Marketing Textbook Notes PDF

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Marketing Textbook Notes PART 1 Assessing the marketplace Chapter 1 Overview of marketing Fundamentals of Successful Marketing: So what is marketing? Marketing is the activity, set of institutions and processes for creating, capturing, communicating, delivering and exchanging offerings that have val...

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Marketing Textbook Notes

PART 1 - Assessing the marketplace Chapter 1 - Overview of marketing Fundamentals of Successful Marketing: So what is marketing? -

Marketing is the activity, set of institutions and processes for creating, capturing, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large.

Marketing (textbook definition) -

An organisational function and a set of processes for creating, capturing, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders.

Marketing plan -

A written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four P’s, action programs, and projected or pro forma income (and other financial statements)

Marketing is a philosophy of organisation -

Marketing is the interface through which the organisation interacts with the customer A knowledge system that places consumer choice as its central tenant We do not just Produce something and expect it to sell

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We do not Sell Sell Sell and expect people to buy

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We are not just Advertising

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Value is in the eye of the consumer!

Common goal of marketing: -

Putting consumers at the heart of our organisational activities Creating customer value and building profitable customer relationships by: Understanding consumer needs and wants.

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Deciding which target markets we can best serve.

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Developing a coherent and compelling value proposition to attract, retain, and grow target consumers.

What does this mean? -

Marketing is not a random activity

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It requires thoughtful planning

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Firms assess their market position and decide on their marketing strategy

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The entire organisation must be involved

Core aspects of marketing:

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Creating Value: The fundamental purpose of marketing is to create value by developing a variety of offerings, including goods, services and ideas, to satisfy customer needs.

Customers have needs and wants: - Customers have unsatisfied needs which lead to demand for products and services - Functional, emotional, life changing, and/or have social impact - Basic physical or survival needs for food, drink warmth, shelter, and rest - Psychological needs for security, belonging, love, self-esteem and fulfilment - Wants reflect a personal preference for how a person desires their needs be satisfied Common goal of marketing - Putting consumers at the heart of our organisational activities - Satisfying customer needs and wants Marketing entitles and exchange

Exchange - The trade of things of value between the buyer and the seller so that each is better off as a result.

Marketing requires Product, Price, Place and Promotion = The four p’s This is known as the four P’s or the marketing mix - Marketing mix - Product, Price, Place and Promotion - the controllable set of activities that a firm uses to respond to the wants of its markets

Product: Creating value Goods - Items that can be physically touched, as opposed to services Service - An intangible offering that involves a deed, performance or effort that cannot be physically possessed; intangible customer benefits that are produced by people or machines and cannot be separated from the producer. Ideas - Intellectual concepts - thoughts, opinions and philosophies. Price: Capturing value Everything has a price, though it doesn’t always have to be monetary. Price is everything the buyer gives up -money, time, energy - in exchange for a product. Place: delivering value Place refers to all the activities necessary to make the product available to the right customer when that customer wants it. Promotion: Communicating value Even the best goods and services will go unsold if marketers cannot communicate their value to customers. Promotion is communication by a marketer that informs, persuades and reminds potential buyers about a product to influence their opinions and elicit a response.

Marketing can be performed by both individuals and organisations

B2C (business to consumer) - The process in which businesses sell to consumers B2B (business to business) - The process of selling merchandise or services from one business to another C2C (consumer to consumer) - The process in which consumers sell to other consumers Marketing impacts various stakeholders

Most people think of marketingas a way to facilitate the sale of goods and services to customers or clients. But marketing can also impact several other stakeholders (e.g. supply chain partners, society at large). Partners in the supply chain include wholesalers, retailers and other intermediaries, such as transport and warehousing companies. Marketing helps create value Marketing didn’t get to its current prominence among individuals, corporations and society overnight. Marketing evolves to reflect what is happening in society.

Production oriented era Around the turn of the 12th century, most firms were production oriented and believed that a good product would sell itself. Manufacturers were concerned with product innovation,not with satisfying the needs of individual consumers. Sales-oriented era Between 1920 and 1950 production and distribution techniques became more sophisticated and the Great depression and world war II conditioned customer to consumer lees or make items himself, for examples they planted victory gardens instead of buying produce. Market oriented Era After world war II soldiers returned home, got new jobs and started families. At the same time, manufacturers turned from focusing on the war effort towards making consumer products.

Value-based marketing Era

Most successful firms today are market orientated. That means they have moved from a production or selling orientation to a value-based orientation, where they attempt to discover and satisfy their customers needs and wants.

Marketing Myopia

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The problem of Marketing Myopia was first introduced by Theodore Levitt in 1960. Marketing myopia refers the problem when companies forget their role in the eyes of the customer. American Railways failed despite huge capital reserves because they focused on being in the ‘railway business’ not the ‘transport business’. Focus on what bundle of benefits you are providing to the customer rather than the product or service you are providing.

Value pyramid Value - Reflects the relationship of benefits to costs, or what the consumer gets for what they give.

How do firms become more value driven? -

By focusing on these four activities.

1. Sharing information Share information about their customers and competitors across their own organisation and even with other firms such as the manufacturers and transportation companies that help them get their product to the marketplace. 2. Balancing benefits with costs Measure the benefits that customers perceive against the cost of their offerings. They use available customer data to find opportunities to better satisfy their customers needs, keep costs down and develop long term loyalty. 3. Building relationships with customers Develop relational orientation as they need to think about their customers in terms of relationships rather than transactions. Relational orientation - A method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship. The relationship approach uses a process known as customer relationship management.

Customer relationship management - A business philosophy and set of strategies, programs and systems that focus on identifying and building loyalty among the firm’s most valued customers. 4. Connecting with customers using social and mobile media Allows them to better connect with customers and therefore their service becomes more effective. - MORE info pg 15 and 16 Why is marketing important? Helps us learn about new goods and services. - Marketing expands firms’ global presence - Marketing is pervasive across marketing channel members Firms do not work in isolation. - Manufacturers buy raw materials and components from suppliers, which they sell to wholesalers, retailers or other businesses after they have turned the materials into products. - Everytime materials or products are brought or sold, they are transported to a different location, which sometimes requires that they be sorted in a warehouse operated by yet another organisation. This is known as a supply chain or marketing channel Supply chain - The group of firms that make and deliver a given set of goods and services Marketing channel - The set of institutions that transfer the ownership of, and move goods from, the point of production to the point of consumption; consists of all the institutions and marketing activities in the marketing process. - Marketing enriches society - Marketing can be entrepreneurial Entrepreneur - a person who organises, operates and assumes the risk of a new business venture.

Chapter 2 - Digital Marketing Apps - Mobile applications designed to offer advanced features to consumers similar to standard websites but optimised for their mobile phones. Blog (weblog) - A web page that contains periodic posts; corporate blogs are a new form of marketing communications. Creators - Those who create user-generated content such as ratings, reviews, posts, comments pictures, videos or full blogs. Distinctly digital consumer elements

1. 2. Personalisation There are dominant digital, hybrid digital and reluctant digital consumers, who all behave differently, and thus need to be treated differently online. The balance of power has shifted online. Consumers can compare prices and product features globally, and can demand a higher level of customer service as a result of the power of word-of-mouth on social media channels -

Consumers are now empowered in many instances because of their unprecedented access to information about products, prices and competition. E.g. with air lines consumers can now go online to several different competitive sites rather than having to go through travel agents etc. This also allows consumers to have control over the process in the transaction.

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Consumer interconnectedness is the desire to be connected all the time with ones device, friends and work and/or study in both social and non-social environments. - This active role of the consumer means they play a significant role in how and where brand interaction occurs. - As a result there is some loss of control over what the company does in an online environment as the firm cannot control all touchpoint engagement. Touchpoints: The range of ways in which a consumer can interact with an organisation, offline and online (e.g. in store, by telephone, website, email, social media.) Changes which have lead to greater consumer experience: 1. Consumers are now empowered in many instances because of their unprecedented access to information about products, prices and competition. 2. The ability to control thee process in the transaction through technologies such as online service automation. 3. Loss of control over brand interaction. 4. The internet has given consumers the ability to explore and express their individuality. 5. Consumers expect all the data stored about them to be targeted precisely to their needs, or used to personalise their experience. As a consequence of giving consumers the ability to express their individuality like never before there is tensions between the consumer's desire for individuality brand/consumption experiences and a need for new forms of sociality and empowerment around brand/consumption. Empowerment: In the context of service delivery, allowing employees to make decisions about how service is provided to consumers. Summary of the five differences: 1. Transparency of information (product, price and promotions) 2. Personalisation and customisation. 3. Loss of control over brand interactions.

4. Demand for individualisation of exchange. 5. Demand for relevant active interaction. Transparency of information: The consumer is now empowered in many instances because of their unprecedented access to information about products, price and competition. Personalisation and customisation: Promotions, goods and services tailored for the individual consumer and which offer a competitive advantage. A benefit of the internet. Can include heightened service or individualised offerings. Digital Channels There are now many different touch points through which consumers can interact with companies.

Search engine optimisation (SEO) The development of websites in order that they are ranked highly by search engines in the organic or unpaid search results. This involves the use of key words relating to the product and industry in the websites content and coding. Content marketing: Content marketing is a marketing technique of creating and distributing valuable, relevant and consistent content to attract and acquire a clearly defined audience – with the objective of driving profitable customer action. Infographic: A pictorial means of presenting information which is a common piece of content marketing particularly for B2B organisations. Social media marketing The 4E framework for social media

1. EXCITE customers with relevant offers 2. EDUCATE them about offering 3. Help consumers EXPERIENCE products, directly / indirectly 4. Give them an opportunity to ENGAGE with their social network EXCITE THE CUSTOMER - Marketers use apps, games etc. to get customers excited about an idea, product, brand or company. - They use social media to communicate deals that are likely to excite customers. - To excite customers an offer must be relevant to the target consumer - Location based software: Any app, website or program that is able to tailor messages to you based on your location. EDUCATE THE CUSTOMER - When a customer arrives at an online website or in store the marketer has the opportunity to educate the consumer about the value proposition and communicate the offered benefits. EXPERIENCE THE PRODUCT - The sits most useful info is the vivid information it provides about the firms goods and services - how they work and where they can be obtained. ENGAGE THE CUSTOMER - With engagement comes action, the potential for a relationship and the possibility of loyalty and commitment, - Organisations are now trying to engage their customers or stakeholders. - E.g. the dumb ways to die, app, website and song got so many people talking about rail safety. Going mobile -

Many people now use phones vs the computer. Social media needs to be accessible through people's mobile phones as this is the main way people access it.

Price check Apps - Customers no longer have to go from store to store to check the prices of things. - There are price check apps offered by companies that allows consumers to compare prices online. Fashion Apps - These apps allow people to access the same information that is online and on the website. - Certain apps will also gives the customer reviews, blog posts and couture shows about the products they are interested in. Location-based Apps - Apps using the GPS function. E.g. google maps uses your GPS to give you the quickest route to work/school etc. - Gamification: The process of building customer loyalty through game-like design elements so as to create interest and engagement. Digital Strategy Social CRM

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The strategic use of the range if social media to engage with customers and gather, manage and analyse information on them with a view to building profitable relationships.

Customer engagement - Includes listening and responding to consumers, involving consumers and empowering consumers. - Listening to what customers say on social networks, blogs, review sites etc. Customer data management -

Data drives modern marketing. As part of social CRM, each engagement with a consumer creates data and this data should be gathered, analysed and used to inform future engagement strategies. - Some of the questions that data from social media can answer: - Who is talking about us and what are they saying? - Who are our most influential consumers? - What incentives encourage people to comment on or share our material? - Where does our material get shared? Etc. This also includes peak times for posting on the various social media sites to ensure maximum exposure of your products or service. Influence: In a social media context, the extent to which a person influences others (e.g. how much the other people in a person’s network read that persons content) Social CRM

The future of digital marketing Virtual worlds, augmented reality and wearable technology -

Virtual worlds are things such as sims.

Flow effect - The immersive state that is produced when a person ‘zones out’ the peripheral environment in favour of the current activity/experience.

Chapter 4 - Analysing the marketing environment A marketing environment analysis framework -

Marketers look for changes in what their customers demand or expect, and they adapt their product and service offerings accordingly. A marketer can identify potential opportunities by monitoring the organisation’s business environment.

Factors that affect the marketing environment:

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Consumers may be influenced by the immediate actions of the focal company, the company’s competitors or the corporate partners that work with the firm to make and supply goods and services to consumers. The firm and therefore consumers indirectly, is influenced by the microenvironment, which includes various cultural and demographic and social, technological, economic and political/legal factors.

The immediate environment Company capabilities - In the immediate environment the first factor that affects the consumer is the firm itself. Successful marketing firms focus on satisfying customer needs that match their core competencies. Marketers can use an analysis of the external environment, such as a SWOT analysis, to categorise an opportunity as either attractive or unattractive. Competitors - Competition also significantly affects consumers in the immediate environment. It is therefore critical that marketers understand their firm’s competitors, including their strengths, weaknesses and likely reactions to the marketing activities that their own firm undertakes.

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The much more immediate and ‘visible’ aspects of our marketing environments Mission, objectives and goals Core competencies and capabilities Competition SWOT Profiling

Corporate partners - Only few firms operate in isolation. E.g. car manufacturers collaborate with suppliers of sheet metal, tyre manufacturers etc. Macroenvironmental factors -

Aspects of the external environment that affect a company’s business, such as the culture, demographics, social issues, technological advances, economic situation and political/regulatory environment.

Culture - The set of values, guiding beliefs, understandings and ways of doing things shared by members of a society; exists on two levels: visible artifacts (e.g. behaviour, dress, symbols, physical settings, ceremonies) and underlying values (e.g. thought processes, beliefs and assumptions) Country culture - Entails easy-to-spot visible manifestations that are particular to a country, such as dress, symbols, ceremonies, language, colours and food preferences, and more subtle aspects, which are trickier to identify.

Regional culture - The influence...