Marketing Class Notes - PDF
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These are class notes on marketing in a market economy; covering topics including the 4Ps, consumer utility, types of utility, the role of middlemen, and the criteria for forming market segments. The notes also touch on the importance of consumer assessment of product quality and explore the concepts of trade, protectionism, and cross-cultural analysis.
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Chapter 1 - marketing in a market economy - creating, communicating, producing, exchange - utility - benefit the consumer (what you pay) 4P’s: 1. Price 2. Product 3. Promotion 4. Place...
Chapter 1 - marketing in a market economy - creating, communicating, producing, exchange - utility - benefit the consumer (what you pay) 4P’s: 1. Price 2. Product 3. Promotion 4. Place - These are how we affect consumer (total) utility - Total utility (including what you produced) > what you give up - Utility need to offset overall cost Types of utility (with Adidas example) 1. Form (putting things together) - Customization online 2. Time (making products available when customers need them) - Express shipping 3. Place (making products available where customers can purchase them) - Online or in store 4. Possession (makes it easier for customers to own and use the product) - Credit cards, payment plans - Middleman - operates between consumer and producers - Take it out and you save costs - But also can be more efficient and lower costs - NOT ALWAYS more efficient - increase utility through: 1. Central currency 2. Middleman 3. Central market - a lot of costs go into cutting middleman - middleman can make you profit immediately - doing it yourself also costs a lot of money - Key Players in market economy 1. Businesses 2. Consumers 3. Government (how much intervention?) - role of consumers in a market economy is to search and vote with your money for the best value - if consumers are lazy they get interior projects - consumers get harmed - business ideas get hurt - yoo jae to be willing to search the market for the best price or you get scammed - consumer assessment of quality - use price as an indicator of quality - average correlation coefficient is.2 -.2 - Different by categories - S ometimes higher prices do not equal higher quality - star ratings are not a great scale either - influenced by price and brand name - the only way is to SEARCH - Do price and quality searching - Have to talk to someone who has nothing to gain by recommending a product - role of government in a market economy is to protect consumers and competition - How heavy of a hand should they have? - Ex. the government allows more mergers. Return on equity in the US is higher. Less competition - If it substantially lessens competition the government won't let it happen - Ex. kroger and albertsons merger - Pro - able to give more, lower prices - Con - less competition, market control, prices can go up - price ceilings - government sets a limit on prices that can be charged, leads to shortages - ex. Rent control CHAPTER 7 - UNDERSTANDING AND REACHING GLOBAL CONSUMERS AND MARKETS - trade feedback loop - increase exports, increase imports, cycle - argument for free trade (specialization) - free trade contends with protectionism - ex. Amazon moving into India - india is growing faster than any other economy BUT - indian regulations, Amazon loses money on transactions, India is unbanked (all cash) - Amazon is still investing though - india wants protectionism, back and forth from both governments - protectionism 1. Tariffs - increases prices 2. Quotas - limits supply - Both cut down on free trade - world trade organization - helps dispute (166 member countries) issues with trade - cross cultural analysis 1. values /attitudes - country of production affects marketing because of perceived quality assumptions - Ex. german cars are high quality, chinese made products are trash - Consumer ethnocentrism - only buying products produced in your country, believe it patriotic and helps home economy 2. Customs - bribery or other forms of bribery - Very common in underdeveloped countries 3. Symbols and language - Semiotics - Back translation - economic consideration 1. Economic infrastructure - anything that can affect/support your brand overseas - Ex. roads, transportation, service 2. Currency exchange rates - Affects profitability, - dollar gets stronger = bad for the companies - investors always are looking for ways to reduce risk, hard because risk and return go up together HAPTER 8 - MARKETING RESEARCH C -marketing research - plan, gather, analysze informationto make informed decision - want to reduce risks - risks 1. Technology 2. People 3. Financial 4. Market a. Highest risk - relationship of research types - problem —--- exploratory research (dont test kist generate hypothesis) —- possible causes —--- descriptive and casual research (est hypothesis) —----- most probable causes - hypothesis generayop stage - use exploratory - unstructured, just generate insights, open ended, qualitative analuzes - hypothesis testing stage - desrcibtive (large samples) and experimental (smaller groups) - fixed alertanitive, quantitative, structured - ex. 1. Sales are falling what do we do? 2. What is our demographic? 3. Will buyers buy more in different packaging? - descriptive - describes attributes of groups of people and relationship between variables - cross tribulation - relationship between variables - correlation coefficient, regression - casual - demonstrates cause and effect of change - ex. Problem - sales of CU meal plan is down - 1. Interview people - they say they are living off - 2. Calculate percentage of freshman that live off 1. exploratory - define the product - clearly defined research hypothesis with clear implications of marketing actions - based on measure of success - action standard, statistical significance, when your going to action with confidence - null and alternative hypothesis - have to stay ahead of your time - methods (not all) - interviews. Social listening (social media talking), focus groups, ethnographics (people in their natural habit, how they use the product daily, observational) - DO NOT MAKE DECISIONS BASED ON EXPLORATORY RESEARCH - not generalizable - just creates ideas 2. Descriptive research - relationship between variables - secondary data - collected by other companies not necesacrily collected for you - big data helps a lot - predictive data - doesnt explain, just shows relationship, doesnt have to make sense - primary data - collected by you - open ended - close ended or fixed alternative Semantic differential scales - weak __________ strong Likerty type scales - strongly diagre _____________ strongly afree Multichotmous - which is your favoitre (check one) - probability samples - chosen from some known population, allows us to make statisticall based inference from sample to population (46% of CU students with MOE) - nonporbability samples - cannot objective estimate how close a sample relcets to any population (46% of Leeds students who I approached and chose to talk to) - DESCRIPTIVE RESEARCH DOES NOT SHOW CAUSATION ONLY CORRELATION 3. Experimental - cause and effect, generaliziable - when certain studies are done enough we can conclude causaustion through correlation - indepentndent variable - potential cause of dependent variable - what is maniuplted - ex. Trying new packaging - dependent variable - what is being measure Ex. sales from the new packaging - mechanical turk - being compensated for research q HAPTER 9 - MARKET SEGMENTATION, TARGETING, AND POSITIONING C - what is it? 1. Identify market needs a. Featires b. Expenses c. Quality d. Savings in time and convenience 2. Link needs to actions 3. Excutte marketing programs and actions a. Marketing mix - why segment? - efficient - mass market (1 thing for everybody) - effective - everyone has different needs and wants - get kicked out by competition - too expensive - have to be somewhere in the middle (SOME companies are better off on one side, but not most) - how far to segment? - have to add more money in your pockett or dont do it - margical revenues > marginal cost ALWAYS or dont do it - considerations in segemnattions 1. Synergies between segments a. Ex. hoel article 2. Cannaibalizim - when you introduce new brands you try to steal from competitors but sometimes you take the fall on yourself a. know you wull have some cannabilism, but continue if revenue > cost b. Minimize this - brand positioning and tiffany/walmart strategies - criteria for forming segments 1. Simplicity and cost effectiveness of assigningf segments a. Identifiable and measurable b. Much easier now with big data 2. Potential for increased profit (substaintial and subtaniably) 3. Similarity of needs within a. Enough alike in the segment 4. Difference of needs among segments a. Enough of difference between segments b. Justifies multiple segments rather than just one 5. Potential of marketing action reaching segment a. Much easier in recent years i. Ex online ads b. Became harder lately as privary increases i. Have to opt in to features for companies - basis for forming market segments 1. Geographic - region, city size 2. Demographic - income, gender, age, maritial staus, occupatiom 3. Pshycographc - personality, values, opinions, lifestyle 4. Behavioral - product feature, usage rate, user status - CLV (how much you are worth to a company) = margain x retention / 1+ discount rate - retention rate - very simplified version - every company has a different formula/algorithm - brand positioning - how a brand is conditionded in consumers mind - perceptual map - graphical representation - relative to competition - axis are attributes - repositioning stradefies move you around - harder when it is an old/devolped brand - want spread in your own berand - physical placement can effect position -ec. Sparkling ice (diet sodA) is in water idle, people think its healthy CHAPTER 10 - DEVELOPING NEW PRODUCTS AND SERVICES - Have to have GROWTH - New markets or new products - most new products fail (80%) - stagegate process to help mizimize risk - if your going to fail, fail fast and fail chaeaply - different process for each company 1. New product strategy development - identify new markets and the strategic roles that product could fill - protocol statement (simple form) 1. Target market 2. Need to be satisfied 3. How the product will satisfy needs 2. Idea generation 1. Supplier and consumer suggestion a. Crowdsourcing 2. Employee suggestion 3. R&D scientist 4. Universities, inventors, small tech firms 5. Competitive production 6. AI ?? - derived demand - buy for use of something else ex.bike parts 3. Screening and evaliation - - internal - can we pull it off feasibility? - when done well, thats the only thing internal look as - once it passeds that then it moves onto external - external - concept test - sometimes internal test fails because they weed out things not based on feasibily and then miss out on successful ideas 4. Business analysis - marketing, finance, legal, etc. - is this a good move for the company? 5. Development - prototypes - phsyocal from of a product, working or not working - revise or release - does not have to be expensive or complex 6. Market testing - stimulated test market - pros - immediate feedback, competition doesnt know - field conditions - takes longer, opens up idea to competition 7. Commerzialiations - really close communication between 4P’s
