Marketing Exam 1

Marketing

"The set of strategies and activities by which companies acquire and engage customers, build strong customer relationships, and create superior customer value in order to capture value from customers in return."

In what way can having competitors to be helpful to a business?

- Share the cost of market and product development - Help legitimize new technologies - Increase total demand - Serve less-attractive segments and lead to more product differentiation

Baby Boomers

- born 1946 to 1964 (71 m) - wealthiest (21% of the population, but >50% of U.S. household wealth) - use their phones about the same amount of time as millennials - fast-growing online shopper demographic

Generation Alpha

- born after 2012 - by 2025 this group will grow larger even than the millennials - 65% of gen. Alpha parents' tech purchases were influenced by their children. - will be the most formally educated, tech-supplied, and globally wealthiest generation

Gen X

- born between 1965 and 1980 (65 m) - considerably smaller segment - less materialistic than the other groups, value experience, not acquisition

Millennials

- born between 1981 and 1996 (73 m) - the first generation to grow up in a world filled with computers, mobile phones, satellite TV, iPods and iPads, and online social media - 85 percent shop online, and 92 percent prefer to do their banking on web or mobile devices -tend to be frugal, practical, connected, mobile, and impatient

Generation Z

- born between 1997 and 2012 (80 m) - the largest generation alive in the United States, the most ethnically and culturally diverse generation -spending an estimated $140 billion annually of their own money and influence a total of almost $333 billion of family spending

Selecting competitors to attack and avoid

- strong or weak competitors - good or bad competitors

Industry

A group of companies that are related based on their main business activities

Services

Activities or benefits offered for sale that are essentially intangible.

Customer Value analysis

An analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitors' offers

Competitor analysis step 2

Assess competitors' objectives, strategies, strengths and weaknesses, and reaction patterns

Marketing Process Step 5

Capture value from customers to create profits and customer equity

Marketing Process Step 3

Construct an integrated marketing program that delivers superior value

Purpose of Marketing Process

Create value for customers and build customer relationships, and capture value from customers in return

5 C's of Step 1 Marketing Process

Customer, Company, Competitors, Collaborators, Context/Climate

What are the six factors that make-up context/ climate

Demographic, Economical, Natural, Technological, Political, Cultural

Marketing Process Step 2

Design a customer value-driven marketing strategy

Assessing Competitors

Determine competitor's objectives, Identify competitors' strategies, Assess strengths and weaknesses, Estimate competitors' reactions

how can we serve these customers best(what's our value proposition)?

Differentiation + Positioning

Marketing Process Step 4

Engage customers, build profitable relationships and create customer delight

Stimuli

Enter the consumer's decision processing and produce certain buyer's response

Stars

High market growth, high market share

Question Marks

High market growth, low market share

SWOT analysis

Holistic view of a company within the broader environment

Demand

Human wants/needs that are backed by buying power

Competitor analysis step 1

Identify the company's competitors

Cash Cows

Low market growth, high market share

Dogs

Low market growth, low market share

market penetration

Making more sales to current customers without changing a firm's products

W-O strategies

Minimize weaknesses using the identified opportunities

W-T strategies

Minimize weaknesses using the identified threats

4 P's of the Third step of the Marketing Process

Product, Pricing, Place, Promotion

What components of Marketing Orientations can lead to Market Myopia?

Production concept, Product concept, Selling concept

what customers will we serve(what's our target market)?

Segmentation + Targeting

Components of the second step of marketing process (STP)

Segmentation, Targeting, Differentiation, Positioning

Competitor analysis step 3

Select which competitors to attack or avoid

Market Offerings

Some combination of products, services, solutions, and experiences offered to a market to satisfy a need or want.

Needs

States of felt deprivation

BCG (growth-share) matrix

The Boston Consulting Group planning tool evaluates business units in terms of their growth potential and market share.

Experience (learning) curve

The drop in the average per-unit production cost that comes with accumulated production experience

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.

Culture

The set of basic values, perceptions, wants, and behaviors learned by members of society

S-O strategies

To use strengths to maximize identified opportunities

Marketing Process Step 1

Understand the marketplace and customer needs and wants

S-T strategies

Use strengths to minimize identified threats

Strategic group

a group of firms in an industry following the same or similar strategy (Ex: BMW, Audi, Mercedes)

market development

a strategic step taken by a company to develop the existing market rather than looking for a new market

Diversification

a strategy in which a company seeks growth by adding products and markets of a kind unrelated to its existing products and markets

Marketing Concept

achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.

differentiation

actually differentiating the market offering to create superior customer value.

Competitive advantage

an advantage over competitors gained by offering consumers greater value

Positioning

arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Strategic Business Unit(SBU)

company division, product line within a division, single product or brand, etc.

(market) segmentation

dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes (geographic, demographic, behavioral).

New sense of marketing

engaging customers, satisfying their needs, and building customer relationship.

Targeting

evaluating each market segment's attractiveness &selecting one or more segments to serve

Reference groups

groups that serve as a point of reference

Product Concept

if we keep improving it, customers will keep buying it. We should devote our energy to making continuous product improvements.

Production Concept

if we make it cheap and widely available, customers will buy it. We should focus on improving production and distribution efficiency.

annual interest rate (i)

interest rate to discount future revenues to their present value

Macro Environment

large societal forces that affect the microenvironment

annual retention rate (r)

likelihood that a customer this year will still be a customer next year

Societal Marketing concept

make good marketing decisions by considering consumers and society's long-term interests.

Social groups

reference groups, family

Competitor Myopia

setting the boundary of their competition set too narrow

Microenvironment

the actors close to the company that affect its ability to serve its customers

Business Portfolio

the collection of businesses and products that make up the company

Wants

the form of needs take as they are shaped by culture and individual personality

Market

the group of consumers or organizations that is interested in the product, has the resources to purchase the product and is permitted by law and other regulations to acquire the product.

Market sector

the market sector refers to a segment of the economy. It is generally a larger phrase than the industry.

Selling Concept

the only way customers will buy it is if we push it on the consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort.

Customer Relationship Management (CRM)

the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction

product development

the process of strategizing, brainstorming, planning, building, and releasing a product to market and then measuring its success

Demographic

the statistical characteristics of the human population

Customer Lifetime Value

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

annual margin (M)

total profit earned per customer in one year