Marketing Fundamentals: The 4Ps and Value

What is Marketing?

• Includes creating, communicating, delivering, and exchanging value.
• Value's definition: benefits received minus costs incurred (price + non-financial costs).
• Value is at the CENTER of marketing.
• Four components of marketing are creating, communicating, delivering, and exchanging value.

The 4P's Marketing Mix

• Also known as traditional components of marketing.
• They include product/service, promotion, place/distribution, and price.
• Creating an offering involves communicating its benefits and delivering it.

Strategies

Product/Service

• Includes tangible goods and/or intangible services.

Price

• Involves the actual translation or exchange of value.

Promotion

• Communicates offerings and their values to potential and current customers.

Place/Distribution

• Delivering the product to the customer, ensuring they understand its use.

Additional Info

• Can be performed by both individuals and organizations, including B2B, B2C, and C2C transactions.
• Fulfilling customer satisfaction, wants and needs, involves concepts of being market oriented.
• Also includes Production, Selling and Product orientation.

Needs vs Wants

Needs

• Considered basic human requirements necessary for survival.
• Food, water, clothing, and shelter, education, recreation, or entertainment.
• Necessary for survival and can be satisfied by many products/services.

Wants

• Needs become wants when they are directed towards a particular product or service
• A want is a specific product or service a consumer desires to satisfy a need.

Key Aspects of Marketing

• Marketing helps create value and satisfying customer needs/wants
• Marketing always entails an exchange and requires marketing mix decisions.
• Performed by companies and individuals, occurring in many situations.

Strategic Planning & The Marketing Environment

Strategic Planning

• A process to allocate resources to capitalize on marketplace opportunities.
• A long-term process involving situation analysis, mission statements, objectives, + strategies.
• Includes segmentation, targeting, positioning strategy development, + marketing mix implementation.

Situation Analysis

• Part of the strategic planning process.
• Conducted before specific actions and decision making, only considering relevant factors.
• Involves analyzing both external (macro) and internal (micro) environments.

Assessing the Internal Environment

• Look internally within the micro environment and assess the company to competitors
• Consider: Company resources, capabilities, and corporate partnerships.

Analyzing the Micro (Internal) Environment

• Company elements are financial capital, brand + corporate culutre
• Corporate partners are raw material, promotional + distrubution suppliers

Competition

• Two Main types: Direct and Indirect Competition
• Direct: selling the same product the same way
• Indirect: selling a different product for the same need

Assessing the External Environment

• Involves tracking conditions in the macro environment and is largely uncontrollable.
• Includes Political/Legal/Regulatory, Economic, Socio-Cultural, Technological + Competitive factors (PESTC).

The Five Forces Model for Determining Competition

• Framework that helps organizations understand competitors.
• Helps understand organizations that could become competitors in the future.
• Allows for developing possible strategies.

SWOT Analysis

• Used during the planning stage, after collecting micro and macro environment data.
• Assesses Strengths, Weaknesses, Opportunities, and Threats.
• Used to organize thoughts and developing goals + strategies.
• Helps you capitalize strengths, compensate for weaknesses, capitalize on opportunities, + mitigate threats.

SMART Objectives

• Objectives should be Specific, Measurable, Attainable, Relevant, and Timely.
• Help guide and motivate a company's employees and marketing actions.
• Should be consistent with company objectives at other levels.

Strategies vs Tactics

• Strategies are the game plan to achieve objectives.
• Tactics are specific actions to execute the strategy.
• Companies use multiple to achieve objectives and capitalize on opportunities.

Marketing Plan

• Is a strategic plan at the functional level that provides a company's marketing group with direction.
• Road map that helps allocate resources and employee tasks efficiently.

Basic Marketing Strategies

• Basic strategies involve decisions about product and market focus.
• Product: products on the horizontal axis
• Market: markets on the vertical axis.
• Focus on existing or new products and markets.

Growth Strategy

• Increasing a company's existing sales to existing customers.
• Can involve special promotions, low prices, attracting new customers or new distribution.
• It is the most common type

Product Development Strategy

• Involves creating new products for existing target customers.
• Can be a totally new innovation, a new product flavor or size, or even an improved product
• Including features like phones that allow payments or to take pictures

Market Development Strategies

• Focus on entering new markets with existing products.
• Example: During the recent economic downturn, manufacturers targeting customers who purchased coffe from coffee shops

Diversification Strategies

• entering new markets with new products
• Often used by companies with little experience.
• Can be profitable but high risk if the experience or resources are not there

Sustainable Competitive Advantage (SCA)

• Developing SCA is another method that companies use to Develop strategies
• Develop an advantage over competition cannot easily be copies or be maintained over the long term

Location Excellence

• Create Locational Excellence by increasing number of locations
• or presence on the internet
• Important for retailers and service providers and requires capital investments

Operational / Product Excellence

• Operational: improve your operations through effective supplier relationships
• Product: Developing customers products with high perceived value

Customer excellence:

• Achieved by developing value-based strategies for retaining loyal customers and providing them with excellent customer service

Strategic planning levels:

• Occurs at corporate, buisness and functional

Strategic Portfolio Planning Approaches

• Involves analysing a companies entrire colleciton of business

Boston Consulting Group (BCG) Matrix

• Helps companies evaluate each of its strategic business units

Market Growth Rate

• How fast the unit is growing compared to the industry its in.

Relative Market Share

• how the unit relates to the overall market share of similar competitors.

Using the BCG Matrix

• Helps managers categorize their SBUs into four categories
• They need to categorize each them using the two by two matrix
• Market growth is the forecast of total revenue incoming from next year.
• Market share refers to the largest competitors current total market share.

Boston Consulting Group Matrix categories

• How fast the unit is growing compared to the industry its in.

Stars

• High market growth rate & high relative market share

Cash Cows

• Low market growth & high relative market share

Question Marks

-Low relative market share in a high growth rate market

• Hardest to determine if they will be successful or not

Dogs

-Low market growth & low relative market share

• Do not make much money, do not have a promising future

Consumer Behaviour

• Looks at many reasons why people buy products + services and customers purchasing decisions
• Not understanding consumer behaviour can have consequences

The Consumer Purchase Decision Process

• Used to describe purchase behaviour and acquisition behaviour
• Can also explain the decision process to decidin to download a free app -Consumers don’t always act in a rational way -5 Stages are need recognition, search, evaluation, choice and post purchase evaluation

Stage 1 Need/Want recognition

• Marketers make potential customers aware of how their products and services add value

Stage 2 Search

• Get information on different alternatives, peoples options online reviews etc

Stage 3 Evaluation

• Evaluative criteria are certain characteristics that are important to you (such as:price, size, features, colour; some characteristics may be more important than others)

Stage 4 Choice

• After considering the alternatives, you decide which one to purchase Includes (how you are paying, where you are buying it from etc)

Stage 5 Post Purchase Use and Evaluation

• decide if you had made the right worth it

Factors influencing low vs high consumer involvement

• Can be actual or preceived risk: financial, social, physiological + psychological
• How well you know the brand, the costs, routine buys etc

External Factors (Affects Consumers Buying Behaviour)

• Situational factors: layout, weather crowd behaviour etc
• Personal factors demographics lifestyle mood etc
• Psychological: self-concept, motivation, perception etc
• Societal: culture, subculture social class etc

External Factors

• Influence consumers

Situational Factors

• physical store design influences consumer spending. IKea
• Layout help consumers get around the store quicker Store atmospherics includes lighting temperature helps spenxding

Uncontrollable Physical factors

-Weather affects a businesses performance, umbrella for rain

• Discounts is key to business

Crowding and Herd Behaviour

• Overcrowding deter or enhance shopping experiences

Social Norms

Influence Shape consumer behaviour

Urgency

• Urgency influences purchases:

Consumer Time

• time sensitive customers drives success
• Drives vaccination and prescriptions

Demographic Factors - Gender, Age, and Stage of Life

Historically

• gender was believed to influence shopping behaviours

Research -

Suggest that gender can be based stereotypes

• Gender based - assumptions is not key

Lifestyles Activities, Interest and opinions

Lifestyle -

Reflect Personal Values

Compaines -

Analise consumer habits.rough lifestyle styles to categorize consumers

Mood and shopping behaviour

• Shopping behaviour is influenced by mood and emotional state
• Marketers use psychological cues to influence perception, promoting high-sugar snacks as healthy highlighting protien

Percetion and reality

Realitlyy

• The big five Traits impact consumer behaviours

Sel concept drivives

• consumer choices

Self concept and the ideal self drive purchases;

Beauty and self-improvement products often target ideal self-perception.

• People want their self portrait and idea to come through

Psychological Factors

• Motivation is the internal drive to fulfill needs

Perception influences

How we see interprefy

• Selectivet exposeur
• Selective attention

Attitudes

• Atitturdes are long term emotial postiions toward products, difficult to change
• Changing consumer attitudes is difficult they are based on preosnal valyesy and beliefs

Consumers attitudes

Company attempts to shift attitudes through branding and marketing

• KFC used to

learnings

• The process by which consumers behaviour alter by what they gain

Sociatal factors

• Shared beliefs customs, behaviours characterized by a society

Culture

• Culture is the s hared customs and character

SUB culture

The blending culture and more

social class

• are often grouped as the same kind
• Governtnent support system impact class
• Studies find that people smoking lower the rate

Reference Groups and Opinion Leaders

• Professional athletes - Nike

opinions

• Experts in specific fields influence consumer choices

influencers

• Social media influencers and personal recommendations strongly impact decisions.

family

-Strong influence on behaviour Children - influence household purchase

• Lego - Financial Success

Busineses must

• Anticipate rather than respond
• Steve Jobers - Believed in observiving behviour
• The audience must have their time - Communicate with audience'
• Market intillegnce - ongoing data collection from operations customer intellegence
• Ansewrs and specicifc QUestion
• Target failed because there research wasnt done

If Internal data has no Answer and quick decision needed

• Wrong decisions outweighs the cost of research.
• The name used should give brand
• Design The restrect Design the recsterch

Data used in process

• Data collectiion from people: Primary Resach Secondary: using expising data
• Types Of Markeying Recetrace desgin

types of Qualitative Research

• Exploratory research design :
• Want more detail or a better understanding of the topic Done Before research, -observing
• Depth interveiws, foucsing groups

QUANTIVE data

_ uses measrable dada to answer ""who what when ""

CAusal - examine cuase adn effects realtionships

• The what IF Qustions

3 Data COntrol

Must be neutral specficic

• Sampling frame: draw lists of subjects with larger sampes for accurancy

• Awae

• data colletion

• Alter consumer behaviour :

• data Cleaning:Ensure accurancy

Statistical tools

Analye trend and predictuions

Realbity vs Valditiy

• Can results be be recasted

• validyt --Measure the product or measure

• Key report components +Executive Summary +Findings & Recommendatiion

Source from

The secondairy DATA

Libraries Governemt reportds

• Industr

  Review and customter feedbacks' from other people

Market Intelegence

the companes gather customer data constantly Examples OF HOW COMPANIES USe intellegene.

• Trackying the product and assess quality

Personlized Redommendations

find best clothing size, reducing returns. mis data collecton of information from all data for better data making

"Key Takeaways understanding Customer requires borht informal and structure process Marketinng red is porject based companies use Customer Market Intelegnce System