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original philosophy of exchange for businesses revolved around the product itself
-firms that adopt this focus on the efficient production of their products with no input from customers
-"if we build it, they will come"
-demand exceeds supply
to sell what is made (persuading people to buy)
-introduced the concept of one-way communication to the customer
info about the market (potential customers, trends, competitors) is collected prior to making decisions that involve the selling process (what to sell, where to sell, price, how to promote)
-practiced by virtually every large and medium size company
· a way of thinking or organizing that says all elements of business are oriented toward customer satisfaction at a long-term profit.
-info about the customer or marketplace is shared throughout the organization-other functional dept (research, finance, manufacturing) are partners in effort to satisfy
-surpass expectations through superior product or service performance
-values repeat purchases above one-time transactions
-cost of keeping customers is less than the cost of gaining new ones
-people buy from people and companies they like and trust
-developing a strategy to ensure long-term survival and growth (sets the stage)
-developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities
-normally thought of as being at a higher level than marketing planning
-takes financial and human relations issues into account in forming an overriding firm strategy
assume each product attribute (price, quality, and so forth) is rated and multiplied by an importance weight
-reflected in judgments regarding the predicted frequency of an event > consumers may use predictions in forming judgments about alts or whether product is needed
-info used to form judgments are biased by the availability of info cues (personal experience or most often, the media)
-when people associate the ease of recalling available info with their estimation of predicted frequency
marketing manager has to predict next year's sales, take this year's forecasted sales as starting point (anchor) then make adjs to figure according to anticipated changes in conditions
-use info easy to recall (available) as original anchors then make insufficient adjusts based on forthcoming avail data-managers use cost of product as anchor for pricing (cost-plus pricing) but do not adjust sufficiently to varying demand and competitive conditions
· choose one that gives you competitive advantage over competitor.
Consumers decide what is to be produced and by whom through their "Dollar Votes"
1. increase sales of current products in current markets.
1. sell new products in new markets.
1. sell current products in new markets.
· Add needs and concerns of society to marketing approach.
· Anheuser-Busch has spent almost $1 billion to discourage drinking heavily, and many millions more to encourage recycling.
· planning, implementing, controlling activities to reach an objective.
· Campbell’s soup controls around 90% of the condensed soup market in the US, still looks to grow through market penetration. Starbuck’s looks to keep their customers in the store longer through market penetration. Via is product development and expanding to Asia is diversification.
· collection of businesses and products an organization has.
· helps a firm search for growth opportunities from current and new markets as well as current and new products.
· urbanized area of 50,000 people. Many companies use this status in deciding whether to open a store or not.
· moral positions, values, or principles that guide actions. Judgment based on one’s values/principles.
· choice between two things with positive aspects.
Why should we study marketing?
1. Marketing is everywhere! Can’t get away from it!
2. Many jobs in marketing. (25-30%)
3. Marketing is very expensive.
4. Marketing is key to every successful business.
What is needed for marketing to occur?
1. Two or more parties with unsatisfied needs.
2. Desire and ability to satisfy these needs
3. A way for the two parties to communicate.
4. Something to exchange.
The four P’s of the marketing mix:
1. Product—a good, service or idea to satisfy the consumer’s needs.
2. Price—what is exchanged for the product.
3. Promotion—means of communication between the buyer and the seller.Place—means of getting product to consumer
Four economic utilities:
1. Form Utility—change physical form of something to add value (manufacturing).
2. Place Utility—value is added to product because it is in one place rather than another.
3. Time Utility—value is added to product because it is available at one time rather than another.
4. Information Utility—value is added to product because customer has more information than another.
Five different approaches to marketing:
1.Production Concept—believe they can satisfy customers with lower cost products
2.Product Concept—make better product, quality performance, innovative features.
3. Selling Concept—product selling and promotion must be emphasized on a large scale
4. Marketing Concept—(most important) must know what customer wants or needs. )
5. Societal Marketing Concept—must consider society's needs.
1. Serve as reference point, easy to evaluate progress.
2. Can get people rallied around the cause.
3. Motivates people—one is always motivated, but depends about what one is motivated and the intensity of that motivation.
4. Aids decision-making. Must be committed to goal or these decisions will skewed.
5. Good decisions lead to good results, and vice versa.
Trends with Goals:
1. Long-Term Customer focus—Bind them 3 ways: economic/financial ties (provide good products at cheaper price), technology/structural ties (provide convenience of exchange through up-to-date technology), social ties.
2. Teamwork/Interdependability—must learn how to handle working with others in the real world.
3. Entitlement/Employee Accountability—goal is to get rid of entitlement by holding employees accountable.
Four elements of diversification analysis:
1. Market Penetration—increase sales of current products in current markets.
2. Market Development—sell current products in new markets.
3. Product Development—sell new products in current markets.
4. Diversification—sell new products in new markets.
Three components of target market:
1. Every potential market has success requirements.
2. Every organization has certain competencies (special skills, technologies, and resources) that distinguished it.
3. Must choose the market that has success requirements that match your competencies.
Two questions asked when needing to change:
1. What’s in it for me? (motivation)
2. Can I do what you’re asking me to do? (ability)
Five (six) forces of the environment:
1. Social Force—include demographic characteristic of the population and its values.
2. Economic Force—things are always becoming more expensive (inflation).
3. Technological Force—inventions or innovations from applied science or engineering research.
4. Competitive Force—the alternative firms that could provide a product to satisfy a special market’s needs.
5. Regulatory Force 6. Natural Environment Force
1. Culture—set of ideas, values, and attitudes that are learned and shared among members of a group.
2. Industry—comprise the effective rules of the game, the boundaries between competitive and unethical behavior, and the codes of conduct in business dealings.
3. Corporation—each organization in an industry has a set of values and a culture that is learned and adopted by its employees.
4. Personal—one’s personal moral ideology.
1. set of ideas, values, and attitudes that are learned and shared among members of a group.
1. things are always becoming more expensive (inflation).
1. force of the environment and nature (natural disasters).
1. must consider needs of society.
1. product selling and promotion must be emphasized on a large scale (Supply>Demand). Focus: Production, Means: Promotion
1. value is added to product because customer has more information than another.
1. change physical form of something to add value (manufacturing).
1. Firm can Distance Products from other Offerings it Markets
2. Image of one Product (or set of products) is not Associated w/ other Products the Company Markets
3. The Product(s) can be Targeted at a Specific Market Segment
4. Should the Product(s) fail, the Probability of Failure Impacting on Other Company Products is Minimized
o The sum of the physical, psychological, and sociological satisfactions the buyer derives from purchase, ownership, and consumption
o Customer satisfying objects – accessories, packaging, and service
1. means of communication between the buyer and the seller.
· Manzer was raised in a home without alcohol, tobacco, or cursing and he maintained these values through college. He had to make relationships as a chemical salesman for Dow Chemical, and these are mostly formed on entertainment and social drinking. He maintained his values.. His son made it on the travelling baseball squad as a freshman and knew there was an initiation process that involved chewing tobacco. He told the upperclassmen no, and they left him alone.
· CFO of Enron had a sign on his desk that read, “If Enron says he’ll rip your face off, he’ll rip your face off.”
· Poor pay more for their groceries, because there are less grocery stores in the inner city. Wal-Mart doesn’t want to move to the inner city because they would not make as much money or bring in jobs.
· 90% of all scientists to have ever lived are alive today. Costs of technology have gone way down. Electronic commerce is becoming more prevalent, but security is still an issue. Story of Target being hacked, Manzer’s wife’s identity stolen in Chicago.
· Stillwater was attempting to have students register themselves for the census in Stillwater so they could reach the status of a Metropolitan Statistical Area. Population was not enough to lure companies like Target.
· Manzer stated, “Men are taking on good characteristics of women, while women are taking on the bad characteristics of men.” Social values are always changing, story of the first rated movie Manzer had ever seen.
· Dow Chemical produced latex for paint and controlled the market, but when WWII began, they were forced to hand over the patents. Dow had to adjust, and began focusing on elements of paper, grew rapidly. Kid was doing poorly on his tests, visited Manzer, and asked for help. After explaining that he had pulled all-nighters to study for the test, Manzer suggested he changed his study habits. Kid said, “That’s just not my style.” Unwilling to change.
-consistent and continuous effort to find out what needed or wanted by customers
-collect info directly from individual customers or track competitive, economic, social, political, or technological trends to anticipate future customer needs
-its interactive nature has allowed firms to build and maintain customers at a low cost
-companies use e-mail to provide fast customer service, a social media presence to build a sense of community, and smartphone applications to make shopping more convenient
use one attribute to exclude alternatives then make a comparison of remaining alternatives based on another attribute or two
-deliver on performance through quality products and consistent services
-attract customers without exaggerating what they should expect
-provide a consistent level of quality while services are often inconsistent in actual performance
-services are chosen based on expectations w/o trial>expectancy gap theory is particularly important for service contexts
-more expensive items are to the consumer, more involved will be in spending time searching for information, evaluating the alts, and evaluating the performance of product
-involvement increases when there is perceived risk, either social or physical
weighted ratings are summed for each alternative and compared with one another
· Basic Objective
o Establish a market for product type
o Persuade early adopters to buy
o Provide high quality
o Select a good brand
o Get patent or trademark protection
o Often high to recover development costs
o Sometimes low to build demand rapidly
o Limited number of channels
o Aimed at early adopters
o Messages designed to educate about product type
· Basic Objectives
o Defend brand’s share of market
o Seek growth by luring customers from competitors
o Improve quality
o Add features to distinguish brand from competitors’ brand
o Low, reflecting heavy competition
o Greater number of channels
o More incentives to resellers
o Messages focus on differentiating brand from its competitors’ brands
o Heavy use of incentives such as coupons to induce buyers to switch brands
o Quality is confused
o Encompasses quality and price
o “What the customer gets in exchange for what the customer gives”
o Product in exchange for money
o Primary focus that equally encompasses customer’s viewpoint of price/quality tradeoff
o Provides a valuable service to consumers b/c it gives us a means for associating a particular product w/ a specific level of quality
o The single most important element on the package, serving as a unique identifier
· Viewed as the set of assets (or liabilities) linked to the brand that add (or subtract) value and the differential effect that knowing the brand name has on customer response to the product or service
· Brands represent consumers’ perceptions and feeling about a product
· Measure of BE is the extent to which customers are willing to pay more for the brand
· Brand With Strong Brand Equity
o Very valuable asset
o Alternative to Line Extension
o A current brand name is used to enter a completely different product class
o Successful extensions of existing brand à additional loyalty and associated profits
o Wrong Extension à Damaging associations, perceptions linked to brand name are transferred back from one product to another
o EX: Jello pudding pops, Ivory Shampoo
o Cooperation of all the various functional departments in the organization
o Important way to manage development of new products
- EX: Personal care products bring self-enhancement and security along with tangible
o One person is responsible for overseeing an entire product line w/ all areas of marketing
o Popular in orgs w/ a line of similar products or one dominant product line
o “Category Management”
o Superior to a brand manager system b/c one manager oversees all brands w/n a particular line (avoiding brand competition)
o EX: PepsiCo, Purex, Eastman Kodak, and Levi Strauss
o The Most IMPORTANT decisions in product management
o Popular strategy b/c of the profitability of a successful new product and competitive necessity
o EX: Coca-Cola comes out w/ a vanilla flavored product that garners a small niche, Pepsi must follow
o The degree of excellence or superiority that an organization’s product possesses
o Tangible and intangible aspects of product or service
o Customer is key perciever b/c determines success
o Popular method used in orgs like Xerox, Polaroid, Exxon, IBM, Monsanto, and Motorola
o A cross-functional team responsible for all the tasks involved in the development of a new product
o Once the new product is already launched the team may
------Turn over responsibility for managing the product to a brand manager or product manager------Mange the new product as a separate biz