D174 Marketing Management Study Guide Modules 1-11 PDF

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D174 Marketing Management Study Guide Modules 1-11...

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Unit 2: Modules 1, 2, 3 Marketing Management 29% Module 1: Marketing: Past, Present, and Future 7% Module 2: Marketing Planning & Strategy 11% Module 3: Global Marketing 11% Unit 3: Modules 4, 5, 6 Market Opportunities 25% Module 4: Market Research Essentials 10% Module 5: CRM, Big Data, and Marketing Analytics 8% Module 6: Understanding the Consumer 7% Unit 4: Modules 7, 8, 9 Product & Pricing Decisions 26% Module 7: Product 9% Module 8: Service 8% Module 9: Pricing 9% Unit 5: Modules 10, 11 Distribution & Promotion Decisions 20% Module 10: Marketing Channels, Logistics, and Supply Chain 10% Module 11: Promotion 10% SUBJECTS TO STUDY FOR ON THE OA SPECIFIC FROM WHAT I REMEMBER

UNIT 2 MODULE 1: MARKETING PAST, PRESENT, FUTURE  Define MARKETING  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.  What are Two Core marketing concepts? Define them.  VALUE: ratio of the bundle of benefits a customer receives from and offering compared to the costs by the customer in acquiring that bundle of benefits  EXCHANGE: facilitated by money, skill, expertise, something of value  What are five conditions that need to be present for an exchange to take place?  2 parties  each party has something of value  both communicate & deliver  free to accept/reject  both believe it’s appropriate  PRODUCTION ORIENTATION COMPANIES  Maximizing production capacity, improving products and efficiency in production w/out much regard for what is going on in the marketplace.  SALES ORIENTATION COMPANIES

 Increase of sales and consequently production capacity utilization by having salespeople “push” product into the hands of customers.  What specific shifts did businesses see before the advent of the Marketing concept?  Pent-up demand for consumer goods/services after the war  Euphoric focus on family, desperate need to regain normalcy of day-to-day life after years of war = baby boomer generation  Opening of production capacity dominated for years by war production  Readily available mainframe computing capability, allowed more sophisticated market research  POST MARKETING CONCEPT APPROACHES  DIFFERENTIATION: distinguish your products from those of competitors in the minds of consumers  Ex: Coca-Cola, “share a coke” campaign w/ popular names on cans  MARKETING ORIENTATION: placing customers at the core  RELATIONSHIP OREIENTATION: cultivating profitable customers  Investing in the long-term, retaining loyal customers instead of constantly focusing on new ones.  CRM: customer relationship management > facilitate higher levels of customer satisfaction and loyalty, identify profitable customers  One to One MARKETING: learning relationship with each customer  Ex: mass-customization, proper cloth > customer gets to choose fabrics, lengths, buttons, collars, colors, etc. What are key components of the Marketing mix? – 7 P’s Traditional 4 P’s:  PRODUCT: product or service the customer buys  PRICE: how much the customer pays  PLACE: how the product is distributed to the customer  PROMOTION: advertisement, how the customer is found and persuaded to buy  Additional 3 P’s: SERVICES MARKETING MIX  PEOPLE: the ppl who help deliver the product/service > employees, social interactions, relationships 

PROCESS: operational efficiencies, levels of standardizations, customization, service designs, ex: apps/online acct management

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PHYSICAL EVIDENCE: facilities, equipment, uniforms, tangible aspects

 MARKETING MIX - ETHICAL DECISIONS  PRODUCT 1. What markets should be targeted, 2. Quality/Quantity of ingredients, 3. Collection of market research data security/privacy  PRICE 1. Price fixing, 2. Predatory pricing – reducing price to eliminate competitors, 3. Not disclosing full price before customer completes their purchase  PLACE 1. Data privacy throughout the channel, 2. Exert unfair influence, 3. Sourcing products  PROMOTION 1. Deceptive/false communications, 2. High pressure, Manipulative sales techniques BIG M = STRATEGIC MARKETING – BIG PICTURE, what the company WANTS ~ THE STRATEGY core-driver customer value, LONG TERM/firm-level commitment to investing in marketing, benefits organizational performance. Supported by the CEO/ Board of Directors LITTLE m = TACTICAL MARKETING – what the company WILL DO ~ specific actions at the FUNCTIONAL AND OPERATIONAL level. SUSTAINABILITY  Balancing business needs and societal needs over the long term and doing the right thing.  What might be included in a company’s Triple Bottom line (TBL) report?  PEOPLE – PLANET – PROFIT: a metric for evaluating not only the financial results of the company but the broader social equity, economic, and environmental considerations as well.  Success objectives beyond profit, strategies/tactical plans to implement change, training and education needed to raise employee awareness  SUSTAINABLE sourcing of materials to efficient environmentally sensitive supply chains, marketers are evaluating critical processes to maximize the environmental impact while meeting corporate objectives related to cost and product quality.

 AMA'S SEVEN BIG PROBLEMS  Effectively targeting high-value sources of growth  The role of marketing in the firm and C-Suite  The digital transformation of the modern corporation  Generating and using insight to shape marketing practices  Dealing with an Omnichannel world - multiple ways to buy  Competing in dynamic, global markets  Balancing incremental and radical innovations

UNIT 2 MODULE 2: MARKETING PLANNING AND STRATEGY  BENEFIT is some type of utility that a company and its products provide its customers. UTILITY is the want satisfying power of a good or service  FORM – when the firm converts raw materials into finished products desired by the market  PLACE – available where at a convenient location  TIME – when they want to purchase OWNERSHIP – the facilities of exchange that are available that allow for transfer of the product ownership from seller to buyer  CUSTOMER SATISFACTION is means for firms to identify ways to create, communicate, and deliver more customer value within a firm

 VALUE PROPOSITION is the whole bundle of benefits the company promises to deliver  CUSTOMER LOYALTY – a customer’s commitment to a company and its products and brands for the long run  CUSTOMER RETENTION – low propensity among a firm’s customer base to consider switching to competitors  CUSTOMER SWITCHING  CORE COMPETENCIES: activities a firm can do exceedingly well  DISTINCTIVE COMPETENCIES: a firm’s core competencies that are superior to those of their competitors  SUSTAINABLE COMPETITIVE ADVANTAGE: the resulting advantage a firm has when it invests in distinctive competencies  FIRST MOVER: when a firm introduces a new market offering, thus defining the scope of the competitive marketplace  SECOND MOVER: firm that follows what the first mover did

PORTER'S FIVE PRIMARY VALUE CHAIN FUNCTIONS

1. INBOUND LOGISTICS – how the firm goes about sourcing raw materials for production 2. OPERATIONS – how the firm converts the raw materials into final products 3. OUTBOUND LOGISTICS – how the firm transports and distributes the final products to the marketplace

4. MARKETING AND SALES – how the firm communicates the value proposition to the marketplace 5. SERVICE – how the firm supports customers during and after the sale  Identify all the four relevant strategic activities an organization engages in to create value for the customer. 1. FIRM INFRASTRUCTURE – how the firm is setup for doing business; are the internal processes aligned and efficient? 2. HR MANAGEMENT – how the firm ensures it has the right people in place, trains and keeps them 3. TECHNOLOGY DEVELOPMENT – how the firm embraces technology usage for the benefit of customers (ex: IVR, apps, etc.) 4. PROCUREMENT – how the firm deals with vendors/quality issues BIG M – Strategy, BIG PICTURE IDEA, what a company WANTS to do  THE WANT - What an organization is going to do, general statement of HOW  ex: a strategy may be “Amazon wants to improve brand awareness among consumers” Little m – Tactical, SPECIFIC ACTIONS, what a company WILL do – at the FUNCTIONAL AND OPERATIONAL LEVEL  SPECIFIC ACTIONS that will be implemented to achieve the goal at a functional and operational level > tv commercials, social media posts, banner ads, promotions  ex: “Amazon will advertise on social media platforms like Facebook and Instagram” MARKETING PLANNING is an ongoing process of developing/implementing market driven strategies for an organization. After the Organizational Mission/Vision/Goals/Objectives the marketing planning process is >  Situation Analysis  Market Research  Marketing Goals/Objectives  Marketing Strategies (segmentation/targeting/positioning/marketing mix strategies)  Implementation Plans  Contingency Planning  Identify the basic difference between mission, vision, goals, and objectives.  Mission – articulates purpose/ reason for existence  Vision – what the company wants to become  Goals – general statements of what the firm wishes to accomplish in support of the mission and vision, eventually becomes refined into specific, measurable, and (hopefully) attainable objectives for the firm.

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Objectives – provides benchmarks by which organizational performance is assessed.

 What are the three areas that must be in place for effective marketing planning. 1. Everyone in the organization must understand and support the concept of customer orientation – placing customer at the center of all aspects of the enterprise. AKA customer-centric organizations 2. To operationalize a customer-centric approach, all internal organizational processes and systems must be aligned around the customer. Internal structure and systems cannot be allowed to become an impediment to a customer orientation 3. CEO/ top partners in the organization must consistently set the tone for market driven strategic planning through the customer-centric business philosophy. Upper management must also support the process through consistent investment of resources necessary to make it work  SITUATION ANALYSIS: 3 COMPONENTS  MACRO-ENVIRONMENT: EXTERNAL trends outside of our company  Political, Legal, and Ethical – all firms operate within certain rules, laws, and norms of operating behaviors.  Sociocultural/Demographics – trends among consumers/society as a whole impact marketing planning greatly. Many such trends are demographics in nature, including changing generational preferences and the rising buying power of minority groups domestically and consumers in developing nations in the global marketplace.  Technological – constantly evolving technologies impact business in many ways. The goal is to try to understand the future impact of technological change so a firm’s products will continue to be fresh and viable.  Economic – the economy plays a role in all marketing planning. Part of a marketing plan is a forecast and accompanying budget, and forecasts are impacted by the degree to which predicted economic conditions materialize.  Natural – the natural environment also frequently affects marketing planning. The concept of environmentally friendly marketing, or green marketing, has been a growing trend in socially responsible companies. Sustainability which refers to business practices that meet humanity’s needs without harming future generations, has evolved into a part of philosophical and strategic core of many firms. COMPETITIVE ENVIRONMENT: PORTER'S 5 FORCES IN COMPETITION 1. THREAT OF NEW ENTRANTS: How strong are entry barriers based on capital requirements or other factors? A cornerstone of JetBlue’s initial market

entry success was the fact that it was exceptionally well-capitalized. Not many new airlines are. 2. RIVALRY AMONG EXISTING FIRMS: How much direct competition is there? How much indirect competition? How strong are the firms in both categories? JetBlue’s industry contains several firms that are much larger, but based on JetBlue’s unique value proposition, few of them can deliver the same customer experience at reasonable prices that JetBlue can. 3. THREAT OF SUBSTITUTE: indirect competitors - Substitutes appear to be different but can satisfy much or all the same customer needs as another product. Teleconferencing from PC to PC impacting the need for business travel – impacting JetBlue and other airlines. 4. BARGAINING POWER OF BUYERS: to what degree can customers affect prices or product offerings? So far, JetBlue has not been in much head-to-head competition with Southwest, Spirit, Allegiant, Frontier, or other low-fare carriers in its primary markets. Should this change, passengers will have more power to demand even lower fares and/or additional services from JetBlue. 5. BARGAINING POWER OF SUPPLIERS: Suppliers impact the competitive nature of an industry through their ability to raise prices or affect the quality of inbound goods and services. Jet fuel literally fires the airline industry’s economic engine. Also, few manufacturers of commercial aircraft still exist. Both factors point to a competitive environment with strong supplier power.  INTERNAL ENVIORNMENT:  Firm Structure and Systems  Firm Culture  Firm Leadership  Firm Resources  MARKET DRIVEN STRATEGIC PLANNING: Describes the process at the corporate or strategic business unity (SBU) level of marshaling the various resource and functional areas of the firm toward a central purpose around the customer.  SBU = STRATEGIC BUSINESS UNIT: relatively autonomous division or organizational unit of a large company that operates independently but within the corporate umbrella, exercising control over most of the factors affecting its long-term performance. What is the function of BCG GROWTH-SHARE MATRIX?  For purposes of strategy development, the BCG matrix approach is seductively simple and has contributed to decision making about internal cash generation and usage across SBUs. It has also morphed in application downward to often be applied to product lines and product groups, which is nominally possible so long as costs and returns can be properly isolated for investment decisions.

DOGS - what happens when there is low growth potential and low market share  ORGANIZATIONAL STRATEGIES  GENERIC BUISNESS STRATEGY: The overall directional strategy at the business level  COMPETITIVE STRATEGIES

 MILES AND SNOW STRATEGY TYPES  PROSPECTOR: searching for new marketing opportunities  ANALYZER: operating in 2 types of domains, one that is stable/predictable and one that is promising/innovative where the firm follows competitors closely  DEFENDER: narrowly focused on improving operational efficiency, not making major adjustments to structure and processes  REACTOR: catching up, perceiving change but unable to respond effectively until forced by environmental factors (ex: Taxis during the rise of Uber and Lyft)

What is SWOT analysis? What value does it bring to the situation analysis of the marketing planning process step?

UNIT 2 MODULE 3: GLOBAL MARKETING  GLOBAL EXPERIENCE LEARNING CURVE – INTERNATIONAL MARKETS, AS COMPANIES EXPAND GETTING MORE INTERNATIONAL EXPERIENCE  4 STAGES (not always linear) 1. NO FOREIGN – business conducted through intermediaries, limited direct contact, no formal internal channel relationships, ex: WEBSITE – international sales are purely coincidental 2. FOREIGN – formal international strategy, developing local intermediaries: distribution/service representation, products modified to fit international requirements 3. INTERNATIONAL – manufacture products outside domestic markets, incorporates international division 4. GLOBAL – all world markets are single markets w/ many different segments, more than ½ of companies’ revenues are generated abroad  GLOBAL MARKET RESEARCH – ASSESSING GLOBAL MARKETS, 5 BASIC TYPES OF INFORMATION 1. ECONOMIC ENVIORNMENT 2. CULTURE, SOCIETAL TRENDS 3. BUSINESS ENVIORNMENT 4. POLITICAL/ LEGAL LANDSCAPE 5. SPECIFIC MRKT CONDITIONS/COMPETITORS

 EMERGING MARKETS  Source of significant economic growth and therefore market opportunities MULTINATIONAL REGIONAL MARKET ZONES Groups of countries that create formal relationships for mutual economic benefit through lower tariffs and reduced trade barriers  Formed by 4 forces > economic, geographic, proximity, political, cultural similarities  4 REGIONAL MARKET ZONES  MERCOSUR: South American Market Zone (Chile, Brazil, Argentina, Paraguay, Uruguay  ASEAN: Asian Market Zone (Indonesia, Malaysia, China, Japan, South Korea  EUROPEAN UNION:  NAFTA: North American Free Trade Agreement (now replaced w/ USMCA Agreement - US, Mexico, Canada) GLOBAL MARKET ENTRY STRATEGIES EXPORTING – most common, minimal investment/little risk - initial entry strategy and not a long-term approach  Market Entry Strategies > Internet, Exported and Distributor, Direct Sales Force- (expensive but can be worth it if you want to gain control)  CONTRACTUAL AGREEMENTS  Licensing > local partnerships are required by law, legal restrictions, limited financial resources  Franchising > access to foreign market w/ local ownership > supply products, services, management expertise in return for market knowledge, financial gains  STRATEGIC ALLIANCES – partnered companies spreading risk, each company maintaining independence  International Joint Venture > partners set up a separate legal entity w/ new identity different from other alliances in management duties, equity position, legal ventures, etc. OWNERSHIP – greater risk > potential long-term growth  Direct Foreign Investment > timing, legal issues, transactions costs, technology xfer, product differentiation, marketing communication barriers  GLOBAL MARKETING STRATEGIES  ORGANIZATIONAL STRUCTURE DECISIONS  PRODUCT DECISIONS  Product adaptation  Backward Invention - discontinued in one market, but new in another  CONSUMER DECISIONS  CHANNEL DECISIONS  MARKETING COMMUNICATION DECISIONS

 Global Marketing Themes, Local marketing  PRICING DECISIONS  Why is organizational structure important for companies in global markets?  Decision making authority  Degree of centralization  Centralized – greater control, consistency  Decentralized – hands on management approach, rapid response to change  Regionalized – combined of both How is product adaptation different from product innovation? DIRECT PRODCUT EXTENSION – use of an established product brand name for a new item in the same product category  

PRODUCT ADAPTATION – alter the existing product PRODUCT INVENTION – new product

 What are four specific product issues facing international consumer marketers. 1. QUALITY 2. FITTING THE PRODUCT TO THE CULTURE 3. BRAND STRATEGY 4. COUNTRY OF ORIGIN  PLACE OR DISTRIBUTION > What are the 6Cs of CHANNEL STRATEGY? 1. Cost > initial investment and cost of maintaining 2. Capital 3. Control 4. Coverage > local distribution networks 5. Character > long term nature of channel decision 6. Continuity > changing distribution system can bring anxiety to customers, and give competitors an opportunity to take advantage of disruption of service PROMOTION OR MARKETING COMMUNICATION  Advertising > global marketing themes, local content, local market ads  Personal Selling  Sales Promotions Public Relations - generate positive publicity for their client and enhance their reputation

PRICING STRATEGIES IN GLOBAL MARKETS  ONE WORLD PRICE – consistent price for ALL markets

 LOCAL MARKET CONDITIONS PRICE – based on local market conditions w/ minimal consideration for the actual cost of putting the product into the market  COST-BASED PRICE – cost + markup PRICE ESCALATION  export costs – transfer pricing  traffic, import fees, taxes  exchange rate fluctuations  middlemen and transportation costs  DUMPING, GRAY MARKETINGS – THE ISSUE  DUMPING – practice of charging LESS THAN PRODUCT PRICE in home market  GRAY MARKET – unauthorized diversion of branded products from low price to high price in different markets ~...