Book_Notes-_Exam_2.docx

Advertising Marketing Information and Customer Insights Customer insights: fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships Marketing information system: people procedures for assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights Interacts with the information users to assess information needs Interacts with marketing environment to develop needed information MIS helps analyze and use the information to develop customer insights, make marketing decisions, and manage customer relationships Developing Marketing Information Internal Data Internal databases: electronic collections of consumer and market information obtained from data sources within the company Competitive Marketing Intelligence Competitive marketing intelligence: the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment Marketing Research Marketing research: the systematic design, collection, analysis, and reporting of data relevant to specific marketing situation facing an organization Defining the Problem and Research Objectives Exploratory research: marketing research to gather preliminary information that will help define problems and suggest hypotheses Descriptive research: marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers Causal research: marketing research to test hypotheses about cause-and-effect relationships Developing the Research Plan Primary data: consists of information collected for the specific purpose at hand Research Approaches Observational data: gathering primary data by observing relevant people, actions, and situations Ethnographic research: a form of observational research that involves sending trained observers to watch and interact with consumers in their ?natural environments? Survey research: gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior Experimental research: gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses Contact Methods Mail questionnaires Telephone interviewing Personal interviewing- group or individual Focus group interviewing: personal interviewing that involves inviting six to ten people to gather for a few hours with a trained interviewer to talk about a product, service, or organization. Online market research: collecting primary data online through internet surveys, online focus groups, web-based experiments, or tracking consumers? online behavior Online focus group: gathering a small group of people online with a trained moderator to chat about a product, service, or organization and gain qualitative insights about consumer attitudes and behavior Sampling Plan Sample: a segment of the population selected for marketing research to represent he population as a whole Research Instruments Questionnaires Mechanical Instruments Secondary data: consists of information that already exists somewhere, having been collected for another purpose Commercial online databases: collections of information available from online commercial sources or accessible via internet Can be obtained more quickly and at a lower cost (where company?s usually start) Secondary information should be relevant, accurate, current, and impartial Implementing the Research Plan Interpreting and Reporting the Findings Analyzing and Using Marketing Information Customer Relationship Management Customer relationship management: managing detailed information about individual customers and carefully managing customer touch points to maximize customer loyalty Other Marketing Information Considerations Marketing Research in Small Businesses and Nonprofit Organizations Secondary data collection , observation, surveys, and experiments can all be used effectively by small organizations International Marketing Research Managing Marketing Information to Gain Customer Insights Consumer buying behavior: the buying behavior of final consumers?individuals and households that buy goods and services for personal consumption Consumer market: all the individuals and households that buy or acquire goods and services for personal consumption Characteristics Affecting Consumer Behavior Cultural Factors Culture: the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions Subcultures: a group of people with shared value systems based on common life experiences and situations Hispanic American Consumers Deeply family oriented Very brand loyal, and favor brands and sellers who show special interest in them African American Consumers Motivated by quality and selection Brands are important, love shopping Asian American Consumers Technology savvy Fiercely brand loyal Mature Consumers Lots of cash to spend, and not super brand loyal Social Class: relatively permanent and ordered divisions in society whose members share similar values, interests, and behaviors Social Factors Groups: two or more people who interact to accomplish individual or mutual goals Opinion Leaders: a person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others. Buzz marketing: enlisting or even creating opinion leaders to serve as brand ambassadors who spread the word about a company?s products. Online social networks: online social communities?blogs, social networking web sits, or even virtual worlds?where people socialize or exchange information and opinions Family Roles and Status Personal Factors Age and Life-Cycle Stage Occupation Economic situation Lifestyle: a person?s pattern of living as expressed in his or her activities, interests, and opinions Personality and Self-Concept Personality: the unique psychological characteristics that distinguish a person or group Psychological Factors Motivation: a need that is sufficiently pressing to direct the person to seek satisfaction of the need Maslow?s Laws: include physiological needs, safety needs, social needs, esteem needs, and self-actualization needs Perception: the process by which people select, organize, and interpret information to form a meaningful picture of the world. Selective attention: the tendency for people to screen out most of the information to which they are exposed Selective distortion: the tendency of people to interpret information in a way that will support what they already believe Selective retention: the consumers are likely to remember good points made about a brand they favor, and forget good points made about competing brands. Learning: changes in an individual?s behavior arising from experience Beliefs and Attitudes Belief: a descriptive thought that a person holds about something Attitude: a person?s consistently favorable or unfavorable evaluations, feelings and tendencies toward an object or idea Types of Buying Decision Behavior Complex Buying Behavior: consumer buying behavior in situations characterized by high consumer involvement in a purchase and significant perceived differences among brands Ex: buying a car Dissonance-reducing buying behavior: consumers buying behavior in situations characterized by high involvement buy few perceived differences among brands Ex: purchasing carpet Postpurchase dissonance: after-sale discomfort when they notice certain disadvantages of the purchased brand Habitual buying behavior: consumer buying behavior in situations characterized by low-consumer involvement and few significantly perceived brand differences Ex: table salt Variety-Seeking buying behavior: consumer buying behavior in situations characterized by low consumer involvement but significant perceived brand differences Ex: switching brands often, buying chewing gum The Buyer Decision Process Need Recognition: the first stage of the buyer decision process, in which the consumer recognizes a problem or a need Information Search: the stage of the buyer decision process in which the consumer is aroused to search for more information; the consumer my simply have heightened attention or may ago into an active information search Evaluation of Alternatives: the stage of the buyer decision process in which the consumers uses information to evaluate alternative brands in the choice set. Purchase Decision: the buyer?s decision about which brand to purchase Postpurchase Behavior: the stage of the buyer decision process in which consumers take further action after purchase based on their satisfaction or dissatisfaction with a purchase Cognitive dissonance: buyer discomfort caused by postpurchase conflict The Buyer Decision Process for New Products New product: a good, service, or idea that is perceived by some potential customers as new Adoption process: the mental process through which an individual passes from first hearing about an innovation to final adoption Awareness: the consumer becomes aware of the new product but lacks information about it Interest: the consumer seeks information about the new product Evaluation: the consumer considers whether trying the new product makes sense Trial: the consumer tries the new product on a small scale to improve his or her estimate of its value Adoption: the consumer decides to make full and regular use of the new product Individual Differencesion Consumer Markets and Consumer Buyer Behavior Price: the amount of money charged for a product or service; the sum of the values that customers exchange for the benefits of having or using the product. Major Pricing Strategies Customer Value-Based Pricing: setting price based on buyers? perceptions of value rather tan on the seller?s cost Good-Value Pricing: offering the right combination of quality and good service at a fair price Everyday Low Pricing: involves charging a constant, everyday low price with few or no temporary price discounts High-Low Pricing? charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items Value-Added Pricing: attaching value-added features and services to differentiate a company?s offers and charging higher prices. Cost-Based Pricing: setting prices based on the costs for production, distributing, and selling the product plus a fair rate of return for effort and risk Fixed Costs: costs that do not vary with production or sales level Variable costs: costs that vary directly with the level of production Total costs: the sum of the fixed and variable costs for any given level of production Costs at different levels of production: short run average costs and long run average costs are curved upward. If the produce less than costs increase per item, if the produce more costs increase per item because of inefficiencies. Experience curve: the drop in the average per-unit production cost that comes with accumulated production experience Cost-plus pricing: adding a standard markup to the cost of a product Unit cost / (1-desired return on sales) Break-even pricing: setting price to break even on the costs of making and marketing a product or setting a price to make a target return Fixed cost / (price-variable costs) Competition-Based Pricing: setting prices based on competitors? strategies, prices, costs, and market offerings. Other Internal and External Considerations Affecting Price Decisions Target costing: pricing that starts with an ideal selling price and ten targets costs that will ensure that the price is met Pricing in different types of markets Pure competition: consists of many buyers and sellers trading in a uniform commodity, such as wheat, copper, or financial securities. No single buyer or seller has much effect on the going market price (do not spend much time on marketing strategy) Monopolistic competition: market consists of many buyers and sellers who trade over a range of prices rather than a single market prices. A range of prices occurs because sellers can differentiate their offers to buyers. Oligopolistic competition: market consists of a few sellers who are highly sensitive to each other?s pricing and marketing strategies Pure monopoly: market consists of one seller Analyzing the Price-Demand Relationship Demand curve: a curve that shows the number of units the market will buy in a given time period, at different prices that might be charged Price elasticity of demand Price elasticity: a measure of the sensitivity of demand to changes in price % change in quantity demanded / % change in price elastic: price elasticity greater than 1 the less elastic the more sensitive to increased prices inelastic: price elasticity less than 1 Pricing: Understanding and Capturing Customer Value sellers can lower prices and produce more revenue New-Product Development Strategy New-product development: the development of original products, product improvements, produce modifications, and new brands through the firm?s own product development efforts. New-Product Development Process Idea Generation: the systematic search for new-product ideas Internal Idea Sources: finds ideas through formal R&D and employees External Idea Sources: ideas from distributors and suppliers, competitors, trade magazines, government agencies, marketing research firms, and inventors Most importantly CUSTOMERS Crowdsourcing: inviting broad communities of people?customers, employees, independent scientists, and researchers, and even the public at large?into the new-product innovation process Idea screening: screening new-product ideas to spot good ideas and drop poor ones as soon as possible Concept Development and Testing: a detailed version of the new-product idea stated in meaningful consumer terms Product idea: idea for a possible product that the company can se itself offering to the market Product concept: detailed version of the idea stated in meaningful consumer terms Product image: the way consumers perceive an actual or potential product Concept testing: testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal Marketing strategy development: designing an initial marketing strategy for a new product based on the product concept Business analysis: a review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company?s objectives Product development: developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering Test Marketing: the stage of new-product development in which the product and its prosed marketing program are tested in realistic market settings Commercialization: introducing a new product into the market Managing New-Product Development Customer-centered new-product development: new-product development that focuses on finding new ways to solve customer problems and create more customer satisfying experiences Team-Based New-Product Development: an approach to developing new products in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness. Produce Life-Cycle Strategies Product life cycle: the course of a product?s sales and profits over its lifetime. It involves five distinct stages; product development, introduction, growth, maturity, and decline Product class (gas powered automobiles), product form (SUVs), brand (Ford Escape) Style: a basic and distinctive mode of expression Fashion: a currently accepted or popular style in a given field Fads: a temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity. Introduction Stage: the PLC stage in which a new product is first distributed and made available for purchase Growth Stage: the PLC stage in which a product?s sales start climbing quickly Maturity Stage: the PLC stage in which a product?s sales growth slows or levels off Decline Stage: the PLC stage in which a product?s sales decline New Product Development and Product Life-Cycle Strategies Advertising Advertising: any paid form on nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor Advertising objective: a specific communication task to be accomplished with a specific target audience during a specific period of time Informative advertising: used heavily when introducing a new-product category Persuasive advertising: more important as competition increases Comparative advertising: company directly or indirectly compares its brand with one or more other brands Reminder advertising: important for mature products; it helps to maintain customer relationships and keep consumers thinking about the product Advertising budget: the dollars and other resources allocated to a product or company advertising program Advertising strategy: the strategy by which the company accomplishes its advertising objectives. It consists of two major elements: creating advertising messages and selecting advertising media. Madison & Vine: a term that has come to represent the merging of advertising and entertainment in an effort to break through the clutter and create new avenues for reaching consumers with more engaging messages Branded entertainment: Advertainment: makes ads themselves so entertaining, or so useful that people want to watch them Message strategy: general message that will be communicated to consumers Creative concept: the compelling ?big idea? that will bring the advertising message strategy to life in a distinctive and memorable way Advertising appeals Meaningful Believable Distinctive Execution style: the approach, style, tone, words, and format used for executing an advertising message Advertising media: the vehicles through which advertising messages are delivered to their intended audiences Determine reach, frequency, and impact Reach: a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time Frequency: measure of how many times the average person in the target market is exposed to the message Media impact: qualitative value of message exposure through a given medium Choosing among media types Selecting specific media vehicles Deciding on media timing Return on advertising investment: the net return on advertising investment divided by the costs of the advertising investment Advertising agency: a marketing services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs