Term
Consumers may not know or can't describe what they need.
Need : Food (Apple) Want (Chips)
The Challenge of New Products: (2)
Focus on the consumer benefit
learn from the past |
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| Marketing seeks to discover consumer needs through research and then to satisfy them with a market program. |
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Potential Consumers (The Market) give information about needs
Organizations Marketing Department: Discovers consumer needs and creates concepts for product to satisfy consumer needs.
Create goods services and ideas |
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Satisfy customer needs by combining:
The Four P's (Controllable Marketing Mix Factors) |
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Definition
Product,
Price,
Promotion (Communication),
Place (distribution) |
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Term
| Uncontrollable Environmental Forces (5) |
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Definition
| Social, Economic, Technological, Competitive, Regulatory |
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Customer Value: Combination of Buyers' benefits (Including quality, convenience, delivery, service) vs. Price Paid
Value Strategies : (3)
Best Price
Best Product
Best Service |
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Relationship Marketing:
Links the organization to its individual customers, employees, suppliers and other partners for their mutual long term benefits
Creating a personal, ongoing relationship between the organization and it's individual customers |
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Marketing Program:A plan that integrates the marketing mix to provide an offering to the target market
3M's strategy - Goal, Strategy, Developmarketing program
*Post it flag highlighter |
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Four different orientations in the history of American Business:
Production (As long as they produce a customer will buy - women's razors
Sales (1920)
Market Concept (1950)
Customer Relationship (1990)
Market Orientation |
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Products, Services and Ideas are marketed
Who Buys products?
Ultimate Consumers
Organizational Buyers |
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Ultimate Users:The people who use the goods and services purchased for a household
Organizational Buyers:Those who manufacture, wholesale retailers, and government agencies that buy goods and services for their own use or resale |
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| Organizations, consumers, society benefit from marketing by UTILITY: The benefits or customer value received from the purchase of a product |
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| Marketing is the activity for creating, communicating, delivering and exchanging offerings that benefit the organization, its stake holders and society at large |
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| Exchange- the trade of things of value between buyer and seller so that each is better off after the trade |
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| A market consists of people with both the desire and the ability to buy a specific thing |
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| A target market:One or more specific groups of potential consumers toward which an organization directs its marketing program |
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| A marketing mix consists of the marketing manager's controllable factors- product, price promotion and place |
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| Customer value proposition:The cluster of benefits that an organization promises customers to satisfy their needs |
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| Societal marketing concept is the view that organizations should satisfy the needs of consumers in a way that provides for society’s well-being. |
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Environmental Forces:
Social, Economic, Technological, Competitive, Regulatory |
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Offerings: What the organization would like to exchange with the customer
Industry: Group of organizations that have similar offerings |
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| Profit is the money left after a business firm’s total expenses are subtracted from its total revenues and is the reward for the risk it undertakes in marketing its offerings. |
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Strategic Business Unit: Division of the organization that is treated as an individual organization.
I.e-
GE Technology Infrastructure (Healthcare and transport)
GE Energy Infrastructure (energy,, oil, gas, water)
GE CONSUMER AND INDUSTRIAL
GE CAPITAL |
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| Core values are the fundamental, passionate, and enduring principles of an organization that guide its conduct over time. |
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| An organizational culture consists of the set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization. |
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Definition
| Can be communicated formally and informally |
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Goals or Objective:
Profit (ROI)
Sales
Market Share
Quality
Efficiency
Employee welfare
customer satisfaction |
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Marketing Plan or Program- A document that serves as a road map to achieving the org's goals and objectives.
Defines strategies and tactics regarding the marketing mix:
Product, price, dist, communication |
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Term
| Line Extension: Adding another product to the existing product line. Ex. Adding another flavor of Stonyfield Farms yogurt to an existing line of yogurts. |
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| Brand Extension: Using an existing Brand Name to introduce a product in a DIFFERENT product line. Ex. Creating new Stonyfield Farms frozen yogurt bars. |
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| Marketing tactics are the detailed day-to-day operational decisions essential to the overall success of marketing strategies. |
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| Marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it. |
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| Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself. |
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The board of directors oversees all three levels of strategy in organizations:
1) Corporate Level
2) Business Unit Level
3) Functional Level
- Info systems
- Finance
- R&D
-Marketing
-Manufacturing
-HR |
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| Social Forces- the demographic characteristics of the population and its values |
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The GPS revolution occurred due to :
technological changes - sat alight technology
regulatory changes - access to satellite technology by private companies
social changes- preference for GPS technology by consumers |
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Environmental forces that affect the organization, its supplier and its customers:
Suppliers - Social, econnomic
organization (marketing dept., other dept, employees) - technology
customers- competitive, regulatory |
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Term
| Market Space - an information and communication based electronic exchanges environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings. |
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Competitive forces:
Competition - consists of alternative firms that could provide a product to satisfy a specific market's needs.
*Pure competition (large number of sellers with similar products, place is important)
*Monopolisitc competition (large number of sellers, unique but substitutable, price is important)
*Oligopoly ( few large competitors, similar products, promotion is important)
*Pure monopoly ( single producer, unique, marketing mix is not important) |
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Definition
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Term
| Market Space - an information and communication based electronic exchanges environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings. |
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Definition
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Term
Competitive forces:
Competition - consists of alternative firms that could provide a product to satisfy a specific market's needs.
*Pure competition (large number of sellers with similar products, place is important)
*Monopolisitc competition (large number of sellers, unique but substitutable, price is important)
*Oligopoly ( few large competitors, similar products, promotion is important)
*Pure monopoly ( single producer, unique, marketing mix is not important) |
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Competitive forces:
Who are the competitors?
Direct - organization with similar offerings. Cereal
Indirect- competition at the general level.
General mills, mcdonalds (sell breakfast)
most indirect level = general mills, ford, old navy |
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Regulatory forces: Federal Legislation
Regulation: restrictions placed on businesses
Protecting Competition:
Sherman Antitrust Act
Clayton Act
Robinson- Patman Act
Protecting Companies: Product Related
Patent Law
Copyright law
Digital Millenium Copyright Act
Protecting Customers:
Nutrition labeling
Consumer Product Safety Act
Consumer product safety commission
Self regulation - an alternative to government control where an industry attempts to police itself |
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A framework for understanding ethical behavior:
Societal culture and norms
V
Business culture and industry practices > Personal normal
V philosophy and
Corporate Culture and expectations ethical behavior |
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Definition
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Term
| Consumerism is a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions. |
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Product Differentiation- A marketing strategy that involves a firm using diff. marketing mix activities to help consumers perceive the product as being different and better than competing products
Examples:
Busch's, Whole Foods, Meijer, Trader Joe |
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Term
Ways to Segment Consumer Markets:
*Geographic
*Demographic
*Psychographic Segmentation
*Behavioral Segmentation
-Product features
-Usage Rate: the quantity of consumer patronage (store visits) during a specific period
-80/20 rule: a concept that suggests 80 percent of a firm's sales are obtained from 20 percent of its customers. |
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Variables to use in forming segments:
i.e
Students-
*Dorms, Sororities, Frats
*Apartments
*Day Commuters
*Night commuters
Non Students-
*Faculty and staff *Workers in the area |
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Step 2 in segmenting and target markets:
GROUP PRODUCTS INTO CATEGORIES-
Individual Wendy's Products
Groupings of Wendy's Products:
breakfast, lunch, dinner, between meal snacks, after dinner snacks |
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Step 3 in Segmenting and targeting markets:
Develop a market-product grid and estimate the size of markets
1)Form a market-product grid
2)Estimate Market Sizes
Market: Type of Sleeper &
the other side is Product: type of pillow
Market-Product grids show alternative strategies |
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Steps in segmenting and targeting markets
4) Select Target Markets
Criteria used:
Market size, excepted growth, competitive position,
cost of reaching the segment, compatibly with organizational objective and resources
Choose the products and segments:
No breakfast, four student segments onl |
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Steps in segmenting and targeting markets:
5) Take marketing actions to reach a target market
*Set restaurant business hours
*Create appropriate menu
*Create and implement appropriate promotional campaigns |
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Step 4 in positioning the product:
Calculate the scores and plot these on the perceptual map
- average the ratings on the actual products/brands - plot these scores
- do not average the ratings for ideal beverages- instead plot each individual consumer's ideal ratings |
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