Marketing Concepts PDF

Marketing - The process of identifying, anticipating, and satisfying customer requirements in a profitable way Compare and contrast market orientation and product orientation - Both are marketing approaches. Market orientation is outward looking where the product is created by focu...

Marketing - The process of identifying, anticipating, and satisfying customer requirements in a profitable way Compare and contrast market orientation and product orientation - Both are marketing approaches. Market orientation is outward looking where the product is created by focusing on market research and customer needs. Product orientation is inward looking wherein the product is created fist based on internal capabilities. When to use which marketing approach - Depending on the market and organizational structure Cost leadership - The advantage a business earns when it becomes one of the lowest-cost organizations in the industry Cost leadership with parity - Cost of production are lowered but price stays the same to increase profit margin Cost leadership with proximity - Cost of production are lowered, in turn, lowering the price of the product as well Cost focus - The company is one of the lowest-cost organizations in a niche market Differentiation - A business creates products that are distinct from their competitors to appeal to customers. Focuses on the quality of the product rather than cost. More premium price point because of higher quality, leading to higher profit margin - Differentiation Focus Business gains competitive advantage by focusing on a particular marketing segment. Usually high-end brands Market Share - The organization's portion of the total value of sales revenue in a specific industry Formula for marketing share - Market share % = (sales revenue / total sales in market) 100% Market Leaders - Businesses that have one of the largest market shares in their respective industry Market Growth - The rate at which the size of an industry is increasing Formula for market growth rate Market growth rate = ([Current market size - Original Market Size] / Original Market Size) 100% Market Concentration - Measures the degree of competitiveness that exists within an industry through the market share of the largest firms in the market Concentration Ratio - The sum of the market shares of the largest firms in the industry Marketing Ethics - The moral aspects of marketing Marketing Planning - The process of formulating the marketing strategies and tactics that help a business achieve their marketing goals SMART Objectives - The main objectives all marketing plans strive to achieve: Specific, measurable, achievable, relevant, time-bound Tools of marketing planning - Segmentation, Targeting, Positioning, Niche and Mass markets, and Unique Selling Points Types of marketing segmentation - Demographics, geographic, psychographic, and behavioral Targeting - The market segment/s the business intends to target Market Positioning - The process a business goes through where they create a product's identity, which ultimately determines the consumer's perception of the product Parts of the product position map Premium products = high price, high quality Bargain products = low price, high quality Cowboy products = high price, low quality Economy products = low price, low quality Market research and its types - The collection, compilation, and analysis of information about a market Primary research and secondary research List three examples of primary research Surveys, interviews, focus groups, observation, test marketing List three examples of secondary research Financial reports online, government publication, online databases, secondary market research reports, academic institutions Parts of the product life cycle Research and development, launch, growth, maturity, decline Product portfolio The collection of all the products owned by the business at a point in time Boston consulting group matrix A marketing planning tool to help plan for a balanced product portfolio Parts of the BCG Dogs = low market share, low market growth Question marks = low market share, high market growth Cash cow = high market share, low market growth Star = high market share, high market growth Aspects of branding Brand loyalty, awareness, development, and value Cost-plus pricing Calculates the cost of producing the good and adds on a percentage (which will become the profit) to that cost to turn it into the selling price Limit pricing A price set by a monopolist to discourage economic entry into the market. The limit price is often lower than the average cost of production Penetration pricing Setting the price lower compared to other competitors in order to attract customers and gain market share Price discrimination Setting different prices for the same product depending on the market segment Psychological pricing A price which leads to a more positive psychological impact on customers Dynamic pricing A flexible pricing mechanism. Usually employed by internet-based companies Price leadership The market leader sets a price on a certain product and other competitors follow Target Pricing The price is determined depending on the rate of return on investment the company wants Absorption pricing The price of the good includes the variable cost of each item and a part of the fixed costs. Is a form of cost-plus pricing High-low pricing A method of pricing where the goods or services offered by the organization are regularly priced higher than competitors, but through promotions, advertisements, and coupons, lower prices are offered on key items Marginal cost pricing A practice of setting the price of products and goods to be equal to the additional cost of producing an extra unit of output Methods of operating internationally Organic growth, franchising or licensing, joint ventures and strategic alliances, and acquisition Organic Growth When a business tries to enter into an international market and does so by themselves to grow organically Franchising Franchising is a business model where a company allows a franchisee to operate their business under their same brand and system in a new location or different branch Licensing A business allowing an individual to produce a product or deliver a service under their intellectual property Joint Ventures Giving equity of your business to people who are already established in the new market Strategic Alliances An organization already well-established in the new market teams up with the business to share knowledge about the market. No change in ownership structures Acquisition A form of growing a business inorganically in the new international market. Done by buying an already operating business in the new market You know these terms very well! Select these 2 Difference between qualitative and quantitative data Quantitative = Based on numbers; financial reports, market data, etc Qualitative = Descriptions or more detailed explanations gained from the target market itself about the product. Usually primary research 7Ps of the marketing mix Product, price, place, physical evidence, people, process