marketing test 1
Database
- A collection of information arranged for easy access and retrieval - Allows marketers to tap into abundant information useful in making marketing decisions
Market opportunity
- A combination of circumstances and timing that permits an organization to take action to reach a particular target market
Oligopoly
- A competitive structure in which a few sellers control the supply of a large proportion of a product o Usually, barriers of some sort make it difficult to enter the market and compete with oligopolies.
Monopolistic competition
- A competitive structure in which a firm has many potential competitors and tries to develop a marketing strategy to differentiate its product
Monopoly
- A competitive structure in which an organization offers a product that has no close substitutes, making that organization the sole source of supply o Because the organization has no competitors, it controls the supply of the product completely and, as a single seller, can erect barriers to potential competitors.
Idea
- A concept, a philosophy, an image, or an issue
Validity
- A condition that exists when a research method measures what it is supposed to measure
Reliability
- A condition that exists when a research technique produces almost identical results in repeated trials - A reliable technique is not necessarily valid.
A market is a group of individuals and/or organizations that have:
- A desire or need for products in a product class - The ability, willingness, and authority to purchase such products
By addressing concerns about the impact of marketing on society
- A firm can contribute to society through socially responsible activities as well as increase its financial performance.
Time series analysis
- A forecasting method that uses historical sales data to discover patterns in the firm's sales over time and generally involves trend, cycle, seasonal, and random factor analyses • In a time series analysis, a forecaster performs four types of analyses
Random sampling
- A form of probability sampling in which all units in a population have an equal chance of appearing in the sample, and the various events that can occur have an equal or known chance of taking place
Product
- A good, a service, or an idea
Market
- A group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase those products
Sample
- A limited number of units chosen to represent the characteristics of a total population
Mission statement
- A long-term view, or vision, of what the organization wants to become
Marketing concept
- A managerial philosophy that an organization should try to satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals - A firm that adopts the marketing concept must satisfy not only its customers' objectives but also its own objectives.
Homogeneous market
- A market in which a large proportion of customers have similar needs for a product
Heterogeneous markets
- A market made up of individuals or organizations with diverse needs for products in a specific product class
Concentrated targeting strategy
- A market segmentation strategy in which an organization targets a single market segment using one marketing mix
Pure competition
- A market structure characterized by an extremely large number of sellers, none strong enough to significantly influence price or supply o Products would be homogeneous, and entry into the market would be easy. o It does not exist in the real world.
Geodemographic segmentation
- A method of market segmentation that clusters people in zip code areas and smaller neighborhood units based on lifestyle and demographic information
Regression analysis
- A method of predicting sales based on finding a relationship between past sales and one or more independent variables, such as population or income - Simple regression analysis uses one independent variable - Multiple regression analysis includes two or more independent variables
The strategic planning process begins with
- A n analysis of the marketing environment, including the industry in which the company operates or intends to sell its products.
Quota sampling
- A nonprobability sampling technique in which researchers divide the population into groups and then arbitrarily choose participants from each group
Social responsibility and ethical conduct are
- A part of strategic planning and the implementation of marketing activities.
Business cycle
- A pattern of economic fluctuations that has four stages:
Good
- A physical entity that you can touch
Marketing strategy
- A plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market
Delphi technique
- A procedure in which experts create initial forecasts, submit them to the company for averaging, and then refine the forecasts - The ultimate goal in using this technique is to develop a highly reliable sales forecast.
Executive judgment
- A sales forecasting method based on the intuition of one or more executives - This approach is unscientific but expedient and inexpensive. - It is not a very accurate method but may work well when product demand is relatively stable and the forecaster has years of market-related experience. - Such forecasts may be too optimistic or pessimistic. - The forecaster has only past experience as a guide for deciding where to go in the future.
Nonprobability sampling
- A sampling technique in which there is no way to calculate the likelihood that a specific element of the population being studied will be chosen
National Advertising Review Board (NARB)
- A self-regulatory unit that considers challenges to issues raised by the National Advertising Division (an arm of the Council of Better Business Bureaus) about an advertisement
Companies that truly adopt the marketing concept develop an organizational culture that is based on
- A shared set of beliefs that places the customer's needs at the center of decisions about strategy and operations.
Focus group
- A small group of 8 to 12 people who are brought together to participate in an interview that is often conducted informally, without a structured questionnaire, to observe interaction when members are exposed to an idea or a concept
Target market
- A specific group of customers on whom an organization focuses its marketing efforts
Prosperity
- A stage of the business cycle characterized by low unemployment and relatively high total income, which together ensure high buying power (provided the inflation rate stays low)
Recession
- A stage of the business cycle during which unemployment rises and total buying power declines, stifling both consumer and business spending
Recovery
- A stage of the business cycle in which the economy moves from depression or recession to prosperity
Depression
- A stage of the business cycle when unemployment is extremely high, wages are very low, total disposable income is at a minimum, and consumers lack confidence in the economy
Marketing objective
- A statement of what is to be accomplished through marketing activities - Should: o Be based on a careful study of the SWOT analysis (i.e., Match strengths to opportunities; Eliminate weaknesses; Minimize threats) o Be stated in clear, simple terms o Be measurable o Specify a time frame for its accomplishment o Be consistent with business-unit and corporate strategies
Green marketing
- A strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment
Undifferentiated targeting strategy
- A strategy in which an organization designs a single marketing mix and directs it at the entire market for a particular product - Effective under two conditions: o A large proportion of customers in a total market must have similar needs for the product o The organization has the resources to develop a single marketing mix that satisfies customers' needs in a large portion of a total market along with the managerial skills to maintain it
Differentiated targeting strategy
- A strategy in which an organization targets two or more segments by developing a marketing mix for each segment -Advantages: Could mean increased sales• Uses excess production capacity - Disadvantages: Production costs are higher
Corporate strategy
- A strategy that determines the means for utilizing resources in the various functional areas to reach the organization's goals - The broadest of the three levels of strategy (corporate, business-unit, and marketing); should be developed with the organization's overall mission in mind - Corporate strategy planners attempt to match the resources of the organization with the opportunities and threats in the environment.
Decentralized organization
- A structure in which decision-making authority is delegated as far down the chain of command as possible
Centralized organization
- A structure in which top-level managers delegate little authority to lower levels
Sales force forecasting survey
- A survey of a firm's sales force regarding anticipated sales in their territories for a specified period - The sales staff is the company personnel closest to customers on a daily basis and, therefore, has first-hand knowledge about customers' product needs.
Customer forecasting survey
- A survey of customers regarding the types and quantities of products they intend to buy during a specific period - May be useful to a business with relatively few customers
Better Business Bureau (BBB)
- A system of nongovernmental, independent, local regulatory agencies supported by local businesses that helps settle problems between customers and specific business firms
Step 1: Identify the Appropriate Targeting Strategy
- A target market is a group of people or organizations for which a business creates and maintains a marketing mix specifically designed to satisfy the needs of group members.
Stratified sampling
- A type of probability sampling in which the population is divided into groups with a common attribute and a random sample is chosen within each group
Probability sampling
- A type of sampling in which every element in the population being studied has a known chance of being selected for study
Marketing plan
- A written document that specifies the activities to be performed to implement and control the organization's marketing strategies
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
- Adam Smith, 1776
Disposable income
- After-tax income
Population (Sampling•)
- All the elements, units, or individuals of interest to researchers for a specific study
Federal Trade Commission (FTC)
- An agency that regulates a variety of business practices and curbs false advertising, misleading pricing, and deceptive packaging and labeling - Most heavily influences marketing activities (of all the federal regulatory units) - Assists businesses in complying with laws and evaluates new marketing methods every year
Random factor analysis
- An analysis attempting to attribute erratic sales variations to random, nonrecurrent events
Seasonal analysis
- An analysis of daily, weekly, or monthly sales figures to evaluate the degree to which seasonal factors influence sales
Cycle analysis
- An analysis of sales figures for a three- to five-year period to ascertain whether sales fluctuate in a consistent, periodic manner
Trend analysis
- An analysis that focuses on aggregate sales data over a period of many years to determine general trends in annual sales
Performance standard
- An expected level of performance against which actual performance can be compared - Examples: a 20 percent reduction in customer complaints, a monthly sales quota of $150,000, or a 10 percent increase in new-customer accounts
Willingness to spend
- An inclination to buy because of expected satisfaction from a product, influenced by the ability to buy and numerous psychological and social forces
Hypothesis
- An informed guess or assumption about a certain problem or a certain set of circumstances
Social responsibility
- An organization's obligation to maximize its positive impact and minimize its negative impact on society
Research design
- An overall plan for obtaining the information needed to address a research problem or issue • This step requires formulating a hypothesis and determining what type of research is most appropriate for testing the hypothesis to ensure the results are reliable and valid.
Marketing cost analysis
- Analysis of costs to determine which are associated with specific marketing efforts • One way to analyze costs is by comparing a company's costs with industry averages. - When looking at industry averages, a company should take into account its own unique situation. - The company's costs can differ from the industry average for several reasons, including its own marketing objectives, cost structure, geographic location, types of customers, and scale of operations.
Sales analysis
- Analysis of sales figures to evaluate a firm's performance - A common method of evaluation because sales data are readily available and can reflect the target market's reactions to a marketing mix - Current sales data must be compared with forecasted sales, industry sales, specific competitor's sales, and the costs incurred from marketing efforts to achieve the sales volume .• Although sales may be measured in several ways, the basic unit of measurement is the sales transaction.
Statistical interpretation
- Analysis of what is typical and what deviates from the average • Data requires careful interpretation by the marketer .• Managers must understand the research results and relate them to a context that permits effective decision making.
Product variable decisions and activities
- Are important because they directly relate to customers' needs and wants
Strategic planning often begins
- At the corporate level and proceeds downward to the business-unit and marketing levels.
Observation Methods
- Avoid direct contact with the subject to reduce bias due to the possible awareness of the observation process .- If the presence of a human observer is likely to bias the outcome or if human sensory abilities are inadequate, mechanical observation devices (cameras, recorders, scanners) may be used to record behavior.
Marketing research can help a firm:
- Better understand market opportunities - Ascertain the potential for success for new products - Determine the feasibility of a particular marketing strategy - Develop marketing mixes to match the needs of customers - Improve the ability to make decisions
To maintain an exchange relationship
- Both buyers and sellers must be satisfied
Profits can be obtained through relationships in the following ways:
- By acquiring new customers - By enhancing the profitability of existing customers - By extending the duration of customer relationships • Implementing the marketing concept means optimizing the exchange relationship.
To build long-term customer relationships, marketers are increasingly turning to marketing research and data analytics.
- By increasing customer value over time, organizations try to retain and increase long-term profitability through customer loyalty .- Through the use of e-marketing, companies can personalize customer relationships on a nearly one-on-one basis.
Federal Trade Commission Enforcement Tools
- Cease and desist order: court ordering business to stop illegal practice - Consent decree: Order for business to stop questionable acts to avoid prosecution - Redress: Money paid to resolve situation - Corrective advertising: Business must make new advertisement correcting misinformation - Civil penalties: Court ordered civil fines up to $10k per day for violating a cease and desist order
Most Recognizable Brands in the World?
1. Apple inc. 11. McDonald's2. Google 12. Ali Baba3. Microsoft 13. AT&T4. Facebook 14. UPS5. Amazon 15. Tencent6. Coca-Cola 16. Starbucks7. Nike 17. IBM8. Samsung 18. Visa9. Disney 19. Pepsi10. Toyota 20. Intel
Characteristics of Top Brands
1. Leadership—clear purpose 2. Engagement—meaningful & collaborative relationship with customers 3. Relevance—delivering on expectations
Segmentation variables
- Characteristics of individuals, groups, or organizations used to divide a market into segments - Several variables are often used in combination when segmenting a market. *Segmentation variables should relate to the customers' needs for, uses of, or behavior toward the product. *Segmentation variables must be measurable. *A company's resources and capabilities affect the number and size of the segment variables used. *The type of product and degree of variation in customers' needs dictate the number and size of segments targeted.
Consumer product needs are influenced by geographic variables, such as
- Climate, terrain, city size, population density, and urban/rural areas.
METHODS OF COLLECTING PRIMARY DATA
- Collecting primary data is a lengthier, more expensive, and more complex process than collecting secondary data .- To gather primary data, researchers use: *Sampling Procedures *Survey Methods *Observation
Environmental Forces
- Competitive - Economic - Political - Legal and Regulatory - Technological - Sociocultural
Federal Trade Commission Act (1914)
- Created the Federal Trade Commission; also gives the FTC investigatory powers to be used in preventing unfair methods of competition.
Secondary data
- Data compiled both inside and outside the organization for some purpose other than the current investigation
Primary data
- Data observed and recorded or collected directly from respondents
Two types of conclusive research are
- Descriptive research - Experimental research
Marketers must:
- Develop a marketing mix that matches the needs of customers in the target marke t- Constantly monitor the competition and adapt their products, distribution decisions, promotion, and pricing to foster long-term success - Collect in-depth, up-to-date information about customer needs
Discretionary income
- Disposable income available for spending and saving after an individual has purchased the basic necessities of food, clothing, and shelter
Factors affecting costs include:
- Distinctive Product Features - Attractive Package Design - Generous Product Warranties - Extensive Advertising - Attractive Promotional Offers - Competitive Prices - High-Quality Personal Service
Credit
- Enables people to spend future income now or in the near future.
The Food and Drug Administration (FDA)
- Enforces regulations prohibiting the sale and distribution of adulterated, misbranded, or hazardous food and drug products.
Strategic performance evaluation
- Establishing performance standards, measuring actual performance, comparing actual performance with established standards, and modifying the marketing strategy, if needed
Self-Regulation advantages
- Establishment and implementation are usually less expensive - Guidelines are generally more realistic and operational. - Effective self-regulatory programs reduce the need to expand government bureaucracy
Factors that affect consumers' general willingness to spend are:
- Expectations about future employment - Income levels - Prices - Family size - General economic conditions
Total budget competitors
- Firms that compete for the limited financial resources of the same customers ex: Car, Bus
Product competitors
- Firms that compete in the same product class but market products with different features, benefits, and prices ex: Qatar Airways, Frontier Airlines, Ryanair
Brand competitors
- Firms that market products with similar features and benefits to the same customers at similar prices ex: American Airlines, United Airlines
Generic competitors
- Firms that provide very different products that solve the same problem or satisfy the same basic customer need ex: Enterprise, Avis
Income
- For an individual, the amount of money received through wages, rents, investments, pensions, and subsidy payments for a given period
Marketing mix
- Four marketing activities—product, price, distribution, and promotion—that a firm can control to meet the needs of customers within its target market - There is a limit to how much these variables can be controlled.
Changes in social and cultural values dramatically influence people's needs and desires for products.
- Gender stereotypes have changes leading to more equality in marketing. - Health, nutrition, and exercise are growing in importance (sales of organic foods, herbs and herbal remedies, vitamins, and dietary supplements have escalated) .- There is a trend toward eat-out and take-out meals and grocery delivery services. - Values regarding the permanence of marriage are changing. - Children continue to be very important.
Why is it important for marketers to consider their target market before changing parts of the marketing mix like price and product?
- Identifying a target market allows marketers to focus on those most likely to purchase the product. Limiting the population funnels research and budgets to the customers with the highest profit potential
Customer relationship management (CRM) employs database marketing techniques to identify different types of customers and develop specific strategies for interacting with each customer. A CRM incorporates three elements:
- Identifying and building a database of current and potential customers, including a wide range of demographic, lifestyle, and purchase information - Delivering differential messages according to each consumer's preferences and characteristics through established and new media channels - Tracking customer relationships to monitor the costs of retaining individual customers and the lifetime value of their purchases
Socially responsible activities can:
- Improve Employee Performance - Improve Customer Loyalty - Generate Positive Publicity - Boost Sales - Attract Goodwill, Publicity, Customers, and Employees -Generate Indirect Long-Term Benefits
Selecting an appropriate target market
- May be the most important decision a company makes in the strategic planning process. - The target market must be chosen before the organization can adapt its marketing mix to meet the customers' needs and preferences. - Identification and analysis of a target market provide a foundation on which a company can develop a marketing mix. - Marketing managers evaluate how entry could affect the company's sales, costs, and profits. - Marketers should also assess whether the company has the appropriate resources to develop a marketing mix that meets the needs of a particular target market.
Competition
- Other firms that market products that are similar to or can be substituted for a firm's products in the same geographic area - Competitors can be classified into one of four types
Sales Estimates
- Potential sales for a market segment can be measured along several dimensions, including: Product Level -Geographic Area -Time- Level of Competition
Laws have also been created to
- Prevent businesses from gaining an unfair advantage through bribery.
What have been associated with SBU success
- Product quality - Order of entry into the market - Market share
What are McDonald's core competencies?
- Production and delivery speed
The evolution of marketing has gone through three periods, including:
- Production orientation - Sales orientation - Market orientation
Sherman Antitrust Act (1890)
- Prohibits contracts, combinations, or conspiracies to restrain trade; calls monopolizing or attempting to monopolize a misdemeanor offense.
Robinson-Patman Act (1936)
- Prohibits price discrimination that lessens competition among wholesalers or retailers; prohibits producers from giving disproportionate services or facilities
Clayton Act (1914)
- Prohibits specific practices such as price discrimination, exclusive dealer arrangements, and stock acquisitions in which the effect may notably lessen competition or tend to create a monopoly.
Wheeler-Lea Act (1938)
- Prohibits unfair and deceptive acts and practices, regardless of whether competition is injured; places advertising of foods and drugs under the jurisdiction of the FTC.
Business-unit strategy (SBU)
- Should be consistent with the corporate strategy while also serving the unit's needs - A division, product line, or other profit center within the parent company - Each of these units sells a distinct set of products to an identifiable group of customers, and each competes with a well-defined set of competitors .- The revenues, costs, investments, and strategic plans of each SBU can be separated from those of the parent company and evaluated.
Customer advisory boards
- Small groups of actual customers who serve as sounding boards for new-product ideas and offer insights into their feelings and attitudes toward a firm's products and other elements of its marketing strategy
Economic Conditions
- Supply and Demand - Buying Power - Willingness to Spend - Consumer Expenditure Levels - Intensity of Competitive Behavior
The Consumer Product Safety Act
- Protects the public from unreasonable risk of injury from any consumer product not covered by other regulatory agencies.
Consumer market
- Purchasers and household members who intend to consume or benefit from the purchased products and do not buy products to make profits or serve an organizational need
Marketing research can involve two forms of data:
- Qualitative data: yields descriptive nonnumerical information. .- Quantitative data: yields empirical information that can be communicated through numbers.
Descriptive research
- Research conducted to clarify the characteristics of certain phenomena to solve a particular problem - Generally, demands prior knowledge - Assumes that the problem is clearly defined - May require statistical analysis and predictive tools
Exploratory research
- Research conducted to gather more information about a problem or to make a tentative hypothesis more specific
Conclusive research
- Research designed to verify insights through objective procedures and to help marketers in making decisions - It is used when the marketer has one or more alternatives in mind and needs assistance in the final stages of decision making.
Experimental research
- Research that allows marketers to make causal inferences about relationships between variables - Requires that an independent variable be manipulated and the resulting changes in a dependent variable be measured - Provides strong evidence of cause and effect
Buying power
- Resources—such as money, goods, and services—that can be traded in an exchange- The major financial sources of buying power are income, credit, and wealth.
Without competitive assessment
- Sales estimates can be misleading
Expert forecasting survey
- Sales forecasts prepared by experts outside the firm, such as economists, management consultants, advertising executives, or college professors - Using experts is a quick way to get information and is relatively inexpensive, but outsiders may be less motivated than company personnel to do an effective job
Strategic windows
- Temporary periods of optimal fit between the key requirements of a market and the particular capabilities of a company competing in that market
Drawbacks of observation:
- Tends to be descriptive and may not provide insights into causal relationships - Subject to the observer's biases or limitations of the mechanical device
When conducting strategic planning
- Seek out experts from many levels of the organization to take advantage of in-house expertise and a variety of opinions.
First-mover advantage
- The ability of a company to achieve long-term competitive advantages by being the first to offer an innovative product in the marketplace • Helps a company build a reputation as a pioneer and market leader • The market is free of competition • Helps establish customer brand loyalty where switching to another may be costly or difficul t• The firm can protect its trade secrets and technology through patents
Late-mover advantage
- The ability of later market entrants to achieve long-term competitive advantages by not being the first to offer a product in a marketplace • Benefit from the first mover's mistakes and improve on the product design and marketing strategy • Lower initial investment costs because the first mover has already developed a distribution infrastructure and educated buyers • More data and certainty about product success
Wealth
- The accumulation of past income, natural resources, and financial resources
For an exchange to take place, the folowing conditions must exist:
1. Two or more individuals, groups, or organizations must participate, and each must possess something of value that the other party desires.2. The exchange should provide a benefit or satisfaction to both parties involved in the transaction.3. Each party must have confidence in the promise of the "something of value" held by the other.4. To build trust, the parties to the exchange must meet expectations.
Sales forecast
- The amount of a product a company expects to sell during a specific period at a specified level of marketing activities • Businesses use the sales forecast for planning, organizing, implementing, and controlling activities. • Overly ambitious sales forecasts can lead to overbuying, overinvestment, and higher costs that weaken a firm's strength and position .• To forecast sales, a marketer can choose from a number of forecasting methods. • Common forecasting techniques fall into five categories: executive judgment, surveys, time series analysis, regression analysis, and market tests.
Service
- The application of human and mechanical efforts to people or objects to provide intangible benefits to customers
Technology
- The application of knowledge and tools to solve problems and perform tasks more efficiently • The rapid technological growth of the last several decades is expected to accelerate
Effective Brand Management Tactics
1.Excel at content marketing2.Improve customer satisfaction3.Focus on the customer experience4.Deliver proper customer support5.Use social listening tools to respond to the negative comments6.Personalize your customer interactions7.Increase employee satisfaction8.Nurture brand advocates9.Generate customer testimonials and success stories10.Increase social media engagement
30-Second Super Bowl Ads
2020--$5,600,0002010--$3,100,0002000--$2,200,0001990--$800,0001980--$275,0001970--$72,5001966--$42,500
The Four-Cell SWOT Matrix
<-- Convert Strength | Weakness Match{ ----------------------- Opportunity | Threat <-----Convert
Marketing environment
- The competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surround the customer and affect the marketing mix
Effectiveness:
- The degree to which long-term customer relationships help achieve an organization's objectives
Benefit segmentation
- The division of a market according to benefits that consumers want from the product • The effectiveness of such segmentation depends on three conditions :• The benefits sought must be identifiable • Using these benefits, marketers must be able to divide people into recognizable segments • One or more of the resulting segments must be accessible to the firm's marketing efforts
Sociocultural forces
- The influences in a society and its culture(s) that change people's: Attitudes- Beliefs -Norms -Customs -Lifestyles
Market density
- The number of potential customers within a unit of land area
Market share
- The percentage of a market that actually buys a specific product from a particular company
Marketing
- The process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment
Market segmentation
- The process of dividing a total market into groups with relatively similar product needs to design a marketing mix that matches those needs - The majority of organizations use market segmentation to best satisfy their customers
Strategic planning
- The process of establishing an organizational mission and formulating goals, a corporate strategy, marketing objectives, and a marketing strategy • Should be guided by a market orientation to ensure that a concern for customer satisfaction is an integral part of the entire company, leading to the development of successful marketing strategies and planning processes
Strategic marketing management
- The process of planning, implementing, and evaluating the performance of marketing activities and strategies, both effectively and efficiently
Marketing implementation
- The process of putting marketing strategies into action
Sampling
- The process of selecting representative units from a total population
Exchanges
- The provision or transfer of goods, services, or ideas in return for something of value
Customers
- The purchasers of organizations' products; the focal point of all marketing activities
Collecting Data
- The research design must specify what types of data to collect and how they will be collected.
Competitive advantage
- The result of a company matching a core competency to opportunities it has discovered in the marketplace
Strategic planners should recognize
- The strategic performance capacities of each SBU and carefully allocate scarce resources among those divisions
Marketing research
- The systematic design, collection, interpretation, and reporting of information to help marketers solve specific marketing problems or take advantage of marketing opportunities - It is a process for gathering information that is not currently available to decision makers.- Its purpose is to inform an organization about: o Customers' needs and desires o Marketing opportunities for products o Changing attitudes and purchase patterns of customers
Market potential
- The total amount of a product that customers will purchase within a specified period at a specific level of industry-wide marketing activity
Self-Regulation disadvantages
- When a trade association creates a set of industry guidelines for its members, nonmember firms do not have to abide by them. - Many self-regulatory programs lack the tools or authority to enforce guidelines. - Guidelines in self-regulatory programs are often less strict than those established by government agencies.
The mission statement should answer two questions:
- Who are our customers?- What is our core competency?
Internet in future
- importance will increase - concerns over privacy - intellectual property protection issues
To collect Qualitative data and Quantitative data
- marketers conduct either exploratory research or conclusive research.
Observation may include the use of ethnographic techniques, such as
- watching customers interact with a product in a real-world environment. - Observation may be combined with interviews.
Growth share matrix developed by the Boston consulting group
---------------------------------- High--> | Star | Question mark | Production ------------------------------------------- market Low--> | Cash Cow | Dog | growth --------------------------------- High Low Relative Market Share
Competitive Growth Strategies
-------------------------------------------- Present | Market Penetration |Product develop | MARKET ------------------------------------------- New | Market development | Diversification | --------------------------------------------- Present New PRODUCT
The effects on buyers and sellers
-Can be dramatic and difficult to predict.
The impact of external forces on value
-Can be extensive as market changes can easily influence how stakeholders perceive certain products.
Increased Sales During Early Pandemic Months
Bidets (increased 300%) -Liquor- Bread machines -Computer accessories -Fitness equipment ---Inflatable pools- Jigsaw puzzles -Patio heaters- Education toys - Children's books -Nailcare
Largest Industry Lobbying Groups (2020)
pharmaceutical and health products ($156 million) electronics manufacturing and equipment ($80.5 million) insurance ($80.4 million) oil & gas ($58 million ) business associations ($55 million)
Relationship marketing
‒ Establishing long-term, mutually satisfying buyer‒seller relationships - Focuses on value enhancement through the creation of more satisfying exchanges - Continually deepens the buyer's trust in the company - Increases the firm's understanding of the customer's needs
Lifestyle analysis provides a broad view of buyers because it encompasses numerous characteristics related to people's:
• Activities (e.g., work, hobbies, entertainment, sports) • Interests (e.g., family, home, fashion, food, technology) • Opinions (e.g., politics, social issues, education, the future)
Market segment profiles help marketers:
• Assess the degree to which the company's products fit potential customers' product needs • Understand how a business can use its capabilities to serve potential customer groups • Determine which segment or segments are most attractive relative to the firm's strengths, weaknesses, objectives, and resources • Make marketing decisions relating to a specific market segment or segments
Reporting Research Findings
• Before preparing the report, the marketer must take a clear, objective look at the findings to see how well the gathered facts answer the research question or support or negate the initial hypotheses. • The researcher must point out the deficiencies in the research and their causes in the report .• For decision makers who do not have time to study how the results were obtained, provide a summary and recommendations first; called an executive summary.
A market segment profile:
• Describes the similarities among potential customers within a segment • Explains the differences among people and organizations in different segments • Not one or two demographic variables: • The target market are consumers aged 18-30 who enjoy playing sports.
Assuming one or more segments offer significant opportunities to achieve organizational objectives, a marketer must decide which offers the most potential at reasonable costs
• Does the firm have sufficient financial resources, managerial skills, employee expertise, and facilities to compete effectively in selected segments • Consider whether some market segments are at odds with the firm's overall objectives, and that possible legal problems, conflicts with interest groups, and technological advancements will render certain segments unattractive • Marketers must consider long-term versus short-term growth
Emerging Trends
• E-commerce• Media consumption• Connecting with others• Personal finances• DIY attitudes• Quick service restaurants
Late-mover disadvantage
• First mover may have patents and other protections on its technology and trade secrets • Customers who have already purchased the first mover's product may believe switching will be expensive or time-consuming, making it difficult to gain market share • Timing of entry into the market is crucial and can determine the advantage that is possible
Locating and Defining Problems or Issues
• Focuses on uncovering the nature and boundaries of a situation or question related to marketing strategy or implementation • Marketers must define the nature and scope of the situation in order to pin down the specific boundaries of a problem or an issue through research.
Marketers segment business markets according to
• Geographic location • Type of organization • Customer size • Product use
First-Mover Risks
• High cost outlays associated with creating a new product • Early sales growth may not match predictions if the firm overestimates demand or fails to target marketing efforts correctly • The product could fail due to market uncertainty or the product might not meet consumers' expectations or needs
Lifestyle segmentation groups people according to
• How they spend their time • The importance of things in their surroundings • Beliefs about themselves and broad issues
An important initial consideration in selecting a target market is whether customers' needs differ enough to warrant the use of market segmentation
• If segmentation analysis shows customers' needs to be homogeneous, firm may decide to use an undifferentiated targeting strategy • If customers' needs are heterogeneous, marketers must select one or more target markets
Wealth gaps may lead to adjustments in consumer spending
• Lower-income consumers don't have enough money for nonessential purchases • Higher-income consumers are considering their purchases more carefully: Is this the best use of my money? Some sense of guilt for having money to spend.
McCoy College Strategic Goals
• Maintain AACSB standards • Develop a strong research culture while maintaining quality teaching • Increase graduate student enrollment by providing innovative, market-driven programs • Focus on global business initiatives • Provide an environment for our learning community that enhances and supports diversity • Foster business community relationships with primary emphasis on small and medium-size businesses • Sustain a development program • Support a dynamic student learning environment
(Demographic Variables) Age
• Marketers need to be aware of age distribution; age distribution changes; how the age distribution will affect demand• Americans in different age groups have different product needs because of their different lifestyles and health situations
Distribution
• Products must be available at the right time and in appropriate locations .• A marketing manager makes products available in the quantities desired to as many target-market customers as possible while minimizing these three costs: - Inventory- Transportation- Storage • The advent of the internet and electronic commerce has dramatically influenced the distribution variable.
Information technology (IT) is changing the lives of consumers across the globe
• Provides business opportunities for entrepreneurs • Improves supply-chain management
Several factors associated with each of these segments should be analyzed, including:
• Sales estimates• Competition• Estimated costs
(Demographic Variables) Race and ethnicity
• Sometimes confounded with other variables such as education and income
Firms can divide a market according to consumer behavior toward a product, which commonly involves an aspect of product use
• Such as heavy, moderate, or light use, and nonusers
Mission Statement
• The goals of any organization should derive from its mission statement .• The organization should have a consistent corporate identity .• Should make the public, customers, employees, and other stakeholders aware of the mission/goals so that they know what they may expect from the firm .• Each level of management and each department should have goals that stem from the mission statement and provide direction for the firm's activities.
Promotion
• The promotion variable relates to activities used to inform and persuade to create a desired response.• Promotion can: -Increase public awareness of the organization and of new or existing products -Help create a direct response such as accessing a website to order a product -Inform customers about product features -Urge people to take a particular stance on a political or social issue -Help to sustain interest in established products
Equality tops list of consumer values
• Top consumer value for a decade: loyalty • New consumer value in 2020: equality "I strongly believe that all people should have equal opportunity and equal access in all areas of life" • Inclusion and diversity also climbed in the rankings
(Demographic Variables) Gender
• Women disproportionately influence buying decisions (estimated that women account for 85 percent of all consumer purchases)
Like consumer markets, business markets are frequently segmented for
- Marketing purposes
(Demographic Variables) Income
- Income strongly influences people's product purchases, often provides a way to divide markets, and affects customers' lifestyles and what they can afford to buy
Changes in a population's demographic characteristics have a significant bearing on relationship and individual behavior.
- Increasing proportion of older consumers and singles- Declining birth rate- Increasing multicultural nature of society
Business market
- Individuals or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations
Personality characteristics (one that many people view positively)
- Individuals with this characteristic, as well as those who aspire to have it, may be influenced to buy that marketer's brand • Marketers taking this approach do not worry about measuring how many people have the positively valued characteristic but rather assume a sizable proportion of people in the target market either have it or aspire to have it
Market segment
- Individuals, groups, or organizations sharing one or more similar characteristics that cause them to have similar product needs
Single-source data
- Information provided by a single marketing research firm
Big data
- Involves massive structured and unstructured data sources that can be used by marketers to discover unique insights and make strategic decisions • Often consists of high-volume data that marketers can use to discover unique insights and make more knowledgeable marketing decisions
Interpreting Research Findings
- Is easier if marketers carefully plan their data analysis methods early in the research process. - Interpreting analytics and implementing insights—as well as research and data collection—are among the top marketing challenges.
Political, legal, and regulatory forces of the marketing environment are closely interrelated.
- Legislation is enacted .- Legal decisions are interpreted by courts - Regulatory agencies are created and operated, for the most part, by elected or appointed officials.
The Five Steps of the Marketing Research Process
- Locating and defining issues - Designing the research project - Collecting data - Interpreting research findings - Reporting research finding
Market test
- Making a product available to buyers in one or more test areas and measuring purchases and consumer responses to marketing efforts -Advantages: Effective for forecasting sales of new products or of existing products in new geographic areas• Gives a marketer an opportunity to test the success of various elements of the marketing mix - Disadvantages: Time consuming and expensive• Uncertainty that customer response represents the total market response or that such a response will continue in the future
Motives
- Market is divided according to consumers' reasons for making a purchase such as personal appearance, affiliation, status, safety, health.
The Importance of Marketing in Our Global Economy
- Marketing Costs Consume a Sizable Portion of Buyers' Dollars - Marketing Is Used in Nonprofit Organizations - Marketing Is Important to Businesses and the Economy - Marketing Fuels Our Global Economy - Socially Responsible Marketing Promotes the Welfare of Customers and Stakeholders
Efficiency
- Minimizing the resources an organization uses to achieve a specific level of desired customer relationships
Regulatory Agencies
- Monitor many marketing activities and usually have the power to enforce specific laws as well as some discretion in establishing rules and regulations to guide industry practices
what do Marketers need to determine what specific strategies competitors are using and how these strategies affect their own.
- Monitor the actions of major competitors - The firm must develop a system for gathering ongoing information about competitors and potential competitors.
Competitive structure types include
- Monopoly -Oligopoly - Monopolistic Competition- Pure competition
A more diverse customer base means marketing practices
- Must be modified and diversified to meet its changing needs.
After analyzing the market segment profiles, a marketer should be able to
- Narrow his or her focus to several promising segments that warrant further analysis
The survey method chosen depends on the
- Nature of the problem or issue - Data needed to test the hypothesis - Resources, such as funding and personnel, available to the researcher
Marketing analytics
- The use of databases, big data, and measurement methods enabled by technology to interpret the effectiveness of a firm's marketing functions - starts with big data and massive files of data available from multiple sources, which are then structured for access and retrieval in databases.
(demographic variables) Marital status and the presence and age of children influence household income and product needs
- These characteristics, often combined and called the family life cycle
Most firms use several forecasting techniques for a variety of reasons:
- They are forced to use multiple methods when marketing diverse product lines. - Multiple methods may be used for a single product line when the product is sold in different market segments. - Variation in the length of forecasts may call for using several forecasting methods .- Sometimes a marketer verifies results of one method by using one or more other methods and comparing outcomes.
Essence of Marketing
- To develop satisfying exchanges from which both customers and marketers benefit.
Cost Estimates
- To fulfill the needs of a target segment, an organization must develop and maintain a marketing mix that precisely meets the wants and needs of that segment, which can be expensive.
As people become wealthier, they gain buying power in three ways:
- To make current purchases- To generate income- To acquire large amounts of credit
Customer relationship management
- Using information about customers to create marketing strategies that develop and sustain desirable customer relationships • Achieving the full profit potential of each customer relationship should be the fundamental goal of every marketing strategy.
In political forces Marketers may:
- View political forces as beyond their control and simply adjust to conditions that arise from those forces - Influence the process through contributions and lobbying
Mission Statement: The McCoy College of Business fosters an engaged learning community that prepares a diverse student population for successful business careers as responsible global citizens. The College complements these efforts with research that adds to knowledge, provides solutions to business challenges, and contributes to pedagogical advances.
- Vision:The McCoy College of Business strives to be a leader in experiential business education and business relevant, socially significant research.
high volume data for marketing decisions (big data)
- Volume - Relates to the quantity of data - Variety - Relates to up to 85 percent of the data being unstructured and needs to be converted into quantitative analysis - Velocity - Relates to the speed of data entering the system - Variability - Relates to data not being consistent or not having a fixed pattern - Complexity - Relates to difficulty of linking, matching, and transforming data across systems
Marketing researchers often employ sampling to collect primary data through:
-Mail Surveys - Telephone Surveys - Personal Interview Surveys - Online Surveys - Social Networking Surveys
Marketing Offers Many Exciting Career Prospects
-Product Development - Personal Selling - Social Media Management Distribution - Pricing - Advertising -Marketing Research - Wholesaling - Retailing
Price
-The price variable relates to decisions and actions associated with pricing objectives and policies and actual product prices. - Price is a critical component of the marketing mix because customers are concerned about benefits, roles, and costs. - Price is often used as a competitive tool. - Higher prices can be used competitively to establish a product's premium image. - Other companies are skilled at providing products at prices lower than others. - Pricing is the most flexible marketing-mix variable and can be changed very quickly.
Core competencies
-Things a company does extremely well, which sometimes give it an advantage over its competition
Political forces are closely interrelated with what other environmental variable?
Legal & Regulatory
Decreased sales during pandemic
Luxury beauty, professional beauty, makeup and fragrance (down 25%) - Sun care and sunglasses - Luggage and suitcases - Swimwear - Event and party supplies