Class 6 - February 17, 2011

This week we discussed Chapter 8, Decision Support Systems and Marketing Research.

A decision support system (DDS) is an interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions.  DDS's are interactive, flexible, discovery-oriented, and accessible.  The fastest growing use of DSS's is for database marketing, which is the creation of a large computerized file of customers' and potential customers' profiles and purchase patterns.  It is usually the key tool in one-on-one marketing.

Marketing research  is the process of planning, collecting, and analyzing data relevant to a marketing decision. 

Marketing Research:

1. Marketing Research Problem - Determining what information is needed and how that information can be obtained efficiently and effectively.
2. Marketing Research Objective - The specific information needed to solve a marketing research problem; the objective should provide insightful decision-making information.
3. Management Decision Problem - A broad-based problem that  requires marketing research in order for managers to take proper actions.

There are several ways to conduct a research project.  It is important that one uses the best way for the information they are trying to achieve.  Not all data is the same and not all forms of collecting data will work best in all situations.  You need to pay attention to what you are trying to figure out and decide which strategy is best for that particular question, whether it be primary data, secondary data, interviews, surveys, or by whichever means you choose.

Class 5 - February 10, 2011

This week we discussed Chapter 7, Segmenting and Targeting Markets.

In class we discussed in great detail market segmentation.  To begin, a market is people of organizations with needs or wants and with the ability and willingness to buy.  A market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.  And the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups is called  market segmentation.  Market segmentation helps markets define customer needs and wants more precisely. 

Marketers segment markets for 3 main reasons:

1. Segmentation enables marketers to identify groups of customers with similar needs and to analyze the characteristics and buying behavior of these groups.
2. Segmentation provides markets with information to help them design marketing mixes specifically matched with the characteristics and desires of one or more segments.
3. Segmentation is is consistent with the marketing concept of satisfying customer wants and needs while meeting the organization's objectives.

To be useful, a segmentation scheme must produce segments that meet four basic criteria:

1. Substantiality:  A segment must be large enough to warrant developing and maintaining a special marketing mix.
2. Identifiability and measurability:  Segments must be identifiable and their size measurable.
3. Accessibility:  The firm must be able to reach members of targeted segments with customized marketing mixes.
4. Responsiveness:  Markets can be segmented using any criteria that seem logical. 

Marketers use segmentation bases, or variables, which are characteristics of individuals, groups, or organizations, to divide a total market into segments.  Consumer goods marketers commonly use one or more of the following characteristics to segment markets:

• geography:  region of a country or the world, market size, market density, or climate.
• demographics:  age, gender, income, ethnic background, and family life cycle.
• psychographics:  personality, motive, lifestyles, and geodemographics (combination of geographic, demographic, and lifestyle segments).
• benefits sought:  grouping according to benefits they seek from the product.
• usage rate: amount of product bought or consumed. -- 80/20 principle:  20% of all customers generate 80% of the demand.

I learned that I will need to pay close attention to these details as I start to market my services to be sure that I am focusing on the right groups of people and not wasting time and money marketing to the wrong groups.

Class 4 - February 3, 2011

This week we discussed Chapter 5, Consumer Decision Making.

One of the things I took away from this class was the 5 steps of the consumer decision-making process. 

1. Need Recognition - the imbalance between present state and preferred state - internal and external stimuli.
2. Information Search - Internal search is to recall from memory.  External search is using outside sources.   When you know more about the subject, it is less risky, where as the less information you know about the subject, the more risky it is.  You eventually end up with an evoked set, the group of brands from your search to choose from. 
3. Evaluation of Alternatives - This is where you narrow down from your evoked set.  You can either pick an attribute and exclude all the products in the set without that attribute or use cutoffs.  Cutoffs are either minimum or maximum levels of an attribute that an alternative must pass to be considered.
4. Purchase - Marketing tells the purchaser what attributes the product has to achieve your objective.
5. Post Purchase Behavior -  When people recognize inconsistency between their values or opinions and their behavior, they tend to feel an inner tension called cognitive dissonance, also referred to as buyers remorse. 

Another thing I found really interesting was Maslow's Hierarchy of Needs.  It is a method of classifying human needs and motivations into five categories in ascending order of importance. 

1. The base level is psychological needs - food, water, and shelter.  Because these are the basic needs, they must be met first. 
2. The second is safety needs - security and protection.  Marketers sometimes appeal to consumers' anxieties and fears about safety to sell their products.
3. The third is social needs - a sense of belonging or love.  Marketers probably appeal more to this need than any other.  Teens especially want to belong to the in crowd and marketers appeal brands for them to this need.   
4. The fourth is esteem needs - self-esteem, recognition and status.  This also includes prestige, fame, and recognition of one's accomplishments.  Marketers know that Asians especially are strongly motivated by status, thus they spend freely on premium brands.
5. The top level is self-actualization needs - self-development and self-realization.  This is the point where people feel that they are what they should be.  Although Maslow felt that very few people ever attain this level, advertisers may focus on this type of need.

I will want to make sure that, as I sell my clients my services, that they feel that they are making the right choice.  I will need to inform them, in detail, of what I will be doing for them, especially those that know less information about it and will view my service as more risky than others might.

Class 3 - January 27, 2011

This week we discussed chapter 3, Social Responsibility, Ethics, and the Marketing Environment.  There were two major things I took away from this class:

The first is about sustainability.  Sustainability is the idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profits and help the world at the same time. Total corporate social responsibility has four components: economic, legal, ethical, and philanthropic.   What seems to be so obvious that it gets overlooked, is that a company must be economical to be profitable.  Profitability is the foundation of the Corporate Social Responsibility pyramid.  Sometimes people try too hard to make their customers happy, that they lower their prices too low to be profitable.  If you do that too much, you won't stay in business. 

Another major part to the pyramid is ethics in business.  Ethics refers to the moral principles or values that generally govern the conduct of an individual or a group.  Morals are the rules people develop as a result of cultural values and norms.  One of the best ways to prevent future ethical problems in your company is to create a code of ethics, one that is neither too vague or too detailed.  This will help all of the employees to know what is right and wrong. 

The second major thing I took from this class was the demographic factors - the generations. 

• Tweens, ages 8 - 14.  They spend on average $39 billion annually, with their parents spending an additional $150 billion.  They tune out during commercials because they're boring.
• Generation Y, those born between 1979 - 1994.  They spend nearly $200 billion annually.  They are impatient, family -oriented, inquisitive, opinionated, ethically diverse, good time managers, street smart and connected through social networks.
• Generation X, those born between 1965 - 1978.  They are the first group of latchkey kids, from dual income homes, and half come from divorced or separated parents.  Over the past 30 years, they have earned 60% more than any other age group, but still tend to be ignored by advertising companies.
• Baby Boomers, those born between 1946 - 1964.  They are the largest demographic of today's population.  They are expected to have more than 60% continue working past retirement age.  They have more than $1 trillion spending power per year.  They are, in some cases, more willing to brand hop than younger ages.

The most important part of this chapter that I will use in my business is the ethical part.  I am going to start a human resource firm when I am done with school and you have to be ethical and honest with your clients, especially when you're dealing with their money.

Class 2 - January 20, 2011

Although I was not there for class this week - we were playing at Disney Land this week - I did read the chapter and go over the professor's PowerPoint presentation.

This week was about chapter 1 in the book: An Overview of Marketing. 

According to the American Marketing Association, marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. 

The thing I found most interesting about this chapter was learning the difference in sales and marketing.  While I knew that they were not the same thing, it was interesting to really find out the different roles they play in business.

Marketing is a process that focuses on delivering value and benefits to customers, not just selling goods services, and/or ideas.  The differences between sales and marketing can be compared in 5  characteristics:  the organization's focus, the firms business, those to whom the product is directed, the firms primary goal, and the tools used to achieve those goals. Sales teams mainly have an "inward looking" focus on what the organization makes rather than what the market wants.  Marketers focus on building relationships with the customers through customer-oriented personnel, training, empowerment and teamwork.  A sales-oriented firm defines its business in terms of goods and services, where as marketers define it in terms of the benefits the customers seek.  A sales-oriented organization directs its products at "everybody" or "the average customer"; whereas a marketing-oriented organization aims at specific groups of people.  The primary goal of sales-oriented organizations seek to achieve profitability through sales volume and place a higher premium on making a sale than on developing a long term relationship with the customer; whereas the market-oriented organizations' goal is to make a profit by creating customer value, providing customer satisfaction, and building long term relationships with customers.  Sales-oriented organizations seek to generate sales through tools such as intensive promotional activities, mainly personal sales and advertising; whereas market-oriented organizations recognize that promotions decisions are only one of four basic marketing mix decisions that have to be made.

While I knew there was a difference in the two, it was interesting to learn why and exactly how they are different.  I will want to use good marketing skills to sell my clients the services they need and not ones that will not benefit them just for the sale.

Class 1 - January 13, 2011

This was my first marketing class.  The teacher seems to be very well educated in marketing and seems like a teacher we will all learn a lot from this semester.  The first night he went over the basics of marketing and what we would be learning in this class.  We are going to be required to open accounts in several social networking sources, which will be great to learn how to use the ones I currently don't have an account with.  This class seems like it will be a great class and very informative.