Essentials Of Mktg

RM02: ESSENTIALS OF MARKETING BLOCK I Unit 1 

 

THE NATURE AND SCOPE OF MARKETING Introduction to Marketing Management Scope and importance of marketing Marketing Concepts and Tools The Changing Marketing Scenario

BLOCK II Unit 2

IDENTIFYING AND SELECTING MARKETS

   

Developing Marketing Strategies Market Oriented Strategic Planning PEST; SWOT Marketing plan Market research

   

Identifying Market Segment, Targeting and Positioning Market Segmentation Pattern Procedures; Evaluation of the Market Segment Market Targeting; Identifying and understanding consumers Information process; Developing and Communicating a Positioning Strategy

Unit 3

BLOCK III Unit 4    

UNDERSTANDING CUSTOMER AND CREATING VALUE

Creating and Delivering Customer Value Concept of Value and value chain; Benefit- value –cost analysis; Value delivery process Marketing mix ( four Ps of marketing) Product and service quality Customer retention; Maximizing customer life time value

Unit 5 Buying Process  Psychological processes  The buying decision process  Situational influences on customer decision making process  Impulse purchasing

BLOCK IV Unit 6

 

PERSONAL SELLING IN SALES MANAGEMENT

Selling process Type of Personal Selling Selling skills the selling process

BLOCK V

CONTEMPORARY ISSUES IN MARKETING



Marketing in 21st Century Changing Trends in Marketing Mix; CRM; e-tailing essentials; B2B Marketing;



Direct Marketing

Unit 7

BLOCK I

UNIT-1

INTRODUCTION TO MARKETING MANAGEMENT OUTLINE The foundation of marketing is exchange, in which one party provides to another party something of value in return for something else of value. In a broad sense, marketing consists of all activities designed to generate or facilitate an exchange intended to satisfy human needs. In a business context, marketing is a total system of business activities designed to plan, price, promote and distribute products to target market in order to achieve organizational objectives.

KEY REFERENCE POINTS      

Definition and scope of marketing The marketing concepts and related issues The evolution of marketing and marketing in new millenium Relationship marketing Marketing as a process Marketing mix

THE SCOPE OF MARKETING To prepare to be a marketer, you need to understand what marketing is, how it works, what is marketed, and who does the marketing. Marketing is everywhere. Formally or informally, people and organizations engage in a vast number of activities that could be called marketing. Good marketing is no accident, but a result of careful planning and execution. Marketing is both an "art" and a "science". There is constant tension between the formulated side of marketing and the creative side. THE IMPORTANCE OF MARKETING Marketing is tricky, and making the right decisions is not always easy. Skillful marketing is a never-ending pursuit. What is Marketing?

Marketing deals with identifying and meeting human and social needs. One of the shortest definition of marketing is "meeting needs profitably". American Marketing Association suggests that marketing is "the process of planning and executing the pricing, promotion, and distribution of goods, ideas, and services to create exchanges that satisfy individual and organizational goals." What is Marketed? Marketing people are involved in marketing ten types of entities: goods, services, events, experiences, persons, places, properties, organizations, information and ideas. A.

Goods: Physical goods constitute the bulk of production and marketing efforts.

B.

Services: A growing portion of business activities are focused on the production of services. The U.S. economy today consists of a 70-30 services to goods mix.

C.

Events: Marketers promote time-based events such as trade shows, artistic performances, and the Olympics.

D.

Experiences: By orchestrating several services and goods, a firm can create and market experiences such as Walt Disney World's Magic Kingdom.

E.

Persons: Celebrity marketing is a major business.

F.

Places: Cities, states, regions and whole nations compete actively to attract tourists, factories, and new residents.

G.

Properties: Are intangible rights of ownership of either real property (real estate) or financial property (stocks and bonds).

The Evolution of Marketing Concepts The marketing concept is the philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs, better than the competition. Today most firms have adopted the marketing concept, but this has not always been the case. The Production Concept The production concept prevailed from the time of the industrial revolution until the early 1920s. The production concept was the idea that a firm should focus on those products that it could produce most efficiently and that the creation of a supply of low-cost products would in and of itself create the demand for the products. At the time, the production concept worked fairly well because the goods that were produced were largely those of basic necessity and there was a relatively high level of unfulfilled demand. Virtually everything that could be produced was sold easily by a sales team whose job was simply to execute transactions at a price determined by the cost of production..

The Sales Concept By the early 1930s however, mass production had become commonplace, competition had increased, and there was little unfulfilled demand. Around this time, firms began to practise the sales concept (or selling concept), under which companies not only would produce the products, but also would try to convince customers to buy them through advertising and personal selling. The sales concept paid little attention to whether the product actually was needed; the goal simply was to beat the competition to the sale with little regard to customer satisfaction. Marketing was a function that was performed after the product was developed and produced, and many people came to associate marketing with hard selling. Even today, many people use the word "marketing" when they really mean sales. The Marketing Concept After World War II, the variety of products increased and hard selling no longer could be relied upon to generate sales. With increased discretionary income, customers could afford to be selective and buy only those products that precisely met their changing needs, and these needs were not immediately obvious. When firms first began to adopt the marketing concept, they typically set up separate marketing departments whose objective it was to satisfy customer needs. Often these departments were sales departments with expanded responsibilities. The marketing concept relies upon marketing research to define market segments, their size, and their needs. To satisfy those needs, the marketing team makes decisions about the controllable parameters of the marketing mix. Holistic Marketing Concept Holistic marketing can be seen as the development, design and implementation of marketing programmes, processes and activities that recognize the breath and interdependencies of their efforts. Holistic marketing recognizes that "everything matters" with marketing—the consumer, employees, other companies, competition and society as a whole. Relationship Marketing A.

Relationship marketing has the aim of building mutually satisfying long-term relationships with key parties—customers, suppliers, distributors and other marketing partners. Relationship marketing builds strong economic, technical and social ties among the parties. 1.

Marketing must not only do customer relationship management (CRM) but also partnership relationship management (PRM).

2.

Four key constituents for marketing are:

3.

a.

Customers

b.

Employees

c.

Marketing partners (channel partners)

d.

Members of the financial community

The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network.

A marketing network consists of the company and its supporting stakeholders (customers, suppliers, distributors, retailers, ad agencies, university scientists and others) with whom it has built mutually profitable business relationships. Integrated Marketing A.

The marketer's task is to devise marketing activities and assemble fully integrated marketing programs to create, communicate and deliver value for consumers.

B.

The 4Ps of marketing: product, price, place and promotion.

Marketing – Mix decisions must be made for influencing the trade channels as well as the final consumers. 1.

C.

Robert Lauterborn suggests that the sellers 4Ps correspond to the customers' 4Cs 4Ps

4Cs

Product

Customer solution

Price

Customer cost

Place

Convenience

Promotion

Communication

Two key themes of integrated marketing are: 1

Many different marketing activities are employed to communicate the deliver value

2

All marketing activities are coordinated to maximize their joint efforts

Internal Marketing A.

Holistic marketing incorporates internal marketing, ensuring that everyone in the organization embraces appropriate marketing principles.

B.

Internal marketing must take place on two levels:

1.

At one level, the various marketing functions (sales forces, advertising, customer services, product management and marketing research) must work together.

2.

Secondly, marketing must be embraced by the other departments - they must "think customer." Marketing is not a department so much as a company orientation.

Social Responsible Marketing A.

Holistic marketing incorporates social responsibility marketing and understanding broader concerns, and the ethical environmental, legal, and social context of marketing activities and programmes.

Market Definition In marketing, the term market refers to the group of consumers or organizations that is interested in the product, has the resources to purchase the product, and is permitted by law and other regulations to acquire the product. The market definition begins with the total population and progressively narrows as shown in the following diagram. Market Definition Conceptual Diagram

MARKET ANALYSIS The goal of a market analysis is to determine the attractiveness of a market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of the firm. David A. Aaker outlined the following dimensions of a market analysis:

♦

Market size (current and future)

♦

Market growth rate

♦

Market profitability

♦

Industry cost structure

♦

Distribution channels

♦

Market trends

♦

Key success factors

MARKET SIZE The size of the market can be evaluated based on present sales and on potential sales if the use of the product were expanded. The following are some information sources for determining market size: ♦

government data

♦

trade associations

♦

financial data from major players

♦

customer surveys

MARKET GROWTH RATE A simple means of forecasting the market growth rate is to extrapolate historical data into the future. While this method may provide a first-order estimate, it does not predict important turning points. A better method is to study growth drivers such as demographic information and sales growth in complementary products. Such drivers serve as leading indicators that are more accurate than simply extrapolating historical data. Important inflection points in the market growth rate sometimes can be predicted by constructing a product diffusion curve. The shape of the curve can be estimated by studying the characteristics of the adoption rate of a similar product in the past. Ultimately, the maturity and decline stages of the product life cycle will be reached. Some leading indicators of the decline phase include price pressure caused by competition, a decrease in brand loyalty, the emergence of substitute products, market saturation and the lack of growth drivers. MARKET PROFITABILITY While different firms in a market will have different levels of profitability, the average profit potential for a market can be used as a guideline for knowing how difficult it is to make money in the market. Michael Porter devised a useful framework for evaluating the

attractiveness of an industry or market. This framework, known as Porter's five forces, identifies five factors that influence the market profitability: ♦

Buyer power

♦

Supplier power

♦

Barriers to entry

♦

Threat of substitute products

♦

Rivalry among firms in the industry

Industry Cost Structure The cost structure is important for identifying key factors for success. To this end, Porter's value chain model is useful for determining where value is added and for isolating the costs. The cost structure also is helpful for formulating strategies to develop a competitive advantage. For example, in some environments the experience curve effect can be used to develop a cost advantage over competitors. Distribution Channels The following aspects of the distribution system are useful in a market analysis: Existing distribution channels : can be described by how direct they are to the customer. Trends and emerging channels: new channels can offer the opportunity to develop a competitive advantage. Channel power structure: for example, in the case of a product having little brand equity, retailers have negotiating power over manufacturers and can capture more margin. Market Trends Changes in the market are important because they often are the source of new opportunities and threats. The relevant trends are industry-dependent, but some examples include changes in price sensitivity, demand for variety, and level of emphasis on service and support. Regional trends also may be relevant. Key Success Factors The key success factors are those elements that are necessary in order for the firm to achieve its marketing objectives. A few examples of such factors include: ♦

Access to essential unique resources

♦

Ability to achieve economies of scale

♦

Access to distribution channels

♦

Technological progress

It is important to consider that key success factors may change over time, especially as the product progresses through its life cycle. Market Segmentation Market segmentation is the identification of portions of the market that are different from one another. Segmentation allows the firm to better satisfy the needs of its potential customers. The Need for Market Segmentation The marketing concept calls for understanding customers and satisfying their needs better than the competition. But different customers have different needs, and it rarely is possible to satisfy all customers by treating them alike. Mass marketing refers to treatment of the market as a homogenous group and offering the same marketing mix to all customers. Mass marketing allows economies of scale to be realized through mass production, mass distribution, and mass communication. The drawback of mass marketing is that customer needs and preferences differ and the same offering is unlikely to be viewed as optimal by all customers. If firms ignored the differing customer needs, another firm likely would enter the market with a product that serves a specific group, and the incumbent firms would lose those customers. Target marketing on the other hand recognizes the diversity of customers and does not try to please all of them with the same offering. The first step in target marketing is to identify different market segments and their needs. Requirements of Market Segments In addition to having different needs, for segments to be practical they should be evaluated against the following criteria: ♦

Identifiable: the differentiating attributes of the segments must be measurable so that they can be identified.

♦

Accessible: the segments must be reachable through communication and distribution channels.

♦

Substantial: the segments should be sufficiently large to justify the resources required to target them.

♦

Unique needs: to justify separate offerings, the segments must respond differently to the different marketing mixes.

♦

Durable: the segments should be relatively stable to minimize the cost of frequent changes.

A good market segmentation will result in segment members that are internally homogenous and externally heterogeneous; that is, as similar as possible within the segment, and as different as possible between segments. Bases for Segmentation in Consumer Markets Consumer markets can be segmented on the following customer characteristics. ♦

Geographic

♦

Demographic

♦

Psychographic

♦

Behavioralistic

Geographic Segmentation The following are some examples of geographic variables often used in segmentation. ♦

Region: by continent, country, state or even neighborhood

♦

Size of metropolitan area: segmented according to size of population

♦

Population density: often classified as urban, suburban or rural

♦

Climate: according to weather patterns common to certain geographic regions

Demographic Segmentation Some demographic segmentation variables include: ♦

Age

♦

Gender

♦

Family size

♦

Family lifecycle

♦

Generation: baby-boomers, Generation X, etc.

♦

Income

♦

Occupation

♦

Education

♦

Ethnicity

♦

Nationality

♦

Religion

♦

Social class

Many of these variables have standard categories for their values. For example, family lifecycle often is expressed as bachelor, married with no children (DINKS: Double Income, No Kids), full-nest, empty-nest or solitary survivor. Some of these categories have several stages, for example, full-nest I, II or III depending on the age of the children. Psychographic Segmentation Psychographic segmentation groups customers according to their lifestyle. Activities, interests and opinions (AIO) surveys are one tool for measuring lifestyle. Some psychographic variables include: ♦

Activities

♦

Interests

♦

Opinions

♦

Attitudes

♦

Values

Behavioralistic Segmentation Behavioural segmentation is based on actual customer behaviour towards products. Some behavioralistic variables include: ♦

Benefits sought

♦

Usage rate

♦

Brand loyalty

♦

User status: potential, first-time, regular, etc.

♦

Readiness to buy

♦

Occasions: holidays and events that stimulate purchases

Behavioural segmentation has the advantage of using variables that are closely related to the product itself. It is a fairly direct starting point for market segmentation. Bases for Segmentation in Industrial Markets In contrast to consumers, industrial customers tend to be fewer in number and purchase larger quantities. They evaluate offerings in more detail, and the decision process usually involves more than one person. These characteristics apply to organizations such as manufacturers and service providers, as well as resellers, governments and institutions. Many of the consumer market segmentation variables can be applied to industrial markets. Industrial markets might be segmented on characteristics such as: ♦

Location

♦

Company type

♦

Behavioural characteristics

Location In industrial markets, customer location may be important in some cases. Shipping costs may be a purchase factor for vendor selection for products having a high bulk to value ratio, so distance from the vendor may be critical. In some industries firms tend to cluster together geographically and therefore may have similar needs within a region. Company Type Business customers can be classified according to types as follows: ♦

Company size

♦

Industry

♦

Decision making unit

♦

Purchase Criteria

Behavioural Characteristics In industrial markets, patterns of purchase behaviour can be a basis for segmentation. Such behavioural characteristics may include: ♦

Usage rate

♦

Buying status: potential, first-time, regular, etc.

Purchase procedure: sealed bids, negotiations, etc. The Marketing Process

Under the marketing concept, the firm must find a way to discover unfulfilled customer needs and bring to market products that satisfy those needs. The process of doing so can be modeled in a sequence of steps: the situation is analyzed to identify opportunities, the strategy is formulated for a value proposition, tactical decisions are made, the plan is implemented and the results are monitored. The Marketing Process

I.

Situation Analysis: A thorough analysis of the situation in which the firm finds itself serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. In addition to identifying the customer needs, the firm must understand its own capabilities and the environment in which it is operating. The situation analysis thus can be viewed in terms of an analysis of the external environment and an internal analysis of the firm itself. The external environment can be described in terms of macro-environmental factors that broadly affect many firms, and micro-environmental factors closely related to the specific situation of the firm. The situation analysis should include past, present and future aspects. It should include a history outlining how the situation evolved to its present state, and an analysis of trends in order to forecast where it is going. Good forecasting can reduce the chance of spending a year bringing a product to market only to find that the need no longer exists. If the situation analysis reveals gaps between what consumers want and what currently is offered to them, then there may be opportunities to introduce products to better satisfy those consumers. Hence, the situation analysis should yield a summary of problems and opportunities. From this summary, the firm can match its own capabilities with the opportunities in order to satisfy customer needs better than the competition. There are several frameworks that can be used to add structure to the situation analysis:

II.

♦

5 C Analysis: company, customers, competitors, collaborators and climate. Company represents the internal situation; the other four cover aspects of the external situation.

♦

PEST analysis: for macro-environmental political, economic, societal, and technological factors. A PEST analysis can be used as the "climate" portion of the 5 C framework.

♦

SWOT analysis: strengths, weaknesses, opportunities, and threats for the internal and external situation. A SWOT analysis can be used to condense the situation analysis into a listing of the most relevant problems and opportunities and to assess how well the firm is equipped to deal with them.

Marketing Strategy: Once the best opportunity to satisfy unfulfilled customer needs is identified, a strategic plan for pursuing the opportunity can be developed. Market research will provide specific market information that will permit the firm to select the target market segment and optimally position the offering within that segment. The result is a value proposition to the target market. The marketing strategy then involves: ♦

Segmentation

♦

Targeting (target market selection)

♦

Positioning the product within the target market

♦

Value proposition to the target market

III. Marketing Mix Decisions: Detailed tactical decisions then are made for the controllable parameters of the marketing mix. The action items include: ♦

Product development: specifying, designing and producing the first units of the product.

♦

Pricing decisions

♦

Distribution contracts

♦

Promotional campaign development

IV. Implementation and Control: At this point in the process, the marketing plan has been developed and the product has been launched. Given that few environments are static, the results of the marketing effort should be monitored closely. As the market changes, the marketing mix can be adjusted to accommodate the changes. Often, small changes in consumer wants can addressed by changing the advertising message. As the changes become more significant, a product redesign or an entirely new product may be needed. The marketing process does not end with

implementation—continual monitoring and adaptation is needed to fulfill customer needs consistently over the long-term. FRAMEWORK FOR PERFORMANCE: A SITUATION ANALYSIS In order to profitably satisfy customer needs, the firm first must understand its external and internal situation, including the customer, the market environment, and the firm's own capabilities. Furthermore, it needs to forecast trends in the dynamic environment in which it operates. A useful framework for performing a situation analysis is the 5 C Analysis. The 5C analysis is an environmental scan on five key areas especially applicable to marketing decisions. It covers the internal, the micro-environmental, and the macro-environmental situation. The 5 C analysis is an extension of the 3 C analysis (company, customers and competitors), to which some marketers added the 4th C of collaborators. The further addition of a macro-environmental analysis (climate) results in a 5 C analysis, some aspects of which are outlined below. Company ♦

Product line

♦

Image in the market

♦

Technology and experience

♦

Culture

♦

Goals

Collaborators ♦

Distributors

♦

Suppliers

♦

Alliances

Customers ♦

Market size and growth

♦

Market segments

♦

Benefits that consumer is seeking, tangible and intangible.

♦

Motivation behind purchase; value drivers, benefits vs. costs

♦

Decision maker or decision-making unit

♦

Retail channel – where does the consumer actually purchase the product?

♦

Consumer information sources – where does the customer obtain information about the product?

♦

Buying process; e.g. impulse or careful comparison

♦

Frequency of purchase, seasonal factors

♦

Quantity purchased at a time

♦

Trends - how consumer needs and preferences change over time

Competitors ♦

Actual or potential

♦

Direct or indirect

♦

Products

♦

Positioning

♦

Market shares

♦

Strengths and weaknesses of competitors

Climate (or context) The climate or macro-environmental factors are: ♦

Political & regulatory environment: governmental policies and regulations that affect the market

♦

Economic environment: business cycle, inflation rate, interest rates and other macroeconomic issues

♦

Social/Cultural environment: society's trends and fashions

♦

Technological environment: new knowledge that makes possible new ways of satisfying needs; the impact of technology on the demand for existing products.

The analysis of these four external "climate" factors often is referred to as a PEST analysis. INFORMATION SOURCES Customer and competitor information specifically oriented towards marketing decisions can be found in market research reports, which provide a market analysis for a particular industry. For foreign markets, country reports can be used as a general information source for the macro-environment. By combining the regional and market analysis with

knowledge of the firm's own capabilities and partnerships, the firm can identify and select the more favourable opportunities to provide value to the customer. THE P'S OF MARKETING Product, Price, Promotion and Placement In popular usage, "marketing" is the promotion of products, especially advertising and branding. However, in professional usage the term has a wider meaning that recognizes that marketing is customer centered. Products are often developed to meet the desires of groups of customers or even, in some cases, for specific customers. McCarthy divided marketing into four general sets of activities. His typology has become so universally recognized that his four activity sets, the Four Ps, have passed into the language. The Four Ps are: ♦

Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual good or service, and how it relates to the enduser's needs and wants.

♦

Pricing: This refers to the process of setting a price for a product, including discounts.

♦

Promotion: This includes advertising, sales promotion, publicity, and personal selling, and refers to the various methods of promoting the product, brand or company.

♦

Placement or distribution refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to "where" a product or service is sold, e.g. in which geographic region or industry, to which segment (young adults, families, business people, women, men, etc.).

These four elements are often referred to as the marketing mix. A marketer can use these variables to craft a marketing plan. The four Ps model is most useful when marketing low value consumer products. Industrial products, services, high value consumer products require adjustments to this model. Services marketing must account for the unique nature of services. Industrial or b2b marketing must account for the long term contractual agreements that are typical in supply chain transactions. Relationship marketing attempts to do this by looking at marketing from a long-term relationship perspective rather than individual transactions. For a marketing plan to be successful, the mix of the four "p's" must reflect the wants and desires of the consumers in the target market. Trying to convince a market segment to buy something they don't want is extremely expensive and seldom successful. Marketers depend on marketing research, both formal and informal, to determine what consumers want and what they are willing to pay for. Marketers hope that this process will give them

a sustainable competitive advantage. Marketing management is the practical application of this process. Most companies today have a customer orientation (also called customer focus). This implies that the company focuses its activities and products on customer needs. Generally there are two ways of doing this: the customer-driven approach and the product innovation approach. In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no point spending R&D funds developing products that people will not buy. History attests to many products that were commercial failures inspite of being technological breakthroughs. The next big thing is a concept in marketing that refers to a product or idea that will allow for a high amount of sales for that product and related products. Marketers believe that by finding or creating the next big thing they will spark a cultural revolution that results in this sales increase. In a product innovation approach, the company pursues product innovation, then tries to develop a market for the product. Product innovation drives the process and marketing research is conducted primarily to ensure that a profitable market segment(s) exists for the innovation. The rationale is that customers may not know what options will be available to them in the future so we should not expect them to tell us what they will buy in the future. It is claimed that if Thomas Edison depended on marketing research he would have produced larger candles rather than inventing light bulbs. Many firms, such as research and development focused companies, successfully focus on product innovation. Many purists doubt whether this is really a form of marketing orientation at all, because of the ex post status of consumer research. Some even question whether it is marketing. Diffusion of innovations research explores how and why people adopt new products, services and ideas. A relatively new form of marketing uses the Internet and is called internet marketing or more generally e-marketing, affiliate marketing or online marketing. It typically tries to perfect the segmentation strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing or one-to-one marketing. FUNDAMENTAL MARKETING CONCEPTS, TRENDS, AND TASKS Core concepts create foundations for marketing management and holistic marketing orientation. Needs, Wants and Demands

Marketers must try to understand the target market's needs, wants and demands. A.

Needs are basic human desires.

B.

Wants are shaped by one's society.

C.

Demands are wants for specific products backed by an ability to pay.

D.

Marketers do not create needs-needs pre-exist marketers.

E.

Marketers, along with society influence wants. 1.

There are five types of needs that marketers must understand: a.

Stated needs

b.

Real needs

c.

Unstated needs

d.

Delight needs

e.

Secret needs

Target Markets, Positioning and Segmentation A.

A marketer can rarely satisfy everyone in a market therefore the marketers must divide the market into segments.

B.

The marketer then decides which segment presents the greatest opportunity – which are its target markets.

C.

For each chosen target market, the firm develops a market offering.

D.

The offering is positioned in the minds of the target buyers as delivering some central benefit(s).

Offerings and Brands A.

Companies put forth a value proposition, a set of benefits they offer to customers to satisfy their needs.

B.

The intangible value proposition is made physical by an offering that can be a combination of products, services, information and experiences.

Value and Satisfaction A.

The offering will be successful if it delivers value and satisfaction to the target buyer.

B.

The buyer chooses between different offerings based on which is perceived to deliver the most value.

C.

Value reflects the perceived tangible benefits and costs to customers.

D.

Value can be a combination of quality, service and prices called the customer value triad.

E.

Value is a central marketing concept.

F.

Marketing can be seen as the identification, creation, communication, delivery and monitoring of customer value. 1.

Satisfaction reflects a person's comparative judgment resulting from a product's perceived performance (or outcome) in relation to his or her expectations.

Marketing Channels (three kinds of marketing channels) A.

Communication channels deliver and receive messages from target buyers.

B.

Distribution channels to display, sell or deliver the physical product or service(s).

C.

Service channels to carry out transactions with potential buyers (warehouses, transportation companies, banks).

Supply Chain A.

Describes a longer channel stretching from raw materials to finished goods.

B.

Represents a value delivery system.

Competition A.

Includes all the actual and potential rival offering and substitutes that a buyer might consider.

Marketing Environment A.

Consists of the task environment and the broad environment.

B.

Task environment includes the immediate actors involved in producing, distribution, and promoting the offering: suppliers, company, dealers and target customers.

C.

The broad environment consists of six components: 1.

Demographic

2.

Economic

3.

Natural

4.

Technological

5.

Political-legal

6.

Social-cultural

Marketing Planning A.

Consists of analyzing marketing opportunities

B.

Selecting target markets

C.

Designing marketing strategies

D.

Developing marketing programs

E.

Managing the marketing effort

Shifts in Marketing Management A.

A number of important trends and forces are eliciting a new set of beliefs and practices on the part of business firms. These fourteen major shifts are: 1.

From marketing does the marketing to everyone does the marketing.

2.

From organization by products units to organizing by customer segments.

3.

From making everything to buying more goods and services from outside.

4.

From using many suppliers to working with fewer suppliers in a "partnership."

5.

From relying on old market positions to uncovering new ones.

6.

From emphasizing tangible assets to emphasizing intangible assets.

7.

From building brands through advertising to building brands through performance and integrated communications.

8.

From attracting customers through stores and salespeople to making products available online.

9.

From selling to everyone to trying to be the best firm serving a well-defined target market.