Marketing 115116 Textbook Notes Chapters 1-10 PDF

Preview

Summary

Marketing Chapter 1SubjectWhat is Marketing? -Managing profitable customer relationships.- ‘The twofold goal of marketing is to attract new customer by promising superior valueand to keep and grow current customers by delivering satisfaction’- The activity, set of institutions, and processes for cre...

Description

Sunday, 3 March 2019

Marketing Chapter 1 Subject What is Marketing?! -Managing profitable customer relationships.

- ‘The twofold goal of marketing is to attract new customer by promising superior value and to keep and grow current customers by delivering satisfaction’

- 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.

Customer Needs & Wants Most basic underlying concept of marketing is human needs. Needs = States of felt deprivation. ! Physical needs for food clothing warmth and safety! Social Needs for belonging and affection! Individual Needs for knowledge and self expression

Wants are the for taken by human needs shaped by culture and individual personality ! Objects that will satisfy needs. As people are exposed to more objects this arouses interest and desire. When backed by buying power, wants become demands. Market offering some combination of products, services, information or experiences offered to a market satisfy a need or want. 1

Sunday, 3 March 2019 Consumers also obtain benefits through experiences, people, places, organisations activities and ideas, and so we can call these products too. Marketing Myopia! the mistake of paying more attention to the specific products a company offers rather than the benefits and experiences produced by these products. Exchange 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 decisions and a time and place of agreement. transaction is marketing’s unit of measurement.

Marketers want to build strong relationships by consistently delivering superior customer value.

Markets the set of all actual and potential buyers of a product or service.

Marketing Chapter 2 Notes COMPANY AND MARKETING STRATEGY Strategic Planning - the process of developing and maintains a strategic fit between the organisations goals and capabilities and it’s changing marketing opportunities! involves adapting the organisation to take advantage of opportunities in its constantly changing environment. Mission Statement - a statement of the organisation’s purpose - what it wants to accomplish in the larger environment. ! starts with ‘what is our business? ‘who is the customer?’ ‘what do consumers value?’ ‘what should our business be?’

2

Sunday, 3 March 2019

mission statements should be market-oriented and defined in terms of satisfying basic customer needs. should be meaningful and specific yet motivating. They should emphasise the organisation’s strengths in the marketplace. setting company objectives and goals! mission needs to be turned into detailed supporting objectives for each level of management.

SBUs - strategic business units, key businesses that make ip the company. business portfolio - the collection of businesses and products that make up the company. after mission and objectives are set, management must now plan business portfolio. must analyse current portfolio, decide which businesses should receive more, less or no investment. Then, it must shape the future portfolio by developing strategies for growth and downsizing. analysing the current business portfolio - start by identifying the SBUs that make up the company. then, assess attractiveness of SBUs, and decide how much support each deserves. ! a way of doing this is the Boston Consulting Group growth share matrix. star - high market growth, high relative market share. often need heavy investments to finance their rapid growth. eventually their growth will slow down and they will become cash cows.! question mark - high growth, low market share. require a lot of cash to hold their share, let alone increase it. Have to think hard about which question marks to keep and build into star, and which to phase out. ! cash cow - low growth, high market share. established and successful SBUs, need less 3

Sunday, 3 March 2019 investment to hold market share. produce a lot of cash that the company uses top its bills and support other SBUs. ! dog - low growth, low market share. may generate enough cash to maintain themselves but do not promise large sources of cash.

product/market expansion grid! useful for identifying growth opportunities.

market penetration - company growth by increasing saes of current products to current market segments without changing the product. market development - company growth by identifying and developing new market segments for current company products product development - company growth by offering modified or new products in current market segments diversification - company growth through starting up or acquiring businesses outside the company’s current portfolio.

main functional business departments - marketing, finance, accounting, purchasing, operations, information systems, human resources. customer value is the key. ! in addition to customer relationship management marketers must also practice partner relationship management. must partner effectively with other departments and companies to from a superior value delivery network. value chain - the series of internal departments that carry out value-creating activities to design, produce, market, deliver and support a firm’s products. 4

Sunday, 3 March 2019 value delivery network - made up of the company, suppliers, distributors, and ultimately the customers who partner with each other to improve the performance of the entire system. marketing strategy - the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships. the company decides which customers it will serve (segmentation and targeting) and how (differentiation and positioning). guided by the marketing strategy, the company designs an integrated marketing mix, made up of factors user its control. these include:

- product! - price! - people! - process ! - physical evidence ! - placement logistics ! - promotion!

customer driven marketing strategy market segmentation - dividing a market into distinct groups of buyers who have different needs, characteristic or behaviours and who might require separate products or marketing programs. ! consumers can be grouped based on geographic, demographic, psychographic and behavioural factors. ! market segment - a group of consumer who respond in a similar way to a given set of marketing efforts. market targeting - the process of evaluating each market segment’s attractivenmenss and selecting one or more segments to enter. ! should target segments it can profitably generate the greatest customer value, and sustain it over time. a company with limited resources might only serve a few special segments or market niches. this means serving customer segments that major competitors overlook or ignore. marketing positioning - arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumeers. ‘ why a shopper will pay a little more for your brand’.

5

Sunday, 3 March 2019 market differentiation - actually differentiating the market offering to create superior customer value.

marketing mix marketing mix - the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. consists of everything the firm can do to influence the demand for its product. product - the gods and services combination the company offers to the target market. e.g. car, car parts, warranty are all the product and service. price - the amount of money consumers must pay to obtain the product. suggested retail price calculated, but may change due to negotiations, discounts, credit terms etc. placement logistics - company activities that make the product available to target customer and end-consumers. May include partnering with resellers, distributers. promotion - activities that communicate the merits of the product and persuade target customers to buy it. media advertising, special promotions, purchasing incentives. people - services are often people-based, e.g. service manager at a service centre for a car. company ambassadors, representatives process - marketers need to be involved in designing and monitoring the process involved in buying and servicing any type of product. e.g. checking in and out of a hotel can be a satisfying experience, or one you never want to do again. physical evidence - necessary to manage customer and potential customer expectations, commencing with an explanation of the criteria to use when comparing products. An effective marketing program blends all of the marketing mix elects into an integrated marketing program, designed to achieve the company’s marketing objectives by delivering value to consumers. ! Marketing mix is the company’s tactical tool kit for establishing song positioning in target markets. Marketing Management managing the marketing process requires four functions:

- analysis - planning - implementation 6

Sunday, 3 March 2019

- control marketing analysis - managing the marketing process starts with a complete analysis of the marketing organisation’s situation. For this, a SWOT analysis can be conducted. It evaluates the company’s overall Strengths Weaknesses Opportunities and Threats. strengths - internal capabilities that may help a company reach it’s objectives and satisfy customers weaknesses - internal limitations that may interfere with a company’s ability to achieve it’s objectives. opportunities - external factors that the company may be able to exploit to its advantage threats - external current and emerging eternal factors that may challenge the company’s performance.

goal is to match the company’’s strengths to attractive opportunities in the environment, while eliminating or overcoming the weaknesses and minimising the threats.

marketing planning - involves deciding on marketing strategies that help the company obtain their overall objectives. consists of:! - executive summary ! - current marketing situation ! - threats and opportunities analysis ! - objectives and issues! - marketing strategy ! - action programs! - budgets ! - controls 7

Sunday, 3 March 2019 marketing implementation - the process that turns market plans into marketing actions in order to accomplish strategic marketing objectives. addresses who where when nd how. doing things right (implementation) is as or more important than doing the right things (strategy). marketing department organisation - marketing organisations must design a marketing organisation that can carry out marketing strategies and plans. large marketing companies often have a CMO (chief marketing officer) which heads the company’s entire marketing operation. marketing control - measuring and evaluating the results of marketing strategies and plans, taking corrective action to ensure that objectives are achieved. involves four steps ! - specific marketing goals set ! - measures performance in the marketplace! - differences between expected and actual performance evaluated! - corrective action closes the gaps between goals and performance operating control involves checking ongoing performance against the annual plan and taking corrective action when necessary. this ensures company chives its sales, profits and other goals. measuring and managing return on marketing investment - marketing managers must ensure that their marketing dollars are being well spent. ! return on marketing investment (ROI) is the net return from a marketing investment divided by the costs of the marketing investment. it measures the profits generated by investments in marketing activties. can be difficult to measure. not easily put into dollar terms. companies can asses ROI in terms of standard marketing performance measures including brand awareness, sales and market share. marketers are now using customer centred measures of marketing impact such as customer acquisition, customer relation, customer lifetime value customer equity.

Marketing investments result in improved customer value and satisfaction, which in turn increases customer attraction and retention. This increases individual customer lifetime

8

Sunday, 3 March 2019 values and the rm’s overall customer equity. Increased customer equity, in relation to the cost of the marketing investments, determines marketing ROI.

Marketing Chapter 3 Notes ANALYSING THE MARKETING ENVIRONMENT Company Microenvironment - marketing success will require building relationships with other company departments, suppliers, marketing, marketing intermediaries, competitors, various publics and customers that combine to make up the company’s value delivery network. the company - marketing managers must work closely with other company departments to create customer value and relationships. suppliers - important leak in overall customer value delivery system. They provide the resources needed by the company to produce its goods and services. supplier problems can seriously affect marketing; managers must watch supply availability and costs. most marketers treat their suppliers as partners. marketing intermediaries - businesses that help the company to promote, sell and distribute its products to final buyers. include reseller, physical distribution firms, marketing services agencies and financial intermediaries.

9

Sunday, 3 March 2019 resellers - distribution channel firms that help the company find customers or make sales to them. include wholesalers and retailers who buy and resell merchandise. reseller market large and can be hard to do a they have a lot of power. physical distribution firms - help company to stock and move goods from their point of origin to their destinations. marketing servicing agencies - are marketing research firms, advertising agencies, media firms and marketing consulting firms that help the company target and promote its products to the right markets. financial intermediaries - include banks, credit companies, and other businesses that help finance transactions or insure against the risks associated with buying and selling goods. competitors - to be successful, a company must provide greater customer value and satisfaction than its competitors do. marketers must gain strategic advantage by positioning their offerings strongly against competitor’s offerings in the minds of consumers. publics - any group that has an actual or potential interest or impact on an organisations ability to achieve its objectives. these include: -financial publics - influences the company’s ability to obtain funds media publics - carries news, features and editorial opinion government publics - legal advisors required for product safety, truth in advertising etc citizen-action publics - marketing decisions may be influenced by organisations and minority groups. local publics - local residents and community organisations. general public - the public’s image of the company affects its buying. internal public - includes workers, managers, volunteers and board of directors. when employees feel good about their company, the positive attitude spills over to external publics. customers - most important actors in the company’s micro environment. aim of the entire value delivery system is to serve target customers and create strong relationships with them. there are five customer markets: - consumer markets - individuals and households that buy goods and services for personal consumption. 10

Sunday, 3 March 2019 - business markets - buy goods and services for further processing or use in production process. - reseller markets - buy goods and services to resell at a profit - government markets - government agencies that buy goods and services to produce public services or transfer them to people that need them. - international markets - these buyers in other countries (consumers, producers, resellers and governments)

macro environment the company and all of the other actors operate in a larger macro environment of forces the shape opportunities and pose threats to the company. demographic environment - demography is the study of human populations in terms of size, density, location, age, gender, race occupation etc. This environment involves people, and people make up markets. changes in demographics have changes in markets which require changes in marketing strategies. changing age, family structure, geographic population shifts etc. baby boomers, generation x, millennials. generational marketing, the changing family (more women working, smaller family sizes) educational changes. increasing diversity. economic environment - factors that affect the consumer purchasing power and spending patterns. major trends and spending patterns across and within world markets are important. e.g. global economic recession 2008. industrial economies - rich markets for many different types of goods subsistence economies - consume most of their own agricultural and industrial output and offer few market opportunities. developing economies - can offer outstanding marketing opportunities for the right kinds of products. natural environment - involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities. environmental concerns have grown steadily over past 30 years. should be aware of several trends in natural environment: growing shortage of raw materials, increased pollution, increased government intervention.

11

Sunday, 3 March 2019 technological environment - forces that create new technologies, creating new products and new opportunities. this environment changes rapidly. political and social environment - consists of laws, government agencies and pressure groups that influence or limit various organisations and individuals in a given society. increased legislation, changing government agency enforcement, increased emphasis on ethics and socially responsible actions, cause-related marketing cultural environment - made up of institutions and other forces that affect a society’s basic values, perceptions, preferences and behaviours. particular societies shapes particular beliefs and values. involves shifts in secondary cultural values, people’s views of themselves, people’s views of each other, people’s views of organisations, views of society, views of nature, views of the universe.

responding to the marketing environment - many view the marketing environment as an uncontrollable element to which they must react and adapt. they passively accept the marketing environment and do not try and change it. analyse environmental forces, designs strategies that will help the company avoid threats and take advantage of the opportunities. proactive stance - aggressive actions taken to affect the publics and forces in the environment. may influence legislation affecting their industries and stage media events to gain favourable press coverage. run ads to shape public opinion. instigate legal actions and file complaints to keep competitors in line. by taking action, companies can often overcome the seemingly uncontrollable environmental events.

Marketing Chapter 4 Notes managing marketing information to gain customer insights marketing information and customer insights to create value for customers and build meaningful relationships with them, marketers must gain fresh, deep insights into what customers need and want. Use insights to develop competitive advantage. example: Apple iPod.

12

Sunday, 3 March 2019 research uncovered two key insights: people wanted personal mystic players that let them take all of their music with them, and wanted to be able to listen to it unobtrusively. based on these insights, apple designed very successful products. the marketing insight when developing the iPod also spawned other apple blockbusters, such as the iPhone and iPad. insights are important, but can be hard to obt...