Marketing Fundamentals PDF

Define marketing The activity, set of instructions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. What are the needs of a consumer -when a person feels deprived of basic necessities such as f...

Define marketing The activity, set of instructions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. What are the needs of a consumer -when a person feels deprived of basic necessities such as food, clothing, and shelter - must concentrate its efforts on certain needs of a specific group of potential consumers called a target market -The 4 p's are aimed toward the needs of the consumer Customer value proposition- a cluster of benefits that an organization promises customers to satisfy their needs. What are the wants of a consumer - a need that is shaped by a person's knowledge, culture, and personality The 4 p's (elements of the marketing mix) Product Price Promotion Place Market People with both the desire and the ability to buy a specific offering Production era early years of the United States up until the 1920s. Goods were scarce and buyers were willing to accept virtually any goods that were available and make do with them Sales era 1920s to the 1960s, manufacturers found they could produce more goods than buyers could consume. Competition grew. Firms hired more salespeople to find new buyers. This sales era continued into the 1960s for many American firms. Marketing concept era SWOT a study undertaken by an organization to identify its internal Strengths and Weaknesses, as well as its external Opportunities and Threats. Customer concept era An organization that has a market orientation focuses its efforts on (1) continuously collecting information about customers' needs, (2) sharing this information across departments, and (3) using it to create customer value customers. Customer relationship management concept (CRM) the process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace.28 This process requires the involvement and commitment of managers and employees throughout the organization29 and a growing application of information, communication, and Internet technology, as will be described throughout this book. Customer value concept The unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price Strategic planning concept the process that the operational and managerial staff of a company goes through to create and implement effective marketing strategies. Strategic marketing planning takes several aspects of company marketing and promotion into consideration. market oriented mission Defining where you are headed, what you want to accomplish and pinpointing a purpose is an important exercise every small business should undertake. A market-oriented purpose, or mission statement, focuses on the customer or consumer and not the product. Goals and objectives are statements of an accomplishment of a task to be achieved, often by a specific time. Goals convert an organization's mission and business into long- and short-term performance targets. Types of goals and objectives Profit Sales Market share Quality Boston consulting group matrix 1. Question marks are SBUs with a low share of high-growth markets. They require large injections of cash just to maintain their market share, much less increase it. The name implies management's dilemma for these SBUs: choosing the right ones to invest in and phasing out the rest. 2.Stars are SBUs with a high share of high-growth markets that may need extra cash to finance their own rapid future growth. When their growth slows, they are likely to become cash cows. 3.Cash cows are SBUs that generate large amounts of cash, far more than they can use. They have dominant shares of slow-growth markets and provide cash to cover the organization's overhead and to invest in other SBUs. 4.Dogs are SBUs with low shares of slow-growth markets. Although they may generate enough cash to sustain themselves, they may no longer be or may not become real winners for the organization. Dropping SBUs that are dogs may be required if they consume more cash than they generate, except when relationships with other SBUs, competitive considerations, or potential strategic alliances exist. product/market expansion matrix 1) Market Penetration-"Selling more of the existing products in existing markets." 2) Product Development-"Introduction new products to existing markets." 3) Market Development-"Introduction existing products to new markets." 4) Diversification-"Introducing new products to new markets." strategic marketing process organization allocates its marketing mix resources to reach its target markets Strategic marketing process is broken into 3 phases planning, implementation, and evaluation Planning phase 3 steps Step 1: Situation (SWOT) Analysis Step 2: Market-Product Focus and Goal Setting Step 3: Marketing Program Market segmentation aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. Step 1: Situation (SWOT) Analysis taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization's marketing plans and the external forces and trends affecting it Step 2: Market-Product Focus and Goal Setting deciding which products will be directed toward which customers Step 3: Marketing Program developing the marketing program, involves developing the program's marketing mix (the four Ps) and its budget Implementation phase involves carrying out the marketing plan that emerges from the planning phase four components of the implementation phase (1) obtaining resources, (2) designing the marketing organization, (3) defining precise tasks, responsibilities, and deadlines, and (4) actually executing the marketing program designed in the planning phase. Component 1: Obtaining Resources Small business owners often obtain funds from savings, family, friends, and bank loans. Marketing managers in existing organizations obtain these resources by getting top management to divert profits from BCG stars or cash cows. Component 2: Designing the Marketing Organization organization chart of a typical manufacturing firm, giving some details of the marketing department's structure. Component 3: Defining Precise Tasks, Responsibilities, and Deadlines team members know the tasks for which they are responsible and the deadlines for completing them. Scheduling activities can be done efficiently with a Gantt chart, which is a graph of a program schedule. Executing the Marketing Program This requires attention to detail for both marketing strategies and marketing tactics. -marketing strategy-which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it. -marketing tactics-detailed day-to-day operational marketing actions for each element of the marketing mix that contribute to the overall success of marketing strategies EX. Writing ads and setting prices for new product lines are examples of marketing tactics. Evaluation phase 2 steps (1) compare the results of the marketing program with the goals in the written plans to identify deviations and (2) act on these deviations—exploiting positive deviations and correcting negative ones. Planning gap difference between the projection of the path to reach a new sales revenue goal (line BD) and the projection of the path of a plan already in place Environmental factors - 5 types Social Economic Technological Competitive Legal and Regulatory Environmental factors- Social forces are changing as people look for new ways to communicate, obtain information, and offer opinions. Simple online interactions that began on desktops have migrated to mobile devices and now include communication with photos, group and video chats, and instant messaging. Environmental factors- Economic forces also influence the demand for Facebook as the cost of smartphones and wireless connectivity declines and Internet access expands throughout the globe, making social networking increasingly affordable to more and more people. Environmental factors- Technological advances in software integration, server speed, and data storage are making Facebook increasingly fast and convenient. New enhancements such as photo editing and an app development kit also increase use of Facebook. Environmental factors- Competitive forces such as the rivalry with Google, Twitter, and Snapchat, the ability of users to easily switch platforms, and the constant threat of new social networks targeted at specific interest groups, encourage rapid expansion. Environmental factors- Legal and Regulatory forces also influence the growth of Facebook. The company obtains trademark and patent rights to its name and many of its features, and it provides guidelines for a variety of topics such as privacy, data protection, protection of minors, and taxation. Trends of the 5 environmental factors Social- Demographic shifts and Cultural changes Economic- Macroeconomic conditions and Consumer income Technological- Changing technology, impact on customer value, enable data analytics Competitive- Alternative forms of competition and Small businesses Regulatory- Laws protecting competition, Laws protecting marketing mix actions, and Self- regulation. Consumer behavior the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions purchase decision process The stages a buyer passes through in making choices about which products and services to buy Problem Recognition 1st step. Buyer process starts when the buyer recognizes a problem or need triggered by internal or external stimuli. Marketers need to identify the circumstances that trigger this need. They can then develop marketing strategies that spark consumer interest. May need to increase consumer motivation. Information Search 2nd step. consumers often search for limited amounts of info. By gathering info, the consumer learns about competing brands and their features. Process can go from total set to awareness to consideration to choice to decision. Companies must identify the hierarchy of attributes that guide consumer decision making (MARKET PARTITIONING) Alternative Evaluation 3rd step. consumer sees each product as a bundle of attributes with varying abilities to deliver benefits. Consumers will pay the most attention to attributes that deliver the sought-after benefits. Beliefs and attitudes via experience and learning lead to buying attitudes. Consumers evaluate products and services by combining their brand beliefs according to importance. Purchase Decision 4th step. can have many sub-decisions (quantity, location, timing, payment method, dealer, brand, etc.). Attitudes of others as well as risk will affect decision as well. Post-purchase Behavior 5th step. Consumer may experience disappointment in product. May hear better things of other products. May find features he doesn't like. Marketer must monitor post-purchase satisfaction and actions. level of involvement the personal, social, and economic significance of the purchase to the consumer The Maslow hierarchy