Marketing Notes for Midterm #1

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Marketing Chapter 1

Marketing a set of business practises designed to plan for and present an organizations products or services in ways that build effective customer relationship
Marketing is about Satisfying Customer needs and wants
Needs a person’s feeling physiologically deprived of basic necessities such as food, clothing, shelter and safety
Wants the particular way in which a person chooses to satisfy a need which is shaped by a person’s knowledge, culture, and personality
Market is the group of people to whom an organization is interested in marketing its products, services or ideas.
Target market: the customers segment of group to whom the firm is interested in selling its products and services; potential customers who have both an interest in the product or service and an ability to buy
Exchange: the trade of things of value between the buyer and the seller so that each is better off as a result
Market Mix: the controllable set of activities that the firm uses to respond to the wants of its target market 4P’s

Product creating value in the form of  goods, services , and ideas that will satisfy the customer’s needs ( Brand – Size – Quality – Features  etc)

• Goods are the items that you can physically touch
• Services are intangible customer benefits that are produced by people or machines and cannot be separated from the producers , air travel, banking insurance etc.
• Ideas  include thoughts opinions philosophies and intellectual concepts that are marketed

Price Transacting Value the overall sacrifice a consumer is willing to make – money , time , energy to acquire a specific product or service.
Place Delivering Value describes all the activities necessary to get the product from the manufacturer or producer to the right customer. developing an efficient system for merchandise to be distributed in the right quantities to the right location, and at the right time in the most efficient way in order to minimize system wide costs while satisfying the service level required.

Promotion Communicating Value   can enhance a product or service’s value, by communicating  to the valued customers , Advertising public rations direct marketing and electronic media

• External forces such as social , technology , economic , regulatory , competitors , and demographics all shape a company’s marketing activities
• Marketing can be performed by both individuals and organizations
  • B2C Business to consumers
  • B2B Business to business
  • C2C Consumer to Consumer
• Marketing occurs in many settings
  • Jumpstart the economies of less developed countries to  bring buyers and sellers together
  • Non profit groups also benefit from good marketing spreading news about their cause.

• Production- oriented Era
• Sales Oriented Era
• Market Oriented Era
• Value based Marketing Era
  • Value  reflects the relationship of benefits to costs, or what the consumer gets for what he or she gives
  • A business must understand what customers view as the key benefits of a given product or service and how to improve on them.
  • Value Get (benefits =  time and money )
  • Isn’t just about  creating  strong products and services it should be a core function of the company
    • Build Value
      1. Sharing information  in a value based marketing oriented firm , marketers share information about customers and competitors that has been collected through customer relationship management
      2. Balancing benefits with costs constantly measure the benefits that customers perceive against the cost of their offering.
      3. Building relationship with customers
         1. Transactional orientation regards the buyer seller relationship as a series of individual transaction so anything that happened before or after the transaction is of little importance.
         2. Relational ship orientation a method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long tern relationship
         3. Customer relationship management a set of strategies, programs, and systems that focus on identifying and building loyalty among the firms most valued customers.
      • Create value for customers and build customer relationship
        1. Understand the marketplace and customer needs and wants
        2. Design a customer driven marketing
        3. Construct a marketing program that delivers superior value
        4. Build profitable relationships
        5. Capture value from customers to create profits and customer equity

    Marketing process in a summary

Chapter 2 Developing marketing Strategies

• Strategic marketing planning process a set of steps to develop a strategic marketing plan
• Planning phase in this phase top management define the mission or vision of the business, evaluate the situation by assessing how various players, both in and outside the organization affect the firm’s potential for success and identify and evaluate different opportunities by engaging in segmentation targeting and positioning and develop the marketing mix.
• Implementation phase where marketing manages implement the marketing mix , allocate resources, and develop the marketing organization
• Control phase the part of the strategic marketing planning process when mangers evaluate the performance of the marketing strategy and take any necessary corrective actions.
• Mission Statement – A broad description of a firm’s objectives and the scope of the activities it plans to undertake; attempts to answer two main questions:  What type of business is it? What does it need to do to accomplish its goals and objectives?
  • Are specific
  • Are realistic
  • Are motivating
  • Are customer centric
  • Fit the market environment
  • Are based on distinctive competencies
• Sustainable competitive advantage, namely ,something the firm can persistently do better than their competitors

STP( Segmentation, Targeting and positioning )
Is the process that firms use to identify and evaluate opportunities for increasing sales and profits.
Segmentation

• Market segment a group of consumers who respond similarly to a firm’s marketing efforts
• Market segmentation the process of dividing the market into groups of customers with different needs, wants, or characteristics – who therefore might appreciate products or services geared especially for them.

Targeting

• The process of evaluating the attractiveness of various segments and then deciding which to purse as a market.

Positioning

• Involves the process of defining the marketing mix variables so that target customers have a very clear, distinctive, desirable understanding of represents in comparison with competing products.

Developing marketing mix

1. Product and value creation – products, which include services, constitute the first of the 4ps’, because the key to the success of any marketing program is the creation of value, firms attempt to develop products and service that customers perceive as they are valuable enough to buy the product.
2. Price and value for Money –a firm provides a product or a service, or a some combination thereof, and in return it receives money. Value based marketing requires that firms charge a price that customers perceive as giving them good value for the products and services
   1. Cost based pricing a pricing strategy that involves first determining the costs of producing of providing a product and then adding a fixed amount above the total to arrive at the selling price
   2. Competitor-based pricing A strategy that involves pricing below, at, or above the competitors’ offering
   3. Value-based pricing a pricing strategy that involves first determining the perceived value of the product from the customers point of view and then pricing accordingly
3. Place and Value Delivery-the firm must be able to, after it has created value through a product and / or service , make the product or service readily accessible when a where the customer wants it .
4. Promotion and Value Commutation is the process that the marketers communicate the value of their offering or the value proposition, through many media forms.

Implement the marketing mix: allocating Resources

• Strategic business unit-A division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives.
• Product line –A group of products that consumers may use together or perceive as similar in some way
• Relative market share – A measure of the product’s strength in a particular market, defined as the sales of the focal product divided by the sales achieved by the largest firm in the industry.
• Market growth rate The annual rate of growth of the specific market in which the product competes

Growth Strategies

• Market Penetration Strategy employs the existing marketing mix and focuses the firm’s efforts on existing customers
• Market development strategy a growth strategy that employs the existing marketing offering to reach new market segments, whether domestic or international
• Product development strategy a growth strategy that offers a new product of service to a firm’s current target market
• Diversification strategy- a growth strategy whereby a firm introduces a new product or service to a market segment that it does not currently serve.

Stars occur in high growth markets and are high market share
Cash cows are in low growth markets but have high market shares
Question marks appear in high growth markets but have relatively low market shares
Dogs are in low growth markets and have relatively low market shares

Macro Strategies – or overarching strategies, focus on elements of excellence to create and deliver value and to develop sustainable competitive advantages.

• Customer excellence which focuses on retaining loyal customers and excellent customers service.
• Operational excellence through efficient operations and excellent supply chain management.
• Product excellence or achieving high-quality products; effective branding and positioning are key.

New growth strategies that companies can implement