1 - Basic Marketing Concepts

8/3/2019 1 - Basic Marketing Concepts

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BA 590BA 590

Basic Marketing

Concepts

Overview


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BA 590 Marketing Review ModulesBA 590 Marketing Review Modules

Marketing Concepts

Customer Needs

Industry Competition

Target Marketing, Segmentation,

and Marketing Research New Product Development and

Sales

1-5


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BA 590BA 590

Module 1

Basic Marketing

Concepts


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The Marketing ConceptThe Marketing Concept

Profit

Profit

CustomerSatisfaction

Total CompanyEffort

Total CompanyEffort

TheMarketingConcept


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Utility and MarketingUtility and Marketing

Exhibit 1-1

From Production

From Marketing

Form

Task

Time

Place

Possession

UtilityValue that comesfrom satisfyinghuman needs

1-6


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Customer ValueCustomer Value

Costs Benefits

One customers views may vary from another

customers view, so firm may not be able to satisfy

everybody Customer value concept takes the customers point

of view, but customers may not explicitly weigh

costs and benefits


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The Marketing Management ProcessThe Marketing Management Process

Whole-CompanyStrategic

ManagementPlanning

Whole-CompanyStrategic

ManagementPlanning

MarketingPlanningMarketingPlanning

Implement MarketingPlan(s) and ProgramImplement MarketingPlan(s) and Program

Control MarketingPlan(s) and Program

Control MarketingPlan(s) and Program

Adjust PlansAs Needed


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The Four Ps of the Marketing MixThe Four Ps of the Marketing Mix

Product Place

Price Promotion

C


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Product

Physical GoodsServiceFeaturesQuality LevelAccessories

InstallationInstructionsWarrantyProduct LinesPackagingBranding

Place

ObjectivesChannelTypeMarket ExposureKinds of

Middleman

Kinds andLocations ofStores

How to HandleTransportingand Storing

Service LevelsRecruiting

MiddlemenManaging

Channels

Promotion

ObjectivesBlendSalespeople

KindNumber

SelectionTrainingMotivation

AdvertisingTargetsKinds of AdsMediaTypeCopy ThrustWho Prepares?

Sales PromotionPublicity

Price

ObjectivesFlexibilityLevel over PLCGeographicTerms

DiscountsAllowances

Four Ps Strategy Decision AreasFour Ps Strategy Decision Areas


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Marketing Strategy Planning ProcessMarketing Strategy Planning Process

Customers

Company

Competitors

S.W.O.T.

Segmentation

& Targeting

Differentiation& Positioning

Product Place

PromoPrice

Narrowing down to focused strategy with screening criteria

External Market Environment

TargetMarket


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ExternalFactors

StrategyPlanning

InternalFactors

Strengths Opportunities

Weaknesses Threats

18-5

SWOT Analysis


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Exhibit 15-1

15-3

Strategy Planning for Advertising

SalesPromotion

MassSelling

PersonalSelling

Target Market

PricePricePromotionPromotionPlacePlaceProductProduct

Copy thrustMedia typesKind ofadvertising

Targetaudience

Who will dothe work?

PublicityAdvertising


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Exhibit 13-1

13-3

Basic Promotion Methods

TargetMarketTargetMarket

PricePricePromotionPromotionPlacePlaceProductProduct

SalesPromotion

SalesPromotion

PersonalSelling

PersonalSelling

PublicityPublicityAdvertisingAdvertising

MassSellingMass

Selling


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Pricing Objectives

Exhibit 16-4

16-4

Dollar or UnitSales Growth

Growth inMarket Share

TargetReturn

MaximizeProfits

MeetingCompetition

NonpriceCompetition

PricingObjectives

SalesOriented

ProfitOriented

Status QuoOriented


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Strategy Planning for Price

Exhibit 16-1

Pricingobjectives

Target

Market

PricePromotionPlaceProduct

Geographicterm

who paystransportation

and how

Discounts andallowancesto whom and

when

Price levelsover product

life cycle

Priceflexibility

16-3


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Exhibit 17-1

Markup chain

in channels

17-3

Key Factors That Influence Price Setting

Pricing

objectives

Discounts and

allowances

Legal

environment

Price flexibility

Geographic

pricing terms

Demand

Cost

Price of other

products in the line

Competition

Pricesettin

g


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24.00

30.00

50.00

Producer Wholesaler Retailer

Cost = 24.00 = 80%

Markup = 6.00 = 20%

Cost = 21.60 = 90%

Markup = 2.40 = 10% Cost = 30.00 = 60%

Markup = 20.00 = 40%

Exhibit 17-2

17-4

Markups


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BA 590BA 590

Overview of Module 2

Customer Needs


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A Model ofBuyerBehavior

5-5

Purchase ReasonTimeSurroundings

PurchaseSituation

MotivationPerceptionLearningAttitudePersonality/Lifestyle

PsychologicalVariables

FamilySocial ClassReference GroupsCulture

SocialInfluence

Problem-Solving Process

Person Does or Does Not Purchase (Response)

Marketing Mixes All Other Stimuli

PersonMakingDecision

Exhibit 5-2


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5-6

The PSSP Hierarchy of Needs

Physiological Needs

Safety Needs

Social Needs

PersonalNeeds

Exh

ibit 5-4


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PurchaseSituationSocial InfluencesPsychologicalVariables

Need-want Awareness

Information Search

Set Criteria

Decide on Solution

Purchase Product

Routinized Response

PostponeDecision Postpurchase

Evaluation

Response

Feedback ofinformationas attitudes

Person makingdecision

Marketing mixes All other stimuli

Exhibit 5-9

5-13

The Consumer Problem Solving Process


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Exhibit 5-11

5-14

Levels of Problem Solving

Extensive

ProblemSolving

Limited

ProblemSolving

Routinized

ResponseBehavior

Involvement Continuum

Low Involvement High Involvement

Low involvement

Frequently purchasedInexpensiveLittle riskLittle information needed

High involvement

Infrequently purchasedExpensive

High riskMuch information desired


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BA 590BA 590


Industry

Competition


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The Competitive Environment

Information on Competitors

Competitive Barriers

Competitive Rivals

Competitor Analysis

Kinds of Markets

Key

Conceptsin the

CompetitiveEnvironment

4-6


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Exhibit 12-1

Conven-tionalofferings

Single-andlimited-linestores

Expandedassortmentand service

Specialty shops anddepartment stores

Expandedassortment

and/or reducedmargins/service

Supermarkets, discounthouses, mass-merchandisers,supercenters

Addedconveniencehigher margins

less assortment

Telephone/mail order,vending machines,door-to-door, conveniencestores, electronic shopping

Expandedassortmentreduced marginsmore information

Internet

12-4

Types of Retailers


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Types of Wholesalers

Exhibit 12-5

12-9

Does wholesaler own

the products?

Limited-functionmerchant

Wholesalers

Servicemerchant

wholesalers

Agent middlemen

How many functionsdoes the wholesaler

provide?

All the functions

Somefunctions

Yes (merchant wholesaler) No (agent middleman)


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Manufacturer or producer

Consumer

Procter &Gamble

DelMonte

NissanCitibank

Wholesaler

Wholesaler

Retailer

Wholesaler

RetailerRetailer

10-5

Exhibit 10-2

Four Examples ofBasic Channels ofDistribution for Consumer Products


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BA 590BA 590


Target Marketing,Segmentation &

Marketing

Research


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Market SegmentationMarket Segmentation

Statusdimension

Dependability dimension

A. Product-market showingthree segments

Statusdimens

ion

Dependability dimension

B. Product-market showingsix segments


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Marketing Information Systems

7-3

Exhibit 7-1

MarketResearchStudies

InternalData

Sources

ExternalData

Sources

DatabasesDecisionSupportSystem(DSS)

MarketingManager

Decisions

Outcomes

MarketingModels

InformationTechnologySpecialists

Inputs

?

Answers

N

ew

Information

Feedback

Information

Sources

Questionsand Answers

Decision

Maker

Result

s


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Definingthe

Problem

Analyzingthe

Situation

GettingProblem-Specific

Data

Inter-preting

Data

Solvingthe

Problem

EarlyIdentification

ofSolution

Feedback to Previous Steps

7-4

Exhibit 7-2

Marketing Research Process


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SecondaryData

Sources

Inside Company

Outside Company

Observation

Questioning

PrimaryData

Sources

AllDataSources

7-5

Exhibit 7-3

Sources of Data


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BA 590BA 590


Product

Development


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Exhibit 13-7

Time13-14

The Adoption Curve

PercentAdoption

Innovators(3-5%)

Early

Adopters(10-15%)

Early

Majority(34%)

Late

Majority(34%)

Laggards/

Nonadopters(5-16%)

05

20

50

90


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The Adoption CurveThe Adoption Curve

Innovators:

First to Adopt, Eager to Try

Young, Well-Educated, Mobile

SeekInfo from non-salesperson Sources

Early Adopters

Opinion Leaders Greater Contact with Salespeople

Word-of-Mouth


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Early Majority:

Avoid Risk, Try Only if Others Have

Usually are Not Opinion Leaders Late Majority:

Cautious About New Ideas, Older

and More Set in Their Ways

More Subject to Peer Pressure


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Laggards:

Suspicious of New Ideas

Do Things the Way that They HaveAlways Been Done


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The Product Life Cycle

9-3

Exhibit 9-1

Total Industry

Profit

+

$ 0

MarketIntroduction

MarketGrowth

MarketMaturity

SalesDecline

Time

Total IndustrySales


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PlaceProduct PricePromotion

Brand

Type ofBrand:Individual orfamily

Manufacturer ordealer

ProductIdea

Physicalgood/service

FeaturesQuality levelAccessoriesInstallationInstructionsProduct line

Warranty

None, full, orlimited

Package

Protection,Promotion,

or both

Target Market

8-3

Exhibit 8-1

Defining Product


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The Transporting Function

Modesof

Transportation

Water

Air

RailTruck

Pipeline


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Push-Pull Strategies

Exhibit 13-6

WholesalerPromotion

Push

WholesalerPromotion

Push

RetailerPromotion

Push

FinalConsumer

Pull

BusinessCustomer

Pull

Pro

motionto

Busine

ssCustomers P

romotio

nto

FinalCustomers

Promotion toChannel Members

Producers Promotion BlendPersonal Selling, Sales Promotion, Advertising, Publicity

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Documents

1 - Basic Marketing Concepts