BUAD 301 Exam 1 03 03 2015 20 02 00 Marketing is the activity set of institutions and processes for creating communicating delivering and exchanging offerings that have value for customers clients partners and society at large Provides long term value rather than a narrow exchange of money Goal of marketing to focus on the wants and needs of the buyer o Deliver satisfaction more effectively and efficiently than competitors Marketing Strategy Involves the allocation of resources to develop and sell products or services that consumers will perceive to provide more value than competitive goods o How do we allocate money and employees time Perceived Value the value of an item in the eyes of the consumer o A laptop that is worth 1000 to me may be worth 2000 to you The Basics o Understand the environment and situation Are there taxes and regulations If it is not related to me it is out of my control o Design a business portfolio comparing the environment and your company objectives A variety of products under one corporation s umbrella i e Johnson and Johnson o Plan a marketing strategy 4 P s Product Price Promotion Place Marketing Environment o Activities do not take place in a continuum o Environment includes many forces Competitive economical political legal regulatory technological all affect the marketing mix i e negative publicity around health effects of soda o Good portion of your environment depends on your industry Porter s Five Forces o Competition and Rivalry overlaps other 4 o Buyer Power o Supplier Power o Threat of Substitutes o Barriers to Entry Marketing Focuses on Customers o I want my product to have more values than my competitors o Mission statements The 5 C s of Marketing Customers Context Climate Collaborators and Complementers Competitors Company o Customers What is your market Who buys Why how where and when do they What is the size of your market and your market buy growth potential What are the customers needs How will we satisfy them How do they make decisions o Context Climate Demographic climate Economic climate how much confidence do consumers have Socio cultural environment Political legal environment Technological environment Natural environment o Collaborators and Complementers Suppliers distributors retailers key influencers Complementary products price of milk goes up so price of ice cream goes up This doesn t affect the price of sprinkles but the consumption of sprinkles goes down o Competitors How do I meaningfully differentiate my product Who are your competitors What are they doing How does their product differ from yours What are their strengths weaknesses Goals How are they meeting customers demands What are their capabilities Competitors come in many shapes and sizes o Company What resources does your firm have What are your firm s strengths weaknesses What is your firm s value proposition to the customer What is your firm s mission and strategy Understanding Your Company o Where are you where are you going o Business Portfolios Strategic Business Units SBUs are departments under the same umbrella i e GAP BabyGAP Athleta that are operated individually Strategic planners should recognize performance capability of each SBU and carefully allocate resources among them Is it worth investing money into each SBU Is the market attractive annual industry growth rate Is our business profitable market share relative to largest competitor o BCG Boston Consulting Growth Matrix Business Portfolio Analysis Star high market share high market growth Market still growing people are buying my product Invest in the star to make it a cash cow Cash Cow high market share low market growth Where we want to be Milk it take money out of it Question Mark low market share high market growth Start off here Management must think hard about which to slow down and which to turn into stars Companies can choose to prioritize it Can also choose to divest and phase it out Dog low market share low market growth Kill it and divest Get rid of this SBU as it is not profitable Goals of BCG determine the appeal of each SBU as though they are a collection of separate investments Determine the amount of cash if any each should receive Problems with BCG Assumption 1 market growth is an indicator for market attractiveness Not the only one Diversity profit margin environmental impact etc Assumption 2 high market share leads to profitability profitable Low share or niche businesses can be o Product Market Expansion Grid Growth Strategies Market Penetration existing product existing market Market Development existing product new market Product Development new product existing market Diversification new product new market Goal of Product Market Expansion Grid where are we where can we go from here o SWOT Analysis what we need to do Build on strengths internal what your company does well not do well Correct weaknesses internal what your company does Exploit opportunities external Is there a market where your product doesn t yet exist Are there few competitors If yes pursue Mergers developing markets market vacated by ineffective competitor Avoid threats New competitors price wars new taxations competitor has new technology o The 4 P s Marketing Mix Product a good service or idea to satisfy the customer s needs Price what is exchanged for the product Promotion a means of communicating between the buyer and the seller Advertising reputation consumer awareness special promotion Place a means of getting the product to the consumer Marketing Research Activities involving the systematic gathering recording processing and analyzing of consumer data to inform marketing management decisions o Companies need to know customers needs marketing environment and competition o They don t need more information they need better information Research is costly expertise is needed Goal to understand what happened and predict what will happen in order to predict one must understand why something happened and to use these understandings and predictions to influence customers Process o Develop goals and objectives o Collect secondary data data collected before now o Design research method for primary data our questions and observations o Conduct research o Analyze data o Prepare report o Implement Research Questions o Applied Research Questions answer questions specific to a given product market etc o Basic Research Questions answer questions independent of product specifics Approaches to Data Collection o