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This is only a representation and students are requested not to limit their learning to this handout only. Branding -- is a promise, a pledge of quality. It is the essence of a product, including why it is great, and how it is better than all competing products. It is an image. It is a combination of words and letters, symbols, and colors. Brand - A name, term, sign, symbol, or a combination of these used to identify the products of one seller or group of sellers and differentiate them from those of competitors. Brand image - The total of all the impressions the consumer receives from the brand. These include actual experience, hearsay from other consumers, its packaging, its name, the kind of store in which it is sold, advertising, the tone and form of advertising, the media used for advertising, and the types of people seen using, buying or recommending the brand. Brand loyalty - The degree of consumer preference for one brand compared to close substitutes; it is often measured statistically in consumer marketing research. Brand Licensing- A popular branding strategy, brand licensing is an agreement in which a company permits another organization to use its brand on other products for a license fee. Royalties maybe as low as 2 per cent of wholesale revenues or higher than 10 per cent. Mattel, for example, licensed Warner Bros Harry Potter brand for use on board games and toys. Warner guaranteed royalties of $20 million from Mattel’s licensing fee of 15 percent of gross revenues earned in these branded products. Marketing -- the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, and people to create exchanges that will satisfy individual and organizational goals. Marketing activities should attempt to create and maintain satisfying relationships exchange relationships. To maintain an exchange relationship, buyers must be satisfied with the obtained good, service, or idea and sellers must be satisfied with the financial reward or something else of value received. A dissatisfied customer who lacks trust in the relationship often searches instead for alternative organizations or products. Marketing management- Is the process of planning, organizing, implementing and controlling marketing activities to facilitate exchanges effectively and efficiently. Effectiveness is the degree to which an exchange helps achieve an organization’s objectives. Efficiency refers to minimizing the resources an organization must spend to achieve a specific level of desired exchanges.
Market- a market could be a specific location or a geographic location, it is a group of people who as individuals or as organizations have needs for products in a product class and have the ability, willingness, and authority to purchase such products. In general use, the term market sometimes refers to the total population or mass market that buys products. There are two types of markets- Consumer markets and Business Markets. Consumer markets- Purchasers and household members who intend to consume or benefit from the purchased products and do not buy to make profits. Business markets- Individuals or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations.
Personal Selling- Paid personal communication that informs customers and persuades them to buy products in an exchange situation. Elements of Personal selling process- The specific activities involved in the selling process vary among salespeople and selling situations. No two salespeople use the same selling methods. Nonetheless, many salespeople move through a general selling process as they sell the products. This process consists of seven steps- prospecting, pre approach, approach, making the presentation, overcoming objections, closing the sale and following up. 4 P's vs. 4 C's • Not PRODUCT, but CONSUMER- Understand what the consumer wants and needs. Times have changed and you can no longer sell whatever you can make. The product characteristics must now match what someone specifically wants to buy. And part of what the consumer is buying is the personal "buying experience." Not PRICE, but COST- Understand the consumer's cost to satisfy the want or need. The product price may be only one part of the consumer's cost structure. Often it's the cost of time to drive somewhere, the cost of conscience of what you eat, and the cost of guilt for not treating the kids. Not PLACE, but CONVENIENCE- As above, turn the standard logic around. Think convenience of the buying experience and then relate that to a delivery mechanism. Consider all possible definitions of "convenience" as it relates to satisfying the consumer's wants and needs. Convenience may include aspects of the physical or virtual location, access ease, transaction service time and hours of availability. Not PROMOTION, but COMMUNICATION- Communicate, communicate, communicate. Many mediums working together to present a unified message with a feedback mechanism to make the communication two-way. And be sure to include an understanding of non-traditional mediums, such as word of mouth and how it can influence your position in the consumer's mind. How many ways can a customer hear (or see) the same message through the course of the day, each message reinforcing the earlier images?
Micromarketing- An approach to market segmentation in which organizations focus precise marketing efforts on very small geographic markets. Geodemographic segmentation- Marketing segmentation that clusters people in zip code areas and smaller neighborhood units based on lifestyle and demographic information. Market density- the number of potential customers within a unit of land area. Psychographic variables- Marketers sometimes use psychographic variables such as personality characteristics, motives and lifestyles to segment markets. A psychographic dimension can be used by itself to segment a market or combined with other types of segmentation variables. Cooperative advertising- Sharing media costs by manufacturer and retailer for advertising the manufacturer’s products. Dealer Loader- A gift, often part of the display, offered to a retailer who purchases a specific quantity of the merchandise Premium push money- Extra compensation to sales people for pushing a line of goods.
AIDA model of communication: A communication model which aims to obtain Attention, Interest, Desire and Action. Advertising objective: The objective of your communication strategy. To inform of a new development, persuade or remind. Benefit: The gain obtained from the use of a particular product or service. Consumers purchase product/services because of their desire to gain these built in benefits. Benefit Segmentation: Dividing a market according to the benefit they seek from a particular product/service. Brand extension strategy: The process of using an existing brand name to extend on to a new product/service e.g. The application of the brand name Virgin on a number of business activities. Competitive Advantage: Offering a different benefit then that of your competitors. Competitor Analysis: Process of understanding and analysing a competitors strengths and weaknesses, with the aim that an organisation will find a competitive positioning difference within the market. Concept testing: Testing the idea of a new product or service with your target audience. Brand repositioning: An attempt to change consumer perceptions of a particular brand. For example VW has successfully repositioned the Skoda brand. Data mining: Application of artificial intelligence to solve marketing problems and aiding forecasting and prediction of marketing data. Dichotomous question: Questions which limit the responses of the respondent eg YES/NO. Direct marketing: The process of sending promotion material to a named person within an organisation. Diversification: A growth strategy which involves an organisation to provide new products or services. The new products on offer could be related or unrelated to the organisations core activities. Demography: A study of the population. Demographic segmentation. Dividing the population into age, gender, income and socioeconomic groups amongst other variables.. Engels Law: Suggest that peoples spending patterns change as their income rises. Exclusive distribution: Limiting the distribution of a product to particular retail store to create an exclusive feel to the brand/product.
Econometric modeling: Application of regression techniques in marketing analysis
Focus Group: A simultaneous interview conducted amongst 6-8 respondents. The aim is to obtain qualitative information on the given topic. Geographic segmentation: Dividing the market into certain geographic regions e.g. towns, cities or neighborhoods. Innovator: Those consumers who are the first to adopt a product/service at the beginning of its lifecycle. They are usually willing to pay a premium to have the benefit of being the first. Intensive distribution: Distributing a product to as many retail outlets as possible. Laggards: Those consumers who adopt the product/service as it reaches the end of its lifecycle. They usually pay a competitive price for the benefit of waiting. Lifestyle segmentation: Analyzing consumers activities, interest and opinion (AIOs) to develop a profile on the given segment. Market Development Strategy: Selling an existing product/service in a new and developing market. Mass marketing: The promotion of a product or service to all consumers. Marketing Planning: A written document which plans the marketing activities of an organization for a given period. The document should include an environmental analysis, marketing mix strategies and any contingency plans should an organization not reach their given objectives. Market position: The perception of a product or an organization from the view of the consumer. Market research: Analyzing and collecting data on the environment, customers and competitors for purposes of business decision making. Modified Rebuy: Where an organization has to make changes to a specific buying situation. New buy: Where an organization faces the task of purchasing a new product/service. Niche marketing: The process of concentrating your resources and efforts on one particular segment Objective to task method: Setting a advertising budget based on the desired goals of the communication campaign. Open ended questions: answers. Questions which encourage the respondent to provide their own
Paretos Law (80/20) : A rule which suggests that 80% of an organizations turnovers is generated from 20% of their customers. Perceptual map: Mapping a product/organization alongside all competitors in the hope to find a ' positioning gap' in the given market.
Primary data: The process of organizing and collecting data for an organization. Product Development Strategy: The development of a new product/service aimed at the organization existing market. The aim is to increase expenditure within the segment. Product Cannibalization: Loosing sales of a product to another similar product within the same product line. Public relations: The process of building good relations with the organizations various stakeholders. Relationship marketing: Creating a long-term relationship with existing customers. The aim is to build strong consumer loyalty. Sales promotion: An incentive to encourage the sale of a product/service e.g. money off coupons, buy one, get one free. Secondary data: Researching information which has already been published. Segmentation: The process of dividing a market into groups that display similar behavior and characteristics. Straight Rebuy: Where an organization reorders without modification to the specification. SWOT analysis: A model used to conduct a self appraisal of an organization. The model looks at internal strengths and weaknesses and external environmental opportunities and threats. Test marketing: Testing a new product or service within a specific region before national launch. Usage segmentation: Dividing you segment into non, light, medium or heavy users. Core Competencies-Things a firm does extremely well, which sometimes gives it an advantage over its competition Market opportunity-A combination of circumstances and timing that permits an organization to take action to reach a target market Competitive advantage-The result of a company’s matching a core competency to opportunities in the market place. Types of competitionBrand Competitors-Firms that market products with similar features and benefits to the same customers at similar prices. Product competitors-Firms that compete in the same product class but have products with different features, benefits and prices Generic competitors-Firms that provide very different products that solve the same problem or satisfy the same basic customer need Total budget competitors- Firms that compete for limited financial resources of the same customers
Discretionary income- Disposable income available for spending and saving after an individual has purchased the basic necessities of food, clothing and shelter Sampling- the process of selecting representative units from a total population Probability sampling- A sampling technique in which every element in the population being studied has a known chance of being selected for study Random sampling – A type of probability sampling in which all units in a population have an equal chance of appearing in the sample Stratified sampling- A type of probability sampling in which the population is divided in sub groups according to a common attribute and a random sample is then chosen within each group. Data mining technique- refers to discovery of patterns hidden in databases that have the potential to contribute to marketers understanding of customers and their needs Strategic Window-A temporary period of optimal fit between the key requirements of a market and a firm’s capabilities Customer Relationship Management- using information about customers to create marketing strategies that develop and sustain desirable customer relationships. Customer Value-Value is important element of managing long term customer relationships and implementing the marketing concept. A value is a customer’s subjective assessment of benefits relative to costs in determining the worth of the product. Mission statement- A long term view of what the organization wants to become Corporate strategy- A strategy that determines the means for utilizing resources in the various functional areas to reach organization’s goals. A corporate strategy determines not only the scope of business but also its resource deployment, competitive advantages and overall coordination of functional areas. BCG matrix- Boston Consulting Group approach is based on the market growth / market share matrix and is based of the philosophy that a product’s market growth rate and its markets hare are important considerations in determining its marketing strategy. All the firms SBUs and products should be integrated into a single, overall matrix and evaluated to determine overall portfolio strategies. The matrix enables the strategic planner to classify a firm’s products into four basic types: stars, cash cows, dogs and question marks. Stars are products with dominant share of the market and good prospects for growth. However, they use more cash than they generate to finance growth, add capacity, and increase market share. Example Apple’s Imac computer. Cash Cows have a dominant share of the market but low prospects for growth typically they generate more cash than is required to maintain market share. Bounty the best selling paper towels in US are a cash cow for Procter & Gamble. Dogs have a subordinate share of the market and low prospects for growth; these products are often found in established markets. Example- Checkers a fast food chain that features twin
drive through lanes is experiencing declining profits and market share and may be considered a dog relative to other fast food chains with different formats Questions marks sometimes called “problem children” have a small share of the growing market and generally require a large amount of cash to build market share. Mercedes mountain bikes are a question mark relative to Mercedes’ automobile products. The long term health of the organization depends on having some products that generate cash and provide acceptable profits and others that use cash to support growth. Intensive Growth- Growth occurs when current products and current markets have the potential for increasing sales. Strategies for intensive growth are – Market penetration, Product Development, Market Development Diversified growth- Growth occurring when new products are developed to be sold in new markets. Michael Porter’s Five Forces Model- Michael Porter described a concept that has become known as the "five forces model". This concept involves a relationship between competitors within an industry, potential competitors, suppliers, buyers and alternative solutions to the problem being addressed. We used the five-forces model as a basic structure and built on it with concepts from the works of many other authors. The result was a model with over 5,000 relational links.
While each industry involves all of these factors, the relational strengths vary. This results in a set of analyses, including: • • • • • • a success potential rating in eleven key areas a list of strategic strengths and weaknesses observations on strategic inconsistencies a written critique of your strategy a graphic analysis of key marketing concepts a written draft of a marketing plan
GATT- General Agreement on tariffs and trade (GATT)- An agreement among nations to reduce worldwide tariffs and increase international trade. Originally signed by 23 nations in 1947, GATT provides a forum for tariff negotiations and a place where international trade problems can be discussed and resolved. The General Agreement on Tariffs and Trade (typically abbreviated GATT) was originally created by the Bretton Woods Conference as part of a larger plan for economic recovery after World War II. The GATT's main purpose was to reduce barriers to international trade. This was achieved through the reduction of tariff barriers, quantitative restrictions and subsidies on trade through a series of different agreements. The GATT was an agreement, not an organisation. Originally, the GATT was supposed to become a full international organisation like the World Bank or IMF called the International Trade Organisation. However, the agreement was not ratified, so the GATT remained simply an agreement. The functions of the GATT have been replaced by the World Trade Organisation which was established through the final round of negotiations in the early 1990s. The history of the GATT can be divided into three phases: the first, from 1947 until the Torquay round, largely concerned which commodities would be covered by the agreement and freezing existing tariff levels. A second phase, encompassing three rounds, from 1959 to 1979, focused on reducing tariffs. The third phase, consisting only of the Uruguay Round from 1986 to 1994, extended the agreement fully to new areas such as intellectual property, services, capital, and agriculture. Out of this round the WTO was born. IMF describes itself as "an organization of 184 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty". With the exception of North Korea, Cuba, Liechtenstein, Andorra, Monaco, Tuvalu and Nauru, all UN member states either participate directly in the IMF or are represented by other member states. Marketing Mix -- the blend of product, place, promotion, and pricing strategies designed to produce satisfying exchanges with a target market. Market Research -- the process of planning, collecting, and analyzing data relevant to marketing decision-making. Using a combination of primary and secondary research tools to better understand a situation. Personal Selling -- persuasive communication between a representative of the company and one or more prospective customers, designed to influence the person's or group's purchase decision. Place - the process of getting a product from the place it was manufactured into the hands of consumers in the right location at the right time. Positioning -- developing a specific marketing mix to influence potential customers’ overall perceptions of a brand; to develop a specific image of the brand in the minds of consumers. Price -- the money or other compensation or unit of value exchanged for the purchase or use of a product, service, idea, or person. Product -- a good, service, person, or idea consisting of a bundle of tangible and intangible benefits that satisfies consumers’ needs and wants. Promotion -- any type of persuasive communication between a marketer and one or more of its stakeholder groups. Promotional tools include advertising, personal selling, publicity, and sales promotion.
Strategic Marketing Planning -- the process of managerial and operational activities required to create and sustain effective and efficient marketing strategies, including identifying and evaluating opportunities, analyzing markets and selecting target markets, developing a positioning strategy, preparing and executing the market plan, and controlling and evaluating results. Unique Selling Proposition (USP) -- the one thing that makes a product different than any other. It's the one reason marketers think consumers will buy the product even though it may seem no different from many others just like it. Difference between Joint venture and Strategic Alliance- Joint venture is the partnership between a domestic firm and a foreign firm or government. Joint ventures are especially popular in industries that call for large investments. Control of the joint venture can be split equally or one party may control decision making. These are gaining importance because with the advent of globalization a number of inexperienced firms are entering the market and it gives a cost advantage as well. Strategic alliances – are partnerships formed to create competitive advantage on a worldwide basis. Similar to joint ventures. What distinguishes strategic alliances from other business structures is that the partners in the alliance may have traditional rivals competing for market share in the same product class.
Ansoff Matrix- A common tool used within marketing was developed by Igor Ansoff in 1957. His model gives organization five strategic business options. 1. Market Penetration: This involves increasing sales of an existing product and penetrating the market further by either promoting the product heavily or reducing prices to increase sales. 2. Product Development: The organization develops new products to aim within their existing market, in the hope that they will gain more custom and market share. For Example Sony launched the Play station 2 to replace their existing model.3. Market Development: The organization here adopts a strategy of selling existing products to new markets. This can be done either by a better understanding of segmentation, i.e. who else can possibly purchase the product or selling the product to new markets overseas. 4. Diversification: Moving away from what you are selling (your core activities) to providing something new e.g. Moving over from selling foods to selling cars.5. Consolidation: Where the organization adopts a strategy of withdrawing from particular
markets, scaling back on operations and concentrating on its existing products in existing
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