CCSU Marketing295 Final 2012 – Flashcards
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Marketing
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exchange between a firm and it's customers. Promotes sale goods or services (Components 4Ps Product,Price,Promotion, Place)
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Market Orientations
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1. Product/Production-Build a better mousetrap 2.Selling Orientation- Let's make a deal 3.Marketing/Customer- building relationships w/ the customer
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Segmentation (customers aren't all the same)
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Breaking the heterogeneous market into smaller, homogeneous markets
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Segment
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A group of customers who share similar inclinations toward a brand
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Targeting
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evaluating each market segment's attractiveness and selecting one or more segments to enter.
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Target Market
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group of persons for whom a firm creates and maintains a product mix that specifically fits the needs and preferences of that group
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Positioning
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Determine who you are in the market, then decide who you want to be.(mix variables)
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Types of Customers
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A customer is a buyer of a product of service, two types of customers: consumers, buisnesses
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Buying Situations:
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B2C B2B High: Specialty purchases --New Buys Moderate: Shopping /=/ -- Modified Rebuys Low: Convenience /=/ -- Straight Rebuys
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Mass Marketing
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All customers are treated the same, Customer needs are not met, But...less expensive to implement
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One-to-one Marketing
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Each customer serves as own segment,More expensive to implement
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Marketing Segmentation
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A segment is broken into smaller customer groups with particular needs that the company can serve well
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Niche marketing
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A segment is broken into smaller customer groups with particular needs that the company can serve well
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Bases for Consumer Segmentation1
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Demographic: Easy to identify and commonly used gender, age, household composition, lifestyle cycle, education income, etc.
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Bases for Consumer Segmentation2
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Geographic- Easy to identify and commonly used country, area of country,climate urban vs. rural, etc.
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Bases for Consumer Segmentation3
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Psychological- Harder to identify but maybe more insightful in determining customer needs/preferences attitudes,knowledge and awareness,wants and needs affiliations, (e.g., political party),traits, (e.g.extraversion) ,expertise and involvement, (e.g., hobbies, brand attributes sought, etc.*VALS- self-expression, ideals & achievement determine customers' product/brand orientation
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Bases for Consumer Segmentation4
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Behavioral- Cannot directly observe customers' psychology but can observe their behaviors grocery scanner data, etc. Examples: products purchased, user status, media habits, loyalty, frequency of usage, etc
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Business market
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vast and involves far more dollars and items than do consumer markets.
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Business buyer behavior
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refers to the buying behavior of the organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others
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Bases for B2B Segmentation
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1.Demographic: Company size, 2.Geographic: Country 3.Type of Firm: Non-profits, retailers 4.Attitudes: Care about price sensitivity, risk tolerance, corporate culture, profitability, high vs. low maintenance accounts, etc.
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Participants in the Business Buying Process
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buying center: Decision-making unit of a buying organization, not a fixed and formally identified unit. memberships vary,
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Segmenting the Market
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marketers integrate two things: 1.their knowledge of the marketplace with appropr- iate customer data which gives insight into similarities in customer needs/preferences
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Effective Segmentation
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Utilizes Appropriate Data:identify meaningful data, Allows Access to Customers: Profitability Potential, Fits with Corporate Goals, develop an actionable plan
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Choose a Target
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The market's fit with the firm's capabilities, and The profitability potential of the market
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Product
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both goods and services. Ex: Company offers something (a flight), and the customer offers something in return (payment)
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Search Qualities
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May be evaluated prior to purchase (Ex.socks)
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Experience Qualities
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Require trial or consumption before evaluation (Ex:restaurants)
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Credence Qualities
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Difficult to judge even post-consumption (ex. Therapy session, Difficult to judge even post-consumption)
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Product Mix
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a company's product lines, 1.Breadth- # of product lines 2.Depth-# of products in a line
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Brands
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Marketers believe that brands have value, above and beyond the benefits of the product itself.
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Customer Benefits of Branding
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Brands convey information (SONY is quality) , signal consistent quality, confer status, reduce the risk of purchase, make purchase decisions easier
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Company Benefits of Branding
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Brands enhance loyalty, allow charging premium prices, brands assist in STP, brands inoculate the company from some competitive action, encourage channel partners' support
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Product Life Cycle (PLC)
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the evolution and duration of a product being available in the marketplace. Market: Intro-Growth-Maturity-Decline
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(PLC) Market Introduction Stage
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1) Penetration: seek market share, price low to stimulate sale, encourage trial, trigger wrd of mouth. 2)Skimming: seek profit, price high initially, then lower to make product accessible
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(PLC) Market Growth
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sales accelerate, profits rise, customer awareness stronger, advertise brand superiority,distribution greater, ^^up pricing, e
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(PLC) Market Maturity
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Industry sales level off, competition ^^, lower prices due to competition, lower profits, products proliferate(rapid^^), weaker firms leave, try to find new benefits,increase, maintain current prices
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(PLC) Market Decline
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Sales and profits are both declining, decide how to proceed with old product: 1)Divest: sell off earlier 2)Harvest: Reduce supportive, and marketing expenditures in order to extract profits 3)Rejuvenate: refurbish to have new beneficial features 4)Maintain: appeal to a new target market
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Strategic Growth 1-2
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1)Market penetration: sell more of same products to current markets (new ways to use same product) 2)Product Development: sell new or modified products to current markets (brand and line extensions)
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Strategic Growth 3-4
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3) Market development: sell existing products to new markets (moving internationally, younger segment 4)Diversification: pursue new markets w/ new products (more difficult)
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Pricing
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The 3 C's impact pricing- company's cost, customers' sense of product's value, competition's price
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Elasticity
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How much does demand (units sold), increase (or decrease) w/ a price change. E>1, demand is elastic If 0<E<1, demand is inelastic If E=1, demand is unitary
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Elasticity: demand increases
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f1)avorable perceptions of the product's benefits or brand image, 2)if competitors brands aren't favorable, 3) if there are a few good substitutes, or substitutes are priced higher
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Demand is More Elastic When...
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Customers don't care about the purchase, don't have strong preferences, item is a luxury rather than necessity, many subs. are available, purchase is large compared to income, household incomes are lower, easier to compare prices
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Distribution
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Sellers prefer to produce large quantities of a limited numbers of goods. Buyers prefer smaller quantities of a wider variety of goods. Breaking bulk: making goods available in smaller batches
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Distribution Channels
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A network of inter-connected firms that provide sellers a means of infusing the marketplace with their goods, and buyers a means of purchasing those goods, as efficiently and profitably as possible
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Suppliers
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upstream actors, supply chain management.
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Channel members
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downstream actors that help a company reach consumers
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Intensive Distribution
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widely distributed. (Distributed, supermarkets, discount stores, etc.) Usually for simple, inexpensive, easily transported products. (snack food,shampoo,newspapers)
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Pull strategy
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Promote directly to end consumers to pull through channel
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Selective distribution
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less widely distributed, usually for complex and/or expensive products that require assistance. (Cars, computers, appliances)
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Push strategy
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promote to distribution, partners to push goods to consumer. Manufacturer has more control due to fewer relationships to manage
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Exclusive Distribution
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extreme case of selectivity. Manufactures have the most control, may become monopolistic.
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Intensity Strategies
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intensive distribution usually goes w/ heavy promotion, lower prices & avg. or lower quality products. (Exclusive-distribution usually goes w/ exclusive promotional efforts, higher prices, & higher quality products
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Pull Strategy
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Incentives offered to consumers to pull products through the channel. (Ex.advertise to consumers, distrubet widely, offer price and quantity discounts, offer inexpensive trials or free samples, offer coupons/rebate, offer financing. loyalty programs/points
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Push Strategy
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Incentives offered to distribution partners to push products through the channel. (Ex.advertise to partners(and Consumers), distribute more selectively, employ a sales force, offer incentives to sale force, offer price and quantity discounts,financing, allowances for marketing activities
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Advertising
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Is the primary means by which a company communicates to its customers about its products, brands, and position in the marketplace (tv ads,radio,print,billboards,pop ups,sponsored events.)
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Integrated Marketing Communications
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Maintain message's holistic nature across all media choices.
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Goals of Ad Campaign
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Various goals models exist: attention,interest, desire,action.(AIDA) 3 Goals:
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Goals of Ad Campaigns Three Categories
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1)Cognition: increase awareness and knowledge about brand 2)Affect: enhance attitudes and positive associations about brand 3)Behavior: encourage more buying of brand
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Ad Goal and PLC
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1) Introduction: get the word out,inform the consumer of offering, 2)Growth: enhance positive attitudes about offering 3)Maturity: remind consumers of offering 4)Decline: ad spending is greatly reduced
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Elaboration Likelihood Model
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1) Central: Ad's argument persuades, occurs when customers are highly involved w/ brand & motivated to process the ad 2) Peripheral: ad's peripheral cues persuade not argue (attractiveness or credibility of endorser,style) Occurs when customers are not involved w/ brand and not motivated to process
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Reach, Frequency and GRPs
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1) Reach: the share of your targt that has seen your ad at least once 2)Frequency: the avg. # of times target saw the ad (within set duration) 3)GRPs: (Reach * Frequency) equals... ex:Ad reached 25% of target an average of 3 times - the ad delivered 75 GRPs
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Reach & Frequency
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1) Reach: the goal is to expose as many of the target customers as possible 2) Frequency: it depends on the goal (ex-Awareness and memory can probably be attained with a few ads Persuasion may take more If ad/product is readily understood, wear-out may occur)
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Personal Selling
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Personal selling and a company's sales force are essential communication vehicles for many industries. (Accounts 14million jobs, 10% work force)
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Personal Selling Aspects
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Get attention of potential customers (prospecting), get interest (sales presentations), get desire (handling customers objections), get action (closing deal)
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Intergrated marketing Communications (IMC) Choices Depend
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The target audience, the company goals: awareness, info about features, enhancement of brand attitudes, strengthening of preferences, stimulation of purchase trial, encouragement of repeat purchasing, attraction of brand switchers.
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Customer evaluations
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marketers are interested in Customer: satisfaction, perceptions of quality, intention to repurchase, likelihood of word of mouth) Want to convert new customers to satisfied, from frequent to finally loyal customers
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Low Involvement Purchases
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Comparison process may be instantaneous & quickly forgotten (toothpaste). Expetations are usually latent. If do not receive what expected, expectations become more explicit (different taste toothpaste)
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High Involvement Purchases
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Comparison process is deliberative and conscious (buyin' athletic shoes) Customers think about purchase & have expectations that must be met
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Search Purchases
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Qualities are obvious from visual examination (buying shoes) Comparative process is straightforward (holistic, attribute-by-attribute, etc.)
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Experiential Purchases
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Evaluation cannot be completed until there is trial or consumption (travel package) Expectations may not be fully formed prior to purchase. Experience & expectations simultaneiously shape the evaluation
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Credence Purchases
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Customers don't have expertise to evaluate (dental services) Customers evaluate what they can (timeliness,courtesy of staff etc)
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Sources of Expectations
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1.Your own experience 2. Your friends' advise 3. Marketing information 4. Third pary communications
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Value
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the tradeoff of the quality of the purchase compared with the price paid and other costs incurred (Quality vs. Price)
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Customer Relationship
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Marketers want to go beyond satisfaction to loyalty (repeat purchasing, word of mouth, attach to the brand) Customer satisfaction is first step in a longer-term relationship
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Customer Relationship Management
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takes planning, money and constant work, requires ongoing monitoring of customers (calls,website habits, purchases,emails) *Companies need to design information systems that Integrate inputs from all relevant touchpoints Make information available in useful formats for managerial usage
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Marketing Research
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Every marketing decision should be based on facts. Marketing research is about gathering those facts, marketing information should be gathered constantly
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Marketing Strategy
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The link between corporate goals and operational tatics. Two primary considerations in marketing strategy: 1) where are we? 2) where do we want to go:?
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Portfolio Assessment Tool
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Boston Consulting Group (BCG) matrix, Brands or products are classified according to whether each has a strong or weak market share and slow or growing market. * Dog: low share, low growth Star: high share, high growth Cash cow: high share, low growth Question mark: low share, high growth
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BCG Portfolio Analysis
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Stars: optimize or hold Dogs: minimize or divest Cash cows: milk Question marks: unknown *If stars and cash cows are sufficiently profitable, companies can carry dogs and question marks
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Marketing Plans
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Complete a situation analysis (5Cs) Choose the segment(s) to target (STP) Create a plan for positioning, implementing the marketing mix (4Ps) *All marketing (strategy and planning) is NONLINEAR
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Framework: 5Cs-Competitors
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In a SWOT analysis, our strengths are defined relative to other providers. Who are our major competitors? Customer's perspective: what is our competition compared with other purchases that vie for our dollar, share of mind, and heart?
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Framework: 5Cs-Competitors
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What are our competitors' strengths? Do they offer better features than we offer? Do they have better price points, and, if so, why? What are their cost advantages? How might our competitors respond to our actions?
