Marketing Definitions: AMA

Marketing Definitions

• American Marketing Association (AMA) 1935
  • Marketing is the performance of business activities that direct the flow of goods and services from producers to consumers.
  • It focuses only on the movement of goods and services from the producer to the consumer.
  • Coca-cola and Indian rail services are examples.
• AMA 1985
  • Marketing involves planning and executing the conception, pricing, promotion, and distribution of goods, ideas, and services to create exchanges that satisfy individual and organizational goals.
  • It is not limited to physical goods but includes ideas and services.
  • Amul is an example used for innovative dairy products, affordable pricing, iconic promotion, and massive cold chain distribution.
• AMA 2004
  • Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
  • It manages long-term relationships through loyalty programs.
  • Amazon Prime membership, fast delivery, and continuous customer engagement serve as an example.
• AMA 2007: Marketing involves creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society.
• AMA 2017
  • Marketing involves creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society.
  • It creates value that supports both customers and the environment (society).
  • Examples include Tesla's electric cars and Nike shoes that promote equality and remove gender disparity.
• Dr. Philip Kotler defines marketing as the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.
  • It identifies unfulfilled needs and desires, defines the market size and profit potential, and pinpoints segments the company can serve best through appropriate products and services.
  • The process involves exploring the market, measuring its size and opportunities, deciding which segments to target, and designing products and services.

Key Marketing Terms

• Marketing research links the consumer, customer, and public to the marketer through information used to identify and define marketing opportunities and problems.
  • It generates, refines, and evaluates marketing actions, monitors performance, and improves understanding.
  • Marketing research specifies the required information, designs the collection method, analyzes the results, and communicates implications.
  • Jio used this to understand data usage in rural areas before launching JioPhone.
• A brand is a name, term, design, symbol, or feature that identifies one seller's goods/services as distinct from others; it is an offering from a known source.
• Needs are basic human requirements like food, air, water, clothing, and shelter.
• A want is a specific satisfier for a need, such as wanting a curry when hungry.
• Demands are wants for specific products backed by an ability to pay.
• A product is a bundle of benefits from a consumer-oriented perspective.
  • Consumers buy products based on their perceived benefits, such as Dettol soap providing protection from germs.
• Companies address needs by offering a value proposition, which is a set of benefits to satisfy customer needs.
  • The intangible value proposition is made physical through an offering combining products, services, information, and experiences.
  • Examples include Tata Nexon EV's affordable electric mobility and Starbucks' cafe environment.
• Value reflects the sum of perceived tangible and intangible benefits and costs to customers.
  • It's a combination of quality, service, and price, known as the "customer value triad".
  • Value increases with quality and service but decreases with price.
• Satisfaction is a person's judgment of a product's perceived performance relative to expectations.

What is Marketed

• Goods such as physical products.
• Services such as production of services.
• Events like trade shows and company anniversaries.
• Experiences are created by orchestrating services and goods, such as Imagicaa Theme Park.
• Persons such as celebrity marketing with high-profile individuals and professionals.
• Places like cities, states, and regions.
• Properties like real estate or bonds.
• Organizations working to build a strong, favorable image, like Tata Group promoting ethical business.
• Information which includes books, schools, and universities, such as Byju's selling online educational courses.
• Ideas market offerings that include a basic idea to deliver some benefit.

Marketing Environment

• Marketing environment divides into external and internal areas.
• The external environment concerns events outside the organization.
• The internal environment deals with factors within the organization.
• Organizations often focus more on the external environment.
• Environmental forces handled through reactive and proactive approaches.
  • Reactive managers adjust plans to fit environmental changes.
  • Proactive managers seek to influence the environment.

The 4 Ps of Marketing

• Product
  • Defined as a bundle of attributes including features, functions, benefits, and uses that exchange tangible and intangible forms.
  • The term product encompasses both goods and services.
• Price
  • Expressed as a formal ratio that indicates the money, goods, or service needed to acquire a given quantity of goods or service.
  • It is the amount paid by a customer for a product purchased.
• Place (or Distribution): The act of marketing and carrying products to consumers covering the extent of market coverage.
• Promotion
  • ANA defines tactics to encourage short-term purchases, influence trials, drive quantity, and influence share.
  • Examples: coupons, sweepstakes, rebates, special packaging, cause-related marketing, and licensing.

The 7 Ps of Marketing

• People
  • They are crucial for service delivery, particularly when dealing directly with consumers, like restaurant waiters.
• Process
  • The process that provides the service provided is part of the consumer's payment.
  • A customer seeking a quick service will look at fast food, and one looking for a relaxing meal will go for a restaurant with higher waiting times.
• Physical Evidence
  • Most services have physical aspects, such as meals in restaurants, or the atmosphere, the waiter etc that are part of the bill.
  • Includes hairdressing salons, and insurance companies that issue documentation for policies.

Holistic Marketing Management

• Holistic marketing development, design, and implementation, that integrates breadth and interdependencies of marketing programs, processes, and activities
• Holistic marketing recognizes that "everything matters" in marketing, requiring an integrated perspective.
• Relationship marketing builds mutually satisfying long-term relationships to retain business.
• Internal marketing ensures everyone embraces appropriate principles, especially senior management.
• Integrated marketing aligns activities to create value through marketing activities that work together.

Holistic Marketing Orientation and Customer Value

• Value exploration is how a company identifies new value opportunities.
• Value creation is how it creates more promising new value offerings efficiently.
• Value delivery involves using capabilities and infrastructure to deliver value efficiently.

Value Chain Model

• Michael Porter's value chain is used to identify ways to create customer value.
• His model describes every firm's synthesis of activities performed to design, produce, market, deliver, and support its product.
• The value chain identifies nine strategically relevant activities: five primary and four support activities that define where value lies.
• Primary activities include inbound logistics, operations, outbound logistics, marketing, and servicing.
• Support activities include procurement, technology development, human resource management, and firm infrastructure.
• A firm must examine its costs and performance in each aspect to maximize its value-creating goals
• Managers estimate competitor data as a benchmark when going to the best-in-class level.

The Industry Life Cycle

• Development, Growth, Shakeout, Maturity and Decline.

Product Life Cycle

• Introduction, Growth, Maturity, and Decline.

Market Segmentation and Targeting

• STP is the strategic process where businesses identify customers, select groups to serve and develop the product's unique persona with new customers.
• Market segmentation divides the market into smaller groups of people; these groups are divided on behavior and needs.
  • Segmentation develops detailed profiles identifying who the customer is
• Target marketing selects specific segments for targeting based on attraction.
  • This involves a measure of whether that segment is worth the resource used in servicing it
• Market positioning creates a unique image for the customers.
  • This strategy involves positioning for select targets so that a marketing mix can be developed for each.

Segmenting Consumer Markets

• Segmentation is Geographical, which segments on location, where Domino's segmentation based on location
• Segmentation is Demographic: based on age and education, sex
• Segmentation is Psychographic, and segments by lifestyle and social class.
• Segmentation is Behavioral by usage.

Types of Target Marketing

• Undifferentiated
• Differentiated
• Concentrated
• Micro

Target Marketing Strategy Elements

• Targeting resources to company initiatives, and variability of the product.

Choosing Target Marketing Responsibly

• Some segments are a risk to children, and controversy can arise from some questionable processes

What is Positioning

• Positioning is created by defining a unique image so as to compare to the closest competitors; defined from what is already in place.
• Some methods for generating new customers with these include brand benefits so as to differentiate the customer's mind on important attributes.

Choosing a Positioning Strategy

• Competitive advantages involve finding possible advantages like creating new services or products.
  • Promoting unique differences of those products like affordability.

Value and Positioning

• Value positions that are well created brand image
• Including Mercedes Benz with product pricing Samsung with product features offering new competitive advantages

Brand Value Chain

• It describes how a brand becomes valuable, beginning with marketing investments through customer perception and ultimately, financial performance.
• The brand value chain provides a snapshot to better understand where the value is created.
• The chain has 4 basic principles assuming the value resides with how customer's measure of a brand .
  • These include the resources required and those which can reduce it.
  • It does require those that can help in brand development.

Business Model

• A business model shows how a company will make its money
• It shows what the company does to solve the four questions.
  • What product is sold; how it is sold, and what will make sure the company produces income.

Key Elements in Business Development

• Value proposition: how is product attractive?
• Target market: who would use it?
• Competitive advantage: What about your product makes it difficult to copy.
• Cost Structure: What are your fixed and variable costs?
• Key Metrics: How do you measure the outcome?
• Resources: What can you use?
• Problem solution for the target market.
• Creating new revenue sources.

Business Model Methods

• Subscriptions to various channels, including Netflix.
• Bundling two products to sell as one.
• Cheap products that are inexpensive: Razerblade.
• Getting products on the cheap and reselling: The free Model in Spotify.
• Using an already successful product and renting it out.
• Crowdsourcing: using the ideas of others (Wikipedia, YouTube).
• Donating an item with every purchase.
• Franchising successful business models to small clients.

Choosing the Right Business Model

• Do I serve the correct customer.
• Is there a benefit?
• Will those benefits generate revenue?
• Expenses fixed?
• How can I get investment?

Design Thinking

• Is there empathy involved?
• Are balance and feasibility considered?
• Is it an approach to inquiry?
• Does experimentation get promoted?
• Can it solve complex problems?

How does it help?

• It helps create and frame opportunities with a human centered problem.

Design Thinking Elements

• Empathize
• Define
• Ideate
• Prototype
• Test

linking these into strategic advantages

• It can assist if you're experiencing standardisation

Value Innovation

• The framework can help lower actions that require a budget, but raise performance with buyers.

What is Blue Ocean

• It is the act of creating something new and unique

How to Make Red Ocean Blue

• Instead of fighting competitors, create new values and strategies.
• Creating a blue ocean is not just about competing; it is about developing uncontested market space and eliminating irrelevant competition.

Key Elements to a Value Chain

• Identifying with others and creating new markets.
• To achieve this new framework should be developed that creates differentiation so one can achieve competitive advantage.

Six Action Strategy

• Find those that can use you, and discover new industries to make them more competitive.

The Strategy Canvas

• This is used as an action-oriented framework that's designed to achieve a well rounded approach from both the company end (efficiency) and user base (creating a new image for your brand) and new opportunities.

What is Strategic Management

• In essence it means
  • Where do you want to grow the business?
  • How do you plan to grow?
  • Defining what it is and guiding it.

How to make Strategic Managment

• Develop a visionary goal so can ask - where do we want to be?
  • This is why the mission statement is also an important component that defines objectives to accomplish in the form of polices.
  • So can ask : what do we want to do?

Key Strategic Points

• Can we get clear what the business is and who are our customers to generate long-term growth and new results.

Understanding New Value (Innovation)

• Can come from new products, services, or business models with customer demand.

Understanding this for value in society

• Will help lead the ability to adopt new techniques with structure and procedures

Differentiating Innovation from Invention

Is this about the market, the product, and something that is a result of goals.

implementation requires new leaderships skills to create this

• This will involve the integration, alignment and extension needed to deliver these new services.

innovation models

• There is disruptive and sustainable ones to promote existing products and new frameworks too.

Understanding How Innovation Is Used

• Innovation can be a process, and help improve process by open systems
• Open processes use customer feedback
• Closed systems will help retain control with the right skills to compete.

Using Product Innovation

• Improving features, and digital camera for new phones.
• This can involve the integration of external users and internal stakeholders to ensure a clear line of objectives.

The End

• Thanks for Listening!