Marketing Midterm
Roles and status
People usually choose products appropriate for their roles and status
Product line filling
adding more items within the present range of the line * To reach extra profits, satisfy dealers, use excess capacity, be the leading full-line company, and plugging holes to keep out competitors
Occupation
affects the goods and services bought
The company
all departments - from manufacturing and finance to legal and human resources - share the responsibility for understanding customer needs and creating customer value
Lifetime value
an estimate of the average revenue that a customer will generate throughout their lifespan as a customer
SWOT analysis
an overall evaluation of the company's strengths (S), weaknesses (W), opportunities (O), and threats (T)
Public
any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives
Positioning
arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
Business markets
buy goods and services for further processing or use in their production processes
Reseller markets
buy goods and services to produce public services or transfer the goods and services to others who need them
International markets
buyers in other countries, including consumers, producers, resellers, and governments
Media publics
carries news, features, editorial opinions, and other content
Learning
changes in individual's behavior arising from experience
Market development
company growth by identifying and developing new market segments for current company products
Market penetration
company growth by increasing sales of current market segments without changing the produc
Product development
company growth by offering modified or new products to current market segments
Diversification
company growth through starting up or acquiring businesses outside the company's current products and markets
Financial publics
company's ability to obtain funds
General public
concern about the general public's attitude toward its products and activities (public image and buying behavior)
factors influencing consumer behavior
cultural, social, personal, psychological
cultural factor on consumer behavior
culture, subculture, social class
threats
current and emerging external factors that may challenge the company's performance
Citizen-action publics
decisions may be questioned by consumer organizations, environmental groups, minority groups, etc. Need for PR
Differentiation
differentiating the market offering to create superior customer value
Market segment
dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes -geographic -demographic -age and life cycle -gender -psychographic -behavioral -occasion -benefit -intermarket
Economic environment
economic factors that affect consumer purchasing power and spending patterns
Economic situation
economic situations affect their store and product choices. Marketers watch for trends in spending, personal income, savings, and interest rates
Market targeting
evaluating each market segment's attractiveness and selecting one or more segments to serve
opportunities
external factors that the company may be able to exploit to its advantage
Marketing intermediaries
firms that help the company to promote, sell, and distribute its goods to final buyers
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 behaviors even though they are located in different countries
Environmental situation
physical, technological, and health circumstances will impact what products they buy, where and how they shop, etc.
Suppliers
provide the resources needed by the company to produce its goods and services
Social class
relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors
Culture
set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions
Positioning maps
show consumer perceptions of their rband versus those of competing products on important buying dimensions (price and orientation axes)
Needs
states of felt deprivation (basic part of the human makeup)
microenvironment and it's forces
the actors close to the company that affect its ability to serve its customers - the company, suppliers, marketing intermediaries, customer markets, competitors, and publics -the company -suppliers -marketing intermediaries -competitors -public -customers
Customers
the aim of the entire value delivery network is to engage target customers and create strong relationships with them
Value (customer perceived value)
the customer's evaluation of the difference between all the benefits and all the costs of a market
Relative advantage
the degree to which the innovation appears superior to existing products
Compatibility
the degree to which the innovation fits the values and experiences of potential consumers
Complexity
the degree to which the innovation is difficult to understand or use
Divisibility
the degree to which the innovation may be tried on a limited basis
Communicability
the degree to which the results of using the innovation can be observed or described to others
Wants
the form human needs take as they are shaped by culture and individual personality
Production concept
the idea that consumers will favor products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency
Selling concept
the idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort
Macroenvironment and it's forces
the larger societal forces that affect the microenvironment - demographic, economic, natural, technological, political, and cultural forces -demographic -economic -natural -technological -political -cultural
Production Concept vs. Marketing Concept
the marketing concept seeks to fully understand the customer and then use that knowledge in decisions, the product concept seeks to capitalize on the company's ability to innovate and create a compelling product
Selling Concept Vs. Marketing Concept
the marketing concept takes an outside-in perspective focusing on profits through customer satisfaction, the selling concept takes an inside-out view that focuses on profits through sales volume
Perception
the process by which people select, organize, and interpret information to form a meaningful picture of the world
The five stages in the adoption process
(1) Awareness = the consumer becomes aware of the new product but lacks information about it (2) Interest = the consumer seeks information about the new product (3) Evaluation = the consumer considers whether trying the new product makes sense (4) Trial = the consumer tried the new product on a small scale to improve his or her estimate of its value (5) Adoption = the consumer decides to make full and regular use of the new product
Strategic planning of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing market opportunities
(1) Defining the company mission (2) Setting company objectives and goals (corporate level) (3) Designing the business portfolio (4) Planning marketing and other functional strategies (business unit, product, and market level)
The five characteristics that influence the rate of adoption
(1) relative advantage (2) compatibility (3) complexity (4) divisibility (5) communicability
Beliefs and attitudes
* Belief = a descriptive thought that a person holds about something * Attitude = a person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea
social factor on consumer behavior
* Groups and social networks * Family * Roles and Status
Contact methods
* Mail --> can be used to collect large amounts of information at a low cost * Telephone --> gathers information quickly, provides greater flexibility * Personal --> takes form in individual or group interviews, can be more costly * Online = through internet and mobile surveys, online focus groups, consumer tracking, experiments, and online panels and brand communities
What makes effective segmentation?
* Measurable --> size, purchasing power, and profiles * Accessible --> effectively reached and served * Substantial --> segment should be the largest possible homogeneous group * Differentiable --> segments are distinguishable and respond differently * Actionable --> designed for attracting and serving segments
Research approaches
* Observational = gathering primary data by observing relevant people, actions, and situations * Survey = gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior * Experimental = selecting matched groups of participants, giving them different treatments, controlling related factors, and checking for differences in group responses
Research instruments
* Questionnaire --> most common, very flexible * Mechanical instruments --> mechanical instruments to monitor consumer behavior; researchers also use a variety of physiological and neurological measures to gauge consumers' emotions and reactions
Groups and social networks
* Reference groups = groups that serve as direct or indirect point of comparison or reference in forming a person's attitudes or behavior * Opinion leaders = person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others * Word-of-mouth * Influencer marketing * Online social networks
Sampling plan
* Sampling unit = who is to be studied * Sample size = how many people should be included; large samples give more reliable results than small samples * Sampling procedure = how should the people in the sample be chosen; probability and nonprobability samples
personal factor on consumer behavior
* age and life-cycle stage * occupation * economic situation * environmental situation * lifestyle * personality and self-concept
Psychological factor on consumer behavior
* motivation * perception * learning * beliefs and attitudes
market research process
1. Define the problem 2. Design the research plan 3. Conduct the research (collecting and analyzing) 4. interpreting and reporting the findings
Natural environment
physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities
Family
The most important membership reference group and buying organization in society. Large interplay of each family role
Product line stretching
a company lengthens its product line beyond current ranges (downward, upward, or both ways)
Competitors
a company must provide greater customer value and satisfaction than its competitors do
Subculture
a group of people with shared value systems based on common life experiences and situations
Product line
a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, and are marketed through the same types of outlets, or fall within given price ranges
Motivation
a need that is sufficiently pressing to direct the person to seek satisfaction of the need (Maslow's hierarchy of needs)
Lifestyle
a person's pattern of living as expressed in his or her activities, interests, and opinions
Marketing concept
a philosophy in which organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do
Mission statements
a statement of the organization's purpose - what it wants to accomplish in the larger environment *Should be market oriented and defined in terms of satisfying basic customer needs
Star
high market share, high market growth rate
Cash Cow
high market share, low market growth rate
Demands
human wants that are backed by buying power (products and services with benefits that add up to the most value and satisfaction)
A difference is worth establishing if it is...
important, distinctive, superior, communicable, preemptive (competitors cannot easily copy the difference), affordable, profitable
Internal publics
includes workers, managers, volunteers, and the board of directors
Consumer markets
individuals and households that buy goods and services for personal consumption
Primary data
information collected for the specific purpose at hand -research approaches -contact methods -sampling plan -research instruments
Secondary data
information that already exists somewhere, having been collected for another purpose (can be obtained quicker and at a lower cost) * Company internal database * Outside suppliers * Commercial online databases --> slight fee for general database services * Internet search engines
Cultural environment
institutions and other forces that affect society's basic values, perceptions, preferences, and behaviors
strengths
internal capabilities that may help a company reach its objectives
weaknesses
internal limitations that may interfere with a company's ability to achieve its objectives
Political environment
laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society
Local publics
local community residents and organizations
Question Mark
low market share, high market growth rate (how most companies start out)
Dog
low market share, low market growth rate
Government publics
management must take government developments into account (product safety, truth in advertising, etc.)
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
Causal research
marketing research to test hypotheses about cause-and-effect relationships
Age and life-cycle stage
people change the goods and services they buy over their lifetimes
demography
the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics * Baby boomers--> post WWII, control majority of spending power (e.g. Travel) * Gen X --> "birth death" after baby boom, seek success & less materialistic * Millennials --> 80's and 90's, seek authenticity and value * Gen Z --> late 90's early 2000's, utter fluency and comfort with digital tech * Gen Alpha --> after 2012, influence on household buying decisions
Product position
the way a product is defined by consumers on important attributes - the place it occupies in consumers' minds relative to competing products
Personality and self-concept
unique psychological characteristics that distinguish a person or group