What is marketing?
An organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
What is a market?
The set of actual and potential buyers of a product.
These people share a need or want that can be satisfied through exchange relationships.
Individuals who have the means to pay for the product and service
Individuals who have the authority to make the p
Marketing exchange?
Each party to the exchange gives up something of value: The customer usually gives up money., however, sometimes they also give up time and information. The firm gives up the good or service. The exchange in the end is mutually beneficial.
Value proposition?
The set of benefits and/or values a company promises to deliver to consumers to satisfy their needs.
It's why customers buy
Value propositions dictate how firms will differentiate and position their brands in the marketplace
How does a customer perceive value?
Customer's evaluation of the difference between all of the benefits and all of the costs of a marketing offer relative to those of competing offers
How do companies become value driven? Steps?
Share information across their organization
Balance customer's benefits and costs
Build relationships with customers
Importance of marketing?
...
What is consumer behavior?
Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and the product use.
Factors that influence consumer decision process?
(marketing;product, price, place, promotion) (psychological; motives attitudes, perceptions, learing, lifestyle) (situational; purchase sit., shopping sit., temporal state) (social factors; family, reference groups, culture)
Personal factors?
(psychological factors) gender, age and life-cycle stage (people change the goods they buy over lifetime), occupation (clothing and other goods), economic situation (income sensitive), personality and self concept, lifestyle.
Define personality and lifestyle
Personality is a person's unique psychological makeup that consistently influences the way a person responds to his environment. Generally defined in terms of traits.
Lifestyle is a pattern of consumption which reflects a person's choice of how he spends
6 selves
private self, social self, real or actual self, ideal self, looking glass self, extended self.
What is motiviation?
A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction.
A motive is goal oriented
Motivation is what gets us to make a purchase. (because of needs)
Maslows Hierarchy
bttm-top. 1.physiological needs (hunger/thirst) 2. safety needs (security/protection) 3. social needs (sense of belonging/love) 4. esteem needs (self esteem/recognition status) 5. self actualization needs (self development/realization)
Perception Process
sensory stimuli=sound, smell, touch, taste, sight. sensory receptors=ears, nose, skin, mouth, eyes. Lead to exposure, attention, interpretation.
Beliefs and attitudes
A belief is a descriptive thought that a person holds about something
An attitude is a person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward or against an object or idea (i.e. a product or a brand). Attitudes are endu
5 steps consumer decision making process.
need recognition, information search, evaluation of alternatives, purchase, post purchase behavior.
Types of need recognition
psychological needs=pertain to personal gratification consumers associate with product or service.
functional=pertain to the performance of a product or service.
Perception/selective exposure/distortion/retention.
exposure=consumer notices certain stimuli and ignores others. distortion=consumer changes or distorts info that conflicts with feelings/beliefs. retention=consumer remembers only that info that supports personal belief.
Attribute sets
three circles. Outer circle: Universal set includes all choices for product category/ Second circle:Retrieval set which brands can be brought from memory. Inner most: Evoked set which brands or stores the consumer would consider purchasing.
Risks:monetaroy, functional, social
Perceived risk: belief that product has negative consequences
Complex, hard-to-understand products, functional risk
Expensive products, financial risk
Product choice is visible to others (risk of embarrassment for wrong choice), social risk
Short cuts (heuristics)
Heuristics: A mental rule of thumb used for a speedy decision, such as . . .
Price equals quality
Brand loyalty
Country of origin - German beers
Length of time company has been in business
Something from my culture is better or more appropriate for me
Situational factors
Factor affecting the consumer decision process; those that are specific to the situation that may override, or at least influence, psychological and social issues., or factors specific to the situation
post purchase behavior
satisfaction, dissonance, loyalty
Consumer satisfaction is a function of consumer expectations and perceived product performance.
Performance < Expectations- Disappointment
Performance = Expectations -Satisfaction
Performance > Expectations - Delight
Cogn
The effect of involvement on consumer buying decisions
previous experience, interest, perceived risk of negative consequences, situation, social visability.
What is culture?
Culture is the accumulation of shared meanings, rituals, customs, norms and traditions among members of a society or organization.
It includes both abstract ideas such as values and ethics, and material objects, such as clothing, food, art and sports.
Traditions, conventions and norms
Traditions: "Things done in the appropriate way."
Conventions: The way we hold our knife and fork; driving on the right hand side of the road
Norms - agreed upon behavior by a group - What is appropriate dress for coming to class? What do you wear out on
Reference groups
Groups
Family
Friends
Famous people
Organizations
Provide:
information
rewards
self-image
What is strategic planning?
The managerial process of creating and maintaining a fit between the organization's objectives and resources and evolving market opportunities.
The goal is long-term profitability and growth
What is a sustainable competitive advantage, how does company get one. 4 generic comp. adv.
customer values = customer excellence(retaining loyal customers/customer service), operational excellence(efficient operations=excellent supply chain management), product excellence(brand image), locational excellence(must be readily available).
Key elements of a marketing plan?
planning phase: 1. business mission and objectives. 2: Situation analysis, SWOT
Implementation phase: 3. identify opportunities: segmentation, targeting, positioning. 4. Implement marketing mix: product, price, place, promotion.
Control phase: 5. Evaluate
SWOT
Internal: Strengths/Weaknesses.
External: Opportunites/Threats.
Marketing Mix
Product(variety, quality, design, packaging), price(list price, discounts, credit terms, pay period), place(channels, coverage, locations, inventory), promotion(advertising, sales, PR, personal)
4 quadrants of BCG portfolio matrix
Stars:fast-growing market leader. Stars usually have large profits but need cash to finance growth.
A cash cow generates more cash than it needs to maintain market share. It is in a low-growth market, but the product has dominant market share
A problem ch
4 generic growth strategies.
Market penetration is to increase market share among existing customers
Market development is to attract new customers to existing products
Product development is to create new product for present customers
Diversification is to introduce new products to
The immediate environment
The immediate environment includes the firm and its immediate influences, such as competition and corporate partners.
Macroenvironmental factors. examples.
demographics:age, race, ethnic
social
technology
economic
political
culture
Criticisms of marketing and companies in general
High prices
Deceptive practices
High-pressure selling
Shoddy, harmful, or unsafe products
Planned obsolescence
Poor service to disadvantaged consumers
create an ethical climate
Values: Establish, Share, Understand
Rules: Management commitment, Employee dedication
Controls: Reward, Punishment
Areas covered by business ethics
Distributor relations
Advertising standards
Customer service
Pricing
Product development
General ethical standards
Framework for ethical decision making
1. identify issues 2. gather info identify stakeholders. 3. brainstorm evaluate alternatives 4. choose course of action
6 tests of ethical action
1. publicity test
2. moral mentor test
3. admired observer test
4. transparency test
5. person in mirror test
6. golden rule tests
Major decision in international marketing
look at global marketing environment > decide whether to go international > which markets? >how to enter market?> global market program > decide on global market organization.
assessing global markets
economic analysis using metrics: economic env. market size, real income
sociocultural a. :power distance, uncertainty avoidance, individuality, masculinity, time orientation
Infrastructure: transportation, communication, commerce
Gov. actions: tariff, quo
Methods of entering global markets, advantages/disadvantages
export, franchising licensing, strategic alliance, joint venture, direct investment.
Global marketing strategy; no change, product change, message change
cultural nuances, subcultures, view of product and consumer role, different positioning, adaptation, single positioning strategy.
Global pricing and distribution
International prices tend to be higher than domestic prices because of additional intermediaries, transportation costs, etc. Protecting those marketing intermediaries can also be a problem
What are GATT and WTO
General Agreement on Tariffs and Trade
World Trade Organization