Core Concepts of Marketing

Target Markets & Segmentation Needs, Wants, and Demands Product or Offering Value and Satisfaction
Exchange & Transactions Relationships & Networks Marketing Channels

Supply Chain Competition Marketing Environment

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1-1

The Four Ps vs. The Four Cs

Marketing Mix

Product

Place

Customer Solution

Convenience

Price

Promotion

Cost
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Communication

1-2

Company Orientations Towards the Marketplace

Production Concept Product Concept Selling Concept Marketing Concept
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Consumers prefer products that are widely available and inexpensive Consumers favor products that offer the most quality, performance, or innovative features Consumers will buy products only if the company aggressively promotes/sells these products

Focuses on needs/ wants of target markets & delivering value better than competitors
1-3

Determinants of Customer Delivered Valu

Image value Personnel value Services value Total customer value

Product value
Monetary cost Time cost
Energy cost

Customer delivered value Total customer cost

Psychic cost
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1-4

Strategic Planning, Implementation, & Control Proces

Planning
Corporate planning Division planning Business planning Implementing Taking corrective action
1-5

Implementation
Organizing

Control
Measuring results

Diagnosing results

Product planning
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Good Mission Statements

Limited number of goals

Stress major policies & values

Define competitive scopes

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1-6

Boston Consulting Groups Growth-Share Matr

Market Growth Rate
20%18%16%14%12%10%8%6%4%2%0 10x
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Stars

Question marks

5
Cash cow

?2
7

Dogs

6
4x 2x 1.5x 1x

.5x .4x .3x .2x .1x

1-7

Relative Market Share

Market Attractiveness: Competitive Position Portfolio Classification

MARKET ATTRACTIVENESS Low Medium High Strong
5.00 5.00 Hydraulic pumps 3.67 Clutches Flexible diaphragms Fuel pumps Relief valve Selectivity/earnings Harvest/divest 1-8

BUSINESS STRENGTH Medium

3.67 Joints

2.33

Weak

1.00

Aerospace fittings

2.33

1.00 4/29/2012 Invest/grow

Intensive Growth Strategies: Ansoffs Product/Market Expansion Grid

Existing products New products 3. Product development

Existing markets

1. Market penetration

New markets

2. Market development

4. Diversification

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1-9

Opportunity Matrix
Success Probability Low High Attractiveness Opportunities
1. Company develops a more powerful lighting system 2. Company develops a device for measuring the energy efficiency of any lighting system 3. Company develops a device for measuring illumination level 4. Company develops a software program to teach lighting fundamentals to TV studio personnel
1-10

High

Low

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Threat Matrix
Probability of Occurrence
High Low

Threats 1. Competitor develops a superior lighting system

Seriousness

High

2. Major prolonged economic depression

3. Higher costs

Low

4. Legislation to reduce number of TV studio licenses

1-11

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The McKinsey 7-S Framework

Structure

Strategy Shared values

Systems

Skills
Staff
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Style

1-12

The Value-Delivery Process

(a) Traditional physical process sequence Make the product Design Procure Make product Sell the product Price Sell Advertise/ Distribute Service promote

(b) Value creation & delivery sequence

Choose the Value

Provide the Value

Communicate the Value

Strategic marketing
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Tactical marketing
1-13

The Marketing Plan

Executive Summary & Table of Contents Current Marketing Situation

Opportunity & Issue Analysis

Objectives Marketing Strategy Action Programs Projected Profit-and-loss Controls
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1-14

Defining the Problem & Research Objectives

Sheds light on problem suggest solutions or new ideas.

Exploratory Research

Descriptive Research

Ascertain magnitudes.

Causal Research

Test cause-and-effect relationships. Tests hypotheses about causeand-effect relationships.

1-15

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Research Approaches
Observational
Focus-group Survey Behavioral Experimental
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1-16

Secondary Data Sources

Internal Sources Government Publications Periodicals and Books Commercial Data On-Line
Associations Business Information
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1-17

The Marketing Research Process

Defining the problem and research objectives

Developing the research plan

Collect the information

Present the findings

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Analyze the information

1-18

Good Marketing Research...

Is scientific Is creative Uses multiple methods Realizes interdependence of models & data Acknowledges the cost & value of information Maintains healthy skepticism Is ethical
1-19

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Model of Buying Behavior

Marketing Other stimuli stimuli
Product Price Place Promotion Economic Technological Political Cultural

Buyers Buyers decision characteristics process

Cultural Social Personal Psychological Problem recognition Information search Evaluation Decision Post-purchase behavior

Buyers decisions
Product choice Brand choice Dealer choice Purchase timing Purchase amount
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1-20

Characteristics Affecting Consumer Behavior

Cultural Social Family & Lifestyle Psychological Buyer

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1-21

Consumer Buying Roles

User
Key Family Decision Roles

Initiator

Buyer

Influencer

Decider
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1-22

Four Types of Buying Behavior

High Involvement Significant differences between brands Few differences between brands Complex Buying Behavior DissonanceReducing Buying Behavior Low Involvement VarietySeeking Behavior Habitual Buying Behavior

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1-23

Consumer Buying Process

Problem recognition
Information search Evaluation of alternatives Purchase decision Post-purchase behavior
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1-24

Decision Making Sets

Total Set

Awareness Set

Consideration Set

Choice Set

Decision

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1-25

Five Forces Determining Segment Structural Attractiveness

Potential Entrants (Threat of Mobility)

Suppliers (Supplier power)

Industry Competitors (Segment rivalry)

Buyers (Buyer power)

Substitutes (Threats of substitutes)

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1-26

Specific Attack Strategies

Price-discount Cheaper goods Prestige goods Product proliferation Product innovation Improved services Distribution innovation Manufacturing cost reduction Intensive advertising promotion
1-27

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Steps in Segmentation, Targeting, & Positioning

6. Develop Marketing Mix for Each Target Segment

5. Develop Positioning for Each Target Segment

4. Select Target Segment(s) 3. Develop Measures of Segment Attractiveness

Market Positioning

Market Targeting

2. Develop Profiles of Resulting Segments

1. Identify Bases for Segmenting the Market
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Market Segmentation

1-28

Bases for Segmenting Consumer Markets

Geographic
Region, City or Metro Size, Density, Climate

Demographic
Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ...

Psychographic
Lifestyle or Personality

Behavioral
Occasions, Benefits, Uses, or Attitudes
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1-29

Product Differentiation

Form

Features

Performance

Quality

Conformance Quality

Durability

Reliability

Repairability

Style

Design

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1-30

Important

Profitable

Distinctive

Differences Worth Establishing

Affordable Superior

Preemptive

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1-31

Positioning is...

the act of designing the companys offering and image to occupy a distinctive place in the the target markets mind.
p. 298

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1-32

New Product Development Process

Marketing Strategy Development Concept Development and Testing Idea Screening Idea Generation Business Analysis Product Development

Market Testing

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Commercialization 1-33

What is a Brand?

User

Culture

Personality

Attributes

Benefits

Values

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1-34

Brand Strategies
Product Category
Existing New

Brand Name

Existing

Line Extension Multibrands

Brand Extension New Brands

New

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1-35

The Three Cs Model for Price Setting

Low Price No possible profit at this price

Costs

Competitors prices and prices of substitutes

Customers High Price assessment No possible of unique demand at product this price features

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1-36

The Marketing Communications Mix

Advertising
Any Paid Form of Non-personal Presentation by an Identified Sponsor. Short-term Incentives to Encourage Trial or Purchase. Protect and/or Promote Companys Image/products.

Sales Promotion

Public Relations Personal Selling Direct Marketing

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Personal Presentations. Direct Communications With Individuals to Obtain Immediate Response.

1-37

Step 6: Decide on Communications Mix

Advertising Public, Pervasive, Expressive, Impersonal Sales Promotion Communication, Incentive, Invitation Public Relations & Publicity Credibility, Surprise, Dramatization Personal Selling Personal Confrontation, Cultivation, Response Direct Marketing Nonpublic, Customized, Up-to-Date, Interactive
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1-38