Copy of Basic Marketing Course Notes.pdf

EXAM FEBRUARY 13Press Ctrl + F to search for a specific topic or word Exam 1 Section: What is Marketing? ○ Set of activities that entail: Processes for creating something of value Communicating, Delivering, and Exchanging of Offerings Commu...

EXAM FEBRUARY 13Press Ctrl + F to search for a specific topic or word Exam 1 Section: What is Marketing? ○ Set of activities that entail: Processes for creating something of value Communicating, Delivering, and Exchanging of Offerings Communication ○ Advertising Delivering ○ Supply Chain Distribution Exchange of Offerings ○ Exchange: 2+ Entities ○ Both entities have something of value for the other entity Involving an organization, customers, and society Has value to relevant stockholders Perceived Value ○ Function (Benefits; Costs) Function: Relationship between variables More Benefits = Higher perceived valueDifferent people value products differently Companies should not try to please every customer; they should tailor products to their target customers. Example: Some people don’t enjoy video games, so there is little to no perceived value on their end Marketing Management Philosophies/ Orientation ○ Production Orientation Focuses on what they’re good at Better at something than anyone else ○ Sales Orientation Companies think that aggressive sales techniques will work Examples: Buy one get one free, Car dealerships ○ Market Orientation Focusing on what the customer needs/ wants Example: Give the teenagers of Tampa their Korean BBQ and hotpot ○ Societal Orientation What is good for society? Market + Societal Orientation  Satisfies Market needs and societal needs Want to contribute to society, but not at the expense of forcing it on customers Examples: Switching from plastic bottles to glass bottles, broader perspective, not just what customers want ○ Customers don’t always know what they want, they want what they know “Don’t knock it until you try it,” I guess Controllable Factors (The 4 Ps) ○ Product strategy Example: choose product design, aesthetics such as color ○ Pricing strategy Choose how much to charge ○ Place (distribution strategy) ○ Promotion Strategy Marketing campaigns, advertisements, product positioning ○ Target Market Decide if you want to market to professionals, everyday joes, etc. (a certain demographic) Uncontrollable Factors ○ Competition Sears obsolete with Amazon overtaking it in all aspects ○ Technology Blockbuster movies rentals obsolete with movie streaming Barnes and Noble book store obsolete with Amazon Kindle and E-books ○ Economy Some companies are affected more than others; luxury brands are less affected ○ Rules/Regulations/ Laws Rules for products that require adaptation ○ Preference and Trends Example: Keto Diet, Mcdonalds started offering salads when a wave of healthy eating became a trend ○ Natural Disasters ○ Customer Reactions ○ Supply Chain issues Incumbent’s curse ○ A company tends not to be dominant because it is easier not to change or adapt.  ○ Fighter Brands ○ Cheaper alternatives launched by companies who do NOT want to lower prices during a recession ○ Examples: Ted & Song airlines (United & Delta) ○ Marketing Strategy ○ Market Strategy is the managerial process of creating a fit between an organization's goals/objectives, resources, & evolving market opportunities ○ Resources, Objectives, and Market opportunities must align for a successful Marketing Strategy SWOT Analysis ○ Strengths Something that you are good at that gives you an edge over competition in reaching your goals ○ Weaknesses Something where you are disadvantaged in reach your goals ○ Opportunities Things happening outside an organization that gives you an edge ○ Threats Something happening in an external environment that hurts you Marketing Objectives ○ Should be realistic Grounded in your capabilities ○ Time specific ○ Measurable ○ Compare to benchmark Competitive Advantage ○ A unique set of features/offerings/benefits ○ Those benefits are perceived as being superior to competitors by the target market ○ Give the customers a reason to choose you or your product ○ Examples: price, convenience, quality, service, niche, Innovative products, etc. Customer Heterogeneity ○ Customer differences: placing different emphasis on things SCA (Sustainable, Competitive, Advantage) ○ History ○ Geography  ○ Patents, copyright, trademark ○ Building Strong Brands ○ Logistics ○ Technology Strategic Alternatives Involving markets/ products: ○ Market Penetration Make your EXISTING customers buy MORE. You could make them consume more at one time or more frequently. The strategy can involve sticking with your current customers and specifically targeting them. Increase market share with existing customers Example: Loyalty programs ○ Market Development Expanding to new customers that you want to use your CURRENT product. You can do this by highlighting a point to make to a certain group you want to target. Why don’t your customers use the product? Find out why and explain what the benefits are from their perspective. Position products to attract new customers to existing products ○ Product Development Create/ launch new products for existing customers ○ Market and Product Development Introducing new products to new customers that originally would not have used your product.  Portfolio Matrix (2x2) Market Growth Rate ○ Low vs High Market Share Dominance ○ Low vs High Dogs (Divest): ○ Get rid of it, DOES NOT GENERATE PROFIT Problem Child/ Question Mark or ???: ○ Same as Dogs but has potential growth ○ The problem child might be successful, but don’t get your hopes up Cash Cows ○ Creates Highest Cash Flows Stars ○ Can have the potential to be a cash cow, prioritize resource allocation ○ Dominant player in a fast growing industry Strategic Actions and Implications: ○ Build Strategy Prioritize building functions of STARS and Potential Stars or Problem Children ○ Hold Strategy Status in resources (cash cows)  ○ Harvest Short-Term focus (for all except Stars or potential stars) Cash grab moves, ○ Divesting Get rid of something (Dogs and Problem Children) Marketing Strategy: The 4 C’s ○ Customer needs (focus on what problems need to be solved) ○ Company resources/ skills ○ Competition Compete to your strengths ○ Context Matters Don’t sell flipflops in Canada during Winter Don’t sell meat to vegans Don’t sell a treadmill to a wheelchair user Consumer Decision Making ○ Identify/recognize needs Needs arise when there is a gap between the current and desired state in Maslow’s hierarchy of needs. Needs and Wants Used interchangeably in marketing 1. Self-Actualization 2. Esteem 3. Social 4. Safety 5. Physical ○ Information search Internal Past experiences recall from memory External (marketing controlled and non-marketing)  Companies; friends/ family ○ Evaluate alternatives Evoked Consideration Set Criteria based on weights given to different or Ranking of attributes Costs associated Aesthetics Evoked set (the limited options you present to yourself) ○ Purchase ○ Post-purchase After the purchase, “cognitive dissonance” Second-guessing your decisions Buying Contexts: ○ When are purchases Consequential? Price Something that might be expensive to you, might not be expensive to someone else…you peasant Potential for something negative Different propensities for risk ○ Someone else may run from a hurricane, you might just not care Social Visibility Is it Socially Important? Types of Consumption ○ Private Consumption Wearing a t-shirt at home Anything not in public view ○ Public Consumption Wearing an outfit in public so others can see ○ Routine Purchase Behavior Automatic less expensive items Examples: Morning coffee, snacks, and drinks ○ Limited Decision Making Require some thought or effort Examples: Medication costs ○ Extensive Decision Making Requires lots of effort and thought Examples: Purchasing a house or buying that Camaro to flex on them haters Types of Decision-Making: ○ Involvement  ○ Consequential Why do we have customer heterogeneity? (Factors that influence Consumer Behavior) ○ Cultural Shared values and beliefs that are passed on from one generation to another Tradition ○ Highest hierarchy member orders first at a restaurant, etc. Communities Region Religion ○ Food restrictions, vegetarian, vegan, pescatarian, etc. Values Language ○ Social More situational than cultural People I interact with Reference groups ○ Students in class ○ Colleagues at workplace Opinion Leaders (Influencers) ○ Logan Paul ○ Belle Delphine ○ Kardashians ○ Kanye West ○ Joe Rogan Family ○ Growing up with family influences traits picked up from family members Friends ○ Individual Gender/ Sex (physiological; social) Physiological vs Social ○ Whether you need (physiological) it or not (social) Physiological ○ Women need tampons ○ Men buying expensive cars to show off (a bit social, but is deeply rooted) Social ○ Males judged more on emotional aspect ○ Females judged more on appearance aspect  Race / Ethnicity Some Africans and Asians have a higher collagen concentration than others, do not need botox Age Babies need diapers, and maybe some grandparents too Life Cycle Married, divorced, have kids, without kids, etc. Stage of life within the Life Cycle Correlated with age, but not the same as age Life Style How you lead your life Prefer to buy Louis Vuitton handbags compared to generic handbags ○ Psychological Personality Introvert ○ Sad boi Extrovert ○ Outgoing ○ Partier Emotional Reactions Eating a gallon of ice cream after getting dumped and binging a Netflix series Sad feelings and emotions ○ Results in unplanned shopping behavior or any behavior that releases dopamine to counteract the negative sad emotional state Affect Emotion Cognition Rationality or mind Perceptions Marketers need different campaigns to attract these different types of people. Stimuli that are you being exposed to Varies across individuals CLV: Customer Lifetime Value ○ How much you spend with them as it ages ○ Future earning potential with this customer ○ Past and current spending with this company/ industry  ○ Complaints, negative reviews/ratings Segmentation, Targeting, and Positioning ○ Markets consist of Customer’s needs/ wants Customer’s ability to buy (afford) Willingness to spend/ buy ○ Market Segment: A subgroup of customers with similar characteristics and needs ○ Market Segmentation: Breaks down the market into smaller segments to help optimize products to sell to a variety of different customers Criteria for Effective Segmentation: ○ Segment has to be substantial (large enough) ○ Identifiable Different between different customers ○ Measurable ○ Accessible/ accessibility: Example: Video game for 18+ but those 18+ people do NOT have a phone to play on ○ Responsiveness How we react to the same stimuli How to perform segmentation: ○ Demographics Age, gender, race, ethnicity, income, life cycle Example: Fragrances ; perfume -> women, cologne -> men ○ Psychographics Who you are: personality, motives, lifestyle, geodemographics ○ Benefits sought ○ Usage rate 80 / 20 rule for most companies 80% of sales are from 20% of customers Strategies for target market ○ Undifferentiated strategy (rare) Pharmaceutical products, new product category focuses on an entire target market rather than a segment of it ○ Multi segment strategy Divides target audience into multiple groups/ segments to target each of those segments ○ One to one marketing Segment size of 1  Example: customized cars like rolls royce ○ Positioning How it is perceived to the competition Segmentation Example: ○ Proctor and Game (P&G, consumer goods corporation) Detergents: segmentation Tide: general purpose, tough cleaning ○ Forbidden fruit Cheer: color fading protection Gain: smell/ odor Dash: Value brand Ivory: milder detergent for sensitive skin Ariel: Ethnic, marketed to hispanics, etc. Exam 1 Quizlet Study Guide: NOT RICK ROLL THIS TIME Exam 2 Section: Exam 2 Quizlet Study Guide: WIP Exam 3 Section: Exam 3 Quizlet Study Guide: WIP Exam 4 Section: Exam 4 Quizlet Study Guide: WIP