Marketing - Test I - chapter 1, 3, 4, 5, 6

Modified Rebuy

___________ the buyer wants to modify product specifications, prices, terms, or suppliers. An automobile company may prefer to use an updated version of bearings. For this it will see different suppliers and thus will get many options to choose from and select the best bid.

Buyer Decision Process

1. Need Recognition: driven by internal or external stimuli 2. Information search: Consumers can obtain information from several sources like personal, commercial, public, and experiential sources. 3. Evaluation of alternatives: that is, how consumers process information to choose among alternative brands. 4.Purchase decision: Two factors can come between the purchase intention and the purchase decision: the attitudes of others and unexpected situational factors. 5. post-purchase behavior: relationship between purchasers expectation of purchase and actual quality - how satisfied or dissatisfied individual is.

Differential Advantage

A company's differential advantage is a culmination of the unique benefits or characteristics of the company or product that set it apart from the competition in the customer's viewpoint. In fact, differential advantages allow companies to charge a premium for products or services when customers not only recognize the advantage but deem it valuable enough to pay higher prices. eg. Faster and/or more thorough customer service More accessible products or services More expertise Nicer facility Friendlier staff More pleasant purchase experience

Mass Marketing

An attempt to appeal to an entire market with one basic marketing strategy utilizing mass distribution and mass media. Also called undifferentiated marketing.

Market Segment - part of target market

An identifiable group of individuals, families, businesses, or organizations, sharing one or more characteristics or needs in an otherwise homogeneous market. Market segments generally respond in a predictable manner to a marketing or promotion offer.

Opinion Leader

a person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others. Opinion leaders are also referred to as influentials or leading adopters. Buzz marketing involves enlisting or even creating opinion leaders to serve as brand ambassadors who spread the word about a company's products

Demographic segmentation

Dividing a market into segments based on variables Such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation Age and life cycle seg: Dividing a market into different age and life-cycle groups Gender segmentation Dividing a market into different segments based on gender Income segmentation Dividing a market into different income segments

Age and life cycle segmentation

Dividing market into different age and life cycle groups.

Income Segmentation

Dividing markets into different income groups.

Chapter 5 - Beginning - Major factors influencing consumer behavior:

Mix up of internal + external influence. external: culture, subculture and social. cultural: Culture, subculture, social class social: Groups and social networks, family, roes and status, Self image Personal: Age and lifecycle stage, occupation, economic situation, personality and self concept. Psychological: Motivation, perception, learning, beliefs and attitudes.

Maslow's Hierarchy of Needs

Most important --> least important in buying process 1. psychological - hunger thirst 2. safety needs: security protection 3. Sense of belonging, love 4. Esteem needs: self esteem, recognition,status 5. Self actualization needs: Self development and realization

primary research

Observation, survey, experiment - collecting info that has not yet been collected Probability samples: Simple random sample Stratified random sample Cluster (area) sample Nonprobability samples: Convenience sample Judgment sample Quota sample Supermarket "smart shelves" track shopper demographics and purchases. Landor researchers visit families, peeking into their refrigerators and diving deeply into their food shopping behaviors and opinions. Or, use loyalty programs to collect data via POS systems or new mobile shopping apps.

Importance of Marketing

fuels both external and internal practices of businesses. E.g. reaching, educating, informing customers, developing the brand, communicating value and differential advantage. consumer trust, more sales, increased awareness, build a social asset, you will learn your target market (marketplace), develop ideal customer, build a powerful brand.

Government Markets

government agencies that buy goods and services for public policy stuff and military

core beliefs

have a high degree of persistence.

Target Market

involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments consisting of the customers whose needs and desires most closely match your product or service offerings.

Marketing Mix and 4 P's

"Marketing mix" is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The 4Ps is one way - probably the best-known way - of defining the marketing mix, and was first expressed in 1960 by E. J. McCarthy. PRODUCT/SERVICE - What does the customer want from the product /service? What needs does it satisfy? What features does it have to meet these needs? Are there any features you've missed out? Are you including costly features that the customer won't actually use? How and where will the customer use it? What does it look like? How will customers experience it? What size(s), color(s), and so on, should it be? What is it to be called? How is it branded? How is it differentiated versus your competitors? What is the most it can cost to provide and still be sold sufficiently profitably? (See also Price, below.) PLACE - right distribution channels, where do your buyers look for product or service, do you need a sales force? PRICE - value of product to consumers, are there estblished price points in this area already, discounts etc. PROMOTION - how do competitors promote, where and when can you get your messages out to your target market, when is the best time to promote etc.

Derived Demand

Business demand that comes from the demand for consumer goods. Example: MRI machines in hospitals: Inelastic and fluctuating demand

Niche Marketing

Concentrating all marketing efforts on a small but specific and well defined segment of the population. Niches do not 'exist' but are 'created' by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a big pond. Also called micromarketing.

Macro-environment uncontrollable factors

Demographic, Economic, natural, technological, political and cultural (secondary - open to change, Core - high persistence)

Uncontrollable Environment

Demographic, economic, political, cultural, natural, technological.

Value Marketing

Customer perceived value, difference between a prospective customers evaluation of the benefits and costs of one product versus other products.

Adoption Process

FIVE STAGES is the mental process through which an individual passes from first learning about an innovation to final adoption. The first stage is awareness. becomes aware of the new product but lacks information about it. The second stage is interest, which involves the consumer seeking information about the new product. The third stage is evaluation, where the consumer considers whether trying the new product makes sense. The fourth stage is trial. In this stage, the consumer tries the new product on a small scale to improve his or her estimate of its value. The final stage is adoption where the consumer decides to make full and regular use of the new product.

Major variables in market segmentation

Geographic segmentation: Geographic segmentation: Dividing a market into different geographical units Such as nations, states, regions, counties, cities, or neighborhoods Demographic seg: Dividing a market into segments based on variables Such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation

Reference Groups

Groups that have a direct influence and to which a person belongs are called membership groups. Reference groups serve as direct or indirect points of comparison or reference in forming a person's attitudes or behavior. An aspirational group is one to which the individual wishes to belong. E.g. business students vs other students Word-of-mouth influence: A significant sub sector of a reference group that refers to the impact of the personal words and recommendations of trusted friends, associates, and other consumers on buying behavior. Rather than leaving it to chance, marketers can help to create positive conversations about their brands

Management - basic works of a company.

In designing marketing plans, marketing management takes other company groups into account—groups such as top management, finance, research and development (R&D), purchasing, operations, human resources, and accounting. All of these interrelated groups form the internal environment. 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.

consumer markets

Individuals and households that buy goods and services for personal consumption.

Reseller markets

Individuals that buy goods to resell for profit.

Secondary research

Information that already exists Collected for another purpose Sources: Company's internal database Purchased from outside suppliers Commercial online databases Internet search engines Advantages Low cost Obtained quickly Cannot collect otherwise Disadvantages Potentially Irrelevant Inaccurate Dated Biased

Cultural Environment

Institutions and other forces that affect a society's basic values, perceptions, and behaviors Persistence of cultural values.

Marketing Concept

Management philosophy according to which a firm's goals can be best achieved through identification and satisfaction of the customers' stated and unstated needs and wants.

psychographic segmentation

Marketers segment their markets using variables such as Social class Lifestyle Personality characteristics The products people buy reflect their lifestyles.

Behavioral Segmentation

Occasion segmentation divides the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item. This segmentation can help firms build up product usage. Companies try to boost consumption by promoting usage during nontraditional occasions. For example, most consumers drink orange juice in the morning, but orange growers have promoted drinking orange juice as a cool, healthful refresher at other times of the day. User status: Markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users. Usage rate: Markets can be segmented into light, medium, and heavy product users. Loyalty status: Consumers can be loyal to brands, stores, and companies.

Product positioning

Positioning, which is the process of arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target customers, depends on the differentiation. Because through the differentiation, which is the process of actually differentiating the product to create superior customer value, we can achieve the desired position in customers' minds. Positioning Map: Perceptual mapping is a diagrammatic technique used by asset marketers that attempts to visually display the perceptions of customers or potential customers. Typically the position of a company's product, product line, or brand is displayed relative to their competition.

Diffusion Process

Relative Advantage - The degree to which the innovation appear superior to other existing products. compatibility - finds value in potential new customers complexity - innovation is difficult or hard to understand to use Divisibility - Degree to which innovation may be tried on a limited basis Communicability - results of using innovation can be observed or described to others

Descriptive research

Used to better describe the market potential for a product or the demographics and attitudes of consumers

exploratory marketing research:

Used to gather preliminary information Helps to define problems and suggest hypotheses

Chapter 6 - Beginning - Market Segmentation

STP - segmentation, targeting, positioning Market segmentation is a marketing term referring to the aggregating of prospective buyers into groups, or segments, that have common needs and respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another.

Secondary cultural beliefs

Secondary beliefs and values are more open to change. Shifts in secondary cultural values of people's views about Themselves Others Organizations Society Nature Universe

Casual Research

Used to test hypotheses about cause-and-effect relationships

Sustainable Marketing

Sustainable marketing is the adoption of sustainable business practices that create better businesses, better relationships and a better world. At Sustainable Marketing Services, we believe sustainable marketing involves the following five key elements. Examples: Optimise the performance of your business Create strong relationships with your customers, other businesses, staff and community Balance your budget and ensure your financial sustainability Help your business community to prosper Reduce your carbon footprint.

New Task

Systems selling (or solutions selling) refers to buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation. computer systems, buildings, robotic assembly lines,

Chapter 3 - Beginning - Controllable environment - (Micro)

The company, suppliers, marketing intermediaries, competitors, publics, customers -5 types - Consumer markets, business markets, reseller markets, gov markets and international markets *Marketing intermediaries help the company to promote, sell, and distribute its products to final buyers. (banks, credit companies finance shiz etc.)

Microenvironment

The company, suppliers, marketing intermediaries, customers, competitors, publics.

Straight Rebuy

There are three major types of buying situations: straight rebuy, modified rebuy, and a new task situation. In a straight rebuy, the buyer reorders something without any modifications. It is usually handled on a routine basis by the purchasing department. A company buying a product or service for the first time faces a new task situation. The marketer not only tries to reach as many key buying influences as possible, but also provides help and information. The buyer makes the fewest decisions in the straight rebuy and the most in the new task situation. example: Medical equipment, office supplies, bulk chemicals

Customer Relationship Management

compile customer data across different channels -- or points of contact between the customer and the company -- which could include the company's website, telephone, live chat, direct mail, marketing materials and social media. CRM systems can also give customer-facing staff detailed information on customers' personal information, purchase history, buying preferences and concerns.

International markets

consist of buyers in other countries including consumers, resellers, governments and producers.

Differentiated Marketing

is when a company creates campaigns that appeal to at least two market segments or target groups. For example, a store can promote a sale that appeals to people in at least two cities or locations, or a company can market a product that appeals to women in at least two age groups. Differentiated marketing strategies can target many more than two segments; shoe companies often create campaigns that appeal to both men and women in a variety of age groups. Differentiated marketing strategies can also use different messages in the same campaign for different segments. For example, a retailer might market low cost to a budget-conscious segment and product quality to an affluent market segment.

Information needed to assess in marketing

primary and secondary research: Secondary: What can we find in our internal databases and from news, trade associations, prior research, etc. primary: Examples: what services are most important for the adult day care facility? What are some new ice cream flavors that would appeal the most to Gifford's customers? What is the ideal price for different products? internal: : Understanding a business in depth is the goal of internal analysis. This analysis is based on resources and capabilities of the firm. *Demographic studies 1. Identify your target market Promotion helps you reach your target market, but first you must know who they are. Gather statistical information regarding your target market's demographics, market segment, needs and buying decisions. Use your research to clarify which media will best promote your product, whether print, online or broadcast. Become an expert in your field and create personal profiles for your ideal customer. How old are they? Are they male or female? What is their job? What salary bracket are they in? What do they do for fun? Do they own a car? Do they have kids? Such details will help you clearly define pricing, promotion and place. 2. Understand the strengths and weaknesses of your competition Collect data on how your competition promotes their products. What is their price point? What do you like and what don't you like about their marketing campaign? 3. Develop a pricing strategy grounded in market research Small businesses can set a price for their product or service based on popular profit margins, competitors' prices, financing options, or the price a customer is willing to pay. A popular profit margin examines the profit of similar products also in your market. Profit margin is a very helpful measure when looking at other companies in your industry. Many industries have profit margin standards which are easily accessible on the Internet or through your Better Business Bureau. 4. Research similar products Whether you sell a service or a tangible item, it is important to know what is currently on the market, and what the competition is offering. You can improve your product or service based on findings about what your customers really want and need. Focus on things like function, appearance, customer service and warranties. 5. Identify the best placement or location for your product or service

Value proposition

refers to a business or marketing statement that a company uses to summarize why a consumer should buy a product or use a service. This statement convinces a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings. Companies use this statement to target customers who will benefit most from using the company's products, and this helps maintain an economic moat. *should be a clear statement that explains how a product solves a pain point, communicates the specifics of its added benefit, and states the reason why it's better than similar products on the market. The ideal value proposition is concise, and it appeals to a customer's strongest decision-making drivers.

Marketing research (Steps)

the action or activity of gathering information about consumers' needs and preferences. steps: 1. Defining the problem and research objectives 2. Develop research plan for collecting info 3. implementing research plan 4. interpreting and reporting the findings 1. Environmental Analysis, Target Market, Research - secondary then primary Environmental analysis: Environmental analysis is a strategic tool. It is a process to identify all the external and internal elements, which can affect the organization's performance. ... The analysis helps align strategies with the firm's environment. Our market is facing changes every day.Feb

Supply chain

the chain of suppliers that an organization relies on to produce marketing materials (print, promotional products and point of sale) to market their products and services. often made up of partners inside and outside of the organization - such as brand managers, marketing services, agencies, direct sales teams, buyers, printers, fulfillment houses and many others. From product brochures and promotional flyers to point-of-sale systems and store signage, each of these supplies must be acquired, managed and distributed to customers, sales teams, branch offices, retail outlets, dealers, distributors and other key audiences around the world. Flow: Creation - 1. identifying and developing marketing materials to meet customer need and/or to support sales initiatives, 2. Production - getting materials in their final form either through sourcing, printing or Web development, 3.Warehousing - technology, storage strategy, planning, 4.Fulfillment - order management, service standards, shipping and tracking use/consumption - how materials are used and displayed in the field and stored based on seasonality or product/service availability, 5.Feedback - collecting information for continuous refinement; from inventory reporting, management metrics, field/customer feedback.

Chapter 4 Beginning: Marketing Intelligence

the external data collected by a company about a specific market which it wishes to enter, to make decisions. It is the first set of data which the company analyses before making any investment decision. *Marketing intelligence is usually the first data set analysed by a company about a specific market. It could be related to population age in that area, infrastructure facilities, spending habits of consumers, state or government regulations etc. Marketing intelligence is all about gathering information on various data sets, analysing the information, breaking down the data into small subsets and the distribution of information to the relevant department of the company.