Marketing 3210 Exam 1

Marketing

(1) is a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. (2)The process of getting the right product to the right people at the right time at the right price

Customer lifetime value

--is the value of the entire stream of purchases that the customer would make over a lifetime of patronage. -satisfied customers remain loyal and talk favorably to others about the company and its products. -loyal customers spend more money and stay longer ( 5x cheaper to keep old than aquire new)

Marketing information system (MIS)

--refers to the people and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights. -provides info to company, distributes, suppliers

Market penetration

-involves making more sales to current customers without changing its original product such as by adding new stores in current market areas to make it easier for customers to visit. -existing market, existing product

Value delivery network (partnering with other marketing systems)

-is made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve performance of the entire system.

Customer-engagement marketing

-making the brand a meaningful part of consumers' conversations -direct and continuous customer involvement in shaping brand conversations, experiences, and community Ex: the death of Mr. Peanut, legos, Mtn. Dew design competition

Examples of changes in Demographic Market (Macro)

1. Americas getting older 2. changes in American family 3. changes in workforce 4. geographic shifts in population 5. changes in where people work 6. Markets are becoming more diverse (gay, national, ethnics)

types of markets

1. Consumer markets: sell to end consumer 2. Business markets: business to business 3. Reseller markets: resell products for profits 4. Government markets: government buys for public service 5. International markets: buy/sell in different countries

Strategic Planning Process:

1. Define a mission 2. Set company's objectives 3. Design a business portfolio 4. Develop detailed marketing plan

Analyzing The Current Business Portfolio

1. Identify strategic business units (SBUs) 2. Assess the attractiveness of its various SBUs 3. Decide how much support each SBU deserves

Marketers obtain information from

1. Internal data 2. Marketing intelligence 3. Marketing research

purpose and problem with big data

1. May provide marketers with rich, timely customer insights 2. Requires a large amount of resources

Reasons for Downsizing

1. Rapid growth of the company 2. Lack of experience in a market 3. Change in market environment 4. Decline of a particular product (age and die)

Boston Consulting Group: Growth-Share Matrix

1. Star: high growth , high share 2. cash cows: low growth, high share 3. question marks: high share, low growth (lot of cash to hold their share) 4. Dogs: low growth, low share (make enough to maintain themselves)

Changes in economic environment (macro)

1. changes in customer spending: Value marketing involves offering financially cautious buyers greater value—the right combination of quality and service at a fair price (McD value menu) 2. income distribution : Over the past several decades, the rich have grown richer, the middle class has shrunk, and the poor have remained poor.

Info customer insights

1. insight into customers needs and wants 2 difficult to obtain because customers don't know what they want - and what and why they buy

Marketing is all around you

1. product placement 2. social media endorsement

types of market intermediaries

1. resellers : don't make , but help company find customers (Walmart) 2. physical distribution firms: distribute products (amazon) 3. marketing service industries : help with market resrach, ads, target market (dont sell) 4. financial intermediaries : banks help buyers and sellers get what they want

views on responding to the marketing environment

1. uncontrollable: React and adapt to forces in the environment 2. proactive: •Take aggressive actions to affect forces in the environment 3. reactive : •Watch and react to forces in the environment

societal vs marketing concept

1......The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company's existing products, and calls for heavy selling and promotion to obtain profitable sales (short term slaes and dont care who buy) 2....an outside-in perspective. As Herb Kelleher, the colorful founder of Southwest Airlines, once put it, "We don't have a marketing department; we have a customer department." focus on customer needs and integrate departments to reach needs

publics

Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives:

Strategic business units can be a

Company division (Beverages) Product line within a division (soft drinks) Single product or brand (Diet Pepsi)

Product concept:

Consumers favor products that offer the most quality, performance, and features. 1. focus on continuous market improvement 2. only on products lead to mareky myopia

Production concept:

Consumers will favor products that are available and highly affordable. 1. low labor costs, high production efficiency, and mass distribution. 2. can lead to market myopia: lose sight of customers

Selling concept:

Consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort. 1. with unsought goods—those that buyers do not normally think of buying, such as life insurance or blood donations 2. track down and sell on product benefits

Co-create value

Consumers wish to co-create value through active involvement during the process. Ex. Lego: online community competition to make a set, vote on the project, the winner gets portion and credit

To Determine Target Market: Use Market Segmentation

Create groups of consumers that differ in some way Geographical Demographics Behavioral

Market Planning—Parts of a Marketing Plan

Executive summary, marketing situation, t threats and opportunities, objective and issues, marketing strategy, action programs, budgets, controls

types of publics

Financial publics: banks, stakeholders Media publics: tv, news Government publics: state, public policy Citizen-action publics: environment, MAD Local publics: community you work with General public: public image Internal publics: employees, managements

An effective mission statement should be:

Focused on markets rather than products Achievable Motivating Specific

Trends in the Natural Environment

Growing shortages of raw materials Increased pollution Increased government intervention Developing strategies that support environmental sustainability

Political and Social Environment: what customers ask for

Increased emphasis on ethics Socially responsible behavior Cause-related marketing

Marketing concept:

Know the needs and wants of the target markets and deliver the desired satisfactions better than competitors. 1. the marketing concept is a customer-centered sense-and-respond philosophy. 2.

Political and Social Environment (macro)

Legislation regulating business is intended to protect 1. companies from each other 2. consumers from unfair business practices 3. the interests of society against unrestrained business behavior

The Changing Marketing Landscape

Not-for-profit marketing growth: Rapid globalization Sustainable marketing

Organizational mission leads to objectives

Objectives are : 1. Specific Measurable Action commitments Ex: market standing : make brands number one in the field

Brand awareness

Smart marketers orchestrate several services and products, thereby creating brand experiences for consumers.

1.5 classifies customers into one of four relationship groups, according to their profitability and projected loyalty

Strangers show low potential profitability and little projected loyalty. Butterflies are potentially profitable but not loyal. True friends are both profitable and loyal. Barnacles are highly loyal but not very profitable.

A Modern Marketing System

Suppliers-->company & competitors -->market intermediaries--->Final Consumer

Societal marketing:

The company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests. 1. improve customer and society well being

3 Key Elements of a Mission Statement

The organization's history The organization's distinctive competitiveness The organization's environment

Integrated marketing program

a comprehensive plan that communicates and delivers the intended value -blend the four Ps

product differentiation

a positioning strategy that some firms use to distinguish their products from those of competitors

Strategic Business Unit (SBU)

a subgroup of a single business or collection of related businesses within the larger organization

Customer insights

afresh marketing information-based understandings of customers and the marketplace -- basis for creating customer value, engagement, and relationships.

Internal databases

are collections of consumer and market information obtained from data sources within the company network. Ex: •customer satisfaction and service records •records of sales, costs, and cash flows •reports on production, shipments, and inventories -accessed more quickly and cheaper

Marketing intermediaries

are firms that help the company to promote, sell, and distribute its goods to final buyers.

Demands

are human wants that are backed by buying power.

Secondary beliefs and values

are more open to change and include people's views of themselves, others, organizations, society, nature, and the universe.

Core beliefs and values

are persistent and are passed on from parents to children and are reinforced by schools, churches, businesses, and government.

Market offerings

are some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

needs

are states of felt deprivation.

Wants

are the form human needs take as they are shaped by culture and individual personality.

Cultural Environment

consists of institutions and other forces that affect a society's basic values, perceptions, and behaviors.

Microenvironment

consists of the actors close to the company that affect its ability to serve its customers, -the company, suppliers, marketing intermediaries, customer, competitors, and publics

Macroenvironment

consists of the larger societal forces that affect the microenvironment—demographic, economic, natural, technological, political, and cultural forces.

Marketing actions

create, maintain, and grow desirable exchange relationships.

Customer satisfaction

depends on the product's perceived performance relative to a buyer's expectations. If the product's performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied.

competitors

gain strategic advantage by positioning offerings strongly against competitors

Main bases of segmentation

geographic, demographic, behavioral-rate of usage, loyalty psychographic-lifestyle, attitudes

Big Data:

huge and complex data sets generated by today's information generation, collection, storage and analysis technologies -customer insights teams, headed by a senior marketing executive with representatives from all of the firm's functional areas. For example, Coca-Cola's vice president of marketing strategy and insights heads up a team of 25 strategists who develop strategy based on marketing research insights.

The marketing environment

includes the actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers.

Market development

involves identifying and developing new markets for its current products. For instance, managers could review new demographic markets. Perhaps new groups—such as seniors—could be encouraged. -current product, new market

Product development i

involves offering modified or new products to current markets such as by moving into new product categories. -new product, current market

Diversification

involves starting up or buying businesses beyond its current products and markets. For example, the company could acquire a company that operates in different market segments with a different product mix. -new product, new market

Digital and social media marketing

involves using digital marketing tools such as web sites, social media, mobile ads and apps, online videos, e-mail, and blogs that engage consumers anywhere, at any time, via their digital devices.

Value chain (partnering with other company departments - internal)

is a series of departments that carry out value creating activities to design, produce, market, deliver, and support a firm's products.

Marketing myopia

is focusing only on existing wants and losing sight of underlying consumer needs. Ex: Netflix and Blockbuster partnership-no partnership and went bankrupt

Generational marketing

is important in segmenting people by lifestyle or life stage instead of age.

Exchange

is the act of obtaining a desired object from someone by offering something in return.

Market positioning

is the arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consume

Marketing management

is the art and science of choosing target markets and building profitable relationships with them. -What customers will we serve (target market)? -How can we best serve these customers (value proposition)?

The business portfolio

is the collection of businesses and products that makeup the company.

Marketing strategy

is the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships.

mission statement

is the organization's purpose; what it wants to accomplish in the larger environment. 1. what is business 2. who are customers 3. what do customers value 4. what will our business do ?

changes in the natural environment (MAcro)

is the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities.

Strategic planning

is the process of developing and maintaining a strategic fit between the organization's goals and capabilities, and its changing marketing opportunities.

Market targeting

is the process of evaluating each market segment's attractiveness and selecting one or more segments to enter.

value proposition

is the set of benefits or values it promises to deliver to customers to satisfy their needs -better than competitors Ex:•Facebook helps you "connect and share with the people in your life"

Competitive marketing intelligence

is the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment. -monitor internet buzz -observe consumers first hand -

Customer equity

is the total combined customer lifetime values of all of the company's customers across all brands sold by that company.

ultimate goal of customer relationship management

is to produce high customer equity

Portfolio analysis

part of strategic planning where management evaluates the products and businesses that make up the company.

marketing mix

product-the firm must first create a need-satisfying market offering price-It must then decide how much it will charge for the offering promotion-it must engage target consumers, communicate about the offering, and persuade consumers of the offer's merits place-and how it will make the offering available to target consumers

Consumers market when they

search for products interact with companies to obtain information make purchases

market

set of actual and potential buyers

Marketing Analysis: SWOT Analysis

strengths, weaknesses, opportunities, threats

customer-perceived value

the customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers.

Customer relationship management

the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

A product's position

the place it occupies relative to competitors' products in consumers' minds.

shared value,

which recognizes that societal needs, not just economic needs, define markets. Nestle: research to wean customers of sugars. Leads to healthier alternatives for its customers and societal benefits as well.

Generations

•Baby Boomers - born 1946 to 1964 •Generation X - born between 1965 and 1976 •Millennials - born between 1977 and 2000 •Generation Z - born after 2000

Demographic environment

•Demography is the study of human populations—size, density, location, age, gender, race, occupation, and other statistics. •Demographic environment involves people, and people make up markets. •Demographic trends include changing age and family structures, geographic population shifts, educational characteristics, and population diversity.

Problems with Matrix Approaches

•Difficulty in defining SBUs and measuring market share and growth •Time consuming •Expensive •Focus on current businesses, not future planning

Technological Environment (Macro )

•Most dramatic force in changing the marketplace •New products, opportunities •Concern for the safety of new products (privacy, identity theft, card info)

Return on Marketing Investment (Marketing ROI)

•Net return from a marketing investment / by the costs of the marketing investment •Measurement of the profits generated by investments in marketing activities

Suppliers

•Provide the resources to produce goods and services •Treat as partners to provide customer value •Can greatly impact normal operations 1. rising supply costs 2. shortages 3.natural disasters Ex: BP and the oyster industry

Takes other company groups into account.

•Top management •Finance •R&D •Purchasing •Operations •Accounting

Marketing Implementation

•Turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives •Addresses who, where, when, and how