Marketing 101 exam 1 – Flashcards
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• Inertia to Passion
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Creating a inertia of a product that is starting to sell and then creating a heightened emotional attachment to the produce or brand
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• 80/20 rule
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• 80% of sales will come from 20% of your customers... 20% of customers are repeat buyers
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• Economies of scale
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• The larger the market/buyers the lower expenses you have and the lower you can sell a product
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• Understand Marketing mix
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(4 P's)/Marketing mix from customer perspective (4 Cs)
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• Price
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Cost, tends to indicate quality and premiums
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Place
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Conveniences, location, location, location. All neo model click vs traditional brick
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Product
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customer- the feat and benefits that will sell to product to the customer
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Promotion
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communication - how will you get the products name out
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Exchange
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involves obtaining a desired product from someone by offering something in return
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• Criteria for a market -
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• a population that has the same wants and needs (demand) and business that have products that supply them with benefits to meet the demand
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• Utility
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The 5 categorical benefits that give uses to the customer: time, place, possession, form, info
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• Time
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- the time it takes to get the product, shipping or physically going to get it
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• place
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- the closest store or the top searched website= best value
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• possession
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- how easy it is to transfer the products ownership
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• form
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- the state in which the product is delivered ex. tv's are given preassembled but a bed you might need to assemble
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• info
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- the store that offers more knowledge to the product will have more value ex. Suit at H&M vs Suit a Men's warehouse
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• What is Value? Components of value
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• marketing takes attributes and converts it into something important to the consumer, • the best companies have the best importance • Consumer = price, utilities, brand loyalty, quality • Sellers = rev vs cost, amount they can give back, earned prestige, CLV* dropping a customer
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• Customer satisfaction model
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• Model of business where the extra time and money* are put into the 5 utilities to build relatationships resulting longterm/ loyal customers, some don't use it because the expenses can be huge
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• Customer Equity
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• The total CLV, some customers; Long term, might be worth dropping. ex. Knuff's friend who bought the superbowl tv's
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• Sustainable Competitive Advantage
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• Distinctive and Differentiation
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- Distinctive Competencies;
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o Brand name, ex coke and global awareness
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- Differential benefits
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o Creating an competitive edge, Apples ability to be user friendly
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• The Value Proposition
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• Accurately summing up that the value that will be realized by the customer, to be successful the proposition must be attractive, but beauty is in the eye of the beholder to market must be analyzed
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- societal marketing orientation (New Era); Triple bottom line
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- (long term) the financial bottom-line= profits to stakeholders + social bottom line =contributing back to the community + environmental bottom line = green marketing
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- marketing (customer) orientation
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- - extra service can have a customer pay 10- 15% more, ex. coffee in a gas station
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- selling orientation
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- - 1930's and the great depression "the hard sell" moving goods out in anyway possible to reduce inventory
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- competitor orientation
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- focuses on gaining intelligence about competitors ex. Home Depo lowering prices due to knowledge about Lowe's
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- production orientation
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- 1920's utilized most effective ways to produce and distribute, worked best in a seller's market; demand is higher then supply ex, new medical cure with a paten sells itself because there is no alternative
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• Mission, marketing myopia
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• A business mission statement needs to define the purpose of the business, what business it is, the target markets, and development. Always avoid being to narrow or marketing myopia
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• SWOT Analysis, SWOT interactions
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• Examines internal (strengths and weakness) ex. Strong brand name/poor diversification. Then external(opportunities and threats), ex. Opportunity to go Globaly/ Threat of government regulations
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• Vulnerability
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SWOT ~ Strength and Threat, ex Gun company's and regulations on guns
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• Leverage
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• SWOT ~ Strength and Opportunity ex Premium location and increasing gas prices
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• Problem
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• SWOT ~weakness and threat ex. No diversification and changing of consumer wants
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• Constraint
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• SWOT ~weakness and opportunity ex. Want to go global but not enough cash on hand
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• Portfolio analysis
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A management tool for evaluating a firm's business mix and assessing the potential of its Strategic Business Units's.
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- (BCG) Matrix: Star; Dog; Question Mark; Cash Cow
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- focuses on how a business should allocate there generated cash
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- (BCG) Matrix: Star
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~high market growth/ high market share = some investment to keep on top
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- (BCG) Matrix: Dog
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~low market share low growth= drop, investment to move markets,
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- (BCG) Matrix: Cash Cow
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= high market share/low growth, not a lot of investment, reallocate resources
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- (BCG) Matrix: Question mark
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= low market share, high growth, high investment to turn into star
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• Product-Market Growth Matrix
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x-axis =Product new/existing y-axis=market new/existing
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• Market penetration
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- existing market/ existing product- seek to increase sales in market
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• Market development market
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-new market/ existing product - existing product into new
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• Product development
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- existing market/ new product - create growth by selling new products in existing markets
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• Diversification,
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new product/ new market, - emphasize both new products and new markets
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• Strategic Alternatives
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- Market penetration; Market development; Product development; Diversification
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• Environments:
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o Economic, Competitive, Technological, Political, Sociocultural
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• Economic Environment
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o Business cycles (market and world), look for the health of the economy
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• Level of economic development;
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LDC, developing country, developed country, focuses on is the country good to expand into
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o LDC
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- least developed country - more exports, not a lot of marketing opportunity
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o Developing country
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- BRIC- Brazil, Russia, India, China= fastest, shifting from agriculture to industry
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o Developed Country
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- bountiful market potential with private marketing systems
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• Competitive environment
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Gaining competitive information to understand possible market trends
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o Micro(Levels of competition) • discretionary income
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- how consumers are paying with leftover funds, ex. MP3's, charity, travel?
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o Micro(Levels of competition) • Product competition
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- the different products, which do the same customers buy ex. Hotels, resorts, inns. etc market to travelers
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o Micro(Levels of competition) • Brand Competition
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- in a single market what does the customer choose. Ex what hotel chain does the consumer want.
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o Macro(Competitive market structures) • Monopoly
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- almost complete domination of market, ex railroads
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o Macro(Competitive market structures)Oligopoly
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- Few Large Company's with the majority of market share and have a large market population, ex cell phone companies
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o Macro(Competitive market structures) • Monopolist
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- lots of business with small shares, go off of differentiation
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o Macro(Competitive market structures) • Perfect competition
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- many small sellers with relativity same product ex. Farmers
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• Technological environment; how does this change industry?
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o Distribution o Inventory Control o Communication o RF Chip technology(inventory)
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• Political/Legal environment o Patents
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- prevention from selling an invention for a given period of time
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Sherman Antitrust Act
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1890 eliminate monopolies, by prohibition of "predatory, vertical, horizontal"
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• Vertical price fixing
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- company tells retailer you must sell at product at this price... later overturned in 2007; lower or higher prices can damage image
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• Horizontal Price fixing
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- lets all set our prices at this
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• Predatory Pricing
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- low price to drive someone out of business, then jacking up the prices
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o Clayton Act
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-1914 prohibits the use of blackmailing to get contracts (buy this contract as well or you wont get this contract), also restricts exclusive offers that restrict competition
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o Federal Trade Commission Act
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1914 - developed to monitor unfair pratices
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• Sociocultural environment
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o The characterists that make up a societies values and beliefs
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• Ethnocentrism
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o Believing your countries culture is superior to others
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• Demographics
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o Statistics that measure age, race, sex, ethnicity
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• Social norms
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o That the societies ethics are built upon ex whats right vs wrong
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• Cultural Values
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o The deeply held inter values of a culture ex Americans and punctuality
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• Product standardization vs. localization
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Standardization- the world is getting smaller and everyone should be linked Localization- the world is not small and each geographic should be marketed to differently
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• Different research study designs
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• Qualitative - interviews,focus groups ,Ethnographies, Projected techniques... Quantitative- scales Causal- labs, field work
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• Types of data
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qualitative, quantitative, primary, secondary
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• Qualitative
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• Problem identifying, interviews, focus groups Ethnographies to gain information for more rigorous studies
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• Quantitative
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• Problem Solving - scaling and counting to develop frequencies
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• Primary
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• Internally gathering data, expensive, time consuming, but get reliable specific results
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• Secondary
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• Bought from external source, cheaper, saves time, but also might not fill the bill, may not be realiable
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• Validity, reliability
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• Construct - does it answer the original question, internal- identify the true causal relationship" does x cause y, External will the lab hold true for the real world
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• Sampling
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• Selecting the appropriate respondents for a study
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• Independent Variable
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manipulation ex.(Pill) "more variables more people"
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Dependent variables
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measurable outcomes ex. (test) never changes
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• Data Mining
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- sophisticated analysis of massive amount of transactions 4- customer acquisition, customer loyalty - customer abandonment - marketbaskets
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• Stealth Marketing
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o Marketing to target market without the target knowing their being marketed to
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• Guerilla Marketing
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o Unique marketing in an unsuspecting area (creates buzz)
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• Buzz vs. Hype
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o Buzz is talked about from the outside positive or negative unique commercial that creates WOM, Hype is what the company thinks about itself a commercial that has little interest and behavior elements
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• Hull's drive theory
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The belief that all animal and human behaviour are driven and that reinforcers reduce these drives (ie hunger > eat > hunger satisfaction). However it only works with primary reinforcers and not all behaviours are followed just by primary reinforcers.
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• Darwin's biological determinism
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o The Cowbird in a smaller birds nest will consume as much as possible
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• Cannibalization
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- when your own products take market share way from each other
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• Traditional vs. non-traditional media types
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o Traditional(Personal) vs nontraditional media (digital)
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Line extensions
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another product under the same brand name.
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Brand extensions
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new product category under same brand name
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• Subliminal messaging
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hidden messages within marketing communication
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• Errors
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Measurement - not what your measuring Non response - no one responds Frame - Phonebook vs college residents "problem questions" • why do you like Wendy's fresh meat better"=assumption • fast food reguaraly (ambiguous • two questions in one • where do you live, Home dormitory • Whats your age overlapping age
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• Threats
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History "which commercial is best AMTRAC, bunny = great reviews, then increase in train #'s. Where the real reason is 9/11 Maturation- Smarter vs maturing Testing Effect - more times taking a test the better you get at it Regression - people have an average
