1, Describe the purpose of marketing
-Marketing is an organizational function and a collection of processes designed to plan
for create, communicate, and deliver value to customers and to build an effective
customer relationship in ways that benefits the organization and its stakeholder.
-Marketing is about:
+ consumer
+ creating value.
+ connections
+ problem solving.
+ brand identity
-What can be marketed? Goods, services, properties, experiences, people, places,
information, events, ideas, organizations
-Marketing maps
Segmenting, targeting, positioning.
Marketing strategy: consumers behaviors, environment, market analytics
Marketing tactics: products, places, price, promotion
-> customer value
2, Understand the concept of marketing mix and demographics/psychographics
The Marketing Mix:
- Four marketing activities—product, pricing, distribution, and promotion—that a firm can
control to meet the needs of customers within its target market.
+ Product: Goods, services, or ideas that satisfy customer needs.
+ Price: Decisions and actions that establish pricing objectives and policies and set product
prices.
+ Place: The ready, convenient, and timely availability of products
+ Promotion: Activities that inform customers about the organization and its products.
---Positioning = framing= get customer attention. Brand name right in the middle, catch people
attention so customer remember the brand name.
-Customers: is the focal point of all marketing activities.
-Target Market: A specific group of customers on whom an organization focuses its
marketing efforts.
+ Large or small customer groups
+ Single or multiple product markets
+ Single or multiple products
+ Local to global markets
-Class terminology:
+ Consumer: the person who USE the products.
+ Customer: the person who BUY the products.
-Demographics vs Psychographics
+ Demos are necessary but not sufficient to make connections.
+ Differences:
Demos: who your buyer is – ex: gender, age, income, race, marital status, family size,
income, education
Psychos: why they buy – ex: belief systems, values, goals, attitudes, personal traits,
interest
3, Compare and contrast the different marketing management philosophies of the evolution of
the marketing concept
Evolution of the Marketing Concept:
-Production orientation: focus on efficiency of internal operations. (What can we make or
do best)
-Sales orientation: focus on aggressive techniques for overcoming customer resistance.
(how can we sell more aggressively) (Personal selling, advertising and distribution
became the focus)
-Marketing orientation: focus on satisfying customer needs and wants.
-Societal orientation: focus on satisfying customer needs and wants while enhancing
individual and society well-being.
4. Explain and examine the different facets of the market orientation
Market orientation: An organizational perspective – puts the philosophy of the marketing
concept into practice.
1, gathering market intelligence
2, disseminating knowledge
3, coordinated response
Marketing concept:
A consumer-oriented philosophy dedicated to understanding and fulfilling consumer needs
through the creation of value, customer relationships, customer loyalty.
Value-driven marketing:
Customer value = customer benefits – customer costs
Value: A customer’s subjective assessment of benefits relative to the costs in determining the
worth of a product
Benefits: Anything desired by the customer that is received in an exchange
Costs: Anything a customer gives up in an exchange for benefits (e.g. Monetary price of the
benefit, Search costs (time and effort) to locate the product, Risks associated with the exchange,
Opportunity cost)
The key to successful marketing:
Three letters: STP
Segmenting
Targeting
Positioning
SECTION 2
What is a market?
-A group of people seeking products in a specific product category
-Can also be:
+ specific location
+ large geography area
+ relationship between supply and demand
+ action world, as in market a product
The importance of Market Segmentation
-Market has a variety of needs and preferences.
-Market segments have specific needs and wants as well as the ability and willingness to
buy.
-Marketer can better define customer needs.
-One word: competitive advantage.
STP marketing
Segmenting: divide market based on needs/ benefits, demographics, lifestyle, behavioral
measures
Targeting: select most appropriate market
Positioning: target marketing message thru 4ps
Segmenting: identifying a group of customers in your market who share a similar set of needs
and wants.
Bases of segmentation is a way in which we divide the overall market by a group of
characteristics that is used to assign segment members.
1, demographic segmentation: age, gender, income, family size, family life cycle, occupation,
ethnicity
2, psychographic segmentation: values, lifestyle, personality, activities, interest, opinion
VALS – Values and Lifestyle:
-Ideals orientation: thinker, believer
-Achievement orientation: achiever, striver
-Self-expression orientation: experiencers, makers
3, Behavioral segmentation: dividing a market by the amount of product bought or consumed
80/20 principal: 20% of all customers generate 80% of the demand.
4, needs segmentation: the process of grouping customers into market segments according to
the benefits they seek from the product
Targeting: evaluate various segments and then selecting the most viable segments who share
similar needs and wants
Undifferentiated, where the market is treated as a whole;
Differentiated, where segments are separated and a unique product is tailored to each segment;
Concentrated, where a small, but well-defined segment is the focus of a company’s marketing
efforts;
Micro, where each individual is offered a customized solution, or product.
4 targeting strategies:
1, Undifferentiated segmentation: marketing approach that views the market as one big market
with no individual segments and thus requires a single marketing mix
-Advantages: potential savings on production and marketing cost
-Disadvantage:
-+ unimaginative product offering
-+ Company more susceptible to competition: de bi canh tranh
Ex: commodity products: flour, sugar
2, Differentiated segmentation: a strategy that choose two or more well-defined market
segments and then develop a distinct marketing mix for each
Advantage: greater financial success, economy of scale
Disadvantage: high cost, cannibalization
3, Concentrated segmentation: focus on the narrow market sometimes benefits more than
spreading over several different segments
Advantage:
-Concentration of resources
-Small firms can compete.
-Meet narrowly defined segment.
-Strong positioning
Disadvantage:
-Segment too small or changing.
-Large competitors may market to niche segments.
4, Micromarketing segmentation: one-to-one marketing which is individualize, information
intensive, long-term perspective, increase customer loyalty
-One size fit all will no longer effective as direct and personal marketing will grow to meet
needs of busy consumers.
-Customer will be loyal to company earned their trust.
-Mass-media approaches will decline as technology allows better customer tracking.
Select a target market
-Do customer’s needs differ enough to warrant the use of market segmentation?
-In which market segment should the firm participate?
-Does the firm have the resources and skills to compete effectively in the target market?
-What is the long-term growth potential of the market segment?
Core competence characteristics:
1, sources of competitive advantage in that it makes a significant contribution to perceived
customer benefits: dong gop loi ich khach hang
2, has applications in a wide variety of markets: co ung dung tren nhieu thi truong
3, difficult for competitors to imitate: doi thu canh tranh kho bat chuoc
Positioning: act of designing the company’s offering and image to occupy a distinctive place in
the mind of the target market
Value proposition
-The brand’s full mix of benefits on which a brand is differentiated and positioned.
-Answer the question: why should I buy your brand?
-Value is a relationship between price and quality.
Perceptual mapping: a means of displaying or graphing, in 2 or more dimensions, the relative
location of products, brands, or group of products in customers’ minds.
Positioning statement:
For (Target market), the (Brand) is the (Point of Differentiation) among all (Frame of Reference)
because (Reason to believe)
-POD describes how your brand, products benefits customers that makes your different
from your competitors.
-Frame of reference: segment/ category which your company competes.
-Reason to believe: statement providing compelling evidence and reasons why customers
in your target market can have confidence in your differentiation claims.
Repositioning: changing consumer perception of a brand in relation to competing brands.
Perception:
-Weber’s law: the stronger the initial stimulus, the greater the added intensity needed to
perceive a difference.
-Differential threshold – just noticeable difference
Perceptual Organization
-Figure and ground
-Grouping
-Closure
-+ Zeigarnik effect
-+ a person beginning a task needs to complete it
-+ when one is prevented from doing so, a state of tention that manifest itself in
improved memory for the incomplete task.
SEC 3
Strategic Planning: the managerial process of creating and maintaining a fit between the
organization’s objectives and resources and evolving market opportunities.
Corporate strategy
-Determine scope of business
-Guides resource deployment
-Provides overall coordination of functional areas.
-Determines how to use resources to accomplish goals.
-Identifies competitive advantages.
-Aligns activities with company vision.
Strategic planning – Top management:
-What kind of business should we be in?
-Where are we now?
-Where do we want to go?
Big picture, long term strategy
Tactical Planning- Functional units
-How can we meet goals set by management?
-What are out specific objectives?
Focus on how, short term execution.
Consumer value delivery process
Strategic marketing: create value: customer segmentation, market selection/focus, value
positioning
Tactical marketing:
-Communicate the value: sales force, sales promotion, advertising.
-Provide the value: product development, service development, pricing, sourcing, making
distributing, services, create marketing plan
A marketing plan: document include an assessment of
-Marketing situation
-Marketing objective
-Marking strategy
-Marketing initiatives
Strategic market plan elements:
1, organizational mission and values
Mission statement: a long-term view, or vision, of what the organization want to be.
-Who are our customers?
-What are our core competences?
2, objectives: a statement of what is to be accomplished thru marketing activities
3, situation or swot analysis
SWOT: Strength, weaknesses, opportunities, threats
Strategic Business Units (SBUs)
-A distinct mission and specific target market
-Control over their resources
-Their own competitors
-Plans independent of other SBUs
Business Portfolio: a collection of business (SBUs) and products that make up a company.
Should fit the company’s overall strengths and weakness.
BCG matrix (Boston Consulting Group)
Star—high growth market, dominant market share requires additional resources for continued
growth -> Market leaders
Cash cow—low growth, dominant market share generates surplus resources for allocation to
other SBUs
Dog—low/declining market, subordinate market share has diminished prospects and represents
a drain on the portfolio
Question mark—high growth market, low market share represents a high-risk/cost opportunity
requiring a large commitment of resources to build market share -> Market
challengers/followers/nichers
4, marketing strategy – target market strategy – marketing mix: product, distribution, price,
promotion
-The activities of selecting and describing one or more target markets and developing and
maintaining a market mix that will produce mutually satisfying exchanges with target
markets.
-4 major directions for strategic efforts:
+ Aggressive: many internal strengths, many external opportunities
+ Diversification: many internal strength, many external threats
+ Turnaround: many internal weakness, many external opportunities
+ Defensive: many internal weakness, many external threats
5, implementation, evaluation, control
-The marketing audit’s role is to make sure that the marketing plan emphasizes the
country’s strengths that are compatible with the shifting market environment.
-Organizational resources and opportunities: core competencies + market opportunities/
strategic windows = competitive advantage
-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.
-Types of competitive advantage:
+ cost
+ product/ service differentiation
+ niche strategies
-Cost competitive advantage:
+ experience curves
+ efficient labor
+ no-frills products
+ government subsidies
+ product design
+ reengineering
+ production innovations
+new service delivery methods
1, Product/ service differentiation:
- advantage achieved when a firm provides something that is unique and valuable to
buyers beyond simply offering a lower price than the competition.
-Example:
+ brand names
+ strong dealer network
+ product reliability
+ image
+ service
2, Niche competitive advantage:
-Advantage achieved when a firm seeks to target and effectively serve a small segment of
the market.
+ used by small companies with limited resources.
+ may be used in a limited geographic market
+ product line may be focused on a specific product line
Competitive advantage strategies:
-Operational Excellence
+ focus on efficiency of operations and processes
+ lower cost operations lead to lower prices for customers.
-Product leadership
+ excellence in technology and product development
+most advanced, highest quality product offering
-Customer Intimacy:
+ Understanding customers better than the competition
+ develop long-term customer relationships
Positional strategies for a competitive advantage:
-Market leader
-Market challenger
+ attack the leader
-Market follower
+ adapter, imitator, cloner
-Marker nicher
+ be a specialist on any product feature, service or any of the 4P’s
Result of competitive advantage:
-Satisfaction
-Loyalty
-Market share
-Profitability
Consolidation Strategies
-Retrenchment
-Pruning
-Divesting
Customer-focused strategic planning
-Puts customer needs and wants first
-Focus on long-term, value added relationship
-Focus on understanding customer in ways that enhance sustainable competitive
advantage.
-Instills a corporate culture that places customers at the top of the organizational
hierarchy.
-Finds ways to cooperate with suppliers and competitors to serve customers more
effectively and efficiently
SEC 4
-Marketing environment: a set of forces, some controllable and some uncontrollable, that
influence the ability of a business to create value and attract and serve customers.
-External environment: political, economy, technology, suppliers, competitors, consumers
-Internal environment: organization
1, social change: American core values
The practice of choosing goods and services that meet one’s diverse needs and interests rather
than conforming to a single, traditional lifestyle.
-Achievement and success
-Efficiency/convenience
-Material comfort
-Individualism
-Freedom
-Youthfulness
-Fitness and health
-Recycling
-Housing trends in household structure
+ delayed marriage
+ cohabitation
+ Dual career families
+ divorce
+ smaller families
-Number of household vs average household size
2, Levels of competition
-Generic competition
+ any option to spend deposable income; unrelated categories
+ Toyota against trip to Australia for the same consumer dollars
-Form competition:
+ solve the same basic need but is from a significantly different product category
+ Toyota against manufacturers of other vehicles that provide the same service such as
Yamaha motorcycles.
-Industry competition
+ same product category but significantly different on price/place/positioning
-Brand competition
+ head to head/ most direct competitors that offer similar products at similar price
points
Porter’s Five Forces
Bargaining power of customers
Bargaining power of suppliers
Threat of substitute products
Threat of new entrants
Competitive rivalry within an industry
3, Consumer Characteristics; US Age trends
What is Business Marketing?
Business products:
-Are used to manufacture other products
-Become part of another product
-Aid the normal operations of an organization
-Are acquired for resale without change in form
Business markets: producer markets, reseller markets, government markets, institutional
markets
B2B Product categories: major equipment, accessory equipment, raw materials, component
parts, processed materials, suppliers, business services
Supplier relationship:
Outsourcing: obtaining outside vender to provide goods and services otherwise supplied in-
house
Reciprocity: a trading partnership in which two firms agree to buy form one another
Offshoring: contracting with other far away companies to perform work previously done in
house
Reverse marketing: finding suppliers who will produce products according to the firm’s
specifications
Demand for business products:
-Derived demand: demand for industrial products that stems from demand for consumer
products
-Inelastic demand: demand that is not significantly altered by a price increase or decrease
-Joint demand: demand involving the use of two or more items in combination to
produce a product
-Fluctuating demand: demand for business products varies dispropionately as consumer
demand varies (multiplier effect)
Types of Business Purchase
Straight rebuy: original product is re-ordered
Modified rebuy: changes are desired in the original prodct
New task: product is purchased for the first time
More involvement
C B (B2B) C (B2C)
Demand Organizational Individual
Volume larger smaller
# of Customers fewer many
Location Concentrated Dispersed
Promotion Personal Selling Advertising
Buying Influence Multiple Single
Negotiations More Complex Simpler
