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Marketing is CUSTOMERS, or managing profitable customer relationships. There are two overall goals in marketing: attracting new customers by promising superior value, and keeping and growig current customers by delivering satisfaction.

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Marketing

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1) Customers 2) Company 3) Competitors 4) Collaborators 5) Context (Environment)

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5 C's of Marketing Analysis

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1) Understand the marketplace and customer needs/wants (Analysis) 2) Decisions: Design a customer-driven marketing strategy (Decisions) 3) Construct an integrated marketing program that delivers superior value (Decisions) 4) Build profitable relationships and create customer delight (Outcomes) 5) Capture value from customers to create profits and customer equity (Outcomes)

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Marketing Process

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States of felt deprivation; part of being human

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Needs

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Form of human needs as they are shaped by culture and individual personality

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Wants

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When wants are backed by buying power, this becomes demand. Wants are shaped by one's society and described in terms of objects that will satisfy those needs.

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Demands

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Some combination of products, services, information, or experiences offered to a market to satisfy a need or a want. These are not limited to physical products, can also include intangible services

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Market Offerings

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The mistake of paying more attention to the specific products a company offers rather than the benefits and experiences produced by these products. Another way to phrase it is when companies focus too much on their own products instead of the changing needs/wants of CUSTOMERS

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Marketing Myopia

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The act of obtaining a desired object from someone by offering something in return

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Exchange

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The set of all actual and potential buyers of a product or service that share a particular need/want that can be satisfied through exchange relationships

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Markets

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The art and science of choosing target markets and building profitable relationships with them; customer management and demand management

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Marketing Management

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The customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers

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Customer-Perceived Value

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The extent to which a product's perceived performance matches/surpasses customer expectations; low expectations = satisfied while expectations that are too high = unsatisfied

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Customer Satisfaction

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The idea that consumers will favor products that are available and highly affordable, meaning that companies should focus on improving production and distribution efficiency (not just what customers want)

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Production Concept

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The idea that consumers will favor products that offer the most quality, performance, and features, meaning that companies should devote their energy to making continuous product improvements

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Product Concept

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The idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort

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Selling Concept

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A philosophy where achieving organizational goals depends on knowing the needs/wants of target markets and delivering the desired satisfactions better than competitors do, aka focusing on delivering customer needs and values

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Marketing Concept

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The idea that a company's marketing decisions should consider consumers' short-term wants and long-term welfare

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Societal Marketing Concept

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Customer Lifetime Value, the value of the entire stream of purchases a customer makes over a lifetime of patronage

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Customer LTV

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Strategies used to manage different types of customer relationships, represented by matrix with butterflies, strangers, barnacles, and true friends

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Customer Relationship Management

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The total combined LTVs of all the company's current and potential customers

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Customer Equity

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Percent of customer's total spending that they get in the customer's spending in their product category

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Share of Customer

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The process of developing and maintaining a strategic fit between the organizations foals/capabilities and its changing market opportunities

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Strategic Planning

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1) Defining the company mission 2) Setting company objectives and goals 3) Designing the business portfolio 4) Planning marketing and other functional strategies 1, 2, and 3 are at the corporate level, while 4 is the business unit, product and market level

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Strategy Planning Process

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Statement of the organization's purpose and what it wants to accomplish in the larger environment; a good mission statement guides the people in the organization and is market (customer) oriented, emphasizes strengths, and is purposeful and aspirational

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Mission Statement

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The collection of businesses and products that make up the company

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Business Portfolio

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Can be a company division, a product line within a division, or sometimes a single product or brand. The company next assesses the attractiveness of its various SBUs and decides how much support each one deserves

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Strategic Business Unit (SBU)

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A portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market share

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BCG Growth-Share Matrix

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high market growth, high market share businesses/products, need heavy investments to finance short-lived rapid growth

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Stars

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low market growth, high market share, produce a lot of cash the company uses to pay bills/support other SBUs needing investment

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Cash Cows

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High market growth, low market share businesses/products, require a lot of cash to hold their share/increase it, tough decision for management whether or not to build these into stars

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Question Marks

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Low market share, low market growth business/products, may generate enough cash to support themselves but are not promising to provide large amounts of cash

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Dogs

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A portfolio-planning tool for identifying company's future growth opportunities through market penetration, market development, product development, or diversification

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Product/Market Expansion Grid

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Company growth by increasing sales of current products to current market segments without changing the product

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Market Penetration

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Company Growth by identifying and developing new market segments for current company products

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Market Development

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Company growth by offering modified or new products to current market segments

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Product Development

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Company growth through starting up or acquiring businesses outside the company's current products and markets (new market, new products)

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Diversification

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An overall evaluation of a company's strengths, weaknesses, opportunities, and threats

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SWOT Analysis

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Internal capabilities that may help a company reach its objectives

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Strengths

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Internal limitations that may interfere with a company's ability to achieve its objectives

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Weaknesses

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External factors that the company may be able to exploit to its advantage

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Opportunities

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Current and emerging external factors that may challenge the company's performance

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Threats

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Brief summary of the company's main goals and objectives

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Executive Summary

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Gives the market description and the product, competition, and distribution review

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Current Marketing Situation

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Helps manage to anticipate important positive or negative developments

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Threats and Opportunities Analysis

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States and discusses marketing objectives and key issues

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Objectives and Issues

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Outlines the broad marketing logic and specifics of target markets, positioning, marketing expenditure levels, and strategies for each marketing mix element

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Marketing Strategy

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Spells out how marketing strategies will be turned into specific action programs

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Action Programs

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Details a supporting marketing budget that is a projected profit-and-loss statement

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Budgets

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Outlines the controls that will be used to monitor progress, allow management to review implantation results, and spot products that are not meeting their goals

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Controls

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Reduces the business portfolio by eliminating products/business units that are not profitable or that no longer fit the company's overall strategy

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Downsizing

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Net return from a marketing investment divided by the costs of the marketing investment

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Financial ROI

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The actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers

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Marketing Environment

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The actors close to the company that affect its ability to serve its customers (customers, company, competitors, and collaborators)

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Microenvironment

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The larger societal forces that affect the microenvironment (demographic, economic, natural, technological, political, and cultural forces

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Macroenvironment

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The aim of the entire value delivery network is to serve target customers and create strong relationships with them. There are consumer markets (individuals/households buying goods and services for individual consumption), business markets (buy goods/services for further processing or use in their production processes), reseller markets (buy goods and services to resell at profit), government markets (gov't agencies that buy goods/services to produce public services or transfer them to others who need them), and international markets (consist of gov't buyers in other countries, including consumers, producers, resellers, and governments).

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Customers (As an actor in the microenvironment)

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Other company groups must be taken into account when designing marketing plans. Top management sets the company's mission, objectives, broad strategies, and policies, and marketing leads the way for all other portions of the company to fulfill customer needs and create customer value

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Company (As an actor in the microenvironment)

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Competitors must also be taken into consideration when developing marketing strategies; large firms with dominant positions in an industry can use certain strategies that smaller firms cannot afford. Small firms can also develop unique strategies that give them better rates of return than what large firms can enjoy.

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Competitors (as actors in the microenvironment)

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Suppliers (provide resources needed by company to produce its goods and services, marketing managers much watch supply and availability costs and keep short term/long term conditions into consideration), Marketing Intermediaries (help the company promote, sell, and distribute its products to final buyers, ex. product movers, consultants, banks, etc.), and Publics (any group that has an actual or potential interest/impact on an organization's ability to achieve its objectives)

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Collaborators (as actors in the microenvironment)

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The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. Marketers keep a close eye on people, who make up markets, and analyze changing age/family structures, geographic population shifts, educational characteristics, and population diversity).

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Demography (as an actor in the macroenvironment)

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Consists of economic factors that affect consumer purchasing power/spending patterns. Marketers must pay close attention to major trends and consumer spending patterns both across and within their world markets.

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Economic (as an actor in the macroenvironment)

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The physical environment/natural resources that are needed as inputs by marketers or that are affected by marketing activities, ex. growing shortages of raw materials, increased pollution, increased gov't intervention in natural resource management

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Natural (as an actor in the macroenvironment)

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Forces that create new technologies, creating new product and market opportunities

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Technological (as an actor in the macroenvironment)

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Consists of laws, gov't agencies, and pressure groups that influence or limit various organizations and individuals in a given society ex. protecting companies from each other, protecting consumers, and protecting the interests of society against unrestrained business behaviors

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Political

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Consists of institutions and other forces that affect a society's basic values, perceptions, and behaviors, ex. core beliefs/values passed on from parents to children/reinforced by society, secondary beliefs/values that are more open to change (much easier for marketers to influence these values in comparison to core values)

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Cultural

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Fresh understandings of customers and the marketplace derived from marketing information that becomes the basis for creating customer value and relationships

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Customer Insights

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People and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers to use the information to gain customer insights

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Marketing Information System

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Consumer and market information obtained from data sources within the company network

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Internal Data

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The systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment (marketers must actively scan the environment)

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Competitive Marketing Intelligence

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The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization

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Marketing Research

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Gather preliminary info to help define problem and suggest hypotheses

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Exploratory Research

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Describes things, such as market potential for a product or the demographics/attitudes of customers who buy it

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Descriptive Research

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Tests hypothesis about cause and effect relationships

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Causal Research

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1) Define the problem and search objectives 2) Develop Research Plan for Collecting Information 3) Implement the research plan, collect/analyze data 4) Interpret and report findings

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Marketing Research Process

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Information that already exists elsewhere, having been collected for another purpose

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Secondary Data

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Information collected for the specific purpose at hand

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Primary Data

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Gathering primary data by observing relevant people, actions, and situations

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Observational Research

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Sending trained observers to watch and interact with consumers in their "natural environments"

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Ethnographic Research

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Gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior

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Survey Research

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Selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses

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Experimental Research

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segment of population selected for marketing research to represent the population as a whole

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Sample

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In collecting primary data, marketing researchers have a choice of two main research instruments: questionnaires (most common, very flexible, and can be done through a variety of contact methods) and mechanical instruments (monitors consumer behavior through people meters, checkout scanners, neuromarketing, etc.)

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Research instruments

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Managing detailed information about individual customers and carefully managing customer touch points to maximize customer loyalty

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Customer Relationship Management (CRM)

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The buying behavior of final consumers (individuals and households that buy goods and services for personal consumption)

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Consumer Buyer Behavior

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All the individuals and households that buy or acquire goods and services for personal consumption

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Consumer Market

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1) The Environment (marketing stimuli) 2) Buyer's Black Box (buyer's characteristics and decision processes, hard to study because it's hard to know what's going on in customers' minds) 3) Buyer Responses (buying attitudes and preferences, what the buyer buys, when, where, how much, etc., and brand and company relationship behavior)

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Model of Buyer Behavior

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Cultural (subculture, social class) Social (groups and social networks, family, roles & status, etc.) Personal (age, occupation, economic situation, lifestyle, personality) Psychological (motivation, perception, learning, beliefs/attitudes)

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Factors Influencing Consumer Behavior

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1) Need recognition (trigger) 2) Info search (know) 3) Evaluate Alternatives (feel) 4) Purchase decision (do) 5) Post-purchase behavior

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Consumer Buyer Decision Process

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Know > Feel > Do. Active info search, actual/desired, trigger = gap. AIDA: Awareness (of product), Interest (in product's benefits), Desire (for product), Action (buy)

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Utilitarian (Rational) Buyer Decision Process ("Buy the Best")

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Feel > Do > Know. Trigger = impulse

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Self-Expressive Decision Process ("Buy what I like")

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Know > Do > Feel

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Low-Involvement Decision Process ("Buy the familiar/cheapest")

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Circular Model that is dynamic (shoppers interact interchangeably across channels, make purchase decisions at less predictable points), accessible (shoppers receive info anytime and anywhere, can come from or through anyone), and continuous (the touch points shoppers are exposed to are "always on"

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Consumer Decision Journey

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purchased gods/services used in the production of other products and services that are sold, rented, or supplied to others

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Business Buying

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determining which products and services an organization needs to purchase

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Business Buying Process

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buyer routinely reorders something without any modifications

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Straight Rebuy

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buyer wants to modify product specifications, prices, terms, or suppliers

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Modified Rebuy

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buyer purchases a product or service for the first time

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New Task

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buying a packaged solution to a problem from a single seller; avoids the separate decisions involved in a complex buying situation

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Systems Selling/Solutions Selling

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Environmental, Organizational, Interpersonal, Individual

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Factors Affecting Business Buyer Behavior

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purchasing through electronic connections between buyers and sellers (usually online)

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E-Procurement

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