MEJO 475: Concepts of Marketing
Analysis
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Control
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Planning Implementatoin
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Geographic Population Shifts
12% of all U.S. residents moving each year and 35% of more moving every five years. Over the past two decade, the U.S. population has shifted toward the South and the West, whereas the Midwest and Northeast have lost population. This population shifts interest marketers because people in different regions buy differently. Americans are moving to "micropolitan areas" which are smaller cities located beyond congested metropolitan areas- these smaller micros may offer many o the advantages of metro areas. The shift in where people live has also caused a shift in where they work.
Belief
A descriptive thought that a person holds about something. Marketers are interested in the beliefs that people formulate about specific products and services because these beliefs make up product and brand images that affect buying behavior.
Primary Data
Information collected the specific purpose at hand. Calls for a number of decisions on research approaches, contact methods, the sampling plan, research instruments.
Strengths and Weaknesses
Internal factors of a SWOT
Customer Lifetime value
Keeping customers loyal makes good economic sense. Loyal customers spend more and stay around longer. Research also shows that it's five times cheaper to keep an old customer than acquire a new one. The lifetime value spent on a product or at a company. Ex: $50,000 spent at Harris Teeter over 10 years once a week for 52 weeks
The diffusion process for new products
Knowledge, Persuasion, Decision (accept/reject), implementation, confirmation
People's View of Society
Patriots defend it, reformers want to change it, and malcontents want to leave it. People's orientation to their society influences their consumption patterns and attitudes toward the marketplace. American patriotism has been increasing gradually the past 20 years- marketers respond with the renewed "Made in America" pitches and patriotic products and promotions. Marketers must take care when appealing to patriotism and other strong national emotions.
Core beliefs
People in a given society hold many beliefs and values. These values have a high degree of persistence, example- 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. These are passed on from parents to children and reinforced by schools, religious institutions, and government.
People's View of Themselves
People vary on their emphasis on serving themselves vs serving others. Some people seek personal pleasure, fun, change, and escape. Others seek self-realization through religion, recreation, or the avid pursuit of careers or other life goals. Some people see themselves as sharers and joiners; others see themselves as individualists. People use products, brands, and services as a means of self-expression, and they buy products and services that match their views of themselves.
People's Views of Others
People's attitudes toward interactions with others shift over time. Today's digital technologies seem to have launched an era of what one trend watched calls "mass mingling"- rather than reacting less, people are using social media and mobile communications to connect more than ever. The more people meet, network, socialize online, the more likely they are to eventually meet up with friends and followers in the real world. The new way of interacting strongly affects how companies market their brands and communicate with customers. Consumers increasingly tap digitally into networks of friends and online brand communities to learn about and buy products and to shape and share brand experiences.
Late mainstream
skeptical- adopt an innovation only after a majority of people have tried it
Psychographic segmentation
social class, lifestyle, personality. People in the same demographic group can have very different psychographic characteristics
licensing
some companies license names or symbols previously created by other manufacturers, names of well-known celebrities, or characters from popular movies and books
A brand personality
specific mix of human traits that may be attributed to a particular brand
Needs
states of felt deprivation. Basic physical needs for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression.
Planning Marketing
step in strategic planning that is a functional strategy
Market Research
systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization. This gives marketers insights into customer motivations, purchase behavior, and satisfaction. Helps them to assess market potential and market share or measure the effectiveness of pricing, product, distribution, and promotion activities.
Competitive Marketing Intelligence
systematic monitoring, collection, and analysis of publicly available information about consumers, competitors, and developments in the marketplace. The goal is to improve strategic decision making by understanding the consumer environment, assessing and tracking competitors' actions, and providing early warnings of opportunities and threats. Help gain insights into how consumers talk about and engage with their brands. Gain insight into competitor moves and strategies and to prepare quick responses.
new product development strategy
the development of original prodcuts, product improvements, product modifications, and new brands through the firm's own product development efforts
brand equity
the differential effect that knowing the brand name has on customer response on the product and its marketing
Value Propositions
the full positioning of a brand- the full mix of benefits on which it is differentiated and positioned
Big Data
the huge and complex data sets generated by today's sophisticated information generation, collection, storage, and analysis technologies. Every year, the people and systems of the world generate about a trillion gigabytes of information. 90% of the world's data has been created in just two years. Big data presents marketers with big opportunities and big challenges. Companies that effectively tap this glut of big data can gain rich, timely customer insights. Marketers, don't need more information, they need better information- and they need to make better use of the information they already have.
Aspirational Group
the individual wishes to belong to this group
Compatibility
the innovation fits the values and experiences of potential consumers. Electric cars are not compatible because cannot be charged many places
Complexity
the innovation is difficult to understand or use. Electric cars are not different nor complex to dive, but concerns on how well they will likely work slow down the adoption rate
Divisibility
the innovation may be tried on a limited basis. Consumers can test-drive electric cars, a positive for the adoption rate. Current high prices to own and fully experience these new technologies will slow adoption
substantial
the market segments are large or profitable enough to serve. A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing program.
accessible
the market segments can be effectively reached and served
Customers
the most important actors in the company's microenvironment. The aim of the entire value delivery network is to engage target customers and create strong relationships with them. Made up of different types of market such as consumer markets, business markets, reseller markets, international markets, international markets, and government markets
Survey Research
the most widely method for primary data collection, the approach best suited for gathering descriptive information. Flexibility; can be used to obtain many different kinds of information in many different situations.
product line length
the number of items in the product line
Perception
the process by which people select, organize, and interpret information to forma a meaningful picture of the world. People can form different perceptions of the same stimulus because of three perceptual processes: selective attention, selective distortion, selective retention
service variability
the quality of services may vary greatly depending on who provides them and when, where, and how they are provided
Customer Insights
the real value of marketing information lies in how it is used. Fresh marketing information-based understandings of customers and the marketplace that become the basis for creating customer value, engagement, and relationships. Customer insight groups collect customer and market information from a wide variety of sources, ranging from traditional marketing research studies to mingling with and observing consumers to monitoring social media conversations about the company and its products. They use this information to develop important customer insights from which the company can create more value for its customers.
Communicability
the results of using the innovation can be observed or described to others. To the extent that electric cars lend themselves to demonstration and description, their use will spread faster among consumers
Second Moment of Truth
When a customer purchases a product and experiences its quality as per the promise of the brand
private brands
a brand created and owned by a reseller of a product or service
Company
a commercial business, actor in the microenvironment
new brands
a company might believe that the power of its existing brand name is waning, so a new brand name is needed or it may create a new brand name when it enters a new product category for which none of its current brand names are appropriate
new product development process
a company must carry out strong new product planning and set up a systematic, customer-driven new product development process for finding and growing new products
general public
a company needs to be concerned about the general public's attitudes toward its products and activities
Citizen-action publics
a company's marketing decision may be questioned by consumer organizations, environmental groups, minority groups, and others
Social Factor influencing consumer behavior
a consumer's behavior also is influenced by social factors, such as the consumer's small groups, social networks, family, and social roles and status
product concept
a detailed version of the new product idea states in meaningful consumer terms
Reference Group
a direct (face-to-face interactions) or indirect points of comparison or reference in forming a person's attitudes or behavior
Market Segments
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. Subcultures include nationalities, religions, racial groups, geographic regions. Many subcultures make up important market segments, and marketers often design products and marketing programs tailored to their needs.
Undifferentiated Targeting
a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer
Differentiating Targeting
a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each
Motivation
a need that is sufficiently pressing to direct the person to seek satisfaction. A need becomes a motive when it is aroused to a sufficient level of intensity
Value delivery network
a network composed of the company, suppliers, distributors, and ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value
Psychological Factors influencing consumer Behavior
a person's buying choices are further influenced by four major psychological factors: motivation, perception, learning, beliefs, and attitudes
Occupation
a person's occupation affects the goods and services bought. Blue-collar workers tend to buy more rugged work clothes, whereas executives buy more business suits.
Lifestyle
a person's pattern of living as expressed in his or her activities, interests, and opinions. It involves measuring consumers major AIO dimensions-activities (work, hobbies, shopping, sports, social events), interests (food, fashion, family, recreation), and opinions (about themselves, social issues, business, products). Helps marketers understand changing consumer values and how they affect buyer behavior
business analysis
a review of the sales, cost, and profit projections for a new product to find out whether these factors satisfy the company's objectives
Target Market
a set of buyers sharing common needs or characteristics that the company decides to serve
Mission Statements
a statement of the organization's purpose- what it wants to accomplish in the larger environment. Should be meaningful and specific, yet motivating. They should emphasize the company's strengths and tell forcefully how it intends to win in the marketplace
positioning statement
a statement that summarizes company or brand positioning using this form: to target segment and need our brand is concept that point of difference.
commercial sources
advertising, salespeople, dealer and manufacturer. Inform the buyer, and consumers have received the most information about a product from commercial sources-those controlled by the marketer
Post purchase behavior
after the product is purchased, the consumer will either be satisfied or dissatisfied and the answer lies in the relationship between the consumer's expectations and the product's perceived performance.
Consumer Market
all of the individuals and households that buy or acquire goods and services for personal consumption
national brands
also known as manufacturer's brands have long dominated the retail scene. National brands must sharpen their value propositions, especially when appealing to today's more frugal consumers
competitive advantage
an advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices
Publics
any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. Several types of publics: financial publics, media publics, government publics, citizen-action publics, local publics, general public, internal publics.
Product
anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. also include services, events, persons, places, organizations, ideas or a mixture of these
Positioning
arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
Baby Boomers
born between 1946-1964. The wealthiest generation in U.S. history- "a marketer's dream". 35% of the U.S. population but control 70% of nation's disposable income and half of all consumer spending
Generation X
born between 1965 and 1976. They seek success and our less materialistic than other groups; they prize experience not acquisition.
industrial products
bought by individuals and organizations for further processing or for use in conducting a business
Triple Bottom Line
brands and products that are financially successful, socially responsible, environmentally responsible
brand positioning
brands are powerful assets that must be carefully developed and managed. Marketers needs to position their brands clearly in target customers' minds
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
Personal Factors influencing consumer behavior
buyer's occupation, age, life-cycle stage, economic situation, lifestyle, personality and self-concept
Age and Life Stage
buying is shaped by the stage of the family life cycle- the stages through which families might pass as they mature over time. Life stage changes usually result from demographics and life-changing events-marriage, having children, purchasing a home, divorce, children going to college, changes in personal income, moving out of the house, retirement. Different life-stage groups exhibit different buying behaviors. Life-stage segmentation provides a powerful marketing tool for marketers in all industries to better find, understand, and engage customers.
Family
family members can strongly influence buyer behavior. The family is the most important consumer buying organization in society, and it has been researched extensively. Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services.
Marketing Intermediaries
firms that help the company to promote, sell, and distribute its products to final buyers. They include resellers, physical distribution firms, marketing services agencies and financial intermediaries.
Suppliers
form an important link in the company's overall customer value delivery network. They provide the resources needed by the company to product its goods and services. They are a person or organization that provides something needed such as a product or service. Actor in the microenvironment
Wants
form human needs take as they are shaped by culture and individual personality. Wants are shaped by one's society and are described in terms of objects that will satisfy those needs
services
form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything
Personal sources
friends, family, acquaintances. The most effective sources because the legitimize and evaluate products for the buyer
Experimental Research
gathering casual information. Experiments involve selecting matched groups of subjects, giving them different treatments, controlling unrelated factors, and checking for differences in groups responses. Tries to explain cause-and-effect relationships
Research Approaches
gathering primary data include observational, surveys, and experiments.
product line
group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges
Total Market Strategy
integrating ethnic themes and cross-cultural perspectives within a brand's mainstream marketing, appealing to consumer similarities across subcultural segments rather than differences
commercialization
introducing a new product into the market
crowdsourcing
inviting broad communities of people-customers, employees, independent scientists and researchers, and even the public at large-into the new product innovation process
Product line filling
involves adding more items within the present range of the line- due to reaching for extra profits, satisfying dealers, using excess capacity, being the leading full-line company, and plugging holes to keep out competitors
Observational Research
involves gathering primary data by observing relevant people, actions, and situations. Researches often observe consumer behavior to glean customer insights they cannot obtain by simply asking customers questions.
Ethnographic Research
involves sending observers to watch and interact with consumers in their "natural environments"- provides a window into customers' unconscious actions and unexpressed needs and feelings. Some things cannot be observed, such as attitudes, motives, or private behavior.
Natural Environment
involves the physical environment and the natural resources that are needed as inputs by marketers of that are affected by marketing activities
Customer Decision Journey
is a model that describes how consumers make purchase decisions. It is therefore non-linear, meaning that the actions overlap and repeat until the final purchase decision, rather than following successively. Steps involve interviewing customers, gather publicly available data on search activities and traffic patterns, purchase additional multidimensional data, examine own site data, identify and analyze trends
First Moment of Truth
is the 3-7 seconds after a shopper first encounters a product on a store shelf. It is in these precious few seconds, P&G contends, that marketers have the best chance of converting a browser into a buyer by appealing to their senses, values and emotions.
Demography
is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics
Zero Moment of Truth
it refers to the research which is conducted online about a product or service before taking any action i.e. searching for mobile reviews before making a purchase.
shopping products
less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price and style
product attributes
lowest level and least desirable level for brand positioning. Competitors can easily copy attributes and customers are not interested in attributes as such- they are interested in what attributes will do for them
Portfolio Analysis
management evaluates the products and businesses that make up the company. The company will want to put strong resources into its more profitable businesses and phase down or drop its weaker ones.
Government publics
management must take government developments into account. Marketers must often consult the company's lawyers on issues of product safety, truth in advertising, and other matters
Customer Relationship Management
managing detailed information about individual customers and carefully managing customer touch points to maximize customer loyalty. Consists of sophisticated software and analysis tools that integrate customer and marketplace information from all sources, analyze it, and apply the results to build stronger customer relationships.
Concentrated Marketing
market-coverage strategy in which a firm goes after a large share of one of a few segments or niches
Exchanges and Relationships
marketing occurs when people decide to satisfy their needs and wants through exchange relationships. Exchange is the act of obtaining a desired object from someone by offering something in return. Marketing consists of actions taken to create maintain and grow desirable exchange relationships with target audiences involving a product, service, idea, or other object
public sources
mass media, consumer rating organizations, social media, online searches
Requirements for effective segmentation
measurable, accessible, substantial, differentiable, actionable
Customer Relationship Management
most important concept of modern marketing and is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
augmented product
offering additional consumer services and benefits such as delivery and credit, after-sale service, product support, warranty
Life Cycle segmentation
offering different products or using different marketing approaches for different ages and life-cycle groups
Online Social Networks
online communities-blogs, social networking websites, and other online communities-where people socialize or exchange information and opinions. These online forms of consumer-to-consumer and business-to-consumer dialogue have big implications for marketers
internal marketing
orienting and motivating customer contact employees and supporting service employees to work as a team to provide customer satisfaction
SWOT Analysis
overall evaluation of the company's strengths, weaknesses, opportunities, threats
Marketing Information System
people and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable and market insights. This begins and ends with information users-marketing managers, internal and external partners, and others who need marketing information.
how will it make the offering available to target consumers
place
Perceptual Maps
planning differentiation and positioning strategies, marketers often prepare these maps that show consumer perceptions of their brands versus those of competing products on important buying dimensions
BCG Growth- Share Matrix
portfolio planning method that evaluates a company's SBUs in terms of market growth rate and relative market share. On the vertical axis, market growth rate provides a measure of market attractiveness. The horizontal axis, relative market share serves as a measure of company strength in the market. The growth-share matrix defines four types of SBUs: stars- high growth, high share business or products needing heavy investment to finance their rapid growth. Cash cows are low-growth, high-share business or products. Question marks are low-share business units in high-growth markets. They require a lot of cash to hold their share, let alone increase it. Dogs are low-growth, low-share businesses and products and generate enough cash to maintain themselves but do not promise to be large sources of cash
Product market expansion grid
portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development or diversification
Word of mouth influence
powerful impact on consumer buying behavior. The personal words and recommendations of trusted friends, family, associates, and other consumers tend to be more credible than those coming from commercial sources, such as advertisements or salespeople.
differentiable
the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. if men and women respond similarly to marketing efforts for soft drinks, they do not constitute separate segments
Markets
the set of actual and potential buyers of a product or service. These buyers share a particular need or want that can be satisfied through exchange relationships
Culture
the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions
Share of a customer
the share they get of the customer's purchasing in their product categories. Banks want to increase "share of wallet". To increase share of customer, firms can offer greater variety to current customers.
measurable
the size, purchasing power, and profiles of the segments can be measured
Shortage of Raw Materials
trend in the natural environment- air and water as air pollution chokes many of the world's largest cities and water shortages are a huge problem in some parts of the U.S. Renewable resources, such as forests and food, also have to used wisely because nonrenewable resources such as oil, coal, and various minerals pose a serious problem. Firms making products that require those resources face large cost increases even the materials remain available.
groups
two or more people who interact to accomplish individual or mutual goals. They have a direct influence and to which a person belongs are called membership groups
speciality products
unique characteristics or brand identifications for which a significant group of buyers is willing to make a special purchase effort
social marketing
using traditional business marketing concepts and tools to separate behaviors that will create individual and society well-being
Innovators
venturesome- they try new ideas at some risk
Information Search
An interested consumer may or may not search for more information. If the consumer's drive is strong and a satisfying product is near at hand, they are likely to buy it then.
Flipped Marketing Funnel
Awareness, Consideration, Conversion, Loyalty, Advocacy
Millennials
Born between 1977 and 2000. Comfort with digital technology; it's a way of life and engage with brands in an entirely new way, such as with mobile or social media.
Cognitive Dissonance
Buyer discomfort caused by post purchase conflict
Socially Responsible Behavior
Beyond written laws and regulations, business is also governed by social codes and rules of professional ethics. Enlightened companies encourage their managers to look beyond what the regulatory system allows and simply "do the right thing." These socially responsibly firms actively seek out ways to protect the long-run interests of their consumers and the environment. Almost every aspect of marketing involves ethics and social responsibility issues. However, these issues usually involve conflicting interests, well-meaning people can honestly disagree about the right course of action in a given situation which has resulted in many industrial and professional trade associations have suggested a code of ethics. And more companies are now developing policies, guidelines, and other responses to complex social responsibility issues.
Generation Z
Born after 2000, this group represents tomorrow's market- forming brand relationships that will affect their buying well into the future. They have digital in their DNA.
People's View of Organizations
By and large, people are willing to work for major organizations and expect them to carry out society's work. The past 20 years have seen a sharp decrease in confidence and loyalty toward America's business and political organizations and institutions- decline in organizational loyalty. Major corporate scandals, rounds of layoffs resulting from the Great Recession, the financial meltdown triggered by Wall Street bankers greed and incompetence have resulted in further loss of confidence in big business. Many people see work not as a satisfaction but a required chore to earn money to enjoy their nonwork hours. This trend suggests that organizations need to find new ways to win consumer and employee confidence.
Porter's competitive strategies
Cost Leadership (Value Chain Focus, Lowest production costs, lowest distribution costs, low price = high share,); Differentiation (highly differentiated line, category line, preferred brand); Focus (Nichers, serve few segments well)
Shifts in Secondary Cultural Values
Cultural swings take place- example: the impact of popular music groups, movie genres, celebrities on young people's hairstyles and clothing norms. Marketers want to predict cultural shifts to spot new opportunities or threats. Major cultural values of a society are expressed in people's views on themselves and others, as well as in their views of organizations, society, nature, and the universe.
Customer Loyalty and Retention
Customers remain loyal and talk favorably to others about the company and its products. The aim of customer relationship management is to create not only customer satisfaction but also customer delight. Customer Acquisition, customer Retention, cost more to acquire the customer
Opportunities and Threats
External Factors of a SWOT
External marketing
External marketing is the action or business of promoting and selling services or products, including market research and advertising to clients and potential clients
The Buyer Decision Process
Need Recognition, Information Search, Evaluation of Alternatives, the purchase decision, post purchase behavior
Competitors
Marketers must gain strategic advantage by positioning their offerings strongly against competitors' offerings in the minds of consumers. Actor in the microenvironment
Opinion Leaders
Marketers of brands subjected to strong group influence must figure out how to reach opinion leaders-people within a reference group who, because of knowledge, special skills, personality exert social influence on others.
Income Distribution
Marketers should pay attention to this along with income levels. Over the past several decades, the rich have grown riches, the middle class has shrink, and the poor have remained poor. The top 5% of American earners get more than 22% of the country's adjusted gross income, and the top 20% of earners capture 51% of all income. The bottom 40% of American earners get just 11.5% of the total income. The distribution of income has created a tiered market.
Model of Buyer Behavior
Marketing and other stimuli enter the consumer's "black box" and produce certain responses (we can't see what's in the black box). Marketing stimuli consists of the four p's, other stimuli include major forces and events in the buyer's environment: economic, technological, social, cultural. These inputs put in the buyer's black box which turns into a set of buyer responses- buyer's attitudes, preferences, brand engagement, and relationships.
People's View of the Universe
Most Americans practice religion, religious conviction and practice have been dropping off gradually through the years. 1/5 of Americans now say they are not affiliated with any particular faith- ages 18 to 29, 1/3 say they are not currently affiliated with one. There is a renewed interest in spirituality, part of a broader search for a new inner purpose. People have been moving away from materialism and dog-eat-dog ambition to seek more permanent values-family, community, earth, faith- a more certain grasp of right and wrong. This changing spirituality affects consumers in everything they do- the products and services they buy.
Technological Environment
Most dramatic force shaping our destiny- forces that create new technologies, creating new product and market opportunities. It has released such mixed emotions resulting in good and bad innovations. Our attitude towards it depends on whether we are more impressed with its wonders or blunders. Changing rapidly, creating new markets and opportunities. When old industries fight or ignore new technologies, their businesses decline- marketers should watch the closely so companies do not miss out on new product and market opportunities.
Four P's of the marketing mix
Product, price, place, promotion
Characteristics that influence rate of adoption
Relative advantage, Compatibility, Complexity, Divisibility, Communicability
Casual Research
Research objective that tests hypotheses about cause-and-effect relationships.
Generational Marketing
Some experts warn that marketers need to be careful about turning off one generation each time they craft a product or message that appeals effectively to another. Others caution that each generation spans decades of time and many socioeconomic levels. For example, marketers often split the baby boomers into three smaller groups, each with its own beliefs and behaviors.
People's View of Nature
Some feel ruled by it, others feel in harmony with it, some seek to master it. A long-term trend has been people's growing mastery over nature through technology and the belief that nature is bountiful. However, people have realized that nature is finite and fragile; it can be destroyed or spoiled by human activities. The renewed love of things natural has created a sizable market of consumers who seek out everything from natural, organic, nutritional products to fuel-efficient cars and alternative medicines- these consumers make up a sizable and growing market. Example- Whole Foods
The Marketing Concept
Takes an outside-in view that focuses on satisfying customer needs as a path to profits. Holds achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. Customer focus and value are the paths to sales and profits. It's a customer-centered sense-and responsibility philosophy where their job is not to find the right customers for your product but to find the right products for your customers.
Population Diversity
The United States is referred to as a salad bowl in which various groups have mixed together but have maintained their diversity by retaining and valuing important ethnic and cultural differences. Marketers now face very diverse markets. Diversity goes beyond ethnic heritage, many companies explicitly target gay and lesbian consumers- media, celebrities, etc has shed light on the LGBT community which has increasingly emerged in the public eye. Many marketers now recognize that the worlds of people with disabilities and those without disabilities are one in the same.
Need Recognition
The buying process starts with need recognition- the buyer recognizes a problem or need. The need can be triggered by an internal stimuli (when one of the person's normal needs rises to a level or higher enough to become a drive) and external stimuli. Marketers should research consumers to find out what kinds of needs or problems arise, what brought them about, and how they led the consumers to this particular product
Evaluation
The consumer considers whether trying the new product makes sense
Adoption
The consumer decides to make full and regular use of the new product
The Changing American Family
The historic American ideal of the two-child, two-car suburban family has been lately losing some its luster. Marketers must consider the special needs of nontraditional households because they are now growing more rapidly than traditional households. Each group has distinctive needs and buying habits. Companies are now adapting their marketing to reflect the changing dynamics of American families
Stages in the Adoption Process
The mental process through which an individual passes from first hearing about an innovation to final adoption. Adoption is the decision by an individual to become a regular user of the product. Stages: Awareness, Interest, Evaluation, Trial, Adoption
Age and family structures
The single most important demographic trend in the United States is the changing age structure of the population. Primarily because falling birthrates and longer life expectancies, the U.S. population is rapidly getting older.
Secondary Beliefs
These values are more open to change. Example- Believing that people should not get married early in life. Marketers have some chance of changing these values but little chance of changing the other.
Customer Equity
Total combined customer lifetime values of all of the company's current and potential customers. The ultimate aim of customer relationship management is to produce high customer equity.
Internal Databases
collections of consumer and market information obtained from data sources within the company network. The marketing department furnishes information on customer characteristics, in-store and online sales transactions, and web and social media site visits. Customer service departments handles customer satisfaction and service problems, accounting department provides detailed records of sales, costs, and cash flows. Internal databases can be accessed quickly and cheaply than other information sources, but they present problems- it if often incomplete or in the wrong form for making marketing decisions.
Strategies for growth and downsizing
companies need growth if they are to compete more effectively, satisfy their stakeholders, and attract top talent. Market penetration, market development, product/ market expansion grid
multibrands
companies often market many different brands in a given product category- its a way to establish different features that appeal to different customer segments to lock up more reseller self space, and capture a larger market share
Government markets
consist of a government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them
consumer markets
consist of individuals and households that buy goods and services for personal consumption
macroenvironment
consists of a larger societal forces that affect the microenvironment-demographic, economic, natural, technological, political, cultural forces
Economic environment
consists of factors that affect consumer purchasing power and spending patterns. They can have a dramatic effect on consumer spending and buying behavior which creates value marketing, looking for greater value in things people buy
Cultural Environment
consists of institutions and other forces that affect a society's basic values, perceptions, preferences, and behaviors. People grow up in a particular society that shapes their basic beliefs and values
Political Environment
consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society
Marketing evironment
consists of the actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers
International markets
consists of these buyers in other countries, including consumers, producers, resellers and governments
unsought products
consumer either does not know about or knows about but does not normally consider buying
Market Offerings
consumers needs and wants are fulfilled and some combination of products, services, information, or experiences offered to a market to satisfy a need or a want
Marketing Process
creating and capturing customer value. Companies work to understand consumers, create customer value, and build strong customer relationships. Companies reap the rewards of creating superior customer value. By creating value for consumers, they in turn capture value from consumers in the form of sales, profits, and long-term customer equity
Value and Satisfaction
customers form expectations about the value and satisfaction that various market offerings will deliver and buy accordingly Satisfied customers buy again and tell others about their good experiences. Customer value and customer satisfaction are key building blocks for developing and managing customer relationships
convenience products
customers usually buy frequently, immediately, and with minimal comparison and buying effort
The Market Research Process
defining the problem/ research objectives, developing the research plan for collecting information, implementing the research plan- collecting and analyzing the data, interpreting and reporting the findings
Early mainstream
deliberate-although they rarely are leaders, they adopt new ideas before the average person
Attitude
describes a person's relatively consistent evaluations, feelings, and tendencies toward an object or idea (favorable or unfavorable).
Learning
describes the changes in an individual's behavior arising from experience
marketing strategy development
designing an initial marketing strategy for a new product based on the product concept
actual product
developing product and service features, a design, a quality level, a brand name, packaging, features
environment sustainability
developing strategies and practices that create a world economy that the planet can support indefinitely. Presenting needs without compromising the ability of future generations to meet their needs.
product development
developing the product concept into a physical product to ensure that the product idea can b turned into a workable marketing offering
differentiation
differentiating the market offering to create superior customer value
Behavioral Segmentation
divides buyers into segments based on their knowledge, attitudes, uses or responses concerning a product
Demographic Segmentation
divides the market into segments based on variable such as age, life-cycle, gender, income, occupation, education, religion, ethnicity, generation.
Geographic Segmentation
dividing a market into different geographical units, nations, states, regions, counties, cities, neighborhoods.
Gender segmentation
dividing a market into different segments based on gender
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
Occasion segmentation
dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item
Benefit Segmentation
dividing the market into segments according to the different benefits that consumers seek from the product
Economic Situation
economic situation will affect his or her store and product choices. Marketers watch trends in spending, personal income, savings, and interest rates.
actionable
effective programs can be designed for attracting and serving the segments.
Buzz Marketing
enlisting or creating opinion leaders to serve as brand ambassadors who spread the word about a company's products
Government Intervention
environmental trend that involves natural resource management. The government of different countries vary in their concern and efforts to promote a clean environment. Some countries vigorously pursue environmental quality such as Germany. Others, such as poorer nations, do little about pollution, largely because they lack the needed funds or political will. In the United States, the EPA was created in 1970 to create and enforce pollution standards and conduct pollution research. In the future, companies doing business can expect continued strong controls from government and pressure groups.
Increased pollution
environmental trend that the industry will almost always damage the quality of the natural environment. Disposal of chemical and nuclear wastes; the dangerous mercury levels in the ocean; the quantity of chemical pollutants in the soil and food supply; the littering o the environment with non-biodegradable bottles and plastics.
Market Targeting
evaluating each market segment's attractiveness and selecting one of more segments to serve
experiential sources
examining and using the product
Cultural Factor Influencing Consumer Behavior
exert a broad and deep influence on consumer behavior-marketers need to understand the role played by the buyer's culture, subculture, and social class.
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
Early adopters
guided by respect-they are opinion leaders in their communities and adopt new ideas early but carefully
product positioning
how a product is defined by consumers on important attributes- the place a product occupies in consumers' minds relative to competing products
Evaluation of Altneratives
how consumers process information to choose among alternative brands. How consumers go about evaluating purchase alternatives depends on the individual consumer and the specific buying situation
Price
how much will the product/ service charge for the offering
Secondary Data
information that already exists somewhere, having been collected for another purpose. Researchers start with this step usually with company's internal database or buy it from outside suppliers. Often obtained more quickly and at a lower cost than primary data. Relevant, accurate, current, and impartial
consumer products
products and services brought by final consumers for personal consumption
engage target consumers, communicate about the offering, persuade consumer's of the offers merits
promotion
The societal marketing concept
questions whether the pure marketing concept overlooks possible conflicts between consumer short-run and consumer long-run welfare. Holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumers and society's well being. Calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preventing or enhancing the ability of future generations to meet their needs.
Social Class
relatively permanent and ordered division in a society whose members share similar values, interests, and behaviors
Descriptive Research
research objective that describes things, such as the market potential for a product or the demographics and attitudes of consumers who buy the product
Exploratory Research
research objective that gathers preliminary information that will help define problems and suggest hypotheses
idea screening
screening new product idea to spot good ones and drop poor ones as soon as possible
service inseparability
services are produced and consumed at the same time and cannot be separated from their providers
service intangibility
services cannot be seen, tasted, felt, heard or smelled before they are bought
service perishability
services cannot be stored for later sale or use
Relative Advantage
the degree to which the innovation appears superior to existing products. Ex: electric cars have less costly energy but have limited range before recharging and cost more initially.
Local marketing
tailoring brands and marketing 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
Micromarketing
tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes local marketing and individual marketing
concept testing
testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal
Microenvironment
the actors close to the company that affect its ability to engage and serve its customers-the company, suppliers, marketing intermediaries, customer markets, competitors, and publics
Marketing Analytics
the analysis tools, technologies, and processes by which marketers dig out meaningful patterns in big data to gain customer insights and gauge marketing performance.
Consumer Buyer Behavior
the buying behavior of final consumers- individuals and households that buy goods and services for personal consumption
service profit chain
the chain that links service firm profits with employee and customer satisfaction
Awareness
the consumer becomes aware of the new product but lacks information about it
Interest
the consumer seeks information about the new product
Trial
the consumer tries the new product on a small scale to improve his or her estimate of its value
Purchase Decision
the consumer's purchase decision will be to buy the most preferred brand, but two factors can come between the purchase intention and the purchase decision. The first factor is attitude of others (if someone important to you thinks that you should buy the lowest-priced car, then the chances of you buying a more expensive car are reduced). The second factor is unexpected situational factors (the consumer may form a purchase intention based on factors such as expected income, expected price, and expected product benefits).
test marketing
the stage of new product development at which the product and its proposed marketing program are tested in realistic market settings
idea generation
the systematic search for new product ideas
brand value
the total financial value of a brand
Personality
the unique psychological characteristics that distinguish a person or group. Useful in analyzing consumer behavior for certain product or brand choices
Media Publics
this group carries news, features, editorial opinions, and other content. Includes television stations, newspapers, magazines, blogs and other social media
Local publics
this group includes neighborhood residents and community organizations.
Internal Publics
this group includes workers, managers, volunteers, and the board of directors
Financial publics
this group influences the company's ability to obtain funds, banks, investment analysts, and stockholders
Product
to deliver on its value proposition, firm must create a need-satisfying market offering
experiences
to differentiate their offers, beyond simply making products and delivering services, they are creating and managing customer experiences with their brands or companies
Cause Related Marketing
to exercise their social responsibility and build more positive images, many companies are now linking themselves to worthwhile causes. Some companies are founded on cause-related missions, under the concept of "values-led business" or "caring capitalism," their mission is to use business to make the world a better place. Cause-related marketing has become a primary form of corporate giving- "do well by doing good" by linking purchases of the company's products or services with benefitting worthwhile causes or charitable organizations.
co-branding
to practice of using the established brand names of two different companies on the same product
Lagging Adopters
tradition bound- they are suspicious of changes and adopt the innovation only when it has become something of a traditional itself
interactive marketing
training service employees in the fine art of interacting with customer sot satisfy their needs
Unique Selling Proposition
what is our point of distinction
core customer value
what is the buyer really buying? problem-solving benefits or services that consumers seek. people who buy an ipad are buying much more than a tablet computer. They are buying entertainment, self-expression, productivity, and connectivity-a mobile and personal window to the world
product line stretching
when a company lengthens its product line beyond its current range. Company can stretch upward, downward, or both. Companies located at the upper end of the market can stretch their lines downward. A company may stretch downward to plug a market hole that otherwise would attract a new competitor or to respond to a competitor's attack on the upper end. Companies stretch upward to add prestige to their current products
Demands
when backed by buying power wants are translated into this. Given their wants and resources, people demand products and services with benefits that add up to the most value and satisfaction
Partnering with suppliers, distributors and customers to build customer relationships
working closely with these partners in other company departments and outside the company to jointly bring greater value to customers
