Module 1 Exam 1 Study Guide Marketing The Goal of Marketing is to make selling products unnecessary What is marketing The strategy that makes a business successful o Henry Ford perfected marketing with the Model T o Consumers options were horses or Model T s The foundation of every business o Product Price Place Promotion Product Price Is it good Is it the best Does it fill a need Can consumers afford your product Place Promotion Is it accessible o Game changers succeed in all areas i e Netflix Apple etc Can be beat by copy cats Is the consumer public aware of your product Netflix vs Red Box or Apple vs Samsung Samsung currently holds the greater market share for smartphones over Apple Common misperceptions o What people think vs reality People think advertising o Reality Complex Multifaceted Defensible Market Segments Coca Cola Introduces Coke Zero o Dr Pepper Pepsi etc introduce imitations Dr Pepper 10 Pepsi MAX etc These products pursue the same market segment Segment characterized by the Man s Man Using black cans Lumber jack commercials strong words Max o Due to strong sales companies pursued the new marketing segment hence a defensible market Time Reality o Competitors WILL tap in to markets compete and win Time and Reality set in to make this possible in all markets Advertising Branding A powerful tool for companies o Generic Brands vs Name Brands Publix Cola Vs Coca Cola Their taste is objectively the SAME o Branding The name represents a product with a reputation With a strong reputation products can build a strong customer base and realize large revenues o Advertising Because of the large advertising budgets profit margins suffer Generic brands can keep a strong profit margin comparable to their name brand competitors due to the large savings on Advertising expenses The savings on advertising are then passed on to o Brands are forced to counter promote to prove their value vs consumers competitors Apple commercials were rare until Samsung heavily advertised The result is a promotional battle to win over their Coke spent 3 000 000 000 Three Billion Dollars on their product consumers advertising Anheuser Busch spent nearly half 1 47B o Why advertise the brand Customers don t buy products they don t know Even if the unfamiliar product is better The History of Marketing Pre 1820 s People were self sustaining they made what they needed 1820 s Industrial era o Trading goods on hand for goods needed Industrial era o The production of one good specialized and sold 1920 s Sales era o Focused on short term profits o Selling what we make Marketing era 40 s 90 s o Focused on consumer needs o Make what we sell Relationship Marketing 90s 2010 o Based on premise of high revenue generating repeat customers Example Delta Air using points system Market Orientation Present Day o Societal Marketing Green Marketing Focuses on societies best interest Macro Marketing strategies o Value A ratio between the quality of a product and the price Companies want to convey value to their consumers Companies adopt tactics to increase value by adding to their product o Example Banks with Daycare Disney on Customer relationships o Value in relationships o Treating customers well Customer Segmentation Best Buy fires customers that use rebates returns coupons and discounts o They profile customers to identify the ones that will provide higher revenues Assessing internal External environmental factors Diversification assets o A method of reducing risk by spreading it out across many o Warren Buffet Berkshire portfolio Diversification Also think Pepsi Nestle If Pepsi Nestle withdrew their products from every convenience store the shelves would be empty Internal marketing o C C Marketing Customer to Customer Marketing B B B C C C Ebay the Model T of their segment Ebay started the C C internal marketing SWOT Analysis segment o Strengths Weakness Opportunity Threat Threats converted to Weaknesses Weaknesses converted to strengths Opportunities Match Strengths SBU s Strategic Business Unit o Example FSU 15 colleges Each with departments Accounting Finance o Successful SBU s Marketing Etc Remember the Star Question Mark Cash Cow Dog Companies invest in start ups in fast growing markets diagram with high potential Extinguish Dog products Retain their established Cash Cows Stars are invested in to eventually become Cash cows Internal Marketing with Employees o Empowerment giving employees the power to act immediately decisively to keep customers happy Results Chick Fil A gives employees 100 for being the first to remember 100 customer names External Marketing o Competitive forces Brand Product Generic Coke vs Pepsi Water vs Soda Cola vs Classic Coke Total Budget 5 Little Ceasar s Pizza vs 5 Foot long from Subway o Economic Forces Indicators include the unemployment rate Walmart is an example of using down economies to their advantage o Technological Forces Environmental impacts push technology forward Also outdating products with less research and o Political Forces Development Using large donations to campaigns as an opportunity to gain economic advantage UPS o Uses large quantities of oil Donates largely to policies supporting offshore drilling Law Suits involving faulty claims and false advertising o Legal Forces o Sociocultural Forces U S Demographic Profile Demographic Categories that characterize a population Large Hispanic increase projected would suggest a new market segment o New market segments suggest opportunities for growth Regulatory Agencies o Federal Trade Commission FTC Enforces laws and guidelines regarding business practices takes action to stop false and deceptive advertising pricing packaging and labeling o Food and Drug Administration FDA Enforces laws and regulations to prevent distribution of adulterated or misbranded foods drugs medical devices cosmetics veterinary products and hazardous consumer products o Consumer product safety commission FCC Regulates communication by wire radio and telivison in interstate and foreign commerce o Environmental Protection Agency EPA Develops and enforces environmental protection standards and conducts research into the adverse effects of pollution o Federal Power Commission FPC Regulates rates and sales of natural gas producers thereby affecting the supply and price of gas available to consumers also regulates wholesale rates for electricity and gas pipeline construction and U S imports and exports of natural gas and electricity Cultural Values o
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