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What is MARKETING?
- social and managerial process
- creating and exchanging value
- building strong customer relationship
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The Marketing Process
Planning and executing the conception, pricing, promotion and distribution of goods
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Needs, wants and demand
- States of deprivation
- Needs shaped by culture and individual personality
- Wants backed by purchasing power
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What is promotion?
Persuasion, remind and information
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Marketing myopia is….eg……
focusing only on existing wants and losing sight of underlying consumer needs; nokia and Kodak
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customer satisfaction is relative to
expectations
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value reflects….and value is not limited to …..hence a low price =/= superior value
costs and benefits; economic considerations
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One exchange is not the goal; …is the goal, which is built through
relationships with several exchanges; delivering value and satisfaction
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Markets are….; but Walmart is only a….; when there is no intermediaries, its called… marketing
the set of actual and potential buyers of a product; marketing intermediaries; direct
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B2C concerns…consumer; B2B is called …marketing; retailers are not…buyers
Ultimate; business/industrial; industrial
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Designing a Customer-Driven Marketing Strategy: marketing management is the art and science of …Marketers select customers that …; Value Proposition: ….a company promises to deliver to consumers to satisfy their needs; Marketing management may also be concerned with changing or even reducing demand, ie…, for example, …
- choosing target markets and building profitable relationships with them; can be served profitably
- includes the set of benefits or values
- demarketing; market niche: Lamborghini
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demarketing strategies
- increase the price to reduce Qd
- two-tier pricing of MTR service during rush hours
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Marketing Management Orientations- PRODUCTION Concept…; is useful when…risks are…
- consumers will favor products that are available and highly affordable; thus, management should focus on improving production and distribution efficiency
- Demand > Supply & Product’s cost is too high and improved productivity will bring it down
- too narrow focus & ignores market desires
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Marketing Management Orientations- PRODUCT Concept…risks are…
- onsumers will favor products that offer the most quality, performance, and feature, thus, organisations should continue making product improvements
- mousetrap mentality & marketing myopia
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Marketing Management Orientations- SELLING Concept…is useful when…risk is…
- consumers will not buy enough of the products unless the organisation undertakes a large-scale selling and promotion effort(inside-out perspective, technology push)
- Demand < Supply (strong effort to move the inventory)
- high risk and low satisfaction
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Marketing Management Orientations- MARKETING Concept…
an organization should strive to satisfy the needs of consumers, while also trying to achieve the organization’s goals.(outside-in perspective, market pull)
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Marketing Management Orientations- SOCIETAL MARKETING Concept…
- Same as MARKETING Concept plus maintain and improve the consumer’s and society’s well-being
- Society(human welfare), customers(satisfaction), company(profit)
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The marketing mix is
product, price, promotion, and place
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Integrated marketing program is
a comprehensive plan that communicates and delivers the intended value to chosen customers
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Customer relationship management involves
- building and maintaining profitable customer relationships;
- acquiring, keeping (retention) and growing customers (means upselling or cross selling)
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Buyer Decision Process
- Awareness(both product and brand)->Advertisement
- Interest->product/price
- Evaluation->competition (at the end of Evaluation, purchase intention is developed)
- Trial->availability(-->production, place)
- Adoption->satisfaction(eventually develop into trust)
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Relationship Building Blocks:Customer perceived value:...;Customer satisfaction:
- total value-total cost;
- the extent to which perceived value matches expectation
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The Changing Nature of Customer Relationships
- selective relationship management to target fewer, more profitable customers
- more interactive two way relationships through blogs, Websites, online communities and social networks
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customers exhibit ….behavior and ….hence marketers may consider …
- variety seeking, brand switching;
- line extentions, introduce different ways to enjoy their product
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…shows true worth of a customer; it is calculated as … ; ….is total sum of NPVs of all current customers and Choosing the “best” …is key
- Customer Lifetime Value; Value at Acquisition+ Annual Value*customer relationship lifetime*discount rate
- Customer Equity; customers
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The Changing Marketing Landscape
- Digital age
- Rapid globalization
- Ethics and social responsibility
- Not-for-profit marketing
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Digital age implications
- Growth of the Internet, advances in telecommunications, information, transportation implies:
- Customer research and tracking
- Product development
- Distribution
- New advertising tools
- 24/7 marketing through the Internet
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Rapid globalization implication
- geographical and cultural distances have shrunk:
- greater market coverage
- more options for purchasing and manufacturing
- Increased competition from foreign competitor
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Ethics and Social Responsibility implications
Marketers need to take great responsibility for the impact of their actions; Caring capitalism” is a way to differentiate your company
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Marketing objective concerns ….it should be smart…
- Market share; promotion, establishing local partnership
- Specific, measurable, actionable, realistic, time-related
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A business portfolio is… strategic business units is… Business portfolio management invloves
- the collection of businesses and products that make up the company
- a unit of company that has a separate mission and objectives that can planned separately from other company business
- analyzing current portfolio and shaping future portfolio
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…is a series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products;… is the forward supply chain, marketing rests under…; …is made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve performance of the entire system
Value chain; from operations, inbound logistics, marketing and sales, service; operations; Value delivery network
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Customer-Driven Marketing Strategy involves..
- Market Segmentation
- Target marketing
- Market Positioning
- Differentiation
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A Market segment is ….customers are grouped…
- a group of consumers who respond in similar ways to marketing efforts.
- Geographic, demographic, psychographic, behavioral
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Target marketing involves…
- Evaluation of each segment’s attractiveness
- Selection of segments to enter
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Market Positioning: Position….; Products are positioned relative to…; Marketers look for clear, distinctive and desirable place in positioning
the place the product occupies in the consumer’s mind; competing products
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Return on marketing is calculated as..
the net return from a marketing investment divided by the costs of the marketing investment
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Microenvironment consists of….
- The company(other dpt, match broader goal),
- Suppliers (watch pricing and supply availability; partnership relationship management),
- Customers
- market intermediaries
- competitors (competitors analysis, gain strategic advantage by positioning their offerings against competitors’ offerings)
- the public (financial, media, internet, government, citizen-action)
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Engel’s Law states that…
As income rises, % spent on food drops, % spent on housing remains constant, % spent on savings rises
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Marketing Information Systems consists of people and procedures for …the information needs, …needed information and Helping …for customers; Marketers obtain information from 3 sources: …market research is not ….happens only when
- Assessing; Developing; decision makers use the information
- Internal data (within company network, Marketing intelligence (publicly available) and market research
- Not ongoing; specific mktg question pops up
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Steps in the Marketing Research Process-1. Defining the Problem and Research Objectives-3 types of research are…(with exp.)
- Exploratory Research: not well understood, gaining insight
- Descriptive Research: describing a population with respect to important variables
- Causal Research: establish cause-and-effect relationships between variables
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information that has been collected or published already is…., the pros are…and cons; information specifically collected to solve a current problem is…, the two sources are observation and questioning; observation is used to discover…not…, the methods include….; questioning methods includes… surveying is best for….; experimental research investigates…
- secondary data, obtained quickly and less expensive, info may not exist or not usable
- primary data;
- behaviors, motivations; mechanical approaches and personal approaches (eg. ethnographic research)
- focus groups, surveys, panels; descriptive information
- causal relationships
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Research Plan for collecting primary data includes…
Research approaches, contact methods, sampling plan, research instruments
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Sampling Plan Decisions includes… sampling procedure includes…their difference is random selection
- Sample units(who), sample size(how many) and sampling procedure
- Probability sample and non-Probability sample
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Features of questionnaires:…. researchers must be careful with…; for Closed-end questions, researchers must… for Open-end questions is useful in….
- Most common, flexible, the wordings and ordering of questions
- Provide answers that are easier to interpret and tabulate
- Exploratory research
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Mechanical devices as research instruments includes…
People meters(TV industry), checkout scanners, neuro-marketing
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Information distribution involves … Intranet provides information to..; Extranet provides information to...
- entering information into databases and making it available in a time-useable manner;
- employees and other stakeholders;
- key customers and suppliers
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understanding customer behaviors is important because…
understanding how customer respond to marketing stimuli, eg. 4Ps, gives the company a competitive advantage
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Characteristics Affecting Consumer Behavior-culture: …is a subset of culture that has …for members such as religions, nationalities; social class is relatively …, …. Division of society into which people share similar values and behavior
- Subculture; a more specific identity
- Permanent, homogeneous
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Characteristics Affecting Consumer Behavior-social: includes ...; ... are people to whom an individual looks as a basis for self-appraisal or as a source of personal standards.... are Groups an individual wishes to belong to;... are individuals who exert direct or indirect social influence over others; Marketers identify them to use as ...some opinion leaders exist on ...;... is the most important consumer-buying organization in society
- groups, opinion leaders, family, social roles and status
- Reference groups; aspirational groups; opinion leaders, brand ambassadors; online social networks; family
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Characteristics Affecting Consumer Behavior: Personal: includes...; Occupation affects...economic situation includes trends in ...lifestyle is used by marketers to do...
- Age and life cycle, occupation, economic situation, lifestyle, personality and self-concept
- the goods and services bought by consumers; personal income, savings and interest rate; lifestyle segmentation
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Characteristics Affecting Consumer Behavior: Psychological: includes…a motive is …Perception is the process by which people …information, which includes …(exp); …means that you see or hear messages without being aware of them, eg…
- Motivation, learning, beliefs and attitude, perception
- a need that is sufficiently pressing to direct the person to seek satisfaction
- select, organize, and interpret ; selective attention (screen out, exclusion in consideration set); selective distortion (interpret to support believes) and selective retention (retain to support attitude)
- Subliminal perception, Visual stimuli may be quickly flashed
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The Buyer Decision Process follows…
Need recognition, search for info, prepurchase evaluation, of alternatives, purchase, consumption, post-consumption evaluation, divestment(disposal)
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Needs can be triggered by…
Internal stimuli(strong enough to drive behavior) & external stimuli, eg. Ads
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During Information Search, The consumer collect info about…as customer has more info, …&… increases; Successive Sets Involved in Customer Decision Making are..
Alternative products/brands; brand knowledge, awareness; total set, awareness set, consideration set, choice set (arise when consumers are highly involved)
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Post-purchase Decision is about… A positive match reinforces the …of the decision and provides future motivation for; …. A negative match will result in…., which is buyer discomfort caused by post purchase coflict
- the quality of match between expectations and outcomes
- correctness, repeat purchase
- cognitive dissonance
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satisfaction is important because
- word of mouth
- cost more to attract new customer than to retain an existing customer
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ansoff grid(market and product)
- ex+ex=market penetration
- ex+new=product development
- new+ex=market development
- new+new=diversification
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high market share=....it is not reliable indicators of profitability, but RELATIVE market share(RMS) indicates ...RMS=...; RMS>1x means ...
- company's sales/ total segment sales;
- competitive position,
- company's market share %/ largest competitor's market share %
- market leader
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increasing share of customer can be achieved through...
- offering great variety
- cross selling
- up selling
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