Introduction to Marketing Concepts

Introduction to Marketing

• Marketing is a process where companies create value for customers and build strong relationships to capture value.
• Focus on customer needs and wants, and providing more effective and efficient satisfaction than competitors.
• Marketing is not just sales, advertising, or fads; it shouldn't mislead people.
• Marketing should identify and fulfill a market demand, and begin before a product is created.
• Products, services, organizations, people, places, and causes can all be marketed.

Marketing Strategy

• Strategic Planning Steps:
  • Define the company's mission
  • Set objectives and goals
  • Design the business portfolio
  • Plan marketing and other strategies.
• Mission statements should be market-oriented, meaningful, and specific, highlighting company strengths and how it intends to win the marketplace.
• Business objectives include profit increase, customer focus, sustainability.

Design the Business Portfolio

• Portfolio analysis is a major activity in strategic planning to evaluate products/businesses managed by a company.
• Identify Strategic Business Units (SBUs); distinct parts of a company that operate independently with their own mission, objectives, and strategies.
• Assess SBUs' market potential and profitability.
• Allocate resources to SBUs based on potential profitability and company goals.
• Tools for portfolio analysis include the BCG Matrix and GE/McKinsey Matrix.
  • BCG Growth-Share Matrix: Categorizes SBUs based on market growth and relative market share, dividing them into Stars, Cash Cows, Question Marks, and Dogs.
  • GE/McKinsey Matrix: Categorizes SBUs based on two dimensions, market attractiveness and business position, categorizing them into Quadrants to facilitate investment and growth decisions.
• Key activities in portfolio analysis are evaluating business portfolios, analysis of strategic business units, assessment of market attractiveness, allocation of resources.

Marketing Planning and Strategy

• Segmentation: Grouping consumers with shared traits.
• Conditions for segments should be differentiable (responding differently to market mixes), accessible (effectively reachable), actionable (creating programs aimed at the segments), and substantial (a large or profitable group).
• Different ways to segment include geographic location (laws, culture, infrastructure, etc.), demographics (age, income, education, etc), psychographics (beliefs, personality, lifestyles), and behavioral (purchase frequency, usage occasion, etc.).
• Targeting: Selecting the segments to focus on.
• Targeting strategies include undifferentiated (mass marketing), differentiated (serving different segments), and concentrated (targeting only a specific segment).
• Differentiation: creating superior customer value.
• Positioning: Establishing a brand's distinctive place in customer's minds.

Marketing Research

• Systematic design, collection, analysis, and reporting of relevant data for marketing problems.
• Aiming to identify and define marketing opportunities and problems, evaluate marketing actions, and monitor performance.
• Includes internal databases, external sources, qualitative and quantitative approaches.
• Quantitative research uses large samples and structured methods (eg surveys, experiments).
• Qualitative research uses small samples and unstructured methods (eg focus groups, in-depth interviews, etc).

Product & Services

• Product Classification: Convenience products (frequent purchases, low effort), shopping products (less frequent, comparisons), Specialty products (high effort, brand loyalty), Unsought products (low awareness, rarely purchased).
• Product line and mix
  • Product line: a group of related products (variations of a given product).
  • Product mix: a total offering of products from a given company, classified by width (number of product lines), length (total products across all lines), depth (number of versions of each product), and consistency (degree to which lines are related).
• Product life cycle (PLC): Introduction, Growth, Maturity, and Decline.
• Technology Adoption Curve: Innovators, Early Adopters, Early Majority, Late Majority, and Laggards.

Branding

• Differentiates a brand in competitive markets by highlighting unique value, creating a distinct image.
• Brand Salience, Brand performance, Brand Imagery, Brand judgments, Brand Feelings, and Brand Resonance must be addressed.

Marketing Channels

• Marketing channel (or distribution channel): Independent organizations linking a product to consumers.
  • Direct channels (producer to consumer) vs Indirect channels (producer to intermediary to consumer).
  • Channel benefits include economies of scale, complexity reduction for customers, and product matching to consumer needs.
  • Conflicts can arise vertically (between producer and retailer) or horizontally (between two retailers).

Promotional Pricing

• Temporary price reductions (to drive short-term sales); risk of the "dust settling effect" (selling drops after promotions).
• Segmented pricing (differing prices for same product to certain groups).
• Dynamic pricing: Adjusting prices in real-time depending on demand, supply, and competitor actions.

Digital Marketing

• Using digital media, data, and technology to deliver value to consumers.
• Builds brand awareness, engagement, and retention.
• Paid, owned, and earned media; push (broadcast) and pull (consumer-seeking) media.

Sales Promotions & Personal Selling & Pricing

• Sales promotions: Offering incentives for immediate purchases (eg. free samples, bonus packs)
• Types of pricing: cost-based pricing (sets price based on cost of goods, distribution and sales), value-based pricing (determined by perceived customer value), competition-based pricing (based on competitors' pricing), and premium pricing (higher pricing for unique products); new product pricing (skimming and penetration pricing).
• Personal selling: face-to-face interactions for relationship building and problem solving.

New Product Development

• Stages in new product development: Idea generation, idea screening, development and testing, strategy development, business analysis, test marketing, and commercialization.
• Failure causes: insignificant point of difference, incomplete market/product definition, insufficient market attractiveness, timing issues., flawed research, packaging failures.

Additional Information

• Brand architecture (single vs. multiple brands), Sustainable Marketing, Key Issues (Greenwashing, Greenhushing), Examples of Sustainable Marketing (Unilever Approach), Key Issues.

Explore the essential concepts of marketing and strategic planning. This quiz covers topics such as creating value for customers, understanding market needs, and developing effective marketing strategies. Test your knowledge on how to build strong relationships and plan business portfolios effectively.