Ch. 1&2 Market Midterm 1

1. important to society
2. important to business
3. Good Career opportunity
4. Marketing affects you EVERY DAY!

1. Assess the wants and satisfaction of customers
2. Design and mange product offerings
3. determine prices and pricing policies
4. Develop distribution strategies
5. Communicate with present and potential customers

Marketing is 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.

1. At least two parties
2. Something of value
3. Communication and Delivery
4. Freedom to accept or reject
5. desire to deal with other party

People with the desire and the ability to make an exchange so it only exists when there are people with the DESIRE and ability

internal capabilities of the firm

aggressive sales techniques and belief that high sales result in high profits

satisfying customer needs and wants while meeting objectives

Satisfying customer needs and wants while enhancing individual and societal well-being

1. exchange of value
2. Deliver by orchestrating the marketing mix
3 Seek to satisfy customer needs and wants at a profit

product, price, promotion, and place

WHat businesses should we be in?

How do we compete effectively in a given business?

How do we orchestrate the marketing mix to deliver value to a particular market segment?

1. source of competitive advantage
2. Application in wide variety of markets
3. difficult for competitors to imitate

1. Customer acquisition
-New customers
-less upfront sales and marketing investment
-acquire higher value customers
-Eliminate unprofitable customer acquisition
2. Customer Retention
-eliminate root causes
-recover customers
-develop loyalty initiative
3. Sales per Customer
-increase share of customers
-generate add on sales
4. Margin
-increase price
-shift mix to higher margin products
-change customer behaviors
-terminate, unprofitable customers based on identifiable characteristics

Those who complained, they were able to retain. Those who don't complain are not retained

it's about choices and trade-offs, deliberately choosing to be different

An organization's special capabilities, including skills, technologies, and resources that distinguish it from other organizations...so really, what do we do well?

Set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition

1. cost
2. product/service differentiation
3. niche strategies

1. lower experience curves
2. Product design
3. Efficient labor
4. reengineering
5. no-frills products
6. Product innovation
7. gov't subsidies
8. new service delievery methods

1. brand names
2. strong dealer network
3. product reliability
4. Image
5. Service

Understand their customer DEEPLY

What are we most like? how are we similar

How do we create separation between us and our key competitors?

arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers

1. Reliability
2. Responsiveness
3. Competence
4. Access
5. Courtesy
6. Communication
7. Credibility
8. Security
9. Knowledge of Customer
10. Tangibles

S-->Strengths
W: Weakness
O-Conditions in external environment that favor strengths (Opportunities)
T-Threats: external things that are threats

Products and Markets. Existing and New

Market penetration (increase purchase frequency, and increase amount per purchase occasion)

Market Development
-Geographic, demographic, usage situation

Product development

Diversification

group of consumers who respond in a similar way to a given set of marketing efforts

1. segment market based on similar characteristics
2. Analyze market based on attractiveness of market segments
3. select one or more target markets

1. right product
2. right message
3 to the right customer
4. At the right time
5. In the right place
6. for the right price

markets in which a business competes for target customers and served markets include both that business's own customers and the competitor's customers

is the activity for creating, communicating, and delivering, and exchanging offerings that benefit the organization, its stakeholders and society at large.

1. They must focus on what the customer benefit is

2. They must learn from the past

1. Product
2. Price
3. Promotion
4. Place
It is the controllaber factors the marketing manager can use

: Links organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit.

a pan that integrates the marketing mix to provide a good, service or idea to prospective buyers.

1. production: scarce goods
2. sales: manufacturers made more goods than people bought
3. market: get customer needs (1960s) and make it.
4. Customer relationship eraL satisfy the high expectation of customers

focus efforts on...
1. Collect information about the customer needs
2. Share info across departments
3. use it to create customer value

Customer Relationship Management: identify prospective buyers, understand them, and develop favorable perception of the organization
Require the commitment of managers and employees...
foundation is CUSTOMER EXPERIENCE

view that organizations should discover and satisfy the needs of its consumers in a way that also provides for society’s well-being

1. Form -->production of good or service
2. Place
3. Time
4. Possession

• 1. Kinds of organizations that exist
• 2. What strategy is
• 3. How this strategy relates to the three levels of structure found in many organizations

: legal entity with people committed to a common mission

o Business: privately owned, and serves customers to earn a profit.
o Nonprofit: nongovernmental organization that serves its customers but does not have profit as the organizational goal.

• It is an organization’s long-term course of action designed to deliver a unique customer experience while achieving its goals.

• Board of Directors→Corporate Level→Strategic Business Level→Functional Level→ Various departments

it is a subsidiary division or unit of an organization that markets a set of related offerings to a clearly defined group of customers.

Functional Level

managers set more specific strategic direction for their businesses to make value-creating opportunities

1. Core Values
2. Mission
3. Organizational Culture

Values
 →They are the fundamental, passionate, and enduring principles that guide the organization’s conduct over time.
 It is the heart and soul, and motivate the stakeholders (employee, shareholder, board, suppliers)
 Is timelessand should not change
 Guide the organization’s conduct.

 A statement of the organization’s function in society, and identifies its customers, markets, products, and technologies .

 Set values, ideas, attitudes, norms of behavior that is learned and shared among the members of an organization
 It is a way the organization connects.

1. Set direction of the business it is in
2. it's specific goals

Ratio of a firm's sales to the total sales of all firms in the industry

 Profit
 Sales
 Market share: ratio of sales revenue to total sales of all firms in the industry, including the firm itself.
 Quality
 Customer Satisfaction
 Employee welfare
 Social Responsibility

1. A strategy's level in the organization
2. offerings an organization provides

o 1. Where are we now
o 2. Where do we want to go.

1. competencies,
2. customers
3. Competitors

Vertical: market growth rate
horizontal: relative market share: sales of SBU divided by sales of the largest firm in the industry

High generation of cash, and dominant share of slow growth market

High share in high growth market

SBUs with low share of high growth market...require injection of cash....

SBUs with low share of slow growth...dropping should be considered.

start as question mark, become stars, the cash cows and then dogs.

PRO: forces firms to put SBUs in growth share matrix
Weakenss: Difficult to get info.

o Helps a firm search for growth opportunites from among current and new markets as well as current and new products.

Horizontal is product
Vertical is Market

market penetration

need market development

Product development

diversification (high risk)

• Increase purchase frequency
• Increase amount per purchase occasion

• Geographic
• Demographic
• Usage Situation: Example: arm and Hammer Baking Soda

• New Feature or Technology
• Brand Extension
• New Brand

An approach where an organization allocates its marketing mix resources to reach its target markets.

1. planning
2. Implementation
3. Evaluation

1. SWOT
2. Market product focus and goal setting
3. marketing program

See external opportunities, weakness and internal strengths and weaknesses

need to do a market segmentation, aggregating prospective buyers into groups or segments that have similar needs and will respond similar in marketing action

1. obtain resources,
2. design marketing organization
3. develop planning schedules
4. actually executing marketing program designed in the planning phase

detailed dat to day operational decisions essential to the overall success of marketing strategies