Marketing Essentials: The 4 P's

Marketing Essentials

• Marketing involves creating and maintaining relationships using the 4P's (Product, Price, Promotion, Place)
• Relationships should satisfy the goals of both individuals and organizations
• Value is defined as the benefits a customer receives from purchasing a good or service

The Marketing Mix (4 P's)

• Product: The actual good or service being offered
• Pricing: How much the product or service costs
• Promotions: Ways to inform, persuade, and remind customers about the product
• Place: Where the product is available to customers

Core Business Functions

• Production/Operations: Creating the product or service
• Financial: Managing the company's finances
• Human Resources: Managing the employees
• Marketing: Promoting and selling the product or service

Factors of Production

• "Land": Natural resources
• Labor: Human effort
• Capital: Equipment and machinery
• Knowledge: Expertise and information

Marketing Philosophy

• Everyone in the organization is involved in marketing
• Everything starts and ends with the customer experience

Eras of Marketing Evolution

• Production Era: Focus on mass production, leading to market saturation
• Sales Era: Focus on aggressive sales tactics because customers were not interested
• Marketing Era: Focus on meeting customer needs and wants, using market research
• Relationship Marketing Era: Focus on building long-term customer relationships through loyalty programs and service
• Societal Marketing: Focus on social responsibility, ethics, sustainability, and charitable causes
• 80% of sales typically come from 20% of customers

Importance of Marketing Planning: The 10 Rule

• Understand your market and know your competition
• Set clear objectives and create a strong brand
• Develop a marketing strategy and budget wisely
• Focus on customer needs, monitor and adjust, and leverage digital tools
• Be consistent in all marketing efforts

Company Operation Stages

• Stage 1: Planning
• Stage 2: Implementation
• Stage 3: Delivery to a ‘Customer’

Strategic Marketing Planning Process

• Planning is the least expensive stage and mistakes can be fixed there
• Environmental Scan: Analyze internal/external factors affecting product development
• Mission/Vision Statement: Defines the company's purpose today and in the future, without objectives
• Opportunity Analysis: Determines if there's a market for the product
• Strategy: Choose between Growth, Maintenance/Hold, or Divestiture

Growth Strategies

• Market Penetration: Selling more of existing products to existing customers, but customers may reach a saturation point
• Market Development: Expanding into new geographies or market segments
• Product Development: Creating new products, but has a high failure rate (80%) and is difficult
• Diversification: Entering completely new markets, needing significant capital

First Mover Disadvantage

• Advantages exist for companies to enter a market later by capitalizing on demand created by earlier firms

Marketing Objectives: SMART-C Framework

• Specific: Increase website traffic by 15%
• Measurable: Track website visitors using analytics tools
• Attainable: Increasing website traffic by 15% is possible with proper marketing
• Relevant: More website traffic is relevant to increasing sales or brand awareness
• Time-bound: Increase website traffic by 15% within the next 6 months
• Challenging: Increasing traffic by 15% is ambitious but doable with the right strategies

Environmental Scan

• This is the process of collecting information about the external and internal marketing environment

SWOT Analysis

• Strengths: What a company excels at (e.g., brand, products, customer base)
• Weaknesses: Areas for improvement (e.g., online presence, costs, service)
• Opportunities: External trends to leverage (e.g., eco-friendly products, new markets)
• Threats: External challenges (e.g., competition, economic downturn)

External Elements

• Competition: Direct (similar products) and Indirect (alternative ways to spend money)

Political, Legal, & Regulatory Factors

• Major Laws: Antitrust laws and consumer protection
• Government Regulation
• Self-Regulation: To avoid government intervention

Economic Factors

• Business Cycles
• Inflation
• Unemployment
• Income

Technological Factors

• Efficiency
• New Products

Socio-Cultural Ethical Factors

• Diversity
• Consumerism
• Social Responsibility
• Ethical Behavior: Due to insufficient laws, changing issues, long-term consequences, personal values, and potential penalties

Global Marketing

• World Peace
• Role of Multinationals
• International Organizations
• Financial Safety
• Technology
• Absolute Advantage
• Foreign Attraction

Why Go Global?

• Increase revenue
• Cut costs
• Avoid government issues
• Competitive pressure
• Closer to customers and raw materials
• Reputation
• Desire of officers to travel
• Economies of scale

Major External Variables for Global Expansion

• Financial: Foreign exchange and counter trade
• Political, Legal, & Regulatory: Positive relationships with countries, understanding different types of laws, and regulatory issues (ISO, EPA, FDA)
• Cultural: Language, customs, behavior, and relationships
• Principle: Accept payment in local currency acculturation, and avoid ethnocentrism

Porter’s Rules

• The long haul focuses on long-term success by building brand loyalty, slow expansion, and lasting relationships with consumers

Global Integration Strategy

• Use local nationals rather than sending employees from the home country to integrate into foreign markets more effectively

Barriers to Trade

• Tariffs: Taxes on imported goods to encourage domestic purchases
• Embargo: Ban on trade with a specific country for political or economic reasons hindering economics
• Quotas: Limits on the quantity of imported/exported products
• Export/Import Restrictions: Limits on goods/services crossing borders
• Administrative (Non-tariff): Rules that make it harder for foreign goods to enter or exit a country
• Escalation Costs: Increased costs due to challenges in complex global markets

International Economic Integration

• Involves countries joining together, like the EU, Mercosur, and NAFTA

Marketing Concerns with Integrations

• Restricted market access
• Resource sharing
• Cost reduction via economies of scale

Global Fraud

• Counterfeiting: Selling fake copies of branded products
• Associative Counterfeiting: Using similar names (e.g., Rolexx instead of Rolex)
• Piracy: Unauthorized use of intellectual property (music, software)
• Gray Markets: Selling genuine products through unauthorized channels at lower prices

Escalation Costs: Product Adaptation

• The more consumer oriented - more adaptation needed
• The more industrial oriented - less adaptation needed

Marketing Research

• The process of collecting and using information for marketing decisions
• It helps us make decisions
• There are two main types; primary, and secondary

Two Key Variables

• These influence outsourcing decisions; cost, and capability

Marketing Research Process Steps

• Define the opportunity or problem
• Conduct exploratory research
• Formulate a hypothesis
• Create the research design
• Collect the data
• Interpret and present the data

Primary Research Methods

• Observations: Using videos, travel with the sales team, and technology
• Surveys: Using in-person, telephone, focus groups, mail, fax, online methods and customer reviews
• Experimentation: Using market tests

Research Systems

• Research input is used in a Marketing Information System (MIS)
• Software is applied to the MIS and produces a Marketing Decision Support System (MDSS)
• Then can use simulations and models
• The data helps with making marketing decisions

Types of Sampling

• Probability: Random, with equal chances of being chosen
• Non-probability: Sample chosen based on chosen criteria

Global Research Keys

• Global research is essential
• Principles still apply
• Implementation is difficult

Market

• People or institutions with needs/wants with power to make buying decisions

Market Segmentation

• Dividing a market into segments with similar characteristics.

Target Market

• Focuses the marketing mix and characteristics of the segment to be attractive

Characteristics Required for a Market Segment (MAP)

• Measurable
• Accessible
• Profitable

High End Segmentation

• Begin with customers and not interchangeable with consumers

Customers vs. Consumers

• Customers are the entities that buy in bulk or for business purposes
• Consumers use the company's products as end-users/ for personal use

Consumer Segmentation Variables/Methods

• Types of Geographic Segmentation Include:
• Local
• Regional
• National
• Global
• Climate
• Useful for business operating differently where they operate

Examples of Segmentation

• In-N-Out Burger targets consumers within areas of specific states
• The North Face segments geographically with local campaigns in cold and warm climates

Demographic Segmentation

• Demographic segmentation consists of gender, age, ethnicity, income, household etc
• Common as data is easy access and measures
• Useful to consider gender, age, ethnicity, income, household type and family like stage as variables

Examples of Demographic Segmentation

• Nike targets marketing with different styles and products to different age groups
• Mercedes-Benz can target high income consumers
• Target markets to family focus groups

Psychographic Segmentation

• Considers the physchological factors like personal values, class and lifestyle
• Helps understand who their customers are, but why they make those decisions

Important areas to focus on are:

• Personality: Consumers adventurous, status-driven, environmentally conscious
• Lifestyle: What a consumer does in their freetime
• Social Class: Class impacts priorities

Examples of Psychographic Segmentation

• Patagonia focuses marketing on the environmentally concious customer
• Apple markets towards creative individuals
• Louis Vuitton's luxury brand puts focus towards high income consumers looking for a status symbol,

Product Relatedness

• Benefits, usage levels, and brand loyalty are key factors to this

Considers Relationship

• What consumers want and value, segmenting on usage patterns and brand loyalty

Useful Variables to Consider

• Benefits sought for speed, while safety and fuel efficiency
• Usage Levels can vary between light and heavy users
• Brand loyalty - targeted with perks and special offers

Companies who use Product Relatedness

• Gillette for smooth shaves or with different skin types,
• Coca-Cola markets different types of soda to daily or casual users
• Apple for keeping loyalty with perks and updates

Indistrial Segmentation Variables

• Useful to divide market base don location, industry, benefits soughts, purchasing situations

Segmentation Criteria

• Focuses on Company Size, Number of locations, Number of employees, Amount Spent

Customer Types or Industry

• Segments based on industry, helps with tailoring offerings with specific features or specs

Common Industries and their needs:

• Construction's often needs heavy machinery and construction tools
• Healthcare wants specialized medical equipment
• Technology requires high performance servers
• Agriculture needs firming equipment

Application

• Focuses on understanding how people inted to use the product and benefits for each industry
• Equipment should provide efficient waste reduction
• Software solutions should provide data and security

Purchasing Situation

• Can either by centralized or decentralized

Centralized

• Purchases happen by a central office with bulk orders

Decentralized

• Each individual location is free to purchase themselves

Segmentation Strategies

• The main types are undifferentiated, differentiated, concentration and micromarketing

Undifferentiated

• Targets entire market with single product in assumption needs are similar
• Best for mass products

Key Characteristics of Segmentation Strategies:

• SIngle product is offered for the market
• Maximum reach
• Lowers the cost for communication
• works with uniform customers

Examples of Segmentation Strategies include:

• commodities of sugar and salt
• colas with simple tastes

Differentiated (Segmentation)

• Targets segments with a distinct marketing mix
• Meets different segment better and boosts sales

Example Characteristics of (Segmentation)

• Uses different products
• Distinclty marketed
• High resource requirement
• Sutiable for food, tech and fashion

Examples of (Segmentation) and why:

• Nike, for different sports
• P&G for a wide range of products
• Automible focuses on income and lifestyle

Concentrated/Niche

• Highly focuses efforts on the target group
• Used for businesses that specialize

Useful Characteristics of the Concentrated

• High focus
• Customized product
• High Brand loyalty
• Cost effective for companies with certain skillsets

Examples of Concentrated

• Tesla focuses on high end and niche market

Micromarketing

• Targets individual customers with high personalization

Factors of Micromarketing

• 1. one-to-one customizing for loyalty
• 2. Local focus on small geographic areas

Useful Characteristics of the Micro

• High degree of personalization
• relies of analytics and client data
• Resource Intesntive
• useful for certain products

Examples of Marketing

• Amazons personalized recommendation
• Starbuck is an app which uses promotions for loyalty
• Local stores target birthdays

Summary of Micro

• Highly effetive but invesment can be high

Posititing

• Aims to create a spot of recognition within the consumer
• Helps with what makes the product unique

Focus

• Helps create the goal to target the specific markey
• Consider, cost competitiveness and sustainability

Consumer Behavior

• Is influenced by external and internal factors

External influences of the buyer

• Culture on learned belief like work ethic, freedom of speech
• Subculture, social classes, social, groups
• Family

Internal Driver of the Buyer

• Needs
• Perception to see and believe

The 3 A's that influence choice

• Attitude
• Association
• Learning

Consume Decision Making Process (B2C)

• 1. Opportunity or Problem
• 2. Search for Alternatives
• 3. Evaluate them
• 4. purchase decision
• 5. Purchase the act
• 6. Post purchase

Emotional Reasoning during buying

• Can be emotional
• Considers short cuts
• Limited Resources

Industrial Buying (B2B)

• Uses 3 Primary Variables
• Quality
• Service
• Price

Key Areas

• The center of the process and buying
• Only applies to this specific sector

User/Supervisor/IT/Finance/Purchaser

• The main people that go through the process
• Change as time goes on
• Approach things differently
• Have to "break code"

Steps in B2B

• 1. Find Opportunity or Problem
• 2. Define a solution
• 3. Search for Vendors
• 4. Evaluate Proposals
• 5. Select vendor
• 6. Look for Feedback

Steps Involve

• The correct influence for best results in processing

Service/Product must:

• Satisfy a customer with symboluic and physical attributes
• warranty consideration, service and brand
• Quality and name

Product Types

• The consumer makes final call
• Has various goods that are convenient
• or for shopping
• Special or unsought in the market

Industrial

• Installation and supplies for business
• Components or goods
• Industrial process

Total Quality Management (TQM)

• Do right 1st time
• Everybody is used to achieve goals
• Quality Teams are made
• continuous gradual improvement

Products can be:

• Defined or be a term
• Deep or shallow
• Have consistency

Product can have mixture of:

• Wide / Narrow

Steps

• Audit
• Clutter
• Strategy
• Exit

Product Life Cycle

• 4 Stages:
• Introduction
• Growth
• Maturity
• Decline
• Can restart
• Manages mixes or introduces when they can.

Power of the Brand

• Management is essential
• Has added Brand value
• Generic and Non-manufacturer name association
• Global identification
• Reflects name
• Has three processes: recognition, preference and insistence
• Must be protected
• Has 4 packaging components: promotion, family tie, cost, and protection

PRP (Product Process Realization)

• 1. Do more effectively
• 2. Better
• 3. Inexpensively