Please enable JavaScript.
Coggle requires JavaScript to display documents.
Exam 4 - Coggle Diagram
Exam 4
Chapter 12 The Art and Science of Marketing
Marketing in a changing world
marketing is the process of creating value for and building relationships with customers in order to capture value back form them
marketing applies to goods and services, as well as nom-profits, places, people, and causes
place marketing describes efforts to attract people and organizations to a particular geographic location
cause related marketing promotes a cause or social issue to selected target markets
marketing helps people satisfy their needs and wants
needs
the differences between a person's actual state and their desired state
wants
specific goods, services, experience, or other entities desirable in light of a person's experiences, culture, personality
marketing facilitates the exchange process
the exchange process is the act of exchanging something of value (money) for something else of value
when exchange actually occurs it takes place in the form of a transaction which is the exchange of value between parties
marketers add utility (the power of a service to satisfy human need) to goods and services
the four forms of utility are:
form utility
place utility
time utility
possession utility
the marketplace concept is the idea that companies should respond to customers' needs and wants while seeking long-term profitability and integrating marketing with other forms of functional units in the organization
this involves relationship marketing focusing on developing long term relationships with customers, suppliers, and distribution partners
one of the goals of relationship marketing is customer loyalty which is the degree to which customers continue to buy from one company verses another
challenges in contemporary marketing
involving the customer in marketing marketing process. there are two types of technology that facilitate this collaboration:
social commerce - the creation and sharing of product related information among customers and potential customers
the voice of the consumer- everything that current and potential customers are saying and writing about a company and its products; also refers to efforts to capture this feedback
customer relationship management - an information system that captures, organizes, and capitalizes on all of the interactions a company has with its customers
learning about customers through collecting, analyzing, and using data to make better marketing decisions
the challenge of measuring effective marketing efforts largely focuses on the matter of attributions - how much does each marketing activity contribute to sales and other marketing metrics
marketing research is the process of gathering and analyzing market intelligence about consumers, competitors, and related marketing efforts through a combination of methods
marketing for greater concern for ethics and etiquette
permission based marketing is an approach in which firms request permission to deliver messages to an audience
a major issue is stealth marketing - delivering marketing messages to people who are not aware that they are being marketed to
another issue is native advertising, or sponsored content - advertising material made to look like regular news stories or social media posts
Understanding todays customers
the consumer market is made up of individuals and households buying goods and services for personal use
the organizational market is composed of companies and noncommercial institutions
consumers can use three distinct approaches to making purchasing decisions:
affective decision making
driven primarily by moods and emotions
habitual decision making
buying the same model or brands as before
cognitive decision making
rational data driven approach
organizational purchasing behaviors differ from consumer purchasing behavior in the following ways:
greater complexity in product usage
participation by and influence of multiple people in the buying process
there is typically a formal buying process
close relationship between buyers and sellers
it is based on economic payback and rational, objective factors
consumer purchase behavior is influenced by multiple factors:
culture
reference groups
socioeconomic levels
situational factors
self image
cognitive dissonance is the tension that exists when a person's beliefs do not match his or her behaviors one form is buying response
identifying market opportunities
strategic market planning involves three steps:
assessing opportunities and establishing market objectives, including market share - a firm's portion of total sales within a market. Marketing opportunities can be classified into four options:
product development - creating new products for current markets
market development - selling existing products to a new market
market penetration - selling more of a firm's products in a market it already serves
diversification - creating new products for new markets
developing a marketing strategy
examining the current market situation including reviewing past performance, evaluating the competition, examining internal strengths, and analyzing the external environment
the marketing mix
the marketing mix consists of four elements of the marketing strategy: product, price, distribution (place), and promotion (often called customer communication)
product
the bundle of value that satisfies a customers needs and wants
price
the amount of money charged for a product or service
affected by numerous factors including:
marketing objective
government regulations
production costs
customer perception
competition
customer demand
distribution channels
systems for moving goods and services from producers to customers
these channels include marketing intermediaries such as wholesalers and retailers
promotion
all the activities a firm undertakes to promote its product to its customers
goals include:
informing
persuading
reminding
crafting a marketing strategy
a companies marketing strategy is its overall plan for marketing a product involving three steps:
segmenting the market
a market is a group of customers that want or need a particular product and have money to buy it
market segmentation is the process of dividing the market into smaller groups with similar needs, wants, and purchase behaviors.
can be segmented in four ways:
demographics
a statistical analysis of a population
geographical segments
categorizing customers based on their geographic location
behavioral segments
grouping customers based on their relationships with or response to product characteristics
psychographics
categorizing customers based on their psychological makeups, interests and lifestyles
choosing target markets
target markets are specific customer groups a company wants to sell its product to
four strategies for reaching a target market:
differentiated marketing
targeting the marketing mix to each customer group
concentrated marketing
focusing on a single marketing segment
micromarketing
also known as individual marketing
targeting a single market or customer
undifferentiated marketing
also known as mass marketing
utilizing the same strategy for all potential customers
developing a marketing mix
after deciding on a target market a company will focus on positioning
positioning is managing the marketing mix in a way designed to occupy a particular place in the minds of target customers
thriving in the digital enterprise: marketing analytics
marketing analytics refers to a range of tools and techniques that help marketers plan and evaluate market activities
major goals are:
tracking the customer journey
measuring effectiveness
testing and tuning promotional messaging
optimizing the placement of adds
prioritizing customers
measuring the share of customers
measuring competitors market activity
data sources for marketing analytics
the data challenge starts with collecting data
data often needs to be cleaned or cleansed, it can be structured or unstructured
being able to tie it all together and use data productively remains a challenge for many companies
chapter 13 Product Management and Pricing
product line and product mix strategies
companies must manage individual products, product lines, and product mixes. the role is handled by a marketing manager in a smaller company. in a larger company it is handled by a brand manager - a manger who develops and implements marketing strategies and programs for specific products or brands
a product line is a group of products from a single manufacturer that are limited in terms of use characteristics
a product mix is a complete list of all products a company offers for sale. a product mix has three dimensions:
width - how many products a line has
length - how many items are in each product line
depth - how many versions of each product is in a product line
a companies product mix can be expanded in several different ways:
line extensions - adding new and similar products to the same product name (also known as family branding)
brand extension - applying a successful brand name to a new product category
line filling - introducing additional items in a given category under the same brand name (new flavors and package sizes)
line stretching - adding items with different price points above or below the current product line
if a company is expanding internally, brand managers must decide which products to offer and weather to standardize or customize the product
pricing strategies
pricing involves capturing value back from the customer in exchange for the value proposed by the product. there are a number of considerations for establishing price
government regulations including price discriminations, deceptive pricing, and price fixing
customer perceptions
marketing objectives
market demand - how sensitive goods and services are to price changes . this measure is known as price elasticity
competition
a company must also consider its cost structure that determines how much a company spends to produce and market its product including:
fixed costs - business costs that do not increase with the number of units produced (rent, salaries)
variable costs - business costs that increase with the number of units produced (raw materials, commissions, supplies)
one critical calculation in setting prices is the break even analysis - calculating the minimum volume of sales needed at a given price to cover up costs
product identities
a brand is a name, term, sign, symbol, design or combination of those used to identify the products of a firm and to differentiate them from competition products. there are multiple components of a brand:
the version that cannot be expressed orally is the brand mark
the graphical or textual representation is the brand logo
the portion that can be expressed orally lettering, words or numbers in the brand name
brand names and symbols are registered as a broad's trademark have legal protection so that their owners have exclusive rights to their use
branding creates value for a product this is called brand equity
the degree to which a person continues to purchase specific brands is known as brand loyalty
there are many types of name brands:
generic brands - products in plain containers that bear only the name of the product
co-branding - a partnership between two or more companies to closely link their brand names together on a single product
private brands - brands that carry the label of a retailer or wholesaler rather than the manufacturer
companies can also license their brand - selling the rights to its brand name and symbol
national brands - brands owned by manufactures and distributed nationally
packaging serves numerous roles, including making products easier to display, facilitating the sale of smaller products, serving a means of product differentiation, and enchasing a products appeal or convenience
labeling is an important aspect of packaging
pricing methods
a company can use one of three fundamental drivers as primary factors for establishing cost:
value-based pricing - setting prices based on customer perception of value
competition based pricing - a method of setting prices based on what other suppliers of similar products are charging
cost-based pricing - setting prices based on production and marketing costs rather than the condition of the marketplace
a company can apply a variety of other methods for optimizing and adjusting pricing
auctions and participative pricing- buyers competitively bid on products being sold or customers pay the amount they think the product is worth
subscription pricing - a price model in which customers are charged a recurring fee for the right to continue to use a product
loss-leading pricing - setting a price on one product at a loss as a way to entice customers to consider other products
free and premium pricing - offering some products for free while charging for others
companies can adjust their pricing strategies as new products move through their lifecycle
penetration phase - introducing a product at a lower price in order to build sakes quickly
skim pricing - charging a higher price for new products during their introductory stage and lowering the price later
algorithmic pricing - a variety of computational methods used to set price
after a company has established its initial price it can also use a number of price adjustment tactics to adjust prices up or down over time
discounting
The new product development process
the product development process is a formal process for generating, selecting, developing and commercializing product ideas. there are six steps:
business analysis - subjecting ideas that survive screening to a business analysis based on estimates of product cost, sales volume, and selling price
prototyping - developing functional prerelease versions called prototypes to be used to target customers
idea screening - subjecting ideas to feasibility or concept testing to identify those with the best chance of turning into successful products
test marketing- releasing a finished product to select customers or market segments
idea generation- brainstorming product concepts that could satisfy unmet market needs
commercialization - large scale production and distribution of products that have survived the testing process
thriving in a digital enterprise: virtual vs augmented reality
characteristics of products
some products are predominantly tangible while others are mostly intangible. the product continuum indicates the relative amounts of tangible to intangible products
products can be classified as consumer products or industrial/commercial products
consumer products are primarily sold to individuals for personal consumption. there are four subgroups:
convenience products
everyday goods and services people buy frequent without much conscious planning
shopping products
fairly important goods and services that people buy less frequently with more planning and comparison
specialty products
particular brands that the buyer especially wants and will seek regardless of location or price
unsought products
products such as life insurance, cemetery plots, and items that are new to the marketplace
industrial and commercial products are purchased by the organizations in large quantities and are used to create other products or to operate the organization
expense items
inexpensive items organizations generally used within a year of purchase
capital items
more expensive products with a longer life cycle
more products go through a product life cycle and progress through four stages:
maturity - sales begin to level off
decline- sales and profits begin to slip
growth - an increase in sales, competition, and distribution outlets
introduction - from R&D phase through fist commercial availability