marketing

relative market share

is used in this application because it provides managers with a product's relative strength, compared with that of the largest firm in the industry.

Marketing

the activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

tangibles (service quality)

the appearance of the physical facility, equipment and personnel

consultative buying center

use one person to make a decision but solicit input from others before doing so

beta testing

uses potential consumers, who examine the product prototype in a "real use" setting to determine its functionality, performance, potential problems, and other issues specific to its use

market share

is the percentage of a market accounted for by a specific entity, and is used to establish the product's strength in a particular market. It's usually discussed in units, revenue, or sales

reliability (service quality)

the ability to perform the service dependably and accurately

Financial Performance Metrics

-some commonly used metrics to assess performance include revenues, or sales, and profits. -An attempt to maximize one metric may lower another. -Managers must therefore understand how their actions affect multiple performance metrics. -can also use relative metrics

customer service

-specifically refers to human or mechanical activities firms undertake to help satisfy their customers' needs and wants. -By providing good customer service, firms add value to their products.

Step 5: Order Specification

-the firm places its order with its preferred supplier (or suppliers). The order includes a detailed description of the goods, prices, delivery dates, and, in some cases, penalties for noncompliance. The supplier then sends an acknowledgement that it has received the order and fills it by the specified date

marketing ethics

examines those ethical problems that are specific to the domain of marketing.

product

**central for the creation of value to the customer -is anything that is of value to a consumer and can be offered through a voluntary marketing exchange. In addition to goods, products might be places (i.e. Six Flags theme parks), ideas (i.e. stop smoking), organizations (i.e. MADD), people (i.e. Oprah Winfrey), or communities (i.e. Facebook) that create value for consumers in their respective competitive marketing arenas.

diffusion of innovation curve

- the number of users of an innovative product or service spreads through the population over a period of time and generally follows a bell-shaped curve. -A few people buy the product or service at first, then increasingly more buy, and finally fewer people buy as the degree of the diffusion slows. -these purchasers can be divided into 5 groups according to how soon they buy the product after it has been introduced: Innovators, early adopters, early majority, late majority, laggards

regional culture

- the region in which people live in a particular country has its own regional culture that affects many aspects of people's life, for instance, the way they might refer to a particular product category. IE: soda, pop, coke... Imagine the difficulty these firms have in developing promotional materials that transcend these regional differences.

culture (social factors)

- the shared meanings, beliefs, morals, values, and customs for a group of people. As the basis of the social factors that impact your buying decisions, the culture or cultures in which you participate are not markedly different from your reference groups. That is, your cultural group might be as small as your reference group at school or as large as the country in which you live or the religion to which you belong. Like reference groups, cultures influence consumer behavior.

monitoring the positioning strategy (step 6 of perceptual mapping)

-Markets are not stagnant. Consumers' tastes shifts, and competitors react to those shifts. Attempting to maintain the same position year after year can spell disaster for any company. - Thus, firms must always view the first 3 steps of the positioning process as ongoing, with adjustments made in step four as necessary. **Some firms might try to change their image in response to a shift in the target market.

quantitative research

-Once the firm has gained insights from doing qualitative research, it's likely to engage in quantitative research, which are structured responses that can be statistically tested. -Quantitative research provides information needed to confirm insights and hypotheses generated via qualitative research or secondary data and helps managers pursue appropriate courses of action. - Formal studies such as specific experiments, scanner and panel data, or some combination of these are quantitative in nature. research methods include: surveys, experiments, panel and scanner

why is the failure rate for new products so high?

-One of the main reasons is the failure to assess the market properly by neglecting to do appropriate product testing, targeting the wrong segment, and/or poor positioning. -Firms may also overextend their abilities or competencies by venturing into products or services that are inconsistent with their brand image and/or value proposition.

Brands Are Assets

-for firms, brands are also assets that can be legally protected through trademarks and copyrights and thus constitute a unique form of ownership. -Firms sometimes have to fight to ensure their brand names are not being used, directly or indirectly, by others -an asset that a firm can build, manage, and harness over time to increase its revenue, profitability, and overall value.

macroenvironmental factors

(external environment) the culture, demographics, social issues, technological advances, economic situation, and political/regulatory environment, or CDSTEP.

Marketing impacts various stakeholders:

(ie: supply chain partners, society at large)

The metrics used to evaluate a firm vary depending on

(1) the level of the organization at which the decision is made (2) the resources the manager controls.

Maslow's Hierarchy of Needs (esteem)

- allow people to satisfy their inner desires. EX: yoga appeals to peoples' desires to grow or maintain a happy, satisfied outlook on life

a product line

-a group of products that consumers may use together or perceive as similar in some way.

Unstructured questions

-are open ended and allow respondents to answer in their own words.

To reduce delivery gaps

-empowering employees -use of technology -provide support & incentives

democratic buying center

-majority rules makes the decision

circles in BCG Matrix

-represent brands, and their sizes are in direct proportion to the brands' annual sales.

Sales-Oriented Era

1920-1950 production and distribution techniques became more sophisticated, and the Great Depression and World War II made customers consume less or manufacture items themselves. As a result, manufacturers had the capacity to produce more than customers wanted or were able to buy. Firms responded to their overproduction in becoming sales oriented; they depended on heavy doses of personal selling and advertising.

What's the more important corporate objective: making a profit, or obtaining and keeping customers?

Although firms cannot stay in business without earning a profit, using profit as the sole guiding light for corporate action can lead to short-term decisions that cause the firm to lose customers in the long run

the process of selling merchandise or services from one business to another is called

B2B (business-to-business) marketing.

The process by which businesses sell to consumers is known as

B2C (business-to-consumer)

brand elements

Brand names, logos, symbols, characters, slogans, jingles, and even distinctive packages **they usually choose to be easy for consumers to recognize and remember.

When consumers sell to other consumers it is called

C2C (consumer-to-consumer) marketing.

purchase situation (Situational Factors)

Customers may be predisposed to purchase certain products or services because of some underlying psychological trait or social factor, but these factors may change in certain purchase situations

Why do customers want more value today than in recent decades?

During the first 3 decades after World War II, most America families experienced real income growth, but starting in the late 1970s and continuing to today, that growth has stagnated. Family incomes have stayed slightly ahead of inflation, but their health care costs, property taxes, and tuition bills have risen much faster than inflation.

combining goods and services

EX: when you go to an optical center, you get your eyes examined (a service) and purchase new contact lenses (a good

How do we know how "good" a brand is, or how much equity it has?

Experts look at 4 aspects of a brand to determine its equity: brand awareness, perceived value, brand associations, and brand loyalty.

to define the zero of tolerance

Firms ask a series of questions about each service quality dimension that relate to: -The desired and expected level of service for each dimension, from low to high. -Customers' perceptions of how well the focal service performs and how well a competitive service performs, from low to high. -The importance of each service quality dimension. --if questions reveal you may be over performing on one dimensions-- research & consider toning it down EX: being responsive to customers' desires to have a diner that serves breakfast 24 hours a day can be expensive and may not add any further value to Lou's Diner, because customers would accept more limited times.

Ecological packaging

In a competitive marketplace, a brand that can associate with less harmful impact on the environment often can gain a significant competitive advantage it can use to induce consumers to purchase in good conscience.

Segment profitability =

Segment profitability = (Segment size X Segment adoption percentage X Purchase behavior X Profit margin percentage) - Fixed costs -Segment size = number of people in the segment -Segment adoption percentage = % of customers in the segment who are likely to adopt the product/service -Purchase behavior = purchase price X number of times the customer would buy the product/service in a year -Profit margin percentage = (selling price - variable costs) ÷ selling price -Fixed costs = advertising expenditure, rent, utilities, insurance, and administrative salaries for managers **This analysis provides an estimate of the profitability of segments at one point in time.

How do these 3 important economic factors - inflation, foreign currency fluctuations, and interest rates - affect firms' ability to market goods and services?

Shifts in the 3 economic factors make marketing easier for some and harder for others - EX: when inflation increases, consumers may switch from buying steaks to hamburgers, and consumers buy less discretionary merchandise, and the sale of low-cost luxuries (personal care products, home entertainment) increase while the sale of fancy cars and extravagant vacations decreases.

select a position (step 5 of perceptual mapping)

So continuing, the company has some choices to appeal to untapped customer needs. -- It could develop a new product to meet the needs of this market (move closer to a different market(circle in perceptual map), different quadrant ) --Alternatively, it could adjust or reposition its marketing approach, its product and promotion, to sell original product (same quadrant just move closer to potential market) - Finally, it could ignore what target market really wants and hope that consumers will be attracted to the original product because it's closer to their ideal product than anything else on the market.

social factors

The consumer decision process is also influenced by the external, social environment, which consists of the customer's family, reference groups, and culture

marketing didn't get to its current prominence over night:

The marketing evolution - production era, sales era, marketing era, and value era

Retaining Loyal Customers:

Viewing customers with a lifetime value perspective, rather than on a transaction-by-transaction basis, is key to modern customer retention programs.

service gap

When the delivery of that service fails to meet customer's expectations

Trade promotions

are promotions to wholesalers or retailers to get them to purchase the new products

customer relationship management (CRM)

a business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm's most valued customers.

Attribute Sets:

a consumer's mind organizes and categorizes alternatives to aid his or her decision process -universal sets broken down into subsets of retrieval and evoked sets -EX: Katie knows that there are a lot of apparel stores (universal set). But, only some have the style that she's looking for, like Macy's, Ann Taylor, The Gap, and Banana Republic (retrieval set). She recalls that Ann Taylor is where her mom shops and The Gap is a favorite of her younger sister. But she is sure than Banana Republic and Macy's carry business attire she would like, so only those stores are in her evoked set.

Product Development

a product development strategy offers a new product or service to a firm's current target market.

Market-Oriented Era

after World War II, manufacturers turned from focusing on the war effort toward making consumer products. The USA entered a buyers' market - the customer became king! When consumers again had choices, they were able to make purchasing decisions on the basis of factors such as quality, convenience, and price. Manufacturers and retailers began to focus on what consumers wanted and needed before they designed, made, or attempted to sell their products and services. It was during this period that firms discovered marketing.

Stage 2: Product Specification

after recognizing the need and considering alternative solutions, the company writes a list of potential specifications that vendors might use to develop their proposals

ancillary services

allowances available to all buyers on proportionately equal terms.

The four P's

are the controllable set of decisions/activities that the firm uses to respond to the wants of its target markets.

Consumer decision rules

are the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives. These rules are typically either compensatory or noncompensatory.

Specialty products/services

are those for which customers express such a strong preference that they will expend considerable effort to search for the best suppliers. EX: luxury cars, legal or medical professionals, or designer apparel.

A strong ethical orientation must be

an integral part of a firm's marketing strategy and decision making.

Structured questions

are closed-ended questions for which a discrete set of response alternatives, or specific answers, is provided for respondents to evaluate.

Wants

are goods or services that aren't necessarily needed but are desired. Regardless of the level of your hunger, your desire for ice cream will never be satisfied by a salad.

Psychological risks:

are those risks associated with the way people will feel if the product or service does not convey the right image. EX: consumers who feel powerless (or vulnerable) choose bigger food portions to gain a sense of status.

4 major generational cohorts

baby boomers, generation x, generation y, generation z

Ethnicity:

because of immigration and increasing birth rates among various ethnic and racial groups, the U.S. continues to grow more diverse.

occasion

behavioral segmentation based on when a product or service is purchased or consumed is called occasion segmentation. When consumers are using this product.. what occasion? EX: people usually buy orange juice for breakfast

"benefits" the consumer perceives

can be subtle and less than rationally assessed.

using CRM systematically

collect information about their customers' needs and then use that information to target their best customers with the products, services, and special promotions that appear most important to them.

A market segment

consists of consumers who respond similarly to a firm's marketing efforts.

shopping situation (Situational Factors)

consumers might be ready to purchase a product or service but be completely derailed once they arrive in the store. - Marketers use several techniques to influence consumers at this choice stage of the decision process. Consider some of the following techniques relating to the store atmosphere, salespeople, crowding, in store demonstrations, promotions packaging,

Physiological risk

could also be called safety risk, refers to the fear of an actual harm should the product not perform properly. EX: when buying cars, and another major physiological risk pertains to growing concerns about health risks associated with the food and beverages we consume.

value cocreation

customers can act as collaborators to create the product or service

crowding

customers can feel crowded because there are too many people, too much merchandise, or lines that are too long. If there are too many people in a store, some people become distracted and may even leave. -Others have difficulty purchasing if the merchandise is packed too closely together. This issue is a particular problem for shopper with mobility disabilities.

service quality

customers' perceptions of how well a service meets or exceeds their expectation

Firms achieve efficiencies by:

developing sophisticated distribution and information systems as well as strong relationships with vendors.

Product line depth

equals the number of products within a product line.

loyalty programs:

firms can identify members through the loyalty card or membership information the consumer provides when he or she makes a purchase. Using that purchase information, analysts determine which types of merchandise certain groups of customers are buying and thereby tailor their offering to meet the needs of their loyal customers better.

loyalty

firms have long known that it pays to retain loyal customers. Loyal customers are those who feel so strongly that the firm can meet their relevant needs best that any competitors are virtually excluded from their consideration, these customers buy almost exclusively from the firm. These loyal customers are the most profitable in the long term. Due to the high cost of finding new customers and the profitability of loyal customers, today's companies are using loyalty segmentation and investing in retention and loyalty initiatives to retain their most profitable customers.

identifiable

firms must me able to identify who is within their market to be able to design products or services to meet their needs. It's equally important to ensure that the segments are distinct from one another, because too much overlap between segments means that distinct marketing strategies aren't necessary to meet segment members' needs.

decline stage

firms with products in the decline stage either position themselves for a niche segment of diehard consumers or those with special needs or they completely exit the market. The few laggards that haven't yet tried the product or service enter the market at this stage.

corporate social responsibility

generally entails voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders

benefit segmentation

groups consumers on the basis of the benefits they derive from products or services. This segmentation is effective and it is relatively easy to portray a product's or service's benefits in the firm's communication strategies. EX: Hollywood is a constant and effective practitioner of benefit segmentation. Film producers know that people visit the theater or rent films to obtain a variety of benefits, and market them accordingly. Need a laugh? Try Adam Sandler's most recent comedy.

Locational excellence

having a good physical location and internet presence

primary ethical dilemma facing managers

how to balance shareholder interests with the needs of society

Biometric data

include one or more physical traits such as facial characteristics, iris scans, or fingerprints.

sources of ideas

internal R&D, licensing, brainstorming, outsourcing, competitors products, customer inputs, R&D consortia

affective component of attitude

involves emotions, or what we feel about the issue at hand, including our like or dislike of something

social risk

involves the fears that consumers suffer when they worry others might not regard their purchases positively.

performance risk

involves the perceived danger inherent in a poorly performing product or service.

value

is a popular positioning method because the relationship of price to quality is among the most important considerations for consumers when they make a purchase decision. *Remember that value does not necessarily mean low priced. EX: watch company advertising by saying its watches are an investment way to market a luxury brand in a necessity-focused economy.

a trade show

is a temporary concentration of manufacturers that provides retailers the opportunity to view what's available and new in the marketplace EX: the fashion world's equivalent to trade shows are fashion weeks

data warehouses

large computer file where all customer info and purchasing history is stored

formal assessment

life key metrics like: • delivery, quality, customer service, and issue resolution. -rates the issues on importance scale -ranks the vendor according to each metric

A competitive advantage

like a wall that the firm has built around its position in a market, it makes it hard for outside competitors to contact the customers inside aka the marketer's target market. Over time, advantages will erode because of these competitive forces, but by building high, thick walls, marketers can sustain their advantage, minimize competitive pressure, and boost profits for a longer time, thus establishing a sustainable competitive advantage is key to long-term financial performance.

ethical decision making in the strategic control phase

managers must be evaluated on their actions from an ethical perspective. - Systems must be in place to check whether each potentially ethical issue raised in the planning process was actually successfully addressed. --Systems used in the control phase must also react to change. The emergence of new technologies and new markets ensures that new ethical issues continually arise. Many firms have emergency response plans in place just in case they ever encounter a situation. Ethics thus remains an ongoing crucial component of the strategic marketing planning process and should be incorporated into all the firm's decision making down the road.

Developing a product

marketers start with the core customer value to determine what their potential customers are seeking. Then they make the actual physical product and add associated services to round out the offering.

The bottom line of marketing research

marketing research should be used only to produce unbiased, factual information

gender

more firms are careful about gender neutrality in positioning their products and attempt to transcend gender boundaries, especially through increased interactions with their customers

Value-Based Marketing Era

most successful firms today are market oriented, meaning they generally have transcended a production or selling orientation and attempt to discover and satisfy their customers' needs and wants. Before the turn of the 21st century, better marketing firms recognized that there was more to good marketing than simply discovering and providing what consumers wanted and needed; to compete successfully they would have to give their customers greater value than their competitors did.

types of B2B buying situations

new buys, modified rebuys, and straight rebuys -These varied types of buying situations call for very different marketing and selling strategies

substantial

once the firm has identified its potential target markets, it needs to measure their size. If a market is too small or its buying power insignificant, it won't generate sufficient profits or be able to support the marketing mix activities.

Geographic Segmentation:

organizes customers into groups on the basis of where they live. Thus, a market could be grouped by country, region (northeast, southeast), or areas within a region (state, city, neighborhoods, zip codes). Not surprisingly, geographic segmentation is most useful for companies whose products satisfy needs that vary by region. Firms can provide the same basic goods or services to all segments even if they market globally or nationally, but better marketers make adjustments to meet the needs of smaller geographic groups.

Maslow's Hierarchy of Needs (safety)

pertain to protection and physical well-being.

Functional needs:

pertain to the performance of a product or service

Psychological needs:

pertain to the personal gratification consumers associate with a product and/or service. EX: Shoes provide a function need, to keep feet clean and protect them from the elements, so why would anyone pay more than $1000 for shoes that may do neither? Because they seek to satisfy psychological needs Christian Louboutin's shoes.

Distributive fairness

pertains to a customer's perception of the benefits he or she received compared with the costs (inconvenience or loss). -Customers want to be compensated a fair amount for a perceived loss that resulted from a service failure. -The key to distributive fairness is listening carefully to the customer. One customer whose flight was cancelled, travelling on vacation, may be satisfied with a travel voucher, whereas another may need to get to the destination on time because of a business appointment. -Regardless of how the problem is solved, customers typically want tangible restitution, not just an apology. If providing tangible restitution isn't possible, the next best thing is to assure the customer that steps are being taken to prevent the failure from recurring.

behavioral component of attitude

pertains to the actions we undertake based on what we know and feel.

standards gap

pertains to the difference between the firm's perceptions of customers' expectations and the service standards it sets. -By setting appropriate service standards, training employees to meet and exceed those standards, and measuring service performance, firms can attempt to close this gap.

Place: Delivering the Value Proposition

place represents all the activities necessary to get the product to the right customer when that customer wants it. Place commonly deals specifically with retailing and marketing channel management

The 3 major phases of the marketing plan are:

planning, implementation, and control.

marketing mix or four P's:

product, price, place, promotion

unethical and social responsible firm

questionable firm practices yet donates a lot to the community

communication gap

refers to the difference between the actual service provided to customers and the service that the firm's promotion program promises. - If firms are more realistic about the services they can provide and at the same time manage customer expectations effectively, they generally can close this gap.

business ethics

refers to the moral or ethical dilemmas that might arise in a business setting.

The consumer decision process model

represents the steps that consumers go through before, during, and after making purchases steps: need recognition, information search, alternative evaluation, purchase, post purchase

B2B market particpants

resellers, institutions, and governments as well as manufacturers/ service providers

lipstick effect

some shoppers enjoy the thrill of "treating" themselves to small luxuries like a Chanel lipstick, but forego larger luxury items like a vacation.

a marketing plan

specifies the marketing activities for a specific period of time. The marketing plan is broken down into various components: how the product or service will be conceived or designed, how much it should cost, where and how it will be promoted, and how it will get to the consumer.

The marketing research process (5 steps)

step 1: defining the objectives and research needs step 2: designing the research step 3: data collection process step 4: analyzing data and developing insights step 5: action plan & implementation **Researchers go back and forth from one step to another as the need arises. **Another important requirement before embarking on a research project is to plan the entire project in advance so that researchers can avoid unnecessary alterations to the research plan as they move through the process.

The 1914 Clayton Act

that supports the Sherman Act by prohibiting the combination of 2 or more competing corporations through pooling ownership of stock and restricting pricing policies like price discrimination, exclusive dealing, and tying clauses to different buyers

The 1936 Robinson-Patman Act

that specifically outlaws price discrimination toward wholesalers, retailers, or other producers and requires sellers to make ancillary services.

empathy (service quality)

the caring and individualized attention provided to customers

unrelated diversification

the new business lacks any common elements with the present business. Unrelated diversifications do not capitalize on either core strengths associated with markets or with products. Thus, they would be viewed as very risky.

user buying role

the person who consumes or uses the product or service

gatekeeper buying role

the person who controls information or access, or both, to decision makers and influencers.

responsiveness (service quality)

the willingness to help customers and provide prompt service

When companies embrace CSR key stakeholders:

their own employees, consumers, the marketplace, and society at large.

Efficient operations enable firms to:

to provide their consumers with lower-priced merchandise or, even if their prices are not lower than those of the competition, to use additional margin they earn to attract customers away from competitors by offering even better service, merchandise assortments, or visual presentations.

Step 3: Evaluate Segment Attractiveness (SIRRP)

to undertake this evaluation, marketers first must determine whether the segment is worth pursuing, using several descriptive criteria: is the segment identifiable, substantial, reachable, responsive, and profitable?

Balancing Benefits with Costs:

value-oriented marketers constantly measure the benefits that customers perceive against the cost of their offerings. They use available customer data to find opportunities to better satisfy their customers' needs, keep costs down, and develop long-term loyalties. EX: IKEA doesn't have highly paid salespeople to sell its furniture, but its simple designs mean customers can easily choose a product and assemble it themselves.

Social Trends:

various social trends appear to be shaping consumer values in the U.S. and around the world, including a greater emphasis on thrift, health and wellness concerns, greener consumers, privacy concerns, and time-poor societies

social engagement

when companies join the online conversation with customers

retrieval sets

which are those brands or stores that can be readily brought forth from memory. -when thinking of apparel stores for business attire-- what stores come straight into your mind? these are retreival

target marketing or targeting

the process of evaluating each segment's attractiveness and deciding which to pursue

primary package

-is the one the consumer uses, like the toothpaste tube. From the primary package, consumers typically seek convenience in terms of storage, use, and consumption.

space 1

- Representing the firm's value proposition, this space reveals which customer needs are effectively met by the benefits that the firm provides but not by the benefits provided by competitors. That is, there's no overlap between competitors. **very center circle of venn diagram (customer needs + firms benefits)

data mining

**way to turn raw data into valuable data that provides insights (information) -uses a variety of statistical analysis tools to uncover previously unknown patterns in the data or relationships among variables. -Data mining can be useful for a broad range of situations and organizations. By analyzing the enormous amount of information that it possesses about its customers, companies have developed statistical models that help identify when a customers is dissatisfied with his or her service. -Once the company identifies an unhappy customer, it can follow up and proactively address that customer's issues. By mining customer data and information, the company also reduced its churn levels. -The purpose of converting data to information is to describe, explain, predict, and/or evaluate a particular situation. -Overall, firms hope to use data mining to generate customer-based analytics that they can apply to their strategic decision making, and thereby make good customers better, and make better customers their best. -Firms can also use secondary data to assess the profitability of their customers by determining the customer life-time value (CLV).

Experimental research (quantitative)

- (an experiment) is a type of quantitative research that systematically manipulates one or more variables to determine which variables have a causal effect on other variables. EX: McDo's research team was trying to determine the most profitable price for a new combo item. McDo's puts the item on the menu at 4 different prices in 4 different markets . In general, the more expensive the item, the less it will sell. But by running this experiment, McDo's determines that the most profitable price is the second least expensive ($5.00). In this experiment, the changed in price likely caused the changes in quantities sold and therefore affected the restaurant's profitability.

question marks BCG Matrix

- (upper right quadrant) appear in high-growth markets but have relatively low market shares -they are often the most managerially intensive products in that they require significant resources to maintain and potentially increase their market share. -Managers must decide whether to infuse question marks with resources generated by the cash cows, so that they can become stars, or withdraw resources and eventually phase out the products.

A marketing plan entails 5 steps:

- In step 1 of the planning phase, marketing executives define the mission of the business. - In step 2 of planning phase conduct a SWOT analysis. (strengths, weaknesses opportunities, and threats) -In step 3 of the implementation phase, go through process of segmentation, targeting, and positioning -In step 4, of the implementation phase the marketing mix using the 4 Ps. -In step 5 of the control phase entails evaluating the performance of the marketing strategy using marketing metrics and taking any necessary corrective actions. It's not always necessary to go through the entire process for every evaluation, EX: a firm could evaluate its performance in step 5 then go directly to step 2 to conduct a situation audit without redefining its overall mission.

Generation Y (Millennials)

- born between 1977 and 2000 . -Children of the Baby Boomers, this group is the biggest cohort. -It also varies the most in age, ranging from teenagers to adults who have their own families. -Now that Gen Y is entering the workplace, it's becoming apparent that its members have different expectations and requirements than those of other cohorts. -Gen Y puts a strong emphasis on balancing work and life - these young adults want a good job, but they also want to live in a location that supports their lifestyle -They also consider marriage secondary, and not obviously necessary, to being good parents themselves. -The younger edge of this group (often called tweens) has never lived without Internet or easy access to cell phones, which makes them technologically savvy. -As a result, these Gen Yers look and consume rather similarly across countries. They have similar lifestyle, music, and entertainment. It's difficult to tell the difference in appearance between Gen Ys in the U.S.A. and other developed countries, based solely on their "uniforms" of jeans, sneakers, and T-shirts.

Reduce communication gap

- coordinate how the expectation is created and the way the service is provided. Expectations typically are created through promotions, advertising, or personal selling. Delivery is another function altogether. -- EX: if a salesperson coordinates a customer's order with the people responsible for the service delivery, the client's expectations of delivery day will likely be met. -Customer expectations can be managed when the service is delivered. - People are generally reasonable when they are warned that some aspect of the service may be below their expectations. They just don't like surprises!

B2b summary

- in various ways, B2B marketing both differs from and mirrors the consumer behavior (B2C) process. The constitution of the buying center (initiator, influencer, decider, buyer, user, gatekeeper), the culture of the purchasing firm (autocratic, democratic, consultative, or consensus), and the context of the buying situation (new buy, modified rebuy, straight rebuy) all influence the B2B buying process in various ways, which means that sellers must be constantly aware of these factors if they want to be successful in their sales attempts. -Also, the Internet has radically changed some elements of the B2B world, increasing the frequency of both private electronic exchanges and auctions.

demographics

- indicate the characteristics of human populations and segments, especially those used to identify consumer markets. -Typical demographics like age - which includes generational cohorts - gender, race, and income are readily available from market research firms. Many firms undertake their own market research as well. -Demographics provide an easily understood "snapshot" of the typical consumer in a specific target market.

RFP process

- is a common process through which organizations invite alternative vendors or suppliers to bid on supplying their required components or specifications. -The purchasing company may simply post its RFP needs on its website or work through various B2B web portals or inform their preferred vendors directly. -Smaller companies may lack the ability to attract broad attention to their requests, so they might turn to a web portal, an Internet site whose purpose is to be a major starting point for users when they connect to the web. -Although there are general portals (like Yahoo or MSN), B2B partners connect to specialized or niche portals to participate in online information exchanges and transactions. -These exchanges help streamline procurement or distribution processes. --Portals can provide tremendous cost savings because they eliminate periodic negotiations and routine paperwork, and they offer the means to form a supply chain that can respond quickly to the buyer's needs. -Small to medium-sized companies looking for skilled service workers also can use portals like Guru.com, started to help freelance professionals connect with companies that need their services, whether those services entail graphic design and cartooning or finance and accounting advice.

questionnaire

- is a form that features a set of questions designed to gather information from respondents and thereby accomplish the researchers' objectives. -Individual questions on a questionnaire can be either unstructured or structured. -Developing a questionnaire is part art and part science. The questions must be carefully designed to address the specific set of research questions

motives (psychological factors )

- is a need or want that is strong enough to cause the person to seek satisfaction. -People have several types of motives. Maslow's Hierarchy of Needs is a paradigm for classifying people's motives. Maslow categorized 5 groups of needs: physiological (i.e. food, water, shelter), safety (i.e. secure employment, health), love (i.e. friendship, family), esteem (i.e. confidence, respect) It argues that when lower-level, more basic needs (physiological and safety) are fulfilled, people turn to satisfying their higher-level human needs (social and personal). **Good marketers add value to their products or services by nudging people up the needs hierarchy and offering information on as many of the pyramid of needs as they can.

postpurchase cognitive dissonance

- is an internal conflict that arises from an inconsistency between 2 beliefs, or between beliefs and behavior. EX: you might have buyer's remorse after purchasing an expensive TV because you question whether a high-price TV is appreciably better quality than a similar size TV at a lower price. --Thus, postpurchase cognitive dissonance generally occurs when a consumer questions the appropriateness of a purchase after his or her decision has been made. Postpurchase cognitive dissonance is especially likely for products that are expensive, are infrequently purchased, don't work as intended, and are associated with high levels of risk. -Marketers direct efforts at consumers after the purchase is made to address this issue. After a pang of dissonance, satisfaction may then set in.

self concept

- is the image that people ideally have of themselves. EX: a person who has a goal to belong may want to see himself as a fun-loving person that people want to be around. Marketers often make use of this self-concept through communications that show their products being used by groups of laughing people having a good time.

institutions

- like hospitals, educational organizations, and religious organizations, also purchase all kinds of goods and services. -Public institutions also engage in B2B relationships to fulfill their needs for capital constructions, equipment, supplies, food, and janitorial services.

Step 4: Implement Marketing Mix and Allocate Resources:

- marketers implement the actual marketing mix - product, price, promotion, place - on the basis of what they believe their target markets will value. - marketers make important decisions about how they will allocate their scarce resources to their various products and services.

Maslow's Hierarchy of Needs (self actualization)

- occurs when you feel completely satisfied with your life and how you live. You don't care what others think. You drive a Ford because it suits the person you are, not because a celebrity endorses it

Product excellence

- providing products with high perceived value and effective branding and positioning. -firms have been able to maintain their sustainable competitive advantage by investing in their brand itself; positioning their product or service using a clear, distinctive brand image; and constantly reinforcing that image through their merchandise, service, and promotion.

habitual decision making

- requires even less thought than impulse by -describes a purchase decision process in which consumers engage in little conscious effort. EX: on my way home I saw a McDo's and went into the drive-through for a cheeseburger, I didn't ponder the potential benefits of going to Wendy's instead. I simply reacted to the cue provided by the sign and engaged in habitual decision making. -Marketers strive to attract and maintain habitual purchasers by creating strong brands and store loyalty because these consumers don't even consider alternative brands or stores.

marketing ethical issues:

- societal issues, like the sale of products or services that may damage the environment; -global issues like the use of child labor; -individual consumer issues like deceptive advertising or the marketing of dangerous products.

Reasons to Decrease Breadth

- sometimes it's necessary to delete entire product lines to address changing market conditions or meet internal strategic priorities

Using the Diffusion of Innovation Theory:

- using the diffusion of innovation theory, firms can predict which types of customers will buy their new product or service immediately after its introduction, as well as later as the product gets more and more accepted by the market. -With this knowledge, the firm can develop effective promotion, pricing, and other marketing strategies to push acceptance among each customer group -However, because different products diffuse at different rates, marketers must work to understand the diffusion curve for each new product and service, as well as the characteristics of the target customers in each stage of the diffusion. -Moreover, the speed with which products or services diffuse depends on several characteristics ( relative advantage, Compatibility, Observability,Complexity and Trialability )

ethical decision making in the strategic implementation phase

- when firms are identifying potential markets and ways to deliver the 4 Ps to them, firms must consider several ethical issues. Sometimes a firm's choice of target market and how they pursue it can lead to charges of unethical behavior --EX: Molson Brewery launched a Facebook campaign targeted at college students and asked them to post party pictures which it'd use to identify the "top party school," this effort encouraged underage, illegal drinking and irritated universities. Although these student groups might have been responsive to the firm's efforts, it didn't represent an appropriate target market. Marketing through social media has some particular ethical concerns associated with it.

Marketplace

- when one firm in the industry leads the way toward CSR, its partners and competitors often have no choice but to follow or run the risk of not doing business or being left behind. - The initiating firm enjoys an advantage by gaining a reputation for being on the cutting edge of CSR efforts.

cash cows BCG Matrix

-(lower left quadrant) are in low-growth markets but are high market share products -these products have already received heavy investments to develop their high market share, they have excess resources that can be spun off to those products that need it. EX: the firm may decided to use the excess resources generated by the cash cow Brand to fund products in the question mark quadrant.

dogs BCG Matrix

-(lower right quadrant) are in low-growth markets and have relatively low market shares. Although they may generate enough resources to sustain themselves, dogs are not designed for "stardom" and should be phased out unless they are needed to complement or boost the sales of another product or for competitive purposes. -ex: Animal Health area in Bayer HealthCare

the store atmosphere

--some retailers and service providers have developed unique images that are based at least in part on their internal environment, also known as their atmospherics. -Research has shown that, if used in concert with other aspects of a retailer's strategy, music, scent, lighting, and even color can positively influence the decision process. -EX: Some Whole Foods stores have built bars and restaurants inside their stores, where customers can stop and relax, have a glass of wine or a bite to eat, but still get their shopping done for the week. --Create interactive atmospheres that will appeal to customers.

methods to get customer feedback

-A very straightforward and inexpensive method of collecting consumers' perceptions of service quality is to gather them at the time of sale. Service providers can ask customers how they liked the service, though customers often are reticent to provide negative feedback directly to the person who provided the service, or distribute a simple questionnaire. ***companies must take care not to lose it, which can happen if there's no effective mechanism for filtering it up to the key decision makers -making effective use of customer complaint behavior. **must put managers on the front lines occasionally to interact directly with the customers, this strategy is known as "management by walking around." Unless the managers who make the service quality decisions know what their service providers are facing on a day-to-day basis, and unless they can talk directly to the customers with whom those service providers interact, any customer service program they create will not be as good as it could be.

Marketing Is Pervasive across Marketing Channel (supply chain) Members

-All the various channel members (ie: suppliers, manufacturers, wholesalers, and retailers) of the supply chain are firms that are likely to provide career opportunities to marketing professionals. -Effectively managing supply chain relationships often has a marked impact on a firm's ability to satisfy the consumer, which results in increased profitability for all parties

Using Multiple Segmentation Methods:

-Although all segmentation methods are useful, each has its unique advantages and disadvantages. Thus, firms often employ a combination of segmentation methods, using demographics and geography to identify and target marketing communications to their customers, then using benefits or lifestyles to design the product or service and the substance of the marketing message. -One very popular mixture of segmentation schemes is geodemographic segmentation

space 6

-Although both the focal firm and its competitors provide these benefits, they somehow are not meeting customer needs. Expending significant efforts to educate customers by the focal firm about these needs would also benefit competitors, so they likely are lower in the priority list of spending. (competitor benefits + firms benefits)

Strategies Based on Product Life Cycle: Some Caveats

-Although the product life cycle concept provides a starting point for managers to think about the strategy they want to implement during each stage of the life cycle of a product, this tool must be used with care. -The most challenging part of applying the product life cycle concept is that managers don't know exactly what shape each product's life cycle will take, so there's no way to know precisely what stage a product is in. **beware of the product life cycle self-fulfilling prophecy --Fortunately, new research, based on the history of dozens of consumer products, suggests that the product life cycle concept is indeed a valid idea, and new analytical tools now provide "rules" for detecting the key turning points in the cycle

Syndicated External Secondary Data

-Although the secondary data described previously are either free or inexpensively obtained, marketers can purchase external secondary data called syndicated data, which are available for a fee from commercial research firms -Consumer packaged goods firms that sell to wholesalers often lack the means to gather pertinent data directly from the retailers that sell their products to consumers, which makes syndicated data a valuable resource for them. -Some syndicated data providers also offer information about shifting brand preferences and product usage in households, which they gather from scanner data and consumer panels. -Overall, both panel and scanner data provide firms with a comprehensive picture of what consumers are buying or not buying. - The key difference between scanner research and panel research is how the data get aggregated. Scanner research typically focuses on weekly consumption of a particular product at a given unit of analysis (ex: individual store, chain, region); panel research focuses on the total weekly consumption by a particular person or household. Both types are valuable.

thrift

-American society has become a consumer society, and yet the economic impacts of a recession and housing crash have prompted many people to embrace the idea of spending less as a virtuous pursuit. - consumers across the board appear to be attempting to save more, spend less on luxuries, and manage to get by without dipping into their savings. - According to some consumer psychologists, in an uncertain economic setting, it's just too hard to be frugal all the time.(lipstick effect) - As consumers have become more savvy and conscientious about bargain shopping , innovative entrepreneurs developed business plans to satisfy the desire for a deal. -These websites deliver daily emails to consumers that are tailored to consumers' preferences, shopping habits, and locations. -Consumer expectations of what constitutes a good deal have changed rapidly over the past several years, meaning marketers need some new ideas about how to appeal to them.

step 4: analyzing data and developing insights

-Analyzing and interpreting the data should be both thorough and methodical. -To generate meaningful information, researchers analyze and make use of the collected data - In this context, data can be defined as raw numbers or other factual information that, on their own, have limited value to marketers. -However, when the data are interpreted, they become information, which results from organizing, analyzing, and interpreting data and putting them into a form that is useful to marketing decision makers. *step could be viewed as converting raw data to information

product attributes

-Another common positioning strategy focuses on the product attributes that are most important to the target market. A well-known symbol can also be used as a positioning tool. EX: what comes to mind when you think of Tony the Tiger, the Nike swoosh, or the Ralph Lauren polo player? These symbols are so strong and well known that they create a position for the brand that distinguishes it from its competition. -Many such symbols are registered trademarks that are legally protected by the companies that developed them. Firms can choose to position their products or services against a specific competitor or an entire product/service classification. -Marketers must be careful, however, that they don't position their product too closely to their competition. If, for instance, their package or logo looks too much like a competitor's, the might be opening themselves up to a trademark infringement lawsuit. Many private-label and store brands have been challenged for using packaging that appears confusingly similar to that of the national brand leaders in a category.

Survey Research (quantitative research)

-Arguably the most popular type of quantitative primary collection method is a survey - a systematic means of collecting information from people using a questionnaire. -marketing surveys can be conducted either online of offline, but online marketing surveys offer researchers the chance to develop a database quickly with many responses, whereas offline marketing surveys provide a more direct approach that includes interactions with the target market. - Web surveys have steadily grown as a percentage of all quantitative surveys. -Online surveys have a lot to offer marketers with tight deadlines and small budgets. The response rates for online surveys are relatively high, and they are also inexpensive and the costs likely will continue to fall as users become more familiar with the online survey process. -Results are processed and received quickly. Reports and summaries can be developed in real time and delivered directly to managers in simple, easy-to-digest reports, complete with color, graphics, and charts. -Diverse online survey software, like Qualtrics or Surveymonkey, make it very easy to draft an online survey, using questions from existing survey libraries. -A survey link can be sent easily in an e-mail to potential respondents as well as posted on specific sites that are likely to attract the target audience or people who are willing to perform online work.

Who is Accountable for Performance?

-At each level of an organization, the business unit and its manager should be held accountable only for the revenues, expenses, and profits that they can control. - expenses that affect several levels of the organization shouldn't be arbitrarily assigned to lower levels. Performance evaluations are used to pinpoint problem areas. -Reasons performance may be above or below planned levels must be examined. -The manager should only be held accountable in the case of the inadequate sales force job or setting inappropriate forecasts. When it appears that actual performance is going to be below the plan because of circumstances beyond the manager's control, the firm can still take action to minimize the harm. -When something beyond their control happens, marketing managers need to ask themselves did I react to salvage an adverse situation, or did my reactions worsen the situation?

disadvantages of being pioneer product

-Because pioneering products and brands face the uphill task of establishing the market alone, they pave the way for followers, who can spend less marketing effort creating demand for the product line and focus directly on creating demand for their specific brand. -Also, because the pioneer is the first product in the market, it often has a less sophisticated design and may be priced relatively higher, leaving room for better and lower-priced competitive products. - A majority of new products are failures: 95% of all new consumer goods fail, and products across all markets and industries suffer failure rates of 50 to 80%.

Step 1: Defining Objectives and Research Needs

-Because research is both expensive and time-consuming, it's important to establish in advance exactly what problem needs to be solved. -To do so, marketers must clearly define the objectives of their marketing research project. -The complexity of the project that the company undertakes depends on how much time and resources it has available, and the amount of in-depth knowledge it needs. -Researchers assess the value of a project through a careful comparison of the benefits of answering some of their questions and the costs associated with conducting the research. -When researchers have determined what information they need to address a particular problem or issue, the next step is to design a research project to meet those objectives.

blogs

-Blogs in particular represent valuable sources of marketing research insights. -Part of what makes blogs so valuable is also what makes them challenging for firms. - Bloggers are usually, but not always, unaffiliated with the companies that produce the items they review, which means they have no reason to hold back from negative commentary.

Brand dilution

-Brand dilution occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold. -EX: Cheetos Lip Balm was based on the idea that if you like Cheetos, you'd want to wipe it all over your lips. FAIL.

Reasons to innovate

-Changing Customer Needs -market saturation -managing risk through diversity -fashion cycles -Improving Business Relationships

churn levels

-Churn is the number of participants who discontinue use of a service, divided by the average number of total participants. -With this knowledge, the company can focus on what it does best.

branding

-Consumers cannot buy products that they don't know exist. -Even if the overall brand name is familiar, it won't help sales of individual products unless consumers know what products are available under that name. -Branding also provides a way for a firm to differentiate its product offerings from those of its competitors. EX: Both Snapple and Tropicana make and sell fruit drinks, yet consumers may choose one over the other because of the associations that the brands invoke.

product-service continuum example (starting with service dominant ending with product dominant)

-doctor -hotel -dry cleaners -restaurant -apparel store -grocery store **those firms that are engaged primarily in selling a good, like an apparel store, typically view service as a method to maintain a sustainable competitive advantage.

space 3

-Customers express little need or desire for these company benefits. The firm thus has several options. It might educate customers about the importance and benefits that it provides with this space, to encourage customers to develop a sense of their need. Alternatively, it could reengineer its approach to stop providing these unwanted benefits, which likely would enable it to save money. **only in circle to the right of venn diagram (firms benefits)

step 3: data collection process

-Data collection begins only after the research design process. -Based on the design of the project, data can be collected from secondary or primary data sources. **this is raw data

BCG Matrix

-Each quadrant in the matrix has been named on the basis of the amount of resources it generates for and requires from the firm. -useful for conceptualizing the relative performance of products or services and using this information to allocate resources, -difficult to implement in practice. -it's difficult to measure both relative market share and industry growth. -Another issue for marketers is the potential self-fulfilling prophecy of placing a product or service into a quadrant (profound implications on whether it is classified as question mark or star as question marks require more marketing and production support. ) - firms have started making these decisions as lower level of the firms and have employee checks and balances to force managers at each level of the organizational hierarchy to negotiate with those above and below them to reach their final decisions

Change in packaging

-Firms occasionally change or update their packaging as a subtle way of repositioning the product. --A change can be used to attract a new target market and/or appear more up to date to its current market. (MARKET CONDITIONS) --Changes also can make consumers feel like they are receiving something tangible in return for paying higher prices, even when the product itself remains untouched. Whether true or not, consumers see new packaging and tend to think that the "new" product may be worth trying. (HIGHER PERCEIVED VALUE) --Some packaging changes are designed to make the product more ecological. (ECOLOGICAL)

Positioning Methods

-Firms position products and services based on different methods such as the value proposition, salient attributes, symbols, and competition. -The positioning strategy can help communicate the firm's or the product's value proposition, the unique value that a product or service provides to its customers, and how it is better than and different from those of competitors. Firms thus position their products and services according to value and salient attributes.

Advantages of brand extensions

-First, because the brand name is already well established, the firm can spend less in developing consumer brand awareness and brand associations for the new product enables companies to introduce new products quicker and more easily. (LESS $$) -Second, if either the original brand or the brand extension has strong consumer acceptance, the perception will carry over to the other product. EX: someone who hasn't used the Neutrogena brand before trying the brand extension, Neutrogena Wave Power Cleanser, might be encouraged to try Neutrogena's core product line of cleaners and moisturizing lotions, especially if their experience with the Wave has been positive. (EXTENDING PERCEIVED VALUE) -Third, when brand extensions are used for complementary products, a synergy exists between the 2 products that can increase overall sales. EX: Frito-Lay markets both chips and dips under its Frito-Lay and Doritos brand names. When people buy the chips, they tend to buy the dips as well. (COMPLEMENTRY PRODUCTS) - Not all brand extensions are successful though. Some can dilute brand equity.

Why do marketers find this research valuable?

-First, it helps reduce some of the uncertainty under which they currently operate. Successful managers know when research might help their decision making and then take appropriate steps to acquire the information they need. -Second, marketing research provides a crucial link between firms and their environments, which enables them to be customer oriented because they build their strategies by using customer input and continual feedback. -Third, by constantly monitoring their competitors, firms can anticipate and respond quickly to competitive moves. -Market research is applicable to corporate or retailing ventures, non-for-profit organizations, governments, and the political sector (politicians want to understand who makes up the voting population to determine how to reach them and they want to understand your media habits, like what magazines you subscribe to so they can target you more effectively). To do so, they rely on the five-step marketing research process.

Marketing Can Be Entrepreneurial

-Great and distinguished entrepreneurs have visions of how certain combinations of products and services can satisfy unfilled needs. They find and understand a marketing opportunity (ie the unfilled need), conduct a thorough examination of the marketplace and develop and communicate the value of their product and services to potential consumers.

Green consumers

-Green marketing involves a strategic effort by firms to supply customers with environmentally friendly merchandise. - Demand for green-oriented products has been a boon to the firms that supply them. Marketers encourage consumers to replace older versions of products with new energy saving models. -New markets emerge for recycled products... These green products and initiatives suggest a complicated business model. -problem with firms that green wash

Concept Testing

-Ideas with potential are developed further into concepts, which in this context refer to brief written descriptions of the product; its technology, working principles, and forms; and what customer needs it would satisfy. - A concept might also include visual images of what the product would look like **refers to the process in which a concept statement is presented to potential buyers or users to obtain their reactions. --These reactions enable the developer to estimate the sales value of the product or service concept, possibly make changes to enhance its sales value, and determine whether the idea is worth further development. If the concept fails to meet customers' expectations, it's doubtful it would succeed if it were to be produced and marketed. Because concept testing occurs very early in the new product introduction process, even before a real product has been made, it helps the firm avoid the costs of unnecessary product development. --Concept testing progresses along the research techniques. The firm likely starts with exploratory research, like in-depth interviews or focus groups, to test the concept, after which it can undertake conclusive research through Internet or mall-intercept surveys. Video clips on the Internet might show a virtual prototype and the way it works so that potential customers can evaluate the product or service. In a mall-intercept survey, an interviewer would provide a description of the concept to the respondent and then ask several questions to obtain his or her feedback. **The most important question pertains to the respondent's purchase intentions if the product or service were made available. -Also, marketers usually collect some information about the customers so they can analyze which consumer segments are likely to be most interested in the product. -Some concepts never make it past concept testing stage, particularly if respondents seem uninterested. Those that do receive high evaluations from potential consumer move on to the next step, product development.

closely monitor competitors

-If competitors offer features that the firm does not, it's important to determine their importance to customers. Important attributes should be considered for inclusion into the firm's offering - or else they will provide a unique value proposition for competitors.

bad packaging

-If customers think the new image is ugly or stupid, then the company poorly misjudged its customers' loyalty to its existing brand position, as exemplified by its packaging. -Many consumers experience "wrap rage" - a great frustration with packaging that makes it seemingly impossible to get at the actual products.

Primary Data Collection Techniques

-In many cases, the information researchers need is available only through primary data, or data collected to address specific research needs. -Depending on the nature of the research problem, the primary data collection method can employ a qualitative or a quantitative research method.

Step 2: Designing the Research

-In this step, researchers identify the type of data needed and determine the research necessary to collect it. *Recall that the objectives of the project drive the type of data needed (as outlined in Step 1). - The projects design might begin with available data (EX: like information that shows people with children come into McDo's at lunchtime and order Happy meals, then McDo's market researchers can start to ask customers specific questions about their McDo's experience McDo's wants a better understanding of customers' experience).

Internal Secondary Data

-Internally, companies also generate a tremendous amount of secondary data from their day-to-day operations. -One of the most valuable resources such firms have at their disposal is their rich cache of customer information and purchase history. -However, it can be difficult to make sense of the millions and even billions of pieces of individual data, which are stored in large computer files called data warehouses. -For this reason, firms use data mining techniques to extract valuable information from their databases -Some retailers try to customize their product and service offerings to match the needs of their customers. EX: Tesco uses its loyalty card to collect massive amounts of information about its individual customers. But these specific data are basically useless until Tesco mines and analyzes them to identify 3 income groups: upscale, middle income, and less affluent. With this mined information, Tesco has been able to create appealing private-label product offerings for each group, according to their preferences, and began targeting promotions to each customer according to his or her income classification.

Responding to the Environment:

-Many companies engage in tactics and marketing strategies that attempt to respond to multiple developments in the wider environment. -In a constantly changing marketing environment, the marketers that succeed are the ones that respond quickly, accurately, and sensitively to their consumers.

Develop Positioning Strategy

-Market positioning involves a process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products. -The positioning strategy can help communicate the firm's or the product's value proposition, which communicates the customer benefits to be received from a product or service and thereby provides reasons for wanting to purchase it.

temporal states (Situational Factors)

-Our state of mind at any particular time can alter our preconceived notions of what we are going to purchase. EX: morning people vs. night people, so a purchase situation may thus have different appeal levels depending on the time of day and the type of person the consumer is. Mood swings can alter consumer behavior. Since retailers can't affect what happens outside the store very much, they should do everything possible to make sure their customers have a positive shopping experience once they are in the store.

Maslow's Hierarchy of Needs (Physiological)

-Physiological needs deal with the basic biological necessities of life - food, drink, rest, and shelter. Everyone remains concerned with meeting these basic needs. Marketers seize every opportunity to convert these needs into wants.

Situational Factors:

-Psychological and social factors typically influence the consumer decision process the same way each time. --But sometimes, situational factors, or factors specific to the situation, override, or at least influence, psychological and social issues. These situational factors are related to the purchase and shopping situation, as well as to temporal states

social media and facial recognition privacy

-Regarding social media, protecting consumers' privacy is mainly up to the consumer. - In contrast, consumers have little control over facial recognition software that allows companies to detect demographic information based on their appearances.

Inseparable Production and Consumption

-Services are produced and consumed at the same time, that is, service and consumption are inseparable. -When receiving a service, the customer is not only present but also may participate in the service process. -Furthermore, the interaction with the service provider may have an important impact on the customer's perception of the service outcome. -Because the service is inseparable from its consumption, customers rarely have the opportunity to try the service before they purchase it. And after the service has been performed, it can't be returned. -Because the purchase risk in these scenarios can be relatively high, service firms sometimes provide extended warranties and 100% satisfaction guarantees ***produced&consumed at the same time, interaction has big effect on perception, hard to return--offer warranties

social media (Qualitative research)

-Social media sites are a booming source of data for marketers. -contributors to social media sites rarely are shy about providing their opinions about the firm's own products or its competitors' offerings. -If companies can monitor, gather, and mine these vast social media data, they can learn a lot about their customers' likes, dislikes, and preferences. -They then might cross-reference such social media commentary with consumers' past purchases to derive a better sense of what they want. -Customers also appear keen to submit their opinions about their friends' purchases, interests, polls, and blogs. - Another creative use of social media for market research involves building online communities for companies. EX: Kraft created a virtual community of target consumers: 150 women who wanted to lose weight, the participants openly shared their frustrations and difficulties managing their weight, because the community environment prompted them to sense that everyone else on the site struggled with similar issues and concerns. -By monitoring the community, Kraft learned that it would need to educate consumers about the Diet plan it was offering and would need to offer products that could address cravings throughout the day, not just at mealtimes. -Noting these various opportunities and market research sources online, many companies have added "heads for social media" to their management teams. These managers take responsibility for scanning the web for blogs, postings, tweets, or Facebook posts where customers mention their experience with a brand. -By staying abreast of this continuous stream of information, companies can gather the most up-to-date news about their company, products, and services, as well as their competitors. -These social media searches allow companies to learn about customers' perceptions and resolve customer complaints they may never have heard about through other channels. -The data gathered through the searches also undergo careful analyses: are customer sentiments generally positive, negative, or neutral? How many customers are talking about the firm's products, and how many focused instead on competitors'? -This data analysis is understandably challenging, considering the amount of data available online. -However, monitoring consumer sentiments has grown easier with the development of social media monitoring platforms. -Some companies take it a step further, by joining the online conversation with customers, a process called social engagement

space 7

-Some competitor benefits are either undesired or unnecessary among customers. The competitor could invest money to educate customers about the importance of these benefits and highlight their needs through advertising and promotional campaigns. If so, the focal firm should recognize that this need is moving to Space 5. Alternatively, the competitor could reengineer its products to eliminate these benefits, in which case it requires no response from the focal firm. (competitors benefits)

Inexpensive External Secondary Data

-Some sources of external data can be quickly accessed at a relatively low cost. -Often, however, inexpensive data sources are not adequate to meet researchers' needs. Because the data initially were acquired for some purpose other than the research question at hand, they may not be completely relevant or timely. -The U.S. Census is a great source of demographic data about a particular market area, and it can be easily accessed at a low cost. However, the data are collected only at the beginning of every decade, so they quickly become outdated. -Researchers must also pay close attention to how other sources of inexpensive secondary data were collected. Despite the great deal of data available on the Internet, easy access does not ensure that the data are trustworthy.

The main value proposition components are:

-Target market -Offering name or brand -Product/service category or concept -Unique point of difference/benefits EX: Gatorade Target market: to athletes around the world Brand: Gatorade Product category: Unique benefits: representing the heart, hustle, and of athleticism

Laws the government as enacted to ensure companies compete fairly with one another:

-The 1890 Sherman Antitrust Act -The 1914 Clayton Act -The 1936 Robinson-Patman Act

Factors Affecting Consumers' search

-The Perceived Benefits vs. Perceived Costs of Search -The Locus of control -actual or perceived risk

product mix

-The complete set of all products and services offered by a firm -typically consists of various product lines -reflects the breadth and depth of the company's product lines.

Select Target Market

-The key factor likely to affect this decision is the marketer's ability to pursue such an opportunity or target segment. -Thus, a firm assesses both the attractiveness of the target market (opportunities and threats based on the SWOT analysis and the profitability of the segment) and its own competencies (strengths and weaknesses based on SWOT analysis) very carefully -four targeting strategies: undifferentiated, concentrated, differentiated, micro marketing

Value and Lifestyle Survey (VALS)

-The most widely used tool to support such psychographic segmentation efforts -owned and operated by Strategic Business Insights (SBI). -Consumers can be classified into the 8 segments shown in the exhibit below based on their answers to the questionnaire. - The vertical dimension of the VALS framework indicates level or resources, including income, education, health, energy level, and degree of innovativeness. -The upper segments have more resources and are more innovative than those on the bottom. -The horizontal dimension shows the segments' primary psychological motivation for buying. -Consumers buy products and services because of their primary motivations - that is, how they see themselves in the world and how that self-image governs their activities. -The 3 primary motivations for U.S. consumers are ideals, achievement, and self-expression. -People who are primarily motivated by ideals are guided by knowledge and principles. Those who are motivated by achievement look for products and services that demonstrate success to their peers. Consumers who are primarily motivated by self-expression desire social or physical activity, variety, and risk. -VALS also enables firms to identify target segments and their underlying motivations. It shows correlations between psychology and lifestyle choices. - Firms are finding that psychographic segmentation schemes like VALS are often more useful for predicting consumer behavior than are demographics. -This is because people who share demographics often have very different psychological traits. EX: 2 people can be the same age, both married, college graduates, demographically they're the same but the ways they think and act are totally different from each other, so lumping them together as a target doesn't make sense. However, there are limitations to using psychographic segmentation. -Psychographics are more expensive as a means to identify potential customers. -To identify VALS Thinkers or Makers, companies use the VALS questionnaire in surveys or focus groups. Then VALS provides segment descriptions, linkages with consumer product and media data, communication styles, and zip code locations.

Strategic Planning is Not Sequential

-The planning process in the "marketing plan" diagram suggests that managers follow a set sequence when they make strategic decisions. -But actual planning processes can move back and fourth among these steps. EX: a situation analysis may uncover a logical alternative that might not be included in the mission statement, meaning the mission statement would need to be revised. The development of the implementation plan also might reveal that insufficient resources have been allocated to a particular product for it to achieve its objective so in that case the firm would need to either change the objective or increase the resources; alternatively, the marketer might consider not investing in the product at all.

Diffusion of Innovation

-The process by which the use of an innovation, whether a product, a service, or a process, spreads throughout a market group, over time and across various categories of adopters -The theory surrounding diffusion of innovation helps marketers understand the rate at which consumers are likely to adopt a new product or service. - It also gives them a means to identify potential markets for their new products or services and predict their potential sales, even before they introduce the innovations.

Promotion (product launch)

-The test results help the firm determine an appropriate integrated marketing communications strategy. -Promotion for new products is required at each link in the supply chain. If the products are not sold and stocked by retailers, no amount of promotion to consumers will sell the products. -Trade promotions often combine introductory price promotions, special events, and personal selling. -Manufacturers may run a special event in the form of a special display in the grocery aisle, an introductory celebration, or a party in conjunction with an interesting event like the Academy Awards. -Another outlet for exposing buyers to new products is a trade show -Finally, as in many B2B sales situations, personal selling may be the most efficient way to get retailers to purchase their products. -Manufacturers also use promotion to generate demand for new products with consumers. If manufacturers can create demand for the products among consumers, they will go to retailers asking for it, thus further inducing retailers to carry the products. -These promotions are often coupled with short-term price reductions, coupons, or rebates. - Sometimes manufacturers promote new products in advance of the product launch to create excitement with potential customers, as well as to measure the likely demand so they have appropriate supply available. - For products that are somewhat complex or conceptually new, marketers may need to provide for more consumer education about the product's benefits than they would for simpler and more familiar products.

unethical and socially irresponsible firm

-The worst situation is when firms behave both unethically and in a socially unacceptable manner

Retailers priorities for secondary packaging

-They want convenience in terms of displaying and selling the product. -In addition, secondary packages often get packed into larger cartons, pallets, or containers to facilitate shipment and storage from the manufacturer to the retailer. These shipping packages benefit the manufacturer and the retailer, in that they protect the shipment during transit; aid in loading, unloading, and storage; and allow cost efficiencies due to the larger order and shipment sizes. -Packaging can also be used in a far more subtle way, namely, to help suppliers save costs

space 5

-This space constitutes the competitor's value proposition: the needs of customers that are met by benefits a competitor provides, but not by the benefits provided by our focal firm. However, if more and more customers start to make demands for these benefits, the focal firm needs to carefully monitor developments and match some benefits if possible. (customer needs + competitors benefits)

idea generation

-To generate ideas for new products, a firm can use its own internal research and development (R&D) efforts, collaborate with other firms and institutions, license technology from research-intensive firms, brainstorm, research competitors' products and services, and/or conduct consumer research -Firms that want to be pioneers rely more extensively on R&D efforts, whereas those that tend to adopt a follower strategy are more likely to scan the market for ideas. -At the end of the idea-generation stage, the firm should have several ideas that it can take forward to the next stage: concept testing.

Step 6: Vendor Performance Assessment

-Using Metrics just like in the consumer buying process, firms analyze their vendors' performance so they can make decisions about their future purchases. -The difference is that in a B2B setting, this analysis is typically more formal and objective. ** identify key issues and how the vendor is performing

Step 4: Proposal Analysis

-Vendor Negotiation, and Selection the buying organization, in conjunction with its critical decision makers, evaluates all the proposals it receives in response to its RFP. -Many firms narrow the process to a few suppliers, often those with which they have existing relationships, and discuss key terms of the sale, like price, quality, delivery, and financing. -Some firms have a policy that requires them to negotiate with several suppliers, particularly if the product or service represents a critical component or aspect of the business. - This policy keeps suppliers on their toes; they know that the buying firm can always shift a greater portion of its business to an alternative supplier if it offers better terms. - The vendor's ability to meet its specifications also is important. The vendor's financial position also provides an important indication of whether the vendor will be able to stay in business.

packaging benefits

-Whether primary or secondary, packaging plays several key roles: it attracts the consumers' attention. -It enables products to stand out from their competitors. -It offers a promotional tool (i.e. "NEW" and "IMPROVED" promises on labels). -Finally, it allows for the same product to appeal to different markets with different sizes, like convenience stores stock little packages that travelers can buy at the last minute, whereas Costco sells extra large versions of products

extended problem solving

-a purchase decision process during which the consumer devotes considerable time and effort to analyzing alternatives; often occurs when the consumer perceives that the purchase decision entails a lot of risk. --To reduce a perceived risk (like social - what will my friends think, or financial - did I pay too much, etc.), one can spend a lot of effort searching for information before actually making a purchase.

impulse buy

-a buying decision made by customers on the spot when they see the merchandise. EX: when I went to the grocery store to do my weekly shopping, I saw a case of popcorn and soda near the checkout counter and knowing that my friends were coming over later to watch a movie, I bought it. -This was an impulse purchase because I didn't go through the entire decision process, I recognized a need and jumped directly to purchase without spending any time searching for more information or evaluating alternatives. --The grocery store facilitated this impulse purchase by providing easily accessible cues (offering the popcorn and soda in a prominent display, at a great location in the store, and at a reasonable price).

the elaboration likelihood model

-a consumer behavior theory -proposes that high and low involvement consumers process different aspects of a message or advertisement. --If both types of consumers viewed ads for career dresses, the high-involvement consumer will scrutinize all the information provided and process the key elements of the message more deeply. As an involved consumer, she ends up judging the ad as truthful and forming a favorable impression of the product, or else she regards the message as superficial and develops negative product impressions --. Whereas, a low-involvement consumer will likely process the same advertisement in a less thorough manner. Such a consumer might pay less attention to the key elements of the message and focus on heuristic elements like brand name or the presence of a celebrity endorser. The impressions of the low-involvement consumers are likely to be more superficial.

new buy situation

-a customer purchases a good or service for the first time, which means the buying decision is likely to be quite involved because the buyer or the buying organization doesn't have any experience with the item. -the buying center is likely to proceed through all 6 steps in the buying process and involve many people in the buying decision. - Typical new buys might range from capital equipment to components that the firm previously made itself but now has decided to purchase instead. Some vendors offer perks to attract new buyers. EX: runway shows offer wholesale buyers an opportunity to inspect new lines of clothing and place orders -most complex and difficult is the new buy, because it requires the buying organization to make changes in its current practices and purchases. As a result, several members of the buying center will likely become involved, and the level of their involvement will be more intense than in the case of modified and straight rebuys. In new buying situations, buying center members also typically spend more time at each stage of the B2B buying process, similar to the extended decision-making process that consumers use in the B2C process.

Individual Brands

-a firm can use individual brand names for each of its products. EX: while Kellogg's makes good use of the corporate branding strategy, it also allows other products, like Famous Amos cookies, Keebler Cookies, and Cheez-Its, to keep individual identities not readily seen as being under the Kellogg's umbrella.

Family Brands

-a firm can use its own corporate name to brand all its product lines and products (this is called a family brand). -When all products are sold under one family brand, the individual brands benefit from the overall brand awareness associated with the family name. EX: Kellogg's uses its family brand name prominently on its cereal brands (i.e. Kellogg's Special K, Kellogg's Froot Loops, Kellogg's Rice Krispies).

generational cohort

-a group of people in the same generation, have similar purchase behaviors because they have share experiences and are in the same stage of life. -Applying age as a basis to identify consumers is quite useful to marketers, as long as it is used in conjunction with other consumer characteristics. EX: age groups can identify appropriate magazine and television shows in which firms should advertise, and lists for direct mail and telemarketing campaigns. -Age is also useful for identifying the best social media outlets (twitter, facebook, etc.).

marketing metric

-a measuring system that quantifies a trend, dynamic, or characteristic -used to explain why things happened and to project the future

Building B2B Relationships

-a multitude of ways to enhance relationships, and these methods seem to be advancing and evolving by the minute. EX: blogs and social media can build awareness, provide search engine results, educate potential and existing clients about products or services, and warm up a seemingly cold corporate culture. An expert who offers advice and knowledge about products increases brand awareness, and a blog is a great medium for this information. -Web analytics, like traffic on the website and the number of comments, can offer tangible evaluations, but a better measure is how often the blog gets mentioned elsewhere, the media attention it receives, and the interaction, involvement, intimacy, and influence that it promotes. EX: Twitter, the micro-blogging site, is valuable for B2B markets, because they can communicate with other businesses as often as they want. -

competitors products

-a new product entry by a competitor may trigger a market opportunity for a firm, which can use reverse engineering to understand the competitor's product and then bring an improved version to market. -Reverse engineering involves taking apart a product, analyzing it, and creating an improved product that doesn't infringe on the competitor's patents, if any exist. -This copycat approach to new product development is widespread and practiced by even the most research-intensive firms.

focus group interviews (Qualitative research)

-a small group of persons (usually 8-12) come together for an intensive discussion about a particular topic. -Using an unstructured method of inquiry, a trained moderator guides the conversation, according to a predetermined, general outline of topics of interest. -Researchers usually record the interactions by video- or audiotape so they can carefully comb through the interviews later to catch any patterns of verbal or nonverbal responses. - focus groups gather qualitative data about initial reactions to a new or existing product or service, opinions about different competitive offerings, or reactions to marketing stimuli, like a new ad campaign or point-of-purchase display materials. - not limited to new products though--services too -focus groups now often takes place online the company saves costs but also gains access to a broader range of potential customers who live in various places -However, these online focus groups rarely include video feeds, so companies lose some important information that can be gleaned from body language

technology advances

-accelerated during the past decade, improving the value of both products and services. - Consumers have constant access to the Internet everywhere. mobile computing has greatly extended via WiFi, 3G, 4G, tablet computers (ie iPad) -from a firms perspective: can track a customers order, determine exactly how much of each product is at a given point in the supply chain, - retailers can also communicate with their suppliers and collaboratively plan to meet their inventory needs. -Mobile devices enhance the customer's experience, by making it easier to interact with the manufacturer or retailer or other customers, and they add a new channel of access, which makes customers more loyal and more likely to spend more with a particular retailer. -Mobile applications aren't just about shopping with a phone, by 2015 people will access the web more often through smartphones than through laptops and desktops combined. -But mobile experiences cannot be identical to web experiences, because the interface is different, and thus the way users employ the sites differ.

search for information

-after a consumer recognizes a need, is to search for information about the various options that exist to satisfy that need. - The length and intensity of the search are based on the degree of perceived risk associated with purchasing the product or service. Regardless of the required search level, there are 2 key types of information search: internal and external.

Purchase and Consumption:

-after evaluating the alternatives, customers are ready to buy. However, they don't always patronize the store or purchase the brand or item on which they had originally decided -Retailers therefore turn to the conversion rate to measure how well they have converted purchase intentions into purchases.

step 3: brainstorm and evaluate alternative

-after the marketing firm has identified the stakeholders and their issues and gathered the available data, all parties relevant to the decision should come together to brainstorm any alternative courses of action. -Management then reviews and refines these alternatives, leading to the final step.

evaluation of results (product launch)

-after the product has been launched, marketers must undertake a critical post-launch review to determine whether the product and its launch were a success or failure and what additional resources or changes to the marketing mix are needed, if any. -Many firms use panel data to improve the probability of success during the test marketing phase of a new product introduction. The consumer panel data is collected by panelists scanning in their receipts using a home scanning device. The information is used to measure individual household first-time trials and repeat purchases. -Through such data, market demand can be estimated, so the firm can figure out how best to adjust its marketing mix. Some products never make it out of the introduction stage. For those products that do move on though, firms can measure the success of a new product by 3 interrelated factors: 1) its satisfaction of technical requirements, like performance, 2) customer acceptance, and 3) its satisfaction of the firm's financial requirements, like sales and profits. --If the product isn't performing sufficiently well, poor customer acceptance will result, which in turn leads to poor financial performance **The new product development process, when follower rationally and sequentially, helps avoid such doming-type failures

consensus buying center

-all members of the team must reach a collective agreement that they can support a particular purchase.

Retailer/store brands

-also called private label brands, are products developed by retailers. -In some cases, retailers manufacture their own products, whereas in other cases they develop the design and specifications for their retailer/store brands and then contract with manufacturers to produce those products. -Some national brand manufacturers work with retailers to develop a special version of its standard merchandise offering to be sold exclusively by the retailer. -In the past, sales of store brands were limited. But in recent years, as the size of retail firms has increased through growth and consolidation, more retailers have the scale economies to develop private-label merchandise and use this merchandise to establish a distinctive identity. -In addition, manufacturers are more willing to accommodate the needs of retailers and develop co-brands for them.

Undesirable Consumer Behavior

-although firms want satisfied, loyal customers, sometimes they fail to attain them. -Passive consumers are those who don't repeat purchase or recommend the product to others. More serious and potentially damaging, however, is negative consumer behavior, like negative word of mouth and rumors.

Product (The four P's)

-although marketing a multifaceted function, its main purpose is to create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs. -must be perceived valuable enough to buy by the customers

similarity with B2B and B2C

-both focus on serving specific types of customer markets by creating value for those customers. -B2B also finds it more productive to focus their efforts on key industries or market segments

Naming Brands and Product Lines

-although there is no simple way to decide how to name a brand or product line, the more the products vary in their usage or performance, the more likely it is that the firm should use individual brands EX: General Motors utilizes several different individual brands (Cadillac, Chevrolet, GMC), each catering to very different target markets and meeting different needs. Hyundai, on the other hand, utilizes only one brand since usage and level of performance are relatively homogeneous.

The Knowledge Gap: Understanding Customer Expectations

-an important early step in providing good service is knowing what the customer wants. It doesn't pay to invest in services that don't improve customer satisfaction. -To reduce the knowledge gap, firms must understand customers' expectations. To understand those expectations, firms must undertake customer research and increase the interaction and communication between managers and employees. -Customers' expectations are based on their knowledge and experiences. If a company doesn't understand the customer's expectations, it's unlikely that the company would ever be able to meet them. Expectations vary according to the type of service. -- EX: don't have the same expectations for the Ritz hotel and the Paradise Motel. People's expectations also vary depending on the situation (i.e. if travelling on business the Paradise Motel might have been fine, but if it's your wedding anniversary you'd prefer the Ritz) -Thus, the service provider needs to not only know and understand the expectations of the customers in its target market but also have some idea of the occasions of service usage.

Labels on products and packages

-another branding element, used for promotion -provide information the consumer needs for his or her purchase decision and consumption of the product -The information required on them must comply with general and industry-specific laws and regulations, including the constituents or ingredients contained in the product, where the product was made, directions for use, and/or safety precautions - is much more than just a sticker on the package; it's a communication tool. - Many of the elements on the label are required by laws and regulations, but other elements remain within the control of the manufacturer. -How manufacturers use labels to communicate the benefits of their products to consumers varies by the product. -Many products highlight specific ingredients, vitamin content, or nutrient content, and country of origin. This focus signals to consumers that the product offers these benefits. -The importance of the label as a communication tool should not be underestimated.

Resellers

-are marketing intermediaries that resell manufactured products without significantly altering their form. -distrubutors (those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods, usually in smaller quantities, to retailers or industrial or business users) -wholesalers(a type of reseller or marketing intermediary that resells manufactured products without significantly altering their form. (retailer is their client, buys in bulk and negotiates fees with retailer) -distributors often buy from manufacturers and sell to other business like retailers in a B2B transaction, then retailers in turn resell those products to the ultimate consumer (B2C transaction). -distributors ask for an additional fee because they act as your sales person to retailers (manufacturer is their client, active partnership, assesses fees based on retailer price) epresent the interests and activities of book publishers. Instead of hiring your own sales and marketing personnel and running your own shipping, storage and returns processing warehouse, you would outsource all of these activities to a book distributor who focuses on these activites on your behalf -Thus, wholesalers, distributors, and retailers are all resellers. --Retailers represent resellers and engage in B2B transactions when they buy merchandise for their stores, fixtures, capital investments, leasing locations, and financing operations.

Secondary data

-are pieces of information that have been collected prior to the start of the focal research project. Secondary data include both external and internal data sources -A marketing research project often begins with a review of the relevant secondary data. - Secondary data might come from free or very inexpensive external sources, like census data, information from trade associations, and reports published in magazines. Although readily accessible, these inexpensive sources may not be specific or timely enough to solve the marketer's research needs and objectives. -Firms also can purchase more specific or applicable secondary data from specialized research firms. -Finally, secondary sources can be accessed through internal sources, including the company's sales invoices, customer lists, and other reports generated by the company itself.

Determinant attributes

-are product or service features that are important to the buyer and on which competing brands or stores are perceived to differ. Because many important and desirable criteria are equal among the various choices, consumers look for something special - a determinant attribute - to differentiate one brand or store from another.

Consumer products

-are products and services used by people for their personal use. -Marketers further classify consumer products by the way they are used and how they are purchased: -specialty, shopping, convenience, and unsought products/services

Unsought products/services

-are products consumers either don't normally think of buying or don't know about at all. -Because of their very nature, these products require lots of marketing effort and various forms of promotion. -When new-to-the-world products are first introduced, they are unsought products.

Shopping products/services

-are products or services for which consumers will spend a fair amount of time comparing alternatives, such as furniture, apparel, fragrances, appliances, and travel alternatives

lifestyle

-are the way we live. If values provide an end goal and self-concept is the way one sees oneself in the context of that goal, lifestyles are how we live our lives to achieve goals.

Innovators

-are those buyers who want to be the first on the block to have the new product or service. These buyers enjoy taking risks and are regarded as highly knowledgeable. -Firms that invest in the latest technology, either to use in their products or services or to make the firm more efficient, are considered innovators. -Typically, innovators keep themselves very well informed about the product category by subscribing to trade and specialty magazines, talking to other experts, visiting product-specific blogs and forums that describe the coolest new products, and attending product-related forums, seminars, and special events. - Yet innovators represent only about 2.5% of the total market for any new product or service. -These innovators are crucial to the success of any new product or service though, because they help the product gain market acceptance. -Through talking about and spreading positive word of mouth about the new product, they prove instrumental in bringing in the next adopter category, known as early adopters. ***enjoy taking risks--well informed--small percent of population--crucial to the success to gain market acceptance--spread positive word of mouth

primary data

-are those data collected to address a specific research needs. Some common primary data collection methods include focus groups, in-depth interviews, and surveys. - No company can ask every customers their opinions or observe every customer, so researchers must choose a group of customers who represent the customers of interest, or a sample, and then generalize their opinion to describe all customers with the same characteristics. -They may choose the sample participants at random to represent the entire customer market. -Or they may choose to select the sample on the basis of some characteristic. -Marketing researchers use various methods of asking questions to measure the issues they are tackling.

Convenience products/services

-are those products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase. -They're frequently purchased commodity items, usually bought with very little thought, like common beverages, bread, or soap

scanner data

-are used in quantitative research obtained from scanner readings of UPC labels (barcodes) at check-out counters. -Whenever you go into your local grocery store, your purchases are rung up using scanner systems. -The data from these purchases are likely to be acquired by leading marketing research firms which use this information to help leading consumer packaged goods firms assess what's happening in the marketplace. EX: a firm can use scanner data to determine what would happen to its sales if it reduced the price of its least popular product by 10% in a given month. In the test market in which it lowers the price, do sales increase, decrease, or stay the same? **analyzes consumption of a particular product at a given unit of analysis (ex: kind bar sales in boston)

culture

-as the shared meanings, beliefs, morals, values, and customs of a group of people. Transmitted by words, literature, and institutions, culture gets passed down from generation to generation and learned over time -The challenge for marketers is to have products or services identifiable by and relevant to a particular group of people. -Our various cultures influence what, why, how, where, and when we buy. -2 dimensions of culture that marketers must take into account as they develop their marketing strategies are the culture of the country and that of a region within a country

Entry into New Markets or Market Segments:

-because the market is saturated at this point, firms may attempt to enter new geographical markets, including international markets, that may be less saturated. -However, even in mature markets, firms may be able to find new market segments. EX: Laundry - so in the U.S. laundry tablets have never been very popular people like using liquid detergent to control the amount they add, Dial has developed a 3-in-1 laundry sheet which includes laundry detergent, fabric softener, and antistatic agents. It's less expensive than purchasing premium brand versions of the 3 items. Dial hopes to appeal to a new market segment that wants a premium product and to save money, without cannibalizing its core customer groups.

Value of Branding for the Customer

-brands add value to merchandise and services, for both consumers and sellers, beyond physical and functional characteristics or the pure act of performing the service. - Brands Facilitate Purchases -Brands Establish Loyalty -Brands Protect from Competition and Price Competition: -Brands Are Assets -Brands Impact Market Value:

Brands Facilitate Purchases

-brands are often easily recognized by consumers, and because they signify a certain quality level and contain familiar attributes, brands help consumers make quick decisions, especially about their purchases. - From promotions, past purchases, or information from friends and family, people are able to recognize the offering before they even read any text on the label, and they likely possess a perception of the brand's level of quality, whether it is a good value, and most important, whether they like it and want to buy it. -Brands enable customers to differentiate one firm or product from another.

Brand Ownership

-brands can be owned by any firm in the supply chain, whether manufacturers, wholesalers, or retailers. -There are 2 basic brand ownership strategies: manufacturer brands and retailer/store brand **the brands can be marketed using a common/family name (group of products) or as individual brands (one product).

Panel and Scanner-Based Research (quantitative)

-can be either secondary or primary. - we consider the use of a panel to collect primary data. Walmart's U.K. subsidiary Asda uses an 18,000-customer panel to help determine which products to carry. Asda sends e-mails to each participant with product images and descriptions of potential new products. The customers' responses indicate whether they think each product should be carried in stores

foreign currency fluctuations

-changes in the value of a country's currency relative to the currency of another country, can influence consumer spending. EX: if euro is $1.35 and U.S. is $1.00, merchandise made in Europe and other countries tied to the euro becomes more costly to Americans, whereas products made in the U.S. cost less for European consumers. Global financial markets are closely connected, such that when one falls, everyone suffers.

neuromarketing

-claims the ability to read consumers' minds, using wireless electroencephalogram (EEG) scanners that measure the involuntary brainwaves that occur when they view a product, advertisement, or brand images. -Such insights would be invaluable for marketers, to discover what truly appeals to consumers. The potential for abuses of such tools are immense.

voice-of-customer (VOC) program

-collects customer inputs and integrates them into managerial decisions. - a method to employ ongoing marketing research to assess how well they are meeting their customers' expectations.

value proposition

-communicates the customer benefits to be received from a product or service and thereby provides reasons for wanting to purchase it. -the intersection of what the customer needs and wants with what the firm can offer **ideally want the competitors offering to be away from the intersection but that is unrealistic -Unfortunately, even if this situation existed, the product or service then would be successful, so it likely wouldn't be sustainable, because competitors would attempt to copy the important product or service attributes and therefore begin to encroach on the firm's value proposition. - Maintaining a unique value proposition can be sustained in the long term only in monopoly situations or possibly monopolistic competition situations. The intersection of customer needs, the benefits provided by our focal firm, and the benefits provided by a competing firm reveal 7 specific spaces where a product or service might be located. -the intersection of customer needs, the benefits provided by our focal firm, and the benefits provided by a competing firm reveal 7 specific spaces where a product or service might be located.

Political/Regulatory Environment:

-comprises political parties, government organizations, and legislation and laws. - Organizations must fully understand and comply with any legislation regarding fair competition, consumer protection, or industry-specific regulation. -The government has enacted laws that promote both fair trade and competition by prohibiting the formation of monopolies or alliances that would damage a competitive marketplace, fostering fair pricing practices for all suppliers and consumers. -The government enacts laws focused on insuring that companies compete fairly with one another.

Step 2 of marketing plan (Conduct a Situation Analysis)

-conduct a SWOT analysis that assesses both the internal environment with regard to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats. -it should assess the opportunities and uncertainties of the marketplace due to changes in Cultural, Demographic, Social, Technological, Economic, and Political forces (CDSTEP). -With this information, firms can anticipate and interpret change, so they can allocate appropriate resources.

Evaluative criteria

-consist of salient, or important, attributes about a particular product. -- However, it becomes difficult to evaluate different brands or stores because there are so many choices, especially when those choices involve aspects of the product that are difficult to evaluate. --Consumers utilize several shortcuts to simplify the potentially complicated decision process: determinant attributes and consumer decision rules.

Customer Service:

-consistency in this area can prove difficult as it is provided by employees and, and invariably, humans are less consistent than machines. -Firms that offer good customer service must instill its importance in their employees over a long period of time that it becomes part of the organizational culture. --once a marketer has earned a good service reputation, it can sustain this advantage for a long time, because a competitor is hard pressed to develop a comparable reputation.

Factors that affect the marketing enviornment

-consumers are the center piece because they are the center of all marketing efforts -Consumers may be influenced directly by the immediate actions of the focal company, the company's competitors, or corporate partners that work with the firm to make and supply products and services to consumers -The firm, and therefore consumers indirectly, is influenced by the macro environment, which includes various impacts of culture, demographics, and social, technological, economic, and political/legal factors.

Without innovation firms would have only 2 choices:

-continue to market current products or take the same product to another market with similar customers. --Even if they succeed in innovating and creating new products, new-to-the-world products are not adopted by everyone at the same time. Rather, they diffuse or spread through a population in a process known as diffusion of innovation.

competitors

-critical that marketers understand their firm's competitors, including their strengths, weaknesses, and likely reactions to the marketing activities that their own firm undertakes.

The Product Life Cycle

-defines the stages that products move through as they enter, get established in, and ultimately leave the marketplace -offers marketers a starting point for their strategy planning -in their life cycle, products pass through 4 stages: introduction, growth, maturity, and decline. **Many products stay in the maturity stage for a very long time. Manufacturers may add features to products, but the mature product category remains essentially the same and seems unlikely to enter the decline stage unless some innovative, superior solution comes along to replace them.

types of consumer buying descisions

-depends on their level of involvement: extended problem solving; and limited problem solving, which includes impulse buying and habitual decision making

Development of New Products:

-despite market saturation, firms continually introduce new products with improved features or find new uses for existing products because they need constant innovation and product proliferation to defend market share from intense competition.

Marketers also use several methods to build customer loyalty:

-developing a clear and precise positioning strategy. -creates an emotional attachment through loyalty programs.

The distinction between a B2B and a business-to-consumer (B2C) transaction

-difference is not the product or service itself, rather, it's the ultimate user of that product or service -B2B transactions tend to be more complex and involve multiple members of both the buying organization and the selling organization, whereas B2C often entails a simple transaction between the retailer and the individual consumer.

behavioral segmentation

-divides customers into groups on the basis of how they use the product or service. Some common behavioral measures include occasion and loyalty. ¬ Occasion: ¬ Loyalty

in-store domenstrations

-during these well-advertised events, customers are often enticed to purchase that day because they get special assistance from the salespeople and can order merchandise that the retailer otherwise doesn't carry. EX: fashion retailers offer trunk shows where vendors show their whole line of merchandise on a certain day, or the taste and smell of new food items may attract people to try something they normally wouldn't

Empowering Service Providers:

-employees are supported in their efforts to do their jobs effectively -empowerment means allowing employees to make decisions about how service gets provided to customers. -When frontline employees are authorized to make decisions to help their customers, service quality generally improves. -Empowerment becomes more important when the service is more individualized. - Empowering service providers with only a rule like "use your best judgment" might cause chaos. Managers should coach and train employees to understand what "use your best judgment" specifically means.

a market penetration strategy

-employs the existing marketing mix and focuses the firm's efforts on existing customers. -Such a growth strategy might be achieved by attracting new customers to the firm's current target market or encouraging current customers to patronize the firm more often or buy more merchandise on each visit. -requires greater marketing efforts, like increased advertising and additional sales and promotions, or intensified distribution efforts in geographic areas in which the product or service already is sold.

A market development strategy

-employs the existing marketing offering to reach new market segments, whether domestic or international. -International expansion generally is riskier than domestic expansion because firms must deal with differences in government regulations, cultural traditions, supply chains, and language. However, many U.S. firms enjoy a competitive advantage global markets because, especially among young people, U.S. culture is widely emulated for consumer products

RFID (radio frequency identification device)

-enables it to track an item from the moment it was manufactured, through the distribution system, to the retail store, and into the hands of the final consumer.

Product Development or product desing

-entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and features or a service's features. An engineering team develops a product prototype that is based on research findings from the previous concept testing step, as well as their own knowledge about materials and technology. -Product prototypes are usually tested through alpha and beta testing. -The firm might develop several prototype products that it gives to users, then survey those users to determine whether the product worked as intended and identify any issues that need resolution. By using virtual testing, consumer companies can demonstrate the likely success, or failure, of a product without actually having to produce it for a market and, potentially, expose its secrets to competitors.

Observation (Qualitative research)

-entails examining purchase and consumption behaviors through personal or video camera scrutiny. -Observation can last for a very brief period of time (i.e. 2 hours watching teens shop for clothes in the mall), or it may take days or weeks (i.e. researchers live with families observe their use of products). -When consumers are unable to articulate their experiences, observation research becomes particularly useful. -Observation may be the best method, and sometimes the only way, to determine how consumers might use a product, and therefore be useful for designing and marketing them. These insights might be helpful, both for the company that gathers them and for consumers who ultimately benefit from better products

Step 5: Evaluate Performance Using Marketing Metrics:

-evaluating the results of the strategy and implementation program using marketing metrics. -metrics make it possible to compare results across regions, strategic business units (SBUs), product lines, and time periods. -The firm can determine why it did or didn't achieve its performance goals with the help of these metrics. -Understanding the causes of the performance, regardless of whether that performance exceeded, met, or fell below the firm's goals, enables firms to make appropriate adjustments. -Typically, managers begin by reviewing the implementation programs, and their analysis may indicate that the strategy (or even the mission statement) needs to be reconsidered. -Problems can arise both when firms successfully implement poor strategies and when they poorly implement good strategies.

Why People Act Unethically:

-every individual is a product of his or her culture, upbringing, genes, and various other influences. In spite of these factors, people continue to grow emotionally in their understanding of what is and is not ethical behavior.

Price

-everything has a price, though it doesn't always have to be monetary. Price is everything the buyer gives up - money, time, energy - in exchange for the product -Marketers must determine the price of a product carefully on the basis of the potential buyer's belief about its value. - the key to determining prices is figuring out how much customers are willing to pay so that they are satisfied with the purchase and the seller achieves a reasonable profit -price should be based on the value that the customer perceives.

green washing

-exploitation method firms use by disingenuously marketing products or services as environmentally friendly, with the goal of gaining public approval and sales, rather than actually improving the environment -Consumers need to question whether a firm is spending significantly more money and time advertising being green and operating with consideration for the environment,

CSR metrics

-firms are starting to report corporate social responsibility metrics in major areas like their impact on the environment, their ability to diversify their workforce, energy conservation initiatives, and their policies on protecting the human rights of their employees and the employees of their suppliers.

Premarket Tests

-firms conduct premarket tests before they actually bring a product or service to market to determine how many customers will try and then continue to use the product or service according to a small group of potential consumers. - One popular proprietary premarket test version is called Nielsen BASES. During the test, potential customers are exposed to the marketing mix variables, such as the advertising, then surveyed and given a sample of the product to try. After some period of time, during which the potential customers try the product, they are surveyed about whether they would buy/use the product again. -This second survey provides an estimation of the probability of a consumer's repeat purchase. - From these data, the firm generates a sales estimate for the new product that enables it to decide whether to introduce the product, abandon it, redesign it before introduction, or revise the marketing plan. -An early evaluation of this sort, that is, before the product is introduced to the whole market, saves marketers the cost of a nationwide launch if the product fails. --Sometimes firms simulate a product or service introduction, in which case potential customers view the advertising of various currently available products or services along with advertising for the new product or service. They receive money to buy the product or service from a simulated environment, such as a mock web page or store, and respond to a survey after they make their purchases. This test thus can determine the effectiveness of a firm's advertising as well as the expected trial rates for the new product.

Society

-firms expend considerable time and energy engaging in activities aimed at improving the overall community and the physical environment. -Companies cannot ignore societal demands that they act responsibly. A firm that fails to do so causes damage to all the preceding stakeholders, as well as itself.

Reason to increase depth

-firms might add items to address changing consumer preferences or to preempt competitors while boosting sales

Reasons to Increase Breadth

-firms often add new product lines to capture new or evolving markets and increase sales

brainstorming

-firms often engage in brainstorming sessions during which a group works together to generate ideas. -One of the key characteristics of a brainstorming session is that no idea can be immediately accepted or rejected. -The moderator of the session may channel participants' attention to specific product features and attributes, performance expectations, or packaging. Only at the end of the session do the members vote on the best ideas or combinations of ideas. Those ideas that receive the most votes are carried forward to the next stage of the product development process.

differentiated marketing

-firms using a differentiated targeting strategy target several market segments with a different offering for each. -Firms embrace differentiated targeting because it helps them obtain a bigger share of the market and increase the market for their products overall. Providing products or services that appeal to multiple segments helps diversify the business and therefore lowers the company's overall risk. Even if one segment isn't doing well, the impact on the firm's profitability can be offset by revenue from another segment that is doing well. But a differentiated strategy is likely to be more costly for the firm.

Reaction to privacy concerns

-firms voluntarily notify their customers that any information provided to them will be kept confidential and not given or sold to any other firm -organizations have emerged as watchdogs over data mining of consumer information -national and states governments require companies to disclose their privacy practices to customers on an annual basis **But laws have yet to catch up with advances in other area, like social media, neuromarketing, and facial recognition software.

responsiveness

-for a segmentation strategy to be successful, the customers in the segment must react similarly and positively to the firm's offering. If, through the firm's distinctive competencies, it cannot provide products or services to that segment, it should not target it.

licensing

-for many other scientific and technological products, firms buy the rights to use the technology or ideas from other research-intensive firms through a licensing agreement. -This approach saves the high costs of in-house R&D, but it means that the firm is banking on a solution that already exists but has not been marketed.

Reason to decrease depth

-from time to time, it's also necessary to delete products within a product line to realign the firm's resources. The decision is never taken lightly. Generally, substantial investments have been made to develop and manufacture the products. -Yet firms often must prune their product lines to eliminate unprofitable or low margin items and refocus their marketing efforts on their more profitable items.

early adopters

-generally don't like to take as much risk as innovators do but instead wait and purchase the product after careful review. -Most of them go ahead and purchase though, after reading reviews and such, because early adopters tend to enjoy novelty and are often regarded as the opinion leaders for particular product categories. -This group, which represents about 13.5% of all buyers in the market, spreads the word. As a result, early adopters are crucial for bringing the other 3 buyer categories to the market. -If the early adopter group is relatively small, the number of people who ultimately adopt the innovation likely will also be small. ***careful review, opinion leaders, crucial for other 3 buyer categories

Use of Technology (reduce delivery gaps)

-gives access to a wider variety of services, a greater degree of control by the customer over the services, and the ability to obtain information. -improves the service provider's efficiency and reduces servicing costs -it can lead to a competitive advantage over less service-oriented competitors. - Technological advances that help close the delivery gap are expanding. EX: salons and cosmetics counters use kiosks to show customers how they would look with different beauty products and various hair colors. **The technological delivery of services can cause problems though. Some customers either do not embrace the idea of replacing a human with a machine for business interactions or have problems using the technology. In other cases, the technology may not perform adequately.

Service Quality and Customer Satisfaction and Loyalty:

-good service quality leads to satisfied and loyal customers. -Customers wind up their purchase decision process has 3 outcomes: satisfaction, dissonance, and loyalty. -Dissonance may just be a passing emotion that is overcome. *Satisfaction,often leads to loyalty. Assuming that none of the service gaps occur customers should be more or less satisfied. - A service provider that does a good job one year is likely to keep customers satisfied the next year too. If a firm not only minimizes but eliminates any service gaps, customers are likely to exhibit significant loyalty to that firm. Customers want to continue receiving such superior service and have no desire to go elsewhere for the offerings it provides them.

Why Is Marketing Important?

-has evolved into a major business function that crosses all areas of a firm or organization. -Marketing advises production about how much of the company's product to make and then tells logistics when to ship it. -creates long-lasting, mutually valuable relationships between the company and the firms from which it buys. -identifies those elements that local customers value and makes it possible for the firm to expand globally. -can be entrepreneurial -enriches society as a whole -pervasive across all channel members

Brands Impact Market Value

-having well-known brands can have a direct impact on the company's bottom line. -The value of a company is its overall monetary worth, comprising a vast number of assets. -The value of the brand, just one of these assets, refers to the earning potential of the brand over the next 12 months.

health and wellness concerns

-health concerns, especially those pertaining to children, are prevalent - New advertising guidelines require marketers to produce food in reasonably proportioned sizes (because people are getting obese and getting diabetes). -Advertised food items must provide basic nutrients, have less than 30% of their total calories from fat, and include no added sweeteners. -The advertising also cannot be aired during children's programming, and companies cannot link unhealthy foods with cartoon and celebrity figures. -At the same time, consumers' interest in improving their health has opened up several new markets and niches focused on healthy living.

factors differentiating services from goods

-heterogenous -inseparable -intangible -perishable

Product Launch:

-if the market testing returns with positive results, the firm is ready to introduce the product to the entire market. This most critical step in the new product introduction requires tremendous financial resources and extensive coordination of all aspects of the marketing mix. -For any firm, if the new product launch is a failure, it may be difficult for the product, and perhaps the firm, to recover. So what does a product launch involve? --First, on the basis of the research it has gathered on consumer perceptions, the tests it has conducted, and competitive considerations, the firm confirms its target market (or markets) and decides how the product will be positioned. Then the firm finalizes the remaining marketing mix variables for the new product, including the marketing budget for the first year. -the timing of the launch may be important, depending on the product. EX: Hollywood Studios typically release movies targeted toward general audiences (i.e. those rated G or PG) during the summer when children are out of school.

government

-in most countries, the central government is one of the largest purchasers of goods and services. EX: Policy Studies Inc. (PSI) offers consulting, technology, and outsourced services to government agencies involved in criminal justice, health care, and human services.

R&D consortia

-in recent years, more and more firms have been joining consortia, or groups of other firms and institutions, possibly including government and educational institutions, to explore new ideas or obtain solutions for developing new products -Here, the R&D investments come from the group as a whole, and the participating firms and institutions share the results. - In many cases, the consortia involve pharmaceutical or high-tech members, whose research costs can run into the millions - too much for a single company to bear. EX: the U.S. cable industry has initiated its "CableLabs-Energy Lab" consortium to find ways to improve the energy efficiency of cable set-top boxes and develop more advanced cable services.

outsourcing

-in some cases, companies have trouble moving through these steps alone, which prompts them to turn to outside firms. EX: IDEO is a design firm that offers not new products but rather a stellar service that helps clients generate new product and service ideas in industries such as health care, toys, and computers.

step 5: action plan & implementation

-in the final phase in the marketing research process, the analyst prepares the results and presents them to the appropriate decision makers, who undertake appropriate marketing strategies. -A typical marketing research presentation includes an executive summary, the body of the report (which discusses the research objectives, methodology used, and detailed findings), the conclusions, the limitations, and appropriate supplemental tables, figures, and appendixes.

stage 1: need recognition

-in the first stage of the B2B buying process, the buying organization recognizes, through either internal or external sources, that it has an unfilled need.

involvement

-is the consumer's degree of interest in the product or service. Consumers may have different levels of involvement for the same type of product.

Customer Loyalty

-in the postpurchase stage of the decision-making process, marketers attempt to solidify a loyal relationship with their customers. -They want customers to be satisfied with their purchase and buy from the same company again. Loyal customers will buy only certain brands and shop at certain stores, and they include no other firms in their evoked set. Such customers are therefore very valuable to firms, and marketers have designed customer relationship management (CRM) programs specifically to retain them.

associated services or augmented services

-include the nonphysical aspects of the product, like product warranties, financing, product support, and after-sale service. -The amount of associated services also varies with the product.

ethical climate within a marketing firm

-includes having a set of values that guides decision making and behavior. -everyone in the firm must understand these values and how they translate into business activities -share consistent language to discuss them -once values are understood, must develop guidelines for the firm to operate ( top management & throughout all employees) -Once the rules are in place, there must be a system of controls that helps resolve dilemmas and rewards appropriate behavior - that is, behavior consistent with the firm's values - and punishes inappropriate behavior

Generation X

-includes those born between 1965 and 1976. -the first generation of latchkey children , and 50% of them have divorced parents. -This influence has led them to act like "helicopter parents" with their own children, working to shield their offspring from any threats or disappointments. - Unlike most previous generations, they're unlikely to enjoy greater economic prosperity than their parents. -Although fewer in number than Generation Y or Baby Boomers, Gen Xers possess considerable spending power because they tend to get married later and buy houses later in life. -They're much less interested in shopping than their parents and far more cynical, which tends to make them astute consumers. -They demand convenience and tend to be less likely to believe advertising claims or what salespeople tell them. -Because of their experience as children of working parents, who had little time to shop, Xers developed shopping savvy at an early age and knew how to make shopping decisions by the time they were teenagers. As a result, they grew more knowledgeable about products and more risk averse than other generational cohorts.

income

-income distribution in the U.S. has grown more polarized - the highest-income groups are growing, whereas many middle- and lower-income groups' real purchasing power keeps declining. -Although the trend of wealthy households outpacing both poor and middle classes is worldwide, it's particularly prominent in the U.S. -The increase in wealthy families may be due to the maturing of the general population, the increase in dual-income households, and the higher overall level of education. -It also may prompt some ethical concerns about the distribution of wealth. - the broad range in incomes creates marketing opportunities at both the high and low ends of the market.

maturity

-industry sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning them. If these efforts succeed, the product achieves new life. -characterized by the adoption of the product by the late majority and intense competition for market share among firms. Marketing costs (i.e. promotion, distribution) increase as these firms vigorously defend their market share against competitors. -They also face intense competition on price as the average price of the product falls substantially compared with the shifts during the previous 2 stages of the life cycle. -Lower prices and increased marketing costs begin to erode the profit margins for many firms. --In later phases of the maturity stage, the market has become quite saturated, and practically all potential customers for the product have already adopted the product. Such saturated markets are prevalent in developed countries. --Firms pursue various strategies during this stage to increase their customer base and/or defend their market share. Other tactics include entry into new markets and market segments and developing new products.

psychological factors (mapll)

-internal influences to the consumer -although marketers can influence purchase decisions, a host of psychological factors affect the way people receive marketers' messages. Among them are motives, attitudes, perception, learning, and lifestyle.

a diversification strategy

-introduces a new product or service to a market segment that currently is not served. Diversification opportunities may be either related or unrelated.

buying center participants

-involved in the buying process -can range from employees who have a formal role in purchasing decisions to members of the design team that is specifying the particular equipment or raw material needed to employees who will be using a new machine that is being ordered. - All these employees are likely to play different roles in the buying process, which vendors must understand and adapt to in their marketing and sales efforts. -We can categorize 6 different buying roles within a typical buying center. 1 or more people may take on a certain role, or one person may take on more than 1 of the following roles: (1) initiator (2) influencer; (3) decider (4) buyer (5) user (6) gatekeeper -- In the end, the final purchase decision must take into consideration every single buying center participant.

brand licensing

-is a contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee. -The firm that provides the right to use its brand (licensor) obtains revenues through royalty payment from the firm that has obtained the right to use the brand (licensee). --These royalty payments may take the form of an upfront, lump-sum licensing fee or be based on the dollar value of sales of the licensed merchandise. -One very popular form of licensing is the use of characters created in books and other media. Such entertainment licensing has generated tremendous revenues for movie studios. EX: Disney flooded retail stores with products based on The Princess and the Frog movie - Licensing is an effective form of attracting visibility for the brand and thereby building brand equity while also generating additional revenue. -- There are, however, some risks associated with it. For the licensor, the major risk is the dilution of its brand equity through overexposure of the brand, especially if the brand name and characters are used inappropriately.

strategic business unit (SBU)

-is a division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives.

marketing research

-is a prerequisite of successful decision making -It consists of a set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers involved in marketing goods, services, or ideas. -can provide valuable information to marketing managers when developing their strategy that will help them make segmentation, positioning, product, place, price, and promotion decisions.

A marketing plan

-is a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the 4 Ps, action programs, and projected or pro-forma income (and other financial) statements. -provides a reference point for evaluating whether or not the firm has met its objectives.

Operational excellence

-is achieved through firms' efficient operations, excellent supply chain management, and strong relationships with suppliers. -All marketers strive for efficient operations to get their customers the merchandise they want when they want it, in the required quantities, and at lower delivered cost than that of their competitors. -by doing this, they ensure good value to their customers, earn profitability for themselves, and satisfy their customers' needs.

Customer excellence

-is achieved when a firm develops value-based strategies for retaining loyal customers and provides outstanding customer service.

Packaging

-is an important brand element with more tangible or physical benefits than other brand elements. -Packages come in different types and offer a variety of benefits to consumers, manufacturers, and retailers

Promotion: Communicating the Value Proposition

-is communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions and elicit a response. -Promotion generally can enhance a product's or service's value. -the value proposition to their customers is done through a variety of media (TV, radio, magazines, sales force, Internet). -A relatively new promotion channel relies on daily deal websites like Groupon to get the word out. -Many smaller companies find that these sites give them greater name recognition than they ever could have achieved on their own. But when a well-known company uses the sites, the effect is even more remarkable.

The Service Gaps Model

-is designed to encourage the systematic examination of all aspects of the service delivery process and prescribes the steps needed to develop an optimal service strategy. There are 4 service gaps: knowledge, standard, delivery and communication gap

a relative metric of sales or profits

-is its increase or decrease over the prior year -comparing results to other benchmark companies.

reference group (social factors)

-is one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors. - A consumer might have various reference groups, including family, friends, coworkers, or famous people the consumer would like to emulate. -- These reference groups affect buying decisions by: (1) offering information (2) providing rewards for specific purchasing behaviors (3) enhancing a consumer's self-image. - Reference groups provide information to consumers directly through conversation or indirectly through observation. -Some reference groups also influence behavior by rewarding behavior that meets with their approval or chastising behavior that doesn't. EX: smokers have to smoke outside or in restricted areas. Consumers can identify and affiliate with reference groups to create, enhance, or maintain their self-image. EX: customers who want to be seem as earthy might buy Birkenstock sandals.

Co-branding

-is the practice of marketing 2 or more brands together, on the same package, promotion, or store. -Co-branding can enhance consumers' perceptions of product quality by signaling "unobservable" product quality through links between the firm's brand and a well-known quality brand. EX: Yum Brands frequently combines 2 or more of its restaurant chains, including A&W, KFC, Pizza Hut, and Taco Bell, into one store space. -This co-branding strategy is designed to appeal to diverse market segments and extend the hours in which each restaurant attracts customers. - Yet co-branding also creates risks, especially when the customers of each of the brands turn out to be vastly different. EX: Burger King and Haagen-Dazs co-branding strategy failed because the customer profiles for each brand were too different. -Co-branding may also fail when there are disputes or conflicts of interest between the co-brands.

the perceived value of a brand

-is the relationship between a product's or service's benefits and its cost. -Customers usually determine the offering's value in relationship to that of its close competitors. - If they believe a less expensive brand is about the same quality as a premium brand, the perceived value of that cheaper choice is high.

line extension

-is the use of the same brand name within the same product line, and represents an increase in a product line's depth.

Qualitative research

-is used to understand the phenomenon of interest through broad open-ended responses. -It provides initial information that helps the researcher more clearly formulate the research objectives. -Qualitative research is more informal than quantitative research methods and includes: observation, following social media sites, in-depth interviews, focus groups, and projective techniques.

packaging

-it's difficult to make a product stand out in the crowd when it competes for shelf space with several other brands. -This problem is particularly difficult for consumer packaged goods, like groceries and health and beauty products. Marketers therefore spend millions of dollars designing and updating their packages to be more appealing and eye catching.

why have economies in developed countries become increasingly dependent on services?

-it's generally less expensive for firms to manufacture their products in less developed countries ---In turn, the proportion of service production to goods production in the U.S., and other similar economies, has steadily increased over time -people place a high value on convenience and leisure. -as the world has become more complicated, people are demanding more specialized services.

price (product launch)

-like the promotion of new products, setting prices is a supply chain-wide decision. - Manufacturers must decide at what price they would like products to sell to consumers. They often encourage retailers to sell as a specified price known as the manufacturer's suggested retail price (MSRP). -Although retailers often don't abide by the MSRP, manufacturers can withhold benefits like paying for all or part of a promotion, or even refusing to deliver merchandise to noncomplying retailers. It's sometimes easier to start with a higher MSRP and then over time lower it than it is to introduce the new product at a low price and then try to raise the price. -When setting the MSRP, manufacturers also consider the price at which the new products are sold to the retailers. The retailers not only need to make a profit on each sale, but they may also receive a slotting allowance from the manufacturer.

customer input

-listening to the customer in both B2B and B2C markets is essential for successful idea generation - Because customers for B2B products are relatively few, firms can follow their use of products closely and solicit suggestions and ideas to improve those products either by using a formal approach, like focus groups, interviews, or surveys, or through more informal discussions. - The firm's design and development team then works on these suggestions, sometimes in consultation with the customer - This joint effort between the selling firm and the customer significantly increases the probability that the customer eventually will buy the new product. -Customer input in B2C markets comes from a variety of sources. In some cases, consumers may not expressly demand a new product, though their behavior demonstrates their desire for it. EX: Wal-Mart analyzed its sales data and saw that the majority of customers buy store brands rather than national brands, so it developed more store brand products. Companies also realize that their customers are on the web (Twitter, Yelp.com...) and by monitoring feedback through these online communities, companies can get better ideas about new products or necessary changes to existing ones. Many companies also proactively develop their own online communities to focus the conversations around topics in which they are interested. - A particularly successful customer input approach is to analyze lead users, those innovative product users who modify existing products according to their own ideas to suit their specific needs. --If lead users customize a firm's products, other customers might wish to do so as well. Thus, studying lead users helps the firm understand general market trends that might be just on the horizon. EX: manufacturers and retailers of fashion products often spot new trends by noticing how innovative trendsetters have altered their clothing and shoes.

laggards

-make up roughly 16% of the market. These consumers like to avoid change and rely on traditional products until they are no longer available. In some cases, laggards may never adopt a certain product or service.

Portfolio Analysis

-management evaluates the firm's various products and businesses - its "portfolio" - and allocates resources according to which products are expected to be the most profitable for the firm in the future. -typically performed at the strategic business unit (SBU) or product line level of the firm -managers also can use it to analyze brands or even individual items. --One of the most popular portfolio analysis methods, developed by the Boston Consulting Group (BCG), requires the firms classify all their products or services into a two-by-two matrix, measuring relative market share and market share growth from high to low

Manufacturers and Service Providers

-manufacturers buy raw materials, components, and parts that allow them to make and market their own goods and ancillary services. -Formerly, purchasing agents spent 70% of their time searching for, analyzing, validating, and forwarding information about parts and components, today they can use websites (EX: VWsupplygroup.com) to communicate with suppliers for all transactions, from procurement to logistics. - Purchasing agents receive product descriptions directly from suppliers online, which means search processes that used to take 2 hours now require about 9 minutes. -Users of the system receive alerts of potential parts shortages before they occur and thus can focus on efficiencies instead of redundant paperwork. • Resellers are marketing intermediaries that resell manufactured products without significantly altering their form.

Performance Objectives and Metrics

-many factors contribute to a firm's overall performance, which makes it hard to find a single metric to evaluate performance. -One approach is to compare a firm's performance over time or to competing firms, using common financial metrics like sales and profits. -Another method of assessing performance is to view the firm's products or services as a portfolio. Depending on the firm's relative performance, the profits from some products or services are used to fuel growth for others.

internal R&D

-many firms have their own R&D departments, in which scientists work to solve complex problems and develop new ideas. -Historically, firms in the computer, consumer goods, industrial goods, and pharmaceuticals industry have relied on R&D development efforts for their new products. - In other industries, like software, music, and motion pictures, product development efforts also tend to come from internal ideas and R&D financial investments. The product development costs for these firms are quite high, and the resulting new product or service has a good chance of being a technological or market breakthrough -Firms expect such products to generate enough revenue and profits to make the costs of R&D worthwhile. -R&D investment generally are considered continuous investments, so firms may lose money on a few new products. In the long run though, these firms are betting that a few extremely successful new products, often known as blockbusters, can generate enough revenues and profits to cover the losses from other introductions that might not fare so well. -Some global firms are also taking an approach called "reverse innovation." They turn to subsidiaries in less developed markets for new product ideas.

family (social factors)

-many purchase decisions are made about products or services that the entire family will consume or use. -Thus, firms must consider how families make purchase decisions and understand how various family members might influence these decisions. When families make purchase decisions, they often consider the needs of all the family members. --EX: everyone participates in choosing what restaurant to go to, but when buying a car it's the parent, not the child, who decides which. -Children and adolescents play an increasingly important role in family buying decisions. They have a very large direct and indirect influence on family spending. Influencing a group that holds this much spending power is vitally important. *Knowing how children influence food buying decisions is a strategic opportunity for traditional supermarkets and their suppliers to exploit.

ethical decision making in the strategic planning phase

-marketers can introduce ethics at the beginning of the planning process simply by including ethical statements in the firm's mission or vision statements. During the planning stage, ethical mission statements can take on another role as a means to guide a firm's SWOT analysis.

Types of Products

-marketers consider the types of products they are designing and selling, because these types affect how they will promote, price, and distribute their products. -two primary categories: consumer vs business products

Economic Situation:

-marketers monitor the general economic situation, both in their home country and abroad, because it affects the way consumers buy merchandise and spend money. -major factors that influence the state of an economy include the rate of inflation, foreign currency exchange rates, and interest rates.

Marketing Enriches Society:

-marketing focuses on factors other than financial profitability, like good corporate citizenry (ie developing greener products, making healthier food options and safer products, and improving their supply chains to reduce their carbon footprint). -Socially responsible firms recognize that including a strong social orientation in business is a sound strategy that is in both its own and its customers' best interest. -It shows the consumer marketplace that the firm will be around for the long run and can be trusted with their business. In a volatile market, investors view firms that operate with high levels of corporate responsibility and ethics as safe investments.

Factors Influencing the Consumer Decision Process

-marketing mix -social factors -situational factors -psychological factors **These factors that affect the consumer decision process are all impacted by the level of consumer involvement

brand awareness

-measures how many consumers in a market are familiar with the brand and what it stands for and have an opinion about it. - The more aware or familiar they are, the easier their decision-making process is, which improves the chances of purchase. -Familiarity matters most for products that are bought without much thought, like soap or chewing gum, but brand awareness is also critical for infrequently purchased items or those the consumer has never purchased before. - If the consumer recognizes the brand, it probably has attributes that make it valuable. For people who have never purchased a Toyota, the simple awareness that it exists can help facilitate a purchase. -Marketers create brand awareness through repeated exposures of the various brand elements (brand name, logo, symbol, character, packaging, or slogan) in the firm's communications to consumers through advertising, publicity, or other methods. -Certain brands gain such predominance in a particular product market over time that they become synonymous with the product itself; that is, the brand name starts being used as the generic product category. EX: Kleenex tissue. Companies must be vigilant in protecting their brand names, because if they are used so generically, over time, the brand itself can lose its trademark status.

privacy concerns

-more and more consumers worldwide sense a loss of privacy. -At the same time that the Internet has created an explosion of accessibility to consumer information, improvements in computer storage facilities and the manipulation of information have led to more and better security and credit check services. -The Federal Trade Commission (FTC), responding to consumer outcries regarding unwanted telephone solicitations, has registered the phone numbers of more than 200 million phone numbers in the Do Not Call Registry. This action was designed to protect consumers against intrusions that Congress determined to be particularly invasive. -In the end, most companies are moving resources away from telephone campaigns and refocusing them elsewhere.

Vendor relationships:

-must be developed over the long term and generally cannot be easily offset by a competitor. -Firms with strong relationships may gain exclusive rights to: (1) sell merchandise in a particular region, (2) obtain special terms of purchase that are not available to competitors, or (3) receive popular merchandise that may be in short supply.

Improving Business Relationships

-new products don't always target end consumers; sometimes they function to improve relationships with suppliers. EX: Kraft found that its lemonade flavor was selling poorly. It realized that the reason was the placement of the packages in pallets. Because it was placed at the bottom of the stacks in pallets, lemonade was the last flavor retailers would sell. By changing and innovating its pallet, Kraft offered chimney stacks for each flavor, enabling the retail stockers to reach whichever flavor they needed easily.

pioneers or breakthroughs

-new to world products -establish a completely new market or radically change both the rules of competition and consumer preferences in a market. -Pioneers have the advantage of being first movers; as the first to create the market or product category, they become readily recognizable to consumers and thus establish a commanding and early market share lead. -Studies also have found that market pioneers can command a greater market share over a longer time period than later entrants can -Yet not all pioneers succeed. In many cases, imitators capitalize on the weaknesses of pioneers and subsequently gain advantage in the market.

limited problem solving

-occurs during a purchase decision that calls for, at most, a moderate amount of effort and time. -Customers engage in this type of buying process when they have had some prior experience with the product or service and the perceived risk is moderate. -usually relies on past experience more than on external information. Common types of limited problem solving is impulse buying and Habitual decision making

brand loyalty

-occurs when a consumer buys the same brand's product or service repeatedly over time rather than buy from multiple suppliers within the same category -Therefore, brand loyal customers are an important source of value for firms. - First, firms reward loyal consumers with loyalty or customer relationship management (CRM) programs, like points customers can redeem for extra discounts or free services, advance notice of sale items, and invitations to special events sponsored by the company. -Second, the marketing costs of reaching loyal consumers are much lower because the firm doesn't have to spend money on advertising and promotion campaigns to attract these customers. Loyal consumers simply do not need persuasion or an extra push to buy the firm's brands. - Third, loyal customers tend to praise the virtues of their favorite products, retailers, or services to others. This positive word of mouth reaches potential customers and reinforces the perceived value of current customers, all at no cost to the firm. -Fourth, a high level of brand loyalty insulates the firm from competition because brand loyal customers do not switch to competitors' brands, even when provided with a variety of incentives. **loyalty programs, less advertising $$, positive word of mouth, protect from competition

lifestyle (psychological factors)

-refers to the way consumers spend their time and money to live. -For many consumers, the question of whether the product or service fits with their actual lifestyle, which may be fairly sedentary(inactive), or their perceived lifestyle, which might be outdoorsy, is an important one. -Others, however, simply like the image that the product or service conveys. A person's perceptions and ability to learn are affected by their social experiences.

negative word of mouth

-occurs when consumers spread negative information about a product, service, or store to others. -When customers' expectations are met or even exceeded, they often don't tell anyone about it. But when consumers believe that they have been treated unfairly in some way, they usually want to complain, often to many people -The Internet has provided an effective method of spreading negative word of mouth to millions of people instantaneously through personal blogs, Twitter, and corporate websites. -To lessen the impact of negative word of mouth, firms provide customer service representatives - whether online, on the phone, or in stores - to handle and respond to complaints. - Many companies also allow customers to post comments and complaints to proprietary social media sites. If a customer believes that positive action will be taken as a result of the complaint, he or she is less likely to complain to family and friends or through the Internet.

The Standards Gap: Setting Service Standards

-once a company has a pretty good idea of customers' service expectations, the next step would be to set service its service standards accordingly and develop systems to meet the customers' service expectations -firms must set specific, measurable goals -Employees should be shown exactly what is expected of them and what specific tasks they are responsible for performing, for the specific service, by management higher up. (servers generally want to do a good job) -employees must be thoroughly trained to complete their specific tasks, how to treat customers, and the manager needs to set an example of high service standards -people can be taught specific tasks related to their jobs, this isn't easily extended to interpersonal relations *** it's not enough to tell employees to be nice or do what customers want. A quality goal should be specific, like: greet every customer you encounter with "good morning/afternoon/evening, sir or ma'am." In extreme cases, such training becomes even more crucial, i.e. cancelled flights, lost baggage, long ticket lines...

evaluation of alternatives

-once a consumer has recognized a problem and explored the possible options, he or she must sift through the choices available and evaluate the alternatives -- Alternative evaluation often occurs while the consumer is engaged in the process of information search. EX: ruling out various stores because you know they won't carry the style you need for the job interview. Consumers forgo alternative evaluations altogether when buying habitual (convenience) products I.E.: you'll rarely catch a loyal Pepsi drinker buying Coca-Cola.

Brand Repositioning:

-or rebranding refers to a strategy in which marketers change a brand's focus to target new markets or realign the brand's core emphasis with changing market preferences. - Although repositioning can improve the brand's fit with its target segment or boost the vitality of old brands, it's not without costs and risks. -Firms often need to spend tremendous amounts of money to make tangible changes to the product and packages, as well as intangible changes to brand's image through various forms of promotion. -These costs may not be recovered if the repositioned brand and messages are not credible to the consumer or if the firm has mistaken a fad for a long-term market trend. -Yet even when they enjoy the benefits of their well-known name and reputations, brands may find it necessary to reposition, even if that means challenging hundreds of years of tradition.

Brands Establish Loyalty

-over time and with continued use, consumers learn to trust certain brands. They know, for example, that they wouldn't consider switching brands, and, in some cases, feel a strong affinity to certain brands.

Generation Z (Digital Natives)

-people in this group were born into a world that already was full of electronic gadgets and digital technologies, like the Internet and social networks. -Because of the technologies available to them, these digital natives will be more globally connected than previous generations. -They thus might have a better appreciation for diverse cultures, but GenZ consumers also were born into a world confronted by both national and international terrorism, often facilitated by technology, and widespread environmental concerns. -Generation Z children are being raised by and have a lot in common with their Generation X parents. - Gen Z and their parents increasingly watch the same television channels, especially when it shows nostalgic shows that the parents remember and the children enjoy. - Both groups also like video games, leading the industry to develop family oriented games on communal consoles. Finally, because Gen Z kids still go shopping with their parents, they're developing an affinity for the same brands, prompting retailers like The Gap and JCrew to develop special product lines to accommodate their demands. But at a certain point, such accommodation might cross the line into exploitation.

brand associations

-reflect the mental links that consumers make between a brand and its key product attributes, like a logo, slogan, or famous personality. These brand associations often result from a firm's advertising and promotional efforts. EX: Toyota's hybrid car, the Prius, is known for being economical, a good value, stylish, and good for the environment. -But firms also attempt to create specific associations with positive consumer emotions, like fun, friendship, good feelings, family gatherings, and parties. EX: State Farm Insurance thus uses the slogan "like a good neighbor, State Farm is here."

locus of control

-people who have an internal locus of control believe they have some control over the outcomes of their actions, in which case they generally engage in more search activities. -With an external locus of control, consumers believe that fate or other external factors control all outcomes. In that case, they believe it doesn't matter how much information they gather; if they make a wise decision, it isn't to their credit, and if they make a poor one, it isn't their fault. These beliefs have widespread effects EX: when people believe they can choose their own consumption goals (internal locus of control), they work harder to achieve them than if those goals feel imposed upon them (external locus of control).

Employees

-perhaps the most basic corporate social responsibility to employees is to ensure a safe working environment, free of threats to their physical safety, health, or well-being. In some cases though, this basic level of safety seems insufficient to achieve responsibility to workers. -when focusing on employees, more and more firms realize that happy employee families make happy and productive employees. Consequently, firms are focusing their efforts on outreach programs aimed at their employees' families.

The Communications Gap: Communicating the Service Promise

-poor communication between marketers and their customers can result in a mismatch between an ad campaign's or a salesperson's promises and the service the firm can actually offer. -Although firms have difficult controlling service quality because it can vary from day to day, they have nearly constant control over how they communicate their service package to their customers. *This control involves a significant responsibility. -If a firm promises more than it can deliver, customers' expectations won't be met. - An advertisement may lure a customer into a service situation once, but if the service doesn't deliver on the promise, the customer will never return. -Dissatisfied customers are also likely to tell others about the underperforming service, using word of mouth, or increasingly, the Internet, which has become an important channel for dissatisfied customers to vent their frustrations. The communications gap can be reduced by managing customer expectations and by promising only what you can deliver, or possibly even a little less.

Complexity and Trial-ability

-products that are relatively less complex are also relatively easy to try. - These products will generally diffuse more quickly and lead to greater/faster adoption than those that are not so easy to try. EX: can go to apple and try the iPad, whereas the options for trying a Kindle are more complex since there is a lack of Amazon stores. Electronics stores typically have just a few floor models, which can lead to an availability problem (not including Apple stores).

to obtain meaningful results on questionnaire:

-questions cannot be misleading at all -questions must address only one issue at a time. -questions must be worded in vocabulary that will be familiar and comfortable to those being surveyed. -The questions should be sequenced appropriately: general questions first, more specific questions next, and demographic questions at the end. -Finally, the layout and appearance of the questionnaire must be professional and easy to follow, with appropriate instructions in suitable places.

A time poor society

-reaching a target market has always been a major challenge, but it's made even more complicated by several trends that increase the difficulty of grabbing those markets' attention. In the majority of families, both parents work and the kids are busier than ever. -The number of hours people work a week has gone up and the number of hours people use for leisure time has dropped. -Among younger consumers, the trend is to cope with a lack of leisure time by multitasking - watching TV or listening to music while talking on the phone or doing homework. -Their divided attention simply cannot focus as well on advertisements that appear in those media. -Retailers are doing their part by making their products available to customers whenever and wherever they want. -Many retailers have become full-fledged multichannel retailers that offer stores, catalogs, and Internet shopping options. -Also, some retailers have extended their hours of operation so that their customers can shop during hours they aren't working. -Automated processes like self-checkout lanes and electronic kiosks speed the shopping process and provide customers with product and ordering information. Strategies to help time-poor customers. To find and develop such methods to make life easier for consumers in the time-poor society, marketers often rely on technology

straight rebuy

-rebuys occur when the buyer or buying organization simply buys additional units of products that had previously been purchased. Many B2B purchases are likely to fall in the straight rebuy category -the buyer is often the only member of the buying center involved in the process. Like a consumer's habitual purchase, straight rebuys often enable the buyer to recognize the firm's need and go directly to the 5th step in the B2B buying process, skipping the product specification, RFP process, and proposal analysis and supplier selection steps.

Learning (psychological factors)

-refers to a change in a person's thought process or behavior that arises from experience and takes place throughout the consumer decision process. EX: Katie needed a new dress for an interview, so she started looking for ads and searching for reviews and articles on the Internet, she learned from each new piece of information, so her thoughts about the look she wanted in a dress were different from those before she had read anything. ** Learning affects both attitudes and perceptions. Each time Katie was exposed to information about the store or the dresses, she learned something different that affected her perception

zone of tolerance

-refers to the difference between customers' expectations regarding their desired service and the minimum level of acceptable service, that is, the difference between what the customer really wants and what he or she will accept before going elsewhere. -a metric to evaluate how well firms perform on the 5 service quality dimensions **typically customers have a fairly narrow zone of tolerance for service dimensions that are fairly important to them and a wider range of tolerance for those service dimensions that are less important

procedural fairness

-refers to the perceived fairness of the process used to resolve them. -Customers want efficient complaint procedures over whose outcomes they have some influence. -Customers tend to believe they have been treated fairly if the service providers follow specific company guidelines. -Nevertheless, rigid adherence to rules can have deleterious effects. When really strict rules are followed, like return policy at clothing stores, have to wait for managers approval, have to wait a few minutes..., the procedure the company uses to handle the return probably overshadows any potential positive outcomes. - Therefore, service providers should be empowered with some procedural flexibility to solve customer complaints.

Business-to-business (B2B) marketing

-refers to the process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization and/or resale by wholesalers and retailers -typically involves manufacturers selling to wholesalers that, in turn, sell products as retailers -transactions can also involve service firms that market their services to other businesses but not the ultimate consumer.

knowledge gap

-reflects the difference between customers' expectations and the firm's perception of those customer expectations -- Firms can close this gap by determining what customers really want by doing research using marketing metrics like service quality and the "zone of tolerance."

organization culture

-reflects the set of values, traditions, and customs that guide its employees' behavior. - The firm's culture often comprises a set of unspoken guidelines that employees share with one another through various work situations. Organizational culture can have a profound influence on purchasing decisions, and corporate buying center cultures thus might be divided into 4 general types: autocratic, democratic, consultative, and consensus. -Knowing which buying center culture is prevalent in a given organization helps the seller decide how to approach that particular client, how and to whom to deliver pertinent information, and to whom to make sales presentations. -cultures act like living, breathing entities that change and grow, just as organizations do. Even within some companies, culture may vary by geography, by division, or by functional department. - Whether you are a member of the buying center or a supplier trying to sell to it, it's extremely important to understand its culture and the roles of the key players in the buying process. Not knowing the roles of the key players could waste a lot of time and could even alienate the real decision maker.

interest rates

-represent the cost of borrowing money. -The interest is the cost to the customers or the fee the bank charges those customers for borrowing the money. -When a customer opens a savings account at a bank, he'll earn interest on the amount saved, which means the interest becomes the fee the consumer gets for "loaning" the money to the bank. - If the interest rate goes up, consumers have an incentive to save more, because they earn more for loaning the bank their money; when interest rates go down, however, consumers generally borrow more.

product mix breadth

-represents a count of the number of product lines offered by the firm. -Too much breadth in the product mix becomes costly to maintain, and too many brands may weaken the firm's reputation.

promotions

-retailers employ various promotional vehicles to influence customers once they have arrived in the store. - An unadvertised price promotion can alter a person's preconceived buying plan. -Multi-item discounts, like "buy 1, get 1 free" sales, are popular means to get people to buy more than they normally would. Some stores make coupons available in the store, on the Internet, or on their cell phones. Another form of promotion is offering a "free" gift with the purchase of a good or service.

Support and Incentives for Employees:

-service job is not easy --the idea of "service with a smile," remains the best approach, but for this to work employees must feel supported: *managers and coworkers should provide emotional support to service providers by demonstrating a concern for their well-being and standing behind their decisions *service providers require instrumental support - the systems and equipment to deliver the service properly. **the support that managers provide must be consistent and coherent throughout the organization. * a key part of any customer service program is providing rewards to employees for their excellent service (***emotional support, instrumental support, reward systems***)

perishable

-services are perishable in that they cannot be stored for use in the future. The perishability of services provides both challenges and opportunities to marketers in terms of the critical task of matching demand and supply. As long as the demand for and supply of the service match closely, there's no problem, but unfortunately, this perfect matching rarely occurs **services cant be stored

Customer Satisfaction

-setting unrealistically high consumer expectations of the product through advertising, personal selling, or other types of promotion may lead to higher initial sales, but it eventually will result in dissatisfaction if the product fails to achieve high performance expectations. --This failure can lead to dissatisfied customers and the potential for negative word of mouth. Setting customer expectations too low is an equally dangerous strategy. **several strategies to improve satisfaction

introduction stage

-stage of the product life cycle when innovators start buying the product - usually starts with a single firm, and innovators are the ones to try the new offering. Some new-to-the-world products and services that defined their own product category and industry include the telephone, the Internet browser, Facebook, Blu-Ray... Sensing the viability and commercialization possibilities of some market-creating new product, other firms soon enter the market with similar or improved products at lower prices. The same pattern holds for less innovative products. The introduction stage is characterized by initial losses to the firm due to its high start-up costs and low levels of sales revenue as the product begins to take off. If the product is successful, firms may start seeing profits toward the end of this stage

Brands Protect from Competition and Price

-strong brands are somewhat protected from competition from other firms and price competition. -Because such brands are more established in the market and have a more loyal customer base, neither competitive pressures on price nor retail-level competition is as threatening to the firm.

education

-studies show that higher levels of education lead to better jobs and higher incomes. - Employment that requires a college or secondary degree accounts for nearly half of all projected job growth in the near future. -Average annual earnings are higher for those with degrees than for those without. For some products, marketers can obtain education level with other data like occupation and income and obtain pretty accurate predictions of purchase behavior. -Marketers need to be quite cognizant of the interaction among education, income, and occupation.

baby boomers

-the 78 million Americans born between 1946 and 1964. -will be the largest population of 50-plus consumers the U.S.A. has ever seen. -Although the Baby Boomer generation spans 18 years, experts agree that its members share several traits that set them apart from those born before World War II. - they are individualistic. -leisure time represents a high priority for them. - they believe that they'll always be able to take care of themselves, partly evinced by their feeling of economic security, even though they're a little careless about the way they spend their money. - they have an obsessession with maintaining their youth. -they'll always love rock 'n roll. -The move from suits and ties to jeans and t-shirts in business is a direct result of Baby Boomers imposing their values on the workplace as they have moved into upper management positions. Boomers have pushed their casual lifestyles into the workplace and virtually every aspect with which they are associated. -Food companies have also targeted Baby Boomers with healthier options for cereals, frozen entrees, and snacks that have no cholesterol, low fat, and no sugar. -Retailers also recognize the immense buying power of Baby Boomers, so they cater directly to them with larger fonts in signage, staff available to read the small print on product packaging, and seating options in stores. They note that their older customers, even the ones with moderate incomes, are more focused on quality than price and make decisions on what merchandise to carry accordingly. -Finally, Baby Boomers are heavy Internet users and tend to do research before purchasing online.

market growth rate

-the annual rate of growth of the specific market in which the product competes. -measures how attractive a particular market is.

Internal Search for Information

-the buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences. I.E.: when you want healthy food always go to Sweetgreen, but when you want dessert you always go to Cheesecake Factory, so in making these choices you're relying on your memory of past experiences when you've eaten at these restaurants.

modified rebuy

-the buyer has purchased a similar product in the past but has decided to change some specifications, like the desired price, quality level, customer service level, options, or so forth. -Current vendors are likely to have an advantage in acquiring the sale in a modified rebuy situation, as long as the reason for the modification is not dissatisfaction with the vendor or its products. -the buyers spend less time at each stage of the B2B buying process, similar to limited decision making in the B2C process.

Listening to the Customers and Involving Them in the Service Recovery

-the customer must have the opportunity to air the complaint completely, and the firm must listen carefully to what he or she is saying. -Customers can become very emotional about a service failure, whether the failure is serious or minor. In many cases, the customer may just want to be heard, and the service provider should give the customer all the time he or she needs to "get it out." -service providers should be sympathetic, listen carefully, and appear (and actually be) anxious to rectify the situation to ensure it doesn't happen again. -When the company and the customer work together, the outcome is often better than either could achieve on their own. -This co-creation logic applies especially well to service recovery. A service failure is a negative experience, but when customers participate in its resolution, it results in a more positive outcome than simply listening to their complaint and providing a preapproved set of potential solutions that may satisfy them.

The Delivery Gap: Delivering Service Quality

-the delivery gap is where the customer directly interacts with the service provider. -Even if there are adequate standards in place, the employees are well-trained, and management is committed to meeting or exceeding customers' service expectations, there can still be delivery gaps. -Even if there are no other gaps, a delivery gap always results in a service failure. -Delivery gaps can be reduced when employees are empowered to spontaneously act in the customers' and the firm's best interests when problems or crises are experienced.

Post purchase

-the final step of the consumer decision process is postpurchase behavior. -Marketers are particularly interested in postpurchase behavior because it entails actual rather than potential customers. -Satisfied customers, whom marketers hope to create, become loyal, purchase again, and spread positive word of mouth, so they're quite important. There are 3 possible postpurchase positive outcomes: customer satisfaction, postpurchase cognitive dissonance, and customer loyalty.

Service Recovery

-the firm has a unique opportunity to demonstrate its customer commitment. **Effective service recovery efforts can significantly increase customer satisfaction, purchase intentions, and positive word of mouth, though customers' post-recovery satisfaction levels usually fall lower than their satisfaction level prior to the service failure. **social media has provided consumers with a stage to complain

Company Capabilities

-the first factor that effects the consumer is the company itself -Successful marketing firms focus on satisfying customer needs that match their core competencies -Marketers can use an analysis of the external environment, like the SWOT analysis to categorize an opportunity as either attractive or unattractive. -if attractive, evaluate in terms of core competencies -

market saturation

-the longer a product exists in the marketplace, the more likely it is that the market will become saturated. -Without new products or services, the value of the firm will ultimately decline. EX: if car companies assumed and expected that people would keep their cars until they stopped running, there would be no need to come up with new and innovative models, but few consumers actually keep the same car until it stops running. Even those who want to stay with the same make and model want something new, just to add some variety to their lives. Therefore, car companies revamp their models every year. --The firms sustain their growth by getting consumers excited by the new looks and new features, prompting many car buyers to exchange their old car years before its functional life is over. -Saturated markets can also offer opportunities for a company that is willing to adopt a new process or mentality, ex: General Mills' new concept gluten-free desserts.

Resolving Problems Quickly:

-the longer it takes to resolve a service failure, the more irritated the customer will become and the more people he or she is likely to tell about the problem. -To resolve service failures quickly, firms need clear policies, adequate training for their employees, and empowered employees.

place (product launch)

-the manufacturer coordinates the delivery and storage of the new products with its retailers to assure that it's available for sale when the customer wants it, at the stores the customer is expecting to find it, and in sufficient quantities to meet demand.

Step 1 of marketing plan (Define the Business Mission)

-the mission statement is a broad description of a firm's objectives and the scope of activities it plans to undertake - it attempts to answer 2 main questions: 1) What type of business are we? And 2) What do we need to do to accomplish our goals and objectives? -These fundamental business questions must be answered at the highest corporate levels before marketing executives can get involved. -Most firms want to maximize stockholders' wealth increasing the value of the firms' stock and paying dividends. -A key goal or objective often embedded in a mission statement relates to how the firm is building its sustainable competitive advantage. However, owners of small, privately held firms frequently have other objectives like achieving a specific level of income and avoiding risks. Nonprofit organizations instead have nonmonetary objectives.

heterogenous

-the more humans are needed to provide a service, the more likely there is to be heterogeneity or variability in the service's quality - If a consumer has a problem with a product, it can be replaced, redone, destroyed, or, if it's already in the supply chain, recalled. In many cases, the problem can even be fixed before the product gets into consumers' hands. -But an inferior service can't be recalled, by the time the firm recognizes a problem, the damage has been done. Marketers also can use the variable nature of services to their advantage, a micromarketing segmentation strategy can customize a service to meet customers' needs exactly. Some service providers tackle the variability issue by replacing people with machines. EX: an ATM, kiosks **high variability, can't fix problems prior to delivery, employ micro segmentation to add value

Intangible

-the most fundamental difference between a product and a service -This intangibility can prove highly challenging to marketers. For instance, it makes it difficult to convey the benefits of services. -Service providers (i.e. physicians, dentists) therefore offer cues to help their customers experience and perceive their service more positively, such as a waiting room stocked with TV sets, beverages, and comfortable chairs to create an atmosphere that appeals to the target market -.A service that cannot be shown directly to potential customers also is difficult to promote. Marketers must creatively employ symbols and images to promote and sell services, as Six Flags does in using its advertising to evoke images of happy families and friends enjoying a roller coaster ride. -Because of the intangibility of services, the images that marketers use must reinforce the benefit or value that a service provides. -Professional service providers (i.e. doctors, lawyers...) depend heavily on consumers' perceptions of their integrity and trustworthiness, but they also need to market their offerings using promotional campaigns ***hard to convey benefits, ambiance is important, employ symbols to promote that reinforce benefits,

step 4: choose a course of action

-the objective of this last step is to weigh the various alternatives and choose a course of action that generates the best solution for the stakeholders using ethical practices. - Management will rank the alternatives in order of preference, clearly establishing the advantages and disadvantages of each. - It's also crucial to investigate any potential legal issues associated with each alternative. Of course, any illegal activity should immediately be rejected. To choose the appropriate course of action, marketing managers will evaluate each alternative using a ethical decision-making metric process

actual product

-the physical attributes of a product including the brand name, features/design, quality level, and packaging are important, but the level of their importance varies, depending on the product. **marketers convert core customer values into actual product

Market positioning

-the process of defining the marketing mix (4 P's) variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products. -After identifying its target segments, a firm must evaluate each of its strategic opportunities. Firms typically are most successful when they focus on opportunities that build on their strengths relative to those of their competition.

Country culture

-the visible nuances of a country's culture, like artifacts, behavior, dress, symbols, physical settings, ceremonies, language differences, colors and tastes, and food preferences, are easy to spot. -But the subtler aspects of country culture generally are trickier to identify and navigate. -Sometimes the best answer is to establish a universal appeal within the specific identities of country -EX: BMW bridged the cultural gap by producing advertising that appeals to the same target market across countries, the only thing that changes is the language.

complexity of products

-there's more to a product than its physical characteristics or its basic service function -Marketers involved with the development, design, and sale of products think of them in an interrelated fashion

multi-attribute model

-this exhibit shows how a compensatory model would work. -- Example with buying cereal: -Customer assigns weights to the importance of each attribute(calories, price, taste, organic). These weights must add up to 1.0. - assigns weights to how well each of the cereals might perform, with 1 being very poor and 10 being very good. -Then multiply each performance rating by its importance weighting to get an overall score for each cereal. - This multi-attribute model allows the trade-off between the various factors to be incorporated explicitly into a consumer's purchase decision.

Managing Risk Through Diversity:

-through innovation, firms often create a broader portfolio of products, which help them diversify their risk and enhance firm value better than a single product can. -If some products in a portfolio perform poorly, others may do well. Firms with multiple products can better withstand external shocks, including changes in consumer preferences or intensive competitive activity. -This diversification enables a company to enjoy more consistent performance than it would with just one of product

ethics in business

-to apply sound ethical principles must be a continuous and dynamic process -marketing is often singled out among business disciplines as the root cause of a host of ethical lapses, anyone involved in marketing must recognize the ethical implications of their actions.

Evaluating Service Quality Using Well-Established Marketing Metrics:

-to meet or exceed customers' expectations, marketers must determine what those expectations are. Yet because of their intangibility, the service quality, often is difficult for customers to evaluate. - Customers generally use 5 distinct service dimensions to determine overall service quality: reliability, responsiveness, assurance, empathy, and tangibles

Brand Extensions

-to the use of the same brand name in a different product line. -It's an increase in the product mix's breadth.

in-depth interview (Qualitative research)

-trained researchers ask questions, listen to and record the answers, and then pose additional questions to clarify or expand on a particular issue. -In-depth interviews provide insights that help managers better understand the nature of their industry, as well as important trends and consumer preferences, which can be invaluable for developing marketing strategies. -Specifically, they can establish a historical context for the phenomenon of interest, particularly when they include industry experts or experienced consumers. -They also can communicate how people really feel about a product or service at the individual level. -Finally, marketers can use the results of in-depth interviews to develop surveys. -In-depth interviews are, however, relatively expensive and time consuming depending on the length of the interaction and the characteristics of people included in the sample (i.e. if it includes medical doctors more expensive than if interviewing teenagers in a mall).

stars in BCG Matrix

-upper left quadrant) occur in high-growth markets and are high market share products. -often require a heavy resource investment in such things as promotions and new production facilities to fuel their rapid growth. -As their market growth slows, starts will migrate from heavy users of resources to heavy generators of resources and become cash cows. - ex: uber

geodemographic segmentation

-uses a combination of geographic, demographic, and lifestyle characteristics to classify consumers -Consumers in the same neighborhood tend to buy the same types of cars, appliances, and apparel and shop at the same types of retailers. -2 of the most widely used tools for geodemographic segmentation are PRIZM (Potential Rating Index by Zip Market) developed by Nielsen Claritas, and ESRI's Tapestry. -Using detailed demographic data and information about the consumption and media habits of people who live in each U.S. block tract (zip code + 4), PRIZM can identify 66 geodemographic segments or neighborhoods. Each block group then can be analyzed and sorted by more than 60 characteristics, including income, home value, occupation, education, household type, age, and several key lifestyle variables.. --the PRIZMs are then turned into clusters of similar segments -Geodemographic segmentation can be particularly useful for retailers because customers typically patronize stores close to their neighborhood. -Thus, retailers can use geodemographic segmentation to tailor each store's assortment to the preferences of the local community. This kind of segmentation is also useful for finding new locations; retailers identify their "best" locations and determine what types of people live in the area surrounding those stores, according to the geodemographic clusters. They can then find other potential locations where similar segments reside.

Step 3 (Identifying and Evaluating Opportunities)

-using STP (segmentation, targeting, and positioning) identify and evaluate opportunities for increasing sales and profits. -With STP, the firm first divides the marketplace into subgroups or segments, determines which of those segments it should pursue or target, and finally decides how it should position its products and services to best meet the needs of those chosen targets.

When we say a "new product/service"

-we don't necessarily mean that the market offer has never existed before -Completely new-to-the-market products represent fewer than 10% of all new product introductions each year. -It's more useful to think of the degree of newness or innovativeness on a continuum from truly "new-to-the-world" to "slightly repositioned."

attitude (psychological factors )

-we have attitudes about almost everything. -An attitude is a person's enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea. -Attitudes are learned and long lasting, and they might develop over a long period of time, though they can also abruptly change. -The one thing attitudes have in common for everyone is their ability to influence our decisions and actions. An attitude consists of 3 components (cognitive, affective, behavioral components) -Ideally, agreement exists among these 3 components. --But when there's incongruence among the 3 cognitive dissonance might occur. Such dissonance is a terrible feeling, which people try to avoid, often by convincing themselves that the decision was a good one in some way. --Although attitudes are pervasive and usually slow to change, the important fact from a marketer's point of view is that they can be influenced and perhaps changed through persuasive communications and personal experience. tc

salespeople

-well-trained sales personnel can influence the sale at the point of purchase by educating consumers about product attributes, pointing out the advantages of one item over another, and encouraging multiple purchases. - The quality of salespeople could mean all the difference between a consumer just visiting the store for fun or making a purchase.

white papers

-what majority of B2B marketers use for their marketing efforts -the majority of B2B buyers regularly read them prior to making a purchase -When executives confront an unfulfilled business need, they normally turn to white papers. -Their B2B partner may have a technologically advanced solution, but buyers have to understand the solution before they can consider a purchase. -A good white paper provides information about the industry and its challenges in an educational context, rather than a promotional sense, to avoid seeming like simply propaganda. That is, the goal of white papers is to provide valuable information that a businessperson can easily understand and that will help the company address its problems with new solutions. -are long-form content designed to promote the products or services from a specific company. Used As a marketing tool,

brand equity

-what the value of a brand translates into -the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service. --For example, firms spend millions of dollars on promotion, advertising, and other marketing efforts throughout a brand's life cycle. Sometimes this spending comes close to crossing ethical lines. However, marketing expenditures allocated carefully can result in greater brand recognition, awareness, perceived value, and consumer loyalty for the brand, which all enhance the brand's overall equity.

Micro-marketing (one-to-one marketing)

-when a firm tailors a product or service to suit an individual customer's wants or needs - Such small producers and service providers generally can tailor their offerings to individual customers more easily. But it is far more difficult for larger companies to achieve this degree of segmentation. -The Internet clearly helps facilitate such a segmentation strategy. Companies can cater to very small segments, sometimes as small as one customer at a time, relatively efficiently and inexpensively. - An Internet-based company can offer one-to-one service more inexpensively than can other venues, like retail stores or telephone-based businesses. The Internet also simplifies customer identification. -Cookies, or small text files a website stores in a visitor's browser, provide a unique identification of each potential customer who visits and details how the customer has searched the site. Marketers can also ask visitors to fill out an online registration form. Using such information, the company can make a variety of recommendations to customers. -The marketing strategy is therefore customized in real time, using known and accurate data about the customer. Customers can even do the work themselves, both to create items for themselves and to find the perfect gifts for others. Some consumers appreciate such custom-made goods and services because they are made especially for them, which means they'll meet the person's needs exactly. But such products and services are typically more expensive than ready-made offerings and often take longer to obtain.

concentrated marketing

-when an organization selects a single, primary target market and focuses all its energies on providing a product to fit that market's needs, it is using a concentrated targeting strategy. - Entrepreneurial start-up ventures often benefit from using a concentrated strategy, which allows them to employ their limited resources more efficiently. EX: Newton Running has concentrated its targeting strategy to runners, but not all runners, it focuses only on those who prefer to land on their forefeet while running. Whereas Nike uses a differentiated targeting strategy, making shoes for segments that include basketball and football players and fashion-conscious white-collar workers.

Observability

-when products are easily observed, their benefits or uses are easily communicated to others, which enhances the diffusion process. EX: consumers seeing their friends using iPads, or seeing it on TV or on YouTube, reading about it in a magazine... may convince them to purchase one also. --In contrast, if people don't want to talk about their product, the use of this product is lea easily observed by others and therefore diffused more slowly.

Changing Customer Needs:

-when they add products, services, and processes to their offerings, firms can create and deliver value more effectively by satisfying the changing needs of their current and new customers or by keeping customers from getting bored with the current product or service offering. -Sometimes, companies can identify problems and develop products or services that customers never knew they needed.

product lines

-which are groups of associated items that consumers tend to use together or think of as part of a group of similar products or services. -adding unlimited numbers of new products can have adverse consequences

early majority

-which represents around 34% of the population, is crucial because few new products and services can be profitable until this large group buys them. -If the group never becomes large enough, the product or service typically fails. -The early majority group differs in many ways from buyers in the first 2 stages. - Its members don't like to take as much risk and therefore tend to wait until "the bugs" are worked out of a particular product or service. When early majority customers enter the market, the number of competitors in the marketplace usually also has reached its peak, so these buyers have many different price and quality choices **wait for the bugs to be worked out, more options bc competitors have reached their peaks

Firms become value driven by focusing on 4 activities:

1) They share information about their customers and competitors across their own organization and even with other firms like the manufacturing and transportation companies that help them get their product or service to the marketplace 2) they strive to balance their customers' benefits and costs 3) they concentrate on building relationships with customers 4) they need to take advantage of new technologies and connect with their customers using social and mobile media.

A marketing strategy identifies

1) a firm's target market(s) (2) a related marketing mix - its 4 P's (3) the bases on which the firm plans to build a sustainable competitive advantage.

Effective service recovery demands:

1) listening to the customers and involving them in the service recovery 2) providing a fair solution 3) resolving the problem quickly.

Legislation has also been enacted to protect consumers in a variety of ways:

1)Regulations require marketers to abstain from false of misleading advertising practices that might mislead consumers. 2)Manufacturers are required to refrain from using any harmful or hazardous materials that might place a consumer at risk. 3)Organizations must adhere to fair and reasonable business practices when they communicate with consumers

The American Marketing Association provides 3 guidelines for conducting marketing research:

1. It prohibits selling or fundraising under the guise of conducting research. 2.It supports maintaining research integrity by avoiding misrepresentation or the omission of pertinent research data. 3. It encourages the fair treatment of clients and suppliers

stages of the new product development process

1. idea generation 2. concept testing 3. product development 4. market testing 5. product launch 6. evaluation of results

The Business-to-Business Buying Process

1. need recognition 2. production specification 3. RFP 3. Proposal analysis and supplier selection 4. order specification 5. vendor performance assessment/ using metrics **Both start with need recognition, but the information search and alternative evaluation steps are more formal and structured in the B2B process. Typically, B2B buyers specify their needs in writing and ask potential suppliers to submit formal proposals, whereas B2C buying decisions are usually made by individuals or families and do not need formal proposals. The final decision rests with a committee, which often demand a great deal of consideration. In B2C buying situations, customers evaluate their purchase decision and sometimes experience postpurchase dissonance. However, formal performance evaluations of the vendor and the products sold generally do not occur, as they do in the B2B setting.

Considerations before starting a Marketing Research Project

1. will this research be useful? 2. is top management committed to the project and willing to abide by the results of the search? **these two represent the value of the search and are essential to figure out bc marketing research is expensive 3. Should the marketing research project be small or large?

actual or perceived risk

5 types of risk associated with purchase decisions can delay or discourage a purchase: performance, financial, social, physiological, and psychological. The higher the risk, the more likely the consumer is to engage in an extended search.

ethical and socially irresponsible firm

A firm's employees may conduct their activities in an ethically acceptable manner, but the firm may still not be considered socially responsible because their activities have little or no impact on anyone other than their closest stakeholders, -not involved with the larger community

Positioning Using Perceptual Mapping

A perceptual map displays, in 2 or more dimensions, the position of products or brands in the consumer's mind. -compares two attributes on both axis and the different levels of these attributes -The position of each brand is denoted by a small circle, and the numbered circles denote consumer's ideal points - where a particular market segment's ideal product would lie on the map. The larger the numbered circle, the larger the market size. To derive a perceptual map, marketers follow six steps.

Marketers can take several steps to ensure postpurchase customer satisfaction, such as:

Marketers can take several steps to ensure postpurchase satisfaction, such as: --Build realistic expectations, not too high and not too low. --Demonstrate correct product use - improper use can cause dissatisfaction. --Stand behind the product or service by providing money-back guarantees and warranties. --Encourage customer feedback, which cuts down on negative word of mouth and helps marketers adjust their offerings. --Periodically make contact with customers and thank them for their support. This contact reminds customers that the marketer cares about their business and wants them to be satisfied. It also provides an opportunity to correct any problems. Customers appreciate human contact. ** these efforts are all to prevent post purchase cognitive dissonance

Determine consumers' perceptions and evaluations of the product or service in relation to competitors' (step 1 of perceptual mapping)

Marketers determine their brand's position by asking consumers a series of questions about their and competitors' products. EX: they might ask how the consumer uses the existing product or services, what items the consumer regards as alternative sources to satisfy his or her needs, what the person likes or dislikes about the brand in relation to competitors, and what might make that person choose one brand over another.

Identify the market's ideal points and size (step 2 of perceptual mapping)

On a perceptual map, marketers can represent the size of current and potential markets. Ideal point (largest circle) represents the largest market, so if the firm doesn't already have a product positioned close to this point, it should consider an introduction. -smallest circle is the smallest market, so there are relatively few customers who want this kind of product. This isn't to suggest that this market should be ignored, however, the company might want to consider a niche, rather than mass, market strategy for this group of consumers.

Determine consumer preferences. (step 4 of perceptual mapping)

The firm knows what the consumer thinks of the products or services in the marketplace and their positions relative to one another. Now it must find out what the consumer really wants, that is, determine the "ideal" product or service that appeals to each market. -can also identify where there is customers with unfulfilled needs **where there is current/potential market not being filled by competitors

sample ethical decision-making metric

The marketer's task here is to ensure that he or she has applied all relevant decision-making criteria and to assess his or her level of confidence that the decision being made meets those stated criteria. --publicity test --moral mentor test --golden rule test ---the person in the mirror test ranking from 1 to 7 if the alternative passes these test (1 is best)

market segmentation

The process of dividing the market into groups of consumers with different needs, wants, or characteristics - who therefore might appreciate products or services geared especially for them

space 2

These customer needs are unmet. It represents an important marketing opportunity, in that the firm could create new products or augment existing services to satisfy these needs better. **only in circle to the left of venn diagram (customer needs)

space 4

These needs are being met by the benefits of the firm, as well as by competitors. (portion of venn diagram that all three circles overlap) (firms benefits+ competitors benefits +customer needs)

Identify competitors' positions (step 3 of perceptual mapping)

When the firm understands how its customers view its brand relative to competitors', it must study how those same competitors position themselves.

marketing firm must consider the entire business process from

a consumer's point of view

Compatibility

a diffusion process may be faster or slower, depending on consumer features, including international cultural differences. EX: Firefox has different features on the Chinese version compared to its Western counterpart because Chinese users surf the Internet differently. Or, the iPad is criticized for lack of compatibility since Adobe's Flash doesn't work on the iPad.

slotting allowance

a fee paid simply to get new products into stores or to gain more or better shelf space for their products.

Test Marketing

a method of determining the success potential of a new product, test marketing introduces the offering to a limited geographical area (usually a few cities) prior to a national launch. -Test marketing is a strong predictor of product success because the firm can study actual purchase behavior, which is more reliable than a simulated test. A test marketing effort uses all the elements of the marketing mix: it includes promotions like advertising and coupons, just as if the product were being introduced nationally, and the product appears in targeted retail outlets, with appropriate pricing. -On the basis of the results of the test marketing, the firm can estimate demand for the entire market. Test marketing costs more and takes longer than premarket tests, which may provide an advantage to competitors that could get a similar or better product to market first without test marketing. For this reason, some firms might launch new products without extensive consumer testing and rely instead on intuition, instincts, and guts.

Manufacturer Brands

also known as national brands, are owned and managed by the manufacturer. EX: Nike, Coca-Cola, Sony. -With these brands, the manufacturer develops the merchandise, produces it to ensure consistent quality, and invests in a marketing program to establish an appealing brand image. -The majority of the brands marketed in the U.S. are manufacturer brands, and manufacturing firms spend millions of dollars each year to promote their brands. -By owning their brands, manufacturers retain more control over their marketing strategy, are able to choose the appropriate market segments and positioning for the brand, and can build the brand and thereby create their own brand equity.

Marketing channel management

also known as supply chain management, is the set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and other firms involved in the transaction (ie: transportation companies) into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, while minimizing systemwide costs and satisfying the service levels required by the customers.

Production-Oriented Era

around the 20th century, most firms were production oriented and believed that a good product would sell itself. Manufacturers were concerned with product innovation, not with satisfying the needs of individual consumers, and retail stores typically were considered places to hold the merchandise until a consumer wanted it.

Marketing Expands Firms' Global Presence:

as marketing helps expand firms' global presence, it also enhances global career opportunities for marketing professionals.

compensatory decision rule

assumes that the consumer, when evaluating alternatives, trades off one characteristic against another, such that good characteristics compensate for bad characteristics. EX: Hanna is looking to buy cereal and is considering several factors like taste, calories, price, and natural/organic claims. But even if the cereal's priced a little higher than she was planning to spend, a superb overall rating offsets, or compensates for, the higher price. -multi-attribute model shows how a compensatory decision rule model works but most customers do not go through this formal process

self values

are goals for life, not just the goals one wants to accomplish in a day. They are the overriding desires that drive how a person lives his or her life. Examples might be the need for self-respect, self-fulfillment, or a specific sense of belonging. This motivation causes people to develop self-images of how they want to be and then images of a way of life that will help them arrive at these ultimate goals. - Self-values help determine the benefits the target market may be looking for from a product. The underlying, fundamental, personal need that pushes a person to seek out certain products or brands stems from his or her desire to fulfill a self-value.

panel data

are information collected from a group of consumers, organized into panels, over time. - Data collected from panelists often include their records of what they have purchased (i.e. secondary data), as well as their responses to survey questions that the client gives to the panel firm to ask the panelists (i.e. primary data). -Primary panel data could give insights into what they think of each option. **analyzes consumption of particular person

services (product)

are intangible customer benefits that are produced by people or machines and cannot be separated from the producer. When people buy tickets, they're not paying for the physical ticket stub, but for the experience they gain. Hotels, insurance agencies, and spas provide services.

Goods (product)

are items that you can physically touch, EX: Nike shoes, Budweiser, Kraft cheese, Tide, an iPad...

The most visible types of B2B transactions

are those where manufacturers and service providers sell to other businesses.

The generally accepted code in marketing,

created by American Marketing Association, -flows from universal norms of conduct to the specific values to which marketers should aspire. - It indicates that the basic ethical values marketers should aspire to are honesty, responsibility, fairness, respect, openness, and citizenship. Each subarea within marketing, like marketing research, advertising, pricing, and so on, has its own code of ethics that deals with the specific issues that arise when conducting business in those areas.

Psychographic Segmentation:

delves into how consumers actually describe themselves. Usually marketers determine (through demographics, buying patterns, or usage) into which segment an individual consumer falls. Psychographics studies how people self-select based on the characteristics of how they choose to occupy their time (behavior) and what underlying psychological reasons determine those choices. EX: a person might have a strong need for inclusion or belonging, which motivates him or her to seek out activities that involve others, which in turn influences the products he or she buys to fit in with the group. Determining psychographics involves knowing and understanding 3 components: self-values, self-concept, and lifestyles.

customers

especially as changes in the marketing environment emerge, firms must consider the effects on the customers who currently patronize them and future customers whom they are targeting. -- CSR programs must take such shifts and trends into account and react to them quickly. A few of the trends that are receiving the most attention include respecting and protecting privacy in an electronic world and ensuring the healthiness of products, especially those aimed at children. -Moreover, CSR often increases consumer awareness of the firm, which can lead to better brand equity and sales in the long run.

The Influence of Personal Ethics

every firm is made up of individuals, each with his or her own needs and desires. -- In marketing, managers often face the choice of doing what is beneficial for them and possibly the firm in the short run and doing what is right and beneficial for the firm and society in the long run. -To avoid such dire consequences, the short-term goals of each employee must be aligned with the long-term goals of the firm. - To align personal and corporate goals, firms need to have a strong ethical climate, explicit rules for governing transactions including a code of ethics, and a system for rewarding and punishing inappropriate behavior.

demographic segmentation:

groups consumers according to easily measured, objective characteristics such as age, gender, income, and education. These variables represent the most common means to define segments, because they are easy to identify and because demographically segmented markets are easy to reach. Gender plays a very important role in how most firms market products and services. EX: TV viewing habits vary significantly between men and women, so companies therefore consider the gender appeal of various shows when they buy advertising time on TV. However, demographics may not be useful for defining the target segments for some companies EX: they're poor predictors of the users of active wear, Nike assumed that active wear would be purchased exclusively by young active people but people of all ages bought the merchandise. Rethinking some stereotypical ideas about who is buying thus has become a relatively common trend among firms that once thought their target market was well defined.

decline

i.e. sales decline) and eventually exists the market

Ethical and socially responsible firm

ideal situation, both employees obtain high ethical standards and ensure actions lead to optimal collective actions

Relative Advantage

if a product or service is perceived to be better than substitutes, then the diffusion will be relatively quick

Sharing Information:

in a value-based marketing-oriented firm, marketers share information about customers and competitors and integrate it across the firm's various departments. Sharing and coordinating such information represents a critical success factor for any firm

fashion cycles

in industries that rely on fashion trends and experience short product life cycles, including apparel, arts, books, and software markets, most sales come from new products. EX: a motion picture generates most of its theater, DVD, and cable TV revenues within a year of its release. Or fashion designers produce entirely new product selections a few times per year.

late majority

is the last group of buyers to enter a new product market. When they do, the product has achieved its full market potential. -By the time the late majority enters the market, sales tend to level off or may be in decline.

The Shape of the Product Life Cycle Curve

in theory, the product life cycle is bell shaped with regard to sales and profits. In reality, however, each product or service category has its own individual shape; some move more rapidly through their product life cycles than others, depending on how different the category is from offerings currently in the market and how valuable it is to the consumer. New products and services that consumers accept very quickly have higher consumer adoption rates very early in their product life cycles and move faster across the various stages.

step 2: gather information and identify stakeholders

in this step, the firm focuses on gathering facts that are important to the ethical issue, including all relevant legal information. - To get a complete picture, the firm must identify all the individuals and groups that have a stake in how the issue is resolved. --- Stakeholders typically include the firm's employees and retired employees, suppliers, the government, customer groups, stockholders, and members of the community in which the firm operates. -Beyond these, many firms now also analyze the needs of the industry and the global community, as well as "one-off" stakeholders, like future generations, and the natural environment itself.

noncompensatory decision rule

in which they choose a product or service on the basis of one characteristic or one subset of a characteristic, regardless of the values of its other attributes EX: Even though one cereal received the highest overall score in the multi attribute model (weighing all relevant attributes), Customer might still pick Kashi because he/she is particularly sensitive to claims of natural or organic contents, and this brand earned the highest score on this attribute (i.e. a 10). --Once a consumer has considered the possible alternatives and evaluated the pros and cons of each, he or she can move toward a purchase decision

universal sets

include all possible choices for a product category, but because it would be unwieldy for a person to recall all possible alternatives for every purchase decision, marketers tend to focus on only a subset of choices. -subset: retrieval and evoked sets

ideas (product)

include concepts, opinions, and philosophies; intellectual concepts like these can also be marketed. EX: groups promoting bicycle safety go to schools, give talks, and sponsor bike helmet poster contests for children. The exchange of value occurs when the children listen to the sponsors' presentation and wear their helmets while bicycling, which means they have adopted, or become "purchasers" of the safety idea that the group marketed.

supply chain partners

include wholesalers, retailers, or other intermediaries like transportation or warehousing companies. All of these entities are involved in marketing to one another.

Labeling requirement laws

including the Federal Trade Commission Act of 1914, the Fair Packaging and Labeling Act of 1967, and the Nutrition Labeling Act of 1990. -Several federal agencies, industry groups, and consumer watchdogs carefully monitor product labels -The Food and Drug Administration is the primary federal agency that reviews food and package labels and ensures that the claims made by the manufacturer are true

sustainable competitive advantage

is an advantage over the competition that is not easily copied and thus can be maintained over a long period of time.

Sentiment mining

is data gathered by evaluating customer comments posted through social media sites such as Facebook, Twitter, and online blogs. -The data are then analyzed to distill customer attitudes toward and preferences for products and advertising campaigns. -Scouring millions of sites by combining automated online search tools with text analysis techniques, sentiment mining yields qualitative data that provide new insight into what consumers really think. -Companies plugged into this real-time information can become more nimble, allowing for quick changes in a product roll-out or a new advertising campaign.

The Perceived Benefits vs. Perceived Costs of Search:

is it worth the time and effort to search for information about a product or service? EX: searching the housing market for a new house, vs. searching for which inexpensive dollhouse to buy from their youngest child.

financial risk

is risk associated with a monetary outlay and includes the initial cost of the purchase, as well as the costs of using the item or service. EX: dry cleaning costs associated with buying professional apparel.

delivery gap

is the difference between the firm's service standards and the actual service it provides to customers. - This gap can be closed by getting employees to meet or exceed service standards when the service is being delivered by empowering service providers, providing support and incentives, and using technology where appropriate.

prototype

is the first physical form or service description of a new product, still in rough or tentative form, that has the same properties as a new product but is produced through different manufacturing processes - sometimes even crafted individually

Perception (psychological factors)

is the process by which we select, organize, and interpret information to form a meaningful picture of the world. --Perception in marketing influences our acquisition and consumption of goods and services through our tendency to assign meaning to such things as color, symbols, taste, and packaging. **Culture, tradition, and our overall upbringing determine our perception of the world.

secondary package

is the wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners. Consumers can use the secondary package to find additional product information that may not be available on the primary package. Like primary packages, secondary packages add consumer value by facilitating the convenience of carrying, using, and storing the product.

companies are undertaking a wide range of corporate social responsibility initiatives

like establishing corporate charitable foundations, supporting and associating with existing nonprofit groups, supporting minority activities, and following responsible marketing, sales, and production practices.

Introductory price promotions

limited duration, lower-than-normal prices designed to provide retailers with an incentive to try the products

Growth Strategies:

market penetration, product development, market development, and diversification. (2 by 2 matrix measuring products and services vs. markets current to new)

Connecting with Customers Using Social and Mobile Media (embracing new technology)

marketers are steadily embracing new technologies, like social and mobile media, to allow them to connect better with their customers and thereby serve their needs more effectively. Businesses take social and mobile media seriously, including these advanced tools in the development of their marketing strategies. Beyond social media sites, online travel agencies (Expedia, Travelocity, Priceline...) have become the first place that users go to book travel arrangements. Several restaurant chains are exploiting location-based social media applications, these customers tend to be more loyal and can help spread the word to others about the restaurant. Users are driving the way brands and stores are interacting with social media

useful to evaluate the profitability of a segment over the lifetime of one of its typical customers

marketers consider factors like how long the customer will remain loyal to the firm, the defection rate (percentage of customers who switch on a yearly basis), the costs of replacing lost customers (advertising, promotion), whether customers will buy more or more expensive merchandise in the future, and other factors.

Building Relationships with Customers:

marketers have begun to develop a relational orientation as they have realized that they need to think about their customers in terms of relationships rather than transactions. To build relationships, firms focus on the lifetime profitability of the relationship, not how much money is made during each transaction

profitability

marketers must also focus their assessments on the potential profitability of each segment, both current and future. -Some key factors to keep in mind in this analysis include market growth (current size and expected growth rate), market competitiveness (number of competitors, entry barriers, product substitutes), and market access (ease of developing or accessing distribution channels and brand familiarity). Some straightforward calculations can help show the profitability of a segment:

roots of ethical conflict

often are the competing values of individuals -Each individual holds his or her own set of values, and sometimes those values result in inner turmoil or even conflicts between employees.

The demand for B2B sales

often derived from B2C sales in the same supply chain.

one of the most important controls is

policing potential violations of human rights and child labor laws. --Some firms even are proactive in enforcing the labor practices of their suppliers. ---Many companies that produce or sell goods made in low-wage countries conduct self-policing. (Self-policing allows companies to avoid painful public revelations.)

inflation

refers to the persistent increase in the prices of goods and services. Increasing prices cause the purchasing power of the dollar to decline = the dollar buys less than it used to.

Innovation

refers to the process by which ideas get transformed into new offerings, including products, services, processes, and branding concepts that will help firms grow

cognitive component of attitude

reflects a person's belief system, or what we believe to be true

derived demand

reflects the link between consumers' demand for a company's output and the company's purchase of necessary inputs to manufacture or assemble that particular output.

Value

reflects the relationship of benefits to costs, or what you get for what you give. Customers want products of services that meet their specific needs or wants and that are offered at a price that they believe is a good value.

Maslow's Hierarchy of Needs (love)

relate to our interactions with others. EX: greeting cards help you express your feelings toward others.

The Segmentation, Targeting, and Positioning Process

step 1: establish overall strategy or objectives step 2: segmentation methods step 3: evaluate segment attractiveness step 4: select target market step 5: identify and develop positioning strategy

ethical decision framework

step 1: identify issues step 2: gather information and identify stakeholders step 3: brainstorm and evaluate alternative step 4: choose a course of action

reachable

the best product or service cannot have any impact, no matter how identifiable or substantial the target market is, if that market cannot be reached through persuasive communications and product distribution. - The consumer must know the product or service exists, understand what it can do for him or her, and recognize how to buy it. EX: If Victoria's Secret fails to tell women that it's offering more affordable less luxurious bras shoppers will walk right past the store and buy basic bras from the Macy's store in the same mall.

External Search for Information:

the buyer seeks information outside his or her personal knowledge base to help make the buying decision. --Consumers might fill in their personal knowledge gaps by talking with friends, family, or a salesperson. They can also scour commercial media for unsponsored and unbiased information, like that available through consumer reports, or peruse sponsored media like magazines, TV, or radio. Sometimes consumers get commercial exposure to products or services without really knowing it. New media like blogs are steadily becoming a major source of external information to consumers. The Internet provides more information than that contained in blogs, though EX: searching for clothes you saw a character wear on a show on the Internet this type of search is an example of external searches for information. using a TV show's site to find a style you liked, referring to a magazine for additional style tips, and finding jeans using the web

Factors that affect the customers Immediate Environment:

the company's capabilities, competitors, and corporate partners.

Need Recognition

the consumer decision process begins when consumers recognize they have an unsatisfied need, and they'd like to go from their actual, needy state to a different, desired state. --The greater the discrepancy between these 2 states, the greater the need recognition -EX: if you're really hungry and don't want to pass it off and eat later, the need - the different between your actual (hungry) state and your desired (not hungry) state - is greater, and you'll want to eat immediately to get your desired state. - Consumer needs like these can be classified as function, psychological, or both. -determining the correct balance of functional and psychological needs that best appeals to the firm's target markets.

related diversification opportunity

the current target market and/or marketing mix shares something in common with the new opportunity. In other words, the firm might be able to purchase from existing vendors, use the same distribution and/or management information system, or advertise in the same newspapers to target markets that are similar to their current consumers.

alpha testing

the firm attempts to determine whether the product will perform according to its design and whether it satisfies the need for which it was intended. Rather than use potential consumers, alpha tests occur in the firm's R&D department (testing internally - on your own employees).

market testing

the firm has developed its new product or service and tested the prototypes. Now it must test the market for the new product with a trial batch of products. These tests can take 2 forms: premarket testing or test marketing.

most important objective of marketers:

the firm's ability to build and maintain consumer trust by conducting ethical, transparent, clear transactions must be of paramount importance.

Step 1: Establish Overall Strategy or Objectives

the first step in the segmentation process is to articulate the vision or objectives of the company's marketing strategy clearly. The segmentation strategy must be consistent with and derived from the firm's mission and objectives, as well as its current situation - its strengths, weaknesses, opportunities, and threats (SWOT).

American Marketing Association definition of CSR

the impact of the company's actions and operating in a way that balances short-term profit needs with society's long-term needs, thus ensuring the company's survival in a healthy environment.

assurance (service quality)

the knowledge of and courtesy by the employees to convey trust and confidence

initiator buying role

the person who first suggests buying the particular product or service

buyer buying role

the person who handles the paperwork of the actual purchase

decider buying role

the person who ultimately determines any part of or the entire buying decision - whether to buy, what to buy, how to buy, or where to buy;

influencer buying role

the person whose views influence other members of the buying center in making the final decision

Emerging Technology and the Ethics of Using Customer Information

the potential threats to consumers' personal information grow in number and intensity **Marketing researchers must be vigilant to avoid abusing their access to these data. -consumers are more anxious than ever about preserving their fundamental right to privacy. -They also demand increasing control over the information that has been collected about them.

growth stage

the product gains acceptance, demand and sales increase, and more competitors emerge in the product category -marked by a growing number of product adopters, rapid growth in industry sales, and increases in both the number of competitors and the number of available product versions. -The market becomes more segmented and consumer preferences more varied, which increase the potential for new markets or new uses of the product or service. -Also during the growth stage, firms attempt to reach new consumers by studying their preferences and producing different product variations which enable them to segment the market more precisely. -The goal of this segmentation is to ride the rising sales trend and firmly establish the firm's brand, so as not to be outdone by competitors. -As firms experience increasing industry sales, profits in the growth stage also rise because of the economies of scale associated with manufacturing and marketing costs, especially promotion and advertising. - At the same time, firms that have not yes established a stronghold in the market, even in narrow segments, may decide to exit in what is referred to as an "industry shakeout."

Step 2: Segmentation Methods

the second step is to use a particular method or combination of methods to segment the market. This step also develops descriptions of the different segments, which helps firm better understand the customer profiles in each segment. With this information, they can distinguish customer similarities within a segment and dissimilarities across segments. Marketers use geographic, demographic, psychographic, benefits, and behavioral segmentation methods

marketing is about an exchange

the trade of things of value between the buyer and the seller so that each is better off as a result. Sellers provide products or services, then communicate and facilitate the delivery of their offering to consumers. Buyers complete the exchange by giving money and information to the seller.

latchkey children

those who grew up in homes in which both parents worked

autocratic buying center

though there may be multiple participants, one person makes the decision alone

Marketing communication -

through salespeople, advertisements, free samples, or other such methods - can attempt to change what people believe to be true about a product or service (cognitive) or how they feel toward it (affective). If the marketer is successful, the cognitive and affective components work in concert to affect behavior.

conversion rate

to measure how well they have converted purchase intentions into purchases. --One method of measuring the conversion rate is the number of real or virtual abandoned carts in the retailer's store or website. -Retailers use various tactics to increase the chances that customers will convert their positive evaluations into purchases: --They can reduce the number of abandoned carts by making it easier to purchase merchandise. --- Most important, they should have plenty of stock on hand of the merchandise that customers want. ---They can also reduce the actual wait time to buy merchandise by opening more checkout lanes and placing them conveniently inside the store --- To reduce perceived wait times, they might install digital displays to entertain customers waiting in line. --For different types of companies, the conversion rate also refers to rentals (i.e. Netflix) or to outright purchases, though some of these lines appear to be blurring as consumers seek new ways to access the items they want. -But conversion rates still tend to be lower for consumers using an Internet channel, because they are able to look at products and throw them in their cart, but still delay their purchase decision.

undifferentiated marketing (mass marketing)

when everyone might be considered a potential user of its product, a firm uses an undifferentiated targeting strategy. Such a targeting strategy focuses on the similarities in needs of the customers as opposed to the differences. If the product or service is perceived to provide similar benefits to most consumers, there simply is little need to develop separate strategies for different groups. Although not a common strategy in today's complex marketplace, an undifferentiated strategy is used for many basic commodities, like salt or sugar. But even those firms now are trying to differentiate their products.

evoked sets

which comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision. -- If a firm can get its brand or store into a consumer's evoked set, it has increased the likelihood of purchase and therefore reduced search time because the consumer will think specifically of that brand when considering choices ----evoked sets are the stores out of the retrieval set that you would actually decide between for your particular purchase

core customer value

which defines the basic-problem solving benefits that consumers are seeking. EX: When Mars manufactures M&Ms, what are customers looking for? Is it a sweet great tasting snack or is it an energy boost?

The 1890 Sherman Antitrust Act

which prohibits monopolies and other activities that would restrain trade or competition and makes fair trade within a free market a national goal.

There are 4 macro strategies that focus on aspects of the marketing mix to create and deliver value and to develop sustainable competitive advantages:

•Customer excellence: focuses on retaining loyal customers and excellent customer service. •Operational excellence: achieved through efficient operations and excellent supply chain and human resource management. •Product excellence: having products with high perceived value and effective branding and positioning. •Locational excellence: having a good physical location and Internet presence.

To prevent the potentially negative consequences of brand extension, firms consider the following

•Marketers should evaluate the fit between the product class of the core brand and that of the extension. If the fit between the product categories is high, consumers will consider the extension credible, and the brand association will be stronger for the extension. EX: when Starbucks introduced its line of instant coffee it made sense to its customers. (MAKES SENSE) •Firms should evaluate consumer perceptions of the attributes of the core brand and seek out similar attributes for the extension because brand-specific associations are very important for extensions. EX: if HP printers were associated with reliability, performance, and value, consumers would expect the same brand-specific attributes in other products that carried the HP brand name. (SIMILAR ASSOCIATIONS OF ATTRIBUTES/PERFORMANCE/QUALITY) •Firms should refrain from extending the brand name to too many products and product categories to avoid diluting the brand and damaging brand equity. •Firms should consider whether the brand extension will be distanced from the core brand, especially if the firm wants to use some but not all of the existing brand associations. EX: Marriott has budget hotels, mid-tier, and luxury hotels. Its luxury hotels, including the Ritz-Carlton, Edition, and Renaissance, don't use the name Marriott at all.