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Marketing

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an organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

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Value Proposition

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The set of benefits or values a company promises to deliver to customers to satisfy their needs

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Maslow's Hierarchy of Needs (Top to Bottom)

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Self-Actualization, Self Esteem, Belonging, Security, and Physiological

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Production Concept

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The idea that consumers will favor products that are widely available and/or highly affordable

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Product Concept

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The idea that consumers will favor products that offer the most quality, performance, and features. Organizations offering such products are expected to expend considerable energy (and funds) to continuously improve the products and/or develop the next generation of products

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Selling Concept

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The idea that consumers will not buy enough of the firm's products unless it undertakes a large scale selling and promotion effort

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Marketing Concept

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The idea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired products/services better than competitors do.

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Societal Concept

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The idea that a company should make good marketing decisions by considering not only consumers' wants and needs, but also the company's requirements, consumers' long term interests and society's long term interests.

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The Marketing Mix (4 P's)

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Product, Price, Promotion, Place

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Mission Statement

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describes the purpose of your organization- the reason for its existence

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Core Values

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fundamental beliefs about what's important and what is and isn't appropriate in conducting company activities

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SWOT Analysis

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Examines internal and external forces that affect the company S - strengths W - weaknesses O - opportunities T - threats

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Goals

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major accomplishments over long period of time

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Objectives

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short-term performance targets that direct efforts toward goal

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Contingency Planning

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Identify aspects most likely to be adversely affected by change, develop alternative courses of action

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Crisis Management

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Create structure to deal with emergencies

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Ethical Challenges

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"...arise in...business organizations [because]...multiple stakeholders...make conflicting demands."

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How to face and Ethical Dilemma

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1. Define problem, collect facts 2. Identify feasible options 3. Assess the effects of each option on stakeholders 4. Establish criteria for determining the most appropriate action 5. Select the best option based on the established criteria

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How to avoid Ethical Lapse?

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1. is the action illegal? 2. is it unfair to some parties? 3. If I take it, will I feel badly about it? 4. Will I be ashamed? 5. Will I be embarrassed due to exposure?

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Basic Situations causing Ethical Issues

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1. Bribes 2. Conflict of Interests 3. Conflicts of Loyalty 4. Issues of Honesty & Integrity 5. Whistle-blowing

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Conflicts of Interest

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"...individuals must choose between taking actions that promote their personal interests over the interests of others." Interferes with best interest of Company Stakeholders and uses Private Information

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Responsibilities to Consumers

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1. Right to Safe Products 2. Right to Be Informed 3. Right to Choose 4. Right to Be Heard

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Responsibilities to Community

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1. Financial Contributions 2. Volunteerism 3. Supporting Social Causes

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Marketers can obtain information from...

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1. Internal data 2. Marketing Intelligence (the systematic collection and analysis of information about competitors and developments in the marketplace) 3. Marketing Research (the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization)

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Exploratory Market Research

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Used during beginning stages of research. Seeks to discover ideas and insight

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Descriptive Market Research

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Pre-planned and structured in design. Goal is to collect statistical data to infer on the population

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Causal Market Research

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Pre-planned and structured. Draws conclusions and explains the relationship between to variables

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Basic vs Applied Research

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Basic- fills knowledge we do not already have Applied- seeks to answer questions in the real world and solve problems

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Primary Data

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Data collected by you, usually more costly ex. surveys, interviews

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Secondary Data

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Cheaper method of discover preexisting data ex. any available data

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Steps in the Research Process

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1. Define the problem and research objectives 2. Develop the research plan 3. Implement the plan (collect the data) 4. Analyze and report the findings

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Research Approached

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Observational (gathering data by observing relevant people, actions, situations) Ethnographic (trained researchers watch and interact with consumers in their natural environment) Survey research (used for collecting descriptive info - knowledge, attitudes, preferences, and buying behavior) Experimental (used for gathering cause and effect information)

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Sampling

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Probability samples - each member of the defined population has a known chance of being included in the sample Non-Probability samples - should only be used when probability sampling costs too much or takes too much time.

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Ways to Survey

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1. Mail questionnaires 2. Telephone interviews 3. Personal interviews 4. Focus group interviews 5. Online research (surveys, panels, experiments, focus groups)

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Consumer Decision Process

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Need Recognition -> Information Search -> Evaluation of Alternatives -> Purchase Decision -> Post Purchase Evaluation

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Cognitive Dissonance

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The customer experiences feelings of post-purchase psychological tension or anxiety. Some companies like to engage their consumers with post-purchase communications in an effort to influence their feelings about their purchase and future purchases.

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Factors Influencing Consumer Behavior

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1. Psychological factors 2. Social factors 3. Situation factors

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Psychological Factors

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- Motives --- Maslow's Hierarchy of Needs - Attitudes: feelings or beliefs about an object or idea *Components of attitude: Cognitive Affective Behavioral *Perception: the meaning applied to incoming stimuli Selective perception Subliminal perception *Learning: affects attitudes and perception

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Social Factors

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-FAMILY!! (The single most influential factor for most of us) -Reference Groups -Cultural factors

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Situational Factors

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-Purchase Situation: *need vs. want *value expectations *financial situation Shopping Situation: *In-store *On-line *Presence of others

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Examples of Buying Decisions

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1. Limited Problem Solving 2. Extended Problem Solving 3. Habitual 4. Impulse Buying

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General Economic Environment

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GDP, Gross National Income, Purchasing Power Parity, Human Development Index

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Real Income

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income of an individual/group after taking into consideration the effects of inflation on purchasing power.

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Evaluating Real Income

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Firms can make adjustments to an existing product or change the price to meet the unique needs of a particular country market.

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Infrastructure and Technological Capabilities

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Transportation, Communication, Distribution Channels, Commerce

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Government Actions

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Tariffs, Quota, Exchange Control, Trade Agreement

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Sociocultural Factors

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Power Distance, Individualism, Masculinity, Time Orientation

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Global Entry Strategies

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Export, Franchising, Strategic Alliance, Joint Venture, Direct Investment

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Pricing Strategies

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Tariffs, Quotas, Anti-dumping Policies, Economic Conditions, Competitive Prices

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Product and Service Strategies

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1. sell the same product or service abroad and at home 2. sell a similar product or service abroad that;s available at home 3. sell a whole new product or service abroad

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Global Communication Strategies

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Adapt to language, consider religious values in different cultures, prepare for varying literacy levels

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Global Distribution Strategies

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Some global channels are very long and complex. Consumer shop local small local stores. Suppliers must be creative in delivering to these outlets

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The Segmentation, Targeting, and Positioning (STP) Process

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1. Break the broad market into smaller, more homogeneous segments 2. Specifically target discrete market segments 3. Position the brand to appeal to the target market

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Market Segmentation

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the process that companies use to divide large heterogeneous markets into smaller markets that can be reached more efficiently and effectively with products and services that match their unique needs/wants

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Segmentation approaches

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1. Undifferentiated 2. Differentiated 3. Concentrated

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Undifferentiated

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focuses on an entire target market rather than a segment of it ex. (Model T)

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Differentiated

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focuses on multiple segments of the target market ex. (Ford Motors has multiple types of cars for multiple purposes)

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Concentrated

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focuses is concentrated on one segment of the market ex, (VW 1955, sold cars directed at stay at home mothers)

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Segmentation methods

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1. Demographic 2. Geographic 3. Psychographic 4. Behavioral

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Demographic segmentation

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Age Income Gender Occupation Family size Education level Marital status Religion Family life cycle Race Ethnicity

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Geographic segmentation

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Regions (of the country, or of the world) Urban/suburban/rural City size Population density Climate

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Psychographic segmentation

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Social class Lifestyle Personality traits

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Behavioral Segmentation

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Benefit sought Occasion User status Usage rate Loyalty status

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Requirements for effective segmentation

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Measurable (size, purchasing power) Accessible (segment can be effectively reached and served) Substantial (segments are large and profitable enough to serve) Differentiable (segments are different and will respond to different marketing mixes) Actionable (company can design effective programs to attract and serve the segment)

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Segments must...

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Segments must be all-inclusive and mutually exclusive

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Target markets

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From the list of segments, companies choose the segment they want to go after first. Companies usually don't have the resources to attack all segments equally. Select the segments that meet the company goals: i.e., the easiest to reach, the most profitable, the most accessible, etc. Once the first target market has been successfully penetrated, move on to the next target.

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Positioning

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Position is determined by the consumer, not the company. The space you want your product/brand to occupy in the consumer's mind. The company's messaging/advertising tries to influence consumers to buy into a certain position, but the real test is what do the consumers actually think about the product/brand. Example: Volvo (safety), Toyota (quality), Apple (user friendly innovation)

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Effective positioning

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Deliver on the brand promise Be consistent Make the position different from competitor's and simple for the consumer to understand

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