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COMM 131
Ethan Pancer

Chapter 1 (page 5- 10) -successful companies customer focused - Marketing is managing profitable customer relationships - new : personalized marketing - satisfying customer need -marketing: the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return Value for customers from customers Understand Design a Construct an Build Capture value the customer- integrated profitable from marketplace driven market marketing realationships customers to and customer strategy program that and create create profits _needs and ________ _delivers _custome _and customer wants superior value delight equity Core customer and marketplace concepts (1) Needs, wants, and demands - Needs: states of felt deprivation (physical, social, and individual) - Wants: the form human needs take as shaped by culture and individual personality - Demand: human wants that are backed by buying power (2) Market offerings - Market offerings: some combination of products, services, information, or experiences offered to a market to satisfy a need or want - Include entities: persons, places, organizations, information, and ideas - Marketing myopia: the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products - Brand experience (3) Customer Value and Satisfaction - Set expectations to high = disappointment, to low = does not attract (4) Exchanges and relationships - Exchange: the act of obtaining a desired object from someone by offering something in return - Marketing is exchanging relationships (5) Markets - Market: the set of all actual and potential buyers of a product or a service - Activities: consumer research, product development, communication, distribution, pricing, and service - Environmental forces: demographic, economic, physical, technological, political/legal, and social/cultural) Modern Marketing System Company Suppliers Marketing Consumers Intermediaries Competitors Major environmental forces Chapter 1 (pages 10-25)  Marketing management: the art and science of choosing target markets and building profitable relationships with them o Customer management and demand management  Production concept: the idea that consumers will favour products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency  Product concept: the idea that consumers will favour products that offer the most quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvements  Selling concept: the idea that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort o Inside-out  Marketing concept: the marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do o Outside-in Starting point Focus Means Ends Existing Selling and Profits Factory Products promoting through sales volume The Selling concept Existing Selling and Profits Factory Products promoting through The Marketing concept sales volume  Societal marketing concept: the idea that a company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests  4 Ps: product, place, price, promotion Society (human welfare) Societal marketing concept Co(wantrs Company satisfaction) (profits)  Customer relationship management: the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction  Customer-perceived value: the customer’s evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers  Customer satisfaction: the extent to which a product’s perceived performance matches a buyer’s expectations  Customer-managed relationships: marketing relationships in which customers, empowered by today’s new digital technologies, interact with companies and with each other to shape their relationships with brands  Consumer-generate marketing: brand exchanges created by consumers themselves- both invited and uninvited – by which consumers are playing an increasing role in shaping their own brand experienced and those of other consumers  Partner relationship management: working closely with partners in other company departments and outside the company to jointly bring greater value to customers  Customer lifetime value: the value of the entire stream of purchases that the customers would make over a lifetime of patronage  Share of customer: the portion of the customer’s purchasing that a company gets in its product categories  Customer equity: the total combine customer lifetime values of all the company’s customers Potential High Butterflies True friends profitability profitability Good fit between Good fit between company’s company’s offerings and offerings and customer’s custom’s needs; high needs; highest profit potential profit potential Low Strangers Barnacles profitability Little fit between Limited fit between company’s offerings and company’s offerings and customer’s needs; lowest customer’s needs; low profit profit potential potential Short-term customers Long-term customers Projected loyalty Capture value Create value for customer and build customer from customers Chapter 1 (page 31-33) in return relationships Build profitable Capture value Understand the Design a customer- Construct an relationships to create profits marketplace and driven marketing marketing program and create and customer customer needs strategy that delivers custome delight equity and wants superior value Customer create management: build satisfied loyal research to serve: market Product and strong relationships customers marketplacend segmentation and service design: with chosed targeting bupradstrong customers relationship Manage Decide on a manage ment Capture marketing value Prreal valueate build strong customer information and proposition: relationships with lifetime value customer data differentiation mpartners and positioning Distribution: manage Increase share demand and of market and supply chains share of customer Promotion: communicate the value proposition Harness Marketing Manage global Ensure ethical and Technology markets social responsibility Chapter 2 (43-68)  Strategic planning: the process of developing and maintaining a strategic fit between the organization’s goals and capabilities Corporate levels Business unit ,product and market level Planning Defining the company Setting company Designing the marketing and mission objectives and business other functional goals portfolio strategies  Mission Statement: a statement of the organization’s purpose- what it wants to accomplish in the larger environment  Business portfolio: the collection of businesses and products that make up the company  Portfolio analysis: the process by which management evaluates the products and businesses that make up the company  Growth-share matrix: a portfolio-planning method that evaluates a company’s strategic business units (SBUs) in terms of its market growth rate and relative market share. SBUs are classified as stars, cash cows, question marks, or dogs Market High Star Question mark growth rate Low Cash Cow Dog High Low Relative market share  Product/market expansion grid: a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, or diversification Existing Market penetration Product development Markets New Markets Market development Diversification Existing products New products  Market penetration: a strategy for company growth by increasing sales of current products to current market segments without changing the product  Market development: a strategy for company growth identifying and developing new market segments for current company products  Product development: a strategy for company growth by offering modified or new products to current market segments  Diversification: a strategy for company growth through starting up or acquiring businesses outside the company’s current products and markets  Downsizing: reducing the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy  Value chain: the series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products  Value delivery network: the network made up of the company, suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system  Marketing strategy: the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships  Market segmentation: dividing a market into distinct groups of buyers who have difference needs, characteristics, or behaviours, and who might require separate products or marketing programs  Market segment: a group of consumers who respond in a similar way to a given set of marketing efforts  Market targeting: the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter  Positioning: arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers  Differentiation: actually differentiating the market offering to create superior customer value  Marketing mix: the set of controllable, tactical, marketing tools – product, price, place, and promotion – that the firm blends to produce the response it wants in the target market Product: Price: Variety LIst price Quality Discounts Design Allowance Features Pament Period Brand name Credit terms Packaging Service Target Customers Intended positioning Place: Coverage Promotion: Assortments Asvertising Locations Personal selling Inventory Sales Promotion Transpotation Public Relations Logistics  Four Cs: customer solution, customer cost, convenience, communication  SWOT analysis: an overall evaluation of the company’s strengths (S), weaknesses (W), opportunities (O), and threats (T).  Marketing implementations: the process that turns marketing strategies and plans into marketing actions to accomplish strategic marketing objectives  Marketing control: the process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved  Return on marketing investment (or marketing ROI): the net return from a marketing investment divided by the costs of the marketing investment Marketing Investment Marketing returns Cost of marketing Improved customer value and investment satisfaction Increased custome increased customer Return on marketing investment attraction retention Increased Customer lifetime values and customer equity Return on marketing investment Chapter 7 (page 246-258)  Segmentation: dividing a market into distinct groups with distinct needs, characteristics, or behaviours that might require separate marketing strategies or mixes  Targeting: to process of evaluating each market segment’s attractiveness and selecting one or more segments to enter  Differentiation: Actually differentiating the market offering to create superior customer value  Positioning: arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the mind of target customers Differentiation: Segmentation: differentiate the divide total market into market offering smaller to create segments superior Create customer value targetedr customers Targeting: Positioning: select the position the segment or market offering in segments to the minds of the enter target customer  Segmentation areas: geographic, demographic, psychographic, behavioural o Geographic segmentation: dividing market into different geographical units, such as global regions, countries, regions within a country, provinces, cities, or even neighbourhoods o Demographic segmentation: dividing the market into segments based on variables such as age, gender, family size, life cycle, household income, occupation, education, ethnic or cultural group, and generation  Age and life-cycle segmentation: dividing a market into different age and life-cycle groups  Gender segmentation: dividing a market into segments based on gender  Household income (HHI) segmentation: dividing a market indo different income segments o Psychographic Segmentation: dividing a market into different segments based on social class, lifestyle, or personality characteristics o Behavioural segmentation: dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product o Occasion segmentation: dividing the market into segments according the occasions when buyers get the idea to buy, actually make their purchase, or used the purchased item o Benefit segmentation: dividing the market into segments according to different benefits that consumers seek from the product o Intermarket segmentation: forming segments of consumers who have similar needs and buying behaviour even though they are located in different countries  Requirements for effective segmentation o Measureable o Accessible o Substantial o Differentiable o Actionable Benefits Segmentation: A decision-orientated research tool (online)  Prominent Segmentation: geographic, demographic, volume segmentation  Volume segmentation: Dik Twedt – one-half consumers account for 80% of consumption  Not efficient predictors of future buying habits (descriptive and not casual factors)  Benefit segmentation: the belief underlying this segmentation strategy is that benefits which people are seeking in consuming a given product are the basic reason for the existence of true market segments o The worriers o The sociables o Sensory Segment o The Independent Segment  Each segments have different marketing strategies  It is easier to take advantage or market segments that already exist than to attempt to create new ones  No brand can expect to appeal to all consumers  A company’s brands can sometimes cannibalize each other, but need not necessarily do so  New and old products alike should be designed to fit exactly the needs of some segment  Marketers who adopt a benefit segmentation strategy have a distinct competitive edge  An understanding of the benefit segments that exist within a market can be used to advantage when competitors introduce new products  Benefit segmentation have unique to product segments except: o Status Seeker: concerned with prestige o Swinger: tries to be modern and up-to-date o Conservative: prefers to stick to large successful companies o Rational Man: looks for benefits (economy, value, durability) o Inner-Directed Man: concerned with self-concept o Hedonist: concerned with sensory benefits Chapter 7 (page 258 – 276)  Target market: a set of buyers sharing common needs or characteristics that the company decides to serve  Porters 5: threats of new entrance, competition, power of suppliers and consumers, threat of substitution Targeting broadly Targeting narrowly Differentiated Micromarketing Undifferentiated (mass) (segmented) Concentrated (local or marketing marketing (niche) marketing individual marketing)  Undifferentiated (mass) marketing: a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer  Differentiated (segmented) marketing: a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each  Concentrated (niche) marketing: a market-coverage strategy in which a firm goes after a large share of one or a few segments or niches  Micromarketing: the practice of tailing products and marketing programs to the needs and wants of specific individuals and local customer segments – includes local marketing and individual marketing  Local marketing: a small group of people who live in the same city, or neighborhood, or who shop at the same store  Individual marketing (mass customization): tailoring products and marketing programs to the needs and preferences of individual customers  Product position: the way the product is defined by consumer on important attributes- the place the product occupies in consumers’ minds relative to competing products  Competitive advantage: an advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices  Differences to promote: important, distinctive, superior, communicable, pre-emptive, affordable, profitable  Value proposition: the full positioning of a brand – the full mix of benefits upon which it is positioned Price More The same Less More More for More for More for more the same less Benefits The same - - The same for less Less - - Less for much less  Positioning statement: a statement that summarizes company or brand positioning- it takes this form: To (target segment and need) our (brand) is (concept) that (point of difference) Good Positioning Sacrifice (online)  A marketplace of “everybody” is no marketplace at all  Segway failed to exclude thus failed to include Beer Tries to Change Image (online)  Classing up beer  Needs to do this without taking finances away from keeping the attraction of heavy users  Beer is “good” for you  Too late to get rid of manly association? o Abercrombie and Fitch o Blue jeans  Smaller changes added together overtime Chapter 6 (pages 201-219)  Consumer buy behaviour: the buying behaviour 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 Consumer’s perspective Marketer’s perspective Prepurchase how does a consumer How are consumer decide that he or she needs attitudes toward products Issues a product? formed and change? How do situational factors, Purchas Is acquiring that product a such as time pressure or Issues stressful or pleasant store distplays, afftect the experience consumer's purchasing decision? What determines whether a Does the product provide consumer will be satisfied Postpurchase pleasure or perform its with a product and whether intended function? he or she will buy it again? Issues  Why?  Culture: the set of basic values, perceptions, wants and behaviours learned by a member of society from family and other important institutions Cultural •culture Social Personal •Subculture •Reference group -age and life cycle stage Psychological •social class •Family -occupation -Motivation •Roles and status -Economic situation -perception Buyer -lifestyle -beliefs and attitudes -personality and self- concept  Subculture: a group of people with shared value systems based on common life experiences and situations o Canada: regional subcultures, founding nations, ethnic subcultures, and mature consumers  Social class: relatively permanent and ordered division in a society whose members share similar values, interests, and behaviours  Group: two or more people who interact to accomplish individual or mutual goals o Opinion leader: person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others  Online social networks: online social communities- blogs, social networking websites, or even virtual worlds- where people socialize or exchange information and opinions  Lifestyle: a person’s pattern of living as expressed in his or her activities, interests, and opinions  Personality: the unique psychological characteristics that distinguish a person or group  Motive (drive): a need that is sufficiently pressing to direct the person to seek satisfaction of the need Maslow’s hierarchy of needs Self actualization needs Self-development and realization Esteem needs self-esteem, recognition, status Social needs sense of beloning, love Saftey needs Security, protection Psychological needs hunger, thirst  Perception: the process by which people select, organize, and interpret information to form a meaningful picture of the world  Learning: changes in an individual’s behaviour arising from experience  Belief: a descriptive thought that a person holds about something  Attitude: a person’s consistently favourable or unfavourable evaluations, feelings, and tendencies toward an object or idea Need Information Evaluation of Purchase Postpurchase recognition search alternatives decision behaviour Chapter 6 (219-224) Need Information Evaluation of Purchase Postpurchase recognition search alternatives decision behaviour  Need recognition: the buyer recognizes a problem or need o Internal / external  Information search: consumer may or may not search for more information o Personal sources / commercial sources / public sources / experiential sources o Inform the buyer / legitimize / evaluate  Evaluation of Alternatives: where the consumer uses information to arrive at a set of final brand choices  Purchase Decision: to buy the most preferred brand o intention / attitudes of others / unexpected situational factors /  Postpurchase Behaviour: the consumer will be satisfied or dissatisfied and will engage in postpurchase behaviour of interest to the marketer o consumer’s expectation / perceived performance o Cognitive dissonance: buyers discomfort caused by postpurchase conflict  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 a final adoption o Awareness o Interest o Evaluation o Trial o Adoption  Influences on innovation’s rate of adoption o Relative advantage o Compatibility o Complexity o Divisibility o Communicability 34% 2.5% iInovators 13.5% Early 34% Early Late 16% Adopters Majority Majority Laggards X - 2 X – X X+  Business buyer behaviour: refers to the buying behaviour of the organization that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others Chapter 5 (157-191)  Customer insights: fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationship  Marketing information system (MIS): People and 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  See Figure 5.1 page 161  Internal databases: electronic collections of consumer and market information obtained from data sources within the company network  Competitive marketing intelligence: the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment  Marketing research: the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing and organization Devloping the Implementing the problem ande research plan for research plan- Ireporting thend research objectives collection collecting and findings information analyszing the data  Exploratory research: marketing research to gather preliminary information that will help define the problem and suggest hypotheses  Descriptive research: marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product of the demographics and attitudes of consumers  Casual research: marketing research to test hypotheses about cause-and-effect relationships  Secondary data: information that already exists somewhere, having been collected for another purpose  Primary data: information collected for the specific purpose at hand  Commercial online databases: computerized collections of information available from online commercial sources of via internet  Observational research: 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 habitat”  Survey research: gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behaviour  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  Focus group interviewing: personal interviewing that involves inviting six to ten people to gather for a few hours with at trained interviewer to talk about a product, service or organization. The interviewer “focuses” the group discussion on important issues  Online marketing research: collecting primary data online through internet surveys, online focus groups, web-based experiments, or tracking consumers’ online behaviour  Online focus groups: gathering a small group of people online with a trained moderator to chat about a product service, or organization and to gain qualitative insights about consumer attitudes and behaviour  Sample: a segment of the population selected for marketing research to represent the population as a whole  Customer relationship management (CRM): managing detailed information about individual customers and carefully managing customer “touch points” to maximize customer loyalty Chapter 8 (288-293, 306-318)  Product: anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need  Service: an activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything  Selling customer experience  Organization marketing: consists of activities undertaken to create, maintain, or change the attitudes and behaviour of target consumers toward an organization Core Customer Value Actual Product -Brand name -Quality level -Designing -Features Augmented product -Delivery and credit -Product support -Warranty -After-sale service  Consumer product: a product bought by final consumers for personal consumption o Convenience product o Shopping products o Specialty products o Unsought products  Convenience product: a consumer product that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort  Product service attributes o Product quality o Product features o Product style and design o Packaging o Labelling o Product support services  See table 8.1 page 292  Shopping product: a consumer product that the customer, in the process of selection and purchase, usually compares on such bases as suitability, quality, price, and style  Sp
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