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Environmental scanning, five major environmental factors in Marketing
Environmental scanning - The process of continually acquiring information on events occurring outside the organization to identify and interpret potential needs.
- 5 major environmental factors
- Social - demographic shifts, cultural changes
- Economic - macroeconomic conditions, consumer income
- Technological - changing technology, technology's impact on customer value, electronic business technologies
- Competitive - alternative forms of competition, small businesses
- Regulatory - laws protecting competition, laws affecting marketing mix actions, self-regulation
History of marketing; marketing concept era
- Production era - up until 1920s, goods were scarce and buyers were willing to accept virtually any goods that wree available and make do with them.
- Sales era - 1920-1960s, manufacturers found they could produce more goods than buyers could consume.
- Marketing era - 1950s, 1. strive to satisfy the needs of consumers 2. while also trying to achieve the organization's goals
- Customer Relationship era - 1980s, firms seek continuously to satisfy the high expectations of customers.
Market, marketing, marketing mix factors, target market
Potential consumers make up a market
, which is people with both the desire and the ability to buy a specific offering.
is the activity for creating, communicating, delivering, and exchanging offerings that benefit the organization, its stakeholders,and society at large.Discover Needs and Wants of Customers and Satisfy Them
- consists of the marketing manager's controllable factors (4 P's)-product, price, promotion, and place - that can be used to solve a marketing problem.
- 4 P's:
- 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.
- consists of one or more specific groups of potential consumers toward which an organization directs its marketing program
Profit is the money left after a business firm’s total expenses are subtracted from its total revenues and is the reward for the risk it undertakes in marketing its offerings.
Laws and ethics
are the moral principles and values that govern the actions and decisions of an individual or group.
are society’s values and standards that are enforceablein the courts.
Market segmentation, types of; psychographic, demographic, socioeconomic, usage, behavioral, geographic
Market segmentation involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action.
Geo, demo, psycho are part of ways to segment consumer markets.
geo - based on where prospective customers live or work (region, city size)
demo - based on some objective physical (gender, race), measurable (age, income) or other classification attribute (birth era, occupation) of prosp. cx
pyscho - based on some subjective mental or emotional attributes (personality), aspirations (lifestyle) or needs of pros. cx
behavioral - based on some observable actions or attitudes by pros. cx- such as where they buy, what benefits they seek, how frequently they buy, and why they buy.
Criterion used for selecting a target segment
5 step process used to segment a markett and select the target segs on which an org wants to focus.
- 1. Group potential buyers into segments - would seg. be worth doing? is it possible? Uses 5 essential criteria to form the segments:
- i. simplicity and cost-effectiveness of assigning potential buyers to segs.
- ii. potential for increased profit.
- iii. similarity of needs of potential buyers within a seg.
- iv. difference of needs of buyers among segs
- v. potential of a mktg action to reach a seg
- 2. Group prods to be sold into categories
- 3. develop a market-product grid and estimate the size of markets
- 4. select target markets
- 5. take marketing actions to reach target markets
- Baby Boomers - 1946-1964, retiring at 10k/day, wealthiest gen. making up 50% of consumer spending.
- Gen X - 1965-1976, 15 percent of the population also called baby bust because number of children each year was declining; largest segment of business travelers
- Gen Y - 1977-1994, 72 million Americans also called echo-boom or baby boomlet.
- Millenials - 1995+
a statement of the organization's function in society that often identifies its customers, markets, products, and technologies. The term is often used interchangeably with vision.
BCG portfolio matrix. Understand The Boston Consulting Group (BCG) method of SBU analysis.
Business portfolio analysis is a technique that managers use to quantify performance measures and growth targets to analyze its clients’ strategic business units (SBUs) as though they were a collection of separate investments.
Vertical axis - market growth rate, which is the annual rate of growth of the SBU's industry.
Horizontal axis - relative market share, defined as the sales of the SBU divided by the sales of the largest firm in the industry.
- bottom left (low growth rate, high market share), generate large amount 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 organiz.'s overhead and to invest in other SBU's.
- top left (high growth rate, high market share), SBUs with 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.
- top right (high growth rate, low market share) SBUs with a low share of high-growth markets. they require large injections of cash just to maintain their market share, much less increase it. They pose a problem to management since they must choose which to invest in and phase out others.
- bottom right (low growth rate, low market share) SBUs with low shares of slow-growth markets. Although they may generate enough cash to sustain themselves, they do not hold the promise of ever becoming real winners for the organiz. Dropping SBUs that are dogs may be required, except when they provide a benefit to other SBUs.
A marketing plan is a road map for the marketing activities of an organization for a specified future time period, such as one year or five years.
Steps in the planning phase of the strategic marketing process
The strategic marketing process is the approach whereby an organization allocates its marketing mix resources to reach its target markets.
- Planning (three steps within)
- 1. situational SWOT analysis: describes an organization’s appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats. Take action after doing SWOT:
- (i) build on a strength
- (ii) correct a weakness
- (iii) exploit an opportunity
- (iv) avoid a disaster-laden threat
- 2. market-product focus and goal settings: determining which products will be directed toward which customers. This decision is based on market segmentation (see definition). Activities include:
- (i) set marketing and product goals. ie. Medtronics heart pacemaker, market for 3 years and manufacture in China for the Asian market
- (ii) select target markets. ie. pacemaker will be targeted at cardiologists and medical clinics performing heart surgery in China, India, Asian countries
- (iii) find points of difference, the characteristics of a product that make it superior to competitive substitutes. ie. pacemaker pts of diff. are high quality, long life, reliability, etc.
3. marketing program:
the activities from focus and goal setting tell the marketing manager which customers to target and which customer needs the firm's product offerings can satisfy--the who and what aspects of the strategic mktg process. This step involves developing the program's mktg mix (four P's) and its budget.
Utilitarianism, moral idealism and other ethical standards
Utilitarianism is a personal moral philosophy that focuses on the “greatest good for the greatest number” by assessing the costs and benefits of the consequences of ethical behavior.
Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome. Embodied in the Consumer Bill of Rights. ie. right to know applies to probable defects in an automobile that relate to safety.
Socially responsible is the idea that organizations are part of a larger society and are accountable to that society for their actions. Three concepts include:
Profit responsibility - maximize profits for owners/stockholders.
Stakeholder responsibility - focuses on the obligations an organiz. has to those who can affect achievement of its objectives like consumers, employees, suppliers, and distributors.
Societal responsibility - obligations that organizations have 1. to the preservation of the ecological environment and 2. to the general public
is the money that remains after paying for taxes and necessities.
Types of competition Oligopoly, Monopoly etc.
- Pure competition - many sellers and they each have a similar product
- Monopolistic compet. - many sellers compete with substitutable products within a price range.
- Oligopoly - a few companies control the majority of industry sales (ie. ATT, Verizon, Sprint).
- Pure monopoly - only one firm sells the poduct; usually produces goods considered essential to a community like PG&E
Consumer behavior (MM), problem solving variations, evaluative criteria
Consumer behavior consists of the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions.
The purchase decision process consists of the five stages a buyer passes through in making choices about which products and services to buy: (1) problem recognition, (2) information search, (3) alternative evaluation, (4) purchase decision, and (5) postpurchase behavior.
Evaluative criteria are the factors that represent both the objective attributes of a brand and the subjective ones a consumer uses to compare different products and brands.
A consideration set is the group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or she is aware.
Steps in developing an organization's promotion program
Marketing program - promotion: advertising, personal selling, public relations, sales promotion, direct marketing
Understand what is meant by cause marketing and how it is implemented.
occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products.
This is different from a firm's standard charitable contributions, which are donations.
ie. Blizzard selling digital pets to raise money for cancer research.
Maslow Hierarchy of needs know the order.
Physiological Needs (bottom, 5th) - are basic to survival and must be satisfied first.
Safety Needs (4th) - involve self-preservation as well as physical and financial well-being.
Social Needs (3rd) - are concerned with love and friendship. ie. Match and eHarmony.com
Personal Needs (2nd) - need for achievement, status, prestige, and self-respect.
Self-Actualization Needs (top, 1st) - personal fulfillment, ie. long-running US Army recruiting, "Be all you can be."
Find the rest answered on the other flashcards.
Brand, brand loyalty, benefit to consumers
Brand loyalty is a favorable attitude toward and consistent purchase of a single brand over time.
Values, beliefs, attitudes
Market research, market research process, market research objectives, when to use (MM), concept
Primary data, secondary data, ways to gather data
Products, product line, product mix
Consumer products, business products
Continuous, discontinuous and innovation.
Common reasons for new-product failures
New-product development stages in the new-product process
Exporting, licensing, direct investment, joint venture, dumping
Product adoption classifications
Market-product strategy, diversification, market modification, product modification, market penetration (MM)
Product position, product repositioning
Variable costs, fixed costs
Be able to calculate the Break-even point.
Skimming pricing, penetration pricing, odd-even pricing, prestige pricing
Promotional allowance, quantity discount, bundle pricing, functional discount, one-price policy
Three degrees of distribution
Total Revenue (Total Revenue = Price x Quantity)
Intermediaries, functions of intermediaries
Promotional budgeting techniques, CPM (Cost per thousand) be able to calculate CPM.
Advertising medium benefits (Radio vs. TV etc.)
As it relates to Marketing your product internationally understand the methods used and the risks associated with each (Exporting, Direct Investment; Licensing; Joint Venture etc.)
Definition of Value (The ratio of perceived benefits to price)
Aided, unaided recall, portfolio testing
Personal selling process (MM), selling formats
Integrated marketing communication
Criterion used to select a target market
Know the following product life cycle diagram