What is marketing?
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.
The four P’s
Brand Identity (helps establish loyalty)
∙ Image of associations
∙ Packaging (Tiffany’s blue boxes)
The Promotional Mix
o Paid, not personal media We also discuss several other topics like What is the amount that will not be collected because customers are unable to pay?
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o TV, radio, magazines, newspapers, internet
∙ Sales Promotion
o Marketing activities that provide extra value or incentives to the sales force, retailers, and consumer. Ex: Free gift with purchase. We also discuss several other topics like What is the main purpose of having administrative agencies?
∙ Direct Marketing
o Mail, catalogs, direct selling, direct response ads, telemarketing, shopping channels, internet sales
∙ Publicity/Public Relations We also discuss several other topics like Which body part stores calcium required for muscle contraction?
o A news story, editorial, or announcement to a mass audience.
o Not always under company control
o Is sometimes unfavorable
∙ Interactive/internet marketing
o Mobile devices, kiosks, interactive TV.
∙ Personal Selling
o Person to person communication
Strategic Marketing Plan:
Opportunity analysis- where are there needs/demands in the market place.
Competitive analysis- What is the competition doing. How much did they spend on advertising etc.
The target marketing process:
∙ Identify markets with unfulfilled needs
∙ Determine market segmentation
∙ Select a market to target
∙ Position through marketing strategies
Target market identification:
Lifestyles, social class, economic status, geographic location, age, marital status, needs. Elements: Don't forget about the age old question of What is a pro forma financial statement?
o Age, gender, marital status
o Lifestyle- areas of interest/hobbies
o Where you live, where is your market
o Benefit/attribute providing a benefit to the consumer
o Reaching a certain percentage of the market. 80/20 rule applies
o Income, occupation
Dividing a market into distinct groups with common needs and who respond similarly to a market situation.
∙ Undifferentiated We also discuss several other topics like How do plants help prevent soil being washed away by rain?
o One product/one market (ford’s first car. 1 product, one target market; men 18+)
o A lot of different products with many line extensions. Different target markets. ∙ Concentrated
o Concentrate money on reach a specific group. Ex rolls Royce; only the elite/rich
Fitting the product of service to one or more segments of the broad market in such a way as to set it apart from competition.
∙ Attributes and benefits
∙ Product class
∙ Product users
∙ Cultural symbols
Wallas’ Creative Process Model
Incubation (setting the problem
(refining the idea)
Preparation (gathering information
Exchange- Two or more parties with something of value to one another, a desire and ability to give up that something to the other party, and a way to communicate with each other.
Marketing- The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
Value- The customer’s perception of all of the benefits of a product or service weighed against all the costs of acquiring and consuming it.
Integrated Marketing Communications (IMC)- coordinating the carious promotional elements and other marketing activities that communicate with a firm’s customers.
Marketing Mix- Combining the four p’s, product price, place (distribution) and promotion into a marketing program to facilitate the potential for exchange with consumers in the marketplace.
Promotion- The coordination of all seller-initiated efforts to set up channels of information and persuasion in order to sell goods and services or an idea.
Promotional mix- The basic tools used to accomplish an organization’s communication objectives. Elements- advertising, direct marketing, interactive/internet marketing, sales promotion, publicity/public relations, personal selling.
Advertising- Any paid form of non-personal communication about an organization, product, service, or idea by and identified sponsor.
Direct marketing- Organizations communicate directly with target customers to generate a response and/or a transaction.
Direct Response Advertising- A product is promoted through an ad that encourages the consumer to purchase directly from the manufacturer.
Interactive Media- Allows a back and forth flow of information whereby users can participate in and modify the form and content of the information they receive in real time.
Sales Promotion- Marketing activities that provide extra value or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales. Broken into two major categories: consumer oriented and trade oriented activities.
Publicity- Non personal communications regarding an organization, product, service or idea not directly paid for or run under identified sponsorship.
Public Relations- The management function which evaluates public attitudes, identifies the policies and procedures of an individual organization with the public interest and executes a program of action to earn public understanding and acceptance.
Personal Selling- A form of person-to-person communication in which a seller attempts to assist and/or persuade prospective buyers to purchase the company’s product or service or to act on an idea.
Contact (or touch) point- Refers to each and every opportunity the customer has to see or hear about the company and/or its brands or have an encounter or experience with it.
Integrated marketing communications management- the process of planning, executing, evaluating, and controlling the use of the various promotional-mix elements to effectively communicate with target audiences.
Target Marketing- Involves four basics:
∙ Identify markets with unfulfilled needs
∙ Segmenting the market
∙ Targeting specific segments
∙ Positioning one’s product or service through marketing strategies.
Geographic Segmentation- Markets are divided into different geographic units. These units include nations, states, countries, or even neighborhoods.
Demographic Segmentation- Dividing the market on the basis of demographic variables such as age, sex, family size, education, income, and social class.
Psychographic segmentation- Dividing the market on the basis of personality and/or lifestyles.
Behavioristic Segmentation- Dividing consumers into groups according to their usage, loyalties, or buying responses to a product.
80-20 rule- 20 percent of their buyers account for 80 percenty of their sales volume.
Benefit Segmentation- The grouping of consumers on the basis of attributes sought in a product.
Positioning- The art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from the competition.
Brand Equity- An intangible asset of added value or goodwill that results from the favorable image, impressions of differentiation, and/or strength of consumer attachment to a company name, brand name or trademark.
Heuristics- Sometimes consumers make their purchase decisions using more simplified rules known as heuristics. For familiar products that are purchased frequently, consumers may use price-based heuristics (buy the least expensive brand) or promotion-based heuristics (choose the brand for which I can get a price reduction through a coupon, rebate, or special deal)
Concave-downward function model- The logic is that those with greatest potential to buy will likely act on the first (or earliest) exposures, while those less likely to buy are not likely to change as a result of the advertising. For those who may be potential buyers, each additional ad will supply little or no new information that will affect their decision. Thus according to the concave-downward function model, the effects of advertising quickly begin to diminish.
Budgeting under this model suggests that fewer advertising dollars may be needed to create the optimal influence on sales.
Percentage of sales method- The advertising and promotions budget is based on sales of product. Management determines the amount by either (1) taking a percentage of the sale dollars or (2) assigning a fixed amount of the unit product cost to promotion and multiplying this amount by the number of units sold.
Account Planning- The process of conducting research and gathering all relevant information about a client’s product, service, brand and consumers in the target audience for use in the development of creative strategy as well as other aspects of an IMC campaign.
Focus Groups-A qualitative marketing research method whereby a group of 10 to 12 consumers from the target market is led through a discussion regarding a particular topic such as a product, service or advertising campaign.
Advertising Campaign- A comprehensive advertising plan that consists of a series of messages in a variety of media that center on a single theme or idea.
Campaign theme- The central message or idea that is communicated in all advertising and other promotional activities. Ex:
∙ McDonald’s- I’m lovin’ it
∙ Marlboro- Marlboro country
∙ Wheaties- Breakfast of champions
∙ Kay Jewelers- Every kiss begins with Kay
∙ Nike- Just do it
∙ BMW- The ultimate driving machine
Slogan (tagline)- A statement or phrase consisting of a few words that succinctly express the company image, identify and/or positioning a company or brand wants to communicate.
Inherent Drama- An approach to advertising that focuses on the benefits or characteristics that lead a consumer to purchase a product or service and uses dramatic elements to emphasize them.
Hierarchy of Effects Model
Awareness, knowledge, liking, preference, conviction, purchase
Cognitive Stage- Awareness, Knowledge
Affective Stage- Liking, preference, conviction
Behavioral Stage- Purchase
Attention, Interest, Desire, Action Cognitive Stage- Attention
Affective Stage- Interest, Desire Behavioral Stage- Action
The Consumer Decision Making Process:
∙ Problem Recognition
∙ Information search
∙ Alternative evaluation
∙ Purchase decisions
∙ Post purchase decisions
∙ Post purchase evaluation