MKTG 471

Product Features

- specific design characteristics that allow a product to perform certain tasks

Components of the Strategic Planning Process

-organizational mission and goals -corporate and business unit strategies -analysis of organizations strengths and weaknesses & identification of organization opportunities and threats

Repositioning

A brand's market share and profitability may be strengthened by product repositioning of existing products

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

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 occur have an equal or known chance of taking place

The term new product may have more than one meaning

A new product can be an innovative product that has never been sold by any organization A new product can be a modified product that existed previously A new product may be a product a specific company has not marketed previously but similar products have been available from other companies A product can be viewed as new when it is brought to one or more markets from another market

Quota Sampling

A nonprobability sampling technique in which researchers divide the population into groups and then arbitrarily choose participants from each group

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 Required for an organization to achieve its marketing objectives

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

Marketing Objective

A statement of what is to be accomplished through marketing activities

Focus group

A study in which a small group of 8-12 people are interviewed often informally, without a structured questionnaire, to observe interaction when members are exposed to an idea or a concept

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

The systematic process of:

Assessing marketing opportunities and resources Determining objectives Defining Strategies Establishing guidelines for implementation and control of the marketing program

Centralized organizations

Authority is concentrated at the top level Very little delegation to lower levels

Observation Methods

Avoid direct contact with subject to reduce possible awareness of observation process Note physical conditions, subject's actions and demographics 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 Data gathered may be influenced by observer bias

Applications

Bring convenience and cost savings to the consumer Companies are using mobile marketing to offer consumers additional incentives

Managing identity requires:

Broadcasting a company's mission, goals, and values Sending a consistent image Implementing a visual identity with stakeholders

First-mover advantage Examples

Build a company's reputation as a pioneer and market leader Market is free of competition Helps establish brand loyalty for the company due to its customer's costs to switch to competing products later on Company can protect its trade secrets or technology through patents

Consumer's Digital Media Behaviors

Businesses have witnessed a range of changes in consumer behavior Consumers expect to access a vast amount of information on companies, products and issues Consumers share information and experiences with each other through social networking sites Consumers can regulate the information they view as well as rate and sequence of exposure Digital media requires marketers to approach their jobs differently compared with traditional marketing

Profits can be obtained through relationships in the following ways:

By acquiring new customers By enhancing profitability of existing customers By extending the duration of customer relationships

Privacy

Companies collect personal information from website visitors in their efforts to foster long-term relationships with customers Hackers may break into websites and steal personal information enabling them to commit identity theft The FTC is considering developing regulations that would better protect consumer privacy by limiting the amount of information businesses can gather online

Organizing the Marketing Unit

Companies that truly adopt the marketing concept develop a distinct organizational culture: A culture based on a shared set of beliefs that makes the customer's needs the pivotal point of the company's decisions about strategy and operations

Corporate Identity

Companies try to develop and manage their corporate identity—their unique symbols, personalities, and philosophies—to support all corporate activities, including marketing

All marketing mix decisions should be:

Consistent with the business-unit and corporate strategies Flexible to permit the organization to alter the marketing mix in response to changes in market conditions, competition, and customer needs

Corporate strategy planners are concerned with broad issues such as:

Corporate culture Competition Differentiation Diversification Interrelationships among business units Environmental and social issues

Consumers are grouped into seven segments according to how they interact with digital media

Creators - create their own media outlets such as blogs, podcasts, videos and wikis Conversationalists - regularly update their Twitter feeds or status updates Critics - are people who comment on blogs or post ratings and reviews Collectors - gather information and organize content generated by critics and creators Joiners - are anyone who becomes a member and participates in a social networking site Spectators - this is the largest group and is composed of those who read what other consumers produce but do not create any content themselves Inactives - online users who do not participate in any digital online media but this number is dwindling

Purpose of market research is to inform an organization about:

Customers' needs and desires Marketing opportunities for particular goods and services Changing attitudes and purchase patterns of customers

Decentralized organizations

Decision making authority is delegated as far down the chain of command as possible

Creating the Marketing Mix

Decisions made in creating a marketing mix are only as good as the organization's understanding of its target market

If actual performance does not meet performance standards:

Determine why a marketing strategy was less effective Determine whether the marketing objective, against which performance is measured, is realistic or not

Developing New Products

Developing new products enhances a product mix and adds depth to a product line Introducing new products can be expensive and risky Failing to introduce new products is also risky

Distribution Considerations

Digital marketing can be viewed as a new distribution channel that helps businesses increase efficiency Processing orders electronically Increase the speed of communications Push-pull dynamic - where the firm provides a product (push), while connectivity allows members to find each other (pull)

four important points on disruption theory

Disruption is a process Disrupters often build business models that are very different from those of incumbents Some disruptive innovations succeed; some don't The mantra "Disrupt or be disrupted" can misguide us.

Sales Orientation

During the first half of the 20th century competition increased and focus shifted to selling products to buyers Marketers were able to learn that many products did not meet consumers needs Businesses viewed sales and selling as the main means of increasing profits

Intellectual Property

Each year, intellectual property losses in the U.S. total billions of dollars There is a fine line between protecting intellectual property and maintaining freedom of speech

Communication is facilitated by an:

Effective training program where employees can learn, ask questions, and become accountable for marketing performance Information system within the marketing unit and with other departments in the organization

Digital Media

Electronic media that function using digital codes; this includes media available through computers, cellular phones, smartphones and other digital devices

Market Orientation

Emerged in the mid-20th century Market orientation requires an organization-wide commitment to researching and responding to customer needs New-product innovation by developing a strategic focus to explore and develop new products to serve target markets Involves being responsive to ever-changing customer needs and wants

Implementing the Marketing Concept

Establish an information system to discover customers' real needs Use the information to create satisfying products A company must coordinate all activities to satisfy customers' objectives as well as its own objectives Listening and responding to consumers frustrations and appreciation is the key in implementing the marketing concept

Benefits of a Personal Interview

Establishes rapport More in-depth interviewing: Probes Follow-up questions Psychological tests Longer in duration Yields more information Respondents can be carefully selected, reasons for nonresponse explored Gives the interviewer greater flexibility

Relationship Marketing

Establishing long-term, mutually satisfying, buyer/seller relationships Focused on value enhancement through creation of more satisfying exchanges Continually deepens the buyers trust Which increases the company's understanding of the customer's needs

Strategic performance evaluation consists of:

Establishing performance standards Measuring actual performance Comparing actual performance with established standards Modifying the marketing strategy, if needed

Benefits of Marketing Research

Facilitates strategic planning Assesses opportunities/threats Ascertains potential for success Helps determine feasibility of a strategy Improves marketer's ability to make decisions

What are the distinguishing characteristics of Design Thinking?

Finding simplicity in complexity Beauty as well as functionality Improving quality of experience Creating elegant solutions Serving the needs of people

Disadvantages of being a late mover:

First mover may have patents on its technology and trade secrets that prevent the late mover from reverse engineering its product or producing a product that is too similar Customers who have already purchased the first mover's product may believe that switching to the late mover's product is too expensive or time-consuming for them Timing of entry to the market is crucial and can determine the amount of late-mover advantage that is actually possible

Step 1: Locating and Defining Problems of Research Issues

Focus on uncovering the nature and boundaries of a situation Define the problem Research will often be in-depth

Bases for Positioning

Head-to head - best when products are equal and if price is lower Avoid competition - critical when introducing a brand into a market in which the company already has one or more brands Position can be based on specific product attributes or features Other bases include price, quality level and benefits

First-Mover Risks

High cost associated with creating a new product from scratch Early sales growth may not be as high as the company predicted if it makes mistakes with regard to the product or its marketing Risk that the product will fail due to market uncertainty, or that the product might not meet consumers' expectations or needs

Establishing a Timetable for Implementation

Identifying the activities to be performed Determining the time required to complete each activity Separating the activities to be performed in sequence from those to be performed simultaneously Organizing the activities in the proper order Assigning responsibility for completing each activity to one or more employees, teams, or managers

Marketing Mix Requires:

In-depth research into the characteristics of the target market Analysis of customer needs, preferences, and behaviors with respect to product design, pricing, distribution, and promotion

Line extensions may

Increase sales Take market share from competitors

Ideas can come from several sources

Internally through departments or franchisees Externally through customers, competitors, advertising agencies, consultants or even outsourcing

late-mover advantage examples

Learn from first mover's mistakes and thus create an updated/improved product design and marketing strategy Lower initial costs since first mover has developed an infrastructure and educated buyers about the product More certainty about the success of the market for the product

Survey Methods

Mail survey Telephone survey Telephone depth interview Personal interview survey In-home (door-to-door) interview Shopping mall intercept interview On-site computer interview Online survey Crowdsourcing

Defining the Problem

Marketers must define the nature and scope of the situation in order to pin down the problem Determine precisely what is the aim of research Researchers and decision makers should remain in the problem or issue definition stage until they have determined precisely what they want from marketing research and how they will use it

Coordinating Marketing Activities

Marketing managers must work with other departments to ensure marketing activities mesh with other functions of the firm Must coordinate the activities of marketing staff within the firm and integrate those activities with the marketing efforts of external organizations Marketing managers can improve coordination by making each employee aware of how his or her job relates to others and how his or her actions contribute to the achievement of marketing objectives

If actual performance exceeds performance standards

Marketing strategy is viewed as being effective Try to gain an understanding of why the strategy is effective

E-Marketing Strategy

More than one-fourth of the world's population uses the Internet and the number is growing More than three-fourths of people in North America have Internet access As more and more shoppers go online, the power of brick-and-mortar businesses is lessening Businesses must learn how to effectively use social media and digital marketing

Communication within the Marketing Unit

One of the most important types of communication in marketing is communication that flows upward from the frontline of the marketing unit to higher-level marketing managers

Question Types

Open-Ended Question -What is your general opinion about coffee shops? (please describe) __________________________ Dichotomous Question -Have you ever purchased a coffee product? Yes No Multiple-Choice Question -What income group are you in? $0-$19,000 $20,000-$59,999 $60,000-$99,000 more than $100,000

Marketing Implementation Depends on:

Organization of the marketing department Motivating marketing personnel Effectively communicating within the marketing unit Coordinating all marketing activities Establishing a timetable for the completion of each marketing activity

Managing Existing Products

Organizations must be able to adjust their products' features in response to changes in customers' needs A marketer must develop, alter and maintain an effective product mix By assessing the current product mix, a marketer can identify weaknesses and gaps which can lead to improving the product mix through -Line Extensions -Product Modifications

Mobile Devices

Over 80% of Americans have a mobile device, many of these devices are smartphones Mobile marketing has proven effective in grabbing consumers' attention

Ethical and Legal Issues

Personal privacy Fraud Misappropriation of copyrighted property

Three ways to delete a product

Phase-out - allows a product to decline without a change in marketing strategy Run-out - exploits any strengths left in the product Immediate drop - used when losses are too great

Methods of Collecting Primary Data

Population sample sampling

Consumer Power and Marketing

Positive ratings and reviews is free publicity Consumer-generated content appears more authentic and can go far in increasing a company's credibility Digital media allows marketers to gather information on their consumers, creating a new way of gathering marketing research Marketers can use information on how consumers use the Internet to better target marketing messages and track the success of their marketing campaigns

Step 5: Reporting Research Findings

Prepare a formal, written document Determine level of detail Clear and objective presentation Consider the intended audience Point out deficiencies in the data Researchers often give their summary and recommendations first For decision makers who do not have time to study how the result were obtained

Pricing Considerations

Pricing relates to perceptions of value and is the most flexible element of the marketing mix Digital online media marketing facilitates both price and nonprice competition Demand for low-priced products has grown Consumers are able to find the price from various competitors in an instant Access to price information benefits the consumer and places pressure on the seller to be competitive and to differentiate products

Step 3: Collecting Data

Primary Data Secondary Data

Three aspects of product differentiation companies must consider

Product Quality Product Design and Features Product Support Services

Product Positioning

Product positioning refers to the decisions and activities intended to create and maintain a certain concept of the product in customers' minds Perceptual maps are created by questioning a sample of consumers about their perceptions of products, brands and organizations with respect to two or more dimensions

Marketers are using these sites to

Promote products Handle questions and complaints Provide information to assist customers in buying decisions

Socially responsible marketing

Promoting the welfare of customers and stakeholders

Marketing research can involve two forms of data:

Qualitative data yields descriptive non-numerical information Quantitative data yields empirical information that can be communicated through numbers

Three major types of product modifications

Quality modifications are changes to a product's dependability and durability Functional modifications are changes that affect a product's versatility, effectiveness, convenience or safety Aesthetic modifications are changes to the sensory appeal of a product

Questionnaire Construction

Questions must be clear, easy to understand, and directed toward a specific objective Designed to elicit information that meets the study's data requirements Maintain impartiality Avoid or reword questions that a respondent might consider too personal or that might require an admission of activities that other people are likely to condemn

Step 2: Designing the Research Project

Research Design An overall plan for obtaining the information needed to address a research problem or issue Hypothesis An informed guess or assumption about a certain problem or set of circumstances Accepted or rejected hypotheses act as conclusions for the research effort

Descriptive Research

Research conducted to clarify the characteristics of certain phenomena to solve a particular problem Demands prior knowledge Assumes problem is clearly defined May require statistical analysis

Exploratory Research

Research conducted to gather more information about a problem or to make a tentative hypothesis more specific To better understand a problem or situation and/or to help identify additional data needs or decision alternatives

Conclusive Research

Research designed to verify insights through objective procedures and to help marketers in making decisions 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 Provides strong evidence of cause and effect Need a dependent variable and independent variable(s) in order to set-up research project

Production Orientation

Second half of the nineteenth century, the Industrial Revolution improved speed and efficiency Large increases in availability of products and consumer response was strong

Target Market Selection

Selecting an appropriate target market may be the most important decision a company makes in the strategic planning process Identification and analysis of a target market provide a foundation on which a company can develop a marketing mix Marketers should also assess whether the company has the resources to develop the right marketing mix to meet the needs of a particular target market

Widgets

Small bits of software on a website, desktop or mobile device An innovative digital marketing tool to personalize webpages, alert users to company information and spread product awareness

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

Promotion Considerations

Social networking sites allow marketers to approach promotion in entirely new, creative ways Digital promotions attempt to increase brand awareness Almost any traditional promotional event can be enhanced or replaced by digital media

Growth and Benefits of Digital Marketing

The Internet has become an important component of a firms' marketing strategies E-marketing allows marketers and customers to share information It is now possible to target markets more precisely and reach markets previously inaccessible The digital world is evolving quickly and is still in an early stage of integration into marketing strategy

Level of Quality

The amount of quality a product possesses

Consistency of Quality

The degree to which a product has the same level of quality over time

Step 4: Interpreting Research Findings

The first step in drawing conclusions from most research is displaying the data in table format The data must be analyzed next: -Statistical interpretation: Analysis of what is typical and what deviates from the average Data requires careful interpretation Managers must understand the research results and relate them to a context that permits effective decision making

Two major trends have caused consumer generated information to gain importance

The increased tendency of consumers to publish their own thoughts, opinions, reviews and product discussions through blogs or digital media Consumers' tendencies to trust other consumers over corporations

Interactivity of Social Media

The main distinguishing characteristic of digital media is their interactivity Traditionally, customers faced a lengthy, dissatisfying experience when supplying feedback Digital media allows interaction in real time Interactivity helps marketers maintain high-quality relationships with existing customers Allows customer to develop relationships with each other

Product Quality

The overall characteristics of a product that allow it to perform as expected in satisfying customer needs

market share

The percentage of a market that actually buys a specific product from a particular company is referred to as that product's (or business unit's)

Marketing

The process of creating, distributing, promoting, and pricing goods, services, and ideas facilitating satisfying exchange relationships with customers developing and maintaining favorable relationships with stakeholders in a dynamic environment

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

Electronic Marketing (e-marketing)

The strategic process of distributing, promoting and pricing products and discovering the desires of customers using digital media and digital marketing

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

Consumers rationalize pirating by thinking:

They don't have the money to pay for what they want Their friends engage in piracy The thrill is worth the risk They are smarter and more tech savvy

The forces of the marketing environment affect a marketer's ability to facilitate value-driven marketing exchanges in three ways:

They influence customers by affecting their lifestyle, standards of living, and preferences and needs for products They help to determine whether and how a marketing manager can perform certain marketing activities They may affect a marketing manager's decisions and actions by influencing buyers' reactions to the firm's marketing mix.

Motivating Marketing Personnel

To motivate marketing personnel, managers must discover their employees' needs and then develop motivational methods that will help employees satisfy those needs Rewards to employees should be tied to organizational goals and be fair, ethical, and well understood by employees Selecting effective motivational tools has become more complex because of greater differences among workers in terms of race, ethnicity, gender, and age

Product Considerations

Traditional marketing and e-marketing are the same on product considerations Marketers must anticipate consumer needs and preferences and tailor products to meet those needs The Internet is a large resource of consumer wants and needs Digital media provides an opportunity to add a service dimension and create new products only accessible on the Internet With the constant sophistication of digital technology, businesses find it necessary to continually upgrade their products offerings

for an exchange to take place:

Two or more parties must participate, and each must possess something of value that the other party desires The exchange should provide a benefit or satisfaction to both parties Each party must have confidence in the promise of the "something of value" held by the other To build trust, the parties to the exchange must meet expectations

Digital Marketing

Uses all digital media, including the Internet and mobile and interactive channels, to develop communication and exchanges with customers

An organization's mission statement should answer two questions:

Who are our customers? What is our core competency?

Venture team

a cross-functional group that creates entirely new products that may be aimed at new markets

sample

a limited number of units chosen to represent the characteristics of total population

Tide Pods represent a

a line extension of the successful Tide laundry product line `\

Design Thinking

a methodology used by designers to solve complex problems, and find desirable solutions for clients draws upon logic, imagination, intuition, and systemic reasoning, to explore possibilities of what could be, and to create desired outcomes that benefit the end user (the customer)

Disruption

a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses Entrants that prove disruptive begin by success- fully targeting those overlooked segments, gaining a foothold by delivering more-suitable functionality— frequently at a lower price

All the companies SBUs and products should be integrated into

a single, overall matrix and evaluated to determine appropriate strategies for individual products and overall portfolio strategies

Marketing costs consume

a sizable portion of buyers' dollars

marketing objective should be based on

a study of the SWOT analysis Be stated in clear, simple terms Be accurately measurable Specify a time frame for accomplishment Be consistent with business-unit and corporate strategy

SWOT analysis

a tool marketers use to assess an organization's strengths, weaknesses, opportunities, and threats

social network

a web-based meeting place for friends, family, coworkers and peers allowing users to create a profile and connect with other users for purposes ranging from getting acquainted, to keeping in touch and building a work-related network

population

all the elements, units, or individuals of interest to researchers for a specific study

Media Sharing Sites

allow marketers to share photos, videos and podcasts but with less interaction

The strategic planning process begins with

an analysis of the marketing environment, including a thorough analysis of the industry in which the company is operating or intends to sell its products

marketing concept

an organization should try to provide products that satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals

customer cost include

anything a buyer must give up to obtain the benefits the product provides including cost, time, effort, and risk

customer benefits include

anything a buyer received in an exchange

Podcasts

are audio or video files that can be downloaded with a subscription that automatically delivers new content to listening devices or personal computers; offers convenience allowing users to listen when and where they choose

stakeholders

are constituents who have a stake or claim in some aspect of a companys products, operations, markets, industry, and outcomes

Strengths and weaknesses are

are internal factors that can influence an organization's ability to satisfy its target market

Stars

are products with a dominant share of the market and good prospects for growth

Strategic windows

are temporary periods of optimal fit between the key requirements of a market and the particular capabilities of a company competing in that market

exchanges

are the provision or transfer of goods, services, or ideas in return for something of value

Core competencies

are things a company does extremely well, which sometimes gives it an advantage over its competition

Blogs

are web-based journals in which writers can editorialize and interact with other Internet users Blogs can represent a potent threat to corporations or an opportunity due to the amount of consumer control Companies can use external blogs to answer consumer concerns or defend their corporate reputations and internal blogs to build enthusiasm and create relationships

Business-unit strategy should be

be consistent with the corporate strategy

The impact on value can be

be extensive as market changes can easily impact how stakeholders perceive certain products

Types of Digital Media

blogs, wikis, podcasts, mobile devices, widgets, social networls

Marketing cost analysis

breaks down and classifies 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

Photo sharing allows

companies to market themselves with snapshots of company events

Video sharing allows

companies to upload ads and informational videos and are now using consumer-generated videos

Marketing knowledge enhances

consumer awareness

marketing mix variables are often viewed as

controllable but have their limit

The broadest of the three levels of strategy

corporate, business unit, and marketing

product variable also involves...

creating/modifying brand names and packaging

stakeholders include:

customers employees investors/shareholders suppliers governments, communities, and more

promotion can educate

customers about the features or urge people to take a stance on political or social issue

Corporate strategy

determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to reach the organization's goals

The broadest of the three levels of strategy (corporate, business unit, and marketing) and should be

developed with the organization's overall mission in mind

Effects of these forces on buyers/sellers can be

dramatic and difficult to predict

components of strategic marketing

economic forces, political forces, legal and regulatory forces, technology forces, sociocultural forces, competitive forces

Design thinking is at the core of

effective strategy development and organizational change.

steps in design thinking

empathize define ideate prototype test

Marketers conduct either

exploratory research or conclusive research

Any strategic planning effort must assess the organization's available

financial and human resources and capabilities as well as how the level of these factors is likely to change in the future

A market orientation is also important for

for the successful implementation of marketing strategies

Cash cows

have a dominant share of the market but low prospects for growth

Question marks

have a small share of a growing market and generally require a large amount of cash to build market share

Dog

have a subordinate share of the market and low prospects for growth

Product Design

how a product is conceived, planned and produced

Customer Services

human or mechanical efforts or activities that add value to a product

Phases of the New-Product Development Process

idea generation screening concept testing business analysis product development test marketing commercialization

Customer Lifetime Value Requires

identifying patterns of buying behavior and using that to focus on the most promising and profitable customers

When design principles are applied to strategy and innovation the success rate for innovation dramatically

improves

Virtual Sites

include Second Life, Everquest, Sim City and World of Warcraft These are user-created, three-dimensional worlds with their own economies, currencies, lands and residents Allows businesses to reach consumers in a creative, fun way Some firms are using virtual technology for recruiting purposes

Growth Share Matrix

includes stars, cash cows, dogs, and question marks

Opportunities and threats exist

independently of the company and therefore represent issues to be considered by all organizations, even those that do not compete with the company

Marketers can use these online forums to

interact with consumers, address problems and promote their company

Business analysis

involves evaluating the potential impact of a product idea on the firm's sales, costs and profits

value

is a customers subjective assessment of benefits relative to cost in determining the worth of a product

Strategic business unit (SBU)

is 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

market

is 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

market growth/market share matrix

is a helpful business tool, based on the philosophy that a product's market growth rate and its market share are important considerations in determining its market strategy

Test Marketing

is a limited introduction of a product in geographic areas chosen to represent the intended market The aim is to determine if potential customers will buy the product and used to lessen the risk of product failure Selection of test areas is important to provide accurate representation of the intended market Test marketing is expensive and competitors may try to interfere Not all test marketed products are launched

Performance standard

is an expected level of performance against which actual performance can be compared

Online Fraud

is any attempt to conduct fraudulent activities online, including deceiving consumers into releasing personal information Includes, among other things Setting up fraudulent profiles on social networking sites Create typosquatting sites based on common misspellings of search engines or social networks Using social networking sites to pose as charitable institutions

Product Differentiation

is creating and designing products so customers perceive them as different from competing products Customer perception is critical

Product development

is determining if producing a product is technically feasible and cost effective To test acceptability, the idea is converted into a prototype or working model The prototype is tested for overall functioning both in the lab and in the field Crucial questions during this phase include how much quality to build into the product This phase is lengthy and expensive so a small number of product ideas are put into development

marketing environment

is dynamic and includes: Competitive Economic Political Legal and regulatory Technological Socio-cultural

design mindset

is not problem-focused, it's solution focused, and action oriented. It involves both analysis and imagination

sustainable competitive advantage

is one that the competition cannot copy in the foreseeable future

Commercialization

is refining and finalizing plans and budgets for full-scale manufacturing and marketing of a product Marketers analyze results of test marketing and make needed changes to the marketing mix During this stage, decisions are made on services such as warranties, repairs and replacement parts Product enters the market with advertising, personal selling and promotion A roll-out is introducing a product in stages starting in one geographic area and expanding

Concept Testing

is seeking a sample of potential buyers' responses to a product idea Often necessary in order to evaluate ideas properly A low-cost procedure allowing the company to determine customers' initial reactions before investing resources in research and development The result of concept testing can help marketers understand which attributes and benefits are most important to potential customers

First-mover advantage

is the ability of an innovative company to achieve long-term competitive advantages by being the first to offer a certain product in the marketplace

Late-mover advantage

is the ability of later market entrants to achieve long-term competitive advantages by not being the first to offer a certain product in a marketplace

Idea Generation

is the activity of seeking product ideas to achieve organizational objectives

line extension

is the development of a product closely related to existing products in the line but designed specifically to meet different customer needs Less risky and less costly than introducing a new product `\

Strategic planning

is the process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, and marketing strategy

Competitive advantage

is the result of a company matching a core competency to opportunities it has discovered in the marketplace

Customer Lifetime Value

is the worth of individual customers and estimates their lifetime value to the company

Marketing relationships with customers are the

lifeline of all businesses

Unlike marketing-mix variables, an organization has

little to no control over marketing environment forces

The Five Steps of the Marketing Research Process

locating and defining issues or problems designing the research object collecting data interpreting research findings reporting research findings

Mission statement

long-term view, or vision, of what the organization wants to become The goals of any organization should derive from its mission statement

Disruptive innovations originate in

low-end or new-market footholds

Disruptive innovations don't catch on with

mainstream customers until quality catches up to their standards.

distribution variable

marketing managers need to make products available in quantities desired to as many target market customers as possible while minimizing these three costs: inventory, transportation, storage to satisfy customers, products must be available at the right time and in convenient locations

product modification

means changing one or more characteristics of a product Differs from a line extension because the original product drops from the product line Certain conditions must exist for the modification to work The product must be modifiable Customers must recognize the modification The modification should make the product more consistent with customers' desires

Product Deletion

means eliminating a product from the product mix when it no longer satisfies a sufficient number of customers Declining products reduce profitability and drain resources A dying product may lose favor with customers and negative feelings may transfer to a company's other products Product deletions may be met with opposition by management, sales people and other employees A systematic review allows an organization to improve a product or delete a product

Screening

means selecting the ideas with the greatest potential for further review Ideas are analyzed to determine whether they match the organization's objectives and resources Keeping the product idea in focus and on track by understanding consumer needs and wants is the key to success A checklist is often used encouraging evaluators to be systematic Most new products are rejected during this phase

Efficiency refers to

minimizing the resources an organization uses to achieve a specific level of desired customer relationships

levels of strategic planning

mission statement corporate strategy business unit strategy marketing strategy marketing mix elements

profits essential to the survival of individual businesses

nonprofit organizations

The marketing concept is a management philosophy guiding an organization's

overall activities

Market orientation combined with social responsibility improves

overall business performance

4 marketing activities a firm can control to meet the needs of customers in its target market are:

product distribution promotion price

evolution of marketing concept

production orientation sales orientation market orientation

Design can be applied to

products, services, processes, physical locations... anything that needs to be optimized for human interaction.

Marketing helps produce

profits essential to the survival of individual businesses

promotion can aim to increase

public awareness of the organization and of new or existing products

Weaknesses

refer to any limitations a company faces in developing or implementing a marketing strategy

Strengths

refer to competitive advantages or core competencies that give the company an advantage in meeting the needs of its target market

Threats

refer to conditions or barriers that may prevent the company from reaching its objectives

Opportunities

refer to favorable conditions in the environment that could produce rewards for the organization if acted on properly

promotion variable

relates to activités used to inform individuals or groups about an organization and its products

price variable

relates to decisions and actions associated with establishing pricing objectives and policies and determining precut prices

marketing builds

relationships

CLV Helps marketers determine how best to allocate

resources to marketing strategies to sustain a customer over a lifetime

A firm that adopts the marketing concept must

satisfy not only its customers' objectives but also its own objectives

marketing managers may

select/motivate intermediaries establish/maintain inventory control procedures develop/manage transportation and storage systems

CLV Identifying individual customers allows marketers to

shift focus from targeting groups to increasing their share of an individual customer's purchases

target market

specific group of customers on whom an organization focuses its marketing efforts

relationships build

stakeholders

The marketing environment forces

surround the customer and affect the marketing mix

promotion can help

sustain interest in established products

CLV can be calculated by

taking the sum of the customer's present value contributions to profit margin over a specific time frame.

Strategic planning should be guided by a market orientation to ensure

that a concern for customer satisfaction is an integral part of the process and permeates the entire company

marketing focuses on

the customers

Effectiveness is

the degree to which long-term customer relationships help achieve an organizations objectives

Brand Manager

the person responsible for a single brand

Market Manager

the person responsible for managing the marketing activities that serve a particular group of customers

Product Manager

the person within an organization who is responsible for a product, a product line or several distinct products that make up a group

Styling

the physical appearance of a product

sampling

the process of selecting representative until from total population -probability->random sampling and stratified sampling -nonprobability-> quota

customers

the purchasers of organizations products the focal point of all marketing activities

product variable decisions are important because

they are directly involved with creating products that address customers needs and wants

Marketing Connects People

through Technology

Companies must establish communication

to build customer trust and loyalty

the marketing mix can be used

to enhance perceptions of value

CLV Emphasis changes from share of market

to share of customer

wiki

type of software that creates an interface enabling users to add or edit content of some types of websites

price is often

used as a competitive tool

Sales analysis

uses sales figures to evaluate a firm's current performance Most common method of evaluation because sales data partially reflect the target market's reactions to a marketing mix and often are readily available Current sales data must be compared with forecasted sales, industry sales, specific competitor's sales, or the costs incurred to achieve the sales volume

Customer relationship management (CRM)

using information about customers to create marketing strategies that develop and sustain desirable customer relationships

marketing creates

value value=customer benefits-customer cost

price is a critical component of marketing mis as customers are concerned about

value obtained in an exchange

Market opportunity

is a combination of circumstances and timing that permits an organization to take action to reach a particular target market

Green marketing

A strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment

a product can be:

a good a service an idea

intense price competition sometimes leads to

price wars