Marketing Mid Term:

CH 1: Marketing; is the activity set of institutions and process for creating,

capturing, communicating, delivering and exchanging offerings that have value for
customers, clients, partners and society at large.
Marketing is about satisfying customers needs and wants.
Marketing require,
Product, place, price and promotion.
Marketing requires product, place, price, promotion
Product: Marketings fundamental purpose is creating value by developing a variety
offerings, including goods, services, and ideas to satisfy customer needs.
a.Goods: Items that physically touch. Tangible products
b.Services: Intangible. Customer benefits are created by people or machines.
Ideas can also be marketed.
Price: Capturing value: Everything buyer exchange, money, time, and/or energy in
exchange for the product.
Place: Represents, all the activities necessary to get the product to the right
customer when that customer wants it.
Promotion: Communication the Value Proposition, Promotion is communication by a
marketer that informs, persuades and reminds potential buyers about a product or
service to influence their opinions and elicit a response.
Marekting create a value:
Most successful firms today are market oriented.
Marketing strategy identifies firms target market, related marketing mix (4P), the
bases on which firm plans to build a sustainable competitive advantage
(something the firm persistently do better than its competitors).
Marketing mix focus on 4 aspects
Achieve Sustainable Competitive Adv.
Customer excellence: loyal customers and excellent customer service
Operational : achieved through efficient operations and excellent supply chain and
human resource managements.
Product: High perceived value and effective branding positioning.
Locational: Good physical location and internet presence.
Step 1: Mission Statement
Step 2: Situation Analysis; SWOT & CDSTEP
Step 3: Using Segmentation, Targeting and Positioning identify and Evaluate
Opportunities.
Segmentation: Dividing Market in to groups of customer with different need,
wants or characteristic.
Targeting: After a firm identified the various market segments, it might
pursue, evaluate each segments attractiveness and decide which to pursue
Positioning: When the firm decide which segments to pursue it must
determine how it wants to be positioned within those segments. Marketing

positioning involves the p[rocess of defining the marketing mix variables so that
target customers have a clear or represent in comparison with competing products.
Implement Marketing Mix: what to do, how to do.
Product Value creation:
Price and Value Capture
Place and Value:
Promotion aand Value Communication:
Portfolio Analysis BCG; Cash Cow, low market growth, high market share, star,
high market share, high growth, Question mark (problem child) low market share
high market growth, Dog, low market share, low growth.
Growth Analysis
Current
New
Market Penetration Product Development
Market Development
Diversification
Developing marketing mix that reinforces the product image relative to
the competitive alternatives, Marketing positioning.
Customer Value
BENEFITS:
Personal value customers attach to the product attributes-that is, what consumers
think the product can do for them!
Functional Benefits: Product related attributes (drinking hot coffee from Starbucks)
Social Benefits: Personal communication between other customers or the firm.
(buying coffee from Starbucks)
Image: The status or self-esteem resulting publicly consuming product or a service,
carry starbucks coffee cup rather than MC
Experiential: These benefits satisfy experiential needs such as sensory pleasure,
variety, and cognitive stimulation. Personalized or memorable consumption of the
product. Lightining or tempature of the place.
COSTS:
Monetary: Financial Sacrifice
Temporal: Time
Psychological: The mental effort (should I buy or intimidating at Starbucks)
Behavioral: Physical effort.
Marketing Plan:
Planning
Define mission/vision of biz.
Situation Analysis
SWOT
In addition, company should assess opportunities, and uncertainties of the
market place due to changes in (CDSTEP)

Cultural
Demographic
Social
Technological
Economic
Political
Competitive Hierarchy:
Define Target Market
Identify Market need

Budget firms competing

for the same discretionary
dollar

Product Form: Firms competing same target market with essentially the same
products, services MC Donald/Burger King
Product Category: Essentially same target group with different products, Taco bell
Generic Core Benefit: satisfying same need with different way, bring food from
home or eat protein bar.
Budget Competition: Competing same amount of money.
Identify Opportunities
Segmentation
Targeting
Positioning
Implementation
Product
Place
Price
Promotion
Evaluate the Results

High

Marketing Analysis
BCG Matrix

Coca Cola BCG Chart by Brand

Increasing Risk

LOW

Star

Question
Mark

DOG

Cash Cow
Relative Market Share

Market Growth vs Relative Market Share:

Cash Cow: High Market share, low growth, milking money
Star: High Market growth, High Market share. You need to feed so much money to
get money.
Question Mark (problem child): High market growth but low market share. Need to
invest money maybe become a star or can be turn to be a dog.
Dog: Low marketshare, low market growth.
Growth Matrix
Increasing Risk
Markets
Current
New

Product and Services

Current
New
Market
Product
Penetration
Development
Market
Diversification
Development

Market Penetration: Selling more established products in to existing markets.

Often by increased promotion or price reductions or better routes to market for
example online selling. Selling used cars to change to lease the cars.
Product Development: Developing new products or services and placing them
into existing market. Pick up service enterprise.

Market Development: Entails taking existing products or services into new

markets . (geography) Car rental.
Diversification: New product into new markets. Enterprise selling luggage,
backpacks, travel accessories.
Enviromental Scan
Growth Strategies
Financial/Operational Results
Portfolio/BCG
External Scan
Demographic Forces
Cultural/Social Trends
Technological Trends
Economic Forces
Regulatory Political Forces
Industry Competitor Analysis.
SWOT
Internal

Strengths

Weakness

External

Opportunities

Threads

Consumer Behavior
Need recognition
Information search
Alternative evaluation
Purchase
Post Purchase
Consumer Decision Process:

1. Need:
a. Functional Needs: Hungry, thirsty etc.
b. Phycological: Pertain to the personal gratification consumer associate with
product and/or service. Small handbag.
2. Information
There are 3 points, marketer need to get pass
1. Selective exposure: Buyer can ignore if nothing related to you,
out side that, buyer can choose ignore. Whatever outside of your
relevancy, buyer choose to ignore. Market must know your
selections so can attract your attention.
2. Selective Distortion
Pre-existing attitudes.
3. Selective Retention
Short term memory limited. Repeatedly exposure same msg.
There are natural defense system of the buyers.
a. Internal: Ask yourself (memory, past experiences)
b. External: Factors affecting consumers search process:
1. Perceived Benefit vs cost: Is it worth the time & effort?
2. Locus Control: Fate or other factors control all outcomes.
3. Actual or Perceived Risk:
Performance Risk: Involves perceived danger inherit in a
poorly performing product or service.
Financial Risk: monetary outlay.
Social Risk: Fears that consumer suffers others may not regard
their purchase positively.
Physiological risk: Safety Risk
Psychological risk: Way people feel about themselves.
3. Evaluation Alternatives
There are many external factors influence people when they go setting retail.
1. Attribute Sets:

a. Universal Sets: all possible choices.

b. Retrieval Sets: Comes from memory.
c. Evoked Sets: Which comprises the alternative brands or stores that
consumer states he/she consider when making a purchase decision.
d. Evaluation criteria: consist of salient or important attributes about a
particular product.
e. Determinant attributes: product or service features that are important
to the buyer.
2. Consumer Decision Rules :
a. Compensatory Decision Rule: Good vs Bad
b. Non compensatory Decision Rule: choose set of one basis.
Factors influencing the consumer decision process: Marketer
influence this process through advertisement, promotion and
marketing

1. Psychological Factors:
a. Motives: Maslows Hierarchy of Needs
Self Actualization: Personal Growth activities. Person feel completely satisfied

Esteem:
Love:
Greeting

Confidence, recognition, respect, helping people. Yoga

friendship, family. Belonging, connection. Starbucks 3 rd place.
cards, haircut.
Safety: Health, financial, psychological, literal security
appears motivational level. Fear base campaign
Physiological: Food water Shelter . Survival
Products
b. Attitude:
Cognitive Component: Person belief
Affective Component: Emotions
Behavioral Component: Actions we take based
on how we feel.
c. Perception: Another psychological factor.
d. Learning: Change in persons thought process or
behavioral that arises from experiences and takes a place
throughout the consumer decision.
e. Lifestyle:
2. Social Factors: How you buy why you buy.
a. Family
b. Reference Group
Reference group influence, what type of product you
will purchase and which brand of product you choose.
Membership Group
a. Primary Group: Immediate family
b. Secondary Group: Acquaintances, friends, they
have deep expertise. Reasonable
recommendation. Opinion Leadership. The most
valuable information until reviews. Credibility
for their reviewers ranking.
Aspirational Reference Group:
Companies commercially tap the most
influencial people (starts, athletes etc). Individuals
like to compare themselves.
Dissociative Reference Group: examples types
of consumer use particular products, a group with
whom an individual does not wish to be associated; a
group whose use of a product will deter other buyers

3. Situational Factors: Marketing influence occurs to get you

into retail market(Service escape)
a. Purchase Situation: Influence occurs when buyer
walk into retail setting.
b. Shopping Situation:

Store Atmosphere:
Sales People
Crowding
In-Store demonstration
Promotions
Packaging
c. Temporal Situation: Mood swings.
4. Purchase and Consumption:
Consumer Involvement and Consumer Buying Decision
High Involvement: Greater Attention, Deeper processing
Low involvement: Less attention, peripheral processing.
Habitual

Limited

Extensive

Involvement

Low

Low to moderate

High

Time

Short

short to moderate

Long

Cost

Low

Low to moderate

High

Information Search

Internal

mostly internal

internal/external

Number of
Alternatives

One

few

Many

5. Post Purchase:
1. Customer satisfaction:
a. Build realistic expectations
b. Demonstrate correct product use
c. Stand behind product or service (money back/warranty etc)
d. Encourage customer feedback
e. Periodically contact customer and thank them.
2. Post Purchase Cognitive Dissonance: Usually connected with high priced
and infrequently purchased.
3. Customer Loyalty:

B2B Markets
A: Manufacturers; components, spare parts etc.
B: Resellers; Selling to retail shops,
C: Institutions; selling to products or services to universities or
institutions.
D: Government; Government contractor.

Market Characteristic
B2B
B2C
Direc
Demand
Derieved t
# Buyers
Few
Many
Size of
Purchase
Large
Small
Derieved: Demand occurred by
demand for consumer products and
services.
For B2B, you have to understand end of consumer as well as your intermediate
customer.
Limited buyers, separate geographically and tent to cluster different part of the
country.
Buying Process
B2B
Buyer Seller
Independence
#People in Process
Decision Criteria
On-Line Applications

Strong
Many
Rational
Widespre
ad

B2C
Weak
Few
Rational/Emotion
al
Emerging

Relationship marketing in B2B is very close.

Buyer Independence: Checking out clerk knows your name because you are
carrying loyalty card. The relationship example in B2C versus B2B relationship is
genuine. B2B their future are linked, they share their strategy, talk about future
plan.
People in process: B2B many people involved. Usually they work as task forces. As a
marketer you need to deal and convince many people.
Decision Criteria: B2B dollars and cents.
On-line Applications: Bulk of the automation mainly done in industrial buying.

Promotion

Buying Mix
B2B
Direct Selling

B2C
Indirect Selling

Pricing
Negotiated
Specified by seller
Product/Serv Technically defined
Emphasize Image &
ice
Materials
Benefits
Place
Phsical Distribution
Direct & Indirect
Promotion: Consultated nature to it in Industrial selling. B2C relay on
advertisement, promotion, gain public attention, persuade them to create urgency
to buy. B2B rely on industrial sells person.
Pricing: B2B; Negotiated as sale force. Interact directly.
Product/Services:
Place:
RFP: Request for proposal
PFQ: Request for a quote

Need: Internal, External. Sources recognizing need; sakes people, suppliers, sales
people
Product Specifications: Technical. Used by suppliers to develop proposal, Can be
done collaboratively with suppliers.
RFP: mainly each company have specific RFP team.
Vendor selected; overview and selection, due diligence, final step before making
decision.
Order specified.
Vendor Analysis
Buyer Center
Sales people encounter in the organization.
Temporary task force,

Gatekeepers: Keep sales people away from managers.

Users: have technical skills, front line manufacturing systems. Jib title will give you
the info.
Influencer: Credibility, strategically powerful,
Buyer: procurement officer

Segmentation, Targeting and Positioning

The first step, understand and evaluate companies marketing strategy than, second
step is marketing segmentation analysis.
SEGMENTATION
Segmentation Strategy
Differentiated: GD diapers
Undifferentiated or mass marketing: (milk commercial)
Concentrated: Selects a single primary target market and focuses all energy on
providing a product to fit.
Micromarketing, one to one: When a firm tailors a product or service to suit an
individual customers.
Segmentation Process
1. Select Market/Product Category
2. Chose basis of segmentation/Segment Attractiveness
Substantial: measure their sizes
Identifiable: Firms must be identify who is in their market
Profitable: Can it be profitable
Responsive: customers must react similarly and positively.
Profitable: is market profitable
Reachable: Is the market reachable
3. Select Segmentation Descriptions, identify different segmentation
variables. (usage based, demographic etc)
4. Profile and Analyze the Segments: Segment size, growth, behavior,
loyalty, profit potential.
5. Select Target Markets
6. Design Implement and Maintain appropriate marketing mix and
market positioning strategy
Geographic Segmentation: Organize customer based on where they live.
Demographic Segmentation: Organize customers based on easily measured
objective characteristics such as age, gender, income and education.
Psychographic Segmentation: How they choose to occupy their time, (behavior)
and what underlying psychological reasons determine those choices.
a. Self Values: How person lives his or her life. Self respect- self-fulfillment
or specific sense of belonging.
b. Self Concept :
c. Lifestyle:
Vals Framework
Innovators: taking inf in (antennas up), confident enough to experiment,
highest number of transactions
Skeptical about advertising.
Achievers: Me first, my family first. Believe money is the source of authority,
commited to family and job. Fully schedules, hard working, goal oriented,
Thinkers: have tendency analysis and paralysis, enjoy historic perspective,
financially established.

Believers: rely on sprituatlity, believe basic rights and wrongs lead to a good
life, want friendly communities, read romance novels, find advertising and a
legimite source of information.
Strivers: have revolving employment or unemployed, use video/video
games, center of low status street culture
Experiencers: Want everything, first in-first out trend option, latest fashion,
believe friends are extremely important, see themselves very sociable.
Makers: distrust the government, strong outdoor interests, believe sharp
gender roles
Survivors: cautious, oldest customers, not concerned appear trendy or
traditional, TV viewers.
Benefit (VALUE) Segmentation:Benefits they derive from products or services.
Benefits vs costs
Functionality
Social Connection
Image-Status
Experiential
Affordability. Low cost
Convenience. Low temporal/behavior cost
Ease of use: Low psychological cost
Behavioral Segmentation: Divides customers into groups based on how they use
the product or services.
Occasional segmentation: Occasion behavioral, (party mix for snacks for
example) When a product or service bought or consumed.
Loyalty Segmentation: Strategy of investing in loyalty initiatives to retain
the firms most profitable customers. Buy 10 get 1 free punch card.
The most useful one geo-demographic segmentation, Geographic, demographic and
lifestyle.
Customer Persona
Behavior: How did they respond to this problem?
Needs/Goals
Education
Where/how they live
Communication chanels
Benefits/Costs
Role job
Maritial Status
Hobby/interest
Income/budget

Positioning
Positioning is not what you do the product or service, positioning is what you do the
mind of the customers
Positioning Strategy
Product user: Apple/Microsoft. User; This positioning highlight the user and
suggest that the product is the ideal solution for that type of person and may even
contribute to their social-self identity.
Emotion: Kleenex
Value/Price Benefit: Walmart. Some products based on relative high quality or
based on the claim that they represent significant value.
Relevant Attributes: Product attribute is a specific feature or benefit of the
product. Positioning this way focuses one or two of the products best
features/benefits, relative to competitive offerings.
Why Develop a Positioning Strategy
Marketing Clutter: refers to the large volume of advertising messages that the
average consumer is exposed to on a daily basis.
Cognitive Limitations:
Competitors Image:
Buying Patterns:
Positioning Steps:
1. Determine consumers perception and evaluation in relation to competitors
2. Identify competitors positions
3. Determine consumer preferences
4. Select position
5. Monitor position strategy
Perceptual Mapping:
A perceptual map represents customer perceptions and preferences spatially by
means of a visual display

Pepsi Max

High in
Caffeine

Pepsi

Coke

Diet Coke
High
Sugar

Low
Sugar
7-up
Low in Caffeine

BRAND MANAGEMENT
Product Mix:
Breadth
Depth
Product Lines: How many different lines company have. Each line has different
customers, different brands.
Depth of a product means, number of categories.

Brand:
Trademark
Servicemark: trademark for a service
Brand naming 1st step of positioning.
What customer understand and memory
Brand Meaning:
Attributes: Diet Coke
Culture: Wells Fargo
Benefits: Cover Girl
User/Personality: Mac

Extending the Brand:

They invest a brand, companies often, began leveraging that brand made
2 types.
Line Extention: Coca Cola, extended classic coca cola, vanilla coke, diet coke etc.
Leveraging the brand and extend the line. Product Development
Brand extention: Risky, Arm & Hammer, their core btrand name, (baking powder)
moved it to cleaning products. Create a new category. Diversification
Pro: Instant recognition, early acceptance, reduced marketing costs
CON: Contamination, Dilution. Confused customer. They no longer understand what
the product means.
Brand Diluation Honda:
Lawn equioments, automotive, lawn care etc. GM joke about Honda line
extention.