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Consists of all consumers who share a common need that can be satisfied by a specific product who have the resources, willingness, and authority to make the purchase. (willing, able, authority)
the usefulness or benefit consumers receive from a product.
-Marketing processes create several different kinds of utility to provide value to consumers:
-Form Utility: Transforming raw materials into finished products
-Place Utility: Making products available where customers want them
-Time Utility: Storing products until they are needed.
-Possession Utility: Allowing consumers to own, use, and enjoy the product.
A business orientation that looks at financial profits, the community in which the organization operates, and creating sustainable business practices.
A systematic tracking of consumers preferences and behaviors over time in order to tailor the value proposition as closely as possible to each individuals unique wants and needs. CRM allows firms to talk to individual customers and to adjust elements of their marketing programs in light of how each customer reacts
A business approach that prioritizes the satisfaction of customer’s needs and wants. Followed TQM approach.
A management philosophy that focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement.
A businessperson who only produces a product when it is ordered.
A managerial view of marketing as a sales function, or a way to move products out of warehouses to reduce inventory.
: suggests that businesses will do better in the end if they concentrate on meeting customers’ needs rather than on selling products.
An analysis of organizations strengths and weaknesses and the opportunities and threats in its external environment.
The controllable elements inside an organization, including its people, its facilities and how it does things that influence the operations of the organization.
: SBUs with products that have a dominant market share in high-growth markets.
-Maximize market share in the face of increasing competition
-Aims to get largest share of loyal customers so SBU will generate profits and reallocate them to other parts of the company.
SBUs with a dominant market share in a low-growth-potential market.
-enjoys a high market share that the firm can sustain with minimal funding.
SBUs with low market shares in fast growth markets.
-Suggests that a business has failed to compete successfully.
SBUs with small share of a slow-growth market. They are businesses that offer specialized products in limited markets that are not likely to grow quickly.
-Large firms sell dogs to small firms to take care of.
The tendency to prefer products or people of one’s own culture.
Specific rules dictating what is right or wrong, acceptable or unacceptable.
Cultures in which people subordinate their personal goals to those of a stable community.
Cultures in which people tend to attach more importance to personal goals than to those of the larger community.
1. Sell the same product in the new market
2. Modify it for that market
3. Develop a brand-new product to sell there.
Product strategy in which a firm offers the same product in both domestic and foreign markets.
Product strategy in which a firm develops a new product for foreign markets.
Designated areas where foreign companies can warehouse goods without paying taxes or custom duties until they move the goods into the marketplace.
A company tries to get a toehold I a foreign market by pricing its products lower than it offers them at home.
Data from research conducted to help make a specific decision. Information it gathers directly from respondents to specifically address the question at hand. Includes demographic and psychological information about customers and prospective customers, customer’s attitudes and opinions about products and competing products, as well as their awareness or knowledge about a product and their beliefs about the people who use those products.
Data that have been collected for some purpose other than the problem at hand.
-Statistics that measure observable aspects of a population
§ Population size
§ Ethnic Group
§ Family structure
o Specific rules dictating what is right or wrong, acceptable or unacceptable
o What ways to dress, how to speak, what to eat and how to behave
o Deeply held beliefs about right and wrong ways to live, that it imparts to it’s members
o Talking about sex in public
-Advocates of standardization argue that the world has become so small that basic needs and wants are the same everywhere
-A focus on the similarities among cultures is certainly appealing
-Realize large economies of scale because it could spread the costs of product development and promotional materials over many markets
-Consistent exposure also helps create a global brand because it forges a strong, unified image all over the world
Independent – manipulation
Dependent – measureable outcome
Advantages of primary data collecting
-Gathering information for a particular need
·Disadvantages of primary data collecting
Advantages of secondary data collecting
o Cheaper, saves time
· Disadvantages of secondary data collecting
o Process in which analysts sift through data to identify unique patterns of behavior among different customer groups
Creating customer relationships through a consistent relevant dialogue across multiple channels in order to maximize customer satisfaction and business results
any point of direct interface between customers and a company (online, by phone, or in person)
-The process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics.
-Can’t please all people all the time, but you have to try your best
o High involvement
o i.e. Buying a car
-You have no choice
-i.e. when a doctor writes you a prescription
o Person who influences others’ attitudes or behaviors
o Trusting someone to tell you the positive and the negative
o Knowledgeable about product category
o Among first to buy new products
o Likely to tell both positive and negative info about product performance
o Online reviews are better because people can identify the reviewers
· – Existing stimulus response relationship “generalize” to a new (similar) stimulus KNUGGET
o The dog salivating to one of the same sounding bells
o i.e. Family brands and product-line extensions
o “Me too” branding strategies
§ Making your brand resemble others
o Halo Effect
-A set of products that you will consider acceptable
-Part of the Evaluations of Alternatives of the Decision Making Process
-Central Route to Persuasion
Giving factual info
-Peripheral route to persuasion
Sounds, smells, sights, pictorial cues
· Anything tangible/intangible that, through exchange process, satisfies consumer/business customer needs
o Physical Goods (tangible)
-(high involvement): Long-term benefits (cars, appliances)
o Nondurable goods (low involvement): Short-term benefits (newspapers, food)
§ Use central route strategy for durable goods (peripheral for nondurable)
o Frequently purchased, little effort
o Low priced
§ Staples, impulse, emergency
o Time/effort in selection
o Moderately brand loyal
o Comparison shop
o Limited problem solving
§ Clothing, appliances, services
o Significant purchase efforts
o Brand loyalty
o Unique characteristics important to buyer
§ Luxury goods
o Little awareness/interest until need arises
o Require much advertising and personal selling
§ Retirement plans, insurance
-The process by which a consumer or business customer begins to buy and use a new good, service or idea
o Single company produces a single product
o Get first-time buyers to try the new product
o Sales increase at a steady, slow pace
o Negative profits
o High pricing: Recover R&D costs, Low pricing: Attract large number of customers
o Marketing communication is to inform customers
§ Many products don’t make it past this stage
o New competitors enter the market creating new variations of the product
o Goal is to encourage brand loyalty
o Sales are at a rapid increase
o Profits increase and peak
o Pricing may need to be reduced because of increased competition
o Marketing communication = heavy advertising to counter new competition
o New features added; sales are mostly replacement products
o Goal is to attract new users
o Sales peak, then level off and often decline
o Profits are narrow
o Priced to maintain market share
o Marketing communication is to use “reminder” advertising
o The number of variations in the product is reduced
o The goal is to remain profitable; decide whether to keep or phase out product
o Sales continue to decline
o Profits are declining
o Pricing may reduce if product can remain profitable
o Marketing communication = decreased to maintain profitability
· “The value of a brand to an organization, the brand’s value above the value of generic version of the product”i.e. how much extra you will pay for a golf shirt with a Lacoste logo on it than for the same shirt without the logo
§ Self-Concept Attachment: The product helps establish the user’s identity (do you feel better wearing brand X over brand Y?)
§ Nostalgic Attachment: Product serves as a link with a past self (Does eating Oreo remind you of a past childhood?)
§ Interdependence: Product is part of the user’s daily routine
§ Love: Product elicits emotional bonds of warmth, passion or other strong emotions (Hershey’s Kiss)
-are familiar with, and; have some favorable, strong, & unique brand memory associations.
-Brand Recall: Can you remember the brand when you are asked about a category
-Brand Recognition: See logo and know what it is
-Services are acts, efforts, or performances exchanged from producer to user without ownership rights. Like other intangibles, a service satisfies needs when it provides pleasure, information, or convenience
-Something done to you (massage)-Something done to something you own (geek squad fixing your computer)
§ “Marketing the product that isn’t there”
§ Customers cant see, touch or smell the good or service (we can’t inspect or handle services before we buy them)
§ Because they’re buying something that isn’t there, customers look for reassuring signs before they purchase
· Marketers overcome this problem by providing physical cues – the look of the facility, the furnishings, logo, stationary, business cards, advertising, employees, website, etc.
§ The characteristic of a service that makes it impossible to store for later sale or consumption- it’s a case of use it or lose it
§ To avoid this, marketers encourage demand for the service during slack times
· Popular option is to reduce prices to increase demands
§ The process by which organizations adjust their services in an attempt to math supply with demand
-Over time even the same service the same individual performs for the same customer changes
· i.e. not getting the exact same haircut everytime you go in
§ Difficult to standardize services because service providers and customers vary
§ Customers often appreciate the one that customizes its service for each individual
-It is impossible to divide the production of a service from the consumption of that service
· i.e. Eating a meal in the restaurant you order from, not having that meal prepared yesterday or at a different location
-removing the middle man, eliminating the need for customers to interact with people at all (i.e. self-checkouts)
-A measurement approach that gauges the difference between a customer’s expectation of service quality and what actually occurs
· Gap Between Consumers’ Expectation and Management’s Perceptions
o Major quality gap occurs when the firm’s managers don’t understand what its customers expectations are in the first place
§ Many service organizations have operations orientation rather than a customer orientation
§ i.e. Banks used to close branches early because that’s more efficient for them in handling transactions, even though its inconvenient for their customers
· Gap Between Management’s Perception and Quality Standards the Firm Sets
o Quality suffers when a firm fails to establish a quality-control program
o Successful companies establish specific goals
-One of the biggest threats to service quality is poor employee performance
· Gap Between Service Quality Standards and Consumers’ Expectations
o Sometimes a firm makes exaggerated promises or does not accurately describe its service to customersi.e. When Holiday Inn advertised “no surprises
· Gap Between Expected Service and Actual Service
o Consumers misperceive the quality of the service. Thus, even when communications accurately describe what service quality the firm provides and what customers can expect, buyers are less than satisfied
o Provide time, place and ownership utility
o They make desire products available when, where and in the sizes and quantities that customers desireThey create efficiencies because they reduce the number of transactions necessary for goods to flow from many different manufacturers to large numbers or customers
Wholesalers and retailers purchase large quantities from many different manufacturers and sell only one of a few at a time to many different customers
-Functions of channel intermediaries that make the purchase process easier for customers and manufacturers
-Firms of individuals such as wholesalers, agents, brokers, or retailers who help move a product from the producer to the consumer or business user
-Direct (manufacturer to consumer)
-Indirect (manufacturer to retailer/ wholesaler to consumer)
§ Indirect is better because the consumer can see choices and more business opportunities because more people are involved (but is more expensive)
§ Direct (manufacturer to user)
§ Indirect (someone in the middle)
- Disintermediation: eliminating layers of channels of distribution (receive products online)
-Communication of the supply chain via internet; knowledge management
-channel of distribution consists of (at minimum) a producer – the individual or firm that manufactures or produces a good or service and a customer
§ Taking out the middle man, not losing money in the middle; strong brands need less middle mediary
§ EX. Buying a loaf of bread at a mom and pop bakery
o includes one or more channel intermediaries such as firms or individuals like wholesalers, agents, brokers, and retailers
§ Coverage - marketing techniques help you get more money
§ Takes liability off the manufacturer
The dominant firm that controls the channel channel leaders have some form of power relative to other members
-firm (franchiser) has the legal authority to call the shots-Corporate companies have control over their franchise’s
- power to reward or un-reward channel intermediaries
- HP and Walmart: You can buy an HP at Walmart; Walmart has the ability to have power over HP because they can either reward them or coerce them
Manufacturers, importers, and wholesalers can all serve as retailers if they sell directly to the end user
-The assignment of value, or the amount the consumer must exchange to receive the offering or product.
-Payment may be in the form of money, goods, services, favors, votes or anything else that has value to the other party
-In some marketing practices, price can mane exchanges of nonmonetary value as well
-The value of something we give up to obtain something else
i.e. The cost of wearing a seatbelt- either agreeing to wear or not to wear the seatbelt. The value is reducing the risk of a fatal accident
o Break-even analysis is a technique marketers use to examine the relationship between costs and price. Allows them to determine what sales volume the company must reach at a given price before it will completely cover its total costs and past which it will begin to turn a profit
o The difference between the price the firm charges for a product
-$4.99, $19, $99
-Prestige products will not use this because they will come across as cheap
-$25, $50, $75 and no prices in between
-Most of the time people will buy the middle ($50) group
-Smart to offer choices on the high end and low end, hoping most people will buy in the middle
-What if we want people to buy $75
· Add $100 group
·-Show a product that is most expensive in order to set your reference price
Price in consumers mind on what cost should be
-setting one product so low consumers will buy it & buy other products associated with it (attracts customers into a store)
-Ex. Safeway advertises low cost of hot dog buns during the 4th in order to get customers in and buy other products such as dogs and soda at the same time
-Illegal marketing practice in which an advertised price special is used as bait to get customers into the store with the intention of switching them to a higher-priced item
-A company sets a very low price for the purpose of driving competitors out of business
o Later, when they have a monopoly, they turn around and increase prices
o The Sherman Act and Robinson-Patman Act prohibit predatory pricing
-Occurs when competitors making the same product jointly determine what price they each will charge
-In smaller markets, there may be no specific price-fixing agreement but sellers will set prices to “meet competition”
-This is not directly price fixing, there must be an exchange of pricing information between sellers to indicate illegal price-fixing actions
-Occurs when the retailer that wants to carry the product has to charge the “suggested” retail price
- The Consumer Goods Pricing Act of 1976 limited this practice, leaving retail stores free to set whatever price they choose without interference by the manufacturer or wholesaler
o Non-personal communication from identified sponsor using mass media
· Personal Selling
o Direct interaction between company representative and customer
· Sales Promotion
o Short-term incentives to encourage sales during specific period of time
· Publicity and PR
o Portrays organization and its products positively by influencing perceptions of public
· Direct Marketing
-Budgeting that is based on a certain percentage of either last year’s sales or on estimates of the present year’s sales
-An organization matches whatever competitors are spending
-% of sales
-Estimate how to distribute the money, and the left over can be the promotion budget
-All you can afford
-More common to use because it is easier
-Set up the goal and see how much we need to put in for reaching the goal
-More expensive because it needs a lot of research
You spend a similar/ exact amount as your competitor
· Attempts to influence the way consumers, stockholders, and other publics feel about companies, brands, celebrities, or not-for-profit organizations
· PR messages are more credible than If the same information appeared in paid advertisement
-Unpaid communication about an organization that appears in mass media
-Can build interest in product
-Can create awareness about event
· Press release: Information distributed to media by organization about its activities, intended to appear as publicity
· Some common types are
o Timely topics
o Research stores
o Consumer information
-Occurs when a company representative interacts directly with a customer or prospective customer to communicate about a good or service
o An approach that focuses on making an immediate sale with little concern for developing a long-term relationship with the customer
o As consumers, hard sell makes us feel manipulated and resentful and it diminishes out satisfaction and loyalty
o Short-sighted approach to selling
o The process by which a salesperson secures, develops, and maintains long-term relationships with profitable customers
o Better of the two
· The process by which a salesperson identifies and develops a list of prospects or sales leads (potential customers)
· Leads come from existing customer lists, telephone directories, commercially available databases, and of course through diligent use of Web search engines like Google.
o When people request more information based of ads
Cold calling, referrals
· The mere fact that someone is willing to talk to a salesperson doesn’t guarantee a sale. After they identify potential customers, salespeople need to qualify these prospects to determine how likely they are to become customers.
· They do this by asking the following
o Are the prospects likely to be interested in what I’m selling?
o Are they likely to switch their allegiance from another supplier or product?
o Is the potential sales volume large enough to make a relationship profitable?
o Can they afford the purchase?
o If they must borrow money to buy the product, what is their credit history?
o Push: when supply is greater than demand. The producer/ company is trying to push the product through the supply chain and into the consumer’s hands. Company is placing product on shelves hoping that the consumers will see it and buy it
o Pull: when demand is higher than supply. Consumers are pulling the product through the supply chain and asking for it, causing retail/ sales outlets to carry the product.
§ When inventory sits around you lose money
-Coordination of marketing communication efforts to influence attitudes or behaviors – *KNUGGET
· doing something in a non-conventional, unique way
o i.e. Shooting someone from behind a tree…
o first time using QR codes
· When you’re being marketed to, and you don’t realize you’re being marketed to
o i.e. Camera phones – Nokia, having employees ask people to take pictures with their camera phones (w/o launching a campaign)
· self-help cassette tapes
o Lose weight label – people got the stop smoking message
o Stop smoking – people got the lose weight message
· Guerilla marketing is all about creating buzz (goal is to get people to talk about us)
· Buzz – people talking about it
o As a consumer, we believe buzz over hype
· Hype – comes from the company
o i.e. television commercial
· Measure effectiveness of the ad
· Allows a large amount of information to be displayed in a small space
-Process of planning, implementing and controlling the personal selling function
o Order taker
o Technical specialist/Missionary salesperson
§ Promote the product, but doesn’t sell the product
o Order getter/New business salesperson
o Team selling
· Multifaceted and challenging activitiesFinancial Rewards
· Straight Commission Plan
· Commission-with-draw plan
o Paying for living expenses (loan) and they take the loan out of your commission check
· Straight salary compensation plan
· Quota-bonus plan
· Combination plan-most companies do this
· Leisure trips/travel
· Recognition dinners
· Intrinsic and extrinsic employee motivation
· Intrinsic will increase satisfaction
· Extrinsic will minimize dissatisfaction
Act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service
- 7 sins
· FTC revises guidelines for products claiming to be eco-friendly
· Guidelines created in 92, revised in 96, 98 and suggested 2010
· Guidelines are just that, little teeth for the FTC
· Consumer rights?
o Advertising is manipulative
o Advertising is deceptive and untruthful
o Advertising is offensive and in bad taste
o Advertising creates and perpetuates stereotypes
o Advertising causes people to buy things they don’t really need
o Activities designed to deceive consumers
o Directing buzz marketing at children or teens
o Buzz marketing activities that damage properties
o Stealth marketing activities that deliberately deceive or lie on behalf of the clients
· Home country is the focus; associated with attitudes of national arrogance and supremacy
· Not conforming to other cultures because “we are the best”
· Is it a good strategy?
· Opposite of ethnocentrism
· Management operates under the assumption that every country is different; the company develops country-specific strategies
o Company operates differently in each host country based on that situation
o 100% adaptation
· Decisions are decentralized
o Losing brand image
o Meeting cultural differences
· Treating them as a “region”
· Region becomes the relevant geographic unit (rather than by country)
· European Union
· Decisions are decentralized per region
o Decentralization – good or bad?
§ Ford motor company, local ad agencies that make decisions
· Entire world is viewed as a potential market
· Managerial goal is to develop integrated world market strategies
o The difference between geocentric and ethnocentric is the strategy in ethnocentric you’re saying your country/culture is the best
o Geocentric sees the whole world as a market, there is no cultural boundaries
o The similarity is that they use one strategy
· Global marketing does not mean doing business in all of the 200-plus country markets
· Global marketing does mean widening business horizons to encompass the world in scanning for opportunity and threat
o Is a certain currency over/under-valued compared to another?
o Assumption is that the Big Mac in any country should equal the price of the Big Mac in the US after being converted to a dollar price
o This company is considering doing business in another country and they look at the price in another country. They realize that panama sells that product for $1 more. They are using the PPP to determine the Big Mac Index
Suggests that we need to keep triangle in balance
The Q Score is a measurement of the familiarity and appeal of a brand, company, celebrity, or television show used in the United States. The higher the Q Score, the more highly regarded the item or person is among the group that is familiar with them. Q Scores and other variants are primarily used by the media, marketing, advertising and public relations industries.
· Historically the web has been which
o Pull (Search engines)
o Push (Pop ups)
· In social network, what are marketers doing? Both
o Pushing – company generated online “pitch”
o Pulling – being part of the “organic dialogue”
· Push/Hype- Opt out
o The default is to collect information unless the consumer takes an affirmative action to prevent the collection o data… no consent required; everything is “pre-checked”
· Pull/Buzz- Opt in
o Requires an affirmative action by the consumer to allow collection and use of consumer information… consent required; consumer chooses
· Time to reach 50 million people
o Radio: 38 years
o TV: 13 years
o The internet: 4 years
o Facebook added 100 million in 9 months
· 80% of companies use LinkedIn as their primary recruiting tool
· Likelihood of Recommendation (0-10)
· Share of Promoters (9-10)
· Share of Detractors (0-6)
· Social networks make it way for marketers to reach influential people such as journalists and consumers who are opinion leaders
· The opportunity social networks provide to create a brand community
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