Marketing test 1
Influences on consumer behaviour...
Culture--> basic trigger of wants and behaviour -deeply entrenched but when changed - creates opportunity. -cultural shifts "selfie" Subculture - shared value systems within groups -regional, founding nations, mature (aging) ethnic groups. -increaing customization to marketing messages ex. tim hortons/africans commercial. "newcomers" Social class: primarily socio-economic status -similar values, interests, behaviours -combination of occupation, income, education, wealth, and other variables
Micromarketing
Differentiated and concentrated marketers tailor their offers and marketing programs to meet the needs of market segments consisting of groups of people, however they do not go so far as to customize their offers to each individual customer... micromarketing is the practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments - includes local marketing and individual marketing.
Ethics in the Workplace
Ethics ▪ standards or moral values that dictate what is right and wrong ▪ culturally based ▪ formed upon society's expectations ▪ vary by person, and by situation ▪ Everyone develops his/her own "code of ethics" ▪ Family + Peer Group + Experiences
variables in market segmentation
Geographic Demographic Geo-Demographic Psychographic Behavioral
Environmental sustainability
Internal/Current-pollution prevention Internal/Tomorrow-new clean technology External/Current - product stewardship External/tomorrow - sustainability vision
government publics
Management must take government developments into account. Marketers must often consult the company's lawyers on issues of product safety, truth in advertising, and other matters.
usage rate
Markets can also be segmented into light, medium, and heavy product users
more for less
Offer the best products at the lowest prices
salutary products
Products that have low appeal but may benefit consumers in the long run bicycle helmets
buyer decision progress
Purchase decision further influenced by: -attitudes of others (dont know how much we can control this one!) -unexpected situational factors. Post-purchase behaiour hinges on buyers epectations vs actual -aka product is totally different -"cognitive dissonance" -can do 30 day risk free, money back, or after care/warranties.
Designing the business portfolio
The major activity in strategic planning is business portfolio analysis, whereby many management evalueates the products and businesses that make up the company. -Purpose of strategic planning: to find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment. -Management must first identify the key businesses that make up the company, called strategic business units (SBU's) -SBU = can be a company division, a product line within a division, or something a single product or brand. -the best known portfolio planning method was developed by the Boston Consulting Group. -created the growth share matrix
Value delivery network
The network made up of the company, suppliers, distributers, and ultimately customers who partner with each other to improve the performance of the entire system.
consumer oriented marketing
The philosophy of sustainable marketing that holds that the company should view and organize its marketing activities from the consumer's point of view
Market segmentation
The process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviours and who might require separate products or marketing programs. (consumers can be grouped and served in various ways based on geographic, demographic, psychographic, and behavioural factors).
Ethics in Marketing
Views of Marketing Ethics 1. Free market and legal system - "if it's legal, it's okay" 2. Individual companies and managers to develop a "social conscience" ▪ International marketers additional challenges: ▪ E.g. bribes, kickbacks - do you lower standards to compete/do business? More recently, an additional layer is forming... ▪ Company image / reputation over time e.g. online reviews in business, we don't want the grey area. we want a marketing code of ethics, or code on conduct in a company.
general publics
a company needs to be concerned about the general public's attitude toward its products and activities
Choosing the right competitive advantages
a company needs to decide how many differences to promote and which ones.
citizen-action publics
a company's marketing decisions may be questioned by consumer organizations, environmental groups, minority groups, and others
belief
a descriptive thought that a person holds about something. may be based on knowledge, religion, opinion
new product
a good, service, or idea that is perceived by some potential customers as new
Loyalty status
a market can also be segmented by consumer loyalty.
undifferentiated (mass) marketing
a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. focuses on what is common in the needs of consumers rather than what is different.
Differentiated marketing
a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each. ex. toyota - produces many different brands of cars. from yaris to lexus, each targeting a different group of buyers - a different market segment.
opinion leader
a person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others
positioning statement
a statement that summarizes company or brand positioning using this form: to (target segment and need) our (brand) is (concept) that (point of difference)
Selecting Target Market Segments
after evaluating different segments, the company must decide which and how many segments it will target.
consumer market
all the individuals and households that buy or acquire goods and services for personal consumption
buying centre
all the individuals and units that play a role in the purchase decision-making process
types of differentiation
along the lines of : 1. product (brands can be differentiated on features, performance, or style and design) 2. services (through speedy, careful delivery) 3. channels (gain competitive advantage through the way that they design their channel's coverage, expertise, and performance) 4. people (hiring and training better people than their competititors do) 5. image (a company or brands image should convey a products distinctive benefits and positioning)
competitive advantage
an advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices
environmentalism
an organized movement of concerned citizens, businesses, and government agencies designed to protect and improve people's current and future living environment.
public
any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. part of microenvironment.
cognitive dissonance
buyer discomfort caused by post purchase conflict
systems selling or solutions selling
buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation
Mutually exclusive categories
demographic info.
Age and life-cycle segmentation
dividing a market into different age and life cycle groups. consumer needs and wants change with age. segment the market based on age or family status
household income (HH) segmentation
dividing a market into different income segments. refers to the total income that a family that lives ina household. many companies target families with affluent income (100K or more a year)
Market segmentation
dividing a market into distinct groups with distinct needs, characteristics, of behaviours that might require separate marketing strategies or mixes. the company identifies different ways to segment the market and develops profiles of the resulting market segments.
Occasion segmentation
dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item
Benefit segmentation
dividing the market into segments according to the different benefits that consumers seek from the product. -group buyers according to the different benefits they seek from the product..the kinds of people who look for each benefit, and the major brands that deliver each benefit.
demographic segmentation
dividing the market into segments based on variables such as age, life-cycle stage, gender, household income, occupation, education, religion, ethnicity, and generation -the most popular bases for segmenting customer groups. their needs, wants, etc vary with demographic variables. good to know the size of the market and reach it effectively. Age- under 6, 6-12, 13-19, etc Gender - male, female Family size - 2,3,4, more than 5 Life cycle - young couple, young couple with children, single parent family generation - baby boomer, gen X education - high school, college ethnic or cultural group - african, canadian
adopting new technologies.. challenges..
e-commerce (When it was a new concept) driverless cars smart home devices..
Trends = opportunities
e.g. modern males are concerned about body image and feel insecure about aging. -consequently, the male grooming and personal care markets are booming. "metrosexuals"
positioning - laundry detergents
each brand is positioned to communicate with, and be attractive to, a distinct segment of the market - families, people who want their clothing to have a strong smell, people with bright clothing, etc.
consumer activism/consumerism
economic and social policies that encourage consumer spending
actionable
effective programs can be designed for attracting and serving the segments. ex. although one small airline identified seven market segments, its staff was too small to develop separate marketing programs for each segment.
Internal databases
electronic collections of consumer and market information obtained from data sources within the company network
evaluating market segments
in evaluating different market segments, marketers must look at 3 factors... -segment size and growth -segment structural attractiveness -company objectives and resources -if a company identifies a segment as being unprofitable, it may encourage them to shop with competitors. -this is where 5 forces that most affect and influence a company's ability to compete in a particular area.
less for much less
involves meeting consumers' lower performance or quality requirements at a much lower price
Promotion
means activities that communicate the merits of the product and persuade customers to buy it.
Product development
offering modified or new products to current markets. (Ex. to capture a piece of the $2 million dollar instant coffee market starbucks developed via coffee.)
almost 40% of canada's population is....
over 50 years of age.
Marketing Information System
people and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights
product stewardship, DFE, cradle to cradle
product stewardship - minimizing not just pollution from the production and product design but all environmental impacts throughout the full product life cycle, all while reducing the cost. DFE (design for environment) and cradle to cradle products- easier to recover, reuse, recycle
Diversification
starting up or acquiring businesses outside the company's current products and markets. (ex. starbucks acquired Evolution juice company that sells premium fresh squeezed juices, intended to use evolution as its entry into the health and wellness category.)
Stocard?
stores all your rewards cards in an app. has GPS capabilities. knows where you are, helps you get new customers, push notifies customers.
major types of buying situations
straight rebuy - a business buying situation in which the buyer routinely reorders something without any modifications modified rebuy - a business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers new task - a business buying situation in which the buyer purchases a product or service for the first time
supplier development
systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others
individual marketing (mass customization)
tailoring products and marketing programs to the needs and preferences of individual customers.
Patagonia
telling consumers to buy less
Consumer buyer behavior
the buying behavior of final consumers - individuals and households that buy goods and services for personal consumption
business buying process
the decision process by which business buyers determine which products and services their organizations need to purchase and then find, evaluate, and choose among alternative suppliers and brands
value proposition
the full positioning of a brand - the full mix of benefits on which it is positioned
substantial
the market segments are large or profitable enough to serve. a segment should be the largest possible homogenous group worth pursuing with a tailored marketing program. it would not pay, for example, for an automobile manufacturer to develop cars esp. for people who are more than 7 feet tall.
accessible
the market segments can be effectively reached and served. ex. suppose a fragrance company finds that heavy users of its brand are single men and women who stay out late and socialize. unless this group shops at certain places and exposed to certain media, its members will be difficult to reach.
adoption process
the mental process through which an individual passes from first hearing about an innovation to final adoption
Types of Samples
•probability sample -simple random sample (every member of the population has a known and equal chance of selection) -stratified random sample (population divided into mutually exclusive groups such as age group, random samples chosen from these groups. -cluster (area) sample (population divided into mutually exclusive groups such as blocks and researcher draws a sample of the groups to interview. •nonprobability sample -convenience sample (researcher selects easiest population members from whom to obtain info) -judgement sample (researcher uses his or her judgement to select population members who are good prospects for accurate information) -quota sample (researcher finds and interviews a prescribed number of people in each of several categories.)
Impact on Society
▪ Accused of promoting materialism over-consumption and false wants ▪ Profits at what cost? -how cheap is cheap enough? -impact of "cheap" -child labour? ▪ Accused of promoting materialism over-consumption and false wants
Impact on Other Businesses
▪ Acquisition and shrinking of competitors - ▪ "Barriers to entry" - heavy promotional spending, power over suppliers & dealers - ▪ Unfair competitive marketing practices such as predatory pricing -e.g. Walmart's low prices. did it to push competition entirely out of business.
Chipotle environmentalism
"food with integrity" core mission - around environmental sustainibility
Value chain
-each company department can be thought of as a link in the company's internal value chain. -success based on how well various department's coordinate activities.
shoddy, harmful, or unsafe products.
-some products have poor quality and function
Differentiation
-the company next decides on a value proposition - on how it will create value for target cistomers, and how it can stand out from its competition.
Major Influences on Business Buying Behavior
1. Environmental 2. Organizational 3. Interpersonal 4. Individual
CRM and big data Marketing ROI (return on investment)
100 million = exclusive rights to series personalize promotion = 10 different trailers 3 months = 3 million new subscribers ongoing revenue = 8.00/month.
local marketing
A small group of people who live in the same city or neighbourhood or who shop at the same store. most convenience stores.
Market development
A strategy for company growth by identifying and developing new market segments/markets for current company products. (Ex. starbucks might explore new demographic markets - get seniors to frequent shops more, or expand in Asia, etc)
Demographic Environment - baby boomers
Baby Boomers: -1940s world war 2, got busy and made babies. 9.8 million people born between 1947 and 1966 Boomers "think young" -wealthiest generation
derived demand
Business demand that ultimately comes from (derives from) the demand for consumer goods.
Demographic Environment Millennials (Generation Y/Echo Boomers):
10.4 million born between 1977- 2000; larger than Generation X/Baby Boomers Comfort with digital technology Personalization and product customization are key to marketing success
Demographic Environment Generation X:
7 million born between 1967 and 1976 Increased parental divorce rates and more employed mothers resulted in latchkey kids Less materialistic; prize experiences Skeptical of marketing Most educated generation to date Face economic pressures; spend carefully
Demographic Environment Family Formation and Household Size
Blended family: -growing market of "non traditional" households Sandwich generation: -growing "crowded nest" syndrome Fewer families have children More dual-income families
Demographic Environment Generation Z
Born after 2000 Make up important kid, tween, and teen markets 5.6 million Total fluency with digital technology -40% of consumer buying by 2020 -communicate using 5 separate devices from 3 of milennials -attention span 8 seconds down from 12 seconds from milennials
Economic Environment
Factors that affect spending Changes in income -Consumption frenzy, record personal debt -Economic crisis leading to consumer frugality -Value marketing is key to success Changes in spending patterns -Rich are getting richer, poor are getting poorer, middle class stagnating
Demographic Environment Increasing Diversity:
Large and growing visible minority market Growth in recognized disabilities Acceptance of LGBT and gay marriages
Cultural Environment
Standard acceptable belief system that affects a society's basic values (for example, the selfie) Core beliefs slow to change Secondary beliefs are more open to change
Technological Environment
Technology Advances - opportunity and a threat. Creating new markets and opportunities Increasing obsolescence Accelerating customer needs Resulting in constantly evolving regulations Technology allows for better CRM (customer relationship management) ex. getting free movie concession with scene card.
Defining a market-oriented mission/defining the company mission
-"What is our business?" "Who is the customer?" "What do consumers value?" "What should our business be?" -Many organizations develop mission statements to answer these questions. -Acts as an "invivisble hand" guiding people int he organization -Mission statements should be market-oriented and defined in terms of satisfying customer needs. -should be meaningful and specific, yet motivating -should emphasize company strengths in the marketplace.
Boston Pizza Foundation
-4 pillar strategy
Market differentiation and positioning.
-After a company has decided which market segments to enter, it must decide how it will differentiate its market offerings for each targeted segment and what positions it wants to occupy in those segments. -A product's POSITION is the place the product occupies relative to competitors products in consumer's minds.. must make it clear what differentiates their product. -POSITIONING = arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of consumers. (basically just meant to distinguish their products from others) ex. when people think of scotiabank, they think of hockey. b/c scotiabank sponsors hockey. -Effective positioning begins with differentiation - actually differentiating the market offering to create superior customer value for consumers.
Developing an Integrated Marketing Mix
-After deciding on overall marketing strategy, company is ready to plan detils of the marketing mix. -The set of controllable, tactical, marketing tools - product, price, place, and promotion - (4 P's) that the firm blends to produce the response it wants in the target market.
personal factors
-Age and life-cycle stage: needs for different products change. age cycle for people who want and need a car are predictable. -Occupation: occupation affects the products bought. -Economic situation: personal finances afects buying choices •trends in personal income, savings, interest rates -Lifestyle- people buy the lifestyles products represent. start to really narrow this down. whats meaningful in someones day? •AIOs (activities, interests, opinions.)
One of 4 strategies can be pursued for each SBU
-Company can invest more to BUILD its share. -Company can invest just enough to HOLD SBU's share at the current level. -Company can HARVEST the SBU, milking its short term cash flow regardless of long term effect. -Company can DIVEST the SBU by selling it or phasing it out and using the resources elsewhere.
Planning marketing: Partnering to build customer relationships (business unit, product, and market level)
-Customer relationship management -Partner relationship management -Marketers must work closely w partners in other company departments to form an effective internal VALUE CHAIN that serves the customer. -also to form a competitively superior external VALUE DELIVERY NETWORK.
Explain the importance in understanding customers and the marketplace, and identify the five core marketplace concepts.
-Outstanding marketplace companies go to great lengths to learn about and understand their customers needs, wants, and demands. This helps them design want-satisfying market offerings and build value-laden customer relationships by which they capture customer lifetime value and greater share of customer. The result is increased long term customer equity for the firm. Core marketplace concepts: 1) needs, wants, demands 2) market offerings (products, services, experiences) 3) value and satisfaction 4) exchange relationships 5) markets
Managing the marketing effort
-Requires 4 marketing management functions: -analysis -planning -implementation -control -Company first develops company wide strategic plans and then translates them into marketing and other plans for each division -Through implementation, the company turns the plans into actions. -Control consists of measuring and evaluating the results of marketing activities and taking corrective action where needed. -Finally, marketing analysis provides information and evaluations needed for all of the other marketing activities.
Managing and measuring return on market investment
-Return on marketing investment (ROI) the net return from a marketing investment divided by the costs of the marketing investment.
Setting company objectives and goals (corporate level)
-The company needs to turn its mission into detailed supporting objectives for each level of management. -product oriented defintion vs. market oriented definition. -product oriented (ex. Facebook, we are an online social network) -market oriented definition (ex. Facebook, we connect people aroud the world and help them share important moments in their lives.)
Describe the major trends and forces that are changing the marketing landscape in this age of relationships.
-The digital age: online, social media, and mobile advances are taking the world by storm - offer exciting new opportunities to engage customers more deeply and selectively. the key to marketing in the digital age: to blend the new digital approaches in with traditional marketing to create a smoothly integrated marketing strategy and mix.
define marketing and outline the steps in this process.
-The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. -Involves 5 steps. -First 4 = creating value FOR customers. 1) Understanding the marketplace & customer needs and wants 2) Design a customer driven marketing strategy with the goal of getting, keeping, and growing target customers. 3) Construct a marketing program that delivers superior value. 4) Building profitable customer relationships and creating customer delight. 5) Company reaps the rewards of strong customer relationships by capturing value FROM customers.
5 competing marketing orientations behind a customer-driven marketing strategy
-The production concept (holds that management's task is to improve efficiency and bring down prices). -The product concept holds that the consumers favour products that offer the most in quality, performance, and innovative features. little promotional effort is required). -The selling concept (holds that consumers will not buy enough of an organization's products unless it undertakes a large scale selling a promotion effort.) -The marketing concept (holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more efficiently and effectively than competitors do). -The societal marketing concept (holds that generating customer satisfaction and long-run societal well being through sustainable marketing strategies are key to both achieving the company's goals and fulfilling its responsibilities.)
Marketing Planning
-Through strategic planning the company decides what it wants to do with each business unit. -Marketing planning involves deciding on strategies that will help the company attain all of its overall strategic objectives.
Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
-To design a winning marketing strategy, the company must first decide whom it will serve. It does this by dividing the market into segments of customers. (market segmentation) -then selects which segments it will cultivate (target marketing) -then HOW it will serve targeted customers (how it will differentiate and position itself in the marketplace)
Sampling
-Who to survey -How many to survey (sample size) -How to choose (probability vs. nonprobability). -dominos has to qualify who eats pizza.
Price
-amount of $ customers must pay to obtain the product.
planned obsolesence
-causes products to become obsolete before they actually need replacing
5 forces that most affect and influence a company's ability to compete in a particular area.
-competitors (how many and are they direct or indirect competition for business in this segment?) -new entrants (how easy is it for a new company to start doing it?) -substitute products (if we dont serve this segment, what else can they buy that will serve the same purpose?) -power of buyers (when it omes to this segment, do buyers have strong bargaining power relative to sellers?) -power of suppliers (if suppliers have control over us, that can affect our prices and reduce the quality or quantity of products we want to produce)
Segmenting Business Markets
-consumer and business marketers use many of the same variables to segment their markets. business buyers can be segmented geographically, demographically (indsutry, company size) or by benefits sought, user status, usage rate, and loyalty status. yet business marketers also use some additional variables... 1. operating characteristics 2.purchasing approaches 3. situational factors 4. personal characteristics
psychographic segmentation
-dividing a market into different segments based on social class, lifestyle, or personality characteristics. -people in the same demographic group can have very different psychographic makeups. social class - lower lowers, upper lowers, working class, middle class, etc lifestyle - athletic/outdoors type, active suburban family, single urban professional personality - highly organized and detail oriented, outgoing and adventurous, creative and artistic
Behavioural segmentation
-dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product. -best starting point for market segments. occasions - regular occasion, special occasion, holiday, seasonal benefits - quality, service, economy, convenience, speed user status - non user, ex user, etc loyalty status - none, medium, strong, absolute readiness stage - unaware, aware, informed, interested, desirous, intending to buy attitude toward product - enthusiastic, positive, indifferent, etc
Market research/consumer behaviour are closely related
-gain new customers -increase in store purchases -measure in store purchases -reach decision makers
Evaluating alternatives - high involvement purchases
-high, risky involvement (Car)
Marketing research
-is our brand even recognized in the marketplace? "Gathering information about customers, their needs, and the marketplace in which they operate" Common areas of market research: ▪ Advertising ▪ Usage ▪ Customer satisfaction ▪ Brand awareness ▪ Pricing influences the more info you have, you can be confident that it represents a larger body of how you might feel.
SWOT analysis / Marketing analysis
-managing the marketing function begins with a complete analysis of the company's situation. -SWOT analysis is an overall evaluation of the company's strengths (S) weaknesses (W) opportunities (O) and threats (T) Strengths - include internal capabilities, resources, and positive situational factors that may help the company serve its customers and achieve its objectives. Weaknesses- include internal limitations and negative situational factors that may affect company's performance. Opportunities - favourable factors or trends in the external environment that the company may be able to exploit to its advantage. Threats - unfavorable external factors or trends that may present challenges to performance.
Designing a Customer-Driven Marketing Strategy
-most companies have moved away from mass marketing and instead are moving toward market segmentation and targeting - identifying maret segments, selecting one or more as the most appropriate to serve, and making products tailored to each. -4 major steps in the first 2 steps, the company selects the customers that it will serve.
Maslow's Hierarchy of Needs
-need requiring satisfaction: Maslow -until THIS level of need is met.. nothing else matters. Perception: process of interpreting info 3000-5000 messages per day. -selective attention.
Personal factors
-personality and self concept: theory suggests possessions contribute to and reflect personal identities. -brand personality: people choose brands that match their own personality ruggedness - sincerity - excitement - competence - sophistication who might fit a kia soul? young people.
high pressure selling
-persuades people to buy goods they hadn't thought of buying.
Product
-refers to the market offering - whether its a tangible product, a service, or a combo of goods and services. ex. can buy a Ford vehicle that comes with services.
Marketing Implementation
-the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives. -whereas marketing strategy addresses the what and why of marketing activities, implementation addresses the who, where, when, and how.
Identifying Possible Value Differences and Competitive Advantages
-to the extent that a company can differentiate and position itself as providing superior customer value, it gains competitive advantage.
Open-ended SURVEYS
-unless you can get someone to codify responses, it can be hard.. there are spelling mistakes, etc.
Positioning
-when all the prior decisions are made, the company positions its brand or product in the market. positioning consists of arranging for a market offering to occupy a clear, disctinctive, and desirable place relative to competing products in the minds of consumers.
choosing a targeting strategy
-which strategy is best depends on company resources. -when resources = limited, concentrated marketing makes the most sense. -the best strategy also depends on the degree of product variability. -undifferentiated marketing is best suited for uniform products such as grapefruit or steel. -products that vary in design such s cameras and cars, are more suited towards differentiation or concentration. -the products life cycle stage must also be considered. -another factor is market variability. if most buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts, undifferentiated marketing is inappropriate.
Company Wide strategic planning: Defining marketing's role (4 parts)
1) Defining the company mission 2) Setting company objectives and goals 3) Designing the business portfolio 4) Planning marketing and other functional strategies
Buyer decision process
1. NEED recogntion - triggered internally or externally (this computer broke, its happened to me) - internal external - see someone else with bigger, better laptop. 2. information search - proceeds through a variety of sources -personal, commercial, public, experimental -user generated content (UGC) 3x more influential. (are these legit reviews? how do we manage reviews?) -brand trust is such an obsession right now.. 3. evaluation of alternatives - depends on the buying situation and the consumer - attributes identified and assessed.
Stages of the business buying process
1. problem recognition 2. general need description 3. product specification 4. supplier search 5. proposal solicitation 6. supplier selection 7. order-routine specification 8. performance review
Concentrated (niche) marketing
A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches. achieves strong marketing position because of its greater knowledge of consumer needs.
attitude
A person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea"the japanese make the best cameras in the world"
Product market expansion grid
A portfolio panning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification
sense of mission marketing
A principle of sustainable marketing holding that a company should define its mission in broad social terms rather than narrow product terms
Market targeting
After a company has defined market segments, it can enter one of these many segments. Market targetig -- involves evaluating each market segment's attractiveness and selecting one or more segments to enter -a company with limited resources might decide to serve only one or a few special segments or market niches.
Marketing department organization
CMO - chief marketing officer (newest) CEO-chief executive officer. COO - chief operating officer CCO- chief communications officer CTO - chief technology officer
netflix
CRM data, watches you while you watch them. gives a % rating for what you might like. predictions become more and more accurate. $100M investment.
Problems with matrix approaches
Centralized approaches have limitations: they can be difficult, time consuming, and costly to implement. Management may find it difficult to implement SBUs and measure marketshare and growth. These approaches focus on classifying current business but provide little advice for future planning.
Corporate Social Responsibility Programs
Corporate Charitable Donations ▪ companies may contribute to a program -e.g. tim hortons "send a kid to camp" ▪ many encourage employees to volunteer
Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return
Customer relationship management = the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Customer engagement marketing = aims to make a brand a meaningful part of consumers conversations and lives through direct and continual customer involvement in shaping brand community, conversations, and experiences. Aim of both customer relationship management and customer engagement marketing = to produce high quality customer equity. customer equity = the total combined customer lifetime values of all the company's customers. The marketer's aim is to build the right relationships with the right customers. In return for creating value for targeted customers, the company captures value from customers in the form of profits and customer equity. In addition to being good at customer relationship management, they must be good at.. partner relationship management.
Political (legal) and Social Environment
Evolving laws influence organizations Marketing activities face: Increasing legislation Changing government agency enforcement Society's emphasis on ethics and socially responsible behavior driving more government intervention
Marketing Environment
Forces that affect a firm's success Microenvironment: Forces with direct impact to the company Company, suppliers, intermediaries, customer markets, competitors, other stakeholders Macroenvironment: External forces with direct impact across industries -the actors and forces outside marketing that affect marketing managements ability to build and maintain successful relationships with target customers.
Marketing strategy and the marketing mix
Marketing strategy=the marketing logic by which the company hopes to create this customer value and achieve these profitable relationships. -Guided by marketing strategy, the company designs an integrated marketing mix made up of factors under its control - products, price, place, and promotion. To find best mix and strategy, company engages in marketing analysis, planning, implementation, and control.
Marketing Research Process step 1
Must ID problem and design research. 3 kids of research: -leads to exploratory research Exploratory: ▪ Gathers information to help define the problem - clarifies nature of problem. e.g. are consumers noticing our market material? Descriptive: ▪ Describes marketing situations or markets. lots of questionnaires. "not as satisfied...extremely dissatisfied" gives you temp. check on what people are perceiving. describes stuff to you. Causal: ▪ Test hypotheses of cause-and-effect relationships e.g. price change impact on sales.
Natural Environment
Natural resources used to produce goods Shortage of raw materials Increased pollution Increased government intervention Strategic decisions around creating environmentally-sustainable products -the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities.
Marketing Research Process step 3
Observational ▪ Gathers data by observing relevant people, actions, situations ▪ Impossible to observe feelings ▪ Ethnographic yields deeper observation..involves sending trained observers to watch and interact with consumers in their "natural environments" good if respondents unwilling/unable. Survey ▪ Gathers data by asking people questions ▪ Most used method for primary data ▪ Suited for gathering descriptive information -questionnaires, interviews, focus groups. Experimental ▪ Best suited for explaining causeand-effect (causal) relationships -e.g. change in price -- impact on sales? Online research - surveys plus.. behavioural "clickstreaming" and social tracking, online listening, big data
the same for less
Offering the same for less can be a powerful value proposition - everyone likes a good deal
online social networks
Online social communities - blogs, social networking Web sites, and other online communities - where people socialize or exchange information and opinions
Penetration vs. Acquisition Strategy
Penetration — grown more organically, open more stores make more product Acquisition— -just buy out another company, acquire it. -so prevalent right now. they keep their brand name but they have acquired many companies. they grow that way. this way is easier and faster. instant revenue. instant brand recognition.
focus group interviewing
Personal interviewing that involves inviting 6 to 10 people to gather for a few hours with a trained interviewer to talk about a product, service, or organization. The interviewer "focuses" the group discussion on important issues.
Turning the 4 P's into the 4 C's
Product - Customer solution: where marketers see themselves selling products, customers see themselves as buying value or solutions to their problems. Price - Customer cost: marketers set prices, but customers are interested in the total costs to them of obtaining, using, and disposing of a product. Place - convenience: customers want the product and service to be conveniently available. Promotion - communication: today's customer demands communication from marketers.
How do Marketers Respond?
Reactive -wait for change, then react. -missed opportunities -damage from threats Proactive -anticipate change, act now -seized opportunities -mitigate impact of others.
How to make a good survey
Reason: were always looking for ways we cna improve instructions: go to link... inform: short survey, just 6 questions
Downsizing
Reducing the business portfolio by elimintating products or business units that are not profitable or that no longer fit the company's overall strategy.
Principles of Sustainable Marketing
Societal marketing: Consumer Wants /Interests + Company's requirements + Society's longterm interests "PEOPLE + PLANET + PROFIT" "PROFIT + PEOPLE + PLANET"
Demographics/demography
Study of human populations -- size, density, location, age, gender, race, occupation, and other statistics Changing age demographics of the Canadian population is both an opportunity and a threat Three Largest Generational Groups: Baby Boomers Generation X Millennials Generation Z of increasing importance... -separates people into different categories.
Pizza turnaround campaign
Symptom of problem: stagnant, declining sales. Customer feedback - honest Reinvented product Research: service, convenience, value Taste Methods: social media and focus groups Action: new recipes sampling : taste tests 1,800 customers promotion campaign - based on research
business buyer behaviour (B2B)
The buying behaviour of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others. -B2B market involves far more dollars and items than consumer markets. -formalized process -> "buying centre" -proposals (RFP's), vendor analysis, contracts, performance reviews, renewals. -e-procurement. e.g. Bcbid. -must put proposals on BCBID. public taxpayer funded instutitions so we must have transparency. UVIC is on them. mini contracts, tell them how much you'll do it for, by what date, etc. some people make a living by going and attacking government contracts! institutions need them to do work for them. crowdsourcing - ?
need recognition
The first stage of the buyer decision process, in which the consumer recognizes a problem or need, can be triggered by internal stimuli ex. hunger or thirst or by external stimuli example - advertisement might get you thinking about a new car.
Marketing Research Process step 2
Then collect data... Secondary (Existing) Data: ▪ Advantages: ▪ Quicker and cheaper ▪ Can clarify problem ▪ Disadvantages: ▪ Relevance, currency, accuracy ▪ Rarely provides all necessary informatioe.g. statistics Canada Primary data ▪ Information collected for a specific problem ▪ Must be relevant, accurate, current, and unbiased ▪ Costly, time-consuming
media publics
This group carries news, features, editorial opinions, and other content. It includes television stations, newspapers, magazines, and blogs and other social media.
internal publics
This group includes workers, managers, volunteers, and the board of directors. use newsletters to inform and motivate.
financial publics
This group influences the company's ability to obtain funds. Banks, investment analysts, and stockholders are the major financial publics.
Customer- driven marketing strategy
This process involves -market segmentation, -market targeting, -differentiation -positioning
Consumer Actions
Two major movements include: ▪ Consumerism - an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers. ▪ Environmentalism - organized movement of concerned citizens, businesses, and govt. agencies to protect and improve peoples current and future living environment.
Vertical vs. Horizontal Strategies
Vertical— -the company owns and operates business at different levels of the channel of distribution. Tim Hortons, etc. coffee has to be consistent. hard to do if you're getting different suppliers. get big enough and vertically integrate by buying a roastery. they roast their own beans. went down to central america and started buying out plantations. vertical again! Horizontal— doesn't have to just be acquisition.
A market segment
a group of customers who respond in a smiliar way toa given set of marketing efforts. ex. in the car market -- customers who want the biggest most comfortable car regardless of price make up one market segment, while those who care about price make up another.
code of ethics
a guideline to help marketing managers and other employees make better decisions
environmental sustainability
a management approach that involves developing strategies that both sustain the environment and produce profits for the company.
societal marketing
a principle of sustainable marketing holding that a company should make marketing decisions by considering consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests
customer-value marketing
a principle of sustainable marketing holding that a company should put most of its resources into customer value-building marketing investments
innovative marketing
a principle of sustainable marketing that requires a company to seek real product and marketing improvements
Sample
a segment of the population selected for marketing research to represent the population as a whole
Target market
a set of buyers sharing common needs or characteristics that the company decides to serve. companies can target very broadly (undifferentiated marketing) very narrowly (micromarketing) or somewhere in between (differentiated or concentrated marketing)
Stages in the Adoption Process
awareness - consumer becomes aware of product but lacks information about it. interest, - the consumer seeks information about the new product evaluation - the consumer considers whether trying the new product makes sense trial - consumer tries the product on a small scale to improve his or her estimate of its value. ex. sampling, freemium model. adoption - the consumer decides to make full and regular use of new product instagram influencers are early adopters.
product value analysis
carefully analyzing a product's or service's components to determine if they can be redesigned and made more effectively and efficiently to provide greater value
Learning
changes in an individual's behavior arising from experience
online marketing research
collecting primary data online through internet surveys, online focus groups, web-based experiments, or tracking consumers' online behavior
bell
communication is our mission, using our platform to give back and bring attention to something like mental health that is stigmatized.
more for the same
companies can attack a competitor's more-for-more positioning by introducing a brand offering comparable quality at a lower price
Market targeting
consists of evaluating each market segment's attractiveness and selecting one or more market segments to enter.
Marketing strategy
consists of specific strategies for targetting markets, positioning, the marketing mix, and marketing expenditure levels. -along with details of a supporting marketing budget.
geographic segmentation
dividing a market into different geographical units, such as nations, states, regions, counties, global regions, cities, or even neighborhoods. -a company may decide to operate in all areas but pay attention to geographical differences in needs and wants. World region - North America, south america, pacific rim, africa, australia country - canada, the US, brazil, england Region of the country - the maritimes, the prairies, the gulf islands, etc Population size - under 5000, 5000-25000, etc Type of region - urban, suburban, rural, mountainous, ocean/beaches
gender segmentation
dividing a market into different segments based on gender. ex. secret deoderant manufactured just for a womans chemistry.. has long been used in clothing, toilettree, and magazines
what is consumer behaviour?
find out whats meaningful to customers and make a message! -what makes them tick? what buttoms must you press? Goal: create marketing programs which trigger desired behaviour.
intermarket (cross market) segmentation
forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries -ex. H&M targets frugal but fashionable shoppers in 43 countries.
customer insights
fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships
online focus groups
gathering a small group of people online with a trained moderator to chat about a product, service, or organization and gain qualitative insights about consumer attitudes and behavior
international marketing research
has grown tremendously over the past decade. markets vary in terms of economic development, customs, cultures, and buying patterns. might have a difficult time finding secondary data..
marketing intermediaries
help the company promote, sell, and distribute its products to final buyers. include resellers, physical distribution firms, marketing services agencies, and financial intermediaries
Which differences to promote
important - delivers a highly valued benefit to target buyers. distinctive - competitors do not offer the difference, or the company can offer it in a more distinctive way. superior - the difference is superior to other ways customers might obtain the same benefit. communicable - the difference is communicable and visible to buyers preemptive - competitors cannot easily copy the difference. affordable - buyers can afford to pay for the difference profitable - the company can introduce the difference profitably.
Consumer buying behaviour - social
influences that exist Reference groups: -opinion leaders - care about what others think. their opinions matter/ influencers! -brand ambassadors -buzz marketing - get conversation started -increasing online presence -SWOT -environmental scanning -market research still in this social category... family. target mom and dad. family members have influence on buying behaviour. -tween/teen market increasingly significant. ex. badger sales representative.
more for more positioning
involves providing the most upscale product or service and charging a higher price to cover the higher costs
Market penetration
making more sales to current customers without changing its original products. (Ex. starbucks making their coffee shops more homey)
Developing strategies for growth and downsizing
market penetration market development product development diversification
positioning maps
marketers often prepare these when considering differentiation and positioning strategies. -often prepare perceptual positioning maps.
User status
marketers want to reinforce and retain regular users, first time users, and regular users of a product. -includes users facing lifes stage changes, such as newlyweds.
generational marketing
marketing to members of a generation, who tend to share the same outlook and priorities. -do marketers need to create separate products and marketing programs for each generation? -defining people by their birthdate may be less effective than segmenting them by lifestyle, or common values they seek in products.
Buyer Decision Process
need recognition, information search, evaluation of alternatives, purchase decision, post purchase behavior
once market segmentation is done...
need to think about market targeting. must deicde which segment or segments to target with their products, services, and communications.
local publics
neighborhood residents and community organizations
desirable products
products that give both high immediate satisfaction and high long-run benefits ex. tasty and nutritious breakfast food
pleasing products
products that give high immediate satisfaction but may hurt consumers in the long run ex. junk food and cigarettes
deficient products
products that have neither immediate appeal nor long-run benefits. ex. bad tasting medicine that is also ineffective
E-procurement
purchasing through electronic connections between buyers and sellers - usually online
Close-ended
quantitative data. "43% said yes..."
companies today - marketing positioning
recognize that they cannot appeal to all buyers in a marketplace, or at least not to all buyers in the same way. buyers are too numerous, too widely scattered and too varied in their needs and buying practices. the companies themselves vary too widely in their abilities to serve different segments of the market. instead, company must deicde which parts of the market it can serve best and most profitably.
Place
refers to the distribution of the product and the availability of the service. ex. Ford partners with many independently owned dealerships to sell their cars.
influence of product characteristics on rate of adoption
relative advantage: the degree to which a consumer perceives that a new product provides superior benefits compatibility- the degree to which the innovation fits the values and experiences of potential consumers complexity - the degree to which consumers find a new product or its use difficult to understand divisibility - the degree to which the innovation may be tried on a limited basis. communicability - the degree to which the results of using the innovation can be observed or described to others
social class
relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors
Planning Primary Data Collection
research approaches, contact methods, sampling plan, research instruments
Word-of-mouth influence
the impact of the personal words and recommendations of trusted friends, associates, and other consumers on buying behavior
cross-cultural marketing
the practice of including ethnic themes and cross-cultural perspectives within their mainstream marketing, appealing to consumer similarities across subcultures rather than differences.
Marketing control
the process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are attained.
Perception
the process of organizing and interpreting sensory information, enabling us to recognize meaningful objects and events
differentiable
the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. if married and unmarried women respond similarly to a sale on perfume, they do not consititute separate programs.
Measureable
the size, purchasing power, and profiles of the segments can be measured. certain segmentation variables are difficult to measure. ex. althought approximately 7-10% of adults are lefthanded, there is no way to identify and target them.
Information Search
the stage of the buyer decision process in which the consumer is motivated to search for more information. -include personal sources such as family and friends, these sources legitimize or evaluate products for the buyer. - commercial sources such as advertising and salespeople. these sources usually inform the buyer -public sources (mass media, consumer ratings) - experiential sources such as examining and using the product
competitive marketing intelligence
the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment
marketing research
the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization
Product position
the way the product is defined by consumers on important attributes - the place the product occupies in consumers minds relative to competing products.
Requirements for Effective Segmentation
to be useful... market segments must be the following: 1.measurable 2. accessible 3. substantial 4. differentiable 5. actionable
group
two or more people who interact to accomplish individual or mutual goals
USP
unique selling proposition - some company's think its a good idea to aggressively promote one difference/benefit to the target market. ex. head and shoulders - gets rid of dandruff.
What do wants become?
wants are the form taken by human needs when shaped by culture and individual personality. -when backed by buying power, wants become demands. -companies address needs by putting forth a VALUE PROPOSITION, a set of benefits that they promise to consumers to satisfy their needs. -VALUE PROPOSITION is fulfilled through a market offering, which delivers customer value and satisfaction, resulting in long-term exchange relationships with customers.
Marketing environment/ micro/ macro
we can control what goes on inside, but theres 2 areas of the environment that we dont have full control over. micro and macro environments. Microenvironment-stakeholder group, close to organization, suppliers, even competitors. will feel immediately if something is going wrong. "relationships" external/some control. + Macroenvironment- external/non controllable. might bring in SWOT abalysis. while you cant eliminate the threats, you can strategize around them. Goal-scanning or emerging opportunities.
The Pressure is Increasing...
• Customers: instant gratification • High-quality + lower prices • Shareholders: more profits "grow, grow, grow!" • Public voice → stronger, louder. -what are some consequences to this pressure? -we have been bad. but, how bad? -consumers have more access to information now.
Sustainable Marketing
•Socially and environmentally responsible marketing (business) that meets the needs of customers while preserving the ability of future generations to meet their needs. ▪Marketing concept: short-term wants and needs of consumers ▪ Strategic planning: future welfare of business ▪ Societal marketing concept: future welfare of society. "Dont cares" "I have to care" "Want to care" viewing social problems as opportunities.
BCG growth share matrix
•vertical axis - market growth rate (provides a measure of market attractiveness) •horizontal axis- relative market share (serves as a measure of company strength in the market) Stars = high growth, high share business or products. often need heavy investments to finance their rapid growth. eventually their growth slows down and they turn into cash cows. Cash cows = low growth, high share business or products. these established and successful SBUs need less investment to hold their market share. thus, they produce a lot of cash that the company uses to pay its bills and support other SBUs Question marks = low share business in high growth markets. require a lot of cash to hold their share, let alone increase it. management has to think hard about which question marks it should try to build into stars and which should be phased out. Dogs = low growth, low share businesses and products. they may generate enough cash to maintain themselves but do not promise to be large sources of cash.
Social Criticisms of Marketing
▪ Deceptive Practices ▪ Pricing e.g. chocolate companies price fixing. ▪ Promotion ex. Nutella ▪ Unsafe Products -2014 = year of recall ▪ Quality vs. cost ▪ Planned Obsolescence - built so it will break down and u can buy another one. what role should government play?
Just because it is legal...
▪ Ethical and legal: ▪ Provide safe/quality products ▪ Ethical and illegal: ▪ Breaking the law for humanitarian reasons ▪ Unethical and legal: ▪ Paying low wages in foreign country with lenient labour laws ▪ Unethical and illegal: ▪ "cooking the books" → false financial reporting
Defining what is "deceptive" vs. "marketing"
▪ Greenwashing - people want sustainable products. people will pay upwards of 3-4x more. Greenwashing, also called "green sheen", is a form of spin in which green PR or green marketing is deceptively used to promote the perception that an organization's products, aims or policies are environmentally friendly. ▪ Pinkwashing - (breast cancer) - the promotion of consumer goods and services using the pink ribbon that represents support for breast cancer-related charities. ▪ Legislation creates regulations and definitions -competition Bureau -department of consumer affairs - regulates consumer safety
Quality of design = quality of info gathered
▪ Questionnaire: ▪ Questions to ask ▪ Style of questions; open-ended and/or closed-ended ▪ Wording and ordering of questions ▪ Free online survey tools like Survey Monkey surveymonkey like UVIC