Introduction to Marketing
Introduction to Marketing MKT 327
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This 20 page Class Notes was uploaded by Jeanette Orn on Saturday September 19, 2015. The Class Notes belongs to MKT 327 at Michigan State University taught by Gilbert Harrell in Fall. Since its upload, it has received 80 views. For similar materials see /class/207243/mkt-327-michigan-state-university in Marketing at Michigan State University.
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Date Created: 09/19/15
Marketing Exam 2 0 Consumer Behavior 0 dcfions and decision processes of individuals and households for consumpfion 0000 Disc ove ry Evoludfion Acunng Consuming o Disposing r producfs and services c Spheres of Influence o Culfure ledrned volues beliefs longudge symbols and pdfferns in d sociefy o Sub Culfure subsef of people Wifh shored volues Wifhin d culfure o Socidl Cldss reldfively sfdble division of sociefy bdsed on educofion income and occupdfion 0 Reference Group figures ouf whdf consumers like and don f like 0 deily amp Orgdnideions sfdnddrd purchdse dnd consumpfion unif o Individudl consumer 0 Decision Making 0 Passive Decision Mdking lifer energy puf info decision jusf do if and see how if feel Roufine decision mdllting Lifer self ego purchdse gt brdnd evoludfion o Acfive Decision Mdking good dmounf of energy puf info decision fhinllt dbouf if firsf Complex decision mdllting High self ego Brdnd evoludfion gt purchdse o Ego self concepf o Lisf of Needs 0 Murrdys Lisf of Mofives Sfdrch s Lisf of Mofives Domindncelconfrol Love of Offspring Exhibifionlexcife Hedlfh Pldylfun Gregoriousness Sexlreldfionship Clednliness Rejecfionlsnub ofhers Curiosify Undersfdndinglspeculdfe Compefifion Humor o Maslow s Hierarchy of Needs needs ond wonts o Physiologicol Nutrition ond Air 0 Sofety Security ond Protection 0 Love ond Belonging Friendship ond Acceptonce o Esteem Prestige ond Stotus o Self Actuolizotion Self fulfillment ond Personol Enrichment o Perception o Sensory Receptors ond Cognitive Anchors o Involves Selective Attention o heed informotion thot supports current viewsbehoviors Selective Comprehension o Interpret products and messoges occording to current beliefs Selective Retention 0 Remember some ond forget other informotion 0 Learning 0 Any chonge in consumer behovior coused by on experience Cognitive Leorning thinking 0 Highly Involving 0 Knowledge about 0 products ottributes not influenced by emotion 0 Steps in decision moking 0 Problem Recognition become owore of unfulfilled need or desire Informotion Seorch thinllting through situotion by recolling informotion stored in memory or obtoining externolly Alternotives Evoluotion determine which product would most likely sotisfy gools Purchose Decision whether or not to buy ond which competing product mode ofter evoluoting olternote ond finonciol commitment to product 0 O O 0 Purchase Evaluation process of determining satisfaction of dissatisfaction with product Contiguity Learningclassical conditioning always occurs 0 Unconditioned Stimulus Meat 0 Unconditioned Response Hunger o Conditioned Stimulus Bell 0 Conditioned Response Hunger Reinforcement Learning 1 See Something Significant symbolic social 2 Want Something Basic or Learned DRIVE 3 Do Something Behaviors Internal and External Get Something response 5 Do it Again Loyalty Habit and Cognitive p o Attitudes 0 Everything about influencing creating and understanding 0 Mental and Neural State 0 Organized through experience 0 Directive influence on peoples response 0 All objects and situations 0 Attitudes Beliefs o Belief Seellting Beliefs can change See world in a certain way 0 Fact Seellting remain the same Cannot alter facts 0 Attitudes and Relation to Customer Behavior 3 Ports 0 Loyalty o 1 Thoughts What an individual believes Thinllt Believe o 2 Feelings Feel Like 0 3 Intentions Want Prefer o Attitudes and Behavior what comes first 0 Low Involvement Behovior leads to Attitude 0 High Involvement Attitude leads to Behovior 0 Changing Consumers Attitude 0 Adding choice criterio 0 Changing importonce desirdbility 0 Changing cognition beliefs 0 Changing behovior 0 Information Processing 0 Everything comes together 0 Memory Sensory II 000 of 0 second Short term I 6 second Long term Infinite o Encoding Process of converting informotion to knowledge Imogery Episodic Verbol Semontic Recoll brought it up Recognition remembered it 0 Left Broin Slow Anolyticolrules Gets tired Reasons 0 Right Broin Fost Visuol Creotive Music 0 Customer Satisfaction and Quality 0 Quality 0 Two Types Stotic Monogement o Preservotion of potterns Dynomic Leadership 0 Force of chonge O Qudlity is like Conditioning Must credte relationships and solutions thdt build sdtistdction and quality Being in good shdpe is not enough to compete 0 Customer Satisfaction O 0 Customer Experience Contact with the business Customer Perception and Sdtisfdction Better than expected gt delighted As expected gt sdtistied Less than expected gt dissdtisfied Sdtisfied Customers Are insulated from competition Tolerdte price incredses Buy more Tell others Are less likely to shop Are likely to become more loydl Unhdppy Customers Only 4 compldin Over 90 won t be back Edch unhdppy customer tells 9 people Unlikely to become loydl Important to CEOS Customer sdtisfdction 7l Good People 38 Time to Mdrket 31 Keeping up with Technology 24 Sdtisfied Customers All satisfied customers ore not loydl and oil loydl ore not satisfied Mdy compldin out of commitment If recovery occurs may become more loydl 0 Speed of recovery 0 Equity of solution Compldining Behdvior Person compldins only if they con conceive something better Alwoys dsllt whdt would be betterwoy Compldints ore mistdlltes mode in the eye of individual customer o Loyalty amp Business Performance 0 Produces Soles 70 come from repeot purchases of loydl customers 0 Produces Lower Costs Cost of ocquiring new is 5 7 times more thon keeping one o Produces Profit 5 increose in loydlty 2 times the profit 0 Customers Leave o 10 prefer on dlterndte product or service 0 10 reasons unreldted to business 0 15 dissdtisfied with d porticuldr product or service 0 65 DON T LIKE THE WAY THEY WERE TREATED 0 Customer Value Leadership 0 Increose the volue of business gt develop Idsting pose of loydl customers 0 Path to Profit 0 Loydlty equity Sdtisfied loyol high customer equity profit Hoppy employees quolity solutions Cost of ocquiring customer low 0 Churn problem Unhdppy churn ow customer equity oss Unhoppy employees poor solutions Cost of ocquiring customer high 0 Customer Acquisition amp Loyalty o MorketlBrdnd Leddership High Customer Loyalty High New Customer Acquisition Get ond keep customers 0 ComplocentlLow growth High Customer Loyalty Low New Customer Acquisition 0 Business Churn High New Customer Acquisition Low Customer Loydlty 0 Exodus Condition Low Customer Loyalty Low New Customer Acquisition Cost of ocquiring customers high 0 Business Performance 0 Quolity Stotic over amp over Dynomic dlwoys chdnging 0 Customer Sdtisfdction 0 Repeat Purchasing 0 Business Performance 0 Customer Equity amp Gaining Loyalty 6 questions 0 Quality gt Thinking I m Smart Value to customer Product is good and fair deal Easy to buy Appropriate value for price 0 Customer Satisfaction gt Feeling I Feel Great Emotional connection to the brand Brand positioned in use situations Customer empathy Core to buyers competitive strategy 0 Repeat Purchasing gt Intentions No Reason to Switch Non switching programs Switching intentions Loyalty programs After sae responsiveness 0 Business Performance gt Customer Equity Quality satisfaction repeat purchasing Thinllting feeling intentions Lifetime Value 0 Attitudes Build Winning Loyalty Strategies 0 Thinking feeling intentions 0 Winners Outstanding in two of those good enough in other Thinllting feeing need eXit barriers Feeling intention need value proposition ntention thinllting need emotional commitment o Segmentation and Targeting o Segmentation voice of customer 0 able to relate to 0 target to a certain product 0 Defining Segmentation Market 0 Measure Number of customers Volume Currency 0 Market Share Components Ours Theirs Ability and need Need and No Ability Effective Segmentation 0 Group Similar needs wants preferences Information gathering and media usage Shopping and buying patterns 0 Segment must be large enough 0 Information must be available Segmentation Variables Geographic Demographic Diversity Psychographic and lifestyle Behavioristic 0 Benefits Strategic Concentration 0 shot gun undifferentiated o pistol differentiated o high powered rifle concentrated Two Target Market Strategies 0 Niche Small marlltet companies ignore do not perceive adequate opportunity 0 Mass Customization One or several marlltets Efficiently responds to needs and desires of individual consumers Positioning High Value Positioning 0 Goal of every business is to create value 0 Value in Exchangedescriptive Price establishes value for the seller 0 Value in Uselapplication Benefits and costs establish value for customer 0 Key Position in use Fundamental Positioning of a Product 0 Attribute o Pricequality OOOOO Marketing Exam 2 IBM Watson Chapter 5 Adapters 0 Understanding healthcare systems linking patient to families and extending to caregivers and organizations Make decisions that positively impact patient Find correlations patterns and relationships Make it months instead of years Watson used to generate cohorts of patients with similar characteristic 0 Draw upon global pool of information to uncover how best to treat them Nurses meticulously train Watson Expect the comprehensive evidence based approach to enhance cancer care at a speedy pace IBM Watson Chapter 7 Based on Developina Customer Lovaltv 0 each customer carefully selected make sure they remain loyal make sure they are satisfied invest millions of dollars to bring tech to promising customers customer loyalty is critical every customer adopting Watson has remained loyal Core Values centered around Customer Satisfaction amp Loyalty Dedication to client success Innovation that matters company world Trust and Responsibility in all relationships Second most respected publicly traded company in 2012 Solutions developed closely with industry domain leaders Healthcare financial and other areas Healthcare Wellpoint Indianapolis health benefits Traded Watson 18000 medical history cases Now uses evidence to help nurses make decisions on utilization management 0 Bring information and data together Turn into knowledge make a difference IBM Watson Chapter 8 Carefully select markets speed evolution of Watson Capabilities 0 not about Capturing markets but Making New markets 0 best suited for data intensive industries require analysis of high volumes of data 0 O O O O O O 0000 MKT EXAM 1 Chapter 1 What is marketing What are the key elements in its definition Marketing is an organizational function and a set of processes for creating communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders The purpose of marketing is to identify the needs and wants of customers within markets and create customer value in ways that will ensure the longrun success of the organization by making connections between companies and customers How does marketing work By creating valuable exchanges that provide utility What are the four basic areas in which marketing is typically applied 1 Consumer marketing 2 Business to business 3 Nonprofit 4 Internal marketing within a functional unit to its internal customersemployees What is utility Four types Utility is a term used to describe the want satisfying potential of a good or service 1 Form utility when knowledge or materials are converted into finished goods or services Marketing provides utility when it guides decisions about what products to create and the attributes those products should possess 2 Place utility make goods and services conveniently available 3 Time utility makes goods and services available when they are wanted 4 Ownership utility makes it possible to transfer the title of a good or service from one party to another What are the stages of marketing evolution Describe each Marketing has progressed through three eras the production era the sales era and the customer marketing era The production era focused on ways to efficiently massproduce new products while the sales era focused on getting people to buy products The customer marketing era moved management s attention toward satisfying customer needs and wants What is marketing strategy Describe each of its four steps 1 Situation analysis all the activities required to understand the global market environment the consumers needs and wants the competition It attempts to predict the future of the market place It provides to context around which plans are created altered and adjusted Understanding the situation also means understanding consumer behavior why customers respond to goods and services how they do Target market it is impractical to try to satisfy all consumer wants and needs A target market is a group of potential consumers with similar interests Positioning the process of creating an image reputation or perception of a company or its goods and services relative to competitors in the consumer s mind Marketing Mix decisions 3 Product b Place c Promotion determining objectives creating messages and developing the forms The communication medium must also be selected d Price New age forces important to create and capture value 6 1 P P PP E J Technology and ecommerce a Technology that spawns new markets b Mass customization c Internet Globally Diversity Ethics Sustainability Relationships 3 Pure transaction one time gtrepeated transactiongtrelationships interactive ongoing 5 And Definitions Key Term nusm 39 39 39 ur 39 39 39 e55 markeungz When a busmess p 39 daggmnn en m to pmduce o ler goods to support 39 open39 to xeseil ataproflt I V dad t1onimiile marketing environment that emsts B when an abundance of product lets the buyer control the consumer marketing When organizations sell to individu 39 quot quot quotJquot quotproducts Omar o m un An organizational philosophy that focuseson satisfying consumer needs and wants Gasma value What consumes perceive they gain from owning musinga over and above the cost39of anquir 39 ix Distribu on channel A set of independent organizations thatmah up a good or service available for purchase by con mm or m 25w 39 39 The degree to which an organiza on s activi bes Me thatmaner to consumers Him The m which activities 8356 Wed 011 Mme um 39 r m We a W mcm oetship unmdbymr one or more of ur clematis unavaand n gt 39 7 Wm munFair n eau quotwanin dizialf e is 5 we Wagoner a a WWW v h ri iafi sereax ea 3911 w Chapter 2 What are the elements of the marketing planning hierarchy Strategic market proceeds from a company s vision to the strategic marketing plan to the marketing mix plans 0 The vision describes what the organization is trying to accomplish in the broadest sense It includes the organization s marketing philosophy 0 The strategic marketing plan is developed in line with the vision by a crossfunctional team representing several business areas such as manufacturing accounting finance and engineering 0 The plan describes the goals and states how the company will achieve them Specialists in each component of the marketing mix prepare a plan for that area What are the components of vision 0 Core values reflect the company s beliefs about the types of behavior acceptable from employees and the company as a whole as well as its relationships to employees customers and society in general 0 Business definition describes the contributions 3 company seeks to make to customers and society Myopia can occur when a company focuses on its goods and services and not on the benefits these goods and services provide to customers 0 Strategic direction is the desired leadership position of an organization as well as the measures used to chart progress toward reaching that goal 0 Strategic infrastructure consists of strategic business units and core competencies Core competencies are the unique resources that are used to create superior customer value They are the building blocks of competitive advantage What are strategic business units How are they measuredmanaged Medium and large companies have SBU s An SBU is a part of the firm that can be managed seperatly for marketing purposes it may be a division within the company a separate product or product line a distinct group of customers or a unique technology Their contribution is measured using Portfolio planning tools 0 Growthshare matrix 0 Uses market growth as a measure of opportunity and the company s market share as the measure of resource strength What are the components of core competencies Base technology research and development skills of a company Process technologies allow the firm to product quality in the most effective and flexible manner possible Product technologies company s ability to create new goods and services People systems procedures that provide the human connection between companies and consumers WPP N Information systems data about consumers market trends etc Who creates the strategic marketing plan Everyone in the organization What is a market strategy A strategy is the development andor deployment of resources with the intent of accomplishing goals and objectives in competitive areas What are types of strategy 1 Lowcost strategy winning through efficiency higher margins and lower prices passed on to the consumer 2 Differentiation strategy delivering value in a way that is clearly different 3 Customer intimacy strategy delivering value through superior empathy for customers and solutions tailored to specific customer needs P Sustainable competitive advantage strategy that competitors can not easily duplicate or surpass Less volatility and better longrun performance What are the components of the strategic marketing plan The strategic marketing plan describes how to accomplish the corporate vision and consists of 5 steps 1 Set objectives desired profit market share total sales 2 Situation analysis at a minimum give the team a general idea about the future including potential size of the market types of customers competitors technology channels of distribution economic conditions governmental regulations and the resources the company will have at its disposal both globally and in individual countries 3 Target market which market segments the firm will emphasize in attempts to satisfy customers better than its competition 4 Positioning create perception in consumers mind relative to competitors 5 Integrated marketing mix plans product place price promotion What is a SWOT analysis Strength weakness opportunities threats What are the steps in the marketing control process What does it do Since results seldom occur precisely as expected the control process provides feedback on how well the strategy is working Review objectivesgtMeasure performancegtEvaluate performancegtAdjust objectivestacticsgtTake action What are the strategies for foreign market entry Exporting and Importing investment can be lower than most other methods Foreign licensing and franchising assigns rights to patent trademark or manufacturing process to a foreign country for royalties Overseas marketing and production also called subsidiaries owned by companies in foreign countries Foreign strategic alliances joint venture two companies combine resources for a new venture They can provide products and services more competitively than a single organization Key Terms And Definitions 39 39 39 39 39 l39l hedrudurt3 Business de nition Describes the conuihutirms the business Physncal dnstnbntzon I39he movement 0 ms p I h39 n is of dieriburion to customers makes m cusmmm and may also talkd lb wmlmny Porggilflpl n zizg tools Tools that measfure the nonp gl c 39all cr ormzmcc o Gommcessz Procedures designed to previdc feedback um Zinc SBU makes to the 0v 1 p I E f hug lrk wmpgt 39 i 39 139 ti inthemm a on how vial tht unggil39al fgy 15f 391 m 139zn of me plan Positioning Creating an HIElgci39OLPEE LESP pdum relative m coma rmew mach 1h Hailing Oan being rth consumers about the orgamzauo p 39 r39ccrOJc ves39 mg timetgeifbig The unique resource a company the Cltn1cstlil 11s nit SBU Apart of the that can Corsavzllop and employs to create superior cmwmcr value he Stef 156d separately for marketing purposes It mag 12 l l v l 39 39 t u fundamental hu dmg blocks of Co l QEUQS IJsdv lfggpa or djvigiun a product or Eruclll ct Ime a distmc gm p Core values A set of statements 135 1 quotyquot mm 0 a ur uque islilnnilcsgkyrw lead sl p position or an bEhaqulnomr 236d or are msz dIlllmployce from scveml Strategic dlfeczoxu It mew res used to chart ngmss Cross 7 o P t p orgammmm 39 arms r pon blc for dwcmpmg w company swam ma towardirjgdmbgumcmm rpgfluo39lljie corporate con guration Tat hating Plan b2 11 on delivering cus Strategic as y 39 eren a on strategy Stratch 1 r ay 33 C C 10 CG E C01 mys 11C E 0 core competenctes Louie value l 3 Vi that death d1sungu15h h produ l p l 1h dist IV W 939 umlg t ccm39c leSi39 md Ploudcs Lb saunas 3 5 rl t0 satisfy Hammer 0 I 39 an 39 L ribin the ma bn i m W1 A m or 39mndml organ qu 39 marketing plan 39Lhe documen dcsc g 39 zhi them in light of mowed in making the product mini 531 am mm DY othci lg and how to at even 39 39 39 a c Fo39dg39ltmens dctudnlggrgfgmmeullzllomign company for We ch m A 4 nccds and or mam mar fcc often called a 7 ma Wham mum I V 7 wilt 13112233 Elf produd inclmaiqu sn g ppemhhpmmqmdewy nig u c by the markcmr P a but also the un n markqnng Md me imam of acmmphshmggmk an 0 Jcc v process andor uad adv Irma u 39 7 which t a mcimp39etmqimof the Erm t together taumate a slgm ogram it w 39 fa wmpan mmgnanun 39 Th extent 1 humble wage ti oompen advantage The strategy that 39 attwrs lcyari cjt easily duplicate or r acuvi EB cur Wm v f Anethalyst sofstrengtlmweaJEcssesg EfES Joint venmr e 31W maxi 1 Earring mmawm CMth how we is co p y mum 9P 8 P A V V r V and rcsou391cw m atcb the predicted market ipportunl ly tin cither opuldgorl M 6 r r 1m 7 tram 7 t Ch 39 I Eating The pmpess of selecting win 7 marine V Emmi the organization wrll cmpl taslzem attempts to sar dumdrincrs Better than its competitors Chapter 3 Describe the marketing environment and the use of environmental scanning The marketing environment comprises all factors that affect a business Divided into two groups 1 Microenvironment includes factors that marketers interact with regularly The microenvironment influences and is influenced by marketing 2 The global macroenvironment includes factors that marketers must take into account when making decisions However marketing seldom influence these factors Together these factors can facilitate or inhibit organizations from reaching their objectives Proactive organizations use environmental scanning to keep up with environmental changes The web is a great tool to help maintain currency in knowledge of the environment Who are stakeholders and why are they important List five different types Stakeholders are important parts of the microenvironment and directly participate in accomplishing the organizations goals They include owners employees suppliers intermediaries and action groups Stakeholders participate with the organization in order to accomplish their own goals consequently marketers must take their desires into consideration when making decisions Companies must make a profit for their owners employees must be happy suppliers have heavy influence on intermediaries who help move the product between you and your customers they also represent your company Action groups serve as watchdogs that keep the interests of the environment and people in balance with profit seeking What are the elements of industry competition Provide major forces that determine competitive intensity Competition involves single competitors and groups of company types that compete We look at the rivalry of existing firms to understand oneonone competition Potential competitors are also viewed because firms enter and exit industries At the same time substitute products can play a role especially when new technologies bring new ways to perform old functions The bargaining power of suppliers is also important because it determines how a company competes Suppliers have more power when there are few suppliers and many buyers All of these factors of industry competition need to be understood in order to build appropriate marketing strategies iii area d6 2 quot r we and writrm y g meme In wh a ermS And 7 Key 7 Chapter 4 What is a marketing information system MIS A marketing decision support systemA trans actionbased information system TBIS You cant connect with customers if you can t locate understand and respond to them MIS are crucial in making informed decisions about nearly every aspect of marketing They are used to systematically collect and analyze data to support decision making AN MIS often includes a marketing decision support system MDSS which puts information in convenient form for executives to use MIS are ongoing and encompass all information Marketing research is conducted to address a particular opportunity problem or issue Marketing information is used in planning marketing mix decisions and performance monitoring A TBIS is a specialized type of MIS which is an electronic link between a firm and its customers distributors and suppliers What is the difference between data and information Data must be translated into information before they are useful for decision making External data comes from outside the firm and internal data from inside Both types are stored in a database so they can be retrieved through a computer Primary data are collected for the first time to address a specific issue Secondary data already exist and can be accessed immediately by a broad range of users Once data are assembled they must be analyzed through sorting the use of statistics and models What are the key roles that marketing information plays 0 Marketing planning 0 Marketing mix decisions 0 Product decisions 0 Place decisions 0 Promotion decisions 0 Pricing decisions 0 Monitoring performance What are the typical steps in a marketing research project Defining the problem 0 Research design layout of what data will be collected from where and how the data will be collected and analyzed 0 Exploratory research gives better understanding of the issues by searching for causes or explanations for the problem defining the magnitude understanding competitors actions and reactions estimate how courses of action may affect the market 0 Focus groups 812 people uncover qualitative information 0 Depth interviews unstructured interviews that allow researchers to probe into a consumers thought process 0 Projective technique word association sentence completion roleplaying 0 Observation participants are simply watches 0 Case analysis in depth study of a few examples What is quantitative research Name some methods Provides information that helps decision makers select the best course of action and estimate results Surveys experiments personal interviews mall intercepts telephone surveys sampling Wi l Chapter 5 What is involvement Consumers behave differently in low and high involvement situations When involvement is high they use an elaborative five step decision process and their attitudes are learning actively When involvement is low they make choices without much effort and learning is passive What are the five steps in decision making Problem recognition Information search Alternative evaluation Decision and purchase WPS JE Jquot Postpurchase evaluation What is information processing Information processing refers to ways in which consumers acquire store and evaluate the data they use to make decisions The human mind has a remarkable ability to process the information it takes in Perception motivation behavioral learning and attitudes are integrated into the human thought system which acquires stores and analyzes data to arrive at goaldirected behaviors Key to information processing is the encoding of information and its use in memory