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82 Cards in this Set
- Front
- Back
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What is Marketing?
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-The process of creating, distributing, promoting and pricing goods, services and ideas
-to facilitate satisfying exchange relationships with customers and -develop and maintain favorable relationships with stakeholders -in a dynamic environment |
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What does marketing require?
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-Two or more parties with unsatisfied needs
-Desire and ability to satisfy the needs -A way for the parties to communicate -Something to exchange |
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What does marketing focus on?
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What is exchange?
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=The core of the marketing definition
-The provision or transfer of goods, services, or ideas in return for something of value |
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Where does the field of marketing come from?
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ECONOMICS.
(Psychology is definitely related, but not the branch. Sociology is the study of studying groups of people, such as target markets, so also related.) |
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What is the marketing mix?
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Product: Goods, services, or ideas (^political situations are a set of marketing itself)
Price: The value that is exchanged for a product. *Doesn't have to be money! Barter situations were still marketing. Place: Making products available at the right time and place. Marketing adds value to Place (distribution). Promotion: Activities to inform individuals or groups about the organization and its products *Communication part. Marketing came out of economics around 1930s, but it did exist in adds before then (hair growing tonic add). |
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What Environmental forces influence the marketing mix?
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Regulatory
Technological Sociocultural Competitive Economic Political Legal |
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What is the marketing concept?
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A management PHILOSOPHY that an organization should try to provide products that satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals.
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What is the marketing orientation?
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An organization-wide commitment to researching and responding to customer needs.
process or action |
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How did the marketing concept evolve?
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Marketing Concept Evolution: (picture)
*In 1850s-industrial revolution. Assembly line production. Much faster than individual assembly. Could be a lot cheaper, and increase in demand. If you build it they will come. = Production orientation *In middle time—reached the max demand, can only buy so much. Turned to sales. = Sales orientation *At the end, figure out what the customer wants, and we’ll build that. = Marketing Orientation |
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Why study marketing?
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Over half of the cost of most products
Nonprofits Economic growth Consumer awareness Builds relationships Build skills |
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Environmental Forces: AT&T Video
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*Scenario:
-Telephone industry is about to change -800 numbers used to be assigned to the telephone companies and if you wanted to switch companies, you had to get a new number -Laws revised to allow for “number portability” -People may want to switch to lower cost providers *What to do?* *Background: early 1990s, heavily regulated industry, and it’s about to change. Business phone numbers…800…and wanted to spell out business name in number, and number would belong to the phone company. If I wanted to switch companies, I had to change the number. Huge hassle…before internet. Phone book number would be wrong. “800/number portability” was about to be created. AT&T had vast majority of 800 numbers. Had the risk of a lot of customers leaving. *Before May 1993, number assigned to company by prefixes. Industry worth ~~7 billion. Losing 10% would be thousands of millions of dollars. 18 months prior to law changing, AT&T had focus groups, role played as if they were MCI. Research helped to create a pool of messages, no matter what the market did. -78 cities…3200 business executives. Companies of all sizes. Meet with executives, present our ideas and competitors' ideas, and see what was most popular. -Can’t have a good marketing campaign without advertising research. -Surround customers with 15 second commercials…flood airways with all these reasons to stay with AT&T. “Most reliable network” if other network goes down. -Final base: price savings. Advertising=saving pennies could lose you customers. -22 commercials from AT&T. needed more efficient was to test commercials…invented new system to have execs watch 8-10 commercials and give feedback. RELIABILITY. =victory. Retained most of their customers and saved hundreds of millions of dollars. AT&T Discussion Questions: 1. What was the environmental force acting upon AT&T in this case? Great example of marketing research. Chapter 3’s environmental forces…what was the most important to AT&T?=legal and regulatory environmental force. Had other aspects, but this one drove the situation 2. How did AT&T respond? active/passive/reactive? viewed as controllable, and active. We’re going to plan in advance, and be prepared and ready for whatever happened 3. What did AT&T researchers do? talked to business customers. Amazing scope of research. Not a survey-talking to them. Why was it worth it? Millions and millions of dollars of potential impact. Avoided losses, even with expensive/time consuming research. 4. What was AT&T’s competitive advantage? RELIABILITY. Technology infrastructure was already set up to be successful-hard to copy, and important to customers. Being the best lets you compete against competitors other than just with price. 5. Amazing on AT&T’s part, but also on the add agency’s part. |
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Types of competitors: Brand Competitors (1)
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*With respect to Diet Coke...
DIET PEPSI would be a Brand Competitor. A diet cola product, & closest substitute (even if you don’t like it) |
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Types of competitors: Product Competitors (2)
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Product competitor to Diet Coke = MILK, orange juice, etc.
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Types of competitors: Generic Competitors (3)
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*Generic competitors offer a different option all together to fulfill need (thirst).
=WATER FOUNTAIN. Anything I can drink to substitute, but not as direct. Not really buying anything. Example: Bring your own lunch. |
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Types of competitors: Total Budget Competitors (4)
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*budget is only so big.
Competition with something else to spend money on. Decided on one over the other, even though their not related at all. =NEWSPAPER |
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Competitive Structures
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*Economic concepts that impact our marketing decisions.*
-AT&T had a monopoly. Difficult to enter business, lots of infrastructure needed. Different marketing strategy when you have no competitors. Know the basic issue with competitive structure. |
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Economic forces: The Business Cycle
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-Look at them while reading, how things happening in the economy effect your business.
-Different impact on different companies. *Say "we’re going to cut out luxury kind of things. Vacations. But, movie theatres didn’t lose money at all. Why? Cheaper than vacation. *From a strategic standpoint, when we’re in a recession, we want to cut cost-employees and marketing tend to get hit first. New product research and advertising=losing customers, but the big problem = losing loyal customers, and then when we hit “recovery”, you’re behind the times. Same with advertising…if you cut advertising, we’ve forgotten who you were. *Cost a lot more to build brand awareness than maintain it. |
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Economic forces: Buying power
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Economic forces: Willingness to spend
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Legislation: Pro-competitve
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Pro-competitive legislation= *Preserves competition*
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Legislation: Consumer protection
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Consumer Protection legislation:
-Protect people from harm -Prohibit hazardous products -Information disclosure -Particular marketing activities |
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Major laws to know: Sherman, Clayton, FTC, and Robinson-Patman Acts
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-Sherman:
-Clayton: -FTC: -Robinson-Patman Acts: |
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Major regulatory agencies to know: FTC, FDA, CPSC, FCC, EPA, FPC
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-FTC: Most heavily influences marketing activities.
Primarily deals with false advertising/misleading advertising, misleading pricing, deceptive packaging and labeling. **Harms consumer, and competition as well. Example: Mazda’s “One Penny Down” financing claim: other fees, etc. applied, so it was “false or misleading” b/c it wasn’t a penny down, as advertised. Issued a cease and desist. -FDA: -CPSC: -FCC: -EPA: -FPC: |
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Political, Legal, and Regulatory: Self-regulating
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-monitor themselves, because they don’t want to be in a position where the FTC has to step in/get taken to court. (laws that could be created to regulate something could be even more strict than if they would of just regulating themselves)
-Jet Blue’s Customer Bill of Rights |
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Political, Legal, and Regulatory: Industry Groups
(NARB, BBB) |
Better Business Bureau
National Advertising Review Board: *Advantages: -More realistic *Limitations: -Nonmember firms do not have to abide -Lack of enforcement tools -Often less strict NARB…advertising monitoring themselves so laws don’t step in. alcohol especially. If you're not a member—you can cause the law to step in on the rest of them. Non-members don’t have to abide by those rules. |
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Political, Legal, and Regulatory: Watchdog Groups
(blueberry news) |
-Consumer groups that get together and keep an eye on what’s going on in industries, and getting a lot of attention for it, good or bad.
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What does technology impact?
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-Firms must keep up with technology to keep their status as market leaders.
-Technology assessments foresee the effects of new products and processes Example: Operator-->turn dial phone-->smart phone |
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How does technology impact marketing specifically?
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-Products offered
-Manufacturing processes -Prices -Distribution processes--Example: Amazon Drone 131 million. People expected to shop online for cyber Monday. Millions go through Amazon-revolutionize how you get your product. Purchase delivered to your door by a drone in minutes. Delivery by Drone in 30 minutes flat. Only for small items…technology way ahead of laws. Privacy issues are huge. Falling aircraft/product laws, etc. Automation replaces people. Security issue. But very creative! -Communication processes -General ability to do business |
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Sociocultural forces: Demographic and Diversity Characteristics
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-Demographics of the United States
What is the fastest growing minority market in the US? = Hispanic. Expected to not be a minority by 2015. -Quick Facts The U.S. Census Bureau provides a demographic snapshot of each state and county. (Where is our target market? Where do they live, by age, etc.) |
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Sociocultural forces: Cultural Values
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-Culture shapes consumer preferences
Products Promotions Prices Distribution -Culture changes very, very slowly. |
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Sociocultural forces: Consumerism (also see "watchdog industry groups)
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-Organized efforts by individuals, groups, and organizations to protect consumers’ rights
E.g., “watchdog” groups -Marketing critics think that consumers are being exploited in the marketplace. *Affluenza demonstrates concerns about exploitation leading to overconsumption. |
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Nine Nations of North America (Cultural Example)
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(Not actual 9 but theory behind them)
If North America was divided into cultural countries/centers rather than political lines. Quebec=French Main more NE Miami more Island, not Dixie How does the Culture of these Regions Affect Consumer Preferences? *What is a beverage product likely preferred more in “Dixie”? Drink=iced tea. It’s elsewhere, but not like in Dixie. In NC when your order tea-you get sweat tea. *Which region is likely to value envir. conservation most? The green strip. *Which region(s) voted Democratic in the last election? Foundry, NE. in 2012-big city vs small city. |
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What is marketing research?
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-The systematic and objective process of generating information for aid in making marketing decisions
-It is about decision making. -It is about making predictions. -It is about dealing with uncertainty. -It is about making future uncertainty more certain (not absolute). To a point…the future is always unknown. -It is about understanding how data can be manipulated (to someone’s advantage) a lot of misconceptions…”someone conducted a study-so that’s what it is.” *Health…doc has recommendation, make decision based on research. |
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When do you conduct marketing research?
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-Time constraints: decision has to be made tomorrow
-Availability of data: if it’s not available easily=expensive -Nature of the decision -Benefits versus costs AT&T Video |
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Alcohol availability Role Play (Logan Utah): Background Information
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Utah Liquor Laws, as Mixed Up as Some Drinks (NY Times July 2011)
-In 2002, Winter Olympics…look at unique drinking laws. -2011, took another look at Utah when Mitt Romney ran from Prez. (he’s from Utah.) -Alcohol license laws done here by county. Fewer counties are dry now…handful of counties are, but not many. -Napoleon Dynamite was Filmed in Logan, Utah. -You have a cultural environment, and a legal environment. -One firm’s threat is another’s opportunity. -Utah drinking age = 21, 20 miles away is Idaho, who’s drinking age is 19. -Utah is a 3.2 beer state…Idaho is not. -Gas station in the deleted scenes: pedro had to buy the lottery ticket from the gas station La Tienda. -Utah didn’t have a lottery, Idaho does. Regulatory Role Play: -You are a city council member of a small town Your state has a strong religious base and your town’s population is 90%+ people of that religion (Mormon) This religion frowns upon alcohol consumption Towns have the right to be more strict than the state laws…Logan was one of these towns. -Your city is considering relaxing the local alcohol laws to be consistent with the state’s Making more alcohol licenses available ($$) *Studied users (25%) and non-users (75%) of alcohol -Population approximately 50k *Assumption: alcohol is an elective, while food, clothing and shelter are necessities -Research Procedure: Counted number of outlets available for Alcohol Food Clothing “Buying” shelter (real estate companies) Divided by the number of “users”of each *Findings 32 outlets for alcohol: 1/300 users 24 outlets for food: 1/1,600 users 27 outlets for clothing: 1/1,500 users 26 real estate companies: 1/1,500 users Conclusion: Alcohol is 5 times more available to users than food, clothing, and shelter! We don’t need to make alcohol more available! Should you make a decision based on this research? Why or why not? Not: “should we make it more available” But: “should we decide based on the research” Thoughts? -How was counting done? Measurement is really important in research. How did they count food versus alcohol? Wasn’t including restaurants in food, but was including restaurants in alcohol #. -Output! In terms of supply. In terms of buying a house versus buying a drink/food. You don’t buy a house every day. Not apples for apples here. -What is an outlet? You can buy alcohol in a grocery store, but think about how much alcohol versus food is sold in a store. -Counting shelter: counting families, # in families, homeless rate (extremely low in Logan) -Bias in this research? Slanted one way. Who conducted the research? Could be unintentional bias, but could be other bias in there. Better way to look at it: supply and demand. |
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Basic vs. applied research
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Basic Research:
-Attempts to expand the limits of knowledge. Knowledge creation…how the world works. What happens in universities a lot. Not really trying to solve an applied problem. -Not directly involved in the solution to a pragmatic problem Applied Research: Conducted when a decision must be made about a specific real-life problem Examples: Basic or Applied? -Should McDonalds add Italian pasta dinners to its menu? Applied -Do consumers experience cognitive dissonance in low-involvement situations? (^buyer’s remorse ^not an important purchase) Basic -Should Procter & Gamble add a high-priced home teeth bleaching kit to its product line Applied -Do firms whose top management team includes a marketing executive perform better? Basic |
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Data vs information
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-Data is raw numbers
-Information is when we’ve done something to data to make it user friendly data is information, in raw form |
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Types of Data
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-Primary-go collect ourselves
-Secondary-already out there |
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Characteristics of valuable information
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-Relevant
-High Quality-original data measured correctly and interpretation done correctly -Timely -Complete |
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Steps in the research process: Step 1 (Concepts/issues/applications in each step)
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Locating and defining issues or problems
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Steps in the research process: Step 2 (Concepts/issues/applications in each step)
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=design the research project
-Key issues: research design, hypothesis, reliability and validity, -Types of research (differences, issues, examples) Exploratory Conclusive (descriptive/causal) -Issues with causality -Cell Phone article |
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Steps in the research process: Step 3 (Concepts/issues/applications in each step)
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=collecting data
-Primary -Secondary *Internal vs external (not specific sources like Neilsen, JD Power, etc.) -Qualitative research (exploratory) *Interviews, focus groups, observation -Quantitative research *Surveys, experiments, observation -Observation -When to conduct |
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Primary contact methods
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(Examples, strengths and weaknesses
Especially “excellent” and “poor”) |
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Research instruments: Written
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Research instruments: Mechanical
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Defining and measuring constructs
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Writing survey questions: types
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Writing survey questions: Issues (common sources of bias)
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Population vs sample
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Probability vs nonprobability
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Random, stratified, quota
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Marketing Research: Experiments
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Marketing Research: test marketing
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Sea Snapper case discussion
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Steps in the research process: (Step 4) Interpreting research findings
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Steps in the research process: (Step 5) Reporting findings
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Chicken pox vaccine article
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Ethical marketing research
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Marketing research technology
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International issues
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Target markets
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Segmentation
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Positioning
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Spaghetti Sauce video
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Targeting Strategies
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Segmentation Variables: Demographic
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Segmentation Variables: Geographic
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Claritas Segmentation
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Prism Segmentation
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Geodemographic data by zip code
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Psychographic variables
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VALS
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Behavioral varialbes
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(product benefit, etc.)
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Business market segmentation
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Developing profiles
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evaluating segments
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selecting target markets
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positioning: The Millennial Segment
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Positioning: Perceptual maps (restaurants)
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sales forecasting
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Guest Speaker
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Are these marketing?
Running a political car Selling used cars Religion |
YES!
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A college student wants a snack and stops at a convenience store to buy a bag of Ranch Flavored Doritos. The store is out of stock and rather than buy another brand of ranch-flavored chips, the student bought a bag of pretzels instead. The pretzels are an example of a __________ competitor for Doritos Ranch flavored chips.
a. Brand b. Product c. Generic d. Total budget |
b. Product
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