MKT Test One Study Guide
MKT Test One Study Guide MKT 3010
Popular in Principles of Marketing
Popular in Department
This 23 page Study Guide was uploaded by Nazifa Islam on Tuesday September 6, 2016. The Study Guide belongs to MKT 3010 at Clemson University taught by Carter Willis McElveen in Fall 2016. Since its upload, it has received 148 views.
Reviews for MKT Test One Study Guide
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 09/06/16
MKT 3010 Chapter One: Overview of Marketing • The American Marketing Association states that “marketing is the activity, set of institutions, and the processes for creating, capturing, communicating, delivering, and exchanging offers that have value for customers, clients, partners, and society at large.” • Marketing plan: something that firms develop that illustrate their plan of activities for a certain period o The marketing plan has a few important key factors § How will the product be viewed/designed § How much will it cost § Where/how will it be promoted § How will we reach our audience • Core Aspects of Marketing o Marketing helps create value o Marketing is about satisfying customer needs and wants o Marketing entails an exchange o Marketing requires product, price, place, and promotion decisions o Marketing can be performed by both individuals and organizations o Marketing occurs in many settings • The marketplace refers to the world of trade o But it can be broken down into groups of similar interests • It is not practical for a marketer to be able to sell their product to everyone • Exchange: the trade of things of value between the buyer and the seller so that each is better off as a result. (This is what marketing is about) • Marketing Mix KNOWN as the 4 p’s: four interrelated sects that marketing is divided into 1. Product: Creating Value • Develop a variety of offerings: good, services, ideas • Goods: items you can physically touch • Services: intangible customer benefits that can’t be separated from the consumer (Buying a movie ticket TO watch the movie, not to just have the ticket) • Getting your eye examined (service), getting glasses (good) • Ideas: Concepts, opinions, and philosophies 2. Price: Capturing Value • EVERYTHING has a price • It’s everything the buyer gives up (money, time, energy) in exchange for a product • It’s important to figure out how much the customers are willing to pay so they’re satisfied and the seller gets a reasonable profit 3. Place: Delivering the Value Proposition • Get it to the right customer when they want it • Marketing channel management/supply chain management: set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and other firms involved in the transaction (maybe transportation companies) into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time while minimizing system wide costs and satisfying the service levels required by the customers. 4. Promotion: Communicating the Value Proposition • Inform, persuade, and remind potential buyers why your product is great § B2C (business-to-consumer) : Retailers will buy merchandise in bulk and sell it to you in smaller amounts § B2B (Business-to-business): Selling merchandise or services from one business to another § C2C: Consumers sell to other consumers § Production-Oriented Era: Around the turn of the 20 century, most firms believed that a product would sell itself o Didn’t really care about satisfying the individual needs of a customer § Sales-oriented Era: Between 1920 and 1950 o People became more self-sufficient and did things on their own instead of needing to go out and buy it § Marketed-Oriented Era: After World War 2. Started focusing more on what consumers wanted and needed. § Value-Based Marketing Era: Most successful firms these days. o Want to give customers greater value than their competitors did o Value: reflects the relationship of benefits to costs, or what you get for what you give. o Value cocreation: Customers act as collaborators with a manufacturer or retailer to create the product or service How Do Marketing Firms Become More Value Driven? I. Sharing Information Ø Marketers share information about customers and competitors Ø Collect purchase information and research customer trends II. Balancing Benefits with Costs Ø Use available customer date to find opportunities to satisfy customers Ø Satisfying customers, keeping costs down, and developing long-term loyalties is key III. Building Relationships with Customers Ø Relationship orientation: A method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship Ø Firms focus on the lifetime profitability of the relationship, not just one transaction o Apple making all of their new phones with the same charger attempts to build this relationship Ø Customer Relationship Management (CRM): A business and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm’s most valued customers. § Only 10 percent of the world’s population uses Facebook. § Supply chain/marketing channel: Group of firms that make and deliver a given set of goods and services § Entrepreneurs: A person who organizes, operates, and assumes the risk of a new business venture. o Key is to satisfy unfilled needs (Netflix, amazon, OWN) Chapter Two Book § Nike began in the early 70’s as an American company in Oregon o Now is about 33% of the worldwide market § Marketing strategy: specific actions a firm intends to implement to appeal to potential customers o Identifies a firm’s target markets, its four p’s, and the basis on which the firm plans to build a sustainable competitive advantage § Marketing plan: provides a blueprint for implementing the marketing strategy § Sustainable competitive advantage: Advantage over the competition that is not easily copied so it can be maintained for a long time o Acts like a wall § There are four strategies in the marketing mix that create and deliver value and develop sustainable competitive advantage a) Customer excellence: Wants to keep loyal customers by having great customer service b) Operational excellence: Achieved through efficient operations and excellent supply chain and human resource management c) Product excellence: Having products with high perceived value and effective branding and positioning d) Locational excelling: Good location and strong internet position A. CUSTOMER EXCELLENCE § Loyalty is much more than you think o It means that customers ae reluctant to patronize competitive firms § Wants a customer that not only buys something for him/herself, but buys it for their whole family. § The key is to not see someone as just a single transaction, but a lifetime customer § It’s important for a company to positon itself. Nike-à sports § Quality customer service is something that gradually must become a natural habit for employees (chick-fil-a) B. OPERATIONAL EXCELLENCE § Second way to achieve a sustainable competitive advantage § Efficient operations, excellent supply chain management, and strong relationship with suppliers § Every company wants to deliver their goods when they’re customers want them, at a decent price, still make a profit, and ensure the greatness of quality § Firms with strong relationships may get exclusive rights o Sell merchandise in a particular region o Obtain special terms of purchase that are not available to competitors o Receive popular merchandise that may be in short supply § Netflix’s supply chain is continuously evolving and becoming increasingly efficient C. PRODUCT EXCELLENCE § Occurs by providing products with high perceived value and effective branding and positioning § Some will have trouble with this if their competitors can do better § It’s important to have a clear and consistent brand image o Microsoft, google, McDonald’s, coke D. LOCATIONAL EXCELLENCE § Important for retailers and service providers § Three most important things are location, location, location § Starbucks is good at this § Keep in mind that just one of these strategy’s alone is not sufficient § Three major phases of the marketing plan are planning, implementation, and control § The marketing plan has 5 phases though 1. The planning phase: define the mission/vision 2. How various things, inside and outside, affect the firm’s potential success 3. Implementation phase: segmentation, targeting, and position (STP) 4. Implement the marketing mix using the four p’s 5. Control phase: evaluate the performance and correcting if needed This goes more in depth over the 5 steps. The marketing plan is a written document composed of an analysis of the current marketing situation, opportunities, and threats for the firm, marketing objectives and strategy specified in terms of the four p’s, action programs, and projected or pro-forma income statements. STEP ONE: Define the business mission § Mission statement: broad description of a firm’s objectives o Tries to answer: § What type of business are we? § What do we need to do to accomplish our goals? STEP TWO: Conduct a situation analysis § Using a SWOT analysis that assesses both the internal environment in regards to Strengths and Weaknesses and external environment in terms of its Opportunities and Threats § Should also observe changes in Culture, Demographic, Social, Technological, Economic, and Political forces (CDSTEP) STEP THREE: Identifying and evaluating opportunities using STP (segmentation, targeting, and positioning) § Divides the market into subgroups § Market segmentation: dividing the market into groups of customers with different needs, wants, or characteristics § Targeting: After a firm has identified the carious market segments it might pursue, it evaluates each segment and decides which to pursue § It’s like coke targeting coke zero for men and diet coke for women § Positioning: Defining the marketing mix variables so that that customers understand what the product does/represents against competing products STEP FOUR: Implement marketing mix and allocate resources § Implement the actual marketing mix-product, price, promotion, and place § Product and value creation: (Includes services). The first of the four p’s § Price and value capture: Firm provides product or service and gets money o So it must be clear what they should and where o Pricing is the only activity that actually brings money in § Place and value delivery: o Product needs to be readily accessible § Promotion and value communication: o Communicate the value of their offering STEP FIVE: Evaluate performances using marketing metrics § Metric: A measuring system that quantifies a trend, dynamic, or characteristic § Used to explain why things happened and to project the future § At each level of an organization, the business unit and its manager should only be held accountable for: revenues, expenses, and profits they can control § Some commonly used metrics to assess performance: revenues, sales, and profits § Portfolio analysis: management evaluates the firm’s various products and businesses § SBU(Strategic business unit)/product line: Division of the firm itself that can be managed and operated somewhat independently § Market share: the percentage of a market accounted for by a specific entity and is used to establish the product’s strengths in a particular market o Relative market share: provides managers with a product’s relative strength o Market growth rate: measures how attractive a particular market is STARS (iphone) § Upper left quadrant § High growth markets and are high market share products § Need heavy investment when it comes to promotion and production § Will eventually transition into cash cows as market growth slows CASH COWS (ipod) § Lower left § Low growth markets, high market share products QUESTION MARKS (ipad) § Upper right § High growth market, low market shares § Require significant resources to grow DOGS (imac) § Lower right § Low growth market. Low market share § Enough resources to sustain themselves § But should be phased out until they’re needed to complement a different product GROWTH STRATEGIES § Market penetration strategy: Employs the existing marketing mix and focuses the firm’s efforts on existing customers o Increase advertisement § Market development strategy: Employs the existing marketing offering to reach new market segments o Maybe international § Product Development: Offers a new product or service to a firm’s current target market § Diversification strategy: Introduces a new product or service to a market segment that is not currently being served o Related diversification: The current target market and/or marketing mix shares something in common with the new opportunity o Unrelated diversification: new business lacks any common elements with the present business Nike going into child care business Chapter Five: Analyzing the Marketing Environment § People and businesses strive to stay cool and up to date § CONSUMERS are always at the centerpiece of the marketing environment § Consumers may be influenced directly by the immediate actions of the focal company, the competitors, or the corporate partners § Value-based marketing aims to provide greater value to consumers than competitors § Sometimes, a firm can anticipate trends COMPANY CAPABILITIES § Try to satisfy customer needs § Like Pepsi introducing Aquafina COMPETITORS § Marketers must understand their firm’s competitors-strengths, weaknesses, and reactions CORPORATE PARTNERS § Very few firms operate in isolation § Parties that work with the focal firm are its corporate partners § Company making coats from “happy sheep” and partnering with ranching industry § Macro-environmental factors: marketers need to understand the factors that operate in the external environment, namely, the culture, demographics, social issues, technological advances, economic situation, and political/regulatory environment (CDSTEP) 1) CULTURE • Shared meanings, beliefs, morals, values, and customs of a group of people • You participate in the cultural aspects of the town and country you live in • Influences what, why, how, where, and what we buy • Country Culture o Behavior, dress, symbols, physical settings, ceremonies, languages, food preferences are easy to spot o Sometimes the best answer is to establish a universal appeal • Regional Culture o May affect how they refer to a certain product (pop, soda, coke) • Generational cohort: A group of people of the same generation have the same purchase behavior GENERATION Z/Digital Natives 2001-2014 • Born into a world full of electronics • Better appreciation for diverse cultures • Born into a world confronted by national and international terrorism • Are similar to their parents, Generation X • Watch the same shows, similar brand of clothes GENERATION Y/Millennials 1977-2000 • 60 million members in the USA alone • Strong emphasis on balancing work AND life • Consider marriage secondly • Younger edge of the group is often referred to as tweens GENERATION X/Xers 1965-1976 • First generation to have both parents work and 50% have divorced parents • Helicopter parents • Tend to get married and buy houses later in life • Less interested in shopping and far more cynical • Became more knowledgeable about products and more risk averse § Baby boomers are referred to the 78 million Americans born between 1946 and 1964 § The oldest BB’s are collecting social security and data shows that this will be the largest population consumer the USA has ever seen § Baby boomers are individualistic, leisure time is very important to them, and they will always be able to take care of themselves. § Have brought their casual dress style into the workplace § Food companies target them with healthy foods § Are more focused on quality than price § Heavy internet users and will do research before purchasing INCOME § Distribution is polarized § Highest income groups are growing and others keep declining § The increase in wealthy families may be because of dual-income households and high levels of education EDUCATION § Higher education will get you a better job GENDER § Gender roles have been blurred § More firms are careful about gender neutrality § Nike has noticed that women have been taking up more challenging activities ETHNICITY § USA is becoming more and more diverse § Immigrants tend to go to New York, LA, San Francisco, and Chicago § Hispanics will most likely purchase from catalogs or online § Trends show that most African Americans will live in the suburbs § Asian Americans are the fastest growing minority population o It’s hard to appeal to all the Asian American groups SOCIAL TRENDS Thrift § Many people are embracing the idea of spending less § Spend less on luxuries and don’t dip into your savings § Lipstick effect: will buy a small luxury (Chanel lipstick) but not a big one (vacation) § It’s all about bargain shopping and good deals Health and Wellness Concerns § In the past 20 years, child obesity has doubled and teenage has tripled in the U.S. o High cholesterol, high blood pressure, signs of heart disease, type 2 diabetes § New guidelines require food to be produced in reasonably proportioned sizes § Puts limits on advertisement (what and where) o Burger King no longer uses SpongeBob to promote themselves § Consumer spending on yoga has increased Greener Consumers § Green marketing: a strategic effort by firms to supply customers with environmentally friendly merchandise § Firms encourage you to get new, eco-friendly things § Some green options are more expensive than traditional ones § Greenwashing: Showing that a company itself is green but not really being green in other ways Privacy Concerns § Explosion of accessibility to consumer information A Time-Poor Society § Most parents work and kids are busier than ever § Leisure time has dropped by a lot § Attention is divided: talking on the phone, listening to music, watching tv, doing hw o Can’t focus on advertisements too § Stores are trying to branch out to catalogs or extending their store hours TECHNOLOGICAL ADVANCES § Advanced technology makes consumers increasingly dependent on the help they can provide o Making decisions, communicating with others § Netflix suggests what we should watch, Pandora suggests what we should listen to, and Amazon tells us what we should read ECONOMIC SITUATION § Marketers monitor the economic situation in their home country and abroad o Inflation, foreign currency exchange rates, and interest rates affect the state of the economy § Inflation: persistent increase in the prices of goods and services § Foreign currency fluctuations: can influence consumer spendings o As the euro becomes more expensive compared to the dollar, merchandise made in Europe and other countries tied to the Euro become more costly to Americans § Interest rates: represent the cost of borrowing money POLITICAL/REGULATORY ENVIRONMENT § Comprises of political parties, government organizations, and legislation and laws § Organizations must understand the rules and regulations and fully comply § The government has enacted laws that promote fair trade and competition Chapter Six- Consumer Behavior § To understand consumer behavior, we must ask why people buy goods or services § Generally, the ratio of benefits is higher for the product or service than any other THE CONSUMER DECISION PROCESS 1. NEED RECOGNITION § When a consumer realizes they have an unsatisfied need and does something about it § Can be functional, psychological, or both § Functional needs: pertain to the performance of a product or service § Psychological needs: personal gratification consumers associate with a product/service 2. SEARCH FOR INFORMATION § Length and intensity of search depends on the degree of perceived risk associated with product § Internal search for information: buyer examines his or her own memory about the product § External search information: Asking around about the product There are 3 important factors that affect the search process I. The perceived benefits versus perceived costs of search Ø Is it worth the time and effort? II. The locus of control Ø Internal LOC: People believe they have some control over outcomes Ø External LOC: Fate/external factors control outcomes o So it doesn’t matter how much information they gather because what’s meant to be will be III. Actual or perceived risk: There’s 5 types 1) Performance risk: Poorly performing product 2) Financial risk: Initial cost and maintenance cost too high 3) Social risk: Wondering that maybe others won’t like what they buy and will be social suicide 4) Physiological risk/safety risk: what will happen if the product doesn’t perform like it is supposed to 5) Psychological risks: The way people will feel if the product or service does not convey the right image EVALUATION OF ALTERNATIVES ATTRIBUTE SETS § All possible choices for a product category § Retrieval set: brands or stores that can easily be brought forth from memory § Evoked set: comprises the alternative brands or stores that the consumer would consider § Evaluative criteria: Important attributes about a certain product § Determinant attributes: product or service features that are important to the buyer and how it makes a competing brand different CONSUMER DECISION RULES § Consumer decision rules: set of criteria that consumers use consciously or subconsciously to quickly and efficiently select among the alternatives § These rules are usually compensatory or noncompensatory § Compensatory: assumes that the consumer trades off one characteristic for another o Higher price, but better taste o She could further her decision by creating a multi-attribute model PURCHASE AND CONSUMPTION § Conversion rate: measure how well retailers converted purchase intentions into purchases o (Real or virtual abandoned carts in store or on website) o Reducing check out times is smart o Some stores will urge their customers to buy something by showing it’s almost out of stock POST PURCHASE § Final step of the consumer decision process § Interesting because it’s about actual rather than potential § There are three possible positive outcomes 1. Customer satisfaction § Hyping up a product might lead to high initial sales but will decrease and end in dissatisfaction § Many retailers don’t put their best foot forward 2. Post-purchase cognitive dissonance § Internal conflict due to inconsistent beliefs § Buyers remorse § Likely will high priced products that are not very popular 3. Customer loyalty: § Negative consumer behavior- negative word of mouth and rumors § Consumers feel they have been treated unfairly in some way FACTORS INFLUENCING THE CONSUMER DECISION PROCESS § Marketing mix, psychological factors, social factors, situational factors PSYCHOLOGICAL FACTORS o MOTIVES, ATTITUDES, PERCEPTION, LEARNING, & LIFESTYLE Motives § A need/want strong enough to cause a person to seek satisfaction § Maslow’s hierarchy of needs (5 groups) Psychological Needs § Basic bio necessities § Less fortunate people in all countries seek this Safety needs § Airbags, home alarms, vitamins, organic meat Love needs § Relate to our interactions with others Esteem needs § Satisfy inner desires § Yoga, books Self-actualization § Completely satisfied with your life and the way you live § You don’t care what others think ATTITUDE § Attitudes are learned and long lasting § Cognitive component: what we believe to be true § Behavioral component: actions we undertake based on what we know/feel PERCEPTION § Another psychological factor § Process by which we select, organize, and interpret info to create a meaningful picture of the world LEARNING § A change in a persons thought process or behavior that arises from experience and takes place throughout the consumer decision process LIFESTYLE § The way consumers spend their time and money to live SOCIAL FACTORS FAMILY § Many products are based on whether the entire family will use it or not § Kids play an important role in family buying decisions REFERENCE GROUPS § One or more persons whom an individual uses as a basis for comparison regarding belefs, feelings, and behaviors § Family, friends, coworkers, famous people CULTURE § Fashion, food, behavior SITUATIONAL FACTORS PURCHASE SITUATION § If you were going to your best friend’s wedding, you wouldn’t go to goodwill. Even if you are a frequent thrift shopper SHOPPING SITUATION § You might be ready to purchase a product but might change your mind when you get to the store. There are techniques to convince you to follow through 1. Store atmosphere: Music, scent, lighting, color 2. Salespeople: A well trained salesperson can educate the consumer about products 3. Crowding: Customers tend to leave when there’s too many people, the line is too long, or merchandise is cluttered together 4. In store demonstrations: Showing a while line of merchandise in one way to make it seem special and unique 5. Promotions: Buy one, get one (good with cosmetics) 6. Packaging: appealing or eye catching TEMPORAL STATE § Mood swings can alter purchase behavior INVOLVEMENT AND CONSUMER BUYING DECISIONS § Consumers make two types of buying decisions depending on level of involvement § Involvement: consumer’s degree of interest in the product or service 1. Extended problem solving: a lot of risk involved, lot of asking around 2. Limited problem solving: moderate time and effort a. Impulse buying –buying on the spot b. Habitual decision making (automatically going to Cookout without even considering the benefits of going to Wendy’s instead) LECTURE NOTES 8/19/16 Product Placement: Affects you everyday § Essentially seeing a product in a non-advertising place (unexpected) o Music **LOTTERY TICKET QUESTION** o Movies o TV Shows o Radio o Video Games o Books Types of Placement 1. Visual- nothing said, you just see it (person drinking Starbucks) 2. Audible-you hear it “Let’s go to Starbucks” 3. Integrated (most effective): Don’t even notice it- not bragging. “Let’s go get a bud” **LOTTERY TICKET QUESTION** 4. Virtual placements: Wasn’t actually there when the filming took place (billboard) Product placement doesn’t always go as planned (lawsuit perspective) Theoretical Framework § Mere exposure: More times you’re exposed to the brand, the more you like it **LOTTERY TICKET** § Associative networks: Associating images and characters together. If you like them, you like the brand more **LOTTERY TICKET** Catalyst (enhancer) for product placement • Channel surfing, flipping • Advent of TIVO and DVR’S (Pre-record so you can fast forward) • Fragmented Media: Cable and satellite channels, internet, Netflix o No one place you can get everyone o **LOTTERY TICKET** • Permanence: Placement even in DVR’s are permanent • Upfront: Integrated the show’s storyline with commercials 8/22/16 You see product placement in video games and books as well Chapter One Introduction: Overview of Marketing Apple • Apple is more of a marketing company than a technology company • CEO of Apple is Tim Cook **LOTTERY TICKET* • Maps was a huge setback for apple • Has a great advertising legacy • One of the first companies to advertise in the SuperBowl • The brand alone is worth 98 billion dollars (not the company) • Most recognizable brand in the WORLD • They don’t claim to be the cheapest in the world and don’t want to be • Jobs legacy is all about secrecy and simplicity • Never be the first to market, make something good…great • Biggest market secret-product placement “Marketing is the activity, set of institutions, and process for creating, capturing, communicating, delivering, and exchanging offers that have value for customers, clients, and society at large as well as partners” Page 4 Components of Marketing CREATING • Collaborating with suppliers and customers • Create offerings that have value to the customer • 3M created the post-it note COMMUNICATING • Tell your customers how awesome it is • Describe those offerings • Learning from customers (2 way street) • Commonly/most purchased item with diapers is beer DELIVERING • Getting those offerings to the consumer • In a way that optimizes value 08/26/16 Finishing Chapter One Who engages in marketing? • For-profit companies • Defined by customers • Defined by function • Nonprofit organizations • Individuals MARKETING IS NOT: • Just buyers and sellers exchanging money • Simply making a profit • A random activity o There’s a marketing plan Chapter Two: Developing a Marketing Strategy and a Marketing Plan Marketing Strategy • What is the organization’s main activity at a particular time • How will it reach its goals 1. Identify target markets 2. Related marketing mix –their 4 p’s 3. Build a sustainable competitive advantage a. Lowering price might be an immediate one **ON TEST** b. But it’s not a sustainable one Sustainable Competitive Advantage Customer Excellence ^ Locational excellence ß Customer Value à operational excellence V Product Excellence Take a look at the marketing plan image in the book page 29 Marketing Objectives • Realistic • Measurable • Time specific • Consistent with and indicating the priorities of the organization Planning Phase: Step One Business mission and objectives • What business are we in • Should we focus on the market(s) the organization is trying to serve rather than a good or service rather than a good or service offered • Don’t want to be too broad either • Also may include sustainable competitive advantage NOT IN THE BOOK: Marketing myopia: Defining a business in terms of goods and services rather in terms of the benefits that customers seek (Blockbuster) (Kodak) 8/29/16 **ON TEST** Planning phase: Step Two SWOT ANALYSIS S: (internal) Things the company does well W: (internal) Things the company does not do well O: (external) Conditions in the external environment that favor strengths T: (external) Conditions in the external environment that do not relate to existing strengths or favor areas of current weaknesses NOT IN THE BOOK **Multiple choice question ** Environmental Scanning: Helps identify opportunities and threats Guidelines for scanning marketing strategy based on 6 macroforces • Social • Demographic • Economic • Technological • Political/legal • Competitive **ON TEST** Step Three: Identifying and Evaluating Opportunity Using STP Know what STP stands for Segmentation (Dividing the market): Which segments of customers can you satisfy Targeting: Evaluation of each segments attractiveness Positioning (What you want the customer to think): How are you positioning the product within the target segments Step Four: Implement Marketing Mix & Allocate Resources Product Value Creation Price Value Capture Place Value Delivery Promotion Value Communication Step Five: Evaluate Performance & Make Adjustments • Who is responsible for performance? • Performance objectives and measures • Financial performance metrics • Portfolio analysis STAR: Requiring a lot for the product to perform • Invest a lot of time, money, and effort • This product is performing, but can bum out quickly CASH COW: Low investment, but it makes money PROBLEM CHILDREN (?): Product in a market that has every reason to be performing, but isn’t DOG: Worst kind, a drain on the bottom line, spend money to get nothing back STAR PROBLEM CHILD High market growth High market growth High market share Low market share Cash neutral Cash Absorbing Hold Build Dasani water FUSE drink CASH COW DOG Low market growth Low market growth High market share Low market share Cash generating Cash neutral Harvest or milk Divest Hi-C! Growth Strategies **2 QUESTIONS ON THE TEST** Product and Services Markets Current New Current Market penetration (Coupon Product development (k- for 50% off, drive-thru) cups) New Market development (going Diversification (New product abroad) line) (Starbucks also serves wine at 5pm) Chapter 5: Analyzing the Marketing Environment Targeting market: Defined group most likely to buy a product • Changes as consumers age • External elements change consumers’ desires 8/31/16 Continuing Chapter 5 What is at the center of the micro and macro environment? CONSUMERS Microenvironment a. Company (Doing what you know and doing it well) v Core competency v Existing knowledge, facilities, patents, etc. v Applied to new markets, new products, etc. b. Competition v Competitive intelligence (CI) v Knows strength and weaknesses v Proactive rather than reactive strategy c. Corporate partners v Firms are part of alliances v Align with competitors, suppliers, etc. v Just in Time Delivery System (JIT) not on test, but will be later v From factory to retailer (JIT) Macroenvironment a. Culture v Country Culture vs. Regional Culture v Spending power of ethnic markets in 2013 v Hispanics: $1.2 trillion v African Americans: $1 trillion v Asian Americans: $713 billion Diversity can result in bottom-line benefits to companies Growth in these groups are outpacing the Caucasian market § Marketing to Hispanic Americans o The population diversity creates challenges for targeting this group – hyperlocal is critical o Hispanics tend to be brand loyal, but aren’t aware of many U.S. brands o Ambicultural group: Ability to switch between 2 cultures seamlessly § Marketing to African Americans o Many firms are creating products for African American markets o More aggressive consumers of media watch more tv and shop more frequently o Favor smaller retail outlets such as drug stores, c-stores o Don’t buy in bulk, will end up spending the same as others but in much smaller bulks § Marketing to Asian Americans o Younger, better educated, and have higher average income of all groups o Sometimes called a “marketer’s dream” o Leading segment of online shopping o Cultural diversity within the AA market complications promotional efforts By 2050, the minority groups will be the majority 09/02/16 **ON TEST** Why Millenials Will Be the Generation To Save Us all § Believe they can change the world § Don’t believe in hierarchy § Resourceful and adaptive § Sense of mission § Think before they act § “One person can change the world” Income § Purchasing power is tied to income § Census bureau tracks income § Many middle class families feel the decline in purchasing power in recent years § Income growth is pretty flat right now § Education is related to income, which determines spending power § Male/female roles have been shifting..marketing has changed to reflect these shifts SOCIAL TRENDS 1. Thrift a. Consumers—attempt to save more, spend less on luxuries, do not dip into savings 2. Health and Wellness Concerns a. Worldwide pandemics or epidemics b. Child/teenage obesity 3. Green Consumers a. Customers who appreciate firms efforts to supply them with environmentally friendly merchandise b. Greenwashing: Painting your product as if it’s green but it may not actually be green i. Disingenuous practice 4. Privacy Concern a. Loss of privacy, identity theft, do not call, do not e-mail 5. Time poor society a. Majority of families are dual income b. Consumers have many more choices regarding leisure time c. Many consumers multitask 6. Technological advances a. Technology has impacted every aspect of marketing i. New products ii. New forms of communication iii. No retail channels 7. Economic Situation a. Foreign currency fluctuations b. Combined with inflation and interest rates affect firms c. Ability to market goods and services 8. Political/Regulatory Environment a. Fair trade practices, trade agreements, prices b. Competitive practice and trade legislation Chapter Six: Consumer Behavior Women view shopping as a personal experience Men view shopping as as mission In other words: men buy and women shop 09/06/16 Consumer Decision Process *Need recognition à information search à alternate evaluation à purchase à post purchase Step One: Need Recognition Functional needs: Serve a function. Rain coat on a rainy day Psychological needs: Want a Northface raincoat, not a Walmart one Step Two: Search for Information Recall info in memory External info search Seek info in an outside enviro Nonmarketing controlled Marketing controlled Factors Affecting Consumer’s Search Process: External Search Need less info Need more info Less risk More risk More knowledge Less knowledge More product experience Less product experience Low level of interest High level of interest Confidence in decision Lack of confidence Perceived benefits vs. perceived costs will affect your decision Internal locus of control: more search activities External locus of control: fate, external factors Actual v. perceived risk Performance risk, financial risk, social risk, physiological risk, psychological risk Step Three: Evaluation of Alternatives: Attribute Sets Universal: Can’t even come up with a list of places you can buy jeans from—too many Retrieval: Can make a last. Target, American Eagle, Belks Evoked: Only places you would actually go Analyze product attribute Use cutoff criteria Rank attributes by importance **ON TEST** Evaluative Criteria: List of product attributes, product stats, about the product Determinant Attributes: Make your decision, Not the same as everyone else’s Decision Heuristic à Rule of thumb Shortcuts: Price, brand, product presentation Step Four: Purchase § Provide money back guarantee § Encourage feedback § Ritual consumption o Grocery shopping every Sunday o Buy beer before every game Step Five: Post-purchase outcomes § Cognitive dissonance: buyer’s remorse § Customer satisfaction § Customer loyalty FACTORS AFFECTING THE CONSUMER DECISION PROCESS (Psychological factors) 1. Motives (hungry, self-actualization, safety) 2. Attitudes: Cognitive (what you think), affective (how you feel), behavior (what you do) 3. Perception: Reality for customers (Like tattoos) a. Hard to change b. It’s like your grandma always think tattoos are bad for people 4. Learning and Lifestyle a. Learning affects both attitudes and perceptions b. If NyQuil doesn’t help me, I will try a different medicine next time c. Lifestyle involves decision in spending time and money 09/07/16 FACTORS AFFECTING THE CONSUMER DECISION PROCESS (Social factors) 5. Individual influences a. Gender, age lifecycle, personality self-concept lifestyle i. Age lifestyle: Living at home, in college, newly married (where you are in life) b. People change their spending cycle when their place in the cycle changes 6. Reference Groups a. Family, friends, co-workers, famous people b. Provide: Info, rewards, self-image 7. Culture a. Shapes who you are/ how you purchase 8. Situational a. Purchase situation: Car breaks, will get one ASAP (urgent) b. Shopping situation: If it’s pleasant, you may stay there longer i. Store atmosphere, salespeople, crowding, in-store demos (Costco and Sams give out samples), promotions, packages TYPES OF BUYING DECISIONS **On test, at least one question –maybe two** § Limited Problem Solving-Some sort of effort and time – Want to make dinner, go grocery shopping and look for good deals § Habitual decision making- Certain kind of cereal you buy, not a lot of thought goes in § Extended problem solving: More thought and effort. Buying a car, laptop, college § Impulse buying: Almost no thought. (Things by the checkout line, milk) TEST REVIEW 50 QUESTIONS, MULTIPLE CHOICE, TRUE AND FALES o Maybe 2-3 questions about product placement o What are catalyst o Mere exposure o What is product placement o There will be a lot of definitions o Test covers 1,2,5,6 and product placement o Most questions come from chapter one and second most from chapter six o Know the 4 p’s o What does STP stand for o What is the definition of marketing o SWOT stands for? What ones are external o Marketing plan and consumer behavior process o 1-2 gross strategies o Portfolio matrix 1-2 questions o Know about Hispanic Americans, African Americans, and Asian Americans o What’s the challenge with Asian Americans o Know the most about millennials o Why do we care about generational cohorts? o USA will be a minority driven culture o Know about the macro-environment (triangles with 3 c’s) o Consumers are in the middle o Evaluated criteria: look up product specs o Determinant attributes “I only care about size and price o Evoked set- Only places I would consider eating at o Retrieval set- A list of pieces to eat o Decision heuristic- I only drink red wine from George – Rule of thumb o Product Planning
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'