Marketing test 1 sg - McMillen PDF

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COB 300 D: Marketing TEST # 1: Topical Overview (Chapters 1-3, 5-6, 9) Test Topics

Marketing Concept vs. alternatives  Marketing concept: the idea that an organization should (1) strive to satisfy the needs of consumers (2) While also trying to achieve the organization’s goals B. Identifying the TRUE need for a product/service C. Process for developing a Marketing Strategy Step 1: Evaluate the environment  SWOT analysis- acronym describing an organization’s appraisal of its internal strengths and weaknesses and its external opportunities and threats -Based on exhaustive study of four areas that form the foundation upon which the firm builds its marketing program: 1) Identify trends in the organization’s industry 2) Analyze the organization’s competitors 3) Assess the organization itself 4) Research the organization’s present and prospective customers. Step 2: Market Product Focus and Set the goals  Market segmentation: involves aggregating prospective buyers into groups or segments that (1) have common needs and (2) will respond similarly to a market action.  Set marketing and product goals  Select target markets  Find points of difference (P.O.D. are those characteristics of a product that make it superior to competitive substitutes)  Position the product Step 3: Develop the Marketing Program  Product strategy: Features, brand name, packaging, service, warranty  Price strategy: List price, discounts, allowances, credit terms, payment period  Promotion strategy: Advertising, personal selling, public relations, sales promotions, direct marketing  Distribution strategy: Outlets, channels, coverage, transportation, stock level  Implement the program (all four strategies become a cohesive marketing program)  Obtaining resources  Designing the market organization  Developing planning schedules  Actually, executing the marketing program designed in planning phase - Marketing strategy: the means by which a marketing goal is to be achieved, usually characterized by a specific target market and a marketing program to reach it - Marketing tactics: detailed day-today operational decisions essential to the overall success of marketing strategies

 Evaluate the Results – compare actual results with goals to identify and act on deviations to fill in its “planning gap”

D. SWOT analysis  Situational (SWOT) analysis: taking stock of where the firms or product has been recently, where it is now, and where it is headed in terms of the organization’s marketing plans and the external forces and trends affecting it.  Describes an organizations appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats  Identify trends in the organization’s industry  Analyze the organization’s competitors  Assess the organization itself  Research the organization’s present and prospective customers  How, when to do it? The first or the three steps in the planning phase  What information comes from it? (See definition)  What decisions are made based on it? Build on a strength, correct a weakness, exploit an opportunity, or avoid a disaster- laden threat E. Core competency: An organizations special capabilities; the skills, technologies, and resources, that distinguish it from other organizations and provide consumer value

F. Competitive advantage: a unique strength relative to competitors that provides superior returns, often based on quality, time, cost, or innovation  Sources (differentiated, niche, etc.) and Importance (part of competitive advantage)  Differentiation:  Brand name/ image  Strong dealer network  Product reliability  Superior service  Niche Strategy: Target narrowly focused market  Limited resources  Limited geographic market  Focused product line Sustainability (growth strategies)  Business portfolio analysis: quantify performance measures and growth targets to analyze its clients’ strategic business units (SBUs) as though they were a collection of separate investors  Diversification analysis: a tool that helps a firm search for growth opportunities from among current and new markets as well as current and new products

G. BCG Market Share matrix – Boston Consulting Group (Nationally known management consulting firm)  A business portfolio analysis that is a tool used to determine the appeal of each SBU or offering and then determine the amount of cash, if any, each should receive  SBU=Strategic business unit: used to separate units so they can be looked at as groups of separate investments  Y axis: Market growth rate (% per year)  X axis: Relative market share (Share relative to largest competitor) Cash cows: (Quadrant III) SBUs that generate large amounts of cash, far more than they can invest profitably in themselves. They have dominant shares of slow-growth markets and provide cash to cover the organization’s overhead and to invest in other SBUs. Stars: (Quadrant II) SBUs with a high share of high-growth markets that may need extra cash to finance their own rapid future growth. When their growth slows, they are likely to become cash cows. Question Marks: (Quadrant I) SBUs with a low share of high markets. They require large injections of cash just to maintain their market share, much less increase it. The name implies management’s dilemma for these SBUs: choosing the right ones to invest in and phasing out the rest. Dogs: (Quadrant IV) SBUs with low shares of slow-growth markets. Although they may generate enough cash to sustain themselves, they do not hold the promise of ever becoming real winners for the organization. Dropping SBUs that are dogs may be required, except when relationships with other SBUs, competitive considerations, or potential strategic alliances exist. Know axis, quadrants (star, dog, etc.) and what the quadrants mean for marketers DRAW IT HERE:

The Marketing Environment  Environmental Forces  Social: Demographic shifts; cultural changes,  Economic: Macroeconomic conditions; consumer incomes  Technological: Changing technology; technology’s impact on customer values; electronic business technology  Competitive: Alternative forms of competition; small businesses  Regulatory: Laws protecting competition; laws affecting marketing mix actions; selfregulation

Know categories, examples of them and why they matter Controllable vs. uncontrollable variables (environmental vs. product.)

J. Competition: types of competitors (brand, product, etc.) and competitive markets (monopoly, etc.) Types of competitors  Brand: (coke and Pepsi) Similar product, and need  Product: (Bottled drinks) similar need, different product  Generic: (Water) *NOT generic store brand* Meets need, no payment, quality level  Total Budget: (indirect) Competing with products of similar value Competitive markets  Pure competition: there are many sellers and they each have a similar products  Monopolistic competition: many sellers compete with substitutable products within a price range  Oligopoly: Few companies control the majority of industry sales  Pure Monopoly: One firm sells the product Know them and how to recognize them

K. Consumer problem-solving (routine, etc.)  Extended problem solving: each of the five stages of the consumer purchase decision process is used, including considerable time and effort on external information search and in identifying and evaluation alternatives. Several brands are in the consideration set, and these are evaluated on many attributes. Extended problem solving exists in high-involvement purchase situations for items such as automobiles and audio systems  Limited Problem Solving: Consumers typically seek some information or rely on a friend to help them evaluate alternatives. Several brands might be evaluated using a moderate number of attributes. Limited problem solving might be used in choosing a toaster, a restaurant for lunch, and other purchase situations in which the consumer has little time or effort to spend.  Routine Problem Solving: For products such as table salt and milk, consumers recognize a problem, make a decision, and spend little effort seeking external information and evaluating alternatives. The purchase process for such items is virtually a habit and typifies lowinvolvement decision-making. Routine problem solving is typically the case for low-prices, frequently purchased products Know each behavior, its elements (time, involvement, etc.) and be able to categorize decisions Know what each type of problem-solving means for marketers

L. Buyer decision-making process 1.) Problem recognition: perceiving a need 2.) Information search: seeking value 3.) Internal search: scan memory for previous experiences with products 4. External search: sources outside our own memories and experiences  Personal sources: relatives and friends  Public sources: consumer reports, government agencies  Marketer-dominated sources: advertising, Web sites, salespeople, displays 5. Post-purchase evaluation: assessing value  

Evaluation criteria: the objective attributes of a brand (such as display) and the subjective ones (such as prestige) Consideration set: the group of brands that a consumer would consider acceptable from among all the brands of which he is aware in the product class Purchase decision: buying value Post-purchase behavior: Value in consumption or use - Cognitive dissonance: the feeling of post-purchase psychological tension or anxiety

Know each step, be able to recognize where someone is in the process by what they have just done and/or what their next step is

M. Influences on consumer behavior (social, situational, etc.): how and why they influence behavior Sociocultural Influences

 Personal influences  Reference groups  Family  Social class  Class and subculture Psychological influences  Motivation and personality  Perception  Learning Values, beliefs, and attributes  Lifestyle Marketing Mix Influences  Product  Price  Promotion  Distribution Situational Influences  Purchase task  Social surroundings  Physical surroundings  Temporal effects  Antecedent states

N. Understand Selective perception process and recognize where someone might be in it Selective perception: a filtering of exposure, comprehension, and retention 1. Selective exposure: occurs when people pay attention to messages that are consistent with their attitudes and beliefs and ignore messages that are inconsistent 2. Selective attention 3. Selective comprehension: involves interpreting information so that it is consistent with your attitudes and beliefs 4. Selective retention: means that consumers do not remember all the information that they see read, or hear, even minutes after exposure to it

O. B2B decision making 1. 2. 3. 4. 5.

Problem Recognition Information search Alternative search Alternative evaluation Purchase Decision

6. Post-purchase evaluation  B2B Decision Making Process is the same; Environmental, Organizational, Interpersonal, and Individual factors affect all steps in the process B2B vs. B2C B2B Market Qualifiers • Resale • Direct use in producing other products • Use in general daily operations  Market Characteristics: Fewer customers exist; larger; derived demand  Product/service characteristics: Technical in nature; bought based on; purchased raw or semi-finished; augmented product characteristics are key (delivery capabilities; customer, technical service)  Buying process characteristics: Longer sales cycle; multiple buying influences (multiple people; decision-makers, influences, users); Professional buyers who are very well informed (purchase using); More complex objectives  Buying Process characteristics: Negotiations are common; Long-term agreements; Decisions more rational B2B Primary concerns  Price of goods: affects ability to compete o COGS, Margin, ROI  Specifications  Supplier service and support  Capacity  Relationship Buying situations:  Straight re-buy  Modified re-buy  New buy Marketing Mix  Product often more complex, more expensive  Negotiated prices  Ads/ promotions more technical  Distribution is very important  Direct selling is typical How it is similar to and differs from consumer decision-making

P. Segmentation and target marketing

Segmentation: The process of aggregating prospective customers into groups that have common needs and will respond to a marketing mix similarly Segments: relatively homogeneous groups of prospective buyers with similar consumption Behavior Segmentation process 1. Determine the customer variables that matter 2. Cluster variables together (age, gender, motive) 3. Group clusters into segments and analyze them 4. Select target market(s) 5. Develop mix and positioning B2C variables for segmenting Demographic o Age, gender, race, ethnicity, education, family size, occupation, social class Geographic o Country, region, climate, terrain, city size, urban/rural/ suburban, market density Psychographic o Motives, lifestyle, personality attributes Behavioristic o Benefit expectations, end-use, volume usage, price sensitivity

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B2B variables for segmenting Geographic location o Location affects the level of product demand Type of organization o Variations in firms’ characteristics leads to segmentation by type Customer size o Different size companies often have different needs Product use o Firms use basic inputs in ways different from one another

B2C and B2B variables for segmentation and how to recognize them Targeting strategy definitions (differentiated, concentrated, etc.) 

Differentiated: multiple marketing mixes, multiple target markets

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Undifferentiated: same strategy, same target market

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Concentrated: same strategy, multiple target markets

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Typical today: o One product-one market (tide) o One product and multiple markets (harry potter books) o Multiple products and multiple markets (FORD) o Segmented of one: mass customization and build to order (Dell)

Q. Positioning Product positioning: refers to the place a product occupies in consumers’ minds on important attributes relative to competitive products Product repositioning: changing the place a product occupies in a consumer’s mind relative to competitive products Strategies:

 Perceptual map: a means of displaying or grouping in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands, as well as its own product or brand. 

Product positioning using perceptual maps o Identify the important attributes for a product or brand class o Discover how target customers rate competing products or brands with respect to these attributes o Discover where the company’s product or brand is on these attributes in the minds of potential customers o Reposition the company’s product or brand in the minds of potential customers

Processes: Head-to-head positioning: involves competing directly with competitors on similar product attributes in the same target market Differentiation positioning: involves seeking a less-competitive, smaller market niche in which to locate a brand

R. Agencies/Major Laws: Major Laws Sherman Anti-Trust Act Clayton Act FTC Act

Monopoly; Price discrimination; Damaging/False advertising;

Agencies

Responsibility

FTC

- Business practices - False/deceptive ads, price, packaging, labeling. -Foods, drugs, cosmetics, medical devices, vet products Product safety Protects public from otherwise unregulated products Tv, radio, air waves Environment (research & regulation)

FDA CPSC (consumer product safety commission)

FCC EPA

*To be considered a part of the market consumers must have* •

Desire, ability, willingness, and authority to purchase such products

S. Sales Estimates Market potential – The total amount of a product that customers will purchase within a specified period at a specific level of industry-wide marketing activity (affected by environmental factors) Company sales potential – The maximum percentage of market potential that an individual firm within an industry can expect to obtain for a specific product Types of Sales Potential estimates - Breakdown approach – Measuring company sales potential based on a general economic forecast for a specific period and the market potential derived from it - Buildup approach – Measuring company sales potential by estimating how much of a product a potential buyer in a specific geographic area will purchase in a given period, multiplying the estimate by the number of potential buyers, and adding the totals of all the geographic areas considered

T. Reference Groups Types of reference groups: Membership – A group to which an individual actually belongs Aspirational – A group to which an individual aspires to belong Dissociative – A group to which an individual does not want to be associated with

Test 2

Chapter 11: Approaches: multi product brand (same name on products) Sunbeam - create multiple products built around your brand. - cover same market with similarly branded products to show consistency between product look and tech. - focus on quality (if customer has bad experience with one product it may affect other products as well. multi branding (individual branding) PG - create multiple brands made with individual brand names - Canvas the market and cover all aspects of market with different products

A total product offers three independent elements: •

The core product

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Its supplemental features

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Its symbolic or experiential benefits

Supplemental Features: Provide added value or attributes that are in addition to the product’s core utility or benefit •

Often include perks such as: •

Free installation

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Guarantees

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Product information

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Promises of repair or maintenance

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Delivery

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Training

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Financing

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Are not required to make the core product function effectively

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Help differentiate the product brand from another

Symbolic or Experiential benefits: Customers receive benefits based on their experiences with the product, which give symbolic meaning to many products (and brands) for buyers •

For some consumers, the simple act of shopping gives them pleasure, which lends to its symbolic value and improves their attitudes about the products they consider buying

Buyers purchase the benefits and satisfaction they think the product will provide •

Services, in particular, are purchased on the basis of expectations

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Often, symbols and cues are used to make intangible products more tangible, or real, to the customer

Product Categories Consumer products – Products purchased to satisfy personal and family needs •

Convenience products – Relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort •

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Shopping products – Items for which buyers are willing to expend considerable effort in planning and making purchases •

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Examples: Appliances, bicycles, furniture, stereos, cameras, shoes

Specialty products – Items with unique characteristics that buyers are willing to expend considerable effort to obtain •

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Examples: Bread, soft drinks, chewing gum, gasoline, newspapers

Examples: Fine jewelry, limited-edition collector’s items

Unsought products – Products purchased to solve a sudden problem, products of which customers are unaware, and products that people do not necessarily think of buying •

Examples: Emergency medical...