Chapter 1 - Overview of Marketing

Utility

Utility usefulness or benefit that consumers receive from a product

Form transform raw material into finished products
Place make products available where customers want them
Time storing products until they are needed
Possession allow consumer to own, use and enjoy product
Info- it informs buyers of the products existence, how to use it, the price, and other facts.

Different Marketing Orientations

Product orientation mgmt. philosophy that emphasizes the most efficient ways to produce
and distribute products
Selling managerial view of marketing as a sales function, or a way to move products out of
warehouse to reduce inventory.
Consumer business approach prioritizes satisfaction of customers needs and wants
Triple bottom line looks at profits, community in which organization operates and creating
sustainable business practices.
o Financial bottom line, social bottom line, environmental bottom line

4 Ps

Product- created to provide benefits sought by consumers. Products are viewed by marketers as
a bundle of attributes that includes packaging, brand name, benefits and features
o Core product benefits product will provide customer
o Actual product physical good or service
o Augmented product actual product plus supporting features
o B2b product equipments business services raw and processes materials components
Promotion marketing communications includes all the activities marketers undertake to
inform consumers about their products and to encourage potential customers to buy these
products.
Place relates to supply chain set of firms that work together to get product from producer to
consumer
Price - value customer give up to obtain desired product
o Critical to success
o Only source of profit
o Most consumers rank reasonable price as most important
o

Chapter 2 - Global, Ethical, and Sustainable Marketing

GATT General Agreements on Tariffs and Trade international treaty to reduce import tax levels and
trade restrictions
WTO World Trade Organization organization that replaced GATT;it sets rules for its member nations
and mediates disputes between nations.

Protectionism policy adopted by government to give domestic companies an advantage

Level of Economic Development

Look at GDP, countrys steps to reduce poverty, inequality and unemployment, standard of
living average quality and quantity of goods and services a country consumes
Least developed, developing and developed countries

GDP total dollar value of goods and services produced by a nation within its borders in a year

Different Environments Market

Competitive environment firms must keep abreast of what comp is doing so develop new
product features, new pricing schedules, or new advertising to maintain or gain market share.
Microenvironment product alternatives from which members of target market may choose
o Discretionary income amount of money people have left after pay for necessities
o Product competition competitors offer different products attempting to satisfy same
consumers wants and needs
o Brand comp competitors offer similar stuffy vying for consumer dollars
Macroenvironments marketers need to understand big picture, overall success
o Monopoly one seller controls market
o Oligopoly small number of sellers each holding substantial market share
o Monopolistic comp many sellers compete for buyers, each co. differnet
o Perfect comp many sellers offer basically same thing
Technological environment buying online, social media, getting data.
Political and Legal environment local, state, national, global laws and regulations that affect
businesses.
Sociocultural Environment characteristics of society, they people who live in that society and
culture that reflects the values and beliefs

Entry Strategies

Straight Extension Strategy firm offers same product in domestic and foreign markets
Product adaption strategy firm offers a similar but modified product in foreign markets
Product invention strategy firm develops a new product for foreign markets
Backward invention firm develops less advances product to serve needs of people living in
countries without electricity or other elements of developed infrastructure

Standardization vs. Localization

1. To what extent will co need to adapt marketing communications to specific styles and tastes of
each local market?
2. Will same product appeal to people there?
3. Will it have to be priced differently?
 4. How does co get the product into peoples hands?

Ethics; philosophies, codes a lot of stuff? Pg 56

Locavorism when many shoppers actively look for products that come from farms within 50 to 100
miles of where they live

Chapter 3- Strategic Market Planning

SWOT Analysis analysis of org. strengths and weaknesses and opportunities and threats in external
environment

Portfolio analysis mgmt. tool for evaluating firms business mix and assessing the potential of an
organizations strategic business units

(BCG) Matrix portfolio analysis model developed by Boston Consulting Group that assesses the
potential of successful products to generate cash that a firm can then use to invest in new products.

strategic business unit (SBU)

Stars- sbu whose products have dominant market share in high growth markets
Question marks products have low market share in high growth markets
Cash cows products have dominant market share in a low growth market
Dogs sbu nobody wants

How the BCG relates to the product life-cycle

Product Market Growth Matrix

Market penetration strategies growth strategies designed to increase sales of existing

products to current customers, nonusers and users of competitive brands in served markets
 Market development strategies introduce existing products to new markets
Product development strategies focus on selling new products in existing markets
Diversification strategies emphasize both new products and new markets

Chapter 4- Market Information/Research

Advantages/disadvantages of primary data collection techniques

When need to make specific decision

Not always truthful, may not be valid or reliable
1) too expensive and 2) too difficult to gather.
This is unfortunately true. Research can be very costly in both money and time. Often times the result is that companies
make decisions not based on research but based on assumptions; you know what they say about assumptions. It is
usually a wise choice to have information prior to embarking on a marketing strategy.
Information is EXTREMELY valuable to a firm and is often thought of as an organizational asset. Research is how you
gain this information related to a variety of issues, e.g. why consumers aren't buying, what consumers are looking for,
what the perception of your product is, etc.
I always advocate looking for secondary data first. This is data that has already been collected. It is less expensive and
easier to obtain than primary data although secondary data can sometimes be obsolete.
One caveat, just because you do research does not mean you are getting the data regarding the correct issue.

Data Mining 134 sophisticated analysis techniques to take advantage of massive amount of
transaction info now available

Data Quality 113 why primary data may not be useful

Chapter 5- Marketing Analytics

CRM customer relationship managements systematic tracking of consumers preferences and

behaviors over time in order to tailor the value proposition as loosely as possible to each individuals
unique wans and needs

Lifetime value of a customer how much profit a firm expects to make from a particular customer,
including each and every purchase they will make from them now and in the future.

Marketing Analytics- group of technologies and processes that enable marketers to collect, measure,
analyze and assess the effectiveness of marketing efforts.

Predictive Analytics- uses large quantities of data within variables that have identified relationships to
more accurately predict specific future outcomes

Chapter 6- Consumer Behavior and B2B

Influences on Consumer Behavior

Perception process by which people select, organize, interpret info from the outside world
Exposure extent to which stimulus is capable of being registered by a persons sensory
receptors
 Exposure extent to which a stimulus is capable of being registered by a persons sensory
receptors
Subliminal advertising supposedly hidden messages in marketers communications
Attention extent to which person devotes mental processing to a particular stimulus
Hierarchy of needs approach that categorizes motives according to five levels of importance,
the more basic needs at bottom and higher at top

Decision making process

Problem recognition, information search, evaluation of alternatives, product choice,

postpurchase evaluation

Opinion Leaders person who is frequently able to influence others attitudes or behaviors by virtue of
his or her active interest and expertise in one or more product categories

Extended, Limited, Routine/habitual problem solving

Stimulus generalization

Stimulus Generalization - existing S-R relationship generalizes to a new (similar) stimulus

E.g., family brands and product-line extensions

Me Too branding strategies

Halo effect - cognitive bias refers to an observer's overall impression of a person,

company, brand, or product influencing the observer's feelings and thoughts about that
entity's character or properties

Product line extensions- related products are added to an established brand

 Masked brands- an attempt to hide the true producer of goods

Me too products another company makes a product just like another companys product (different
cola drinks)

Elaboration Likelihood Model; central/peripheral route to persuasion

Central route to persuasion consumer highly involved, use facts or info to influence decision
Peripheral route consumer involvements low, uses peripheral cues to influence

Hemispheral Lateralization

Involvement theory

Developed from hemispheral lateralization, aka split brain theory

Right and left sides of brain specialize in the types of information they process.

Left hemisphere: cognitive activities e.g. reading, speaking and information

processing.

Right hemisphere: nonverbal pictorial information

The left side is rational active and realistic

The right side is emotional, impulsive and intuitive

Cocktail Party Phenomenon

How much information gets encoded?

Stroop test: idea that there is a bottleneck in information that we receive.

only limited info gets to our short term memory through the bottleneck.

Cocktail party phenomenon

Maslow Hierarchy of Needs

 I believe Maslows Hierarchy is relevant in identifying that needs can be classified into
different levels. However, I do not feel that people always go in order from bottom to
top.

The hierarchy is still important for marketers to understand that different products
meet different types of needs. Important to identify what need your product is
meeting.

Types of buying

straight rebuy business buyers make routine purchases that require minimal decision making
modified rebuy used by business buyers to categorize a previously made purchase that
involves some change and that requires limited decision making
new-task buy new b2b purchase that is complex or risky and requires extensive decision
making

Crowdsourcing practice in which firms outsource marketing activities (such as selecting an ad) to a
community of users

Outsourcing -business buying process of obtaining outside vendors to provide goods or services that
otherwise might be supplied in-house.

Buying Center group of people in an organization who participate in purchasing decision

Consumerism social movement attempts to protect consumers from harmful business practices

JFKs 4 rights right to safety, right to be informed, right to choose, right to be heard

Classical conditioning

Repetition

Increases the strength of association between CS and US

Slows the process of forgetting

At some point it can become too much. Individual is satiated with information
(advertising wear out).

Marketers can avoid this by using cosmetic or substantive variations of an existing

message

How many repetitions should you use?

Chapter 7- Segmentation

CRM systematic tracking of consumers preferences and behaviors over time in order to tailor the value
proposition as closely as possible to each individuals unique wants and needs. Allows firms to talk to
individual customers and to adjust element of their marketing programs in light of how each customer
reacts.

Segmentation process demographics, psychographics, behavior

Segmentation strategies

Undifferentiated -Sending the same promotional message to everyone

Concentrated-Designing a promotional message that communicates the benefits desired by a
single specific segment
Differentiated-Designing more than one promotional message, with each communicating
different benefits

Perceptual Map technique to visually describe where brands are located in consumers minds relative
to competing brands.

Chapters 8, 9: Product and Branding What is a product?

Types of consumer products:

Convenience usually low priced, widely available and purchased frequently with minimum of
comparison and effort
Shopping consumers spend considerable time and effort gathering info and comparing
alternatives before making a purchase
Specialty unique and important to buyer, will devote significant effort to acquire
Unsought consumer has little awareness or interest until the product or need for product is
brought to her attention
Durable provide benefit over long period of time, car furniture appliance
Nondurable short time benefit because consumed or no longer useful

Product adoption, category of adopters

Six stages, people drop out at every stage

Awareness, advertising

Interest, create a buzz (teasers)

Evaluation, provide info

Trial, experience the product

Adoption, choose the product

Confirmation, determine costs vs. benefits

ADOPTION PYRAMID

Awareness: Learning innovation exists (media blitz).

Interest: Potential consumer sees some benefit to satisfy some need.

Evaluation: Weigh costs & benefits of product.

Trial: Experience or use product for 1st time.

 Adoption: Prospect chooses product (purchase).

Confirmation: Favorable experience = positive opinion = confirmation (have to resell thru ads).

Product life cycle, what characteristics at each stage

Brand equity value of brand to organization (9)

Kellers model of brand knowledge - in order to build a strong brand, you must shape how customers
think and feel about your product. You have to build the right type of experiences around your brand, so
that customers have specific, positive thoughts, feelings, beliefs, opinions, and perceptions about it.
Chapter 10: Pricing What is price?

BE analysis

Break even analysis

How many units of this product must I sell at this price to break even (cover all costs)

All costs are covered but there isnt a penny left over

BE = Total Fixed Costs / (Unit Price - Unit Variable Costs )

Psychological pricing odd even, lining, prestige

price lining setting a limited number of different specific prices, called price points for items in a
product line

Loss Leader -setting prices very low or even below cost to attract customers into a store

Bait and Switch illegal marketing practive in which an advertised price special is used as bait to get
customers into the store with the intention of switching them to a higher priced item

Predatory Pricing illegal , co sets a very low price for purpose of driving competitors out of business
Horizontal price fixing - competitors making same product jointly determine what price will be. Keeps
prices high by eliminating competition. Illegal under Sherman Act.

Elasticity of Demand deals with market reaction to changes in price

Elastic- inverse relationship

If you lower price, total revenue increases

If you raise the price, total revenue goes down

Price Skimming a very high premium price that a firm charges for its new highly desirable product

Price Penetration firm introduces a new product at a very low price to encourage more customers to
purchase it

Cost-Based Strategies

Advantages: Simple, relatively risk free

Disadvantages: Misses many factors (competition, demand, etc.); difficult to est. costs

Cost Plus Pricing - most common approach

Marketer figures all costs for the product and then adds desired profit per unit
 Straight markup pricing is the most frequently used; price is calculated by
adding a pre-determined percentage to the cost

Chapter 11- Distribution What is the supply chain?

What is supply chain management?

Outsourcing - business buying process of obtaining outside vendors to provide goods or services
that otherwise might be supplied in-house.
insourcing company contracts with a specialist firm to handle all or part of its supply chain
operations
crowdsourcing - practice in which firms outsource marketing activities (such as selecting an ad)
to a community of users
channel of distribution -series of firms or individual that facilitates the movement of a product
from the producer to the final customer
o consumer
Direct
Indirect
Manufacturer-retailer-consumer
Manufacturer-wholesaler-retailer-consumer
o B2B
Direct
Indirect-
Manufacturer-industrial distributor-business customer

Channel intermediaries firms or individuals (wholesalers, agents,brokers,retailers), who help move a

product from the producer to the consumer or business user. middlemen

Functions and value-added of channel intermediaries (page 335)

Time, place, ownership, utilities

Transportation and storage utilities
Facilitating functions credit to buyers
Repair and maintenance function
Risk taking
Communications and transaction functions
Efficiency by creating
Breaking bulk channel members purchase large quantities from manufactures and sell smaller
quantities to many different customers
Creating assortments channel members provide variety of products in one location, reduces
transactions

Ethical concerns of distribution pg 341

Channel leader is dominant firm that controls the channel, have power relative to members
Economic power- control resources
Legitimate power legal authority to call shots
Reward or coercive power power to reward channel intermediaries

Slotting allowances- fee paid in exchange for agreeing to place a manufacturers product on a retailers
valuable shelf space

Managing the channel of distribution

1. Develop Distribution objectives

a. Support of marketing goals , increase sales
2. Evaluate internal and external environmental influences
a. What is best situation for distribution channel
3. Choose distribution strategy
a. Conventional vertical horizontal
4. Develop distribution tactics
a. Necessary steps to implement strategy
b.

Economic, legitimate, reward/coercive power

Channel leaders have some form of power relative to other members

economic power- control resources
legitimate power- legal authority to call shots
reward or coercive power- power to reward channel intermediaries

Channel Strategies

Steps in determining channel objectives and tactics

1) Develop Distribution Objectives

- support of marketing goals, e.g. increase sales

2) Evaluate Internal and External Environmental Influences

- what is best situation for distribution channel?

3) Choose a distribution strategy

- Conventional, Vertical, and Horizontal

4) Develop Distribution Tactics

- necessary steps to implement strategy

Conventional marketing system multiple level distribution channel in which channel members work
independently of one another

Vertical marketing system (vms) channel of distribution in which there is formal cooperation among
members at the manufacturing, wholesaling and retailing levels

Horizontal marketing system arrangement within a channel of distribution in which two or more firms
at the same channel level work together for a common purpose

Inventory control: activities to ensure that goods are always available to meet customers demands

JIT just in time inventory management and purchasing processes that manufacurers and
resellers use to reduce inventory to very low levels and ensure that deliveries from suppliers
arrive only when needed.
RFID- radio frequency identification product tags with tiny chips containing info about the
items content, origin and destination .

S-O-R paradigm

The Stimulus

Most any aspect of customer & employee environment.

The Organism

Affect emotional reaction

Arousal physiological feeling state

The Response

Approach behaviors

Desire to stay, explore, work, affiliate

 Avoidance behaviors

Desire not to stay, explore, work, affiliate

E commerce - nonstore retailers any method used to complete an exchange with a product end user
that does not require a customer to visit a store

Merchandise mix total set of all products offered for sale by a retailer, including all product lines sold
to all consumer groups

Wheel-of-retailing concept: new retailers start out as low-cost, low-margin until they evolve into
high priced options. At this point, a new low-cost comes in and takes their business.

Multilevel Marketing system in which a master distributor recruits other people to become
distributors, sells the companys product to the recruits and receives a commission on all the
merchandise sold by the people recruited.

Chapters 13 and 14: Promotion

Promotional Mix -major elements of marketer controlled communication including advertising sales
promotion public relations personal selling and direct marketing

Promotional budgets, techniques on how to determine budget

Top-down approach

% of sales

All you can afford

Bottom-up

Objective task

Competitive parity promotion budgeting method in which an organization matches whatever

competitors are spending

What is social media?

Guerrilla marketing marketing activity in which a firm ambushes consumers with promotional content
in places they are not expecting to encounter this kind of activity

M-Commerce promotional and other e commerce activities transmitted over mobile phones and other
mobile devices such as smartphones and personal digital assistants (pda)

Web strategies
 Push vs. Pull

Historically the web has been which?

Pull (e.g., search engines)

Push (e.g., pop ups)

In a social network, what are marketers doing?

Pushing - company generated online pitch

Pulling - being part of the organic dialogue

Hype vs. Buzz (Perception is key)

Push/Hype- Opt out

The default is to collect information unless the consumer takes an affirmative

action to prevent the collection of dataNo consent required; everything is
pre-checked

Spam

Pull/Buzz- Opt in

Requires an affirmative action by the consumer to allow collection and use of

consumer informationConsent required; consumer chooses

BACN BACN=Bland Automated Community Notification

The Feedback Cycle

The flywheel: Power of WOM
Touchpoint analysis consumers come in contact with a company or a brand in many different ways
begore after and during purchase. These points of contact are call touchpoints.
 What do your customers care about?

What do they find talk-worthy?

Will your customers recommend you?

What would customers say about you?

Listening vs. talking

Are you listening or just talking?

Successful social network marketing resembles a conversation with your customers

Consumers grow tired of the sales pitch

Be present in their community

Just because you say something does not mean people are interested

Give them relevant dialogue

Listen before engaging customer

 Built in focus groups

Real-time

Inexpensive

SocialMention, Google Alerts, Twitter search

Measuring impact: traditional vs. nontraditional

Non-traditional forms of marketing rely on non-traditional metrics

Is the number of followers or fans a meaningful metric?

Clicks, time on site, mentions about you/competitor

Are you listening to the right people?

Are all comments created equal?

How do you know?

What is the best metric to use?

ROI?

Dell credits social media with $1million in revenue

Return on Investment (ROI) used to determine how effective and efficient the firms
management has been

ROI = (net income)/(total investments)

ROI = (net profit)/(sales) * (sales)/(investment)

Net promoter score - an index ranging from -100 to 100 that measures the willingness of customers to
recommend a company's products or services to others

Influencers and profitability

Search Engine Optimization (SEO) systematic process of ensuring that firm comes up at or near the top
of lists of typical search phrases related to your business

What is sales management? -

Sales management objectives

Performance vs. behavioral objectives

Sales management strategies Structure ad pnd size of sales force

What is Public Relations? communication function that seeks to build good relationships with an
organizations publics, including consumers, stockholders and legislators.

PR campaigns a coordinated effort to communicate with one or more of the firms publics

Objectives of Public relations

Introduce new products to retailers and consumers

Influence government legislation
Enhance the image of an organization
Provide advice and counsel
Enhance the image of a city, region, or country
Manage a crisis
Call attention to a firms involvement with the community

IMC- integrated marketing communication strategic business process that marketers use to plan,
develop, execute and evaluate coordinated measurable persuasive brand communication programs over
time to targeted audiences

Market penetration increasing sales of current products in current markets increased promotion
while keeping price the same if revenue increase because price increased a little bit

Sampling in market research selecting representative elements from a population and treating their
answers as typical of all those in whom they are interested

Product differentiation colgate has new formula to separate its product from top competitors like
crest