BUSML 3250 Principles of Marketing Midterm Study Guide Professor Rebecca Naylor Chapter 1 Marketing the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return Goal to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction Managing profitable customer relationships The marketing process understand the marketplace and customer needs and wants design a customer driven marketing strategy construct an integrated marketing program that delivers superior value build profitable relationships and create customer delight Needs states of felt deprivation Wants the form human needs take as they are shaped by culture and individual personality Demands human wants that are backed by buying power Marketing Myopia the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products Focuses only on existing wants and losing sight of underlying consumer needs Customer Value and Satisfaction Satisfied customers buy again and tell others about their good experience Dissatisfied customers often switch to competitors and disparage the Moment of delight when something is better than what you expected product to others companies strive to do this Customer equity combined customer lifetime values of all the company s customers Customer lifetime value lifetime revenue operating expenses cost of acquisition implementation and delivery costs Market Orientations Production concept the idea that consumers will favor products that are available and highly affordable therefore the organization should focus on improving production and distribution efficiency Product concept the idea that consumers will favor products that offer the most quality performance and features therefore the organization should devote its energy to making continuous product improvements Selling concept the idea that consumers will not buy enough of the firm s products unless the firm undertakes a large scale selling and promotion effort Marketing concept a philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do Societal marketing concept the idea that a company s marketing decisions should consider consumers wants the company s requirements consumers long run interests and society s long run interests Customer driven marketing strategy what customers can we serve what s our target market and how can we best serve these customers what s our value proposition Done by market segmentation diving the market into segments and target marketing selecting which segments to go after Value proposition set of benefits of values it promises to deliver to consumers to satisfy their needs help to differentiate one brand from another Chapter 2 Mission a statement of the organization s purpose what it wants to accomplish in the larger environment What business are we in What customers should we serve How should we develop the firm s capabilities and focus its efforts The mission statement should not be focused on profits instead the mission should focus more on customers and the customer experience the company seeks to create BCG Matrix Star high growth high share business they often need heavy investments to finance their rapid growth eventually growth will slow down and they will turn into cash cows Cash cow low growth high share business or product need less investment to hold their market share they produce a lot of the cash that the company uses to pay its bills and support other SBU s that need investment Question mark could fail or become a star low share business units in high growth markets they require a lot of cash to hold their share let alone increase it Dog low market share low growth may generate enough cash to maintain themselves but do not promise to be large sources of cash The BCG Boston Consulting Group matrix is used for company s to classify all its SBU s according to the growth share matrix Product Market Growth Matrix Illustrates different growth strategies with two dimensions 1 Opportunities for growth in existing or new markets 2 Allocating resources into existing products of new products SWOT analysis Strengths internal capabilities that may help a company reach its objectives Weaknesses internal limitations that may interfere with a company s ability to achieve its objectives Opportunities external factors that the company may be able to exploit to its advantage Threats current and emerging external factors that may challenge the company s performance Market Segmentation dividing a market into distinct groups of buyers who have different needs characteristics or behaviors and who might require separate products of marketing programs Market Segment a group of consumers who respond in a similar way to a given set of marketing efforts Market Targeting the process of evaluating each market segment s attractiveness and selecting one or more segments to enter Market Positioning arranging for a product to occupy a clear distinctive and desirable place relative to competing products in the minds of target consumers 4 P s of Marketing Place product availability where and when customers want them all activities from raw materials to finished products ensure products arrive in usable condition at designated places when needed logistics aspect Product includes physical unit package warranty service brand image value products can be tangible goods idea or services Promotion role is to bring about exchanges with target markets by informing educating persuading reminding pretty much any type of communication Price what a buyer must give up to obtain a product the most flexible of the 4 P s quickest to change competitive weapon but easily copied Chapter 3 Microenvironment the actor s close to the company that affect its ability to serve its customers the company suppliers marketing intermediaries customer markets competitors and publics Macroenvironment the larger societal forces that affect the microenvironment demographic economic natural technological political and cultural forces Demographic Environment dividing the market into segments based on variables such as age life cycle gender income occupation education religion ethnicity and generation Economic Environment economic factors that affect
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