Marketing - 204 - Midterm.docx

***Chapter 1 -- Marketing Fundamentals*** **Customer Value Proposition** - unique combination of benefits received by targeted buyers that will satisfy their needs, includes quality, price, convenience, delivery, and both before-sale and after-sale service. Achieved through a combo of 1. Product...

***Chapter 1 -- Marketing Fundamentals*** **Customer Value Proposition** - unique combination of benefits received by targeted buyers that will satisfy their needs, includes quality, price, convenience, delivery, and both before-sale and after-sale service. Achieved through a combo of 1. Product design 2. Pricing strategies 3. Service elements **Market** - potential groups of consumers who have both the willingness and ability to buy a product - Market, target market, and consumers are different groups of people **Target Market** - Specific group of existing and potential consumers to which marketers direct their marketing efforts **Marketing Mix (4Ps)** - Product, price, place, and promotion **Marketing** - process through which goods, and services move from concept to the customer. It includes the coordination of 4 Ps of marketing: - To identify, select, and develop a product; - Determine its price - Select a distribution channel to reach a customers place, and - Develop and implement a promotional strategy   **Marketing Process** involves: 1. Identifying customer needs, 2. Managing the marketing mix to meet these needs, and 3. Reaching potential consumers or the market **Exchange** - The trade of things valued between buyers and sellers so that each benefits **Products - goods, services, and ideas ** **Goods** - Tangible, physical **Services** - Intangible, not physical cannot be touched **Ideas** - Project/charity **Evolution of business Philosophies:** **Until the 1930s** - Product orientation - focused on manufacturing **1930s - 1960s** - Sales orientation - Focused on selling as many products as possible **1960s - 1990s** - Marketing orientation - Focused on the idea that an organization should strive to satisfy the needs of consumers while achieving the organizations goals **1990s - current** - Relationship marketing orientation - Organizations considering the lifetime value of their customers **Relationship marketing** - organizations create long term links with customers **Three elements of relationship marketing**: 1. **Social media** 2. **Customer Relationship Management (CRM)** - Process of building and developing long term customer relationships 3. **Corporate Social Responsibility** a. Sponsorship of community programs b. Sponsorship or involvement in fundraising initiatives for charities c. Business philosophy that implements socially responsible business practices **Digital Marketing** - Digital tech to reach consumers - Content marketing - Mobile marketing - Social media marketing **Experiential Marketing** - Creates opportunities for consumers to directly interact with brands **Influencer Marketing** - Businesses working with influencers to promote a product **Partnership marketing** - Creation of formal associations between brands (combining products/services) **Greenwashing** - deceptive use of marketing practices to give the impression that a organization is environmentally friendly ***Chapter 2 -- The Marketing Environment*** **Five environments of marketing:** - **Social** - **Economic** - **Technological** - **Competitive** - **Regulatory** **Situation Analysis** -- Taking stock of a firms or products past performance where it is now, and where it is headed **SWOT Analysis** -- Assessment of how well an organization or brand is servicing its business and target market - **Strengths** - **Weaknesses** - **Opportunities** - **Threats** **Environmental Scan** - Continually acquiring information on events occurring outside an organization to identify trends, opportunities, and threats to a business - Elements in an environmental scan include social factors, economic factors, technological factors, competitive factors, and regulatory factors **Steps in an Environmental Scan** 1. Collect the facts and identify trends 2. Determine the impact that this fact/trend will have on the business and create business objectives based on them 3. Brainstorm, evaluate, and implement ideas to meet business objectives **Social Forces** -- The demographic characteristics of the population and its culture, changes here can have a dramatic impact on marketing strategy - Demographics -- Statistical data on a population according to characteristics such as gender, age, and income **Demographic Forces** -- Aging population, diverse generations, ethnic diversity, big-city growth, changing household composition **Culture**: Within social forces, along with demographics, one must look at culture - **Media** - Social media - TV and video viewing - Widespread use of internet numerous times per day - **Food consumption** - Concerned with what they eat health wise - Buying local - **Gender attitude and roles** - Companies moving away from traditional gender norms to avoid stereotypes - **Healthy living for an aging population** - Increase in interest for maintaining and improving health - **Ethical consumption** - Interest in being less wasteful - Sustainable consumers **Economic Forces:** **Economy** -- Income and resources that affect the cost of running a business or household **Macroeconomic Forces** -- Short term trends and cycles in the economy **Microeconomic Forces** -- Refers to the supply and demand of goods and services and how this is impacted by individual, household, and company decisions to purchase - Gross income -- total made by a household pretax - Disposable income -- After tax income that goes towards necessities - Discretionary income -- leftover money that can be spent for fun and luxury **Technological Forces** -- Refers to inventions or innovations from scientific or engineering research - Can replace existing products **Competitive Forces**: - Direct competition or indirect competition - Ex.) Tim's is a direct competition to Starbucks, while a grocery store with coffee to make at home is indirect **Types of competition/competitive nature** **Monopoly** -- One firm **Oligopoly** -- Few firms (airlines) **Monopolistic competition** -- Many firms, similar products (coffee shops, fast food) **Perfect competition** -- Many firms, identical products (agriculture) **Regulatory forces** -- Restrictions placed on businesses, products, or services by the government or industry associations ***Chapter 3 -- Consumer Behaviour*** **Customer Purchase Decision Process:** 1. **Problem recognition: Perceiving a need** - Occurs when a person realizes that the difference between what they have and what they would like to have is big enough to actually do something about it 1. **Information Search: Seeking Value** - Clarifies the problem for the customer - **Internal search** - scan their memory for knowledge of previous experiences - **External Search** - if lack experience, knowledge, or problem is more complex - Personal sources (people you trust) - Public sources (product ratings) - Marketer-dominated sources (promotional) 1. **Evaluation of alternatives: Assessing Value** - The information search can suggest evaluative criteria for the purchase - Objective - Subjective - **Evoked set -** The group of brands that a customer would consider acceptable 1. **Purchase decision: Buying Value** - Having examined the alternatives in the evoked set, three choices remain: - What brand - Who to buy from - When to buy  1. **Post Purchase behaviour** - Satisfied buyers tell three people - Dissatisfied buyers complain to nine people - Mobile technology expedites the communication and expands the reach - *Cognitive dissonance* - questioning your choice Purchase decision process is influenced by **marketing mix influences (4P's)**, **situational influences**, **Psychological influences** and **socio-cultural influences** ***Involvement and Problem-Solving Variations*** **Involvement** - Personal, social, and economic significance of a purchase to the customer - Impacts how customer may engage in the five-step process - A companies marketing mix influences the customer purchase decision process - Marketers consider all factors that influence the customer during their journey across the process ***Situational influences on consumer decisions*** 1. Purchase task 2. Social surroundings - friends 3. Physical surroundings - store atmosphere 4. Temporal effects - time of day 5. Antecedent states -- mood ***Psychological influences on consumer behaviour*** **Motivation** - Energizing force that stimulates behaviour to satisfy a need **Personality** - Persons character traits that influence behavioural responses **Self Concept** - **Actual** - How people actually see themselves - **Ideal** - How people would like to see themselves **Perception** - The process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world **Selective perception** - Filters information so that only some of it is understood or remembered or even available **Perceived Risk** - Represents the anxieties felt because the customer cannot anticipate the outcomes of a purchase but believes that there may be negative consequences **Dealing with perceived risk:** - Obtaining seals of approval - Securing endorsements from influential people - Providing free trials of the product - Providing illustrations - Providing warranties and guarantees **Learning -** Behaviours that result from repeated experience and reasoning **Behaviour learning** - Developing automatic responses to a type of situation built up through repeated exposure **Cognitive learning -** Involves making connections between two or more ideas or simply observing the outcomes of others behaviours and adjusting your own accordingly **Brand Loyalty** - Favourable attitude toward and consistent purchase of a single brand over time; the degree of target market commitment toward a brand over time that results in varying levels of purchase commitment **Attitude Formation** - **Attitude -** Tendency to respond to something in a consistently favourable or unfavourable way - Shaped by values and beliefs - **Beliefs** - Customers perception of how a product or brand performs **Lifestyle** - Activities - Interests - Opinions **Psychographics -** Analysis of customer lifestyles that offers insight into behaviours ***Socio-cultural influences on consumer behaviour*** - A customers formal and informal relationships with other people will also have an impact on customer behaviour **Personal influence** -- Influenced by view, opinions, or behaviours of others **Reference group** - Group of people who influence a persons attitudes, values, and behaviours** ** **Family influence** **Culture** - set of values, ideas, and attitudes that are learned and shared among the members of a group ***Chapter 4 -- Market Research*** **Marketing Research** - Process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions - Purpose: Reduce risk of and improve marketing decisions **The Five-Step Market Research Approach** 1. Define the Problem/Issue/Opportunity 2. Develop the Research Plan 3. Collect Relevant Information 4. Develop Findings 5. Take Marketing Actions **Step 1: Define the Problem/Issue/Opportunity** - Set research objectives: Specific, measurable, and achievable goals - Identify possible marketing actions - Measures of success: Criteria for evaluating proposed solutions **Step 2: Develop the Research Plan** - Identify specific constraints - Determine data needed for marketing actions - Choose data collection methods - Sampling: Process of gathering data from a subset of the total population - Types: Probability sampling -- random - Non-probability sampling -- specific group **Step 3: Collect Relevant Information** - Data types: 1. Secondary data: Already recorded prior to the project - Internal: Marketing input data, Marketing outcome data - External: Published sources outside the organization 2. Primary data: Newly collected for the project - Observational data: Watching people (mechanical, personal, neuromarketing methods) - Questionnaire data: Asking people **Primary Data Collection Methods** - Idea Generation Methods -- coming up with an idea - In-depth Interviews - Focus groups - Idea Evaluation Methods -- testing an idea - Personal interview surveys - Mail surveys - Telephone interviews - Online surveys **Types of questions:** **1. Open-ended question**  **-** An open-ended question allows respondents to provide their own answers, expressing thoughts or explanations without being constrained by predefined choices. **Example:** "What are your thoughts on the new product we launched?" Respondents are free to answer in any way they choose. **2. Closed-ended or fixed-alternative question** \- A closed-ended question provides respondents with a limited set of pre-defined answers to choose from.                  **Example:** "How often do you exercise?"                  A) Every day                  B) A few times a week                  C) Rarely                  D) Never **3. Dichotomous question** \- A dichotomous question is a type of closed-ended question that has only two possible answers, usually a simple "Yes" or "No."                  **Example:** "Do you own a car?"                  A) Yes                  B) No **4. Differential scale (Semantic Differential Scale)**  **Definition:** This type of scale asks respondents to rate something on a scale between two opposite adjectives, typically using a numerical range.                  **Example:** "How do you feel about our customer service?"                          1.        Friendly ⬜⬜⬜⬜⬜ Unfriendly                          1.        Satisfied ⬜⬜⬜⬜⬜ Dissatisfied **5. Likert scale**  **Definition:** A Likert scale asks respondents to express how much they agree or disagree with a statement, often using a 5-point or 7-point scale ranging from "Strongly agree" to "Strongly disagree."                  **Example:** "I am satisfied with the service provided."                  Strongly agree                  Agree                  Neutral                  Disagree                  Strongly disagree **Other Sources of Primary Data** 1. Social media 2. Panels and experiments 3. Information technology 4. Data analytics and data mining **Step 4: Develop Findings** - Analyze the Data: - Big data: Large amounts of data from various sources - Information technology: Computing resources for data collection, storage, and analysis - Data Mining and Predictive Modelling: - Data mining: Processing large amounts of data to find insightful patterns - Predictive modelling: Statistical models to foretell outcomes - Analytics: - Descriptive: What has happened - Predictive: What might happen - RFM -- Recency (when purchased), Frequency (how often purchased), Monetary value (value of transaction) - Metrics: Numerical data to track performance - Dashboards - Key Performance Indicators (KPIs) **Step 5: Take Marketing Actions** - Make action recommendations - Implement the action recommendations - Evaluate the results **Sales Forecasting Techniques** - Sales Forecast: Total number of products a firm expects to sell in a specified time period - Three main techniques: 1. Judgments of the decision maker 2. Surveys of knowledgeable groups (buyers) 3. Statistical methods ***Chapter 5 -- Marketing To Organizations*** **Business to Business (B2B)** **Business Marketing** -- Marketing products and services to firms, governments, or nonprofit organizations **Organizational Buyers** -- Entities purchasing goods and services for their own use or for resale, they include: 1. **Industrial Markets** (over 2.4 million businesses) - Reprocess purchased products or services before selling to the next buyer 2. **Reseller Markets** (under 200k retailers0 - Buy physical products, resell without any reprocessing 3. **Government Markets** (largest) - Comprise federal, provincial, and municipal units 4. **Nonprofit Markets** - Aim to provide goods and services for societal good - Ex.) Hospitals, art organizations, cultural groups -- benefit from tax advantages **Content Marketing in B2B** - Keeps potential customers engaged - Uses interactive environments and social media - Provides opportunity for feedback and discussion monitoring **Derived Demand** - Demand for industrial products and services is driven by demand for consumer products and services **Inelastic Demand** -- Increase or decrease in price, product will be bought for the new amount **Fluctuating Demand** -- Small changes in demand result in large change in B2B Organizations buy products and services to help them achieve their objectives **Reverse Marketing** -- Work with suppliers to make products, services, and capabilities fit the buyers needs **Buyer-seller relationships:** - **Reciprocal arrangements** -- Organizations agree to purchase each other's products and services - **Supply Partnership** -- buyer and its supplier adopt to mutually beneficial objectives, policies, and procedures to lower the cost or increase the value **Buying Center** -- Group of people who share common goals, risk, and knowledge important to the purchase decision A diagram of a buying centre Description automatically generated Roles in a Buying Center 1.**Users**: These are the individuals who will use the product or service. While they might not have the final say in the purchasing decision, their input is often critical because they can directly assess how the product or service will affect day-to-day operations.         **Example**: In a software purchase for a company, the employees who will be using the software daily are the users. 2\. **Influencers**: Influencers affect the buying decision by providing information or opinions about the purchase. They often have specialized knowledge and can shape the preferences of the decision-makers.         **Example**: A technical expert who evaluates software functionality and provides feedback to decision-makers would be an influencer. 3\. **Buyers**: The buyers handle the actual purchasing process, including negotiating contracts, pricing, and terms. They may also manage supplier relationships. Although they manage the transaction, they might not make the final decision on what to buy.         **Example**: A purchasing manager or procurement officer who handles supplier negotiations. 4\. **Deciders**: Deciders have the final authority to approve the purchase. They can be senior management or department heads who make the decision based on input from other members of the buying center.         **Example**: A CEO or department head who gives the green light for purchasing a new software system. 5\. **Gatekeepers**: Gatekeepers control the flow of information within the buying center. They can restrict or facilitate access to decision-makers and other stakeholders. They often have the ability to influence which vendors get considered.         **Example**: An executive assistant who manages the schedule of a decision-maker or a procurement officer who decides which suppliers can present their proposals. Chapter 6 -- Segmentation, Targeting, and Positioning **Consumer Market** - goods, services, and ideas for personal use **Business Market** - Products to run a business or be used as a component in another good or service **Market Segmentation** - aggregation of prospective buyers into groups that have common needs and respond similarly to marketing programs - Similar consumption behaviour, attitudes, and profiles - Product Differentiation - positioning a product to a target group so that it appears distinct from competitive offerings ***Forms of market segmentation*** 1. **Mass Marketing** - Product with broad appeal is widely marketed with no product or marketing differentiation   2. **Segment Marketing** - Marketing a wide range of different products and brands to specifically meet the needs of an organizations varied target markets   3. **Niche Marketing** - Restrict efforts to a narrow but profitable segment that is of marginal interest to major competitors   4. **Individualized Marketing** - Involves customizing offers to fit individual needs   **Target Market** - specific group or segments of customers Segmentation Variables in Consumer Markets - Geographic - Demographic - Psychographic - Behaviouristic **Persona** - Character description of a brands typical customer **Steps in Market Segmentation** 1. Identify consumer/customer needs and common characteristics in the market 2. Cluster common consumer/customer variables to create meaningful market segments 3. Estimate the size and the feasibility of each segment 4. Identify the segments to be targeted 5. Take actions with marketing programs to reach the segments 6. Monitor and evaluate the success of these programs compared with objectives