Marketing Semester Review

The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

Consumption: growth is pulled by supply; “Fordian” the selling of consumer goods generalizes; household appliances, etc.

Overconsumption: growth is pulled by consumption, household debts; “Individualist” the selling of intangible goods and goods to show off grows.

Arbitration: slower growth; “Meaning and value” the selling of meaningful intangible goods or even political values.

Consumer is much more informed than before:
• He is more educated
• He can compare at any time (private labels...)
• He does not trust brands anymore
• He has a wide experience of traditional marketing techniques... and develops his critical sense
• He is subjected to contradictions of hyper selection
• He refuses blind consumption, centered on ownership.

The digital age, rapid globalization, ethics and social responsibility, and not-for-profit marketing.

Consumers will favor products that are available
and affordable.

Consumers will favor products that offer the most
in quality, performance, and innovative features.

Consumers will not buy enough without a large scale selling and promotion effort.

Focus on satisfying the needs and wants of target
markets.

a company should make good marketing decisions by considering consumers' wants, the company's requirements, and society's long-term interests.

The definition of local markets is a meeting of supply and demand for goods and services to local importance. The products available on the market is usually very limited and meet local needs.

Un-segmented market in which products with mass appeal products (aspirin, orange juice, soft drinks, paperback romances, etc.) are offered to every customer through mass retailers or independent stores, and promoted through mass media.

The process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.

Concentrating all marketing efforts on a small but specific and well defined segment of the population. Niches do not 'exist' but are 'created' by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a big pond. Also called micromarketing.

Customized consumer goods.

– Services
– Products
– Services and products
– Events
– Experiences
– Places
– People
– Ideas

An industry (a collection of sellers) gives goods/sevices to the market (a collection of buyers) in exchange for money.

-Business to Consumers (B to C)
-Business to Business (B to B)
-Nonprofit

a business strategy that focuses on single, "point of sale" transactions. The emphasis is on maximizing the efficiency and volume of individual sales rather than developing a relationship with the buyer.

Relationship marketing is a strategy designed to foster customer loyalty, interaction and long-term engagement. This customer relationship management (CRM) approach focuses more on customer retention than customer acquisition.

Transactional; focus on products, mass production, efficiency and productivity, profit, margin, and volume.

Relational; focus on markets, mass customization, flexibility and responsiveness, value, satisfaction, and retention.

focus on selling and promoting existing products, profits come from sales volume.

focus on customers need through integrated marketing, profits come through customer satisfaction.

a state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am hungry.

the form that a human need takes as shaped by culture and individual personality. i.e. I want a hamburger, French fries, and a soft drink.

Relational; focus on markets, mass customization, flexibility and responsiveness, value, satisfaction, and retention.

focus on selling and promoting existing products, profits come from sales volume.

focus on customers need through integrated marketing, profits come through customer satisfaction.

a state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am hungry.

the form that a human need takes as shaped by culture and individual personality. i.e. I want a hamburger, French fries, and a soft drink.

a human want backed by buying power. i.e. I have money to buy this meal

what the market offers to fulfill needs and wants.

1. Determine needs and wants
2. Design customer driven marketing strategy
3. Construct marketing program that delivers superior value
4. Build relationships and delight the customer
5. Capture value from customer to achieve profits

evaluating each segment’s attractiveness and selecting one or more segments to enter.

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

product, price, promotion, place, physical evidence, process, and people.

product variety, quality, design, features, brand name, packaging, sizes, services, warranties, returns.

list price, discounts, allowances, payment period, credit terms.

sales promotion, advertising, sales force, public relations, direct marketing.

channels, coverage, assortments, locations, inventory, transport.

Product= Customer solution
Price= Customer cost
Promotion= Communication
Place= Convenience

– Technical :
• Protect the product (transport, storage, ...), make the
package more user-friendly, etc.
– Communication :
• Communicate brand personality, provide specific information, etc.
• AIDA : awareness, interest, desire, action

Technical: preserving, distributing.
Marketing: service, informing, warning, positioning, and attributing.
Required: safety and environmental protection.

Material, shape, graphics, and colors.

anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.

Attractiveness from: value-based prices, product features and quality, and services mix and quality.

a detailed version of the product idea, stated in meaningful consumer terms.

The product concept is the answer to the following questions:
1. What is the consumer waiting for?
2. Why will he buy the product?
3. What will he do with the product?

1 - Physical components and features.
2 - Services attached to the product.
3 - Product quality.

a pure tangible good (shoes) to a service (doctor's exam). Hybrid offer (restaurant).

The value of a product is a mix between the value of its image (brand, packaging, design), and its attributes (convenience, service, taste).

all the products offered by the organization and
corresponding to:
• A market or market segment
• A technology or activity
• A consumption context

A group of products that are closely related because they function in a similar manner, they link together in the consumer’s mind as they complement one another or are perceived as substitutes in the satisfaction of a need or a want. A range is composed of one or more lines.

A range is balanced if it has:
– Leading products:
in terms of turnover, image and profits
– Traffic builders:
to attract consumers because of their price or
innovative qualities
– Regulators:
with consistent turnover or seasonal products
– Tactical products:
occupy a place opposite the competitors
– Future products:
young products destined to become leaders

The Product Life Cycle (PLC) explains how features change over the life of a product
• Marketing strategies must change and evolve as a product moves through the PLC
• The PLC relates to a product category

• Full-scale launch of new product into marketplace
• Sales are low, high failure rate
• Little competition
• Frequent product modification
• Limited distribution
• High marketing and product costs
• Promotion focused on product awareness and to stimulate primary demand
• Intensive personal selling to retailers and wholesalers

• Sales grow at an increasing rate
• Many competitors enter market
• Large companies may acquire small pioneering firms
• Profits are healthy
• Promotion emphasizes brand advertising and comparative ads
• Wider distribution
• Towards end of growth stage, prices fall
• Sales volume creates economies of scale

• Sales continue to increase but at a decreasing rate
• Marketplace is approaching saturation
• Typified by annual models of products with an
emphasis on style rather than function
• Product lines are widened or extended
• Marginal competitors dropout
• Heavy promotions - sales promotions
• Prices and profits fall

• Signaled by a long-run drop in sales
• Rate of decline is governed by how rapidly consumer tastes change or how rapidly substitute products are adopted.
• Falling demand forces many out of market
• Few specialty firms left

The total price charged for a product sold to a customer, which includes the manufacturer's cost plus a retail markup.

A percentage added to the cost to get the retail price.

A final price after deducting all discounts and rebates.

the difference between the price that you pay for an item and the price at which you sell the the item to customers. (gross profit)

ROI= (gain on investment-cost of investment)/cost of investment

formula to measure the degree to which spending on marketing contributes to profits.

1. Develop Pricing Objectives
2. Estimate Demand
3. Determine Costs
4. Evaluate the Pricing Environment
5. Choose a Pricing Strategy
6. Develop Pricing Tactics

A curve that shows the quantity of a product that customers will buy in a market during a period of time at various prices if all other factors remain the same

A measure of the sensitivity of customers to changes in price.
• Price elasticity of demand = Percentage change in quantity demanded / Percentage change in price

Influencers:
• Availability of substitute goods or services
– If a product has a close substitute, its demand will
be elastic
• Time period
– The longer the time period, the greater the likelihood that demand will be more elastic
• Income effect
– Change in income affect demand for a product
even if its price remains the same

1. Design a good product.
2. Determine product costs.
3. Set price based on costs.
4. Convince buyers of product's value.

1. Assess customer needs and value perceptions.
2. Set target price to match customer perceived value.
3. Determine costs that can be incurred.
4. Design product to deliver desired value at target price.

the selling price is based on an estimate of volume or quantity that a firm can sell in different markets at different prices
– Target costing
– Yield management pricing