Marketing Test

Market Offerings

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

Market Planning

*involves choosing marketing strategies that will help the company attain its overall strategic objectives. A detailed marketing plan is needed for each business, product, or brand.

Product/market expansion grid (or Ansoff's Growth-vector Matrix)

*looks at new markets, existing markets, existing products, and new products for company growth opportunities. -MARKET PENETRATION -MARKET DEVELOPMENT -PRODUCT DEVELOPMENT -DIVERSIFICATION

Market Planning V.S. Implementation

-A brilliant marketing strategy counts for little if the company fails to implement it properly. -Many managers think that "doing things right" (implementation) is as important as, or even more important than, "doing the right things" (strategy). The fact is that both are critical to success, and companies can gain competitive advantages through effective implementation.

Strategic business units can be a

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

***Marketing Strategies and Marketing Mix(CH.2,slide28)

-Consumers stand in the center of Figure 2.4 where the goal is to create value for customers and build profitable customer relationships. -Next comes marketing strategy—the marketing logic by which the company hopes to create this customer value and achieve these profitable relationships. The company decides which customers it will serve (segmentation and targeting) and how (differentiation and positioning). -Guided by marketing strategy, the company designs an INTEGRATED MARKETING MIX made up of factors under its control—product, price, place, and promotion (the four Ps). -To find the best marketing strategy and mix, the company engages in marketing analysis, planning, implementation, and control. Through these activities, the company watches and adapts to the actors and forces in the marketing environment.

Problems with Matrix Approaches

-Difficulty in defining SBUs and measuring market share and growth -Time consuming -Expensive -Focus on current businesses, not future planning Because of these problems, many companies have dropped formal matrix methods in favor of more customized approaches that better suit their specific situations. -Increasingly, companies are placing responsibility for strategic planning in the hands of cross-functional teams of divisional managers who are close to their markets.

Market Penetration

-Market penetration involves making more sales to current customers without changing its original product such as * by adding new stores in current market areas to make it easier for customers to visit. (Existing Markets & Existing Products) A growth strategy that helps to increase sales to current market segments without changing the product (e.g., Superbowl ads)

Steps to Strategic Planning

1) Defining the Company Mission ( 2) Setting Company Objectives and Goals 3) Designing the business portfolio 4) Planning Marketing and other functional Strategies -At the corporate level, the company starts the strategic planning process by defining its overall purpose and mission (see Figure 2.1). -This mission is then turned into detailed supporting objectives that guide the entire company. Next, 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.

Marketing Control

1) Evaluating results 2) Taking corrective action 3) Operating control 4) Strategic control Because many surprises occur during the implementation of marketing plans, marketers must practice constant marketing control.

Analyzing the Current Business Portfolio

1) Identify strategic business units (SBUs) 2) Assess the attractiveness of its various SBUs 3) Decide how much support each SBU deserves -The purpose of strategic planning is to find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment. For this reason, most standard portfolio analysis methods evaluate SBUs on two important dimensions: the attractiveness of the SBU's market or industry and the strength of the SBU's position in that market or industry.

Five Alternative Marketing Concepts

1) Production Concept 2) Product Concept 3) Selling Concept 4) Marketing Concept 5) Societal Marketing Concept

Value Proposition

A brand's value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs EX: Value proposition: Vine gives you "the best way to see and share life in motion" through "short, beautiful, looping videos in a simple and fun way for your friends and family to see." Value propositions differentiate one brand from another. They answer the customer's question, "Why should I buy your brand rather than a competitor's?" Companies must design strong value propositions that give them the greatest advantage in their target markets. 1) More-for-more 2) More- for- same 3)Same for less 4) less-for-much less *5) More-for-less

Chapter 3:

Analyzing the Marketing Environment

Differentiation

Begins the Positioning process

Consumer-Generated Marketing

Brand exchanges created by consumers themselves—both invited and uninvited—by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers. -A growing form of customer-engagement marketing is consumer-generated marketing. -This might happen through uninvited consumer-to-consumer exchanges in blogs, video-sharing sites, social media, and other digital forums. But increasingly, companies themselves are inviting consumers to play a more active role in shaping products and brand content. Some companies ask consumers for new product and service ideas. *For example, at its My Starbucks Idea site, Starbucks collects ideas from customers on new products, store changes, and just about anything else that might make their Starbucks experience better.

Chapter 2

Company and Marketing Strategy

Product Concept

Consumers favor products that offer the most QUALITY, performance, and features. -The focus is on continuous product improvements.

Production Concept

Consumers will favor products that are AVAILABLE and highly AFFORDABLE -With the production concept, management focuses on improving production and distribution efficiency. This concept is one of the oldest orientations that guides sellers. -However, although useful in some situations, the production concept can lead to MARKETING MYOPIA and losing sight of the real objective—satisfying customer needs and building customer relationships.

Selling Concept

Consumers will not buy enough of the firm's products unless the firm undertakes a large-scale SELLING AND PROMOTION effort. -The selling concept is typically practiced with unsought goods—those that buyers do not normally think of buying, such as life insurance or blood donations. These industries must be good at tracking down prospects and selling them on a product's benefits.

Diversification

Diversification involves starting up or buying businesses beyond its current products and markets. For example, the company could acquire a company that operates in different market segments with a different product mix. (New Markets & New Products) A growth strategy through starting up or acquiring businesses outside the company's current products and markets (e.g., Disney fairy tale wedding)

Marketing Process

In the first four steps, companies work to understand consumers, create customer value, and build strong customer relationships. In the final step, 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.

Marketing Environment

Includes the actors and forces OUTSIDE marketing that affect marketing management's ability to build and maintain successful relationships with target customers

Marketing Concept

Know the needs and wants of the target markets and deliver the desired SATISFACTIONs better than competitors. -Under the marketing concept, customer focus and value are the paths to sales and profits. -Instead of a product-centered make-and-sell philosophy, the marketing concept is a CUSTOMER-CENTERED sense-and-respond philosophy. The job is not to find the right customers for your product but to find the right products for your customers.

Engaging Customers

Life is good starts with a deeply felt, engagement-worthy sense of purpose: spreading the power of optimism

Market Development

Market development involves identifying and developing NEW MARKETS for its CURRENT PRODUCTS. *For instance, managers could review new demographic markets. Perhaps new groups—such as seniors—could be encouraged. Managers could consider new geographic markets in U.S. markets and in non-U.S. markets, especially Asia. (New Markets & Existing Products) A growth strategy that identifies and develops new market segments for current products (e.g., geographical expansion)

Marketing Experiences

More than just a mobile game app, Angry Birds is "a digital immersion in addictively cheerful destruction." Creator Rovio plans to expand the Angry Birds experience through animated videos, licensed products, and even Angry Birds-branded playgrounds and activity parks.

Return on Marking Investment (Marketing ROI)

NET RETURN from a marketing investment divided by the costs of the marketing investment *Measurement of the PROFITS GENERATED by investments in marketing activities

Product Development

Product development involves offering modified or new products to current markets such as by moving into new product categories. (Existing Markets & New Products) A growth strategy that offers new or modified products to existing market segments (e.g., Windows 10)

Describe the environmental forces that affect the company's ability to serve its customers.

The Microenvironment The Macroenvironment

SWOT Analysis

The company should analyze its markets and marketing environment to find attractive OPPORTUNITIES and identify environmental THREATS. It should analyze company STRENGTHS and WEAKNESSES as well as current and possible marketing actions to determine which opportunities it can best pursue. *The goal is to MATCH the company's strengths to attractive opportunities in the environment, while simultaneously eliminating or overcoming the weaknesses and minimizing the threats. (External, Internal)=on Y-axis (Positive, Negative)= X-axis

Societal Marketing

The company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and SOCIETY's LONG-RUN INTERESTS. -The societal marketing concept questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare. Is a firm that satisfies the IMMEDIATE needs and wants of target markets always doing what's best for its consumers in the long run?

Cause-Related Marketing

To exercise their social responsibility and build more positive images, many companies are now linking themselves to worthwhile causes. It has become a primary form of corporate giving which lets companies "do well by doing good" by linking purchases of the company's products or services with benefiting worthwhile causes or charitable organizations. Cause-related marketing has stirred some controversy. Critics worry that cause-related marketing is more a strategy for selling than a strategy for giving—that "cause-related" marketing is really "cause-exploitative" marketing.

Implementation

Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives -Addresses who, where, when, and how

Relative Market Share

a measure of a company strength in the market is X graph (high to low)

Market Growth Rate

a measure of market attractiveness is Y graph (low to hight)

Stars

are high-growth, high-share businesses or products requiring heavy investment to finance rapid growth. They will eventually turn into cash cows. -May need heavy investment to grow

Question Marks

are high-growth, low-share business units requiring a lot of cash to hold their share. -Build into Stars or phase out

Cash Cows

are low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share. -Established, successful SBU's Produce cash

Integrated Marketing Program

is a comprehensive plan that communicates and delivers the intended value to chosen customers. -The company's marketing strategy outlines which customers it will serve and how it will create value for these customers. Next, the marketer develops an INTEGRATED MARKETING PROGRAM that will actually deliver the intended value to target customers. The marketing program builds customer relationships by transforming the marketing strategy into action. It consists of the firm's marketing mix, the set of marketing tools the firm uses to implement its marketing strategy.

Market Segment

is a group of consumers who respond in a similar way to a given set of marketing efforts. A company might decide to serve -only one or a few special segments or market niches, -segments that major competitors overlook or ignore. -several related segments—perhaps those with different kinds of customers but with the same basic wants. -all market segments, offering a complete range of products. Most companies enter a new market by serving a single segment; if this proves successful, they add more segments.

Portfolio Analysis

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

BCG Growth-share matrix*

is a portfolio-planning method that evaluates a company's SBUs in terms of MARKET GROWTH RATE and RELATIVE MARKET SHARE *The best-known portfolio-planning method is the now-classic Boston Consulting Group (BCG) approach. The growth-share matrix defines four types of SBUs. 1) Stars 2) Cash Cows 3) Question Marks 4) Dogs

Marketing

is a process by which companies CREATE VALUE for customers and BUILD STRONG CUSTOMER RELATIONSHIPS in order to capture value from customers in return. -Value creation and customer relationship Marketing occurs when people decide to satisfy their needs and wants through EXCHANGE RELATIONSHIPS

Value Chain

is a series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products. -Marketing alone can't create superior customer value. Under the company-wide strategic plan, marketers must work closely with other departments to form an effective internal company value chain.

Marketing myopia

is focusing ONLY on existing WANTs and losing sight of underlying consumer needs. Many sellers suffer from marketing myopia, the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products. Smart marketers orchestrate several services and products, thereby creating brand experiences for consumers

Value Delivery Network

is made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve performance of the entire system. -More companies today are partnering with other members of the supply to improve the performance of the customer value delivery network. -Competition no longer takes place only between individual competitors. Rather, it takes place between the entire value delivery network created by these competitors.

Exchange

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

Market Positioning

is the arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Marketing Management

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

Business Portfolio

is the collection of businesses and products that make up the company. -The best business portfolio is the one that best fits the company's strengths and weaknesses TO opportunities in the environment. *Business portfolio planning involves two steps. 1) the company must analyze its current business portfolio and determine which businesses should receive more, less, or no investment. 2) it must shape the future portfolio by developing strategies for growth and downsizing.

Market Segmentation

is the division of a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate products or marketing mixes. Every market has segments, but not all ways of segmenting a market are equally useful. For example, Tylenol would gain little by distinguishing between low-income and high-income pain relief users if both respond the same way to marketing efforts. In the car market, for example, consumers who want the biggest, most comfortable car regardless of price and consumers who care mainly about price and operating economy represent two different segments.

Mission Statement

is the organization's purpose; what it wants to accomplish in the larger environment. Forging a sound mission begins with the following questions: 1) What is our business? 2) Who is the customer? 3) What do consumers value? 4) What should our business be? A mission statement should: Not be myopic in product terms Be meaningful and specific Be motivating Emphasize the company's strengths Contain specific workable guidelines Not be stated as making sales or profits

Customer Relationship Management

is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Customer Relationships: 1) Basic: low-margin customers 2) Full Partnerships: high-margin customers 3) Frequency Marketing Programs: reward customers Beyond offering consistently high value and satisfaction, marketers can use specific marketing tools like frequency marketing programs that reward customers who buy frequently or in large quantities.

Strategic Planning

is the process of developing and maintaining a strategic fit between the organization's goals and capabilities, and its changing marketing opportunities. -Strategic planning sets the stage for the rest of planning in the firm. Companies usually prepare annual plans, long-range plans, and strategic plans. -The annual and long-range plans deal with the company's CURRENT businesses and how to keep them going. -In contrast, the strategic plan involves ADAPTING the firm to take advantage of opportunities in its constantly changing environment. -4steps

Market Targeting

is the process of evaluating each market segment's attractiveness and selecting one or more segments to enter. -A company should target segments in which it can profitably generate the greatest customer value and sustain it over time.

Marketing MIX

is the set of tools (four Ps) the firm uses to implement its marketing strategy. This set includes 1) product, 2) price 3) promotion 4) place -To deliver on its value proposition, the firm must first create a need-satisfying market offering (product). It must then decide how much it will charge for the offering (price) and how it will make the offering available to target consumers (place). Finally, it must engage target consumers, communicate about the offering, and persuade consumers of the offer's merits (promotion). *The firm must blend each marketing mix tool into a comprehensive integrated marketing program that communicates and delivers the intended value to chosen customers.

Customer Equity

is the total combined customer lifetime values of all of the company's customers. -The ULTIMATE AIM of customer relationship management is to produce high customer equity. Customer equity is the total combined customer lifetime values of all of the company's current and potential customers. As such, it's a measure of the future value of the company's customer base. Clearly, the more loyal the firm's profitable customers, the higher its customer equity. -Customer equity may be a better measure of a firm's performance than current sales or market share. Whereas sales and market share reflect the past, customer equity suggests the future. -Marketers should care not just about current sales and market share. Customer lifetime value and customer equity are the name of the game.

Customer Lifetime Value

is the value of the entire stream of purchases that the customer would make over a lifetime of patronage. -At Stew Leonard's profitable four-store supermarket, the lifetime revenue of a customer is $50,000. Because his average customer spends about $100 a week, shops 50 weeks a year, and remains in the area for about 10 years, losing one customer can be a significant loss.

Downsizing

is when a company must prune, harvest, or divest businesses that are unprofitable or that no longer fit the strategy. -The firm may have grown too fast or entered areas where it lacks experience. -The market environment might change, making some products or markets less profitable. -Some products or business units simply age and die.

Dogs

low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash. -Do not promise to be cash sources

Market Segmentation

refers to dividing the markets into segments of customers.

Target Marketing

refers to which segments to go after.