Marketing Fundamentals

sustainable marketing

Marketers are reexamining their relationships with social values and responsibilities and with the very Earth that sustains us. As the worldwide consumerism and environmentalism movements mature, today's marketers are being called on to develop sustainable marketing practices.

product/market expansion grid

Marketing needs to identify, evaluate, and select market opportunities and establish strategies for capturing them. One useful device for identifying growth opportunities is the product/market expansion grid

marketing experiences:

More than just a sports bar, Buffalo Wild Wings mission is to provide a total eating and social environment that "fuels the sports fan experience" through in-store and online engagement. Smart marketers orchestrate several services and products, thereby creating brand experiences for consumers

proactive

Rather than assuming that strategic options are bounded by the current environment, these firms develop strategies to change the environment and overcome seemingly uncontrollable environmental events.

types of marketing intermediaries:

Resellers are distribution channel firms that help the company find customers or make sales to them. Large and growing reseller organizations, such as Walmart and Costco, frequently have enough power to dictate terms or even shut smaller manufacturers out of large markets. Physical distribution firms help the company stock and move goods from their points of origin to their destinations. Marketing services agencies are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its products to the right markets. Financial intermediaries include 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.

four relationship groups, according to their profitability and projected loyalty. Each group requires a different relationship management strategy.

Strangers show low potential profitability and little projected loyalty. Butterflies are potentially profitable but not loyal. True friends are both profitable and loyal. Barnacles are highly loyal but not very profitable.

How might the strategic plan of the college or university influence decisions in the school's programs and offerings? How might it influence decisions in food services, dormitories, executive education, and undergraduate versus graduate programs?

Strategic planning sets the stage for the rest of planning in the firm. Companies usually prepare annual plans, long-range plans, and strategic plans. The annual and long-range plans deal with the company's current businesses and how to keep them going. In contrast, the strategic plan involves adapting the firm to take advantage of opportunities in its constantly changing environment.

suppliers:

Suppliers can control the success of the business when they hold the power. The supplier holds the power when they are the only or the largest supplier of their goods; the buyer is not vital to the supplier's business; the supplier's product is a core part of the buyer's finished product and/or business.

social marketing:

The company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests. 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.

A firm might want to abandon products or markets for a number of reasons:

The firm may have grown too fast or entered areas where it lacks experience. The market environment might change, making some products or markets less profitable. Some products or business units simply age and die.

selling vs marketing concept:

The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company's existing products, and calls for heavy selling and promotion to obtain profitable sales. It focuses primarily on customer conquest—getting short-term sales with little concern about who buys or why. VS. The marketing concept starts with a well-defined market, focuses on customer needs, and integrates all the marketing activities that affect customers. In turn, it yields profits by creating relationships with the right customers based on customer value and satisfaction.

uncontrollable element:

They passively accept the marketing environment, analyze environmental forces and design strategies that will help the company avoid the threats and take advantage of the opportunities the environment provides.

the competition:

Those who sell same or similar products and services as your organisation are your market competition, and they way they sell needs to be taken into account. How does their price and product differentiation impact you? How can you leverage this to reap better results and get ahead of them?

the customers

Who the customers are (B2B or B2C, local or international, etc.) and their reasons for buying the product will play a large role in how you approach the marketing of your products and services to them.

the general public

Your organisation has a duty to satisfy the public. Any actions of your company must be considered from the angle of the general public and how they are affected. The public have the power to help you reach your goals; just as they can also prevent you from achieving them

integrated marketing program:

a comprehensive plan that communicates and delivers inteded value

Marketing:

a process by which companies create value for customersand build strong customer relationships in order to capture value from customers in return. is engaging customers and managing profitable customer relationships.

demands:

are human wants that are backed by buying power

cultural environment - secondary beliefs and values

are more open to change and include people's views of themselves, others, organizations, society, nature, and the universe.

cultural environment - core beliefs and values

are persistent and are passed on from parents to children and are reinforced by schools, churches, businesses, and government have a high degree of persistence. For example, most Americans believe in individual freedom, hard work, getting married, and achievement and success. These beliefs shape more specific attitudes and behaviors found in everyday life.

market offerings:

are some combination of products, services, information, or experiences offered to a market to satisfy a need or want. include other entities, such as persons, places, organizations, information, and ideas

needs:

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

wants:

are the form human needs take as they are shaped by culture and individual personality are the form human needs take as they are shaped by one's society and are described in terms of objects that will satisfy those needs. are display as objects and are shaped by everything that is surrounding us (society)

cultural environment

consists of institutions and other forces that affect a society's basic values, perceptions, and behaviors. strongly affect how people think and how they consume, so marketers are keenly interested in cultural forces.

microenvironment

consists of the actors close to the company that affect its ability to serve its customers—the company, suppliers, marketing intermediaries, customer markets, competitors, and publics

macroenvironment

consists of the larger societal forces that affect the microenvironment—demographic, economic, natural, technological, political, and cultural forces.

major forces in the comapny's macroenviroment:

demographic economic natural technological political cultural

the microenviroment: marketing intermediaries

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

customer engagament marketing

fosters direct and continuous customer involvement in shaping brand conversations, experiences, and community goes beyond just selling a brand to consumers. Its goal is to make the brand a meaningful part of consumers' conversations and lives. Today, companies are using online, mobile, and social media to refine their targeting and to engage customers more deeply and interactively. The new marketing is customer-engagement marketing.

marketing environment

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

natural environment - environmental sustainability

involves developing strategies and practices that create a world economy that the planet can support indefinitely. means meeting present needs without compromising the ability of future generations to meet their needs.

Market development

involves identifying and developing new markets for its current products. For instance, managers could review new demographic markets. Perhaps new groups—such as seniors—could be encouraged. Managers could consider new geographic markets in U.S. markets and in non-U.S. markets, especially Asia.

Market penetration

involves making more sales to current customers without changing its original product such as by adding new stores in current market areas to make it easier for customers to visit.

economic environment - changes in consumer spending: value marketing

involves offering financially cautious buyers greater value—the right combination of quality and service at a fair price.

Product development

involves offering modified or new products to current markets such as by moving into new product categories.

Diversification

involves starting up or buying businesses beyond its current products and markets. For example, the company could acquire a company that operates in different market segments with a different product mix.

digital and social media marketing:

involves using digital marketing tools such as web sites, social media, mobile ads and apps, online videos, e-mail, and blogs that engage consumers anywhere, at any time, via their digital devices.

partner relationship management

involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers: - All company departments should be costumer focus - Trade partners play a key role as they are in contact with final costumers

portfolio analysis

is a major activity in strategic planning whereby management evaluates the products and businesses that make up the company.

Value chain

is a series of departments that carry out value creating activities to design, produce, market, deliver, and support a firm's products.

market:

is a set of actual and potential buyers. These buyers share a particular need or want that can be satisfied through exchange relationships. Sellers must search for buyers, identify their needs, design good market offerings, set prices for them, promote them, and store and deliver them

marketing myopia:

is focusing only on existing wants and losing sight of underlying consumer needs. the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products

demographic environment - generational marketing

is important in segmenting people by lifestyle or life stage instead of age.

exchange:

is the act of obtaining a desired object from someone by offering something in return. Marketing actions try to create, maintain, and grow desirable exchange relationships.

marketing management:

is the art and science of choosing target markets and building profitable relationships with them. •What customers will we serve (target market)? •How can we best serve these customers (value proposition)?

mission statement

is the organization's purpose; what it wants to accomplish in the larger environment.

the natural enviroment

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

share of customer

is the portion of the customer's purchasing that a company gets in its product categories

customer equity

is the total combined customer lifetime values of all of the company's customers. 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. Whereas sales and market share reflect the past, customer equity suggests the future.

customer lifetime value

is the value of the entire stream of purchases that the customer would make over a lifetime of patronage.

Downsizing

is when a company must prune, harvest, or divest businesses that are unprofitable or that no longer fit the strategy.

Market offerings include

other entities, such as persons, places, organizations, information, and ideas.

actors in the microenvironment:

suppliers, marketing intermediaries, competitors, various publics, and customers

the business portfolio

the collection of businesses and products that makeup the company. The best business portfolio is the one that best fits the company's strengths and weaknesses to opportunities in the environment.

Many sellers suffer from marketing myopia:

the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products.

customer relationship management

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

strategic planning

the process of developing and maintaining a strategic fit between the organization's goals and capabilities, and its changing marketing opportunities.

five step marketing strategy:

the production, product, selling, marketing, and societal marketing concepts. Marketing management wants to design strategies that will build profitable relationships with target consumers.

Marketing Model

understand value, create value, delivery value, capture value

first three steps in the marketing process:

understanding the marketplace and customer needs, designing a customer value-driven marketing strategy, and constructing a marketing program—all lead up to the fourth and most important step: building and managing profitable customer relationships.

Sound marketing is critical to the success of every organization:

• large for-profit firms • not-for-profit organizations

demographic enviroment 2.0

•Baby Boomers - born 1946 to 1964 •Generation X - born between 1965 and 1976 •Millennials - born between 1977 and 2000 •Generation Z - born after 2000

business objectives

•Build profitable customer relationships •Invest in research •Improve profits

Strategic business units can be a

•Company division •Product line within a division •Single product or brand

demographic environment

•Demography is the study of human populations—size, density, location, age, gender, race, occupation, and other statistics. •Demographic environment involves people, and people make up markets (i.e. segmenting people by lifestyle or life stage instead of age.), income distribution, •Demographic trends include changing age and family structures, geographic population shifts, educational characteristics, and population diversity.

Problems with Matrix Approaches

•Difficulty in defining SBUs and measuring market share and growth •Time consuming •Expensive •Focus on current businesses, not future planning

demographic enviroment - geogrpahic shifts in population

•Growth in U.S. West and South and decline in Midwest and Northeast •Change in where people work § Telecommuting § Home office Such population shifts interest marketers because people in different regions buy differently. For example, people in the Midwest buy more winter clothing than people in the Southeast.

Analyzing The Current Business Portfolio

•Identify strategic business units (SBUs) •Assess the attractiveness of its various SBUs •Decide how much support each SBU deserves

marketing objectives

•Increase market share •Create local partnerships •Increase promotion

political and social environment 2.0

•Increased emphasis on ethics •Socially responsible behavior: . Enlightened companies encourage their managers to look beyond what the regulatory system allows and simply "do the right thing." •Cause-related marketing: To exercise their social responsibility and build more positive images, many companies are now linking themselves to worthwhile causes. It has become a primary form of corporate giving which lets companies "do well by doing good" by linking purchases of the company's products or services with benefiting worthwhile causes or charitable organizations.

demographic enviroment - markets are becoming more diverse

•International •National •Ethnicity •Gay and lesbian •Disabled

technological environment:

•Most dramatic force in changing the marketplace •New products, opportunities •Concern for the safety of new products

the microenviroment: suppliers

•Provide the resources to produce goods and services •Treat as partners to provide customer value

Boston Consulting Group (BCG) Approach

•Stars are high-growth, high-share businesses or products requiring heavy investment to finance rapid growth. They will eventually turn into cash cows. •Cash cows are low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share. •Question marks are low-share business units in high-growth markets requiring a lot of cash to hold their share. •Dogs are low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash.

customer perceived value

•The difference between total customer perceived benefits and customer cost the customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers.

customer satisfaction

•The extent to which perceived performance matches a buyer's expectations depends on the product's perceived performance relative to a buyer's expectations. If the product's performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted. higher levels of customer satisfaction lead to greater customer loyalty

Forging a sound mission begins with the following questions:

•What is our business? •Who is the customer? •What do consumers value? •What should our business be? These simple-sounding questions are among the most difficult the company will ever have to answer. Successful companies continuously raise these questions and answer them carefully and completely.

The twofold goal of marketing is to:

•attract new customers by promising superior value grow current customers by delivering satisfaction

Consumers market when they:

•search for products •interact with companies to obtain information make purchases

PESTLE Analysis:

- political legal dimension - economic dimension -demographic dimension - socio cultural dimension - technological dimension - economical dimension

responding to the marketing environment - views on responding

1. uncontrollable: react and adapt to forces in the environment 2. proactive: take aggrressive actions to affect forces in the environment 3. reactive: watch and react to forces in the environment

A mission statement should:

1.Not be myopic in product terms 2.Be meaningful and specific 3.Be motivating 4.Emphasize the company's strengths 5.Contain specific workable guidelines 6.Not be stated as making sales or profits

marketing mix:

4 Ps •product •price •promotion •place The company's marketing strategy outlines which customers it will serve and how it will create value for these customers. Next, the marketer develops an integrated marketing program that will actually deliver the intended value to target customers. The marketing program builds customer relationships by transforming the marketing strategy into action. It consists of the firm's marketing mix, the set of marketing tools the firm uses to implement its marketing strategy. The major marketing mix tools are classified into four broad groups called the four Ps of marketing: product, price, place, and promotion. To deliver on its value proposition, the firm must first create a need-satisfying market offering (product). It must then decide how much it will charge for the offering (price) and how it will make the offering available to target consumers (place). Finally, it must engage target consumers, communicate about the offering, and persuade consumers of the offer's merits (promotion).

value proposition:

A brand's value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs. examples: •BMW promises "the ultimate driving machine" •Facebook helps you "connect and share with the people in your life" •YouTube "provides a place for people to connect, inform, and inspire others across the globe." Value propositions differentiate one brand from another. They answer the customer's question, "Why should I buy your brand rather than a competitor's?" Companies must design strong value propositions that give them the greatest advantage in their target markets.

the microenviroment: publics

Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives: •Financial publics. This group influences the company's ability to obtain funds. •Media publics. This group carries news, features, and editorial opinion. •Government publics. Management must take government developments into account. •Citizen-action publics. A company's marketing decisions may be questioned by consumer organizations, environmental groups, minority groups, and others. •Local publics. This group includes neighborhood residents and community organizations. •General public. A company needs to be concerned about the general public's attitude toward its products and activities. •Internal publics. This group includes workers, managers, volunteers, and the board of directors.

customer generated marketing

Brand exchanges created by consumers themselves. Consumers are playing an increasing role in shaping brand experiences. happen through uninvited consumer-to-consumer exchanges in blogs, video-sharing sites, social media, and other digital forums. But increasingly, companies themselves are inviting consumers to play a more active role in shaping products and brand content. Some companies ask consumers for new product and service ideas.

demographic enviroment - changing american family

Changes in the American family have included: •More couples and Divorcing or separating •More people choosing not to marry or marrying later •More people marrying without intending to have children •Increasing number of working women •Increasing number of stay-at-home dads Changes in the workforce have included: •More educated workers •More white collar workers

5 C's marketing strategy:

Company: This includes analysis of factors that need to be improved in a product line and market image. Such analysis is often done on a regular basis to remain hands on with changing market dynamic and customer's response towards the product. Collaborators: This analysis deals with understanding the shared interests that helps is company's growth. It involves spotting of collaborators such as distributors, suppliers, and alliances to tap un-reaped opportunities. Customers: Under the first 'C', a company analyses a range of factors such as market size, its growth trend, customers changing tastes and preference, seasonal demand of products, their frequency of purchase, reason for customer's choice of a particular brand, benefit vs. cost analysis, tapping of specific market segment. These help to determine needs of customers and assessing capacity of its own to fulfill the same. Competitors: It helps to analyze present and the future of a certain business. This analysis focuses on 3 major aspects namely that include mapping out the competitors, products sold by them, chalking out potential opportunity along with understanding threat that competitors might impose in the near future. It also includes ratio of market share as compared to competitors and identifying focus areato enjoy largest market share. Climate or Context: This component of analysis focuses on discovering right context or climate also known as PEST analysis (Political, Economic, Social and Technological).

the microenviroment: customers

Consumer markets consist of individuals. Business markets buy goods and services for further processing or use in their production processes. Reseller markets buy goods and services to resell at a profit. Government markets consist of government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them. International markets consist of various buyers in other countries, including consumers, producers, resellers, and governments.

product concept:

Consumers favor products that offer the most quality, performance, and features. The focus is on continuous product improvements However, focusing only on the company's products can also lead to marketing myopia. For example, some manufacturers believe that if they can "build a better mousetrap, the world will beat a path to their doors."The better solution might be a chemical spray, an exterminating service, a house cat, or something else that suits their needs even better than a mousetrap

production concept:

Consumers will favor products that are available and highly affordable the production concept can lead to marketing myopia and losing sight of the real objective—satisfying customer needs and building customer relationships.

selling concept:

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—those 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. Such aggressive selling, however, carries high risks. It focuses on creating sales transactions rather than on building long-term, profitable customer relationships.

main elements in a marketing system

Each party in the system adds value for the next level and is affected by major environmental forces (demographic, economic, natural, technological, political, and social/cultural). Marketing means managing markets to bring about profitable customer relationships. Activities such as consumer research, product development, communication, distribution, pricing, and service are core marketing activities. Buyers also carry out marketing, thus, in addition to customer relationship management, today's marketers must also deal effectively with customer-managed relationships. Marketers are no longer asking only "How can we influence our customers?" but also "How can our customers influence us?" and even "How can our customers influence each other?"

the microenviroment: competitors

Firms must gain strategic advantage by positioning their offerings strongly against competitors' offerings in the minds of consumers. a company must provide greater customer value and satisfaction than its competitors do. Marketers must gain strategic advantage by positioning their offerings strongly against competitors' offerings in the minds of consumers.

Business portfolio planning involves two steps.

First, the company must analyze its current business portfolio and determine which businesses should receive more, less, or no investment. Second, it must shape the future portfolio by developing strategies for growth and downsizing.

the natural environment: trends

First, there are growing shortages of raw materials. Air and water may seem to be infinite resources, but some groups see long-run dangers. Renewable resources, such as forests and food, also have to be used wisely. Nonrenewable resources, such as oil, coal, and various minerals, pose a serious problem. Firms making products that require these scarce resources face large cost increases, even if the materials remain available. A second environmental trend is increased pollution. Industry will almost always damage the quality of the natural environment. Consider the disposal of chemical and nuclear wastes; chemical pollutants in the soil and food supply; and the littering of the environment with non-biodegradable packaging materials. A third trend is increased government intervention in natural resource management. The governments of different countries vary in their concern and efforts to promote a clean environment. The Environmental Protection Agency (EPA) was created in 1970 to create and enforce pollution standards and conduct pollution research. Many companies are developing strategies that support environmental sustainability.

the resellersor marketing intermediaries

If the product the organisation produces is taken to market by 3rd party resellers or market intermediaries such as retailers, wholesalers, etc. then the marketing success is impacted by those 3rd party resellers. For example, if a retail seller is a reputable name then this reputation can be leveraged in the marketing of the product.

the microenviroment: the company

In designing marketing plans, marketing management takes other company groups into account. •Top management •Finance •R&D •Purchasing •Operations •Accounting All of these interrelated company groups form the internal environment, the microenvironment. With marketing taking the lead, all departments—from manufacturing and finance to legal and human resources—share the responsibility for understanding customer needs and creating customer value.

marketing concept:

Know the needs and wants of the target markets and deliver the desired satisfactions better than competitors. 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. The job is not to find the right customers for your product but to find the right products for your customers.

political and social environment

Legislation regulating business is intended to protect •companies from each other •consumers from unfair business practices •the interests of society against unrestrained business behavior includes laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.