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Marketing Review Modules
• Marketing Concepts• Customer Needs• Industry Competition• Target Marketing, Segmentation,
and Marketing Research• New Product Development and
Sales1-5
The Marketing Concept
ProfitProfit
CustomerSatisfaction
CustomerSatisfaction
Total CompanyEffort
Total CompanyEffort
TheMarketingConcept
Utility and Marketing
Exhibit 1-1
From Production
From Marketing
FormForm
TaskTask
TimeTime
PlacePlace
PossessionPossession
UtilityValue that comesfrom satisfyinghuman needs
UtilityValue that comesfrom satisfyinghuman needs
1-6
Customer Value
Costs Benefits
• One customer’s views may vary from another customer’s view, so firm may not be able to satisfy everybody
• Customer value concept takes the customer’s point of view, but customers may not explicitly weigh costs and benefits
The Marketing Management Process
Whole-CompanyStrategic
ManagementPlanning
Whole-CompanyStrategic
ManagementPlanning
MarketingPlanning
MarketingPlanning
Implement MarketingPlan(s) and Program
Implement MarketingPlan(s) and Program
Control MarketingPlan(s) and Program
Control MarketingPlan(s) and Program
Adjust PlansAs Needed
ProductPhysical GoodsServiceFeaturesQuality LevelAccessoriesInstallationInstructionsWarrantyProduct LinesPackagingBranding
PlaceObjectivesChannel TypeMarket ExposureKinds of
MiddlemanKinds and
Locations of Stores
How to Handle Transporting and Storing
Service LevelsRecruiting
MiddlemenManaging
Channels
PromotionObjectivesBlendSalespeople Kind Number Selection Training MotivationAdvertising Targets Kinds of Ads Media Type Copy Thrust Who Prepares?Sales PromotionPublicity
PriceObjectivesFlexibilityLevel over PLCGeographic
TermsDiscountsAllowances
Four P’s Strategy Decision Areas
Marketing 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
External Factors
StrategyPlanning
Internal Factors
Strengths Opportunities
Weaknesses Threats
18-5
SWOT Analysis
Exhibit 15-115-3
Strategy Planning for Advertising
SalesPromotion
Mass Selling
PersonalSelling
Target Market
PricePricePromotionPromotionPlacePlaceProductProduct
Copy thrustMedia typesKind of advertising
Target audience
Who will do the work?
PublicityAdvertising
Exhibit 13-113-3
Basic Promotion Methods
TargetMarketTargetMarket
PricePricePromotionPromotionPlacePlaceProductProduct
SalesPromotion
SalesPromotion
PersonalSelling
PersonalSelling
PublicityPublicityAdvertisingAdvertising
MassSellingMass
Selling
Pricing Objectives
Exhibit 16-416-4
Dollar or UnitSales Growth
Growth in Market Share
TargetReturn
MaximizeProfits
MeetingCompetition
NonpriceCompetition
PricingObjectives
SalesOriented
ProfitOriented
Status QuoOriented
Strategy Planning for Price
Exhibit 16-1
Pricingobjectives
TargetMarket
PricePromotionPlaceProduct
Geographicterm —
who paystransportation
and how
Discounts andallowances—to whom and
when
Price levelsover product
life cycle
Priceflexibility
16-3
Exhibit 17-1
Markup chainin channels
17-3
Key Factors That Influence Price Setting
Pricing objectives
Discounts andallowances
Legal environment
Price flexibility
Geographicpricing terms
Demand
Cost
Price of otherproducts in the line
Competition
Pricesettin
g
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 17-217-4
Markups
A Model of Buyer Behavior
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
5-6
The PSSP Hierarchy of Needs
Physiological Needs
Safety Needs
Social Needs
PersonalNeeds
Exhibit 5-4
Purchase SituationSocial InfluencesPsychological
Variables
Need-want Awareness
Information Search
Set Criteria
Decide on Solution
Purchase Product
Routinized Response
Postpone Decision Postpurchase
EvaluationResponse
Feedback ofinformationas attitudes
Person making decision
Marketing mixes All other stimuli
Exhibit 5-9
5-13
The Consumer Problem Solving Process
Exhibit 5-11
5-14
Levels of Problem Solving
Extensive Problem Solving
Limited Problem Solving
Routinized Response Behavior
Involvement Continuum
Low Involvement High Involvement
Low involvementFrequently purchasedInexpensiveLittle riskLittle information needed
High involvementInfrequently purchased
ExpensiveHigh risk
Much information desired
The Competitive Environment
Information on Competitors
Competitive Barriers
Competitive Rivals
Competitor Analysis
Kinds of Markets
KeyConcepts
in theCompetitiveEnvironment
4-6
Exhibit 12-1
Conven-tionalofferings
Single- andlimited-linestores
Expandedassortmentand service
Specialty shops anddepartment stores
Expandedassortmentand/or reducedmargins/service
Supermarkets, discounthouses, mass-merchandisers,supercenters
Added conveniencehigher marginsless assortment
Telephone/mail order,vending machines,door-to-door, conveniencestores, electronic shopping
Expandedassortmentreduced marginsmore information
Internet
12-4
Types of Retailers
Types of Wholesalers
Exhibit 12-512-9
Does wholesaler own the products?
Limited-functionmerchant
Wholesalers
Servicemerchant
wholesalers
Agent middlemen
How many functions does the wholesaler
provide?
All the functions
Some functions
Yes (merchant wholesaler) No (agent middleman)
Manufacturer or producer
Consumer
Procter &Gamble
DelMonteNissanCitibank
Wholesaler
Wholesaler
Retailer
Wholesaler
RetailerRetailer
10-5
Exhibit 10-2
Four Examples of Basic Channels of Distribution for Consumer Products
Market SegmentationS
tatu
s d
imen
sio
n
Dependability dimension
A. Product-market showingthree segments
Sta
tus
dim
ensi
on
Dependability dimension
B. Product-market showingsix segments
Marketing Information Systems
7-3
Exhibit 7-1
MarketResearchStudies
InternalData
Sources
ExternalData
Sources
DatabasesDecisionSupportSystem(DSS)
MarketingManager
DecisionsOutcomes
MarketingModels
InformationTechnologySpecialists
Inputs?
AnswersN
ew I
nfo
rmat
ion
Feedback
Information
Sources
Questionsand Answers
Decision
MakerResult
s
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
SecondaryData
Sources
Inside Company
Outside Company
Observation
Questioning
PrimaryData
Sources
AllData
Sources
7-5
Exhibit 7-3
Sources of Data
Exhibit 13-7Time13-14
The Adoption CurveP
erce
nt
Ad
op
tio
n
Innovators(3-5%)
EarlyAdopters(10-15%)
EarlyMajority
(34%)
LateMajority
(34%)
Laggards/Nonadopters
(5-16%)
05
20
50
90
The Adoption Curve
• Innovators: • First to Adopt, Eager to Try• Young, Well-Educated, Mobile• Seek Info from non-salesperson Sources
• Early Adopters• Opinion Leaders• Greater Contact with Salespeople• Word-of-Mouth
The Adoption Curve
• 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
The Adoption Curve
• Laggards:• Suspicious of New Ideas• Do Things the Way that They Have
Always Been Done
The Product Life Cycle
9-3
Exhibit 9-1
Total IndustryProfit
+
–
$ 0
MarketIntroduction
MarketGrowth
MarketMaturity
SalesDecline
Time
Total IndustrySales
PlaceProduct PricePromotion
Brand
Type of Brand:Individual or family
Manufacturer or dealer
ProductIdea
Physicalgood/service
FeaturesQuality levelAccessoriesInstallationInstructionsProduct line
Warranty
None, full, orlimited
Package
Protection,Promotion,
or both
Target Market
8-3
Exhibit 8-1
Defining “Product”
Push-Pull Strategies
Exhibit 13-6
WholesalerPromotion
Push
WholesalerPromotion
Push
RetailerPromotion
Push
FinalConsumer
Pull
BusinessCustomer
Pull
Pro
mo
tio
n t
oB
us
ine
ss
Cu
sto
me
rsP
rom
otio
n to
Fin
al C
usto
mers
Promotion toChannel Members
Producer’s Promotion BlendPersonal Selling, Sales Promotion, Advertising, Publicity
13-13