MKTG 495 Test 1

Maximizing Core Competencies

(Re)define the business concept (Re)shaping the business scope (Re)positioning the company's brand identity

Core Cultural Values

1. Core beliefs and values are passed from parents to children and reinforced by social institutions 2. Secondary beliefs and values are more open to change

The Political-Legal Environment - Two major trends:

1. Increased business legislation 2. Growth of special interest groups (including the consumerist movement)

The Value Chain

A tool for identifying ways to create more customer value Every firm is a synthesis of activities performed to design, produce, market, deliver and support its product

Marketing Channels - Communication

deliver and receive messages from target buyers and include newspapers, magazines, radio, television, mail, telephone, smart phone, billboards, posters, fliers, CDs, audiotapes, and the Internet.

Customer-Perceived Value

1. Customers tend to be value maximizers within the bounds of search costs and limited knowledge, mobility, and income. 2. Customers choose the offer they believe will deliver the highest value and act on it 3. Customer-perceived value is the difference between the prospective customer's evaluation of all the benefits and costs of an offering and the perceived alternatives 4. Total customer benefit is the perceived monetary value of the bundle of economic, functional and psychological benefits customers expect from a given market offering because of the product, service, people, and image 5. Total customer cost is the perceived bundle of costs customers expect to incur in evaluating, obtaining, using and disposing of the given market offering, including monetary, time, energy, and psychological costs

Satisfaction is a person's feeling of pleasure or disappointment that result from comparing a product or service's perceived performance (or outcome) to expectations

1. If the performance or experience falls short of expectations, the customer is dissatisfied. 2. If it matches expectations, the customer is satisfied. 3. If it exceeds expectations, the customer is highly satisfied or delighted 4. Customer assessments of product or service performance depend on many factors, including the type of loyalty relationship the customer has with the brand. 5. Although the customer-centered firm seeks to create high customer satisfaction, increasing customer satisfaction by lowering price or increasing services may result in lower profits. 6. Expectations result from past buying experience, friends' and associates' advice, public information and discourse, and marketers' and competitors' information and promises.

Primary activities of Value Chain

1. Inbound logistics: bringing materials into the business 2. Operations: converting materials into final products 3. Outbound logistics: shipping out final products 4. Marketing (includes sales) 5. Service

Information needs probes for marketing managers.. examples of questions a marketing manager might ask...

1. What decisions do you regularly make? 2. What information do you need to make these decisions? 3. What information do you regularly get? 4. What special studies do you periodically request? 5. What information would you want that you are not getting now? 6. What information would you want daily? Weekly? Monthly? Yearly? 7. What online and offline newsletters, briefings, blogs, reports, or magazines would you like to see on a regular basis? 8. What topics would you like to be kept informed of? 9. What data analysis and reporting programs would you want? 10. What are the four most helpful improvements that could be made in the present marketing information system?

Marketing Intelligence

A. A marketing intelligence system is a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment. B. It reports "happenings" data from books, newspapers, trade publications, customers, suppliers, distributors, managers and social media monitoring C. Marketing intelligence gathering must be legal and ethical D. Communicating and Acting on Marketing Intelligence: competitive intelligence works best when it is closely coordinated with decision-making process

Business Unit Strategic Planning

A. Develop a specific mission for the strategic business unit B. Conduct a SWOT analysis

Internal Records Examples

A. Internal reports of orders, sales, prices, costs, inventory levels, receivables and payables B. The Order-to-Payment Cycle, which is the heart of the internal records system, includes invoices, shipping and billing documents C. Sales Information Systems include sales and inventory data D. Databases, Data Warehouses and Data Mining provide information that enables customer engagement

Analyzing the Macroenvironment

A. Needs and Trends 1. Create new solutions to similarly unmet needs 2. A fad is an unpredictable, short-lived, and without social, economic and political significance 3. A trend is more predictable and durable than a fad; trends reveal the shape of the future and can provide strategic direction 4. A megatrend is a large social, economic, political and technological change that is slow to form and, once in place, influences us for some time B. Identifying the Major Forces 1. Demographic 2. Economic 3. Socio-cultural 4. Natural 5. Technological 6. Political-legal

New Consumers

Can use the internet as a powerful information and purchasing aid Can search, communicate, and purchase on the move Can tap into social media to share opinions and express loyalty Can actively interact with companies Can reject marketing they find inappropriate

New company capabilities

Can use the internet as a powerful information and sales channel, including for individually differentiated goods Can collect fuller and richer information about markets, customers, prospects, and competitors Can reach customers quickly and efficiently via social media and mobile marketing, sending targeted ads, coupons, and information Can improve purchasing, recruiting, training, and internal and external communications Can improve cost efficiency

Maximizing Customer Lifetime Value

Companies that want to build loyalty should: 1. Interact closely with customers 2. Develop loyalty programs/frequency programs/club membership programs 3. Create institutional ties

Demand states (Irregular demand)

Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis.

Demand states (Full demand)

Consumers are adequately buying all products put into the marketplace.

Demand states (Declining demand)

Consumers begin to buy the product less frequently or not at all.

Demand states (negative demand)

Consumers dislike the product and may even pay to avoid it.

Demand states (Unwholesome demand)

Consumers may be attracted to products that have undesirable social consequences.

Demand states (nonexistent demand)

Consumers may be unaware of or uninterested in the product.

Demand states (Latent demand)

Consumers may share a strong need that cannot be satisfied by an existing product.

The natural Environment

Corporate environmentalism Opportunities await those who can reconcile prosperity with environmental protection

Marketing Research - Scientific method

Effective marketing research uses the principles of the scientific method: careful observation, formulation of hypotheses, prediction, and testing.

Positioning

For each target market, the firm develops a market offering that it positions in target buyers' minds as delivering some key benefit(s)

Improving Marketing Intelligence

Motivate sales force to report new developments Motivate intermediaries to pass along intelligence Hire external experts to collect intelligence Network internally and externally Set up a customer advisory panel Take advantage of government-related data Purchase information from outside research vendors Collect marketing intelligence on Internet

Defining the Corporate Mission

Over time, the mission may change to respond to new opportunities or market conditions Classic questions: What is our business? Who is the customer? What is of value to the customer? What will our business be? What should our business be?

Media Types

Paid media: TV, magazine and display ads, paid search, and sponsorships Owned media: a company or brand brochure, web site, blog, facebook page, or twitter account Earned media: word of mouth, buzz, or viral marketing

The Demographic Environment

Population size and growth, rate in cities, regions and nations, age distribution and ethnic mix, educational levels, household patterns

The Economic Environment

Purchasing power depends on income, savings, debt, credit availability and price

Satisfaction

Satisfaction reflects a person's judgment of a product's perceived performance in relationship to expectations.

Types of Needs

Stated needs (The customer wants an inexpensive car.) Real needs (The customer wants a car whose operating cost, not initial price, is low.) Unstated needs (The customer expects good service from the dealer.) Delight needs (The customer would like the dealer to include an onboard GPS system.) Secret needs (The customer wants friends to see him or her as a savvy consumer.)

Example of market definition:

Steelcase describes itself as "the global leader in furnishing the work experience in office environments."

Target markets

The segment(s) present the greatest opportunities

Value Delivery Process

Three phases to the value creation and delivery sequence: 1. Choosing the value: homework; market segmentation, target market selection, value positioning 2. Providing the value: identification of features, prices, distribution 3. Communicating the value: use the Internet, advertising, sales force and other communication tools

Top Marketers

Top marketers are increasingly going beyond sales revenue to examine the marketing scorecard and interpret what is happening to market share, customer loss rate, customer satisfaction, product quality, and other measures. They are also considering the legal, ethical, social, and environmental effects of marketing activities and programs

Good marketing research

Uses the principles of the scientific method Is creative Does not rely on one method; uses two or three to increase confidence in the results Recognizes that data are interpreted from underlying models that guide information sought Balances cost and value of information Avoids glib assumptions/has a healthy skepticism Is Ethical

Value

Value is primarily a combination of quality, service, and price (qsp), called the customer value triad. Value perceptions increase with quality and service but decrease with price

Offerings

a combination of products, services, information, and experiences

Value:

a combination of quality, service, and price (qsp: the customer value triad)

Satisfaction:

a person's judgment of a product's perceived performance in relationship to expectations

Value Proposition

a set of benefits that satisfy those needs

Importance of Marketing Insights

a. Marketing insights provide diagnostic information about how consumers and markets behave, why we observe certain effects in the marketplace and what that means to marketers b. Marketing insights can form the basis for successful marketing programs, and gaining insights is crucial for marketing success

A strategic market definition, however

also focuses on the potential market.

High satisfaction or delight creates

an emotional bond with the brand or company, not just a rational preference.

Brands

an offering from a known source

Environmental threat is a challenge posed by

an unfavorable trend or development that, in the absence of defensive marketing action, would lead to lower sales

Opportunity:

area of buyer need and interest that a company has a high probability of satisfying

Mission statements can be used to define

competitive territory and boundaries (e.g. Industry, Products and applications, Competence, Market segment, Vertical, Geographical)

A target market definition tends to

focus on selling a product or service to a current market

Marketing Channels - Distribution

help display, sell, or deliver the physical product or service(s) to the buyer or user. To carry out transactions with potential buyers, the marketer also uses

Higher. levels of quality result in

higher levels of customer satisfaction, which support higher prices and (often) lower costs.

Segmentation

identification of distinct segments of buyers by identifying demographic, psychographic, and behavioral differences between them.

The information in marketing research is used to

identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.

Marketing Channels -Service

include warehouses, transportation companies, banks, and insurance companies.

Competition

includes all the actual and potential rival offerings and substitutes a buyer might consider.

External environment (opportunity and threat) analysis:

monitor key macroenvironmental forces

Impressions:

occur when consumers view a communication

Satisfaction will also depend on

product and service quality

The original four Ps

product, price, place and promotion

Engagement:

the extent of a customer's attention and active involvement with a communication

Marketing research is

the function that links the consumer, customer, and public to the marketer through information

Marketing research specifies

the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications.

Quality is

the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs

The Sociocultural Environment impacts consumption trends and behavior, including:

views of ourselves, others, organizations, society, nature and of the universe.

Core Business Processes

• The market-sensing process—gathering and acting upon information about the market • The new-offering realization process—researching, developing, and launching new high-quality offerings quickly and within budget • The customer acquisition process—defining target markets and prospecting for new customers • The customer relationship management process—building deeper understanding, relationships, and offering to individual customers • The fulfillment management process—receiving and approving orders, shipping goods on time, and collecting payment

Establishing Strategic Business Units using three characteristics

1 .Single business or collection of related businesses that can be planned separately from the rest of the company 2. Own set of competitors 3. Manager responsible for strategic planning and profit performance

Brand communities are specialized communities of consumers and employees whose identification and activities focus around the brand, characterized by:

1. A consciousness of kind/felt connection to the brand, company, product or other community members 2. Shared rituals, stories, and traditions that help convey the meaning of the community 3. A shared moral responsibility or duty to both the community as a whole and individual community members 4. Brand communities can rise organically from brand users or can be company-sponsored/facilitated 5. The more connected members are, the more likely he or she will spend

The Technological Environment Trends include:

1. Accelerating pace of change 2. Unlimited opportunities for innovation 3. Varying R&D budgets 4. Increased regulation of technological change

Five priorities for a successful CMO

1. Act as the visionary for the future of the company. 2. Build adaptive marketing capabilities. 3. Win the war for marketing talent. 4. Tighten the alignment with sales. 5. Take accountability for returns on marketing spending.

Market opportunity analysis questions

1. Can we articulate the benefits convincingly to a defined target market(s)? 2. Can we locate the target market(s) and reach them with cost-effective media and trade channels 3. Does our company possess or have access to the critical capabilities and resources we need to deliver the customer benefits? 4. Can we deliver the benefits better than any actual or potential competitors? 5. Will the financial rate of return meet or exceed our required threshold for investment?

A Dramatically Changed Marketplace

1. Consumers are empowered through technology, like social media, and by expanded information, communication and mobility. 2. Consumers can use the Internet as a powerful information and purchasing aid. 3. Consumers can search, communicate, and purchase on the move. 4. Consumers can tap into social media to share opinions and express loyalty. 5. Consumers can actively interact with companies.

Most large companies consist of four organizational levels

1. Corporate: designs corporate strategic plan to guide enterprise 2. Division: establishes plan covering allocation of funds to each business unit 3. Business unit: develops strategic plan for the unit 4. Product: each product level develops a marketing plan

Marketing Environment

1. Task environment includes the actors engaged in producing, distributing, and promoting the offering. 2. road environment consists of six components: demographic environment, economic environment, social-cultural environment, natural environment, technological environment, and political-legal environment

Good mission statements have five major characteristics

1. They focus on a limited number of goals 2. They stress the company's major policies and values 3. They define the major competitive spheres within which the company will operate 4. They take a long-term view 5. They are short, memorable and meaningful as possible

Demand states (Overfull demand)

More consumers would like to buy the product than can be satisfied.

Marketing plays an especially important role in helping companies identify and deliver high-quality goods and services to target customers.

1. Correctly identify customers' needs and requirements 2. Communicate customer expectations properly to product designers 3. Make sure customers' orders are filled correctly and on time 4. Check that customers have received proper instructions, training, and technical assistance in the use of the product 5. Stay in touch with customers after the sale to ensure they are, and remain, satisfied 6. Gather customer ideas for product and service improvements and convey them to the appropriate departments

Consumers have varying degrees of loyalty to specific brands, stores, and companies.

1. Loyalty is a deeply held commitment to rebuy or repatronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior 2. The value proposition consists of the whole cluster of benefits the company promises to deliver; it is more than the core positioning of the offering. 3. The value delivery system includes all the experiences the customer will have on the way to obtaining and using the offering. At the heart of a good value delivery system is a set of core business processes that help deliver distinctive consumer value.

Marketers must prioritize strategic planning in three key areas

1. Managing the businesses as an investment portfolio 2. Assessing the market's growth rate and the company's position in that market 3. Establishing a strategy

What is Marketing?

1. Marketing is about identifying and meeting human and social needs 2. "Meeting needs profitably." 3. American Marketing Association definition: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Needs, Wants, and Demands

1. Needs = basic human requirements 2. Wants = when needs are directed to specific objects that might satisfy the need 3. Demands= wants for specific products backed by an ability to pay Marketers do not create needs: Needs pre-exist marketers.

Examples of Opportunities

1. Offer something in short supply 2. Supply existing product or service in a superior way 3. Benefit from converging industry trends/introduce hybrid products or services to the market 4. Make buying process more convenient or efficient 5. Meet the need for more information and advice 6. Customize a product or service 7. Introduce a new capability 8. Deliver a product or service faster 9. Offer product at a much lower price

Measures of Market Demand

1. Potential market: sufficient interest in market offer (becomes a market if sufficient income and access) 2. Available market: interest, income and access to a particular offer 3. Qualified available market: interest, income, access and qualifications for the market offer 4. Target market: part of the qualified available market the company decides to pursue 5. Penetrated market: set of consumers who are buying the company's product

Organization and Organizational Culture

A company's organization is its structures, policies, and corporate culture, all of which can become dysfunctional in a rapidly changing business environment. Corporate culture is "the shared experiences, stories, beliefs, and norms that characterize an organization."

Marketing Research - Research creativity

In an award-winning research study to reposition cheetos snacks, researchers dressed up in a brand mascot Chester Cheetah suit and walked around the streets of San Francisco. The response the Character encountered led to the realization that even adults loved the fun and playfulness of Cheetos. The resulting repositioning led to a double-digit sales increase despite a tough business environment.

Types of Growth

Intensive Growth - Corporate management should first review opportunities for improving existing businesses Integrative Growth - A business can increase sales and profits through backward, forward, or horizontal integration within its industry Diversification Growth - Diversification growth makes sense when good opportunities exist outside the present businesses - The industry is highly attractive and the company has the right mix of business strengths to succeed Downsizing and Divesting Older Businesses - Companies must carefully prune, harvest, or divest tired old businesses to release needed resources for other uses and reduce costs

The Political-Legal Environment

Laws, government agencies and pressure groups that influence organizations and individuals create business opportunities or uncertainty/confusion

Companies often define themselves in terms of products

Market definitions of a business describe the business as a customer-satisfying process, which is preferred because products are transient but basic needs and customer groups endure forever.

Marketing Decision Making (#1)

Marketers must choose features, prices, and markets and decide how much to spend on advertising, sales, and online and mobile marketing in an environment where consumers, competition, technology, and economic forces change rapidly and consequences quickly multiply.

Marketing Decision Making (#2)

Marketers that fail to carefully monitor their customers and competitors, continuously improve their value offerings and marketing strategies, or satisfy their employees, stockholders, suppliers, and channel partners in the process are more vulnerable to competitive entry.

The Value of Marketing

Marketing ability helps create sufficient demand for products and services, which is essential for a firm's financial success, creates jobs and provides resources for firms to engage is socially responsible activities.

Marketing Research - Ethical marketing

Marketing research benefits both the sponsoring company and its customers. The misuse of marketing research can harm or annoy consumers, increasing resentment at what consumers regard as an invasion of their privacy or a disguised sales pitch.

Marketing Research - Interdependence of models and data

Marketing researchers recognize that data are interpreted from underlying models that guide the type of information sought.

Marketing Research - Value and cost of information

Marketing researchers shoe concern for estimating the value of information against its cost. Costs are typically easy to determine, but the value of research is harder to quantify. It depends on the reliability and validity of the findings and management's willingness to accept and act on those findings.

Marketing Research - Healthy skepticism

Marketing researchers show a healthy skepticism toward glib assumptions made by managers about how a market works. They are alert to the problems caused by "marketing myths."

Marketing Research - Multiple methods

Marketing researchers shy away from overreliance on any one method. They also recognize the value of using two or three methods to increase confidence in the results.

Updated Four Ps

Modern marketing realities suggest a more representative set that encompasses modern marketing realities: people, processes, programs and performance. 1. People: reflects internal marketing and the fact that employees and understanding consumers' whole lives are critical to marketing success 2. Processes: reflects all the creativity, discipline, and structure brought to marketing management. 3. Programs: reflects all the firm's consumer-directed activities. It encompasses the old four Ps as well as a range of other marketing activities that might not fit as neatly into the old view of marketing. These activities must be integrated such that their whole is greater than the sum of their parts and they accomplish multiple objectives for the firm. 4. Performance: captures the range of possible outcome measures that have financial and non-financial implications (profitability as well as brand and customer equity) and implications beyond the company itself (social responsibility, legal, ethical, and community related).

The Marketing Research Process

Step 1: Define the Problem, the Decision Alternatives, and the Research Objectives i. Do not define the problem too broadly or too narrowly ii. Some research is exploratory - the goal is to identify the problem and to suggest possible solutions iii. Some research is descriptive - it seeks to quantify demand iv. Some research is causal - it tests a cause-and-effect relationship Step 2: Develop the Research Plan i. Develop the most efficient plan for gathering needed information ii. Discover what it will cost to execute the plan iii. Consider data sources 1. Secondary data - collected for another purpose; already exists 2. Primary data - freshly gathered for a specific purpose or project iv. Choose research instruments v. Choose a sampling plan 1. Sampling unit: whom should we survey? 2. Sample size: How many people should we survey? 3. Sampling procedure: How should we choose the respondents? vi. Choose a contact method 1. Mail contacts 2. Telephone contacts 3. Personal contacts 4. Online contacts 5. Online research pros: Step 3: Collect the Information Step 4: Analyze the Information Step 5: Present the Findings Step 6: Make the Decision

What is Marketed?

Ten main types of entities: goods, services, events, experiences, persons, places, properties, organizations, information, and ideas.