MKT Exam 1 Chap 1-7

strategic targeting

Focuses on customers whose needs the company can fulfill by ensuring that its offerings are customized to their needs deliberate choice to ignore some customers and better serve others

intervening factors - types of perceived risk

Functional risk Physical risk Time risk Financial risk Psychological risk Social risk

5 basic markets

Resource consumer Intermediary Manufacturer Government

Consumer Behavior

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.

internal marketing

The task of hiring, training, and motivating able employees who want to serve customers well

relationship marketing

aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business - customers - employees - marketing partners - financial community

allocating resources

assess each SBU's competitive advantage and the attractiveness of the market in which it operates: - grow - harvest - hold

Crafting a positioning statement

attributes that describe the offering vs benefits delivered by the attributes

Marketing Definition

the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Achieve optimal outcomes when a firm aligns customer value and customer profile

- Effectiveness: company is able to reach all strategically viable customers - Efficiency: company communication and distribution reaches only the customers it has targeted

Points-of-parity (POPs)

Attribute/benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands

Points-of-difference (PODs)

Attributes/benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand

Buyer-Supplier Relationships - Relevant forces

Availability of alternatives Importance of supply Complexity of supply Supply market dynamism

Good mission statements

Focus on a limited number of goals Stress major policies and values Define major markets the company aims to serve Take a long-term view Short, memorable, meaningful

Value across 3 domains

Functional value- performance related Psychological- emotional related Monetary value- cost related

Managing B2B Relationships

relationship between supplier and customer - loyalty - one-to-one marketing

integrated approach to managing strategy and tactic

relationship marketing integrated marketing internal marketing performance marketing

customer value analysis

reveals the company's strengths and weaknesses relative to those of various competitors

post purchase behavior

satisfaction, actions, uses and disposals

Role of the buying center

seek the best value from fewer and better suppliers

targeted marketing

sell different products to all the different segments of the market different customers have different wants/needs

marketing forces

shape the relationships among different market entities - technology - globalization - physical environment - social responsibility

Cons of research plan

small samples, results may not be generalized

Buying Decision Process

1. Problem recognition 2. Information search 3. Evaluation of alternatives 4. Purchase decision 5. Post-purchase behavior

single segment targeting

niche marketing> focus on smaller, well-defined group of customers that seek a distinctive mix of benefits

mass customization

ability of a company to meet each customer's requirements - to prepare on a mass basis individually designed products, services, programs, and communications

Stages of the business buying process

1. problem recognition 2. need description 3. product specification 4. supplier search 5. proposal solicitation 6. supplier selection 7. contract negotiation 8. performance review

psychographic segmentation

Buyers are divided into groups on the basis of psychological/personality traits, lifestyle, or values

Enhancing Services

Add high quality services to product offerings to provide value and establish ties with customers bundle services to improve customer satisfaction and increase profits

product value analysis

An approach to cost reduction that studies whether components can be redesigned, standardized, or made by cheaper methods of production without adversely affecting product performance.

marketing mix modeling

Analyzes data from a variety of sources to understand more precisely the effects of specific marketing activities

target compatibility

Can the company create superior value for target customers? reflection of the company's ability to outdo the competition in fulfilling the needs of target customers

Target Attractiveness

Can these customers create superior value for the company? ability of a market segment to create superior value for the company > monetary and strategic value

supplier search

Catalog sites Vertical markets Buying alliances "Pure Play" auction Private exchanges Spot and barter markets

Secondary Data Sources

Data collected for another purpose and already exist somewhere

Defining the customer profile

Demographic Factors Geographic factors Behavioral Factors Psychographic factors

Segmenting Business Markets

Demographic factors Operating variables Purchasing approaches Situational factors Personal characteristics

evaluating a marketing plan

Is the plan simple and succinct? Is the plan complete? Is the plan specific? Is the plan realistic?

Behavioral Segmentation

Marketers divide buyers into groups on the basis of their actions: user status, usage rate, buyer-readiness stage, loyalty status, occasions

Model of Consumer Behavior

Marketing Tactics & Market Context -> Consumer characteristics/psychology -> Buying decision process & Purchase decisions

Measuring Market Demand

Measure and forecast the size, growth, and profit potential of new opportunities

Positioning as storytelling

Narrative branding - setting - cast - narrative arc - language

problem recognition

Someone in the company recognizes a problem or need that can be met by acquiring a good or service

market outcomes

Stem from the interplay of market forces - new consumer capabilities - new company capabilities - new competitive environment

Developing market offerings

Strategy involves choosing a well-defined market in which the company will compete and determining the value it intends to create in the market. Tactics, or marketing mix, make the company's strategy come alive.

Developing Effective Business Marketing Programs

Systems selling Additional services Customer reference programs Online and offline communications and branding

Analysis and Decision Making

Tabulate the data and develop summary measures market data vs market insights

performance review

The buyer periodically reviews the performance of the chosen supplier(s)

problem recognition

The buyer recognizes a problem/need triggered by internal/external stimuli

Successive Sets Involved in Consumer Decision Making

Total Set Awareness Set Consideration Set Choice Set Choice

customer value proposition

based on the difference between benefits the customer gets and the cost they assume for different choices

Proposal solicitation

buyer invites qualified suppliers to submit proposals

new task buying situation

buys a product or service for the first time

positioning statement

communicating an offering's category membership along with points of parity and points of difference and developing a narrative to convey the offering's positioning

effective marketing audit

comprehensive systematic unbiased periodic

Institutional Markets

consist of schools, hospitals, nursing homes, and prisons that provide goods and services to people in their care

monetary value

cost revenues costs of serving customers - expenses for tailoring offerings - expenses for communicating offerings - expenses for delivering offerings

becoming customer oriented organization

create long-term customer value listen and respond to customers

Developing a Value Proposition

customer value collaborator value company value an optimal value proposition balances the value for customers, collaborators, and the company

Primary data source

data freshly gathered for a specific purpose or project

memory processes

encoding> the more attention we pay to the meaning of info during encoding, the stronger the resulting associations in memory will be retrieval> info may be available in memory but not be accessible for recall without the proper retrieval cues or reminders

context

environment in which the company and its collaborators operate

long-term memory

episodic memory: storing info about events that we have experienced in our lives semantic memory: storing info about the world, such as facts meanings and concepts procedural memory: knowing how to perform certain procedures such as walking, talking, and riding bike

Holistic Marketing

essential approach to succeeding in the rapidly evolving market - relationship marketing - integrated marketing - internal marketing - performance marketing

Performance Marketing

financial accountability, environmental impact, social impact

Cash-flow metrics pathway

focuses on how well marketing expenditures are achieving short-term returns

Choosing Frame of Reference

frame of reference serves as a benchmark against which customers can evaluate the benefits of a company's offering good starting point in defining a competitive frame of reference for brand positioning is category membership

Buying Center Dynamics

participants with differing interests, authority, status, and susceptibility to persuasion, and sometimes with very different decision criteria individuals are making decisions on behalf of the organizations

Tactical Targeting

identifies the ways the company can reach these strategically important customers strategically reach all important customers in an effective and cost-effective manner

reference groups (social factor)

include all the groups that have a direct or indirect effect on a person's beliefs, decisions, and behavior

Ultimate targeting - one-to-one approach

individualized offerings, messages, and media easier to do as firms grow and gather information

target customers

individuals or organizations whose needs the company plans to fulfill

Diversified Portfolio

involves SBUs with broad assortments containing multiple product lines

specialized portfolio

involves SBUs with narrow assortments consisting of one or a few product lines

Customer metrics pathway

looks at how prospects become customers, from awareness to preference to trial to repeat purchase, or some less linear model

Buying Center

many people impact the buying decision of an organization (initiators, users, influencers, deciders, approvers, buyers, gatekeepers)

selective attention

marketers must work hard to attract the notice of consumers

market exchange

marketers view industry as a group of sellers and use the term market to describe customer groups

market potential

maximum sales available to all firms in an industry during a given period, under a given level of industry marketing effort, and under extant environmental conditions

Emotions

mental states that arise spontaneously rather than from conscious effort and reflect people's positive/negative reactions to internal/external stimuli

Perception

process by which one selects/organizes/interprets information to create a meaningful picture of the world Selective attention subliminal perception selective distortion

Targeting Multiple Segments

product specialization: sell certain products to several segments market specialization: sell many products to a single segment

marketing dashboards

provide all up-to-the-minute info necessary to run the business operations for a company 4 key pathways for dashboards

straight rebuy

purchasing department reorders items

Unit metrics pathway

reflects what marketers know about sales of product/service units

need description

the buyer determines the needed item's general characteristics and the required quantity

company demand

the company's estimated share of market demand at alternative levels of company marketing effort in a given time period

company sales forecast

the expected level of company sales based on a chosen marketing plan and an assumed marketing environment - sales quota - sales budget

Marketing Research

the function that links the consumer, customer, and public to the marketer through information - info used to identify and define marketing opportunities and problems > generate, refine, and evaluate marketing actions; monitor performance; improve understanding of marketing as a process

market forecast

the market demand corresponding to the level of industry marketing expenditure

total customer cost

the perceived bundle customers will incur in evaluating, obtaining, using, and disposing of the given market offering

Targeting

the process of identifying customers for whom the company will optimize its offering

category membership

the products or sets of products with which a brand competes and which function as close substitutes

Company sales potential

the sales limit approached by company demand as company marketing effort increases relative to that of competitors

selective distortion

the tendency to interpret information in a way that fits our preconceptions consumers will often distort info to be consistent with prior brand and product beliefs and expectations

collaborators

work with the company to create value for target customers

Organizing the marketing department

* Functional organization * Geographic organization * Product or brand organization * Market organization * Matrix organization

demographic segmentation

- Age: our wants and abilities change with age - Life cycle stage: person's major concern (marriage, kids, retirement) - Gender: men/women have different attitudes and behave differently - Income: income segmentation - Race & Culture

Evaluation of Alternatives

- Beliefs and attitudes - Info processing - Expectancy Value Model

4 planning activities

- Defining the corporate mission - Building the corporate culture - Establishing strategic business units - Assigning resources

new competitive environment

- Deregulation - Privatization - Retail transformation - Disintermediation - Private labels - Mega-brands

Mass Marketing

- Firm ignores segment differences and goes after the whole market with one offer - Product with a superior image that can be sold to the broadest number of buyers - Mass distribution and mass communications - Arguments for: largest potential market, lowest cost per person, leads to lower prices or higher margins

POP vs POD

- Multiple Frames of Reference: common if competition widens or the firm plans to expand into new categories - Straddle Positioning: one set of POD & POP, POD for one category may become POP for another category or vice versa, allows brands to expand market coverage and customer base - Perceptual/positioning maps: visual representations of consumer perceptions and preferences, allow brands to find holes or unmet needs

Selling and Buying Centers

- Who are the major decision participants? - What decisions do they influence, and how deeply? - What evaluation criteria do they use?

Strategic Business Unit (SBU)

- a single business or collection of businesses that can exist separately from the rest of the company - has its own set of competitors - has a manager responsible for strategic planning and profit performance, who controls most of the factors affecting profit

Communicating category membership

- announcing category benefits - comparing to exemplars - relying on product descriptor

New consumer capabilities

- can use the internet as a powerful information and purchasing aid - can search, communicate, and purchase on the move - can tap into social media to share opinions and express loyalty - can actively interact with companies - can reject marketing they find inappropriate or annoying - can extract more value from what they already own

New company capabilities

- can use the internet as a powerful information and sales channel, including for individually differentiated goods - can collect fuller and richer information about markets, customers, prospects, and competitors - can reach customers quickly and efficiently via social media and mobile marketing, sending targeted ads, coupons, and information - can improve purchasing, recruiting, training, and internal and external communications - can improve cost efficiency

purchase decision

- decision heuristics- rule of thumb - level of consumer involvement> elaboration likelihood model - intervening factors

Developing a Marketing Plan - 3 functions

- describes the company's goal and proposed course of action - informs the relevant stakeholders about the goal and action plan - persuades the relevant decision makers of the viability of the goal and the proposed course of action

POD criteria

- desirable to consumer - deliverable by company - differentiating from competitors

Becoming a Market-Driven Company

- develop company-wide passion for customers - organize around customer segments instead of products - understand customers through qualitative and quantitative research

Contents of a Marketing Plan

- executive summary: elevator pitch - situation overview: overall evaluation of the environment - G-STIC section: core of the marketing plan - exhibits

Data Mining

- identify prospects - decide which customers should receive a particular offer - deepen customer loyalty - reactivate customer purchases - avoid serious customer mistakes

3 Key areas of Corporate & business unit planning

- managing the company's business as an investment portfolio - assessing the market's growth rate and the company's position in that market - developing a viable business model

Defining the Corporate Mission

-A mission is a clear, concise, and enduring statement of the reasons for an organization's existence -Often referred to as its core purpose, a company's mission is a long-term goal that provides company employees and management with a shared sense of purpose, direction, and opportunity.

Who does marketing research?

-Marketing departments in big firms -Syndicated-service research firms (info sold for fee) -Custom marketing research firms (specific projects) -Specialty-line marketing research firms (specialized research)

G-STIC Approach

-Set a goal -Develop a strategy -Design the tactics -Define an implementation plan -Identify a set of control metrics

contract negotiation

-buyer negotiates the final order, including listing technical specifications, quantity needed, expected time of delivery, return policies, and warranties -blanket contracts vs periodic purchase orders -long-term contracts to ensure supply -vendor-managed inventory

Research Approaches

-observational> ethnographic -survey research -behavioral

strategic value

-social value: influence of target customers on other potential buyers -scale value: worth of the information that customers provide -information value: worth of the info customers provide

Customer Value analysis steps

1. Identify the relevant attributes and benefits that customers value 2. Assess the relative importance of these attributes and benefits 3. Assess the company's and competitors' performances on the key attributes/benefits 4. Monitor customer values over time 5. The seller at a disadvantage has 2 alternatives a) increase total customer benefit b) decrease total customer cost

Supplier Selection

Before selecting a supplier, the buying center will specify and rank desired supplier attributes evaluate vendors (price, reputation, reliability, agility)

POP Forms

Category- essential attributes for credible offering in category Correlational - negative associations that arise from existence of positive associations Competitive- associations designed to overcome perceived weakness of brand

Communicating conflicting benefits

Challenge: consumers want to maximize both of the negatively correlated attributes or benefits - develop a product or service that performs well on both dimensions - launch 2 different marketing campaigns> devoted to different brand attributes/benefits

modified rebuy

Change of product specifications, prices, delivery requirements, or other terms

Business market

Consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.

4 Key psychological processes that influence consumer responses

Consumer motivation Perception Learning Memory

What influences consumer behavior?

Cultural Factors Social Factors Personal Factors

5 C's

Customers Competitors Collaborators Context Company

Creating sustainable advantage - 3 core strategies

Differentiate on an existing attribute Introduce a new attribute Build a strong brand

Developing a positioning strategy

Positioning: act of designing a company's offering and image to occupy a distinctive place in the minds of the target market the goal is to instill the brand in the minds of consumers to maximize the potential benefit to the firm

Total Customer Benefit

The perceived value of the bundle of functional, psychological, and monetary benefits customers expect from a given market offering because of the product, service, and image

marketing metrics

The set of measures that helps marketers quantify, compare, and interpret marketing performance

competitive advantage

ability to perform in one or more ways that competitors cannot or will not match - leverageable advantage

Scope of Marketing

about identifying and meeting human/social needs

competitors

aim to fulfill the same needs of the same customers that the company is targeting

company

develops and manages a given market offering

integrated marketing

devise marketing "the whole is greater than the sum of its parts"

geographic segmentation

divides the market into different geographical units such as nations, regions, states, counties, cities, or even neighborhoods

market demand

the total volume that could be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program

brand metrics pathway

tracks the longer-term impact of marketing through brand-equity measures that assess both the perceptual health of the brand from customer and prospective customer perspectives and the overall financial health of the brand

elaboration likelihood model

two ways to persuade: - central route> follow if consumer possesses sufficient motivation/ability/opportunity - peripheral route> attitude formation provokes less thought/ comes from consumer brand associations

subliminal perception

unconscious messaging

Consumer motivation

understanding begins with understanding the needs consumers aim to fulfill with their actions - basic human requirements, biological & psychological - wants shaped by society - demand backed by ability to pay a need becomes a motive when it is aroused to a sufficient level of intensity to drive us to act

Pros of research plan

useful first step in exploring consumers' perception, respondents may be less guarded and may reveal more about themselves in the process

associative network memory model

views memory as a network of nodes and connecting links, nodes represent stored information or concepts, and links represent the strength of association between the nodes Marketers want to activate these brand-related nodes brand associations- all brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes that become linked to the brand node