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trade of things of value between buyer and seller so that each is better off
Necessary elements for exchange
*Two or more parties with unsatisfied needs
*Desire and ability to satisfy those needs
*A way for the parties to communicate
*Something to exchange |
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| Requirements for Marketing to occur |
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•1. 2 or more parties with unsatisfied needs
•2. A desire and ability on their part to be satisfied
•3. A way for the parties to communicate
•4. Something to exchange |
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| potential people/consumers with both the desire and the ability to buy a specific product |
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| one or more specific groups of potential consumers toward which an organization directs its marketing program |
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*Product: a good, service, or idea to satisfy the consumer’s needs
*Price: what is exchanged for the product
*Promotion: a means of communication between the seller and buyer
*Place: a means of getting the product to the consumer |
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*Controllable factors
*marketing managers controllable factors that can be used to solve a marketing problem |
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| Uncontrollable factors involving - social, economic, technological, competitive, and regulatory forces in a marketing decision |
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| the unique combination of benefits received by targeted buyers that includes quality, convenience, on time delivery, and both before sale and after sale service at a specific price |
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Meaningful customer relationships are achieved by a firm identifying creative ways to connect closely to its customers through specific marketing mix actions implemented in its marketing program
*relationship marketing- linking the organization to its individual customers, employees, suppliers, and other partners for their mutual long term benefits |
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| , a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers |
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| Evolution of the market orientation |
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Production Era
Sales Era
Marketing Concept Era
The Customer Relationship Era |
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| the idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organization’s goals |
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focuses its efforts on
*Continuously collecting info about consumers needs
*Sharing this info across departments
*Use it to create customer value, seek to continuously satisfy the expectations of customers and create customer value |
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| Customer Relationship Management |
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| - identify prospective buyers, understand them intimately, develop favorable long term perceptions of the organization and its offerings so that buyer will choose them in the marketplace |
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| - internal response that customers have to all aspects of an organization and its offerings, includes both direct and indirect contacts with the company |
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| Societal Marketing Concept |
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| - view that organizations should satisfy the needs of consumers in a way that provides for society’s well-being |
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| people who use G and S for a household |
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| manufacturers, wholesalers, retailers, and govnt agencies that buy G and S for their own use or for resale. |
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| the benefits or customer value received by users of a product |
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It is delivered when customers wants and needs are satisfied
*Value is the set of benefits that we are getting, (reliability, customer service, better performance, mac vs pc)
*Common Value Strategies: Best service, best price, best product, best promotion, |
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| Occurs when a person feels deprived of a certain necessity |
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| Manifestations of needs that are influenced by knowledge, culture and personality. |
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| Idea behind needs and wants |
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| : Marketing doesn’t create needs, but instead marketing shapes wants. |
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| is the money left after a business firms total expenses are subtracted from its total revenues and is the reward for the risk it undertakes in marketing its offerings |
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| : An organization’s long-term course of action designed to deliver a unique customer experience while achieving its goals. |
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*Broad corporate image, Business Unit analysis, CMO role
*The corporate level is where top management directs overall strategy for the entire organization |
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| Board of Director or "Top Management" |
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*Applying the marketing concept to guide the business unit
*Individuals both inside and outside the organization with a variety of skills and experiences that are invaluable in establishing overall strategy |
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| Strategic Business Unit Level |
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| Strategic business unit refers to a subsidiary, division, or unit of an organization that markets a set of related offerings to a clearly defined group of customers |
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*Works with all other functional units in carrying out day-to-day activities
*where groups of specialists actually create value for the organization |
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| used when developing marketing programs for new offerings or improving current ones |
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| Organizational Foundation (why) |
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Core Values
Mission
Organizational Culture |
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| the fundamental passionate and enduring principles that guide its conduct over time |
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| statement of the organizations functions in society, often identifying its customers, markets, products, and technologies |
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| set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization |
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| - describes the clear, broad, underlying industry category or market sector of an organizations offering |
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| statements of an accomplishment of a task to be achieved, often by a specific time, convert mission into performance targets |
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Specific
Measurable
Attainable
Relevant
Time-Based |
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The ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.
*Sales or units sold can be used to express market share. |
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| are an organizations special capabilities, including skills, technologies and resources that distinguish it from other organizations and that provide value to its customers |
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| a unique strength relative to competitors, often based on quality, time, cost, or innovation |
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| Business Portfolio Analysis |
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| used to quantify performance measures and growth targets to analyze SBUs as though they were a collection of separate investments |
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| generate large amounts of cash, far more than they can invest profitably in themselves, they have dominant shares of slow growth markets and provide cash to cover the organizations overhead to invest elsewhere |
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| o Stars have a high share of high growth markets that may need extra cash to finance their own rapid future growth, when their growth slows, they are likely to become cash cows |
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| have a low share of high growth markets. They require large injections of cash just to maintain their market share much less increase it |
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| have low shares of slow growth markets. They may generate enough cash to sustain themselves; they do not hold the promise of every becoming real winners for the organization. |
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| develops a simple, excellent offering that captures the imagination of its employees and its customers (the hedgehog knows one big thing) |
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| believes that an organization must swim out of the red ocean of bloody competition and into a blue ocean having less competition |
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| Lots of competition in the market place |
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| measure of the quantitative value or trend of a marketing activity or result |
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| road map for the marketing activities of an organization for a specified future time period, such as 1 or 5 years |
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| the visual display on a single computer screen of the essential information related to achieving a marketing objective |
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| Strategic Marketing Process |
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| organization allocates its marketing mix resources to reach its target markets, divided into 3 parts planning, implementation, and evaluation |
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Situational Analysis
SWOT: Strengths, Weaknesses, Opportunities, Threats |
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Market-Product focus and Goal setting
Set market and product goals
Select target markets
Find points of difference
Position the product |
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Marketing Program
Develop the programs marketing mix
Develop the budget by estimating revenues expenses and profits |
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Four Components
Obtaining resources
Design marketing organization
Developing schedules
Execute marketing program |
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Compare results with plans to identify deviations
Act to correct negative deviations exploit positive ones
Planned vs actual |
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| the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends |
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demographic shifts
cultural changes |
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demographic shifts
cultural changes |
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Macroeconomic conditions
Consumer income |
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Changing technology
Technology's impact on customer value
Electronic business technologies |
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Alternative forms of competition
Small businesses |
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Laws protecting competition
Laws affecting marketing mix actions
self-regulation |
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| The social forces of the environment include the demographic characteristics of the population and its values |
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| - the describing of a population according to selected characteristics such as age, gender, ethnicity, income, and occupation |
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| Values, ideas and attitudes that are learned and shared among members of a group |
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Blending of traditional gender roles
Consumers searching for value
Consumer power
The Green Movement
Use of Social Networks |
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| economy pertains to the income, expenditures, and resources that affect the cost of running a business and household |
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| trends in terms of consumer income also very important to marketers |
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| - the total amount of money made in one year by a person, household, or family unit |
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*the money a consumer has left after paying taxes to use for food, shelter, clothing, and transportation
*Has increased recently as goods are more efficient and use less energy |
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| the money that remains after paying for taxes and necessities |
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| Technology’s impact on customer value |
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| Cost of technology is plummeting, causing the customer value assessment of technology based products to focus on other dimensions such as quality, service, and relationships |
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| - competition refers to the alternative firms that could provide a product to satisfy a specific market’s needs |
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| is competition in which every company has a similar product |
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| is competition in which the many sellers compete with their products on a substitutable basis |
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| is a common industry structure, which occurs when a few companies control the majority of industry sales |
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| occurs when only one firm sells the product |
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| Components of Competition |
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| are business practices or conditions that make it difficult for new firms to enter the market |
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| o Powerful buyers exist when they are few in number, there are low switching costs, or the product represents a significant share of the buyer’s total costs which makes pressure for price competition |
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When the market is slow competition is high
High fixed costs also cause competition |
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| Small business as competitors |
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| make up majority of competitive landscape for most businesses, generate 60-80% of new jobs and 50% of GDP, as economic growth increases new small business activity increases |
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| Major federal legislation has been passed to encourage competition, which is deemed desirable because it permits the consumer to determine which competitor will succeed and which will fail |
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A company can protect its competitive position in new and novel products under the patent law, which gives inventors the right to exclude others from making, using, or selling products that infringe the patented invention
o Copyright law |
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| Consumerism a grassroots movement started in the 1960’s to increase the influence, power, and rights of consumers in dealing with institutions |
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| A collection of people or of organizations with both the desire and ability to buy a particular product. |
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| aggregating prospective buyers into marketing groups that have common needs and will respond similarly to a marketing action |
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| use different marketing mix activities (such as product features and advertising) to help consumers perceive the product as being different and better than competing products |
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Identify Market Needs
Link needs to actions
Execute marketing program actions |
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| Benefits in terms of product features, expense, quality, savings in time and convenience |
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| Take steps to segment and target markets |
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| Execute marketing program actions |
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| A marketing mix in terms of product, price, promotion, place |
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than forming groups of consumers from our market population.
*Consumers in any one group should have common needs and should respond to marketing stimuli in similar ways. |
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| One Product and Multiple Market Segments |
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Produce single product or service and attempt to sell it to two or more market segments
Often involve new promotional campaign or method of distribution
EX- movies, magazines, books |
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| Multiple Products and Multiple Market Segments |
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EX- Ford’s different lines of cars, SUVs, and pickups
Many firms offer variations of same product (high and low end) |
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| Segments of one/Mass customization |
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Tailor goods or services to the tastes of individual customers on a high volume scale
Customer relationship management- recognizing individual needs and wants of customers |
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Simplicity and cost-effectiveness of assigning potential buyers to segments
Potential for increased profit and ROI
Similarity of needs within segments
Differences in buyers between segments
Feasibility of reaching segments with marketing actions |
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geographic: (region)- based on where prospective customers live or work
Demographic: (household size)- objective physical (race), measurable (age, income) or other classification attribute
Psychographic: (lifestyle)- subjective mental or emotional attributes (personality), attributions (lifestyle) or needs of prospective customers
Behavioral- based on some observable actions or attitudes (examples are product features and usage rate- quantity consumed or number of store visits during a specific period)
80/20 rule- 80% of a firm’s sales are obtained from 20% of its customers |
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| text Step 2 group products to be sold in categories |
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o Combine individual products that sell together, group into meaningful categories
Wendy’s- selling combo of products to make a meal |
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| •text Step 3- Develop a Market-Product grid and estimate the size of markets |
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o Market-product grid- framework to relate market segments of potential buyers to products offered or potential marketing actions
Identify markets (horizontal) and product groupings (vertical). Wendy’s- markets-student vs nonstudent, products- each type of meal/eating occasion
Estimate size of each market-product combination, estimates help determine which target market segment to collect and which product groupings to offer |
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| Text step 4; select target market |
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o Divide the market into segments- 5 criteria
Size / Substantiality
Expected Growth
Competitive Position (Market Attractiveness)
Cost of Reaching the Segment
Compatibility with the Organization |
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| Step 3 Positioning; Text step 5 take marketing action |
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| The place an offering occupies in consumers’ minds on important attributes |
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| competing directly with competitors on similar product attributes in the same target market |
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| Differentiation Positioning |
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| seek less-competitive, smaller market niche in which to locate a brand |
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Segmentation
1. Place Consumers into Segments
2. Group Products in Similar Ways
3. Develop a Product-Market Grid and Estimate Market Size
Targeting
4. Select Target Markets
Positioning
5. Taking Marketing Actions to Reach Target Markets |
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