Marketing Midterm Notes PDF

Marketing Midterm Notes Chapter 1: Role of Marketing: To focus on what customers want and need to generate revenue and profit. Marketing mix: 4ps - Product (good or services including color, design, package) - Price (what is exchanged for the product $) - Place...

Marketing Midterm Notes Chapter 1: Role of Marketing: To focus on what customers want and need to generate revenue and profit. Marketing mix: 4ps - Product (good or services including color, design, package) - Price (what is exchanged for the product $) - Place (how it would reach the customers eg. store online, etc) - Promo (how to communicate about the product eg. sponsors, events, tv, prints, etc.) Marketing process: 1) identifying the customers needs 2) managing the marketing mix to meet their needs 3) reading potential consumers on the market Exchange and Value: Exchange is the value traded between buyers and sellers. Value is what is received in exchange for what is given up. Needs vs. Wants: Needs are basic necessities and wants are shaped by knowledge, culture, and personality. Customer Value Proposition: Unique combination of benefits (quality, price, convenience, service) that satisfies target customers' needs. Target Market: Specific group of consumers to whom marketing efforts are directed at. Chapter 2: The Marketing Environment: - Marketers must monitor the marketing environment continuously. - Key areas: Social, Economic, Technological, Competitive, Regulatory. Environmental Forces Impacting Marketing: - Social Forces: Demographics and cultural characteristics can significantly impact marketing strategies. For eg. data about a population according to gender, age, ethnicity, income, education, occupations, etc. - Economic Forces: Macroeconomic factors (GDP growth, inflation, unemployment) affect consumer confidence and spending. Microeconomic factors relate to individual purchasing decisions. - Technological Forces: New and emerging innovations can replace existing products and change how markets reach/interact with customers. - Competitive Forces: The different things that affect how businesses compete with each other. - Regulatory Forces: Restrictions placed on businesses, products, or services to protect consumers. For eg, the gov sets standards and encourages fair competition. Situation (SWOT) Analysis: - Assess a firm’s past performance and current position. - Identifies Strengths, Weaknesses, Opportunities, and Threats. - Aim to build on strengths, correct weaknesses, exploit opportunities, and avoid threats. Steps in an Environmental Scan: 1. Collect data and identify trends. 2. Analyze external trends and their impact on the business. 3. Set business objectives. 4. Brainstorm and evaluate ideas to meet objectives. Chapter 3 Consumer Behavior Overview: 1. Motivation: What pushes customers to buy something 2. Personality: Our personal traits that affect how we behave when shopping. Everyone reacts differently to the same product. 3. Perception: The view and understanding of customers when they purchase something. 4. Learning: When the customers learn from their experiences. If they have good experiences with a product or service, they will buy it again. If they have a bad experience, they will find something better. - Brand Loyalty: Consistent preference for a brand over time. 5. Values, Beliefs, & Attitude: What customers believe & value shape their attitude towards a product. If they believe a product is good for the environment, they may be more likely to buy it. 6. Lifestyle: Describes the customer’s activities, interests, and opinions. Their lifestyle choices can influence what they decide to buy. Customer Purchase Decision Process: Stages of Decision Process: - Step 1: Problem Recognition (when the person realize they need something) - Step 2: Information Search (when they look for info about it online and in store) - Step 3: Evaluation of Alternatives (when they compare the different options to see what is best) - Step 4: Purchase Decision (they decide to buy the product or service) - Step 5: Post-Purchase Behavior (when the person thinks about whether they made a good choice or not) Customer purchase decisions: 1) Routine problem solving - This is when you buy something without much thought. 2) Limited problem solving - This is when you buy something and comparing different options is involved. 3) Extended problem solving - This is when you buy something which involves more time and careful consideration. Influences on Consumer Behavior: 1. Psychological Influences: - Motivation, perception, learning, beliefs, and attitudes. 2. Socio-Cultural Influences: - Family, reference groups, culture, and subculture. - Family Influence: Roles in decision-making (information gatherer, influencer, decision maker, purchaser, user). 3. Cultural Diversity: - Importance of understanding cultural and subcultural differences in consumer behavior. Chapter 4 What is Marketing Research? - Process of defining marketing problems and opportunities. - Systematically collecting and analyzing information. - Recommending actions to reduce risk and improve marketing decisions. Challenges in Marketing Research: - Predicting consumer behavior for new products. - Obtaining truthful responses from consumers. - Ensuring accurate recall of interests and purchases. Five-Step Market Research Approach: 1. Define the Problem/Issue/Opportunity - Set specific, measurable, and achievable research objectives. - Identify possible marketing actions and measures of success. 2. Develop the Research Plan - Identify constraints and data needed. - Determine data collection methods 3. Collect Relevant Information Data Types: - Secondary Data: Already recorded data (internal and external). - Primary Data: Newly collected data (observational, asking people). - Advantages of Secondary Data: Time-saving, low cost, detailed. - Disadvantages of Secondary Data: May be outdated, may not fit the project. 4. Analyze the Data - Use methods and technologies to analyze big data. - Focus on transforming data into useful information. - Data Mining: Finding correlations and patterns. - Predictive Modeling: Statistical models predicting outcomes. 5. Take Marketing Actions - Make recommendations based on findings. - Suggest actions and evaluate results for businesses so they can improve their marketing strategies. Key Concepts in Analytics: - Descriptive Analytics: What has happened (e.g., web visits, social media interactions). - Predictive Analytics: What might happen based on data mining. Metrics in Marketing: They are numbers that show how well something is performing. - Easy to understand. - Available regularly. - Actionable and impactful. Sales Forecasting Techniques: 1. Judgments of Decision Maker: Decisions made in a company using their knowledge and experiences to estimate future sales. 2. Surveys of Knowledgeable Groups: Surveys are conducted with people who know a lot about the market like customers or experts to gather their opinion on future sales. 3. Statistical Methods: Uses past sales data to identify patterns or trends, then applying it to predict future sales. Chapter 6 Steps in Market Segmentation: When they divide the market 1. Identify Consumer Needs: Understand common characteristics and needs within the market. 2. Group customers with similar trades. 3. Estimate Segment Size: Assess the size of each identified segment. 4. Target Segments: Select which segments to focus on for marketing efforts. 5. Marketing Actions: Develop and implement marketing programs to reach selected segments. 6. Monitor Success: Evaluate the effectiveness of marketing programs against set objectives. Market Segmentation Importance: Consumer Diversity: Different needs mean a single product cannot satisfy everyone. Resource Efficiency: Companies must allocate resources effectively to target likely buyers. Consumer Insights: Understanding target markets is crucial for effective marketing. Product Positioning: Creating a specific image of the product in the minds of the targeted group. Key Elements of Positioning Statements: 1. Target market and need 2. Branded product name 3. Product category 4. Unique attributes and benefits - Example Format: "For (target market) who desire (need), (brand) is the (category) that offers (benefits)." Repositioning: Adjust brand image to align with changing consumer attitudes and needs. Positioning Maps: 1. Identify important product attributes. 2. Assess how target customers rate competing products. 3. Determine the position of the company’s product relative to competitors. Forms of Market Segmentation: 1. Mass Marketing: Broad appeal with no differentiation. 2. Segment Marketing: Targeting specific segments with tailored products. 3. Niche Marketing: Focusing on a specific product over small groups. 4. Individualized Marketing: Customizing offers to individual needs. Dividing the markets: 1. Geographic: Location of the target market. 2. Demographic: Characteristics Information (age, gender, income). 3. Psychographic: Attitudes, values, and lifestyles. 4. Behavioristic: Interaction and usage patterns with the product. Segmentation Analytics: - Uses data to group people based on their lifestyle and shopping behavior, helping companies target specific groups more accurately. Chapter 7 Brand Concepts: 1. Brand Loyalty: When customers keep buying the same brand's products because they trust and like it, even when there are other options available. 2. Brand Personality: The human traits or characteristics associated with a brand, which help to create an emotional connection with customers (e.g., a brand being seen as fun, reliable, etc.) 3. Brand Name Criteria: - Suggest product benefits. - Memorable, distinctive, and positive. - Fits company/product image. - Legally protectable and simple. Types of Brands: 1. Manufacturer Brands: Owned by manufacturers. 2. Private-label Brands: Owned by retailers. 3. Generic Brands: Unbranded products. Product Types: 1. Goods: Tangible items. - Non-durable Goods: Consumed once (e.g., food). - Durable Goods: Lasts for an extended period (e.g., appliances). 2. Services: Intangible activities or benefits. - Hybrid Products: Combination of goods and services. Total Product Concept: Products have three layers: 1. Core Product: Primary benefit. 2. Actual Product: Features, design, branding. 3. Augmented Product: Additional services or benefits. Product Lines and Mixes: 1. Product Line: Group of similar products targeting the same market. - Depth: Number of variations within a product line. - Length: Total number of products in the line. 2. Product Mix: All product lines marketed by a company. - Width: Number of different product lines. Consumer Product Classifications: 1. Convenience Products: Frequently purchased, inexpensive. 2. Shopping Products: Less frequently purchased, requires comparison. 3. Specialty Products: High price, strong brand identity, exclusive distribution. 4. Unsought Products: Not actively thought about by consumers, requires significant marketing. Business Products: Business products are items companies buy to help them operate or make other products. 1. Production Products: Raw materials or parts that become part of the final product, like wood for furniture. 2. Support Products: Things that help with production but don’t become part of the product, like machines or office supplies. Branding Elements: - Brand: Name, phrase, symbol, or design that distinguishes a product. - Brand Equity: Value derived from consumer loyalty and brand associations. Protecting Brands: - Patents: Protect inventions. - Copyrights: Protect original works of authorship. - Trademarks: Protect brand names and logos. Chapter 8 Product Life Cycle (PLC): Describes the stages a new product goes through from launch to decline. Stages: 1. Introduction: - Few competitors. - Focus on awareness. - Minimal profits. 2. Growth: - More competitors enter. - Product differentiation. - Increased profits. 3. Maturity: - Many competitors. - Brand loyalty. - Maximized profits. 4. Decline: - Reduced competition. - Focus on best sellers. - Decreasing profits. Length of the Product Life Cycle: - Varies by industry, competition, and marketing strategies. - Consumer products generally have shorter life cycles. - Technological changes can shorten life cycles. - Effective marketing can extend life cycles. Strategies to Extend Product Life Cycles: 1. Modifying the Product: - Product improvements. - Line extensions. 2. Modifying the Market: - Finding new customers. - Increasing product use. - Creating new situations for use. 3. Repositioning the Product: - Adapting to changing consumer needs or competition. 4. Introducing New Products: - Meeting changing consumer needs or improving value. Types of New Products: 1. Minor Innovations: - No new learning required (e.g., improved toothpaste). 2. Continuous Innovations: - Changes routine but requires minimal new learning 3. Radical Innovations: - Requires new learning and consumption patterns (e.g., self-driving cars). New Product Development Process: 1. New Product Development Strategy: Identify focus that meets company objectives. 2. Idea Generation: Gathering ideas from sources outside the company, such as customers, competitors, and industry experts. 3. Idea Screening: Retain good ideas; evaluate against company criteria (R-W-W concept). 4. Business Analysis: Review sales, costs, and profit projections. 5. Development: Create product concept and conduct concept testing. 6. Test Marketing: Introduce product in a realistic market for feedback. Common Reasons for New Product Failure: - Poor execution of the marketing mix (4 Ps). - Bad timing of product launch. - Insufficient market attractiveness. - Insignificant point of difference. Chapter 9 Price: Money or considerations exchanged for ownership/use of a product. Barter: Exchange of goods/services without money. Price Equations: Item Price = List Price - Incentives + Extra Fees Ex Tuition: Tuition = Published Tuition - Scholarship + Activity Fees Price as an Indicator of Value - Value Pricing: Enhancing benefits while maintaining the price. - Value Equation: A simple way to think about how much something is worth so Value = Perceived Benefits / Price - Price signals quality; too low may indicate poor quality, too high may suggest low value. Profit Equation: Total Revenue - Total Cost General Pricing Approaches: 1. Demand-Oriented: Focus on what customers are willing to pay. - Skimming: Start high, then lower the price. - Penetration: Start low to attract buyers, then raise the price. - Prestige: High price for high status. - Odd-Even: Price just under a round number (e.g., $9.99). - Bundle: Sell multiple items together at one price. 2. Cost-Oriented: Set prices based on how much it costs to make the product. - Standard Markup: Add a percentage on top of the cost. - Cost-Plus: Add a fixed amount to the cost. 3. Profit-Oriented: Set prices to meet profit goals. - Target Profit: Set a price to make a certain amount of profit. - Competition-Oriented: Set prices based on what competitors charge. Estimating Demand and Revenue: - Demand Curve: Graph showing quantity sold at various prices. - Price Elasticity: Sensitivity of demand and revenue to price changes. - Total Revenue (TR): TR = Price (P) × Quantity (Q). Break-Even Analysis: Break-even Point (BEP): - BEP Quantity = Fixed Cost / (Unit Price - Unit Variable Cost) - Used to analyze profit impacts from changes in price, fixed, and variable costs. Legal and Ethical Considerations - Price Fixing: Collusion to set prices. - Price Discrimination: Different prices for different customers. - Deceptive Pricing: Misleading price offers. - Predatory Pricing: Low prices to eliminate competition. Steps to Set a Final Price: 1. Select Approximate Price Level. 2. Set List or Quoted Price: One-price vs. Flexible-price policy. 3. Make Special Adjustments: Discounts, allowances, geographic adjustments. 4. Monitor and Adjust Prices: Keep track of competitor activity, legislative changes, economic conditions, and consumer demand. Chapter 15 Organizational Structure and Strategy: - Marketing strategy must align with the company’s mission. - Types of Organizations: - Business Firms - Not-for-Profit Organizations Three Levels of Strategy 1. Corporate Level - where top management works and decides the overall strategy for the entire organization. 2. Business Unit Level - where managers focus on specific markets or products and sets directions for individual areas. 3. Functional Level - where individual departments (like marketing or manufacture) make specific plans to help the overall goals of the business. Goals and Objectives: Types of Goals are… - Profit - Sales - Market Share - Quality - Customer Satisfaction - Employee Welfare - Social Responsibility Mission Statement: - describes what a business the business is about Tracking Strategic Performance: - Marketing Dashboards: Visual tools for monitoring marketing objectives. - Marketing Metrics: Data points to show the performance of a marketing program. Setting Strategic Direction: - Key Questions: - Where are we now? - Where do we want to go? - How will we get there? SWOT Analysis - Assess internal Strengths and Weaknesses, Opportunities and Threats. Marketing Plan Phases: 1. Planning Phase: - SWOT Analysis - Market-Product Focus and Goal Setting. - Creating a target market 2. Implementation Phase: - Obtaining resources - Designing the marketing organization 3. Evaluation Phase: - Companies check if their results match the goal they set and make changes to improve negative outcomes.