principles of marketing exam 1 (chpt 1-5 + microecon)

The set of strategies and activities by which companies acquire customers, build strong customer relationships, and create superior customer value in order to capture value from customers in return.

The difference between a consumer's actual state and some ideal or desired state

Physical needs (food, water), Social needs (belonging, affection), Individual needs (learning, self-expression)

A desire for a particular product that is used to satisfy a need. Wants are culturally and socially influenced

Want + Buying power

NO

1. Needs and wants
2. Market offerings
3. Markets
4. Exchanges and relationships
5. customer value and satisfaction

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

paying too much attention to the market offerings and not customer wants and needs s

kodak cameras, colgate tv dinner, crystal pepsi

The set of actual and potential buyers of a product of service

The act of obtaining a desired object from a person or an organization by offering something in return

the value a consumer expects to obtain from a purchase (people value different attributes about a product based on their cultural/social environment)

the segment of customers a company intends to pursue

the benefits you promise to provide to satisfy customer needs

the extent to which a product's perceived performance matches a buyer's expectations

Customer satisfaction - firms seek to DELIGHT customers by exceeding expectations

the value of the entire stream of purchase that a single customer would make over a lifetime of patronage.

the total combined customer lifetime values of all of the company's current and potential customers

the portion of the customer's purchasing that a company gets in its product categories

Apple watch - fits into many different categories

a good mission statement is reflected by an external focus (what needs you are trying to satisfy) instead of an internal focus (what you are offering in the present)

SMART - Specific, Measurable, Attainable, Relevant, and Time-Bound

Revenue and sales, profitability, ROI, productivity, product development, customer satisfaction, social responsibility, etc.

-Analyze its current business portfolio or strategic business units (SBUs);
-Decide which SBUs should receive more, less, or no investment;
-Develop strategies for growth and downsizing.

A unit of the company that has a separate mission and objectives that can be planned independently from other company businesses

the process by which management evaluates the products and businesses that make up the company

a portfolio analysis model developed by the Boston Consulting Group that assesses the potential of successful products to generate cash that a firm can then use to invest in new products

Market Growth Rate (high v. low) = y axis
Relative Market Share (high v. low) = x axis

Products with high market share in a high growth market. Can become the next cash cow.

-(lower left quadrant) are in low-growth markets but are high market share products
the funds from the cash cow are harvested to invest into the stars and possible promising question marks

- (upper right quadrant) appear in high-growth markets but have relatively low market shares
require lots of resources to maintainrow market share
managers must decide whether to invest in them in hopes they become stars OR let them die out and fall into dog category

-(lower right quadrant) are in low-growth markets and have relatively low market shares.
Although they may generate enough resources to sustain themselves, dogs should be phased out unless they are needed to complement or boost the sales of another product or for competitive purposes.

looks at new products, existing products, new markets, and existing markets for company growth opportunities

A tool for deciding how to grow the business - broken up into 4 quadrants = market penetration, product development, market development, and diversification

Existing product, Existing market - increasing sales of current products to current market segments.
Common tactics: increase advertising, cut prices, frequent shopper programs, increase distribution

Existing Products, New market - selling current products to new customer segments
common tactics - communicate different usesenefits of the product (advertise in different media, expand geographically)

new product, existing market - selling new products to current market segments
common tactics: new flavors of same product (oreos, m&m's), planned obsolescence (products made to become unusable in a short amount of time so people buy the next new version.

new product new market - starting up or buying businesses outside of the firm's current products and consumer segments
common tactics : acquisitions

1. Perform a situation analysis (SWOT)
2. Develop marketing strategies
3. Implement
4. Monitor and control (marketing metrics)

Strengths Weaknesses Opportunities Threats

y-axis - internal/external
x-axis - positive/negative

the process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics

evaluate each potential segment and decide which of these groups they will invest resources to try to turn them into customers

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

Studying the marketing environment allows marketers to take advantage of opportunities as well as combat threats

Actors close to the company that affect its ability to serve customers

larger societal forces that affect the microenvironment

Company Itself, suppliers, marketing intermediaries, customer markets, competitors, publics

areas/dept. inside a company
affects the marketing department's planning strategies
all departments must "think consumer" ad work together to provide superior customer value and satisfaction

important link in the overall customer value delivery system
provide resources to produce goods and services
often treated like partners in creating and delivering customer value

help the company promote, sell, and distribute its goods to the final buyers - resellers, physical distribution firms, marketing service agencies, financial intermediaries

rubbermaid did not. want to comply with walmart, so walmart moved their product to the bottom shelves. their shares dropped from $50 to $20

marketers must seek to gain strategic advantage against competitive organizations

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

financial public
media public
govt. public
citizen-action public
local public
general public
internal public

companies may target any or all types of markets hat may purchase a company's goods and services

the company and all other actors operate in a larger macroenvironment of forces that shape opportunities and pose threats to the company

demographic, economic, natural, technological, political, cultural

consists of factors that affect consumer purchasing power and spending patterns

changes in income (1990s, consumptions frenzy, record debt, crisis leads to frugality), income distribution (upper class wealthier, middle class shrinking, underclass poorer)

consumers practice a certain amt of thrift to justify blowing a larger sum frivolously

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

shortage of raw materials
increased pollution
increased government intervention

most dramatic force shaping our destiny. changes rapidly, creating new markets and opportunities and/or danger of products becoming obsolete

laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society

society's major cultural views are expressed in people's views of:
- themselves
- others
- organizations
- society
- nature
- the universe

demography - the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics

gender, diversity, families, geographic shifts, age, education

systematic design and execution of initiatives to collect, analyze, and report data, information, and insights relevant to a specific marketing situation facing an organization

often the most difficult step in the research process -> finding the problem

can the info be acquired from existing data? - secondary data
if not, primary research will be necessary (data collected to specifically address the question at hand.

secondary data can be used to learn about potential new customers and how current customers view your offering

paid for reports. research firms collect large amounts of data about consumer opinions, trends, demographics, industries, etc.

customer databases tracking behavior on site, customers service calls, purchases, etc.

data warehousing and data mining - examples: safeway club, scanner data, sales reports, inventory reports

exploratory, causal, descriptive, customer interviews, focus groups, case studies, ethnographics, lab research, field studies, cross-sectional, longitudal

discovery of ideas or insights - generally provides qualitative datat (small scale studies) with in depth probing of a few consumers who fit the profile of the "typical consumer"

interviews- useful to discover latent purchase motives

known to consumers and admitted to researcher

unknown to consumers or consumers are reluctant to admit them

a group of people who are asked about their attitude towards a product, service, advertisement or new style of packaging

unobtrusive method - research simply records the consumer's behavior, often without their knowledge

nonhuman devices record behavior (cookies)

research methods that describe market and consumer characteristics and functions. large samples and quantitative data, most surveys fall into this category

experiments involve selecting matched group of subjects, giving them different treatments, controlling unrelated factors, and checking for differences in group responses. only type of research that potentially can demonstrate that a change in one variable CAUSES a predictable change in another variable

process by which participants are selected

the researcher selects the easiest population members from which to obtain information

the researcher uses their own judgement to select population members who are good prospects for accurate information

the researcher finds and interviews a prescribed number of people in each of several categories. `

managing information about individual customers and carefully managing customer touch points in order to maximize customer loyalty

the analysis tools, technologies, and processes by which marketers dig out meaningful patterns in big data to gain customer insights and gauge marketing performance

wealth changes, substitutes/complements, tastes and preferences

prices of substitutes decrease, prices of complements increase, income or population decreases, tastes and preferences turn against the product.

prices of substitutes increase, prices of complements decrease, income or population increases, tastes and preferences turn in favor of the product

input costs, technology

(DEC) sellers expect price to rise in future, price of labor/input increases, govt. or union restrictions increase cost, price of substitute in production rises, price of product jointly falls, number of sellers declines

(INC) sellers expect price to decline in future, price of labor/input falls, govt. or union restrictions lowers cost, price of substitute in production falls, price of product jointly rises, number of sellers increases

environment -> buyer's decision processing -> buyer's responses

Marketing stimuli: product, price, place, promotion

Other: economic, technological, social, cultural

buyer's characteristics, buyer's decision process

buying attitudes and preferences
purchase behavior: what the buyer buys, when, where, and how much
brand engagements and relationships.

Culture, Social, Personal, Psychological

Culture (national, large) and Subculture (ethnicacial communities within larger national identity)

Groups, social networks, influencers.
family
roles and status

Age and life stage, occupation, economic situation, environmental situation, lifestyle, personality and self-concept

motivation, perception, learning, beliefs and attitudes

the most basic cause of a person's wants and behavior - learned from society, family and other institutions.. culture reflects basic values perceptions, wants, and behaviors

membership, reference, and aspirational groups
marketers attempt to reach opinion leaders within groups important to target market

strongly influences buying behavior (gender stereotypes for certain types of purchases. children are influential and have substantial disposable income of their own

Role = expected activities
status = esteem given to role by society

a person's pattern of living as expressed in his or her activities interests and opinions

segmentation system using demographic, behavioral, and lifestyle factors to classify American households into segments

the unique psychological characteristics that distinguish a person or group
generally defined in terms or traits

people associate brands with certain personalities (ex: north face = rugged, redbull = excitement)

a motive is a need that is sufficiently pressing to direct the person to seek satisfaction

do something to get your message noticed

people will interpret it based on beliefs

make sure the mess age makes it all the way to memory so the consumer can use that information when they need to retrieve it in making purchase decisions

The process that occurs whenever the consumer recognizes a difference between his current state of affairs and some desired or ideal state; this recognition initiates the decision-making process.

marketers should activate problem recognition - advertise benefits, generate concern about existing state

personal sources, commercial sources, public sources, experiential sources

identify consideration set
narrow list and compare pros and cons
use evaluative criteria to decide among remaining choices

educate customers about which product attributes should be considered
when brand is not part of the consideration set
- product improvement + advertising
- induce trial
- striking package designs and display
- coupons, rebates

rational choice suggests that we should evaluate all the information about the alternatives, weight it all and make an optimal choice. people may make choice based on HEURISTICS

country of origin, price = quality, brand name

how good was the choice? customer satisfaction (exceed expectation/delight?), ultimately affects future decisions and word of mouth communication

awareness, interest, evaluation, trial, adoption

consumer becomes aware of the new product but lacks information about it

consumer seeks information about a new product`

consumer considers whether trying the new product makes sense

consumer tries new product on a small scale to improve his or her estimate of its value

consumer decides to make full and regular use of the new product