Description
Marketing AEM 2400
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)
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
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
Don't forget about the age old question of What is mercantilism theory?
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
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
Don't forget about the age old question of What is the primary purpose of diagnostic during the late 1800s and early 1900s?
- 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
Don't forget about the age old question of What is the meaning of internal attribution?
If you want to learn more check out 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 We also discuss several other topics like What is the difference between a “partial equilibrium model” and a “general equilibrium model”?
- 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 We also discuss several other topics like What are the three important reasons to study media law?
o Management
o Customers
o Local community
o Suppliers
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