BUSINESS BMAL 590 Marketing
1. What is Marketing?
a. Marketing Is Am Exchange Relationship
i. The customer seeks benefits from the company and expects to pay
ii. The Company offers benefits to its customers and seeks profits
b. Why Is Marketing Important?
i. The goal is to build and maintain relationships with the customer
c. The Marketing Framework
2. Context:includesthe macro-environment: the economy, legal constraints, cultural differences, and global segments
5. Help marketers asses any business problem or opportunity in terms of a general analysis of the entire business situation
1. Segmentation: Customers aren’t all the same;they vary in their preferences, needs, and resources
2. Targeting: Attracting some of those customers makes better sense than going after others
3. Positioning: Communicate your benefits clearly to your intended customers
iii. 4Ps: Product, Price, Promotion, and Place
iv. The 5Cs, STP and 4Ps are independent
d. The Marketing Science of Customer Behavior
i. Types of Shopping
1. Business to Consumer (B2C)
a. Convenience Purchases: Staples (standard, frequently consumed goods such as bread or gas) Impulse Purchases (candy or magazine near check-out stand)
b. Sopping Purchases: going online to find a restaurant and make reservations when heading out of town
c. Specialty Purchases: a new car, some fashions or shows, an expensive laptop computer
2. Business to Business (B2B)
a. Straight Rebuy: You’re out of toothpaste and you mindlessly pop a tube of your usual brand into the cart
b. Modified Rebuy: Your reach for your brand of toothpaste but you try a new flavor
c. New Buy: You’re buying teeth whitening strips for the first time and consider the attributes of each
d. Segmented by selling installations, accessories, raw materials, parts, or business services
e. Roles in B2B Purchases
i. Initiator: A secretary who notices a printer in the office frequently needs repair
ii. User: Every staff member who sends a job to that printer
iii. Influence: The IT person who knows Brand X is cheaper
iv. Buyer: Administrator who orders equipment and supplies
v. Gatekeeper: Accountant who controls the budget
ii. Customer Involvement
1. Its not the type of product or purchase that matters. It’s the type of customer behavior (customer or business level of involvement) that is relevant and the marketing actions and reactions.
2. Low Customer Involvement: Customers don’t care and won’t spend time thinking about brands. They will typically be somewhat price sensitive.
3. Moderate Customer Involvement: Some effort is expended prior to purchase to obtain good value
4. High Customer Involvement: For expensive purchases, brand, uniqueness, and quality matter.
iii. Purchase Decision Making
1. Identify needs/wants
2. Search for Alternative Solutions
3. Evaluate Alternatives
5. Evaluate Post-Purchase
iv. Models of How Buyers Make Decisions
1. Lexicographic Method: A customer compares brands by the most important attributes or dimensions. The Customer them compares the brand on the next important attribute, etc. until only one brand is left
2. Average Method: This method uses average so one attribute can’t make or break a brand. If a brand is strong on one attribute and average on another, it will dominate a brand that was just average on all attributes
3. Use Attribute Importance: Models can be more complex by bringing in weights to express how important the attributes are to the customer. Those important weights underpin how segments of customers differ.
2. Marketing Segmentation
a. Why Segment?
i. Marketers need to examine any given market for differences among customers
ii. There must be differences among the customer population for segmentation to be feasible
iii. Noting that consumers have unique needs and desires acknowledges that a market will demonstrate heterogeneity. This means that dies to these differences, different products will be required in order to satisfy the different needs in the market.
iv. The ability to find a smaller homogeneous market within a larger heterogeneous market is the foundation of segmentation.
v. Often times with these smaller homogeneous markets, demand can become less price elastic: consumers are willing to pay more to get something that is closer to what they want. Therefore. Marketers deal with customer variation through segmentation.
b. What Are Market Segments?
i. Segmentation is breaking the heterogeneous market into small. Homogeneous markets.
ii. Market Segment: is a group of customers who share similar inclinations toward a brand.
iii. Segments: are homogenous groups of customers
iv. Groups of Customers
1. Mass Marketing: All Customers would be treated the same
2. One-to-One Marketing: Each customer serves as is or her own segment
3. Segmentation Strategy: Customers are broken into more homogeneous groups that are small enough that customer needs are met but large enough to be profitable.
4. Niche Marketing: The company strategically focuses and targets a smaller market with particular needs that the company can serve well. Falls between one-to-one and segments strategies. Usually smaller that segments
c. How Do Marketers Segment the Market?
i. Bases for Consumer Segmentation
4. VALS (values and lifestyles)
ii. Bases for B2B Segmentation
3. Type of Firm
a. Price sensitivity
b. Risk tolerance
c. Corporate culture
e. High vs. low maintenance accounts
iii. Effective Segmentation
1. Effective Segmentation utilizes appropriate data
2. Effective Segmentation allows access to customers
3. Effective Segmentation had profitability potential
4. Effective Segmentation fits with corporate goals
5. Effective Segmentation is actionable
iv. Different Strategies
1. Breadth Strategy: Reaching Multiple Markets
a. This company elects to market a single product to two or more segments
2. Depth Strategy: Serving One Segment Well
a. This company focuses on single segment and has multiple offering for the segment
3. Tailoring Strategy: Customizing For Segments
a. This company serves multiple segments, marketing a different product to each segment
3. Channel of Distribution and Business Marketing Networks and Logistics
a. What Is Distribution?
i. Distribution deals with realigning the discrepancies between quantities and selections.
ii. Breaking bulk means making goods available in smaller batches
iii. A distribution channel is a network of inter-connected firms that provide sellers a mean of purchasing those goods as efficiently and profitably as possible
1. Customer oriented (ordering, handling, and shipping)
2. Product oriented (storage and display)
3. Marketing-centric (promotion)
4. Financial oriented
b. What Are Distribution Channels, Logistics, And Supply Chain Management?
i. Distribution Channels are networks of interconnected firms who activities enable products to be sold and consumers to have easier access to those products to be sold.
ii. Logistics is the coordination of the flow of all the goods, services, and information between channel members throughout the channel.
iii. The upstream partners that a company has to deal with are its suppliers; this is called supply chain and dealing with those firms is called supply chain management.
iv. The downstream is how the company reaches the consumers; they provide the way to channel merchandise to the customer
v. Designing Distribution Channels
1. Intensive distribution is used for widely distributed products (snack food, shampoo, newspapers). Heavy promotion, lower prices, and average or lower quality products.
a. The pull strategy is used to promote directly to end consumers in order to pull the goods from the manufacturer to the consumer.
2. Selective distribution is used for less widely distributed products. Complex and/or expensive products.
a. The push strategy is used to provide incentives to the distribution partners to help push the goods to the buying customer.
vi. Push and Pull
1. The term push and pull refer to whether the manufacturer targets consumers of channel partners with its marketing communications.
2. Customers pull goods through channel, while intermediaries push goods to consumers from the manufacturer.
3. Push activities: advertisements to partners, selective distribution, sales force incentives, price discounts, quantity discounts, financing typically directed at the intermediary, and allowances for marketing activities
4. Pull activities: consumer-directed advertising, wide distribution, coupons, rebates, loyalty point, price discounts, quantity discounts, and fee samples.
vii. Channel Conflict and Power
1. Coercive power (the “bully”) is when one party can make another party do something by taking away benefits or inflicting punishment on the other party
2. Information power (the “know-it-all”) is when one party gets cooperation because it has information the other party seeks.
3. Legitimate power is when by size or expertise, one party can make claims and threats that encourage the other party to conform
4. Referent power is when one party cooperates with another because the former seeks affiliation with the latter
5. Reward power is when one party had the ability to provide good outcomes for the other party
viii. Transaction Cost Analysis and Revenue Sharing
1. Transaction Cost Analysis (TCA) is a model that considers the channel member’s production and governance costs, both of which are ideally minimized
a. Intermediaries often reduces costs of producing
2. Governance costs are those costs associated with coordination and controlling the members in the channel
3. Double marginalization is the problem associated with determining what is a proper profit for the manufacturer and retailer without increasing the price paid by the consumer to the point where demand drops
ix. Channel Integration
1. Integration refers to the back or buy decision that firms face when determining whether to do a distribution function or have someone else undertake the activity
2. Integration means having the activity “done in house” rather than outsourced.
3. Firms ay forward integrate, meaning doing an activity that is “downstream” so the function is closer to the end consumer, or backward integrate, meaning doing an activity “upstream”, so the function is further away from the customer than the company is currently doing
4. Horizontal competition: competition between retailers of different types
5. Vertical competition: competition between manufacturers and their partners.
1. Retailing is often the most visible element of the channel and can impact image, positioning, and brand equity
2. Multisite: opening additional stores
xi. Franchising and E-Commerce
1. Franchising is a form of multi-size expansion that allows the company to retain some control without complete ownership of capital expenditure
2. Franchisor (Company) Benefits
b. Efficiencies and economies of scale
c. Committed people
d. Reduced investment risk
e. Ability to focus on core functions (product development)
3. Franchisee (Local Owner) Benefits
a. Well-known brand
b. Market awareness
c. Supplier relationships
4. Product Franchising: a supplier authorizes a distributor some territory to carry its products, use its name, and benefits of its advertising. (automobile dealerships and gas stations)
5. Business Format Franchising: offer a system in which to conduct business, a brand name, and advertising. (McDonald’s, Holiday Inn, 7-Eleven convenience stores)
4. Marketing Research Tools
a. What is Marketing Research, And Why IS It Useful to Marketers?
i. Examples of Relevant Marketing Research
a. Cluster analysis for segmentation
b. Multidimensional scaling for perceptual mapping, targeting, and positioning
i. MDS asks how similar items are
a. Conjoint for new products
b. Scanner data for pricing
c. Surveys to assess customer satisfaction with internet as a distribution option
d. Experiments to verify ad testing
a. Secondary data to understood context
b. Observational data to check on competitors
c. Networks to study collaborators
d. Interviews to study company’s employees
e. Surveys for customer satisfaction
ii. Marketing Research Process
1. Define marketing and marketing research problem
2. Try answer questions with secondary data
3. Design primary data collection
a. Sample(e.g., random sample, stratified sample by segment)
i. Qualitative: interviews, focus groups, observations, ethnographies
ii. Quantitative: surveys, experiments, scanner data analysis
c. Instrument (e.g., questionnaire, focus group moderator guide)
d. Modality of administration (e.g. Web survey, mail, personal interview)
4. Collect data
5. Analyze data
6. Communicate results (white paper, presentation, recommendations)
iii. Kinds of Data
1. Secondary Vs. Primary
a. Secondary data already exists
b. Primary data requires that marketers design a study, collect, and analyze data
2. Exploratory, Descriptive, Casual
a. Exploratory: Focus groups and interviews are used to formulate marketing questions
b. Descriptive: Surveys and scanner data are used to obtain large-scale stats
c. Casual: Experiments are used to study the effects of manipulated marketing mix variables on measures of sales and customer attitudes
iv. Seven Popular Marketing Research Techniques
1. Cluster analysis for segmentation
a. Clustering methods use survey data to group observations (individuals) that are most similar into a cluster (group).
2. Perceptual mapping for positioning
a. Are used to understand how customers view a business in the marketplace
3. Focus groups for concept testing
a. 8-10 consumers; 3-4 groups
4. Conjoint for testing attributes
a. To understand how consumers make trade-offs among attributes uncovering what combinations of attributes customers value most
5. Scanner data for pricing and coupon experiments and brand switching
a. Can be used to forecast demand
6. Surveys for customer satisfaction
7. Network methods to identify opinion leaders in buzz marketing
a. Social network methods can be used to study patterns of buzz
b. Network methods are simple techniques used to study patterns of interconnected “actors”.
c. An actor is some agent, such as consumer, a firm, etc.
5. Marketing Strategy
i. Marketingstrategy centers on assessing the current situation and determining future direction
ii. The link between corporate goals and operational tactics
b. Portfolio Assessment
i. The Boston Consulting Group (BCG) Matrix is used in portfolio analysis and classifies brands or products according to whether each has a strong or weak market share and a slow or growing market.
ii. Dog: Products in low growth markets and with low relative market share (optimize or hold)
iii. Star: Product in high growth markets with high relative market share (minimize or divest)
iv. Cash Cow: Products in low growth markets but with high relative market share (milk)
v. Question mark or problem child: Products in high growth markets but having low markets share (products in development, new technologies, uncertain markets)
c. Measures to Facilitate Marketing Strategy
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- Submitted On 22 May, 2020 02:11:36