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Define marketing.

Define marketing.

Description

School: Cornell University
Department: Applied Economics and Management
Course: Marketing
Professor: Debra perosio
Term: Fall 2016
Tags:
Cost: 50
Name: Prelim Review
Description: These notes cover all material we have covered in Marketing since the beginning of the year.
Uploaded: 10/08/2017
11 Pages 164 Views 22 Unlocks
Reviews


Marketing AEM 2400


Define marketing.



Prelim Review Sheet

Overview  

- Marketing definition: the process of constructing an exchange exploiting  the core competencies of the organization to satisfy the needs/wants of an  appropriately targeted segment of customers

- Philosophies

o Product orientation – if producer produces it, consumer will buy it o Sales orientation – producer has an overcapacity and consumers  have more choice, must convince consumers to buy the product

o Marketing orientation – producer is in the service of the costumer,  creating something that appeals to people’s needs and wants

o Societal orientation – the producer has a responsibility to society,  businesses should operate for the good of community and customers  (customers tend to expect this today)


What is societal orientation?



We also discuss several other topics like What is mercantilism theory?

o One-to-one marketing or customized marketing – marketing  breaks the market into smaller segments and markets to specific  groups but customized marketing considers person as an individual  and each customer needs personal attention

- Exchange

o Organization – has a unique, sustainable competitive advantage  based on core competencies and is meaningful If you want to learn more check out What is meta-analysis?

o Customer – has a need/want and tends to be willing to pay for it - Marketing concept

o Understand environment – macroenvironment and  

microenvironment

o Craft marketing offering to fit environment – segmentation,  targeting and positioning; product; distribution; pricing; integrated  marketing communication


What is core benefit proposition?



Marketing Strategy

- Mission statement – the purpose of the organization, unlikely to change - Generic strategy – 3 to 5 year plan

o Porter's generic strategies matrix (market/cost-differentiation)

Differentiation

Cost

Broad

Market

Differentiation

- A product with unique  quality, features,  

service, technology,  

style, location,

- Additional benefits to  justify slightly higher  

price

Cost Leadership  

- Control price

- Comes from high  volume – selling  

cheap prices to  

everyone

Don't forget about the age old question of What is the meaning of external attribution?

Narrow  

Market

Differentiation Focus - Differentiated product  but only selling to  

targeted segment

- Niche market

Cost Focus  

- Low price offered to  a niche market

- Does not come from  high volume

- Growth strategies

o Ansoff's growth matrix (market/product)

Existing Products

New Products

Existing

Market

Penetration

- Low risk, low  

reward strategy

- Higher usage  

among current  

users, draw in  

competitors’ users, draw new users  

into market

Product Development - New products through  new product development merger/acquisition or  

partnership

- Know the market and  habits of people who  

purchase your product,  use that to grow

New Market

Market  

Development

- Take existing  

products into new  

markets

- Can be new  

geographically,  

demographically,  

ect.

Diversification

- High risk, high reward  strategy

- New product  

development,  

merger/acquisition,  

partnership

- Danger running  

unfamiliar product in  

unfamiliar market

We also discuss several other topics like What is an express contract?

Ethics in Marketing

- Marketing Concept

o Honestly represent what the organization does well

o Honestly try to satisfy the needs/wants of the costumer

o Make a fair exchange that is ethical and good business

- Organizational responsibilities (pyramid)

1. Economic/legal responsibilities  

- *You do no one any good by going out of business

- Be profitable

- Profit is the foundation on which all other responsibilities rest 2. Legal responsibilities

- Obey the law

- Law is society’s codification of right and wrong

- Play by the rules of the game

3. Ethical responsibilities

- Be ethical  

- Do what is right, just and fair

- Avoid harm

- Standards of organization

- Expectations of customers, other stakeholders

4. Philanthropic responsibilities

- Be a good corporate citizen

- Contribute resources to the community

- Improve the quality of life

- Serving stakeholders

o Management

o Customers

o Local community

o Suppliers We also discuss several other topics like What is the difference between a “partial equilibrium model” and a “general equilibrium model”?
We also discuss several other topics like What is a nonpublic forum?

o Owners/stockholders

o Employees

- Specific concerns/AMA Code

1. Do no harm

2. Foster trust in marketing system

3. Embrace ethical values

Marketing Environment (SWOT)

SWOT = strengths, weaknesses, opportunities, threats

Macroenvironment (external environment)

- Opportunities/Threats

- Economic factors

- Demographic factors

- Social/cultural factors

- Political/legal factors

- Science/technology factors

Microenvironment (internal environment)

- Strengths/weaknesses

- Company analysis

o Core competencies – things done particularly well, generally related  to competitive advantage/generic strategy

o Value chain – disciplines/functions of the firm

 Primary activities – inbound logistics, operation, outbound  logistics, sales and marketing, servicing

 Secondary activities – procurement, product and technology  development, human resources management, administrative,  finance infrastructure, company culture

o Specialization

- Collaborators analysis

o Partners along the value chain – suppliers, vendors, operations,  research and development, marketing

- Competitors analysis

o Direct/indirect/potential

- Customers analysis

Consumer Decision Making (CDM)

Consumer decision-making process

- Moderators

o Cultural, social and psychological factors affect all steps in the CDM  process

o Involvement – how involved the consumer is in the purchasing  process

 High: extensive problem solving

 Medium: limited problem solving

 Low: routine problem solving

 Triggered by… infrequent purchases, expense (financial risk),  personal relevance (social, psychological)

- Process stages

1. Need recognition (ideal/actual, stimulus)

- Non-market stimulus

- Marketing stimulus – use advertising and the power of  

suggestion to convince people to buy things they don’t know  they want

2. Information search (evoked set, high/low level)

- Have an unfulfilled need/want so costumer does research to see what will satisfy

- Sets

o Awareness set – products you know exist

o Evoked set – products you would actually consider buying o Inert set – products you would not consider buying

- Level

o Low-level search

o High-level search

3. Alternative evaluation

- Multiattribute attitude model  

o Identify attributes of the brand (perception)

o Assign scores from 1 to 10 based on importance  

(importance)

o Marketing tactics

 Emphasize most attractive attributes

 Minimize competitor’s most attractive attributes

 Persuade customers to change weighting

 Create new attribute

4. Purchase

5. Post-purchase behavior (cognitive dissonance)

- Influences

o Cultural

o Social

o Psychological

o Individual

Marketing Research/Analytics

- Traditional project research

o Process

1. Identify and formulate the problem/opportunity

2. Plan the research design and gather secondary data

3. Specify the sampling procedures

4. Collect primary data

5. Analyze the data

6. Prepare and present the report

7. Follow up

o Research design

 Exploratory – initial insights, qualitative, small sample

∙ Techniques: focus group, interview, ethnography, mystery shopping

 Descriptive – help develop hypothesis, quantitative, large  sample

∙ Technique: surveys, web analytics, transaction tracking

 Causal/experimental – confirm hypothesis, quantitative, large sample

∙ Techniques: test markets (costly to release nationwide, so try in small market), advertising testing (alpha/beta tests

for websites), online experiments

- Big data and analytics

o Data velocity

o Data variety

o Data volume

o Definitions: the exponential growth in the volume, variety, and  velocity of information and the development of complex new tools to  analyze and create meaning from such data

o Applications

 Loyalty cards allow you to build a database of your best  

customers

 Example: Spotify recommends based on what users typically  listen to at certain times of day, predicts future preferences and can tell artists about their listener’s demographics

Segmentation, Targeting, Positioning

Segmentation

Divide the market into segments

- Reasons to/not to segment

o Segment:  

 Understand competitive conditions

 Customize products

 Customize distribution, pricing

 Customize marketing communications

o Don’t segment

 Cost – every change you make in product, distribution pattern  and communication cost money

 Modern technology has reduced significantly

- Criteria

Substantiality

Segment must be large enough to warrant a special marketing mix

Identifiability  and  

measurability

Segments must be identifiable and their size  measurable

Accessibility

Members of targeted segments must be reachable  with marketing mix

Responsiveness

Unless segments responds to a marketing mix  differently, no separate treatment is needed

- Bases

o Geographic

o Demographic

o Psychographic – Activities, Interests, Opinions (AIO), lifestyle, life  cycle

o Behavioral – usage, occasion for use and benefits sought

- Evaluating most attractive segment

o Size – which is the biggest and has most potential customers? o Growth – which demographic is growing?

o Structural attractiveness – What foes the competition look like? How  competitive and who is

already involved?

 Porter’s Five

Forces

Targeting

Determine the most attract

targets to prioritize

- Undifferentiated – go after

all segments but do not

differentiate your product

- Differentiated (multi-segment) – do after at least multiple segments and differentiate for each segment

- Niche (concentrated) – micromarketing, going after one segment and  differentiating your product to appeal exactly to that segment - Mass customization – craft individualize products and individualized  communication

Positioning

Develop positioning for each targeted segment

- Definition: developing a specific marketing mix to influence potential  customer’s overall perception of a brand, product line or organization in  general  

- Perceptual mapping/multidimensional scaling

o Perceptual mapping – a means of displaying or graphing, in two or  more dimensions, the location of products, brands or groups of  products in consumer’s minds

Product Strategy

- Types of products (offering)

A product is everything good or bad that a person receives in an exchange o Good

o Service

o Idea

o Convenience – a relatively inexpensive item that merits little  shopping effort (i.e. candy, soft drinks, aspirin)  

o Shopping – a product that requires comparison shopping because it

is usually more expensive than a convenience product and is found in fewer stores  

 Homogeneous – essentially the same (i.e. refrigerators,  

televisions, washers, dryers) – look for cheapest option usually  Heterogeneous – essentially different (i.e. houses, universities,  clothing, furniture) – often harder to compare

o Specialty – a particular product for which consumers search  extensively and are very reluctant to accept substitutes (i.e. Bose  speakers, Rolls-Royce automobiles, highly specialized forms of  medical care)

o Unsought – a product unknown to the buyer or a known product that the buyer does not actively seek (i.e. insurance, burial plots)

- Individual product decisions

o Core benefit proposition (CBP) – What does the product do and  what does it deliver?

o Unique selling position (USP)

o Benefits vs. features

∙ Benefit – customer point of view, what does the product  do for you?

∙ Feature – the aspects of the product that provide the  

benefit

o Actual product

∙ Features

∙ Design

∙ Quality

∙ Packaging

∙ Branding

∙ Brand – a name, term, symbol, design or combination  

thereof that identifies a seller’s products and  

differentiates them from competitor’s products  

∙ Brand equity – the value of a company or brand name

o How much more customer will pay because brand  

name is Apple, Google, Coca-Cola, Amazon,

Facebook, Toyota, ect.

∙ Brand sponsor  

o Manufacturer’s brand  

 Manufacturers i.e. Best Buy, Samsung, Apple

 If you stock manufacturer’s brand, they will  

help with marketing communications

 IMC help, traffic

 Enhance prestige

 Supply chain support

 Easy to replace if poor sales

o Private-label brand

 A brand owned by a retailer

 Have greater control and earn more profit  

than using manufacturer’s brand

o Family brand

 Sub-brand

 I.e. Apple has different marketing strategies  

for Beats, iPhone, ect

o Licensing

 NFL, Star Wars

∙ Brand strategy (brand name vs. product line)

Existing Line

New Line

Existin

g  

Brand

Line Extension

Same product, same brand

- Improvements – new features, sizes,  flavors, ingredients, ext.  

- Good fit/recognition  

- Dangers: overextension and  

cannibalization )if only existing  

customers not new customers are buying the product)

Brand Extension

New product, sme brand - Launch new product  with establish,  

recognized brand name - Dangers: poor fit if  brand name does not  match the new product

New  

Brand

Multibranding

Same product, new brand

- Launch additional brand in existing  product category

- Different brand/price appeals

- Shelf space – can take over more shelf  space

- Flankers – gives the allusion of options - Price differences – don’t want expensive  brand name associated with cheaper  products

- Dangers: spreading too thin

New Brands

New Product, new brand - Assumes that the  

existing names are not  appropriate

- I.e. P&G uses Pampers  for diapers rather than  Crest or Tide because  diapers are so different

- Dangers: spreading  resources too thin

o Augmented product – add-ons, not core to how the product works  but offer additional value

 Warranty

 Delivery

 Credit

 Installation

 Training

 After­sale service

 Ext.

4 P’s

- Product

- Price

- Place

- Promotion

Questions

- What product?

- At what price?

- What place (distribution)?

- How do we promote it (advertise)?

- Product Life Cycle

o There are various product life cycles

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