Marketing Option
Key Marketing Concepts
Marketing is an exciting field of study with a wide range of topics. In the Marketing curriculum, information
on the following topics will be covered extensively. These topics will be introduced in the MKT 170 course
and then reinforced throughout all the other marketing option courses. In future classes it will be expected
that you know this material, with each course extending some of these issues. It is expected that you will
become familar with the following;
1 2 3 4
5 6 7 8
9 10 11 12
The “Marketing
Concept” and its
linkages with
satisfaction, quality,
value and profitability.
The “Marketing
Management Process”
and its integration of
marketing activities.
The
Theprocess
processofofmarket
market
segmentation,
segmentation,targeting
targeting
and
andpositioning
positioning.
The environmental
forces that affect a
company’s ability to
serve its customers in
domestic and international markets.
How
to collect
and
The
macro
and micro
utilize marketing
environmental
forces
knowledge
for
that
affect a company’s
decision
making.
ability
to serve
its
customers in domestic
and international
markets.
The to
major
factors
How
collect
and
that
influence
utilize marketing
buyer behavior.
knowledge
for
decision making
Personal selling
activities and the steps
involved before,
during and after
a transaction.
Characteristics
The
“Innovationand
shape of the
“Product
Adoption
Curve”
and
Lifecorresponding
Cycle.”
the
percentages within
each category
Thegrowth
“Innovation
The
Adoption Curve”
and
opportunities
available
the
corresponding
to firms that want
topercentages
expand. within
each category.
“Marketing Math”
and an understanding
of the importance of
numerical calculations in the field
calculations
in the
of marking.
field
of marking.
The definition and
scope of marketing.
marketing
Marketing Option Key Marketing Concepts
The growth
opportunities available
to firms that want
to expand.
January 2005
The Definition of Marketing
Producers
Marketing
Activities
Consumers
American Marketing Association Definition of Marketing:
Marketing is an organizational function and a set of processes for creating, communicating
and delivering value to customers and for managing customer relationships in ways that benefit
the organization and its stakeholders.
Marketing Option Key Marketing Concepts: Model 1 of 12
January 2005
The Marketing Concept
Customer
Satisfaction
Total
Company Effort
The
Marketing
Concept
Profit as an objective
(or other measure of
long term success)
Marketing Option Key Marketing Concepts: Model 2 of 12
January 2005
The Marketing Management Process
Business
Mission Statement
Objectives
Situation or
SWOT Analysis
Marketing Strategy
Target
Market Strategy
Implementation,
Evaluation, and Control
Market
Marketing Mix
Place
Product
Price
Marketing Option Key Marketing Concepts: Model 3 of 12
Promotion
January 2005
Growth Opportunities
t
en ts
s
e c
Pr odu
Pr
ew ts
N duc
o
Pr
Present
Markets
Market
Penetration
Product
Development
New
Markets
Market
Development
Diversification
Marketing Option:Key Marketing Concepts: Model 4 of 12
January 2005
Market Segmentation, Targeting & Positioning
SEGMENTATION
A process that clusters groups of people that have common needs and will respond similarly to a marketing
action.
TARGETING
Targeting is the process of focusing marketing efforts on specific segments identified through the
segmentation process.
A Company’s
Marketing Efforts
POSITIONING
The process of communicating to target market segments how they should think about, view, or perceieve
an offering in relation to competitors.
“The new XG90 is the safe SUV
in its class.”
A Company’s
Marketing Efforts
“The new XG90 handles like a
sports car, not like a SUV.”
Marketing Option Key Marketing Concepts: Model 5 of 12
January 2005
r
og
So
cia
l/C
ul
tu
em
D
ra
l
Environmental Forces
h
ap
ic
Suppliers
Economic
Organization
Regulatory
Customers
al
m
gic
Co
lo
pe
tit
i
o
hn
ve
c
Te
Marketing Option Key Marketing Concepts: Model 6 of 12
January 2005
The Marketing Research Process
Identify Problems
& Opportunities
Conduct
Exploratory Research
Define Research Objectives
& Research Questions
Determine & Choose
Research Design
Develop Sampling Plan
& Questionnaire Design
Collect & Process Data
Analyze & Interpret Data
Present Findings
Learn from Results
and/or Take Actions
Marketing Option Key Marketing Concepts: Model 7 of 12
January 2005
The Consumer Behavior Process
Th
n
io
ot
ou
g
ht
Em
Problem Solving Process
Problem Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
r
io
av
h
Be
Marketing Option Key Marketing Concepts: Model 8 of 12
En
vir
Cu onm
ltu en
re t &
Post-Purchase Behavior
January 2005
The Personal Selling Process
Prospecting
Pretransaction
(Precall Planning)
Preapproach
Approach
Needs Assessment
Transactional
(Interaction Phase)
Presentation
Meeting Objections
Gaining Commitment
Post - Transaction
Marketing Option Key Marketing Concepts: Model 9 of 12
Follow-Up & Services
January 2005
The Product Life Cycle
Dollars
Product Category Sales
Product Category Profits
0
Time
Market Introduction
Market Growth
Market Maturity
Sales Decline
Gain Awareness
Stress Differentiation
Maintain Brand Loyalty
Harvest/Delete
Competition
Few
More
Many
Reduced
Product
One
More Versions
Full Product Line
Best Sellers
Skimming or
Penetration
Gain market share, deal
Defend market share, profit
Stay Profitable
Inform, educate
Stress points of difference
Reminder oriented
Minimal Promotion
Limited
More outlets
Maximum outlets
Fewer Outlets
Product Life Cycle
Stages
Marketing Objectives
Price
Promotion
Place
Marketing Option: Key Marketing Concepts: Model 10 of 12
January 2005
Marketing Option Key Marketing Concepts: Model 11 of 12
Laggards or Nonadopters (5-16%)
Late Majority (34%)
Early Majority (34%)
Early Adopters (10 - 15%)
Innovators (3 - 5%)
Percentage of Adopters
The Innovation Adoption Curve
Time
January 2005
Marketing Math: Fundamentals of Profit,
Break-even & Pricing
PROFIT
is the amount of money earned over the expenses incurred. When provided with price, quantity and cost
information, you should be able to algebraically solve the equation if any one piece of information is missing
(i.e. you can calculate the selling price if given profit, quantity, fixed costs & unit variable costs).
Profit
Total Revenue = Price x Quantity
Return
=
Total Costs = Fixed Costs + (Unit Variable Costs x Quantity)
on Sales
Total Revenue
Profit = Total Revenue - Total Costs
Therefore,
Profit = (Price x Quantity) - [Fixed Costs + ( Unit Variable Costs x Quantity)]
MARGINS
When selling a product, the contribution margin (sometimes called gross margin) is the amount left over
after you have covered the costs of the good sold. Contribution margin is often expressed as a percent
Contribution Margin in Dollars = Price - Unit Variable Cost
Markup
Percent
=
Price - Unit Variable Costs
Price
BREAK - EVEN
is the point at which the revenue generated from sales equal the total costs.
=
Fixed Costs
(Price - Unit Variable Costs)
Break
Even
Point in
Dollars
=
1-
(
Fixed Costs
Unit Variable Costs
Price
(
Break
Even
Point in
Units
PRICING
Price based on Markup on Cost
Desired
Selling
Unit Variable Cost (1 + Markup Percent)
Price
Price Based on Return from Price
Desired
Unit Variable Cost
Selling
1 - Desired Return Percent on Price
Price
Markup
as a
percent
of cost
Markup
as a
percent
of price
=
=
Dollar Markup
Cost
Marketing Option Key Marketing Concepts: Model 12 of 12
=
=
Dollar Markup
Price
January 2005