MK3010-Chap-2

Aggregating potential car buyers into groups that have common needs and will respond in the same way to a marketing mix is a process known as _______.

Answer = Market segmentation allows organizations to develop different marketing mix actions to help consumers perceive product differences against competitors.

If Mom places the highest value on convenience when looking for a cup of coffee, which of the marketing mix components is she most concerned with?

Answer = Place Chains such as coffee shops strategically select locations so they can make their products or services easily accessible to their customers.

Joe to Go offers donuts with its simple cup of black coffee that customers serve themselves. In doing so, the company is attempting to create value for Dad and other customers through which element of the four Ps?

Answer = Product An organization creates value by offering products and services that meet customer needs. In this case, they are creating value by adding donuts to their core product offering, a simple cup of coffee

When Martha needs to compare the results of the marketing program for the Coffee Collective and then implement changes based upon what she finds, she is in the _____________ phase of the strategic marketing process.

Answer = control The third phase of the marketing planning process is controlling the results of marketing activities through measurement and evaluation to determine if any changes may be needed moving forward.

The Coffee Collective will need to detail the day-to-day operational decisions that are needed to execute the marketing planning phase. These actions are often organized into the "Four Ps," also called the _________.

Answer = marketing mix The marketing mix consists of the controllable variables the company puts together to satisfy their target market.

The Coffee Collective's goal is to provide customers with a unique coffee drinking experience and a loyalty rewards program. In doing so, the Coffee Collective is differentiating their experience in hopes of providing _____________ for their customers.

Answer = perceived superior value When customers see the benefits of a marketing offering as greater than the cost of obtaining those benefits they perceive superior value from that offering and are satisfied with their purchase.

When conducting a SWOT analysis, Martha would need to identify strategies that take advantage of the Coffee Collective's ________while avoiding __________.

Answer = strengths and opportunities; weaknesses and threats In order to effectively capitalize internal and external market factors, an organization needs to build on its strengths and opportunities while avoiding weaknesses and threats.

Martha categorizes prospective buyers into groups that have common needs and will respond similarly to a marketing action, she then determines the group she will focus on. This group represents Martha's ______________.

Answer = target market A target market represents a similar group of customers to whom a company wishes to appeal.

9. Understand why strategies for opportunities in international markets should be considered.

INTERNATIONAL OPPORTUNITIES SHOULD BE CONSIDERED• The world is getting smaller• Develop a competitive advantage at home and abroad• Get an early start in a new market• Find better trends in variables• Weigh the risks of going abroad

8. Know four broad types of marketing opportunities that help in identifying new strategies.

MARKET PENETRATION--trying to increase sales of a firm's present products in its present markets—probably through a more AGGRESSIVE marketing mix.MARKET DEVELOPMENT--trying to increase sales by selling PRESENT products in NEW markets.PRODUCT DEVELOPMENT--offering NEW OR IMPROVED PRODUCTS for present markets.DIVERSIFICATION--moving into totally different lines of business—perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system.• Which opportunities come first?

1. Understand what a marketing manager does.

MARKETING MANAGEMENT PROCESS--the process of (1) PLANNING marketing activities, (2) DIRECTING the implementation of the plans, and (3) CONTROLLING these plans.(Exhibit 2-1) "The Marketing Management Process"• Managers should seek new opportunities before customer interests pass them by• Strategic management planning concerns the whole firmSTRATEGIC (MANAGEMENT) PLANNING--the managerial process of developing and maintaining a match between an organizations' resources and its market opportunities.

2. Know what marketing strategy planning is—and why it is the focus of this book.

MARKETING STRATEGY--specifies a target market and a related marketing mix.TARGET MARKET-- a fairly homogeneous (similar) group of customers to whom a company wishes to appeal.MARKETING MIX--the controllable variables the company puts together to satisfy this target group.

5. Know the difference between a marketing strategy, a marketing plan, and a marketing program.

Marketing plan fills out marketing strategyMARKETING PLAN--a written statement of a marketing strategy and the time-related details for carrying out the strategy.• Implementation puts plans into operationIMPLEMENTATION--putting marketing plans into operationOPERATIONAL DECISIONS--short-run decisions to help implement strategies• Analytical tools provide control• Marketing analytics—measure, manage, and analyze marketing performanceMARKETING ANALYTICS--the practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness. • Several plans make a whole marketing programMARKETING PROGRAM--blends all of the firm's marketing plans into one "big" plan.

6. Understand what customer lifetime value and customer equity are and why marketing strategy planners seek to increase them.

Relationships increase lifetime customer valueCUSTOMER LIFETIME VALUE (CLV)--the total stream of purchases that a customer could contribute to the company over the length of the relationship.• Customer equity estimates profitabilityCUSTOMER EQUITY--the expected earnings stream (profitability) of a firm's current and prospective customers over some period of time.• Customer equity focuses on the revenues and costs of acquiring, retaining, and enhancing customers• Customer equity and customer lifetime value are important marketing metricsRETENTION RATE--the percentage of customers retained as compared to the total number of customers.ACQUISITION COST--the expense required to acquire a new customer.

7. Be familiar with the text's framework for marketing strategy planning.

WHAT ARE ATTRACTIVE OPPORTUNITIES?• Breakthrough opportunities are best!!!BREAKTHROUGH OPPORTUNITIES--opportunities that help innovators develop HARD-TO-COPY marketing strategies that will be very profitable for a long time.• Competitive advantage is needed—at leastCOMPETITIVE ADVANTAGE--a firm has a marketing mix that the target market sees as better than a competitor's mix.• Avoid hit-or-miss marketing with a logical processMARKETING STRATEGY PLANNING PROCESS HIGHLIGHTS OPPORTUNITIES• Process narrows down from broad opportunities to a specific strategy• Screening criteria make it clear why you select a strategy• S.W.O.T. analysis highlights advantages and disadvantagesS.W.O.T. ANALYSIS--identifies and lists the firm's strengths, weaknesses, opportunities, and threats.• Segmentation helps pinpoint the target• Customers want something differentDIFFERENTIATION--the marketing mix is distinct from what is available from a competitor.• Narrowing down to a superior marketing mix

Target Market

a fairly homogeneous (similar) group of customers to whom a company wishes to appeal

competitive advantage

a firm has a marketing mix that the target markets sees as better than a competitor's mix

target marketing

a marketing mix is tailored to fit some specific target customers

customer service

a personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase

narrowing down to

a superior marketing mix

several plans make

a whole marketing program

marketing plan

a written statement of a marketing strategy and the time-related details for carrying out the strategy

different marketing strategies for

acquiring, retaining and enhancing

advertising

any paid form of nonpersonal presentation of ideas, goods, or services.

chanel of distribution

any series of films ( or individuals) that participate in the flow of products from producer to final user or consumer

how can we estimate customer lifetime value?

average profit margin retention rate acquisition cost

marketing program

blends all of the firm's marketing plans into one "big" plan

mass selling

communicating with large numbers of customers at the same time.

Each of the Four Ps

contributes to the whole

Strategy jobs must be

done together

the process of narrowing down

from broad opportunities to specific strategy

S.W.O.T. analysis

identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)

the marketing plan guides

implementation and control

personal selling

involves direct spoken communication between sellers and potential customers

target marketing is

is not mass marketing

selecting a market-oriented strategy is

is target marketing

relationships increase

lifetime customer value

customer equity considers

lifetime value of all current and future customers

price

making it right

Four basis types of opportunities

market penetration market development product development diversification

marketing plan fills out

marketing strategy

production-oriented and marketing-oriented managers have different views of the market

mass marketing may do target marketing target marketing can mean big markets and profits

What does marketing analytics do?

measure, manage and analyze marketing performance

Diversification

moving into totally different lines of business - perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system

product development

offering new or improved products for present markets

breakthrough opportunity

opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitability for a long time

segmentation helps

pinpoint the target

implementation puts

plans into operation

sales promotion

promotional activities - other than advertising, publicity, and personal selling - that stimulate interest, trial, or purchase by final customers or others in the channel.

analytical tools

provide control

implementation

putting marketing plans into operation

place

reaching the target

operation decisions

short-run decisions to help implement strategies

customers want

something different

marketing strategy

specifies a target market and a related marketing mix

promotion

telling and selling the customer

average profit margin

that can be estimated based on his or her purchase over some time period

marketing mix

the controllable variables the company puts together to satisfy this target group

customer equity

the expected earnings stream (profitability) of a firm's current and prospective customers over some period of time

acquisition cost

the expense required to acquire a new customer

product

the good or service for target's needs

strategic management planning

the managerial process of developing and maintaining a match between an organization's resources and its market opportunities

differentiation

the marketing mix is distinct from what is available from a competitor.

retention rate

the percentage of customers retainer as compared to the total number of customer

marketing analytics

the practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness

marketing management process

the process of (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans

customer equity focuses on

the revenue and costs of acquiring, retaining, and enhancing customers.

customer lifetime value(CLV)

the total stream of purchases that a customer could control contribute to the company over the length of the relationship

mass marketing

the typical production-oriented approach—vaguely aims at "everyone" with the same marketing mix.

international opportunities should be considered

the world is getting smaller develop a competitive advantage at home and broad get an early start in a new market find better trends in variables weigh the risks of going abroad

developing marketing mixes for target markets

there are many marketing mix decisions the "Four Ps" make up a marketing mix Customer is not part of the marketing mix

understanding target markets leads

to good strategies

Market Development

trying to increase sales by selling present products in new markets

Market Penetration

trying to increase sales of a firm's present products in its present markets—probably through a more aggressive marketing mix.

The Four Ps deliver

value

screening criteria make it clear

why you select a strategy

avoid hit-or-miss marketing

with a logical process

3. Understand target marketing

• Target marketing is not mass marketingTARGET MARKETING--a marketing mix is tailored to fit some SPECIFIC target customers.MASS MARKETING--the typical production-oriented approach - vaguely aims at "everyone" with the same marketing mix. - assumes everyone is the sameManagers Have Different Views of the Market"• Mass marketers may do target marketing• Target marketing can mean big markets and profits

4. Be familiar with the Four Ps in a marketing mix.

• There are many marketing mix decisions• The "Four Ps" make up a marketing mix• PRODUCT - the good or service for the target's needs• PLACE - reaching the target(channel of distribution--any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer.)• PROMOTION—telling and selling the customer(personal selling--involves direct spoken communication between sellers and potential customers.)(customer service--a personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase).(mass selling--communicating with large numbers of customers at the same time.)(advertising--any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor.)(publicity--any unpaid form of nonpersonal presentation of ideas, goods, or services.)(sales promotion--promotional activities—other than advertising, publicity, and personal selling—that stimulate interest, trial, or purchase by final customers or others in the channel.)• PRICE—making it right• The Four Ps deliver value• Each of the Four Ps contributes to the whole• Strategy jobs must be done together• Understanding target markets leads to good strategies