MKT327 1st EditionExam # 3 Study Guide Lectures: 14 - 19Lecture 14 (March 11)*Like a journey all marketing plans BEGINS with and DEPENDS ON INFORMATION**In addition to its foundation the strength of a structure depends on its FRAMEWORK*1) Strategic framing decisionsa) Segmentation- who are we trying to reachb) Positioning- what image we are trying to createc) General marketing- frames the marketing mix in order to achieve certain market positiond) Competitive- how you are going to compete or keep your market positione) Channels- install physical connections f) Integrative marketing communication (IMC)- install emotional/psychological connections2) Market demanda) Market demand is defined by the number of people with the desire to satisfy a particular want; and with the ability (physical and financial) to address that want.b) General marketing strategyi) Provides general guidelines for framing the marketing mix to:(1) Increase number of buyers(2) Increase desire (3) Maximize satisfaction (4) Increase ability (a) Lemonade cartoon example- ‘all I need is one good customer’c) General marketing strategy specifiesi) A ‘guiding framework’ that the firm should focus on (build mix around) given:(1) Market position(2) Nature of demand(3) Relative market position (4) Market growth/saturation d) General marketing strategy alternativesi) Primary demand focus(1) Create new users/usage (a) Increase (i) Willingness(ii) Ability(iii) Purchase rateii) Selective demand focus (1) Market leader(a) Retain through:(i) Satisfaction(ii) Buying process(iii) Competition (2) Challenger (a) Acquire through:(i) Positioning/segmentation (ii) Competition e) Framing marketing mix i) Strategic direction ii) Tactical direction3) Product classificationsa) Consumer goodsi) Convenience(1) Staple goods (a) Develop trust/habit(b) Price for trial(c) Shelf facing/ awareness(d) Intensify distribution(2) Impulse goodsii) Shopping(1) Homogeneous(a) Best price among certain product (2) Heterogeneous (a) Considering performance, quality and etc. (3) Both:(a) Secure position/ differentiate(b) Selective distribution(c) Competitive pricingiii) Specialty(1) Maximize value in use(2) Establish prestige image(3) Personal relationships(4) Exclusive distributioniv) Unsoughtv) Emergency vi) Both(1) Recognize need(2) Maximize proximity(3) Inform availability b) Industrial goodsi) Component parts(1) Raw materials (2) Assembly partsii) Support products (1) Installations(2) Accessory equipment(3) Supplies(4) Industrial servicesc) Consumer goods classification- selection criteriai) Pre-purchase planningii) Comparison numberiii) Purchase frequencyiv) Purchase decision locationd) Industrial goods classification- Selection criteriai) Depreciatedii) Expensed- cost of goods soldiii) Expensed- operating expensesiv) Physical state (assembly)Lecture 15 (March 13) 1) Positioning strategiesa) Value propositionsi) Starbucks: quality coffee packaged in psychological lifting ambiance and experienceii) Dunkin donuts: maximize satisfaction for food and beverage rituals iii) McDonalds: maximum value with maximum access to product stables (give Starbucks quality at Dunkin’ Donuts price)iv) Biggby: Fresh quality coffee with ‘home town’ flavor 2) Strategic Directiona) Nature of demandi) Selectiveii) Primaryb) Competitive positioni) Leaderii) Challengeriii) Nicherc) Market positionsi) Many open ii) Few openiii) Noned) Utilityi) Formii) Timeiii) Placeiv) Possession e) McDonalds- i) Nature of demand(1) Primaryii) Competitive position(1) Challengeriii) Market positions(1) Noneiv) Utility(1) Time(2) Place (3) Possessionv) INCREASE PURCHASING RATE-general marketing strategy f) Starbucksi) Nature of demand(1) Selectiveii) Competitive position(1) Leader(2) Nicheriii) Market Position(1) Noneiv) Utility(1) Formv) RETAIN BY INCREASING SATISFACTION- general marketing strategy3) Tactical Directiona) McDonaldsi) Convenienceii) Trusted brand leader (establish a relationship) / high quality iii) Price for trialiv) Promote brand preferencev) Intensive distributionb) Starbucksi) Heterogeneous shopping/ specialty(1) Differentiation/ value in use (environment)(2) Promote prestige image (3) Premium pricing(4) Selective distribution (modular strategy)4) Competitive Strategy (keeping/ retaining position)a) A competitive strategy defines what other organizations the firm will measure its performance against (Perspective)b) And how a firm will allocate its resources versus these other organizations (strategic actions)c) To protect its weaknesses and/ or exploit its strengths (tactical approach)i) Leader- do what it takes to stay at topii) Challenger(1) Attack(2) Differentiation(3) Low-costiii) Follower(1) Can be happy and profitable in the middleiv) Niche(1) Be acceptable in that small piece of the market place5) Framing marketing mixa) Strategic directionb) Tactical framing factorsi) Product life cycle(1) The conceptual framework of the stages products move through over their lives that marketers use to identify broad marketing mix strategies (2) Identifying stage in life cycle (a) Product development(b) Introduction(i) Single or few firms(ii) Low-moderate sales growth (iii) Losses (c) Growth(i) Firms entering industry(ii) Accelerating growth in growth rate(iii) Profits occur and increase(d) Maturity(i) Industry stable (entry/exits)(ii) Sales peak(iii) Profits peak(e) Decline (i) Firms exiting industry(ii) Accelerating decline in growth rate(iii) Profits minimum(f) Graphed with losses/investments- sales/profits (y-axis)ii) Product classification6) Innovationa) New to firm (re-engineering)b) New to market (re-design)c) New to world (invent)i) Ultimate innovation(1) Is not merely to come up with new products and services, but to create entirely new markets- and better yet- to change way we live and workd) Reasons for innovations importancei) Consumer dynamics(1) Inherent need to search/exploreii) Competitor dynamics(1) Continuous quality improvementiii) Impact on wealth(1) Direct impact on stocks 7) Successful new product developmenta) Depends uponi) Product related factors(1) Relative advantage(a) Clear perceived superiority(2) Compatibility(a) Consistency/ fit with consumer beliefs(3) Satisfaction(a) Degree product meets needs of consumers(4) Product complexity(a) Extent product use is easy(5) Trialability(a) Extent product can be tested(6) Observability(a) Speed in which benefits experiencedii) A tale of two revolutions(1) In 2001 two innovators predicted their