Marketing
BCG
Business Portfolio: collection of businesses, products, and or services (market offerings) that make up the company
Portfolio analysis: is an evaluation of the company’s SBUs and includes evaluation of;
Attractiveness of SBUs market or industry
Strength of SBUs position in that market or industry
The BCG Growth Share Matrix uses market growth rate and relative market share to classify SBUs into four groups
Stars: SBU whose products have a dominate market share and high growth markets
Strategy: Build into cash cow via investment
Question Marks: SBUs whose products have a low market share in high growth markets
Strategy: Build into Stars via investment or reallocate funding and let slip into dogs
Cash cows: SBU whose products have dominant market share in a low growth market
Strategy: Maintain or harvest for cash to build Stars
Dogs: SBU that don’t look to promising
Strategy: Liquidate (maybe maintain)
Product Market Expansion Grid
Market penetration strategy: Seeks to increase sales of existing products in existing markets
Product development strategy: Creative growth by selling new products to existing markets
Market Development Strategy: introduce existing products to new markets
Diversification Strategy: Emphasize both new products and new markets
SWOT Analysis
Strengths: internal capabilities that may help a company reach its objectives
Weaknesses: Internal limitations that may interfere with a company’s ability to achieve its objectives
Opportunities: External factors that company may be able to exploit to its advantage
Threats: Current and emerging external factors that may challenge the company’s performance
Demographics: The study of human population in terms of size density, location, age gender, race occupation, and other statistics
The four largest generational groups:
- Baby Boomers
Born between 1946 and 1964; about one-third of the population
Wealthiest generation that controls 50% of Canada/Us spending
- Generation X
Born between 1965 and 1980. Sometimes overlooked as “in between consumer group”
Increased parental divorce rate and more employed mothers
Most educated generation: Less materialistic; prize experiences
More skeptical of marketing, but tend to be more loyal
- Generation Y or Millennials
Born between 1982 and 1998: Larger than generation X or Baby Boomers
Fluent with tech, open to new reach brans
Engage with brands in new ways, seek authenticity and ability to share with others
Most in dept
- Generation Z (I Gen, Zoomers)
Most ethically and culturally diverse
Takes digital tech for granted (Wi-Fi, smartphones, etc.) Grew up online
Marketers must meet Gen Z where they are – mobile and social
Forming brand relationships now that will last well into the future
- Generation Alpha
Demographic Environment
Crowded ness at home
fewer families have children
More dual-income families
More single parent families
More married couples without children
Geographical shifts in population:
Rural to urban (city, suburb) migration continues, through this
Better educated
Increasing diversity through race and disabilities
Consumer Behaviour
KEY TERMS
Part 1
Marketing: The process of creating, promoting, and delivering products or services to meet customer needs and build relationships.
Needs: Basic things people require to survive, like food, water, and shelter.
Wants: Specific ways people choose to satisfy their needs, shaped by culture and personal preferences.
Demands: Wants backed by the ability and willingness to pay for them.
Market Offerings: Products, services, or experiences offered to satisfy customer needs or wants.
Marketing Myopia: Focusing too much on selling a product and not enough on meeting customer needs or solving problems.
Exchange: The act of giving something (like money) to receive something else (like a product or service).
Market: The group of people who are interested in and able to buy a product or service.
Production Concept: The idea that customers prefer products that are affordable and widely available.
Product Concept: The idea that customers value high-quality, innovative products.
Selling Concept: The idea that customers need to be persuaded to buy through aggressive promotion and sales tactics.
Marketing Concept: The idea that businesses succeed by understanding and meeting customer needs better than competitors.
Societal Marketing Concept: The idea that businesses should balance customer satisfaction, profits, and social responsibility.
Customer Relationship Management (CRM): Using strategies and technology to build and maintain positive relationships with customers.
Customer-Perceived Value: The benefits customers believe they receive compared to the costs of a product or service.
Customer Satisfaction: How well a product or service meets or exceeds customer expectations.
Customer-Engagement Marketing Building deeper connections with customers by involving them in the brand’s activities.
Customer Brand Advocacy: Loyal customers who promote a brand by recommending it to others.
Customer-Generated Marketing: Marketing content created by customers, such as reviews or social media posts.
Partner Relationship Management: Working with other businesses or groups to create more value for customers.
Customer Lifetime Value: The total profit a business earns from a customer over their entire relationship.
Share of Customer: The portion of a customer’s spending in a specific category that a company captures.
Customer Equity: The total combined value of all current and future customers to a business.
Internet of Things (IoT): A network of connected devices that share data to improve experiences and operations.
Digital and Social Media Marketing: Using online platforms like websites, apps, and social media to promote products and interact with customers.
Part 2
Strategic Planning: A process where a business sets its goals and decides how to achieve them. It focuses on the long-term direction of the company.
Mission Statement A brief description of a company’s purpose and values. It explains why the business exists and what it aims to achieve.
Business Portfolio: The collection of products, services, or business units a company owns. It shows what the company offers to meet its goals.
Portfolio Analysis: A tool businesses use to evaluate their products or services to decide where to invest, grow, or discontinue.
Growth-Share Matrix: A chart that helps companies decide which products to invest in based on market growth and market share.
Product/Market Expansion Grid: A framework to explore growth opportunities by selling more of what you already offer or creating new products for new markets.
Market Penetration: Selling more of your existing products to your current customers.
Market Development: Finding new groups of customers or locations to sell your existing products.
Product Development: Creating new products to sell to your current customers.
Diversification: Introducing new products to new markets to spread risk and increase opportunities.
Value Chain: The series of activities involved in creating, delivering, and supporting a product or service.
Value Delivery Network: The partnership of a company and its suppliers, distributors, and customers working together to create value.
Marketing Strategy: A plan to identify the right customers and meet their needs better than competitors.
Market Segmentation: Dividing a market into smaller groups of people with similar needs or behaviors.
Market Segment: A group of customers with similar needs or characteristics within a larger market.
Market Targeting: Choosing which market segments to focus on and serve.
Positioning: Creating a clear and unique image of your product in the minds of customers.
Differentiation: Making your product or service stand out by offering something unique or better than competitors.
Marketing Mix: The combination of product, price, place, and promotion strategies to attract and satisfy customers.
SWOT Analysis A tool to evaluate your Strengths, Weaknesses, Opportunities, and Threats.
Marketing Implementation: Putting your marketing plans into action to achieve your goals.
Marketing Control: Measuring and improving the effectiveness of your marketing efforts.
Marketing ROI: A way to measure the profit you earn from your marketing efforts compared to what you spent.
Consumer behavior refers to the actions and decision-making processes of individuals or groups when selecting, purchasing, using, or disposing of products and services. It is influenced by cultural, social, personal, and psychological factors and involves stages like recognizing needs, searching for information, evaluating alternatives, making a purchase, and post-purchase evaluation.
Consumer market: The group of individuals or organizations that purchase goods and services for personal use.
Culture: The shared values, beliefs, and customs that influence consumer behavior.
Subculture: A smaller group within a culture that shares distinct beliefs or behaviors.
Reference group: A group that influences an individual’s attitudes and behaviors, often through social comparison.
Opinion leader: A person who influences others’ decisions due to expertise or knowledge in a specific area.
Word-of-mouth influence: The impact of personal conversations and recommendations on consumer decisions.
Influencer marketing: A marketing strategy where brands partner with individuals who have a large social following to promote products.
Online social networks: Digital platforms where individuals connect and influence each other’s decisions.
Lifestyle: The way people live, which affects their choices and behavior.
Personality: The unique set of characteristics that influence how a person reacts and makes decisions.
Motive (drive): The internal desire or need that motivates a consumer to make a purchase.
Perception: The process of interpreting and understanding information about a product or service.
Learning: The changes in consumer behavior resulting from experiences or information.
Belief: A consumer’s knowledge or conviction about a product or brand.
Attitude: A person’s consistent feelings or evaluations towards a product or brand.
Need recognition: The first stage in the buying process, where a consumer identifies a need.
Information search: The process of seeking information to satisfy a recognized need.
Alternative evaluation: Comparing different options before making a purchase decision.
Consideration set: The group of products a consumer is considering for purchase.
Choice set: The final products from the consideration set that the consumer is likely to buy.
Purchase decision: The decision made after evaluating alternatives, leading to a purchase.
Post purchase behavior: The consumer’s experience and reaction after making a purchase.
Cognitive dissonance: The discomfort a consumer feels after making a purchase that might contradict their beliefs or expectations.
Complex buying behavior: When consumers make careful decisions due to high involvement and unfamiliar products.
Dissonance-reducing buying behavior: When consumers experience cognitive dissonance after a purchase but attempt to reduce it.
Habitual buying behavior: When consumers make decisions based on habit, with little thought or involvement.
Variety-seeking buying behavior: When consumers switch products frequently for the sake of variety, not due to dissatisfaction.
Customer journey: The stages a consumer goes through from recognizing a need to post-purchase behavior.
New product: A product that is new to the market or a consumer, requiring education and adoption.
Adoption process: The stages a consumer goes through in accepting and purchasing a new product.
Chapter 3
Marketing Environment: Everything inside and outside a business that affects how it markets and sells products.
Microenvironment: The people and groups close to a business, like customers, suppliers, and competitors, that affect its success.
Macroenvironment: Big-picture forces like the economy, technology, and culture that influence a business.
Marketing Intermediaries: Companies that help deliver a product to customers, like wholesalers and retailers.
Public: Any group that affects or is affected by a business, like media, communities, or governments.
Demography: The study of people’s characteristics, like age, gender, and income, to understand markets.
Baby Boomers: People born between 1946 and 1964, known for their large numbers and significant spending power.
Generation X: People born between 1965 and 1980, often independent and practical.
Millennials (Generation Y): People born between 1981 and 1996, tech-savvy and value experiences.
Generation Z: People born from 1997 to 2012, highly digital and socially aware.
Generation Alpha: Kids born after 2013, growing up with advanced technology and global connectivity.
Economic Environment: The financial factors, like income and inflation, that influence how people spend money.
Natural Environment: The physical world, like resources and climate, that businesses rely on and affect.
Environmental Sustainability: Making decisions that protect the environment for future generations.
Technological Environment: Innovations and advancements in technology that create new business opportunities.
Political Environment: Laws, regulations, and government actions that impact business operations.
Cultural Environment: Shared beliefs, values, and traditions that shape consumer behavior.
Chapter 5
Consumer buyer behavior: The actions and decision-making processes of individuals and households when purchasing goods and services.
Consumer market: The collection of individuals and households who buy goods and services for personal use.
Culture: The set of values, beliefs, and norms shared by a group of people that shape their behaviors and preferences.
Subculture: A group within a larger culture that shares specific values and traditions.
Reference group: A group that influences an individual’s attitudes, behaviors, and purchasing decisions.
Opinion leader: A person who influences others’ opinions and buying decisions due to their expertise or credibility.
Word-of-mouth influence: The impact of personal recommendations on consumer decisions.
Influencer marketing: Partnering with individuals who have a strong online presence to promote products.
Online social networks: Digital platforms where users interact and share content, affecting consumer opinions.
Lifestyle: A person’s way of living, reflected in their activities, interests, and opinions.
Personality: The unique characteristics and traits that influence an individual’s behavior and preferences.
Motive (drive): The internal need or desire that prompts a person to take action.
Perception: The process by which individuals interpret information and form a view of the world.
Learning: Changes in behavior resulting from experiences or information.
Belief: A person’s conviction about something based on knowledge or opinion.
Attitude: A person’s consistent evaluations, feelings, and tendencies toward an object or idea.
Need recognition: The realization of a gap between the current state and a desired state.
Information search: The process of seeking out information to solve a need or make a purchase decision.
Alternative evaluation: Comparing different options to determine the best choice.
Consideration set: The shortlist of brands or products a consumer seriously evaluates.
Choice set: The final group of options from which a consumer makes a purchase decision.
Need Recognition: Show how their product meets need/want or solves a problem
Search for Information: Clear accurate information easy to find online or in person
Evaluation of alternatives: Pros and cons of offering better be enticing vs competition (What makes us stand out)
Purchase Decision: Potential for last minute nudges or sweeteners (sales, coupons, limited offers)
Post Purchase Evaluation: Must have satisfactory after sales policies to develop long term relationships
Performance < Expectations = Disappointment
Performance = Expectations = Satisfaction
Performance > Expectations = Delight
Factors Influence consumer behaviour
Cultural Factors: are factors that relate to the culture I which a consumer lives or was raised in
Social Factors: are factors that relate to the social situation of consumers (family, groups, our roles)
Personal factors: are factors that that relate to personal characteristics of a consumer (age, life stage, personality, economic situation
Psychological factors: are cognitive factors that impact how people experience life including perceptions, motivation, learning beliefs and attitudes (Perception, motivations, learning, beliefs, attitudes)
Segmentation: Dividing a market with distinct needs
Behavioral segmentation: Dividing the market based on consumer behaviors, such as purchasing habits, product usage, brand loyalty, or responses to specific marketing messages.
Example: A streaming service targeting users who frequently watch specific genres, offering personalized content recommendations based on their viewing history.
Demographic segmentation: Dividing the market based on demographic factors such as age, gender, income, education, and family size.
Example: A car company offering different models for young, single professionals (compact cars) and large families (SUVs).
Psychographic segmentation: Dividing the market based on lifestyle, values, interests, attitudes, and personality traits.
Example: A fitness brand targeting health-conscious individuals with a focus on eco-friendly products for consumers who value sustainability and wellness.
Market segmentations should measurable, accessible, substantial, differentiable, actionable
Selecting Target Market Segments
Undifferentiated marketing: A marketing strategy where a company targets the entire market with a single offer, aiming to reach the largest number of consumers.
Coca-Cola using a single product and message aimed at the entire global market, focusing on the universal appeal of refreshment.
Differentiated marketing: A marketing strategy where a company targets multiple market segments with different offers for each segment.
Procter & Gamble offering multiple brands of laundry detergent (Tide, Gain, and Ariel) targeting different consumer preferences in terms of price, fragrance, and performance.
Concentrated marketing: A marketing strategy where a company focuses on a single market segment and tailors its marketing efforts specifically to that segment.
A luxury watch brand like Rolex, focusing all its marketing efforts on high-income individuals who seek exclusive, high-end timepieces.
Micromarketing: A highly targeted marketing strategy that focuses on specific individuals or small groups, often using personalized offers and communication.
A local bakery that customizes its marketing and product offerings for individual customers, using data from loyalty programs to send personalized discounts or special offers.
Differentiation
Competitive advantage: an advantage over competitors gained by offering greater customer value
They can lower their prices or provide more benefits that justify higher prices
Ways to be different
Product: Features, performance, style, design
Services: speed, delivery
Channels: coverage, expertise’
People: training staff
image: convey distinctive benefits through brand imagery
What difference to promote
Distinctive: different from competitors
Superior: better than competitors
Important: gives valued, relevant benefit
Communicable: Difference is visible to buyers
Pre-emptive: cant be copied by competitors
Affordable: buyers can afford to pay for difference
Profitable: company can profit
Positioning
Positioning: is the way the product is defined by consumers on important attributes
Three levels of positioning
Attributes: Are features or facts about something(lightweight, durable, ingredients
Benefits: are desirable outcomes or experiences(taste, health benefits, social benefits)
Beliefs/values: are strong, emotional concepts(makes me a better person)
positioning changes overtime(marketers can engage in repositioning)