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59 Cards in this Set
- Front
- Back
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Marketing
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• Is about identifying and meeting human and social needs. Or "meeting needs profitably"
•AMA defines marketing as: the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. |
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Marketing Management
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The art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
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What is marketed?
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• Goods
• Services • Events • Experiences • Persons • Places • Properties • Organizations • Information • Ideas |
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Who markets?
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•A marketer: is someone who seeks a response - attention, a purchase, a vote, a donation - from another part, called the prospect.
•Marketers must have qualitative and quantitative skills, entrepreneurial attitudes, and a keen understanding of how marketing creates value within the organization. •Marketing is not only done by marketers. Marketing happens when a there is a possible touch point, where the customer interacts with a company either directly or indirectly in some way. •Marketers should also be involved in key management activities such as product innovation and new business development. •Marketers must think like executives in other departments and vice versa. |
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What is a market?
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• It is a physical or non-physical (internet)space where there are a collection of buyers and sellers who transact over a particular product or product class (housing market).
○ Marketers use the term market to cover groupings of customers. ○ They view sellers as making up the industry and buyers as making up the market. • There are many different types of markets: ○ Need markets ○ Product markets ○ Demographic markets ○ Geographic markets ○ Voter markets ○ Labor markets ○ Donor markets |
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Markets can be...
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• Marketplace - physical
• Marketspace - digital • Meta-market - Describes a cluster of complimentary products and services closely related in the minds of the consumers, but spread across diverse industries. (cars, finance companies, mechanics, insurance companies.) |
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Needs, Wants, and Demands
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•Needs can be basic needs such as water or food. Humans can also have strong needs for recreation or entertainment.
•Needs become wants when they are directed to specific objects that might satisfy the need. (IE you need food but you want a piece of pizza.) •Demands are wants for specific products backed by an ability to pay. •Sometimes customers have needs that they are not fully conscious of or cannot properly articulate. In this case a customer will have: • stated need, what they verbally express • real need, what they are really asking for • unstated need, the customers expectation of the product in which they are searching for • delight need, what they are hoping to have come with the product they are purchasing (the extras ??) • secret need, how the customer is hoping to be perceived after purchasing a specific type of product |
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Target markets, positioning, and segmentation
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• Marketers distinguish particular groups based on their preferences
• These groups can be segmented by psycho-graphics, demographics, behavioral differences • Marketers will then determine what group, or target market presents the greatest opportunity and markets to that group. Depending on that type of group the marketer will position the product or service in a specific way. |
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Offerings and Brands
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• Companies address needs by putting fourth a value proposition, a set of benefits that satisfy those needs.
•The value proposition is made physical by an offering, which can be a combination of products, services, information, and experiences. • A brand is an offering from a known source. |
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Value and Satisfaction
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• An offering is successful if it is perceived to deliver the most value, the sum of intangible and tangible benefits and cost to customers.
• Value is a combination of quality, service, and price. • Value perception increases with quality and service, but decreases with price. • Marketing can be seen as the identification, creation, communication, delivery, and monitoring of customer value. • Satisfaction reflects a person's judgment of a product's perceived performance in relationship to expectations. |
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Marketing Channels
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• To reach a target market, marketers use kinds of channels:
• Communication channel • Deliver and receive messages from target buyers (radio, internet, billboard ads) • Marketers also communicate through the look of their retail stores, Web sites, and other media. • Can also include toll-free numbers, e-mail, blogs to supplement the communication • Distribution channel • Used to display, sell, or deliver physical product or service to the buyer or user. • Channels may be direct or indirect. • Examples: distributors, wholesalers, retailers • Service channel • The marketer carries out the transaction using service channels such as warehouses, transportation companies, and banks. |
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Supply Chain
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•This describes how the product moves from a raw good all the way to the store shelves.
• The marketer can capture a small percentage of the total value generated by the supply chain's value delivery system, but a marketer can expand upstream or downstream to capture more of the value (make or buy). |
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Competition
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This encompasses all the actual and potential rival offerings and substitutes that a buyer may consider.
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Marketing Environment
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•The marketing environment consists of the task environment and the broad environment.
• Task environment includes the actors engaged in producing, distributing, and promoting the offering, such as the company, suppliers, distributors, dealers, and target customers. • The broad environment consists of six components: demographic, economic, socio-cultural, natural, technological, political-legal environments. |
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Marketing Environment Continued
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• With the introduction of Internet and globalization companies are often worldwide with a mass selection of goods and services often customized for the locale they are sold in.
• Companies have cut out the middle man by selling products online and delivering directly to the customer. • Customers now have the ability to research any product online before they buy at either a physical store or online • Companies now have a far greater reach with the Internet. Companies can directly converse with consumers, and vice versa through the various social media channels. • Disintermediation refers to the delivery of products and services by intervening in the traditional flow of goods through distribution channels, such as with Amazon.com. •Disintermediation has given consumers an increased buying power since they can go online to collect information about practically any offering |
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Production Concept
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• Holds that consumers prefer products that are widely available and inexpensive.
• Managers of production-oriented businesses focus on high production efficiency, low costs, and mass distribution. |
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Product Concept
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proposes that consumers favor products offering the most quality, performance, or innovative features.
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Selling Concept
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Holds that consumers and businesses, if left alone, won't buy enough of the organization's products, so the organization must undertake an aggressive selling effort.
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Marketing Concept
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• The job is to find the right products for your customers instead of the right customer for your product.
• The marketing concept holds that the key to achieving organizational goals is being more effective than competitors in creating, delivering, and communicating superior customer value to your target markets. |
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Holistic Concept
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is based on the development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and inter-dependencies.
•This concept recognizes that everything matters in marketing and that a broad, integrated perspective is often necessary. •Components of holistic marketing • Internal marketing • Integrated marketing • Relationship marketing • Performance marketing |
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Relationship Marketing
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•aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business.
•Build relationships with key constituents: customers, employees, marketing partners (suppliers, distributors, dealers, agencies) |
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Integrated Marketing
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•occurs when the marketer devises marketing activities and assembles marketing programs to create, communicate, and deliver value for consumers such that "the whole is greater than the sum of its parts."
•Marketers should design and implement any one marketing activity with all other activities in mind. |
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Internal Marketing
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•an element of holistic marketing, is the task of hiring, training, and motivating able employees who want to serve customers well.
• It ensures that everyone in the organization embraces appropriate marketing principles. • Marketing is no longer the responsibility of a single department - it is a company-wide undertaking that drives the company's vision, mission, and strategic planning. |
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Performance Marketing
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requires understanding the financial and non-financial returns to business and society from marketing activities and programs.
Financial Accountability: •Marketers are increasingly asked to justify their investments in financial and profitability terms, as well as building the brand and growing the customer base. Social Responsibility marketing: •Marketers must consider the ethical, environmental, legal, and social context of their role and activities • Corporate Social Marketing - Supporting behavior change campaigns • Cause Marketing - Promoting social issues through efforts such as sponsorship's, licensing agreements, and advertising • Cause-related marketing - Donating a percentage of revenues to a specific cause during a given period • Corporate Philanthropy - Making gifts of money, goods, or time to help nonprofit organizations, groups, or individuals • Corporate Community Involvement - Providing volunteer services to the community • Socially responsible business practices |
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Original Four P's
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• Product - variety, quality, design, features, brand name, packaging, returns
• Price - List price, discounts, allowances, payment method, credit terms • Promotion - Sales promotion, advertising, sales force, public relations, direct marketing • Place - Channels, coverage, assortments, locations, inventory, transport |
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Characteristics of a Great Marketing
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• The company selects target markets in which it enjoys superior advantages and exits or avoids markets were it is intrinsically week.
• Virtually all the company's employees and departments are customer- and market-minded. • There is a good working relationship between marketing, R&D, manufacturing, sales, and customer service. • The company has incentives designed to lead to the right behaviors. • He company continuously builds and tracks customer satisfaction and loyalty. • The company manages a value delivery system in partnership with strong suppliers and distributors. • The company is skilled in building its brand name(s) and image. • The company is flexible in meeting customers’ varying requirements. |
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Value delivery process
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• The value creation and delivery sequence consists of 3 phases that begin before there is a product and continues through development and after launch.
○ Choosing the value, marketers segment the market, select the appropriate target, and develop the offering's value positioning. ○ The formula "segmentation, targeting, and positioning (STP)" is the essence of strategic marketing. ○ Providing the value through specific product features, prices, and distribution. ○ Communicating the value through the sales force, Internet, advertising, and other communication tools to announce and promote the product. |
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Value Chain aka value delivery network
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developed by Michael Porter is a tool for identifying ways to create more customer value. According to this model, every firm is a synthesis of activities performed to design, produce, market, deliver, and support its product.
• The primary activities of the value chain are: ○ Inbound logistics (bringing materials into the business) ○ Operations (converting materials into final products) ○ Outbound logistics (shipping final products) ○ Marketing (including sales) ○ Service ○ The support activities of the value chain are: ○ Procurement ○ Technology development ○ Human resource management ○ Firm Infrastructure (costs include general management, finance, planning, accounting, legal, and government affairs.) |
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five core business processes
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• A firm's success depends not only on how well each department performs its work, but also on how well the company coordinates departmental activities to conduct these processes
○ Market sensing process: Gathering and acting upon market information ○ New-offering realization process: Researching, developing, and launching new high-quality offerings quickly and within budget ○ Customer acquisition process: Defining a target market and prospecting for new customers ○ Customer relationship management process: Activities concerning building deeper understanding of, relationships with, and offerings for individual customers. ○ Fulfillment management process: Activities in receiving and approving orders, shipping the goods on time, and collecting payment. |
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Core Competencies
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• It is a source of competitive advantage and makes a significant contribution to perceived customer benefits
• It has applications in a wide variety of markets • It is difficult for competitors to imitate |
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Holistic Marketing addresses three key management questions to create, maintain, and renew customer value:
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• Value exploration - Identifying new opportunities
• Value creation - How companies create new value offerings • Value delivery - How a company uses its capabilities and infrastructure to deliver the new value offerings more efficiently |
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Strategic Planning used to select and execute the right activities:
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• Managing a company's businesses as an investment portfolio
• Assessing each business's strength by considering the market's growth rate and the company's position and fit in that market • Establishing a strategy |
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Most companies have four different organizational levels
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• corporate, division, business unit, and product.
• Corporate designs the strategic plan, allocates resources to each division and the division will establish a plan covering the allocation of funds to each business unit within each division. • Each business unit develops a strategic plan to carry that unit into a profitable future • Each product level (product line, brand) develops a marketing plan for achieving its objectives. |
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Marketing Plan
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the central instrument for directing and coordinating the marketing effort, operating at both the strategic and tactical levels.
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Strategic Marketing Plan
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lays out the target markets and the firm's value proposition, based on an analysis of the best market opportunities .
Planning • Corporate planning • Division planning • Business Planning • Product Planning Implementing • Organizing • Implementing Controlling • Measuring Results • Diagnosing Results • Taking Corrective Action |
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Tactical Marketing Plan
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specifies marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service.
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Corporate & Division Strategic Planning
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All corporate headquarters undertake four planning activities that include:
• Defining the corporate mission • Establishing strategic business units • Assigning resources to each unit • Assessing growth opportunities |
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Defining the corporate mission: (Corporate and Division Strategic Planning)
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• Includes a focus on a limited number of goals, stress the company's major policies and values, and define the company's major competitive spheres
• A mission statement also takes a long-term view and are as short, memorable, and meaningful as possible. • Key competitive dimensions for mission statements are: ○ Industry - What industry or industries does your company operate or serve in? ○ Products and applications - Define the range of products and applications your company will supply. ○ Competence - the firm identifies the range of technological and other core competencies it will master and leverage. ○ Market Segment - the type of market or customers a company will serve. ○ Vertical - The number of channels, from raw materials to final product and distribution, in which a company will participate. This can range to a company handling all of the steps from raw material to distribution, or outsourcing a part of, if not all forms of production. ○ Geographical: The range of regions, countries, or country groups in which a company will operate defines its geographical sphere. |
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Establishing strategic business units: (Corporate and Division Strategic Planning)
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• A business can define itself in terms of three dimensions: customer groups, customer needs, and technology.
• When dealing with a large company with multiple business units, each will require its own strategy. • The purpose of identifying the company's strategic business units is to develop separate strategies and assign appropriate funding, ○ Strategic Business Units have three characteristics: • Single business or collection of related businesses that can be planned separately from the rest of the company • It has its own set of competitors • It has a manager responsible for strategic planning and profit performance who controls most factors affecting profit. |
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Assigning resources to each unit: (Corporate and Division Strategic Planning)
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Once the strategic business units have been defined, management must decide how to allocate corporate resources to each and make decisions on whether or not keep certain business units based on its value.
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Assessing growth opportunities: (Corporate and Division Strategic Planning)
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Refers to planning new businesses, downsizing, and terminating older businesses depending on future sales forecasts.
• Three options for increasing sales and profits are: ○ Intensive growth opportunities • Determine whether more market share can be gained with its current product mix in their current markets using a market penetration strategy • Consider whether it can find or develop new products of potential interest to its current markets with a product-development strategy • Later a firm will review its opportunities to develop new products for new markets in a diversification strategy ○ Integrative growth opportunities • Increase sales and profits through: □ Backward integration (acquiring a supplier) □ Forward integration (acquiring a competitor) □ Or consider diversification ○ Diversification growth opportunities • This makes sense when good opportunities exist outside the present businesses |
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Goal Formulation
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○ This follows SWOT analysis
○ Objectives that are specific with respect to magnitude and time ○ Examples: profitability, sales growth, market share improvement, risk containment, innovation, and reputation. ○ After setting objectives the business unit will manage by objectives (MBO), but in order for this to work, the unit's objectives must be: • Arranged hierarchically - most to least important • Quantitative whenever possible • Realistic • Consistent |
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Strategy Formulation
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• Goals indicate what the business unit wants to achieve; strategy is the game plan for getting there.
○ The strategy will include: § A marketing strategy, technological strategy, and a sourcing strategy. § Michael Porter's three generic strategies: § Overall Cost Leadership § Differentiation § Focus § As a part of strategy formulation, companies may decide to form an alliance in order to satisfy business needs (product development, market penetration, etc.). □ Partner Relationship Management (PRM) ® The act of development organizational structures that support strategic alliances in order to keep them thriving and continue a mutually satisfying long-term relationship. |
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Program Formulation and Implementation
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• Seven elements of in successful business practice
○ Strategy ○ Structure ○ Systems ○ Style - how employees think and behave ○ Skills - to carry out strategy ○ Staff - able people who are properly trained ○ Shared values - values that guide employee actions |
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The Marketing Plan and Marketing Performance
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A marketing plan summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives, along with tactical guidelines for the marketing programs and financial allocations over the planning period.
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Contents of a Marketing Plan
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• Executive summary
○ state main goals and recommendations • Situation Analysis ○ background data on sales, costs, the market, competitors, and various forces in the macro-environment. Site trends, critical issues, etc. • Marketing Strategy ○ Manager defines mission, marketing and financial objectives, and needs the market offering is intended to satisfy as well as its competitive positioning. This will require inputs from other departments, such as purchasing, manufacturing, sales, finance, and HR. • Financial Projections ○ Include sales forecast (by product category), expense forecast (marketing costs broken down into finer categories), and break-even analysis. • Implementation controls ○ Outlines the metrics and controls for monitoring and adjusting implementation of the plan. ○Spells out the goals, schedule, and budget for each month or quarte |
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From Marketing Plan to Marketing Action
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• Plans are created way in advance to allow time for research, analysis, management review, and coordination between departments.
• As the plan is rolled out, results are monitored, and deviations from the plan are investigated. • The plans are updated as needed to adapt to change. • The plan should define how progress toward objectives will be measured for sake of evaluation • Measure marketing performance |
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Measure marketing performance
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Marketing Metrics is a set of measures that helps organizations quantify, compare, and intercept their marketing performance.
○ Can be separated by: □ Short-term results, which often reflect profit-and-loss concerns, such as sales turnover and shareholder value. □ Changes in brand equity, which can be measured by the level of customer awareness, attitudes and behaviors; market share, relative price premium; number of complaints; distribution and availability; total number customers; perceived quality; and loyalty and retention. |
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Marketing Plan Performance
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Four ways to measure marketing plan performance:
• Sales analysis - measures and evaluates actual sales in relation to goals • Market share analysis • Marketing expense-to-sales analysis, and financial analysis • Financial analysis |
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Profitability Analysis
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• This analysis will determine if change is needed within customer groups, products, or territories.
•Identify specific expenses for each marketing function (i.e. advertising) and assign cost to a particular entity, such as a marketing channel. □ Next, create a profit-and-loss statement for each entity and determine if corrective action is needed |
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Marketing Information
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Systems consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
• This system draws from data based on internal company records, marketing intelligence, and marketing research. |
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Internal Records and Database Systems
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To spot important opportunities and potential problems, marketing managers rely on internal reports and databases of all sorts.
• Order-to-Payment Cycle • Sales Information Systems • Databases, Data Warehousing, and Data Mining |
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Marketing Intelligence
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is a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment.
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Marketing Research System
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• Managers will commission formal studies of specific problems and opportunities, such as a market survey, a product-preference test, a sales forecast by region, or an advertising evaluation.
○ These marketing insights provide diagnostic information about how and why we observe certain effects in the market place. ○ This will help marketers create or improve a product that customers desire. |
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Marketing Research
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is the systematic design, collection, analysis, and reporting of data and finds relevant to a specific marketing situation facing the company.
• Three types of marketing research sources: ○ Syndicated-service research firms: Neilsen, which gathers consumer and trade information ○ Custom marketing research firms, which design studies, carry them out, and report findings. ○ Specialty-line marketing research firms, which provide specific services such as field interviewing |
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Marketing research follows a six-step process
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• Define the problem, decision alternatives, and research objective
• Develop the research plan • Collect the information • Analyze the information • Present the findings • Make the decision |
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Forecasting and Demand Measurement
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• Marketing research and collecting marketing intelligence can help to identify marketing opportunities.
• Following that data collection the company must then measure and forecast the size, growth, and profit potential of each new opportunity . • The sales forecasts are prepared by marketing and are used by: ○ Finance to raise cash for investments and operations ○ Manufacturing to establish capacity and output ○ Purchasing to acquire the right amount of supplies ○ Human resources to hire the needed workers. • Before all this can happen there needs to be a decision on which market to measure |
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Measures of Market Demand
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Used to evaluate opportunities in market planning. If the company isn't satisfied with current sales, it can try to attract a larger percentage of buyers from its target market, lower the qualifications for potential buyers, expand its available market by adding distribution or lowering its price, or re-position itself in the minds of the customers.
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Potential Market
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is the set of customers with a sufficient level of interest in a market offer.
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