MKTReview1.doc

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Department
Marketing
Course
MKT 201
Professor
Smita Kulkarni
Semester
Fall

Description
MARKETING IMPORTANT CONCEPTS – FIRST EXAM Chapters 1, 2, 4, 9 and 7 It is important to read the chapters from the textbook. Chapter 1 –Overview of Marketing Understanding what is marketing and its definition Marketing is the activity, set of institutions and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large Core Aspects of Marketing • Helps create value • Is about satisfying customer needs and wants  Finding the buyers who are most likely to be interested in their offers • Entails an exchange  Trade of things of value between the buyer and the seller so that each is better off as a result  Sellers provide products and services, then communicate and facilitate the delivery of their offerings to consumers  Buyers complete the exchange by giving the money and info to the seller • Requires product, price, place and promotion decisions • Can be performed by both individuals and organizations  B2C (business-to-consumer)  B2B (business-to-business)  C2C (consumer-to-consumer) • Impacts various stakeholders  Impact partners in supply chain, employees, and society at large  Develop marketing programs to attract the “best and brightest” employees – “employment marketing”  Undertake marketing research to understand what potential employees seek & think about the firm  Develop a value proposition & an employment brand image, communicating and fulfilling promise Marketing Mix – 4Ps 4 Ps are the controllable set of activities that the firm uses to respond to the wants of its target markets • Product – Creating  Create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customers’ needs • Price – Capturing  Price is everything the buyer gives up (time, money, energy) in exchange for the product  Marketers must determine the price of a product carefully on the basis of the potential buyer’s belief about its value  The key to determining prices is to figure out how much customers are willing to pay so that they are satisfied with the purchase and the seller achieves a reasonable profit • Place – Delivering  Represents all the activities necessary to get the product to the right customer when that customer wants it  Supply chain management is the set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, stores, and other firms involved in the transaction into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, while minimizing system-wide costs and satisfying the service levels required by the customers • Promotion – Communicating  Communication by a marketer that informs, persuades, and reminds potential buyers about a product to influence their opinions and elicit a response  Enhances a product’s value Production-Oriented Era, Sales Oriented Era, Marketing Oriented Era and Value Based Marketing Era • Production-Oriented  A good product would sell itself  Manufacturers were concerned with product innovation, not with satisfying the needs of individual consumers  Retail stores typically were considered places to hold the merchandise until a consumer wanted it • Sales Oriented Era  Depended on heavy doses of personal selling and advertising • Marketing Oriented Era  Manufacturers and retailers began to focus in what consumers wanted and needed • Value Based Marketing Era  Give customers greater value than competitors do  Value – the relationship of benefits to costs  Value Cocreation – Customers act as collaborators to create product/ service What is Value Based Marketing? (Have an example to support) – What do value based companies do? • Understand what customers view as the key benefits of a given product/ service & how to improve • Isn’t just about creating strong products and services; it involves deciding which products/services to provide for whom • Share info about customers and competitors, and integrate it across the firm’s various departments • Constantly measure the benefits that customers perceive against the cost of their offerings • Build relationships with Customers  Relational Orientation NOT Transactional Orientation  Use CRM (Customer Relationship Management) – a business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firms’ most valued customers Why is Marketing important? Marketing • Expands firms’ global presence • Is pervasive across the supply chain • Enriches society • Can be entrepreneurial Chapter 2 –Developing Marketing Strategies and a Marketing Plan What is a marketing strategy? A marketing strategy identifies • A firm’s target market(s) • A related marketing mix (4 Ps) • The bases on which the firm plans to build a sustainable competitive advantage What is Sustainable Competitive Advantage? • Sustainable Competitive Advantage is an advantage over the competition that is not easily copied and thus can be maintained over a long period of time • The firm builds a wall around its position in the market. When the wall is high, it will be hard for competitors outside the wall to enter the market and compete for the firm’s target customers  Sustain advantage, minimize competitive pressure & boost profits for a longer time • Key to long-term financial performance How to deliver customer value and develop sustainable competitive advantage? • Locational Excellence  Having a good physical location and Internet presence • Operational Excellence  Achieved through efficient operations and excellent supply chain and human resource management  Efficient Operations  Excellent Supply Chain Management and Strong Supplies Relations – may gain exclusive rights to (1) sell merchandise in particular region, (2) obtain special terms of purchase that are not available to competitors or (3) receive popular merchandise that may be in short supply  Human Resource Management • Customer Excellence  Focuses on retaining loyal customers and excellent customer service  Retaining Loyal Customers – Develop a clear and precise positioning strategy, create an emotional attachment through loyalty program • Product Excellence  Having products with high perceived value and effective branding and positioning Steps in the marketing plan (Refer Exhibit 2.2) (You should be able to briefly describe the five different steps in the marketing plan) • Step 1: Business mission & objectives  Mission Statement – A broad description of a firm’s objectives and the scope of activities it plans to undertake, attempts to answer two main questions: What type of business? And What need to be done to accomplish our goals and objectives?  Must be answered at the highest corporate levels before marketing executives can get involved • Step 2: Situation Analysis (SWOT)  Using a SWOT analysis that assesses both the internal environment with regards to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats  Assessing the opportunities and uncertainties of the marketplace due to changes in Cultural, Demographic, Social, Technological, Economic and Political forces (CDSTEP) • Step 3: Identify Opportunities  Divides the marketplace into subgroups or segments, determines which of those segments it should pursue or target, and decides how it should position its products and services to best meet the needs of those chosen targets  Segmentation o Market Segment – Consumers who respond similarly to a firm’s marketing efforts o Market Segmentation – Process of dividing the market into groups of customers with different needs, wants, or characteristics who might appreciate products or services geared especially for them  Targeting – Evaluates each segment’s attractiveness and decides which to pursue  Positioning o Determines how it wants to be positioned within those segments o Involves the process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product represents compared to competitors’ • Step 4: Implement marketing mix  Product and Value Creation – Develop products and services that customers perceive as valuable enough to buy  Price and Value Capture – Good value for product  Place and Value Delivery – Make product/service readily accessible when and where customers want it  Promotion and Value Communication – Through a variety of media including tv, radio, magazines and Internet • Step 5: Evaluate performance using marketing metrics  Metric – measuring system that quantifies a trend, dynamic, or characteristics. Used to explain why things happen and to project the future  Performance evaluations are used to pinpoint problem areas  Portfolio Analysis – firm’s various products and businesses – used to allocate resources according to the predicted most profitable – typically performed at the strategic business unit (SBU) or product line level of the firm What are Planning, Implementation and Control Phase? • Planning phase: Step 1, 2 • Implementation phase: Step 3, 4 • Control phase: Step 5 Growth Strategies – Market / Products and
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