Notes - Instructor: Rob Aitken; David Bishop; Cathie Child; Kirsten Robertson; Leanne PDF

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Instructor: Rob Aitken; David Bishop; Cathie Child; Kirsten Robertson; Leanne Ross; John Williams; Ben Wooliscroft...

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Lecture 1: What is Marketing What is marketing? The action or business of promoting and selling products or services, including market research and advertising Meeting needs and desires of people, organisations, and society Lecture 2: Creating Customer Relationships And Value Through Marketing Marketing perceived as - selling, advertisements, sales promotions, etc. Companies are becoming more authentic and transparent Demand for information → customer service What do customers want? Instant communication, quality, good price, uniqueness, customer service, transparency, sustainability, excellent experience, convenience, personalisation, same day delivery, customers want info on line and in store What is Marketing? Building long-term relationships Working with customers Determining needs Developing offerings that offer superior value The right product, at the right place, at the right time, at the right price Marketers are building content - and becoming publishers Who are my market? How do I reach them? What are their motivations? What are the problems I can help them solve? How can I entertain them and inform them at the same time? What content will compel them to purchase what I have to offer? What is Marketing? An organisational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders Broad view of Marketing? Marketing is the activity, set of institutions, and processes for creating, communicating, and delivering, and exchanging offerings that have valuer for customers, clients, partners, and society at large Social Marketing For the good of society (food waste) What is Value? Customer value refers to the difference between the benefits the customer gains from owning and using a product and the costs of obtaining the product Value differs based on your target segment The Marketing Management Framework The addition of the word management suggests concern with control and efficient allocation of resources Analysis - research, understanding the environment, what is happening now and likely to happen in the future Planning - where do we want to be Implementing - getting things done Control - measuring progress, taking corrective action Marketing process

Marketing is managing profitable relationships Marketing is the management process for identifying, anticipating and (40% of new products fail) Markets and Exchange Market - set of actual and potential users of product

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Marketing occurs when an exchange takes place Customer must be happier with the product than to have what they exchanged for the product The seller must assess the total costs and value to the customer to know how their offering rates in their buyers minds

Marketing Management Choosing target markets and building profitable relationships with them Market segmentation - who are you going to serve Demand - do you want to increase/decrease demand - depends on resources Choosing a value proposition - how are you going to differentiate your firm from the next The 4PS - Controllable Marketing Factors Product, Promotion, Price, Place Production concept - belief that consumers prefer available and affordable products, management concerned with production and distribution efficiency Demand exceeds supply Product concept - belief that consumers will choose products with the best quality, performance and features, management concerned with continuous improvement Selling concept - belief that consumers won’t buy enough unless a large scale selling and promotion program undertaken Marketing concept - belief that the most successful approach is to determine the needs of the customer and satisfy them more effectively (and efficiently) than competitors Marketing as a Philosophy

Basic Marketing logic -

Organisation works with customer ro co-create value → customer satisfaction → customer loyalty → organisational success

The corporate culture also shapes customer satisfaction -

Valued and committed employees are important for customer satisfaction and retention Companies must focus on internal marketing

Real marketing attempts to -

Know and understand the customer so well that that market offering solves their perceived problem and therefore sells itself (though the marketer will have to let the customer know it is available) Create enough value so both the customer and organisation are satisfied Result in a customer who is ready to buy (again and again)

Define Marketing and outline the steps in the marketing process: Marketing is the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. The marketing process involves five steps. The first four steps create value for customers. First, marketers need to understand the marketplace and customer needs and wants. Second, marketers design a customer-driven marketing strategy with the goal of getting, keeping, and growing target customers. Third, marketers construct a marketing program that actually delivers superior value. All of these steps form the basis for the fourth step, building profitable customer relationships and creating customer satisfaction and perceptions of value. In the final step, the company reaps the rewards of strong customer relationships by capturing value from customers. Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts:

Outstanding marketing companies go to great lengths to learn about and understand their customers’ need, wants, and demands. This understanding helps them to design want-satisfying market offerings and build value-laden customer relationships by which they can capture customer lifetime value and greater share of customer. The result is increased long-term customer equity for the firm. The core marketplace concepts are needs, wants, and demands; market offerings (products, services and experiences); satisfaction and value; exchange and relationships, and markets. Identify the key elements of a customer-driven marketing strategy: To design a winning marketing strategy, the company must first decide whom it will serve. It does this by dividing market into segments of customers (market segmentation) and selecting which segment it will serve (target marketing). Next, the company must decide how it will serve targeted customers (how it will differentiate and position itself in the marketplace) by deciding on a value proposition, which gives the customer a reason to buy the brand, rather than its competitors. The company then needs to ensure that it can develop lasting and profitable customer relationships by providing ongoing value to those customers. Describe the main trends and forces that are changing the marketing landscape in this age of relationships: The boom in computer, telecommunications, information transportation, and other technologies has created exciting new ways to learn about and relate to individual customers. It has also allowed new approaches by which marketers can target consumers more selectively and build closer, two-way customer relationships. In an increasingly smaller world, many marketers are now connected globally with their customers and marketing partners. Today, almost every company, large or small, is touched in some way by global competition. Today’s marketers are also examining their ethical and societal responsibilities Marketers are being called to take greater responsibility for the social and environmental impact of their action. Marketing myopia - the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products Demarketing - marketing in which aim is to reduce demand, either temporarily or permanently Lecture 3: Psychological Influences Motivation = is the energizing force that stimulates behaviour to satisfy a need and causes people to behave as they do, involves needs and goals Needs & Motivation

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Maslow’s Hierarchy of needs

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Motivational Conflict ← Approach - Approach → Which sandwich should I choose? ← Approach - Avoidance → Avoid a situation of being old ← Avoidance - Avoidance → Dentist - avoid pain and dentist Credit card, Insurance

Perception = the process by which individuals select, organize and interpret information to create a meaningful picture of the world Perceptual Process

Attention = processing activity is devoted to a particular stimulus Sensory overload = advertisements try to break through the clutter Interpretation = assigning meaning to sensory stimulus Depends on schema/set of beliefs to which we assign it Social loafing = phenomenon of a person exerting less effort to achieve a goal when they work in a group than when they work alone Consumer Learning Cognitive learning = through thinking, reasoning and mental problem solving Behavioural learning = developing automatic responses to a situation built up through repeated exposure Ongoing, incidental Relies on repetition and reinforcing Self-concept = they way people see themselves and the way they believe others see them Actual/Real self - true to your core identity Ideal self - person you want to be Private self - how we see ourselves in private Public self - how we see ourselves/are seen in public Looking Glass self - how we think others see us Extended self - something (product/possession/memory) becomes part of me Stimulus response model

Lecture 4: Scanning The Marketing Environment The environment shapes the company’s opportunities and threats To be successful, an organisation must adapt its marketing mix to trends and developments in this environment Every product has specific life expectancy - improvements and changes can enlarge this expectancy → market research Technology - changing parenting Alerts when your front door opens Cameras to check children are doing their homework Responding to the Environment - Change in food products Environmental forces affect the organisation, its suppliers, and its customers

An environmental scan of today’s marketplace shows the many important trends that influence marketing

Two broad categories of influence Micro-environment - elements directly connected to the organisation over which they may have some influence Macro-environment - wider set of variables that have an impact on all organisations ability to succeed Often described as outside the scope of an individual organisation influence Micro Environment Company – Do marketing decisions fit with the objectives and plans of senior management and the priorities of other departments? Suppliers Supply availability and pricing can influence your ability to deliver value Competitors - to be successful, an organisation must provide greater customer value and satisfaction than its competitors Components of Competition

Gull Effect - Inadvertently pushing up prices Marketing intermediaries Resellers - buy and sell merchandise Distribution organisation - warehouse, transportation Financial - financial transactions, insurance Marketing services agencies - research, advertising services Customer markets Customer markets Consumer: buy goods for personal use Business: buy offering to use in their own production process Reseller: buy to resell offering for a profit Government: buy offering in order to produce public services Public/Stakeholders Media Government: Regulations, ASA Local: Neighbourhood residents General Public: Attitude towards and image of the company Internal Public: Employees Social Forces Social forces Demographics

Economic Forces Gross income Disposable income Discretionary income Political Environment Includes laws and government agencies that influence or limit your company Legislation affecting businesses worldwide has increased Laws protect companies, consumers and the interests of society Technological Forces Technology Connectivity Electronic Commerce Online presence more important than ever Online shopping experience is becoming unique to individuals based on Demographics, geographic location, past purchases, brand interactions Sensor can detect nearby devices and offer personalised offers Responding to the Marketing Environment “There are three kinds of companies: those who make things happen, those who watch things happen, and those who wander what’s happened.” Increases emphasis on being socially responsible Summary The organisation must start with the marketing environment in searching for opportunities and monitoring threats. The marketing environment consists of all the actors and forces that affect the organisation’s ability to transact effectively with the target market. The marketing environment can be divided into the micro-environment and the macroenvironment. Lecture 5: Sociological and Cultural Influences Consumer lifestyles - a mode of living that is identified by how people spend their time and resources, what they think of themselves and the world around them, a patterned way of life Lifestyle Research - opinions, interests, hobbies, ownership, demographics, activities New Zealand Lifestyle Segment Young Pleasure Seekers Traditional Family Values Opinion Leaders and Word of Mouth Opinion Leaders are people who are knowledgeable about products and whose advice is taken seriously by others Exert direct or indirect social influence over others Toothpaste ads Word of Mouth - information about products and services that is conveyed by individuals on an informal basis Transmitted by individuals to individuals (company not directly involved), the influencing of people during conversations Reference Groups - people to whom an individual looks as a basis for self-appraisal Interaction - direct or indirect Nature of attraction - aspirational or dissociative Degree of formality - formal or informal Reference Group Influence Informational Influence Normative Influence - certain dress code Family - formal, direct, normative Family Life Cycles - distinct phases that family progresses through, each phase brining identifiable purchasing behaviour, a family life cycle consists of the distinct phases that a family progresses through from formation to retirement, each phase bringing with it identifiable purchasing behaviors

Culture - the set of values, ideas, and attitudes that are learned and shared among the members of a group, serve to regulate (consumer) behaviour of members of a particular society Dynamic, shared, learned through enculturation and acculturation Subculture - subgroups within the larger, or national, culture with unique values, ideas, and attitudes McCracken Transfer of Meaning Model

Lecture 6: Consumer Behaviour - Consumer decision making Problem Recognition = perceiving a need Actual Situation ---- Gap ---- Ideal Situation Information search = seeking a value External and Internal search Pre-purchase or ongoing search Alternative evaluation = assessing a value Deciding on Evaluative Criteria - Evoked Set - Determining Consideration Set Purchase Behaviour = buying value From Whom to Buy and When to Buy Post-purchasing behaviour = realizing a value Customer Satisfaction Cognitive Dissonance – A feeling of post-purchase tension or anxiety Different Types of Decision Making Fishbein Model: Multi-Attribute Model The attitude towards an object is based on the summed set of beliefs about the object’s attributes weighted by the evaluation of these attributes Attitudes = a learned predisposition to respond to an object in a consistently favourable or unfavourable way lasting – general evaluation – of people, objects, advertisements, or issues – pre-disposition to respond Consistency = seek harmony among thoughts/ feelings, and behaviors change to make thoughts/feelings & behaviour consistent

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Compensatory vs Non-Compensatory DM Compensatory DM – A low value on one attribute can be compensated by a high value on another attribute E.g. Fishbein Model Non-Compensatory DM: – benefits on some attributes may not compensate for shortfalls on others

Elimination by aspect: – … has to have an excellent academic reputation – - … has to be affordable DM Influenced by -

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Level of Involvement = perceived level of personal importance or interest (psychological outcome of motivation) Enduring Involvement Situational Involvement Purchase Situation Purchase Task Social Surroundings Physical Surroundings Temporal Effects (time of day)

So, there are three different decision types Routine decision making (habit) – Low involvement Limited decision making Extensive decision making – High involvement Lecture 7: Market Segmentation, Targeting, and Positioning Market Segmentation - involves aggregating prospective buyers into groups, or segments, that have common needs and will respond similarly to a marketing action Each market segment consists of people who are relatively similar to each other Market segmentation links market needs to an organization’s marketing program Product Differentiation: = marketing strategy Firm using different marketing mix actions To help consumers perceive the product as being different (and better) than competing products

1. Group potential buyers into segments Geographic Segmentation Demographic Segmentation Behavioural Segmentation (incl Usage) Benefit Segmentation Psychographic Segmentation / Lifestyle Segmentation 2. 3. 4. Select Target Markets Actual selection of segment(s) you want to serve Strategies: One Product – One Market (Market Aggregation) - flour, fuel, coal One Product – Multiple Market Segments - Harry Potter books, Star Wars movies Multiple Products – Multiple Market Segments - Milk (fresh, fat, light, low calories milk, extra calcium) One Product – One Segment - Ocho chocolate ($12 - $15) Consider Market size, expected growth Cost of reaching segment Segment’s willingness to react Compatibility with organizational objectives and resources Competitive position

The right product in the right place, at the right time, at the right price Product Positioning - the place a product occupies in consumers’ minds based on important attributes relative to competitive products Head to head Positioning (against a competitor) Differentiation Positioning (away from competitor) Consideration - product attributes, benefits, usage occasions, users Perceptual map - displaying the location of products or brands in the minds of consumers (High/Low Quality, High/Low Price) Product REpositioning = changing the place a product occupies Lecture 8: Market Research - from customer insights to actions Marketing Research - The process of v defining a marketing problem and/or opportunity, systematically collecting and analyzing information and recommending actions 5-Step Marketing Research Approach

Step 1: Define the problem What do we want to find out? Is there a problem? What exactly is a problem? Define the research objectives Define the research questions Step 2: Develop a Research Plan What constraints do we have? What type of data is needed to answer RQ? What data collection methods to employ Exploratory - explore, provide idea about vague problem, understand why Descriptive - describe a situation, find frequencies, put a number to it Causal - change in one variable - leads to change in another How do we measure research’s success Types of Marketing Information

Step 3: Collect Information Secondary data: gathered previously for other purpose, relatively cheap, easy to get, not time consuming, out of date, does not answer specific question Internal Data Sales data, Revenue, Costs, Customer Database, Employee knowledge (Salesforce etc) External Data Statistics New Zealand, Government, Trade Journal, Reports, Newspapers / TV, Market Research Firms Primary data: Newly collected for specific project Watching People - Observation, Ethnographic Research Asking People - Surveys & Questionnaires, Focus Groups & Interviews Experiments Other Sources: Social Media Big Data & Data Mining Social Media - Customers part...