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Midterm

Midterm 1 Notes (Ch 1,2,4,11,5).docx

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Department
Marketing
Course
MKT 702
Professor
Rob Wilson
Semester
Fall

Description
Defining Marketing 07/10/2013 14:40:00 Why is Marketing Important?  Acceptance of innovative products; easily enrich/facilitate lives  Inspires innovation in marketing  Marketers influence wants What is the Scope of Marketing?  What: Identifying and meeting needs profitably o “The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” o Goods, services, events, experiences, persons, places, properties, organizations, information, ideas  Who: Marketers and prospects o Eight demand states  Negative: Dislikes the product; avoids paying for it  Nonexistent: Unaware or uninterested  Latent: Strong, unmet need  Declining  Irregular  Full: All products being bought  Overfull: Demand exceeds supply  Unwholesome o Key customer markets: Consumer, business, global, non-profit and governmental What are the Core Marketing Concepts?  Needs, Wants, Demands o Needs: Basic human requirements; become wants (shaped by society) when directed to specific objects that meet need  Stated needs  Real needs  Unstated needs  Delight needs  Secret needs o Demands: Wants for specific product backed by ability to pay  Target Markets, Positioning, Segmentation  Offerings and Brands o Value proposition: Set of benefits that satisfy those needs; made physical by offering of goods or services o Brand is offering from known source  Value and Satisfaction o Customer value triad – quality, service, price  Marketing Channels o Communication, distribution, service  Supply Chain  Competition  Marketing Environment How Has Marketing Management Changed in Recent Years?  MARKETING MANAGEMENT: Art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.”  Major societal forces and changes in company capabilities in the last 10 years have changed the marketing landscape What Are the Tasks Necessary For Successful Marketing Management?  Developing marketing strategies and plans  Capturing marketing insights  Connecting with customers  Building strong brands  Shaping the market offerings  Delivering value  Communicating value  Creating successful long-term growth Chapter 2 07/10/2013 14:40:00 Marketing and Customer Value  Deliver customer value at a profit; satisfy needs and wants  Value-Delivery Process o Choosing the value: Marketing research o Providing the value: Features, prices, distributing o Communicating the value: Utilizing sales force, promotion, advertising, etc.  Value Chain - Tool for identifying ways to create customer value o Primary activities:  Inbound logistics (Bringing materials into business)  Operations (Converting materials into final products)  Outbound logistics (Shipping out final products)  Marketing/Sales o Support activities  Procurement  Technology development  Human resource management  Firm infrastructure o Examine costs and performance in each activity; identify areas of improvement o Core business processes:  Market-sensing – Gather market intelligence, act on information  New offering-realization – Researching, developing, launching new offerings efficiently and within budget  Customer-acquisition – Defining target markets and prospecting for new customers  Customer relationship management – Building deeper understanding with, relationships with, and offerings to traditional customers  Fulfilment management – Receiving and approving orders, shipping goods on time, collecting payment Core competencies  Source of competitive advantage; makes significant contribution to perceived customer benefits  Applications in wide variety of markets  Difficult for competitors to imitate  Distinctive capabilities – describe excellence in broader business processes  Competitive advantage depends on how well company has fitted core competencies and distinctive capabilities into interlocking “activity systems”  Business realignment can maximize core competencies o Redefining business concept o Reshaping business scope o Reposition brand identity Holistic Marketing Orientation & Customer Value  Holistic marketing – integrating the value exploration, value creation, and value-delivery activities with the purpose of building long-term, mutually satisfying relationships and co-prosperity among key stakeholders  Managing superior value chain o Value exploration o Value creation o Value delivery Central Role of Strategic Planning  Successful marketing requires customer value orientation  Calls for action in three areas o Managing business as an investment portfolio o Considering market’s growth rate, position, and fit in market when assessing strengths o Establishing strategy  Marketing plan: Central instrument for directing and coordinating marketing efforts o Strategic: Lays out target markets and value proposition based on analysis of market opportunities o Tactical: Specifies marketing tactics Corporate Division Strategic Planning  Defining the corporate mission o What is our business? Who is the customer? What is of value to the customer? What will our business be? What should our business be? o Mission statements  Focus on limited number of goals  Stress company’s major policies and values  Define major competitive spheres within which the company will operate  Take a long-term view  Short, memorable, meaningful  Establishing strategic business units o Target market definition: Focus on selling a product/service to current market o Strategic marketing definition: Focuses on potential market o Business defined in three dimensions: Customer groups, customer needs, technology o Three characteristics of SBU:  Single business/collection of related businesses that can be planned separately from the rest of the company  Has its own set of competitors  Has manager who is responsible for strategic planning and profit performance; controls most factors affecting profit o Develop separate strategies and assigning funding  Assigning resources to each SBU o Once defined, must allocate corporate resources to each o Value calculations assess potential of business based on growth opportunities from global expansion, repositioning/retargeting, strategic outsourcing  Assessing opportunities o Planning new business, downsizing, or terminating older businesses o Fill strategic planning gap (between desired sales & current portfolio)  Intensive growth  Product-market expansion grid – considers opportunities in terms of current/new products and markets  Market-penetration strategy  Market-development strategy  Product-development strategy  Diversification strategy  Integrative opportunities  Sales/profits can be increased through backward, forward, horizontal integration within industry  Diversification opportunities  Industry is highly attractive; company has right mix of business strengths to be successful  Done within context of organization  Changing a corporate culture is key to successfully implementing a new strategy Business Unit Strategic Planning Steps  Business mission – each unit needs to define specific mission within broader company mission  SWOT analysis o External: Monitor macro/micro environment; set up marketing intelligence system to track developments  Marketing opportunity: Area of buyer need/interest with high profitability that company can satisfy  Supply something in short supply  Supply existing product in innovative way (Problem-detection, ideal, consumption-chain)  New product or service  Market Opportunity Analysis  Can the benefits involved be articulated convincingly?  Can the target market be located and reached cost effectively?  Does company possess/have assess to critical capabilities and resources needed to deliver benefits?  Can company out-deliver competitors?  Will financial rate of return meet/exceed investment threshold? o Internal Analysis o Goal formulation  Develop specific goals for planning period  Business units set objectives; manages by objectives (MBO)  Arranged hierarchically – most to least important  Should be stated quantitatively whenever possible  Should be realistic  Must be consistent o Strategy formulation  Marketing strategy, technology strategy, sourcing strategy  Porter’s Generic Strategies  Firm that leads in strategic group will make most profits  Overall-cost leadership: Good at engineering, purchasing, manufacturing, physical distribution; problem: firms will compete with still-lower costs  Differentiation: Concentrate on superior performance in customer-benefit area  Focus: Target 1+ narrow market segments; pursues cost leadership/differentiation  Strategic Alliances (Usually marketing)  Product/service alliance  Promotional alliance  Logistical alliance  Pricing collaborations o Program formulation and implementation o Feedback and control Product Planning: The Nature and Contents of a Marketing Plan  Marketing plan – Written document that summarizes what marketer has learned about marketplace; indicates how firm plans to reach marketing objectives; contains tactical guidelines and financial allocations  Most important outputs of marketing process; provides direction and focus  Documents how organization will achieve strategic objectives thru specific marketing strategies o Executive summary and ToC o Situation analysis o Marketing strategy o Financial projections o Implementation controls 10/7/2013 2:40:00 PM  Marketing insights – Diagnostic information about how and why we observe certain effects in the marketplace and what that means to marketers  good = successful marketing programs; crucial for marketing success  Marketing research – Systematic design, collection, analysis, reporting of data, and findings relevant to specific marketing situation facing the company  Marketing research firms fall into 3 categories: o Syndicated-service research firms o Custom marketing research firms o Specialty-line marketing research firms Marketing Research Process  Define the Problem, Decision Alternatives, Research Objectives o Managers must be careful not to define problem too broadly or narrowly for researcher o Exploratory, descriptive, causal research  Develop the Research Plan o Must make decisions about data sources, research approaches, research instruments, sampling plan, contact method o Data sources  Gather secondary and/or primary data  Research approaches  Observational research  Focus-group research  Survey research  Behavioural research  Experimental research  Research instruments  Questionnaires  Qualitative measures  Word associations  Projective techniques  Visualization  Brand personification  Laddering  Technological Devices  Sampling plan  Sampling unit  Sample size  Sampling procedure  Contact methods  Mail  Telephone  Personal  Online  Collect the Information  Analyse the information  Present the findings  Make the decision Seven Characteristics of Good Marketing Research  Scientific method  Research creativity  Multiple methods  Interdependence of models and data  Value and cost of information  Healthy scepticism  Ethical marketing Competitive Dynamics 07/10/2013 14:40:00 Competitive Strategies for Market Leaders  Market leaders – 40%  Market challenger – 30%  Market follower – 20%  Market nichers – 10%  To stay number one, firm must find ways to expand total market demand, protect share through strategies, and increase market share Expand Total Market Demand  Market leader should look for new customers/increase usage from existing customers  Every product class has potential to attract unaware/resistant customers New Customers  Market-penetration strategy (Customers who could but do not)  New-market segment strategy (Customers who have never)  Geographical-expansion strategy (Not available to customers) More Usage  Marketers can try to increase amount, level, frequency of consumption  Increasing frequency of consumption: o Additional opportunities to use the brand  When consumers’ perceptions of usage different from reality (ie. Fail to replace short-lived product) o New ways to use the brand  Identify new and different applications Protecting Market Share  While trying to expand market size, dominant firm must actively defend current business  Continuous innovation through leading industry Proactive Marketing  Responsive marketing – find stated need, fill  Anticipative marketing – predicting what customers will need  Creative marketing – discovers solutions cust
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