Marketing Fundamentals

Marketing Fundamentals

• Marketing is how companies create customer value, build strong relationships, and capture value in return
• The marketing process involves five steps

The Marketing Process

• Understand the marketplace, including customer needs and wants
• Create a marketing strategy focused on providing customer value
• Develop a strong marketing plan that benefits customers
• Build strong relationships with customers to foster happiness and loyalty
• Gain value from customers through profits and long-term trust

Evolution of Marketing

• 1950s: Focus on product distribution
• 1960s-1980s: Shift to consumer and competition-based strategies
• 1990s-Present: Emphasis on digital, social, and environmental marketing

Kotler's Marketing Evolution

• 1.0 Product-centric: Focus on selling products
• 2.0 Customer-centric: Focus on understanding customer needs
• 3.0 Human-centric: Focus on values, emotions, and social responsibility
• 4.0 Digital marketing: Focus on online engagement and connectivity
• 5.0 Technology-driven sustainable marketing: Focus on AI, automation, and sustainability
• 6.0 Immersive marketing: Focus Experiential and Metaverse marketing

Alternatives to Traditional Marketing:

• Societal Marketing, Social Marketing and Ecological Marketing

Societal Marketing

• Considers business goals, customer needs, and society's long-term interests
• Questions whether customer satisfaction is always beneficial for society

Social Marketing

• Uses marketing to address social problems like health and anti-smoking campaigns

Ecological Marketing

• Focuses on marketing's impact on nature, such as energy use and pollution
• Emerged in the 1970s to address environmental issues

Alternative Marketing Approaches

• Relationship Marketing and Macro Marketing

Relationship Marketing

• Shifts from selling to building lasting customer relationships
• Includes loyalty programs, customer support, and partnerships

Macro Marketing

• Connects marketing with environmental and social concerns
• Includes green, social, and eco-friendly products

Future of Marketing

• Businesses must adapt their strategies to address new customer and environmental needs
• Green Marketing

Green Marketing (1980s)

• Paying more for eco-friendly products became common
• Beyond saving resources, it addresses animal welfare, poverty, and environmental concerns
• Focuses on packaging and design for all products, not just green ones
• Sustainability should be integral to the business strategy

Trends in Green Marketing

• Digital platforms (social media, AI) promote green initiatives
• Customers contribute to creating eco-friendly brands
• Sustainability should involve consumers, not just marketers

John Grant's Perspective on Green Marketing

• Sees it as a broad movement that changes how businesses and people perceive sustainability
• Central Message: Green marketing should change business strategies, innovation, and customer behavior for sustainability

Key Ideas from John Grant

• Sustainability is both an ethic and a guiding principle
• Sustainability is an urgent matter requiring action
• Sustainability is about changing actions, not just discussion

Planetary Boundaries

• Nine limits exist to ensure Earth's safety
• Breaching these limits leads to environmental damage
• Climate change (excessive greenhouse gases), biodiversity loss, ozone depletion (damage to Earth's protective layer), and freshwater use are examples of these boundaries

Earth Overshoot Day

• Marks when resource consumption exceeds Earth's capacity each year
• An earlier date indicates unsustainable resource use
• Reducing resource use can help push this date later

Territorial vs. Consumer-Based Emissions

• 1 -Territorial emissions: Pollution generated within a country
• Example: CO2 emissions from factories in China, used in climate targets
• 2 -Consumer-based emissions: Pollution from imported products
• Example: iPhones made in China and bought in the U.S., used for carbon footprint analysis
• Some countries import products from polluting countries

Sustainable Living Principles

• Focus on sufficiency, efficiency, and consistency

Sufficiency

• Avoid wasting resources by consuming only what is necessary.
• Reduce consumption through behavior and lifestyle changes.
• Policies to help limit ads that promote overconsumption
• Owning fewer items and use public transport
• Using less is always better, even with "green" products, to avoid the rebound effect

Efficiency

• Employ technology to enhance resource efficiency
• Reduce waste and lower emissions
• Includes LED lights, efficient machines, fuel-efficient cars, recycling and circular economy for materials
• Lower environmental impact while maintaining quality, but must be combined with sufficiency

Consistency

• Harmonize human activities with ecosystems
• Promotes renewable energy, eco-friendly systems, and long-term sustainability
• Examples: Using solar/hydro energy, biodegradable packaging, and eco-friendly farming

Sustainable Practices

• Requires all three principles: efficiency, sufficiency, consistency
• Efficiency reduces waste
• Sufficiency prevents overconsumption
• Consistency ensures long-term sustainability

Green Markets

• Prioritize environmentally sustainable products and services
• Aim to minimize environmental impact while meeting consumer needs
• Driven by growing "demand for eco-friendly solutions"

Green Market Importance

• Due to climate change awareness
• Government incentives
• Business benefits
• Brand loyalty
• Cost savings
• Competitive advantage
• Shift towards circular economy and zero-waste

Sustainable Solution Providers

• Monopoly: one provider like Tesla in early EV market
• Oligopoly: few green companies in renewable energy
• Monopolistic Competition: differentiated firms in organic foods
• Perfect Competition: eco-friendly firms in sustained farming

Green Manufacturing

• Reduces waste, saves energy, and uses eco-friendly materials
• Relies on digital factories to enhance sustainability

Components of Green Manufacturing

• Resource Optimization
• Factories use sensors to lower waste
• Waste Reduction
• Better output control and 3D printing to limit material waste
• Energy Efficiency
• IoT and data analytics can optimize machines, smart lighting and climate control reduce energy use

Green Manufacturing - Sustainable Materials

• Using recycled and bio-based resources lowers carbon footprint, preserves resources, cuts down pollution, and reduces costs

Green Market Services

• Help businesses and individuals lower their environmental impact
• Eco-Consulting
• Experts advise businesses on sustainability
• Helps reduce, save, and go green

Carbon Offsetting

• Balances out CO₂ emissions with green projects
• Examples: tree planting
• Sustainable Finance

Sustainable Finance

• Investing on green projects
• Examples: green bonds and ethical funds
• Eco-Tourism
• Respects nature and communities with low impact and conservation

Waste Management

• Less pollution from the reusing of materials through recycling and circular economy

Consumer Behaviour in Green Markets

• Consumers prefer eco-certified products and are willing to pay more for sustainability, though price sensitivity matters
• They influence social media, choose minimalist lifestyles, and promote sustainability

Consumer Skepticism

• Greenwashing - Misleading eco-friendly claims are not trusted by all consumers
• High production costs: Sustainable sourcing is often expensive
• Scalability issues: Small green businesses struggle against big corporations

Laswell’s Model of Communication (1948)

• A linear communication model, one-way process

Steps, Components of Communication

• 1 Who? (Sender)
• 2 Says what? (Message)
• 3 Through which channel? (Medium)
• 4 To whom? (Audience)
• 5 With what effect? (Impact)

Criticisms of Communication Model

• Oversimplified, no feedback or interaction
• Ignores context (culture, relationships, noise)
• Limited scope, not for conversations
• NO power dynamics

Watzlawick’s Communication Theory Key Axioms

• It's imossible to not communicate
• Interactions shape meaning/communication
• It integrates digital and analog and can compliment or be symmetrical
• Key Idea: It is shaped by relationships and complex

Habermas’ Theory of Communicative Action

• Goal: Communication should create understanding, not just for personal gain
• Ideal Speech Situation: Without manipulation or power struggles
• Key Idea: honest, fair and rational

Communication Process

• Interactive with feedback and potential barriers

Components of Interaction

• Sender
• Encoding
• Channel
• Receiver
• Decoding
• Feedback
• Noise
• Key Idea: It is shaped by relationships and complex

Decision Making Factors

• The brain processes 11 million pieces of data per second, only choosing 40, influenced by automatic small choices
• Insights
• Honesty is influenced by form signing
• Weather affects mood, choices
• Key Idea: It is shaped by relationships and complex, influenced by hidden factors

Kahneman's Decisions Models

• System 1 (Intuitive, fast thinking)
  • Leads to quick, emotional choices
• System 2 (Logic)
  • Logical, problemsolving but needs a lot of energy and focusses

Behavioral Economics Key Takeaways

• We make emotional choices mor ethan logical ones
• Achieved by image, text, colour, and methaphors

Priming Defintion

• Influenced by the exposure of an word or image on a behaviour

Types of Priming

• Semantic
• Conceptual
• Phonologic
• Repititive
• Associative Priming

Factors in Website Design

To boost customer engagement and conversions, websites should strategically incorporate colours, imagery, and messaging

Framing Explanation

• Shapes opinions without facts

Framing - Types

• Positive
• Negative
• Key Idea: is it influenced and affected by medium

Nudging Definition

• Influenced and Encourages better choices without pushing
• Two types:
• System 1: emotional
• System 2: logical

Sustainability Communication

• To be effective sustainability should be a moral for positive change but not misused, therefore effective communication is key

Type of Sustainability Communication

• Commmunication OF: informs stakeholders
• Commmunication ABOUT: educate the public awareness
• Commmunication FOR: inspires action

Where to find it

• Civil society
• Education
• Media
• Science
• Politics
• Economy
• Key Idea: You need all factors to reach sustainability

Market Segmentation & Behaviour

• Help businesses to focus on right audience and position products correctly
• There are types

Types of Market Segmentation

• Demographic: Age, geneder etc
• Geographic: Country, region etc
• Psychographic: Lifestyle, values etc
• Behavioural: Buying habbits etc

Psychographic Segmentation in Germany

• It is a social status broken down into sections
• Traditionalists
• Hedonists
• Liberal intellectuals
• Perfromers
• Key Idea; it helps adapt strategies to socials

Customer Targeting Segmentation and Position

• Segmentation: Identify groups
• Targeting: Pick profitable segments
• Positioning: Brand image tht appeals

Multivariable Segmentation

• Fine tunes the correct customer needs
• Key Idea: Deliver the right product

Effective Segmentation

• Measurable
• Assesible
• Substantia
• Differentiable
• Actionable

Perceptual Map Definition

• To help understand Brand and customer perception of Quality, insights.

Differentiation Points:

-Parity: Features offered in all brands e.g. toothpaste -Differenece: Unique aspect of each product creates a competitive advantage

Brand Differentiation

• Service: Customer support
• Product: features
• Channel: online vs in store avability
• People: customer engagament
• Image: brand

Target Strategies Approach

• mass
• differentiated
• concentrated

Target Strategies Approach (A) Mass Marketing:

Coca-Cola uses one global message for the entire market

Target Strategies Approach (B) Differentiated Marketing

GAP using several brands with specialised customer groups. Nike making for different sports

Target Strategies Approach (B) Concentrated Marketing

Chanel making luxury items only

Picking Criteria for Target Market

Factors such as revenue generation, growth rate, and aligning with overall business objectives should be looked at and checked

• strength of the company etc
• Key Idea; All strengths, compant and objectives can be achieved

Positioning - Creating Brand Identity - Definition

Positioning is influenced by how to product is perceived in consumers minds

• Tesla and the innovative image, creating new, and re-competing the opposition
• Products characteristics are dependent on brand name and origin
• Key Idea; you need to shapes customer reception or you might gain a competitive edge

Pricing and Marketing

• the price is dependent on customers perception and satisfaction
• Pricing considerations:
• Internal - companies goals, marketing strategy, cost structures
• External - market demand and competition

The 4'Ps of Marketing Mix

• Product - Quality, Branding, Design
• Price - cost, discount and payment options
• Place - Channel and storage
• Promotion - Adverts and PR

Product Definition

A product consists of 3 levels:

• Core Benefit: reason of the product
• The Actual product: brand
• Augmented; warranty

Product lifecycle

• Development - Research
• Introduction - Launch and cost
• Growth - more sales
• Maturity
• Decline

Distribution

• Product availability
• Delivery
• Convenience

Distribution Process Involve

• Communication
• Negotiations
• Financial

Service Marketing 7'P

• The 4'P mix plus
• People
• Environment
• Processes

4'P Additional

People Processes Programs Performance

IMC

To increase brand presence all facets need to a work together to be consistent