Marketing
Marketing
Marketing is an ever present force in contemporary society, communicate with customers and
address their wants and needs
4 Ps of marketing are product, place, price and promotion
Phases of a product:
a. Introductory- low sales, little no profit, little to no competition
b. Growth- increasing sales, rapidly increasing profit, market accepted product and
competitors begin to enter the market
c. Maturity- sales high, profit high then declining, high level of competition
d.Decline- sales declining, profit declining, and competitive pressure remains high and
demand falls
Product width- number of different product lines
Product depth- number of different versions
Multi-branding- market a new product or line under a different name
Price skimming- price product high to increase profits
Penetration pricing- pricing a product lower than market price to gain share in a new market
Leader pricing- pricing products below market price to attract customers to a store they wouldn’t otherwise shop
Loss leader- product priced below cost
Bundling- grouping related products together and pricing them as a single product
Prestige pricing- raising the price of a product to increase the perception of its value
Competitive pricing- setting the price of a product according to the competitor’s prices
Public relations- practice of creating and maintaining public goodwill through publicity and non
paid forms of communication
E-commerce- buying and selling goods over the internet
Content marketing- promotion through the creation and sharing of messages and materials
designed to stimulate interest in a product
Guerrilla marketing- innovative, unconventional promotional tactics that engage customers
through unique experiences
IMC (integrated marketing communication)- immersive and targeted communication with
customers to help move them through the various stages of the buying process
Omni channel communications- unified and consistent communication with customers across all channels a company employs
Corporate- single company owns all levels of production and distribution
contractual- formal agreement, example franchise
Administered- one member of the channel system effectively controls the system out of sheer
power and size
Channel conflict- when a company sells products directly to consumers
Omni channel retailing- strategy used to improve customer experience through creating seamless, consistent, engagement across all channels
PEST- political, economic, social, technological
Business cycles
a. Expansion- increasing employment, economic growth and upward pressure on prices
b. Peak- high point
c. Contraction- growth slows, employment declines, and pricing pressure subsides
d. Trough- economy has hit a bottom
Price fixing- when two or more competing companies agree on how much to charge for a product or services
Price discrimination- company charges different prices to buyers of the same product
Predatory pricing- prices a product extremely low to drive out competition
Bait and switch- company advertises a product for a low price and switches a customer to a high-priced product
Mom Save Our Soul Mom
○Mission Statement
○Situation Analysis
○Objective
○Strategy Development
○Monitoring and controlling
Swot analysis- internal controllable factors and external uncontrollable factors that influence an
organization
Tactical planning- identification of key actions and tactics aligned to the marketing strategy that
will enable marketers to achieve the marketing objective
BCG matrix- consists of four quadrants that show high and low market share and growth potential
○Dog- low market share and no room for growth
○Cash cow- high market share and not much growth potential
○Question mark- low market share and low rate of return but its direction is unclear
○Star- high market share and strong return on funds invested
Porter’s Five- tools for analyzing the competitiveness of a market
Strategies are what an organization is going to do to achieve objectives and tactical plans are the actions a company implement
Primary research is directly related to what you need to know, and secondary data already exists and may not directly address what you need to know
Ethnographic research- study through direct observation of users in their natural environments
Database marketing organizations- companies that collect and analyze massive data sets in
consumers which can be used as secondary data for marketing research
Syndicated marketing- secondary research that is collected by a marketing research company and can be purchased by organizations
Strategic opportunity matrix maps the four growth strategies to a grid based on whether they
address new or existing products and markets
a. Market penetration- uses current products and current markets with the goal to increase
market share
b .Market development- uses existing products to capture new markets
c. Product developments- uses new products in the existing market
d. Diversification- completely new opportunities for the company by creating new products
and markets
B2B sales- sales to another company that consumes the product or services as part of operating the business or uses the product in the assembly of the final product it sells to consumes
Customer relationship management (CRM) processes implemented by a company to handle its contact with customers with the goal of creating a unified customer experience to maximize retention
Customer life cycle- the steps in the customer relationship with a company from initial contact to loyalty
a. Reach- getting a prospective customers attention
b. Acquisition - bringing prospective customer into a sphere of influence
c. Conversion- turning a prospect into a paying customer
d. Retention- engaging a existing customer to keep them
e. Loyalty- turning a customer into an advocate for the company
Customer lifetime value- the total profit a company expects to gain from customer throughout
the relationship
Customer equity- total combined lifetime values of all a company’s customers
Value equity- how the customer assesses the value of the product or service provided by the
company
Brand equity- how the customer assesses the value of the brand above its objective value
Retention value- tendency for the customer to stick with the brand, even if it’s higher than an
otherwise, equal product
Permission marketing suggests that marketers should always ask for permission to sell or to offer buyers marketing messages
Controlling the assault of non solicited pornography and marketing is the US Federal act that
establishes a standard for commercial email
Federal trade commission recommends four fair information practice principles
a. Notice- consumers should be given notice of a company’s information practices before any
personal info is collected from them
b. Choice- consumers should be given the options to control how their data is used by opting in
or out
c. Access- consumer should have the ability to view the data collected and verify and contest
its accuracy
d. Security- information collectors should ensure that the data they collect is accurate and
secure
B2B- businesses that consume the product or service as part of their operations or use the
product as part of their offering to consumers
B2C- consumers who will buy and use the product or service/retailers
Marketing segmentation- process of dividing the market into subgroups of consumers
Targeting- selection of a segment or segments of the market on which marketers will focus
Geographic segmentation - segmenting markets by region of the country, city or county, size,
market density or climate
Demographic segmentation- uses categories such as age, education, gender, income, and
household size
Psychographic segmentation- segmentation by personality or lifestyle
Product related segmentation- differentiated by the consumers relationship with the product
Differentiated marketing strategy is one in which the company decides to provide separate
offerings to each different marked segment that it targets
Undifferentiated marketing- mass marketing, involves marketing to the entire market the same
way
Concentrated marketing- niche marketing, is a strategy that targets only one or a few very defined and specific segments of the consumer population
Micro marketing- targeting strategy that focuses narrowly on catering to the needs of individuals or a very small segments in a targeted geography
Individual marketing- targeted micro marketing focusing on the needs of an individual
Local marketing- targeted micro marketing focusing on a small segments in a given geography
Positioning is a strategic activity where marketers identify the distinctive place they want a
product or service to hold in minds of target market segment
○ Positioning maps- Graphical depiction of how potential customers view a brand or product
and the competition against key criteria
Consumer behavior- the study of individuals, groups, or organizations and all the activities
associated with purchase, use and disposal of goods and services
Consumer decision process
a. Problem and opportunity- recognize a need
b. Search- search for info about options
c. Evaluation- evaluates, considers, and ranks the available options
d. Decision- decision whether or not to purchase a product or service
e. Buy- completed the purchase
f. Post purchase- assesses the decision and the buying experience
Needs and motives (Maslow theory)
a. Physiological needs- hunger, thirst, and other basic drives
b. Safety and security- both physical and financial security as well as health and physical well
being
c. Love and belonging needs- feel accepted by social groups
d. Esteem needs- need to feel good about myself, to be respected and valued by others, and to have a positive self image
e. Self actualization- self fulfillment , this is the need humans feel to reach their full potential
and accomplish all that they can with their talents and abilities
Perception- process by which a consumer identifies, organizes and intercepts information to
create meaning
Selective perception- individuals perceive what they want to in media messages and disregard the rest
Routine problem solving- automatic, low involvement purchase decision process based on limited information or information gathered in the past
Extended problem solving- complex, high involvement purchase decision process with significant investment in information searching and product comparison
Limited problem solving- moderately involved purchase decision making process where a consumer has some prior knowledge it still conducts light research
Fair trade- organized social movement that seeks to help producers in developing countries
achieve better trading conditions s while promoting sustainability
Ethical consumerism is the type of consumer activism based on the concept of dollar voting
Boycott- voluntary and intentional refusal to buy products from a certain person, company or
country for ethical or political reasons
Supply chain transparency- company discloses how the products are sourced and made
Corporate social responsibility- way of conducting business with commitment to values, norms,
and expectations of society for social responsibility
Consultative selling- sales approach where the seller becomes a trusted advisor and to the
customer and builds a relationship to truly understand customer needs
Solution selling- sales approach where the sellers diagnose the customer’s problem then
recommends a mix of products and services to solve it
Team selling- sales approach that involves multiple people from an organization joining forces to advance a customer opportunity
Telemarketing- method of direct marketing by a salesperson over the phone
Adaptive selling- using social styles to customize a sales approach to the specific customer
a. Analytical- they want to know how/ low responsive low assertive
b. Driver- they want to know what/ low responsive high aggressive
c. Amiable- they want to know why/ low assertive high responsive
d. Expressive- they want to know who/ high responsive high assertive
○ Integrated marketing communications- immersive and targeted communication with
customers to help move them through various stages of the buying process
The internet of things- embedding computers in everyday things, turning them into smart and
connected devices that can be monitored and used for data analytics
Planned obsolescence- selling products that need to be replaced frequently by design because
they are obsolete
Pyramid scheme- unethical and unsustainable business model where those higher up the pyramid profit from recruitment fee of those below
Hard selling- sales approach using psychological pressure and insistent language to push a
customer to a quick purchase decision
Straight rebuy- an organization reorders a purchase or service without modifications
Modified rebuy- an organization reorders a product or service with modifications
New task- a buying situation where an organization considers buying a product or service for the first time
Economic buyer- this individual is responsible for buying products that enable the company to
achieve a business advantage, justifies the purchase by linking it to the profit
Infrastructure buyer- aka influencers, influence the buying decision of the execution level.
Influencers are the tech personnel who help develop specs and evaluate alternate products
User buyer- this position often initiates the buying decision of at the user level. Feedback from the users help decide whether the organization will achieve its financial objectives through the
purchase
Initiators- suggest purchasing a product or service
Deciders- have the final decision
Buyers- responsible for the contract
End users- of the item being purchased
Gatekeepers- control the flow of information
Phases of negotiation
a. Investigation- information gathering
b. Determine your desired outcome
c. Presentation- assemble the info you gathered in a way that supports your position
d. Bargaining- parties discuss their goals and seek an agreement
e. Closure- come to an agreement on the terms or one party has decided the offer is
unacceptable
Distributive view- win- lose negotiation that see the situation as a fixed pie to be divided
Integrative approach- win- win negotiation on that looks for ways to expand the pie so each party gets more
Negotiation approach
a. Distributive- divide pie win- lose
b. Integrative- collaborate to expand the pie (win-win)
c. Inductive- start with details
d. Deductive- start with big picture
e. Mixes- focus on key details and big picture items
Dual- concern model maps five styles of handling conflict
a. Avoidance- uncooperative and unassertive/ avoid conflict and deny that it is there
b. Accommodation- cooperative and unassertive, gives to what the other side wants, of it
means giving up one’s personal goal
c. Compromise- middle ground, individuals have some desire to express their own concerns
and get their way, but still respect the other persons goals
d. Collaboration- high both assertiveness and cooperation achieving the best outcome from
conflict, both sides argue for their position while listening to the other side