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Marketing

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-activities, a set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

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Value

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-the value of a product compares its benefits with its costs -Benefits include not only the functions of the product, but also the emotional satisfaction associated with owning, experiencing, or possessing it

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T/F: A satisfied customer perceives the benefits derived from the purchase to be greater than its costs?

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True, the ratio for costumer value is: Value=Benefits/costs

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Marketing Strategies to increase value for customers

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-add benefits and decrease costs of products to provide greater value -Develop an entirely new product that performs better (provides greater performance benefits) than existing products -keep a store open longer during busy season (adds benefits of greater shopping convenience) -offer price reductions (the benefits of lower costs) -offer info that explains how a product can be used in new ways (the benefit of new uses at no added cost)

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Utility

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-ability of a product to satisfy a human want or need -companies such Microsoft and Sony offering different types utility

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Different forms of utility

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-Form utility -time utility -Place utility -Possession utility

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Form Utility

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-providing products with features that customers want ex: Microsoft's Xbox 1 having wide angle projector for big-screen viewing, and PS 4 has a controller with six-axis sensor

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Time Utility

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-providing products when customers will want them ex: Both companies create Internet buzzes and rumors among gamers by hinting at upcoming release dates without specifics

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Place Utility

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-providing products where customers will want them ex: Xbox 1 will be available at Microsoft's online store, and PS 4 will be accessible online through sites like Amazon and many brick and mortar retailers, including Best Buy and Target

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Possession Utility

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-transferring product ownership to customers by setting selling prices, setting terms for customer credit payments, and providing ownership documents

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Consumer Goods

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-physical products purchased by consumers for personal use -Firms that sell goods to consumers for personal consumption are engaged in consumer marketing, also known as business-to-consumer (B2C) marketing

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Industrial Goods

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-physical products purchased by companies to produce other products -ex: surgical instruments and bulldozers -Firms that sell goods to other companies and engaged in industrial marketing, also known as business-to-business (B2B) marketing.

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Services

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products having nonphysical features, such as information, expertise, or an activity that can be purchased

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Service Marketing

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-the application of marketing for services , continues to be a major growth area in the U.S. -ex: Insurance companies, airlines, public accountants, and health clinics

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Relationship Marketing

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-marketing strategy that emphasizes building lasting relationships with customers and suppliers -stronger relationships, including stronger economic and social ties, can result in greater long-term satisfaction, customer loyalty, and customer retention. ex: Starbucks's Card Rewards program where they offer free coffee refills and other extras,

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Customer Relationship Management (CRM)

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-organized methods that a firm uses to build better information connections with clients, so that stronger company-client relationships are developed

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Data Warehousing

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-the collection, storage, and retrieval of data in electronic files -provides the raw materials from which marketers can extract info that enables them to find new clients and identify their best customers.

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Data Mining

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-the application of electronic technologies for searching, sifting, and reorganizing pools of data to uncover useful information - used to find clues about what customers look at or could possibly be interested in.

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The Marketing Environment

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-every marketing program must recognize the factors in a company's external environment, which is everything outside an organization's boundaries that might affect it.

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Political-Legal Environment

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-the relationship between business and government, usually in the form of government regulation of business -both global and domestic political-legal environments have profound effects on marketing -ex: political push for alternative energy sources is creating new markets and products for emerging companies such as India's Suzlon Energy Limited (large wind turbines).

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Sociocultural Environment

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-the customs, mores, values, and demographic characteristics of the society which an organization functions -changing social values force companies to develop and promote new products, such as poultry and meat without antibiotics and growth hormones, for both individuals consumers and industrial customers

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Technological Environment

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-all the ways by which firms create value for their constituents -new products make existing products obsolete, and many products change our values and lifestyles -ex: mobile devices, the availability of a vast array of apps, and social media, facilitate business communication just as prepackaged meals provide convenience for busy household cooks

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Economic Environment

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-relevant conditions that exist in the economic system in which a company operates -they determine spending patterns by consumers, businesses, and governments, the economic environment influences marketing plans for product offerings, pricing, and promotional strategies. ex: potential economic variables include inflation, interest rates, and recession

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Competitive Environment

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-the competitive system in which businesses compete -marketers must convince buyers that they should purchase one company's products rather than another's -each marketing program seeks to make its product the most attractive -a failed program loses the buyer's dollar forever (or at least until it is time for the next purchase decision0.

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Substitute Product

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-product that is dissimilar from those of competitors, but that can fulfill the same need -ex: your cholesterol level may be controlled with either of two competing products: a physical fitness program or a drug regimen

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Brand Competition

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-competitive marketing that appeals to consumer perceptions of benefits of products offered by particular companies ex: For Internet searches, you could use Google, Bing, or Yahoo. -Based off users perceptions

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International Competition

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-competitive marketing of domestic products against foreign products ex: Boeing vs Airbus

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Marketing Plan

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-detailed strategy for focusing marketing efforts on consumers' needs and wants -identifies objectives needed to be accomplished for future -contains a strategy that identifies specific activities and resources that will be used to meet the needs and desires of customers in the firm's chosen target markets, to accomplish the marketing objectives

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Steps of Developing a Marketing Plan

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1) Identify the objective or goal to be achieved 2) Plan for when it will happen, and for the paths (or routes) that will be taken to get there) 3) Evaluate resource requirements and availabilities 4) Adjust plans as needed to become realistic and feasible 5) Keep notes and data about what happened because learning from this experience increases the chances for greater success on the next

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Structure of the actual Marketing Plan

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1) Overall Business Mission 2) Marketing Objectives(What Marketing will accomplish) 3) Marketing Strategy (Things Marketing Will Do) 4/5 Identify Target Markets based on Marketing Mix (4 P's): a) Product b) Price c) Place(distribution) d) Promotion

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Marketing Objectives

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-the things marketing intends to accomplish in its marketing plan -the foundation that guides all of the detailed activities in the plan -exist solely to support the company's overall business mission and typically focus on maintaining or enhancing the organizations future competitive position in its chosen markets ex: Starbucks mission is to be leading retailer of specialty coffee. Two supporting marketing objectives: 1) a 5% increase in its world wide market share by 2015, 2) be the leading retailer (in dollar sales) of specialty coffee in China by 2018

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Marketing Strategy

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-all the marketing programs and activities that will be used to achieve the marketing goals -marketing planning is an ongoing process-not just a one-time endeavor-it can be improved through experience by learning from past triumphs and mistakes

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Marketing Manager

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-manager who plans and implements the marketing activities that result in the transfer of products from producer to consumer -responsibilities include: planning, organizing, leading, and controlling an organizations marketing resources toward supporting and accomplishing the organization's overall mission.

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T/F: Marketing Strategy focuses on the needs and wants of customers in the company's chosen target markets.

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True

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Marketing Mix

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-Utilities the 4 P's: combination of product, pricing, promotion, and place (distribution) strategies used to market products -specific activities for each of the 4 P's will be designed differently to best meet the needs of each target market

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Product

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-good, service, or idea that is marketed to fill consumers' needs and wants

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Product Differenttiation

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-creation of a product feature or product image that differs enough from existing products to attract customers ex: Apple consistently introducing a succession of newer models of the iPhone with faster, more powerful, and consumer-friendlier innovations.

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Pricing

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-process of determining the best price at which to sell a product -On one hand, prices have to support a variety of costs such as operating, administrative, research, and marketing. -On the other hand, prices can't be so high that customers turn to competitors -successful pricing mean finding a profitable middle ground between these two requirements. ex: By offering a reduced price saving for its breakfasts meals, Starbucks is promoting its affordability image.

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Benefits of Low Prices

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-generally lead to larger sales volumes

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Benefits of High Prices

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-usually limit market size but increase profits per unit -can also attract customers by implying that a product is of high quality

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Place (Distribution)

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-part of the marketing mix concerned with getting products from producers to consumers -where and how customers get access to the products they buy -availability in places such as retail store, Internet, or by direct delivery to customer.

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Distribution

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-the set of activities that moves products from producers to customers. -choosing the proper outlet like a retail store, requires decisions about several activities -Warehousing and inventory control decisions are distribution decisions as well as transportation options.

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Promotion

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-aspect of the marketing mix concerned with the most effective techniques for communication info about products -most visible component of the marketing mix most important promotional tools include: advertising, personal selling, sales promotion, publicity/public relations, and direct or interactive

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Advertising

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any form of paid non-personal communication used by an identified sponsor to persuade or inform potential buyers about a product

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Personal Selling

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-person-to-person sales ex: insurance, custom-designed clothing, and real estate

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Sales Promotion

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-direct inducements such as premiums, coupons, and package inserts to tempt consumers to buy products (usually inexpensive items) ex: premiums (usually free gifts), coupons, and package inserts are all sales promotions meant to tempt the consumers to buy products.

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Public Relations

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-communication efforts directed at building goodwill and favorable attitudes in the minds of the public toward the organization and its products -seeks to build favorable attitudes in the minds of the public toward the organization and its products

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Integrated Marketing Strategy

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-strategy that blends together the Four Ps of marketing to ensure their compatibility with one another and with the company's nonmarketing activities as well -Toyota offers relatively small number of different models, targeting auto customers that want high quality, excellent performance reliability, and moderate prices (a good value for the price).

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Target Market

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-the particular group of people or organizations on which a firm's marketing efforts are focused

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Market Segmentation

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-process of dividing a market into categories of customer types, or "segments" having similar wants and needs and who can be expected to show interest in the same products ex: GM once offered automobiles with various features and at various price points

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Product Positioning

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-process of fixing, adapting, and communicating the nature of a product

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Geographic Variables

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-geographic units that may be considered in developing a segmentation strategy -geographic units, from countries to neighborhoods

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Geographic Segmentation

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-geographic units, from countries to neighborhoods, that may be considered in identifying different market segments in a segmentation strategy ex: McDonald's restaurants in Germany serving beer on their menu, while in the U.S. they don't

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Demographic Segmentation

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-a segmentation strategy that uses demographic characteristics to identify different market segments(separates consumers by demographic variables)

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Demographic Variables

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-characteristics of populations that may be considered in developing a segmentation strategy -identifies traits such as: age, income, gender, ethnic background, marital status, race, religion, and social class

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Geo-Demographic Segmentation

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-using a combination of geographic and demographic traits for identifying different market segments in a segmentation strategy

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Geo-Demographic Variables

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-combination of geographic and demographic traits used in developing a segmentation strategy

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Psychographic Segmentation

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-a segmentation strategy that uses psychographic characteristics to identify different market segments

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Psychographic Variables

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-consumer characteristics, such as lifestyles, opinions, interests, and attitudes, that may be considered in developing a segmentation strategy ex: lifestyles, interests, personalities, and attitudes

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Behavioral Segmentation

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-a segmentation strategy that uses behavioral variables to identify different market segments

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Behavioral Variables

answer

-behavioral patterns displayed by groups of consumers and that are used in developing a segmentation strategy ex: heavy users (buy in bulk, the key to Sam's Club and Costco), situation buyers (Halloween is now the second largest "holiday" in terms of spending); or specific purpose shoppers.

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Marketing Research

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-the study of what customers need and want and how best to meet those needs and wants

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Secondary Data

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-data that is already available from previous research -can save time, effort, and money

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Primary Data

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-new data that is collected from newly performed research -when secondary sources are unavailable or inadequate, primary is used. -ex: Coca -Cola's study on taste test for new taste of Coke products

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Observation

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-research method that obtains data by watching and recording consumer behavior

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Survey

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-research method of collecting consumer data using questionnaires, telephone calls, and face-to-face interviews ex: UPS surveying customers to see how they can improve service

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Focus Group

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-research method using a group of people from a larger population who are asked their attitudes, opinions, and beliefs about a product in an open discussion

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Experimentation

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-research method using a sample of potential consumers to obtain reactions to test versions of new products or variations of existing products

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Psychological Influences

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-include an individual's motivations, perceptions, ability to learn, and attitudes that marketers use to study buying behavior

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Personal Influences

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-include lifestyle, personality, and economic status that marketers use to study buying behavior

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Social Influences

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-include family, opinion leaders, and such reference groups as friends, coworkers, and professional associates that marketers use to study buying behavior

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Cultural Influences

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-include culture, subculture, and social class influences that marketers use to study buying behavior

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Brand Loyalty

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-pattern of repeated consumer purchasing based on satisfaction with a product's performance

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Evoked Set (Consideration Set)

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-group of products consumers will consider buying as a result of info search ex: reading online reviews for local gym before considering purchasing a membership

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Rational Motives

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-reasons for purchasing a product that are based on a logical evaluation of product attributes -based on rational motives, emotional motives, or both -involve: cost, quality, and usefullness

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Emotional Motives

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-reasons for purchasing a product that are based on nonobjective factors -include: sociability, imitation of others, and aesthetics

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T/F: Marketing stops with the sale of a product

answer

False: marketers want consumers to be happy after buying products so that they are more likely to buy again.

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Services Companies Market

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-firms engaged in the business of providing services to the purchasing public

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Industrial Market

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-organizational market consisting of firms that buy goods that are either converted into products or used during production ex: clock making company Seth Thomas buys electronics, metal components plastic, and glass from other companies to make clocks for consumers.

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Reseller Market

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organizational market consisting of intermediaries that buy and resell finished goods ex: wholesalers and retailers that buy and sell furnished goods

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Institutional Market

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-organizational market consisting of such nongovernmental buyers of goods and services as hospitals, churches, museums, and charitable organizations

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Differences in B2B buyers from normal consumer buyers

answer

-the buyers purchasing skills and emphasis on buyer-seller relationship -industrial buyers buy in bulk -they study competing products and alternative suppliers a lot closer by networking with others and doing individual research -trained in methods of negotiation -experts on the products they buy

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Social Networking

answer

-network of communications that flow among people and organizations interacting through an online platform

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Social Networking Media

answer

websites or access channels, such as Facebook, Twitter, LinkedIn, etc, which consumers go for info and discussions

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Corporate Blogs

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-comments and opinions published on the Web by or for an organization to promote its activities

SOM 122 Chapter 11: Marketing – Flashcards

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