

- brands are assets

- brands reduce marketing costs

What is the importance of pricing (3 things)?

- a strategic opportunity to create value

- not an after thought to the rest of the marketing mix

- pricing signals quality or lack of quality

What is the role of pricing in the marketing mix?

- usually ranked as one of the most important factors in purchase decisions

- the only element in marketing mix that generates revenue

- misunderstood by managers

What are the 5 C's of pricing?

- competition = monopoly, oligopoly, monopolistic competition, pure competition

- costs = variable costs (vary with production volume), fixed costs (unaffected by production volume), total cost

- company objectives: profit orientation (maximize profits, target return pricing, target profit pricing), sales orientation, competitor orientation, customer orientation

- customers: the most important C!, understanding customers reactions to diff prices, price is half of the value equation

- channel members = manufacturers, wholesalers, and retailers have diff perspectives on pricing strategies, manufacturers must protect against grey market transactions

How is the demand curve impacted by price?

- demand increases as price decreases

- demand decreases as price decreases (for prestige products, like hermes bags)

How do you measure customers reactions to increase or decrease of price?

- price elasticity of demand

- % change in quantity demanded/% change in price

What are factors influencing price elasticity of demand?

- income= as income increases, spending behaviour changes, they want higher priced products

- substitution effects = the greater the availability of substitute products, the higher the price elasticity of demand for any given product

What is a monopoly, oligopoly, monopolistic competition, and pure competition?

- monopoly = one firm controls the market (less price competition, fewer firms)

- oligopoly = handful of firms control the market (more price competition, fewer firms)

- monopolistic competition = many firms selling differentiated products at diff prices (less price competition, many firms)

- pure competition = many firms selling commodoties for the same price (more price competition, many firms)

What are 3 pricing strategies?

- cost: starts with cost, all costs calculated on a per unit basis, assumes cost don't vary for diff levels of production

- value = setting prices that focus on the overall value of the product, consumer perceptions

- competitor = set prices to signal info of how products compares with competitors, premium pricing

What are the 4 psychological factors affecting value-based pricing strategies?

- market penetration pricing:

- everyday low pricing (EDLP): saves search costs of finding lowest overall prices

- high/low: relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases

- new product pricing: price skimming, market penetration pricing

What are some price tactics? price lining, price bundling, leader pricing

- price lining: establishing a price floor and a price ceiling for line of similar products and setting price points in between to represent distinct differences in quality

- price bundling: pricing of more than one product for a single, lower price

- leader pricing: building store traffic by aggressively pricing and advertising a regularily purchased item, often priced at or just above the store's cost

What are 3 types of consumer price reductions?

- markdowns: integral component of high/low pricing strategy, enable retailers to get rid of slow moving or obselete murchandise, used to generate store traffic

- quantity discounts for consumers: size discount, the more you buy the cheaper the unit cost

- coupons and rebates: coupons (retailer handles), rebate (manufacturer issues)

What are some B2B pricing tactics and discounts?

- seasonal discount: additional reduction as incentive to retailers to order merchandise in advance of the buying season

- cash discounts: additional reduction that reduces invoice cost if buyer pays invoice prior to the end of the discount period

- allowances: advertising or listing allowances (additional price reductions) offered in return for specific behaviours

- quantity discounts: reduced price according to amount purchased (cumulative quantity discount, noncumulative quantitity discount)

- uniform delivered versus geographic pricing: uniform (shipper charges one rate), geographic (diff prices are charged depending on geographical delivery area)

What is the difference between advertising or listing allowances?

- advertising: offered to retailers if they agree to feature the manufacturer's product in their advertising and promotional efforts

- listing: offered to get new products into stores or to gain more or better shelf space

What are some legal and ethical aspects of pricing?

- deceptive or illegal price advertising (deceptive reference prices, loss leader pricing, bait and switch)

- predatory pricing = when a firm sets very low price for one or more product with the intent to drive competition out of business

- price discrimination = firms sell same product to different resellers at diff prices, usually larger firms receive lower prices

- price fixing = practice of colluding with other firms to control prices