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107 Cards in this Set

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marketing has passed through stages
- mass marketing
- product variety marketing
- target marketing
mass marketing
- seller mass produces mass distributes and mass promotes ne product to all buyers
- mcdnalds produced only one size of hamburger for the entire market
product variety marketing
- seller produces two or more products or services that have different features, styles quality and size
- today mcdonalds offers regular hamburgers, big macs, and quarter pounders
- argument for prduct variety marketing is that consumers have different tastes and they vary over time
target marketing
- seller identifies market segments, selects one or more and develops products and services tailored to each selected segment
micromarketing
- a form of target marketing in which companies tailor their marketing programs to the needs and wants of narrowly defined geographic, demographic, psychographic, or benefit segments
customized marketing
- marketing in which the company adapts its offers to the needs of specific customers or buying organizations
market segmentation
- dividing a market into direct groups of buyers who might require separate products or marketing mixes
market targeting
- evaluating each market segments attractiveness and selecting one or more segments to enter
market positioning
- if buyers have the same tastes, buy a product in the same amounts and react in the same way to marketing effors, undifferentiated marketing is appropriate
geographic segmentation
- dividing a market into different geographic units such as nations, states, regions, countries, cities or neighborhoods
market
- the set of actual and potential buyers of a product
demographic segmentation
- dividing the market into groups based on demographic variables such age, gender, family size, family life cycle, income, occupation, education, religion, race and nationality
gender segmentation
- dividing a market on the basis of gender
income segmentation
- dividing a market on into different income groups
psychographic segmentation
- dividing a market into differnet groups based on social class, lifestyle or personal characteristics
behaviorial segmentation
- dividing a market into groups based on consumer's knowledge, attitude, use or response to a product
requirements for effective segmentation
- measurability
- accessibility
- substantiality
- actionability
steps of the marketing process
1. market segmentation
2. market targeting
3. positining
bases for segmenting a market
a. geographic segmentation
b. demographic segmentation
c. psychographic segmentation
d. behavior segmentation
requirements for effective segmentation
a. measurability - the degree to which segments size and purchasing pwer can be measured
b. accessibility- degree to which segments can be accessed and served
c. substantiability- degree to which segments are large or profitable enough to serve as markets
d. actionability- the degree to which effective programs can be designed for attracting and serving segments
evaluating market segments
1. segment size and growth
2. segment structural attractiveness
3. company objectives and resources
market coverage alternatives
a. undifferentiated marketing strategy
b. differentiated marketing strategy
c. concentrated marketing strategy
undifferentiated marketing strategy
- an undifferentiated marketing strategy ignores market segmentation differences and goes after the whole market with one market offer
differentiated marketing strategy
- firm targets several market segments and designs separate offers for each
concetrated marketing strategy
- especially appealing to cmpanies with limited resources
- instead of going for a small share of a large market the firm pursues a large share of one or more small markets
choosing a market coverage strategy
1. company resources
2. degree of product homogeneity
3. market homogenity
4. competitiors strategies
positioning strategies
a. specific product attributes
b. needs products fill or benefits products offer
c. certain classes of users
d. against an existing competitior
market homogeneity
- if buyers have the same tastes, buy a product in the same amounts and eract the same way to marketing efforsts, undifferentiated marketing is appropriate
competitors strategies
- when conpetitiors use segmentation, undifferentiated marketing can be suicidial
- conversely when competitors use undifferentiated marketing a firm can gain advantage by using differentiated or concentrated marketing
specific product attributes
- price and product features can be used to position a product
underpositioning
- failing ever to position the company at all
overpositioning
- giving buyers a too narrow picture of the company
confused positioning
- leaving buyers with a confused image of a company
managing demand
1. use price to create or reduce demand
2. use reservations
3. overbook
4. use queuing
5. shift demand
6. change the salesperson's assignment
7. create promotional events
use price to create or reduce demand
- managers can create more demand for a product by lowering its price
- restauraunts offer special on slow days
- ex: subway offers two for one specials on tuesdays
- when demand exceeds capacity managers raise prices to lower demand
use reservations
- hotesl and restaurants often use reservations to monitior demand
- when it appears that they will have more demand than capacity managers can save capacity for the more profitable segments
- reservations can also limit demand by allowing managers to refuse any further reservation when capacity meets demand
overbook
- used to match demand with capacity
- many hotels find alternative accomodations, pay for one nights stay at the new hotel and provide transportation to the hotel
- can increase demand by compensating for no shows but managers should use it judciously
revenue management
- methodological approach to allocating a perishable and fixed inventory to the most proftiable customers
- some systems desgined to maximize REVPAR- revenue per available room
- values the business of repeat customers
Queuing
- when capacity exceeds demand and guests are willing to wait, queues will form
- restaurants or hotels
- voluntary queues like waits at restaurants are a common and effective way of managing demand
price
- the amount of money charged for a good or service
marketing objectives
- survival
- current profit maximization
- market-share leadership
survival
- it is used when the economy slumps or a recession is going on
- a manufacturing firm can reduce production or match demand and a hotel can cut rates tp create the best cash flow
cost plus pricing
- adding a standard markup to the cost of the product
cross selling
- the company's other products that are sold to the guest
discriminatory pricing
- refers to segmentation of the market and pricing differences based on price elasticity characteristics of the segments
fixed costs
- costs that do not vary with the production or sales level
going rate pricing
- setting price based largely on following competitors prices rather than on company cost or demand
price
- the amount of money charged for a product or service , or the sum of the values consumers exchange for the benefits of having or using the product or service
upselling
- this occurs through training of sales and reservation employees to offer continuously a higher priced product that will better meet the customers needs, rather than settling for the lowest price
value based pricing
- uses the buyers perceptions of value, not the sellers cost, as the key to pricing
yield management/ revenue management
- yield management is a pricing method using price as a means of matching capacity with demand
- the goal of yield management is to optimize the yield or contribution margin
factors to consider when setting price
1. internal factors
2. external factors
internal factors
marketing objectives
marketing mix strategy
marketing objectives
Survival- when economy slumps or recession is going on, manufacturing firm can reduce production or match demand and htel can cut rates to create best cash flow


Current profit maximization- companies may choose the price that will produce the maximum current profit, cash flow, or return on investment, seeking financial outcomes rather than long run performance

market share leadership- when companies believe tha a company with the largest market share will eventually enjoy low costs and high long run profits they will set low opening rates and streive to be the market share leader

product quality leadership- hotels like the Ritz chain charge a high price for their high cost products to capture the luxury market

other objectives- stabilize market, create excitement fr new product, draw more attention
marketing mix strategy
costs
fixed costs
variable costs
organization consideration
costs
fixed costs- costs that do not vary with production or sales level

variable costs- costs that vary directly with the level of production
organizational considerations
- management must decide who within the organization should set prices
- in small companies this will be top management
- in large companies pricing is typically handled by a corporate department or by a regional or unit manager under guidelines established by corporate management
external factors
- nature of the market and demand
- consumer perceptin of price and value
- analyzing the price demand relationship
- price elasticity of demand
- competitors price and offers
- other environmental factors
general pricing approaches
1. cost based pricing
2. break even analysis and target profit pricing
3. value based pricing
4. competition based pricing
cost based pricing
- a standard markup is added to the cost of the product
break-even analysis and target profit pricing
- price is set to break even on the costs of making and marketing a product, or ot make a desired profit
value based pricing
- companies based their prices on the products perceived value
- percevied value pricing uses the buyers perceptions of vlaue not the sellers cost as a key to pricing
competition based pricing
- based on establishment of price largely against those of competitors with less attention paid to costs or demand
prestige pricing
- hotels or restaurants seeking to position themselves as luxorius and elegant will enter themarket with a high price that will support this posiiton
market skimming pricing
- setting a high price when the market is price insensitive
- common in industries with high reaserach and development costs such as pharmeaceutical and computer firms
marketing penetration pricing
- companies set a low initial price to penentrate the market quickly and deeply, attracting many buyers and winning a large market share
product- bundle pricing
- combine several products and offer the bundle at a reduced price
- mostly used by cruise lines
volume discounts
- hotels have special rates to attract customers who are likely to purchase a large quanitity of hotelroms, either for a single period or throughout the year
discounts based on time of purchase
- seasonal discount, price reductin to buyer who purchase services out or eason when demand is lower
discriminatory pricing
- company sells a product or service at two or mre prices althugh the difference in price is not based on differences in cost
- maximizes amount each customer pays
last minute pricing
- outlet for unsold inventory
psychological pricing
- psychological aspects such as prestige, reference prices, round figures, and ignoring end figures
promotional pricing
- temporarily pirce products below list price and someimes even below cost for special ocassions such as introduction or festivities
- gives guest reason to come and poromotes positive image for hotel
price spread effect
- restaurant industry historically employed a rul eof thumb that the highest price entree should be no more than 2.5x as expensive as the lowest price entree
intiating price cuts
- excess capacity, unable to increase business through promtional efforts, product mprovement, follow the leader pricing and to dominate the market
intitiating price increases
- reasons for a compnay t increase price are cost inflation or excess demand
buyer reactions to price changes
- competitors, distributors supplies and other buyers will associate price with quality when evaulating hospitality products they have not experienced directly
competitor reactions to price changes
- most likely t react when the number of firms involved is small
- when prduct is uniform
- when buyers are well informed
responding to price changes
- reason
- market share
- excess capacity
- meet changing cost conditions
- lead an industry wide program , temporary versus permanent
microenvironment
- consists of actors close to the company that affect is ability to serve its customers, the company itself, marketing channel firsm, customer markets, broad range of publics
macroenvironment
- larger societal forces that affect the entire microenvironment
- demographic, economic, natural, technoligcal, political, competior and cultural forces
- first examine microenvironment then macroenvironment
suppliers
- firms and individuals that provide the resources needed by the company to produce its goods and services
marketing intermediaries
- help the company promote, sell and distribute its goods to the final buyers
- business firms that help hospitality companies find customers or make sales
marketing service agencies
- suppliers that help the firm formulate and implement marketing strategy and tactics
- PR agencies, advertising agencies, direct mail houses
financial intermediaries
- banks, credit compnaies, insurance companies and other firms that help hospitality cmpanies finance their transactions or insure the risks associated with the buying and selling of goods and services
3 variables of analyzing each competitor
1. share of market- competitors share of target market

2. share of mind- percentage of customers who anmed the competitor in first company that came to mind in the industry

3. share of heart- percentage of customers who named the competitor whom they would prefer to buy the product
4 levels of competitors
1. product form competition
2. product category competition
3. general competition
4. budget competition
ex:
1. product form- fast food hamburgers, wendys, Burger King
2. Product category competition- fast food restaurants, taco bell subway
3. general- prepared food- full service restaurants
4. budget- food and entertainment - movie theatres grocery stores
marketing information system (MIS)
- structure of people, equiptment, and procedures to gather, sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers
marketing intelligence
- everday information about developments in the marketing environment that help managers prepare and adjust marketing plans
marketing research
- systematic design, collection, analysis, and reporting of data and findings relevenat to a specific marketing situation facing a company
observational research
- gathering of primary data by observing relevant people, actions and situations
primary data
- information cllected for a specific purpose at hand
sample
- segment of a population selected for marketing research to represent population as a whole
- offer of a trial amount of a product to cnsumers
secondary data
- information that already exists somehwere, having been collected for another purpose
survey research
- gathering of primary data by asking people questions abut their knowledge, attitudes, preferences and buying behavior
internal records
- information consists of info gathered from sources within the company to evaluate marketing performance and to detect marketing problems and opportunities
marketing intelligence
- marketing intelligence includes everyday information about developments in the marketing environment that help managers to prepare and adjust marketing plans and short run tactics
- marketing intelligence can cme from internal sources or external sources
interal sources
- companies executives, owneers and employees
external sources
- cimpetitors, government agencies, suppliers, trade magazines, newspapers, business magazines, trade association newsletters and meetings, databases available on the internet
marketing research
- proces that identifeis and defines marketing opportunities and prblems, monitrs and evalues marketing actions and performance and communicates findings and implication to manageemnet
- product oriented and has beginning and ending
- four steps
1. defining problem and research objectives
2. developing research plan
3. implementing research plan
4. interpreting and presenting findings
3 research approaches
1. observational research
2. survey research
3. experimental research
role
- cnsists of the activities that a person is expected to perform according to the persons around him or her
- son, daughter, wife, manager or worker
lifestyle
- a persons pattern of living as expressed in his or her activities interests and opinions
- portrays the whole person interacting with his/her environment
believers
- principle oriented customers with more modest incomes
- conservative and predictable custmers who favor american products and estblsihed brands
- lives are centered on family, church, community and nation
achievers
- successful, work oriented people who get their satisfaction from their jobs and their families
- plitically conservative and respect authority and status quo
-favor established products and services that show off their success
blue chip blues
- the nations most affulent blue collar households are conceptrated in blue chip blues
- composed of post war suburban subdivisions in major metropolitan areas
- here lives a blue collar version of the american dream
- majority of adutls have high school educations and own confortable middle class homes
- boasting one of the highest concentrations of married couples with children, blue chip blues is the type of neighborhood with fast food restaruants attached to every shpping center, baseball diamonds and motorboarts in the driveways