Lecture Notes Flashcards

Module 1: Introduction to Marketing

• 6Marketing is more than just promotion.

• Marketing: Creating mutually beneficial exchanges between buyers and sellers (American Marketing Association definition).

Misconceptions About Marketing

• Not just promotion, advertising, sales, or social media; includes pricing, service experience and distribution.

• Data-driven: Grounded in good data, not just assumptions.

• Beyond unethical practices: Focused on sustainable relationships.

• Not just for marketers: Requires organization-wide involvement.

• Not just a cost center: Delivers a return on investment.

Marketing Mix

• Traditional (Four Ps):

  • Product: Tangible or intangible offering exchanged with the buyer (physical product, service, idea, political candidate).

  • Place: Distribution; how the product or service is delivered to the market, including locations and e-commerce platforms.

  • Price: Creating value so that the buyer believes received a good value for funds traded in the exchange.

  • Promotion: Getting the word out about the product or service.

• Extended (Seven Ps):

  • People: Front line employees and customer interactions.

  • Physical Evidence: Decor, seating, uniforms and similar.

  • Process: How the service is delivered.

    • Ex: FedEx's efficient transportation system.

Evolution of Marketing

• One-on-one transactions: Small, local markets with limited travel.

• Industrial Revolution: Mass production and transportation infrastructure led to widespread product availability.

• Selling era: Pushing products through door-to-door sales and advertising due to supply exceeding demand.

• Marketing era: Focus on asking people what they want and fulfilling those wants.

• Customer focus: Using technology to customize and better understand customer needs.

Post-Marketing Concept Approaches

• Differentiation orientation: Differentiating products from competitors.

• Market orientation: Organization-wide customer focus.

• Relationship orientation: Building customer lifetime value.

  • If a customer is happy with Nike, they will buy shoes there for the next twenty or thirty years.

• One-to-one marketing: Mass customization through technology.

  • Etsy.com allows buyers to order custom products.

Ethics and Sustainability

• Marketers should prioritize profitability, legality, and ethical conduct.

• Ethical considerations in the marketing mix:

  • Products: Ensuring safety and accurate representation.

  • Price: Full disclosure of prices.

    • Ticketmaster's service fees are unethical in price disclosure.

  • Distribution: Partnering with ethical channel members.

  • Marketing Communications: Accurate and responsible promotions.

• Sustainability: Balancing profit, planet, and people (Triple Bottom Line).

  • Profit: Maintaining business viability.

  • People: Livable wages and community support.

  • Planet: Environmental responsibility, such as pollution and packaging reduction.

  • Refillable cleaning products exemplify the triple bottom line.

Module 2: Marketing Planning

Creating Value

• Value: Bundle of benefits received minus the cost of acquiring the benefits.

• Utility: How companies try to create value:

  • Form utility: Combining components into a finished product.

    • Ex: Grocery stores selling pre-made sandwiches.

  • Time utility: Making products available at convenient times.

    • Ex: Coffee shops open early in the morning.

  • Place utility: Making products available in convenient locations.

    • Ex: Drive through coffee shops.

  • Ownership utility: Making it easy for the buyer to engage in that exchange or take ownership.

    • Ex: Accepting multiple payment methods.

Porter's Value Chain

• Primary activities (add value directly):

  • Inbound Logistics: Sourcing raw materials.

  • Operations: Converting raw materials into final products.

  • Outbound Logistics: Distributing finished products.

  • Marketing and Sales: Communicating the value proposition.

  • Service: Supporting customers during and after the sale.

• Support Activities (enable primary activities):

  • Firm Infrastructure: Organizational structure.

  • Human Resources Management: Hiring, training, and retaining employees.

  • Technology Development: Using technology to better serve customers.

  • Procurement: Managing vendor and quality issues.

• Each stage contributes in adding value, ultimately allowing companies to earn profit.

Big M vs. Little M

• Big M: Strategic marketing; organizational commitment to marketing.

  • If we invest in marketing, we're going to get a return on that investment.

• Little M: Tactical marketing; implementing the strategic vision.

Marketing Strategy vs. Tactics

• Marketing Strategies: Actions to achieve marketing objectives.

  • Expanding distribution, developing new products, launching a promotional campaign.

• Tactics: Specific actions to support strategies.

  • Researching prospective markets, establishing partnerships with wholesalers or retailers in foreign locations.

  • The actions that I'm going to take that support that larger strategy.

Levels of Planning

• Strategic level: Top-level plans that drive the overall direction.

  • Done by people at the very top of the organization. They drive the overall direction of the company and establish the company mission and the vision and the strategic goals.

• Business level: Planning for separate business units or divisions.

  • WGU College of Business Plan differs from the college of IT or the college of health professions.

• Functional level: Marketing plan supporting the business plan.

BCG Matrix

• Tool to decide how to distribute funds.

• Dimensions: Market Share and Market Growth.

  • Market Share: How much of the market do we currently hold?

  • Market Growth: How fast is the industry growing?

• Categories:

  • Stars: High market share in a fast-growing market; continue investing.

  • Cash Cows: High market share in a slow-growing market; maintain position.

  • Question Marks: Low market share in a fast-growing market; nurture potential.

    • Also known as problem children.

  • Dogs: Low market share and low growth; divest.

Firm-Level Strategies

• Generic Business Strategies: overall direction at the business level.

  • Growth: Adding new products and services.

  • Stability: Maintaining current operations.

  • Retrenchment: Reallocating funds from low-performing to high-performing areas.

• Competitive Strategies (Michael Porter):

  • Competitive Advantage: Cost leadership or Differentiation.

  • Competitive Scope: Broad target or Narrow Target.

  • Cost Leadership: Low costs, broad market (e.g., Aldi).

  • Differentiation: Unique products, broad market (e.g., Apple).

  • Cost Focus: Low costs, narrow market (e.g., Claire's).

  • Focused Differentiation: Unique products, narrow market (e.g., luxury car companies).

• Strategy Types (Bells and Snow): What's your philosophy, in terms of what type of, you know, company do you wanna be in the marketplace?

  • Prospectors: Innovators and first movers (risk takers).

  • Analyzers: Second movers that replicate successful products.

  • Defenders: Protecting current market position.

  • Reactors: Reacting to changes; least desirable strategy.

Marketing Planning Process

1. Business Mission, Vision, and Goals: Driven by who we are. and where we're going as a business. Align your marketing with it.

2. Situation Analysis: Analyzing the current situation inside and outside of the company.

3. Market Research: Filling information gaps about customers, competitors, and trends.

4. Marketing Goals and Objectives: What to accomplish with the marketing program.

5. Develop Strategies: Use the marketing mix.

6. Implement Strategies: Specify who does what by when, including monitoring progress.

7. Contingency Planning: Considering "what-if" scenarios (worst-case, best-case, expected).

Situation Analysis Components

• Macro-Level External Environment: Uncontrollable factors like changes in laws, sociocultural trends, technological trends, economic trends and the natural environment ( climate change).

• Competitive Environment: Competitors.

• Internal Environment: Within our company

Porter's Five Forces Model

• A tool to analyze our competitive environment.

  • Threat of new entrants.

  • Bargaining power of suppliers.

  • Bargaining power of buyers.

  • Threat of substitute products or services. (indirect competitors).

Internal Environment Analysis

• Structure and systems.

• Culture.

• Leadership.

• Resources.

SWOT Analysis

• Summarizes key aspects in the situation analysis.

• Strengths: Internal things that you're really good at and wanna use in your marketing program.

• Weaknesses: Internal areas to address.

• Opportunities: External factors beneficial to the company.

• Threats: External factors harmful to the company.

• Used for capturing information, not strategy creation.

Module 3: Global Marketing

Global Experience Learning Curve

• The more we do something, the better we get at it.

1. No Foreign Marketing: No international strategy; may occasionally sell internationally.

2. Foreign Marketing: Develop a foreign international strategy. Use intermediaries in those foreign markets, or setting up our own sales force. Production in home market.

3. International Marketing: Production in foreign market to serving those foreign markets. Has an international division.

4. Global Marketing: World is a single market with many segments. Produce wherever it makes the most sense, you know, wherever those there are those resources. We sell wherever it makes the most sense.

Assessing Global Markets

• Economic environment: What's happening in that country in terms of, you know, you know, their business cycle?

• Cultural and societal consideration. Societal trends and cultural trends.

• Business environment: How do companies do business in that country?

• Legal and political landscape. How stable the government is.

• Specific market conditions. Who are the competitors?

Emerging Markets

• Transitioning from low-income to modern economies.

• Growing income levels.

• Consumers lack access to many products.

• Traditional marketing mix strategies may not work.

Multinational Regional Market Zones

• NAFTA (USMCA): North American free trade agreement between The United States, Mexico, and Canada.

• Mercosur: South American market.

• ASEAN: Asian market zone.

• European Union: Europe (28 countries).

Market Entry Strategies (Least to Most Risky)

1. Exporting: Produce domestically; sell internationally through websites, distributors, or direct sales force.

2. Contractual Agreements:

   • Licensing: License assets (patent or trademark) to another company in another country that produces under your name.

   • Franchising: Franchising globally is the same way as we franchise domestically. The franchisee is the one investing.

3. Strategic Alliances: two or more partnering companies, establish an independent a new company that they'll have a stake in.

   • Joint Venture: Two or more companies create a third company.

4. Direct Foreign Investment: Setting up its own operations or manufacturing in a foreign market.

Other Strategy Decisions

• Organizational Structure:

  • Centralized (domestic headquarters makes decisions) vs. Decentralized (foreign markets make decisions).

  • Organize by product lines, regions, or matrix structure.

• Consumer Decisions:

  • Quality perception.

    • Align with the culture, avoid offensive content.

  • Country of origin effect: Positive or negative perception based on where products are made.

• Product Decisions:

  • Direct product extension.

  • Product adaptation: Altering to fit local needs.

  • Product invention: Creating new products for the international market.

• Channel Decisions (Distribution):

  • Partnering with distributors, wholesalers, retailers.

  • The Six C's Channel Decisions:

    • Cost, capital, control, coverage, character, continuity.

• Marketing Communications:

  • Global marketing themes.

  • Global marketing themes with local content.

  • Basket of global advertising themes.

  • Local market ad generation.

• Pricing Decisions:

  • One world price: Same price everywhere (rarely possible).

  • Local market conditions price: Based on local market (difficult to cover expenses).

  • Cost-based price: Cost plus markup (may price out of market).

  • Price escalation.

Global Pricing Issues:

*   Dumping: Illegal practice of pricing below cost.
*   Gray markets (product diversion): Unauthorized diversion of products from low to high price markets.