MKT Exam 1 Chap 1-7
strategic targeting
Focuses on customers whose needs the company can fulfill by ensuring that its offerings are customized to their needs deliberate choice to ignore some customers and better serve others
intervening factors - types of perceived risk
Functional risk Physical risk Time risk Financial risk Psychological risk Social risk
5 basic markets
Resource consumer Intermediary Manufacturer Government
Consumer Behavior
The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.
internal marketing
The task of hiring, training, and motivating able employees who want to serve customers well
relationship marketing
aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business - customers - employees - marketing partners - financial community
allocating resources
assess each SBU's competitive advantage and the attractiveness of the market in which it operates: - grow - harvest - hold
Crafting a positioning statement
attributes that describe the offering vs benefits delivered by the attributes
Marketing Definition
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
Achieve optimal outcomes when a firm aligns customer value and customer profile
- Effectiveness: company is able to reach all strategically viable customers - Efficiency: company communication and distribution reaches only the customers it has targeted
Points-of-parity (POPs)
Attribute/benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands
Points-of-difference (PODs)
Attributes/benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand
Buyer-Supplier Relationships - Relevant forces
Availability of alternatives Importance of supply Complexity of supply Supply market dynamism
Good mission statements
Focus on a limited number of goals Stress major policies and values Define major markets the company aims to serve Take a long-term view Short, memorable, meaningful
Value across 3 domains
Functional value- performance related Psychological- emotional related Monetary value- cost related
Managing B2B Relationships
relationship between supplier and customer - loyalty - one-to-one marketing
integrated approach to managing strategy and tactic
relationship marketing integrated marketing internal marketing performance marketing
customer value analysis
reveals the company's strengths and weaknesses relative to those of various competitors
post purchase behavior
satisfaction, actions, uses and disposals
Role of the buying center
seek the best value from fewer and better suppliers
targeted marketing
sell different products to all the different segments of the market different customers have different wants/needs
marketing forces
shape the relationships among different market entities - technology - globalization - physical environment - social responsibility
Cons of research plan
small samples, results may not be generalized
Buying Decision Process
1. Problem recognition 2. Information search 3. Evaluation of alternatives 4. Purchase decision 5. Post-purchase behavior
single segment targeting
niche marketing> focus on smaller, well-defined group of customers that seek a distinctive mix of benefits
mass customization
ability of a company to meet each customer's requirements - to prepare on a mass basis individually designed products, services, programs, and communications
Stages of the business buying process
1. problem recognition 2. need description 3. product specification 4. supplier search 5. proposal solicitation 6. supplier selection 7. contract negotiation 8. performance review
psychographic segmentation
Buyers are divided into groups on the basis of psychological/personality traits, lifestyle, or values
Enhancing Services
Add high quality services to product offerings to provide value and establish ties with customers bundle services to improve customer satisfaction and increase profits
product value analysis
An approach to cost reduction that studies whether components can be redesigned, standardized, or made by cheaper methods of production without adversely affecting product performance.
marketing mix modeling
Analyzes data from a variety of sources to understand more precisely the effects of specific marketing activities
target compatibility
Can the company create superior value for target customers? reflection of the company's ability to outdo the competition in fulfilling the needs of target customers
Target Attractiveness
Can these customers create superior value for the company? ability of a market segment to create superior value for the company > monetary and strategic value
supplier search
Catalog sites Vertical markets Buying alliances "Pure Play" auction Private exchanges Spot and barter markets
Secondary Data Sources
Data collected for another purpose and already exist somewhere
Defining the customer profile
Demographic Factors Geographic factors Behavioral Factors Psychographic factors
Segmenting Business Markets
Demographic factors Operating variables Purchasing approaches Situational factors Personal characteristics
evaluating a marketing plan
Is the plan simple and succinct? Is the plan complete? Is the plan specific? Is the plan realistic?
Behavioral Segmentation
Marketers divide buyers into groups on the basis of their actions: user status, usage rate, buyer-readiness stage, loyalty status, occasions
Model of Consumer Behavior
Marketing Tactics & Market Context -> Consumer characteristics/psychology -> Buying decision process & Purchase decisions
Measuring Market Demand
Measure and forecast the size, growth, and profit potential of new opportunities
Positioning as storytelling
Narrative branding - setting - cast - narrative arc - language
problem recognition
Someone in the company recognizes a problem or need that can be met by acquiring a good or service
market outcomes
Stem from the interplay of market forces - new consumer capabilities - new company capabilities - new competitive environment
Developing market offerings
Strategy involves choosing a well-defined market in which the company will compete and determining the value it intends to create in the market. Tactics, or marketing mix, make the company's strategy come alive.
Developing Effective Business Marketing Programs
Systems selling Additional services Customer reference programs Online and offline communications and branding
Analysis and Decision Making
Tabulate the data and develop summary measures market data vs market insights
performance review
The buyer periodically reviews the performance of the chosen supplier(s)
problem recognition
The buyer recognizes a problem/need triggered by internal/external stimuli
Successive Sets Involved in Consumer Decision Making
Total Set Awareness Set Consideration Set Choice Set Choice
customer value proposition
based on the difference between benefits the customer gets and the cost they assume for different choices
Proposal solicitation
buyer invites qualified suppliers to submit proposals
new task buying situation
buys a product or service for the first time
positioning statement
communicating an offering's category membership along with points of parity and points of difference and developing a narrative to convey the offering's positioning
effective marketing audit
comprehensive systematic unbiased periodic
Institutional Markets
consist of schools, hospitals, nursing homes, and prisons that provide goods and services to people in their care
monetary value
cost revenues costs of serving customers - expenses for tailoring offerings - expenses for communicating offerings - expenses for delivering offerings
becoming customer oriented organization
create long-term customer value listen and respond to customers
Developing a Value Proposition
customer value collaborator value company value an optimal value proposition balances the value for customers, collaborators, and the company
Primary data source
data freshly gathered for a specific purpose or project
memory processes
encoding> the more attention we pay to the meaning of info during encoding, the stronger the resulting associations in memory will be retrieval> info may be available in memory but not be accessible for recall without the proper retrieval cues or reminders
context
environment in which the company and its collaborators operate
long-term memory
episodic memory: storing info about events that we have experienced in our lives semantic memory: storing info about the world, such as facts meanings and concepts procedural memory: knowing how to perform certain procedures such as walking, talking, and riding bike
Holistic Marketing
essential approach to succeeding in the rapidly evolving market - relationship marketing - integrated marketing - internal marketing - performance marketing
Performance Marketing
financial accountability, environmental impact, social impact
Cash-flow metrics pathway
focuses on how well marketing expenditures are achieving short-term returns
Choosing Frame of Reference
frame of reference serves as a benchmark against which customers can evaluate the benefits of a company's offering good starting point in defining a competitive frame of reference for brand positioning is category membership
Buying Center Dynamics
participants with differing interests, authority, status, and susceptibility to persuasion, and sometimes with very different decision criteria individuals are making decisions on behalf of the organizations
Tactical Targeting
identifies the ways the company can reach these strategically important customers strategically reach all important customers in an effective and cost-effective manner
reference groups (social factor)
include all the groups that have a direct or indirect effect on a person's beliefs, decisions, and behavior
Ultimate targeting - one-to-one approach
individualized offerings, messages, and media easier to do as firms grow and gather information
target customers
individuals or organizations whose needs the company plans to fulfill
Diversified Portfolio
involves SBUs with broad assortments containing multiple product lines
specialized portfolio
involves SBUs with narrow assortments consisting of one or a few product lines
Customer metrics pathway
looks at how prospects become customers, from awareness to preference to trial to repeat purchase, or some less linear model
Buying Center
many people impact the buying decision of an organization (initiators, users, influencers, deciders, approvers, buyers, gatekeepers)
selective attention
marketers must work hard to attract the notice of consumers
market exchange
marketers view industry as a group of sellers and use the term market to describe customer groups
market potential
maximum sales available to all firms in an industry during a given period, under a given level of industry marketing effort, and under extant environmental conditions
Emotions
mental states that arise spontaneously rather than from conscious effort and reflect people's positive/negative reactions to internal/external stimuli
Perception
process by which one selects/organizes/interprets information to create a meaningful picture of the world Selective attention subliminal perception selective distortion
Targeting Multiple Segments
product specialization: sell certain products to several segments market specialization: sell many products to a single segment
marketing dashboards
provide all up-to-the-minute info necessary to run the business operations for a company 4 key pathways for dashboards
straight rebuy
purchasing department reorders items
Unit metrics pathway
reflects what marketers know about sales of product/service units
need description
the buyer determines the needed item's general characteristics and the required quantity
company demand
the company's estimated share of market demand at alternative levels of company marketing effort in a given time period
company sales forecast
the expected level of company sales based on a chosen marketing plan and an assumed marketing environment - sales quota - sales budget
Marketing Research
the function that links the consumer, customer, and public to the marketer through information - info used to identify and define marketing opportunities and problems > generate, refine, and evaluate marketing actions; monitor performance; improve understanding of marketing as a process
market forecast
the market demand corresponding to the level of industry marketing expenditure
total customer cost
the perceived bundle customers will incur in evaluating, obtaining, using, and disposing of the given market offering
Targeting
the process of identifying customers for whom the company will optimize its offering
category membership
the products or sets of products with which a brand competes and which function as close substitutes
Company sales potential
the sales limit approached by company demand as company marketing effort increases relative to that of competitors
selective distortion
the tendency to interpret information in a way that fits our preconceptions consumers will often distort info to be consistent with prior brand and product beliefs and expectations
collaborators
work with the company to create value for target customers
Organizing the marketing department
* Functional organization * Geographic organization * Product or brand organization * Market organization * Matrix organization
demographic segmentation
- Age: our wants and abilities change with age - Life cycle stage: person's major concern (marriage, kids, retirement) - Gender: men/women have different attitudes and behave differently - Income: income segmentation - Race & Culture
Evaluation of Alternatives
- Beliefs and attitudes - Info processing - Expectancy Value Model
4 planning activities
- Defining the corporate mission - Building the corporate culture - Establishing strategic business units - Assigning resources
new competitive environment
- Deregulation - Privatization - Retail transformation - Disintermediation - Private labels - Mega-brands
Mass Marketing
- Firm ignores segment differences and goes after the whole market with one offer - Product with a superior image that can be sold to the broadest number of buyers - Mass distribution and mass communications - Arguments for: largest potential market, lowest cost per person, leads to lower prices or higher margins
POP vs POD
- Multiple Frames of Reference: common if competition widens or the firm plans to expand into new categories - Straddle Positioning: one set of POD & POP, POD for one category may become POP for another category or vice versa, allows brands to expand market coverage and customer base - Perceptual/positioning maps: visual representations of consumer perceptions and preferences, allow brands to find holes or unmet needs
Selling and Buying Centers
- Who are the major decision participants? - What decisions do they influence, and how deeply? - What evaluation criteria do they use?
Strategic Business Unit (SBU)
- a single business or collection of businesses that can exist separately from the rest of the company - has its own set of competitors - has a manager responsible for strategic planning and profit performance, who controls most of the factors affecting profit
Communicating category membership
- announcing category benefits - comparing to exemplars - relying on product descriptor
New consumer capabilities
- 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 or annoying - can extract more value from what they already own
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
purchase decision
- decision heuristics- rule of thumb - level of consumer involvement> elaboration likelihood model - intervening factors
Developing a Marketing Plan - 3 functions
- describes the company's goal and proposed course of action - informs the relevant stakeholders about the goal and action plan - persuades the relevant decision makers of the viability of the goal and the proposed course of action
POD criteria
- desirable to consumer - deliverable by company - differentiating from competitors
Becoming a Market-Driven Company
- develop company-wide passion for customers - organize around customer segments instead of products - understand customers through qualitative and quantitative research
Contents of a Marketing Plan
- executive summary: elevator pitch - situation overview: overall evaluation of the environment - G-STIC section: core of the marketing plan - exhibits
Data Mining
- identify prospects - decide which customers should receive a particular offer - deepen customer loyalty - reactivate customer purchases - avoid serious customer mistakes
3 Key areas of Corporate & business unit planning
- managing the company's business as an investment portfolio - assessing the market's growth rate and the company's position in that market - developing a viable business model
Defining the Corporate Mission
-A mission is a clear, concise, and enduring statement of the reasons for an organization's existence -Often referred to as its core purpose, a company's mission is a long-term goal that provides company employees and management with a shared sense of purpose, direction, and opportunity.
Who does marketing research?
-Marketing departments in big firms -Syndicated-service research firms (info sold for fee) -Custom marketing research firms (specific projects) -Specialty-line marketing research firms (specialized research)
G-STIC Approach
-Set a goal -Develop a strategy -Design the tactics -Define an implementation plan -Identify a set of control metrics
contract negotiation
-buyer negotiates the final order, including listing technical specifications, quantity needed, expected time of delivery, return policies, and warranties -blanket contracts vs periodic purchase orders -long-term contracts to ensure supply -vendor-managed inventory
Research Approaches
-observational> ethnographic -survey research -behavioral
strategic value
-social value: influence of target customers on other potential buyers -scale value: worth of the information that customers provide -information value: worth of the info customers provide
Customer Value analysis steps
1. Identify the relevant attributes and benefits that customers value 2. Assess the relative importance of these attributes and benefits 3. Assess the company's and competitors' performances on the key attributes/benefits 4. Monitor customer values over time 5. The seller at a disadvantage has 2 alternatives a) increase total customer benefit b) decrease total customer cost
Supplier Selection
Before selecting a supplier, the buying center will specify and rank desired supplier attributes evaluate vendors (price, reputation, reliability, agility)
POP Forms
Category- essential attributes for credible offering in category Correlational - negative associations that arise from existence of positive associations Competitive- associations designed to overcome perceived weakness of brand
Communicating conflicting benefits
Challenge: consumers want to maximize both of the negatively correlated attributes or benefits - develop a product or service that performs well on both dimensions - launch 2 different marketing campaigns> devoted to different brand attributes/benefits
modified rebuy
Change of product specifications, prices, delivery requirements, or other terms
Business market
Consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.
4 Key psychological processes that influence consumer responses
Consumer motivation Perception Learning Memory
What influences consumer behavior?
Cultural Factors Social Factors Personal Factors
5 C's
Customers Competitors Collaborators Context Company
Creating sustainable advantage - 3 core strategies
Differentiate on an existing attribute Introduce a new attribute Build a strong brand
Developing a positioning strategy
Positioning: act of designing a company's offering and image to occupy a distinctive place in the minds of the target market the goal is to instill the brand in the minds of consumers to maximize the potential benefit to the firm
Total Customer Benefit
The perceived value of the bundle of functional, psychological, and monetary benefits customers expect from a given market offering because of the product, service, and image
marketing metrics
The set of measures that helps marketers quantify, compare, and interpret marketing performance
competitive advantage
ability to perform in one or more ways that competitors cannot or will not match - leverageable advantage
Scope of Marketing
about identifying and meeting human/social needs
competitors
aim to fulfill the same needs of the same customers that the company is targeting
company
develops and manages a given market offering
integrated marketing
devise marketing "the whole is greater than the sum of its parts"
geographic segmentation
divides the market into different geographical units such as nations, regions, states, counties, cities, or even neighborhoods
market demand
the total volume that could be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program
brand metrics pathway
tracks the longer-term impact of marketing through brand-equity measures that assess both the perceptual health of the brand from customer and prospective customer perspectives and the overall financial health of the brand
elaboration likelihood model
two ways to persuade: - central route> follow if consumer possesses sufficient motivation/ability/opportunity - peripheral route> attitude formation provokes less thought/ comes from consumer brand associations
subliminal perception
unconscious messaging
Consumer motivation
understanding begins with understanding the needs consumers aim to fulfill with their actions - basic human requirements, biological & psychological - wants shaped by society - demand backed by ability to pay a need becomes a motive when it is aroused to a sufficient level of intensity to drive us to act
Pros of research plan
useful first step in exploring consumers' perception, respondents may be less guarded and may reveal more about themselves in the process
associative network memory model
views memory as a network of nodes and connecting links, nodes represent stored information or concepts, and links represent the strength of association between the nodes Marketers want to activate these brand-related nodes brand associations- all brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes that become linked to the brand node
