Study_Notes__Grewal___Levy__Chapters_1-6

MAR 101 Study Notes (Grewal & Levy) Chapters 1-6 Chapter 1: Overview of Marketing - Marketing is the activity and processes for creating, capturing, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large (p. 4). Understand customer needs and wants

Design customer driven strategy

Marketing program that delivers value

Profitable customer relationships that delight

Capture value from customer to create profits

- Marketing requires a good marketing mix or the 4 P’s: product (creating), price (capturing), place (delivering) and promotion (communicating) (p. 6-10). - Marketing can be done by both organizations (B2B) and individuals (C2C) (p. 11-12). - Traditionally there have been three orientations to the market: production concept, selling concept, and marketing concept. To be successful companies need to focus not only on the marketing concept, but carry their plans even further to focus on value based marketing so that they can build strong customer relationships to capture value (profits) from customers in return (p. 13-14). - Marketing is all about developing sustainable profitable customer relationships that deliver value to the customer and create customer satisfaction. Value can be difficult for marketers to determine and is that which is perceived by the customer based on their evaluation of the benefits they will receive (p. 17-18). - Customer Relationship Management (CRM) is one of the most important concepts of modern marketing (p. 18). - Marketing is important in our society. It expands our global presence; it is pervasive across organizations and the supply chain; it makes our life easier and enriches society (p. 18-23). Chapter 2: Developing Marketing Strategies and a Marketing Plan - A marketing strategy identifies a firm’s target market, the 4 P’s and the bases upon which to build a sustainable competitive advantage which is an advantage over the competition that is not easy to copy (p. 32-33). - The four basic strategies for competitive advantage are (p. 33-38): - Customer excellence - Operational excellence - Product excellence -1-

- Locational excellence - In order to develop a value and market orientation, companies need to do strategic planning and define a market oriented mission and marketing plan. They need to see where they’ve been in order to see where they are going (p. 39-52). Step 1 Mission & Objectives

Step 2 Situation Analysis SWOT

Step 3 Identify Opportunities

Step 4 Implement Marketing Mix

Step 5 Evaluate -Portfolio Analysis

- The company mission then needs to be turned into objectives and goals for each level of management based and then marketing strategies are based to support the marketing objectives and goals. - SWOT Analysis (p. 56-57): Internal

External

Strengths -

Weaknesses –

Internal capabilities

Internal limitations

Opportunities –

Threats –

External factors

Current & emerging external factors

Positive

Negative

- Portfolio Analysis has different methods – a widely used method is the Boston Consulting Group’s (BCG) growth-share matrix (p. 51). High Market Growth Rate Low

Rising Star

Question Mark

Cash Cow

Dog

High Low Relative Market Share - There are issues with matrix approaches to strategic planning. Often it is difficult to define a Strategic Business Unit (SBU), and this method was traditionally in the hands of senior managers. Much of today’s strategic planning has been decentralized where individual business units create meaningful goals that match to the overall company’s goals. -2-

- Based on the strategic analysis company’s develop strategies for growth or downsizing (p. 52-55). Existing Product New Products Existing Markets New Markets

Market Penetration

Product Development

Market Development

Diversification

- Marketing Strategies should be customer centered with market segmentation, targeting, positioning and the marketing mix (product/price/place/promotion) centered around the customer (p. 56-59). Chapter 3: Marketing Ethics - Business ethics refers to the moral or ethical dilemmas that might arise in a business setting. Marketing ethics, in contrast, examines those ethical problems that are specific to the domain of marketing (p. 87). - The process of creating a strong ethical climate within a marketing firm includes having a set of values that guides decision making and behavior (p. 87). - People act unethically for a variety of reasons; we are influenced by our culture, our upbringing, and a host of other reasons (p. 90-91) Ethical Decision Making Framework (p. 94-101): Identify the Issues

Gather information and identify the stakeholders

Brainstorm and evaluate alternatives

Choose a course of action

- During this decision making process, there are some metrics that can be used to help structure the information and determine the right course of action. The book uses two different metrics:

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Chapter 4: Analyzing the Marketing Environment - Companies operate within a microenvironment (company, competition, corporate partners - suppliers, marketing intermediaries, customers) as well as a macroenvironment (culture, political/legal, economic, demographics, social, technology). They have to balance these forces within their planning (p. 125-134). - Each of these environments has their own special issues that marketers have to be aware of and sensitive to. - Changing demographics is one of the largest areas of concern for marketers and has created population groups within the market that have to be addressed individually based on their particular wants and needs: Seniors, Baby Boomers, Generation X, Generation Y (Millennials), and Tweens. - Culture has also played an increasing factor in shaping beliefs and values within the social macroenvironment.

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- Corporate Social Responsibility (CSR) refers to the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders (p. 134-140). - More and more companies are using the CSR Framework to report their CSR activities and companies are realizing that “doing good mean doing better.” (p. 138). Chapter 5: Consumer Behavior The Consumer Decision Process (p. 151): Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Postpurchase Behavior

- Needs can be both functional or psychological (p. 153). - Whether someone has an internal locus of control or an external locus of control can have an affect the research process (p. 154-155). - When evaluating the alternatives there are several “rules” that consumer might use to help them make a decision: - Compensatory decision rule - Non-compensatory decision rule - Heuristics - Elaboration Likelihood Method (ELM) - Post Purchase stress or “buyers remorse” is often called postpurchase dissonance or cognitive dissonance (p. 160-161). This is an area that marketers can a lot to relieve in order to create customer value and sustainable customer relationships. - There are four major factors that affect how consumers make a purchase decision (p. 162-172): - The Marketing Mix or 4 P’s - Social Factors or our family and reference groups - Situational Factors or store atmosphere - Psychological Factors or our motivations, attitudes, perceptions, and lifestyle (how we spend out time and money) - A marketer’s objective is to understand which factors may be relevant to his/her target market and plan accordingly. Marketers can make a difference if they help the consumer reduce dissonance (buyer’s remorse) by helping the consumer to feel good about the purchase (follow-up letter, etc.)

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Chapter 6: Business-to-Business Marketing The Business Decision Process (p. 187): Need Recognition

Product Specification

RFP Process

Analyze proposal & select vendor

Order Specification

Purchase

- Business markets differ from the consumer markets in that there are far fewer buyers but far larger buyers. Buying decisions are much more complex and formal and involve many more buyers. Long term relationships are important. - Businesses go through a more detailed buying decision process than do consumers that includes detailed product specifications, a proposal solicitation (RFP) and a supplier selection based on the proposal evaluation. Key to a business purchase is the implementation and performance review that analyzes what did or did not go as expected (p. 188-190). There are four major factors that affect how consumers make a purchase decision (p. 191199): - The Buying Center – the roles different people play in the purchasing process: - Gatekeepers – control the flow of information - Influencers - Users - Deciders - Buyers - The organization culture – the set of values and traditions of the organization and whether one person makes the decision or they seek opinions of others - The buying situation – what type of a purchase is it: - new buy - straight rebuy - modified rebuy - The internet – and how it influences the buying process

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