Marketing 301 Midterm Review Slides

Principles of Marketing
Eighteenth Edition
Chapter 1
Marketing: Creating Customer Value
and Engagement
Copyright © 2021, 2018, 2016 Pearson Education, Inc.

What is Marketing?
Marketing is a process by which companies create value

for customers and build strong customer relationships in
order to capture value from customers in return.
Understanding the Marketplace and
Customer Needs
Needs States of felt deprivation
The form human needs take as they are shaped by
Wants culture and individual personality
Demands Human wants that are backed by buying power
Staying close to customers:

Airbnb’s CEO Brian Chesky and
co-founder Joe Gebbia regularly
stay at the company’s host
locations, helping them shape
new customer solutions based
on real user experiences.
Customer Needs
Market offerings are some combination of products,
services, information, or experiences offered to a market to
satisfy a need or want.
Marketing myopia—paying more attention to the specific

products than to the benefits and experiences produced
Customer Needs
Exchange is the Marketing

Customers form
act of obtaining a actions try to
expectations
desired object create, maintain,
about the value
from someone and grow
and satisfaction
by offering desirable
of market
something in exchange
offerings.
return. relationships.
 Satisfied customers buy

again
 Dissatisfied customers
switch to competitors
Customer Needs
A market is the set of actual and potential buyers.
Consumers participate in marketing when they…
 search for products
 interact with companies to obtain information
 make purchases
Designing a Customer Value-Driven
Marketing Strategy
Marketing management is the art and science of choosing
target markets and building profitable relationships with
them.
 What customers will we serve (target market)?
 How can we best serve these customers (value proposition)?
Marketing Strategy
Production Product
Concept Concept
Selling
Concept
Societal
Marketing
Marketing
Concept
Concept
Marketing Strategy
Societal Marketing: the company’s marketing decisions should
consider consumers’ wants, the company’s requirements, consumers’
long-run interests, and society’s long-run interests
Figure 1.4 Three

Considerations Underlying
the Societal Marketing
Concept
Marketing Strategy
The marketing mix is comprised of a set of tools known a
the four Ps:
Product Price Place Promotion
Integrated marketing program—a comprehensive plan

that communicates and delivers intended value
Managing Customer Relationships and
Capturing Customer Value
Customer relationship management—the overall process
of building and maintaining profitable customer
relationships by delivering superior customer value and
satisfaction.
Customer lifetime value is the value of the entire stream
of purchases that the customer would make over a lifetime
of patronage.
Customer lifetime value: To keep

customers coming back, Stew
Leonard’s has created the
“Disneyland of dairy stores.” Rule
#1—The customer is always right.
Rule #2—If the customer is ever
wrong, reread Rule #1.
Share of customer is the portion of the customer’s
purchasing that a company gets in its product categories.
Figure 1.5 Customer Relationship Groups
Eighteenth Edition
Chapter 2
Company and Marketing Strategy
Partnering to Build Customer
Engagement, Value, and
Relationships
Company-Wide Strategic Planning
Strategic planning is the process of developing and
maintaining a strategic fit between the organization’s goals
and capabilities, and its changing marketing opportunities.
Figure 2.1 Steps in Strategic Planning
The mission statement is the organization’s purpose;
what it wants to accomplish in the larger environment.
CVS Health’s overall

mission is to be a
“pharmacy innovation
company,” one that is
“helping people on their way
to better health.” Its
marketing strategies and
programs must support this
mission.
Product- versus Market-Oriented Business Definitions
Company Product-Oriented Definition Market-Oriented Definition
Starbucks We sell coffee and snacks. We sell “The Starbucks

Experience,” one that
enriches people’s lives in
one moment, one human
being, one extraordinary cup
of coffee at a time.
Panera We sell fast-casual food in our We give customers “Food
restaurants. as it should be”: food that
tastes good; food that feels
good; food that does good
things for them and the
world around them.
Designing The Business Portfolio
The business portfolio is the collection of businesses and
products that make up the company.
Portfolio analysis is a major activity in strategic planning

whereby management evaluates the products and
businesses that make up the company.
Mars Inc. is not only

the world’s number-
one candy maker; it is
also a world-leading
pet nutrition and
health-care company.
Strategic business units can be a…
Product line
Company Single product
within a
Division or brand
division
Analyzing The Current Business Portfolio
Identify Assess the Decide how

strategic attractiveness much support
business units of its various each SBU
(SBUs) SBUs deserves
Figure 2.2 The BCG Growth-Share Matrix
Figure 2.3 The Product/Market Expansion Grid
Marketing Strategy and the Marketing
Mix
Customer Value-Driven Marketing Strategy
Marketing strategy is the marketing logic by which the

company hopes to create customer value and achieve
profitable customer relationships.
Mix
Market segmentation is the division of a market into

distinct groups of buyers who have different needs,
characteristics, or behaviors and who might require
separate products or marketing mixes.
Market segment is a group of consumers who respond in

a similar way to a given set of marketing efforts.
Mix
Market targeting is the process of evaluating each market

segment’s attractiveness and selecting one or more
segments to enter.
Market positioning is the arranging for a product to

occupy a clear, distinctive, and desirable place relative to
competing products in the minds of target consumers.
Differentiation begins the positioning process.

Mix
Developing an Integrated Marketing Mix
Marketing mix is the set of controllable, tactical marketing

tools—product, price, place, and promotion—that the firm
blends to produce the response it wants in the target
market.
Managing the Marketing Effort
Figure 2.7 SWOT Analysis: Strengths (S), Weaknesses (W), Opportunities (O),
and Threats (T)
Managing the Marketing Effort
Market Planning—Parts of a Marketing Plan
Executive Marketing Objectives Threats and

Summary Situation and Issues Opportunities
Marketing Action
Strategy Budgets Controls
Programs
Measuring and Managing Return on
Marketing Investment
Return on Marketing Investment (Marketing ROI)
Net return from a marketing investment divided by the
costs of the marketing investment
Measurement of the profits generated by investments in
marketing activities
Eighteenth Edition
Chapter 3
Analyzing the Marketing
Environment
A Company’s Marketing Environment
The marketing environment includes the actors and

forces outside marketing that affect marketing
management’s ability to build and maintain successful
relationships with target customers.
The Microenvironment and
Macroenvironment
Microenvironment consists of the actors close to the
company that affect its ability to serve its customers—the
company, suppliers, marketing intermediaries, customer
markets, competitors, and publics.
The Microenvironment and
Macroenvironment
Macroenvironment consists of the larger societal forces
that affect the microenvironment—demographic, economic,
natural, technological, political, and cultural forces.
The Microenvironment
Figure 3.1 Actors in the Microenvironment
The Macroenvironment
Figure 3.2 Major Forces in the Company’s Macroenvironment

The Demographic and Economic
Environments
The Demographic Environment
Demography the study of human populations—size,

density, location, age, gender, race, occupation, and other
statistics
Demographic Environment involves people, and people

make up markets
Demographic Trends include changing age and family

structures, geographic population shifts, educational
characteristics, and population diversity
Environments
Baby Boomers Born 1946 to 1964
Generation X Born 1965 to 1980
Millennials Born 1981 to 1996
Generation Z Born 1997 to 2012
Generation Alpha Born after 2012

Environments
Generational marketing segments people by age cohorts.

Environments
The
changing A better-
American educated,
family more white-
collar, more
professional
population
Geographic
shifts in
population Working remotely: Apps like Slack let
Increasing people working remotely collaborate
Diversity anywhere and everywhere through the
internet and mobile devices.
Environments
The Economic Environment
Economic environment: Consumers adopted a new back-to-basics

sensibility in their lifestyles and spending patterns. To serve the tastes
of these more financially frugal buyers, companies like Target are
emphasizing the “pay less” side of their value propositions.
The Natural and Technological
Environments
The Natural Environment
The natural environment is the physical environment and

the natural resources that are needed as inputs by
marketers or that are affected by marketing activities.
Environments
Trends in the Natural Environment…

 Growing shortages of raw materials
 Increased pollution
 Increased government intervention
 Developing strategies that support environmental
sustainability
Environments
Environmental sustainability involves developing
strategies and practices that create a world economy that
the planet can support indefinitely.
The natural environment:

Walmart has emerged in recent
years as the world’s super “eco-
nanny” through its own
sustainability practices and its
impact on the actions of its huge
network of suppliers.
Environments
The Technological Environment
Most
dramatic
force in
changing the
marketplace
New
products,
opportunities
Marketing technology: Disney
Concern for takes full advantage of digital
the safety of technology in creating magical
new customer experiences at its Walt
products Disney World Resort.
The Political-Social and Cultural
Environments
The Political and Social Environment
Legislation regulating business is intended to protect…

 companies from each other
 consumers from unfair business practices
 the interests of society against unrestrained business
behaviour
Environments
The Political and Social Environment
 Increased emphasis on Cause-related marketing
ethics and socially
responsible actions
Cause-related marketing: Ben & Jerry’s

three-part “linked prosperity” mission
drives it to make fantastic ice cream
(product mission), manage the
company for sustainable financial
growth (economic mission), and use
the company “in innovative ways to
make the world a better place” (social
mission). Both Ben & Jerry’s and its
products are “Made of Something
Better.”
Environments
The Cultural Environment
The cultural environment consists of institutions and other

forces that affect a society’s basic values, perceptions, and
behaviors.
Eighteenth Edition
Chapter 4
Managing Marketing Information to
Gain Customer Insights
P&G: Customer Insights and Creating
Irresistibly Superior Experiences
Customer insights are fresh marketing information-based
understandings of customers and the marketplace that
become the basis for creating customer value,
engagement, and relationships.
To gain deep customer insights, P&G

employs a wide range of marketing
research approaches—from traditional
large-scale surveys and small-scale
focus groups to real-time social media
listening, mobile surveys, and big data
analytics.
Marketing Information and Customer
Insights
Marketing Information and Today’s “Big Data”
 Big data is the huge and complex data sets generated by today’s
sophisticated information generation, collection, storage, and
analysis technologies
 Big data comes from marketing research, internal transaction data,
and real-time data flowing from its social media monitoring,
connected devices, and other digital sources
Marketing Information and Customer
Insights
Figure 4.1 The Marketing Information System

Developing Marketing Information
Marketers obtain information from:
Internal Marketing Marketing

Data Intelligence Research
Marketing Research
Marketing research is the systematic design, collection,
analysis, and reporting of data relevant to a specific
marketing situation facing an organization.
Developing Marketing Information
Figure 4.2 The Marketing Research Process

Marketing Research
Developing the Research Plan
is information that already exists somewhere,

Secondary Data having been collected for another purpose
is information collected for the specific

Primary Data purpose at hand
Marketing Research
Primary Data Collection
Research Approaches
Survey research involves gathering primary data by
asking people questions about their knowledge, attitudes,
preferences, and buying behavior.
Experimental research involves gathering primary data by

selecting matched groups of subjects, giving them different
treatments, controlling related factors, and checking for
differences in group responses.
Marketing Research
Primary Data Collection – Research Approaches
Focus Groups
 Six to 10 people
 Trained moderator
 Challenges:
 Expensive
 Difficult to generalize from
small group
 Consumers not always New focus group designs: The Mom
open and honest Complex uses “Mom Immersion
Sessions” to help brand marketers
understand and connect directly with
their “mom customers” on important
brand issues.
Marketing Research
Primary Data Collection
Research Approaches
Observational research involves gathering primary data
by observing relevant people, actions, and situations.
Ethnographic research involves sending trained

observers to watch and interact with consumers in their
“natural environments.”
Ethnographic research: Under Intuit’s

“follow me home” program, teams of Intuit
employees visit customers in their homes
or offices to watch them use the
company’s products in real life.
Marketing Research
Table 4.2 Types of Samples
Probability Sample
Simple random sample Every member of the population has a known and equal
chance of selection.
Stratified random The population is divided into mutually exclusive groups
sample (such as age groups), and random samples are drawn from
each group.
Cluster (area) sample The population is divided into mutually exclusive groups
(such as blocks), and the researcher draws a sample of the
groups to interview.
Nonprobability Sample
Convenience sample The researcher selects the easiest population members from
which to obtain information.
Judgment sample The researcher uses his or her judgment to select population
members who are good prospects for accurate information.
Quota sample The researcher finds and interviews a prescribed number of
people in each of several categories.
Analyzing and Using Marketing
Information
Customer Relationship Management (CRM)
CRM involves managing detailed information about

individual customers and carefully managing customer
touch points to maximize customer loyalty.
Eighteenth Edition
Chapter 5
Consumer Markets and Buyer
Behavior
Copyright © 2021, 2018, 2016 Pearson Education, Inc.

Consumer Markets and Buyer Behavior
Consumer buyer behavior is the buying behavior of final

consumers—individuals and households that buy goods
and services for personal consumption.
Consumer markets are made up of all the individuals and

households that buy or acquire goods and services for
personal consumption.
The Buyer Decision Process
(Rational Perspective)
The buying process

starts long before
the actual purchase
and continues long
after. In fact, it
might result in a
decision not to buy.
Therefore,
marketers must
focus on the entire
buying process, not
just the purchase
decision
Model of Consumer Behavior
Figure 5.1 The Model of Buyer Behavior

Factors that Affect Consumer Behavior
Characteristics Affecting Consumer
Behavior
Cultural Factors
Culture is the set of basic
values, perceptions,
wants, and behaviors
learned by a member of
society from family and
other important
institutions.
Behavior
Cultural Factors
Subcultures are groups of people within a culture with
shared value systems based on common life experiences
and situations.
Huskies vs. Cougars: fans

following this PAC-12
rivalry identify with one of
the Washington schools
Behavior
Cultural Factors
Social classes are society’s relatively permanent and
ordered divisions whose members share similar values,
interests, and behaviors.
 Measured as a combination of occupation, income,
education, wealth, and other variables
Behavior
Groups and Social Networks
Word-of- Online
Reference Influencer Opinion
Mouth Social
Groups Marketing Leaders
Influence Networks
Influencer marketing: CoverGirl’s “I Am

What I Make Up” campaign uses a
diverse team of influential brand
ambassadors who explain authentically
in their own words what the slogan
means to them.
Behavior
Social Factors
The most important consumer-buying organization
Family in society
Role and
Can be defined by a person’s position in a group
Status
Harnessing the power of mom-to-mom

influence: Each year, Disney invites 175
to 200 moms and their families to its
Disney Social Media Moms Celebration
in Florida, an affair that’s a mix of public
relations event, educational conference,
and family vacation with plenty of Disney
magic for these important mom
influencers.
Behavior
Personal Factors
Affects the goods and services bought by
Occupation consumers
Affects tastes in food, clothes, furniture, ad
Age & Life Stage recreation
Situations include trends in spending, personal
Economic income, savings, interest rates
Appealing to occupation segments:

Medical apparel maker FIGS sells
modern, comfortable, and
functional scrubs direct to medical
and health professionals.
Behavior
Personal Factors
A person’s pattern of living as expressed in his or
Lifestyle her psychographics
The unique psychological characteristics that
Personality distinguish a person or group
Brand personality: MINI markets to

personality segments of people who
are “adventurous, individualistic,
open-minded, creative, tech-savvy,
and young at heart”— anything but
normal—just like the car.
Behavior
Psychological Factors
A motive (or drive) is a need that is sufficiently pressing to
direct the person to seek satisfaction of the need.
Motivation research refers to qualitative research

designed to probe consumers’ hidden, subconscious
motivations.
Behavior
Maslow’s Hierarchy of Needs
According to
Maslow, human
needs are arranged
in a hierarchy.
Starving people will
take little interest in
the latest
happenings in the
art world.
Behavior
Psychological Factors
Perception is the process by which people select,
organize, and interpret information to form a meaningful
picture of the world.
Perceptual Processes:
Selective Selective Selective

Attention Distortion Retention
The Buyer Decision Process for New
Products
The adoption process is the mental process an individual
goes through from first learning about an innovation to final
regular use.
Stages in the adoption process include:
Awareness Interest Evaluation Trial Adoption

The Buyer Decision Process for New
Products
Individual Differences in Innovativeness
Early Early Late Lagging

Innovators
Adopters Mainstream Midstream Adopters
Eighteenth Edition
Chapter 8
Products, Services, and Brands:
Building Customer Value
STARBUCKS: Delivering the “Starbucks
Experience”
The iconic Starbucks brand is

about a lot more than just making
good coffee. At its core, Starbucks
doesn’t sell just coffee. It sells the
Starbucks Experience, one that
enriches people’s lives one
moment, one human being, one
extraordinary cup of coffee at a
time. “Life happens over coffee.”
What is a Product?
Product is anything that can be offered in a market for

attention, acquisition, use, or consumption that might
satisfy a need or want.
Services are a form of product that consists of activities,

benefits, or satisfactions and that is essentially intangible
and does not result in the ownership of anything.
Many companies are now focusing on creating and

managing customer experiences with their brands.
What is a Product?
Figure 8.1 Three Levels of Product
What is a Product?
Type of Consumer Product
Marketing Convenience Shopping Specialty Unsought
Considerations
Customer Frequent purchase; Less frequent purchase; Strong brand Little product awareness
buying little planning, little much planning and shopping preference or knowledge (or, if
behaviour comparison or effort; and loyalty; special aware, little or even
shopping effort; low comparison of brands on purchase effort; little negative interest)
customer price, quality, and style comparison of brands;
involvement low price sensitivity
Price Low price Higher price Highest price Varies

Distribution Widespread Selective distribution in fewer Exclusive distribution Varies
distribution; outlets in only one or a few
convenient locations outlets per market area
Promotion Mass promotion by Advertising and personal More carefully targeted Aggressive advertising
the selling by both the producer promotion by both the and personal selling
producer and resellers producer and resellers by the producer and
resellers
Examples Toothpaste, Major appliances, Luxury goods, such as Life insurance and Red
magazines, televisions, furniture, and Rolex watches or fine Cross blood donations
and laundry detergent clothing crystal
Table 8.1 Marketing Considerations for Consumer Products

What is a Product?
Product and Service Classifications
Consumer products are products and services bought by
final consumers for personal consumption.
Convenience Products
Shopping Products
Specialty Products
Unsought Products
What is a Product?
Convenience products are consumer products and
services that the customer usually buys frequently,
immediately, and with a minimum comparison and buying
effort.
Soft Drinks
Candy
Fast Food
What is a Product?
Shopping products are less frequently purchased
consumer products and services that the customer
compares carefully on suitability, quality, price, and style.
Furniture
Cars
Appliances
What is a Product?
Specialty products are consumer products and services
with unique characteristics or brand identification for which
a significant group of buyers is willing to make a special
purchase effort.
Medical Services
Designer Clothes
High-end Electronics
What is a Product?
Unsought products are consumer products that the
consumer does not know about or knows about but does
not normally think of buying.
Life Insurance
Funeral Services
Blood Donations
Product and Service Decisions
Figure 8.2 Individual Product Decisions
Individual Product and Service Decisions
Communicate and deliver benefits by product and service
attributes.
Quality
Features
Style and design
Style describes the appearance of the product.
Design contributes to a product’s usefulness as well as to

its looks.
Brand is the name, term, sign, or design or a combination
of these, that identifies the maker or seller of a product or
service.
Packaging involves designing and producing the container
or wrapper for a product.
Labels identify the product or brand, describe attributes,

and provide promotion.
Product support services augment actual products.
Customer service: From the start,

under the Lexus Covenant,
Lexus’s high-quality support
services create an unmatched car
ownership experience and some
of the world’s most satisfied car
owners.
Product Line Decisions
Product line is a group of products that are closely related
because they function in a similar manner, are sold to the
same customer groups, are marketed through the same
types of outlets, or fall within given price ranges.
Product Line Decisions
Product line length is the number of items in the product
line.
Line Stretching
Line Filling
Product line stretching and filling:

Through skillful line stretching and
filling, B M W now has brands and
lines that successfully appeal to
the rich, the super-rich, and the
hope-to-be-rich.
Product Mix Decisions
Product mix consists of all the product lines and items that
a particular seller offers for sale.
Width Depth
Length Consistency
The product mix: Colgate-

Palmolive’s nicely consistent product
mix contains many brands that
constitute the “Colgate World of
Care”— products that “every day,
people like you trust to care for
themselves and the ones they love.”
Brand Strategy: Building Strong Brands
Figure 8.6 Brand Development Strategies

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Principles of Marketing

Copyright © 2021, 2018, 2016 Pearson Education, Inc.

Marketing is a process by which companies create value

Demands Human wants that are backed by buying power

Staying close to customers:

Marketing myopia—paying more attention to the specific

Exchange is the Marketing

 Satisfied customers buy

Figure 1.4 Three

Product Price Place Promotion

Integrated marketing program—a comprehensive plan

Customer lifetime value: To keep

CVS Health’s overall

Company Product-Oriented Definition Market-Oriented Definition

Starbucks We sell coffee and snacks. We sell “The Starbucks

Portfolio analysis is a major activity in strategic planning

Mars Inc. is not only

Identify Assess the Decide how

Marketing strategy is the marketing logic by which the

Market segmentation is the division of a market into

Market segment is a group of consumers who respond in

Market targeting is the process of evaluating each market

Market positioning is the arranging for a product to

Differentiation begins the positioning process.

Marketing mix is the set of controllable, tactical marketing

Executive Marketing Objectives Threats and

The marketing environment includes the actors and

Figure 3.2 Major Forces in the Company’s Macroenvironment

Demography the study of human populations—size,

Demographic Environment involves people, and people

Demographic Trends include changing age and family

Baby Boomers Born 1946 to 1964

Generation X Born 1965 to 1980

Millennials Born 1981 to 1996

Generation Z Born 1997 to 2012

Generation Alpha Born after 2012

Generational marketing segments people by age cohorts.

Economic environment: Consumers adopted a new back-to-basics

The natural environment is the physical environment and

Trends in the Natural Environment…

The natural environment:

Legislation regulating business is intended to protect…

Cause-related marketing: Ben & Jerry’s

The cultural environment consists of institutions and other

To gain deep customer insights, P&G

Figure 4.1 The Marketing Information System

Internal Marketing Marketing

Figure 4.2 The Marketing Research Process

is information that already exists somewhere,

is information collected for the specific

Experimental research involves gathering primary data by

Ethnographic research involves sending trained

Ethnographic research: Under Intuit’s

CRM involves managing detailed information about

Copyright © 2021, 2018, 2016 Pearson Education, Inc.

Consumer buyer behavior is the buying behavior of final

Consumer markets are made up of all the individuals and

The buying process

Figure 5.1 The Model of Buyer Behavior

Huskies vs. Cougars: fans

Influencer marketing: CoverGirl’s “I Am

Harnessing the power of mom-to-mom

Appealing to occupation segments:

Brand personality: MINI markets to