Marketing

Customer Excellence

- Achieved when a firm develops value-based strategies for retaining loyal customers and provides outstanding customer service. - Having a strong brand, unique merchandise, loyalty programs (part of overall CRM), and superior customer service all help solidify a loyal customer base. - Loyalty is more than simply preferring to purchase from one firm instead of another. It means that customers are reluctant to patronize competitive firms. - Viewing customers with a lifetime value perspective, rather than on a transaction by transaction basis, is key to modern customer retention programs - Developing a reputation for strong customer service provides a long term sustainable advantage because competitors are hard pressed to develop a comparable reputation

App Pricing Models

- Ad-supported apps are free to download, but place ads on screen when using program to generate revenue - Freemium apps are free, but include in-app purchases that enhance the app. Majority of app store revenue comes from Freemium model - Paid apps charge upfront price for full functionality - Paid apps with in-app purchases

Sustainable Competitive Advantage

- An advantage over the competition that is not easily copied and can be maintained over a long period of time. - A competitive advantage acts like a wall that the firm has built around its position in a market. This wall makes it hard for outside competitors to contact customers inside (the target market) - This advantage minimizes competitive pressure and boosts profits for a longer time

What makes a brand?

- Brand name, URLs, Logos and Symbols, Characters, Slogans, Jingles/Sounds

Value of Branding for the Customer

- Brands facilitate purchases because they signify a certain quality level & contain familiar attributes which helps consumers make quick decisions - Brands establish loyalty b/c over time & with continued use consumers learn to trust certain brands - Brands protect from competition because they have a loyal customer base and are more established in the market

Secondary Research - Advantages & Disadvantages

- Census data, sales invoices, internet info, syndicated data - Advantages: saves time in collecting data b/c they're readily available, free or inexpensive (except for syndicated data) - Disadvantages: may not be precisely relevant to information needs, info may not be timely, sources may not be original and therefore usefulness is an issue, methodologies for collecting data may not be appropriate, data sources may be biased

The Immediate Environment

- Company Capabilities: successful firms focus on satisfying customer needs that match their core competencies - Competitors: critical that marketers understand their firm's competitors, including their strengths, weaknesses, & likely reactions to the marketing activities that their own firm undertakes. We have to concern ourselves with competition b/c competitors take our customers - Corporate Partners (i.e suppliers)

Compensatory vs. Non Compensatory Decisions

- Compensatory decision assumes that the consumer, when evaluating alternatives, trades off one characteristic against another - Non compensatory is when consumer chooses a product on the basis of one characteristic, regardless of the value of the products other attributes

Four P's

- Comprise the controllable set of decisions or activities that a firm uses to respond to the wants of its target markets - Product (creating value) - Price (capturing value): everything the buyer gives up -- money, time, or energy -- in exchange for the product - Place (delivering value): using supply chain management to ensure the merchandise is produced and distributed in the right quantities, to the right locations, and at the right time - Promotion (communicating value)

Complexity of Products

- Core Customer Value: defines the basic problem solving benefits that consumers are seeking - Actual Product: brand name, quality level, packaging, features/design - Associated Services/Augmented Product: includes non physcial aspects of the product, such as product warranties, financing options, product support, & after-sale service

Macroenvironmental Factors

- Culture, demographics, social trends, technological advances, economic situation, and political/regulatory environment

What are the four strategies that focus on aspects of the marketing mix to create and deliver value and to develop sustainable competitive advantages?

- Customer excellence, Operational Excellence, Product Excellence, and Locational Excellence

4E's - Educate

- Education is about reminding people about what they already know. By engaging in appropriate education, marketers are expanding the overlap of the benefits that they provide with the benefits that customers require. - Education constitutes a method to develop a sustainable competitive advantage

Operational Excellence

- Efficient operations enable firms either to provide their consumers with lower-priced merchandise or, even if their prices aren't lower than the competition, to use the additional margin they earn to attract customers away from competitors by offering even better service, merchandise assortment, or visual presentations - Firms become operationally excellent by developing sophisticated distribution and information systems as well as strong relationships with vendors. Vendor relations must be developed over the long term and generally cannot be easily offset by a competitor

Consumer Buying Decisions

- Extended Problem Solving: common when customer perceives that the purchase decision entails a lot of risk - Limited Problem Solving: occurs during a purchase decision that calls for, at most, a moderate amount of time & effort. Consumers use this when they've had some previous experience w/the product & the perceived risk is moderate. Relies on past experience more than external info - Impulse Buying: A type of limited problem solving. A buying decision made on the spot when the merchandise is seen - Habitual Decision Making: decision process in which consumers engage in little conscious effort (i.e seeing drive through and automatically getting it). Strong brands & brand loyalty lead to habitual purchasing

SWOT Analysis

- Firm assesses both internal environment with regard to its Strengths and Weaknesses and external environment in terms of Opportunities and Threats

Functional needs vs. Psychological needs

- Functional needs pertain to the performance of a product or service - Psychological needs pertain to the personal gratification consumers associate with a product/service - It is a spectrum: most goods & services seeks to satisfy both functional & psychological needs to varying degrees

Growth Strategies

- Market penetration strategy employs the existing marketing mix and focuses the firm's efforts on existing customers. Such a growth strategy might be achieved by attracting new consumers to the firm's target market or encouraging current customers to patronize the firm more often. A market penetration strategy generally requires greater marketing efforts, such as increased advertising and additional sales/promotions - Market development strategy employs the existing marketing offering to reach new market segments, whether domestic or international. - Product development strategy offers a new product or service to a firm's current target market - Diversification strategy introduces a new product or service to a market segment that is not served. Diversification strategies may related or unrelated. In a related diversification opportunity, the current target market and/or marketing mix shares something in common with the new opportunity (i.e women's clothing manufacturer starts making mens clothes). In an unrelated diversification, the new business lacks any common elements with the present business (i.e if Nike ventured in day care industry). Unrelated diversifications are viewed as very risky

Factors Affecting the Consumer Decision Process

- Marketing Mix: product, price, place, promotion - Psychological Factors: motives, attitudes, perceptions, learning, lifestyle - Situational Factors: purchase situation, shopping situation, temporal state - Social Factors: family, reference groups, culture

Primary Research - Advantages & Disadvantages

- Observed consumer behavior, focus groups, surveys, experiments - Advantages: specific to immediate data needs and topic at hand, offers behavioral insights generally not available from secondary research - Disadvantages: costly, time consuming, requires more sophisticated training & experience to design study and collect data

Product Excellence

- Occurs by providing products with high perceived value and effective branding and positioning - Can maintain advantage by investing in their brand itself and positioning their product or service using a clear, distinctive brand image

Locational Excellence

- Particularly important for retailers and service providers - "Three most important things in retailing are location, location, location"

Phycographic vs. Behavioral vs. Benefits

- Phycographic delves into how consumers actually describe themselves- "I never eat meat b/c my religion tells me not to" <- why I do what I do - Behavioral divides customers on the basis of how they use the product or service - " I never eat meat" <- what I do - Benefits segments consumers on the basis of the benefits they derive from a product - "I never eat meat b/c I want to lose weight <- losing weight is the benefit sought from not eating meat

Maslow's Hierarchy of Needs

- Physiological needs: basic biological necessities of life -- food, needs, rest, and shelter - Safety needs: products pertaining to protection & physical well-being - Love needs: relate to our interactions with others - Esteem needs: allow people to satisfy their inner desires - Self-actualization: occurs when you feel completely satisfied with your life, how you live, and you don't care what others think

Breadth vs. Depth

- Product Mix Breadth represents a count of the # of product lines offered by a firm - Product Line Depth equals the # of products within a product line

Product Mix & Product Lines

- Product Mix: a complete set of all products & services offered by a firm - Product Lines: groups of associated items that consumers tend to use together or think of as part of a group

Evaluation of Segment Attractiveness

- Segment must be identifiable, substantial, reachable, responsive, and profitable - Reachable: consumer must know the product exists, understand what it can do for him, & recognize how to buy it - Identifiable: first you have to make sure that your target market actually exists

Types of Social Media

- Social Network Sites: excellent way for marketers to create excitement (Facebook) - Media Sharing Sites: can highlight how consumers can experience their goods or services, as well as encourage customers to engage with the firm (Youtube, Instagram) - Thought-Sharing Sites: effective at educating & engaging users, & in many cases enhance their experience with the products being discussed (blogs, Twitter)

4E's - Experience

- Social media offers experience-based info that was not previously available unless consumers bought and tried the product - Examples include samples of songs/e-books on iTunes and explanatory Youtube videos

Types of Products

- Specialty Products/Services: those which customers express such a strong preference for that they will extend considerable effort to search for the best suppliers (i.e wedding gowns) - Shopping Products: products which consumers will spend a fair amount of time comparing alternatives (i.e sneakers) - Convenience Products: products for which the consumer isn't willing to expend any effort to evaluate prior to purchase. They're frequently purchased commodity items, usually bought with very little thought (i.e shampoo) - Unsought Products: products that consumers either don't normally think of buying or don't know about (i.e a fire extinguisher). Also, when new-to-the-world products are 1st introduced, they're unsought products

Boston Consulting Group Matrix

- Stars occur in high-growth markets and are high market share products. Stars often require a heavy resource investment in such things as promotions and new production facilities to fuel their rapid growth. - Cash Cows are in low-growth markets but are high market share products. Because these products have already received heavy investments to develop their high market share, they have excess resources that can be spun off to those products that need it. - Question Marks appear in high-growth markets but have relatively low market shares; thus, they are often the most managerialy intensive products in that they require significant resources to maintain and potentially increase their market share. Managers must decide whether to infuse Question Marks with resources generated by Cash Cows, so that they can become Stars, or withdraw resources and eventually phase out the product - Dogs are in low-growth markets and have relatively low market shares

4E's - Engage

- The first three E's set the stage of the last one: engaging the customer. With engagement comes action, the potential for a relationship, and possibly even loyalty & commitment. - Engagement can backfire though -- challenge then is to know my customers love me enough to engage with me in a positive way

Types of Risk

- The higher the risk, the more likely the consumer is to engage in an extended search - Performance risk (risk of product performing poorly) - Financial Risk - Social risk (fear that others won't view their purchase positively) - Physiological/safety risk (risk involves what happens if product doesn't perform as expected - Psychological risk (risk that people feel product doesn't convey the right image)

4E's - Excite

- To excite customers, an offer must be relevant to its targeted customer. Relevancy can be achieved by providing personalized offer

Targeting Strategies

- Undifferentiated/Mass Marketing: Use this when everyone might be considered a potential user of the product. Used for many basic commodities - Differentiated Targeting Strategy: target several market segments with a different offering for each. Helps firms obtain a bigger share of the market and increase the market for their products overall - Concentrated Targeting Strategy: when an organization selects a single, primary target market & focuses all its energies on providing a product to fit that market's needs. Start-ups often use a concentrated strategy b/c it allows them to employ their limited resources more efficiently - Micromarketing/One-to-One Marketing: when a firm tailors a product/service to suit an individual customer's wants or needs.

Attribute Sets

- Universal sets: include all possible choices for a product category - Retrieval sets: brands that can be readily brought forth from memory - Evoked set: the alternative brands that consumer would consider when making a purchase decision

How do marketing firms become more value driven?

1. Share information about customers and competitors and integrate it across the firm's various departments (i.e advertising department works with purchasing department when planning promotion) 2. Constantly measure the benefits that customers perceive against the cost of their offering by using available customer data to find opportunities to satisfy their customers needs better, keep down costs, and develop long term loyalties. 3. Building relationships with customers by thinking about their customers in terms of relationships rather than transactions -- focusing on lifetime profitability of relationship, not how much money is made during each transaction. 4. Connecting with customers using social and mobile media

Mission Statement

Attempts to answer two main questions: 1. What type of business are we? 2. What do we need to do to accomplish our goals and objectives?

The centerpiece of the marketing environment is always ____________

Consumers

Marketing is about satisfying ___________

Customer needs and wants

Customer Relationship Management (CRM)

Firms systematically collect information about their customers needs and then use that information to target their best customers with the products, services, and special promotions that appear most important to them

Marketing Strategy

Identifies: 1. A firm's target market 2. A related marketing mix (its four Ps) 3. The bases on which the firm plans to build a sustainable competitive advantage

3 Component's of a Social Media Strategy

Listen -> Analyze -> Do Listen: Can use sentiment analysis to get new insights into what customers really think Analyze: Use metrics such as bounce rate (% of visitors leaving site almost immediately), click paths (shows how users proceed through information), conversion rates (% of customers that buy), keyword analysis (determine what keywords people use to search on Internet for their products & services) Do: Implement what you learn and engage your customers

Consumer Decision Process

Need recognition -> information search (internal vs. external search) -> alternative evaluation -> purchase -> post purchase

STP Process

Step 1. Establish Strategy or Objectives (Segmentation) Step 2. Use segmentation methods Step 3. Evaluate segment attractiveness (targeting) Step 4. Select target market Step 5. Identify & develop positioning strategy

The Marketing Research Process

Step 1: Define objectives & research needs Step 2: Design the research Step 3: Collecting the data Step 4: Analyzing the data & developing insights Step 5: Developing & implementing an action plan

How do marketers create value for a product or service?

Value represents the relationship of benefits to costs. Firms can improve their value by increasing benefits, reducing costs, or both. If an activity doesn't increase benefits or reduce costs, it probably shouldn't occur.

Value Cocreation

When customers act as collaborators to create the product or service (i.e when Nike allows customers to custom design, they're cocreating)