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MKT 100 Notes for ENTIRE COURSE.docx

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Ryerson University
MKT 100
Theresa Miedema

MKT 100 Vocab List Week 1: Chapter 1:  Marketing  Needs/wants  Target market o Product o Price o Place o Promotion  Product: Goods/services/ideas  Price: Time/money/energy  Place  Promotion: audience, advertising  B2B  B2C  C2C  Production oriented era  Market oriented era  Sales oriented era  Value based oriented era Week 2: Chapter 2:  Planning: o business mission & objectives o situation analysis (SWOT)  Implementation (Market Strategy): o Identify Opportunities  Segmentation  Targeting  Positioning o Implement Marketing Mix  Product  Price  Place  Promotion  Control phase: o Evaluate performance using marketing metrics  Corporate planning  Strategic business planning  Functional planning  Portfolio analysis o Stars, question marks, cash cows, dogs  Growth strategies o Market penetration o Product development o Market development o Diversification  Sustainable competitive advantage o Customer excellence o Operational excellence o Product excellence o Locational excellence  Situational analysis framework o Microenvironment:  Company  Corporate partners  Competition o Macroenvironment: (CDSTEP)  Culture  Demographics  Social  Technological  Economic  Political/legal  Metrics: Understanding & Managing Costs o Variable o Fixed: capital & operating Week 3: Chapter 3: Situation Analysis  SWOT o Controllable  Internal  Strengths, weakness o Uncontrollable  External  Opportunities, threats  Implications o Capitalize/leverage strengths o Address weaknesses o Take advantage of opportunities o Minimize threats  Goal & strategy development o Focus on plan goals, strategy, decision o Develop contingency plans o Watch list o Ignore o  Metrics: Percentage Change o % change = ((new amount – old amount) / old amount) 100% Week 4: Chapter 17: Marketing Ethics & Social Responsibility  Values  Rules  Controls  Corporate social responsibility  Ethics vs Social Responsibility o Both ethical and socially responsible o Ethical firm not involved with the larger community o Questionable firm practices, yet donates a lot to the community o Neither ethical nor socially responsible  Ethical decision making o Identify issues o Gather info, identify stakeholders o Brainstorm and evaluate alternatives o Choose course of action  Utility principle  Categorical imperative principal Week 4: Chapter 4: Market Research  Set of techniques and principles for systematically collecting, recording, analyzing, interpreting data to aid decision-making  Define research problem & objectives  Design research project o Primary, secondary research o Types of research  Exploratory (Qualitative)  Observation, interviews, focus groups, social media  Conclusive research (Quantitative)  Experiments, survey, scanner, panel  Descriptive  Cross-sectional  longitudinal  experimental  Collect data  Analyze data  Present action plan  Make decision  Metrics 3: Market share & market analysis o Unit market share (%) = (unit sales/total market unit sales) x 100 o Revenue market share (%) = (sales revenue/total market revenue) x100 o Four firm concentration ratio = sum (market share of top four competitors) o Herfindahl Index = sum (market share ^2) Week 5: Chapter 5: Understanding Buyer Behaviour CBD Process o Need recognition o Formation search o Evaluation of alternatives o Purchase decision o Post-purchase behaviour 1. Need recognition o Functional o Psychological 2. Information search o Internal search o External search o Factors affecting search  Cost vs benefit  Locus of control  Internal/external  Actual or perceived risk (higher the risk, more likely the consumer is to engage in an extended search)  Performance  Financial  Social  Physiological (safety)  Psychological (image)  Type of product/service o Speciality goods/services o Convenience 3. Alternative Evaluation o Consumer decision rules  Compensatory  Non-compensatory  Decision heuristics  Price, brand, product presentation 4. Purchase and consumption 5. Postpurchase outcomes o Customer satisfaction o Postpurchase dissonance o Customer loyalty Factors Influencing Consumer Buying Decisions  Psychological factors o Motives o Attitude o Perception o Learning o Lifestyle  Social factors o Family o Reference groups o culture  Situational factors o Purchase situation o Shopping situation o Temporal state Maslow’s Hierarchy of Needs  Physiological  Safety  Love  Esteem  Self-actualization Week 5: Chapter 6: Business to Business Marketing  Differences b/w business and consumer markets o Market characteristics  Fewer customers, geographically concentrated, larger orders  Demand is inelastic, fluctuates more, and frequently o Product  Purchased based on specs  Raw and semifinished goods are purchased  Heavy emphasis on delivery time, technical assistance, after-sale service, financing assistance o Buying  Decision is more complex  Negotiated pricing, complex financial agreements  Involves qualified professional buyers, more formalized buying process  Specific buying procedures  Buyers and sellers work close for long term relationship o Marketing mix  Direct selling is the primary form of selling and physical distribution  Advertising is technical, promotions emphasize personal selling  Price is inelastic, negotiated  Business Buying Process o Need or problem recognized o Product specified o Search process o Proposal analysis, supplier selection o Order specification o Performance assessment Factors affecting the buying process  The Buying Centre o Initiator (group leader) o Influencer (finance dept) o Decider (vp marketing) o Buyer (purchasing agent) o User (mktg managers) o Gatekeeper (secretary) Organizational Culture  Buying culture o Autocratic (one person decides) o Democratic (majority rules) o Consultative (one person decides with others input) o Consensus (collective agreement)  Buying Situations o New buys o Modified rebuys o Straight rebuys METRICS 4: Contributing Margin Contribution margin = sales or revenue – COGS MIDTERM Chapter 7: Segmentation, Targeting, & Positioning  Segmentation – identify and profile distinct groups of buyers who differ in their needs and preferences  Targeting – select one or more market segments to enter  Positioning – establish and communicate the distinctive benefits of the marketing offering by getting customers to form a mental picture THESE WORDS ARE NOT INTERCHANGEABLE  Market segment – a group of customers who share a similar set of needs and wants within an overall market  Market segmentation – the process of identifying and categorizing the overall market into groups of customers with similar needs and wants  Target market – the qualified available market segment which the company decides to pursue o Market – a group of buyers o Book readers o Market segment – subgroup of buyers within the market with a common need o Female baby boomers who are empty nesters and are retired and enjoy reading romance novels Segmentation  Market segments are identified not created (common need) o Geographic, demographic, psychographic, behavioural characteristics  Market attractiveness o Identifiable  Who is in their market  Are the segments unique o Reachable  Know the product exists  Understand what it can do  Recognize how to buy o Responsive  React positively to firm’s offering  Move toward the firm’s products/services  Accept the firm’s value proposition o Substantial and profitable  Size matters  Too small segment is insignificant, not profitable  Growth potential equally important  Preference patterns o Homogeneous preferences (one group) o Diffused preferences (spread out) o Clustered preferences (several groups) Business segmentation  Demographic  Operating variable  Purchasing approaches  Situational factors  Personal characteristics Segmentation process  Needs based segmentation  Segment identification  Segment attractiveness  Segment profitability  Segment positioning  Segment acid test Positioning  Act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market  Steps o Determine customer’s perceptions and evaluations in relation to competitors o Identify competitors positions o Determine consumer preferences o Select position o Monitor positioning strategy  Positioning map o Target market characteristics o Customer need o Customer benefit o Point of differentiation Differentiation  Product, personnel, image, channel, price  Developing a positioning statement o Target market characteristics o Customer need o Customer benefit o Point of differentiation Metric 5: Markup & Margin  Markup – always a % based on cost of prod/service o $ amount you want to add to the cost to determine selling price  Margin – a % based on price of prod/service o $ amount of the selling price that is available to cover fixed costs  Mark-up dollars = margin dollars  Mark-up percent NOT EQUAL margin percent  Price = cost + (cost x markup &) or price = cost + (price x margin %)  Markup (%) = markup $ / cost x 100  Margin (%) = margin $ / price x 100 Week 8: STP continued Metrics 7 – Break Even  Revenues  Fixed costs  Variable costs  Break even point = fixed costs/contribution margin per unit  Target break even Use break even to assess segment potential  Estimate segment size  Ecospout case o Total fixed costs= $71000 o Total var costs/unit= $.06 o Ave retail selling price= $.8 o Retail margin 50% o Target prof 20%  Retail price = $1.8  Retail margin = price x margin %  $1.80 /2 = $0.9  Retail costs = price – margin $  1.80 0.9 = 0.9  Whole sale rev/unit = o Break even volume = fix costs / cont margin per unit o Target break even volume = (fix cost + target profit) / cont margin per unit o Target profit dollars = fix cost x target prof % STP Continued Market Segments are  IDENTIFIED, not created  Starts with a COMMON NEED  In identifying market segments, begin w/ understanding common need, then layer in geographic, demographic, psychographic & behavioural characteristics Chapter 8: Product Management Product Development  Innovation and value: why do firms create new products o changing customer needs o market saturation  the longer a product exists in a market place, value will decline  keep creating new products so customers won’t become bored o managing risk through diversity  focus on several products instead of just one  better able to withstand external shocks (changes in customer preferences or intensive competitive activity) o fashion cycles  most sales come from new products  disruptive products require higher lvl of learning from consumers, offer much more benefits than predecessor products Product Adoption Cycle Adoption  firms can predict which types of customers will buy their new product/service immediately after its introduction  can develop effective promotion, pricing, to push acceptance  different products are adopted at different rates  factors affecting product diffusion o relative advantage  when a product is perceived to be better than substitutes o compatibility  consistent w/ people’s past behaviour, needs, values o observability  easily recognized logo  common product ppl see being used o complexity and trialability  less complex, easy to try How firms develop new products Marketing, design, engineering, manufacturing, procurement, finance  Idea generation o Can use its own R&D efforts, collaborate w/ other firms, license technology, brainstorm, research competitors (reverse engineering), conduct consumer research  Concept testing o Brief written descriptions of the product o Its technology, working principles, and forms, what customer needs it would satisfy o Concept statement is presented to potential buyers that represent the target market to obtain their reactions  Product development o Balancing various engineering, manufacturing, marketing, economic considerations to deveop a product’s form and features o Prototype o Alpha testing (test on employees) o Beta testing (potential customers)  Market testing o Premarket test – exposed to marketing imx, given a sample to try, would you use this product again o Test marketing – restrict to limited geographical area prior to national launch  Product launch o Promotion, place, price, timing  Evaluation of results o Success of a failure, what additional resources/changes to marketing mix are needed o Satisfaction of technical requirements (performance) o Customer acceptance o Satisfy firm’s financial requirements Stages in the product life cycle Life Cycle Variation Product Classifications Tangibility  Non-durable o Consumed quickly & purchased frequently  Durable o Normally survive many uses Intangible  Services o Intangible, inseparable, variable, perishable Product Classifications – Use - Consumer:  Convenience goods o Purchase frequently, immediately, w/ min effort  Shopping goods o Goods compared on suitability, quality, price, style  Specialty goods o Have unique characteristics o brand identification o do not require comparison  Unsought goods o Normally do not think of buying (cemetery plot) Product Classifications – Use - Industrial  Materials & parts o Goods that enter manufacturer’s product completely o Can be raw materials or manufactured parts  Capital items o Long-lasting goods that facilitate developing/managing finished product  Maintenance, repair & operating supplies o Short term goods/services that facilitate developing/managing finished products Product-Line Decisions  line stretching – company lengthens its product line beyond its current range of products  line filling – company lengthens its product line within its present range of products  line modernization, featuring, pruning- company focuses on existing products by improving, featuring, eliminating certain product lines Services High experience & credence qualities  consumer generally o rely on word of mouth o rely on price, personnel, physical cues when judging quality o highly loyal to service providers who satisfy them Dinstinctive Characteristics of Services  Intangibility o Place, people, equipment, communication material, symbols, price  Inseparability  Variability  Perishability How to Reduce Variability  Invest in good hiring and training procedures  Standardize the service-performance process  Monitor customer satisfaction How to Reduce Perishability  Demand Side o Differential pricing o Nonpeak demand o Complementary services o Reservation systems  Supply side o Part time employees o Peak-time efficiency o Increased consumer participation/ Metric 6: Pricing Wholesale to Retail   Contribution marg
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