Marketing doc révision!!!!!! PDF

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MARKETING INTRODUCTION PART 1 – MARKETING PLANNING CHAPTER 1: MARKETING APPROACH 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.

Why is marketing important: -

Identify and understand the appropriate consumers. Discover what products, services or ideas these consumers want. Report back to the production division on what it needs to produce, and in what quantity, format, etc. Try to sell the clients the product manufactured by the firm. Contribute to reach growth, sales and profitability and effectiveness objectives.

Marketing: creating, consuming goods that have a value

Also, “Marketing is the generous act of helping others become who they seek to become.” Marketing is the generous act of helping someone solve a problem. Their problem.” Seth Godin

Marketing is… Bringing producers and customers together. (avocados) The marketing functions

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The marketing function contributes to attaining the company’s growth, sales and profitability.

Components or functions of marketing -

Marketing research Product development Marketing communication (brand and branding management) Selling Advertising Etc.

Does marketing create needs? no Marketing: Customer want someone to listen to their needs and treat them as though they were important. It is much easier and less costly to keep an existing client than to try to gain a new one!

Milestones in the development of marketing: 1) Production orientation This orientation focuses on production efficiency that will lead to high quality products. (industrial rev and WW2) Standardization and specialisation in the assembly line of ford cars. Improves productivity. Greater demand than supply. 2) Product orientation Some sellers think that consumers will always buy a good product at a reasonable price, so a business only has to make the best product to automatically reap financial success. But people are not rational and not well informed about everything available on the market when they buy stuff. However, if no mouse problem won’t buy a mousetrap even if it’s the best one in the world. Product development is a primary concern of businesses. 3) Marketing orientation Satisfy the customer while keeping the company’s goals in mind. Focus on the consumer rather than the business. It represents a shift from a seller’s market (shortage of products or services) to a buyer’s market (abundance of products or services). Marketing orientation is found in all organizations whose objective is to succeed over the short and medium terms. Facilitating transactions. Now, modern marketing Basic marketing concepts -

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It is the role of the marketing function to identify the appropriate consumers and try to sell them the product manufactured by the firm. The marketing function also discovers what products these consumers want, and then reports back to the production division on what it needs to produce, and in what quantity, format, etc. Marketing is not advertising; it includes research but also so much more (we only see the top of the iceberg)

Needs and desires -

Marketing tries to identify needs and meet them by creating the appropriate product. (Maslow’s pyramid). • Buy potato chips because associated with relaxing (doesn’t meet nourishment needs). • Cars can be symbol of prestige, power and style. • A consumer is not buying a simple piece of clothing but a reflection of their personality.

Need: is a state of lacking something (being hungry) - State of lacking something (hungry, affection) - Expressed or latent (unaware of) - Essential to market success - Organized in sequence - Met by a desired object Want: Psychological wants are often contrasted with physiological needs that make life more enjoyable but are not essential for existence. Corresponds to a way to meet this need (choosing Italian restaurant instead of fastfood restaurant). Backed by purchasing power, a want is transformed into demand. Marketing creates wants but may satisfy a need. Marketing can stimulate/ wake up a want. The marketer’s job is to identify the needs and wants of customers and to try to meet them with the right offer. *AMA has a code of ethics to avoid ppl being manipulated in ads. Demand -

The quantity of a good or service that economic agents buy in a given market. • Volume (quantity unit) • Value (monetary unit)

Consumer: All economic agents (industry, government, etc.), not just an individual making a purchase. Customer: The person or entity making the purchasing decision. Current dollar: Not adjusted to inflation Constant dollar: Eliminated inflation Company demands and market demand -

Company demand: Transaction carried out to buy a product or service from a specific company (in volume or dollars).

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Market demand: The sum of individual company demand. Sometimes several businesses or actors join forces to stimulate total market demand, (ex: ads for milk but not naming any brand so d for milk goes up and all the industry benefits from it).

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Market share: In marketing refers not to the share of consumers who buy the company’s product, but to the company’s share of demand (share of demand). It is the % of a market’s total sales earned by a company.

The significance of market share: Market share is a measure of the consumers' preference for a product over other similar products. A higher market share usually means greater sales, less effort to sell more and a strong barrier to entry for other competitors. The different types of demand -

Actual demand: The company’s actual sales or business volume at a specific point in time. Can be in the current period or a previous one.

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Potential demand: The maximum level that demand for a product can reach in a given context. (people who do not use a product but might do so are potential consumers). (past or present)

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Demand projection: Every demand has a ceiling, and this ceiling depends as much on consumers’ financial means as on their tastes, interests, receptivity to a marketing strategy and environment. The marketing managers’ task is then to estimate the maximum level that market demand could reach at a given time, which is the potential market demand. (future demand) When actual demand=potential demand: the market can be considered to have reached its saturation level, which generally corresponds to the maturity stage in the product lifecycle.

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The market and its components -

Market: Set of consumers, individuals or businesses that express wants and needs by buying products, services or even ideas.

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Different types of markets: • Consumer goods market: It’s all the individuals who purchase products or services to meet their personal needs • Business market: Organizations that buy products and services in order to use them to make other goods, or to meet their internal needs. They may be the industrial suppliers of a consumer goods manufacturer, or any firm that sells to other businesses municipalities or public organizations. Doesn’t include individual consumers. (like processing companies, farm producers, construction industries, extraction industries and services companies). Different marketing from B2C, more focused on price, product, sales and after-sale service. • Distribution intermediaries’ market: Individuals and organizations situated between the producer and the consumer. Buys products and services with the intention of reselling them. Main intermediaries are retailers, wholesalers, manufacturers’ agents and dealers. • Government market: (business to government or B2G) The gov can become the main customer of some businesses. Usually will take the least expensive, price is usually the priority among the decision-making criteria. • International markets: exporting products (in Canada mostly to US)

Exchange -

All definitions of marketing have one thing in common: the concept of exchange. This concept rests on four elements: • The customer’s need • The satisfaction of this need • A relationship between the business and the consumer • And the optimization of business profits

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The goal of marketing is to optimize the relationship of exchange between the business and the customer and to maximize their satisfaction. Usually concluded with a transaction Basics of customer relationship and customer service

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Value, quality, satisfaction et fidelity. -

Value: Benefits received minus monetary and non-monetary cost. economic, social, and experiential levels

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Customer service: Everything that customers experience when doing business with a company. Company relationship with its customers. Growing importance rn.

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Customer lifetime value: The sum total of the present values (1$ is not worth the same now and in 5 years) of all the profits that can be made from a particular customer over that person’s lifetime. Proves more profitable to take care of its customers than to seek new ones. Costs 5 times more to attract new customer than to retain an existing one.

The result of the exchange process Consumers care about: -

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Value (the benefits received minus the monetary and non-monetary costs), quality, satisfaction, loyalty (how long consumer have been dealing with this brand, the longer the more loyal; how much the consumer buys of that brand, trying to maintain or increase the consumer share of the brand or company. (satisfaction is not equal loyal and vice-versa but still a strong link)

American Customer Satisfaction Index

Branches of Marketing Consumer marketing (general), business marketing, relationship marketing, environmental marketing, international marketing services marketing, retailing, societal marketing.

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INTEGRATED MARKETING MODEL

Marketing is central to the relationship between the organization and the market. The elements of the marketing mix are considered controllable variables.

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The internal marketing management process -

Analysis Analyse the market, objectives and resources to make the marketing plan Planning Strategic aspects of the process (key concepts; segmentation, positioning and targeting) Implementation Of the marketing plan, requires coordination Control Success or failure of the operation via the marketing information system (MIS)

The future of marketing -

Society has become more demanding of businesses (want them to operate ethically and reduce its impact of the environment. 4 Rs of construction (Reduce, reuse, recycle, rethink) • Globalization: The globalization of competition has opened the world to consumers. Increases competition but more potential buyers. Export/import • Technology affects all industries (technological advancements)

Marketing… o o o o

Globalization of markets Technological advancements Sustainable development, social responsibility Consumer purchasing power

SESSION 2/CHAPTER 2: MARKETING PROCESS How marketing contributes to a company’s mission -

The marketing function must be linked to the company’s mission before the concepts of marketing planning and control are even considered. Mission: General and specific objectives that form the basis of other strategies. Marketing plans are based on overall strategies and objectives. Principle of synergy. Marketing: A strategic contribution to a company Business strategy: the foundation

Marketing in business o o o

Marketing strategies goal is to attain the company’s growth, sales and profitability Marketing strategies contribute to success of business strategy Aligned to company’s mission objectives and resources.

Strategy: follows an overall vision of the means used to achieve a final objective. (river) Tactic: a temporary adjustment of an element of the strategy at a given time (rebate coupons) (boat), the how-to. *A marketing strategy is often defined according to one variable of the marketing mix

Ex : -

Business strategies

Objective: Gain a 20% market share in one year. Strategy: Set the lowest price as possible. Tactics: Insert rebate coupon in a magazine.

Moves and the how a business gets to meet its objectives. To survive, a business must sell: without customers, there can be no business. Business strategies influence marketing strategies.

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2 types of business strategies; Competitive strategies & development strategies (depends on objective of the company) 1. Competitive strategies (strategy to meet competition driven objectives) -

Leader strategies: A leader (company with dominant position in a given market and is recognized as a leader by its competitors) is a point of reference that rival companies strive to attack, imitate or avoid. Sets the pace of the market.

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Challenger strategies: A challenger (company considered the main rival of the leader and seeks a dominant position) openly uses offensive strategies intended to make it the market leader. Must predict the leader’s potential reactions.

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Follower strategies: Rather than trying to take first place, a follower (a competitor with a small market share that adapts its actions to its competitors) develops strategies aimed primarily at retaining its market share instead of attempting to increase it considerably. (mostly in oligopolistic markets, few companies).

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Specialist (or nicher) strategies: A market specialist focuses on a relatively distinctive market segment. Strategies developed to seek a niche that distinguishes the company from its competitors and then focus exclusively on that niche. 1. Leader (highest market share, innovator): be the first and continue to be the first 2. Challenger (fight for market share) 3. Follower (Competitor with a small market share that adapts its actions to its competitors) 4. Specialist (niche) no interest to be the leader

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Walt Disney is a leader because in the mission statement they say that they want to be “the most creative, innovative” etc. Also, Apple. Burger king is a challenger (attacking McDonalds). Why eat with a clown when you can dine with the king? Also, Fizz Mobile. Hertz and avis; avis assuming its 2nd position Uniprix avec option +, a follower imitating the products. Also, online shopping companies. Specialist strategy: Scéno Plus.

2. Development strategies (increase sale, profit, market share, size of business)

Strategy used to identify, evaluate and meet development objectives driven by sales increase, profit, market share… 2 strategic planning tools to help with future growth • Ansoff model • BCG matrix

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The Ansoff matrix:

Existing market

New market

Existing products

New products

Market penetration strategy

Product development strategy

(Low risk)

(Medium risk)

Market development strategy

Diversification strategy

(Medium risk)

(High risk)

Examples Penetration: Coca cola Market development: Big mac in Japan Product development : New IPhone Diversification : MC Café, Lego -

Market penetration: increase the sales of its existing products in existing markets by using different methods. Company remains in the same market niche and keeps its product intact. (least risky, familiar territory)

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Market development: increase its sales by introducing existing products on new markets. Same product to new groups

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Product development: increase sales by using its existing markets to launch entirely new products, or “new” products developed by modifying existing ones.

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Diversification: increase its sales by developing new products for new markets. Riskier 2 new things (product and market) *The newer the product or market, the higher the business risk

BCG matrix:

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Analysis of strategic market positioning: analyse market and help make strategic decisions The BCG (stands for consulting firm who came up with this) matrix to help with long term strategic planning, help a business consider growth opportunities by reviewing product portfolio. (take into account position of company or market share of a product) Based on market growth rate and relative market share. (market share relative to the market leader) Developmental strategy Helps on resource allocation. Relative market share

Market growth

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HIGH

LOW

HIGH

Stars

Question Marks

LOW

Cash cows

Dogs

The company’s share of demand. It is the % of a market’s total sales earned by a company Market share= company demand/market demand

Cash cows: high relative market share 40%, - “Milk” these products (large market share) in a slow-growing market - It can cost way too much to keep product alive - Company prefers cash cows Dogs: pen for white board 10%: small share of market, often liquidated - Difficult to survive, market with weak growth potential - It can cost way too much to keep product alive - Divest/remove? Stars: on its way up - High relative market share in a growing market - The company must have a lot of liquidity to fund its growth. Question mark: little profit but in growing market, could become cash cow or dog - Product has strong competition in a market space that is growing but is not generating enough profits - They can become stars or dogs - It requires investment to ensure its growth to star - Can risk becoming a dog - Must remove it if market share is not expected to improve

etu Relative market share rowth.

Strategy decisions: Orientation 1. Production orientation - Focus on production efficiency. - When demand exceeds supply. - Need to reduce cost. 2. Product orientation - “Make the best product and customers will come” - Focus on the quality of products and services. - Assumption of complete information and rational customers. - Solution or product? 3. Sales orientation - Hard to sell. - Persuade customers to buy through aggressive promotion or other marketing strategies. - High sales volumes equal high profits for the company. 4. Marketing orientation - Give the people what they want/need. - Invest in consumer research and surveys. - Sacrifice short-term profits in order to build a lasting relationship with their customers. 5. Societal marketing orientation - “Don’t give people what they want, give them what society wants.” - Put the human welfare on top before profits and satisfying the needs. - Emphasize on social responsibilities and sustain long-term success.

MARKETING PLANNING: where it all starts Marketing management process -

To meet business objectives, marketing process involving planning and control Planning: defining end point Control cycle: helps guide the process and indicates the extent to which objectives were achieved. Compare results with objectives. Marketing strategies are influenced by business strategies

The marketing plan (p.43) -

Marketing planning process leads to the marketing plan

An analytical framework that features three general elements: a situation analysis, a set of strategies and an action program. These 3 elements can be broken down in 7 parts:

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1) 2) 3) 4) 5) 6) 7)

Situation analysis Setting ...