Marketing pdf - Notes de cours Séances 1 à 8 PDF

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Course Marketing PGE 1er semestre séances 1 à 8...

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Principles of marketing

Marketing : the process of building profitable customer relationships by creating value for customers and capturing value in return. In essence, it’s about value, exchange, and a lot of common sense. Marketing is about managing profitable customer relationships - Attracting new customers - Retaining and growing current customers - Reminding long-term clients why they should stay «!Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others.!»

Defining Marketing’s Role in a company • Fact : - Marketing and HR are the only two services in a company that spend money but do not quantitatively bring money in… How do you justify such a service ?

• Marketing management is «!the art and science of choosing target markets and building profitable relationships with them.!» -Marketing is the trigger that enables other services in the company to function effectively. No customer, no sales, no money…

• Strategic planning : the heart of the company - The process of developing and maintaining a strategic fit between the organization’s goal and capabilities and its changing marketing opportunities.

• A wining marketing strategy - What customers will serve ? - How can we serve these customers best ? Steps in Strategic planning As a marketer, you will need to know what the company’s goal and objectives are in order to be strategic in your planning. Corporate level : Difining the company mission —> Setting company objectives and goals —> Designing the business portly —> Planing marketing and other functional strategies (Businessunit, product, and market level Defining Marketing’s Role in a company : Knowing what the company is aiming for is via the mission statement - A statement of an organization’s purpose ; what it wants to accomplish in the larger environment ; needs to be specific, realistic, and motivating ; today’s statements are market-oriented. - Note : a mission statement is never explicitly stated to the customer.

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Setting company objectives and goals The mission is turned into detailed business and marketing objectives. Marketing strategies and programs must develop to support marketing objectives - How are these done ? - What is there to consider in order to establish these objectives ? Where it’s going to happen and the potential influences.

But where does marketing take place ? The marketing environment

• Marketing environment : - The actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers Microenvironment • - Includes the actors close to the company • Macroenvironment - Involves larger societal forces The Microenvironment : The company ; Suppliers ; Marketing intermediaries ; Customers ; Competitors ; Publics

The microenvironnement The company Marketing must consider other parts of the organization, including : - finance - R&D - purchasing - operations - Accounting Marketing decisions must relate to broader company goals and strategies Suppliers Marketers must watch supply availability and pricing - What happens if you need widgets and only one supplier can make it ? Effective partnership relationship management with suppliers is essential - Be nice to those you work with ! Marketing intermediares Include : - resellers - Physical distribution firms - marketing services agencies - financial intermediaries Help to promote, sell and distribute goods to final buyers

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Companies must work with their intermediaries as partners rather than simply as channels through which they sell their products. Customers The five types of customer markets : - Consumer - Business - Reseller - Government - International Competitors

- Conducting competitor analysis is critical for success of the firm - A marketer must monitor its competitors’ offerings to create strategic advantage - «!Keep your friends close but your enemies closer!». Publics Any group that has an actual or potential interest in or impact on an organization Seven publics include : - Financial - Media - Government - Citizen-action - Local - General - Internal The Macroenvironment Demographic forces ; economic forces ; natural forces ; technological forces ; political forces ; cultural forces Demographic environment The study of human populations in term of size, density, location, age, gender, race, occupation and other statistics. World population will exceed 8,1 billion by 2030 - why is this relevant ? Economic environment Changes in income. Marketers should pay attention to income distribution as well as average income. Upper class, middle class, working class, and underclass. The distribution of income has created a two-tiered market : the affluent and the less affluent. Natural environment Involves the natural ressources that are needed as inputs by marketers or that are affected by marketing activities.

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Trends - Shortages of raw materials - Increased pollution - Increased government intervention - Green movement and environmental protection laws - Focus on environmental sustainability strategies Technological environment The most dramatic force shaping our destiny. Rapidly changing force which creates many new marketing opportunities but also turns many existing products extinct. # Research and development is a key element - Many government programs to encourage more R&D spending. Government agencies to regulate new products safety. Political environment Consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. - Legislation affecting businesses worldwide has increased. - Laws protect companies, consumers and the interests of society. - Increased emphasis on socially responsible actions. Cultural environment Made up of institutions and other forces that affect a society’s basic values, perceptions, preferences and behaviors. Persistence of Cultural values. Secondary cultural values are more open to change. People’s views of themselves, others, organizations, society, nature, and the universe. The new marketing landscape With globalization, new twists and trends are present within the environment that marketers plan in Challenges can include : - The digital age - Rapid globalization - Ethics and social responsibility - Not-for-profit Marketing Responsibility to the Marketing environment «!There are three kinds of companies : those who make things happen, those who watch things happen, and those who wonder what’s happened.!»

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From Corporate to Consumer Now that we know what role marketing plays in a company, we should understand HOW marketing actually happens. - What’s the first place to start ? The Marketplace and Customer Needs Exchange - The act of obtaining a desired object from someone by offering something in return. - One exchange is not the goal, relationships with several exchanges are the goal. - Relationships are built through delivering value and satisfaction. Market - Set of actual and potential buyers of a product. - Marketers seek buyers that are profitable. Need - State of felt deprivation Wants - The form of needs as shaped by culture and he individual personality Demand - Wants which are backed by buying power Marketing offers satisfy needs/wants/desire - Combination of products, services, information or experiences - Offer may include : - Services - activities - people - Places - Information or ideas Value - Customers form expectations regarding value - Marketers must deliver value to consumers Satisfaction - A satisfied customer will buy again and tell others about their good experience. Factors influencing consumer behaviour - Cultural (culture, subculture, social class) - Social (Reference groups, family, roles and status) - Personal (age and life-cycle stage, occupation, economic situation, lifestyle, personality and selfconcept) - Psychological (motivation, perception, learning, beliefs and attitudes) Psychological Factors : motivation A motive is a need that is sufficiently pressing to direct the person to seek satisfaction. Maslow ordered needs based on how pressing they are to the consumer.

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Psychologic factors : perception Perception is the process by which people select, organize, and interpret information. Perception includes : - selective attention • Consumers screen out information - Selective distortion • people interpret to support beliefs - Selective retention • people retain points to support attitudes

Psychological factors : learning Learning theory describes changes in an individual’s behavior arising from experience.

- Learning occurs through • • • •

Drives : a strong internal stimulus that calls for action Stimuli : objects that move drive to motive Cues : minor stimuli that affect response Reinforcement : feedback on action

Psychological factors : Beliefs and attitudes Belief : - a descriptive though about a brand or service - May be based on real knowledge, opinion, or faith Attitude : - describes a person’s evaluations, feelings and tendencies toward an object or idea - They are difficult to change - Direction and extremity Consumer-Centric Marketing Strategy

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Market segmentation (identify bases for segmenting the market, develop segment profiles) —> Target marketing (develop measure of segment attractiveness, select target segments) —> Market positioning (develop positioning for target segments, develop a marketing mix for each segment) Segmenting consumer market

• Geographical segmentation • Demographic segmentation - Most popular bases for segmenting consumer markets • Psychographic segmentation - Lifestyle, social class, and personality-based segmentation • Behavioural segmentation - Occasions, benefits sought, user status, usage rate, loyalty status • Using multiple segmentation bases Geographic segmentation variables

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World region or country US region State City Neighborhood City or metro size Density Climate

Demographic segmentation variables

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Age Gender Family size Family life cycle Income Occupation Education Religion Race Generation Nationality

Behavioural segmentation variables

• Behavioural segmentation divides buyers into groups based on their knowledge, attitudes, uses, •

or response to a product. But, buyers can be grouped according to : - Occasions - The different benefits that they seek from the product - Usage : light, medium, and heavy product users - Consumer loyalty

Bases of segmentation Market segmentation based on price

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High

Low

High

Price segment

Value segment

Low

Convenient segment

Loyal segment

Segmenting markets effectively

• Measurable - Size, purchasing power, and profile or segment • Accessible - Can be reached and served • Substantial - Large and profitable enough to serve • Differentiable

Target marketing Evaluating market segments - Segment size and growth - Segment structural attractiveness • Level of competition • Substitute products • Power of buyers • Powerful suppliers - Company objectives and resources Target marketing strategies Undifferentiated (mass) marketing —> Differenciated (segmented) marketing —> concentrated (niche) marketing —> Micromarketing (local or individual marketing)

• Undifferentiated (mass) marketing : market coverage strategy that ignores market segment • • •

differences and targets the whole market with one offer. Differentiated (segmented) marketing : market coverage strategy that targets several market segments and designs separate offers for each. Concentrated (niche) marketing : market coverage strategy in which a company pursues a large share of one or a few submarkets, like luxury brands and personal shopping. Micromarketing : - the practice of tailoring products and marketing programs to the needs/wants of specific individuals and local customer groups. - Includes : local marketing and individual marketing.

Choosing a target marketing strategy Considerations include : - Company resources - The degree of product variability - Product’s life-cycle stage

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- Market variability : competitors’ marketing strategies Positioning The way the product is defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products. Involves implanting the brand’s unique benefits and differentiation in the customer mind. Perceptual positioning maps show perceptions of brands on important buying dimensions. Choosing the right competitive advantages

• How many differences to promote ? - Unique selling proposition - Several benefits • Which differences to promote ? Criteria includes : - Important - Distinctive - Superior - Communicable - Preemptive - Affordable Selecting an overall positioning strategy Value propositions represent the full positioning of the brand Possible value propositions : - More for more - More for the same - More for less - The same for less - Less for much less Developing a positioning statement A positioning statement summarizes the company or brand positioning. Example : to (target segment and need) our (brand) is (concept) that (point of difference). Ex : to busy multitaskers who need help remembering things, Evernote is a digital content management application that makes it easy to capture and remember moments and ideas… So this means that : - Not all consumers are alike - There are many considerations to take into account when establishing which consumer to build a relationship with.

Bringing together Company and customers There are marketing orientations, which are like philosophies What approach should guide our strategy ? What weight should the company, the product, the customer, society have ?

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Marketing management philosophies

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Production concept Product concept Selling concept Marketing concept Social marketing concept - Green marketing - Cause-related marketing - De-marketing

Production concept Focus on production - View of customers • They will buy as long as the product is available and affordable • Model T : you can have any color as long as it’s black

- Focus on production justified : • Demander higher than supply • Non-competitive product cost Product concept Focus on the product - View of consumers : we have to have the best quality and the most features and they will buy - Consumers might not care about quality - Consumers might not be willing to pay for the best quality - Consumers might not be able to discern quality difference - Consumers might prefer simplicity Selling system Focus on selling - View of consumers : we have to sell to the or else they won’t buy - Focus on selling justified : • Introductory stages of product life cycle • Unsought goods (life insurance, funeral services, fire detectors…) Marketing concept Focus on marketing - Creating mutually rewarding exchange relationship - Consumer needs and wants have priority - View of customers : they will buy if you fulfill their needs better than the competition. - Achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. «!What does my customer want ? Then that’s what I will make.!» Marketing management orientations

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- Societal marketing concept : the marketing strategy should deliver value to customers and other stakeholders affected by marketing decisions in a way that maintains or improves the customer’s and the society’s well-being.

- Green marketing - De-marketing Not that we know what sorts of considerations companies need to make with regards to WHO consumers are… we need to know HOW consumers make buying decisions. Designing a customer-driven marketing strategy

- What customers will we serve ? Market segmentation and target marketing —> customers that can be served profitably

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- How can we serve these customers best ? • By defining a value proposition that will differentiate and position the brand in the marketplace. • Set of benefits or values a company promises to deliver to consumers in order to satisfy their needs. Consumer markets and buying behavior

- Consumer buyer behavior refers to the buying behavior of final consumers - individuals and households who buy goods and services for personal consumption.

- All of these final consumers combine to make up the consumer market.

The buyer decision process!

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Types of buying decision behavior

- Degree of involvement :

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• How much the consumer cares about the purchase decision • Higher levels for products that are expensive, risk, purchased infrequently, and highly selfexpressive. Degree of perceived differences between brands The type of decision will influence the promotional strategy most likely to be effective.

The buyer decision process Need recognition - Triggered by internal (person’s normal needs) or external stimuli (advertisements, friends) - Must reach an intensity high enough to become a drive - Needs are basic, wants are learned behaviors to satisfy them Information search - Influenced by level of involvement (interest) in the decision - Memory (internal) search - External search : personal, commercial, public, experiential sources of information. - Word-of-mouth sources are most influential (credibility) Evaluation of alternatives - Evaluation procedure depends on the consumer and the buying situation - Attributes and importance weights are chosen as criteria - Alternatives compared against the criteria - Markets can influence this stage ; personal selling Purchase decision - Two factors intercede between purchase intentions and the actual decision : • Attitudes of others • Unexpected situational factors Postpurchase decision - What the consumer thinks and does after purchasing and using the product or service - Satisfaction : relationship between consumer expectation and perceived performance • Delighted consumers engage in positive word-of-mouth • Unhappy customers tell on average 11 other people - Cognitive dissonance Buyer decision process for new products

- New products : good, service or idea that is perceived by customers as new - The adoption process : mental process through which an individual passes from first hearing about an innovation to final adoption.

- Five stages in the adoption process : awareness, interest, evaluation, trial and adoption. - Individual differences in innovativeness : consumers can be classified into five adopter categories, each of which behaves differently toward new products.

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- Influence if product characteristics on rate of adoption • • • •

Relative advantage Compatibility Complexity (it’s hard to tell people why they need this new product) Communicability

Marketing strategy : designing the business portfolio

- A business portfolio is the collection of businesses and products that male up the company - Business portfolio planning involves two steps : • Analyzing its current business portfolio • Shaping the future portfolio by developing strategies for growth and down sizing The business portfolio & BCG matrix

Product/market expansion grid

Planning marketing : partnering to build customer relationships

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Provide a guiding philosophy Identify attractive opportunities Design effective strategies Build customer and partner relationship management

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• Form strong value chains • Form superior value delivery network ...