Terminology Nov.

. 4, 5 The Marketing Mix 4 Ps of Marketing Product Mix Research conducting surveys and gathering information on consumer preferences, habits and lifestyles to develop an effective marketing plan Product development using information to make a product that meets the needs of the consumer that can be effective and competitively priced Packaging providing assortment of packaging to promote product and to protect them until delivery to the consumer Branding a products name, trademark, logo, slogan and package designed to create and maintain brand identity Price Mix Place Mix Physical Distribution how the company distributes the product to the consumers efficiently and inexpensively Inventory Management ensuring that there is no extra stock and still having enough to satisfy consumers needs Storage arrangement and maintenance of storage facilities to house products until they are needed for consumption by the business or for sale to the consumer Promotion Mix Advertising and publicity to make the consumer aware of the companys product, e.g. magazines, newspapers, television, radio, out-of-home, direct-to-home, internet, speciality advertising

Product Life Cycle

Types of Pricing Penetration Pricing when price starts off low; for price sensitive consumers; used when the company anticipates making huge savings on producing high volumes; product is expected to gain appeal quickly Price Skimming when price starts off high; for customers who focus on quality; used when company does not expect to make huge savings on producing high volumes and might have large capital costs (i.e. initial setup costs) Profit when revenue > cost

Loss when revenue < cost Breakeven Point point at which revenue = cost; i.e. where profit and loss are both equal to 0

Factors that Affect a Businesss Profit Internal Factors: Company Culture goals and vision or mission statement is it reflective of the companys values/ what it plans to achieve? Employee Behaviour how committed are employees to the company? How is the employee turnover rate? Turnover Rate the rate at which employees are cycled through the hiring and firing process. If the rate is too high, the company is hiring and firing too quickly, and hence spending too much money on recruitment and training - Positive Reinforcement wages (compared to industry average), benefits, bonuses, other incentives, employee morale (high/low) - Negative Reinforcement treatment of unwanted behaviour (warnings before termination, severity of penalties), the promotion of good ethics in companys mission statement (how much stress is put on values and morals) External Factors: Competition (price wars), government regulations, consumer buying behaviour, supplier concentration, industry conditions, etc.

Terminology Nov. 11, 12 Porters 5 Industry Forces New Entrants high barriers to entry, high capital costs, regulated environment can deter new entrants from entering the industry Buyers if switching costs are high, buyer power is low Suppliers if switching costs are high, supplier power is high Substitutes products that arent the same but similar perform similar functions or offer a similar service. They do not compete directly with these products e.g. A substitute for coke would be fruit juice or water. Substitute for air travel is bus, train, car Competitive Rivalry Types of Competition Monopoly the only company in its industry, has control over price, leads to an inefficient economy Perfect Competition many companies in industry keep competition intense hence, makes the economy efficient, leading to price wars and keeping price in control. Threat is lower if competition is high and if exit barriers are high. Oligopoly industry dominated by a few companies. Market can be very unstable therefore, companies tend to make formal agreements to set the price, quantity and supply Product Market Focus PRODUCT MARKET EXISTING NEW EXISTING Market Penetration Market Development NEW Product Development Differentiation

PEEST Political regulated or deregulated environment, legal barriers Economic dollar value, is the economy stable? What is the companys position relative to rest of the industry? Is it leading or lagging? Environmental do they produce environmentally-friendly products, or do they create a lot of pollution through wastage, toxins, noise Social social and cultural values of the customers, which target market is your company pursuing? Technological is the software, equipment up-to-date? How fast is the rest of the industry improving its performance through miniaturization, automation, etc. compared to your company

SWOT

Strengths and Weaknesses of the company - what are the companys strongest points? What factors need improvement and how can that be achieved? Opportunities and Threats Within the Industry - referring to PEEST, have there been any changes within your industry recently that your company might be able to take advantage of? Will any of these changes restrict the progress of your company? How can that be overcome?

Terminology November 18 & 19 Ethical Behaviour in Business Ethics the moral principles and values that govern the actions and decisions of an individual Laws societys values and standards that are enforceable in the courts Morals the rules people develop as a result of cultural values and norms Social Responsibility organizations are part of a larger society and are accountable to that society for their actions Profit Responsibility companies have duty to maximize profits of their owners Stakeholder Responsibility firm has an obligation to the stakeholders that can affect the achievement of its objectives Societal Responsibility - firm has an obligation to the preservation of the ecological environment and the general public Social Audit - a systematic assessment of a firms objectives, strategies, and performance in the domain of social responsibility Sustainable Development - conducting business in a way that protects the natural environment while making economic progress Bottom Line - a measure of financial performance that refers to the final profit or loss that a company makes at the end of a given period of time Deceptive Practices Product planned obsolescence, quality and safety/unsafe products, product warranty, patent protection Pricing excessive mark-ups, geographic predatory pricing, price discrimination, price fixing Distribution exclusive dealing, tying agreements (one product tied to another) Selling Decisions bribing, stealing trade secrets, misrepresenting, disclosure of customer rights, unfair discrimination Promotion false advertising, deceptive advertising, bait and switch (lure in customer with one product and then sell them another)

Terminology Nov. 25, 26

Consumer Behaviour: the actions a person takes in purchasing and using goods and services. Need Recognition perceiving a need Buyer senses a difference between current state and desired state (internal or external stimulus) Marketers try to show the shortcomings of previous good or service, which activates the buyer

Information Search seeking value

Consumer has heightened attention/more receptive to information or may go into an active search Influence varies with product and buyer

Personal sources family, friends, neighbours Commercial sources salespeople, dealers, displays Public sources mass media, consumer ratings Experiential sources handling, examining, using (most unplanned purchases)

Evaluate Alternatives assessing value

Consumers use information to evaluate alternative brads in a choice set (several criteria used)

Marketers must determine which attributes have the most influence on a consumers choice Purchase Decision buying value

Affected by attitudes of others or unexpected situational factors

I.e. whom to buy from (retailer return policy)? When to buy (sale/rebate offers)?

Post purchase Behaviour value in consumption/use

Consumers take further action after purchase based on satisfaction/dissatisfaction based on expectations and perceived performance Satisfied buyer tells on average 3 people Dissatisfied buyer complains to atleast 9 people Consumers reduce dissatisfaction by justifying their decision Financial impact of repeat patronage is significant; therefore firms focus attention on customer satisfaction (refund policies, customer service, etc.)

Situational Influences

Purchase task reason for purchase (gift, own use, etc.) Social surroundings someone with you during your purchase Physical surroundings dcor, music, crowd Temporal surroundings time of day, amount of time Antecedent surroundings consumers mood, amount of money on hand

Psychological Factors

Motivation biological and physical needs (Maslows Hierarchy) motivation arises from a need and one is motivated to satisfy unmet needs Personality refers to persons consistent behaviour or responses to recurring situations (traits, self-image)

Lifestyle persons pattern of living expressed by his/her:

Activities (work, sports) Interests (food, fashion) Opinions (themselves)

Psychographics analysis of consumer lifestyles (combination of psychology and demographics) Sociocultural Influences:

Family (most important consumer influence) Social Class (common attitudes shared within social class) Cultural (values, ideas, attitudes)