Customer-Driven Strategic Marketing

Marketing Defined: The process of creating, promoting distributing and pricing goods, services and ideas to facilitate a satisfying exchanges with customers to develop and maintain favorable relationships with stakeholders in a dynamic environment. Marketing is how we compete in a free market based on exchange. Customers are the focus:
Value Driven Marketing: Value= (benefits exceed cost) (costs are not just dollar amount but time spent to get product) A. How is it determined (customer benefits -minus -customer cost) B.Value Proposition C.Strategies for increasing customer value Ways to increase value: 1. Increase Benefits 2. Reduce Cost 3. Raise the benefits by more than you raise the costs

Q:Needs, wants, and demandswhat are the differences? A: Needs: a state of felt deprivation (desired state is not equal to actual state). Want: is a need shaped by your culture and personality. Demand: want backed by buying power Q: Understand the different stages, in order, in Maslows Hierarchy of Needs model: Value Driven Marketing: Value= (benefits exceed cost) (costs are not just dollar amount but time spent to get product) A. How is it determined (customer benefits -minus -customer cost) B.Value Proposition C.Strategies for increasing customer value Ways to increase value: 1. Increase Benefits 2. Reduce Cost 3. Raise the benefits by more than you raise the costs Q: Understand how consumers determine value: A: Value= Customer Benefits-Customer Costs (customer costs include anything given up to obtain product, time etc)

Q:Understand how consumers determine satisfaction (or dissatisfaction)what part of the satisfaction model do marketers have more control over? A: Customer Expectations VS. Perceived Performance (reality)

Marketers have vthe most control over how they communicate with the customer thus creating expectations

Q: What is an exchange and why do we engage in this activity (vs. solicitation, power, etc.): A: Exchange: the provision of goods, services or ideas in return for something of value. 4 Conditions: 1. Two plus individuals, groups or organizations must participate 2. The exchange must provide a benefit to all parties 3. Each party must have confidence in the promise of gaining something of value 4. The parties to the exchange must meet the expectations. **Exchange is the most efficient way of trading something of value. Both parties are better off** Q: Understand the components of the marketing mix (also called 4Ps)what activities or decisions occur in each area (Ex. Branding is a product decision.) A: 4-Ps (4-Cs) 1. Product (addressing customer needs and wants); Branding, creating and modifying brand names and packaging 2. Price (cost); Raise prices to establish an item as a premium product (Mont Blanc), competitive tool. 3. Place (convenience, distribution); making businesses/products located in convenient places (subway in Walmart) 4. Promotion (communication); internet promotion YouTube, etc, curious george promo 5. Understand the differences among the alternatives types of products (goods, services, ideas) Q: Understand the alternative types of prodicts (goods, services, ideas): A: goods are something tangible (you can touch), services are something that is done for you (car wash), ideas are (intelectual property, may be copywrited) Q: Marketing Management Defined: A: process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently. Q: What is demarketing?see lecture notes: A: DemarketingA. Involves reducing or shifting demand for a product

B. Does not involve eliminating demand Ex: Demarketing the demand for water in ABQ (4Ps) Q: Four marketing management philosophies (production concept, the product concept, etc)what are the assumptions about the consumer and how does a company respond: A: 1. Production Orientation- 19th century technology made it possible to produce goods more efficiently. ex:You can get whatever model you want--but only in black. 2. Product Orientation- The extra things; thinking ahead that the customer needed it. 3. Sales Orientationa. If we push the product hard. Supply > Demand b. 1 million units go out and we get rid of them (some commercials TV shop, car dealers) agressive sales tactics. 4. Market Orientation- An organization wide commitment to researching and responding to customer needs. a. Pepsi, Samuel Adams b. Southwest Airline--Best job even though they are a low end provider Planning Marketing Strategies Q: Steps in the strategic planning process (assessing organization resources and opportunities, etc) A: The place where opportunities, core competencies, and Strategic windows meet Q: Be able to explain core competency, competitive advantage, market opportunity, and strategic window A: Core Competencies- things a company does very well that gives it an advantage over its competition. Competetive Advantage- the result of a company matching a core competency to an opportunity discovered in its marketplace. Market Opportunity- A combination of circumstances and timing that permits an organization to take action to reach a particular target market. Strategic window- temporary periods of optimal fit between the key requirements of the market and the particular capabilities of a company competing in the market. Q: Understand the components of a SWOT analysis and they relate to one another; how is it used to make strategic marketing decisions? A: Strengths and weaknesses are internal to the company do not come from the environment. Opportunity and threats do come from the environment

 EXAMPLE: Wolfes Bagels: STRENGTHS 1. Brand Name 2. Quality 3.Established Wholesale Business (distributed to retailers 20%) 4. Production Capabilities WEAKNESSES: 1. Atmosphere 2. High Overhead 3. Not Low Cost OPPORTUNITIES: 1. Food Service not offering premium bagels 2. People eating bagels outside of breakfast. THREATS: 1. National Chains 2.Super Markets (better bagels at a lower price) To perform an analysis take threats and convert to opportunity: Sell to national chains, by supplying to supermarkets they did not prove their brand had value. Convert weaknesses to strengths: Q: What is marketing myopia? A: Short sighted and inward looking approach to marketing that focuses on the needs of the firm instead of defining the firm and its products in terms of the customers' needs and wants. Q: What are the two primary questions to be answered in a mission statement? A: What are our core competencies? Who are our customers? Q: The qualities of good objectives (specify a time frame, etc.)What is a strategic business unit? A: Be based on a SWOT analysis Be expressed in clear, simple terms Be accurately measurable Specify a specific time frame for accomplishment Be consistant with business--unit, corporate strategy Q: What is a Business Unit Strategy (SBU)? A: (SBU)- a division, product line or other profit center within a parent company; has their own resources and does their own planning) ex: Anderson School of Management, Food services (The SUB). Market- a group of individuals and/or organizations that have needs for products and the ability, willingness and authority to buy Market Share- the percentage of a market that actually buys a specific product from a specific company. Q: Boston Consulting Group Matrix or growth-share matrix (dogs, cash cows, etc) understand the four types of SBUs in this matrix; how does money or resources flow among the different types?; what is the typical path an SBU will follow through the matrix?

A: How to use Matrix for making strategic decisions: Star: in order to maintain high market share they need cash. High market share in a low growth industry. The cash cow provides funds for a different SBU, iphones go to tablets (star) Dog doesnt get any cash. Dogs are a low growth industry with low market share. The Marketing Environment, Social Responsibility, and Ethics Q: Understand the following areas from the demographic environmentsee lecture notes for most of this information Q:: geographical shifts in populationwhere are people moving and why? A: People are moving to the west and to the south because of financial situations and jobs. At the fastest growing metropolitans Raleigh, NC is in 4th place and Myrtle Beach, SC is in the 9th place. Q: ethnic and racial diversityknow the characteristics of each group and be able to identify which group(s) are growing the fastest and why? A: White, non-hispanic (64%): Northeast and the Midwest, moving slower Hispanic (16%): Exploding, the most difficult people because of their different cultures and languages. It is important to target these people because they are growing. Black, non-hispanic: Younger people, you want to target them to become life-long customers. Located in Illinois, Michigan area Asian (5%): The best educated=Highest income. Located in northern California. Native American (0.9%): NM-pay attention: 12% of the population. Challenges is the langages and the distribution. Q: generational marketing (seniors, baby boomers, etc.)know characteristics of each age group A: W.W.II Silent generation: Frugal (cheap) = They got a lot of money now which they give to their grand kids. Disney knows that=Ads with the grandparents. Dont write this people off=They got the money Babyboomers: End of the war births moms where home. They wanted everything big so they worked hard to be able to buy the nice stuff. They are afraid of getting old so they use pills and botox. Since they dont want to feel old they are working after their retirement. Gen-X: Birthrate went down. The most disliked generation distrust. They value other things. They want to feel independence. Gen-Y: We are the internet generation (Lazy). They are trying to reach us, we are doing everything online, thats why they need to have the ads in music, social media and video games.

All of us are going to remember 9/11. Shootings in school= we dont feel safe. Diverse generation (mixed race families). We are all individuals and want to feel special. We have helicopter-parents they dont let us fail. The good things about Gen-Y is that we are resourcful, customer service is coming back and we are more open-minded. Q: Understand the following concepts from the competitive environment, types of competitive structures (monopoly, oligopoly, etc.): types of monopolies (patent protected, government sanctioned, etc.) A: Legal and illegal. Gas=illegal, the ABC stores in Sweden=Legal monopoly. 3 different kinds; 1= Natural ( iTunes), 2=Governments sanctioned ( Electricity, regulated NM gascompanies) 3= Patent protection (17 years=monopoly: Pharmalogics on drugs) Oligopoly: 3-5 Companies: Airlines, Sodas, Beer industry. Monopolistic competition: Many competitors, Wrangler and Levis Pure competition: Unlimited numbers of competitors, perfect information=internet: setting the prices. Q: Types of Competition (brand, product, etc.) Brand Competition: Same things, same benefits and same experience, for example movie theathers. Product Competitors: In the same category, for example Netflix, amazon, iTunes, playstation and directtv. Generic competitors: Offer the same product and experience in another way. For example books, go carting, golf, Lobo football and restaurants Total Budget Competitors: Lottery made busweisters sales goes down, The casinos in ABQ= hurting restaurants and bars. Q: Understand the following concepts from the economic environment: The difference between disposable and discretionary incomebe sure you know how to calculate each one A: Disposable Income: the amount of money left after payment of taxes, ready source for buying power. Discretionary Income: Disposable Income minus food, clothing, shelter. (Younger and older have higher discretionary income). Q:The components of buying power 1. Income 2. Credit

3. Wealth Willingness to Spend (consumer confidence) Economic Conditions (marketing strategy changes a lot) -Business Cycle Q: The four stages in the business cycle: 1. Prosperity Phase : expansion, boom or upswing of economy. 2. Recession Phase : from prosperity to recession (upper turning point). 3. Depression Phase : contraction or downswing of economy. 4. Recovery Phase : from depression to prosperity (lower turning Point). Q: Different between the alternative type of legistation (procompetitive, consumer protection, etc.) A: Procompetitive: Preserves CompetitionExample AT&T and T-mobile couldnt get together=Monopoly. Consumer protection legistation: Nutrition labeling, transfer your phonenumber when you changed company, NY= stopped larged sodas. Protects People from harm Prohibits Hazardous Products Requires Information Disclosure Aimed at Particular Marketing Activities Trademark and copyright protection Self-Regulation: National advertising review board=power to pull the ad, Direct marketing association= Directmail, do not call us. Q: Understand characteristics of technology (dynamic change, ability to reach customers, etc.) 1. Dynamic Change 2. Ability to reach customers 3. Self Sustaining Technology Q: Understand social responsibility, ethical issues, cause-related marketing, and green marketing: Social Responsibility: a companies responsibility to maximize positive impact and minimize negative impact on:

1. Marketing citizenship 2. Stakeholders Ethical Issues: Obligation to do what is right 1. Marketing Ethics-principles and standards that define acceptable marketing conduct as dtermined by various stakeholders 2. Ethical Issues- an identifiable problem, situation or opportunity requiring a choice amoung several actions

Marketing Research and Information Systems Q:Understand the steps, in order, in the market research process (locating and defining issues and problems, etc.) 1. Locating and defining issues Focusing on and locating the nature and boundaries of a situation Define the problem Determine what is the aim of the research 2. Designing the Research Project 3. Collecting Data 4. Interpreting Research Findings 5. Reporting Research Findings Q: What is a hypothesis- an educated guess Q:Know the two types of research (exploratory, conclusive) and understand when it is appropriate to use each one; conclusive has sub-types 1. Exploratory 2. Conclusive Descriptive Experimental Q:Understand the difference between research reliability and research validity 1. Validity- are your results accurate 2. Reliability- are they measurable Q: Secondary data vs. primary datawhat the advantages and disadvantages to each type: Methods of Collection Primary Data Sampling Population: all the elements, units, or individuals of interest to researchers for specific study

 Sample: a limited number of units chosen to represent the characteristics of a total population

Q:Sources of secondary data (government internet site/publications, trade associations, etc.) 1. Internal 2. External Periodicals Government Publications Trade Associations Syndicated Services Internet Q:Be able to define a sample: A: A lmited number of units chosen to represent the characteristic of a population. Q:Sampling methods (probability and non-probability)both of these methods have subtypes: 1. Probability a. SRS b. Stratified Sampling c. Cluster Sampling 2. Non- Probability a. Convenience Sampling b. Quota Sampling Q: Be able to compare and contrast the two methods of collecting primary data (observation, survey) 1. Survey Methods a. Mail Survey b. Telephone Survey c. Online Survey d. Social Networking Sites e. Personal-Interview Survey In-home (door-to-door) interview Focus-group interview Customer advisory boards

 Telephone depth interview Shopping mall intercept interviews 2. Observation Method Human or mechanical Avoid direct contact with subject to reduce possible awareness of observation process Note physical conditions, subjects actions, and demographics Observations may be combined with sale-subject interviews Data gathered may be influenced by observer bias

Q:Advantages and disadvantages of all survey methods (mail questionnaire, telephone interview, etc.) Survey Methods Mail Survey Telephone Survey Online Survey Social Networking Sites Personal-Interview Survey In-home (door-to-door) interview Focus-group interview Customer advisory boards Telephone depth interview Shopping mall intercept interviews Social Networking Sites- emerging way to capture data quickly Personal Interview-People dont go house-to-house anymore. Focus Groups- Used often as seen in video with kids. Disadvantages can be group think, sample size (too small to sample) can be used effectively; Consumer advisory boards- similar to a focus groups ex: asking moms what makes a great diaper Telephone Depth- survey Shopping mall intercept- does not have to be in a shopping mall Mobile Survey- sent to phone very personalized only takes a couple of minutes

Consumer Buying Behavior

Q: Understand the five primary steps in the consumer decision process (problem recognition, information search, etc)study this concept extensively. Note: The Black Box IS NOT one of the five steps. 1. Problem Recognition- When a consumer becomes aware of an actual state and desired state. 2. Information Search- Acitve information Search Internal- buyers search their memories for information External-Public, Consumer Reports, WSJ, Personal; friends, classmates, family.Marketer Dominated, #1 source of information is referrals 3. Evaluation of Altermatives Consideration seta group of brands that a buyer views as alternatives for possible purchase Evaluative criteriaobjective and subjective characteristics that are important to a buyer 4. Purchase Chooses the product or brand to be bought Chooses the seller Negotiates the terms of the transaction Makes the purchase or terminates the process 5. Post Purchase Evaluation Cognitive dissonancea buyers doubts shortly after a purchase about whether the decision was the right one Also known as post purchase dissonance and buyers remorse Determine satisfaction Feedback to cognitive structure

Q:The two types of information search (internal, external)external has subtypes A: InternalQ: What is cognitive dissonance and how can marketers minimize its impact A: Cognitive Dissonance; a buyers doubts shortly after a purchase about whether the decision was the right one (Also known as post purchase dissonance and buyers remorse) Cognitive Dissonance can be reduced by post purchace communication to reassure customers of their purchase and answer doubts with information to make them feel comfort in their choice

Q: The types of consumer behavior (routinized response behavior, etc.) Levels of Involvement When the 5 steps to not apply 1. Routinized response behaviorused when buying frequently purchase, low-cost items 2. Limited problem solvingused when purchasing products occasionally or unfamiliar brands in familiar product categories 3. Extended problem solvingused when purchasing unfamiliar, expensive, or infrequently purchased products 4. Impulse buyingresulting from a powerful urge to buy something immediately Q:Psychological influences on the buying decision process (perception, motives, etc.) Perception Motives Learning Attitudes Personality and self-concept Lifestyle

Q: Understand the differences among the three perceptual processes (selective exposure a.k.a. selection attention, selective distortion, and selective retention) 1. Selective Exposure- too much information to collect not capable of processing all of it. How to market as to stay in the minds of consumers. More likely to pay attention to something we anticipate. 2. Selective Distortion- twist information to your own beliefs 3. Selective Retention- we only select and process what is consistant with our own beliefs.

Q: What is a motive and what are differences between Maslows and Freuds theories on motivation Freuds theory says that our motivation is subconscious and something we cannot explain, Maslows Theory says that human beings are propelled into action by different motivating factors at different times biological drives, psychological needs, higher goals.

Q: What is learning and how can marketers help consumers learn about their product(s)

Learning: changes in an individuals thought processes and behavior caused by information and experience; unfreeze attitudes and behaviorsrefreeze. Marketers can use learning by taking the approach of educated consumers of the benefits of their products. Sources of Learning behavioral consequences information processing experience

Q:Be able to describe the three components of attitudes (cognitive, affective, conative) 1. Cognitive- what you relate a product to. Prius hippy car, UNM price of tuition 2. Affective-feelings, emotions towards a product, sentimental emotion evoked by a product 3. Conative-how likely are you to purchase Q:Understand how personality influences our purchases as consumers Personality: set of internal traits and distinct behavioral tendencies that result in consistent patterns of behavior in certain situations; Brands having personality types. Do people choose brands based on actual self-concept or ideal

Q:What is a lifestyle and what are the three components of lifestyle (activities, etc.) individuals pattern of living expressed through; 1. activities 2. interests and 3. opinions

Q:Social influences on the buying decision process (family, culture, etc.) Roles Family Reference Groups Opinion Leaders Digital Networks Social Class Culture and Subculture