MKTG522

1. Study Guide MKTG522

2. Course Objectives • Marketing strategies to sustain customer relationships • Creation of a value proposition based on statistical analysis • Assessment of the tangible and intangible merits of an offering • Impact of pricing on performance ratios and profitability • Comparison of the logistics of retailers versus wholesalers • Critique of a company’s integrated marketing communications • Evaluation of global marketing decisions based on local and ethical considerations

3. CO 1: Marketing Overview Marketing strategies to sustain customer relationships Text chapters: 1 and 2

4. Evolution of marketing

5. Marketing concept • PostWorld War 2, increased demand for goods and services • Customer orientation: discover what consumers want and provide • Service orientation: ensure customer satisfaction across the organization • Profit orientation: focus on the goods and services that will earn most profit; expand the organization around these products in ways that serve the most consumers

6. SWOT Analysis

7. Environmental factors • Marketing mix factors are controllable, so manipulate them to compensate for uncontrollable changes • Process is called environmental scanning

8. Mission statement • A firm’s mission is shaped by • history (aims, policies, achievements); • current preferences (views of owners and managers); • environmental factors (threats and opportunities); • resources; and • the organization’s distinctive competencies. • The mission should • provide a vision or direction; • be motivating; • focus on distinctive values; • define the firm’s competitive domain; and • stress major company policies.

9. Market-Oriented Business Definitions

10. Market-Oriented Strategic Planning Links a company’s objectives, skills and resources to changing market opportunities and threats • Reshapes products so that they can meet sales and growth projections • Goal is to shape the firm’s market response so that customers are satisfied and profit is realized • Marketing plan is central element of the planning process and used to coordinate the marketing effort

11. Corporate Strategy • Marketing management is a process of planning, organizing, implementing, and controlling marketing activities to facilitate and expedite exchanges. • It consists of analyzing market opportunities, researching and selecting target markets, developing marketing strategies, planning marketing tactics, and implementing and controlling the marketing effort.

12. Business Portfolio • A business portfolio is the collection of businesses and products that make up the company. • The best portfolio is the one that best fits the company’s strengths and weaknesses to opportunities in the environment. • Portfolio analysis is a strategic business activity that allows management to evaluate products and lines of business with a goal to allocate more resources to the strongest performing products. • The first step is to identify strategic business units (SBUs).

13. Growth Share Matrix The Boston Consulting Group Approach This matrix defines four types of SBUs. • Stars: high-growth market, high-share product • Cash cows: low-growth market, high-share product • Question marks: low-share product, high-growth market • Dogs: low-share product, low-growth market

14. CO 2: Research and Buying Behaviors Creation of a value proposition based on statistical analysis Text chapters: 4–7 and Appendix 1

15. Market Research • Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

16. Problem Recognition • Marketing allows a company to earn a profit by solving a customer’s need. Several situations allow the problem to be recognized. • In marketing research, problem recognition is the first step of the process. Solving the wrong problem will lead to useless data collection: “garbage in, garbage out.” • In the business buying-decision process, problem recognition serves as the first step, where a company identifies a need that can be met by acquiring a product.

17. Research Methods • Data can be collected within an organization (internally) or externally. • The process can be formal—involving a predetermined set of steps and objectives—or informal. • Informal research must be conducted carefully. • Managers must focus on obtaining the objectives of the research by formulating questions in advance and recognizing biases.

18. Research Planning • Because research can be costly and time consuming, companies should plan for research activities. • The research plan outlines sources of existing data and spells out the specific research approaches, contact methods, sampling plans, and instruments that researchers will use to gather new data. • Research objectives must be translated into specific information needs. • The research plan should be presented in a written proposal.

19. Primary Versus Secondary Primary • Tailored to an organization’s specific marketing needs • Conducted by the organization or through a third-party research firm • Observation • Focus groups • Surveys Secondary • Obtained through previously conducted research: • U.S. Census Bureau • Standard rate and data • Nielsen ratings • Industry reports

20. Observational Research • Involves gathering primary data by observing relevant people, actions, and situations • Can obtain information that people are unwilling or unable to provide Disadvantages • Some things cannot be observed. • Long‑term or infrequent behavior is also difficult to observe. • Observations can be very difficult to interpret.

21. Ethnographic Research • Involves sending trained observers to watch and interact with consumers in their “natural habitats.” • Often yields the kinds of details that don’t emerge from traditional research questionnaires or focus groups • Example: company offers customers samples of a new pizza and observes how customers respond

22. Survey Research: Contact Methods

23. Interviews and Questionnaires Personal interviewing takes two forms—individual and group interviewing. • Individual interviewing involves talking with people one on one. • Group interviewing (focus group interviewing) consists of inviting 6–10 people to meet with a trained moderator to talk about a product, service, or organization. The questionnaire is the most common data collection instrument. • Closed‑end questions include all the possible answers, and subjects make choices among them. • Open‑end questions allow respondents to answer in their own words. • Care should be given to the wording and ordering of questions.

24. Qualitative Versus Quantitative Qualitative research methods Quantitative research methods Aim to measure quantities of behaviors or actions Can be used to project results of a survey on the entire market using sampling • Phone or online surveys • Personal interviews • Aim to understand people’s attitudes and values • Can be used to understand the behaviors and ideas of small groups of ideal members of a targeted group • Focus groups • Depth interviews • Watching behavior (ethnography)

25. Customer-Driven Marketing Strategy

26. Segmenting, Targeting, and Positioning (STP) Goal: • Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs. • Then communicate the benefits that will appeal to each group.

27. Levels of Market Segmentation

28. Key Requirements of Market Segments • In order to be useful, marketing segments must be • measurable (size, needs, characteristics of customers); • divisible (with clear criteria for dividing); • substantial (large enough to support profit potential); • accessible (through traditional marketing and distribution channels); and • actionable (marketers can actually use the segments to support marketing actions that are based on market research).

29. Segmenting International Markets Companies can segment international markets using one or a combination of several variables (Kotler and Armstrong, 2014, p. 202). • Geographic location: Nations close to one another will have many common traits and behaviors. • Economic factors: Countries may be grouped by population income levels or by their overall level of economic development. • Political and legal factors:These include the type and stability of government, receptivity to foreign firms, monetary regulations, and the amount of bureaucracy. • Cultural factors:We group markets according to common languages, religions, values and attitudes, customs, and behavioral patterns.

30. Measuring Marketing Success Process for measuring success Tools for measuring success Marketing return on investment or sales Break-even analysis Marginal analysis Market potential Operating ratios Inventory turnover • Make decisions based on data • Determine the effectiveness of those decisions using data analysis tools • Make changes to improve future actions and decisions based on data analysis

31. Buying Behavior

32. Personality Personality refers to the unique psychological character­istics that distinguish a person or group. • A brand personality is the specific mix of human traits that may be attributed to a particular brand. One researcher identified five brand personality traits. • Sincerity (down to earth, honest, wholesome, and cheerful) • Excitement (daring, spirited, imaginative, and up-to-date) • Competence (reliable, intelligent, and successful) • Sophistication (upper class and charming) • Ruggedness (outdoorsy and tough) • The basic self-concept premise is that people’s possessions contribute to and reflect their identities; that is, “we are what we have.”

33. Motivation • A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction. • Psychoanalyst Sigmund Freud suggested that a person’s buying decisions are affected by subconscious motives that even the buyer may not fully understand. • Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations.

34. Maslow’s Hierarchy of Needs

35. Perception Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. • Selective attention is the tendency for people to screen out most of the information to which they are exposed. • Selective distortiondescribes the tendency of people to interpret information in a way that will support what they already believe. • Selective retention is the retaining of information that supports their attitudes and beliefs.

36. Learning Learning describes changes in an individual’s behavior arising from experience. • Drive is a strong internal stimulus that calls for action. It becomes a motive when it is directed toward a particular stimulus object. • Cues are minor stimuli that determine when, where, and how the person responds.

37. Beliefs and Attitudes • A belief is a descriptive thought that a person has about something. • Attitude describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea. Attitudes are difficult to change.

38. Four Types of Buying Behavior

39. CO 3: Research and Development Assessment of the tangible and intangible merits of an offering Text chapters: 8 and 9

40. Products Versus Services • A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. • Broadly defined, “products” also include services, events, persons, places, organizations, ideas, or mixes of these. • Services are a form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

41. Tangibility • A company’s market offering often includes both tangible goods and services. • At one extreme, the offer may consist of a pure tangible good, such as soap or toothpaste. • At the other extreme are pure services, for which the offer consists primarily of a service. • To differentiate their offers, marketers are creating and managing customer experiences with their brands or company.

42. Core Customer Value Product planners need to think about products and services on three levels. • Augmented product, which is created around the core benefit and actual product by offering additional consumer services and benefits • Actual product • Core customer value, which addresses the question, “What is the buyer really buying?” • When developing products, marketers first must identify the core customer value that consumers seek from the product. They must then design the actual product and find ways to augment it in order to create this customer value and the most satisfying customer experience.

43. Consumer Product Considerations

44. Four Is of service (serviiiice) • Characteristics of services that create marketing challenges

45. Industrial Product Considerations Industrial products are those purchased for further processing or for use in conducting a business. The three groups of industrial products and services areas follows. • Materials and parts include raw materials and manufactured materials and parts. • Capital items are industrial products that aid in the buyer’s production or operations, including installations and accessory equipment. • Supplies and services include operating supplies and maintenance and repair services.

46. Industrial Product Decisions The focus of these decisions is to create core customer value.

47. Product Line Versus Product Mix Product line Product mix This consists of all the product lines that a company offers. A company’s mix has four dimensions: width, length, depth, and consistency. This is a group of closely-related products that function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. • Product line length is the number of items in the product line.

48. Ten C0mpanies Dominate U.S. Brands

49. Differentiation strategies • Porter’s generic strategies describe how a company pursues a competitive advantage: lower cost, differentiation, or focus. • Cost leadership is appropriate when customers are price sensitive. • Differentiation is appropriate when the market is competitive and customers have specific needs. It works best for big companies. The company has a strength that is difficult to copy that allows it to create a product that customers will pay a premium for.

50. Branding Benefits to customers Benefits to sellers Provides trademark and legal protection Allows for segmentation of customers Helps customers to distinguish one product from another Justifies selling a product at a higher sales price • Customers pay more for brand-name items because they know they will receive the same quality level, features, and benefits every time they buy. • Branding also helps customers identify one product from another. • The brand is a designator of quality.