MKT 337 Week 1 Notes
MKT 337 Week 1 Notes MKT 337
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This 17 page Class Notes was uploaded by Christopher Notetaker on Monday February 1, 2016. The Class Notes belongs to MKT 337 at University of Texas at Austin taught by Professor Gabbi in Winter 2016. Since its upload, it has received 35 views. For similar materials see Principles of Marketing in Marketing at University of Texas at Austin.
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Date Created: 02/01/16
Marketing Environment (Ch. 4) 2/1/16 10:29 AM 1. Social Factors a. American Values i. Self-sufficiency, upward mobility, work ethic, conformity b. Growth of Component Lifestyles i. Less conformance to traditional stereotypes 1. People all have their own generations lifestyles a. Some care about organic food, some care about social issues c. Changing Roles of Families and Working Women 2. What does an environmental scan entail? a. Analyze likely impact of trends i. For your company 1. Threats 2. Opportunities ii. To your customers iii. To your supplies 3. Demographics a. Population Size b. Age c. Gender d. Ethnicity e. Income f. Occupation g. Generally, hard/cold facts h. Easy to capture and chart i. Be careful about subsequent assumptions To your competitors 4. Comparing the Cohorts a. You can characterize each cohort (Baby Boomers, Generation X, Generation Y) i. Baby Boomers 1. 78 million 2. Diversity as a cause 3. Mass movement 4. Conform to rules 5. Killer Job 6. TV 7. Became institutions 8. Task-Focused ii. Generation X 1. 43 million 2. Accept diversity 3. Self-reliant 4. Reject rules 5. Killer life 6. Political Correct 7. Mistrust institutions 8. Multi-task iii. Generation Y 1. 73 million 2. Are diverse 3. Self-inventive 4. Ignore rules 5. Killer lifestyle 6. Internet 7. Don’t believe in Institutions 8. Irrelevant 9. Hyper multi-task 5. Racial and Ethnic Diversity in America a. By 2025: i. Hispanic population will grow to 20% of population ii. African American population will grow to 13% of population iii. Asian American population will double to 7% of population b. Marketing to Hispanic Americans i. Diverse 1. The population’s diversity creates challenges for targeting this group 2. Hispanics tend to be brand loyal, but are not aware of many U.S. brands 3. Nearly half of adult U.S. Hispanics have home Internet access c. Marketing to African Americans i. Uniform 1. Many firms are creating products for African American market 2. Promotional dollars and media choices directed toward African Americans continue to increase d. Marketing to Asian-Americans i. Rich and diverse 1. Younger, better educated than average, and have highest average income of all groups 2. Many products have been developed for Asian American market 3. Cultural diversity within the Asian American market complicates promotional efforts 6. GINI Coefficient a. GINI = Distribution of wealth in a country i. Lower is better ii. US wealth distribution is disproportionate to the idea of freedom/equality 7. US Microeconomics a. Typical median gross household income (2008): $49,000 i. Disposable (after taxes how much do I have to spend in total) 1. Spent on a. Food b. Housing c. Clothing d. Transportation, health care, insurance ii. Discretionary (“optional”) income 1. Spent on a. Luxuries b. Savings b. What does recovery look like? i. The corporations are benefiting from the recovery because the world are buying more of the US items 1. Exports are increasing a lot 2. The future markets are not in the US 8. Discussion P&G (Proctor and Gamble) a. P&G is the middleclass i. Middleclass marketing ii. The future for P&G 1. Looking to market to the different income cohorts a. Lower class and upper class i. Lower Class 1. Price matching (Lowest price) ii. Upper Class 1. Discretionary spending (Opulence) 2. P&G have to change to market to this new spread of income a. Data shows P&G can expect new better results Notes MKT 337 1/27/16 ▯ Strategic Planning ▯ ▯ BCG Portfolio Matrix o Stars (High Relative Market Share and High Market Growth Rate) Profit potential is high Attracts competition because it is successful May need heavy investment to stay ahead o Question Marks or Problem Children (High Market Growth Rate and Low Relative Market Share) Build into stars or phase out Spend a ton of money to become a star or get out of the market Requires cash to build market share o Cash Cows (Low Market Growth Rate and High Relative Market Share) Established, successful SBU’s Beaten competitors in the STAR area and now you can make lots of money Competition weakened No serious investments Spend enough money to make sure that your natural flow continues Produce cash Cash cows are what make you money o Dogs (Low Market Growth Rate and Low Relative Market Share) Low profit potential Dogs strategy should almost always be get out Usually discontinued o What do you want? You want cash cows to give you capital so you can fund your future stars so you don’t be a dog over time o Apple vs. Microsoft in BCG Apple has a bunch of dogs and a total butt load of question marks Microsoft has several cash cows Apple and Microsoft has tons of cash to invest in whatever and whenever they want ▯ Ansoff’s Strategic Opportunity Matrix TERMS o Market Penetration Increase market share among existing customers Marketing amazon o Market Development Attract new customers to existing product Marketing amazon to new countries o Product Development Create new products for present markets Marketing Amazon the first time o Diversification Introduce new products into new markets Amazon Cloud ▯ Mission Statements Coca-Cola o “Everything we do is inspired by our enduring mission” o To refresh the world: in body, mind, and spirit ▯ SWOT Analysis ▯ Competitive Advantage Three Strategies o Cost Leadership Strategy Have the lowest cost and broadest reach Wal-Mart o Differentiation Strategy Perceived to be better by everyone (broad) Target HEB o Focus Strategy Perceived to be better by a certain group (narrow) Restoration Hardware Whole Food Analysis how to achieve these strategies o Price leader makes a cost leader Heaviest involvement in R/D, efficient labor o Product/Service Differentiation Competitive Advantage Strong brand, specific store experience, the image you portray, the feelings of owning the products, the service experience o Niche Competitive Advantage Used by small companies with limited resources May be used in a limited geographic market Product line may be focused on a specific product category Sources of Sustainable Competitive Advantage o People are an amazing source of competitive advantage ▯ Porter’s Five Forces Products, Buyers, Substitutes, Sellers(Suppliers), Business o Each one of these are barriers to entry in a market You want a product with high entry barriers, high brand loyalty, supplies power low, no threat of substitutes, and no rivalry ▯ Why write a marketing plan? Business mission statement o What am I trying to do? SWOT Analysis Objective o What am I trying to accomplish? ▯ Criteria for Good Marketing Objectives Marketing Mix: The Four Ps Product o Includes Physical Unit Package Warranty Service Brand Image Value o Products can be Tangible goods Ideas Services Place o Product availability where and when customers want them o All activities from raw materials to finished products o Ensure products arrive in usable condition at designated places when needed Promotion o Role is to bring about exchanges with target markets by Informing Educating Persuading Reminding Price o Price is what a buyer must give up to obtain a product THE FORMULA o ▯ Organizations are like big ships Corporate level strategic direction includes o Business and Mission Can change quick on paper but slow in reality o Culture Always slow to change o Goals (objectives) Can change relatively quickly ▯ Notes MKT 337 1/25/16 ▯ Introduction to Marketing ▯ ▯ What is Marketing? Discover customer’s needs Satisfy customer’s needs ▯ Kotler on Marketing Shortage of customers leads to hyper-competition which leads to price wars Marketing is the way to compete on other issues than price ▯ The 4 P’s Product Place Promotion Price ▯ Creating Value Perceived Value = F((What you get)/(What you pay)) o F ((Product)(Place)(Promotion)/(Price)) We create value for our customers so that we can bring value to the organization (more revenue) Promote product, place, and promotion so that you don’t have to worry so much about price ▯ Different Orientation’s Production Orientation o What can we make or do best? Oil, Henry Ford Sales Orientation o How can we sell more aggressively? Life insurance Market Orientation o What do customers want and need? Find the right customers, build relationships with them, extract more value from them, promote the right product experience Societal Marketing Orientation o What do customers want/need, and how can we benefit society? Make people believe that what ‘we’ are doing is good for them. Make them believe our company stands for ‘good’ ▯ Overview of the Marketing Process This slide is the guidelines for the semester o ▯ What motivates a customer to take action? Unsatisfied Needs and Wants o Needs Underlying state of felt deprivation for basic items such as food and clothing and psychological needs such as belonging o Wants Form that a human need takes as shaped by culture and individual personality ▯ Maslow’s Hierarchy of Needs Each individual need must be satisfied at the lower levels before they progress to the higher, more complex levels Slot your product in the hierarchy where you would expect them to slot ▯ What will satisfy needs? Products o Anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a need or want iPod, toothpaste Services o Activities or benefits offered for sales that are essentially intangible and does not result in the ownership of anything Banking, airlines, haircuts, and hotels ▯ The Breadth and Depth of Marketing Who markets? o Companies o Political Organizations o Governments o Individuals What is marketed? o Products o Services o Ideas To whom? o Industrial buyers People who buy stuff for business to consume ‘B to B’ o Consumers ‘B to C’ Ultimate users o People who use the service/product but don’t buy them Children o Apple marketed to the user instead of the industrial buyer ▯ Why is Marketing so important By virtue of who and what is involved o Everyone is involved somehow, at multiple levels o Enormous levels of resources are at stake o Competition is fierce Balancing needs of various stakeholders o Customers o Investors/shareholders o Employees “What have you done for me lately” generation How do you stop your employees from switching jobs o Community o Society ▯ Cuties Most of the time fruit simply competes on price However, cuties made people think about fruit with more value than the price o Cuties got people to think about the product, place, and promotion but failed to retain people trying the fruit Initial Promotion Marketing o Parents Safe, easy to peel o Kids Make them cute for kids to eat Initial Place Marketing o Where can you buy cuties? EVERYWHERE. Highly unusual. Fruit doesn’t respond well to being moved. Sell the product everywhere Initial Product Marketing o Created a new type of fruit Being successful with product, place, and promotion allows you to raise the price and still be profitable INCREIBLY successful o This means people began to compete with Cuties Cuties Problems o Overspent on promotion. Try to keep your numerator value (Product, Place, Promotion) increasing Other options Diversify using extra money from high profits before competition Cuties vs. Commodities o This problem of crowding out/competition extends across all industries o How do I maintain my status? If I don’t feel like I can maintain that status how do I figure out what is next? ▯ Strategic Portfolio Management