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Date Created: 09/20/14
Exam 1 92014 122 PM Chapter 1 Marketing s Value to Consumers Firms and Society DNA Distinct Notable Attribute what distinguishes you from everybody else Marketing strategies Product differentiation is the key to competitive advantage Price directly effects sales must re ect the customers value Promotion achieving desired campaigns Place getting the right products to the right place and time schedules Having products available in stores at the most convenient store area Satisfying customers by creating value American Marketing Association Definition of Marketing Marketing is 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 Marketing entails processes that focus on delivering value and benefits to customers not just selling goods and services The key is to create value to the customer Exchange Conditions for exchange 0 1 At least two parties 2 Something of value 3 Communication and delivery 4 Freedom to accept or reject OOOO 5 Desire to deal with other party meaning you want to work with the other person The Management job in Marketing More than selling and advertising Things a Firm Should Do in Producing a Bike Analyze needs Who needs it Predict wants How many people want it Estimate demand Will there be a lot of people who want it Predict when When do they want it Determine where Where are you going to buy it Estimate price How much should it be Decide promotion How are you going to promote the product Estimate competition Who are your competitors out there Provide service Can you service the product after you buy it Production vs Marketing Production 0 making goods 0 performing services Marketing makes sure right goods and services are produces Both of these creates customer satisfaction Four Marketing Management Philosophies Production intemal capabilities of the firm Sales aggressive sales techniques and belief that high sales result in high profits Market satisfying customer needs and wants while meeting objectives Societal satisfying customer needs and wants while enhancing individual and societal wellbeing Production Orientation Field of dreams orientation Sales Orientation Marketing selling things and collecting money 0 Disregards market needs and consumer demand 0 Despite the quality of sales force often cannot convince people to buy what is neither wanted nor needed Market Orientation Marketing concept 0 Focusing in customer wants and needs to distinguish products from competitors offerings 0 Integrating all the organization s activities to satisfy these wants 0 Achieving the organization s longterm goals by satisfying customer wants and needs Achieving a Marketing Orientation Obtain information about customers competitors and markets Examine the information from a total business perspective Determine how to deliver superior customer value Implement actions to provide value to customer Societal Marketing Orientation An organization exists not only to satisfy customer wants but also to preserve or enhance individuals and society s longterm best interests For example 0 Less toxic products 0 More durable products 0 Products with reusable or recyclable materials Marketing is Important to You Important to every consumer Important to your job Affects innovation and standard of living Marketing Key Characteristics Pro t and nonprofit girl scouts More than persuasion if done well it will market itself Begins with needs everybody has needs Doesn t go along it needs consumer behavior etc Involves exchanges Builds relationships can lead to repeat purchases Customer Value Requirements Offer products that perform Eam trust Avoid unrealistic pricing Give the buyer facts Offer organizationwide commitment in service and aftersales support Cocreation with customers I will work with you but if you do this I will do this Customer Satisfaction is The customer s evaluation of a good or service in terms of whether that good or service has met their needs and expectations Did you meet my needs and satisfy me Universal Functions of Marketing Buying Selling Transporting Storing Standardization and grading Financing Risk taking Market information Putting it all together Total company effort to satisfy customers Offer superior customer value Attract customers Satisfy customers Retain customers Increase sales to customers Build profitable customer relationships Why Study Marketing Important to society Good career opportunities Important to business 92014 122 PM Chapter 2 Elevator Pitch 2 minute speech about what your strategy and plan is you are the product and the brand you are marketing Marketing Strategy Planning Strategic Planning is The managerial process of creating and maintaining a fit between the organization s objectives and resources and the evolving market opportunities The goal of strategic planning is longterm profitability and growth Ansoff s Opportunity Matrix Market penetration increase market share among existing customers Market development attract new customers to existing products Product development create new products for present markets Diversi cation introduce new products into new markets Present product and present market Market Penetration Starbucks sells more coffee to customers who register their reloadable Starbucks cards Present product and new market Market Development Starbucks opens stores in Brazil and Chile New Product and present market Product Development Starbucks develops powdered instant coffee via New product and new market Diversification Starbucks launches Hear Music and buys Ethos Water The Management Job in Marketing Market planning Wholecompany strategic management planning Implement marketing plans and program Control marketing plans and program What is Marketing Strategy Finding opportunities and developing pro table marketing strategies that the company can use to capitalize Selecting a MarketOrientated Strategy is Target Marketing Productoriented manager sees everyone as basically similar and practices mass marketing Marketingoriented manager sees everyone as different and practices target marketing What is a Marketing Plan Planning the process of anticipating future events and determining to achieve organizational objectives in the future Marketing planning designing activities relating to marketing objectives and the changing marketing environment Marketing plan a written document that acts as a of marketing activities for the marketing activities for the marketing Why Write a Marketing Plan Provides a basis for comparison of actual and expected performance Provides clearly stated activities to work toward common goals Provides an examination of the marketing environment Serves as a reference for the success of future activities Allows entry into the marketplace with awareness Describing the Target Market Marketing strategy involves o The activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets Marketing Opportunity Analysis MOA involves o The description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments Target Market Strategy Segment the market based on groups with similar characteristics Analyze the market based on attractiveness of market segments Select one ore more target markets The Marketing Mix is A unique blend of product place distribution promotion and pricing strategies designed to produce mutually satisfying exchanges with a target market The four Ps 0 Product I Physical unit I Package I Warranty I Service I Brand I Image I Value I Products can be 393 Tangible goods 393 Ideas 393 Services 0 Place I Product availability where and when the customer wants them I All activities from raw materials to finished products I Ensure products arrive in usable condition at designated places when needed 0 Promotion I Role is bring about exchanged with target markets by 393 Informing 393 Education 0 Persuading 393 Reminding I Includes integration of 393 Advertising 393 Public relations 393 Sales promotion 393 Personal selling 0 Price I Price is what a buyer must give up to obtain a product I The most exible of the 4 Ps quickest to change I Competitive weapon I Price X Units sold total revenue The Price Element of the Marketing Mix Price setting 0 OOOOO Price objectives Price exibility Price changes over the life cycle Discounts and allowances Geographic pricing terms Competition Attractive Opportunities Breakthrough opportunities Competitive advantage Avoid hitormiss marketing All Four Ps Contribute to the Whole Selection of target market 0 O O 0 Product Place Promotion Price Intemational Opportunities Should Be Considered Smaller world Competitive advantage Early start Better trends Risks involved 92014 122 PM Chapter 3 Evaluating Opportunities in the Changing Marketing Environment The Marketing Environment Marketing Strategy Planning Process 0 Narrowing down to the best opportunities 0 Developing a strategy The External Environment Unless marketing manager understand the external environment the rm cannot intelligently plan for the future Environmental management is when a company implements strategies that attempt to share the external environment within which it operates Marketing Strategy Planning Competitors Company amp External Market Environment Company 0 Objectives 0 Resources Competitors 0 Current 0 Prospective External marketing environment 0 Economic o Technological 0 Political and legal 0 Cultural and social Evaluating opportunities 0 Screening criteria 0 Planning grids 0 Planning for multiple products Best opportunities to pursue The Market Environment Target 0 Place and price direct market environment customer competitive environment and resources and objectives of the firm Place and promotion economic environment Promotion technological environment Price political and legal environment OOOO Price and product cultural and social environment Objectives Set Firm s Course Three basic objective provide guidelines 0 Socially and economically useful function I Allows you to meet people where they are 0 Develop an organization 0 Eam pro t Company Resources May Limit Search for Opportunities Financial strength Producing capability and exibility Marketing strengths 0 Gives you a competitive advantage Collaborations can help offset weaknesses o Other people can help you accomplish your goal The Competitive Environment Avoid HeadOn Competition Know the Market Situation 0 Monopoly o Monopolistic competition 0 oligopoly 0 pure competition Analyzing Competitors to Find a Competitive Advantage Key concepts Competitive barriers Competitive advantage Competitive rivals OOOO Competitor analysis The Economic Environment Key economic forces 0 Global economy 0 Repaid change 0 Interest rates The Political Environment Examples of characteristics of the political environment 0 Regional economic groupings o Nationalism The Technological Environment The applications of science to convert and economy s resources to output Widespread of our barcodes Technology is all around us The Cultural and Social Environment Changes in Cultural and Social Environment 0 Changing role of women 0 Changes come slowly The Legal Environment Consumer Protection Agencies Food and drug administration FDA Consumer product safety commission CPSC Rewards of Global Marketing Having a global vision means 0 Recognizing and reacting to intemational marketing opportunities 0 Using effective global marketing strategies 0 Being aware of threats from foreign competitors Importance of Global Marketing to the United States Derives 12 of gross domestic product GDP from world wide trade 7 of US employment is supported by exports US businesses export over 17 trillion in goods and services annually More smaller companies are aggressively pursuing international markets The Fear of Trade and Globalization Millions of Americans have lost jobs Millions fear losing jobs Threat of if workers do not accept pay cuts Vulnerability to operations moving offshore Bene ts of Globalization Expands economic freedom Spurs competition Raises productivity and living standards Offers access to foreign capital global export markets and advanced technology Extemal Environment Facing Global Marketers Culture Natural Resources Economic Development Culture The common set of values shared by its citizens that determine what is socially acceptable Factors to keep in mind when dealing with different cultures 0 Language and cultural idioms 0 Customs and traditions 0 Economic Development Developed country 9 Less developed country 9 Economic Development China and India China and India have two of the highest growth rates in the world Have the world s two largest populations Among highest levels of income disparity Great linguistic and cultural diversity Political and Legal Considerations Agreements and organizations 0 CAFTA o NAFTA 0 European Union Demographic Makeup Marketing considerations 0 Population density 0 Urban or rural 0 Age Natural Resources Shortages in natural resources create 0 Intemational dependencies Shares of wealth In ation and recession Export opportunities if resources are abundant OOOO Stimulates for military intervention 92014 122 PM Chapter 4 Focusing Marketing Strategy with Segmentation and Positioning A Market Is People or organizations with Needs or wants and with The ability and The willingness to buy A group of people that lacks any one of these characteristics is NOT a market Search for Opportunities can Begin by Understanding Markets What is a company s market Don t focus on the product Generic markets to product markets Broaden market de nitions to nd opportunities Focusing Marketing Strategy with Segmentation and Positioning Segmentation o De ning markets 0 Dimensions to use 0 Identifying segments 0 Identifying segments to target 0 Segmentation approaches Positioning 0 Understanding customer s View Positioning techniques Evaluating segment preferences Differentiating the marketing mix OOOO Relationship between positioning and targeting Market Segmentation Market people or organizations with needs or wants and the ability and willingness to buy Market segment a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs Market segmentation the process of dividing a market into meaningful relatively similar identi able segments or groups The Concept of Market Segmentation Markets have a variety of product needs and preferences Marketers can better define customer needs Decision markers can define objectives and allocate resources more accurately Criteria for Segmentation Substantiality segment must be large enough to warrant a special marketing mix ldenttifiability and measurability segments must be identifiable and their size measureable Accessibility members of targeted segments must be reachable with marketing mix Responsiveness unless segment responds to a marketing mix differently no separate treatment is needed Segmentation is a TwoStep Process Naming broad productmarkets and segmenting markets to selecting target markets and develop marketing mixes Marketers Need lnforrnation About Competitors All customer needs Some generic market One broad productmarket Homogeneous narrow productmarkets 0 Single target market 0 Multiple target market 0 Combined target markets 123 narrowing down to specific productmarket 4 segmenting into possible target markets last three selecting target marketing approach Market Segmentation Defines Possible Target Markets Broad productmarket or generic market name goes here De ning Target Markets movie A market grid Geographic Demographic Behavioral and social Cultural Differentiation and positioning Multibranding having two restaurants in one place Behavioral Dimensions for Segmenting Consumer Markets Behavioral segmenting dimensions 0 Needs economic psychological and social Benefits sought Thoughts how people are thinking Rate of use Purchase relationship Brand familiarity what brand do you prefer Kind of shopping Type of problemsolving OOOOOOOO Information required Geographic Segmentation Region of the country or world Market size Market density Climate Demographic Dimensions for Segmenting Consumer Markets Demographic segmentation dimensions 0 Income Sex or age Family size or family life cycle Occupation or education OOOO Ethnicity or social class Age Segmentation Marketers can segment markets using cohorts o Tweens Teens Generation Y Generation X Baby Boomers That war generation ages 6166 The great depression generation ages 96776 The Gl Generation ages 77 OOOOOOO Gender Segmentation Women make 70 of consumers goods purchases annually Many marketers of maledominated arenas are targeting women Increasing numbers of marketers in female dominated categories targeting men Income Segmentation Determines consumer wants Determines buying power Retailers can appeal to o Lowincome WalMart o Highincome Saks Fifth Avenue 0 Both Costco Target Ethnic Segmentation Largest ethnic markets are 0 Hispanic Americans 0 African Americans 0 Asian Americana Companies must make products geared toward specific ethnic groups as they continue to expand Family Life Cycle Age Children Marital Status Psychographic Segmentation Market segmentation on the basis of personality motives lifestyles and geodemographics Geodemographic Segmentation Segmenting potential customers into neighborhood lifestyle categories Combines geographic demographic and lifestyle segmentation Benefit Segmentation The process of grouping customers into market segments according to the benefits they seek from the product Ethical Issues in Selecting Segmenting Dimensions Ethical issues 0 exploitation 0 creates unnecessary wants 0 does harm Intemational issues Positioning Developing a specific marketing mix to in uence potential customers overall perception or a brand product line or organization in general Product Differentiation A positioning strategy that some firms use to distinguish their products from those of competitors 92014 122 PM Chapter 5 Demographic Dimensions of Global Consumer Markets Demographics Austin fth in population growth becoming 11th largest city in US Reasons for growth 0 Austin steady growth and economic success especially after recession 0 Smaller suburbs around Austin are the nation s fasts growing such as Cedar Park and Georgetown Austin has become a constant growth city according to the Census Bureau s periodic lists reinforcing the longrunning story of growth in Texas Austin s quality of life has attracted young adults and graduates more than any other metropolitan due to the creation of j obs and the increase of traffic Economic opportunity has attracted more people to migrate to Austin About 70 people a day between 2011 to 2012 allowing faster economic recovery Marketing Strategy Planning and Demographic Dimensions of Final Consumers Final consumers 0 Ch 5 demographic dimensions of global and consumer markets 0 Ch 6 nal consumers and their buying behavior Organizational consumers 0 Organizational customers and their buying behavior Final Consumers 0 Ch 5 demographic dimensions of final consumer markets I Global consumer markets 393 Population trends 393 Income growth and distribution 393 Urbanization literacy and other differences 393 Technology usage trends I US consumer market 393 Population trends 393 Income growth and distribution 393 Spending patterns 393 Ethnic dimensions Understanding Potential Markets 3 main questions 0 What are its relevant segmenting dimensions 0 How big is it Is it expected to grow 0 Where is it It can be anywhere you want it to be Marketers Search for Growing Markets Other countries Current population Population trends Other Population Trends Increasing density Increasing urbanization No Money No Market Gross National Income GNI the total value of goods and services produced by a company s economy in a year by it s customers income eamed by foreigners who own resources in the nation gross domestic product GDP GNI country s population source per capita income Issues Related to Development What do third world consumers really need 0 Literacy and marketing problems Advertising product labeling and marketing 0 Much segmenting may be required Technology Adoption Races Across Continents Technology indicators developing countries need this 0 Cell phones 0 Intemet 2010 population and percent change by state He wants us to remember these numbers Florida Atlantic coast is slowing in growth due to high taxes California OOOO Texas exceeds California and Florida Population Trends in the US Consumer Market Key trends 0 Population growing but the growth rate has slowed to less then 1 per year 0 Birthrate boom or bust Number of babies bom per thousand people in the population most of the future growth is expected to come from immigrants mainly Latin Americans and Asians o Graying of America people are living longer opportunity abound 0 Generation X fewer in number 0 Generation Y techno savvy what we are Indirectly or directly the basis for all marketing it is the most basic statistic in marketing Majority of the population is mid and south west US Population Mobility Population mobility 0 Rural to urban 0 Urban to suburban Percent of Total Income Going to Different Income Groups in 2008 The top 20 of households receive almost have of the total income The bottom only 4 of households receive less then half of the total outcome Demographic Factors People are the basis for any market 0 Demographic characteristics relate to buyer behavior 0 Demographic cohorts have their own needs values and consumption pattems Tweens Pre and early adolescents ages 812 Population of 20 million Teens Directly spend about 50 billion annually Parents spend 150 billion on tweens annually View TV ads as just advertising Population of about 25 million Spend approximately 72 hours per week tuned in electronically View shopping as a social sport 50 million teens around the world are on Facebook The average teens spends 45 per week Generation Y Bom between 1979 and 1994 Surpassed population of baby boomers Two stages 1 Those bom in 1994 fit closer to the teen cohort 2 Those bom in 1979 have established careers and started families Purchasing power of 200 billion annually Generation X Bom between 1965 and 1978 Population of 40 million Independent resilient adaptable cautious and skeptical 71 have children under age of 18 home ownership is an important goal avid buyers of the latest clothes technology and recreational products Baby Boomers Bom between 1946 and 1964 Population of 75 million Working longer to compensate for economic downtum which affected retirement savings The market of service directed at seniors is one of the fastest growing business markets People are working longer because people are living longer Growing Ethnic Markets Estimated purchasing power of ethnic markets in 2013 o Hispanics 15 trillion 0 African Americans 12 trillion 0 Asian Americans 775 billion The minority population of the united states in 2011 reached 110 million Marketing to Hispanic Americans The Hispanic population s diversity creates Million Hispanics aged 2034 in the united states of US Hispanics have home intemet access Highly responsive to Marketing to African Americans 47 are between 18 and 49 years old More rms are creating products for the African American market Promotional dollars and media choices directed toward African Americans continue to increase Marketing to Asian Americans Younger better educated and have highest average income of all groups Early adopters of latest digital gadgets Cultural diversity within the Asian American market complicates promotional efforts Role of Families and Working Women Growth of dualincome families results in increased purchasing power Approximately 59 of workage females are in the workforce Working wives bring in 45 of the total family eamings The phenomenon of working women has probably had a greater effect on marketing than any other social change Technology and Time Use Leisure time accounts for less than About Constant digital immersion can decrease a Different Types of Spending Total income 9 taxes Disposable income 9 necessities Discretionary Trends in TS Households and Families Traditional family high divorce rate married couple without children single adult households Ethnic Dimensions of the US Market Buy differently Increasing median income High growth rate Avoid stereotypes its not a melting pot it s a salad bowl College Demographic Selecting Colleges That Help Get Jobs Freshmen Have Making Money on Their Minds Money appears to be high on the minds of entering college freshmen re ecting the in uence of the struggling economy In a survey of nearly 220000 firsttime full time freshmen at 297 fouryear institutions 781 being welloff financially as a very important objective That is higher than any other item on the list including raising a family 744 helping other in difficulty 691 and developing a meaningful philosophy of life 48 o 416 said the cost of attending a college was a very important factor 0 45 reported having an unemployed father and 79 reported having an employed mother 0 533 reported taking out loan 0 565 said a very important factor was finding a school where graduates get goodjobs hewer students are reporting business as a major
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