MOS 1021 Marketing Notes (All Notes).docx
MOS 1021 Marketing Notes (All Notes).docx

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School
Western University
Department
Management and Organizational Studies
Course
Management and Organizational Studies 1021A/B
Professor
Maria Ferraro
Semester
Fall

Description
Chapter 1: Fundamentals The Essence  the focus is satisfying consumers' needs and encourage loyalty  customer value is the unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-time delivery, and both before and after sale service  target market is the group of existing and potential customers to which a marketer targets its marketing effort  marketing mix is the 4 Ps- product, price, place and promo The Process: 1. Identifying customers’ needs 2. Manage the marketing mix to meet consumer needs 3. Realize profits for the company  marketing is the process of planning goods, services or ideas to meet consumers needs and organizational objectives; includes the 4 Ps and distribution programs designed to make a profit  exchange is the trade of things between buyers and sellers  market has potential consumers with both the willingness and ability to buy. Sometimes the market, target market and consumers are different groups of people and marketers need to decide on a balance. Evolution  1930's production orientation is focusing organizational efforts on the manufacture of goods; industrial revolution; goods tend to sell no matter the quality bc of short supply, consumers needs are not a priority  1930's-1960's sales orientation is focusing organizational efforts on selling as many products as possible; rise of competition; efficiency in production; products in abundance; consumer needs still not a major consideration until 60's when the basic marketing stage evolved  marketing orientation focused on organizational efforts to collect and use info about customers' needs to create customer value  marketing concept is the idea that an organization should strive to satisfy the needs of consumers while also trying to achieve organizational goals; includes sharing info across departments, creating customer value  1990's the last decade, marketing has evolved to focus on long term relationships rather than short term transactions so; offer better service, quality, loyalty and customer retention  internet has facilitated relationship marketing and created a whole new focus on customer relationship management (CRM) which is less expensive, and delivers superior customer value and satisfaction, systematic Progression of Marketing and Evolving Areas  evolving areas include: customer relationship management, experiential marketing and corporate social responsibility  CRM focuses on a firms most valuable customers using a number of ways to encourage loyalty and build strong relationships , identifying elements that lead to customer satisfaction  EX of CRM. A phone call to raise awareness of a new product, loyalty cards, incentives  CRM can track a persons life and needs at each stage, ex new mother: pre-natal vit, diapers, school supplies etc.  Experimental marketing creates opportunities for consumers to directly interact with brands, generates word of mouth awareness, and free publicity ex. Absolute Vodka  Corporate Social Responsibility is when organizations voluntarily consider the well-being of society by taking responsibility of how their business impacts consumers, suppliers, employees, shareholders, communities etc.  Societal marketing concept focuses on the consumer and the well-being of society ex. Habitat for Humanity  CMA is the professional body for the marketing industry that responds to legislative issues and sets guidelines on responsible business practices Chapter 2: Environment 1. Demographic forces 2. Socio-cultural forces 3. Economic forces 4. Technological forces 5. Competitive forces 6. Regulatory forces  the process of continually acquiring info on events occurring outside the organization to identify trends, opportunities, and threats to your business  demographics (forces) is the statistical data on a population according to characteristics such as age, gender, ethnicity, income and occupation  currently there is an aging population where the people over 50 own 75% of the net worth and marketers know that the elderly populations in Canada are likely to spend their resources on travel and health care  baby boomers are the generation of people born between 1949 and 1964; interested in aging, health, self-image, and retirement  generation X- people born between 1965 and 1976; not as brand loyal, self-reliant, entrepreneurial and better educated, less prone to materialism, and are a key influence in the market  generation Y- people born between 1975 and 1995; children of the boomers, aka echo boom; like music, video games, sports and technology; will be influential  in Canada there is a mix of ethnicities, non-traditional families and opportunities to expand into foreign markets  socio-cultural forces are cultural values, ideas and attitudes as well as society's morals and beliefs, tend to develop gradually, and identifying these trends you must have good intuition  in Canada there is an increase in awareness in health in fitness, environmental issues, changing gender roles  economic forces are the collective income, expenditure and resources that affect the cost of running a business or a household; affects ability to purchase, employment by looking at inflation, recession, etc.  Gross income is total amount made by one person, household or family including taxes  Disposable income is after-tax income used to purchase clothing, rent and transport or savings *if taxes rise at a faster rate than income, consumers have less disposable income  Discretionary income is the after tax income left over, for a vacation or other luxuries  technological forces are inventions from applied science or engineering research, waves of technology  ensures that products do not become obsolete or replaced ex.OnStar and GM  competitive forces refer to alternative products that can satisfy a specific market's needs  direct competition means similar products sold in the same category  indirect competition means products competing for the same buying dollar in a slightly different but related category ex. Pizza  Perfect Competition means many firms, identical products ex. Apple farmer  Monopolistic Competition means many firms, similar products, most common ex. Jeans  Oligopoly means few firms ex. Airlines  Monopoly means one firm, carefully monitored, not illegal ex. Cable provider  regulations are restrictions places on marketing practices by government and industry associations  Competition Bureau is responsible for the administration and enforcement of Competition Act, Consumer Packaging and Labelling Act and the Precious Metals Marking Act; role is to promote and maintain fair competition so that Canadians can benefit from lower prices, product choice and quality service Chapter 3: Consumer Behaviour Actions a person takes when you purchase and use the products or services: 1. PERCEIVE A NEED: problem recognition is the initial step in the purchase decision, occurs when a person realizes that the difference between what he or she has and what they would like to have is big enough to actually do something about it 2. SEEK VALUE: customers begin to search for information about the product or service and scan their memory for pervious brand experiences; use external search, personal sources ex. family and public sources ex. Internet 3. ASSES VALUE: the info stage provides brand names that might meet the criteria such as attributes like sounds quality in an MP3 or subjective ones like prestige; these criteria establish a evoked set of possibilities 4. BUY VALUE: three choices include brand? Who to buy from? When to buy? ; consider return policies, rebates, past experiences and selling location 4. VALUE IN USE: compare your expectations and decide if you are satisfied; the feeling of post-purchase psychological tension or anxiety is called cognitive dissonance – to alleviate it, consumers often attempt to applaud themselves for making the right choice 5. INVOLVEMENT and PROBLEM SOLVING: includes the personal, social and economic significance of a purchase to the consumer, usually 1. for expensive purchases, 2. with consequences and 3. reflect personal image Extended problem solving (several brands and attributes with psychological and socio-cultural influences) 1. Purchase Task: the reason for the decision 2. Social Surroundings ex. Other people present 3. Physical Surroundings ex. Decor, music 4. Temporal Effects ex. Time of day, time available 5. Antecedent states ex. Mood, cash on hand Psychological Influences  motivation is the energizing force that stimulates behaviour to satisfy a need; needs are boundless (5 classes include: physiological, safety, social, personal, self-actualization)  personality is a person's consistent behaviours or responses to recurring situations; compliant people prefer known brand names and use more mouthwash and soap while aggressive types use razors and buy YSL  perception is the process by which someone selects, organizes and interprets info to create a meaningful picture of the world  selective perception is the process which filters the info so that only some it is understood or remembered or even available to the conscious mind  selective exposure occurs when people pay attention to messages that are consistent with their attitudes and beliefs and ignore messages that are inconsistent; often occurs in post-purchase stage when consumers read ads for their product  selective comprehension involves interpreting info so that it is consistent with your attitudes and beliefs ex. Snow Pup was perceived as a toy  selective retention means that consumers do not remember all the info they read/see/hear; affects internal and external info search stage; brochures work to fix this issue  perceived risk is the anxiety felt when a consumer cannot anticipate possible negative outcomes of a purchase; affect that info search stage: the greater the risk, the more extensive the external search is likely to be ; Strategies developed to recognize risk include: 1. obtaining seals of approval 2. securing endorsements from influential people 3. providing free trials 4. giving extensive usage instructions 5. providing warranties and guarantees Learning  behaviours that result from repeated experience or reasoning  four variables are central to how one learns from experience: drive, cue, response, reinforcement  marketers use two concepts from behavioural learning: 1. Stimulus generalization occurs when a response brought about by one stimulus (cue) is generalized to another stimulus ex. Using the same brand name to launch new products, Tylenol (cold, flue, sinus) 2. Stimulus discrimination refers to one's ability to perceive differences among similar products, mostly low investment purchases like beer  cognitive leaning is without direct experience, through thinking, reasoning and mental problem solving; involves making connections between ideas or by observing the outcomes of others behaviours  brand loyalty is a favourable attitude toward and consistent purchase of a single brand over time without much thought; results from positive reinforcement Values, Beliefs and Attitude  attitude is a tendency to respond to something in a consistently favourable or unfavourable way; a learned predisposition; we have core values like material well-being, as well as personal values like product attributes  beliefs are consumer's perceptions of how a product or brand performs; they create an attitude Attitude change approach: 1. Change beliefs about the extent to which a brand has certain attributes 2. Changing the perceived importance of the attributes 3. Adding new attributes to the production Lifestyle  a way of living that is identified by how people spend their time and resources, what they consider important in their environment and what they think of themselves and the work around themselves  activities, interests and opinions study is called psychographics  very useful for segmenting the market Socio-cultural Influences  Personal Influences: 1. Opinion leaders: more likely to be important for products that provide a form of self-expression ex. Memberships, cars, clothing; to reach them, firms use sport figures 2. Word of mouth: people influencing each other in personal conversations; most powerful source of information; teaser ad campaigns are run in advance of new-product intro to stimulate conversations; supplying facts and toll- free numbers and demonstrations are also helpful ; buzz marketing refers to a rand becoming popular as a result of people talking about it; magnified by the internet called viral marketing  Reference Groups: important influence on the purchase of luxury for individuals whom looks is a basis for self- appraisal 1. Membership: one to which a person actually belongs ex. Frat 2. Aspiration: one that a person wishes to be identified with ex. Professional society 3. Dissociative: one that a person wishes to maintain a distance from because of differences in values  Family Influences: 1. Consumer Socialization: the process by which people acquire the skills, knowledge and attitudes necessary to function as consumers ex. Children at a young age, have brand preferences 2. Family Life Cycle: describes the distinct phases that a family progresses through from formation to retirement, each phase brining with it identifiable purchasing behaviours 3. Family Decision Making: occurs in the context of relationship dynamics ex. Spouse-dominant and joint (joint decision making increases w. Education of spouses)  Culture and Subculture:  culture refers to the set of values, ideas and attitudes both learned and shared  subcultures are subgroups within a larger culture that have unique values, ideas and attitudes and can be defined by regions, or demographic group that demonstrate specific buying pattens ex. Food consumption effected by immigration  ex. French-Canadians: link price to value, believe ads, cautious about new products, exhibit brand loyalty, more smokers and drinkers, few golfers/joggers/gardeners, big lottery buyers, travel less, less likely to have a credit card, make fewer long distance calls, traditional  ex. Chinese- Canadians: prefer communication in their own language, luxury vehicles and value work, family and education  Global Cultural Diversity:  cross-cultural analysis involves the study of similarities and differences among consumers in two or more nations or societies; involves an understanding of and an appreciation for the values, customs, symbols and language of other societies  values represent socially preferable modes of conduct or states of existence that tend to persist over time ex. German word for debt and guilt are the same, so they have not responded to Visa  customs are what is considered normal and expected about the way people do things in a specific country or culture  OECD, the Organization for Economic Cooperation and Development, fosters democratic government and takes action to set guidelines for preventing international bribery and corruption  Cultural Symbols are objects, ideas or processes that represent a particular group of people or society ex. Thumbs up is offensive with palms up  Back translation means retranslating a word or phase back into the original language by a different interpreter to catch errors Chapter 5: Research Market Info Systems and Research - MIS or Marketing Information Systems are a set of procedures and processes for collecting, sorting, analyzing and summarizing info on an ongoing basis ex. Local sales figures, market conditions - Market Research is the process of collecting info in order to recommend actions to improve marketing activities; reduces risk of uncertainty and poor decision making; not easily conducted because sometimes consumers aren’t truthful or are unsure - Research Classifications: 1. Exploratory: preliminary research conducted to clarify the scope and nature of the marketing problem; conducted with the expectation that more conclusive research will follow 2. Descriptive: designed to describe basic characteristics of a given population or to clarify their usage and attitudes; provides detailed profiles of product purchasers, describes the size and characteristic of market as well as product usage patters, and consumers attitudes toward particular brands 3. Causal Research: identifies the cause-and-effect relationships among variables; examines the effect of ads on sales, relationship between price and perceived product quality and the impact of a new package on sale The Six-Step Market Research Approach: 1. Define the problem/issue/opportunity: specify objectives 2. Design the research plan: what info will be needed/relevant, how it will be collected to ensure that respondents answer truthfully and whether a sampling plan is needed (sample should be a representative of the population being researched) 3. Conduct exploratory research: ensure that the researcher has not overlooked a key insight that is important to the rest of the study; three basic tools include: secondary data, focus group research and in-depth interviews 4. Collect quantitative research info; statistically reliable info that uses observational or questioning techniques; far more costly and time consuming; includes surveys, panels, experiments, test markets and observational research which is useful and flexible but costly and unreliable b/c may be hard to interpret 5. Compile, analyze and interpret data: synthesizing and simplifying info with relevant observations 6. Generate report and recommendations - Probability sampling is selecting a sample so that each element of a population has a specific known chance of being selected; very precise rules - Non-Probability sampling include a selection so that the chance of choosing a particular element of a population is either unknown or zero; uses arbitrary judgments; often used when time and budgets are limited; should not be assumed to represent the overall population - Experiment – the researcher changes just ONE element, usually one of the factors in the marketing mix and keeps all the other variables constant - Secondary Data can be divided into internal and external categories; includes facts, figures that have already been recorded by a third party; lower in cost; readily available; might be out of date; the definitions or categories may not be right for the project; data might not be specific enough - *Focus Group are an informal interview session; research technique where a small group of people meet for a few hours with a trained moderator to discuss predetermined areas - *In-Depth Interviews are detailed interviews where a researcher questions an individual at length in a free- flowing conversational style in order to discover info that may help solve a problem *are forms of research called qualitative which provide insightful and directional info with the knowledge that it is not statistically accurate The Future - market research should be actionable and should be evaluated as any investment decision Chapter 6: Segmentation and Targeting Segmentation - consumers have diverse needs and a single product cannot satisfy everyone - companies have infinite amounts of money and it needs to be spent efficiently on those consumers who are most likely to purchase the product - how a product is classified depends on its usage; two main segments are: 1. Consumer Market: consists of products, ideas and services that a person can purchase for personal use 2. Business Market: products that are purchased either to run a business or to be used as a component in another product or service - marketing segmentation involves aggregation of prospective buyers into groups that have common needs and respond similarly to marketing programs; these groups are relatively homogeneous - product differentiation involves positioning a product apart from the competition in the eyes of consumers; does not mean that a product has to be better than the competition, it means that it has a new unique feature or costs have been minimized to provide a cheaper alternative, etc. ; the key is to find the ideal balance between satisfying a customer’s individual wants while remaining profitable - mass marketing involves a product being marketed to the entire market with no differentiation - segment marketing involves designing different products and services to meet the needs of different target groups ex. Kellogg’s; in a business to business market, the market is often segmented by the needs of key accounts - niche marketing occurs when a company focuses its efforts on a limited segment in the market ex. Kashi cereal targets health conscious - individualized marketing involves customizing offers and products that fit individual needs; companies in the service industry follow similar approaches by tracking individual consumer requirements ex. Concert tickets online Market Segmentation - a marketer needs to combine strong analytical skills, strategic thinking, understanding of the consumer, a vision and how this all fits with the company’s direction Steps to Segmentation: 1. Review company objectives 2. Identify consumer/customer needs and common characteristics in the market 3. Cluster common consumer/customer variables to create meaningful market segments 4. Conduct SWOT analysis on the segments to determine strengths, weaknesses, opportunities and threats 5. Identify the segment that best meets company objectives 6. Identify marketing programs and budget requirements needed for this segment 7. Create a sales forecast for this segment 8. Conduct a profit-and-loss financial analysis for this segment Target Market Profiles - Geographic is where a target market lives using variables such as country, region, provinces, region, city size and types of locations such as urban, suburban or rural - Demographics ranges for age, gender, family life-cycle
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