Marketing Principles

General Knowledge:Definition: An activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large.Needs: States of felt deprivation.Wants: The form taken by human needs as they are shaped by culture and individual personality.Demands: Human wants that are backed by buying power.Customer Value: The difference between the values the customer gains from owning and using a product and the costs of obtaining the product.Customer Satisfaction: The extent to which a product’s perceived performance matches a buyer’s expectations.Exchange: the underlying theory of marketing, and explains why we need to work in order to get the things we want. “The act of obtaining a desired object from someone by offering something in return”Transaction: A trade between two parties that involves at least two things of value, agreed-upon conditions, a time of agreement and place of agreement.Relationship marketing: the process of creating, maintaining and enhancing strong, value-laden relationships with customers and other stakeholdersFOUR P’s: PRODUCT – PRICE – PLACE – PROMOTION

Marketing Challenges in the 21st Century:Marketing accountabilityImplementation of stronger market orientationThe new marketing landscapeGrowth of non-profit marketingRapid GlobalisationInformation Technology and electronic marketingThe changing world economyThe call for ethical behaviour and social responsibility

1. PRODUCT & SERVICEVarietyQualityDesign featuresBrand namePackagingSizesAdd-onsWarrantiesReturns

2. PRICEList priceDiscountsAllowancesCredit terms

3. PEOPLEPeople interacting with peopleis how many service situations might be describedRelationships are important in marketing

4. PROCESSIn the case of ‘high-contact’services, customers are involved in the process.Technology is also importantin conversion operations andservice delivery

5. PHYSICAL EVIDENCEServices are mostly intangible.Thus the meaning of other tools &techniques used in measures of satisfaction are important

6. PLACEMENTFor customer serviceDemand chain managementLogistics managementChannel management

7. PROMOTIONAdvertisingPersonal sellingDirect marketingSynchronous marketing

TARGET CUSTOMERSINTENDED POSITIONING

Marketing concepts:

1. Production: available, affordable products. Mgmt stresses increased production and efficiency.

2. Product: Emphasis on high quality, performance and features. Mgmt seeks to continuously improve the product.

3. Selling: consumers won’t purchase or want a product unless org maximises marketing/promotion efforts

4. Marketing: goals depend on determining needs and wants in order to increase customer satisfaction

5. Societal Marketing: goals depend on determining needs/wants in order to increase customer satisfaction, with a society/community outlook: emphasis on environmental sustainability.

Marketing Process Model: 1. Understand needs and wants

- Research the market/customers/potential customers- Mgmt of data & mktg info

2. Design marketing strategy - Select target market & segmentation- Decide value proposition – differentiation/positioning

3. Integrated marketing program- Product/service design & branding- Pricing- Distribution- Promotion- Essentially 4 or 7P’s. Other P’s: Process, Physical evidence, Personnel

4. Build profitable relationships- CRM- Partner relationship – Mktg relationships

5. Capture Value- Create profits, loyalty- Capture customer lifetime value- Increase market share

Strategic Planning – Strategic fit between goals & capabilities & changing opportunities 1. Planning

- Strategic plans- Marketing plans

2. Implementation- Carry out plans

3. Control- Measure results- Evaluate - Take corrective action Process begins again (continuously).

4. Analysis takes place at each step

Marketing Plans1. Executive Summary2. Current mktg situation: distributions, microenvironment, product, market, competition3. SWOT & Issue analysis4. Objectives: financial & mktg goals: sales goals, market share, profit goals5. Mktg strategy: Mktg approach – Broadly6. Action Programs: specific programs for specific objectives7. Projections: profit/loss statement8. Controls: monitoring

Macro environment:1. Demographic2. Economic3. Natural 4. Technological5. Political6. Cultural

Marketing research process1. Defining problem/research objectives2. Developing research plan for collecting info

- Determine specific needsi. Demographics

ii. Consumer attitudesiii. Forecasts

- Gather secondary data – info already exists, initially gathered for another purposei. Internal sources

ii. Gov’t publicationsiii. Periodicals/booksiv. Commercial data

- Plan primary data collectionsi. Approaches

a) Observationalb) Surveysc) Experiments

ii. Contact methodsa) Mailb) Telephonec) Personal

iii. Instrumentsa) Questionnaireb) Mechanical devices – people metres, scanners

- Presenting the plani. Including costs & time frames

3. Implementing research plan- Collecting date- Processing info- Analysis info gathered

4. Interpretation and reporting of findings

Consumer Behaviour 1. Marketing Stimuli

- 4/7 P’s2. Other Stimuli

- External Forces3. Buyers black box

- Buyer characteristics- Buyer decision process

4. Response- Product/service choice- Brand choice- Dealer- Timing

Buyer Characteristics1. Internal

- Psychologicali. Motivations

ii. Perceptionsiii. Learningiv. Beliefs

- Personali. Age

ii. Life cycleiii. Occupationiv. Education v. Economic status

vi. Lifestyle2. External – buyer environment

- Culturali. Culture

ii. Social class- Social

i. Householdii. Reference groups

iii. Roles/status- Marketing efforts

i. Objectivesii. Strategies

iii. Mktg mix- Environmental influences

i. Economic climateii. Technology

iii. Political

Buyer Decision Behaviour 1. Complex Buying

- High Involvement- Significant differences between brands

2. Dissonance Reducing- High involvement,- Little differences between brands

3. Habitual- Low involvement - Few differences

4. Variety Seeking- Low involvement - Significant differences

Buyer Decision Making Process (Existing product) 1. Need recognition2. Information Search

- Personal reference points- Commercial sources

3. Evaluation of alternatives4. Purchase decision5. Post purchase behaviour

- Satisfaction levels- Repurchases

Buyer Decision Making Process (New product) 1. Awareness2. Interest3. Evaluation4. Trial5. Adoption

Three Stages of Marketing1. Mass marketing: mass produced, mass distributed, mass promoted – 1 product to the whole

market2. Product variety mktg: 2+ products to different group with different marketing strategies 3. Target mktg: identification of segments, 1 chosen to target

3 steps of target marketing:1. Market segmentation: distinct groups of buyers with different needs & behaviours

- Indentify bases for segmenting- Develop profiles of segments

2. Market targeting: selecting most attractive segment to target- Develop measures of segment attractiveness- Select target segments

3. Market position: setting competitive positioning (customer perception of value) & mktg mix- Develop positioning strategy for each segment- Develop mktg mix for each target segment

Segmentation:1. Geographical

- Region, City size, Density, Climate2. Demographic:

- Age, Sex, Family size, Lifecycle, Income, Occupation, Education, Religion, Nationality3. Psychographic:

- Socio economic, Values, Attitudes, Lifestyle, Personality4. Behavioural:

- Purchase occasion, Benefits sought, User status, Usage rate, Loyalty

Differentiation/Positioning: the way a product is defined/perceived by consumersPositioning strategies:

- Product attributes- Benefits- Usage occasions

- Users- Against Competitors- Away from competitors- Product classes

1. Identify customer value differences i.e. Competitive Advantage2. Select the right competitive advantage3. Select overall positioning strategy4. Positioning Statement

Perceptual Map:

Organisation differentiation by:1. Product Differentiation

- Features, performance, consistency, durability, reliability, reparability2. Services Differentiation

- Delivery, installation, repair services, customer training, consultation3. Personnel Differentiation

- Highly trained, courteous, professionalism, knowledgeable, accuracy4. Image differentiation

- Image constructs a strong, singular, distinctive message of org/product- Takes time: golden arches, apple, red kangaroo - from persistence in the market- Endorsements: high profile people able to convey the distinctive message

PRODUCT:

Definition: Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a need or want. It includes physical objects, services, persons, places, organisations and ideas.

Three levels of Products: Core Product – problem solving services or core benefit that consumers are really buyingActual Product – quality level, features, styling, brand name & packagingAugmented Product – additional consumer services & benefits built around the core & actual

Product Classifications: Consumer Products: bought by final consumers for personal consumption.

Convenience: bought frequently, immediately, with minimum comparison and effortShopping: process of selection, comparison & purchaseSpecialty: unique characteristics, brand ID, significant group of buyers willing to make a special purchase. E.g. luxury carsUnsought: consumers either don’t know about or don’t think about purchasing, e.g. life insurance.

B2B Products: bought for further processing or for use in conducting a business. `

Concepts relating to marketing strategies e.g. Product Life Cycle Bling H2o Case Study