M370 Midterm
Targeting
"Target market selection involves evaluating each market segment's attractiveness and selecting one or more" HBR, p 176
Customer Profitability
"firms need to systematically estimate the profitability associated with [customer knowledge]..." know the given costs of retaining customers and attracting them Need Acquisition Cost Could Determine Break-even point Determine Customer Lifetime Value Strategic Implications see reading
CLV calculation
(M - C / (1-r + i)) - Aq where M is margin C is cost incurred r is retention rate i is interest rate To find margin take revenue and multiple it by the margin percent
2 types of quality
(level and consistency level being performance quality and consistency mean conformance quality, is it free from defects)
Product development flow chart
1.Ideation $ 2 Screening $$ 3 Concept Testing $$$ 4 Marketing Strategy Development $$$ 5 Business Analysis $$$ 6 Product Development $$$$ 7 Test Marketing $$$$ 8 Commercialization $$$$$
Implications for Marketing Strategy
After CLV make decision 1)Firing Customers getting rid of those not profitable 2)Reward customers to lead to loyalty 3)identify cross-selling opportunities, additional or related products
Personal Factors
Age and Life-Cycle Stage People change the goods they buy over their lifetimes. Occupation Occupation influences the purchase of clothing and other goods. Economic Situation Some goods and services are especially income-sensitive.
3 customer myths
All customers are not all the same 1)it costs less to serve loyal customers in fact they are more expensive and demand more like discounts 2)Loyal customers pay higher prices for the same bundle of goods No, in fact they pay lower and are more price sensitive because they believe loyal customers deserve lower prices 3)loyal customers market the company who knows because maybe they just buy them at same place because its convenient and never say anything KNOW WHEN TO LOSE A CUSTOMER
Acquisition Cost calculation
Aq = (number or X to get one customer ) * (cost of one X) eg cost of one / click thru rate * conversion rate see practice
adoption process steps
Awareness interest evaluation trial adoption
Brand origination (sponsorship)
...
Knowing when to lose a customer Turning Friends into True Believers Enjoying Butterflies Smoothing Barnacles p98
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What are benefits of this segmentation
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What makes a good segment? p164
...
four ideas that can help firms build customer value by Theodore Levitt
1)There are no commodities; all products can be differentiated. 2) Products are problem solving tools. Consumers think more about holes and thirst, not drill bits and colas. 3) There is a bias toward the measureable (sales, profit, etc). Firms should also attempt to measure more difficult phenomenon, like customer satisfaction, fun, and friendliness. 4) Make the intangible (reputation and brand equity or the power of the brand) more tangible to consumers.
4 perils of CRM
1)implementing CRM before creating customer strategy No customer strategy 2)rolling out CRM before changing organization to match No organizational change 3)assuming more CRM technology is better Technology focus 4)stalking customers, not wooing them
What types of segmentation will businesses use?
ALL OF THEM
Customer relationship groups
Butterflies True Friends Barnacles Strangers in clock order p23 know what to do with each
how to choose a differentiation and positioning strategy?p174
By, 1) identifying a set of differentiated competitive advantages where you can build a position 2) choose right competitive advantage, 3)select overall positioning strategy
opinion leader example
CAN ONLY BE ONE a person who influences others' attitudes or behaviors. Page 47 They are valuable information sources because they are: knowledgeable about a product category, among the first to buy new products, and likely to tell both positive and negative information about product performance.
Product layers and examples
Core benefit : basic benefits, like phone for talking Actual product: features, package, brand, quality color style augmented product: warranty, instructions, delivery something more than product like apps for iphone
balance and relations between all four
Cows and Stars throw off cash to help question marks grow. Many firms use cash to keep Dogs alive. Cash Flows vary across the 4 types of products l Balancing the numbers of SBUs of each type is essential for long-term financial health know when to build, hold, harves, divest
Culture examples
Culture is learned from family, church, school, peers, colleagues. Culture reflects basic values, perceptions, wants, and behaviors. Cultural shifts create opportunities for new products or may otherwise influence consumer behavior.
how to manage new product development types
Customer Centered Is there a real customer for the product? Team Based Does the organization have the scientific and technological ability to develop the product. Systematic Is the potential for such a product large enough to offer the promise of profitability?
Differentiation in STDP
Find competitive advantage to differentiate along the lines of product, service, channels, people, or image determine unique selling position (USP) and stick to it and promote differences
Preventing Decline with product development
Find new uses for the product- aspirin to prevent heart attack, baking soda for odors. Change packaging, labels, quality-individual portions in food.
Question Marks and what to do with it
For "?" the question is whether the firm can develop a brand with major share and make their brand a "star" Low profits but potential star or cash cow; invest for growth or discontinue
When CRM works it allows companies to
Gather customer data swiftly Identify the most valuable customers Increase customer loyalty
Bases for segmentation
Geographic segmentation demographic Physchographic Behavioral or product use behavior also benefits
True Friends
Good fit between firm offerings and customer needs High Profitability and Loyalty approach softly, dont communicate often or they will ignore everything, reward them and grow them
Butterflies
Good fit with firm but are not loyal and go from place to place High Profitability but Low Loyalty Cherish them while they are there then forget milk the account, cease investing soon enough
types of differentiation
Horizontal- different products with same quality and price vertical differentiated: if one is better than the other but sold for same price
Dogs and what to do with it
If the brand has low share in a category that has low or no growth then it was classified a "Dog" This usually signifies the difficulty the firm has making profit from such brands. Produces poor profits; make the most of profits or discontinue
customer-centered new-product development
new-product development that focuses on finding new ways to solve customer problems and create more customer-satisfying experiences
Product mix depth
number of versions offered for each product in the line
examples of behavioral segmentation
occasions, benefits, user status( first time etc) , usage rate, loyalty status
online social networks
online social communities - blogs, social networking Web sites, or even virtual worlds - where people socialize or exchange information and opinions
Multi-brands
only company holding many brands, like pepsi hold fritos and orange juice
internal marketing
orienting and motivating customer-contact employees and supporting service people to work as a team to provide customer satisfaction
Maslows theory of motivation
person tries to satisfy most important need first, see chart of pyramid
opinion leader
person within a reference group who, b/c of special skills, knowledge, personality, or other characteristics, exerts social influence on others
Business buyer process
problem recognition general need description product specification supplier search proposal solicitation supplier selection order-routine specification performance review
individual product decisions
product attributes (quality, features, style, design) branding packaging labeling product support services
Five life cycle stages of buyers from CLV
prospect first time buyers early repeat buyer, high risk of defection core customers, wont leave unless un satisfied core defectors, leave for compeition
e-procurement
purchasing through electronic connections between buyers and sellers - usually online
RFM
recency frequency monetary value
downsizing
reducing the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company's overall strategy
social group
reference group family roles and status
influences on product adoption
relative advantage - superior? compatability - fits vales and experiences divisibility - degree to try on limited basis complexity communicability - innovation can be seen
social class
relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors
idea screening
screening new-product ideas in order to spot good ides and drop poor ones as soon as possible Potential Cost Degree of Difficulty Competitive Fit Barriers to Entry Longevity
Preventing Decline with Market Development Strategy
Increasing the number users- new customers. Increase distribution-regional beer going national Pork it's the new white meat-taking business from beef and chicken.
Categories of adopters
Inovators early adopters early majority late majority laggards, shape of bell curve
What is Product Growth measurement used by Boston Consulting Group
Is the product category growing in sales volume? What percent growth? The FIRM must determine what % of growth constitutes HIGH vs. LOW growth determining these then classifying them as cash cows, srars, ect
The marketing process
Know needs of customer Understand the marketplace and customer needs and wants. Design a customer-driven marketing strategy. Construct a marketing program that delivers superior value. Build profitable relationships and create customer delight. Capture value from customers to create profits and customer quality leading to firm success should always start with the customer
Barnacles
Limited fit and only come when it benefits them Low profitability but high Loyalty cross sell and up-sell, know size of wallet
Brand development strategies
Line extension Brand Extension Multibrands New Brands
Metrics for firms with more than one brand!
Market Share/Market Growth Matrix (BCG approach) Product/Market Expansion
market penetration calculation
Market penetration (%) = # users of our brand / Total population* *define the geographical area or unit (ex: U.S.) Companies can decide how to measure like using th population or only population above a certain age
Preventing Decline with penetration
Marketers want to keep products from reaching the "Decline Stage" in PLC. They try to extend the PLC in the early maturity stage by: Increasing frequency of use-creatively using advertising and promotion to increase the number of times consumers use the product.
Psychological factors heirarchy
Maslows hierarchy 1)Self Actualization Self-fulfillment 2)Ego Needs Prestige, status 3)Belonging Love, friendship, acceptance by others 4)Safety Security, shelter, protection 5)Physiological water, sleep, food WORK BOTTOM UP Most marketing needs are in 2-4
How to extend product life in mature phase
Modify the "market" = market development Increase use among current customers = penetration Modify the product = product development Modify the marketing mix (service, price, distribution, promotion) if same customers use penetration if different use market development strategy
What is a brand?
Name Term Sign Symbol Design That identifies the product of one marketer to distinguish from another
Buyer decision Process, and example
Need recognition Information search Evaluation of alternatives Purchase decision Post-purchase can be short or long. Short eg if need water Car is old What can I afford? What best fits me? This is it! Hey, was this right?
Licensing
One firm sells another the right to use a brand name for a specific purpose and for a specific time period. Examples: Jurassic Park movie Jurassic Park candy, key chains & toys. Oreo Cookies, Oreo Cereal If another name is there it is co-branding, if just one and getting paid to use then it is licensing
product or a brand can be
Organization People Ideas places
Strangers
Poor fit with firm offerings and customer needs Low Profitability and Loyalty identify early and invest nothing make profit on every transaction
Slides
Slides
Customer Lifetime Value Analysis
The total expected 'margin' stream arising from each customer over his/her relationship with the Brand/Firm. Understand the potential value of customers Learn more about patterns of individuals or groups of customers
Stars and what to do with it
This results in a matrix where firms with products in growing product categories (market growth) and major share are called "Stars" Produces high profits; invest to keep as a star and to eventually turn into cash cow
growth-share matrix
This tool helps decide product potential a portfolio-planning method that evaluates a company's strategic business units (SBUs) in terms of its market growth rate and relative market share on bottom. SBUs are classified as satrs, question marks, cash cows or dogs in clock wise p41 packet
social factors
Those we interact with Family Reference groups Opinion leaders (1 person) Social networks Roles - professional, clergy, students...
co branding
Two brand names on one package Example: DQ Oreo Cookies and Cream Blizzard. 2 (or more) brands on one product package (often involving 2 firms)
unit market share
Unit Market Share = Brand Units Sold (#) / Total Market Units Sold (#)* The firm must define the market and the competitors in that market or category Given the UMS formula then Brand Unit Sales = Total Market Unit Sales x Brand Unit Market Share & Total Market Units Sold = Brand Units Sold (#) / Brand Unit Market Share (#)
How to match products with segments?
Use a Perceptual Map or positioning map X and Y axis are attributes usually the worst ideas fall in the middle
Types of differentiation and what are they p12455
Vertical: different products with same brand at different price and benefit points Product line stretching: Upward Downward Both Horizontal: same product but different varieties Product line filling horizontal
positioning statement requirements
Who are the customers? What is the set of needs this product fulfills? Why is the product the best option to satisfy needs?
style
a basic and distinctive mode of expression
store brand (or private brand)
a brand created and owned by a reseller of a product or service
new task
a business buying situation in which the buyer purchases a product or service for the first time
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
convenience product
a consumer product that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort ex Toothpaste, magazine, beer
unsought product
a consumer product that the consumer either does not now about or knows bout but does not normally think of buying ex Life insurance, innovative introductions
shopping product
a consumer product that the customer, in the process of selection and purchase, usually compares in such bases as suitability, quality, price, and style ex Television, phones, clothing
specialty product
a consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort ex Rolex, Mercedes, Gucci
fashion
a currently accepted or popular style in a given field
belief
a descriptive thought that a person holds about something
product concept
a detailed version of the new-product idea stated in meaningful consumer terms Explain Show Inquire
new product
a good, service, or idea that is perceived by some potential customers as new
market segment
a group of consumers who respond in a similar way to a given set of marketing efforts
subculture
a group of people with shared value systems based on common life experiences and situations
product line
a group of products that are closely related b/c they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall w/in given price ranges
service inseparability
a major characteristic of services - they are produced and consumed at the same time and cannot be separated from their providers
service intangibility
a major characteristic of services - they cannot be seen, tasted, felt, heard, or smelled before they are bought
service variability
a major characteristic of services- their quality may vary greatly, depending on who provides them and when, where, and how
service perishability
a major characteristic of services- they cannot be stored for later sale or use
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
differentiated (segmented) marketing
a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each
concentrated (niche) marketing
a market-coverage strategy in which a firm goes after a large share of one or a few segments
brand
a name, term, sign, symbol, design, or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors
motive (drive)
a need that is sufficiently pressing to direct the person to seek satisfaction of the need
attitude
a person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea
lifestyle
a person's pattern of living as expressed in his or her activities, interests, and opinions
product/market expansion grid
a portfolio-planning tool for identifying company growth opportunities through market penetration, product development, diversification or market development clock wise p131
consumer products and types packet
a product bought by final consumers for personal consumption Convenience Shopping Specialty Unsought
industrial product
a product bought by individuals and organizations for further processing or for use in conducting a business
business analysis
a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives is it profitable??
target market
a set of buyers sharing common needs or characteristics that the company decides to serve
mission statement
a statement of the organization's purpose - what it wants to accomplish in the larger environment
positioning statement
a statement that summarizes company or brand positioning - it takes this form: to (target segment and need) our (brand) is (concept) that (point-of-difference)
market development
a strategy for company growth by identifying and developing new market segments for current company products
market penetration
a strategy for company growth by increasing sales of current products to current market segments w/out changing the product
product development
a strategy for company growth by offering modified or new products to current market segments
diversification
a strategy for company growth through starting up or acquiring businesses outside the company's current products and markets
fad
a temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
differentiation
actually differentiating the market offering to create superior customer value
personal group
age and life cycle occupation economic situation personality and self concept (like confident, aggressive)
consumer market
all the individual and households that buy or acquire goods and services for personal consumption
buying center
all the individuals and units that play a role in the purchase decisions-making process
service
an activity, benefit, or satisfaction offered for sale that is essentially intangible and does not results in the ownership of anything
competitive advantage
an advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices
team-based new product development
an approach to developing new products in which various company departments work closely together, overlapping the steps in the product development to save tie and increase effectiveness
SWOT analysis
an overall evaluation of the company's strengths (S), weaknesses (W), opportunities (O), and threats (T)
product
anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need
positioning
arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
positioning
arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
customer generated marketing
brand exchanges created 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 word of mouth
branding challenges
brand positioning( attributes, benefits, beliefs and values), name selection, brand sponsorship ( co brand, manufacturer, private, licensing), and brand development
derived demand
business demand that ultimately comes from (derives from) the demand for consumer goods
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
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
steps in strategic planning
define company mission set objectives, goals design business portfolio plan marketing and other strategies
marketing strategy statement
describe target market, planned value proposition, and projected sales, market share etc
marketing strategy development
designing an initial marketing strategy for a new product based on the product concept
product development
developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable market offering DO IT STAGE
Brand strength factors from Young and Rubicam
differentiation, relevance- how consumers feel about it meeting needs, knowledge - how much consumers know of brand, esteem - how respected is brand high on all four is high brand equity
age and life-cycle segmentation
dividing a market into different age and life-cycle groups
geographic
dividing a market into different geographical units such as nations, states, regions, counties, cities, or neighborhoods
income segmentation
dividing a market into different income segments
gender segmentation
dividing a market into different segments based on gender
psychographic segmentation
dividing a market into different segments based on social class, lifestyle, or personality characteristics
market segmentation
dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs
behavioral segmentation
dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product
market segmentation
dividing a market into smaller segments with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes
behavioral or product use behavior segmentation
dividing a population into groups based on purchase frequency and usage level.
demographic segmentation
dividing the market into segments based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality
benefit segmentation
dividing the market into segments to the different benefits that consumers seek from the product like e commerce shoppers seek conveinence
occasion segmentation
dividing the market segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item
Geographic segmentation
dividing the overall market into groups based on geography. Most products derive the majority of their sales from a very small number of regions.
Business buyer behavior influences
environmental(tech, competition, politics) organizational interpersonal (authority, expertise, influence) individual
line extension
extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category
brand extension
extending an existing brand name to new product categories
positioning strategy with differentiation
focus on horizontal say that consumers differ in taste while vertical also focuses that consumers are different in taste but also take advantage in their willingness to pay for quality also use marketing mix for differentiation
intermarket segmentation
forming segments of consumers who have similar needs and buying behavior even though they are located in different countries
reference group
groups of people (uppeclass etc) that have a significant effect on an individual's evaluations, aspirations, or behavior. Can cause conformity where a person changes as a reaction to real or imagined group pressure. Some of the strongest pressures to conform come from our gender roles. Examples: fraternities, clubs, church groups, school classes
demands
human wants that are backed by buying power, luxury
types of phychographic segments
ideals thinkers, believer achievement achievers,strivers buy jaguar to show achievement self expression experiences, makers like paintings
What difference to promote when differentiating
important - good value distinctive - unique superior communicable - visible to buyer preemptive - cannot be easily copied affordable profitable
4 things that make up a service
intangible perishable, example cant store it like airline ticket variable inseperable
Service profit chain links
internal service quality satisfied and productive service employees greater service value satisfied and loyal customers healthy service profits
commercialization
introducing a new product into the market
Product line stretching p204 horizontal stretching is called filling
line filling will add extra products in the same line, line stretching is when it lengthend its line beyond current range, downward or upward to attack comeptitors
customer-manged relationships
marketing relationships in which customers, empowered by today's new digital technologies, interact w/ companies and with each other to shape their relationships with brands
Why stretch product line up and down
may add low end products to appeal to poor or upward to add prestige to current products
requirements for effective segmentation phv
measurable accessible substantial differentiable actionable
Psychological group
motivation perception learning beliefs and attitude
How to evaluate a market segment
segment size and growth structure attractiveness company objectives and resources
two types of segments generally
segments based on benefit sought by customer segments based on observable characteristics of customer
major marketing tasks for services
service differentiation service quality service productivity, work more for less or faster
market offerings
some combination of products, services, information, or experiences offered to a market to satisfy a need or want
needs
states of felt deprivation, water
style design eastures
style is appearance design is product made
culture group
subculture social class ( upper class rich etc)
supplier development
systematic development of networks of supplier-partners to ensure an appropriate and dependable supple of products and materials for use in making products or reselling them to others
local marketing
tailoring brands and promotions to the needs and wants of local customer segments - cities, neighborhoods, and even specific stores
individual marketing
tailoring products and marketing programs to the needs and preferences of individual customers - also labeled "one-to-one marketing," "customized marketing," and "markets-of-one marketing"
concept testing
testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal
exchange
the act of obtaining a desired object from someone by offering something in return
packaging
the activities of designing and producing the container or wrapper for a product
marketing management
the art and science of choosing target markets and building profitable relationships with them
consumer buyer behavior and types
the buying behavior of final consumers - individuals and households that buy goods and services for personal consumption characteristics that affect it are Culture Social Personal Psychological p44
business buyer behavior
the buying behavior of the organizations that buy goods and services for use in the production of other products and services or to resell or rent them to others at a profit
service-profit chain
the chain that links service firm profits with employee and customer satisfaction
product quality
the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs
business portfolio
the collection of business and products that make up the company
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
brand equity
the differential effect that knowing the brand name has on customer response to the product or its marketing like McDonalds saying if every asset was gone they would still make a come back because of their brand
customer satisfaction
the extent to which a product's perceived performance matches a buyer's expectations balance product performance =,>,< buyers expectations
wants
the form human needs take as shaped by culture and individual personality, coffee
value proposition
the full positioning of a brand - the full mix of benefits upon which it is positioned
societal 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
product concept
the idea that consumers will favor products that offer the most quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvements
selling concept
the idea that consumers will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion event
marketing strategy
the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships
marketing concept
the marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions
adoption process
the mental process through which an individual passes from first hearing about an innovation to final adoption
marketing myopia
the mistake of paying more attention to the specific products a company offers to the benefits and experiences produced by these products
return on marketing investment (or marketing ROI)
the net return from marketing investment divided by the costs of the marketing investment
value delivery network
the network made up of the company, suppliers, distributors, and, ultimately customers who partner with each other to improve the performance of the entire system
customer relationship management
the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction Build and maintain profitable customer relationships Deliver 'superior' customer value + satisfaction Use Information about customers Acquire and retain customers
share of a customer
the portion of the customer's purchasing that a company gets in its product catgories
micromarketing
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
co-branding
the practice of using the established brand names of two different companies on the same product
marketing
the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return
portfolio analysis
the process by which management evaluates the products and businesses that make up the company
perception
the process by which people select, organize, and interpret info to form a meaningful picture of the world
strategic planning
the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities
market targeting (targeting)
the process of evaluating each market segment's attractiveness and selecting one or more segments to enter
market targeting
the process of evaluating each market segments attractiveness and selecting one or more segments to enter
marketing control
the process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved
marketing implementation
the process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives
decline stage
the product life-cycle stage in which a product's sales decline
growth stage
the product life-cycle stage in which a product's sales start climbing quickly
maturity stage
the product life-cycle stage in which sales growth slow or level off, profits peak
introduction stage
the product life-cycle stage in which the new product is first distributed and made available for purchase profits are negative but innovators are buying, no competitors or few
value chain
the series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products
market
the set of all actual and potential buyers of a product or service
product mix (or product portfolio)
the set of all product lines and items that a particular seller offers for sale, like pepsi sell soda, orange juice, gatorade, chips ect
culture
the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions THE MOST BASIC cause of a persons wants and behavior includes subculture and social class
marketing mix
the set of controllable tactical marketing tools - product, price, place, and promotion - that the firm blends to produce the response it wants in the target market
test marketing
the stage of new product development in which the product and marketing program are tested in realistic market settings
idea generation
the systematic search for new-product ideas Internal External customers Suppliers Crowdsourcing
production concept
the the idea that consumers will favor products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency
customer equity
the total combined customer lifetime values of all the company's customers
personality
the unique psychological characteristics that distinguish a person or group
social marketing
the use of commercial marketing concepts and tools in programs designed to influence individuals behavior to improve their well-being and that of society
customer life time value
the value of the entire stream of purchases that the customer would make over a lifetime of patronage
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
interactive marketing
training service employees in the fine art of interacting with customers to satisfy their needs
Value positioning, selecting overall positioning strategy
true positioning is in the mind of the consumer but 5 types clockwise in top and far right boxes More for More More for same More for Less Same for Less Less for much less X = price Y= benefits
What do we do with barnacles?
try to make them profitable through selling more or raising fees, if nor fire them
group
two or more people who interact to accomplish individual or mutual goals
major development changing marketing
uncertain economic environment (recession) digital age rapid globalization call for more ethics and social responsibility - sustainable marketing growth of non for profit marketing
selecting a target market strategy
undifferentiated (mass) marketing (market to everyone like COKE) differentiated (segmented) marketing (market to segments, different products to different segments like clothing) concentrated (niche) marketing (market to only one segment) Micro Marketing (market to individual customer)
Marketing Metrics
unit market share revenue market share relative market share market penetration
phychographic segmentation
variables - dividing the population into homogeneous groups based on behavioral and lifestyle profiles developed by analyzing consumer activities, interests, and opinions (AIO) and values, attitudes, and lifestyles (VALS) through surveys.
good positioning statement includes
who customers what needs to satisfy why our product is the best option
partner relationship management
working closely with partners in other company departments and outside the company to jointly bring greater value to customers
4P's and 4C's
Product Price Place Promotion Customer solution, customer cost, convenience, communication
How can brands be arranged?
Product line: closely related one brand name and category products. Like coke offering soda but many flavors or product mix
Product Life cycle PLC
Products have a limited life They pass through distinct stages Profits vary by stage Products require different management at different stages Introduction innovation growth maturity decline
Cash cows and what to do with it
Products of major share in slow growing markets are called "Cash Cows" Produces good cash flow; use to support question mark or star
What is a product or brand?
Quality Features/attributes Style and Design Brand image Packaging Labeling Product Support
relative market share
Relative Market Share (I) (%) = Brand's Market Share (# or $) / Largest Competitor's Market Share (# or $) Note: this can also be calculated using actual sales instead of share always use next largest competitor, if we are it then use the next best DONT USE ALL OTHER OR STORE BRANDS
Branding Strategies
Retailers Have Several Options When Deciding What Brands to Sell 1)National Brands Manufacturers' Brands Coca-Cola 2)Retailer/Store Brands Private Label Brands Brands That Are Owned & Sold by a Retailer Sam's Cola also include licensing, co branding
Revenue Market Share
Revenue Market Share = Brand Sales Revenue ($) / Total Market Sales Revenue ($)* Given this RMS formula then Brand Sales Revenue = Total Market Sales Revenue x Brand Revenue Market Share & Total Market Sales Revenue = Brand Sales Revenue ($) / Brand Revenue Market Share ($)
cross sell
SELLING SOMETHING TO SOMEONE WHEN THEY ARE BUYING SOMETHING ELSE, LIKE AMAZON RECOMMENDING THINGS
STDP
Segmentation Targeting Differentiation Positioning p47 diagram
Market share
is sales $ Proportion (%) *of total sales ($ or quantity) *in a market. i.e.. geography, industry, other definition of measure (by the competitors or a research firm) *held by each competitor Example: Coke may have 20% of the carbonated soft drinks $ business in the U.S. while perhaps Pepsi has 18%
segmenting steps
know benefits consumer seeks segment market, develop profiles based on customer benefits find observable variables, like demographic that can discriminate among benefit segment
Sigmund Freud motivation theory
largely people are unconscious about the psychological forces that shape their behavior, buying decisions are affected by subconscious motivations
