Marketing 1

  1. Betting on a sure thing
    • Betting is a form of entertainment
    • On the average you will lose
  2. Data mining
    • Discovering hidden predictive information
    • Form of market research; investing on info
    • Doesn't always pay off
  3. Investing in customer relationships
    • Business determine profitability of customers
    • Time and money are invested for personal relationships
  4. Total rewards
    • Basis for freebies
    • Rewards programs
  5. Predictor variables and which are continuously updated?
    • Predictor variables are thing such as how close someone lives to a casino
    • Continuously updated are things like age, gender (women play more slots)
    • This is on average what they predict
  6. 80/20 Rule
    • 80% of profit comes from 20% of customers which tend to be repeat customers
    • Gary Loveman
  7. 4 P's of Marketing
    • Product
    • Promotion
    • Place
    • Price
  8. Paul favorite definition of marketing
    • Identifying, understanding and satisfying buyer demands through exchanges
    • Who they are and how to satisfy
    • Sometimes "satisfaction" isn't sufficient
  9. Difference between satisfied and very satisfied
    Satisfied are 3x more likely to go somewhere else
  10. 3 kinds of customers
    • Make you money (frequent)
    • Could make you money (someone new)
    • People who cost you (not worth it); only buy sale items

    • Word of mouth is very powerful
    • Repeat customers are crucial!
  11. Another definition of marketing
    • Attempts to anticipate, sometimes to change, but always to satisfy buyer demands through exchanges to achieve our own objectives
    • Figuring out what someone wants in the future
  12. Common components to almost all marketing definitions?
    • Satisfying buyers
    • Exchange process
  13. Advertising and selling
    • The tip of the iceberg; surface level
    • Very visible and dramatic, but only a small part of the whole
    • This is "promotion"
  14. What is happening when there is voluntary exchange?
    • Marketing; it is buyers and sellers interacting
    • Not limited to monetary exchanges and to for-profit organizations
    • Applies to individuals and non profits
  15. "Discovering marketing" or "Beginning marketing"
    Organizations that could ignore customers' concerns in the past now speak of this; It means that they didn't have a specific marketing department but still did it

    As long as voluntary exchange is happening, so is marketing
  16. What questions does a business need to ask?
    • Is marketing done well? 
    • -- Checking sales/profit but also at specific products

    • Does marketing matter?
    • -- Competition, the more competition the harder it is to get customers 
    • -- Producers want to restrict competition
  17. Middlemen
    • Organizations that exist to bring buyers and sellers together; facilitating and expediting exchanges
    • They are good at making goods available to customers since manufacturers just make products
    • Much of marketing is done my these
  18. What are the most channels of distribution for consumer goods?
    20th Century: Manufacturer -> Wholesale -> Retail -> Customer

    21st Century: Manufacturer -> Retailer -> Customer
  19. How much consumer spending was online?
    • 10%
    • Online is more tell then sell
    • Info online tells us what we should buy 
    • Big purchases are not done online
  20. Form Utility
    • Manufactures make things by turning inputs into outputs; physically changing the product
    • Marketing activities affect form utility only indirectly
  21. What do marketing activities contribute directly to?
    • Time utility
    • Place utility
    • Possession utility

    When, where, and how the customer wants it
  22. Where are value added activities done for consumer goods manufactured outside the US?
    • Still in the US; before and after
    • Planning, design, branding, retailing

    Nike outsources and doesn't actually make the product; people who make nike products are not profitable. They just do the before and after manufacturing
  23. The role and importance of marketing in organizations
    • What determines how customers are treated
    • Take care of the customer
  24. 4 orientations that related to the role and importance of marketing in organizations
    Production orientation: stress on making products; producer priorities

    Product orientation: offer highest quality as expert producer sees it; professionals, professors, performers

    Selling orientation: promoting products to push prospects to buy with strong ads and selling (common marketing mentality, but is a mistake)

    Marketing orientation: customer satisfaction focus; opposite of selling orientation
  25. Marketing Myopia
    • Short sightedness
    • Mistake of focusing on a product's form instead of benefits buyers seek
    • Thinking that there will always be demand for your product
    • Ex: IBM & Remmington/ Blockbuster & Netflix; they were slow to change and became obsolete
  26. Production and product orientations association?
    • Excess demand
    • Inward-looking, what's important to producers
    • After a certain level of development, supply tends to grow faster than demand-- they then "discover marketing"
  27. Beginner's Mistake
    • Associated with the selling orientation. 
    • Hospital Ex: The first time hospitals experienced losing money and empty beds, they discovered marketing. They believed that they just had to persuade people to buy their stuff. Didn't work bc all competitors were doing the same thing.
    • Mistake 1: marketing & ads were the same
    • Mistake 2: they sent the same messages "world class care"
    • Mistake 3: all ads are made to target pts when they should've marketed to physicians and insurances
  28. Selling vs Marketing orientation
    Selling orientation: we must sell what we make

    Marketing orientation: we must make what we can sell
  29. Recession vs Depression
    Recession: when your neighbor loses their job

    Depression: when you lose your job. More severe, but it's harder to lose your job when it is responsible for customer satisfaction
  30. "Marketing is everybody's responsibility"
    Idea of integrating customer perspective through the whole organization

    We want everyone asking how they can enhance customer experience i.e accounting making a corporation more cost effective

    Easier to accept now
  31. Top Management
    • Sets direction and tone-- "corporate culture"
    • Thinking long term. Which markets to get in and out of.
  32. Marketing Management
    Plans 4 Ps
  33. Lower Level Management and their Staff
    • Lowest status but very important
    • Delivers daily customer satisfaction
    • Common irony because satisfied employees are more likely to lead to satisfied customers (internal marketing)
  34. Changes in marketing since 1980
    • More fragmented markets: mass market is just about dead & big market segments have split
    • Slow economic growth: easier to do marketing when business is booming
    • Already high level of affluence: people have too much shit
    • De-regulation: Laws no long restrict competition as much; more competition=easier loss of customers
    • Entry of strong new competitors
    • More experience/training in marketing: better prepared=higher level of comp
    • Customers are more knowledgeable: We can price compare and defend our interests
  35. How can organizations anticipate and adapt to environmental forces?
    • Use scenarios (worst/best case/most likely)
    • Bigger organizations may try to influence politics
  36. Company Culture
    • Internal environment of an organization
    • The way they do things
  37. Role and importance of marketing
    Understanding customers is high priority; most is talk rather than actions
  38. 3 indicators of how important marketing is in a corporation
    • Willingness to invest in marketing research
    • How much of the 4 P's are managed by the marketing department (hospitals only let marketing do promotion)
    • How much of top management come from marketing
  39. 1st way to describe your customer
    • Demographics: population characteristics (visible terms) such as age, sex, education, income
    • No excuse for ignorance concerning demographic trends
    • CBS doesn't charge high in ads even though it's top watched because they want younger consumers that haven't formed brand loyalty
  40. Which age group is the biggest/smallest in 2010?
    The biggest used to be baby boomers/boom echo. Smallest were middle aged and seniors.

    Now the 0-15 age group is bigger bc more people have been born
  41. Why is household income important?
    • This is where important decisions are made.
    • Household is one or more people at the same address.
    • High income families are the smallest percentage but seem larger bc they are over represented.
    • 50-100K was the highest at 30%
  42. Ethnic percentage in the US
    • White was biggest and asian was smallest.
    • Now 80% of babies born in the US are not white
  43. Senior Boom and stereotypes
    • On average, they are now healthier and wealthier than ever
    • Older households accumulate more assets (houses) so they have more net worth

    Old/New stereotypes: old=stingy and poor; new=throw money around
  44. What is a customer that is older than the average customer?
    • Mature adult
    • There is more diversity since people are older
  45. Huge trends between 2000 and 2020
    50+ age group will increase by 76% and <50 will decrease by 1% (may be smart to market to older)

    By 2025, 20% of the US population will be 65+

    Less rigid age-roles now

    • Majority Fallacy: mistake of always going for the biggest/fastest growing target market (COMPETITION)
    • KGOY- kids grow older younger i.e they know more
  46. Trend for married women w/children under 6 labor participation?
    More married women w/young children in the labor force now

    Lifestyle changes reflect this
  47. Time poverty
    • Feeling like you don't have time to get things done
    • People now have to pick up chores because mom is working
  48. Instant gratification
    Less time=no patience
  49. Life simplification
    Keep it Simple Stupid (KISS) people will pay for simplification
  50. Changing Gender Roles
    • The idea that females are suppose to be homemakers.
    • Stereotype: dad worked and mom stayed home

    50 yrs ago there were more role decisions; mom picked some things, dad picked others. kids had no decisions (now they have more power)
  51. "What Women Want"
    • Dominate family (consumer) decision making: both parents make money so they make decisions together with kid influence
    • Make women comfortable: women spend more time shopping; they pay attention to if they are being treated w/respect in stores
    • Spread word: if women feel disrespected in a store, they will spread a negative word
    • Cleanliness
    • Control: attention to detail
    • Safety
  52. Asian shopping trend
    • Highest avg family income
    • Most frequent shoppers
    • Brand conscious/not brand loyal
    • Concerned w/appearances
    • Most likely to use the internet to plan a shopping trip
  53. Black shopping trend
    • Most fashion-conscious
    • More willing to travel to new/favorite stores (prefer in store shopping)
    • Preference for shopping alone
    • Most enjoyment in shopping
  54. Latino shopping trend
    • Most likely to shop as a family
    • Strong children influence 
    • Preference for national chain stores
    • More acculturation than assimilation
  55. Changing composition of US households
    Married w/children used to be dominant, but now more people are not married
  56. The Economic Environment
    The overall climate for marketing

    • The demand for most products and most organizations is pro-cyclical
    • Stronger demand=stronger economy; money at restaurants are more sensitive/inferior goods are the opposite
  57. American Economy Since 1990
    • Slow economic growth and low rates of inflation
    • Longest period of prosperity in US history
    • Followed by severe and stubborn recession
  58. Retailing Since 1990
    • Many major store chains have gone out of business
    • Relative decline of malls, less interest in shopping
  59. Interpersonal Influences on Consumer Behavior
    "The ways in which individual consumers' behavior is affected by other people"
  60. Culture
    • All beliefs, objects, etc. that are shared with a society and are passed on to next generation
    • The broadest influence on behavior
  61. Monopolistic Competition
    Most realistic and relevant of 4 traditional models for American marketing
  62. 5 forces of competition model (Portor Model)
    • More realistic, useful for organization's decision making (hypercompetition)
    • Adds effects of potential entrants, substitutes, suppliers, and buyers
  63. Intensification of Competition
    • Deregulation
    • Globalization
    • Scrambled (intertype competition) retailing- everyone offering everyone else's business
    • Much easier price comparisons
  64. What do laws protect?
    • Competition: anti-trust laws//wealth of nations 
    • Consumers
  65. Pendulum swing
    • Roughly there is a political pendulum swing in the opposite direction
    • Producers usually get their way politically (they can get organized easier and make bigger impact)

    Liberals=optimistic on gov regulation for business
  66. What determines what is acceptable?
    Market forces (customers, producers)

    Technology determines possibility and market forces determine practicality
  67. Why can technology be a turn-off?
    There is always a minority that want to get cutting edge (20%)

    • Businesses think that if its not broken then don't fix it.
    • New tech has bugs and may be more expensive
  68. Whats wrong with high tech?
    Not personal, need to be more user friendly
  69. Why are potential effects of technology are exaggerated?
    • New tech takes longer for full impact
    • Media exaggerates how quick new tech is impacting (bias)
  70. What tech improvements tend to reduce prices?
    • Cost effect
    • Substitution effect: making new products
    • On-line effect: comparing prices is easier
  71. Interpersonal (social) influences on consumer behavior
    The ways in which individual consumers' behavior is affected by other people

    • When you go shopping with other people, you spend more than when you go by yourself bc people want to show off. 
    • Competitive effect/social effect
  72. Digital natives
    Born since 1980 where tech has been around for most of their life
  73. Melting pot vs tossed salad
    Culture is a melting pot and makes us similar

    • Sub-culture makes us different
    • Different heritages, flavors, textures that influence each other but don't change
  74. Sub-cultures
    • Most powerful bases include race, religion, national origin, geography can have an effect on identity
    • Beware of stereotypes
    • By mid-century there will no longer be majorities
  75. 9 Nations
    Markets are affected by the different regions

    Regionalization: different taste for the same spaghetti sauce

    Scanner data, data base marketing; different companies will market differently based on the area
  76. Prizim System (Zip markets)
    • 66 kinds of American neighborhoods
    • Geodemographics: gray power neighborhood/bohemian mix neighborhood (short north)
  77. Upper-Upper class
    • Old money (rockerfellers, kennedys)
    • Typically less rich than new
  78. Lower-Upper Class
    New money (want to show the money)
  79. Which social class is the biggest
    Middle class is always the biggest
  80. Opinion leaders
    • Basically one-on-one
    • They want to share info
    • Influence consumers
    • Heavy users but not brand loyal (need for novelty)
    • Early adopters
    • Same social class
  81. Maslow Hierarchy of Needs
    • Physiological
    • Safety 
    • Social
    • Personal

    • People want to satisfy this and most people take for granted the biological needs
    • Very general and can apply to any product
  82. Perception
    • You don't just physically see, you have to absorb it and register it
    • Process of exposure, attention, reception, and interpretation of sensory stimuli
    • Conformation bias

    Highly selective
  83. Subliminal perception
    • Hidden communication
    • Possible to communicate in a way that they are now physically aware of 
    • Few authorities believe in it bc our senses don't work that way
  84. Personality as influence on consumer behavior
    • Generally weak relationships until more marketing-specific concepts considered
    • Self-monitoring
  85. Classic C.B Model** 5 Distinct Stages
    • 1) need recognition
    • 2) information search
    • 3) consideration of options
    • 4) purchase
    • 5) post-purchase evaluation
  86. Situational factors
    • Physical surroundings: atmosphere of stores
    • Social surroundings: people spend more when they are with someone
    • Temporal perspective: time affecting purchasing
    • Task definition: purpose; who is the product for?
    • Antecedent state: mood; don't go grocery shopping when you're hungry
  87. Buyer types
    People purchasing in and for various kinds of organizations
  88. 4 types of organizational customers
    • Producers: buys ingredients
    • Intermediaries: middle-men; buy stuff to make more valuable
    • Governments: provide services
  89. Institutions
    Non-for-profit
  90. Fundamental differences in b2b buyers
    • Fewer in number
    • Larger in size
    • Geographically concentrated
  91. 4 P's differences for B2B markets
    • Product: purchase inputs rather than outputs; support services and total systems often important
    • Place: fewer middlemen; sellers go to buyers (opposite to individuals)
    • Promotion: selling is critical (customer relations), ads are much less important bc you are communicating large complex message w/small # customers
    • Price: less price sensitivity, but more subject to negotiation

    Governments are diff bc they go to suppliers and the first 3 are fixed
  92. Demand differences for B2B
    • Demand is dependent on how much the customer's customer wants to buy
    • Fluctuates more
    • More rational (businesses are more expert in buying)
  93. B2B buying process differences
    • Takes longer, lasts longer (business buying decision requires more thought and time)
    • Involves more people (more people are involved in the decision)
    • More formal (more rules and laws involved)
  94. Segmentation
    The process of identifying smaller, more homogeneous segments; figuring out the most useful ways to divide a group into similar segments within the larger market
  95. Micromarketing
    • Sometimes a forecast
    • Each individual is their own market segment
    • Not cost efficient and practical
  96. What is limited by the size of the market?
    • Specialization
    • Adam smith (father of econ) talked about this
    • The bigger the market, the smaller the segments
  97. Privacy issues
    When targeting your best customers, find out as much as you can about lifestyles, media habits
  98. 4 basic areas for market segmentation info
    • Demographic (very plentiful)
    • Geographic (very plentiful)
    • Psychographic: lifestyle; social class, personality tell you about consumers but harder to obtain
    • Behavioristic: loyalty status

    Companies do a mixture of these typically
  99. Segmentation strategy alternatives
    • Concentration: focus on a niche; specialization
    • Mass marketing: undifferentiated; not workable in high income countries
    • Multiple segments: differentiated; different models, different ads for different customers
  100. What to do after deciding how to segment your market
    • Select one or more targets
    • Design the appropriate marketing mixes
  101. Product forms
    • Goods
    • Services
    • Ideas
    • Places
    • Personalities (politians, athletes)
    • Events (concert)
    • Experiences (disney)
    • An entire org (Walmart)
  102. Product
    • Anything that satisfies a need or a want and can be offered in exchange
    • Bundle of benefits that vary based on personality
  103. Total Product Concept (3 Levels)
    • Core (benefits): fundamental level
    • Tangible: physical
    • Augmented: extras
  104. Health care benefits sought
    • Care: physical treatment
    • Caring: feeling
    • Cure
    • Comfort
    • Convenience
    • Cost control
    • Quality: we want high quality, but cut corners when we have to pay
  105. Product parity
    Similar/identical products
  106. Tangible product level
    Physical level of product; this is most easily copied (reverse engineering)
  107. Product design
    • Optimizing the combination of: 
    • Function (what can it do)
    • Value (quantity+quality)/price
    • Aesthetics (what it looks/smells like)
  108. Quality
    • Absence of defects: how quality was measured; six sigma
    • Capabilities
    • Performance level

    Always from the customers point of view
  109. Augmented Product Level
    • Service/intangible level
    • These are tie breakers; harter to compare & replicate

    • Service
    • Credit
    • Delivery
    • Reputation
  110. Branding
    How producers identify their stuff

    • A strong brand name is more the result of effective marketing rather than the cause
    • You get a strong brand when you do the other marketing right; misunderstanding was that all you need is a brand name
  111. Brand name
    Brand mark
    Trade mark
    • Name: Simplest way; its what you say
    • Brand mark: something you see; sign, packaging
    • Trade mark: most profitable assets worth billions; valuable name that you can "rent"
  112. History of brand names
    • Became important around the industrial revolution along w/ads and packaging
    • We brand ourselves and look for something that speaks to us personally
  113. Importance of brands
    • Current customers buy products and tell others; use this to strengthen relationship
    • You want to know what consumer think/feel when they hear your brand (emotional connection)
    • Can be worth billions
  114. Types of brand names
    • National/Manufacturer brands: household names
    • Resellers/private label brands: sell through website or stores. 70% of what Kroger sells is kroger brand
    • Generic brands: may have no name or brand but no support. Typically account for 2% of sales
    • Licensed brands: ohio state/entertainment
    • Brand characters: celebrity or real person
    • Brandstanding: controversial brand sponsoring events on campus to seem better
  115. Battle of the Brands
    • Competitve struggle manufacturer brands vs retailer brands
    • Big retailers are becoming huge and powerful, now people just go to stores to see the available brands
    • In general, brand loyalty for consumer products has decreased significantly in recent years
  116. Advantages to private brands
    • Developing your own brand is not guaranteed; bigger places have more economies of scale
    • Better value
    • Exclusive availability
    • Greater profitability
  117. Types of consumer products
    • Convenience products: everyday items
    • Shopping products: get best price; homogeneous-price based; heterogeneous-attribute based
    • Specialty products: accept no substitute; expensive/high status brand
    • Unsought products: customers don't want it i.e donating blood
  118. Syndication
    When 1 good product pays for the rest of the failures
  119. Pressures for new products
    • Market saturation: durable goods that lasts for years
    • New substitutes: when competition comes out with something better
    • Changes in tastes, incomes: new customers
    • Intensified competition: highest profits are in the first couple months
  120. Product observations
    • Some organizations don't need as many new products i.e men's socks don't change, but some companies want to be pioneers
    • Product life cycle is becoming shorter
  121. Stages of new product development
    • Generate Ideas: copy competition, develop in lavs
    • Evaluate Ideas: filter ideas
    • Conduct Business Analysis: double check the maybe idea
    • Develop product and marketing mix: prototype and things start to get expensive
    • Test marketing: optional and throw the puppy into the world
    • Commercialization: the product is out and hope for the best
  122. Parallel processing
    Try to work on different parts at the same time; companies try to work on more than one step (need for speed)
  123. Product Champions
    • Champion: advocate who believes in the product; the product is their child
    • Helps it jump steps for best possible chance
  124. Product life cycle
    • Introduction: baby; high potential, very vulnerable (no profit, low sales)
    • Growth: young adulthood; best time in product's life cycle (high profit, high sales)
    • Maturity: adulthood; both profit and sales begin to decline
    • Decline: old age; profit and sales further decline; cut backs or bite the bullet
  125. Slotting allowances
    When companies pay retailers to sell their new product
  126. Shake out period
    Some companies start to drop out bc they know product will fail
  127. Over the product life cycle
    • Growth slows (short & early in life cycle)
    • Customers become more knowledgeable bc more experience
  128. Product Items
    1 specific product= SKU
  129. Product lines
    • Set of related product items
    • Coke-a-cola has a soft drink product line and a water product line
  130. Product Categories
    • Different brands of a product
    • Different pizza shops
  131. Product mix
    All product lines together
  132. Product proliferation
    • When companies have too many products
    • Not financially smart
  133. Unique problems of services marketing
    • Intangibility: communication; appearances, behaviors, credentials
    • Variability: quality control
    • Perishability: scheduling
    • Inseparability: delivery
    • Low productivity: cost
  134. Rainmakers
    • Cultivate referrals
    • Professional visibility opportunities
    • Specialize
    • Market penetration
    • De-marketing: more selective of customers bc too many dawg
  135. Marketing of Higher education
    • Product: big inc of demand for education; inc quality of students
    • Place: innovation on how courses are delivered
    • Promotion: personal selling
    • Price: college is getting more expensive, rising more than healthcare
Author
Zaqxz
ID
343080
Card Set
Marketing 1
Description
dlkj
Updated