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Marketing Mix (Four Ps)

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a unique blend of products, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market. 5th P is People - employees of the firm

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Marketers can manage the _____ of a firm in order to meet _____ _____ _____ goals and objectives.

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elements; Strategic Business Unit

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Sustainable Competitive advantage

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an advantage that cannot be copied by the competition

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Sustainability

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the idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profits and help the world at the same time

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Exchange

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people giving up something in order to receive something else they would rather have

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Conditions for exchange

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1. There must be at least two parties 2. Each party has something that might be of value to the other party 3. Each party is capable of communication and delivery 4. Each party is free to accept or reject the exchange offer 5. Each party believes it is appropriate or desirable to deal with the other party

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Empowerment

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delegation of authority to solve customers' problems quickly - usually by the first person the customer notifies regarding a problem

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Relationship Marketing

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a strategy that focuses on keeping and improving relationships with current customers

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Customer Value

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the relationship between benefits and the sacrifice necessary to obtain those benefits

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Customer Satisfaction

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customers' evaluation of a good or service in terms off whether it has met their needs and expectations

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Teamwork

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collaborative efforts of people to accomplish common objectives

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Ansoff's Strategic Opportunity Matrix matches products with markets. Firms can explore these four options:

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1. Market Penetration 2. Market Development 3. Product Development 4. Diversification

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Market Penetration

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a marketing strategy that tries to increase market share among existing customers. Present Product/Present Market

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Market Development

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a marketing strategy that entails attracting new customers to existing products. Present Product/New Market

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Product Development

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marketing strategy that entails the creation of new products for present markets. New Product/Present Market

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Diversification

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a strategy of increasing sales by introducing new products into new markets. New Product/New Market

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Marketing Objective

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a statement of what is to be accomplished through marketing activities

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Elements of a good Marketing Objective

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1. Realistic 2. Measurable 3. Time Specific 4. Compared to a Benchmark

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Market

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people or organizations with needs or wants and the ability and willingness to pay

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Market Segment

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a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

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Market Segmentation

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the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

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The purpose of market segmentation is to enable the marketer to

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tailor marketing mixes to meet the needs of one or more specific segments

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To be successful, a segmentation scheme must produce segments that meet four basic criteria:

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1. Sustainability 2. Identifiability and Measurability 3. Accessibility 4. Responsiveness

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Segment Bases (Variables)

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characteristics of individuals, groups, or organizations

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Geographic Segmentation

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segmenting markets by region of a country or the world, market size, market density, or climate

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Demographic Segmentation

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segmenting markets by age, gender, income, ethnic background, and family life cycle

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Family Life Cycle

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a series of stages determined by a combination of age, marital status, and the presence or absence of children

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Psychographic Segmentation

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segmenting markets on the basis of personality, motives, lifestyles, and geodemographics

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Geodemographic Segmentation

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segmenting potential customers into neighborhood lifestyle categories

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Benefit Segmentation

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the process of grouping customers into market segments according to the benefits they seek from the product

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User-Rate Segmentation

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dividing a market by the amount of product bought or consumed

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80/20 Principle

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a principle holding that 20 percent of all customers generate 80 percent of the demand

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Satisficers

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business customers who place an order with the first familiar supplier to satisfy product and delivery requirements

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Optimizers

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business customers who consider numerous suppliers (both familiar and unfamiliar), solicit bids, and study all proposals carefully before selecting one

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Steps in Segmenting a Market

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1. Select a market or product category for study 2. Choose a basis or bases for segmenting the market 3. Select Segmentation Descriptors 4. Profile and analyze segments 5. Select markets 6. Design, implement, and maintain appropriate marketing mixes

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Target Market

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a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying results

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Undifferentiated Targeting Strategy

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a marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix

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Concentrated Targeting Strategy

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a strategy used to select one segment of a market for targeting marketing efforts

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Niche

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one segment of a market

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Multisegment Targeting Strategy

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a strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each

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Cannibalization

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a situation that occurs when sales of a new product cut into sales of a firm;s existing products

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Positioning

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developing a specific marketing mix to influence potential customers' overall perception of a brand, product line, or organization in general

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Position

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the place a product, brand, or group of products occupies in the customers' minds relative to competing offerings

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Product Differentiation

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a positioning strategy that some firms use to distinguish their products from those of competitors

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Perceptual mapping

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a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers' minds

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Repositioning

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changing customers' perceptions of a brand in relation to competing brands

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Experience Curve

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curve that shows costs declining at a predictable rate as experience with a product increases

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Boston Consulting Group Model

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used to determine the future cash contributions and cash requirements expected for each strategic business unit

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Portfolio Matrix

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a tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate

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The Portfolio Matrix breaks SBUs into four categories:

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1. Stars 2. Cash Cows 3. Problem Children 4. Dogs

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Stars

answer

in the portfolio matrix, a business unit that is a fast-growing market leader

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Cash Cow

answer

in the portfolio matrix, a business unit that generates more cash than it needs to maintain its market share

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Problem Child (Question Mark)

answer

in the portfolio matrix, a business unit that shows rapid growth but poor profit margin

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Dog

answer

in the portfolio matrix, a business unit that has low growth potential and a small market share

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Marketing Concept

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the idea that the social and economic justification for an organization's existence is the satisfaction of customers wants and needs while meeting organizational objectives

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The Marketing Concept includes the following:

answer

1. Focusing on customer wants and needs so that the organization can distinguish its product(s) from the competitor's offerings 2. Integrating all the organization's activities, including production, to satisfy customer wants 3. Achieving long-term goals for the organization by satisfying customer wants and needs legally and responsibly

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Market Orientation

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a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer's decision to purchase a product; it is synonymous with the marketing concept

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Marketers interested in customer value:

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1. Offer products that perform 2. Earn Trust 3. Avoid unrealistic pricing 4. Give the buyer facts 5. Offer organization-wide commitment in service and after-sales support 6. Cocreation

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Planning

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the process of anticipating future events and determining strategies to achieve organizational objectives in the future

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Marketing Planning

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designing activities relating to marketing objectives and the changing marketing environment

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Marketing Plan

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a written document that acts as a guidebook of marketing activities for the marketing manager

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Elements of a Marketing Plan

answer

1. Business Mission Statement 2. Situation, or SWOT, Analysis 3. Objectives 4. Marketing Strategy - Target Market Strategy - Marketing Mix - Product - Place - Promotion - Price - People 5. Implementation - Evaluation - Control

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Mission Statement

answer

a statement of the firm's business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions

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Marketing Myopia

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defining a business in terms of goods and services rather than in terms of the benefits customers seek

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SWOT Analysis

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identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)

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Environmental Scanning

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collection and interpretation of information about forces, events, and relationships in events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan. Part of SWOT Analysis

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Competitive Advantage

answer

a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition

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Cost Competitive Advantage

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being the low-cost competitor in an industry while maintaining satisfactory profit margin

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Costs can be reduced in a variety of ways:

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1. Experience Curves 2. Efficient Labor 3. No-frills Goods and Services 4. Government Subsidies 5. Product Design 6. Reengineering 7. Product Innovations 8. New Methods of Service Delivery

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Product/Service Differentiation Competitive Advantage

answer

the provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition

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Niche Competitive Advantage

answer

the advantage achieved when a firm seeks to target and effectively serve a small segment of the market

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Marketing Strategy

answer

the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets

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Market Opportunity Analysis (MOA)

answer

the description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments

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Implementation

answer

the process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes the plan's objectives

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Evaluation

answer

gauging the extent to which the marketing objectives have been achieved during the specified time period

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Control

answer

provides the mechanisms for evaluating marketing results in light of the plan's objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines

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Marketing Audit

answer

a thorough, systematic, periodic evaluation of the objectives, strategies, structure and performance of the marketing organization

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Four Characteristics of a Marketing Audit:

answer

1. Comprehensive 2. Systemic 3. Independent 4. Periodic

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Marketing

answer

1. a philosophy 2. 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

question

Steps in Segmenting A Market:

answer

1. Select a market or product category for study 2. Choose a basis or bases for segmenting the market 3. select segmentation descriptors 4. Profile and analyze segments 5. Select markets 6. Design, implement, and maintain appropriate marketing mixes

question

Dynamic Planning

answer

intranet resident planning designed to be extremely flexible and emergent strategy oriented

question

Dynamic Planning is apt to use

answer

Enterprise Weblog software

question

Static Planning

answer

far less flexible and not as conductive to emergent strategies

question

A static plan is more apt to be

answer

a written document sitting in a three-ring binder on a manager's desk

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Strategic Planning

answer

the managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities

question

Strategic planning creates and maintains

answer

a fit between the organization's resources and the evolving market opportunities

question

The goal of strategic planning is to

answer

sustain and increase long-run profitability and growth

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Strategic decisions require

answer

long-term commitments of resources

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Strategic errors can threaten a firm's _____, but a good plan can help _____ and _____ the firm

answer

survival; protect and grow

question

Strategic marketing management addresses two questions:

answer

1. What is the organization's main activity at a particular time? 2. How will it reach its goals?

question

Strategic Business Unit (SBUs)

answer

a subgroup of a single business or collection of related business within the larger organization

question

Characteristics of Strategic Business Units (SBUs)

answer

1. A distinct mission and specific target market 2. Control over its resources 3. Its own competitors 4. A single business or a collection of related businesses 5. Plans independent of other SBUs

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Production Orientation focuses on

answer

Internal capabilities of the firm Field of Dreams orientation - "if you build it, they will come." Doesn't consider if what is produced meets market needs

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Sales Orientation focuses on

answer

Aggressive sales techniques and belief that high sales result in high profits Marketing = Selling Things and Collecting Money Disregards market needs and consumer demand Despite the quality of sales force, often cannot convince people to buy what is not needed or wanted

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Market Orientation focuses on

answer

Satisfying customers needs and wants while meeting objectives

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Societal Orientation focuses on

answer

Satisfying customers needs and wants whiles enhancing individual and societal well being

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