Introduction TO Marketing Management PDF

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Lecture notes from my Marketing Degree at Aston University ...

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INTRODUCTION TO MARKETING MANAGEMENT Assessment: Group presentation Muller Rice case study (30%) MCQ + Reflective essay (70%)

LECTURE 1 – Introduction, MARKETING PRINCIPLES AND SOCIETY Definition: the management process of anticipating, identifying and satisfying customer requirements profitably. It’s about creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society.

CORE OF MARKETING Needs – state of felt deprivation for basic items such as food, clothing and other complex needs Eg. I am hungry Wants – form that a human need takes as shaped by culture and individual personality Eg. I want pizza Demands – human wants backed by buying power Eg. I have money to buy this meal Difference between customer and consumer – a customer purchases or obtains an offering, a consumer uses it MARKETING ORIENTATION Developing a market orientation means developing the following: - customer orientation: understanding very clearly what customers want - competitor orientation: understanding of competitors’ shortterm weaknesses and strenghts, and long-term capabilities and strategies - interfunctional coordination: all the business need to work together to make sure customers are happy Developing a market orientation within a company is a capability, something that not all companies can do. Organizations that

manage to develop a market orientation are better at market sensing (understaning the strategic implications of the market). COMPANY ORIENTATIONS OR PHILOSOPHIES They are settled in a big time scale. Production period (1890-1920) : after the Industrial Revolution. Characterized by physical production and supply, demand exceeded supply. There was little competition and consumers will favor products that are available and affordable. Eg. first cars Sales period/selling concept (1920-1950): after the First World War. Characterized by personal selling supported by market research and advertising. Marketing period (1950-1980): after the Second World War. Characterized by more advanced focus on the customer’s needs. Societal marketing period (1980-now): during th Information Revolution. Characterized by a stronger focus on social and ethical concerns in marketing. DIFFERENCES BETWEEN SALES AD MARKETING Marketing activity geared around understanding and communicating to the customer desing, develop. Sales is organized principally around enhancing the distribution of the companies’ offerings once those offerings have already been designed. While marketing activities stimulate demand, sales activities stimulate suplly. THE 4PS OF MARKETING MIX - product: the offering and how it meets the customer’s need - place: (distribution) the way in which the offering meets customers’ needs - price: the cost to the customer, and the cost plus profit to the seller - promotion: how the offering’s benefits and features are conveyed to the potential buyer Recently they extended to 7Ps: - physical evidence

- process - people MARKETING AS EXCHANGE Marketing is a two way process. There are three main types of buyer- seller exchanges in marketing: -

- In the first exchange type, the exchange takes place between the fire service who protect the general public from fire, and the public who support them, sometimes through signin petitions to keep them in service - In the second exchange type, the retailer offer a shop and the customer purchase the goods by paying - In the third type of exchange, we have a manufacturer and a retailer. Here the manufacturer offers goods, return facilities and other services and the retailer undertakes to pay a wholesale price for the goods offered by the manufacturer

LECTURE 2 : MARKETING ENVIRONMENT AND STRATEGY (Ch.4,5) There are three types of environment:

- the external environment: consists of political, social and technological influences and organizations often have very limited influence on these - the performance environment: consists of competitors and suppliers and organizations have much stronger level of influence - the internal environment: concerns the resources, processes, and policies and organization manages to achieve its goals.

THE EXTERNAL ENVIRONMENT To make sense of the external environment, we use the well-known acronym, PESTLE ( Political, Economic, Socio-cultural, Technological, Legal, Ecological environment). In brief, we could say tha the external environment comprises: - the macro environment: the wider political, economic, social, and technological context in which the organization operates - the micro environment: the organization itself, its customers, competitors, distributors and suppliers THE MACRO ENVIRONMENT Factors that impact businesses: Political factor- government policy, European Union legislation Economic factor - economic growth and employment, interest and exchange rates, inflation and taxation Social factor - demographic and cultural trends, corporate social responsibility and marketing ethics Technological factor - the emergence of new technologies (internet, PCs, tablets, mobile devices, ‘big data’) THE MICRO ENVIRONMENT Factors that impact businesses: Customers- consumers, businesses, international markets, government markets Distributors- help the company to promote, sell, and distribute its products to the end users E.g. resellers, physical distribution firms, marketing services, agencies, financial intermediaries

Suppliers- provide the resources needed by the company to produce its good and services Competitors- those businesses that serve a target with similar products and services agains whom a company must achieve a competitive advantage THE MICRO ENVIRONMENT PORTER’S 5 FORCES

STRATEGIC MARKETING ‘FIT’ Strategy is matching the activities and resources of an organization to the environment in which it operates. Environmental scanning is an important component of the strategic marketing planning process. It is the process of internal communication of external information about issues that may potentially influence an organiwation’s decision-making process. The Strategic Marketing Planning is a complex and involved process. Certain key aspects can be identified. It is necessary to: - first to develop knowledge and understanding of the marketplace (strategic market analysis, marketing audit)

- secondly to determine what the marketing strategy should achieve - third decision area concerns how the goals are to be achieved (strategic marketing action) - The marketing Audit It is a detailed analysis of the three environments (external, perfomance, internal). Marketing Audit considers the organization’s marketing health. The Boston Matrix is a tool used to evaluate and organization’s porftolio of products and services.

The SWOT analysis is a summarising the analysis the marketing audit and analysis. It is used to organization’s strategic

tool of derived from the PESTLE determine an position.

In brief, the purpose of strategic market analysis is to help managers understand the nature of the industry, the way firms behave competitively within the industry, and how competition is generally undertaken.

- Developing Marketing Goals and Strategies After the strategic market analysis it becomes easier to determine exactly what the marketing strategy should actually achieve, what the strategic marketing goals should be.

To do this properly we need to determine: - vision, sets out what an organization wants to become - mission, what an organization wants to achieve in the long term - values, define how employees should behave and interact to help shape how the goals will be achieved - goals, what an organization wants to achieve (should be SMART: specific, measurable,… Eg. increases in revenue over a given time period) - strategy, matching the activities and resources of an organization to the environment in which it operates - Core Marketing Strategy Ansoff’s matrix (AKA product-market expansion matrix)

- Strategic Market Action Having analysed the industry and the main competitors, determined suitable strategic marketing goals, and performed a SWOT analysis, the final set of marketing strategy activities concerns the identification of the most appropriate way of achieving the goals and putting the plan into action. We can consider the idea of competitive advantage, competitive positioning, and implementation. Competitive advantage: it is achieved when an organization has a significant and sustainable edge over its competitors, when attracting buyers. It is necessary to understand how strategies can lead to the development of sustainable competitive advantages. This give rise to three generic strategies:

- cost leadership, obtaining a cost strucutre significantly below that of rivals, whilst retaining products that are close to competitors - differentiation/ differential advantage, creating something that is unique, using company strenghts to distinguish the product or service from competitors based on critera that are valued by customers - focus strategies, help to seek out unfulfilled market needs Competitive positioning: perhaps the single most important aspect of developing marketing strategy is to decide how to compete in selected target markets. Which markets are the best suited to utilizing the organization’s strenghts and minimising our weaknesses? We must understand the way various firms are positioned in the market, and from that we can understand where the company is currently positioned and decide where it wants to be positioned. Implementation: it is the action phase of the strategic marketing process, the action that follows all the preliminary thinking of the strategic marketing plan.

LECTURE 3-4: CONSUMER AND BUSINESS BUYING BEHAVIOUR

Consumer buying behaviour: the buying behaviour of the final consumers, individuals and households who buy goods and services for personal consumption (Kotler, 1999) Understanding customers: - Where do they buy? - How do they buy? - Who is important? - What are their choice criteria? - When do they buy? As consumers, we consider cognitions (thoughts), perceptions (how we see things), and learning (how we memorize tecniques and knowledge). These are processes that are crucial in explaining how consumers think and learn about offerings.

THE EXTRINSIC REASONS FOR PURCHASE Picking a product can be motivated by intrinsic or extrinsic evaluations or both. Intrinsic evaluations take place because a consumer likes a product. On the contrary, extrinsic evaluations might occur because a friend mentioned that it was a great product. Extrinsic reasons for purchase can be subdivided in five categories: 5 CATEGORIES: 1. Economic – concerned with expenditure of money, time, and effort spent in purchasing and consuming a product or service. 2. Technical – concerned with the product’s perceived quality of performance in the anticipated usage situation 3. Social – concerned with the extent to which a purchase will enhance a person’s feelings of esteem, personal worth in relation to others 4. Legalistic – concerned with what are perceived to be the legitimate demands of others 5. Adaptive – a form of social learning concerned with imitating others, seeking expert advice

THE CONSUMER ACQUISITION PROCESS The consumer proposition acquisition process is composed of six distinct stages: - motive development: we decide that we wish to acquire an offering; it is the initial recognition that some sort of problem needs solving - information gathering: we look for alternative ways of solving our problems and search for informations - proposition evaluation: once we have collected the informations we need to evaluate them; but first we must determine the criteria used to rank the various offerings (rational: based on cost/irrational: based on desire) - proposition selection: in most cases the offering we select is the one we evaluate as fitting our needs best; however, we must re-evaluate our decision because what we want is not available - acquisition/purchase: selection has taken place, different approaches to proposition acquisition might exist ( routine purchase: regular purchase / infrequent purchase )

- re-evaluation: the theory of dissonance suggests that we are motivated to re-evaluate our beliefs, attitudes, opinions if the position we hold on them at one time is not the same as the position we held at an earlier period; this difference in evaluations is psychologically uncomfortable and can causes anxiety; to reduce dissonance we might try to neutralize it by: selective forgeting information, minimizing the importance of an issue, decision, or act There are a number of roles that can be undertaken by purchases and people can adopt more than one role: - initiator, person who first suggests or thinks of the idea of buying a particular product - influencer, person whose views or advice will influence the product or service - decider, person with the power of financial authority to make the choice - buyer, person who conducts the transaction - user, the actual consumer/user of the product Understanding the above is important for segmentation and targeting communications. DIFFERENT INVOLVEMENT FOR DIFFERENT PRODUCTS

Complex: tends to be of something that has a high value purchase, we get really involved in the process Eg.cars

Variety seeking: there is low involvement in the purchase process because the product has a low value, but we perceive that here are high brand differences Eg. coffee Dissonance reducing: one got high involvement but we perceive that there are low brand differences Eg. clothing Habitual: everytime habits, products that we tend to buy without spending too much time thinking about it Eg.toothpaste, salt INFORMATION PROCESSING During the purchasing process we perceive particular communications that have effects on our purchase. Perception: Perception is the process of synthesizing information to make sense of the world and way in which we perceive things can be different from people to people Learning: how well do we learn about new offerings. Marketers need to understand some of these processes like: - classical conditioning, things about the environment (eg. in supermarkets they often use the smell of new bread) - operant conditioning, sale promotion to get people behave in a particular way - social learning: we tend to learn from others, people are very much influenced by others Memory: recognition and recall of a particular product using symbols, signs etc

OTHER THINGS THAT INFLUENCE THE WAY IN WHICH WE PURCHASE THINGS PERSONALITY How and what we buy is also based on personalities.

There are various approaches to this; one of them is the Big Five, the idea that people have five personality dimensions: 1. openness to new experiences 2. conscientiousness 3. agreeableness 4. stability 5. extraversion Products are often targeted to people with a certain personality profile. Brand personalities are often used. LIFESTYLE FACTORS Lifestyle factors are also very important in termp of buying behaviour: - pattern of living expressed in a person’s activities, interests and opinions (AIO dimensions) - phychographics is the tecnique of measuring lifestyles - important implications for marketing as lifestyles correlate with purchasing power We can also look at lifecycle stages: as people move through a particular lifecycle they need to change their purchases. SOCIAL INFLUENCES: CULTURE Although our own personality and other characteristics impact on how we consider and consume offerings, the opinions, attitueds and values of others also affect how we consume. Social class categories and income are very important as well. REFERENCE GROUPS Finally, consumers learn through imitation. As consumers we may consider our opinions, attitudes and values compared with specific reference groups. These are then groups to whom we refer and can be subdivided in: - primary groups (family, friends, neighbours) - secondary groups (religious groups and professional associations) - reference groups, direct or indirect influence on the person’s behaviour or attitudes (fellow students, professional bodies, social groups)

- aspirational groups, reference group we want to belong to - social networking

BUSINESS MARKETS KEY CHARACTERISTICS: 1. 2. 3. 4.

Nature of demand Buying processes Buyer-seller relationships Internationalism

TYPES OF ORGANIZATIONAL CUSTOMERS We also have different types of organizational customers: - commercial (distributors, original equipment manufacturers, users and retailers) - government (health,policing, education, transport, environmental protection and national defence and security) - institutions, not-for-profit organizations (eg. churches and charities), community based organizations (eg.housing associations), and governement related organizations (eg. hospitals, schools, museums, libraries and universities)

TYPES OF BUSINESS GOODS AND SERVICES We also have different types of goods and services that are required: - inputs goods ( raw materials, they are components part of the finished item) - equipment goods (systems) - supply goods (consumable goods)

THE DECISION MAKING UNIT THE DECISION MAKING UNIT - PARTICIPANTS There are people that take on particular roles within the industrial buying situation. These are called the DMU – Decision Making Unit, composed by:

- Influencer: this person affects the buying process, he will have a big influence in which a particular product is purchased - Gatekeeper: he gathers informations about the purchase - Decider: the most important person, they are the ones who make the final decision, they have the biggest say - Buyer: the person who executes the purchase, usually they are a professional buyer - Users: they are going to use the things THE DECISION MAKING UNIT – PROCESSES Buy classes: what type of purchase it will be (new buy, modified rebuy, straight rebuy) Buy -

phases: need/problem recognition product specification supplier and product search evaluation of proposals supplier selection evaluation

If it is a new buy we’ll go through all the buy phases.

STP (vai a pagina 203 e ristudia) How organizations decide on which segments of a market to concentrate their efforts? The answer is a process know as market segmentation and it is an intregal part of marketing strategy. Marketing segmentation is the division of a market into different groups of customers with similar needs and proposition requirements. Marketing segmentation is also related to product differentiation. IF you aim at a different market segments, you might adjust different variations of your offering to satisty those segments. CRITERIA: vedi libro Target market: identifying which groups of customers to aim for

- undifferentiated marketing (target everybody by organising their offers), differentiated marketing, customized marketing, focused concentrated marketing - voglio fare lamore con te  SEI MATTO...