An organization function and a collection of processes designed to plan for, create, communicate, and deliver value to customer relationships in ways that benefit the organization and its stakeholders
Demographics are variables that allow us to group people together based upon some similar characteristics.
Psychographics seeks to understand how people are different
Gather market intelligence
Obtain information - customers, competitors, and markets
Deliver superior customer value
Do actions to provide value
The amount of degree of influence we have will direct/change our stance.
We can’t change the economy but we can change our organizational decisions. We can control our own business and decisions.
· Achievement and Success
· Material Comfort
· Fitness and Health
· Delayed Marriage
· Dual Career
· Smaller Families
· The practice of choosing goods and services that meet one’s diverse needs and interests rather than conforming to a single, traditional lifestyle.
· 63% of all females are in the workforce
· Purchasing power from dual-career families is rising
· Female population growing faster as women tend to live longer
A product that serves the same purpose
Competitors who offer similar products and service to the same customers at similar prices
· 29 million
· Purchasing power of $39 billion
· Richest and most influential generation
· 1979-1994 birth range
· Population of 60 million
· Purchasing power of $200 billion
· Impatient, family oriented, street smart, time managers
· Use word of mouth advertising
· Born between 1965 and 1978
· Population of 40 million
· Savvy and cynical consumers
· Born between 1946-1964
· Population of 77 million
· $1 trillion in spending power
o Bargaining power of customers
o Threat of substitute products
o Threat of new entrants
o Bargaining power of suppliers
o Competitive rivalry within an industry
· Family Size
· Family Life Cycle
Dividing a market by the amount of product bought or consumed – 20% of our customers generate 80% of our revenue.
The process of grouping customers into market segments according to the benefits they seek from the product
Divide market based on needs/benefits, demographics, lifestyles, behavioral measures
Types of Segmenting- demographic variables, geographic, psychographic, behavioristic
Members of a particular segment must be similar in their attitudes, behaviors, finances, etc.
groups must be of sufficient size to warrant special marketing efforts
§ What is the purpose of the organization?
§ Should be market-oriented and defined in terms of customer needs.
o a statement of what is to be accomplished through marketing activites
Stars, high growth, high market share – large cash flow
Cash Cows, low growth, high market share
Question Marks, high growth, low market share
Dogs, low growth rate, low market share
Aggressive, Diversification, Turnaround, Defensive
· Advantage when a firm seeks to target and effectively serve a small group
· Used by small companies with few resources
· May be used in a small geographic market
§ Market leader
§ Market challenger
§ Market Follower
§ Market Nicher
A business should be judged by being strong financially, internally, innovation, and customers
exposed to outside influences without leaving your comfort zone
§ CPSC – Product Safety
§ FCC – Broadcast Advertising
§ ICC – Distribution channels
§ EPA – Product manufacturing
§ FDA – product safety
Is a concern for how a company’s actions might affect the interest of others
§ Straight rebuy – original product is reordered
§ Modified Rebuy – changes are desired in the original product
§ New Task – product is purchased for the first time
o Need Recognition
o Information Search
o Evaluation of Alternatives
o Postpurchase behavior
o Cognitive Dissonance
o Social/reference groups
o Personal influences – lifestyle/personality
§ Consistent response toward an object
§ Amount of affect or feeling for or against a stimulus
(BI = Aact + SN) – behavioral intention = attitude toward act + subjective norms
· consumer insight is perceived meanings of data collected form the study of consumer behavior
an organizational function and a collection of processes designed to plan for, create, communicate, and deliver value to customers and to build effective customer relationships in ways that benefit the organization and its stakeholders.
Focus on satisfying customer needs and wants
o Segmenting, targeting and positions
o Creating relationships
o Solving customer problems.
oriented philosophy that suggests that satisfaction of consumer needs provides the focus for product development and marketing strategy to enable the firm to meet its own goals
Focus on efficiency of internal operations
Products are anything of value that solve problems for customers. They can be places, people
Focus on aggressive techniques for overcoming customer resistance
Focus on satisfying customer needs and wants while enhancing individual and societal well-being
A group of marketing variables that a business controls with the intent of implementing a marketing strategy directed at a specific target market.
Product, Place, Promotion, Price
1. manufacturer brands
Brands are a promise to deliver specific benefits associated with products or services to consumers.
a mark made by burning with a hot iron to attest quality or designate ownership; often applied to livestock.
A name, term, sign, symbol
or design, or a combination of them,
intended to identify the goods
or services of one seller or group
of sellers and to differentiate
them from those of competitors.
An identifying name, term, design, symbol or any feature that identifies one marketers product as distinct from others.
marketing and financial value associated with a brand's strength
value of brand is based on loyalty
the marketing and financial value associate with a brand’s strength
-A billion cokes produced in just one day
the set of traits people attribute to a product as if it were a person
(sincerity, excitement, competence, sophistication, ruggedness)
functions of packaging
Brand extensions-takes an existing brand into a new category
Line extensions-an addition to an existing product line that retains the currently utilized brand name (ex. M&M's and pretzels, also ingredient branding)
Diffusion of innovations
acceptance of public. looks like a bell curve. It passes the peak when
going from early majority to late majority which is when over 50% of the population now accepts it
-Intangible (unsure how good the service is e.g doctor visit)
-Inseparable (surgeon has to be there to provide the service)
-Perishable (empty seat in restaurant = lost revenue)
-Variability (on time good service, bad another time)
customer's perception of how well a service meets or exceeds their expectations
-reliability, responsiveness, assurance, empathy, and tangibles
• Core - the reason why the service is ordered
• Augmented - the special features that come along with the service
• People processing - physical changes to self (operation)
• Possession processing - physical changes to possession you already own (lawn
• Mental stimulus processing - seeing a show or game
• Information processing - paying for knowledge (accountant, training)
stressing tangible clues - allstate shows two hands
using personal info- celebrities elp convey an image
strong organizational image- Mcdonalds = family friendly
-Identify the maker: need to be memorable
-Create barriers to entry
-Serve as a competitive advantage
Focus on brand earnings, brand strength, and trust, allows you to quantify the value of the brand
A brand name owned by a wholesaler or a retailer. Also known as a private label or store brand.
-Ex) sears & kennmore, Kirkland cosco, Walmart ozark trail
Made by a bigger company and normally don’t advertise that
they made it. It has a specific brand name for the product (Tide)
One big company that uses its name for all products, just different
model numbers (GE)
Advertises individual and family brand. (Kellogg’s Rice
-Helps make proper selections
-Lowers cognitive dissonance
Levels of product
what the product does, or the need it fulfills (transportation for cars)
Levels of a product
what does the product need to function (steering wheel, etc)
Levels of a product
what would add to the experience of the product (air conditioning)
A relatively inexpensive item that merits little shopping effort.
a product that requires comparison shopping because it is usually more expensive than a convenience product and is found in fewer stores (HD tv)
A product that requires comparison shopping, because it is usually more expensive and found in fewer stores.
a particular item that consumers search extensively for and are reluctant to accept substitutes
A particular item that consumers
search extensively for and are reluctant to accept substitutes.
set of items that function similarly and solve similar products
deepen the product mix by adding additional products to the line
moving into an entirely new product category (apple coming out with
sources include customers, employees, distributors, competitors,
the filter that eliminates bad ideas
The filter which eliminates ideas that are inconsistent with the organization’s new-product strategy or are inappropriate for some other reason
creat prototype, marketing strategy, approvals
demand, cost, sales, and profitability. If the product appears to be successful, it will continue on
trial run in a test market
product lands itself on the shelves
Product life cycle
the time it takes to break even and start making money
Product life cycle
shows that money can be made on the product and maybe product mix
should be developed
Product Life Cycle
not doing well, becoming obsolete (VHS tapes)
Product Life cycle
sales volume goes flat, competition is maxed out (DVD players right now)
Heterogeneity quality of service depends on who, when, where and how. (who is your server at a restaurant?)
Service quality dimensions: Reliability
done right the first time
we want it done fast
The gap between the managements perception and the expectation of a customer (a gap means a difference in perception)
Gap between expectations and the performance received of the customer. Can be positive or negative.
• Negative gap means a gap exists
• Positive gap - expectations exceeded
• If no gap, satisfactory experience
• We are disconfirmed if expectations are not the same as the actual performance
whether positive or negative
Class Video: Terry Haley – Brand Director Pei Wei Asian Diner
Name: Pei Wei is one of the most common names in the Chinese culture, that’s how the name was decided
Logo: Pei Wei has a lot of logo consistency. Very clear, sophisticated clean logo that has an Asian flare and reads well
What defines Pei Wei: Two aspects
Food: the quality is good and fresh. PF Changs principals coming to life in Pei Wei
Ambiance: you have to make consumers feel sophisticated. That’s why they chose dark colors, clean lines, bright reds, lightening
Class Video: Terry Haley
o What would the retailer’s selling price be, given the retailer’s cost is $200, and the retailer’s markup on selling price is 50%? The answer must be $400. 50% of the selling price is markup, therefore 50% of the selling price must be cost.
o Given the manufacturer’s selling price is $100 and the manufacturer’s cost is $35, what would the manufacturer’s markup on selling price be? 65%.
o Company X sells products to retailers for $30. It costs the company $20 to make each video game. The total fixed costs for plant operation is $20,000. How many products does Company X need to sell to break even? Answer: 2,000.
Break even point in dollars = BEP units * SP
o Single price
o Loss leader
-outsourcing of logistics functions
Organizing the inventory.
(Barcodes, RFID chips)
o Levels of Intermediaries
o Multiple Channels
o Intensity of Distribution
o Channel Choice Factors
goods and industrial equipment.
When the sales person comes right to your door and sells you products.
any communication addressed to a consumer that is designed to generate a response.
Carefully coordinating all promotional messages to assure the consistency at every touchpoint between a company and the consumer.
a method of carefully coordinating all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer
The way a company encodes an idea (synthesizing a message) and the way the consumer decodes the idea (receiver is interpreting the idea).
-Contest and sweepstakes
-if our firm cuts back promotions and all others maintain promotions, we lose market share
-if our firm maintains promotions and all others maintain promotions, we have same market share, profits stay low
-if our firm cuts back promotions and all other firms cut back promotions, there are higher profits for everyone
-if our firm maintains promotions and all others cut back promotions, we gain in market share
Make sure not to be under competitive, but also not under price products.
Firms should aim to get their customers’ Attention, hold their Interest, arouse their Desire, and initiate Action.
Sales promotions impact behavior, NOT attitude
Advertising gives you a reason to buy (attitude), sales promotions give the inceptive to buy (behavior).
o Gauge public opinion
o Establish dialogue
o Enhance company image
o Build/rebuild trust
o Build on marketing efforts
o Crisis management
Pros and Cons of Advertising
Concave-Downward Response Curve
S-Shaped Response Function
o False testimonials
o Bait and switch
o Misleading demonstrations
7P’s and 4C’s
§ Store visits
§ Conversations with sales people
§ Interactions via the web
§ Traditional phone conversations
§ Service registration/warranty cards
§ Encourage and track customer interaction with the company
§ Store and integrate customer data using IT
§ Understand interactions with current customer base
§ Foster customer-satisfying behaviors
§ RFM analysis
When a person has an experience with a product or service there are three possible outcomes:
- A negative experience will have customer displeased and will use another brand
- With a neutral experience, barely satisfied with product and willing to switch to another
- A positive experience will have customer delighted and loyal to brand
o Negative: dissatisfied, defect.
o Neutral: satisfied, switchable.
o Positive: delighted, loyal.
Affects our CS/D in terms of:
-Getting people to complain: helps organization to fix the problem-Effective resolution: fair procedures, outcomes, interactions.
o Acquisition of customers can cost 5 times more than retaining current customers