Marketing identifying and meeting human and social needs

societal process individuals and groups obtain what they need and want
Marketing Management art and science of choosing target markets
goods, services, events, experiences, persons ,places,
Marketed
properties, organizations, information, and ideas
The GOODS Physical goods constitute the bulk of most countries’ production and marketing efforts
The SERVICES work of airlines, hotels, car rental firms, barbers and beauticians etc.
time-based events, such as major trade shows, artistic performances, and company
The EVENTS
anniversaries
The EXPERIENCE orchestrating several services and goods
The PERSONS Artists, musicians, CEOs, physicians, high-profile lawyers and financiers
The PLACES Cities, states, regions, and whole nations compete to attract tourists, residents, factories
The PROPERTIES intangible rights of ownership
The ORGANIZATIONS work to build a strong, favorable, and unique image
The INFORMATION production, packaging, and distribution of information
The IDEAS Every market offering includes a basic idea
MARKETERS AND PROSPECTS Who Markets?
Marketer someone who seeks a response
Prospect attention, a purchase, a vote, a donation—from another party
Eight demand
1. Negative demand Consumers dislike the product
2. Nonexistent demand Consumers may be unaware
3. Latent demand Consumers may share a strong need
4. Declining demand Consumers begin to buy the product less frequently
5. Irregular demand Consumer purchases vary on a seasonal, monthly, weekly, daily
6. Full demand Consumers are adequately buying all products
7. Overfull demand More consumers would like to buy the product than can be satisfied
8. Unwholesome demand may be attracted to products that have undesirable social consequences
Market physical place where buyers and sellers gathered to buy and sell goods
KEY CUSTOMER MARKETS
Consumer Markets Companies selling mass consumer goods and services
Business Markets Companies selling business goods and services
Global Markets must decide which countries to enter; how to enter each
limited purchasing power such as churches, universities, charitable organizations, and
Nonprofit and Governmental Markets
government agencies
MARKETPLACE physical, such as a store you shop in
MARKETSPACE digital, as when you shop on the Internet
METAMARKET result of marketers packaging a system
Core Marketing Concepts
Needs basic human requirements such as for air, food, water, clothing, and shelter
Wants needs become wants when directed to specific objects that satisfy the need
Demands wants for specific products backed by an ability to pay
Five Types of Needs
1. Stated needs customer wants an inexpensive car
2. Real needs customer wants a car whose operating cost, not initial price, is low
3. Unstated needs customer expects good service from the dealer
4. Delight needs customer would like the dealer to include onboard GPS navigation system
5. Secret needs customer wants friends to see him or her as a savvy consumer
Value Proposition set of benefits that satisfy those needs
Intangible Value Proposition made physical by an offering
Brand offering from a known source
Customer Value Triad combination of quality, service, and price (qsp)
reflects a person’s judgment of a product’s perceived performance
Satisfaction
3 Marketing Channels
1.Communication channel deliver and receive messages from target buyers and include newspapers, magazines
2.Distribution channel display, sell, or deliver the physical product or service
3.Service channel warehouses, transportation companies, banks, and insurance companies
Supply Chain
Competition
Marketing Environment
Task Environment
Broad Environment
1.Network information technology
2.Globalization
3.Deregulation
4Privatization
5..Heightened competition
6.Industry convergence
7.Retail transformation
8.Disintermediation
9.Consumer buying power
10.Consumer information
11.Consumer participation
12.Consumer resistance
Production Concept
Product Concept
Selling Concept
Marketing Concept
Holistic Marketing Concept
holistic marketing
Relationship Marketing
Marketing Network
Integrated Marketing
Internal Marketing
Performance Marketing
FINANCIAL ACCOUNTABILITY
SOCIAL RESPONSIBILITY
MARKETING
Value Chain
1.market-sensing process
2.new-offering realization process
3.customer acquisition process
4.customer relationship mgmt
process
5. fulfillment management process
Core Competencies
1. Value exploration
2. Value creation
3. Value delivery
Marketing Plan
Strategic Marketing plan
Tactical Marketing plan
Defining Competitive Territory and Boundaries in Mission Statements
1.Industry
2.Products and applications
3.Competence
3.Market segment
longer channel stretching from raw materials to components
actual and potential rival offerings and substitutes
task environment and the broad environment
actors engaged in producing, distributing, and promoting the offering
six components: demographic environment, economic environment, social-cultural
environment, natural environment, technological environment, and political-legal environment
12 Key to Major Societal Forces
digital revolution has created an Information Age
Technological advances made it easier for companies to market in
create greater competition and growth opportunities
converted public companies to private ownership
Intense competition among domestic and foreign brands
Industry boundaries are blurring
Store-based retailers face competition from catalog houses
amazing success of early dot-coms
Internet, consumers have substantially increased their buying power
Consumers can collect information in as much breadth and depth
Consumers have found an amplified voice to influence peer and public opinion
Many customers today feel there are fewer real product differences
one of the oldest concepts in business; consumers prefer
products that are widely available and inexpensive
consumers favor products offering the most quality
consumers and businesses, if left alone, won’t buy enough of the organization’s products
achieving organizational goals is being more effective
s based on the development, design, and implementation of marketing programs
integrating the value exploration, value creation, and value delivery activities
aims to build mutually satisfying long-term relationships
ultimate outcome of relationship marketing is a unique company asset
marketer devises marketing activities and assembles marketing programs
element of holistic marketing, is the task of hiring, training, and motivating able employees
understanding the financial and nonfinancial returns
Marketers are increasingly asked to justify their investments in financial and profitability terms
effects of marketing extend beyond the company and the customer to society as a whole
Chapter II
tool for identifying ways to create more customer value
Core business processes
gathering and acting
researching, developing, and launching
defining target markets
building deeper understanding, relationships, and offerings
receiving and approving orders
companies owned and controlled most of the resources that entered their businesses
3 Key management of Holistic Marketing
How a company identifies new value opportunities
How a company efficiently creates more promising new value offerings
How a company uses its capabilities and infrastructure to deliver
central instrument for directing and coordinating the marketing effort
written document that summarizes what the marketer has learned
lays out the target markets and the firm’s value proposition
specifies the marketing tactics, including product features, promotion
Some companies operate in only one industry
Firms define the range of products and applications they will supply
firm identifies the range of technological and other core competencies
type of market or customers a company will serve
 4.Vertical
5.Geographical
Market definitions
Target market definition
Strategic market definition
INTENSIVE GROWTH
INTEGRATIVE GROWTH
DIVERSIFICATION GROWTH
Corporate culture
Business Mission
Marketing Innovation
SWOT Analysis
Marketing Opportunity
Environmental threat
Goal Formulation
Strategic Formulation
1.Overall cost leadership
2.Differentiation
3.Focus
strategic group
STRATEGIC ALLIANCES
1. Product or service alliances
2. Promotional alliances
3. Logistics alliance
4. Pricing collaborations
4.Style
5.Skills
6.Staff
7.Shared Values
1.Executive summary and table of
contents
2.Situation analysis
3.Marketing strategy
4.Financial projections
5.Implementation controls
Role of Research
marketing information system (MIS)
Internal Records
Order-to-Payment Cycle
Marketing Intelligence
Fad
Trend
Megatrend
Population
Demographic
POPULATION AGE MIX
EDUCATIONAL GROUPS
HOUSEHOLD PATTERNS
Economic Environment
vertical sphere is the number of channel levels
range of regions, countries, or country groups
describe the business as a customersatisfying process
focus on selling a product or service to a current market
focuses on the potential market
first course of action should be a review of opportunities for improving existing businesses
business can increase sales and profits through backward
makes sense when good opportunities exist outside the present businesses
shared experiences, stories, beliefs, and norms that characterize an organization
business unit needs to define its specific mission
Imaginative ideas on strategy exist in many places within a company
overall evaluation of a company’s strengths, weaknesses, opportunities, and threats
area of buyer need and interest
challenge posed by an unfavorable trend or development
Once the company has performed a SWOT analysis, it can proceed to goal formulation
Goals indicate what a business unit wants to achieve; strategy is a game plan for getting
there
3 PORTER’S GENERIC STRATEGIES
Firms work to achieve the lowest production and distribution costs
business concentrates on achieving superior performance
business focuses on one or more narrow market segments
firms directing the same strategy to the same target market
Even giant companies—AT&T, Philips, and Nokia—often cannot achieve leadership
4 major categories STRATEGIC ALLIANCES
One company licenses another to produce its product
One company agrees to carry a promotion for another company’s product or service
One company offers logistical services for another company’s product
One or more companies join in a special pricing collaboration
7 Elements McKinsey & Company, strategy
company employees share a common way of thinking
employees have the skills needed to carry out the company’s strategy
company has hired able people, trained them wel
s employees share the same guiding values
5 marketing Plan
marketing plan should open with a table of contents
relevant background data on sales, costs, the market
marketing manager defines the mission, marketing and financial objectives
sales forecast, an expense forecast, and a break-even analysis
outlines the controls for monitoring and adjusting implementation of the plan
To develop innovative products, successful strategies
consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and
distribute needed, timely, and accurate information to marketing decision makers
To spot important opportunities and potential problems
heart of the internal records system
set of procedures and sources that managers use
unpredictable, short-lived, and without social, economic, and political significance
reveal the shape of the future and can provide strategic direction
large social, economic, political, and technological change
main one marketers monitor
Developments often move at a fairly predictable pace
Mexico has a very young population and rapid population growth
five educational groups: illiterates, high school dropouts, high school diplomas, college degrees, and
professional degrees
Traditional-a husband, wife, and children- 2010 married couple with children under 18
available purchasing power in an economy depends on current income, prices, saving
Core beliefs and Values
Secondary beliefs and value
subcultures
Corporate environmentalism
potential market
available market
target market
penetrated market
Market demand
market demand function
market potential
marketing sensitivity of
demand
expansible market
Non-expansible market
market penetration index
share-penetration index
MARKET FORECAST
Company demand
company sales forecast
Sales quota
Company sales potential
Total market potential
market-buildup method
Multiple-Factor Index Method
Forecasting
COMPOSITE OF SALES
FORCE OPINIONS
EXPERT OPINION
PAST-SALES ANALYSIS
MARKET-TEST METHOD
 
Marketing Research System
Marketing insights
marketing research
 
1. Syndicated-service
research firms
2. Custom marketing
research firms
3. Specialty-line marketing
research firms
 
1.Primary data
2.Secondary data
Research Approaches
Observational Research
Ethnographic research
Focus Group Research
Survey Research
passed from parents to children and reinforced by social institutions
more open to change
groups with shared values, beliefs, preferences, and behaviors
recognizes the need to integrate environmental issues
set of consumers with a sufficient level of interest
set of consumers who have interest, income, and access to a particular offer
part of the qualified available market the company decides to pursue
set of consumers who are buying the company’s product
total volume that would be bought by a defined customer group
Market demand is not a fixed number, but rather a function of the stated condition
limit approached by market demand
distance between the market minimum and the market potential shows
market for racquetball playing
the market for weekly trash or garbage removal
compare the current and potential levels of market demand
Comparing current and potential market shares
Only one level of industry marketing expenditure will actually occur
company’s estimated share of market demand at alternative levels
expected level of company sales based on a chosen marketing plan
sales goal set for a product line, company division, or sales representative
Sales limit approached by company demand
maximum sales available to all firms
calls for identifying all the potential buyers in each market
Like business marketers, consumer companies also need to estimate area market potentials
art of anticipating what buyers are likely to do under a given set of conditions
When buyer interviewing is impractical, the company may ask its sales representatives to estimate
their future sales
Companies can also obtain forecasts from experts
Firms can develop sales forecasts on the basis of past sales
When buyers don’t plan their purchases carefully
Chapter IV
Marketing managers often commission formal marketing studies of specific problems and
opportunities
provide diagnostic information about how and
why we observe certain effects in the marketplace, and what that means to marketers
systematic design, collection, analysis, and reporting of data and findings relevant to a specific
marketing situation facing the company
3 Categories of Marketing Research
These firms gather consumer and trade information, which they sell for a fee
These firms are hired to carry out specific projects. They design the study and report the findings.
These firms provide specialized research services.
2 DATA SOURCES
data freshly gathered for a specific purpose or for a specific research project
data that were collected for another purpose and already exist somewhere
Marketers collect primary data in five main ways: through observation, focus groups, surveys,
behavioral data, and experiments.
gather fresh data by observing the relevant actors and settings unobtrusively as they shop or
consume products
particular observational research approach that uses concepts and tools from anthropology and other
social science disciplines
A focus group is a gathering of 6 to 10 people carefully selected by researchers based on certain
demographic, psychographic, or other considerations
Companies undertake surveys to assess people’s knowledge, beliefs, preferences, and satisfaction
and to measure these magnitudes in the general population
 Customers leave traces of their purchasing behavior in store scanning data, catalog purchases, and
Behavioral Research
customer databases
most scientifically valid research, designed to capture cause-and-effect relationships by eliminating
Experimental Research
competing explanations of the observed findings
Marketing researchers have a choice of three main research instruments in collecting primary data:
Research Instruments
questionnaires, qualitative measures, and technological devices.
Questionnaires consists of a set of questions presented to respondents

Qualitative Measures relatively unstructured measurement approaches that permit a range of possible responses

  5 Popular Qualitative Research Approaches

1.Word associations Ask subjects what words come to mind when they hear the brand’s name
Give people an incomplete stimulus and ask them to complete it, or give them an ambiguous stimulus
2.Projective techniques
and ask them to make sense of it

3.Visualization requires people to create a collage from magazine photos or drawings to depict their perceptions

4.Brand personification Ask subjects what kind of person they think of when the brand is mentioned
A series of increasingly more specific “why” questions can reveal consumer motivation and
5.Laddering
consumers’ deeper, more abstract goals
Technological Devices There has been much interest in recent years in various technological devices
Galvanometers Can measure the interest or emotions aroused by exposure to a specific ad or picture

SAMPLING PLAN After deciding on the research approach and instruments, the marketing researcher must design

  3 Decisions of Sampling Plan

1. Sampling unit Whom should we survey?
2. Sample size How many people should we survey?
3. Sampling procedure How should we choose the respondents?
Now the marketing researcher must decide how to contact the subjects: by mail, by telephone, in
CONTACT METHODS
person, or online.
Personal Contacts Personal interviewing, arranged interviews, intercept interviews
marketers contact respondents for an appointment and often offer a small payment or
Arranged interviews
incentive
most versatile method; e interviewer can ask more questions and record additional observations about
Personal interviewing
the respondent

Intercept interviews researchers stop people at a shopping mall or busy street corner and request an interview on the spot

Online Contacts approach of increasing importance, the Internet offers many ways to do research
The data collection phase of marketing research is generally the most expensive and the most prone
Collect the Information
to error
The next-to-last step in the process is to extract findings by tabulating the data and developing
Analyze the Information
summary measures
As the last step, the researcher presents findings relevant to the major marketing decisions facing
Present the Findings
management

The American Airlines managers who commissioned the research need to weigh the evidence. If their
Make the Decision
confidence in the findings is low, they may decide against introducing the in-flight Internet service

Measuring Marketing Marketers are facing increased pressure to provide clear, quantifiable evidence to senior management
Productivity as to how their marketing expenditures help the firm to achieve its goals and financial objectives

Marketing Metrics set of measures that helps them quantify, compare, and interpret their marketing performance

analyze data from a variety of sources, such as retailer scanner data, company shipment data, pricing,
Marketing-Mix Modeling media, and promotion spending data, to understand more precisely the effects of specific marketing
activities
Firms are also employing organizational processes and systems to make sure they maximize the
Marketing Dashboards
value of all these different metrics
customer-performance
records how well the company is doing year after year on such customer-based measures
scorecard
stakeholder-performance tracks the satisfaction of various constituencies who have a critical interest in and impact on the
scorecard company’s performance: employees, suppliers, banks, distributors, retailers, and stockholders
Customer Perceived Value
(CPV)
Loyalty
Value delivery system
Total Customer benefit
Total Customer Cost
Customer value analysis
Total Customer Satisfaction
Monitoring Satisfaction
Periodic surveys
quality
Customer
Profitability/Profitable
Customer
Customer Profitability
Analysis
Customer Lifetime Value
(CLV)
Customer relationship
management
Customer touch point
Personalizing marketing
Permission marketing
One-to-one marketing
Building Loyalty
Frequency programs
Club membership programs
Customer Database
Database Marketing
data mining
Consumer behavior
Culture
reference groups
primary groups
membership groups
secondary groups
Aspirational groups
dissociative groups
opinion leader
FAMILY
family of orientation
personality
LIFESTYLE AND VALUES
lifestyle
core values
biogenic
psychogenic
motive
Sigmund Freud
Abraham Maslow
HERZBERG’S THEORY
SELECTIVE ATTENTION
SELECTIVE DISTORTION
SELECTIVE RETENTION
SUBLIMINAL PERCEPTION
Learning
drive
Cues
Discrimination
evaluated value that a customer perceives to obtain
deeply held commitment to rebuy or repatronize a preferred product
all the experiences the customer will have
the perceived monetary value
perceived bundle of costs
reveal the company’s strengths and weaknesses
satisfaction is a person’s feelings of pleasure or disappointment that result from comparing a product’s
Wise firms measure customer satisfaction regularly
can track customer satisfaction directly and ask additional questions
as “fitness for use,” “conformance to requirements,”
a person, household, or company that over time yields a revenue
best conducted with the tools of an accounting technique
is best describes the net present value of the stream of future profits
process of carefully managing detailed information
any occasion on which a customer encounters the brand and product
making sure the brand and its marketing are as relevant as possible
the practice of marketing to consumers only after gaining their expressed permission
works best for firms that normally collect a great deal of individual customer information
Creating a strong, tight connection to customers is the dream of any marketer
designed to reward customers who buy frequently
be open to everyone who purchases a product or service
organized collection of comprehensive information
process of building, maintaining, and using customer databases
marketing statisticians can extract from the mass of data useful information
study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services
the fundamental determinant of a person’s wants and behavior
groups that have a direct (face-to-face) or indirect influence
with whom the person interacts fairly
Groups having a direct influence
religious, professional, and trade-union groups, which tend to be more formal and require less
continuous interaction.
those a person hopes to join
are those whose values or behavior an individual reject
the person who offers informal advice or information about a specific product
the most important consumer buying organization in society
consists of parents and siblings
set of distinguishing human psychological traits
same subculture, social class, and occupation may lead quite different lifestyles
person’s pattern of living in the world as expressed in activities, interests, and opinions
belief systems that underlie attitudes and behaviors
arise from physiological states of tension such as hunger, thirst, or discomfort
they arise from psychological states of tension such as the need for recognition, esteem, or belonging
aroused to a sufficient level of intensity to drive us to act
assumed the psychological forces shaping people’s behavior are largely unconscious
explain why people are driven by particular needs
Herzberg developed a two-factor theory that distinguishes dissatisfiers
Attention is the allocation of processing capacity to some stimulus
stimuli don’t always come across in the way the senders intended
don’t remember much of the information to which we’re exposed
selective perception mechanisms require consumers’ active engagement and thought.
induces changes in our behavior arising from experience
strong internal stimulus impelling action
minor stimuli that determine when, where, and how a person responds
have learned to recognize differences in sets of similar stimuli
Emotions
Memory
short-term memory
long-term memory
Brand associations
MEMORY PROCESSES
Memory encoding
Memory retrieval
Problem Recognition
Information Search
INFORMATION SOURCES
SEARCH DYNAMICS
market partitioning
belief
EXPECTANCY-VALUE MODEL
heuristics or rules of thumb
noncompensatory models
conjunctive heuristic
lexicographic heuristic
elimination-by-aspects
heuristic
1.Functional risk—
2.Physical risk—
3.Financial risk—
4.Social risk—
5.Psychological risk—
6.Time risk—
POSTPURCHASE
SATISFACTION
POSTPURCHASE ACTIONS
POSTPURCHASE USES AND
DISPOSAL
central route
peripheral route
Decision Heuristics
availability heuristic
representativeness heuristic
anchoring and adjustment
heuristic
Decision framing
Mental accounting
segregate gains.
integrate losses
Prospect theory
Consumer response is not all cognitive and rational
Cognitive psychologists distinguish between (STM) (LTM)
temporary and limited repository of information
more permanent, essentially unlimited repository
brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes
Memory is a very constructive process, because we don’t remember information and events
completely and accurately
describes how and where information gets into memory
the way information gets out of memory
The buying process starts when the buyer recognizes a problem
consumers often search for limited amounts of information
Major information sources to which consumers will turn fall into four groups
gathering information, the consumer learns about competing brands and their features
This process of identifying the hierarchy
descriptive thought that a person holds about something
The consumer arrives at attitudes toward various brands
mental shortcuts
consumer choice, positive and negative attribute considerations don’t necessarily net out
minimum acceptable cutoff level for each attribute and chooses the first alternative
the consumer chooses the best brand on the basis of its perceived most important attribute
consumer compares brands on an attribute selected probabilistically
The product does not perform to expectations.
The product poses a threat to the physical well-being or health of the user or others.
The product is not worth the price paid.
The product results in embarrassment in front of others.
The product affects the mental well-being of the user.
The failure of the product results in an opportunity cost of finding another satisfactory product.
Satisfaction is a function of the closeness between expectations and the product’s perceived
performance
A satisfied consumer is more likely to purchase the product again
Marketers should also monitor how buyers use and dispose of the product
attitude formation or change stimulates much thought and is based on the consumer’s diligent
attitude formation or change provokes much less thought and results from the consumer’s association
of brand
Previously we reviewed some common heuristics that occur with noncompensatory decision making
Consumers base their predictions on the quickness and ease with which a particular
Consumers base their predictions on how representative or similar the outcome
Consumers arrive at an initial judgment and then
adjust it based on additional information
the manner in which choices are presented
the way consumers code, categorize, and evaluate financial outcomes of choices
seller has a product with more than one positive dimension
Marketers have a distinct advantage in selling something if its cost
maintains that consumers frame their decision alternatives