Marketing
the activity, set of institutions, and processes for creating, communicating, delivering, and enhancing offerings that have value for customers, clients, partners, and society at large
Utility
ability of a product to satisfy a human want or need
Form utility
designing products with features that customers want
Value
a relative comparison of a product's benefits versus its costs ______ = benefits/costs
Time utility
sales agreements that stipulate when products will be delivered to customers
Place utility
sales agreements that stipulate where products will be delivered to customers
Ownership utility
transferring product ownership to customers by setting selling prices, setting terms for customer credit payments, and providing ownership documents
Consumer goods
tangible goods that you, the customer, may buy for personal use
Industrial goods
physical items used by companies to produce other products
Services
products with intangible (non-physical) features
Relationship marketing
building long-lasting relationships with customers and suppliers
Substitute products
may not look alike & may different, but can fulfill the same need (1st type of competiton)
Brand competition
similar products; based on buyer's perception of the benefits of each (2nd type of competiton)
International competition
domestic v. foreign products (3rd type of competiton)
Marketing managers
plan & implement activities that result in the transfer of goods or services to its customers
Marketing plan
detailed strategy for focusing marketing efforts on a customers' needs/wants
Marketing mix FOUR P's
Product, Pricing, Place, Promotion
Product
good or service designed to fill a consumer's need or want
Product differentiation
creation of a feature or image that makes a product different enough from existing products to attract consumers
Pricing
selecting the best price at which to sell a product
Place
distribution & location; concerned with getting the product to the consumer
Promotion
techniques for communicating information about products
Target markets
groups of people with similar wants/needs and who can be expected to show interest in the same products
Marketing segmentation
dividing a market into categories of customer types or "segments
Geographic segmentation
buying decisions that are affected by location; geographic variables are the geographical units that may be considered in a segmentation strategy
(1st way to identify market segments)
Demographic segmentation
demographic variables describe populations by identifying traits such as age, income, gender, ethnic background, marital status, race, religion, and social class (may be one or many)
(2nd way to identify market segments)
Psychographic segmentation
Psychographic variables buying decisions affected by lifestyles, interests, and attitudes
Consumer behavior
study of the decision process by which people buy and consume products
Influences on consumer behavior
1. Psychological: values, perceptions, abilities, attitudes
2. Personal: lifestyle, personality, economic status
3. Social: family, leaders, reference groups (friends)
4. Cultural: culture, sub-culture, social class
Brand loyalty
consumers regularly purchase products because they are satisfied with their performance
Consumer buying process
-Problem/need: consumer recognizes problem or need
-Information seeking: consumers seek information
-Evaluation of alternatives: consumers analyze products to decide which best meets their needs
-Purchase decision: consumers make based on rational motives
Rational motives
logical evaluation of product attributes: cost, quality, & usefulness
Emotional motives
non-objective factors such as sociability, imitation, and aesthetics
Organizational markets
-Industrial markets
-Reseller markets
-Government/Institutional markets
Industrial market
businesses that buy goods to be converted into other products or that are used during production
Reseller market
Intermediaries including wholesalers & retailers that buy and resell finished goods
institutional market
non-governmental organizations, such as hospitals, churches & charities, that use supplies and equipment as well as legal, accounting, and transportation services
Differences in "organizational buying" behavior
unlike most consumers, organized buyers are professional, specialized, and well-informed
-trained to negotiate
-usually are specialists for particular items/experts on the product
Product feature
qualities that a company builds into its product
Value package
a bundle of attributes (benefits & features) that a product has
Convenience goods & services (consumer product)
consumed rapidly & regularly, inexpensive (milk, fast food, etc.)
Shopping goods & services (consumer product)
Purchased less often, more expensive (car insurance, tires, etc.)
Specialty goods & services (consumer product)
Purchased infrequently, very expensive (jewelry, wedding gown, etc.)
Expense items (industrial product)
goods & services that are consumed within a year; used directly in the production process (ex. loads of tea processed into tea bags)
Capital items (industrial product)
permanent- expensive & long-lasting- goods & services; purchased infrequently and controlled by managers (ex. buildings, baking ovens, airplanes, maintenance, etc.)
Product mix
group of products that a firm makes available for sale
Product line
group of products that are closely related because they function in a similar manner or are sold to the same customer group who will use them in similar ways
Multiple/diversified product lines
a range of products beyond their original purpose; allows a company to grow rapidly
Speed to market
firm's success in responding to customer demand or market changes
Product life cycle (PLC)
series of stages through which it passes during its commercial life
PLC stages
1. Introduction: when the product reaches the marketplace
2. Growth: sales start to climb (speed depends on appeal)
3. Maturity: sales start to slow due to competition, advertising prices, etc. (PROFIT HIGHEST)
4. Decline: sales/profits continue to fall d
Branding
process of using names & symbols to communicate the quality of a product made by a particular producer
Brand awareness
the brand name that first comes to mind when you consider a particular product category
Product placement
a promotional tactic for brand exposure in which television, film, etc. characters use a real product with the brand visible to viewers
effective because the message is delivered in an attractive setting
Buzz marketing
relies on word-of-mouth to spread the "buzz" about a particular product or idea
effective because those receiving the "buzz" don't feel tricked or taken advantage of when hearing it from a friend/family member
Viral marketing
form of buzz marketing that relies on the Internet to spread information like a virus from person to person
effective because it leads to consumer awareness faster & with wider reach at a lower cost; is also highly interactive
National brands
produced by, distributed by, and carry the name of the manufacturer (ex. Proctor & Gamble producing Ivory shampoo due to the popularity of Ivory soap products)
Licensed brands
companies selling the rights to put their brand names on products (ex. "Nascar" on clothing, accessories, etc.)
Private brands (private labels)
the result when a wholesaler or retailer develops a brand name and has a manufacturer put it on a product (ex. Sears developing the "Craftsman" brand tools)