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133 Cards in this Set
- Front
- Back
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Marketing |
The performance of activities that seek to accomplish an organization’s objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from a producer to customer or client. It provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers. |
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Customer Satisfaction
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The extent to which a firm fulfills a customer’s needs, desires, and expectations.
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Innovation
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The development and spread of new ideas, goods, and services.
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Pure subsistence economy
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When each family unit produces everything it consumes, there is no need to exchange goods and services and no marketing is involved.
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Marketing builds a…
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long-lasting relationship that benefits both the firm and the customer.
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Macro-marketing
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A social process that directs an economy’s flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society.
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Discrepancies and separations that marketing overcomes:
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Discrepancies of quantity (Producers prefer economies of scale, consumers like to buy/consume in small amounts), Discrepancies of Assortment (producers specialize in producing a narrow assortment of goods/services, consumers like a broad variety). Spatial separation (Producers are located where it is economical, consumers are scattered), Separation in time (consumers may not want to consume goods when producers prefer to produce them), Separation of information (producers do not know all consumer needs, consumers don’t know everything that is available), Separation in values (producers value goods and services in terms of costs and competitive prices, consumers value them in terms of price and satisfying needs), Separation of ownership (producers hold title to goods that they don’t want to consume, consumers want goods and services that they don’t own). |
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Universal functions of marketing
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Buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information (collection, analysis, and distribution of info needed to plan, carry out, and control marketing activities).
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Intermediary
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Someone who specializes in trade rather than production. (retailers and wholesalers)
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Collaborators
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Firms that facilitate or provide one or more of the marketing functions other than buying or selling. (Ad agencies, marketing research firms, product testing labs, etc.)
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Economic system
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The way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people/groups in the society.
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Command Economy
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Government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. May work fairly well as long as an economy is simple and the variety of goods and services is small.
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Market-directed economy
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The individual decisions of the many producers and consumers make the macro-level decisions for the whole economy.
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Marketing Evolution
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1. The Simple Trade Era – sell surplus. 2. The Production Era – increase supply, ‘if we can make it, it will sell’. 3. The Sales Era – company emphasizes selling to beat competition. 4. The Marketing Department Era – ‘coordinate and control’ = improve short-run policy planning and to try to integrate the firm’s activities. 5. The Marketing Company Era – develop long-range plans, and the whole company effort is guided by the marketing concept. |
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Marketing Concept
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An organization should aim all of its efforts at satisfying its customers – at a profit. There are three basic ideas: customer satisfaction, total company effort, and profit.
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Triple Bottom Line
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Measures an organization’s economic, social, and environmental outcomes – as a measure of long term-success. ‘People, planet, and profit’
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Customer value
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The difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. Any time customer value is reduced – because the benefits to the customer decrease or the costs increase – the relationship is weakened.
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Micro-macro dilemma
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What is ‘good’ for some firms and consumers may not be good for society as a whole.
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Social responsibility
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A firm’s obligation to improve its positive effects on society and reduce its negative effects.
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Marketing ethics
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The moral standards that guide marketing decisions and actions.
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Marketing management process
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The process of (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans.
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Strategic (management) planning
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The managerial process of developing and maintaining a match between an organization’s resources and its market opportunities.
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Marketing strategy planning
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Finding attractive opportunities and developing profitable marketing strategies. Really attractive opportunities are those that fit with what the whole company wants to do and is able to do well.
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Marketing Strategy
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Specifies a target market and a related marketing mix.
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Target market
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A fairly homogenous group of customers to whom a company wishes to appeal.
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Marketing mix
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The controllable variables the company puts together to satisfy this target group.
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Target Marketing
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A marketing mix is tailored to fit some specific target customers.
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Mass Marketing
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The typical production oriented approach, vaguely aims at ‘everyone’ with the same marketing mix.
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Mass Marketer v. Mass Marketing
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Mass marketers are like Walmart or Kraft Foods, they aim at clearly defined target markets, their target markets are usually large and spread out.
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Marketing Mix
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Product, Place, Promotion, Price. 1. Product – developing the right ‘product’ for the target market (remember that it should satisfy some customers’ needs). 2. Place – reaching the target (channels of distribution). 3. Promotion - telling and selling the customer (personal selling, mass selling, and sales promotion). 4. Price – making it right (consider the competition in the target market and the whole cost of the marketing mix). |
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Channel of distribution
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Any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer.
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Personal selling
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Involves direct spoken communication between sellers and potential customers. Personal selling may happen face-to-face, over the telephone, or even over the Internet.
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Mass selling
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Communicating with large numbers of customers at the same time. The main form is advertising or publicity.
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Advertising v. Publicity
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Advertising is any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor (newspapers, TV, internet, etc.). Publicity is any unpaid form of that, including getting favorable coverage in news stories or on TV (includes creating web pages or social media).
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Sales promotion
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Promotion activities - other than advertising, publicity, and personal selling – that stimulate interest, trial, or purchase. (Coupons, samples, signs, contests, events, catalogs, etc.)
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Marketing Plan
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A written statement of a marketing strategy and the time-related details for carrying out the strategy. It must contain: (1) what marketing mix will be offered to whom (target market), and for how long (2) what company resources (costs) will be needed at what rate (3) what results are expected (sales and profits, customer satisfaction levels, etc.) Also include some control procedures – whoever is to carry out the plan will know if things are going wrong (compare actual sales to expected sales). |
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Operational decisions
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Short-run decisions to help implement strategies.
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Marketing strategy is evaluated…
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regularly and changed as feedback identifies what is working and what could work better.
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Marketing program
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Blends all of the firm’s marketing plans into one ‘big’ plan.
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Customer lifetime value
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Total stream of purchases that a customer could contribute to the company over the length of the relationship.
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Customer equity
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The expected earnings stream (profitability) of a firm’s current and prospective customers over some period of time.
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Three potential sources of new revenue
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Acquiring new customers, retaining current customers, and enhancing the customer value by increasing their purchases. The marketing manager should evaluate the effective ness of a marketing mix in achieving each of these objectives, considering both revenues and costs over the long term. |
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Breakthrough opportunities
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Opportunities that help innovators develop hard-to-copy marketing strategies that will be profitable for a long time.
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Competitive advantage
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A firm has a marketing mix that the target market sees as better than a competitor’s mix.
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Marketing planning process
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Start with a broad look at a market, develop a set of specific qualitative/quantitative screening criteria that help define what business and markets the firm wants to compete in (SWOT is useful here). Use segmentation to decide which segments (subgroups of customers) to serve.
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SWOT Analysis
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Strengths and weaknesses come from assessing the company’s resources and capabilities. Opportunities and threats emerge from an examination of customers, competition, and the external market environment.
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Differentiation
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The marketing mix is distinct from what is available form a competitor.
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Types of opportunities to pursue
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Market penetration, market development, product development, diversification.
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Market penetration
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(PP, PM) Trying to increase sales of a firm’s present products in its present markets – often through a more aggressive marketing mix. They might strengthen the relationship with customers or try to attract competitor’s consumers or current nonusers. Easiest to pursue.
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Market development
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(PP, NM) Trying to increase sales by selling present products in new markets. May search for new uses for a product or try advertising in different media to reach new target customers.
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Product development
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(NP, PM) Offering new or improved products for present markets. Analyze the present market’s needs, possibly see new ways to satisfy customers.
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Diversification
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(NP, NM) Moving into totally different lines of business – entirely unfamiliar products, markets, or even levels in the production-marketing system. These are hard to evaluate and usually involve the biggest risk.
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Why consider international opportunities?
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Possible economies of scale, which might give a firm a competitive advantage in both its home markets and abroad. Risks are often higher in foreign markets. Many firms fail because they don’t know the culture, regulations, and there may be political/social unrest.
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The External Market Environment
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Economic environment, Technological environment, Political and legal environment, cultural and social environment. Managers can’t control this, but they can analyze it when making decisions that can be controlled.
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Mission Statement
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Sets out the organization’s basic purpose for being, focuses on a few key goals, supplies guidelines that help managers determine which opportunities to pursue. May need to be revised as new market needs arise/market environment changes, but it is not done casually. |
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Company objectives
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Guide managers as they search for and evaluate opportunities – and later plan marketing strategies. |
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What resources may limit the search for opportunities?
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1. Lack of financial strength 2. Producing capability and flexibility (small firms v. economies of scale) 3. Marketing strengths create competitive advantages (familiar brand, strong channel relations, creative brand advertising, industry-leading salseforces). |
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Pure Competition
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Competitors offer very similar marketing mixes, and customers see the alternatives as close substitutes. They have failed to differentiate their offerings, and profit margins shrink.
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Oligopoly
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A small number of firms control the market, with high barriers to competitive entry.
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Monopolistic Competition
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A number of different firms offer marketing mixes that at least some customers see as different. Each tries to get ‘control’ in its own target market. This is the most typical
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Monopoly
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One firm completely controls a broad product market. Government commonly regulate monopolies, and they face competition sooner or later.
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Sustainable competitive advantage
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A marketing mix that customers see as better than a competitor’s mix and cannot be quickly or easily copied.
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Competitor analysis
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An organized approach for evaluating the strengths and weaknesses of current or potential competitor’s marketing strategies. You compare the SW of your current target market and marketing mix with what competitors are currently doing or are likely to do in response to your strategy. Helps the manager identify potential opportunities for differentiating the marketing mix. |
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Competitor Matrix
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An organized table that compares the SW of a company with those of its competitive rivals.
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Economic environment
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Macro-economic factors (including national income, economic growth, and inflation) that affects patterns of consumer and business spending.
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How do Interest rates and inflation affect buying?
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Interest rates directly affect the total price borrowers must pay for products It affects when, and if, they will buy. Interest rates usually increase during periods of inflation.
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How to changes in the exchange rate affect international trade?
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When the dollar is strong, it’s worth more in foreign countries. This makes US products more expensive overseas and foreign products cheaper in the US.
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Technology
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The application of science to convert an economy’s resources to output. It creates opportunities for new products and for new processes (ways of doing things). Marketing managers who anticipate the impact of new technology can plan and adapt marketing strategies for the future.
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Nationalism
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An emphasis on a country’s interests before everything else.
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Antimonopoly Laws
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Businesses and individual managers are subject to both criminal and civil laws. Consumer protection laws are not new, foods/drugs are controlled, and product safety is controlled (Consumer Product Safety Act set up the CPSC).
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Cultural and social environment
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Affects how and why people live and behave as they do- which affects consumer buying behavior.
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GDP and GNI
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GDP is gross domestic product, the total market value of all the goods and services provided in a country’s economy in a year. GNI is gross national income, similar to GDP but doesn’t include income earned by foreigners who own resources in that nation.
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Generation X
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Born immediately after the baby boom (1965 -1977). Better educated than previous generations.
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Generation Y
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‘Millenials’ (1978-1994), kids of baby boomers, increasingly attractive market for industries like housing, appliances, furniture, and electronics.
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Generation Z
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(1995~) Still young, ‘digital natives’, more cautious and realistic, more accepting of other races and cultures.
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Sustainability
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The idea that it’s important to meet present needs without compromising the ability of future generations to meet their own needs.
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BCGs Growth Share Matrix
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Cash cows generate cash (High market share, low market growth rate), stars require continual investment to keep growing (HMS, HGR), ?? means the cost of business is more than some of our competitors, and it’s not going to get better (LMS, HGR), Dogs must be sold (LMS, LGR) because the returns on investment would be better put to use on ‘stars’ or ‘cows’
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Continuum of Environmental Sensitivity
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Industrial products are the most insensitive to shifting across cultures. Firms producing and selling products near the sensitive end of the continuum should carefully analyze how their products will be seen and used in new environments - and plan their strategies accordingly.
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Market
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A group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services that satisfy those needs.
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Generic market v. Product market
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GM is a market with broadly similar needs and sellers offering various, often diverse, ways of satisfying those needs. PM is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs.
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Four part description of a product-market
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Product type (describes the goods/services the customers want), Consumer needs, consumer types, geographic area (where the firm plans to compete for customers).
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Market segmentation (2 steps)
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1. Name broad product-markets 2. Segment these in order to select target markets and develop suitable marketing mixes. |
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Narrowing down to target markets
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All customer needs --> Some generic market --> One broad product-market --> Homogeneous product-markets --> Select target marketing approach (Single target market, multiple target markets, combined target markets)
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Criteria for ‘good’ market segments
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1. Homogenous within 2. Heterogeneous between 3. Substantial (big enough to be profitable) 4. Operational (segmenting dimensions should be useful for identifying customers and deciding marketing mix variables) |
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Ways to develop market-oriented strategies in a broad product-market
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1. Single target market approach 2. Multiple target market approach 3. Combined market approach. All three involve target marketing. |
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Single Target Market approach
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Segmenting the market and picking one of the homogenous segments as the firm’s target market.
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Multiple Target Market approach
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Segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix.
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Combined Target Market approach
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Combining two or more submarkets into one larger market as a basis for one strategy.
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Combiners
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Try to increase the size of their target markets by combining two or more segments. Looks for similarities between submarkets, rather than differences. Makes compromises in developing the marketing mix, but this may help achieve some economies of scale. It’s attractive to firms with limited resources, because it requires less investment.
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Segmenters
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Aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. Provides superior value and satisfies customers better greater profit potential for the firm. Hope to increase sales by getting a larger share of the target market by building such a close relationship with customers that they face no real competition.
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Qualifying dimensions v. Determining Dimensions
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QD are those relevant to including a customer type in a product-market. DD are those that actually affect the customer’s purchase of a specific product or brand in a product-market.
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Clustering techniques
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Using a computer to try to find similar pattern within sets of data. Clustering groups of customers who are similar on their segmenting dimensions into homogenous segments.
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Customer Relationship Management (CRM)
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The seller fine-tunes the marketing effort with information from a detailed customer database. The database stores info that is useful for segmentation. Analytic software aids in identifying customer segments, so that each can be delivered a different marketing mix.
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Positioning
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How customers think about proposed or present brands in a market. (Helps the manager differentiate the marketing mix) Perception maps often help understand this.
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Repositioning
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If research shows that target customers aren’t viewing the brand in the desired way.
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Positioning statement
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Concisely identifies the firm’s desired target market, product type, primary benefit or point of differentiation, and the main reasons a buyer should believe the firm’s claims.
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Economic buyers
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People who know all the facts and logically compare choices to get the greatest satsisfaction from spending their time and money.
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Economic needs
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Concerned with making the best use of a consumer’s time and money. Examples: Economy of purchase or use, efficiency in operation or use, dependability in use, improvement of earnings, convenience.
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Discretionary income
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What is left of income after paying taxes and paying for necessities.
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Needs
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The basic forces that motivate a person to do something.
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Wants
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Needs that are learned during a person’s life.
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Drive
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A strong stimulus that encourages action to reduce a need.
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Physiological needs
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Concerned with biological needs like food, liquid, rest, and sex.
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Safety needs
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Concerned with protection and physical well-being, like health, financial security, medicine, and exercise.
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Social needs
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Concerned with love, friendship, status, and esteem, anything that involves a person’s interaction with others.
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Personal needs
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Concerned with an individual’s need for personal satisfaction, unrelated to what others think or do, like accomplishment, fun, freedom, relaxation.
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Perception
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How we gather and interpret information from the world around us. 1. Selective exposure – only notice information that interests us. 2. Selective perception – screen out/modify ideas that conflict with our attitudes/beliefs. 3. Selective retention – remember only what we want to. |
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Learning
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A change in a person’s thought processes caused by prior experience, often based on direct experience.
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Cues
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Products, signs, ads, and other stimuli in the environment.
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Response
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Depending on the cues and past experiences, an individual chooses some specific response. It is an effort to satisfy a drive.
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Reinforcement
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Occurs when the response is followed by satisfaction (reduction in the drive).
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Attitude
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Person’s point of view toward something.
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Belief
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A person’s opinion about something. They may help shape a consumer’s attitudes but don’t involve any liking/disliking.
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Expectation
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An outcome or event that a person anticipates or looks forward to. Customers will be dissatisfied if their expectations aren’t met.
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Trust
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The confidence a person has in the promises or actions of another person, brand, or company. Trust drives expectations (when they trust, they expect something from the other party).
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Psychographics or Lifestyle analysis
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The analysis of a person’s day-to-day pattern of living as expressed in that person’s Activities, Interests, and Opinions (AIOs). Helps provide ideas for advertising themes.
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Family Life cycle influences on needs
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Marital status, age, and the age of any children in the family have an important effect on how people spend their income. Singles/young couples seem to be more willing to try new products and brands.
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Empty nesters
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High-income period, an attractive market for many items. Spend more on travel, etc.
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Social class
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A group of people who have approximately equal social position as viewed by others in the society.
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Reference group
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The people to whom an individual looks when forming attitudes about a particular topic.
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Opinion leader
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A person who influences others, not necessarily wealthier or better educated.
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Culture
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The whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people.
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Three levels of problem solving
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Information search, Identify alternatives, decide/set criteria that are important, evaluate alternatives that meet the need.
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Extensive v. Limited problem solving
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Limited problem solving is used when some effort is required in deciding the best way to satisfy a need.
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Routinized response behavior
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When a customer regularly selects a particular way of satisfying a need when it occurs. Typical when a customer has considerable experience in meeting a need and doesn’t require new information.
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Low-involvement purchases
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Purchases that have little importance or relevance for the customer.
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Dissonance
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A feeling of uncertainty about whether the correct decision was made. (buyer’s remorse)
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Adoption process
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When consumers face a new concept, they have to go through steps to accept/reject a new idea. 1. Awareness – comes to know about the product. 2. Interest – if the customer becomes interested, he or she will gather general information and facts. 3. Evaluation – a consumer begins to give the product a mental trial. 4. Trial – the consumer may buy the product to experiment with it. 5. Decision – the consumer decides on either adoption or rejection. 6. Confirmation – the adopter continues to rethink the decision and searches for further reinforcement. |
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Marketing
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Analyze needs, Predict wants, Estimate demand, predict when, determine where, estimate price, decide promotion, estimate competition, and provide service.
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Direct market environment
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Customers, the resources and objectives of the company, and the firm’s competitors.
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Demographic dimensions for segmenting consumer markets
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Behavioral and geographic dimensions, income, gender/age, family size/family life cycle stage, occupation/education, social class, or ethnicity.
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What affects the Consumer decision process?
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Economic needs, psychological variables, social influences, purchase situation factors.
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Major US demographic trends
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1. Aging of America 2. Slowdown of birthrate 3. Uneven regional growth 4. Nontraditional household formation 5. Asian/Hispanic dominated immigration 6. Rising ethnicity and multicultural awareness 7. Evolving from ‘melting pot’ to ‘salad bowl’. |
