Intro to Marketing Lecture and Textbook Notes PDF

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Intro to Marketing Quiz Workshops (5x assignments) Test Exam Lecture One What is marketing? (chapter 1) Learning objectives Define marketing and outline the steps in the marketing process. Explain the importance of understanding customers and the marketplace and identify the five core marketplace co...

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Intro to Marketing Quiz - 15% Workshops - 30% (5x 5% assignments) Test - 20% Exam - 35%

Lecture One - What is marketing? (chapter 1) Learning objectives • Define marketing and outline the steps in the marketing process. • Explain the importance of understanding customers and the marketplace and identify the five core marketplace concepts. • Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. • Describe the main trends and forces that are changing the marketing landscape in this age of relationships. We define marketing as: ‘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”. • • • • • • • • •

communicating with customers and creating relationships creating a brand promoting products and services relationship management advertising pricing production placement creating value for consumers in multiple ways

Core marketing concepts • NEED - state of felt deprivation eg. hunger • WANT - shaped by culture and individual personality, satisfies a need • DEMAND - want combined with willingness and ability to pay Market offerings: goods services and experiences A market offering is a product that is some combination of goods services and experiences that can be offered to a market to satisfy a need or want. In the broadest sense, market offerings include: • goods • services/experiences • persons • places • organisations • information • ideas

Exchanges, transactions and relationships • Exchange os the act of obtaining a desired object from someone by offering something in return. • A transaction is a trade between two parties that involves at least two things of value, agreed upon conditions , and a time/place agreement. Market • A market = actual buyers + potential buyers • These buyers share a particular need or want that can be satisfied through exchange relationships. A simple model of the marketing process

Step 1: Understanding the marketplace 1. What customers will we serve? (target market) 2. How can we serve these customers best? (value proposition) Step 2: A customer-driven marketing strategy 1. What customers will we serve? (target market) 2. How can we serve these customers best? (value proposition) The marketing organisation’s value proposition • is the set of benefits or values that it promises to deliver to customers to satisfy their needs • should differentiate brands and position them in the marketplace Step 3: Preparing an integrated marketing plan The marketing program • builds customer relationships by transforming the marketing strategy into action • consists of the firm’s marketing tools the firm uses to implement its marketing strategy The extended marketing mix

step 4: building customer relationships Customer relationship management (CRM) is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. relationship building blocks: customer value and satisfaction • Customer perceived value is the customer’s evaluation of the difference between all the benefits and the costs of a market offering relative to those of competing offerings. • Customer satisfaction depends on the products perceived performance relative to a buyers expectations. Customer relationship levels and tools Basic relationship // Full partnership // Frequency marketing programs // Club marketing programs Frequency/loyalty marketing programs Operate on a quasi-club basis. Members are issued with a card and accrue points for every purchase made using the card. These points can subsequently be exchanged for goods, bonuses or cash. The changing nature of relationships • Relating more carefully with selected customers • Relating more deeply and interactively - customer-managed relationships - online social networks - consumer-generated marketing Relationship marketing: customer lifetime value Customer lifetime value (CLV) refers to the value of an entire stream of purchases that the customer would make over a lifetime of patronage. Step 5: Capturing value from customers • Creating customer loyalty and retention • Growing share of customer • Building customer equity • Building the right relationship with customers building the right relationship with the right customers

The changing marketing landscape what external factors might influence how we do marketing? The internet Globalisation • falling trade barriers make it easier to sell globally • consumers’ tastes and preferences are converging • less product differentiation between countries sustainability • study reveals 1/3 consumers in the UK are now buying from brans based on their social and environmental impact (Unilever 2017) • in NZ, purchasing of Fair-trade, ethical, socially responsible and environmentally friendly products is on the rise (Colmar Brunton 2015) • Gen Y are most motivated by a sustainable value preposition and an increasing number (65%) are willing to spend more for organic, sustainable and ethically produced products and brands. • less interest in disposable products • more interest in buying local • environmentally friendly packaging • communicating sustainable business to customers and other shareholders • companies on the Dow Jones’ Sustainability Group outperform those on its traditional index • environmental mistakes damage reputation and create distrust • environmentally sustainable practises, products and services are often a unique selling point • a number of people who prefer to deal with businesses that are socially and environmentally responsible Putting it all together

Lecture two - Marketing planning and the marketing environment (Chapters 2-3) Learning objectives • Discuss how to design business portfolios and develop growth strategies • Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value • Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it. • Describe the environmental forces that affect the company’s ability to serve its customers. • Explain how changes in the demographic and economic environments affect marketing decisions. • Identify the main trends in the firm’s natural and technological environments. • Explain the key changes in the political and cultural environments. • Discuss how companies can react to the marketing environment. company-wide strategic planning Strategic planning is the process of developing and maintaining a strategic fit between the organisation’s goals and capabilities and its changing marketing opportunities. The Planning Process

Defining a market-orientated mission: strong mission statement • Market orientated and based on satisfying customer needs • Meaningful and specific, yet motivating • Emphasise company’s strengths in the marketplace • Should NOT be stated in sales or profits • E.g “To give people the power to build community and bring the world closer together”, “Our policy is New Zealand’s Lowest Food Prices” Selling company objectives and goals Overall mission and strategy translate into marketing objectives the business portfolio The collection of businesses and products that make up the company.

analysing the current business portfolio: the big growth-share mix

developing strategies for growth and downsizing: the product/market expansion grid

company-wide strategic planning: the planning process

customer-driven market strategy • Market segmentation is the process of dividing a market into distinct groups of buyers with different needs, characteristics or behaviours and who might require separate products or marketing programs. • Market targeting is selecting one or more market segments to enter (i.e the segments where a company can profitably generate the greatest customer value and sustain it over time) • Market differentiation and positioning is arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers. developing an integrated marketing mix Product: what is the goods and services combination we offer? Price: how much do we ask customers to pay for the product? Placement: how is the product made available to our customers? Promotion: how are customers informed and persuaded to buy the product? People: how do our people ensure superior service to customers? Process: how can we ensue superior service through our processes? Physical Evidence: how do we reassure our customers? e.g. impressive buildings, well-trained staff, great website? four p’s Things that you decide internally, that you control. • Product • Price • Place • Promotion four c’s You have to keep in mind what they refer to in terms of market and relationship with your clients. • Customer’s wants and needs • Cost to the user • Convenience • Communication Analysing the marketing environment

actors in the micro-environment

actors in the marketing environment - suppliers • Suppliers form an important link in the company’s overall customer value delivery system • Most marketers today treat their suppliers as partners in creating and delivering customer value types of marketing intermediaries • Resellers - find and sell to customers • Physical distribution firms - inventory and move goods • Marketing service agencies - research, advertising, media and consulting • Financial intermediaries - finance transactions or insure against risk - Banks and insurance companies are among the many financial intermediaries that comprise the broader value network in which a business operates. Managing these relationships is also important. actors in the marketing environment - competitors • To be successful, a company must provide greater value than its competitors • Marketers must do more than simply adapt to the needs of target consumers; they must gain strategic advantage by positioning their offerings strongly against competitors actors in the marketing environment - publics Publics are any group that has an actual or potential interest in or impact on an organisations ability to achieve its objective. These include: • Financial public • Media • Government • Citizens’ action groups • Local public • General public • Internal public

actors in the marketing environment - customers Companies might target any or all of five types of customer markets, each of which has special characteristics that calls for careful study by the seller: • Consumer markets • Business markets • Reseller markets • Government markets • International markets the company’s macro-environment

demographic environment Demography is the study of human populations in terms of: • Population, size, density and diversity • Age and gender • Family size and structure • Educational characteristics • Occupation • Race/ethnicity • Other relevant demographic statistics demographic environment: changing age structure

demographic environment: changing family structure • Rise of a single parent families and families with no children • Decline in household size • Increasing number of working women

economic environment The economic environment consists of factors that affect consumer purchasing power and spending patterns, including changes in: • Income and income distribution • Spending patterns natural environment The natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities. Key natural environment issues include: • Shortages of raw materials • Increasing pollution • Rise in government intervention technological environment Perhaps the most dramatic force shaping our future, the technological environment involves forces that create new technologies, new products and market opportunities. political and social environment The political environment consists of laws, government agencies and pressure groups that influence or limit various organisations and individuals in a given society. Key political issues: • Legislation affecting business - increasing legislation and changing government agency enforcement • Emphasis on ethics and socially responsible behaviour - social responsibility and causerelated marketing. cultural environment The cultural environment is made up of institutions and other forces that affect a society’s basic values, perceptions, preferences and behaviours. The persistence of culture includes: • Core beliefs and values - relatively resistant to change • Secondary beliefs and values - more open to change • People’s views of: - themselves - others - organisations - nature - society - universe Responding to the marketing environment - reactive approach Assumptions: The environment is largely uncontrollable Strategies: Research, understand, react and adapt Responding to the marketing environment - proactive approach Assumptions: The environment is partially controllable Strategies: • Hire lobbyists to influence legislation affecting their industries • Stage media events to gain favourable press coverage/run advertorials to shape public opinion • Instigate legal actions and regulatory complaints to keep competitors in line • Form contractual agreements to better control distribution channels Responding to the marketing environment Despite the unpredictability of the external environment, enlightened marketing managers take a proactive rather than reactive approach to the marketing environment.

Lecture three - managing marketing information to gain customer insights (chapter 4) Learning objectives • Explain the importance of information in gaining insights about marketplace and customers • Define the marketing information system and discuss its parts • Outline the steps in the marketing research process • Explain how companies analyse and use marketing information key terms • Customer insight • Marketing information system (MIS) • Internal databases, competitive marketing intelligence • Marketing research, qualitative research, quantitive research, explorative research, descriptive research and causal research • Secondary data, primary data, commercial online databases, observational research, ethnographic research, netnographic research, survey research, experimental research, focus group interviewing, online marketing research, online focus groups, sample, open and closed questions • Customer relationship marketing (CRM) marketing information and customer insights • To create value for customers and to build meaningful relationships with them, marketers must first gain fresh, deep insights into what customers need and want • Customers needs and buying motives are often anything but obvious • Companies must design effective marketing information systems (MIS) that give managers the right information, in the right form, at the right time managing marketing information to gain customer insights • Customer insights are fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships. Many companies are now restructuring their marketing research functions. They are creating • customer insights teams. The marketing information system

developing marketing information - obtaining the information • Internal databases • Competitive marketing intelligence • Marketing research developing marketing information - marketing research

Market research - defining the problem and research objectives • Exploratory research gathers preliminary information to help define the problem and suggests hypotheses • Descriptive research describes things, e.g. the market potential for a new product, customer attitudes to current products • Casual research tests hypotheses about cause and effect relationships developing the research plan Research objectives must be translated into specific information needs. The research plan outlines: • sources of existing data • specific research approaches and contact methods • sampling plans and instruments developing the research plan - types of data To meet the manager’s information needs, the research plan may call for gathering secondary data, primary data or both. • Secondary data is information that already exists somewhere, having been collected for another purpose • Primary data is information collected for the specific purpose at hand gathering data - sources of secondary data • Internal sources - company profit and loss statements, balance sheets, sales figures, sales call reports, invoices, inventory records and prior research reports • Government publications • Periodicals and books • Commercial data

gathering data - sources of secondary data The researcher must evaluate secondary information carefully. Evaluating secondary data criteria: • Relevance - fits research project needs • Accuracy - reliably collected and reported • Currency - up-to-date enough for current decisions • Impartiality - objectively collected and reported Primary data collection - research approaches • Observational • Survey • Experiment planning primary data collection

contact methods

personal contact methods • Individual (e.g. at home, shopping mall intercepts) • Group (e.g focus groups, forums) online data collection methods • Internet survey • Online panels • Web-based experiments • Content analysis • Online focus group online marketing research advantages • Speed • Low cost • More interactive and engaging • Able to reach ‘hard-to-reach’ consumers • Higher response rates

sampling plan - key issues to consider • Sampling unit - who is to be studied? • Sample size - how many people should be included? • Sampling procedure - how will the sample be selected? sampling procedure - probability sample • Simple random sample - every member of the population has a known and equal chance of selection • Stratified sample - the population is divided into mutually exclusive groups (such as age groups) and random samples are drawn from each group • Cluster (area) sample - the population is divided into mutually exclusive groups (such as blocs) and the researcher draws a sample of the groups to interview sampling procedure - non-probability sample • Convenience sample - the researcher selects the easier population members from which to obtain information • Judgement sample - the researcher uses his or her judgement to select population members who are good prospects for accurate information • Quota sample - the researcher finds and interviews a prescribed number of people in each of several categories planning primary research - research instruments • Questionnaires or surveys • Mechanical instruments Interpreting and reporting the findings • The researcher should not try to overwhelm managers with numbers and fancy statistical techniques. Rather, the researcher should present important findings and insights that are useful in the major decisions faced by management. • Interpretation should not be left only to the researchers. While researchers may have research expertise, the marketing manager knows more about the problem/decisions that must be made. analysing and using marketing information Customer relationship management (CRM) is the systematic collation of data from multiple touch points, which is often combined with sophisticated analytical tools to enable a 360 degree view of individual customers. Uses and benefits include: • Integrate customer information • Provide deep insights for marketing decisions • Database is easily interrogated • Pinpoint high value customers and target them efficiently • Shopping rewards programs • Create offers tailored to specific customers • Cross-sell company’s products and services marketing information may be distributed via: • Company intranet • Extranets Other marketing considerations • Small businesses • Not-for-profit organisations’ • International • Ethics and public policy

Lecture four - Understanding consumer and business buyer behaviour (Chapter 5) Learning objectives • Identify the consumer market and the main factors that influence consumer buyer behaviour •...