BA 590

Basic Marketing
Concepts
Overview
 BA 590 Marketing Review Modules

• Marketing Concepts
• Customer Needs
• Industry Competition
• Target Marketing, Segmentation,
and Marketing Research
• New Product Development and
Sales
1-5
 BA 590

Module 1

Basic Marketing
Concepts
The Marketing Concept
Customer
Customer Total
Total Company
Company
Satisfaction
Satisfaction Effort
Effort

The
Marketing
Concept

Profit
Profit
 Utility and Marketing
From Production
Time
Time
Form
Form

Utility
Utility
Value
Value that
that comes
comes Place
Place
from
from satisfying
satisfying
human
human needs
needs

Task
Task
Possession
Possession

Exhibit 1-1 From Marketing

1-6
 Customer Value

Costs Benefits
• One customer’s views may vary from another
customer’s view, so firm may not be able to satisfy
everybody
• Customer value concept takes the customer’s point
of view, but customers may not explicitly weigh
costs and benefits
 The Marketing Management Process

Whole-Company
Whole-Company
Strategic
Strategic
Management
Management
Planning
Planning

Adjust Plans Marketing

As Needed Marketing
Planning
Planning

Control
ControlMarketing
Marketing Implement
ImplementMarketing
Marketing
Plan(s)
Plan(s) and
andProgram
Program Plan(s)
Plan(s)and
andProgram
Program
The Four Ps of the Marketing Mix

Product Place

C
Price Promotion
 Four P’s Strategy Decision Areas
Product Place Promotion Price
Physical Goods Objectives Objectives Objectives
Service Channel Type Blend Flexibility
Features Market Exposure Salespeople Level over PLC
Quality Level Kinds of Kind Geographic Terms
Accessories Middleman Number Discounts
Installation Kinds and Selection Allowances
Instructions Locations of Training
Warranty Stores Motivation
Product Lines How to Handle Advertising
Packaging Transporting and Targets
Branding Storing Kinds of Ads
Service Levels Media Type
Recruiting Copy Thrust
Middlemen Who Prepares?
Managing Sales Promotion
Channels Publicity
 Marketing Strategy Planning Process

Narrowing down to focused strategy with screening criteria

Customers
Segmentation Product Place
S. & Targeting
W. Target
Company O. Market
T. Differentiation
& Positioning Price Promo

Competitors

External Market Environment

 SWOT Analysis

Strengths Opportunities

Internal Strategy External

Factors Planning Factors

Weaknesses Threats

18-5
 Strategy Planning for Advertising
Target Market

Product Place Promotion Price

Personal Mass Sales

Selling Selling Promotion

Advertising Publicity

Target Kind of Who will do

Media types Copy thrust the work?
audience advertising
Exhibit 15-1
15-3
 Basic Promotion Methods

Target
Market

Product Place Promotion Price

Personal Mass Sales

Selling Selling Promotion

Advertising Publicity

Exhibit 13-1
13-3
 Pricing Objectives
Target
Return
Profit
Oriented Maximize
Profits

Dollar or Unit
Sales Growth
Pricing Sales
Objectives Oriented Growth in
Market Share

Meeting
Competition
Status Quo
Oriented Nonprice
Competition
Exhibit 16-4
16-4
 Strategy Planning for Price
Target
Market

Product Place Promotion Price

Pricing
objectives

Geographic
Discounts and
Price levels term —
Price allowances—
over product who pays
flexibility to whom and
life cycle transportation
when
and how

Exhibit 16-1
16-3
 Key Factors That Influence Price Setting

Pricing
objectives
Price of other
Price flexibility
products in the line

Discounts and
Demand allowances
Price
setting
Cost Legal
environment

Geographic
Competition
pricing terms
Markup chain
in channels
Exhibit 17-1
17-3
 Markups
50.00

30.00

24.00 Markup = 20.00 = 40%

Markup = 6.00 = 20%

Markup = 2.40 = 10% Cost = 30.00 = 60%

Cost = 24.00 = 80%
Cost = 21.60 = 90%
Producer Wholesaler Retailer
Exhibit 17-2
17-4
 BA 590

Overview of Module 2

Customer Needs
 A Model of Buyer Behavior
Marketing Mixes All Other Stimuli

Psychological Social Purchase

Variables Influence Situation
Motivation Family Purchase Reason
Perception Social Class Time
Learning Reference Groups Surroundings
Attitude Culture
Personality/Lifestyle

Person
Making
Decision
Problem-Solving Process

Exhibit 5-2
5-5 Person Does or Does Not Purchase (Response)
 The PSSP Hierarchy of Needs

Personal
Needs

Social Needs

Safety Needs

Physiological Needs

Exhibit 5-4
5-6
 The Consumer Problem Solving Process
Marketing mixes All other stimuli

Psychological Purchase Situation

Social Influences
Variables
Person making
decision
Need-want Awareness

Routinized Response
Information Search
Feedback of
information
Set Criteria as attitudes

Decide on Solution

Postpone Purchase Product

Decision Postpurchase
Exhibit 5-9 Evaluation
5-13 Response
 Levels of Problem Solving
Low involvement High involvement
Frequently purchased Infrequently purchased
Inexpensive Expensive
Little risk High risk
Little information needed Much information desired

Routinized Limited Extensive

Response Problem Problem
Behavior Solving Solving

Low Involvement High Involvement

Involvement Continuum

Exhibit 5-11
5-14
 BA 590

Overview of Module 3

Industry
Competition
 The Competitive Environment

Kinds of Markets

Competitor Analysis
Key
Concepts
in the Competitive Rivals
Competitive
Environment
Competitive Barriers

Information on Competitors

4-6
 Types of Retailers
Expanded
Specialty shops and
assortment department stores
and service

Expanded
assortment Supermarkets, discount
houses, mass-merchandisers,
Single- and/or reduced supercenters
Conven- and margins/service
tional limited-
offerings line
Added Telephone/mail order,
stores
convenience vending machines,
higher margins door-to-door, convenience
less assortment stores, electronic shopping

Expanded
assortment Internet
reduced margins
Exhibit 12-1 more information
12-4
 Types of Wholesalers
Does wholesaler own
the products?
Yes (merchant wholesaler) No (agent middleman)

How many functions does

the wholesaler provide?
Agent middlemen
Some functions

Limited-function
merchant
All the functions Wholesalers

Service
merchant
wholesalers
Exhibit 12-5
12-9
 Four Examples of Basic Channels of
Distribution for Consumer Products
Manufacturer or producer

Del Procter &

Citibank Nissan
Monte Gamble

Wholesaler Wholesaler

Wholesaler

Retailer Retailer Retailer

Consumer
Exhibit 10-2
10-5
 BA 590

Overview of Module 4

Target Marketing,
Segmentation &
Marketing Research
 Market Segmentation

A. Product-market showing B. Product-market showing

three segments six segments
Status dimension

Status dimension

Dependability dimension Dependability dimension

 Marketing Information Systems
Information Questions Decision
Sources and Answers Maker Results

New Information
Marketing
Market
Models
Research Answers
Studies
?
Inputs Marketing
Internal Decision
Data Databases Support Manager Outcomes
Sources System Decisions
(DSS)

External
Data Information
Sources Technology
Specialists

Exhibit 7-1 Feedback

7-3
 Marketing Research Process
Early
Identification
of
Solution

Getting
Defining Analyzing Inter- Solving
Problem-
the the preting the
Specific
Problem Situation Data Problem
Data

Feedback to Previous Steps

Exhibit 7-2
7-4
 Sources of Data

Inside Company
Secondary
Data
Sources
Outside Company
All
Data
Sources
Observation
Primary
Data
Sources
Questioning

Exhibit 7-3
7-5
 BA 590

Overview of Module 5

Product
Development
 The Adoption Curve
Early Early Late Laggards/
Innovators
Adopters Majority Majority Nonadopters
(3-5%)
(10-15%) (34%) (34%) (5-16%)
90
Percent Adoption

50

20

5
0
Exhibit 13-7
13-14 Time
 The Adoption Curve

• Innovators:
• First to Adopt, Eager to Try
• Young, Well-Educated, Mobile
• Seek Info from non-salesperson Sources
• Early Adopters
• Opinion Leaders
• Greater Contact with Salespeople
• Word-of-Mouth
 The Adoption Curve

• Early Majority:
• Avoid Risk, Try Only if Others Have
Usually are Not Opinion Leaders
• Late Majority:
• Cautious About New Ideas, Older
and More Set in Their Ways
• More Subject to Peer Pressure
 The Adoption Curve

• Laggards:
• Suspicious of New Ideas
• Do Things the Way that They Have
Always Been Done
 The Product Life Cycle

Market Market Market Sales

Introduction Growth Maturity Decline

Total Industry
Sales

Total Industry
Profit
$0
Time
–

Exhibit 9-1
9-3
 Defining “Product”
Target Market

Product Place Promotion Price

Product
Brand Package Warranty
Idea

Physical
good/service Type of Brand:
Features Individual or Protection,
Quality level family Promotion, None, full, or
Accessories Manufacturer or or both limited
Installation dealer
Instructions
Product line
Exhibit 8-1
8-3
The Transporting Function

Truck
Rail
Modes
of
Transportation

Air
Pipeline

Water
 Push-Pull Strategies

Producer’s Promotion Blend

Personal Selling, Sales Promotion, Advertising, Publicity

Promotion to
Channel Members
Wholesaler Wholesaler
Promotion Promotion
Business Customers

Push Push

Final Customers
Promotion to

Promotion to
Retailer
Promotion
Push

Business Final
Customer Consumer
Pull Pull
Exhibit 13-6
13-13