WEEK 6 MARKETING: AN INTRODUCTION BUSN 102 – Özge Can Marketing in a Changing World 13-3 Marketing: The process of creating value for customers and building relationships with those customers in order to capture value back from them Applies to: not only good and services but also: for-profit organizations, people, places, and causes Marketing in a Changing World 13-4 Place Marketing: Marketing efforts to attract people and organizations to a particular geographical area Cause-Related Marketing: Identification and marketing of a social issue, cause, or idea to selected target markets The Role of Marketing in Society 13-5 Needs and wants Exchanges and transactions Four utilities The Role of Marketing in Society 13-6 Needs Differences between a person’s actual state and his or her ideal state; they provide the basic motivation to make a purchase Wants Specific goods, services, experiences, or other entities that are desirable in light of a person’s experiences, culture, and personality The Role of Marketing in Society 13-7 Exchange Process The act of obtaining a desired object or service from another party by offering something of value in return Transaction An exchange of value between parties The Role of Marketing in Society 13-8 Utility The power of a good or service to satisfy a human need Four aspects of utility: Form Time Place Possession Examples of the Four Utilities 13-9 Different Views of Marketing Function: 13-10 Product concept: Focusing on the production of goods, not satisfying customers Selling concept: Generating as many sales transactions as possible; customers are only a target to be sold to Different Views of Marketing Function: 13-11 Marketing concept: An approach to business management that stresses customer needs and wants, seeks long-term profitability, and integrates marketing with other functional units within the organization Selling Concept vs. Marketing Concept 13-12 The Marketing Concept Involves: 13-13 Relationship Marketing A focus on developing and maintaining long-term relationships with customers, suppliers, and distribution partners for mutual benefit Customer Loyalty The degree to which customers continue to buy from a particular retailer or buy the products of a particular manufacturer or service provider Challenges in Contemporary Marketing 13-14 1) Involving the customer in the marketing process 2) Making data-driven decisions 3) Conducting marketing activities with greater concern for ethics and etiquette 1) Involving the Customer 13-15 Customer Relationship Management (CRM) A type of information system that captures, organizes, and capitalizes on all the interactions that a company has with its customers Social Commerce The creation and sharing of product-related information among customers and potential customers 2) Making Data-Driven Decisions 13-16 Marketing Research The collection and analysis of information for making marketing decisions Tracking each aspect of marketing effectiveness Key marketing research techniques: Observation, surveys, interviews and focus groups, process data collection, ethnographic research, neuromarketing studies 3) Greater Concern for Ethics and Etiquette 13-17 Permission-Based Marketing Firms first ask permission to deliver messages to an audience and then promise to restrict their communication efforts to those subject areas in which audience members have expressed interest Stealth Marketing The delivery of marketing messages to people who are not aware that they are being marketed to Understanding Today’s Customers 13-18 I. Consumer Market: Individuals or households that buy goods and services for personal use II. Organizational Market: Companies, government agencies, and other organizations that buy goods and services either to resell or to use in the creation of their own goods and services The Consumer Decision Process 13-19 The Organizational Customer Decision Process Consumer Decision Process 13-21 Rational model of customer buying behavior: Need recognition Information research Evaluation of alternatives Purchase Postpurchase evaluation The Consumer Decision Process 13-22 Consumer behavior is less logical and far more complicated: Subconscious decision-making, gut feelings and emotional responses Cognitive Dissonance Tension that exists when a person’s beliefs don’t match his or her behaviors; a common example is buyer’s remorse, when someone regrets a purchase immediately after making it 23 Major Purchase Influences: 13-24 Culture Socioeconomic level Situational factors Reference groups Self-image Organizational Customer Decision Process: 13-25 An emphasis on economic payback and other rational factors A formal buying process Greater complexity in product usage The participation and influence of multiple people Close relationships between buyers and sellers Strategic Marketing Planning 13-26 Strategic Marketing Planning The process of examining an organization’s current marketing situation, assessing opportunities and setting objectives, and then developing a marketing strategy to reach those objectives Involves the following steps: Examining current marketing situation Asessing opportunities abd setting objectives Developing marketing strategy Strategic Marketing Planning Process 13-27 Analyzing External Environment 13-28 Environmental factors include: Economic conditions Natural enviorenment Social and cultural trends Laws and regulations Technology Pursuing Market Opportunities 13-29 Crafting a Marketing Strategy Crafting a Marketing Strategy 13-31 Marketing Strategy: An overall plan for marketing a product; includes: 1) identification of target market segments 2) choosing the target markets 3) positioning in the target market 4) developing the marketing mix Dividing Markets into Segments Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 13-32 1) Dividing Markets into Segments 13-33 Market A group of customers who need or want a particular product and have the money to buy it Market Segmentation The division of a diverse market into smaller, relatively homogeneous groups with similar needs, wants, and purchase behaviors 1) Dividing Markets into Segments 13-34 Demographics: The study of statistical characteristics of a population Psychographics: Classification of customers on the basis of their psychological makeup, interests, and lifestyles Geographic Segmentation Behavioral Segmentation: Categorization of Categorization of customers according to customers according to their relationship with their geographical products or response to location product characteristics Choosing Your Target Markets 13-35 2) Choosing Your Target Markets 13-36 Target Markets Specific customer groups or segments to whom a company wants to sell a particular product Undifferentiated (mass) marketing Differentiated marketing Concentrated marketing Individualized marketing (micromarketing) Market-Coverage Strategies: 13-37 Staking Out a Position in Your Target Markets 13-38 3) Positioning in Your Target Markets 13-39 Positioning Managing a business in a way designed to occupy a particular place in the minds of target customers Such variables emphasized: product attributes, customer service, brand image, price or category leadership Customers ultimately decide on the positioning The Marketing Mix 13-40 4) The Marketing Mix 13-41 Marketing Mix The four key elements of marketing strategy: product, price, distribution, and customer communication 4) The Marketing Mix 13-42 4) The Marketing Mix 13-43 Product A bundle of value that satisfies a customer need or want Holistic view to the offering: Brand name, design, packaging, support services, warranty, ownership experience, and etc. 4) The Marketing Mix 13-44 Price The amount of money charged for a product or service Factors on pricing: Marketing objectives, government regulations, production costs, customer perceptions, competition, customer demand 4) The Marketing Mix 13-45 Distribution (marketing) channels Systems for moving goods and services from producers to customers Key factors: customer needs, product support requirements, market coverage, distribution costs, competition, positioning 4) The Marketing Mix 13-46 Promotion Persuasive techniques used by companies to communicate with their target markets and the general public Direct and indirect communication: Face-to-face, media, direct mail, billboards, social media and etc. Mid-Term Exam 47 Format: Multiple-choice questions (%60) Short essays (%40) Content: Motivation (Chp.10) HRM concepts (Chp.11) Labor relations (Chp.12) Marketing (Chp.13) Exam: Key Topics 48 Four indicators of motivation Classical theories of motivation Maslow’s hierarchy of needs, Theory X, Y and Z, Herzberg’s two factors, McClelland’s three needs Modern theories of motivation Expectancy, equity, goal-setting theories, job characteristics model Core job dimensions to consider in motivation Reinforcing high-performance Exam: Key Topics 49 Human resource (HR) planning Managing the employee life-cycle (recruiting, terminating retiring) Evaluating employees: Performance appraisal Training and development Employee compensation Salary, wage, incentives, benefits Unionization: employee and management perspectives Collective bargaining process Exam: Key Topics 50 The role of marketing Product, sales and marketing concepts Challenges in contemporary marketing Customer decision process & buying behavior Consumer market vs. organizational market Steps in stratetigc marketing planning Marketing strategy and its dimensions Marketing mix: product, price, distribution, promotion Example Questions: 51 In the workplace, motivation can be assessed by measuring four indicators: satisfaction, engagement, rootedness, and ________. A) intelligence B) commitment C) creativity D) work performance Example Questions: 52 Workplace factors such as health insurance, pension plans, and retirement benefits would satisfy which of the following needs in Maslow's hierarchy? A) safety needs B) social needs C) esteem needs D) physiological needs Example Questions: 53 ________ suggests that employee satisfaction depends on the perceived ratio of inputs to outputs. A) Herzberg's two-factor theory B) David McClelland's three needs theory C) Expectancy theory D) Equity theory Example Questions: 54 Carrey works as a bank teller who handles deposits and disbursement. In an attempt to improve her motivation, Carrie's manager asks her to distribute traveler's checks and sell certificates of deposit as well. Though the additional tasks are not more challenging than what Carrey has been doing, they give her more to do. This is an example of ________. A) job enrichment B) cross-training C) job enlargement D) benchmarking Example Questions: 55 John stayed late in order to finish up a project. When his manager found the completed project on her desk, she immediately sent John an email praising his good work and thanking him for going the extra mile. In this example, John's manager uses ________. A) transactional analysis B) cognitive restructuring C) negative reinforcement D) positive reinforcement Example Questions: 56 ________ refers to a statement of the tasks involved in a given job and the conditions under which the holder of a job will work. A) Job specification B) Job description C) Succession planning D) Job analysis Example Questions: 57 Quality of hire measures ________. A) the amount of money spent in hiring and training new employees B) the level of productivity of employees in the probationary period C) how closely incoming employees meet the company's needs D) the percentage of the workforce that leaves every year Example Questions: 58 Salary differs from wages in that the salary ________. A) falls under the purview of a certain law B) is based on a fixed amount per year C) relates to exempt employees D) is paid by the unit of time Example Questions: 59 ________ refers to an incentive program that rewards employees for meeting specific, individual goals. A) Pay for performance B) Knowledge-based pay C) Salary D) Commission Example Questions: 60 ________ refers to a company-sponsored counseling or referral plan for employees with personal problems. A) Health savings accounts B) Employee assistance program C) High-deductible insurance D) Retirement plans Example Questions: 61 ACZ Pharmaceuticals, an American multinational pharmaceutical corporation, conducts "HIV/AIDS Awareness" camps in various cities across the United States. The firm also uses this campaign to promote its latest range of drugs. In this example, ACZ Pharmaceuticals uses ________. A) place marketing B) social commerce C) stealth marketing D) cause-related marketing Example Questions: 62 ________ utility is the benefit provided by making the company's products available where customers want to purchase them. A) Form B) Possession C) Place D) Time Example Questions: 63 Creating new goods and services for a firm's current markets is called ________. A) market penetration B) product development C) market development D) diversification Example Questions: 64 Majestic Shoes Inc., an international shoes and footwear manufacturing firm, groups its customers according to the region in which they live. The firm markets its range of waterproof, cold-weather footwear in mountainous regions. In this example, Majestic Shoes Inc. uses which of the following targeting strategies? A) demographic segmentation B) psychographic segmentation C) horizontal integration D) geographic segmentation Example Questions: 65 Which of the following is true about concentrated marketing? A) It ignores differences among buyers. B) It refers to firms that use the same marketing mix for the entire market. C) It allows a firm to focus all its time and resources on a single type of customer. D) It refers to firms that use a different marketing mix for each marketing segment.