Marketing Exam 1

Marketing Definition (2)

"Attempts to anticipate, sometimes to change but always to satisfy buyer demands through exchanges to achieve our own objectives" Anticipate - figure out what customer will want in the future Change - Much harder to "change" what customers want than you would think. Not advertisement - since "on average, all of us are exposed to 3000 marketing messages a day but we certainly don't buy also those 3000 products a day".

Organizational Orientations

"How do customers get treated in different organizations at different times".

Internal environment of an organization

"How we do things here"

Marketing Definition

"Identifying (who are they?), understanding (what do they want) and satisfying (giving them what they want for the lowest price they are willing to pay whilst making you the highest profit margin) buyer demands through exchanges.

Functions of marketing

"facilitating and expediting exchanges" Facilitating = helping exchanges happen expediting = speeding up process.

Important woman behavior as consumers

"what women want" - question us men have been asking for centuries jokes. Woman dominate family (consumer) decision making - what family car to get Are more attentive to customer details = need to make them comfortable (psychological comfort) "gleeful in spreading the word" = woman take the shopping experience more seriously, are more likely to file written complaints". Important since word of mouth is the most powerful form of marketing communication, and increasingly more powerful these days. cleanliness = put more emphasis on cleanliness (historically cook and clean) - "clean enough" is very subjective between woman and men Control = woman like alternatives, want more choices, like being able to decide Safety = woman like and value safety, they live with at least 50% of the population being bigger and stronger = more safety awareness.

Situational factors - psychological influences on consumer behavior

- physical surrounding (pretty much the only factor marketers can control, e.g. lighting in restaurant, music tempo, used to make your customers spend more time and hence money at your store). - Social surrounding (how consumer behavior is influenced by who we are with) Can't influence but can be aware of to satisfy customer better than competition: -temporal perspective - time of day / time in hands -Task definition - purpose - Antecedent state - mood

Type of Business consumers

-Producers = quality of ingredients -Intermediaries = Wholesalers Retailers -> marketability = most important -Governments = political factors and price -Institutions = political factors and price

Hospitals "discovering of marketing" 3 big mistakes

1) 90% of marketing budget was towards advertisement 2) They were all saying the same thing 3) They were not targeting the decision makers - who usually decides what hospital the patient is going to and if they are going to are not the patients themselves but doctors / healthcare.

Basis for Segmentation

1) Demographic 2) Geographic (^lots of data available, started here) 3) Psychographic (lifestyle) 4) Behavioristic - customer loyalty status 5) Benefit Sought. (^going "further", specially for 20%ers)

Two most common challenges of distribution for consumer goods

1) M-W-R-C Manufacture, warehouse, retailer and consumer has two middlemans - warehouse and retailer 2) M-R-C Manufacture, retail, consumer - only 1 middleman

Types of brand names

1) National / manufacturers brand names = best known brands and associated with the making of a product 2) Resellers / private label brands = Kroger / walmart brands - supplied a lot of times by national brand manufacturer themselves or contact manufacturers (companies specialized in legally copying national brands) ---> growing market share and quality 3) Generic brands = no advertisement (not only medicine) - never had a significant market share in us - hard to tell the difference in the product itself but it is the image that makes the most difference. 4) Licensed brands = osu sweaters, burberry in japan = allowing a foreign company to produce your product for a royalty fee ---> can be risky / damage brand name.

Common Components to almost all marketing definitions

1) Satisfying buyers need (at the appropriate level - can't give them stuff for free, satisfy you best customers more) 2) Exchange process - marketing usually involves exchange, something for money for the most part.

Tangible product level of total product concept model

1) Size 2) Color 3) Package 4) Physical Characteristics 5) Features Product design = in between manufacturing and marketing = optimizing the combination of: 1) Function 2) Value = (quality + quantity / cost) 3) Aesthetics the combination of these three (product design) has become increasingly important in past years. "apple" as example: a good part of its appeal stems from how the product looks, feels, etc. "quality" and its evolution: There has been an increasing emphasis on quality in recent years: many years ago, quality = absence of defects Then it became about products capabilities (e.g. swiss army knife example) Then finally and currently it is about performance level One problem with quality and it current definition of performance level is that it is the most easily copied ---> reverse engineer = actual quality difference between products decreases the longer a product in on the market = product parody. * quality must be perceived from the customers point of view --- not engineers imposing their own expert quality expectations.

3 Kinds of customers

1) Those that will make you money (20%ers, your best customers, those that will make you or break you) 2) Those that could make you money 3) Those that cost you money - you are better off without them and there are perfectly legal ways of getting rid of them

Classic Consumer Behavior Model

1) need recognition 2) Information search 3) consideration of options 4) Purchase 5) Post-purchase evaluation (you check prices more often after you purchase a car to see if you have "buyers remorse / regret" and get rid of it - marketers can help get rid of it) very artificial / formal model (slows it down) but is very useful for analysis, much like watching a football game on TV allows for a more precise analysis through different angles than at the stadium (realistic).

Alternatives to segmentation strategy

1. Concentration - focusing on just one group = niche or focus strategy (german pop) 2. Mass Marketing / "undifferentiated" - lower cost, but not as effective 3. Multiple segments -- differentiated - mix of 4p's to each different customer, e.g. a car manufacturer.

Product Concepts - Types of Consumer Products

1. Convenience products = frequently replaced products, need easy access = toilet paper and food * half of all products purchased in convenience stores are consumed within 30 minutes. 2. Shopping products = products we usually want to shop around and compare (price or attribute) when shopping. a. Homogenous -- price based b. Heterogeneous -- attribute based. * you want to locate a shopping product next to other shopping products to allow for customer comparisons. 3) Speciality products = "accept no substitute" 4) Unsought products = products customers don't want to and usually don't "shop around" for. e.g. life insurance ---> require aggressive marketing.

Differences in the buying process B2B vs C2B

1. Takes longer (more expensive so more cautious + business relations) 2. Involves more people 3. Often more formal (more complicated overall)

Difference in Demand in B2B vs C2B

1. demand is derived = dependent on how much your customers customers want to buy --- consumers demand is direct 2. Fluctuates more = much more volatile 3. Somewhat more rational - buyers type's are much more rational / "professional" than amateurs.

Changing composition of U.S. Households

2013 data: Married = 52% Singles (AND MINGLES) = 27% Others = 21% Single Parent = 9% 1970 vs 1990 married with children = 41% vs 27% married with no children = 30% vs 29% Not married = 29% vs 44% in recent years, married with children decreased while not married increased. married with no children = two can live as cheap as 1.8 - more disposable / free spending income

"Evolution of organizational orientation"

4 * (5 in book) orientations that relate to the role and importance of marketing in organizations: 1) Production orientation 2) Product orientation ^ associated with excess demand (surplus) - susceptible to market conditions (recession vs expansion). Tend to be inward-looking (reflect values of the producers) - started to change and become more outwards looking in the 60s-80s 3) Selling orientation 4) Marketing orientation

80-20 Rule

80 % of your profit /sales come from 20% of your customers

Geography - influence us as consumers

9 nations - split U.S.A into different regions foundry vs tex mex vs empty corner. Regionalization -- decentralization = more expensive but more effective Can be approached through "scanner data - data mining" - stores will be arranged differently for different zip code customers. Prizm (z = zip, m = marketing) system = "Geodemographic: approach = split U.S. zip codes into 66 kind of american neighborhoods.

laws protecting 1) Competition 2) Consumers

= categories of law affecting marketing Competition (antitrust laws / shermont act of 1980) Consumers (JFK consumer bill of rights - right for information, etc) 1890-1960 = period where relatively few and general laws affecting marketing were passed. 1960+ = period where more and more specific laws affecting marketing were passed (most in regards to business practices) However, roughly every 15 years or so the political pendulum swings in the opposite direction - liberals = more optimistic about government intervention and regulation Conservative = more optimistic about it - "road to hell was paved with good intentions" THEREFORE, most laws protecting consumers and competition were passed during liberal majority periods. However, this pattern broke during 1975-2008 when there was a overall move towards deregulation by both side of the political spectrum. Since 2008 however, there has been small steps towards "re-regulation".

Hyper competiton

= current competition scene. Characterised by intensification of competition caused by: - *Deregulation* (relaxing / removing restrictions in competition) - Globalization "competition at local level (sports) vs national level. -Scrambled (intertype competition) retailing (can buy almost anything anywhere, food at drug store) - Much easier price comparison (internet) Effect: increased competition makes marketing more important but also more difficult.

Selling Orientation

= making people buy more of our stuff - promoting the product is crucial - push prospects to buy with strong ads and selling = very common way of thinking about marketing but a mistake.

Integrating the customer perspective through the whole organization

A important aspect of the marketing concept - marketing is everybody's business in the organization, even those who do not have direct contact with customer should be putting themselves in their shoes. "Marketing is everybody's responsibility" - southwest example - high level management working one day out of every month at airlines counters to get contact with customers and live their employees lifes.

Tip of the marketing iceberg

Advertising and selling are the tip of the marketing iceberg. Very visible and dramatic but only a small part of the whole. B2B: <1% of revenue B2C: approx 6% of revenue (usually see 5% of iceberg) Advertisement is usually only effective as a form of first impression. For example a toothpaste, advertisement may lead you to try a new toothpaste out, but after that, how important is advertising on your decision to buy again? Not as important as quality, and many other factors...

Personality as influence on consumer behavior -- another variable of consumer behavior

Applied vs conceptional subject example like physics and math (psychology and marketing) Generally there is a weak relationship between personality and consumer behavior, at least until more marketing specific concepts are considered Self-monitoring = kind of behavior = capacity to understand other people's perception of yourself = make good sales people = actors.

Repeat Customers - 20%ers

Are crucial because: 1) They don't need as much help 2) Generally are more profitable 3) Buy more frequent 4) higher value purchases

Culture - Age Cohorts born since 1980

Are those "born into technology" = digital natives rather than digital immigrants Increased presence of / importance / part of every day experience: - electronic media - computers -diversity --- college interview, dorms. But mostly surface familiarity, not really everyday = most natural thing to do is fall back to your comfort zone. -materialism --- great for marketing (move in day example)

Opinion Leaders - influence us as consumers

Are very important for marketers to target because they will then "pass along" their opinion to "followers" are: -heavy users but not brand loyal - attentive to specialized media (movie oscar nominee next fall) - Same Social class - Early adopters

Why do we need middlemans?

B/c you can only specialize in one thing (the manufacturer cannot also sell, at least effectively).

Best Job securitity

Be someone important to customer satisfaction

Why has marketing become increasingly important since the 1980s

Because it is harder to satisfy market / customers / employees now: b/c 1) More fragmented markets 2) Slow economic growth 3) Already high level of affluence 4) De-regulation (removal of laws that limit competition) 5) Entry of strong new competitors (adds to competition) 6) More experience, training in the practice of marketing (manager got "bigger, stronger and faster") 7) Customers who are generally more knowledgeable, demanding and skeptical (less amature consumers, more professional consumers)

Branding (product 1st p)

Biggest buzzword in marketing in recent years. 1)Brand name = anything that identifies a particular brands stuff = something you can easily say, such as "Pepsi" 2) Brand Mark = old letters in coke, golden arches 3) Trademark = some kind of legal protection to brand = very important as brand itself sometimes is worth a LOT of money. * illegal use of trademarks cost american brands billion of dollars in lost sales and reputation. History, Psychology of brand names: -most brand names are < 100 years old = oldest came in at beginning of industrial revolution -People started talking about brands as people (under armour example). ***a strong brand name is much more the RESULT of effective marketing than the CAUSE. -kmart vs walmart example (walmart = light advertiser, but very powerful brand = result of EFFECTIVE marketing) branding targets: -renewed stress -concentration on current customers (branding, designed to strengthen relationship with best customers -- bonding you and your customers.) -Summary of all beliefs and feeling (association between brands and first idea the pops up on people's mind) -can be worth billions (sell for x3-x5 the physical assets value) - Brand characters = Ronald McDonald = most times not real people - brandstanding = sponsoring to get on your good side, not even talking about brand -- free shows at osu, student orgs. Basically trying to get you more into /aware of their brand. - The battle of the brands = Natonal / manufacturers vs private / retailers ---> retailers have been winning /becoming more common over last 50 years. * In general, brand loyalty for consumer products has decreased significantly in recent years - even though brands have been trying the most to build loyalty during this period.

Business vs individual customers as consumers

Business = professional consumers Individual customers = amature consumers

Questions a business needs to ask vs question it should not

Business should not ask if "they should be doing marketing" Rather, they should be asking: 1) is being marketing done well Good indicators / specific measures are customer satisfaction and factors mentioned on return surveys? 2) does marketing matter? depends greatly on the type of business and market. For example, markets with high competition need more marketing while monopolies (captive customers) need no marketing. we like competition when it works in our favor (as customers), not the other way around.

Buyer types (B2B consumers)

Buyer types = the people who do the purchasing for various kinds of organizations.

Fundamental differences between C2B and B2B marketing

Buyers tend to be: 1) fewer in number 2) larger in size (million of potential customers buying little vs few customers buying big) 3) Geographically concentrated

Magnificent Marketing

Casino Example - illustrates several marketing examples / principles

Typical political economy

Commonly, we think of politics as a simple majority rule, but it doesn't always work this way. Since the producer side is always smaller than the consumer side, the impact of political decisions impact them the most. Hence, they are more likely to organize themselves and get their way politically at the expense of consumers (less competition = better for producers, more = better for consumers)

Economic text competition model vs actual marketing competition

Competition as experienced by real world marketers is much more intense than in economic texts. The "monopolistic competition" (multiple competitors, ease of entry into markets) is the most realistic and relevant of the 4 traditional models for American marketing. A more realistic and useful model for organizations decision making is Michael Porter's (Harvard Professor) "five forces" model - which includes not only current competitors but takes into account potential entrants, substitutes, suppliers and buyers.

Buyer Behavior (consumers - interpersonal influence - and business)

Consumers = amateurs - we decide how to spend our money however we want Interpersonal influences on consumer behavior = how we are affected by other people as consumers e.g. overall, when we go shopping with one or more people, we usually spend more individually on average. brodest influence on consumer behavior = culture = all beliefs, objects, etc that are shared with a society and are passed onto the next generation (e.g. how close you should be to other people, learned intuitively rather than "mom with yardstick" + traffic light example of russian friend) Some long-held traditional values of American culture ("culture rules are just there, like air") -Individualism = "to each his own", "song I gotta be me" -materialism = "make a lot of money" is more frequent response of what is important when asked to college students. Pilgrims, "came to do good, end up doing well" --- great for marketing - Youthfulness - "new world", premium on youth vs Asia (probably on the process of weakening), but in asia "nail who stands out gets hammered down" -Pragmatism = being practical - practice not theory. Businesses = professionals

Form utility

Created by manufacturers - those who make things. Transforms inputs into outputs. Only affected indirectly by marketing. Marketing usually comes after form utility in the form of value added activities.

Product (our first P)

Definition of a product: "anything that satisfies a need or a want and can be offered in exchange" "bundles of benefits" * Like beauty, benefits sought in products are in the eyes of the beholder (subjective) E.g.: goods, services, ideas, places, personalities, events, experiences, an entire organization (before the good / service itself sometimes ---> new idea)

Lower level Management and their staff

Delivers daily customer satisfaction.

Augmented (intangible / service) product level of total product concept model

Dimension: 1) service --- to big expensive machine, could be custom design, installation, training 2) credit 3) delivery 4) reputation 5) etc

Caesars "Total Rewards" system - Basis for Feebies

Example of Data mining, segments customers into 90 categories of their likelihood to spend money. Gives the customers a rating based on Gender (female), age (older) and place of residence (closer = better) and hence "rewards" best ranked customers with freebies. Developed by Garry Loveman --- porn star joke. Exceptions to the rules would be quickly identified and adapted --- author example.

Discovering marketing

False feeling. All companies that say they discovered marketing really just failed to realize it was already taking place. Breathing example - kid learning about respiration but has been doing it all his life. The point is, as long as these companies were partaking in voluntary exchange, so was marketing.

Marketing Orientation

Focuses on customer satisfaction = the opposite of selling orientation Ideally, you wouldn't have to do any selling. You should strive for that but won't always get it. Try to make selling superfluous. Selling - "we must sell what we make" marketing - "We must make what we can sell".

Advantages of private / Reseller brands

If done right: 1) Better value 2) Exclusive availability = only available at your store (old roy example, walmarts owners dog). 3) Greater profitability * discount stores such as walmart first mainly sold nationaal brands to build trust and then introduced their private brand --> most times these private brands are manufactured by someone other than the organization ---> sometimes even the national brand manufactures itself or contract manufacturers.

When is marketing taking place?

If there is voluntary exchange, marketing is taking place. Marketing is not limited to monetary exchange and to for-profit-organizations. Marketing's basic function is to "manage exchange relations profitably".

*The total product concept*

Is used to understand your current product, your competitors product or a product you may want to manufacture in the future. Is like non-invasive / image surgery 3 levels: 1) Core (benefits) = most fundamental level 2) Tangible 3) Augmented

Some reservations on Population Bulges

Less rigid age-roles - KGOY = "Kids grow older younger" major fallacy = always going after the largest, most visible target audience. why? that's were most of the current demand and current and future competition is at and will also be targeting. Might be beneficial to be a beer targeting young girls rather than boys for example.

The marketing environment --- "the uncontrollables"

Like weather, the marketing environment is something we cannot control but we should learn about and adapt to. shapes the overall conditions on where marketing and other business activities happen Should adjust and accommodate to = reactive, not proactive. organizations should try to anticipate and adapt to environmental forces = scanning and planning and scenario analysis. some exceptions - such as trying to influence environment through politics.

Retailing since 1990

Many Major store chains have gone out of business (e.g.: Lazaros and Big Bear in columbus / central Ohio region). Relative decline of malls (dominant in the 1990s) and less interest in shopping (landscape changed- online option - hard economic times). Overall, it has been a really tough time for retailers in the last 10-15 years.

Data Mining

Market research term / technique = fidelity cards or any other system that gathers customer behavior information for marketing. E.g.: Kroger's fidelity card. Used to provide greater information to invest in customer relation - focusing on the 20%ers.

How does most of marketing?

Middlemans = those that bring buyers and sellers together Examples of middlemans = campus bars, frats/student organizations. Why do middleman bring buyers and sellers together? Because they make money doing so.

Latino Subculture`

More acculturation (selective intake of habits) than assimilation (borrowing all habits). This creates a challenge for marketers. The reasons behind this retention of their culture stems from two primary reasons: 1) There is a high number of spanish speaking media vs eastern europe speaking media, which allows them to stay more in touch with culture 2) There are still frequent waves of latino immigration compared to other cultures and these new immigrants bring with them "updates" such cultures

Marketing Management (middle management)

More influence on customer satisfaction than top management but not as much as lower level management.

Nike example

Nike doesn't manufacture any of its products (form utility), but it takes place in value adding activities (planning, designing, branding and retailing) which enable it to make a profit and sell those product it doesn't manufacture for a greater price than they are otherwise worth.

Product Orientation

Offers highest quality as expert producer sees it goes of the principle that producer's are the experts and they know what's best for the customer than the customers themselves. e.g.: professionals, professors and performers tend to have a much higher standard of what is good or bad.

B2B marketing (includes government)

Organizational marketing, also known as "Industrial marketing" and B2B marketing. = bigger than C2B marketing dollar to dollar.

Healthcare benefits sought (core level) example

Possible benefits sought in healthcare: 1) Care = treatment 2) Caring = emotional / psychological 3) Cure = most dramatic, like "heart surgery" --> not as common 4) Comfort = hospice / chronic health issue 5) Convenience = hospice / chronic health issue 6) Cost Control 7) Quality = "as long as somebody else is paying, we want the highest quality" ---> "others usually end up paying 80% of times in healthcare" *on average, last year of life = greatest amount of spend on healthcare, more than all previous years combined. *IN U.S. healthcare is 17% of expenditure Consider a range of healthcare products and their benefits sought: 1) Regular dental check-up = convenience, cost 2) Routine birth = "luxury experience" ,comfort and caring (Helps create a solid relation with family, might lead to their decision to come back for different kind of treatment) 3) Heart surgery = Quality and cure = hard to measure, obtained from word of mouth / personal reference (friend, family doctor) 4) Hospice care = comfort & convenience ---> marketing can help overcome patient resistance *conclusion = you want to understand what benefits are customers seeking in your specific product in order to be able to better satisfy their needs.

4ps of marketing (ammunition) --- "the controllables"

Price, product, place and promotion

Perception -another basic psychological variable (5 senses) - how we affect ourselves

Processes of exposure, attention, reception, and interpretation of sensory stimuli best sensory memory comes from nose. is highly selective - blocking what we are not interested in what we perceived and what is remembered are strongly affected by what we expect to see, hear, etc / what we want to. very distorted, a lot of confirmation bias - e.g "big game" different interpretation of play by MU fan and OSU fan. Perception is more like film editing than a "camera" recording everything as it happens. Subliminal perception -- DOES NOT WORK why might this idea that it works never die?

4 p's difference for B2B markets

Product: - Purchases of inputs rather than outputs - support services and total system often important = group of products together vs individual products (looking for solutions to their problems) - "solution to problems" = benefits Place: -fewer middleman -sellers go to buyers Promotion: - Selling is Critical - selling people more important (papi morgan stanley) - Advertising generally much less important Promotion and place are pretty much opposites in B2B to B2C. Price: -Less sensitive overall (due to less possibility for substitution = less sellers) -But more subject to negotiation (list price only happens 3% of times) -government as special case (price is more important for government b/c they already made all other specifications therefore if you can't give the their price they will just go to whoever can).

Social Class - influence us as consumers

Ranks or layers in which a society is arranged. In U.S. there is more social mobility and social classes are tracked in U.S not only by income but also occupation, education, income and residence. Members of a social class tend to share things that relate to some kinds of consumer behavior -- language, values, lifestyle. One's social class could be a influence on how you choose stores, brands, etc. Social Class structure: 1/6 Upper-upper class = Old money Lower-upper class = Bill gates 2/3 Upper-middle class --- wall to wall Lower-middle class --- capet = identify 1/6 Upper-lower class Lower-lower class decrease in middle class went towards upper AND lower class

Recession vs depression

Recession is when your friend loses his job, depression is when you lose your job.

"Demographics"

Refers to population characteristics such as age, sex, education, income and marital status. Huge and "first" part of marketing environment: - can be easily obtained -part of the marketing macro-environment. Companies mainly focus on the young demographic - tv example, want to reach a young demographic with your tv ad since those are customers who will "last longer", are more influenceable and hence and draw you larger profits. There is no excuse for ignoring concerning demographic trends and projections since they are pretty well known!

Irony with inverse relation between level or management and daily customer satisfaction

Satisfied customers are extremely important (20%ers, make them repeat customers) but those that have the greatest influence on customer satisfaction are those that are paid the least in an organization.

Some Demographic trends

Segmentation by age: 5 key age groups: 0-15 (millennials, gen Z), 15-34 (gen y), 35-44 (baby busters), 45-64 (baby boomers), 65+ (elders) Segmentation by Household (1 or more people who live under the same address) Income: under 25k 25-50k 50-100k over 100k - a lot more people with low income then most of us imagine - a lot fewer people with high income then most of us imagine. Segmentation Ethnic group: Asian = 5% Black = 14% Latino = 16% White = 64% = shrinking percentage, U.S. becoming more ethnically diverse - non majorities by mid century. Segmentation by Median HH Net Worth and Age: Household net worth increases until 70s (older = wealthier) "get on good terms with granddads" joke. Between 2000 and 2020: Age 50+ will increase 76% (most of pop growth), whilst age 50 under will remain constant (1% increase). By 2025: 20% of the U.S. Population will be 65+ This can be troublesome for some companies, such as coke, who generally have younger target audience = decreasing target audience. Could try to make new products to appeal to older population but "you can't ride two horses with one butt" Labor force participation for Married women with childer under 6: 1960 = 20% 1996 = 60% 2008 = 64% positive relation between time and married woman with children under 6 labor force participation. This has led to lifestyle changes caused by effects such as: 1) Time poverty (mom is not there to do stuff for us, makes it seem like there is less time) 2) Instant gratification ("hate to wait") 3) Life simplification (without mom to do it, we wants thing simple - KISS = "keep it simple stupid" - want's thing delivered or simple) 4) Changing gender roles - now dad might have to do laundry or shop, might have to address new gender's preferences.

Senior boom and stereotypes

Seniors are now healthier and wealthier than ever. They are also the most diverse (most variation in terms of health, education and income) among all age groups --- older you get more chance for discrepancy. old stereotype - don't want to spend and can't afford new stereotype - more money, can spend!

Top Management

Sets direction and tone of "corporate culture" - no daily influence on customer satisfaction

American Economy since 1990

Slow economic growth (= bad for marketing) but low rates of inflation (= good for marketing). Longest period of prosperity in U.S. History Followed by severe and stubborn recession (2007 - housing crisis). This is still affecting (maybe permanently changed) consumers behavior --- sitting on their wallet.

Satisfied vs very satisfied

Sometimes, satisfied is not enough - especially for you best customers. On scale from 1-5, a 4 (5 being very satisfied) is 3x more likely to buy from someone else the next time.

Production Orientation

Stress on making products. Focuses on producers priorities (inwards looking) e.g. Henry Ford's Model T - maximizing output, minimizing cost = putting america on wheels - "you can have any color as long as it is black" Wouldn't work today since competition means you must give customers more options but that was the way to go at that time. Another example? U.S. Post office is a lot better at marketing itself in B2C than individual shipping packages to other individuals because they have more competition there

Biggest advertising medium

TV

Marketing Myopia

The mistake of focusing on a product's form utility instead of the benefits sought by the consumers and thinking that there will always be a demand for your product E.g..: Nokia vs Apple. Example of problem with inwards looking of product orientation. Also the reduction of typewriters, where IBM did much better because it was willing to switch to word processors.Also blockbuster vs Netflix. Basically happens whenever there is an improvement to a old system/product.

Betting on a sure thing

The only sure thing in a Casino is that the system is set for players to lose ---> odds are you are going to lose.

Lifestyle - another influence on consumer behavior

The patterns in which people spend their time and money along with basic orientation. Identified with prism system. - General - Looks at AIO's - Activities, interests, opinions - Product Specific - pattern of how people spend their time and money for your particular product - product specific analysis examples: "Bohemian mix" "Kids & the cul-de-sacs" "Gray Power"

Segmentation and Mass Marketing

The process of identifying smaller, more homogenous, segment within the larger, more heterogeneous market as a whole--> in marketing = figuring out your 20%ers In general, there has been a shift away from mass marketing and into "micromarketing" (=segmentation) Factors that allow / facilitate segmentation: Demand factors ---> Individualism nature of american consumer "gotta be me" Supply factors ---> Technology gives companies better info about these smaller customer groups and allows them to produce in smaller quantities. Specialization (adam smith) however is limited by the size of the market ---> bigger markets = allow more specialization = "small segments might be large enough After deciding how to segment your markets 1) Select one or more targets ---> focus on your USP's (unique selling points) 2) Design the appropriate marketing mix(es) = develop the 4p's accordingly.

Internal marketing

Thinking of employees as customers / target market you want to satisfy since satisfied employees = satisfied customers. The best employer tries to satisfy his employees as much as possible. Good employees are harder to find and are more valuable than customers - e.g.: cameron mutual restaurantes and book "customers come second"

Marketing value added ativities

Time Utility - making products available at the right time Place Utility - ... at the right place Possession Utility - in the right way and to the right people. In other words, marketing value added activities are not nearly as physical and tangible as form utilities and this is one of the reasons may firms didn't realize they were already doing marketing.

Walmart vs other retailers

Walmart is roughly as big as the 2, 3, 4 and 5th biggest retailers combined.

Misunderstanding related evolution of organizational orientation

When many companies realized the need to look outwards rather than inwards to production and product = when they thought they "discovered marketing" = when supply grew faster than demand. These companies then started to heavily advertise their products thinking that was marketing - but it is only tip. Hospital example: with increase in competition, hospitals thought they "discovered marketing" and began heavy advertisement campaigns - however, they were getting more empty beds than ever. Why?

Targeting your best customrs

You want to target those best customers (20%er) who: 1. Buy most frequently 2. Bought most recent 3. Buy the most (largest purchases) You're goal is to find out as much as possible about their lifestyles, media habits ,shopping behavior, demographic, etc. Then you should concentrate on keeping these people VERY happy ---> "it costs 5x more to get a new customer than satisfying existing ones"

McDonalds demographic focus

ages 6-16 (can be be predicted how many will be in 2 years by looking at current 4-14 age numbers - since these are the people who play the biggest part in the family decision to go to Mcdonalds. it is easy to obtain and calc these numbers and hence Mcdonalds should not ignore them.

Melting Pot vs Tossed salad --- Culture vs subculture - both influence us as consumers

culture gives you broad similarities subculture gives you differences ("americans are friendly, but don't make really good friends") Tossed salad = together but don't really mix melting pot = mixes into one Subcultures: basis include (most powerful subcultures) = race, religion, national origin and geography. beware of stereotypes = people in other groups tend to be less familiar to us, hence we don't make as fine of distinctions (asians look all alike, americans look all alike) Mid Century estimates -- % of the total american population: (race = most powerful and charged of subgroups) Latino = 30% Black = 13% Asian = 8% = no majorities by the time I am middle aged. Hence, might cause some desire to switch target customers, but must be done carefully. To target specific groups effectively, you must show real respect and demonstrate relevance. VP speech example - cause complaints due to lack of "deepness" on approach - people see through "fake appeal to specific targeting of groups". Therefore, you have to do your homework or it can backfire = "are they interested in us or our money" = very expensive. + ethical groups are often geographically concentrated.

Role and importance of marketing to a organization

depends on its internal environment but mostly how much of the 4p's can the market department determine? E.g. Hospitals can mostly only influence promotion, only suggestions to product, price and place. Good indicators are: 1) How much does the organization invest in market research 2) Where do top managers come from (area)?

The Economic Enviroment

has the most immediate impact on marketing. Demand for most products and most organizations are pro-cyclical = goes along with the business cycle = better economic environment = better demand (strength of relation depends on product, e.g. food has a very strong relation)

Technological enviroment

technology = all the knowledge producers have on combining inputs to make outputs = recipes for producing things. Marketforces (customers, producers) determine what is acceptable and profitable - determines what is practical vs what is possible. Technology can be a turn-off that requires careful marketing. Only a minority will be willing to jump right off into something new. Most will adopt "if it ain't broken, don't fix it". Marketing new technologies can be very expensive especially since some people (usually older) are not comfortable with technology. Ways marketing can circumvent this uncertainty towards technology by consumers. "high tech-high touch" - warms up reluctant customers to new technologies = not as impersonal, e.g. make it more user friendly The potential of technology are frequently exaggerated - there are biases often - by news trying to make it interesting, markets of new products themselves and deniers. However, technological improvement tends to reduce prices - of existing products, through: - cost effect - substitution effect - on-line effect

Motivation - what moves you to action - how we affect ourselfs

two general and basic models Maslow hierarchy of needs -physiological - sleep joke (s need) -safety -social -Personal most consumers are working on social and personal levels because they have already met the two other basic levels. Freud - Hidden motives - reasons we do things are usually do to hidden motives, often sexual

Shopping comparison Ethic difference ("race, ethnicity and the way we shop" in American demographics")

use the shopper profile to build your marketing strategy, for example: look at the % of blacks living near to store, if % of white is high rather than blacks, maybe try to fit it to their liking (fast, online) Asian- Americans (average) - most frequent shoppers - *most brand conscious* - least brand loyal (won't be in exam, textbook says otherwise) - most concerned with appearances (status seeking) -most likely to use the internet to plan a shopping trip * Must consider that "Asian" is a very broad term and consists of many countries and origins, could need more specific targeting. Black Americans: -Most fashion-conscious (Fashion Leaders) - Most willing to travel to favorite store -Most willing to travel to new stores -Greatest preference for shopping aone -*Most enjoyment in shopping*= like shopping experience the most. Latino Americans: - *Most likely to shop as a family* - Influence of children on purchases is the greatest - Greatest preference for national chain stores = brand loyal *Must consider that "latino" is also a broad term and hence more specific targeting might be needed.