Intro to Marketing Exam 1: Ch. 1-6

Value Proposition & USP

Full mix of benefits on which the brand is differentiate & positioned * Developing a unique selling proposition (USP) for each brand and sticking to it * Positioning on more than one differentiator Winning value propositions: * more for more * more for the same * more for less * the same for less * less for much less Losing value propositions: * the same for more * less for more * less for the same Marginal proposition: * the same for the same

Demands

Human wants that are backed by buying power Given their wants and resources, people demand products and services with benefits that add up to the most value and satisfaction.

BCG Growth Share Matrix (current)

Identifies the strategic business units The best-known portfolio-planning method was developed by the Boston Consulting Group (BCG), a leading management consulting firm. This BCG Growth-Share matrix shows the classification of company's SBUs. Market growth rate provides a measure of market attractiveness. Relative market share serves as a measure of company strength in the market. The Growth-Share Matrix defines four types of SBUs: Stars are high-growth, high-share businesses or products. Require heavy investments to finance rapid growth Cash cows are low-growth, high-share businesses or products. Established and successful SBU's need less investment to hold their market share- generates a lot of cash that company can use to fund other businesses Question marks, are low-share business units in high-growth markets. Require a lot of cash to hold share- so it is a question for company to hold & grow or potentially divest to a company who can make the proper investments Dogs are low-growth, low-share businesses and products. May generate cash to sustain self, but does not promise large amounts of cash The 10 circles in this growth-share matrix would represent a company's 10 current SBUs. The company must decide how much it will invest in each product or business SBU. It must decide whether to build, hold, harvest or divest. a portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market share. As time passes, SBUs change their positions in the growth-share matrix. Many SBUs start out as question marks and move into the star category if they succeed. They later become cash cows as market growth falls, and then finally die off or turn into dogs toward the end of the life cycle. There are limitations for the BCG approach. It can be difficult, time consuming, and costly to implement. Management may find it difficult to define SBUs and measure market share and growth. In addition, these approaches focus on classifying current businesses but provide little advice for future planning.

Customer Relationship Groups

* Butterflies: the company should create satisfying and profitable transactions, capturing as much of their business as possible in the short time during which they buy from the company. Efforts to convert butterflies into loyal customers are rarely successful. Stock market investors who trade shares often, but without building a relationship with one broker- they will jump around. * True friends: are loyal and have the potential to generate good profit for the company. There is a strong fit with the brand's offerings and their needs. The firm should make continuous relationship investments to delight these customers and nurture, retain, and grow them. * Barnacles: are highly loyal but not very profitable. There is a limited fit between their needs and the company's offerings. The company may be able to improve the profitability of barnacles by selling them more, raising their fees, or reducing service to them. However, if they cannot be made profitable, they should be fired. Ex: small bank customer, banks regularly, but never generates enough returns to cover the cost of maintaining their accounts. *Strangers customers are classified into one of four relationship groups, according to their potential profitability and projected loyalty. Each of the four customer relationship groups requires a different relationship management strategy.

Marketing information

* Customer needs and motives for buying are difficult to determine. * Required by companies to obtain customer and market insights * Generated in great quantities with the help of information technology and online sources * Use these consumer insights to build customer value & engagement -> can be difficult to obtain Most marketing managers are overloaded with data and often overwhelmed by it. Marketers don't need more information; they need better information. And they need to make better use of the information they already have. The real value of marketing research and marketing information lies in how it is used—in the customer insights that it provides.

Wants

* Form taken by human needs when shaped by culture and individual personality * Unique & individual shaped by our experience, culture For example, an American needs food but wants a Big Mac, French fries, and a soft drink.

Consumer insights

* Fresh marketing information-based understandings of customers and the marketplace — Become the basis for creating customer value, engagement, and relationships — How we develop our 4P's * Customer insights teams collect customer and market information from a wide variety of sources. Many companies are now restructuring their marketing research and information functions. They are creating customer insights teams which 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 consumer online conversations about the company and its products. This information is then used to develop important customer insights from which the company can create more value for its customers.

Observational research

* Gathering primary data by observing relevant people, actions, and situations * Insights based on what consumers do, behave, interact with product

Secondary data

* Information that already exists * Collected for another purpose * Sources: — Company's internal database — Purchased from outside suppliers * Nielsen & IRI data -> trial, repeat, brand loyalty, demographics — Commercial online databases -> searchable * Mintel, Euromonitor, Lexis Nexis — Internet search engines Researchers usually start by gathering secondary data. The company's internal database provides a good starting point. Companies can buy secondary data from outside firms that supply high-quality data to suit a wide variety of marketing information needs.

Mail, Telephone, Personal Interviewing, Online Research

* Mail questionnaires are used to collect large amounts of information at a low cost per respondent. * Telephone interviewing gathers information quickly, while providing flexibility, though more costly, and intrusive * Personal interviewing methods include — Individual interviewing — Group interviewing Online Research * Data is collected through — Internet surveys — Online focus groups — Web-based experiments — Tracking consumers' online behavior * Well-suited to quantitative research and replacing mail and telephone contact methods

Reactive companies

* passively accept the marketing environment and do not try to change it. — Simply react and adapt to it

Primary Data Collection

* research approaches: observation, survey, experiment * contact methods: mail, telephone, personal, online * sampling plan: sampling unit, sample size, sampling procedure * research instruments: questionnaire, mechanical instruments

Sampling

*A sample is a segment of the population selected to represent the population as a whole. *Decisions required for sampling design: — Sampling unit - People to be studied — Sample size - Number of people to be studied — Sampling procedure - Method of choosing the people to be studied

Proactive companies

*develop strategies to change the environment. — They take aggressive actions to affect the publics and forces in their marketing environment. — Shape new products/industries * Apple ipod, ipad * Google search engine * Amazon online marketplace

Steps in strategic planning

1. Defining the company mission 2. Setting company objectives and goals (Corporate level) 3. Designing the business portfolio 4. Planning marketing and other functional strategies (Business unit, product, and market level) At the corporate level, the company starts the strategic planning process by defining its overall purpose and mission. The mission is turned into detailed supporting objectives that guide the entire company. Then, headquarters decides what portfolio of businesses and products is best for the company and how much support to give each one. In turn, each business and product develops detailed marketing and other departmental plans that support the company-wide plan. Thus, marketing planning occurs at the business-unit, product, and market levels. It supports company strategic planning with more detailed plans for specific marketing opportunities.

Requirements for Effective Segmentation

1. Measurable - size & purchasing power of segments can be measured 2. Accessible - markets can be reached & served 3. Substantial - large & profitable enough to serve 4. Differentiable - conceptually distinguishable & respond differently to marketing mix 5. Actionable - programs for attracting & serving can be designed

Marketing Mix = 4 P's

1. Product (packaging) 2. Price 3. Place 4. Promotion the firm uses to the 4 P's to implement its marketing strategy To deliver on its value proposition, the firm must first create a need-satisfying market offering (product). It must then decide how much it will charge for the offering (price) and how it will make the offering available to target consumers (place). Finally, it must communicate with target customers about the offering and persuade them of its merits (promotion). The firm must blend each marketing mix tool into a comprehensive integrated marketing program that communicates and delivers the intended value to chosen customers.

Marketing management orientations

1. Production Concept: holds that consumers will favor products that are available and highly affordable. Marketers focus on driving efficiencies, keeping costs down so prices can stay low. 2. Product Concept: holds that consumers will favor products that offer the most quality, performance, and features. Marketers focus on making continuous improvements- always new and improved. 3. Selling Concept: refers to the idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort. We typically see this with unsought goods- a category of products that consumers don't even know they need-life insurance, blood donation, funeral services- track down prospects and really sell to them. But a focus on short term sales does not work to build long term relationships 4. Marketing Concept: a philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. Focus on creating value for consumers- companies focus on market research and work to develop products they need OR anticipate a need before a consumers realizes it. 5. Societal Marketing Concept: holds the idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests. Focus now on sustainable marketing, socially & environmentally responsible marketing that meets the needs of present consumers and also works to protect the interests of future generations. There are 3 main considerations underlying the societal marketing concept- This figure shows that companies should balance three considerations in setting their marketing strategies: company profits, consumer wants, and society's interests.

4 market targeting strategies

1. Undifferentiated (or mass marketing) refers to a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. Focuses on the common needs of consumers- not on what is unique or different. Issues with developing 1 product that meets the needs of all consumers- and may have trouble competing with more niche-focused brands. 2. Differentiated (or segmented marketing) refers to a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each. P&G several different detergent brands, and then further definition & Differentiation within each brand. Stronger sales & position in the market as they offer something for everyone's needs. Can be expensive from a marketing/product development point of view. P&G markets at least six different laundry detergent brands in the United States (Tide, Gain, Cheer, Era, Dreft, and Bold), which compete with each other on supermarket shelves. Thanks to its differentiated approach, P&G is really cleaning up in the $15 billion U.S. laundry detergent market, capturing a 61 percent market share. 3. Concentrated (or niche marketing) refers to a market-coverage strategy in which a firm goes after a large share of one or a few smaller segments or niches. Stacne went after men's socks as they noticed no one was innovating in the category- celeb designs & collabs, seen on NBA court now sold at Target to Bloomies for up to $40 per pair 4. Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. Rather than seeing a customer in every individual, micromarketers see the individual in every customer. Micromarketing includes local marketing and individual marketing. Local marketing involves tailoring brands and marketing to the needs and wants of local customer segments like cities, neighborhoods, and even specific stores- many hotel chains do this. Individual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers.

4 steps in the marketing research process

1. defining the problem and research objectives. 2. developing the research plan for collecting information. 3. implementing the research plan-collecting and analyzing the data. 4. interpreting and reporting findings.

Stages of the Business Buyer Decision Process

1. problem recognition 2. general need description 3. product specification 4. supplier search 5. proposal solicitation 6. supplier selection 7. order-routine specification 8. performance review The buying process begins with problem recognition. Problem recognition can result from internal or external stimuli. Having recognized a need, the buyer next prepares a general need description that describes the characteristics and quantity of the needed items or solutions. If complex, work with others in the organization on all the specifications and rank order the importance of all the elements. Once the buying organization has defined the need, it develops the item's technical product specifications, often with the help of a value analysis engineering team. Product value analysis is an approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized, or made by less costly methods of production. In the next buying process step, the buyer conducts a supplier search to find the best vendors. In the proposal solicitation stage, the buyer invites qualified suppliers to submit proposals. The buyer next reviews the proposals and selects a supplier or suppliers. May require a written proposal or presentation from the supplier. During supplier selection, the buyer will consider many supplier attributes and their relative importance. Rate suppliers against the attributes (quality, on time delivery, price) can negotiate with preferred suppliers on price, terms. The buyer now prepares an order-routine specification. It includes the final order with the chosen supplier or suppliers. Many large buyers now practice vendor-managed inventory, in which they turn over ordering and inventory responsibilities to their suppliers. The final stage of the business buying process is the supplier performance review, in which the buyer reviews the supplier performance. The seller's job is to monitor the same factors used by the buyer to make sure that the seller is giving the expected satisfaction.

Consumer market

All the individuals and households that buy or acquire goods and services for personal consumption 327 Million people who consume $12Trillion in goods & services Consumers are diverse and there are different reasons why they buy what they buy

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 Firms can differentiate in terms of product, services, channels, people, or image.

Survey research

Asking people questions about their knowledge, attitudes, preferences, and buying behaviour Best suited for descriptive information

International segmentation

Companies can segment international markets using one or a combination of several variables. * Geographic segmentation assumes that nations close to one another will have many common traits and behaviors. For example, some U.S. marketers lump all Central and South American countries together. * World markets can also be segmented based on economic factors. Countries might be grouped by population income levels or by their overall level of economic development. For example, many companies are now targeting the BRIC countries - Brazil, Russia, India, and China - which are fast-growing developing economies with rapidly increasing buying power. * Countries can also be segmented by political and legal factors such as the type and stability of government, receptivity to foreign firms, monetary regulations, and amount of bureaucracy. * Cultural factors can also be used by grouping markets according to common languages, religions, values and attitudes, customs, and behavioral patterns. Using intermarket segmentation (also called cross-market segmentation), marketers form segments of consumers who have similar needs and buying behaviors even though they are located in different countries. Example of this is HM- target fashion conscious but furgal shoppers across 43 countries with lower price trendy apparel and accessories

Choosing a target

Companies need to consider many factors when choosing a market-targeting strategy. 1. Which strategy is best depends on the company's resources. When the firm's resources are limited, concentrated marketing makes the most sense. 2. The best strategy also depends on the degree of product variability. 3. The product's life-cycle stage also must be considered. When a firm introduces a new product, it may be practical to launch one version only, and undifferentiated marketing or concentrated marketing may make the most sense. In the mature stage of the product life cycle, however, differentiated marketing can be useful. 4. Another factor is market variability. If most buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts, undifferentiated marketing is appropriate. 5. Finally, competitors' marketing strategies are important. When competitors use differentiated or concentrated marketing, undifferentiated marketing can be suicidal.

Value chain

Company departments are links in the company's internal value chain. That is, each department carries out value-creating activities to design, produce, market, deliver, and support the firm's products. The firm's success depends not only on how well each department performs its work but also on how well the various departments coordinate their activities. Marketers must find ways to get all departments to "think consumer" and develop a smoothly functioning value chain. One marketing expert puts it this way: "True market orientation . . . means that the entire company obsesses over creating value for the customer and views itself as a bundle of processes that profitably define, create, communicate, and deliver value to its target customers.... Everyone must do marketing regardless of function or department."

Geographic segmentation

Dividing a market into different geographical units — Such as nations, states, regions, counties, cities, or neighborhoods — May decide to operate in one or a few geographic areas — Or, operate in all areas, but pay special attention to localized needs & wants — Localizing product, advertising, promotion, sales efforts to specific geo, markets

Demographic segmentation

Dividing a market into segments based on variables — Such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation — One of the more popular way of targeting consumers due to the fact that needs, wants, usage rates

Difference to Promote

Each brand difference has the potential to create company costs as well as customer benefits. A difference is worth establishing to the extent that it satisfies the criteria of being important, distinctive, superior, communicable, preemptive, affordable, and profitable. * Important. The difference delivers a highly valued benefit to target buyers. * Distinctive. Competitors do not offer the difference, or the company can offer it in a more distinctive way. * Superior. The difference is superior to other ways that customers might obtain the same benefit. * Communicable. The difference is communicable and visible to buyers. * Preemptive. Competitors cannot easily copy the difference. * Affordable. Buyers can afford to pay for the difference. * Profitable. The company can introduce the difference profitably.

Model of Buyer Behavior

Environment: 1. Marketing stimuli - price, product, place, promotion 2. Economic 3. Social 4. Technological 5. Cultural Buyer's Black Box: 1. Buyer's characteristics 2. Buyer's decision process Buyer's Response: 1. Buying attitudes and preferences 2. Purchase behavior: what the buyer buys, when they buy, where the buyer buys, and how much the buyer buys 3. Brand and company relationship behavior

Defining the problem

Exploratory research: * Used to gather preliminary information * Helps to define problems and suggest hypotheses Descriptive research: * Used to better describe the market potential for a product or the demographics and attitudes of consumers Causal research: * Used to test hypotheses about cause-and-effect relationships

Social factors

Groups that have a direct influence and to which a person belongs are called membership groups. In contrast, 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. Ex; an aspirational reference group is a group to which you wish you belong to- like a young basketball player emulating a basketball star with hopes of playing in the NBA one day. Marketers try to understand reference groups of their target markets as it helps to further dimensionalize what their target market is interested in and influenced by An opinion leader is 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. Word-of-mouth influence 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. Partner with agencies like Bzzz Agent to have those conversations Influencer Marketing involves established influencers or creating new influencers to spread the word about a company's brands. Online social networks are online communities where people socialize or exchange information and opinions -> blogs, message boards, social media sights & even communal shopping sites Family members can strongly influence buyer behavior, it is an important reference group and consumer buying organization in society. Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services. Children are also growing in their influence, influencing 80% of household purchases -> where to eat, vacation, mobile devices and even which cars to buy. A person's position in each group can be defined in terms of both role and status -> person belongs to many groups family, clubs, organizations, online communities People usually choose products appropriate to their roles and status.

Target Market

Market segmentation reveals the firm's market segment opportunities. The firm has to evaluate the various segments and decide how many and which segments it can serve best. In evaluating different market segments, a firm must look at three factors. First, a company wants to select segments that have the right size and growth characteristics. The largest and/or fastest growing segment is not always the most attractive for every company/brand. Example, a small company may lack the skills or resources to manage such a large segment, or they maybe too competitive- it may be more profitable for them to go after a smaller target. Second, the company needs to examine major structural factors that affect long-run segment attractiveness like strong and aggressive competitors or if it is easy for new entrants to come into the segment. The existence of actual or potential substitute products, the relative power of buyers (can demand lower prices more services), and powerful suppliers (control prices, reduce quality or quantity of supply) can also affects segment attractiveness. Finally, the company must consider its own objectives and resources. Some attractive segments can be dismissed quickly because they do not mesh with the company's long-run objectives. Or, the company may lack the skills and resources needed to succeed in an attractive segment. After evaluating different segments, the company must decide which and how many segments it will target. A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. Market targeting can be carried out at several different levels.

Psychographic segmentation

Marketers segment their markets using variables such as — Social class: athleta targets urban active lifestyle to women with its yoga and athletic gear — Lifestyle: Panera - good tasting and good for you food — Personality characteristics: Lowe's hotels has a variety of "personal classifications" and they cater to each traveler differently - luxury jet setters, confident business travelers, vacationing families The products people buy reflect their lifestyles.

Relationships

Marketing consists of creating, maintaining, and growing desirable exchange relationships. — Strong relationships are built by consistently delivering superior customer value.

What is marketing?

Marketing is the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Sound marketing is critical to the success of every organization. Marketing is used by large for-profit firms, such as Google, Target, Coca-Cola and Microsoft as well as not-for-profit organizations, such as colleges, hospitals, museums, symphony orchestras, and even churches. Amazon- help customers find and discover anything they want to buy online Facebook- help over 2B connect and share with the people in their lives Starbucks- creating a culture of warmth and belonging where everyone is welcome St Jude- finding cures and saving children

Market offerings

Products, services, information, or experiences — Offered to satisfy a need or want Product: a tangible, physical item that can be offered to a market for acquisition, use, consumption that satisfy a physical need Service: an activity or benefit offered for sale that is intangible and does not result in the ownership of anything

Experimental research

Selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses Tries to explain a cause & effect relationship

Ethnographic research

Sending trained observers to watch and interact with consumers in their natural environments Challenges in that some things cannot be observed like attitudes, motives, or private behavior Observations can also be difficult to interpret different researchers may interpret actions differently

Consumer needs

States of felt deprivation, shared among all of us, basic * Physical needs—food, clothing, warmth, and safety * Social needs—belonging and affection * Individual needs—knowledge and self-expression

Stages in the Adoption Process

The adoption process is the mental process through which an individual passes from first learning about an innovation to final adoption. Consumers go through five stages in the process of adopting a new product, which is a good, service, or idea that is perceived by some potential customers as new. 1. awareness: In this stage the consumer becomes aware of the new product but lacks information about it. 2. interest: involves the consumer seeking information about the new product. 3. evaluation: where the consumer considers whether trying the new product makes sense. 4. trial: In this stage, the consumer tries the new product on a small scale to improve his or her estimate of its value. 5. adoption: where the consumer decides to make full and regular use of the new product. Marketers should think about how to help consumers through this process.

Competitive intelligence

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. Systematic monitoring, collection, and analysis of information — About consumers, competitors, and developments in the marketing environment Techniques * Observing consumers first-hand * Quizzing the company's own employees * Benchmarking competitors' products * Conducting online research * Monitoring social media buzz Offers insights about consumer opinions and their association with the brand -> how they talk about the brand, how they engage with the brand Provides early warnings of competitor strategies and potential competitive strengths and weaknesses Helps firms to protect their own information Be ethical- don't snoop

Macroenvironment

The macroenvironment are forces that shape opportunities and pose threats to the company. 6 major factors to consider here- demographics, economic, natural, technological, political, cultural Demographics: the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. So important because this looks at people and people make up our markets. Marketers analyze: — changing age and family structures: The U.S. population contains several generational groups. These include the Baby Boomers, Generation X, Generation Y or Millennials, and Generation Z. These are discussed in more detail on the next slide. — the changing American household: More people are divorcing or separating, choosing not to marry, marrying later, or marrying without intending to have children. Marketers must increasingly 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. — geographic shifts in population: Population shifts interest marketers because people in different regions buy differently. For example, people in the Midwest buy more winter clothing than people in the Southeast. — increasing diversity: Marketers face increasingly diverse markets as their operations become more international in scope. Some major companies also explicitly target gay and lesbian consumers. Economic environment: economic factors that affect consumer purchasing power and spending patterns. — Economic factors can have a dramatic effect on consumer spending and buying behavior. Consumers have now adopted a back-to-basics sensibility in their lifestyles and spending patterns that will likely persist for years to come. They are buying less and looking for greater value in the things they do buy. In turn, value marketing has become the watchword for many marketers. Marketers in all industries are looking for ways to offer today's frugal buyers greater value- like value for money, practicality, durability — Marketers should pay attention to income distribution as well as income levels. This distribution of income has created a tiered market. Many companies aggressively target the affluent, while other firms target those with more modest means. Still other companies tailor their marketing offers across a range of markets, from the affluent to the less affluent. Natural environment: involves the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities. Marketers should be aware of several trends in the natural environment. Anything from extreme weather to natural disasters can impact a business. — shortages of raw materials: Firms making products that require scarce resources face large cost increases, even if the materials remain available. Ex- Tokyo earthquake in 2011- automakers experienced shortage of black and red pigment only made in one factory in Japan, — increased pollution — increased government intervention: The governments of different countries vary in their concern and efforts to promote a clean environment Today, enlightened companies adopt practices that support environmental sustainability. This refers to the effort to create a world economy that the planet can support indefinitely. Brands and companies know that consumers are increasing demanding this as they care for the environment they want the brands they interact with to do the same Technological * New technologies can offer exciting opportunities for marketers. Many firms use radio-frequency identification, or RFID, technology to track products through various points in the distribution channel. New technologies create new markets and opportunities. Companies that do not keep up will soon find their products outdated. * Government agencies investigate and ban potentially unsafe products. Regulations have resulted in much higher research costs and longer times between new product ideas and their introduction. Marketers should be aware of these regulations when applying new technologies and developing new products. Political: refers to laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. Cultural: Business legislation has been enacted for a number of reasons. The first is to protect companies from each other. The second purpose of government regulation is to protect consumers from unfair business practices. The third purpose is to protect the interests of society against unrestrained business behavior

SWOT analysis

This refers to an overall evaluation of the company's strengths (S), weaknesses (W), opportunities (O), and threats (T). Strengths include internal capabilities, resources, and positive situational factors that may help the company serve its customers and achieve its objectives. Weaknesses include internal limitations and negative situational factors that may interfere with the company's performance. Opportunities are positive factors or trends in the external environment that the company may be able to exploit to its advantage. Threats are negative external factors or trends that may present challenges to performance.

Perceptual map

a means of displaying in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how they perceive competing products or brands, as well as the firm's own product or brand

Personal factors

age and life-cycle stage, occupation, economic situation, lifestyle, personality and self-concept A buyer's decisions also are influenced by personal characteristics of the buyer. A person's occupation affects the goods and services bought. Marketers try to identify the occupational groups that have an above-average interest in their products and services. A company can specialize in making products needed by a given occupational group. Tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle. One of the leading life-stage segmentation systems is the Nielsen PRIZM Lifestage Groups system. PRIZM classifies every American household into one of 66 distinct life-stage segments, which are organized into 11 major life-stage groups. Analyzing and understanding this lifestage groups can help marketers find, understand and engage consumers. A person's economic situation will affect his or her store and product choices. Marketers watch trends in spending, personal income, savings, and interest rates. Lifestyle is a person's pattern of living as expressed in his or her psychographics. It involves measuring consumers' major AIO dimensions - activities (work, hobbies, social), interests (food, fashion, family), and opinions (brands, business, politics). The lifestyle concept can help marketers understand changing consumer values and how they affect buyer behavior. Personality refers to the unique psychological characteristics that distinguish a person or group. It can be useful in analyzing consumer behavior for certain product or brand choices. A person's self-concept is also made use of by marketers. The idea is that people's possessions contribute to and reflect their identities. Brand's also have personalities and consumers choose brands with personalities that match their own 5 brand personalities: Sincerity- Method Excitement- Apple Competence- Washington Post Sophistication- Gucci Ruggedness- Jeep

Internal databases

collections of consumer and market information obtained from data sources within the company network * Data like: — Consumer demographics — In-store & online transactions — Web & social media visits — Customer satisfaction & complaints data — Sales & costs — Production, shipments, inventory Ex: USAA provides financial services to U.S. military personnel and their families, largely through direct marketing via the phone, the internet, and mobile channels. It maintains a huge customer database built from customer purchasing histories and information collected directly through customer surveys, transaction data, and browsing behavior at its web and social media sites. USAA uses the database to tailor direct marketing offers to the needs of individual customers.

Primary data

companies may opt to collect its own data, specific to answer its own specific marketing question

Buyer Decision Process

consists of five stages. Consider here it is more steps and stages than just purchase, though there are times when you may skip a step- for example for a product that is a routine purchase for you- like toothpaste, you may have already done the research - but as marketers we focus on the entire process because we always have new buyers coming in so we need to satisfy all of the steps 1. need recognition: The need can be triggered by internal stimuli when one of the person's normal needs rises to a level high enough to become a drive. A need can also be triggered by external stimuli. Needs can be triggered by either internal stimuli ( a normal need like hunger or thirst becomes strong enough to become a drive) or an external stimuli (an advertisement or talk with a friend might get you thinking about buying a new car) 2. information search: Consumers can obtain information from several sources like personal (family & friends), commercial (advertising, salespeople, brand website) public (social media, media coverage, peer review, consumer rating associations), and experiential sources (examining, using the product) 3. evaluation of alternatives: 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 (what others think you should do- influence) and unexpected situational factors (competitor price drops, friend has a bad experience) so you change your mind on brand to purchase 5. postpurchase behavior: Determining if the consumer is satisfied or dissatisfied with the purchase lies in the relationship between the consumer's expectations and the product's perceived performance. However, all major purchases result in cognitive dissonance, or discomfort caused by postpurchase conflict.

Factors influencing Buyer Behavior

cultural, social, personal, psychological

Behavioral segmentation

dividing a market into segments based on consumer knowledge, attitudes and usage of a product, or responses to a product

Product market expansion grid

helps develop strategies to shape the future portfolio The product/market expansion grid refers to a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification. Let's consider in terms of Starbucks. Starbucks has become America's—the world's—largest coffeehouse by skillfully engaging customers and delivering superior customer value. At its core, Starbucks doesn't sell just coffee. It sells "The Starbucks Experience." Starbucks story emphasizes: Good marketing strategy means keeping your eye squarely on delivering customer value. The objective isn't just growth or sales or profits; it's engaging customers in a meaningful way and creating value for them. Companies must first consider if they can achieve deeper market penetration. That is, make more sales to current customers without changing the original products. How? Add new stores for convenience to customers, add new features like the mobile app, improve advertising, store locations get people to stay longer. Second, companies must consider possibilities for market development. This refers to identifying and developing new markets for its current products. Look at new demographic markets, ie seniors, or look to new markets outside US -> huge growth in China. Third, companies could consider product development by offering modified or new products to current markets. New on the go products like Via instant, k-cups for at home use, RTD in stores Finally, companies might consider diversification, which refers to starting up or buying businesses beyond the firm's current products and markets. Starbucks reserve- enter new businesses

Psychological factors

motivation, perception, learning, beliefs and attitudes A motive (or drive) is a need that is sufficiently pressing to direct a person to seek satisfaction. Many companies employ teams of psychologists, anthropologists, and other social scientists to carry out motivation research to understand why consumers do what they do- what the motices are to fulfill those needs. Abraham Maslow sought to explain why people are driven by particular needs at particular times. Why does one person spend a lot of time and energy on personal safety and another on gaining the esteem of others? Maslow's answer is that human needs are arranged in a hierarchy, from the most pressing at the bottom to the least pressing at the top. They include physiological needs, safety needs, social needs, esteem needs, and self-actualization needs. Once that first need is fulfilled, that need is no longer a motivator. A motivated person is ready to act, and how they do so is based on their perception of the situation. Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. Even stimuli or the information around us can be perceived in different ways. Selective attention tendency to screen out most of the information you are exposed to- marketers have to work especially hard to get consumers attention Selective distortion describes the tendency of people to interpret information in a way that will support what they already believe. Selective retention means that consumers are likely to remember good points made about a brand they favor and forget good points made about competing brands. Learning describes changes in an individual's behavior arising from experience. The practical significance of learning theory for marketers is that they can build up demand for a product by associating it with strong drives by using motivating cues and providing positive reinforcement. A belief is a descriptive thought that a person holds about something- can be based on real knowledge, opinion and may or may not carry an emotional charge for consumers. 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. Attitudes put people into a frame of mind of liking or disliking things, of moving toward or away from them. Can be very difficult to change- ex Beyond Meat trying to change attitudes about plant based protein alternatives.

Mission Statement

refers to the organization's purpose. What it wants to accomplish in the larger environment. Forging a sound mission begins with the following questions: What is our business? Who is the customer? What do consumers value? What should our business be? Successful companies continuously raise these questions and answer them carefully and completely. These questions can often be the most difficult to answer. Mission statements should be market oriented and defined in terms of satisfying basic customer needs. Products & technology may become outdated but market needs may last forever Mission statements 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. For example, Google's mission is to give people a window into the world's information, wherever it may be found. Finally, a company's mission should focus on customers and the customer experience it seeks to create. For example, Buffalo Wild Wings chain's mission is to provide a total eating and social environment that "fuels the sports fan experience."

Exchange

the act of obtaining a desired object from someone by offering something in return — political candidate wants votes — a church wants membership & participation — an orchestra wants an audience

Microenvironment

the actors close to the company that affect its ability to engage and serve its customers - the company, suppliers, marketing intermediaries, competitors, the public, and customers Company: — Interrelated groups in a company form the internal environment — Departments share the responsibility for understanding customer needs and creating customer value. Suppliers: — Provide the resources needed by the company to produce its goods and services — Marketers must have a close relationship with suppliers — Supplier problems seriously affect marketing * Supply shortages or delays * Labor strikes * Natural disasters * Price trends of key inputs Marketing intermediaries: Help the company to promote, sell, and distribute its products to final buyers — Resellers are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers. — Physical distribution firms help the company stock and move goods from their points of origin to their destinations. — Marketing services agencies are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its products to the right markets. — Financial intermediaries include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods. Competitors: — Marketers must gain strategic advantage by positioning products strongly against competitors. — No single strategy is best for all companies. * Consider its own size and industry position compared with those of its competitors * Be aware of competitors both large and small Publics: any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives — Financial: influence the company's ability to obtain funds. Ex: Banks, investment analysts, stockholders. — Media: carry news, features, and editorial opinions. Ex. TV, newspapers, magazines, blogs, social media — Government: Management must take government developments into account like truth in advertising, product safety, regulatory issues — Citizen action: A company's marketing decisions may be questioned by consumer organizations, environmental groups, etc. — Local: neighborhood residents and community organizations. Broader community in which you operate — General: general public's image of the company affects its buying — Internal: workers, managers, volunteers, and the board of directors. When employees feel good about the company positive attitude can spill over to the external publics. Customers: — Customers are most important actors in the company's micro environment -> engage our target customers and create strong relationships with them — Five types of customer markets: * Consumer markets: consist of individuals and households that buy goods and services for personal consumption. * Business markets: buy goods and services for further processing or use in their production process. * Reseller markets: buy goods and services to resell at a profit. * Government markets: consist of government agencies that buy goods and services to produce public services. * International markets: consist of buyers in other countries, including consumers, producers, resellers, and governments.

Consumer buyer behavior

the buying behavior of final consumers - individuals and households that buy goods and services for personal consumption

Cultural factors

the most basic cause of a person's wants and behavior. Culture is the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions. These can have broad and deep influence on consumer behavior A subculture is a smaller, sub-group of people with shared value systems based on common life experiences and situations. Ex: nationalities, religion, geographic regions. Marketers may develop products or marketing programs tailored to those specific target markets.

Strategic planning

the process of developing and maintaining a strategic fit between the organization's goals, capabilities and its changing marketing opportunities. * involves adapting the firm to take advantage of opportunities in its constantly changing environment.

Value proposition

the set of benefits or values it promises to deliver to consumers to satisfy their needs Ex: Jet Blue- you above all. Bringing humanity back to travel Spirit Airlines- bare fare. Less Money More Go Such value propositions help to differentiate each brand from the other- give you a unique position -> help consumers answer why should I buy your brand vs. the others? Have a strong value proposition gives you a strong competitive advantage in the market.

Customer Lifetime Value (CLV)

the value of the entire stream of purchases a customer makes over a lifetime of patronage Customer defections can be costly. Losing a customer means losing more than a single sale. It means losing that customer's lifetime value. For example, the average customer at Stew Leonard's supermarket spends about $100 a week, shops 50 weeks a year, and remains in the area for about 10 years. If this customer has an unhappy experience and switches to another supermarket, Stew Leonard's has lost $50,000 in lifetime revenue. The loss can be much greater if the disappointed customer shares the bad experience with other customers and causes them to defect. In fact, a company can lose money on a specific transaction but still benefit greatly from a long-term relationship. This means that companies must aim high in building customer relationships.

Positioning

the way a product is defined by consumers on important attributes —the place the product occupies in consumers' minds relative to competing products

Goals for marketing

— Attract new customers by promising superior value — Keep and grow current customers by delivering satisfaction

Traditional Marketing

— Making a sale — Abundance of products in the nearby shopping centers — Television, magazine, and direct-mail ads marketing is seen in abundance at shopping malls and in magazine, television, and direct-mail advertisements. Therefore, marketing in the old sense refers to making a sale—"telling and selling."

Contemporary Marketing

— Satisfying customer needs — Imaginative Web sites and mobile phone apps, blogs, online videos, and social media — Reach customers directly, personally, and interactively marketers have assembled a host of new marketing approaches—imaginative Web sites, mobile phone apps, blogs, online videos, and social media. Thus, marketing in the new sense involves satisfying customer needs.