Principal of Marketing

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Principal of Marketing by Mind Map: Principal of Marketing

1. Creating & Capturing Customer Value

1.1. WHAT is Marketing

1.1.1. The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

1.1.2. The marketing process Create value: Understand marketplace, customer needs and wants => Design a customer-driven marketing strategy => Conduct an integrated program that delivers superior value => Build profitable relationships and create customer delight Capture value: to create profits and customer equity

1.2. Understanding the Marketplace & Customer Needs

1.2.1. Needs: State of felt deprivation

1.2.2. Wants: The form human needs take as they are shaped by culture and individual personality

1.2.3. Demands: Human wants that are backed by buying power

1.2.4. Market offerings: Some combination of products, services, information, or experiences offered to a market to satisfy a need or want

1.2.5. Marketing myopia: The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products

1.2.6. Exchange: The set of obtaining a desired object from someone by offering something in return

1.2.7. Market: The set of all actual and potential buyers of a product or service

1.3. Customer-Driven Marketing Strategy

1.3.1. market segmentation => target marketing =>how it will differentiate and position itself in the marketplace

1.3.2. Marketing Management Orientations Production Concept: management’s task is to improve production efficiency and bring down prices Product Concept: consumers favor products that offer the most in quality, performance, and innovative features; thus, little promotional effort is required Selling Concept: Unless firms undertakes a large-scale selling and promotion effort Marketing Concept: achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do Social Marketing Concept: generating customer satisfaction and long-run societal well-being through sustainable marketing strategies keyed to both achieving the company’s goals and fulfilling its responsibilities

1.4. Intergrated Marketing Plan and Program

1.4.1. 4 Ps

1.5. Building Customer Relationships

1.5.1. customer relationship management: build and maintain profitable customer relationships by delivering superior customer value and satisfaction.

1.5.2. Customer-perceived value: The customer's evaluation of the difference btw all the benefits and all the costs of a marketing offer relative to those of competing offers.

1.5.3. Customer satisfaction: The extent to which a product's perceived performance matches a buyer's expectations.

1.5.4. customer-managed relationships: Marketing relationships in which customers, empowered by today's new digital technologies, interact with companies and with each other to shape their relationships with brands.

1.5.5. Consumer-generated marketing: Brand exchanges created by consumers themselves—both invited and uninvited— by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers.

1.5.6. Partner relationship management: Working closely with partners in other company departments and outside the company to jointly bring greater value to customers.

1.6. Capturing Value from Customers

1.6.1. Customer lifetime value: The value of the entire stream of purchases that the customer would make over a lifetime of patronage.

1.6.2. Share of customer: The portion of the customer’s purchasing that a company gets in its product categories

1.6.3. Customer equity: The total combined customer lifetime values of all of the company’s customers.

1.7. The changing Marketing Landscape

2. Company Marketing Strategy

2.1. Company-Wide Strategic Planning

2.1.1. Strategic planning: The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. Corporate level: mission => Objectives and goals => the business portfolio => developing functional plans Mission statement: A statement of the organization’s purpose—what it wants to accomplish in the larger environment. Business unit, product and market level: planning marketing and other functional strategies

2.2. Designing Business Portfolio

2.2.1. Business portfolio: The collection of businesses and products that make up the company

2.2.2. Portfolio analysis: The process by which management evaluates the products and businesses that make up the company Product/market expansion grid: A portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification Market penetration: Company growth by increasing sales of current products to current market segments without changing the product

2.2.3. Growth-share matrix: A portfolio-planning method that evaluates a company’s SBUs in terms of its market growth rate and relative market share.

2.3. Planning Marketing

2.3.1. Partnering with Other Company Departments Value chain: The series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products.

2.3.2. Partnering with Others in the Marketing System Value delivery network: The network made up of the company, its suppliers, its distributors, and, ultimately, its customers who partner with each other to improve the performance of the entire system. L’Oréal builds long-term supplier relationships based on mutual benefit and growth. It “wants to make L’Oréal a top performer and one of the world’s most respected companies. Being respected also means being respected by our suppliers.”

2.4. Markting Strategy & Marketing Mix

2.4.1. Marketing strategy: The marketing logic by which the company hopes to create customer value and achieve profitable customer relationships Market segmentation: Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs. Market segment: A group of consumers who respond in a similar way to a given set of marketing efforts. Market targeting: The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. Positioning: Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. Burger King builds its entire worldwide marketing campaign around its “Have it your way” positioning. Differentiation Actually differentiating the market offering to create superior customer value.

2.4.2. Marketing mix The set of tactical marketing tools— product, price, place, and promotion— that the firm blends to produce the response it wants in the target market Product: Variety, Quality, Design, Features, Brand name, Packaging, Services (customer solution) Price: List price, Discounts, Allowances, Payment period, Credit terms (customer cost) Promotion: Advertising, Personal selling, Sales promotion, Public relations (convinience) Place, Channels, Coverage, Locations, Inventory, Transportation, Logistics (communication)

2.5. Mkt Effort & ROI

2.5.1. SWOT analysis: An overall evaluation of the company’s strengths (S), weaknesses (W), opportunities (O), and threats (T).

3. Analyzing the Marketing Environment

3.1. Mic, Mac

3.1.1. Marketing environment: The actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. Microenvironment: The actors close to the company that affect its ability to serve its customers— the company, suppliers, marketing intermediaries, customer markets, competitors, and publics. Macroenvironment: The larger societal forces that affect the microenvironment—demographic, economic, natural, technological, political, and cultural forces. Publics: P&G’s Tide Loads of Hope program recognizes the importance of community publics. It washes, dries, and folds loads of clothes for families struck by local disasters. Company Demography: The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. Economic environment: Economic factors that affect consumer purchasing power and spending patterns Natural environment: Natural resources that are needed as inputs by marketers or that are affected by marketing activities. Technological environment: Forces that create new technologies, creating new product and market opportunities Political environment: Laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society. Cultural environment: Institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors.

4. Consumer Markets & Consumer Buyer Behavior

4.1. Consumer buyer behavior: The buying behavior of final consumers— individuals and households that buy goods and services for personal consumption.

4.2. Consumer market: All the individuals and households that buy or acquire goods and services for personal consumption

4.3. Characteristics Affecting

4.3.1. Culture: The set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions. Subculture: A group of people with shared value systems based on common life experiences and situations.

4.3.2. Social class: Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors. Group: Two or more people who interact to accomplish individual or mutual goals Opinion leader: A person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others. Online social networks: Online social communities—blogs, social networking Web sites, or even virtual worlds—where people socialize or exchange information and opinions

4.3.3. Personal Factors Age and Life-Cycle Stage Occupation Lifestyle: A person’s pattern of living as expressed in his or her activities, interests, and opinions.

4.3.4. Personality: The unique psychological characteristics that distinguish a person or group.

4.3.5. Psychological Factors Motive (drive): A need that is sufficiently pressing to direct the person to seek satisfaction of the need. Motivation: an aging baby boomer who buys a sporty convertible might explain that he simply likes the feel of the wind in his thinning hair. At a deeper level, he may be buying the car to feel young and independent again. Perception: The process by which people select, organize, and interpret information to form a meaningful picture of the world. Learning: Changes in an individual’s behavior arising from experience. Belief: A descriptive thought that a person holds about something. Attitude: A person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea

4.4. Types of Buying Decision Behavior

4.4.1. Complex buying behavior: Consumer buying behavior in situations characterized by high consumer involvement in a purchase and significant perceived differences among brands laptop, mortobike

4.4.2. Dissonance-reducing buying behavior: Consumer buying behavior in situations characterized by high involvement but few perceived differences among brands. cosmetics, food

4.4.3. Habitual buying behavior: Consumer buying behavior in situations characterized by low-consumer involvement and few significantly perceived brand differences. Nc cham

4.4.4. Variety-seeking buying behavior: Consumer buying behavior in situations characterized by low consumer involvement but significant perceived brand differences. soap powder

4.5. The Buyer Decision Process

4.5.1. Need recognition: The first stage of the buyer decision process, in which the consumer recognizes a problem or need.

4.5.2. Information search: The stage of the buyer decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into an active information search.

4.5.3. Alternative evaluation: The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set.

4.5.4. Purchase decision: The buyer’s decision about which brand to purchase.

4.5.5. Postpurchase behavior: The stage of the buyer decision process in which consumers take further action after purchase based on their satisfaction or dissatisfaction with a purchase. Cognitive dissonance: Buyer discomfort caused by postpurchase conflict.

4.6. Buyer decision process for New Products

4.6.1. Adoption process: The mental process through which an individual passes from first hearing about an innovation to final adoption. The adoption process: To help potential customers get past concerns about the uncertain economy, Hyundai offered an Assurance Program protecting customers against lost jobs and incomes.

5. Customer-Driven Marketing Strategy

5.1. Market Segmentation

5.1.1. Geographic segmentation: Dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods Walmart has developed special formats tailored to specific types of geographic locations, from Hispanic-focused Supermercado de Walmart stores to smaller Marketside and Neighborhood Market supermarkets

5.1.2. Demographic segmentation: Dividing the market into segments based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. Gender segmentation: Dividing a market into different segments based on gender. Harley-Davidson has boosted its efforts to move women from the back of the bike onto the rider’s seat. Age and life-cycle segmentation: Dividing a market into different age and life-cycle groups. Life-stage segmentation: Disney Cruise Lines targets primarily families with children, large and small. Most of its destinations and shipboard activities are designed with parents and their children in mind. Income segmentation Dividing a market into different income segments.

5.1.3. Psychographic segmentation: Dividing a market into different segments based on social class, lifestyle, or personality characteristics.

5.1.4. Behavioral segmentation: Dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product. Occasion segmentation: Dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item. M&Ms runs special ads and packaging for holidays and events such as Easter. Benefit segmentation: Dividing the market into segments according to the different benefits that consumers seek from the product. Loyalty Status. “Mac fanatics”—fanatically loyal Apple users—helped keep Apple afloat during the lean years, and they are now at the forefront of Apple’s burgeoning iPod, iTunes, and iPhone empire

5.2. Market Targeting

5.2.1. Undifferentiated (mass) marketing: A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.

5.2.2. Differentiated (segmented) marketing: A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each VF Corporation offers a closet full of over 30 premium lifestyle brands, each of which “taps into consumer aspirations to fashion, status, and well-being” in a well-defined segment.

5.2.3. Concentrated (niche) marketing: A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches Thanks to the reach and power of the Web, online nicher Etsy—sometimes referred to as eBay’s funky little sister— is thriving.

5.2.4. Micromarketing: Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; It includes local marketing and individual marketing. Local marketing: Tailoring brands and promotions to the needs and wants of local customer segments—cities, neighborhoods, and even specific stores. The North Face uses “geo-fencing” to send localized text messages to consumers who get near one of its stores. Individual marketing: Tailoring products and marketing programs to the needs and preferences of individual customers—also called one-toone marketing, customized marketing, and markets-of-one marketing. Video screens in malls and stores can now determine who’s watching them and change the ads accordingly.

6. Products, Services & Brands

6.1. Creating customer experiences: The Olive Garden sells more than just Italian food. It serves up an idealized Italian family meal experience. “When you’re here, you’re family.”

6.2. Core, actual, and augmented product: People who buy a BlackBerry device are buying more than a cell phone, an e-mail device, or an organizer. They are buying freedom and on-thego connectivity to people and resources.

6.3. Product and Service Classifications

6.3.1. Consumer product A product bought by final consumers for personal consumption

6.3.2. Convenience product A consumer product that customers usually buy frequently, immediately, and with minimal comparison and buying effort.

6.3.3. Shopping product A consumer product that the customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, and style.

6.3.4. Specialty product A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort

6.3.5. Unsought product: A consumer product that the consumer either does not know about or knows about but does not normally consider buying. life insurance and red cross blood donations

6.3.6. Industrial product A product bought by individuals and organizations for further processing or for use in conducting a business.

6.4. Product & Service Decisions

6.4.1. Product quality The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.

6.4.2. Brand A name, term, sign, symbol, design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors.

6.4.3. Packaging The activities of designing and producing the container or wrapper for a product. recently launched a multiyear initiative to create “frustration-free packaging” and eliminate “wrap rage.” Its goal is to eventually offer its entire catalog of products in frustrationfree packaging.

6.4.4. Labeling and logos can enhance a brand’s positioning and personality: Pepsi’s new logo is “more adventurous, more youthful, with a bit more personality to it.” It presents a “spirit of optimism and youth.”

7. New product Development & Product Life-Cycle Strategies

7.1. New-product Development Strategies

7.1.1. The development of original products, product improvements, product modifications, and new brands through the firm’s own product development efforts.

7.2. Process

7.2.1. Idea generation The systematic search for new-product ideas.

7.2.2. Idea screening Screening new-product ideas to spot good ideas and drop poor ones as soon as possible.

7.2.3. Product concept A detailed version of the new-product idea stated in meaningful consumer terms This is Tesla’s initial all-electric roadster. Later, more-affordable mass-market models will travel more than 300 miles on a single charge, recharge in 45 minutes from a normal 120-volt electrical outlet, and cost about one penny per mile to power.

7.2.4. Concept testing Testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal. HP signs up consumers to evaluate prototype imaging and printing products in their homes and offices to gain insights about their entire “out-of-box experience.”

7.3. Product Life-Cycle

7.3.1. The course of a product’s sales and profits over its lifetime. It involves five distinct stages: product development, introduction, growth, maturity, and decline.

7.4. Additional Product & Service Considerations

8. Pricing

8.1. Customer value-based pricing: Setting price based on buyers’ perceptions of value rather than on the seller’s cost.

8.1.1. Good-value pricing Offering the right combination of quality and good service at a fair price.

8.1.2. Value-added pricing Attaching value-added features and services to differentiate a company’s offers and charging higher prices. Rather than dropping prices for its venerable Stag umbrella brand to match cheaper imports, Currims successfully launched umbrellas with funky designs, cool colors, and value-added features and sold them at even higher prices.

8.2. Cost-based Pricing

8.3. Competition-Based Pricing

8.3.1. Setting prices based on competitors’ strategies, prices, costs, and market offerings. Pricing against larger, low-price competitors: Independent bookstore Annie Bloom’s Books isn’t likely to win a price war against or Barnes & Noble. Instead, it relies on outstanding customer service and a cozy atmosphere to turn booklovers into loyal customers.

9. Pricing Strategies

9.1. New-product

9.1.1. Market-skimming pricing (price skimming) Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales.

9.1.2. Market-penetration pricing Setting a low price for a new product to attract a large number of buyers and a large market share. To lure famously frugal Chinese customers, IKEA slashed its prices. The strategy worked. Weekend crowds at its cavernous Beijing store are so big that employees need to use megaphones to keep them in control.

9.2. Product Mix

9.2.1. Product line pricing Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors’ prices.

9.2.2. Optional product pricing The pricing of optional or accessory products along with a main product.

9.2.3. Captive product pricing Setting a price for products that must be used along with a main product, such as blades for a razor and games for a videogame console. At Six Flags, you pay a daily ticket or season pass charge plus additional fees for food and other in-park features

9.2.4. By-product pricing Setting a price for by-products to make the main product’s price more competitive. “There’s green and money to be made in animal poop!” exclaims Dan Corum, the Woodland Zoo’s enthusiastic compost and recycling coordinator (also known as the prince of poo, the emperor of excrement, the GM of BM, or just plain Dr. Doo).

9.2.5. Product bundle pricing Combining several products and offering the bundle at a reduced price.

9.3. Price Adjustment

9.3.1. Discount and Allowance Pricing

9.3.2. Segmented Pricing

9.3.3. Psychological Pricing

9.3.4. Promotional Pricing

9.3.5. Geographical Pricing

9.3.6. Dynamic pricing: The Internet seems to be taking us back into a new age of fluid pricing. At, you can “name your own price.”

9.3.7. International pricing: To lower prices in developing countries, Unilever developed smaller, more affordable packages that put the company's premier brands within the reach of the cash-strapped customers.

9.4. Price Changes

9.4.1. Initiating price increases: When gasoline prices rise rapidly, angry consumers often accuse the major oil companies of enriching themselves by gouging customers.

10. Marketing channel

10.1. Supply Chain

10.1.1. Value delivery network A network composed of the company, suppliers, distributors, and, ultimately, customers who “partner” with each other to improve the performance of the entire system in delivering customer value. In making and marketing just one of its many models— say, the Ford Escape hybrid—Ford manages a huge network of people within Ford plus thousand of suppliers and dealers outside the company who work together to give final customers “the most fuel-efficient SUV on the market

10.2. Channel Behavior

10.2.1. Channel conflict Disagreement among marketing channel members on goals, roles, and rewards— who should do what and for what rewards. Burger King has had a steady stream of conflicts with its franchised dealers over everything from advertising content to the price of its cheeseburgers. Conventional distribution channel A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, even at the expense of profits for the system as a whole. Vertical marketing system (VMS) A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate. Contractual VMS A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts. Corporate VMS A vertical marketing system that combines successive stages of production and distribution under single ownership— channel leadership is established through common ownership Franchise organization A contractual vertical marketing system in which a channel member, called a franchisor, links several stages in the production-distribution process Horizontal marketing system A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity. Multichannel distribution system A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments.

10.3. Channel Design Decision

10.4. Mkt Logistics

11. Communicating customer value

11.1. The Promotion Mix

11.1.1. The specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships. Advertising Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Sales promotion Short-term incentives to encourage the purchase or sale of a product or service Personal selling Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships Public relations (PR) Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events

11.2. Intergrated Mrt

11.2.1. Direct marketing Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.

11.2.2. Burger King’s richly integrated, multipronged Whopper Freakout campaign, which employed a carefully coordinated mix of everything from TV and radio ads to rich media ad banners and a Freakout Web site, boosted store traffic and Whopper sales by 29 percent.

11.3. Procees

11.3.1. Identify

11.3.2. Determine Moving customers through the buyer-readiness stages: Kia used its biggest-ever marketing campaign—centered around a major Super Bowl commercial—to create awareness and knowledge of its redesigned Sorento SUV.

11.3.3. Designing a message Ad message content: United Way uses moral appeals—urging people to “Live United. Make a difference. Help create opportunities for everyone in your community

11.3.4. Choosing media Personal communication channels Word-of-mouth influence Buzz marketing The Vocalpoint marketing arm of P&G has enlisted an army of buzzers to create word-of-mouth for P&G and other company brands. Nonpersonal communication channels