• - philosophy or a management orientation that stresses the importance of customer satisfaction, as well as the set of activities used to implement this philosophy.
• the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”  It involves managing customer relationships in ways that benefit both the organization and its stakeholders (customers, stockholders, employees, the public, suppliers).

focuses on internal capabilities of the firm rather than on the desires and needs of the marketplace.  The firm is concerned with what it does best, based on its resources and experience, rather than with what consumers want.  (Field of Dreams Orientation)

         It can work on occasion – e.g., 3M’s Post-It Notes.

long term philosophy of business based on three major tenets

a. customer satisfaction- focusing on customer wants and needs so the organization can differentiate its products from competitors offerings

b. achieving customer satisfaction at a profit and doing so in a legal and responsible manner.

c. Intergating all the organization's activities, including production, to satisfy customers' wants and needs. i.e. company-wide commitment to the philosophy.

requires:

a. top management leadership

b. a customer focus

c. competitor intelligence- knowing your competitors and their strengths and weakness.

d. interfunction coordination to meet customer wants and needs and deliver superior values

e. win-win mutually rewarding relationships

strategy that entails forging long-term partnerships with customers and contributing to their success.

i.e. Wegmans Food Markets- "Employees first, customer's second."

Market Strategy

(3 Basic Components)

a. target market

b. marketing objectives

c. marketing mix

1. Product- the need-satisfying offering of the firm

2. Place- (channels of distribution) all activities concerned with the movement of goods from producer to consumer (storage, transporting, reselling)

3. Promotion- communication with target market

4. Price- the exchange value of the product or service.

1. Realistic
2. Measureable
3. Specific
4. Time frame
5. In writing
6. Consistent with organizations priorities and objectives

S- Strength (internal)

W- Weakness (internal)

O- Opportunity (external)

T-Threats (external)

try to increase market share among existing customers

i.e. beanie babies improve the sales of happy meals

attracting new customers to existing products

i.e. teaching new uses for old products, baking soda

creation of new products for present markets

i.e. new flavor of soup.

strategy of increasing sales by introducing new products into new markets

i.e. sony aquired columbia pictures

Ford promised its customers any color vechile as long as it was black. example of market oriented firm?

t or f

1. Economic responsibilities- be profitable
2. Legal responsibilities- obey the law
3. Ethical responsibilities- do what is right, just, and fair. avoid harm.
4. Philanthropic responsibilities- be good corporate citizen; contribute resources to the community; improve the quality of life.

basic level, childlike.

i.e. you would try to sell your product to any-and-everyone regardless of their need/ability to pay, focused on your own paycheck.

moves from egocentric viewpoint toward the expectations of society. loyalty and obedience to the organization become paramount.

i.e. try to sell your product legally and as approved by your sales manager, regard for the customers long-term well-being might be secondary.

Represents the morality of the mature adult.

i.e. you wouldnt try to sell your product to someone who doesnt really need it, you're focused on whats right for your customer and yourself in the long run.

• Form
• Time
• Place
• Possession

1. Need Recognition- occurs when consumers are faces with an imbalanced between actual and desired states.
2. Information Search
3. Evaluation of Alternatives
4. Purchase
5. Post Purchased Behavior

applying previously  learned concepts to a new situation.

i.e. sears lawnmower works well, lets buy a sears dryer.

When the marketer is researching characteristics of consumers, income is the best single indicator of social class.

t or f

Marketing of goods and services to individuals and organzations for purposes OTHER THAN personal consumption

Much bigger market than the consumer market.

• Producers
• Resellers
• Governments (biggest market)
• Institutions

• Farmed
• Natural

• Initiator
• Influencers/ Evaluators
• Gatekeepers
• Decider
• Purchaser
• Users

• Target Marketing
• Marketing Mix

• Substantiality
• Indentifiable and measureable
• accessibility
• Responsiveness

Bases for segmenting

(consumer markets)

• Geographic segmentation
• Demographic segmentation
• -age
• -gender
• -income
• -ethnic background
• -family life cycle
• Psychograhic segmentation
• -personality
• -motives
• -lifestyles
• Benefit Segmentation
• Usage Rate

Changing consumer's perceptions of a brand in relation to competing brands

i.e. hardee's hamburgers

process of planning, collective, and analyzing data relevant to a marketing decisions.

3 roles:

1. descriptive
2. diagnostic
3. predictive

method that involves recording the behavioral patterns of people obejects and occurances. relies on four types of observation:

1. people watching people
2. people watching an activity
3. machines watching people
4. machines watching an activity

-subset of a population

-relevant population from which a sample will be drawn

Mr. Jones was interested in how school system might better...collect data interviews students in his 5th period class, random sampling.

t or f

Personal selling as a promotional tool is used more often in the business market than in the consumer market while advertising is used more in consumer marketing.

t or f

MRO- Manufactor replacement Operating

t or f

Leasing is moe common in business than ultimate consumers.

t or f

need-satisfying offering of the firm.

-the heart of the organization's marketing program

-starting point in creating a marketing mix

Purchased for:

• use in the manufacture of other goods or services
• use in an organization's operations
• resale to other customers

inexpensive items that require little shopping effort, purchased regularly, with little planning, and require a wide distrubtion

i.e. asprin

require comparision shopping among stores on the basis of price or desired product qualities/characteristics

2 types

Homogeneous

Hetergeneous

products that consumers see as being basically the same, but the consumer regularly shops for the best price

i.e. washer/dryers

consumers differ in quality, style, suitability, and lifestyle compatibility. unique features and different levels of quality and price

i.e. furniture

searched for extensively, and substitutes are not acceptable.

quite expensive, and distribution is limited

not sought out by the consumer because they are either unknown to the consumer or they are not actively sought because the desire to postpone their purchase.

i.e. life insurance, retirement

specific version of a product that can be designed as a distinct offering among an organization's products.

SKU (size/each color/each flavor)

refers to the number of product lines that an organization offers. firms increase product mi witdh to:

• spread risk across multiple lines
• capitalize on established reputations

the number of product items in a product line. firms increase product line depth to:

• attract buyers with widely different preferences
• capitalize on econmies of scale
• increase sales and profits by further segmenting the market
• even out seasonal sales patterns

changes in one or more of a product's characteristics

• Quality Modification- entails changing a product's dependability or durability
• Functional Modification- a change in a product's versatility, effectiveness, convenience, or safety
• Style Modification- aesthetic product change rather than a quality or functional modification.

the practice of adding products to a product line by:

-targeting new market segments (adding kids shoes to an adult shoe line)

-offering new features (adding a sports shoe with "the pump" to our line of regular sports shoes.

should be undertaken if the line is overextended, symptoms include

-some products are not contributing to profit because of low sales or cannibalization

-manufacturing/marketing resources are being disproportionately allocated to slowmoving products.

-items in the line have become obsolete because of new product entries in the line.

-major tool marketers have to distinguish their products from those of the competition

-name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitor's products.

-that part of the brand that can be spoken.

element of the brand that cannot be spoken, such as symbols

i.e.coffee cup with a drop of coffee falling from it.

-imaginary characters used as a spokesperson.

i.e. tony the tiger.

-Phrases that are consistently used in promotional campaigns for products/services

use of a combination of brand names to enhancethe percieved value of a product or when it produces incremental benefits to brand owners and users.

-two organizations wish to collaborate to offer a product, or to add value to products that are generally perceived to be homogeneous shopping goods.

Identifies a product by class or type and cannot be trademarked.

i.e. aspirin used to be a brand name.

• Containing and protecting products
• promoting products
• facilitating storage, use, and convenience
• facilitating recycling and reducing environmental damage.

Warranty

(Express/Implied)

-guarantees the quality or performance of a good or service.

-made in writing

-unwritten guarantee that a good or service is fit for the purpose for which it was sold.

• New to the world
• new product line
• additions to exsisting product lines
• improvements or revisions of exisiting products
• repositioned products
• lower-priced products

New Product Development Process

1. New-product strategy
2. idea generation
3. idea screening- often involves concept tests
4. business analysis
5. development- build a prototype and create a marketing strategy
6. test marketing
7. commercialization
8. new product

-Macro- all people, diffusion of innovation process

-Micro- individual, adoption process

1. Innovators
2. Early Adopters
3. Early Majority
4. Late Majority
5. Laggards

1. awareness
2. inerest
3. evaluation
4. trial
5. adoption

• Complexity (slows it down)
• Compatibility
• Relative Advantage
• Observability
• Trialability

Sales and profits for a new product or industry begin at zero in product life cycle.

t or f

Coca Cola is best known branch. the value of the brand name itself is called owner's equity

t or f

Primary reason we discuss in class for difference between peaks of the sales and profits lines is repositioning.

t or f

intangible or benefits that an organization provides to consumers in exchange for money or something of value.

i.e. airline trips, financial advice, auto repair.

inevitable differences in a service provider's performance from one day to the next.

i.e. quarterback may be hot one week and ice cold the next.

eliminates the need for customers to interact with people

i.e. self-service gas tanks and atm machines.

service perishability means that a firm cant store its services -its a case of use it or lose it

i.e. unoccupied hotel rooms, airline seats.

tangible product accompanied by suporting services.

i.e. buy a computer and get free telephone support service for two years.

embodying is the inclusion of a service with a purchase of a physical good.

businesses rely on expensive equipment or facilities and skilled personnel to deliever a service.

i.e. hospitals, restaurants, amusement parks.

- technologies must move customers smothly through the service. clear signs and other guidelines must show customers how to use the service.

-important for frequently purchased services such as dry cleaning or banking that are obtained at a fixed location.

-service managers who operate a storefront service requiring people to come to their location realize they much create an atractive environment to lure customers.

i.e. sky boxes at stadiums.

selling the individual provider of the service.

i.e. lawyers, self-improvement services, personal trainers.

flow of products through a pipeline from producer to consumer:

-products

-ownership of goods

-communication other than promotion

-risks associated with ownership

• producer
• intermediaries ( resellers)
• -wholesalers
• -brokers
• -retailers
• Facilitating intermediaries
• -transportation
• -warehouses
• -financial institutions
• consumers

• retailers
• -sell to ultimate consumers
• merchant wholesalers
• -sell to producers, governments, institutions, resalers, and retailers
• agents and brokers

• Transactional functions
• -contacting and promoting
• logistical functions
• -physcial distribution
• -storing/sorting
• facilitating functions
• -financing/research on consumer

evaluate alternative

-appliances, clothing, electronics

through one outlet

-speciality goods, ferrari, baccarat crystal

• vending machines
• direct retailing
• -marykay
• direct marketing
• -catalogs, telemarketing
• electronic retailing
• -online shopping

-franchisor grants a franchisee the business rights to operate or to sell a product

-franchisor- orginates the trade name, product, medthods of operation

-franchisee- pays the franchisor for the right to use its name, product, or business methods

catalogs, homes shopping, vending machines are part of the reail industry

t or f

a franchisor is an individual or business that is granted the right to sell anothers product

t or f

Exclusive Distribution is more appropiate for shopping goods than for specialty

t or f

gravel is an example of a product that likely has a short channel.

t or f

Nonstore retailing no longer worry about "place"

t or f

Service companies often tie tangible or physical evidence to their service to position it

t or f

Wholesaler takes title and physical possession

t or f

• Personal Selling
• Advertising
• Public Relations
• Sales Promotion
• -special sales
• -temporary packaging
• -coupons
• -samples
• Direct Marketing
• -telelmarketing
• -catalogs
• infomercials

1. Interpersonal communication

• Advantage- immediate feedback
• Disadvantage- cost of personal contacts

2. Mass Communication

• Advantage- reaching large numbers at once
• Disadvantage- waiting to assess reaction and responses to mass communicated promotion

• Attention
• -greeting, approach
• Interest
• -show knowledge of customer's needs
• Desire
• -explain differential advantages and benefits
• Action
• -request action on their part.
• -give them a little push, coupons

• Introduction- price skimming/penetration strategies.
• Growth- prices stabilize, prices may decrease to meet competition or savings can be passed on to customers
• Maturity- prices are stable, but further price decreases maye be necessary due to competition, price increases are usually cost initiated, not demand initiated.
• Decline- further price decreases unless youre the last in the marketplace, then your product may be collectable or difficult to obtain so it becomes a specialty good with higher price

Loyalty marketing programs would be considered part of public relations for a firm

t or f

CPM stands for cost per million contacts

t or f

Exxon "evolutionary advertise" incident

t or f

• Institutional Advertising
• -promotion the corportation as a whole rather than a single product to establish and maintain the company's identity
• Advocacy Advertising
• -instititutional advertising used to promote the company's viewpoint on a topic- controversal issues
• Product Advertising
• -promotion of the benefits of a single good or service

Pioneering Advertising

Competitive Advertising

Comparative Advertising

• designed to stimulate primary demand for a new product or product category
• designed to influence demand for a specific brand
• compare two or more specifically named or shown competing brands on one or more specific attributes

1. establish advertising objectives
2. determine advertising budget
3. develop creative stragedy for the message
4. make media decisions

sell the sizzle, not the steak

benefits rather than attributes

identifies a reason for a person to buy a product.

(fear, humor, love)

effort to capture media attention

usually through a press release

collaboration of two or more firms in a sales promotion

i.e. at&t's true rewards program offers discounts at Blockbuster

items that are useful or interesting merchandise given away free of charge and typically carrying an imprinted message or name

i.e. pens, notebooks, t-shirts

Consumer Sales Promotion

Trade Sales Promotion

Internal Sales Promotion

-directed at ultimate consumers

-directed at resellers

-directed at firms employees

Trail blazing advertisement is most approriate for introduction stage.

t or f

First step in personal selling is approach customer

t or f

Face to Face interaction

Slotting Allowances

t or f

Sales promotion may be directed to ultimate consumers, middleman, and own employees

t or f

Price Elasticity of Demand

-Elastic Demand

-Inelastic Demand

consumer's responsiveness or sensitivity to changes in price.

-situation in which consumer demand is sensitive to changes in price

-situation in which an increase or decrease in price will not significantly affect demand for the product.

• Availability of substitutes  (many)

• price relatice to purchasing power- if price is an inconsequential amount to consumers, demand will be more inelastic

• product durability- the more durable (and easily repaired) the more likely its elastic
• a products other uses- the greater the number of different uses for the product the more elastic demand tends to be
• rate of inflation- when inflation rate is high demand becomes more elastic

the practice of marking up prices by 100 percent or doubling the cost

i.e. the retailer pays $10 for the vase so she marks it up to $20 to sell to customers.

method of identifying the level of sales at which total revenue will equal total cost, given a products per-uint selling price.

total fixed costs

-----------------

price- variable costs per unit

1. establish pricing goals
2. estimate demand, costs, and profits
3. choose a pricing strategy to help determine a base price
4. fine tune the base with pricing tactics

Cumulative Quanity Discount

Noncumulative Quality Discount

• deduction from list price that applies to the buyers total purchases made during a specific period of time
• deduction from list price that applies to a SINGLE order rather than the total volume

FOB (Origin) Pricing

FOB (Destination) Pricing

• price tactic that requires the BUYER to absorb the freight costs
• price tactic that requires the SELLER is responsible for delievering the product

i.e. postage stamps

price tactic in which the seller pays the actual freight charges and bills every purchaser an identical flat charge.

different customers pay different prices for essentially the same merchandise

i.e. buying cars

odd numbered prices to connote bargins and even numbered prices to imply quality

$5.99 vs. $6.00

Price Bundling

Unbundling

Marketing two or more products in a single package for a special price

Reducing the bundle of services that comes with the basic product