MIDE Exam 1

Latent Demand

Demand and willingness to purchase exist, but consumers lack the purchasing power to afford the product. Demand not fulfilled by any product in the market (ex. cure to a disease)

Macroenvironment Factors

Demographics, economics, social-cultural, technological, natural, political-legal

Environmental Sustainability

Developing strategies and practices that create a world economy that the planet can support indefinitely

Delight Need

Didn't tell you because they don't know/didn't know they could offer the product/service

Dissatisfied Customers

Dissatisfied customers often switch to competitors and disparage the product to others

Financial Intermediaries

Banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods

Real Need

Based on deficiency that actually exists, asks for clarification

Customer-Generated Marketing

Brand exchanges by consumers themselves - both invited and uninvited - by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers.

Economic Environment

Economic factors that affect consumer purchasing power and spending patterns

Marketing Intermediaries (Microenvironment)

Firms that help the company to promote, sell, and distribute its goods to final buyers.Marketing intermediaries include resellers, physical distribution firms, marketing services agencies, and financial intermediaries.

Inside-Out Perspective (Selling Concept)

It starts with the factory, focuses on the company's existing products, and calls for heavy selling and promotion to obtain profitable sales

Secret Need

Know they need it but don't share it with you

Customer-Engagement Marketing

Making the brand a meaningful part of consumers' conversations and lives by fostering direct and continuous customer involvement in shaping brand conversations, experiences, and community.

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.

True Friends

-Both profitable and loyal -There is a strong fit between their needs and the company's offerings -The firm wants to make continuous relationship investments to delight these customers and engage, nurture, retain, and grow them -It wants to turn true friends into true believers, who come back regularly and tell others about their good experiences with the company

Seth Godin Tribes Video

-Essence of factory system: used an efficient factory to churn out change, used cheaper labor and faster machines -Ran out of cheaper labor and faster machines, so pushed ideas on the world with TV's (ads--can build an entire industry with ads) -Tribes are what matter now= leading and connecting people and ideas -What we do now is find something worth changing and then assemble the tribes and then spread the idea to form a movement -Most movements, most leadership is about finding a group that that's disconnected but already has a yearning -Tell a story --> connect a tribe --> lead a movement --> make change -Leaders challenge the status quo, build culture, they have curiosity, people want to be missed, they commit to the tribe

Technological Environment

-Forces that create new technologies, creating new product and market opportunities -Digital technologies and the dawn of the Internet of Things have created a brave new world of marketing

Barnacles

-Highly loyal but not very profitable -There is a limited fit between their needs and the company's offerings -Barnacles are perhaps the most problematic customers -The company might be able to improve their profitability by selling them more, raising their fees, or reducing service to them -However, if they cannot be made profitable, they should be "fired"

Generation Alpha

-Kids born after 2012, largely the children of the millennials -Although still a relatively small market, by 2025 this group will grow larger even than the millennials -"Generation Alpha will be the most formally educated generation ever, the most technology-supplied generation ever, and globally the wealthiest generation ever" -81 percent of US Gen Alpha parents said their latest technology purchase- including smartphones, tablets, and TVs- was influenced by the activities and needs of their children

Steve Jobs' Marketing Philosophy

-Marketing is about values -Even a great brand needs investment and caring if it's going to retain its relevance and vitality -Don't talk about the product or why it's better -Apple at its core value believes that people with passion can change the world for the better -Theme of new brand marketing campaign was "think different" and move this world forward

Generation Z

-People born between 1997 and 2012 who make up the tweens to twenty-something markets -This tweens to young twenty-somethings group is now the largest generation alive in the United States- 80 million strong, making up 26 percent of the population -They are also the most ethnically and culturally diverse generation -Gen Zers spend an estimated $43 billion to $143 billion annually of their own money and influence up to $333 billion of family spending

Butterflies

-Potentially profitable but not loyal -There is a good fit between the company's offerings and their needs -The company should create satisfying and profitable transactions with them, capturing as much of their business as possible in the short time during which they buy from the company -Then it should move on and cease investing in them until the next time around

Strangers

-Show low potential profitability and little projected loyalty -There is little fit between the company's offerings and their needs -The relationship management strategy for these customers: Don't invest anything in them; make money on every transaction

Generation X

-The 55 million people born between 1965 and 1980 in the "birth dearth" following the baby boom -Although they seek success, they are less materialistic than the other groups; they prize experience, not acquisition -They are sensible shoppers who research products heavily before they consider a purchase, prefer quality to quantity, and tend to be less receptive to overt marketing pitches -They are the most educated generation to data and they possess hefty annual purchasing power -Although Gen Xers make up less than a quarter of all US adults, they pull in 29 percent of the nation's total income

Baby Boomers

-The 72 million people born during the years following World War II and lasting until 1964 -The baby boomers are the wealthiest generation in US generation -Today's baby boomers account for about 22 percent of the US population but control 42 percent of the spending power

Milennials (Generation Y)

-The 75 million children of the baby boomers born between 1981 and 1996 -These children of the baby boomers number 75 million or more, dwarfing the Gen Xers and now larger than the baby boomer segment -The millennials were the first generation to grow up in a world filled with computers, mobile phones, satellite TV, iPods and iPads, and online social media -More than sales pitches from marketers, millennials seek authenticity, value, and opportunities to shape their own brand experiences and share them with others -Compared with other generational groups, they tend to be frugal, practical, connected, mobile, and impatient

Marketing Process (Capturing Customer Value)

Capture value from customers to create profits and customer equity

Cultural Environment

Cultural factors strongly affect how people think and how they consume, so marketers are keenly interested in the cultural environment

General Public

A company needs to be concerned about the general public's attitude toward its products and activities. The public's image of the company affects its buying behavior

Citizen-Action Publics

A company's marketing decisions may be questioned by consumer organizations, environmental groups, minority groups, and others. Its public relations department can help it stay in touch with consumer and citizen groups.

Internet of Things (IoT)

A global environment where everything and everyone is digitally connected to everything and everyone else

Marketing Concept

A philosophy in which achieving organization goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. Under the marketing concept, customer focus and value are the paths to sales and profits. Instead of a product-centered make-and-sell philosophy, the marketing concept is a customer-centered sense-and-respond philosophy.

Marketing Philosophy

A philosophy whose main focus is providing customer satisfaction

Customer Brand Advocacy

Actions by which satisfied customers initiate favorable interactions with others about a brand

Core Marketing Activities

Activities such as consumer research, product development, communication, distribution, pricing, and service are core marketing activities

Public

Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives

Product

Physical product or service

Choosing a Value Proposition

The company must also decide how it will serve targeted customers - how it will differentiate and position itself in the marketplace. A brand's value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs.

Customer-Perceived Value

The customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers. Importantly, customers often do not judge values and costs "accurately" or "objectively," they act on perceived value.

Customer Satisfaction

The extent to which a product's perceived performance matches a buyer's expectations

Wants

The form human needs take as they are shaped by culture and individual personality

Social Marketing Concept

The idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests. The social marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and society's well-being. It calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs.

Production Concept

The idea that consumers will favor products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency. Companies adopting this orientation run a major risk of focusing too narrowly on their own operations and losing sight of the real objective - satisfying customer needs and building customer relationships.

Product Concept

The idea that consumers will favor products that offer the most quality, performance, and features; therefore, the organization should devote its energy to making continuous product improvements

Selling Concept

The idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort. The selling concept is typically practiced with unsought goods that buyers do not normally think of buying, such as life insurance or blood donations. These industries must be good at tracking down prospects and selling them on a product's benefits.

Macroenvironment

The larger societal forces that affect the microenvironment - demographic, economic, natural, technological, political, and cultural forces

Outside-In (Marketing Concept)

The marketing concept takes an outside-in perspective and starts with a well-defined market, focuses on customer needs, and integrates all the marketing activities that affect customers

Marketing Myopia

The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products. They are so taken with their products that they focus only on existing wants and lose sight of underlying customer needs. They forget that a product is only a tool to solve a consumer problem. These sellers will have trouble if a new product comes along that serves the customer's need better or less expensively. The customer will have the same need but will want the new product.

Customer Relationship Management

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, engaging, and growing customers

Natural Environment

The physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities

Share of Customer

The portion of the customer's purchasing that a company gets in its product categories. To increase share of customer, firms can offer greater variety to current customers. Or they can create programs to cross-sell and up-sell to market more products and services to existing customers.

Market

The set of all actual and potential buyers of a product or service

Demography

The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics

Customer Equity

The total combined customer lifetime values of all of the company's customers. As such, it's a measure of the future value of the company's customer base. Clearly, the more loyal the firm's profitable customers, the higher its customer equity. Customer equity may be a better measure of a firm's performance than current sales or market share.

Twofold Goal of Marketing

The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering value and satisfaction

Ultimate Outcome of Marketing

The ultimate outcome of marketing is when a successful exchange occurs

Customer Lifetime Value

The value of the entire stream of purchases a customer makes over a lifetime of patronage

Partner Relationship Management

Working closely with partners in other company departments and outside the company to jointly bring greater value to customers. Marketers must also partner with suppliers, channel partners, and others outside the company. Marketing channels consist of distributors, retailers, and others who connect the company to its buyers.

Marketing Management

The art and science of choosing target markets and building profitable relationships with them. The marketing manager's aim is to engage, keep, and grow target customers by creating, delivering, and communicating superior customer value.

Selecting Customers to Serve

Companies decide who they will serve by dividing the market into segments of customers (market segmentation) and selecting which segments it will go after (target marketing).

Competitors (Microenvironment)

Companies must also gain strategic advantage by positioning their offerings strongly against competitors' offerings in the minds of consumers

What do companies need to consider?

Companies need to consider employees, stakeholders, and society

Irregular Demand

Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis (ex. skiing passes, holiday decorations)

Full Demand

Consumers are adequately buying all products put into the marketplace (demand higher than supply)

Declining Demand

Consumers begin to buy the product less frequently or not at all (ex. physical retail, CDs)

Unwholesome Demand

Consumers may be attracted to products that have undesirable social consequences (ex. alcohol or cigarettes)

Nonexistent Demand

Consumers may be unaware of or uninterested in the product (no purchasing power = no demand)

Demands

Human wants that are backed by buying power. Given their wants and resources, people demand products and services with benefits that add up to the most value and satisfaction.

What happens if marketers set expectations too low?

If marketers set expectations too low, they may satisfy those who buy but fail to attract enough buyers.

What happens if marketers set expectations too high?

If they set expectations too high, buyers will be disappointed.

The Company (Microenvironment)

In designing marketing plans, marketing management takes other company groups into account - groups such as top management, finance, research and development, information technology, purchasing, operations, human resources, and accounting

How do companies learn about customer needs?

In order for companies to learn about and understand customer needs, wants, and demands, they conduct consumer research, analyze mountains of customer data, and observe customers as they shop and interact, offline and online

Social-Cultural Environment Factors

Increased emphasis on ethics, socially responsible marketing, and sustainable marketing

Marketing Activities

Marketing includes activities such as public relations, sales promotions, advertising, social media, pricing, distribution, and many other functions

Kotler & Keller Marketing Definition

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

Overfull Demand

More consumers would like to buy the product than can be satisfied (demand higher than supply)

Market Offerings

Some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Examples include banking, airline, hotel, retailing, and home repair services. More broadly, market offerings also include other entities, such as persons, places, organizations, information, ideas, and causes.

4 P's

Product, Price, Place, Promotion

Needs

States of felt deprivation. They include basic physical needs for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression.

Satisfied Customers

Satisfied customers buy again and tell others about their good experiences

What must sellers do?

Sellers must search for and engage buyers, identify their needs, design good market offerings, set prices for them, promote them, and store and deliver them

Negative Demand

Should have it but reluctant to choose it (more transgressive in marketing approach)

Suppliers (Microenvironment)

Suppliers provide the resources needed by the company to produce its goods and services

Exchange

The act of obtaining a desired object from someone by offering something in return

Marketing Definition

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large (set of activities that help businesses reach the target market effectively)

Marketing Environment

The actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers

Microenvironment

The actors close to the company that affect its liability to serve its customers - the company, suppliers, marketing intermediaries, customer markets, competitors, and publics

Price

The amount a consumer pays (amount of money exchanged for a good or service)

Media Publics

This group carries news, features, editorial opinions, and other content. It includes television stations, newspapers, magazines, and blogs and other social media.

Local Public

This group includes local community residents and organizations. Large companies usually work to become responsible members of the local communities in which they operate.

Internal Publics

This group includes workers, managers, volunteers, and the board of directors. Large companies use newsletters and other means to inform and motivate their internal publics. When employees feel good about the companies they work for, this positive attitude spills over to the external publics.

Financial Publics

This group influences the company's ability to obtain funds. Banks, investment analysts, and stockholders are the major financial publics

Cumulative Function of Marketing

To communicate, deliver, and create value for the consumer

Promotion

Tools used to get the message out

Marketing Process (Creating Customer Value)

Understand the marketplace and consumer needs and wants --> Design a customer value-driven marketing strategy --> Construct an integrated marketing program that delivers superior value --> Build profitable relationships and create customer delight

Customer-Driven Marketing

Understanding customer needs even better than customers themselves do and creating products and services that meet both existing and latent needs, now and in the future

Digital and Social Media Marketing

Using digital marketing tools such as websites, social media, mobile apps and ads, online video, email, and blogs to engage consumers anywhere, at any time, via their digital devices

Unstated Need

What consumers didn't tell you (i.e. service package)

Stated Need

What the customer asks for (stated on surface)

Place

Where the product is purchased