Using information about customers to create marketing strategies that develop and sustain desirable customer relationships.
Undertaking marketing research to understand what potential employees are seeking, as well as what they think about the firm; developing a value proposition and an employment brand image; communicating the brand image to potential employees; and then fulfilling the brand promise by ensuring the employees experience matches that which was advertised.
People who organize, operate, and assume the risk of a new business venture.
The rade of things of value between the buyer and the seller so that each is better off as a result.
Items that you can physically touch.
Opinions, programs, and philosophies.
Process that creates value by creating, distributing, promoting and pricing through exchanges of money/credit/barter of: goods, ideas, services.
Marketing Mix (Four P’s)
Price, Product, Promotion, Place
Specifies the marketing activities for a specific period of time. Plan can be broken down into various components (how the product will be conceived, how much it should cost, where & how it will be promoted, & how it will get to the consumer)
Based on the philosophy that buyers and sellers should develop a long-term relationship. The lifetime profitability of the relationship is what matters, not how much money is made during each transaction.
Intangible customer benefits that are produced by people or machines and cannot be separated from the producer.
Raw Material-Manufacturer-Retalier-Consumer.A transactional orientation, in which the parties don’t care much about their trading partners as the merchandise passes among them. Each link in the chain is out for its own best interest.
Regards the buyer-seller relationship as a series of individual transactions, so anything that happened before or after any transaction is of little importance.
Reflects the relationship of benefits to costs, or what you get for what you give.
Consumers can act as collaborators to create the product or service.
Marketing Mix: Product
Creating value by developing a variety of offerings, including goods, services, ideas, to satisfy customer needs.
Marketing Mix: Price
Capturing value. Everything the buyer gives up(Money, time, energy) in exchange for the product.
Marketing Mix: Place
or supply chain management, describes all activities necessary to get the product to the right customer when the customer wants it.
(Time, Place, Form Utility)
Marketing Mix: Promotion
communication by a marketer that informs, persuades, reminds and creates image to position the product/service to create brand identity, image and brand personality to target market segment about a product or service to influence their opinions or elicit a response.
Refers to the world of trade. More narrowly, can be segmented into groups of people who are pertinent to an organization for particular reasons.
Around the turn of the 20th century. Believed that a good product would sell itself. Manufacturers were concerned with product innovation, not with satisfying the needs of individual consumers.
Between 1920-1950, after world war II and the great depression customers consumed less, yet manufacturers had capacity to produce more than consumers wanted or were able to buy.
Firms found their answer to overproduction; becoming sales oriented; depended on heavy doses of personal selling and advertising.
Products once limited because of World War II, were now plentiful; USA entered buyer’s market- the customer was king. Consumers had choices and were able to make purchasing decisions on the basis of factors such as quality, convenience, and price. Manufactures and retailers began focusing on what customers wanted and needed before they designed, made, or attempted to sell their products and services. During the period that firms discovered marketing.
Value-Based Marketing Era
Transcended a production or selling orientation and attempt to discover and satisfy their customers needs and wants. Every value based marketing firm must implement its strategy according to what its customers value. Sometimes providing greater value means providing a lot of merchandise for little money (Value Menus)
Value-Based: Sharing Information
marketers share information about customers and competitors and integrate it across the firm’s various departments. EX- J. Crew, collects purchase information and research customer trends to determine what their customers will want to wear in the next few weeks; and logisticians use the same purchase history to forecast sales and allocate appropriate merchandise to the stores.
Those people in charge of getting the merchandise to the stores
Importance of Marketing
Can be entrepreneurial, expands global presence, enriches society, pervasive across supply chain.
FInal step in the marketing plan.
Achieved when a firm develops value-based strategies for retaining loyal customers and provides outstanding customer service.
Introduces a new product or service to a market segment that currently is not served.
Steps 3 and 4 in marketing plan.
Having a good physical location and internet presence. Particularly important for retailers and service providers. Competitive advantage through location is sustainable because it is not easily duplicated.
Market Development Strategy
A growth strategy that employs the existing market offering to reach new market segments, whether domestic or international.
Market Growth Rate
The annual rate of growth of the specific market in which the product competes.
Market Penetration Strategy
A growth strategy that employs the existing marketing mix and focuses the firm’s efforts on existing customers.
Involves the process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.
Consists of consumers who respond similarly to a firm’s marketing efforts.
Process of dividing the market into groups of customers with different needs, wants, or characteristics.
Percentage of a market accounted for by a specific entity.
A measuring system that quantifies a trend, dynamic, or characteristic.
Used to explain why things happened, and to project the future.
Identifies a firm’s target market, related marketing mix, and bases on which the firm plans to build a sustainable competitive advantage.
A broad description of a firm’s objectives and the scope of activities it plans to undertake. Attempts to answer two questions: What type of business are we? and What do we need to do to accomplish our goals and objectives?
Achieved through efficient operations, excellent supply chain management, strong relationships with their suppliers, and excellent human resource management (which yields productive employees).
Steps 1 & 2 of the marketing plan.
Product Development Strategy
A growth strategy that offers a new product or service to a firm’s current target market.
Occurs by having products with high perceived value, effective branding and positioning. Some firms have difficulty developing a competitive advantage through products if their competitors can deliver similar products or services easily.
Groups of associated items, such as those that consumers use together or think of as part of a group of similar products.
Anything that is of value to a consumer and can be offered through a voluntary marketing exchange.
Current target market shares something in common with the new opportunity.
Relative Market Share
A measure of the product’s strength in a particular market, defined as the sales of the focal product divided by the sales of achieved by the largest firm in the industry.
Second step in a marketing plan; uses a SWOT analysis that assesses both the internal environment (strengths and weaknesses) and the external environment (opportunities and threats)
Segmentation, Targeting, Positioning.
Strategic Business Unit (SBU)
A division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives.
Sustainable Competitive Advantage
Advantage over the competition that is not easily copied and thus can be maintained over a long period of time.
Acts like a wall the firm has built around its position in the market.
The process of evaluating the attractiveness of various segments and then deciding which to pursue as a market.
The new business lacks any common elements with the present business. Do not capitalize on core strengths associated with markets or with products. Viewed as being very risky.
Marketing Plan Steps
Define the Business Mission & Objectives2. Situation analysis (SWOT)3. Identify Opportunities (segmentation, targeting, positioning)4. Implement Marketing Mix (4 P’s)5. Evaluate performance using marketing metrics
78 million Americans born. Individualistic, leisure time represents a high priority, believe they will always be able to take care of themselves. Used to be careless about the way they spend money. Obsession with maintaining their youth. Will always love rock ‘n roll. Massive market for antiaging products. Focused on adding to their depleted savings accounts & ensuring their access to the best health care & wellness services. Many continue working past retirement age, often bc not saved enough.
Visible differences tools and artifacts, behavior, dress, symbols, physical settings, ceremonies, language differences, colors and tastes, and food preferences. EX: BMW’s ad only changing languages
The shared meanings, beliefs, morals, values, and customs of a group of people. Transmitted by words, literature and institutions, culture get passed down from generation to generation and learned over time.
Indicate the characteristics of human population segments especially those used to identify consumer markets. Typically include: age, gender, race, and income.
Macroeconomic factor that affects the way consumers buy merchandise and spend money, both in a marketer’s home country and abroad.
Foreign Currency Fluctuations
Changes in the value of a country’s currency relative to the currency of another country. Can influence consumer spending.
1965-1976, 41 million. 1st generation latchkey children (grew up with both parents working), 50% have divorced parents, unlikely to enjoy greater economic prosperity than their parents. Spending power bc they tend to get married later in life. Less interested in shopping than their parents & far more cynical, making them astute consumers. Demand convenience & tend to be less likely to believe advertising claims or what sale people tell them.
Knowledgeable about products & more risk adverse than other cohorts.
Generation Y (Millennials)
1977-2000, 60 million. Biggest cohort since original postwar boom. Varies most in age. Have different expectations & requirements than other cohorts.
Strong emphasis on balancing work and life.
A group of people of the same generation have similar purchase behaviors because they have shared experiences and are in the same stage of life.
Involves a strategic effort by firms to supply customers with environmentally friendly merchandise.
The persistent increase in the process of goods and services
Represent the cost of borrowing money.
operate in external environment; the culture, demographics, social issues, technological advances, economic situation, and political/regulatory environment.
Comprises political parties, government organizations, and legislation and laws.
Make up America’s fastest growing group, currently 39 million seniors.
Tends to complain, need special attention, and takes time browsing before purchasing, they also have time to shop and money to spend. They like “Made in USA”, natural fibers, recognizable brand names (not designer), value, quality, and classic styles. Loyal and will spend; demand hassle free shopping and convenient locations. Prefer to buy a few high quality items rather than large number of low quality.
Macro-environmental factor that has greatly contributed to the improvement of the value of both products and services in the past few decades.
Region in a particular country affects the way they refer to particular product category. EX: Some Americans say “soda”, others say “pop”, while others say “coke” no matter what brand.
Generation X: Tweens
Younger edge of generation X. Never lived without the internet or easy access o cell phones.
Makes them technologically savvy. Expect easy access to virtually everything, prompting them to be called “entitled generation”. Proficient at tasks that overwhelm other generations: multitasking to conduct business deals on laptops while updating Facebook and texting their friends.
First factor that affects the consumer is the firm itself.
Affects consumers in the immediate environment. Very critical that marketers understand their firm’s competitors
Parties that work with the focal firm.
Income Distribution in the USA has grown more polarized- the highest income groups are growing. Middle and lower income groups real purchasing power keeps declining.
Increase of wealthy Americans may be due to the maturing of the general population, increase in dual-income households, & higher overall level of education.
Average annual earnings are higher for those with degrees. Those who did not graduate from high school =24,000; high school grads = 30,000; those with bachelor’s degrees = 53,000.
Affects how many firms design & promote their products and services. Firms are careful about gender neutrality in positioning their products & attempt to transcend gender boundaries.
80% of all population growth in the next 20 years is expected to come from African American, Hispanic, & Asian communities. Most immigrants go to New York, LA, San Fran.
, Chicago. Marketers have increased their focus on communication channels thats appeal to Hispanics. African Americans are retailers best customers. Asians represent the fastest growing minority population, tend to earn more, have more schooling, and be more likely to be professionally employed or own a business.
The Federal Trade Commission
Responded to consumer outcries regarding unwanted telephone solicitations, has registered more than 157 million phone numbers in the Do Not Call Registry. This action was designed to protect consumers against intrusions that Congress determined to be particularly invasive.
A time-poor society
Majority of families have both parents working, and the kids are busier than ever.
Recording devices (DVR, TiVo) for tv have become more widespread, and many time-strapped consumers simply record and fast-forward through the commercials missing all the messages marketers are trying to send them. Many consumers attempt to cope with their lack of leisure time by multitasking (watching tv while on the phone); their divided attention means they can’t focus as well on advertisements that appear in the media.
Retaining loyal customers
Having a strong brand, unique merchandise, and superior customer service all help solidify a loyal customer base. Having a loyal customer is an important method of sustaining an advantage over competitors.
Loyalty is when customers are reluctant to patronize competitive firms. Viewing customers with a lifetime value perspective rather than on a transaction-by-transaction basis, is key to modern customer retention.
Methods to building customer loyalty
Developing clear & precise positioning strategy. Create an emotional attachment through loyalty programs.
Vendor relationships must be developed over the long term and generally cannot be offset by a competitor. With strong relationships may gain rights to 1) sell merchandise in particular region, 2) obtain special terms of purchase that are not available to competitors , 3) receive popular merchandise that may be in short supply.
Boston Consulting Group Product Portfolio Analysis: Stars
Upper left quadrant. High-growth markets and are high market share products. Often require a heavy resource investment in such things as promotions and new production facilities to fuel their rapid growth. As market growth slows, stars will migrate from heavy users of resources to heavy generators of resources and become cash cows.
Boston Consulting Group Product Portfolio Analysis: Cash Cows
Lower left quadrant. Low growth markets, but high market share products. Products have already received heavy investment to develop their high market share, they have excess resources that can be spun off to those products that need it.
Boston Consulting Group Product Portfolio Analysis: Question Marks
Upper right quadrant.
Appear in high growth markets but have relatively low market shares; often most managerially intensive products in that they require significant resources to maintain & potentially increase their market share. Manager must decide whether to infuse question marks with resources generated by the cash cows, so that they can become stars, or withdraw resources & eventually phase out the products.
Boston Consulting Group Product Portfolio Analysis: Dogs
Lower right quadrant. Low growth markets & have relatively low market shares. Generate enough resources to sustain themselves, dogs are not destined for “stardom” & should be phased out unless they are needed to complement or boost the sales of another product or for competitive purposes.