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The five major value and engagement themes

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1. Creating value for the customers in order to capture value in return 2. Customer engagement & today's digital & social media 3. Building & managing strong, value creating brands 4. Measuring and managing return on marketing 5. Sustainable marketing around the globe

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Needs become

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wants

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Wants become

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demands

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Marketing Myopia

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Company's paying more attention to products than to the products actual benefits

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Market

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Set of actual or potential buyers of a prod or service

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Marketing Management Orientations: Production Product Selling Marketing Societal Marketing Concept

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Before was handmade specialty goods Production- Value cheap and available (industrial revolution, if you produce it, it will be sold) Product- Value quality, performance, and innovation Selling- Value huge marketing effort Marketing- Value consumers wants and desires and target competitively Societal Marketing Concept- Society, Consumers, Company (profits)

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4 P's of Marketing

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Product, Placement, Price, Promotion

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Customer engagement marketing

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New, being a part of consumers everyday lives and conversations

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Customer Lifetime Value

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All purchases EVER made by a customer

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Customer Equity

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All of a company's potential and actual customer lifetime values added up

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The Marketing Process

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1. Understand market place and customer needs and wants 2. Design a customer value driven marketing strategy 3. Construct on integrated marketing program that delivers superior value 4. Engage customers build profitable relationships, create customer delight 5. Capture value from customers to create profits and customer equity

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Marketing Offerings

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Products, services, experiences

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5 core customer & marketplace concepts

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1. needs, wants, demands 2. market offerings 3. value / satisfaction 4. exchanges & relationships 5. Markets

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Value proposition

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Innovative service / feature intended to make a company or product attractive to customers

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Strategic Planning

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The process of making a plan fit for company goals, capabilities, and the changing market opportunites

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4 Steps of Strategic Planning

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1. Define company mission 2. Set corporate objectives / goals 3. Design the business portfolio 4. Plan marketing / other functional strats

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Mission Statement

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Company's purpose / what it wants to accomplish

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Business Portfolio

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Collection of businesses / products that best fit the strengths and weaknesses of a comp / make up that comp

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SBU's

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Strategic business units Can be comp division, product line within a div, or sometimes even a single brand or product

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Growth Share Matrix

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Market Growth Rate- Measures market attractiveness Relative Market Share- Measures a company's strength in a particular market Stars- High growth, high share Differentiation, high then eventually plateauing Cash cows- Low growth, high share Create a lot of cash that can be reinvested Question Mark- High growth, low share Awareness & education, promotional objectives very expensive, need to pick carefully Dog- Low growth, low share dont promote

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Build Hold Harvest Divest

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Invest Sustain Milking short term Selling / phasing out

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Product Market Expansion Grid

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Market Penetration- current product / market Market Development- current product / new markets Product Development- New (ish) product, current market Diversification- New market / product

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Product life cycle

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Question mark, star, cow, dog

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Two main pricing strategies

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Skimming- pricing high to skim the top of the demand Penetration- Establish self into market / competition out

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Value Chain

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Internal company departments that support a firms product's, we are all marketers

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Value Delivery Network

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A network of the comp suppliers, distributors, and customers to improve the performance of the entire system in delivering customer value

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Marketing Strategy

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The logic behind creating customer value and profitable customer relationships

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Segmentation Market Segment

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Dividing a market by buyer needs, behaviors, characteristics, and who may require a different marketing strategy or a mix A group of consumers who respond to marketing efforts similarly

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Targeting Positioning Differentiation Marketing Mix

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Evaluating each segment to target the most profitable Arranging for a product to occupy a desirable spot next to a competitor Differing the company's market offering to create increased customer value The specific set of price, placement, promotion, and product that the firm blends for the response they want in their target market

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The 4 A's Product Price Placement Promotion

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Acceptability- The degree to which a product exceeds customer expectations Affordability- Extent customer is willing to pay Accessibility- Extent to readily acquire Awareness- Extent customers are aware / informed of a product

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5 Marketing Management Functions

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Planning- Develop Strategic Plan / Marketing Plan Implementation / Organization- Put the plans into action Control- Measure / Evaluate marketing activity results, & take corrective actions when necessary Analysis- The numbers analyzed provide info needed for all other marketing

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Marketing Management Control in detail

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Operating Control- Checking ongoing against annual and correcting when needed Strategic Control- Looking at whether the comp's stratus match its opportunities

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SWOT

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Internal: Strengths, weaknesses External: Opportunities, Threats

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VALS

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VALS ("Values and Lifestyles") is a proprietary research methodology used for psychographic market segmentation

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Contents of a marketing plan

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Executive Summary- Brief summary of goals, easy for top management to understand Curren Market Situation- Describes target market and the company's position in it Threats / Opportunity Analysis- SWOT Marketing Strategy- Everything Action Program- What, when, who, how, much Budgets- Projected profits/loss statement Controls- Outlines controls used to monitor progress, measures of return on marketing investment

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Current market situation

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Also includes: Market Description, Product Review, and Review of competition

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Company's with many products Company's with few products

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Product Management Organized Customer Management Organized

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Marketing ROI

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Net return of a marketing investment / Cost of the investment

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Marketing Environment

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The actors / forces that affect marketing managers ability to do their jobs

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Micro Environment

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Actors close to the company

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Macro Environment

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Larger societal forces that effect the company

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Actors in a Micro Enviornment

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Company- All levels interdependent Suppliers- Partings in creating value Marketing Intermediaries- yup Competitors- yup Publics- Interest in or impact on an org's ability to achieve its goals Customers- Most important actor

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Types of Publics

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Financial (banks), Media (tv), Gov (Lawyer), Citizen Action (Pita), Internal, General Public, Local Public

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Actors in a Macro Environment

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Demography- Baby Boomers (1946-1964, 78 million, 70% of the disposable income in USA) Gen X- (1965-1976, 49 million, Most educated) Gen Y- (1977-2000, millennial's, 83 million) Gen Z- (2000-now, 82 million) Economic- affecting purchasing power / spending pattern Natural- Physical environment affected / natural resources needed Technological- Disruptive force, new tech, market ops, or products Political- laws, gov agencies, pressure groups that affect / limit orgs / individuals Cultural- Strongly affect how people think / behave, self, others, org, society, nature, universe

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Number one most important trend

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The changing age structure

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FDA EPA ECC FAA

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Food / Drug Safety Environmental protection Communication Aviation Administration

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Sherman Antitrust Act 1890

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Prohibits monopolies or activities (price fixing, predatory pricing), that restrain trade or competition in interstate commerce

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FTC 1914

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Federal Trade Commission monitors and remedies unfair trade methods

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Robinson Patman Act 1936

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Amends the Clayton Act to define price discrimination as unlawful, empowers the FTC to establish limits on quantity discounts, prohibits allowances of certain kinds

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Clayton Act 1914

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Supplements the Sherman act by prohibiting certain types of price discrimination and tying clauses

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Consumer Product Safety act 1972

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Established CPSC and authorizes it to set safety standards, as well as exact penalties for not upholding those standards

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Big Data

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Huge and complex data set, easily overwhelming

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Customer insights

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Fresh marketing info-based understandings of customers and the marketplace that create customer value, engagement and relationships

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Marketing Information Systems

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Assessing info needs, developing needed info (internal databases, intelligence, research), and analyzing and using the info

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Internal Database

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Collection of consumer / customer info obtained internally

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Customer vs consumer

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Customer buys, consumer uses, can be both

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Competitive Marketing Intelligence

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Systematic monitoring / collecting / analyzing of publicly available info about consumers / competitors . developments

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Marketing Research

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Systematic design collection analysis and reporting of data relevant to a specific marketing situation an org is facing

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Marketing Research Process Exploratory Research Descriptive Casual Written Proposal Primary / Secondary Data

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Defining the Problem / Research Objectives -Exploratory Research: Preliminary marketing research to help define the problem / create a hypothesis -Descriptive: Marketing Research to better describe marketing problems / sitch / markets -Casual: Marketing Research to test hypothesis about cause / effect relationships Developing the Research Plan - Written Proposal: Management problems addressed, the research objectives, info to be obtained, and how the results will help decision making -Primary data: obtained for purpose at hand -Secondary data: obtained for dif purpose Implementing the Research Plan - Analyzing the Data Interpreting and Reporting the Findings

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Primary Data Collection

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Research Approaches- Observations, surveys, and experiments Observational Research- Observing relevant people, actions, and situations Ethnographic Research-Sending undercover reps to observe targets in natural environments Survey Research- Knowledge, attitudes, perceptions, preferences Experimental- Match groups, dif treatments, control, check differences

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Two main instruments for primary data collection

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Questionnaires and mechanical devices

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Contact Methods

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Mail- Large amount low cost Telephone- Quick, flexible, higher cost Personal Interview- high high cost Focus Group- high cost, 6-10 people Online- Really good for cheap flexible quantitative data Online research groups- Qualitative research cheap easy and flexible

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Behavioral Targeting

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Using consumer tracking data to effectively target market

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Sampling Plan

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Marketing group segment meant to represent the population

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Types of Sampling

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Probability: Simple Random- everyone equal chance Stratified Random- random drawn from each cluster Cluster (area)- mutually exclusive blocks, researcher chooses one or so Non-probability: Convenience sampling- easiest to obtain info from Judgement sampling- uses judgment to pick good candidates Quota Sample- prescribed number of people from several categories

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Research Instruments

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Questionnaires- most common instrument Mechanical Devices- scanners, gps, tech

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Customer Relationship Management

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To manage detailed reports on individual customers

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Big Data and Marketing Analytics

answer

The analysis tools, technologies, and processes by which marketers dig out meaningful patterns in big data to gain customer insights and gauge marketing performance

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Demographic Geographic Psychographic Behavioristic

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Easy to obtain Easy to obtain Harder to obtain, well established company Google analytics, online tracking

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Trade area

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Man-made / natural obstacles restricting changing trade areas. Primary 65%, Secondary 20%, tertiary, occasionally

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PRIZM

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Potential rating index for categorizing specific demogeogaraphic areas

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Avoidance by niche cannibalism

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avoiding competition through niche eating your own company's sales

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Model of Buying Behavior

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The Environment- Macro and 4 p's Buyers black box- brain, characteristics, decision process (can't monitor) Buyers response- Buying attitudes / preferences, what where when who, brand engagements / relationships

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Factors influencing consumer behavior

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Cultural Social Personal Psychological

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Factors influencing consumer behavior: Culture Culture Subculture Social Class

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Learned behaviors from society Group with shared value systems and similar lifestyles Relatively permanent ordered divisions in society who share similar values, interests, and behaviors

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Factors influencing consumer behavior: Social Groups Social Networks Family Roles Status

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2 or more people achieving a goal Online exchanging of info / opinions Strong influence on the market / changes often Activities expected of you General esteem given to you

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Factors influencing consumer behavior: Personal Age & life cycle Occupation Economic Sitch Lifestyle Personality Brand personality self-concept

answer

PRIZM 66 distinct lifestage segments Blue collars = more rugged purchases can target economic sitch Activities, interests, opinions The unique psychological characteristics that distinguish a person or group Specific mix of human traits attributed to a comp Also self image, we are what we consumer, the idea that peoples possessions reflect their identities

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Factors influencing consumer behavior: Psychological Motivation Interpretive consumer research Perception Selective Distortion Selective Retention

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A need that is sufficiently pressing Hypnosis, dream therapy, or soft lights The process by which people select and interpret info to form a meaning of the world People interpreting things in a way that supports what they already know Remembering the good for favored company's and forgetting the good of unfavored

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Factors influencing consumer behavior: Psychological Learning Drive vs. Motive Cues and Responses Beliefs Attitudes

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Changes in an individuals behavior from experience Same thing except motive is directed towards a particular corrective action Minor stimuli determining when where and how a person responds, which is the final action A descriptive thought that a person holds about something A person's consistent favorable / unfavorable tendencies towards an object / idea

question

Maslows Hierarchy of needs

answer

(Bottom) Physiological Needs- Hunger, thirst Safety Needs- Security, protection Social Needs- sense of belonging, love Esteem Needs- Self-esttem, recognition, status (Top) Self-Actualization Needs- Self-development and realization

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Buyer Decision Process

answer

Need Recognition- Recognizes prob or need (internal or external stimuli) Info Search- Motivated to search for info Personal Sources (most influential) Commerical Sources (most info) mobile site Public Sources- Social media, consumer ratings Experiential- Examining / using a product Evaluation of Alternatives- Evaluate alt brands Purchase Decision- The buyers decision on what brand to buy (two things can come btwn purchase intention and decision, attitudes of others, and unexpected situational factors) Post Purchase Behavior- Consumer expectations vs perceived performance

question

Consideration set (evoke set)

answer

Brands you already consider

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Cognitive Dissonance

answer

Buyers remorse

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Buyer Decision Process for new products

answer

Awareness- Aware of new prod but lacks info Interest- Seeks info about new prod Evaluation- Weighs pros / cons of trying prod Trial- Tries new product on a small scale Adoption- Decides to make full and regular use of the product

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Consumer Buyer Behavior

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The buying behavior of final consumers personal consumption (serv or prod)

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Consumer Market

answer

All individuals / households that consumer goods / services for personal consumption

question

Subculture facts Hispanics Blacks Asians

answer

Family oriented, high population, children largely control what the family buys Strongly motivated by quality and selection, more price conscious Most affluent US demographic, brand loyal af

question

Total Market Strategy

answer

Marketing to other races to market completely

question

Word of mouth influence

answer

the high impact of personal words on buying behavior

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Opinion Leaders Buzz Marketing

answer

A person within a ref group who has social influence on others Enlisting Opinion Leaders as brand ambassadors

question

Types of Buying Decision Behavior

answer

Complex Buying Behavior- High consumer involvement in a purchase and significant perceived differences among brands Dissonance-Reducing Buying Behavior- High involvement by few perceived differences among brands Habitual Buying Behavior- Low consumer involvement few signif perceived brand difs Variety Seeking Buying Behavior- Low consumer involvement but signif perceived brand difs

question

Five Adopter Groups

answer

Innovators- 2.5% Venturesome, new ideas at some risk Early Innovators- 13.5% Opnion leaders, new ideas carefully Early Mainstream- 34% Deliberate, rarely leaders, before average person Late Mainstream- 34% Skeptical, only after majority use Lagging Adopters- 16% Tradition bound, only use when is a tradition of sorts itself

question

Five Characteristics important in innovation rate adoption

answer

Relative Advantage- Degree to which innovation appears superior to existing products Compatibility- Degree to which the innovation fits the value / experiences of potential customers Complexity- Degree to which the innovation is difficult to use / understand Divisibility- Degree to which may be tried on a limited basis Communicability- Degree to which results of the innovation can be described to others

question

Buying Center

answer

A group of people who decide what to buy, purchasing manager (head guy), plant manager, line manager

question

Types of Buying Situations

answer

Straight Rebuy- Buyers routinely buy without modification (reordering) Modified Rebuy- Business buying situation where wants to modify product specifications New Task- Buyer purchases a prod or service for the first time

question

Institutional Market Governmental Market

answer

Provides goods or services to people in their care Fed, State, or local carrying out of governmental duties

question

Retailers / Resellers Whole salers

answer

Resell Goods Dont sell goods to final customers

question

5 Requirements for Effective Segmentation

answer

Measurable- Size, profiles, and purchasing power can be measured Accessible- Segs can be reached easily Substantial- Large or profitable enough to serve Differentiable- Conceptually distinguishable Actionable- Programs are effective / possible

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