Marketing Basics Ch 1-4, Ch 1-12

• These notes are written in reference to Midterm (Ch. 1 - 4), and Finals (Ch. 1 - 12)

Defining Marketing

• Marketing involves having products/services and selling them to both customers and society, provided there's recognized value.
• Value is derived from what customers receive compared to what they give up.
• If perceived benefits outweigh the cost, there's value; otherwise, there is none.

Activities in Marketing

• Creating Value: developing offerings through collaboration.
• Communicating Value: describing the offering's value and understanding customer needs.
• Delivering Value: providing offerings where they can provide value.
• Exchanging Value: trading value for offerings.
• The personal value equation is calculated as: Value = Benefits received - (Price + Non-financial Costs)

Non-financial costs

• Consist of time and effort spent shopping.
• Personal value varies among customers.

The 4Ps

• Product: goods and services (creating offerings), and input is needed from all departments.
• Promotion: communicating effectively through advertising and customer education.
• Place: where products are sold, delivered through the company's supply chain.
• Price: the monetary exchange for products, including non-monetary aspects like loyalty points or data sharing.

Marketing Concepts

• Market-oriented approach prioritizes satisfying customer needs while ensuring profitability.
• Production-oriented focuses on reducing production costs, assuming products will sell based on quality.
• Selling-oriented involves aggressive sales tactics used during periods of scarcity or economic downturn.
• Product orientation focuses on creating products that differentiate from others
• Market orientation creates products based on customer needs and wants.
• Value orientation advances market orientation by building customer relationships.

Marketing's Role in Organizations

• Organizations begin with an idea to improve customer service, often formalized in mission statements.

The Changing Marketing Environment

• Criticisms of marketing include creating unnecessary wants, like in the fashion industry which leads to waste.
• Sustainability involves managing the disposal of harmful products.
• Ethics and social responsibility require firms to act ethically to avoid societal backlash.
• Service-dominant logic focuses on delivering service rather than just products, tangible or intangible.
• Metrics involve data analysis to evaluate the effectiveness of marketing efforts.
• Global environment necessitates awareness of varying cultural standards.

Components of Strategic Planning

• Strategic planning involves situation analysis and developing a mission statement, objectives, and strategies.
• Planning Phase: assessing the external & internal environment, setting objectives and missions.
• Implementation Phase: determining opportunities and using the 4Ps.
• Control Phase: evaluating performance and using marketing metrics.

Situation Analysis

• Situation analysis must be conducted before making specific actions, considering internal (micro) vs. external (macro) factors.
• Micro Environment includes resources, capabilities, and corporate partnerships.
• Micro-competition centers on competition between companies and their corporate partners.
• Macro Environment is the PESTC which consists of Political, Economic, Socio-Cultural, Technological, and Competitive factors.

Considerations in the Macro Environment

• Political Factors: government policies, regulations, and legislation.
• Economic Factors: economic trends, taxation issues, and market cycles.
• Socio-cultural Factors: media views, social factors, consumer patterns, and demographics.
• Technological Factors: technology development, research funding, and technology legislation.
• Competitive Factors: potential new entrants, product substitutes, and competitive intensity.
• SWOT analysis: Analyzing Strengths, weaknesses, opportunity, and threats

Organizational Objectives and Strategies

• Objectives are the end goals organizations aim to achieve within a specific timeframe.
• Strategies are the plans of action or game plans to achieve objectives.
• Tactics are specific actions, like coupons or ads, used to execute strategies.
• Marketing plan is a strategic plan at the functional level, and guides a company's marketing direction.
• Market Penetration leverages existing products in existing markets to increase sales.
• Market Development introduces existing products to new markets.
• Product Development introduces new products to existing markets.
• Diversification involves entering new markets with new products.

Developing Sustainable Competitive Advantage (SCA)

• Locational excellence: gained through strategic locations or online presence.
• Operational excellence: achieved by improving company operations.
• Product excellence: having a high perceived value and good branding.
• Customer excellence: retaining loyal customers and providing excellent service.

Strategic Planning Within Companies

• Corporate Level: top executives develop strategic plans for the entire corporation.
• Business Level: strategic business units (SBUs) formulate their own plans and mission statements.
• Functional Level: developing a marketing plan or financial plan, specifically executed based on business plans.

Strategic Portfolio Planning Approaches

• BCG Matrix is used for strategic portfolio planning
• Market growth rate is the company's market share compared to its industry.
• Relative market growth rate is the company's 'market share compared to its competitor.
• Stars are high market share, and high growth rate, which require investment to maintain growth.
• Cash Cows are high market share, and low growth rate, but need careful management to fund stars.
• Question Marks are low market share, and high growth rate, and require decisions on investment.
• Dogs are low market share, and low growth rate, so company may be advised to invest eleswhere

Understanding Buyer Behaviour

• Consumer behaviour - reasons behind why people acquire products or services.

Consumer Decision Making Process

• The consumer decision-making framework is organized into 5 stages:
• Stage 1: Need/Want Recognition when consumer identifies a need or problem.
• Stage 2: Search where the consumer looks for information and uses prior knowledge.
• Stage 3: Evaluation where the consumer will evaluate different options based on several factors.
• Stage 4: Choice occurs once the evaluation is done, but is still influenced by sales tactics.
• Stage 5: Post Purchase Use and Evaluation: Customer will regret if expectations are not met.

Product Disposal

• Product Disposal, known as the term circular economy to describe a business production model.
• Takes out waste and pollution.
• Keeps the products and materials they are made of in use for as long as possible.
• Protects and regenerates natural systems (disposing of products and reusing them.)

Low-Involvement vs High-Involvement Buying

• The level of involvement reflects how important or interested the consumer is in the decision.
• Low-involvement decisions are inexpensive, regularly purchased, and have minimal risk with little thought.
• This can also be known as Routine response behaviour
• Impulse buying - purchases that are made without planning or previous thought
• High-involvement decisions carry higher risk to buyers, and are at a higher price.
• Extended problem solving: Comparing aspects like features, prices, and warranties, which can cause post-purchase dissonance.
• Limited problem solving- a mix of both high/low, where one knows some info but is still searching for something new.

Influences on Consumers' Buying Behaviour

• External Factors include Social norms, time constraints, and situational factors.
• Psychological Factors include motivations and beliefs.
• Selective exposure: seeking information aligned with existing beliefs.
• Selective attention: focusing on certain things while ignoring others.
• Selective retention: remembering belief-consistent info, forgetting contradictory information.
• Selective distortion: misinterpreting messages to confirm beliefs.
• Learning: past experiences and instrumental conditioning influence behaviour.
• Attitude: operant/instrumental and classical associations influence purchasing behaviours.
• Personal Factors:
• Chronological age is actual age.
• Cognitive age is how old you perceive yourself.
• Societal Factors are related to you and those around you, which influence your buying.
• Marketing research helps companies answer specific questions.

Research Steps

• Step 1: Define the problem
• Step 2: Design the research, either through primary or secondary sources.
• Step 3: Design data and collection forms
• Step 4: Specify the group studying
• Step 5: Collect the data
• Step 6: Analyze the data
• Step 7: Write the report

B2B Markets

• Derived demand originates from a source other than the primary buyer; often consumers.
• Fluctuating demand has a domino effect, with small changes impacting the entire supply chain.

B2B vs B2C Markets

• Market Characteristics: External factors affecting the market (demographics, competition)
• Product Characteristics: Features and qualities of the product itself
• Buying Process Characteristics: consumer decision-making process
• Marketing Mix Characteristics: The 4 Ps

B2B Buyers

• Producers transform goods and services into other products.
• Resellers sell goods without material changes, including wholesalers and retailers.
• Governments buys huge quantities.
• Institutions are nonprofits and hospitals.
• Need Recognition - need for a specific product/service
• Product Specification - define requirements/specifications the product needs
• Supplier Search - looking for a correct vendor
• Proposal Analysis & Supplier Selection - choosing supplier
• Order Specification - price, quantities, date, details
• Performance Assessment - assessing supplier afterwards

Factors Affecting the Buying Process

• The Buying Centre is groups of people who make purchasing decsions:
• Initiator sees the need for product
• Influencer has expertise
• Decider is the final person to make the decision
• Buyer chooses products at best prices
• User will use product
• Gatekeeper will decide whether you can get thru

B2B Situations

• Straight rebuy is purchase the same product in the same quantity from a vendor.
• New Buy is when a product is bought for the first time.
• Modified rebuy is same product from before, but modifications have been made.

The Buying Culture

• Autocratic - one person in charge
• Consultative - one person decides but consults with others
• Democratic - majority decides
• Consensus - everybody agrees
• Interpersonal factors - office politics
• Personal Factors buyer might choose a vendor who they favour more

Networks and B2B relationships

• Relationship commitment is a belief that a relationship with a business partner is important
• Relationship trust is confidence in other partners' reliability and integrity.

Targeted Marketing vs Mass Maketing

• Target market is the target group
• Mass marketing is broad but not personalized
• Differentiated is more personalized when focusing on specific customer segments.
• One-to-one marketing builds closer relationships with all customer

Steps in one-to-one marketing

• Establishing metrics
• Looking more closely at customers
• Differentiating among customers

Markets

• Segmentation bases is used to classify buyers to create real value for them.
• Segmentation Targeting Positioning Process
• Needs-Based Segmentation similar needs and wants are identified
• Market Identification behaviour, demographics, geography, and psychographics.
• Segment Attractiveness, Profitability, Positioning, Marketing-Mix Strategy.
• Segmental attractiveness has good growth, is identifiable, and accessible etc.
• Target Market consists of multi segments and concentrated market.
• concentrated markets are niche

Ways to position products

• Target Market - their characteristics
• Needs - the customer's
• Benefits that the customer gets
• Differentiation in the market

Parts of an Offering

• Products, services designed to deliver value to customers.
• A formula to calculate is: (Product + Service [benefits received] - Price)
• Features, characteristics of an offering. (Ex: storage of an iPad)
• Total cost is the amount to own, use, and throw the product out eventually

Marketing

• Service-Dominant Approach focuses on the relationship with customer
• Product-Dominant Approach focuses on the product you are trying to sell
• The core is the main product what you are trying to push
• Augmented has things that make the product even better than the original
• A product's technology platform is the core technology it is built on.
• Product line is related, offering many distinct ones (ex: Apple).
• Finally, line depth is the different offerings from each group.
• Mix is the entire arrangement of products that a firm offers