Principle Of Marketing Chapters 1 - 6

Facilitating exchange between business and its customers.

1. Understand market and customer needs, wants.

2. Design customer-driven marketing strategy.

3. Construct integrated marketing program that delivers superior value.

4. Build profitable relationships and create customer delight.

5. Capture value from customers to create profit and customer equity.

States of felt deprivation

Needs that are shaped by culture and individual personality.

Human wants backed by buying power.

Set of benefits and values business promises to deliver to consumers to satisfy their needs.

1. Production Concept

2. Product Concept

3. Selling Concept

4. Marketing Concept

5. Societal Marketing Concept

Idea that customers favor products that are available and highly affordable; therefore, organization should focus on improving production and distribution efficiency.

Idea that consumers will favor products that offer the most quality, performance, and features; therefore, organization should devote its energy to making continuous product improvements.

Idea that consumers will not buy enough of a product unless firm undertakes a large-scale selling and promotion effort.

Philosophy in which achieving organizational goals depends on knowing needs and wants of target markets and delivering the desired satisfactions better than competitors do.

Idea that a company's marketing decisions should consider consumers' wants, company's requirements, consumers' long-run interests, and society's long-run interests.

Customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.

Extent to which a product's perceived performance matches a buyer's expectations.

1. Changing Economic Environment.

2. The Digital Age (the Internet).

3. The Growth of Not-For-Profit Marketing.

4. Rapid Globalization.

5. Sustainable Marketing (the call for more social responsibility).

Process of developing and maintaining strategic fit between the organization's goals and capabilities and its changing marketing opportunities.

1. Define the company mission.

2. Set company objectives and goals.

3. Design business portfolio.

4. Planning marketing and other functional strategies.

Strategic Business Units.

Key businesses that make up the company.

Can be a company division, a product line within that division, or a single product or brand.

1. Market Penetration.

2. Market Development.

3. Product Development.

4. Diversification.

An attempt to sell more of the current product to the current customer segment.

(U.S. Turkey Producers).

To take the current product, and introduce it into new markets.

(Color printers to consumer market).

Offer new products to current customers. (Kellogg's Rice Krispy's to Rice Krispy Treats).

Offer new products to new markets.

1. Market Segmentation.

2. Market Targeting.

3. Positioning.

4. Differentiation.

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, who might require separate products or marketing programs.

The process of evaluating each market 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 brands in the minds of target consumers.

Actually differentiating the market offering to create superior customer value.

The set of tactical marketing tools--product, place, price, promotion--that the firm blends to produce the response it wants in the target market.

1. Product.

2. Place.

3. Price.

4. Promotion.

1. Customer Solution.

2. Customer Cost.

3. Convenience.

4. Communication.

S: Strengths - Internal capabilities that may help a company reach its objectives.

W: Weaknesses - Internal limitations that may interfere with a company's ability to achieve its objectives.

O: Opportunities - External factors that the company may be able to exploit to its advantage.

T: Threats - Current and emerging external factors that may challenge the company's performance.

Return on [marketing] investment.

The net return from a marketing investment divided by the costs of the marketing investment.

The actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers.

The actors close to the company that affect its ability to serve its customers--the company, suppliers, marketing intermediaries, customer markets, competitors, and publics.

1. Company

2. Suppliers

3. Marketing Intermediaries

4. Competitors

5. Publics

6. Customers

1. Consumer Market

2. Business Market

3. Reseller Market

4. Government Market

5. International Market

The larger societal forces that affect the microenvironment--demographics, economic, natural, technological, political, and cultural forces.

1. Demographic

2. Economic

3. Natural

4. Technological

5. Political

6. Cultural

1. Baby Boomers

2. Generation X

3. Millennials (Generation Y)

The 78 million people born during the years following WWII. (1946 to 1964).

The 49 million people born between 1965 and 1976 in the "birth dearth" following the baby boom.

The 83 million children of the baby boomers born between 1977 and 2000.

The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

[Competitive] Marketing Intelligence:

The systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment.

1. Define the problem and research objectives.

2. Develop the research plan for collecting information.

3. Implement the research plan.

4. Interpret and report the findings.

Marketing research to gather preliminary information that will help define problems and suggest hypotheses.

Marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product of the demographics and attitudes of consumers.

Marketing Research to test hypotheses about cause-and-effect relationships.

1. Observational Research

2. Survey Research

3. Experimental Research

Gathering primary data by observing relevant people, actions, and situations.

A form of observational research that involves sending trained observers to watch and interact with customers in their "natural environments."

Gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior.

Gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses.

A segment of the population selected for marketing research to represent the population as a whole.

Each population member has a known chance of being included in the sample, and researches can calculate confidence limits for sampling error.

Population where sampling error cannot be calculated.

In collecting primary data, marketing researchers have a choice between two main research instruments--questionnaires and mechanical devices.

Most common instrument, whether administered in person, by phone, by e-mail, or online.

Meters on TV sets, cable boxes, satellite, etc., in selected homes. (Example).

Intrusion on consumer privacy.

Misuse of research finding.

1. Culture

2. Social

3. Personal

4. Psychological

1. Culture

2. Subculture

3. Social Class

1. Groups and Social Networks

2. Family

3. Roles and Status

1. Age and Life-cycle Stage

2. Occupation

3. Economic Situation

4. Lifestyle

5. Personality and Self-Concept

1. Motivation (Drive)

2. Perception

3. Learning

4. Beliefs and Attitudes

1. Upper Class (Upper Uppers and Lower Uppers).

2. Middle Class (Upper Middles and Lower Middles).

3. Working Class

4. Lower Class (Upper Lowers and Lower Lowers).

(AKA the influential or leading adopters).

A person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others.

1. Physiological Needs

2. Safety Needs

3. Social Needs

4. Esteem Needs

5. Self-Actualization Needs

1. Complex Buying Behavior

2. Dissonance-Reducing Buying Behavior

3. Habitual Buying Behavior

4. Variety-Seeking Buying Behavior

Consumer buying behavior in situations characterized by high involvement in a purchase and significant perceived differences among brands.

Consumer buying behavior in situations characterized by high involvement in a purchase, but few perceived differences among brands.

Consumer buying behavior in situations characterized by low consumer involvement and few significant perceived brand differences.

Consumer buying behavior characterized by low consumer involvement but significant perceived brand differences.

1. Need Recognition

2. Information Search

3. Evaluation of Alternatives

4. Purchase Decision

5. Post-purchase behavior

The first stage of the buyer decision process in which consumer recognizes a problem or need.

The stage of the buyer decision process in which the consumer is motivated to search for more information.

The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set.

The buyer's decision about which brand to purchase.

The stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction.

Buyer discomfort caused by post-purchase conflict.

A good, service, or idea that is perceived by some potential customers as new.

The mental process by which an individual passes from first hearing about an innovation to final adoption.

1. Innovators

2. Early Adopters

3. Early Majority

4. Late Majority

5. Laggards

Venturesome people; risk-takers. The first to users.

Prestige-Oriented opinion leaders.

The leading segment of the mass market.

Followers of the Early Majority

Conservative; price-conscious.

Business Markets:

Are much bigger in size.

Involve far more dollars and items.

Involves more decision participants.

Involves more professional purchasing effort.

Business demand that ultimately comes from the demand for consumer goods.

1. Straight Rebuy

2. Modified Rebuy

3. New Task

4. Systems Selling (Solutions Selling)

A business buying situation in which the buyer routinely reorders something without any modification.

A business buying situation in which the buyer wants to modify product specifications, prices, terms or suppliers.

A business buying situation in which the buyer purchases a product or service for the first time.

Buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation.

1. Users

2. Influencers

3. Buyers

4. Deciders

5. Gatekeepers

Members of the buying organization who will actually use the purchased product or service.

People in an organization's buying center who affect the buying decision; they often help define specifications and also provide information for evaluating alternatives.

People in an organization's buying center who make an actual purchase.

People in an organization's buying center who have formal or informal power to select or approve the final suppliers.

People in an organization's buying center who control the flow of information to others.

1. Environmental

2. Organizational

3. Interpersonal

4. Individual

1. The economy

2. Supply Conditions

3. Technology

4. Politics/regulation

5. Competition

6. Culture and Customs

1. Objectives

2. Strategies

3. Structure

4. Systems

5. Procedures

1. Influence

2. Expertise

3. Authority

4. Dynamics

1. Age/Education

2. Job position

3. Motives

4. Personality

5. Preferences

6. Buying Style

Schools, hospitals, nursing homes, and other institutions that provide goods and services to people in their care.

Governmental units--federal, state, and local--that purchase or rent goods and services for carrying out the main functions of government.