MKT202 Marketing Management - exam notes PDF

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Summary

Chapter 1Entities being marketed  Goods  Services  Events  Experiences  Persons  Place  Properties  Organisations  Information  IdeasWho markets?  Marketers is someone who seeks response – a purchase, a vote, a donation from prospect. If two people are trying to sell something to each oth...

Description

Chapter 1 Entities being marketed  Goods  Services  Events  Experiences  Persons  Place  Properties  Organisations  Information  Ideas Who markets?  Marketers is someone who seeks response – a purchase, a vote, a donation from prospect. If two people are trying to sell something to each other, both are marketers. Markets  Resource  Manufacturer (turns resources bought into goods/services)  Intermediary (buy finished product by manufacturer)  Consumer (buy product from intermediaries)  Government (collects taxes from almost all) Key customer markets  Consumer (selling mass consumer goods & services) – B2C  Business (selling business goods & services) – B2B  Global (companies that sells goods & services worldwide)  Nonprofit & governmental (companies selling to nonprofit with limited purchasing power) Marketplace – physical space Marketspace – digital space (amazon) Metamarket – cluster of complementary products/services Needs Wants Demands  Needs are basic human requirement  Needs becomes wants when they are directed to a specific object to satisfy the needs  Demands are wants for specific object backed by an ability to pay I need Food. I want noodles. I demand noodles from DTF.

Marketing concepts

1. Production concept a. consumers prefer products that are widely available and inexpensive. b. concentrate on achieving high production efficiency, low costs, and mass distribution. 2. Product concept a. Consumers favour products offering the most quality, performance, or innovative features. b. believing a better product will by itself lead people to beat a path to their door. 3. Selling concept a. holds that consumers and businesses, if left alone, won’t buy enough of the organization’s products. b. Such as insurance or cemetery plots sold via hard selling. 4. Marketing concept a. Selling focuses on the needs of the seller; marketing on the needs of the buyer. b. The job is to find not the right customers for your products, but the right products for your customers. Holistic marketing concept 1. Relationship marketing a. aims to build mutually satisfying long-term relationships with key constituents (customers, employees, marketing partners – distributors & agencies, financial community – shareholders & investors) that affects firms marketing activities 2. Integrated marketing a. Designing and implementing marketing activities to create and communicate value by working on communications, products & services, channels, products and price (4Ps) b. Create a whole new campaign such as a social media hashtag # campaign example, the video’s jumping off point worked with the hashtag to spark a debate around gender equality. 3. Internal marketing a. hiring, training, motivating employees who want to serve customers well. b. When all departments work together to achieve the same marketing goals. 4. Performance marketing a. Understanding financial and non-financial returns to business and society from marketing activities. b. Works with sales revenue, brand, customer equity, ethics, environment, legal and social factors 4 Ps 1. Product (product variety, quality, design, features, packaging, sizes, warranties) 2. Price (list price, discounts, allowances, payment period, credit terms) 3. Promotion (sales promotion, advertising, sales force, PR, direct marketing) 4. Place (channels, coverage, assortments, locations, inventory, transport) Chapter 2

Macro-Environmental forces  Demographic environment o Population size, growth rate, ethnic, age, education levels, household patterns  Economic environment o Consumer psychology, income distribution and levels, savings, debt and credit  Sociocultural Environment o World view (view of ourselves, view of society, view of the universe), core cultural values, subcultures  Natural environment o Shortage of raw materials, increased energy costs and pollution levels, changing roles of government  Technological environment o Accelerating pace of change, unlimited opportunities for innovation, increased regulation of technological change  Political-legal environment o Increase in business legislation, growth of special-interest groups Chapter 4 Marketing research process 1. Define the problem, the decision alternatives, research objectives 2. Develop research plan a. Data sources (primary or secondary data) b. Research approaches i. Observational – watch consumer shop ii. Focus group – gather 6-10 people survey selected via demographic and psychographic to discuss various topics and length for a small fee) iii. Survey research (gather info from individuals through questionnaire) iv. Behavioural research (track customer’s purchasing behaviour in store as actual purchases is more reliable than customer’s statements) v. Experimental (capture cause and effect relationships) c. Research instruments (questionnaires, qualitative measures, technological devices) d. Sampling plan (sampling unit, size or procedures) e. Contact methods (mail, telephone, personal, online – cost effective, wide reach) 3. Collect information 4. Make the decision 5. Present the findings 6. Analyse information

Chapter 5

Customer perceived value  Customers are value-maximisers and will choose the offer they perceive to have the highest value and act on it.  The difference between prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.  Customer perceived value = Total customer benefits – Total customer cost  Total customer benefit (perceived monetary value of): o Product benefit o Services benefit o Personnel benefit o Image benefit  Total customer cost (perceived bundle of cost) o Monetary cost o Time cost o Energy cost o Psychological cost How to enhance CPV:  By offering more functional and psychological benefit to its products and services by allowing personalised and customisable options or improving the aesthetic of the product  Reduce buyer’s non-monetary cost by offering more discount, value-added services (easier refund process, better helpdesk) Delivering high customer value  Value proposition: whole cluster of benefits the firm promises to deliver  Value delivery system: experiences the customer will have on the way to obtaining and using the offering Customer’s satisfaction  Feelings of pleasure or disappointment from comparing a product’s perceived performance to expectations.  Expectation is formed from past buying experience, friends’ and associates’ advice, and marketers’ and competitors’ information and promises.  Measuring customer satisfaction regularly is its key to customer loyalty and retention and it can be done by surveys, customer loss rate, mystery shoppers  How to improve satisfaction instead of lowering price of item is by investing more in research & development/manufacturing process to improve the item Product and service quality  Quality is the totality of features and characteristics of a product or service that has a bearing on its ability to satisfy stated or implied needs.  Product and service quality + customer satisfaction = company profitability is intimately connected. There is a high correlation between relative product quality and company profitability Attracting and retaining customers  Managing customer base

o Reducing the rate of customer defection (selecting and training employees who are knowledgeable and friendly) o Increasing the longevity of customer relationship (more engaged company is, more likely a customer is to stick around) o Enhance growth potential via “share of wallet”, cross-selling & up-selling o Make low-profit customers more profitable or terminate them (encourage unprofitable customers to buy more or in larger quantities, forgo certain features or services, or pay higher amounts or fees.) o Focus more effort on high-profit customers (Thoughtful gestures such as birthday greetings, small gifts, or invitations to special sports or arts events can send them a strong positive signal.) Cultivating customer relationships: Building loyalty (deeply held commitment to re-purchase or re-visit a product or service in the future despite situational influences that cause switching behaviours) 1. Interacting with customers 2. Developing loyalty programs (club membership programmes) 3. Creating institutional ties (privileges) Customer relationship management (managing detailed information about individual customers and all customer “touch points” to maximise loyalty. 1. Personalising marketing a. ensure brand & marketing are “as relevant as possible to as many customers as possible” (allow customisation of products) 2. Customer empowerment a. Consumers as evangelists for brands (example like using influencers to promote their products, host a social media competition) 3. Customer review and recommendations a. Providing online customer ratings and reviews to diminish mistrust of brand advertising b. Customer’s rating and reviews play important roles in consumer’s decision 4. Customer complaints a. Proactively monitor social media and other places where customer complaints and feedback may be aired (be responsive) b. Set up a 24-hour toll-free hotline, accept responsibility for customer’s disappointment

Chapter 6

What influences consumers behaviours:  Cultural factors: Basic determinant of a person’s wants, and behaviours acquired through socialisation processes with family and other key institutions. o Subculture: Nationalities, religions, racial groups, geographic region o Social class: lower class, upper lower, working class, middle class, upper middles, lower uppers, upper class  Social factors o Reference groups  Primary: family, friends, co-workers  Secondary: religious, professional, sport o Family  Family of orientation (parents, siblings) & family of procreation (spouse, children) o Cliques o Roles and status  Personal factors o Age & stages in life cycle:  one’s taste in food, clothes, furniture and recreation is often related to age  Family & psychological life cycle stages affect consumption o Occupation & economic circumstances  Disposable income, purchasing power o Personality & self-concept  Sincerity (down to earth, honest, wholesome, and cheerful)  Excitement (daring, spirited, imaginative, and up to date)  Competence (reliable, intelligent, and successful)  Sophistication (upper-class and charming)  Ruggedness (outdoorsy and tough) o Lifestyle & values  Lifestyle – pattern of living as expressed in activities, interests and opinions. Shaped by money or time constraints. Buyer decision process (five-stage model) 1. Problem recognition o The buying process starts when consumer recognise a problem triggered by an internal and external stimulus. o Companies: product launch, content sharing, live demo 2. Information search o Consumer will search for information from personal, friends/families, websites (commercial), publicly (social media), in-store experience (experiential) to learn about the products o Companies: digital marketing, testimonials by celebrities 3. Evaluation of alternatives o Beliefs & attitudes

o Customer will compare their needs for a product and start to compare with competitors’ products and when one dominates, most likely that is what customers buy. o Companies: marketing collateral featuring product benefits, samples, test kits 4. Purchase decision o brand, dealer, quantity, timing, payment & intervening factors o Companies: promotion, sales person persuasion 5. Post purchase behaviours o Satisfaction, actions, uses & disposals o Companies: Online campaign to reward customers for feedback and sharing Chapter 8: Tapping into global market Global firm: Operates in more than one country & captures R&D, production, logistical, marketing, and financial advantages not available to purely domestic competitors. (example, IKEA) Deciding whether to go abroad:  Reasons: o Better profit opportunities o Larger customer base to achieve economies of scale o Less dependence on any one market o Desire to counterattack global competitors in their home markets o Customers require international service  Risks o Lack understanding of foreign needs, regulations o Lack knowledge of foreign business culture o Lack managers with international expertise o Changes in country’s environment Deciding which market to enter 1. How many markets to enter? a. Waterfall approach – gradually enter countries in sequence  Carefully plan expansion accordance to factors such as geographical factors, income, population  Example, Body Shop b. Sprinkler approach – entering many countries simultaneously  Example, Microsoft sold more than 60 million licenses and upgrades of windows 8 in the first of its launch c. Born global – market to enter world from onset 2. Developed vs developing markets a. Developing market – Indonesia, Vietnam, India b. Developed markets – USA, Australia, Singapore c. Regional free trade zones – ASEAN, NAFTA 3. Evaluating potential markets a. Enter countries with high market attractiveness, low market risk, and in which the firm possesses competitive advantage

Ways to enter the market (mode of entry)  Indirect exporting o Domestic-based export merchants or agents  Direct exporting o Traveling export sales reps o Foreign-based distributors or agents  Licensing/franchising o License to use trademark, patent, trade secret, or other items of value for a fee or royalty o Franchising – complete brand concept & operating system  Joint ventures o New setup by shareholders based on common interest o Foreign and local companies share ownership & control  Direct investment o Foreign company buys part or full interest in a local company or build own manufacturing or service facilities under own brand name  Acquisition o Acquire existing local brands instead of bringing existing brands overseas o Leverage on existing customer bases and resources of the local brand Chapter 9: Marketing segmentation Market segmentation: a group of customers who share a similar set of needs and wants  Geographic o Divides the market into geographical units such as nations, states, regions, countries, cities or neighbourhoods  Demographic o Divides market by age & life-cycle stage, life stage, gender, income, generation, education, social class, religion, nationality, race o Example: Parents of young and school-going children, age 25 to 45 years old, with household income of $3,000 and above.  Psychographic (believe, are) o Divides market based on psychological/ personality traits, lifestyle, or values o Lifestyle, personality o Example: These parents are likely to be kiasu and are focused on the educational achievements of their children.  Behavioural (Do) o Divides market by needs & benefits, decision roles, user and usage-related variables o Needs & benefits –not all buyers of a particular product have the same needs or want the same benefits from it o Occasions, user status (first time user), usage rate (from start till end) o Example: They may send their children for tuition and / or enrichment classes to improve their academic performance and to build their portfolio. They are likely to visit shopping malls on weekends to do grocery shopping, dine out and to spend time with their family.

Market targeting (Evaluating and selecting the market segments)  Consider the following two factors: o Segment’s overall attractiveness – size, growth, profitability, economies of scale and low risk o Company’s objectives and resources

Market Segmentation and Effective Targeting  To be an effective target, a market segment needs to be o Identifiable: be able divide consumers into separate segments based on identifiable characteristics such as demographics o Sizeable: must consist of enough consumers to make the segment profitable o Stable and Growing o Reachable o Congruent with marketer’s objectives and resources Chapter 10: Brand positioning (Positioning is the act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market) Determine Competitive Frame of Reference  Competitive frame of reference defines: o Which other brands a brand competes with, which brands should be the focus of competitive analysis  Identify competitor o Determine category membership, products with which a brand competes and which function as close substitutes  Analyse competitors o Competitive analysis – competitors’ strengths and weaknesses as well as their strategies and objectives Point of Differences (PODs)  Attributes or benefits consumers strongly associate with a brand and believe they could not find to the same extent with a competitive brand  Example - Apple (design, ease-of-use, and irreverent attitude)  Three criteria o Desirable to consumer o Deliverable by the company

o Differentiating from competitors Point of parity (POPs)  Attribute or benefit associations that are not necessarily unique to the brand but may be shared with other brands.  Three types o Category points-of-parity o Competitive points-of-parity o Correlational points-of-parity Brand mantra  Three to five word articulation of the heart and soul of the brand  Example, Starbucks – rich, rewarding coffee experience Chapter 12: Stages of product life cycle

Chapter 13: Product strategy (Anything that can be offered to a market to satisfy a want or need) Customer value hierarchy 1. Core benefit a. Service/benefit customer is really buying 2. Basic product a. Service/benefit turned into a simple product 3. Expected product a. Attributes & conditions buyer expect 4. Augmented product a. Exceeds customer’s expectations 5. Potential product a. Possible augmentation & transformation a product may undergo in future Product differentiation  Form - Size, shape, or physical structure of a product  Features - Features that supplement basic function.  Customisation - Individualise market offerings, messages, and media.  Performance quality - Level at which the product’s primary characteristics operate. Low, average, high, or superior level.  Conformance quality - Degree to which all produced units are identical and meet promised specifications.  Durability - Measure of product’s expected life under natural or stressful conditions.  Reliability - Measure of probability that a product will not malfunction or fail within a specific time period.

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Repairability - Measures the ease of fixing a product when it malfunctions or fails. Style - Describes the product’s look and feel to the buyer. It creates a distinctiveness that is hard to copy. (includes aesthetics)

Services differentiation  Ordering ease – How easy it is for the customer to place an order with the company.  Delivery – How well the product or service is brought to the customer – speed, accuracy, and care.  Installation – Work done to make a product operational in its planned location.  Customer training – Help customer’s employees use the vendor’s equipment properly and efficiently.  Customer consulting – Data, information systems, and advice services the seller offers the buyers.  Maintenance and repair – Help customers keep purchased products in good working order.  Returns – Returns or exchanges are an unavoidable reality of doing business Product line strategy  Line stretching o Occurs when a company lengthens its product line beyond its current range o Down-Market Stretch: introduce lower-priced line  Strong growth opportunities as mass-retailers attract more shoppers seeking value-price goods  Tie up lower-end competitors  Own market stagnating or declining o Up-Market Stretch: enter the high end market  More growth  Higher margins  Position as full-line manufacturers o Two-way stretch: stretch lines in both direction  Line filling o lengthen product line by adding more items within present range. Product mix - set of all products and items a particular seller offers for sale. A product mix consists of various product lines.  Types of pricing o Product line pricing  Price differences for items in product line  Example, mobile phones, tour packages  Eg: Low = $300, average=$600, High=$900 o Captive-product pricing  Require the use of ancillary or captive products  Eg: Printer = $49, Cartridge = $50 (repeated purchase)

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