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Mizzou MRKTNG 3000 - Exam 1 lecture notes

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Marketing: process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectivesScope of marketing is communicationMarketing:First task: Discover consumer needsSecond: satisfy consumer needsFind the right combo of the four P’sPotential consumers(the market) info about needs discover needs satisfy needs through goods/servicesWhat is the marketing mix?Product, place, price, promotionBenefits:Functional: benefits you get from doing somethingEarning course credit for taking this classSocial: social benefits= meeting friends, business partners, etcPersonal:Experiential: anything that “tastes” good. A sporting eventCosts:Monetary: tuition, book fees, etcTemporal: time spent in class and studyingPsychological: stress, studying, listening to the teacherBehavioral: expending energy walking to class; getting sick from lecturesAnalyzing the Marketing Environment:Monitoring the external environmentAdapt your strategyIdentify an industry trend$40 billion diet industrydue toincreased consumption of health and diet productsBusinesses respond in a variety of ways:EX: diet coke, splenda, coke, protein smoothies, organic/ gluten free products, supplementsSara Lee: whole wheat & multigrain breadHostess went bankrupt (due to lack of performing these steps)Marketing Environment Analysis Framework:Consumers immediate environment macroenvironmentIdentify trends by using the internet and other mediaConsumers are heart of everythingEX: Folgers coffee hurt by trend of people going out for coffeeEconomic boost would hurt Folgers b/c folgers is cheapEconomic downturn would hurt targetImmediate environment:Competition, company, corporate partnersMacroenvironmental factors:Culture, demographics, social trends, technology, economic, political/legal, cultureAthletic shoe industry: health trend, new technology, trend toward lighter shoesNFL: players in troubleChinese restaurants: more Chinese immigrants (exposure)Rising food costs, healthy eatingEntertainment industry: peoples image is the product3 phases of strategic marketing plan:1. Mission (step 1 is defining mission and or vision)2. Environmental analysis3. Segmentation targeting positionPorter’s Five Forces Model:Corporate strategy: decide which industries to compete inTells us whether to enter new product category or stay in currentGives an idea of where opportunities or threats may come from Industry profitability dependent onIndustry competitiveness:Low intensity= higher profitabilityIndustry has low intensity when few firms are competingDecide whether an industry is profitable NOT whether a company or firm is profitableAffects pricing ability and therefor effects profitabilityLow intensity example: Commercial aircraft & utility companies. (monopoly = extreme form of low intensity)Boeing and AirbusProfitable industry  low competitionAvailability of substitutes:Customers can choose different products as substitutesSubstitute: different product category that performs the same function (tea is sub for coffee)Few or no subs = higher profitabilityEx. Of few/ no subs: gasoline/ stations, cell phonesEx. Of many subs.: beer/ wine, farmers marketsThreat of potential entrants:Determines likelihood of profitability in the futurePioneering: new product category big advantageHigh barriers to entry= higher profitability for existing firmsHigh barriers exist when:High capital requirements, economies of scale are presentHigh product differentiation (wrist watches)nichesNetwork externalities: when addition of a person/ consumer to a network is profitableEX of network barrier: word processing softwareCar industry and software= high barrier industryEbay/ Amazon (online auction) successful because they built barriersSupplier and Buyer Power:Lower bargaining power for suppliers/ buyers= higher profitabilityLower bargaining power when: high number; low infoEx: automobile industrySupplier= tire manufacturerFavors bargaining power if high in numbersBuyers: many of them= high infoAircraft industry: low number of buyers(only weak spot)Low supplier power ex: computer industry disc driveLow buyer power ex: medical services helps their profitabilitySustainable competitive advantage (SCA): advantage that can be maintained overtimeThe “holy grail” to your strategyApple: ability to innovate both hardware and softwareMcDonalds SCA: dollar menu, easily reachable (many locations), take away products then reintroduceOperational efficiency (faster service, convenience)Step 2: environmental analysisConduct a situational analysis using SWOTIntensive growth strategies: Ansoff’s Product/Market expansion grid1. Market penetration existing products & existing marketswhen firm lowers price, increases distribution, or increases promotiontry to grow sales of existing products in existing markets2. Market development Existing products & new marketsgeographical or geographical marketex: boone county bank aimed at college studentsMcDonald’s in new era3. Product development New products & existing marketsex: Apple smart watch; new diet cherry coke4. Diversification new products & new marketsKraft FoodsHypothetical Market Structure & StrategiesMarket leader= top 40%Expand market strategyExpand market, defend market share, expand market share (McDonalds)Market Challenger= next 30% after top 40%Attack leader/ status quo (Burger King)Market Follower= next 20% after first two groupsImitate market leaders and challengers (Wendys)Market Nicher= bottom 10%Specialized.New companies usually start as market nicher (in and out)Market challengers, followers, and nichers all battle to grow market shareChile Vs. ChinaChile:exports tons of fruit and copperpop.= 17.2 milliondemocratic republic, communist governmentadvantage: govt. controls everything; overproductionrisk: rebellion, enterprise might not be as free, people want to enter Chinese marketChile’s GDP is higherChina’s GDP is about half of what Chile’s isChile is growingChina:economy has been growing towards middle class; economy was weak in 2008 but still growingpop.= 1.3 billionmore suppliers/imports, domestic production, demand potential, more diverse economy,China’s economy has a direct effect on Chile’s economySimilarities: import cars, both have to import energy needs (gas, oil) – electricity for ChileDifferences: ?Market Segmentation: process of dividing


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