Question: 

1)Reflect back from everything you have learned from this notes and write a summary:

2)Decide what your 2 or 3 most-important "Lessons Learned" are:

MRK108 Midterm Notes 

Chapter 1:

Product Orientation: Mass production line, Ford introduced an assembly line, build it and they will come, Ford had the best and cheapest car, they were all the same if you built the best product for the best price

Sales Orientation: The evolution of sales techniques that convince consumers to buy, competition now exists, truly convince people why your product is better than the competitors, short term driven

Marketing Company Orientation: Coordination of marketing activities into one department, the goal is to understand the consumer better- not just to sell to them

Integrate

Marketing Concept

FocusAchieve

Societal Marketing Orientation: A dual emphasis- consideration of what the customer wants, makes themselves look better and have a positive image

Relationship Marketing Orientation: Focus on delighting the customer, focus on keeping and improving relationships with customers

Share StoriesListen to the CustomersAct upon customer desire

Trust

Key Marketing Terms:

Exchange: People giving up one thing to receive another thing they would rather have

Customer Value: The relationship between benefits and the sacrifice necessary to obtain those benefits

Market Segments: Groups of individuals, families, or companies that are placed together

Marketing Mix: Four P's:

P: Product- Goods, services that meet the desired wants and needs of consumers

P: Price- Must be above costs but still be attractive to consumers

P: Place- Refers to how the products are distributed

P: Promotion- Involves techniques of reaching the consumer with the information about products and services

Chapter 3:

Elements of a Strategic Marketing Plan

Corporate-Level Planning

Corporate Strategy:

Define the Mission Statement

Set Organizational goals and objectives

Setting Strategic Directions:

Situation(SWOT) Analysis

Portfolio Analysis

Identification or growth strategies

Business Unit-Level Planning

Business Strategy:

Development of Competitive advantage

Identification of core competences

Marketing-Level Planning

Marketing Strategy:

Identification of Target Market

Development of Four P's

Implementation, Evaluation and Control:

Marketing Audits

Annual marketing plan review

Strategic Decisionvs Tactical Decision

Wider in Scope and Long-TermNarrow in Scope and Short-Term

Environmental Scanning:

S- Strengths(Internal)

W- Weakness(Internal)

O- Opportunities(External)

T- Threats(External)

Developing Growth Strategies:

Ansoff's Strategic Opportunity Matrix

Market Penetration: A firm using the market penetration alternative tries to increase market share existing customers. Example; Starbucks sells more coffee to customers who register their reloadable Starbucks cards

Market Development: Involves attracting new customers to existing products. Example; Starbucks opens new stores in India.

Product Development: Involves the creation of new products for present markets. Example; Starbucks develops new powdered coffee cake Nice.

Diversification: A strategy of increasing sales by introducing new products into new markets. Example; Starbucks launches hear music and buys ethos water.

Competitive Advantage: The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition.

Cost

Product/Service Deafferentation

Niche Strategies

Cost Comparative Advantage: Being the low-cost competitor in an industry while maintaining satisfactory profit margins.

Product/Service Differentiation Competitive Advantage: The provision of a unique benefit that is valuable to buyers beyond simply offering a low price. Example, Oakley Custom Glasses

Niche Competitive Advantage: Serving the needs of a segment that has good growth potential but is not crucial to the success of the major competitors

Geographic Niche

Product Niche: Booster Juice

Building Sustainable Competitive Advantage:

An advantage that:

Cannot be copied

Can be satisfied

Sources of tomorrows competitive advantage

Skills and assets of the organization

Target Market Strategy: Begins with Market Opportunity analysis(MOA)

MOA= Estimated size and sales potential of segments that are of interest

Single Segment Entire MarketMultiple Segments

Target Market

Product: Product offering and Product strategy

Package

Warranty

After-Sale Service

Brand Name

Image

Value

Price: What the buyers must give up in the exchange

Can be an important competitive weapon

Quickest element to change

Implementation:

Turning the marketing plan into action

Can be the source of failure

Marketing Research Process:

1.Study the current situation (Wants & Needs)

2.Select a Research Method

3.Collect Data

4.Analyze Data

5.Prepare Report

6.Follow Up

Questionnaire Design

Open Ended

Types of QuestionsScaled Response

Closed Ended

Qualitative Data Collection Methods:

Depth Interviews: One to one, Costly and Time Consuming

Focus Groups: Small groups of people with different characteristics, Guided discussions

Survey Research, Mall interviews

Impact of Technology:

Online Surveys

Rapid Development, Real time reporting

Dramatically reduced costs

Improved respondent participation

Ability to contact difficult people to reach

Mobile Marketing Research

Consumers use their phones to research products, seek out information and make purchases

Market research conducted on consumers mobile devices

Social Media Marketing Research

Facebook, Twitter, LinkdinHow to measure the chatter

The rise of Big Data

So much information

Need a way to track all of it

Chapter 6:

The Consumer Decision Making Process

1.Problem/Need Recognition

2.Information Seeking

3.Evaluation of alternatives

4.Purchase decision

5.Post-purchase evaluation

Types of Consumer Buying Decisions

Factors Determining the Level of Consumer Involvement

Previous Experience

Interest

Perceived Risk of Negative Consequences

Situation

Social Visibility

Cultural Influences on Consumer Buying Decisions

Social Factors:

Reference Groups

Opinion Leaders

Family

Individual Factors

Gender

Age and Family life-cycle stage

Personality

Self-concept and Lifestyles

Cultural Factors

Culture and values

Subculture

Social Class

Psychological Factors

Perception

Motivation

Learning

Beliefs and attitudes

Maslow's Hierachy of Needs

Beliefs and Attitudes

Belieforganized pattern of knowledge that an individual hold as true about their world

Attitudeslearned tendency to respond consistently toward a given object

Rest on a person's value system

More enduring than beliefs

Chapter 8:

Why Segment?

Identify groups of customers with similar needs and study them

Consistent with the marketing concept

Information to design appropriate for each mix

Segmentation Basis

Characteristics of individuals, groups, or organization

Geographic Segmentation

Region of the country

Region of the world

Market Size

Market Destiny

Climate

Demographic Segmentation

Age

Gender

Income

Ethnic Background

Family Life Cycle

Age-Demographic

Tweens: 2 million Canadians, Influence over $20 billion of family spending

Teenager: 2.1 million Canadians , substantial purchasing power, largely discretionary

Baby Boomers: 9.6 million Canadians, retirement properties, health and wellness

Seniors: 5 million Canadians, have time and money and youthfulness

Gender-Demographic

Many products continue to segment by gender(Clothing,perfume and jewelry)

Males becoming increasingly targeted as traditional roles continue to change

Marketers targeting women for men's products

Income-Demographic

Income influences consumers' wants

Income influences consumers' buying process

Ethnic-Demographic

Sizable ethnic exists

Marketers are developing unique approaches do these segment

Tracking ethnic communities is one of the most challenging and most important task for a marketer

Psychographic Segmentation

Personality

Motives

Lifestyles

Geodemographic

PRIZIM C2 Lifestyle segmentation system

Benefit Segmentation

Segmenting according to the benefits that the consumers are seeking from product/service

Segmentation based one needs and wants

Usage Rate Segmentation

Segmentation based on the amount of product used, bought or consumed

Heavy vs. Light weight, 80/20 Rule

Steps in segmenting a market

1.Select a market or product category

2.Choose a bias or bases for segmenting the market

3.Select segmentation descriptors

4.Profile and analyze segments

5.Select target market

6.Design, implement, and maintain appropriate marketing mixes

Target Market

Group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group

Target Market strategies

Undifferentiated

A mass-market philosophy

One marketing mix for the entire market

Concentrated

A market nice to target-single segment

Highly specialized marketing mix

Multisegment

Serve two or more segments with distinct marketing mixes for each

One-to-One marketing

Individual marketing method that uses customer information to build a long-term relationship

Four Trends

Personalization

Time Savings

Loyalty

Technology

Positioning

Position: The place the product, brand, service occupies in the consumers mind

Effective positing requires:

oAssessing the positions occupied by competing products

oDetermining the important dimensions underlying these positions

Product Differentiation

A form of positioning that firms use to distinguish their products from those of competitors

Repositioning

Changing the consumer's perception of a brand in relation to competing brands

MRK 108 Final Exam Review 

Chapter 9: What is Product

Define Product:

Starting point in Marketing

A product may be defined as anything, both favorable and unfavorable, received by a perfect in an exchange for possession, consumption, attention, or short-term use.

A product is anything that can be marketed by an organization

A tangible goods are physical; a service of some sort, an actual good

-the packaging, style, colour, size

A intangible good is service not physically visible, an idea

-the seller's reputation, the way consumers believe others will view the product

Classify Consumer Products

Product can be classified as either business or consumer products.

Business Product: a product used to manufacture other goods or services

-hard-drive is sold at stores and used to manufacture computer

Consumer Products: bought by costumer, satisfy one's need

-breaks down to 4 categories:

-Convince Products

-relatively inexpensive item, available often,

-bought without needing convincing

-Shopping Products

-comparison shopping

-more expensive

-found in fewer stores

-two types:

-homogeneous

-similar products, decision made based on pricing

-heterogeneous

-decisions vary based on: features, quality, an performance

-Specialty Products

-expensive

-search extensively for a particular item, don't want a substitute

-selecting marketing making sure their reputation is maintained

-Unsought Products

-potentially unknown to the buyer

-new products fall in this category

Define the term: Product Item, Product Line, Product Mix

A company often does not sell a single product

-marketing managers make it an important decision regarding how they will sell a product under the same brand name

-A Product Item: a version of a product that can be designated to differentiate itself among others

-A Product Line: a group of closely related product items

-A Product Mix: all the products sold by organization

-Product Mix Width: the number of product lines in an organization

-Product Line Length: the number of products in a product line

-Product Line Depth: number of products in a product line

Adjustment to Product Items, Lines, and Mixes

-product responding to changes in the environment

-Product Modification: modifying existing products:

-Quality Modification: -change in products durability and dependability

-Reduce pricing, making it more appealing

-Functional Modification: -changing a company's versatility, effectiveness, convenience and safety

-Style Modification: an aesthetic product change rather than a quality or function change

-Planned Obsolescence: can be wasteful and unethical. Introducing a new product by discontinuing the first product, after a period of time they need replacement

-repositioning: changing the perspective of buyers

-Product Line Extensions: adding another product to compete more broadly

-Product Line Contraction: -organization may get carried away with the product line

-three major benefits:

-resources become more concentrated on important products

-no longer wasting resources on weaker products

-new product line has greater chance to compete rather than older

Describe Marketing uses in Branding

-the target market being able to distinguish one product from another, and one brand from another

- a brand name: is that part of a brand that can be spoken

- a brand mark; the element that cannot be spoken, the symbol

Benefits of Branding:

-three main purposes: product identification, repeat sales, and a new product sales

-brand equity: to the value of company and brand names

-invokes strong connection, they are loyal

-global brand: selling outside domestic, 20% sold outside of domestic

-brand loyalty: consistent preference by customers towards one brand

Brand Strategies:

-unbranded products are known as generic products

Generic Product vs Brand

-cheaper, no-frill products

Manufactures' Brand vs Private Brands

-brand name is called manufactures' brand

-private brand: private label; president's choice

Individual Branding vs. Family Branding

-individual: using different brand names for different items

-family brand: branding under a family

Co-Branding

-two or more brands on a single product

Three common types of cobranding: ingredient branding, cooperative branding, and complementary branding

Ingredient Branding: a brand is a part of a product

Cooperative Branding: two brands receive equal treatment, in context of advertisement

Complementary Branding: products are advertised and marketed together

Trademarks: the right to use a brand or part of a brand

Service Mark: the same function just for a service

Generic Product Name: product is labelled by class or type

Describe Marketing uses of Packaging and Labelling

Packaging is also considered as promotion

-three main packaging functions

-contain and protect products: they need to carry the product, they need to protect the product from breakage, heat, cold, or anything needed

-promote products: the packaging differentiates themselves from other promoting the product itself. Design, colour, shape, material all reflect packaging promotion

-facilitate the storage use: packaging needs to be convenient to handle and use

-facilitate recycling and reduce environment damage: its overlook to environment, the eco-friendly packaging

Labelling can be persuasive or informational

Persuasive Labelling: focus on logo followed by information

-they will purchase something that says new, improved

Informational Labelling: focus on information rather than design

-they will purchase something that can have health benefits

Discuss Global issues in branding and packaging

When entering a Foreign Market with an existing product, a firm has three options for handling the brand name.

-one brand name everywhere: greater identification, and easier to promote product

-strategy used when company markets mainly one product and the brand name does not have negative connotations on the country

-adaptations and modifications: can't use one brand name if the product can't be pronounced.

-negative affect in other local markets

-different brand names in different markets: use local brand names to avoid problems to occur.

-change of name, translated to local market to sell

*other things to look at is the global packaging, packaging aesthetics

Describe how and why product warranties are important marketing tools

Warranty: protects the buyer and provides essential information about the product

-expressed warranty: stated, eg. 100% cotton

-implied warranty: unwritten guarantee

Chapter 10: Developing and Managing Products

Explain the importance of developing new products and describe the six categories of new products

New products are important to sustain growth, increase revenue and profits and replace discontinued items

-new to the world, the market, new to producer and seller

Six categories:

-New to the world products: create entirety new market, smallest category of new product

-New Product Lines: products a firm has not offered before, they enter an established market

-Addition to Existing Product Line: adding a new product to an existing line, entering established market

-Improvements or Revision of existing firms: the product can be changed slightly or significantly to improve

-Repositioning Products: already established products targeted to a new market

-Lower Priced Products: a product with many features, provides performance like competing brands

Explain the steps in the new product development process

New products are more successful:

Make long term commitment

Use company-specific approach

Capitalize on experience to achieve and maintain competitive advantage

Establish an environment

New-Product Development Process

New-Product Strategy: new product being developed meeting the objectives of the marketing, business and corporation department

-what role the product must play, to offer the market and survive the market

Idea Generation: new product ideas come from many sources:

Customers: understand the wants and needs of customers and reflecting those towards the product

Employees: marketing personnel, exchanging ideas is a useful strategy, new product can be launched

Distributors: they have first-line skills to customer needs

Competitors: monitoring the performance of competitors

Vendors: creating products with vendors

Research and Development: R&D, product development, product modification

Idea Screening: ideas that are not inconsistent are eliminated. It's the first filter

Business Analysis: once they pass the idea screening, the product is established, they figure out the demand,

cost, sales, profit m revenue

Development: prototype and marketing strategy is developed

-team-orientated product development known as simultaneous product development

Test Market: they test the product

Commercialization: They launch the product

Discuss global issues in new-product development

The increasing globalization o markets need to consider one product to be introduced globally.

-better to start with the global strategy to come up with a single goal

Explain the diffusion process through which new products are adopted

-adopter: a consumer who is happy enough with his or her trial experience and will experience it again

Diffusion of Innovation:

-innovation is a product perceived as new by a potential adaptor

-diffusion: is the process by which the adoption of an innovation spreads

five categories:

-innovators: the early birds who invest, first 2,5%

-early adopters: they are not the first but they adapt at an early stage, the next 13.5%

-early majority: they list out the pro and cons before they adapt to the product, next 34%

-late majority: they adapt after their friend adapt, refer to reference, next 34%

-laggards: past influences their decisions, they are the next 16%

Explain the concept of product life cycle

Introduction - Growth - Maturity - Decline

Chapter 11: Service and Non-Profit Organization

Discuss the importance of services to the economy

Service: the result of applying human or mechanical efforts to people or objects

-the service sector plays a crucial role in the Canadian economy, employing more then 78% of the workforce and accounting for a similar percentage of the GDP.

Discuss the differences between service and goods

The difference between services and goods is that service has no physical attributes

Services: distinguished by 4 types characteristics

-intangible: they lack the physical characteristics

-a search quality: characteristics that can be assessed before purchase

-experience quality: characteristics that can be assessed after purchase

-credence quality: difficulty assessing characteristics even after purchase

-inseparable: goods are produced, sold, and then consumed. You need to be involved for production of service. Quality of service depends on quality of employees

-inconsistent: the inability of service quality to be consistent each time its delivered, depends on provider

-inventoried: services cannot be stored and used for the next day. If not consumed it perishes

Describe the components of service quality and the gap model of service quality

The four unique characteristics make it harder to define and measure "service quality" compared to "tangible goods". Research show that customers evaluate service quality by the following five components

-Reliability: performing the service dependently, accurately, and consistently. The service is accurate the first time and every time.

-Responsiveness: the ability to provide prompt service. Customer gets fast service needed when needed

-Assurance: the knowledge and courtesy of employees and their ability to convey time

-Empathy: offer caring gesture, individual attention paid to customers. Employees provide empathy towards customers

-Tangibles: the physical evidence of service. The resources needed to provide service

The Gap Model of Service Quality

The gap between service delivered and influencing customer evaluation can result in 5 gaps:

-Gap 1: Knowledge Gap- not understanding customer needs, wants and desire

-Gap 2: Standards Gap- not understanding the quality needed to satisfy customer needs

-Gap 3: Delivery Gap- not understanding the service being delivered; knowledge and tools to perform their job.

-Gap 4: Communication Gap- the unbalance of what is provided vs what is told to be provided

-Gap 5: Expectation Gap- the unbalance of what service is provided vs what is expected

*Larger Gap: Poor Service

*Smaller Gap: Stronger Service

Develop marketing mixes for services using the eight P's of services marketing

Elements of the marketing mix (product, place, promotion, pricing) need to adjusted to meet special needs created by these characteristics.

Product StrategyProcess Strategy

People Strategy Place (Distribution) Strategy

Physical Evidence StrategyPromotion Strategy

Price Strategy Productivity Strategy

Chapter 12: Setting the Right Price

Explain the importance of price

Price has two meanings: one to the consumer: they see as cost of a product, to the seller: they see as revenue

Price is that which is given up in an exchange to acquire a good or service.

Typically, the money exchanged for the good or service.

The Importance of Price to Marketing Managers

-price is key to revenue, which in return are key to profits for an organization

-revenue is price charged to customers multiplied by the number of units sold

-pays for every activity' production, finance, sales, distribution...

-profit: revenue - expense

Describe the four-step pricing process

The process of setting the right price:

-Establish Pricing Goals: first step to establish pricing goals

-three categories: Profit Orientated, Sales Orientated, Status Quo

Profit: -profit maximization: price it to get the most revenue

-satisfactory profits: reasonable level of profits, connected to CSR

-target return on investment: measures management's overall effectiveness in generating profits with the company's assets

Sales: -pricing based on market share

-market share: is a company's product sales as a percentage of total sales for that industry

-sales maximization: maximize sales; ignore- profits, competition, and environment

*Status Quo Pricing: seeks to maintain existing prices or to meet the competition prices

-Estimate Demand, Costs, and Profits: estimate the total revenue at a variety of prices

Introductory Stage:

Growth Stage:

Maturity Stage:

Decline Stage:

-Choose a Price Strategy to help determine a Base Price: initial price and the intended direction for price

movements over the product life cycle

-Price Skimming: market-plus approach, having high prices compared to competing products

-works best when product determined to attract consumers despite price concerns

-Penetration Pricing: low prices. Goal to capture large shares, go along only if firms pricing objective is

to obtain a larger market.

-Status Quo Pricing: price identical or compete with prices being similar to competitors

-Fine-Tune the Base with Pricing Tactics:

-Base Price: the price at which a company is expected to sell the goods and service

-Discounts and Allowance:

-quantity discounts:

-cash discount

-functional discounts:

-Seasonal discounts:

-Value-Based Pricing:

-Geographic Pricing:

-FOB origin pricing:

-uniform delivered pricing:

-zone pricing:

-freight absorption pricing:

-basing-point pricing:

Other Price Tactics:

-single-price tactic: all goods and services offered at same price

-flexible pricing: different price paid for essentially the same products

-professional service pricing: towards lawyers, trainer...

-price lining: seller established a series of prices for a type of merchandise

-loss leader pricing: selling near or below cost price, hoping that people will buy

-odd-even pricing: pricing numbers as key; odd: connote barging, even: imply quality

-price bundling: marketing two or more products in a single package

-two-part pricing: charging two different amounts to consume a single good or service

-Results lead to the Right Price

Recognize the legalities and ethic of setting a price

Bait Pricing: getting consumer to approach product with false and misleading pricing and then pressuring them to purchase the product

Deceptive Pricing: promoting price or discount that is not actually available. Seller leads purchaser that they are receiving discount.

Bait and Switch Tactic: persuading the consumer towards a product knowing it is not valid and selling a substitute for a much higher price.

Second form of Deceptive Pricing: when seller promotes a discount from a regular item that hasn't been regular

price for a very long time.

Price Fixing: occurs when two or more companies conspire to set the prices for their products or services.

Predatory Pricing: setting the price low enough to eliminate its competitors from the market or business, done

over a long-term. Competitors who cannot compete exit

Resale Price Maintenance: to achieve their desired profit, producers take time to research where they want their

products to be positioned in terms of price and quality

Price Discrimination: practice of charging different priced to different buyers for goods of like grade and quality within relatively the same period to substantially reduce the competition

Chapter 15: Marketing Communication

Discuss the role of promotion in the marketing mix

Promotion helps establish the brand, no goods and services can service the market place without it

Promotional Strategy: is a plan for the use of the elements of promotion

-promotional mix strategy: advertising, public relations, sales promotion, personal selling, direct-response communication, and social media

-market mix: place, promotion, place, product

-prove that the product has competition and are better them competitor

-competitive advantage: the set of unique features of a company and its products that are perceived by the target market as superior to others

Describe the communication process

Communication: process by which we exchange or share meaning

-two categories:

-interpersonal communication: direct, face to face

-mass communication: expressing concept or message to a larger audience

-The communication process:

-Sender: interpersonal conversation

-originator of the message in the communication process

-Encoding

-encoding: taking the thought of the sender and putting it on paper

-Message: channeling the message, a voice feature given (advertising; radio, tv)

-transmitting a message

-noise: an interference when you are transmitting the message

-Receiving and Decoding:

-receivers: the decode the message

-decoding: interpretation of the message being sent

-Feedback: interpersonal response, the receivers the response to the message

Outline the goals and tasks of promotion

People communicate with one another for many reasons. Promotion can perform one or more of the four tasks:

-Informing: inform the audience, making the product that exists a need

-happens in early stages of the product life cycle

-communicate the purpose and understand the benefits to customers

-Persuading: main promotional goal when entering the growth phase,

-the product should have some awareness

-important for competition

-buyers in this phase become loyal purchasers

-Reminding: keeping the product in the mind of the customer

-prevails in maturity stage, they become loyal

-Connecting: develop a relation-ship

-maintain the relationship; increases customer loyalty (highly needed in later years)

Discuss the elements of Promotional Mix

Promotional strategies to reach a target market

-will meet the needs of the target market

-maintain organization goal

-six different types:

-Advertising: mass communication of a product of organization

-Publicity: achieved by the execution of public relations

-communication tool that evaluates public attitude

-identifies area of need in organization

-performs on it

-executed it out

-Sales Promotion: short-term tool

-increase demand for a short period; coupons, contest, samples

-Personal Selling: a communication between two who are paid to influence each other's decision

-persuading one or many to purchase a product

-Direct-Response: marketing to many, targeting some; only those who seek it need it

-communication and internet communication is main

-Communication: exchange of information influencing view on product; seeking information

-Social Media: online market: communication through internet

-allows marketers to better understand consumer needs

-speaking to the organization without the source of communication

-SOCIAL MEDIA: highly influential

consumer-generated content: any form of publicity available online

Discuss the AIDA concept and its relationship to the promotional mix

Classic model for achieving promotional goals: AIDA

-Attention, Interest, Desire, Action

-Attention: gaining attention of target market to sell product

-Interest: simple awareness of a brand; create an interest for the product in the public eye

-Desire: making it a need, proving essential information of the product to promote it and sell

-Action: taking it into action, some will be convinced and won't buy, goal is to make them a

purchaser

AIDA and the Promotional Mix:

Although advertising does have an impact in the later stages AIDA helps gaining attention.

-greatest strength is to crease desire towards product

Known the factors that affect the promotional mix

Promotion varies from one product and one industry to the next

Nature of the Product:

-business product or customer products

Stages in the Life Cycle

-advertising varies in each phase

Target Market Characteristics

Types of Buying Decisions

Available Funds

Push and Pull Strategies

Discuss the concept of integrated marketing communication