I-Core Marketing Midterm – Flashcards
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Creating value from customers and managing profitable customer relationships to capture value from them in return
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Marketing
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The mistake of focusing on products offered rather than the benefits and experiences produced by them and for the consumer. examples: -Drill (Consumer wants a hole, not the drill itself) -Taxi vs Uber ... Taxi in myopia, Uber is not
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Marketing Myopia
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States of felt deprivations -Marketer's assess consumer needs, wants and demands
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Needs
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Needs + Cultural Influence
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Wants
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Combination of product/service, information, location, experiences, and price that satisfy a need or want
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Market Offerings
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(need --> want) + exchange medium = demand
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Demand equation
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When a market offering more than satisfies a demand in a given market and currency or some other payment mechanism is traded for the market offering
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Exchange
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Set of all actual and potential buyers of a product or service
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Market
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Success depends on knowing needs and wants of target markets and delivering desired satisfaction to customers better than your competitors
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Marketing Concept
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Outside-In: Starts with a well defined market, focuses on customer needs, and integrates all the marketing activities that affect customers --> As opposed to starting with the factory and eventually selling to obtain profit (selling concept)
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Marketing Concept Perspective
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Product performance meets buyer expectations
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Customer Satisfaction occurs when
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Process of building and maintaining profitable customer relationships by giving superior customer value/satisfaction of consumer needs
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Customer Relationship Management (CRM)
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Customer Value and Customer Satisfaction
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What are the building blocks of CRM?
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1. Build relationships 2. Deliver value + satisfaction 3. Use info about customers 4. Acquire/retain customers
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What is the purpose of CRM? (4)
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Benefits weighed against costs of a marketing offer relative to a competing offer from point of view of customer
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Customer Perceived Value (CPV)
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CPV >= All costs to acquire + Price
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CPV equation
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Benefits, All costs to acquire
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With CPV ____________ goes down as ___________ goes up (and vise versa)
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How much a product's perceived performance matches buyer's expectations
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Customer Satisfaction
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Initiated by the customer, customer shapes his/her relationship with a brand
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Customer-Managed Relationships
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Value of all purchases customer makes over lifetime
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Customer Lifetime Value (CLV)
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How much of one specific customer's purchasing a company gets in its product categories
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Share of Customer
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Total combined CLV of all a company's customers
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Customer Equity
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1. Understand marketplace/ Customer needs 2. Design strategy 3. Create program that delivers value 4. Build profitable relationships 5. Capture value to get profits and customer equity
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Steps of the Marketing Process (5)
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Consumers post about a business w/o invitation of the brand/business examples: Yelp, Google Reviews, Trip Advisor
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Consumer-generated marketing
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They're more likely to produce CGM (negative)
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When someone does NOT like a brand
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Art and science of choosing target marketings an building profitable relationships with them
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Marketing Management
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Market share and penetration
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Marketing Metrics
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Firm must define market and competitors in it
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Unit Market Share requirements
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Expanding Market share without changing product
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Market Penetration
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1. Butterflies 2. True Friends 3. Strangers 4. Barnacles
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What are the four customer relationship groups?
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High Profitability - Not Loyal example: Stock market investor who trades shares often and in large amounts but enjoys hunting for best odds
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Butterflies
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Profit off them for as long as you can and then cease to invest until next time around
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How to react to Butterflies
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High Profitability - Loyal
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True Friends
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Maintain
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How to react to True Friends
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Low Profitability - Loyal example: Smaller bank customer who banks regularly but do not generate enough returns to cover costs of maintaining their accounts
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Barnacles
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Should try to improve their profit ability but if they cannot be made profitable they should be fired
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How to react to Barnacles
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Low Profitability - Not Loyal
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Strangers
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Get rid of them
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How to react to Strangers
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Problem solving tools
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Products are...
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All products can be differentiated
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There is no such thing as a commodity because...
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-Find way to measure the "unmeasurable" - fun, satisfaction, friendliness -Make the intangible, more tangible to consumers - reputation, brand equity, brand power
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How to build value through marketing (2)
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Buying behavior of final consumers -final consumers combined make up consumer market
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Consumer buyer behavior
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1. Cultural 2. Social 3. Personal 4. Psychological
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What are the characteristics affecting consumer behavior? (4)
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1. Culture 2. Subculture 3. Social Class
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Types of Cultural Factors (3)
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Most basic cause of a person's wants and behavior
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Culture
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Groups of people with shared value systems based on common life experiences and situations examples: nationalities, religions, racial groups, geographic regions
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Subculture
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Create opportunities for new products or can otherwise influence consumer behavior
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Effect of culture shifts
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Culture
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Social Class is considered
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your nose; you don't see it on yourself but others do
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Culture is like...
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Those we interact with 1. Family 2. Reference groups 3. Opinion leaders 4. Social networks 5. Roles and status
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Types of Social Factors (5)
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Someone who influences the behaviors or attitudes of other; NOT a spokesperson
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Opinion Leader
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-Knowledgable -Among first to buy -Tell both positive and negative information
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Opinion Leaders are valuable information sources b/c... (3)
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People that have a significant effect on an individual's evaluations, aspirations, or behaviors
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Reference Group
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Conformity, where a person changes a reaction to real or imagined group pressure
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Reference Groups can lead to...
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Gender roles
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Strongest pressure to conform comes from
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1. Age and life-cycle 2. Occupation 3. Economic situation 4. Self-concept 5. Lifestyle
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Types of Personal Factors (5)
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People change the goods they buy over their lifetime
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Age and Life-cycle (personal consumer behavior)
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Influences the purchase of clothing and other goods
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Occupation (personal consumer behavior)
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Some goods are very income sensitive
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Economic Situation (personal consumer behavior)
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1. Motivation 2. Perception 3. Learning 4. Beliefs and Attitudes
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Types of Psychological Factors (4)
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Psychological
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What consumer behavior does Maslow's Hierarchy of needs fall under?
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Upper - Self actualization self fulfillment Middle - Ego needs prestige status belongingness friendship love acceptance by others safety security shelter protection Lower - Physiological water sleep food
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What are the tiers of Maslow's?
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The middle
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What tier of Maslow's should effective marketing appeal to?
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1. Need recognition -Car is Old. 2. Information search -What can I afford? 3. Evaluation of alternatives -What best fits me? 4. Purchase decision -This is it. 5. Post-purchase behavior -Was this right?
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Steps of the buyer decision process (5)
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Cognitive dissonance-buyer discomfort caused by post-purchase conflict
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Post-purchase behavior almost always results in...
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Good or service or idea perceived by some potential customers as new
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New Product
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Mental process through which an individual goes from first learning about product to final adoption
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Adoption Process
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1. Awareness 2. Interest 3. Evaluation 4. Trail 5. Adoption
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Stages of the Adoption Process (5)
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1. Innovators (2.5%) 2. Early adopters (13.5%) 3. Early majority (34%) 4. Late majority (34%) 5. Laggards (16%)
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Categories of Adopters (5)
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Bell curve
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What kind of curve do categories of adopters fit?
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1. Relative Advantage 2. Compatibility 3. Complexity 4. Trialability/Divisibility 5. Observability
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What are the factors in adoption?
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Process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing market opportunities
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Strategic Planning
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1. Define mission 2. Set objectives and goals 3. Designing portfolio 4. Planning marketing and other strategies
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What are the four steps of strategic planning?
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Statement of the organization's purpose; what it wants to accomplish in the larger environment
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Mission Statement
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Act as an invisible hand that guides people in the organization
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Clean mission statements....
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Growth-share matrix
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Firms with more than one Strategic Business Unit (SBU) can use
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1. Stars 2. Cash Cows 3. Question Markes 4. Dogs
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Four quadrants of the growth-share matrix
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High Growth - High Share -Eventually become cash cow
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Stars
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Low Growth - High Share
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Cash Cows
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Low Share - High Growth
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Question Marks
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Low Growth - Low Share -Sell
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Dogs
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1. Is the product category growing in sales volume? 2. What percent growth? -Firm must determine what % of growth constitutes HIGH vs LOW growth
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Questions to determine Product Growth measurement
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Portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification
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Product-market expansion Grid
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Ansoff Mdoel
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What is another name for the Product-market expansion grid?
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1. Market penetration 2. Market Development 3. Product Development 4. Diversification
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What are the four grids of the Product Market expansion grid (Ansoff)?
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Making more sales of current products to current market segments without changing product
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Market Penetration (Ansoff)
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Company growth by identifying and developing new market segments for current company products
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Market Development (Ansoff)
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Growth by offering modified or new products to current markets
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Product Development (Ansoff)
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Starting up or buying up businesses beyond company's current products and markets to achieve growth
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Diversification (Ansoff)
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Marketing logic company uses to hopefully create customer value and profitable customer relationships
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Marketing Strategy
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Product Place Promotion Price
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4 P's of Marketing
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Consists of consumers who respond in a similar way to a given set of marketing efforts
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Market Segment
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Consists of consumers who respond in a similar way to a given set of marketing efforts
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Marketing Segment
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Dividing a market into distinct groups of buyers who have different needs, characteristics, or behavior, and who might require separate products or marketing programs
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Marketing Segmentation
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Evaluating each market segment's attractiveness and selecting one or more segments to enter
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Market Targeting
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Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of consumers
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Positioning
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Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of consumers
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Positioning
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Actually differentiating the market offering so that it gives consumers more value
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Differentiation
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SWOT
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Marketing Analysis begins with...
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Strengths and Weaknesses
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Internal Marketing Analysis
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Opportunities and Threats
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External Marketing Analysis
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Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives
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Marketing Implementation
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Implementation
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"Doing things right"
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Strategy
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"Doing the right things"
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Net return from a marketing investment/costs of investment
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Return on Marketing Investment
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-Brand awareness -Sales -Market Share
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Marketing ROI can be measured by... (3)
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Segment Target Differentiate Position
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What does STDP stand for?
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1. Geographics 2. Demographics 3. Psychographics 4. Product Use Behavior
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What are the common bases for segmentation? (4)
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Divide market based on location
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Geographics
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Dividing consumers into groups based on sex, income, age, occupation, race, religion, edu
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Demographics
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Dividing buyers by social class, interests, activities, values, lifestyle, or personality
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Psychographic
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Dividing a population into groups based on purchase frequency and usage level ex: Starbucks provide incentives after 2pm because of business lull
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Product Use Behavior
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Dividing a population into groups based on the benefits they seek in the products or service example: car buyers who seek safety or car buyers who seek performance
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Benefit Segmentation
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1. Measurable 2. Accessible 3. Substantial 4. Differentiable 5. Actionable
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What makes a good segment? (5)
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1. Undifferentiated 2. Differentiated 3. Concentrated 4. Micro-Marketing
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What are the four types of Target Market Segments?
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Mass marketing, rarely used, markets to everyone
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Undifferentiated (Target Market Segment)
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Targeting certain segments; used by most businesses
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Differentiated (Target Market Segment)
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Choose one segment; like bridal store
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Concentrated (Target Market Segment)
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Market to individual customers; high customization, local marketing
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Micro-Marketing (Target Market Segment)
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Product's space on the map represents consumer's perceptions for different brands of a product
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Positioning/Perceptual Map
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Exists in the mind of the consumer
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Positioning
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1. Be competitive in a way that matters 2. Differentiate
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How to choose overall positional strategy
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Full mix of benefits on which a brand is differentiated and positioned
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Value proposition
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1. More for More 2. More for Same 3. More for Less 4. Same for Less 5. Less for much Less
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Sectors of the Value proposition grid
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Vertical differentiation, offering lower and higher priced brands example: BMW downward stretch to Mini Cooper
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Product Line Stretching
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Horizontal; offering more variants of same things; same price different benefits example: BMW offering different cars (sedan, two door, etc)
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Product Line Filling
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Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need
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Product
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A form of product that consists of activities, benefits, or satisfactions offered fro sale that are essentially intangible and do not result in the ownership of anything
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Services
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1. Core Product 2. Actual Product 3. Augmented Product
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Product Layers
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Core customer value -Redbull: energy
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Core Product
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Brand name Quality level Design Packaging Features -Redbull: the can, the liquid
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Actual Product
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Product Support Delivery and Credit After-sales Service Warranty -Redbull: Redbull sponsored events
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Augmented Product
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Product bought by final consumer for personal consumption
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Consumer Products
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1. Convenience 2. Shopping 3. Specialty 4. Unsought
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What are the four types of consumer products?
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Frequent purchase, little planning, low price, wide distribution, mass marketing example: toothpaste, magazine, detergent
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Convenience Product
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Less frequently purchased, requires planning and shopping effort, comparison of brands on price, quality, and style; higher priced than convenience, fewer outlets and selective distribution example: major appliances, televisions, furniture, clothing
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Shopping Product
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Strong brand preference and loyalty, special purchase effort little comparison of brands, high price, exclusive distribution, carefully targeted promotion example: Luxury goods, Rolex, fine crystal
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Specialty Product
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Little product awareness or knowledge, little or even negative interest, price and distribution vary, promotion is aggressive and person example: Life insurance, Red Cross blood donations
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Unsought Products
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Products purchased for further processing or for use in conducting a business
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Industrial Products
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Organization People Places Ideas
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What a product/brand can be... (4)
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Carry out activities to "sell" the organization itself
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Organization Marketing
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Activities undertaken to create, maintain, or change attitudes or behaviors toward particular people example: Presidential election
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People Marketing
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Activities to create, maintain, or change attitudes towards a place example: Pure Michigan
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Place Marketing
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Using commercial marketing concepts and tools to influence individual's behavior
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Social Marketing
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Quality Feature/attributes Style and Design Brand Image Packaging Labeling Product Support
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What make up product/brand? (7)
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That which IDs the product of one marketer to be distinguished from another; name, term, sign, symbol, design, or combination that identifies the product or service
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Brand
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Group of products that are closely related because they function in a similar manner, sold to same customer groups, marked throughs game types of outlets, or fall within given price ranges
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Product Line
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Number of items in the product line
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Product Line Length
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Line Filling Line Stretching
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What are two ways to expand product line
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All product lines and items a particular seller offers for sale example: Campbell soup's product mix has 3 major product lines and each one has several sub lines
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Product mix/portfolio
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1. Intangibility 2. Inseparability 3. Variability 4. Perishability
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Service Characteristics (4)
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Can't be seen, tasted, felt, heard, or smelled before they are bought; provider has to make it tangible in some way
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Intangibility
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Services cannot be separated form their providers, whether the provider be people or machines; customers produce part of the experience Example: taxi, massage
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Inseparability
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Quality of service depends on who provides it, when, where, and how it is provided Example: Waiter
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Variability
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Services can't be stored for later sue Example: concert ticket, plane ticket
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Perishability
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Measure of brand's ability to get consumer preference and loyalty
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Brand Equity
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Customer equity
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What is the fundamental asset underlying brand equity?
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Should suggest something about product's benefits and qualities, should be easy to pronounce, recognize, and remember; should be distinctive, extendable, and translate easily into foreign languages; capable of registration and legal protection
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Brand name selection
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1. National Brand 2. Private Brand 3. Licensed Brand 4. Co-Brand
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What are the four brand origination/sponsorship options?
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Brand created and owned by a reseller of a product or service Example: Kirkland
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Store/Private Brand
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Manufacturer's brand Example: PepsiCo
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National Brand
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Use names or symbols previously created by other manufacturers Example: Scooby Snacks
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Licensing
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Two established brands of different companies are used on the same product Example: Dairy Queen Oreo McFlurry
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Co-Branding
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Line extension, Brand extension, Multibrands, new brands
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Brand Development
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Occurs when a company extends its existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category Example: Cheerios has new line of cereal including honey nut, frosted, banana nut, etc
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Line Extensions
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Extending existing brand name to new product categories Example: Kellog expanded Special K from just cereal to cracker, nutrition bars, protein shakes
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Brand Extension
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When a company markets many different brands in a given product category
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Multibrands
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A way to establish different features that appeal to different customer segment
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Multibranding offers
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If a company believes power of its existing brand is waning or when it enters a new product category -Offering too many can result in a company spreading its resources too thin
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New Brands
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Brands are not maintained by advertising but by customers' brand experiences; customers come to know a brand through a wide range of contacts and touch points
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Brand Management
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Original products of improvements or modifications to existing product though a firm's own efforts
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New Product Development
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1. Idea generation 2. Idea screening 3. Concept development/testing 4. Marketing Strategy development 5. Business Analysis 6. Product Development 7. Test Marketing 8. Commercialization
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What are the eight stages of product development?
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Systematic search of new product ideas
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Idea Generation
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Inviting broad communities of people into the new product innovation process
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Crowdsourcing
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Screening new product ideas to spot good ideas and drop poor ones ASAP
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Idea Screening
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Detailed version of the new product idea stated in meaningful consumer terms
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Concept Development and testing (Product Concept)
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How consumers perceive an actual or potential product
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Concept Development and testing (Product Image)
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Testing new product concept with a group of target consumers to find out if the concepts have strong consumer appeal
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Concept testing
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Designing an initial marketing strategy for a new product based on the product concept
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Marketing Strategy Development
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-Describe target Market -State planned value proposition -Lay out sales, market share, and profit goals for the first few years
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What are the three part of a marketing strategy statement?
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Review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company's objectives
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Business Analysis
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Developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering
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Product Development
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Stage in which product and its proposed marketing program are tested in realistic market setting
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Test Marketing
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Introducing the new product into the market
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Commercialization
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1. Is there a real customer for the product? 2. Does the organization have the scientific and technological ability to develop the product 3. Is the potential for such a product large enough to offer the promise of profitability?
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Questions to ask when managing NPD (3)
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1. Innovation/Introduction 2. Growth 3. Maturity 4. Decline
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What are the four stages of the Product Life Cycle?
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TRIAL -lowest sales and highest costs -profit loss at first -customers in this stage are innovators -product has few or no competitors
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Innovation/Introduction Stage (PLC)
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SHARE -sales rapidly growing -costs are avg -profits increasing -customers are early adopters -competition growing
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Growth (PLC)
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DIVERSIFY -Sales reach their peak -Costs are low -Profits reach their peak -Customers are mid-majority -Competition for product reaches its peak
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Maturity (PLC)
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HARVEST -sales are declining -costs are very low -profits are eroding -customers are laggards -competition is declining
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Decline (PLC)
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Increase use among current customers (happens during maturity)
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Penetration
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1. Innovation = Smart Watch 2. Bigger, thinner TVS = Growth 3. Non-smart cell phone = Maturity 4. Walkman music player = Decline
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Examples of the 4 stages PLC
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1. Style 2. Fashion 3. Fad
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What three other factors affect PLC?
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Purchase decision
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Where does CRM start?
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Potential (Efficiently Attract) Acquired (Optimize Profit)
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What are the two types of customers?
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1. Gather Customer Data Swiftly 2. ID the most valuable customer 3. Increase profitable customer loyalty
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When CRM works it allows companies to...
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1. Implementing CRM before having a strategy 2. Rolling out CRM before we have an organization 3. Assuming technology will always help 4. Stalking, not wooing, customers
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What are the four perils of CRM?
