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Value= benefits received – (Price + hassle)
The net benefit a consumer receives from a product less the price paid for it and the hassle or effort to acquire it |
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The group of organizations involved in selling and promoting goods from the time they are produced until they reach end users
Marketing channel is a useful tool for management |
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| a warehouse or storage facility that emphases is processing and moving goods on down the channel to wholesalers, retailers, or consumers |
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| Distribution channels perform four main functions: |
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1.) Facilitate exchange
2.) Sort products based on demand
3.) Standardize exchange transactions
4.) Facilitate buyer/seller product and information searches. |
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| the firms a company partners with to actively promote and sell a product as it travels through its marketing channel to users |
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| third parties that facilitate the supply and sale of products from manufacturers to users |
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| Supply Chain Management (SCM) |
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| The management and control of all materials, funds, and related information in the logistics process from the acquisition of raw materials to the delivery of finished products to the end user. |
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| include all of the organizations that impact products before, during, and after their production |
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| Third-party logistics (3PLs) |
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| Firms to which other companies outsource their entire order processing and shipping departments |
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| a situation that occurs when intermediaries are cut out of marketing channels |
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| Structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. |
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| Weighs more recent periods of time more heavily than more distant periods of time (pg. 452 more info) |
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| The Strategic Planning Process |
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Process that helps an organization allocate its resources under different conditions to accomplish its objectives, deliver value, and be competitive in a market drive economy
Developing plans and strategies for 1.) Products and their 2.) Pricing 3.) Promotion, 4.) Delivery |
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This is the revenue producing element in the corporate or strategic plan
How the products will be delivered
Supporting research and forecasts
Which products will be created
How the products will be exchanged for revenue
How the products will be communicated |
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| Michael Porter’s 5-forces model |
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The framework of the five forces model helps organizations understand their current competitors as well as organizations that could become competitors in the future
1. Rivalry
2. Substitute Products
3. New Entrants—New Competitors
4. Bargaining power of suppliers
5. Bargaining power of buyer |
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| Marketing environmentally safe products and services in a way that is good for the environment; doing more to engage in “sustainable” practices that help protect the environment and conserve natural resources |
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Helps companies evaluate each of its strategic business units based on two factors:
(1) The SBU’s market growth rate and
(2) The SBU’s relative market share. |
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| a product with high growth and a high market share. |
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| a product with a low growth and low market share. |
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| a product with low growth and a high market share. |
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People have to fulfill their basic needs before fulfilling higher level needs
First: Psychological needs: food, water, sleep
Safety Needs: feeling safe and sheltered
Social Needs: being loved and accepted
Esteem Needs: being respected as a result of your accomplishments
Last: Self- Actualization Needs: realizing your full potentials |
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Describes a person’s disposition as other people see it
Openness, conscientiousness, extraversion, agreeableness, neuroticism |
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how you see yourself
your ideal self, buy products to enhance how they feel about themselves |
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women—buy specific clothes, show until you drop, 2/3 household purchases
men—male specific, see it buy it, ¾ alcohol |
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Chronological age: How old in years you actually are.
Cognitive age: How old you perceive yourself to be. |
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| researching lifestyles, what they do, spend their time |
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| study of demographics (age, education, sex, income) +Personality (attitudes, activities, values, lifestyles) |
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| àtransaction between aBusiness and Customer. |
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| Business-to-Business (B2B) àUsed to describe electronic commerce transactions between businesses |
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Dividing people and organizations into groups according to how they behave with or act toward products
Benefits from products, how often they use the product, |
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segmenting buyers by personal characteristics such as age, incomes, ethnicity, family size
How do ages, races, and ethics affect what they buy? |
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Where are customers located, how can we reach them?
What products do they buy based on their location
Relies on city size and population density |
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| psychographic segmentation |
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What do our customers think about and value, how do they live their lives
Segmenting buyers by their activities, interests, opinion, attitudes, values, and lifestyles |
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| Product dominant approach to marketing |
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Focus on producing products cheaply
Product-oriented centers on capturing business by focusing on creating and manufacturing better products at lower prices
Featureàa characteristic of the offering
Benefitàthe degree to which a feature satisfies a buyers need or desire |
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| Service dominant approach to marketing: |
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Marketers should consider what services it takes for the customer to acquire their offerings
What customers wantàdefines the productàintegrates the product, price, and service dimensions
Action that provides a buyer with an intangible benefit (for example hair cut)
“Pure” servicesà offerings that don’t have any tangible characteristics associated with them |
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Family life style implication
The stages families go through over time and how it affects people’s buying behavior |
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Finding and attracting new customers is far more difficulty then retaining current customers
Organizations try to interact with and form relationships with current customers
Goal of firms is to do as much business with their best customers as possible |
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Target marketing-choosing select groups of people to sell to
Mass Marketing-selling same product to all consumers.
Niche Marketing-Targeting an extremely select group of consumers |
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| B2B markets differ from B2C markets because: |
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Number Sold -More transactions in B2B markets
Complexity-Larger transaction size in B2B
Personal Selling-Fewer B2B customers |
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| More characteristics of B2B |
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B2B sellers watch general economic conditions to anticipate consumer buying patterns that can affect demand.
Companies try to influence their B2B sales by directly influencing consumers.
Derived demand à demand that comes from a secondary source.
Fluctuating demand:- small change in demand by consumers has large effect throughout the chain of businesses that supply all the goods and services |
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| the stages a product may go through |
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1.) Introduction
market cost higher, profits low
pricing strategies can vary and may be based on skimming or penetration pricing
2.) Growth
Sales increase and more competitors enter the market
3.) Maturity
Sale peaks and begins to level off and competitors have saturated
Number of potential new customers decline
4.) Decline
Sales drop and companies must decide whether to keep, modify, or drop a product. |
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setting initial price low on a product to capture as much market share possible
This is used for new food products, health and beauty supplies, and paper products in grocery and mass merchandise stores
A company might do this in its pricing to recoup its investment into a product faster |
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| charging a low initial price for an offering and maintaining that price throughout the products life cycle |
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| pricing products a few cents or dollars below the next dollar amount |
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| price lining ( price levels) |
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| àgas pricing (regular, super, and premium) is an example of price lining |
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| an entity that is created when two parties agree to share profit, losses, and control with one another in the economic activity they jointly undertake |
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| Granting an independent operator the right to use your company’s business model, techniques, and trademarks for a fee |
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Demand that occurs when we promote a product to a final consumer
Focuses on created demand for a product among consumers so that businesses agree to sell products
Strategy in which consumers are targeted with sale promotions such as coupons, contests, games |
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Demand occurs when we promote a product to members of the supply chain
Consumers are informed via advertising and other promotions that the product is for sale, but the main focus is to sell to intermediaries |
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Hiring an organization to do a task for your company that was previously performed.
Used to lower costs and focus on the activities they do best. |
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| societies well being not just profits |
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| environmental sustainability |
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| Outsourcing work to a company abroad |
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| when firms move activities in-house |
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| Consumer advantages of internet: |
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Enables brand new forms of business that were simply not practical or possible before (i.e. digital downloads, auctions, instant messaging, webcams, etc.)
Companies can offer consumers control, choice, and value in all stages of the purchase process
Balance of power shifts toward the consumer—brings in issues of online privacy and security |
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| Marketing using the Internet |
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| marketing using the world wide web |
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