Introduction to Marketing Concepts

Introduction to Marketing

• Marketing reveals a product's purpose
• Management functions: planning, organizing, staffing, leading, controlling
• Business functional areas: operations, HR, accounting, finance, marketing
• Market encompasses target market (potential buyers)
• Customer buys; consumer consumes
• Generational cohorts share similar experiences
• Markets are potential and actual buyers
• Marketing is the process of creating value for customers
• Kotler's definition: creating customer value, strong relationships, and capturing value back
• Walton's definition: right product, price, place, and promotion
• Marketing mix (4Ps): product, price, place, promotion, process, physical evidence, people
• Marketing is moving goods/services from concept to customer
• New product development process: idea generation, screening, evaluation, development, commercialization
• Marketing is beyond advertising & selling; customer satisfaction & profitability are key
• Two marketing perspectives: storytelling/selling, and customer relationships
• Marketing process: understand needs, design strategy, create value, build relationships, capture value
• Strategic 3Cs: customers, competition, company
• USP (Unique Selling Proposition): competitive advantage, differentiating benefit
• Demand: purchasing power
• Marketing and Exchange: company sells goods to customers
• Marketing System: supplier → company/competitors → intermediaries (retailers, wholesalers) → consumers
• Marketing Management: choosing target markets, building profitable relationships
• STP (Segmentation, Targeting, Positioning)
• Selecting Customers: segmentation and targeting
• Segmentation: demographic (age, gender), geographic (location), psychographic (AOI), behavioral (frequency)
• Value Proposition: benefits/values to satisfy needs and uniquely solve problems
• Examples of value propositions: Nike's accessibility, innovation, customization, and status

The Marketing Process

• Marketing: creating customer value and building strong relationships to capture value
• Marketing framework stages:
  • Stage 1: Understanding markets & customer needs & wants (VUCA)
  • Macroenvironment: PESTLE (political, economic, social, technological, legal, environmental)
  • Microenvironment: Internal factors
  • Needs: states of deprivation; Wants: culturally shaped desires; Demands: wants backed by buying power
  • Market offerings (product, service, information, experiences) satisfy needs/wants
  • Marketing Myopia: focusing on current wants, ignoring underlying needs and wants.
  • Stage 2: Designing a customer-driven strategy
    • Segmenting: dividing market into groups with similar needs/wants
    • Targeting: evaluating segment attractiveness, selecting segments
    • Positioning: defining product in consumers' minds based on attributes
    • Segmentation methods: demographic, geographic, psychographic, behavioral
    • Marketing Orientations: Production, Product, Selling, Marketing, Societal
  • Stage 3: Preparing an integrated plan and program
    • Integrated marketing program: communicating & delivering value to chosen customers.
  • Stage 4: Building customer relationships
    • CRM (Customer Relationship Management): building/maintaining profitable relationships
    • Customer Perceived Value: difference between total customer value and cost
    • Customer Satisfaction: perceived product performance matching expectations
  • Stage 5: Capturing value from customers
    • Customer Lifetime Value (CLTV): total purchases over customer lifetime
    • Share of Customer: portion of purchases from a company
    • Customer Equity: all customer lifetime values combined; Factors: relationship equity, value equity, brand equity

SWOT Analysis

• SWOT (Strengths, Weaknesses, Opportunities, Threats) – evaluate competitiveness and strategic planning
• SWOT is used for realistic, fact-based, data-driven perspective of a company
• Strengths: internal resources/capabilities for competitive advantage
• Weaknesses: internal factors disadvantaging the company; hinder mission/potential
• Opportunities: external positive events; increase chances for success
• Threats: external negative events; risk to competition
• Benchmarking: comparing processes & metrics (best practices)
• TOWS matrix: strategic analysis for formulating strategies

Consumer Behavior

• Consumer behavior: final consumer buying behavior, personal/household consumption
• Consumer market: all consumers who buy/acquire for personal use
• Market research on consumer behavior to understand: who buys, how they buy, when/why/where
• Model of consumer behavior: Environment → Buyer's Black Box → Buyer Response
• Buyer responses: purchasing preferences, brand loyalty, etc.
• Consumer Roles in the Buying Process: initiator, influencer, decider, gatekeeper, buyer, user
• Five stages of the decision process:
  • Need recognition
  • Search
  • Information sources (personal, commercial, public, experiential)
  • Choice
  • Purchase
  • Post-purchase (satisfaction, comparison, evaluation)