Marketing fundamentals

• Marketing is a set of activities that creates, communicates, delivers, and exchanges offerings, providing competitive value to customers, organizations, and society.
• It focuses on understanding customer needs and wants

Market Research

• Market research identifies needs through qualitative or quantitative data.
• Qualitative research is exploratory, suggestive, and directional.
• Quantitative research is causal, conclusive, and predictive.
• Data can be primary or secondary
• Considerations for data reliability include measurements, validity, statistical biases, and big data
• Brands sell ideas, solutions, or services to satisfy the same need with different solutions.

Maslow's Pyramid

• Maslow's Hierarchy of Needs suggests that basic needs must be met before higher-level needs are addressed

Brand Image

• Brand image includes associations with a brand name like a hoodie, price, or quality.
• Brand personality includes human characteristics, e.g., sincerity, excitement, competence, sophistication, and ruggedness.
• The consistency is key to developing brand personality
• Brand personalities are created through communication, promotion, and celebrity endorsements

Examples of Brands

• Apple is considered innovative
• OpenAI is considered dangerous
• Nivea stands for affordability and consistency

Marketing and Needs

• Marketing is not about creating needs but innovating and developing new solutions that align with a brand and its capabilities

Brand Awareness

• Brand recall is the ability to remember a brand without cues.
• Brand recognition is the ability to recognize a brand when seen or heard.
• Brand recognition lowers uncertainty and risk, creating greater value.

Gaining Market Share

• Market share is gained by breaking the competition, using advertising and promotion
• Advertising aims to target an audience using STP (Segmentation, Targeting, Positioning)

Pricing Strategies

• Cost, quality, and differentiation should be considered
• Price affects the perception of quality in products.

Place (Distribution)

• Place refers to the distribution channel and accessibility, contributing to brand image, e.g., Zara buying buildings.

Product (Marketing Mix)

• Product plays multiple roles, interacting with strategic components, and is crucial in risky or low-familiarity environments

Markets

• A market is where buyers and sellers meet, characterized by people willing and able to buy

Value

• Marketing involves creating value and communicating it in a competitive market
• To succeed, marketing must offer sustainable competitive advantages and adapt to competition.

Components of Value

• Value includes attributes dictating product specifications and the benefits to the customer.
• Customers exploit brand image attributes to present themselves
• Quality includes objective performance metrics and subjective perceptions.
• Packaging influences perception

Pricing Componets

• Monetary price may include other non-monetary costs like complexity, accessibility, and uncertainty.
• Uncertainty can be mitigated by free trials and building familiarity, with brand image playing role

Understanding Vaule

• Customers value a product if they feel they own it (Endowment Effect).

Brand Examples

• Car brands elicit different perceptions like Mercedes with black tie and SEAT with t-shirts.

Heterogeneity

• Heterogeneity requires segmentation, grouping people with shared components
• Segmentation uses demographics (easiest to measure), psychographics, behavioral, and geographical data

Segmentation Goal

• The goal is to identify a target that responds similarly to marketing mix activities

Segmentation Schemes

• Effective segmentation achieves homogeneity within and heterogeneity across segments

Examples of Segmentation

• Changing aspects like color in products influences perceived quality.
• Color can greatly differentiate a brand and has many dimensions.
• These dimensions are Hue, Saturation, and Brightness

Global vs Int'l Markets

• Global markets are unified with the same customers and information
• International markets consist of interdependent, non-uniform domestic markets.

Globalization: When to Go

• First decision is whether or not to go global
• Global strategy expands market share, leverages scale economies, and diversifies risk
• Globalization offers incentives, strengthens the brand, and provides survival in the face of competitors

Going Golbal - Penetration

• Going global involves optimizing the marketing mix, including place, promotion, price, and product
• One strategy to do this is product development (new products in existing markets)
• Another strategy to do this is market development (e.g. Zara clothing available in Portugal).

Domestically Focused Firms

• Domestic firms have flexibility, responsiveness, and the ability to customize programs

Globalization

• Globalization connects the world and converges markets, integrating local economies into a global one.

Forces Facilitating Globalization

• Forces facilitating globalization include economies of scale, removal of trade barriers, global customers, global suppliers, IT evolution, and global needs

Standardization vs Customization

• Standardization is the globalization of the 4Ps
• Customization is the localization of the 4 Ps
• Cultural differences work against globalization

Cultural Differences

• Cultural differences require customization but must be balanced with brand consistency
• Protectionism, regulations, political factors, and economic differences also work against globalization.

Glocal Strategy

• Many companies use the glocal strategy to be adaptable on a local scale

Standardization

• Standardization includes not changing the marketing mix and profiting from economies of scale

Examples of Standardization

• Red Bull maintains consistent packaging except in some Asian markets
• There is a need to react to cultural differences / Customization

Cultural Undertanding

• To truly understand another culture, you must detach yourself from your own

Nivea Case Study

• NIVEA stays consistent but varies by country for web pages, messaging, and products
• The brand exploits color heavily and has shifted focus to anti-aging products, staying relevant in the market

Consistency

• Although they leverage celebrity endorsements, Nivea maintains casual, simple values and consistent product quality.

Glocal

• Nivea changes product sizes in different locations and changes the names to make the brand more relatable and accessible

Preparedness

• Globalization depends on internal preparedness like the preparedness (internal), global network, distrubution channels, openness to collaborate, and organizational resources

Standard Processes

• Standard processes, financial resources, production capacity, market knowledge and systematic decision-making all support internationalization

Market Research

• Market research is important when deciding on standardization and customization
• Industry factors to investigate are current and future market factors

Motives for Globilizaiton

• Proactive globalization has potential in growth, profits, economies of scale, and by managerial urge
• Reactive globalization has potential in increasing market competiveness

Barriesr to Globalization

• Examples of barries are lacking expertise in a country, production limitations, underdeveloped networks, financial issues, and political risk

Cultural Environment

• Cultural envoronment includes culture analysis and critical thinking when considering an organization and/or society
• The ability to adapt to factors that influence performance may be impacted

Detachment

• Detaching from one's own culture is imperative as marketers may be affected by other cultures depending on if they are as good or bad from a descriptive approach

Care and Culture

• We should value customers, work with organization culture, and think about collaboration/negotiations

Culture Values

• What is fair, what is just, what is funny, what is good, what is bad: this reflects different interpretations of the same thing due to internalized cultural differences

Culture: Source of Bias

• Self Reference Criteria (src) may be a source of bias
• It's difficult to have a balanced interpreation of culture without the proper tools or models as a reference

Examples Spain

• Language, greetings, and attitudes all contribute to cultural understanding

Socialization

• Friendship Patterns/Socialization/Structure of a social Network contributes to that of a larger structure
• How you market can be impacted by friendship patterns
• Brand Awareness - > How to spread information

Cultural Orientations

• What dimensions can culture vary in
• Communication (Low Context vs High Context) Different Communication (e.g. upgrade vs downgrade)

Hofstede's Model

These factors influence your market environment Marketing/Survey/SamplingProcess/Comparative Model with different Variables

Factor 1

Power Distance Index (PDI): Drives and differentiates cultures High PDI Cultures-> leadship, structure (authority)

Factor 2

Factor 2: Individualism Overall Integration of individuals

Factor 3

Factor 3: Uncertainty Avoidance Attitude towards risk

Factor 4

Masculinity vs. femininity (decision making styles)

Factor 5

Time perspective (what is the time reference for the decision)

Factor 6

Indulgence vs Restraint These factor need to be assesed on what their scores are and by relative comparrison Neighboring countries are likely ot be similar. Shared laugane, historical backround, and beliefs all are the reasons for simialrity in countries within the scores.

Emotional Responses

• You want to convey different emotions within different cultural backrounds that will give differing emotional responses between
• Valence and arousal -> Two different dimensions

Factors of Economic Development

• Main sources: Primary, Secondary, Tertiary
• Pay attention to exchanged rates

Market Development

• Stages: Income, Industrialization, Infrastructures

Political Factors

• Home and Host countries play an effect - Need to establish risk

Market Entry

• Strategy Block III

Export Modes: Productions

Takes place in home country -> Externalization activites

Export

production and sales online, avoid high traffic

Distributors

Distributes depending on product and markets, the brand awareness requires a certain consistancy to not affect certain marketing mix variables

Sales Agents

Small groups, they seek to create sales. Disadvantage, may be expensive if there is a high demand, they can get competitive.

Subsidiaries

Subsidiaries/set own store Setting up your own chain. It is intermediate: Production takes place in the host counter and products are made their: franchise or licencing.

Full Ownership

• It is intermediate entry and requires more intamacy with trade as customer contact increases
• Joint Venture, two firms/ copetitors bulid a new independant company

Factor Considerations

Value/weight, marketability, ect.

Extenal Influences

Coutry risk

Market Size influance

• High Market Size -> Internalization ( want a full presence!)

How Can You Choose a Market

How can your choice - What is a good balance? What factors influence the market decision Is demand high/costs low

Decisions

Naïve (same Apporoach) Pragmatic (what works best)

Market Segmentation - Take Away: Requires balance with social impact and consider all stake holders Adaptibilty is critical

Case Study: ford Pinto

Should strengthen the shell / leave it as is for time constraints

Heuristics

Decisions Driven On: Availability -> We judge the likelihood of events based on how easily examples come to mind.

Decisions

Six steps to rational decisions making