Marketing 311- Exam 1
Motivation Research
Qualitative research designed to probe consumers' hidden subconscious motivations
Barnacles
Highly loyal but not very profitable
Demands
Human wants that are backed by buying power
Customer Demands
Human wants that are backed by buying power.
Societal Marketing
Idea that a company should make good marketing decisions by considering consumers wants, comapanies requirements, consumers long term interests, and society's long run interests
Casual Research
Marketing research to test hypothesis about cause-effect relationships
Open Source Model
practice in software industry in which companies share their software codes to assist in development of better product
Question Marks
High growth, low share
Production Concept
Idea that consumers will favor products that are available and highly affordable and that the org. should therefore focus on improving production and distribution efficiency
Product Concept
Idea that consumers will favor products that offer the most quality, performance, and features and that the org. should therefore devote its energy to making continuous product improvements
Today's visionary organization uses key elements to?
(1 ) establish a foundation and (2) set a direction using (3) strategies that enable it to develop and market its offerings successfully.
three steps in the planning phase of the strategic marketing process:
(1) situation (SWOT) analysis, (2) market-product focus and goal setting, and (3) the marketing program.
offerings
(products, services, or ideas) that create value for both the organization and its customers by satisfying their needs and wants.
Focus Groups
*6-10 People *Trained Moderator *Challenges are that its expensive, difficult to generalize from a small group, consumers aren't always open and honest
Questionaires
*Most common form of marketing research *Administered in person, by phone, or online *Flexable *Research must be care with wording and orders of questions
Research Plan
-Outlines Sources of Existing Data -Spells out the specific research approaches, contact methods, sampling plans, and instruments to gather data
Market Entry Strategies
1. Exporting Strategy- low risk 2. Contractual Agreements- medium risk 3. Strategic Alliances- medium risk 4. Direct Investment- high risk
Market Planning (4 Steps)
1. Situation Analysis 2. Set Marketing Objectives 3. Develop Marketing Strategies 4. Implement & Control Marketing Plan
What are the two main themes of Chapter 2?
1. The structure of business organizations and marketing's place in the organization 2.The Strategic Marketing Process Most organizations think strategically. If they don't... It's better to do so using formal planning
4 P's in Marketing
1. product (creating 2. price- capturing 3. place- delivering 4. promotion- communicating
4 Steps of Global Marketing
1. whether to go global 2. which markets to enter 3. level of commitment 4. how do we develop marketing mix strategies?
Physical (food, clothing, warmth, safety) Social (belonging and affection) Individual (Knowledge and self-expression)
3 Different kinds of Needs
-Selective Attention -Selective Distortion -Selective Retention
3 Perceptual Processes:
Straight Rebuy Modified Rebuy New Task
3 major types of buying situations
-Internal data -Marketing intelligence -Marketing Research
3 ways Marketers can obtain the needed info
-Customer solution -Customer cost -Convenience -Communication
4 C's
-Product -Place -Price -Promotion
4 broad groups that make up the Marketing mix:
-Motivation -Perception -Learning -Beliefs/Attitudes
4 major psychological factors that influence a person's buying choices:
-Defining problem and objectives -Develop plan -Implement plan -Interpret and report
4 steps of market research process
-Complex -Variety-Seeking -Dissonance-reducing -Habitual
4 types of buying behavior:
Generation X
45 million people born btwn 1965 and 1976 in the "birth death" following the baby boom
-Production -Product -Selling -Marketing -Societal Marketing concepts
5 Alternative concepts under which organizations design and carry out their marketing strategies
-Awareness - Interest - Evaluation -Trial -Adoption
5 stages in the process of adopting a new product:
Employee welfare
A firm may recognize the critical importance of its employees by stating its goal of providing them with good employment opportunities and working conditions.
Value Proposition
A given set of values or benefits a company promises to deliver to satisfy customer needs
New product
A good, service, or idea that is perceived by some potential customers as new
relational orientation
A method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship.
What is the meaning of an organization's mission?
A mission is a statement of the organization's function in society, often identifying its customers, markets, products, and technologies. It is often used interchangeably with vision.
Motive (drive)
A need that is sufficiently pressing to direct the person to seek satisfaction of the need
Attitude
A person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea
Lifestyle
A person's pattern of living as expressed in his or her activities, interests, and opinions
Growth-share matrix
A portfolio method that evaluates a company's strategic business units in terms of their market growth rate and relative market share. SBUs are classified as stars, cash cows, question marks, or dogs.
Step 3: Marketing Program:
Activities in step 2 tell the marketing manager which customers to target and which customer needs the firm's product offerings can satisfy—the who and what aspects of the strategic marketing process. The how aspect—step 3 in the planning phase—involves developing the program's marketing mix (the four Ps: Product strategy, price strategy, promotion strategy, Place (distribution) strategy) and its budget. Each marketing mix element is combined to provide a cohesive marketing program. Putting this marketing program into effect requires that the firm commit time and money to it in the form of a sales forecast and budget that must be approved by top management.
Microenvironment
Actors CLOSE to the company that affect its ability to serve its customers - the co, suppliers, marketing intermediaries, customer markets, competitors, and publics
Promotion: elements
Advertising Personal selling Public relations Sales promotion Direct marketing
True Friends
Both profitable and loyal
S - Strengths W - Weaknesses O - Opportunities T - Threats
An overall analysis of the company. SWOT stands for:
Public -Financial -Media -Gov -Citizen-Action -Local -General -Internal
Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. List the 7 types
Market positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers (Most important "P" thats not a "4 P")
Market positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
Marketing management
Art and science of choosing target markets and building profitable relationships with them
Marketing Management
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?
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
BRIC Countries
Brazil, Russia, India, China- the largest and fastest growing developing countries
Derived Demand
Business demand that ultimately comes from (derives from) the demand for consumer goods
Derived demand
Business demand that ultimately comes from (derives from) the demand for consumer goods.
What is business portfolio analysis?
Business portfolio analysis is a technique that managers use to quantify performance measures and growth targets to analyze its clients' strategic business units (SBUs) as though they were a collection of separate investments.
-Need recognition -Info search -Eval. of alternatives -Purchase decision -Postpurchase behavior
Buyer Decision process consists of 5 stages:
Cognitive Dissonance
Buyer discomfort caused by postpurchase conflict
Cognitive dissonance
Buyer discomfort caused by postpurchase conflict
Systems selling
Buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation
Learning
Changes in an individual's behavior arising from experience
How is the nature of relationships with customers changing?
Companies are relating with more carefully selected customers using selective relationship management to target fewer more profitable customers Companies are relating more deeply and interactively by making relationships interactive through blogs, websites, online communities and social networks
Market Development
Company growth by identifying and developing new market segments for current company products
Market Penetration
Company growth by increasing sales of current products to current market segments w/o changing the product
Data Warehouse
Company-wide electronic data base of finely detailed customer info that needs to be sifted thru for gems
Integrated Marketing Program
Comprehensive plan that communicates and delivers the intended value to chosen customers
Target Market
Customer segment that the company decides to go after
value cocreation
Customers act as collaborators with a manufacturer or retailer to create the product or service.
Customer satisfaction
Customers are the reason the organization exists, so their perceptions and actions are of vital importance. Satisfaction can be measured with surveys or by the number of customer complaints an organization receives.
Customer-percieved Value
Customers evaluation of the difference btwn all the benefits and all the costs of a marketing offer relative to those of competing offers
Sustainable Marketing
Customers expect companies to deliver value in a socially and environmentally responsible way
Target Marketing
Deciding which segments to go after
Business Buying Process
Decision process by which business buyers determine which products and services their orgs. need to purchase and then find, evaluate, and choose among alt. suppliers and brands
Environmental Sustainability
Developing strategies and practices that create a world economy that the planet can support indefinitely
Customer Perceived Value
Difference between total customer values and total customer cost
functional level
Each strategic business unit has a functional level, where groups of specialists actually create value for the organization. The term department generally refers to these specialized functions such as marketing, finance, information systems, research & development, manufacturing, human resources. At the functional level, the organization's strategic direction becomes its most specific and focused. Just as there is a hierarchy of levels within an organization, there is a hierarchy of strategic directions set by managers at each level. A key role of the marketing department is to look outward, keeping the organization focused on creating value both for it and for customers. This is accomplished by listening to customers, developing and producing offerings, and implementing marketing program activities.
What is the most important buying organization in society
Family
Product: elements
Features Brand name Packaging Service Warranty
Social responsibility
Firms may seek to balance the conflicting goals of stakeholders to promote their overall welfare, even at the expense of profits.
Marketing Intermediaries
Firms that help the company to promote, sell, and distribute its goods to final buyers
Stars
High growth, high share
Customer Insights
Fresh understandings of customers and the marketplace derived from marketing info that becomes the basis for creating customer value and relationships
Observational Research
Gathering primary data by observing relevant people, actions, and situations
Experimental Research
Gathering primary data by selecting matched groups of subjects, givin em diff. treatments, controlling related factors, and checking for differences in group responses
Primary Data
Info collected for the specifac purpose at hand
Cultural Environment
Institutions and other forces that affect society's basic values, perceptions, preferences, and behaviors
Ethnographic Research
Involves Sending Trained observers to watch and interact with consumers in their nautral enviornment
Buzz marketing
Involves enlisting or even creating opinion leaders to serve as 'brand ambassadors' who spread the word about a company's products.
Information Distribution
Involves entering info into databases and making it available in a time useable manner
Partner Relationship Management
Involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers.
Growth Strategies: Where Do We Want to Go?
Knowing where the organization is at the present time enables managers to set a direction for the firm and allocate resources to move in that direction. Two techniques to aid managers with these decisions are (1) business portfolio analysis and (2) diversification analysis.
Macroenvironment
Larger societal forces that affect the microenvironment - demographic, econ, natural, tech, political, and cultural
Political Environment
Laws, gov. agencies, and pressure groups that influence and limit various orgs. and individuals in a given society
Discuss how an organization assesses where it is now and where it seeks to be.
Managers of an organization ask two key questions to set a strategic direction. The first question, "Where are we now?" requires an organization to (a) reevaluate its competencies to ensure that its special capabilities still provide a competitive advantage; (b) assess its present and prospective customers to ensure they have a satisfying customer experience—the central goal of marketing today; and (c) analyze its current and potential competitors from a global perspective to determine whether it needs to redefine its business. The second question, "Where do we want to go?" requires an organization to set a specific direction and allocate resources to move it in that direction. Business portfolio and diversification analyses help an organization do this. Managers use business portfolio analysis to assess the organization's strategic business units (SBUs), product lines, or individual products as though they were a collection of separate investments (cash cows, stars, question marks, and dogs) to determine the amount of cash each should receive. Diversification analysis is a tool that helps managers use one or a combination of four strategies to increase revenues: market penetration (selling more of an existing product to existing markets); market development (selling an existing product to new markets); product development (selling a new product to existing markets); and diversification (selling new products to new markets).
Customer Relationship Management
Managing detailed info about the individual customers and carefully managing customer touch points to maximize customer loyalty
Market-Oriented Era
Manufacturers and retailers thus began to focus on what consumers wanted and needed before they designed, made, or attempted to sell their products and services. It was during this period that firms discovered marketing.
Production-Oriented Era
Manufacturers were concerned with product innovation, not with satisfying the needs of individual consumers, and retail stores typically were considered places to hold the merchandise until a consumer wanted it.
ma con
Marketing aims to satisfy customer needs/wants - marketing research Marketing entails exchange - trade of things of value between the buyer and seller. Marketing can be performed by individuals and organizations: suppliers, manufacturers, wholesalers, retailers, consumers, profit, not for profit. B 2 B marketing; B 2 C marketing, C 2 C marketing. Supply chain
Explain why managers use marketing dashboards and marketing metrics.
Marketing managers use marketing dashboards to visually display on a single computer screen the essential information required to make a decision to take an action or further analyze a problem. This information consists of key performance measures of a product category, such as sales or market share, and is known as a marketing metric, which is a measure of the quantitative value or trend of a marketing activity or result. Most organizations tie their marketing metrics to the quantitative objectives established in their marketing plan, which is a road map for the marketing activities of an organization for a specified future time period, such as one year or five years.
Executing the Marketing Program:
Marketing plans are meaningless pieces of paper without effective execution of those plans. Effective execution requires attention to detail for both marketing strategies and marketing tactics.
Marketing Control
Measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved
Users
Members of the buying organization who will actually use the purchased product or service.
Users
Members of the org. who will actually use the product
Marketing Myopia
Mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products
Profit
Most firms seek to maximize profits—to get as high a financial return on their investments (ROI) as possible.
Natural Environment
Natural resources that are needed as inputs by marketers or that are affected by marketing activities
Motive (drive)
Need that is sufficiently pressing to direct the person to seek satisfaction of the need
marketing ROI
Net return from a marketing investment divided by the costs of the marketing investment
Value Delivering Network
Network made up of the company, its suppliers, its distributers, and ultimately its customers who partner with each other to improve the performance of the entire system
Although marketing managers can set strategic directions for their organizations, how do they know if they are making progress in getting there?
One answer is to measure performance by using marketing dashboards.
Place: elements
Outlets Channels Coverage Transportation Stock level
Customer Relationship Management
Overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction
Marketing Myopia
Paying more attention to the product itself then the benefits that the product brings to consumers
Marketing Information System (MIS)
People and procedures for assessing info needs, developing the needed info, and helping decision makers to use the info to generate and validate actionable customer and market insights
Influencers
People in an organization's buying center who affect the buying decision; they often help define specifications and also provide information for evaluating alternatives.
Gatekeepers
People in an orgs. buying center who control the flow of info to others
Buyers
People in an orgs. buying center who make an actual purchase
Marketing
Process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return
Marketing
Process by which companies create value for customers and build strong relationships in order to capture value from customers in return.
Portfolio Analysis
Process by which management evaluates the products and businesses that make up the company
Strategic Planning
Process of developing and maintaining a strategic fit btwn the org.'s goals and capabilities and its changing marketing opportunities
4 P's
Product, Price, Promotion, Place
slide 3
Production -orientation: beginning of 20th century, mfrs. concerned with making products and setting up distribution. "customers favor products that are available and affordable. Sales-orientation: 1920-1950 " customers will buy if company heavily promotes the product" Market orientation: "customers will buy products only if product satisfies their needs/wants4. Value orientation: "customers will buy products only if it provides better value than competitors offerings". Successful companies are relationship oriented NOT transaction oriented. Relationship orientation: aim to develop a long term relationship with the customer . Customer relationship management: aims to build loyalty among firms' most valued customers.
E-procurement
Purchasing through electronic connections btwn buyers and sellers - usually online
Supply Chain
Raw Material->Manufacturer-> Retailer-> Consumer
Downsizing
Reducing the business portfolio by eliminating products or business units that are not profitable or that no longer fill the company's overall strategy
transactional orientation
Regards the buyer-seller relationship as a series of individual transactions, so anything that happened before or after the transaction is of little importance.
Customer-Managed Relationships
Relationships in which customers, empowered by today's new digital technologies interact with companies and with each other to shape their relationship with brands
Social classes
Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors.
Dogs
SBUs with low shares of slow-growth markets. Although they may generate enough cash to sustain themselves, they do not hold the promise of ever becoming real winners for the organization. Dropping SBUs that are dogs may be required, except when relationships with other SBUs, competitive considerations, or potential strategic alliances exist
Institutional Market
Schools, hospitals, etc that provide goods/services to people in their care; low budget, captive audience
Institutional market
Schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care.
Sample
Segment of pop. selected for marketing research to represent the pop. as a whole
Value Chain
Series of internal departments that carry out value creating activities to design, produce, market, deliver and support a firm's products
Market
Set of all actual and potential buyers of a product or service
Immersion Groups
Small group of consumers who interact directly and informally w/ product designers w/o a focus group moderator present
Market Offerings
Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
Market Offerings
Some combo if products, services, info, or experiences offered to a market to satisfy a need or want (includes physical products, services, persons, places, orgs, info, and ideas)
Order-Routine Specification
Stage of business buying process in which buyer writes the final order w/ chosen supplier, listing the tech specs, quantity needed, expected time of delivery, return policies, and warranties
Proposal Solicitation
Stage of business buying process in which the buyer invites qualified suppliers to submit proposals
Individual marketing
Tailoring products and marketing programs to the needs and preferences of individual customers—also labeled "markets-of-one marketing," "customized marketing," and "one-to-one marketing"
Selective Attention
Tendency for people to screen out most of the information to which they are exposed
Survey research
The gathering of primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior
Marketing strategy
The marketing logic by which the business unit hopes to achieve its marketing objectives
Portfolio analysis
The process by which management evaluates the products and businesses making up the company
B2C (business-to-consumers)
The process in which businesses sell to consumers.
Marketing intelligence
The systematic collection and analysis of publicly available information about competitors and developments in the marketing environment
Marketing research
The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization
goal of SWOT analysis
The task is to translate the results of the SWOT analysis into specific actions that will help the firm grow. The ultimate goal is to identify the critical strategy-related factors that impact the firm and then build on vital strengths, correct glaring weaknesses, exploit significant opportunities, and avoid disaster-laden threats.
Word of mouth
This influence can have a powerful impact on consumer buying behavior.Tends to be more credible than advertising or salepeople
marketing tactics
To implement a marketing program successfully, hundreds of detailed decisions are often required. These decisions, called marketing tactics, are detailed day-to-day operational decisions essential to the overall success of marketing strategies.
data visualization
Today's marketers use data visualization, which presents information about an organization's marketing metrics graphically so marketers can quickly (1) spot deviations from plans and (2) take corrective actions. ex: The Sonatica marketing dashboard in Figure 2-3 uses data visualization tools like graphs and a map to provide a snapshot of how parts of its business are performing as of December 2011
Customer Equity
Total combined customer lifetime value of all of the companies customers
Customer Equity
Total combined customer lifetime values of all of the company's customers
Marketing Implementation
Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives
Group
Two or more people who interact to accomplish individual or mutual goals
Basic Relationships
Type of relationship companies build. Ex: Nike creates this kind thru brand-building ads, PR, and its website
Full Partnerships
Type of relationship companies build. Ex: Nike sales reps work close with Sports Authority, Dicks, etc
Customer Lifetime Value
Value of the entire stream of purchases that the customer would make over a lifetime of patronage
Customer Lifetime Value
Value of the entire stream of purchases that the customer would make over a lifetimes of patronage
Germany is important because?
Very industrious and competitive
competencies
What do we do best? The answer involves an assessment of the organization's core competencies, which are its special capabilities—the skills, technologies, and resources—that distinguish it from other organizations and provide customer value. Exploiting these competencies can lead to success.
competitive advantage
What do we do better than others? Competencies should be distinctive enough to provide a competitive advantage, a unique strength relative to competitors that provides superior returns, often based on quality, time, cost, or innovation.
Acting on Deviations:
When evaluation shows that actual performance has failed to meet expectations, managers need to take corrective actions. In response to the negative and positive deviations from targets, task force might consider the following: ● Exploiting a positive deviation. ● Correcting a negative deviation.
Expectations too low, satisfy but dont attract Expectations too high, buyers will be disappointed
Why is it important for marketers to set the right level of expectations?
Diversification
a marketing strategy of developing new products and selling them in new markets. This is a potentially high-risk strategy for Ben & Jerry's if it decides to try to sell Ben & Jerry's branded clothing in Brazil. Why? Because the firm has neither previous production nor marketing experience on which to draw in marketing clothing to Brazilian consumers.
strategy (vs tactics)
an organization's long-term course of action designed to deliver a unique customer experience while achieving its goals. All organizations set a strategic direction. And marketing helps to both set this direction and move the organization there. Tactics -- short term plans and courses of action, often "corrective"
Marketplace
any location or medium used to conduct an exchange
strategic business unit level
at the strategic business unit level, managers set a more specific strategic direction for their businesses to exploit value-creating opportunities. For less complex firms with a single business focus, such as Ben & Jerry's, the corporate and business unit levels may merge.
A good MIS
balences what info users would like to have against what they need and what is feasible to offer
Consumer Orientation
business approach that prioritizes the satisfaction of customers needs and wants **relationship era
Economic Environment
business cycle, level of economic development, indicators of economic health **external environment
Systems selling (or solutions selling)
buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation.
Attention Economy
company's success is measured by its share of mind rather than share of market, companies make $$ through eyeballs rather than just dollars
Online databases
computerized collections of information available from online commercial sources or via the internet
FTC
created FTC to monitor unfair practices
Functional Planning
decision process that concentrates on developing detailed plans for strategies & tactics for short-term, supporting long term strategic planning
relative market share
defined as the sales of the SBU divided by the sales of the largest firm in the industry. A relative market share of 10 X (at the left end of the scale) means that the SBU has 10 times the share of its largest competitor, whereas a share of 0.1 X (at the right end of the scale) means it has only 10 percent of the share of its largest competitor.
Sociocultural Environment
demographics, values, social norms, and ethnocentrism **external environment
organizational strategies vary in at least two ways:
depending on (1) a strategy's level in the organization and (2) the offerings an organization provides to its customers.
business
describes the clear, broad, underlying industry or market sector of an organization's offering. To help define its business, an organization looks at the set of organizations that sell similar offerings—those that are in direct competition with each other—such as "the ice cream business." The organization can then begin to answer the questions, "What do we do?" or "What business are we in?"
Market Segment
distinct group of customers within larger market who are similar/ their needs differ from the larger market
Marketing Plan
document that describes marketing environment, outlines marketing objective and strategy, and who is responsible for carrying out each part of strategy
Stars
dominant market share, high growth rate
Cash Cows
dominant market share, low growth market
Production Orientation
emphasizes most efficient ways to produce and distribute products **production era
Operational Planning
focuses on developing detailed plans for day to day activities that carry out an organization's functional plans
TQM
focuses on satisfying customers through empowering employees to improve quality
Customer Insights
fresh understanding of customers (needs and wants) and the marketplace dervied from marketing information that become the basis for creating customer value and relationship
Data Broker & Accountability
gives consumers access to files of personal info, ability to correct inaccuracies, chance to opt out of sale of that data to companies
Industrial Goods
goods bought for further processing or for their own use
BOP (Bottom of Pyramid)
group of consumers who live on less than $2 per day
Economic Communities
groups of countries that band together to promote trade among themselves
Sherman Antitrust
guarantees free competition and prohibits exclusive territories, price fixing, and predatory pricing
Lifetime Value of a Customer
how much profit they expect to make from one customer
Societal Marketing Concepts
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
Services
intangible product exchanged directly between producer and customer
market segmentation
involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. This enables an organization to identify the segments on which it will focus its efforts—its target market segments—and develop specific marketing programs to reach them.
marketing
is the activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
Triple Bottom Line Orientation
looks at/focuses on the financial, social, and environmental bottom lines
Strategic Planning
managerial decision process that matches organizations resources and capabilities to it's market opportunities
Target Market
market segments on which an organization focuses its marketing plan
Marketing Concept
marketers first identify consumer needs then provide products to satisfy the needs to ensure the firm's profitability
Societal Marketing
marketers must satisfy customers needs in ways that also benefit society and deliver profit to the firm
B2B Marketing
marketing of goods and services form one organization to another
Competitive Environment
microenvironment and macroenvironment **external environment
Political/Legal Environment
national laws of commerce, regulations, political stability, human rights issues, regulatory issues **external environment
Social Networking Platforms
online platforms that allow a user to represent themself via a profile on a website/network **facebook, instagram, etc
strategic marketing process
organization uses strategic marketing process, whereby an organization allocates its marketing mix resources to reach its target markets (This process is divided into three phases: planning, implementation, and evaluation), to answer 3 questions: 1. How do we allocate our resources to get where we want to go? 2. How do we convert our plans into actions? 3. How do our results compare with our plans, and do deviations require new plans?
Business Cycle
overall patterns of change in the economy that affect consumer and business purchasing power, includes periods of prosperity, recession, depression, and recovery
Buyers
people in an organization's buying center who make an actual purchase.
Food and Drug Act
prohibits harmful practices in the production of food and drugs
Embargo
prohibits specified goods form entering/leaving a country
E-procurement
purchasing through electronic connections between buyers and sellers - usually online.
Consumer Credit Protection Act
requires full disclosure of credit and loan terms and rates
Nutrition Labeling and Education
requires new food labeling requirements be set by FDA
The evaluation phase of the strategic marketing process
seeks to keep the marketing program moving in the direction set for it. Accomplishing this requires the marketing manager to (1) compare the results of the marketing program with the goals in the written plans to identify deviations and (2) act on these deviations—correcting negative deviations and exploiting positive ones.
Value Chain
series of activities involved in designing, producing, marketing, delivering, and supporting any product. each chain link has potential to either add or remove value from the product
The Marketing Mix
set of tools (four ps)the firms uses to implement its marketing strategy. It includes product, price, promotion and place.
Consumer Product Safety Improvement Act
sets rules for children's products and reauthorizes & modernizes the consumer products safety commission
Dogs
small share of slow growth market, offer specialized products in limited markets
Distinctive Competency
superior capability of a firm in comparison to its competitors
Tariff
tax on imported goods
Dark Side of Marketing
terrorism, addictive consumption, exploited people, illegal activities
Marketing
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
market growth rate
the annual rate of growth of the SBU's industry.
Business portfolio
the collection of businesses and products that make up the company
Production Concept
the idea that consumers will favor products that are available or highly affordable
The Implementation Phase of the Strategic Marketing Process:
the result of the tens or hundreds of hours spent in the planning phase of the strategic marketing process is the firm's marketing plan. Implementation, the second phase of the strategic marketing process, involves carrying out the marketing plan that emerges from the planning phase. If the firm cannot put the marketing plan into effect—in the implementation phase—the planning phase was a waste of time. There are four components of the implementation phase: (1) obtaining resources, (2) designing the marketing organization, (3) developing planning schedules, and (4) actually executing the marketing program designed in the planning phase.
Performance review
the stage of the business buying process in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the arrangement.
marketing dashboard
the visual computer display of the essential information related to achieving a marketing objective. Often, active hyperlinks provide further detail. An example is when a chief marketing officer (CMO) wants to see daily what the effect of a new TV advertising campaign is on a product's sales. The idea of a marketing dashboard really comes from the display of information found on a car's dashboard. On a car's dashboard we glance at the fuel gauge and take action when our gas is getting low. With a marketing dashboard, a marketing manager glances at a graph or table and makes a decision whether to take action or to analyze the problem further. An effective marketing dashboard helps managers assess a business situation at a glance.
Countertrade
trade that doesn't involve cash
Consumer
ultimate user of a good or service
Selling Orientation
views marketing as a sales function, or way to move products out of warehouses to reduce inventory **sales era
Nationalization
when a domestic government reimburses a foreign company for its assets after taking it over
Expropriation
when a domestic government seizes a foreign company's assets without any reimbursement
Product Competition
when firms offering different products compete to satsify the same consumer needs and wants
corporate level
where top management directs overall strategy for the entire organization. "Top management" usually means the board of directors and senior management officers with a variety of skills and experiences that are invaluable in establishing overall strategy. The board of directors oversees the three levels of strategy in organizations: corporate, strategic business unit, and functional.
Marketing audit
A comprehensive, systematic, independent, and periodic examination of a company's environment, objectives, strategies, and activities to determine problem areas and to recommend a plan of action to improve the company's marketing performance
Stars
Les Mis Song performed by Javert
Customer Needs
State of felt deprivation.
Organizational direction (what)
• Business • Goals (objectives) Long-term Short-term
Organizational strategies (how)
• By level: Corporate, SBU, Functional • By offering: Product, Service, Idea
Organizational foundation (why)
• Core values • Mission (vision) • Organizational culture
To set a strategic direction, an organization needs to answer two difficult questions:
(1) Where are we now? and (2) Where do we want to go?
Advantages of Online Research
*low cost *speed *higher response rates *good for hard to reach groups
-Problem recognition -General need description -Product specification -Supplier search -Proposal solicitation -Supplier selection -Order-Routine specification -Performance review
8 Stages of the buying Process
New task
A business buying situation in which the buyer purchases a product or service for the first time.
Straight rebuy
A business buying situation in which the buyer routinely reorders something without any modifications.
Modified rebuy
A business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers.
What is the difference between a business firm and a nonprofit organization?
A business firm is a privately owned organization that serves its customers to earn a profit so that it can survive. A nonprofit organization is a nongovernmental organization that serves its customers but does not have profit as an organizational goal. Instead, its goals may be operational efficiency or client satisfaction.
customer relationship management (CRM)
A business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm's most valued customers.
Belief
A descriptive thought that a person holds about something
Quality
A firm may offer the highest quality, as Medtronic does with its implantable medical devices.
Market segment
A group of consumers who respond in a similar way to a given set of marketing efforts.
Subculture
A group of people with shared value systems based on common life experiences and situations
Undifferentiated (mass) marketing
A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer
Differentiated (segmented) marketing
A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each
Concentrated (niche) marketing
A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches
What is the difference between a marketing dashboard and a marketing metric?
A marketing dashboard is the visual computer display of the essential information related to achieving a marketing objective. Each variable in a marketing dashboard is a marketing metric, which is a measure of the quantitative value or trend of a marketing activity or result.
Designing the Marketing Organization:
A marketing program needs a marketing organization to implement it. typical manufacturing firm marketing department's structure. Four managers of marketing activities are shown to report to the vice president of marketing or chief marketing officer. Several regional sales managers and an international sales manager may report to the manager of sales. The product or brand managers and their subordinates help plan, implement, and evaluate the marketing plans for their offerings. However, the entire marketing organization is responsible for converting these marketing plans into reality.
Consumer Buyer Behavior
Buying behavior of final consumers - individuals and households that buy goods and services for personal consumption
Product/market expansion grid
A portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification
Sample
A segment of the population selected for marketing research to represent the population as a whole
Target market
A set of buyers sharing common needs or characteristics that the company decides to serve
Mission statement
A statement of the organization's purpose—what it wants to accomplish in the larger environment
Positioning statement
A statement that summarizes company or brand positioning—it takes this form: To (target segment and need) our (brand) is (concept) that (point-of-difference)
Market development
A strategy for company growth by identifying and developing new market segments for current company products
Market penetration
A strategy for company growth by increasing sales of current products to current market segments without changing the product
Product development
A strategy for company growth by offering modified or new products to current market segments
Diversification
A strategy for company growth through starting up or acquiring businesses outside the company's current products and markets
marketing plan
A written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or pro forma income (and other financial) statements.
Exchange
Act of obtaining a desired object from someone by offering something in return
Exchange
Act of obtaining a desired object from someone by offering them something in return
Marketing Environment
Actors and forces outside marketing that affect marketing managment's ability to build and maintain successful relationships w/ target customers
Personal Factors
Age, Occupation, Economic, lifestyle, personality, self concept
Consumer Market
All the individuals and households that buy or acquire goods and services for personal consumption
Consumer market
All the individuals and households who buy or acquire goods and services for personal consumption
Buying Center
All the individuals and units that play a role in the purchase decision-making process
Competitive advantage
An advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices
Explain the three steps of the planning phase of the strategic marketing process.
An organization uses the strategic marketing process to allocate its marketing mix resources to reach its target markets. This process is divided into three phases: planning, implementation, and evaluation. The planning phase consists of (a) a situation (SWOT) analysis, which involves taking stock of where the firm or product has been recently, where it is now, and where it is headed. This assessment focuses on the organization's internal factors (strengths and weaknesses) and the external forces and trends affecting it (opportunities and threats); (b) a market-product focus through market segmentation—grouping buyers into segments with common needs and similar responses to marketing programs—and goal setting, which in part requires creating points of difference—those characteristics of a product that make it superior to competitive substitutes; and (c) a marketing program that specifies the budget and activities (marketing strategies and tactics) for each marketing mix element.
What is the difference between an organization's business and its goals?
An organization's business describes the clear, broad, underlying industry or market sector of an organization's offering. An organization's goals (or objectives) are statements of an accomplishment of a task to be achieved, often by a specific time. Goals convert an organization's mission and business into long- and short-term performance targets to measure how well it is doing.
core values
An organization's core values are the fundamental, passionate, and enduring principles that guide its conduct over time. A firm's founders or senior management develop these core values, which are consistent with their essential beliefs and character. They capture the firm's heart and soul and serve to inspire and motivate its stakeholders—employees, shareholders, board of directors, suppliers, distributors, creditors, unions, government, local communities, and customers. Core values also are timeless and should not change due to short-term financial, operational, or marketing concerns. Finally, core values guide the organization's conduct. To be effective, an organization's core values must be communicated to and supported by its top management and employees; if not, they are just hollow words.
Sales-Oriented Era
As a result, manufacturers had the capacity to produce more than customers really wanted or were able to buy. Firms found an answer to their overproduction in becoming sales oriented; they depended on heavy doses of personal selling and advertising.
loyalty
Average business loses ½ of its customers in 5 years Generating a new customer costs 5 times as much as keeping a current one Example: Taco bell's life time value of a customer is estimated $14,000, Lexus: $700,000
New Task
Biz. buying situation in which the buyer purchases a product or service for the first time
Straight Rebuy
Biz. buying situation in which the buyer routinely reorders something w/o any modifications
Modified Rebuy
Biz. buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers
Business Buyer Behavior
Buying behavior of orgs. that buy goods and services for use in the production of other products and servies that are sold, rented, or supplied to others
mission
By understanding its core values, an organization can take steps to define its mission, a statement of the organization's function in society that often identifies its customers, markets, products, and technologies. Often used interchangeably with vision, a mission statement should be clear, concise, meaningful, inspirational, and long-term.
Strategic Business Unites (SBUs)
Can be a company division, a product line w/i a division, or sometimes a single product or brand
Online (Internet) marketing research
Collecting primary data through Internet surveys and online focus groups
Business Portfolio
Collection of businesses and products that make up the company
Marketing information system (MIS)
Consists of people and procedures to asses the informational needs, develop the needed info, and help decision makers use that info for the customer
Complex Buying Behavior
Consumer buying behavior in situations characterized by high involvement and significant perceived diffs among brands
Dissonance-Reducing buying behavior
Consumer buying behavior in situations characterized by high involvement but few perceived brand differences
Dissonance-reducing buying behavior
Consumer buying behavior in situations characterized by high involvement but few perceived differences among brands
Habitual buying behavior
Consumer buying behavior in situations characterized by low consumer involvement and few significant perceived brand differences
Variety-seeking buying behavior
Consumer buying behavior in situations characterized by low consumer involvement but significant perceived brand differences
Habitual Buying Behavior
Consumer buying behavior in situations characterized by low involvement and few significantly perceived brand differences
Variety Seeking Buying Behavior
Consumer buying behavior in situations characterized by low involvement but significant perceived brand differences
Product Concept
Consumers will favor products that offer the most quality, performance and features. Organizations thus devote energy to making continuos products improvements
Step 2: Market-Product Focus and Goal Setting:
Determining which products will be directed toward which customers (step 2 of the planning phase) is essential for developing an effective marketing program (step 3). This decision is often based on market segmentation, Points of Difference Example: Medtronic's Pacemaker-Set Marketing & Product Goals, Select Target Markets,Find Points of Difference, Position the Product
Age and life-cycle segmentation
Dividing a market into different age and life-cycle groups
Geographic segmentation
Dividing a market into different geographical units such as nations, states, regions, countries, cities, or neighborhoods
Gender segmentation
Dividing a market into different groups based on gender
Psychological segmentation
Dividing a market into different groups based on social class, lifestyle, or personality characteristics
Income segmentation
Dividing a market into different income groups
Market Segmentation
Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs
Market segmentation
Dividing a market into distinct groups of buyers who have distinct needs, characteristics, or behavior and who might require separate products or marketing mixes
Behavioral segmentation
Dividing a market into groups based on consumer knowledge, attitude, use, or response to a product
Market segmentation
Dividing a market into smaller groups of buyers with distinct needs, characteristics, or behavior who might require separate products of marketing mixes
Occasion segmentation
Dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item
Benefit segmentation
Dividing the market into groups according to the different benefits that consumers seek from the product
Demographic segmentation
Dividing the market into groups based on demographic variables such as age, sex, family size, family life cycle, income, occupation, education, religion, race, and nationality
Market Segmentation
Dividing the market into segments of customers
Market Segmentation
Dividing the markets into segments of customers
marketing metric
Each display in a marketing dashboard shows a marketing metric, which is a measure of the quantitative value or trend of a marketing activity or result. 2 8 The choice of which marketing metrics to display is critical for a busy marketing manager, who can be overwhelmed with irrelevant data.
Ethnographic Research
Form of obervational research involves sending trained observers to watch and interact w/ consumers in their "natural env."
Economic Environment
Economic factors that affect consumer purchasing power and spending patterns
Internal Data
Electronic collections of consumer and market info obtained from data sources w/i the company network
Internal databases
Electronic collections of information obtained from data sources within the company
Single-source data systems
Electronic monitoring systems that link consumers exposure to television advertising and promotion (measured using television meters)
Technological Environment
Forces that create new technologies, creating new product and market opportunities
Intermarket segmentation
Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries
Goals or objectives
Goals or objectives (terms used interchangeably in this book) are statements of an accomplishment of a task to be achieved, often by a specific time. For example, Netflix might set a goal of being the top provider of online movies by 2012. Goals convert an organization's mission and business into long- and short-term performance targets. Business firms can pursue several different types of goals: profit, sales, market share, quality, customer satisfaction, employee welfare, social responsibility S.M.A.R.T. Specific, Measurable, Attainable, Relevant, Time-Based Nonprofit organizations (such as museums and hospitals) also have goals, such as to serve consumers as efficiently as possible. Similarly, government agencies set goals that seek to serve the public good.
Government market
Governmental units—federal, state, and local—that purchase or rent goods and services for carrying out the main functions of government.
Subculture
Group of ppl w/ shared value systems based on common life experiences and situations
Aspirational Groups
Groups and individual wishes to belong to
Reference Groups
Groups that form a comparison or refernce in forming attitueds or behavior
Membership Groups
Groups with direct influence and to which a person belongs
-Stars -Cash Cows -Question Marks -Dogs
Growth share matrix's 4 types of SBUs
Selling Concept
Idea that consumers will not buy enough of the firm's product unless it undertakes a large-scale selling and promo effort
Sales (dollars or units)
If profits are acceptable, a firm may elect to maintain or increase its sales even though profits may not be maximized.
Competitors
In today's global marketplace, the distinctions among competitors are increasingly blurred.
Written Research Plan
Includes: 1. Management Problem 2. Research Ojectives 3. Information Needed 4. How the results will hlep management decisions 5. Budget
Secondary Data
Info that already exists somewhere thats collected for another purpose
Primary data
Information collected for the specific purpose at hand
Secondary data
Information that already exists somewhere, having been collected for another purpose
Price: elements
List price Discounts Allowances Credit terms Payment period
Value Marketing
Looking for ways to offer today's more financially cautious buyers greater value
Cash Cows
Low growth, high share
Dogs
Low growth, low share
Strangers
Low potential profitability and little projected loyalty
Variation by Level
Moving down an organization involves creating increasingly specific, detailed strategies and plans. For example, at the corporate level, top managers may struggle with writing a meaningful mission statement; while at the functional level, the issue is whether Joan or Adam makes tomorrow's sales call.
chap 1
Marketing creates, captures, communicates, delivers offerings that have value for the customers (product, price, promotion, and place decisions). Value: benefit that customers gain from using/owning/adopting an offering compared to the cost of obtaining that offering (subjective, varies for different occasions) Offering could be physical good, service, ideas
Customer Managed Relationships
Marketing relationships in which customers, empowered by today's new digital techs, interact w/ companies and w/ each other to shape their relationships w/ brands
Descriptive Research
Marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers
Descriptive research
Marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers
Exploratory research
Marketing research to gather preliminary information that will help define problems and suggest hypotheses
Exploratory Research
Marketing research to gather preliminary information that will help define problems and suggest hypothesis
Casual research
Marketing research to test hypotheses about cause-and-effect relationships
marketing plan
Most organizations tie the marketing metrics they track in their marketing dashboards to the quantitative objectives established in their marketing plan, which is a road map for the marketing activities of an organization for a specified future time period, such as one year or five years. The planning phase of the strategic marketing process (discussed later in this chapter) usually results in a marketing plan that sets the direction for the marketing activities of an organization.
Variation by Offering
Organizational strategies also vary by the organization's offering. The strategy will be far different when marketing a very tangible physical product (a Medtronic heart pacemaker), a service (a Southwest Airlines flight), or an idea (a donation to the American Red Cross).
Opinion Leader
Person w/i a reference group who, bc of special skills, knowledge, personality, or other characteristics, exerts social influence on others
Opinion leader
Person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts influence on others
Attitude
Person's consistently favourable or unfavourable evals, feelings, and tendencies twrd an object or idea
Focus group interviewing
Personal interviewing that involves inviting 6 to 10 people to gather for a few hours with a trained interviewer to talk about a product, service, or organization. The interviewer "focuses" the group discussion on important issues.
Describe how core values, mission, organizational culture, business, and goals are important to organizations.
Organizations exist to accomplish something for someone. To give organizations direction and focus, they continuously assess their core values, mission, organizational culture, business, and goals. Today's organizations specify their foundation, set a direction, and formulate strategies—the "why," "what," and "how" factors, respectively. Core values are the organization's fundamental, passionate, and enduring principles that guide its conduct over time—what Enron forgot when it lost sight of its responsibilities to its stakeholders. The organization's mission is a statement of its function in society, often identifying its customers, markets, products, and technologies. Organizational culture is a set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization. To answer the question, "What business are we in?" an organization defines its "business"—the clear, broad, underlying industry category or market sector of its offering. Finally, the organization's goals (or objectives) are statements of an accomplishment of a task to be achieved, often by a specific time.
industry
Organizations that develop similar offerings create an industry, such as the computer industry or the automobile industry. As a result, organizations make strategic decisions that reflect the dynamics of the industry to create a compelling and sustainable advantage for their offerings relative to those of competitors to achieve a superior level of performance. The foundation of much of an organization's marketing strategy is having a clear understanding of the industry within which it competes.
Deciders
People in an orgs. buying center who have formal or informal power to select or approve the final suppliers
Influencers
People in an orgs. buying center who help define specifications and also provide info for evaluating alts.
Gatekeepers
People in the organization's buying center who control the flow of information to others.
Deciders
People in the organization's buying center who have formal or informal power to select or approve the final suppliers.
Marketing Concept
Philosophy that holds that achieving org. goals depends on knowing the needs and want of target markets and delivering the desired satisfactions better than competitors
planning gap
Planners call this the planning gap: (a wedge-shaped shaded gap in the figure) the difference between the projection of the path to reach a new goal (line BD) and the projection of the path of the results of a plan already in place (line BC). The ultimate purpose of the firm's marketing program is to "fill in" this planning gap
What are points of difference and why are they important?
Points of difference are those characteristics of a product that make it superior to competitive substitutes—offerings it faces in the marketplace. They are the single most important factor in the success or failure of a new product.
Share of Customer
Portion of the customer's purchasing that a company gets in its product categories
Share of Customer
Portion of the customer's purchasing that the company gets in its product categories
Butterflies
Potentially profitability but not loyal
Question Marks
SBU's with low market share, fast growth market
Cash cows
SBUs that generate large amounts of cash, far more than they can invest profitably in themselves. They have dominant shares of slow-growth markets and provide cash to cover the organization's overhead and to invest in other SBUs.
Question marks
SBUs with a low share of high-growth markets. They require large injections of cash just to maintain their market share, much less increase it. The name implies management's dilemma for these SBUs: choosing the right ones to invest in and phasing out the rest.
Mission Statement
Statement of the org.'s purpose - what it wants to accomplish in the larger environment
3 Levels of Business Planning
Strategic, Functional, Operational
Competitive Marketing Intelligence
Systematic collection and analysis of publicly available info about consumers, competitors, and developments in the marketing environment
Marketing Research
Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an org.
Supplier development
Systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others.
Supplier Development
Systematic development of ntwrks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others
Local marketing
Tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, and even specific stores
Selective Distortion
Tendency for people to interpert information in a way that will support what they already believe
Selective Retention
Tendency to rememeber good points made about a brand they Favor and forget good points about competing brands
business portfolio analysis
The Boston Consulting Group (BCG), a nationally known management consulting firm, has developed business portfolio analysis. It is a technique that managers use to quantify performance measures and growth targets to analyze their firms' strategic business units (SBUs) as though they were a collection of separate investments. The purpose of the tool is to determine the appeal of each SBU or offering and then determine the amount of cash each should receive. More than 75 percent of the largest U.S. firms have used this analytical tool. More than 75 percent of the largest U.S. firms have used this analytical tool. The BCG business portfolio analysis requires an organization to locate the position of each of its SBUs on a growth-share matrix. The vertical axis is the market growth rate, The horizontal axis is the relative market share The BCG has given specific names and descriptions to the four resulting quadrants in its growth-share matrix based on the amount of cash they generate for or require from the organization: Cash cows, stars, question marks, dogs. An organization's SBUs often start as question marks and go counterclockwise around to become stars, then cash cows, and finally dogs. Because an organization has limited influence on the market growth rate, its main alternative is to try to change its relative market share. To do this, management decides what future role each SBU should have and either injects or removes cash from it.
Step 1: Situation (SWOT) Analysis:
The essence of situation analysis is taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization's marketing plans and the external forces and trends affecting it. An effective summary of a situation analysis is a SWOT analysis, an acronym describing an organization's appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats. The SWOT analysis is based on an exhaustive study of four areas that form the foundation upon which the firm builds its marketing program: ● Identify trends in the organization's industry. ● Analyze the organization's competitors. ● Assess the organization itself. ● Research the organization's present and prospective customers.
What are examples of a functional level in an organization?
The functional level in an organization is where groups of specialists from the marketing, finance, manufacturing/operations, accounting, information systems, research & development, and/or human resources departments focus on a specific strategic direction to create value for the organization.
B2B (business-to-business)
The process of selling merchandise or services from one business to another.
Complex buying behavior
The behavior of a consumer in situations characterized by high consumer involvement in a purchase, and a significant perceived difference among brands.
Purchase decision
The buyer's decision about which brand to purchase
Consumer buyer behavior
The buying behavior of final consumers—individuals and households who buy goods and services for personal consumption
Business buyer behavior
The buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others.
Value-Based Marketing Era
The challenge for firms is to find out what consumers are looking for and attempt to provide those very goods and services and still make a profit. Every value-based marketing firm must implement its strategy according to what its customers value.
Business buying process
The decision process by which business buyers determine which products and services their organizations need to purchase, and then find, evaluate, and choose among alternative suppliers and brands.
Value proposition
The full positioning of a brand—the full mix of benefits upon which it is positioned
Customer Satisfaction
The extent of which the products perceived performance matches a buyer's expectations
Problem recognition
The first stage of the business buying process in which someone in the company recognizes a problem or need that can be met by acquiring a good or a service.
Need recognition
The first stage of the buyer decision process, in which the consumer recognizes a problem or need
Customer Wants
The form needs take as they are shaped by culture and individual personality.
Explain the four market-product strategies in diversification analysis.
The four market-product strategies in diversification analysis are (1) Market penetration, which is a marketing strategy to increase sales of current products in current markets. There is no change in either the basic product line or the markets served. Rather, selling more of the product or selling the product at a higher price generates increased sales (2) Market development, which is a marketing strategy to sell current products to new markets. (3) Product development, which is a marketing strategy of selling new products to current markets. (4) Diversification, which is a potentially high-risk marketing strategy of developing new products and selling them in new markets.
Target marketing
The process of evaluating each market segment's attractiveness and selecting one or more segments to enter
Observational research
The gathering of primary data by observing relevant people, actions, and situations
Environmental research
The gathering of primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses
Marketing concept
The idea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do
What is the implementation phase of the strategic marketing process?
The implementation phase carries out the marketing plan that emerges from the planning phase and consists of (1) obtaining resources; (2) designing the marketing organization; (3) developing planning schedules; and (4) executing the marketing program designed in the planning phase.
Describe the elements of the implementation and evaluation phases of the strategic marketing process.
The implementation phase of the strategic marketing process carries out the marketing plan that emerges from the planning phase. It has four key elements: (a) obtaining resources; (b) designing the marketing organization to perform product management, marketing research, sales, and advertising and promotion activities; (c) developing schedules to identify the tasks that need to be done, the time that is allocated to each one, the people responsible for each task, and the deadlines for each task's accomplishment; and (d) executing the marketing strategies, which are the means by which marketing goals are to be achieved, and their associated marketing tactics, which are the detailed day-to-day operational decisions essential to the overall success of a firm's marketing strategies. These are the marketing program actions a firm takes to achieve the goals set forth in its marketing plan. The evaluation phase of the strategic marketing process seeks to keep the marketing program moving in the direction that was established in the marketing plan. This requires the marketing manager to compare the results from the marketing program with the marketing plan's goals to (a) identify deviations or "planning gaps" and (b) take corrective actions to exploit positive deviations or correct negative ones.
Marketing control
The process of measuring and evaluating the results of marketing strategies and plans, and taking corrective action to ensure that objectives are achieved
Adoption process
The mental process through which an individual passes from the first hearing about an innovation to final adoption
Return on marketing (or marketing ROI)
The net return from a marketing investment divided by the costs of the marketing investment
Value-delivery network
The network made up of the company, suppliers, distributors, and ultimately customers who "partner" with each other to improve the performance of the entire system.
Customer relationship management (CRM)
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction
How do the goals set for a marketing program in the planning phase relate to the evaluation phase of the strategic marketing process?
The planning phase objectives are used as the benchmarks with which the actual performance results are compared in the evaluation phase to identify deviations from the written marketing plans and then correct negative ones or exploit positive ones.
Micromarketing
The practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups—includes local marketing and individual marketing
strengths and weaknesses of portfolio analysis?
The primary strength of business portfolio analysis lies in forcing a firm to place each of its SBUs in the growth-share matrix, which in turn suggests which SBUs will be cash producers and cash users in the future. Weaknesses of this analysis arise from the difficulty in (1) getting the needed information and (2) incorporating competitive data into business portfolio analysis.
Perception
The process by which people select, organize, and interpret information to form a meaningful picture of the world
C2C (consumer-to-consumer)
The process in which consumers sell to other consumers.
Strategic planning
The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities. It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio, and coordinating functional strategies
Marketing implementation
The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives
Value chain
The series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products.
Culture
The set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions
Marketing mix
The set of controllable tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market.
General need description
The stage in the business buying process in which the company describes the general characteristics and quantity of a needed item.
Supplier research
The stage of the business buying process in which the buyer tries to find the best vendors.
Order-routine specification
The stage of the business buying process in which the buyer writes the final order with the chosen supplier(s), listing the technical specifications, quantity needed, expected time of delivery, return policies, and warranties.
Product specification
The stage of the business buying process in which the buying organization decides on and specifies the best technical product characteristics for a needed item.
Postpurchase behavior
The stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction
Information search
The stage of the buyer decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into active information search
Alternative evaluation
The stage of the buyer decision-making process in which the consumer uses information to evaluate alternative brands in the choice set
What are the three steps of the planning phase of the strategic marketing process?
The three steps of the planning phase of the strategic marketing process are (1) Situation (SWOT) analysis, which involves taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization's marketing plans and the external forces and trends affecting it. To do this, an organization uses a SWOT analysis, an acronym that describes an organization's appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats. (2) Market-product focus and goal setting, which determines what products an organization will offer to which customers. This is often based on market segmentation—aggregating prospective buyers into groups or segments that have common needs and will respond similarly to a marketing action. (3) Marketing program, in which an organization develops the marketing mix elements and budget for each offering.
exchange
The trade of things of value between the buyer and the seller so that each is better off as a result.
Personality
The unique psychological characteristics that lead to relatively consistent and lasting responses to one's own environment
Product position
The way the product is defined by consumers on important attributes—the place the product occupies in consumers' minds relative to competing products
how to get loyalty
When customers are satisfied/delighted with the value they received. Satisfied customers: tell 3 other customers Dissatisfied customers: ???? Q and A
cross-functional teams
When developing marketing programs for new offerings or for improving existing ones, an organization's senior management may form cross-functional teams. These consist of a small number of people from different departments who are mutually accountable to accomplish a task or a common set of performance goals. Sometimes these teams will have representatives from outside the organization, such as suppliers or customers, to assist them.
Marketing Mix
a combination of the 4 P's that together create a desired response among a set of predefined consumers
organization
a legal entity that consists of people who share a common mission. Today's organizations can be divided into business firms and nonprofit organizations.
Product development
a marketing strategy of selling new products to current markets. Ben & Jerry's could leverage its brand by selling children's clothing in the United States. This strategy is risky because Americans may not see the company's expertise in ice cream as extending to children's clothing.
Market penetration
a marketing strategy to increase sales of current products in current markets, such as selling more Ben & Jerry's Bonnaroo Buzz Fair Trade-sourced ice cream to U.S. consumers. There is no change in either the basic product line or the markets served. Increased sales are generated by selling either more ice cream (through better promotion or distribution) or the same amount of ice cream at a higher price to its current customers.
Market development
a marketing strategy to sell current products to new markets. For Ben & Jerry's, Brazil is an attractive new market. There is good news and bad news for this strategy: As household incomes of Brazilians increase, consumers can buy more ice cream; however, the Ben & Jerry's brand may be unknown to Brazilian consumers.
nonprofit organization
a nongovernmental organization that serves its customers but does not have profit as an organizational goal. Instead, its goals may be operational efficiency or client satisfaction. Regardless, it also must receive sufficient funds above its expenses to continue operations. Social entrepreneurs, like Teach For America, SightLife, and Hand in Hand International described in the Making Responsible Decisions box, seek to solve the practical needs of society and are usually structured as nonprofit organizations.
business firm
a privately owned organization such as Target, Nike, or Volkswagen that serves its customers to earn a profit so that it can survive.
strategic business unit (SBU)
a subsidiary, division, or unit of an organization that markets a set of related offerings to a clearly defined group of customers. ex: Some multimarket, multiproduct firms, such as General Electric and Johnson & Johnson, manage a portfolio or group of businesses and each is a SBU.
Diversification analysis
a technique that helps a firm search for growth opportunities from among current and new markets as well as current and new products. For any market, there is both a current product (what the firm now sells) and a new product (what the firm might sell in the future). And for any product there is both a current market (the firm's existing customers) and a new market (the firm's potential customers).
Differential Benefit
a value/benefit that competitors don't offer
Market
all consumers who share a common need that can be satisfied by a specific product who have the resources, willingness, and authority to make the purchase
Buying center
all the individuals and units that play a role in the purchase decision-making process.
National Do Not Call Registry
allows consumers to limit # of telemarketing calls
Selling Concept
the idea that consumers will not buy enough of the firms products unless it undertakes a large scale selling and promotion effort
marketing strategy
the means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it. The term implies both the end sought (target market) and the means to achieve it (marketing program).
Profit
the money left after a business firm's total expenses are subtracted from its total revenues and is the reward for the risk it undertakes in marketing its offerings.
Organizational Direction: What Will It Do?
the organization's foundation enables it to set a direction in terms of (1) the "business" it is in and (2) its specific goals.
Market share
the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.
organizational culture
the set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization. An organization must connect with all of its stakeholders. Thus, an important corporate-level marketing function is communicating its core values and mission to them
Proposal solicitation
the stage of the business buying process in which the buyer invites qualified suppliers to submit proposals.
Supplier selection
the stage of the business buying process in which the buyer reviews proposals and selects a supplier or suppliers.
business model
the strategies an organization develops to provide value to the customers it serves. Technological innovation is often the trigger for this business model change. With today's increased global competition, many organizations are rethinking their business model. Key question: Whether by us or a competitor, how else can the same or greater value be provided to our customers? Consider textbook authors
