Marketing Process in Business

Marketing in Business Environments

• Definition of Marketing: creating value for customers and building strong customer relationships to capture value from customers in return
• 5 Steps of Marketing Process:
  • Understand the marketplace and customer needs and wants
  • Design a customer value-driven marketing strategy
  • Construct an integrated marketing program that delivers superior values
  • Build profitable relationships and create customer delight
  • Capture value from customers in return
• Market Offerings: a combination of products, services, information, or experiences offered to a market to satisfy a need or want
• Marketing Myopia: focusing only on existing wants and losing sight of underlying consumer needs

Marketing Management Orientation Concepts

• 5 Concepts:
  • Production Concept: consumers will favor products that are available and highly affordable
  • Product Concept: consumers favor products that offer the most quality, performance, and features
  • Selling Concept: consumers will not buy enough of the firm’s products unless the firm undertakes a large-scale selling and promotion effort
  • Marketing Concept: know the needs and wants of the target markets and deliver the desired satisfactions better than competitors
  • Social Marketing Concept: the company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests

Marketing Mix (4Ps)

• Product
• Price
• Promotion
• Place

Additional Concepts

• Customer Relationship Management (CRM): building and maintaining profitable customer relationships by delivering superior customer value and satisfaction
• Partner Relationship Management (PRM): working closely with partners in other company departments and outside the company to jointly bring greater value to customers
• Customer Lifetime Value (CLV): the value of the entire stream of purchases that the customer would make over a lifetime of patronage
• Share of Customer: the portion of the customer’s purchasing that the company gets in its product categories
• Customer Equity: the total combined customer lifetime values of all of the company’s customers

Consumer Markets and Buyer Behaviour

• Definition of Market: a place where parties can gather to facilitate the exchange of goods and services
• Consumer Markets: made up of individuals and households that buy or acquire goods and services for personal consumption
• Business Markets: markets in which organisations sell their goods and services to other organisations to use in their manufacturing process or service provision

Factors Influencing Consumer Behaviour

• Cultural
• Social
• Personal
• Psychological

Buyer’s Decision-Making Process

• 5 Steps:

  • Need/problem recognition
  • Information search
  • Evaluation of alternatives
  • Purchase decision
  • Post-purchase evaluation### External and Internal Factors Affecting Pricing

• Overall marketing strategy, marketing objectives, marketing mix, and markets and demands influence pricing.

• In different types of markets, pricing strategies vary:

  • Pure competition: many small companies, none of which can control prices.
  • Monopoly: one seller in the market, company has total control over price.
  • Monopolistic: many sellers, company has limited control over price.
  • Oligopoly: few sellers, when one company lowers price, others are often forced to do so.

Pricing Strategies

• Price elasticity: measure of sensitivity of demand to changes in price.
  • Inelastic demand: demand hardly changes with a small change in price.
  • Elastic demand: demand changes greatly with a small change in price.
• Market-skimming pricing: sets high initial prices to "skim" revenue layers from the market.
• Market-penetration pricing: sets a low price for a new product to attract a large number of buyers and a large market share.
• Product mix pricing: takes into account cost differences between products, customer evaluations, and competitors' prices.
• Other pricing strategies:
  • Product line pricing
  • Optional product pricing
  • Captive product pricing
  • By-product pricing
  • Product bundle pricing

Price Adjustment Strategies

• Discount and allowance pricing: reduces prices to reward customer responses.
• Segmented pricing: sells a product or service at two or more prices, where the difference is not based on cost differences.
• Psychological pricing: considers the psychology of prices, not just the economics.
• Promotional pricing: temporarily prices products below list price to increase short-run sales.
• Geographic pricing: used for customers in different parts of the country or world.
• Dynamic pricing: adjusts prices continually to meet individual customer needs and situations.
• International pricing: sets prices in a specific country based on various factors.

Marketing Channels and Supply Chains

• Supply chain: firms that supply raw materials, components, and services.
• Value delivery network: composed of companies, suppliers, distributors, and customers who partner to improve system performance.
• Marketing channels (distribution channels): set of interdependent organizations that make a product or service available to consumers.
• Channel behavior and organization:
  • Channel conflict: disagreement among channel members over goals, roles, and rewards.
  • Horizontal conflict: among channel members at the same level.
  • Vertical conflict: between different levels of channel members.
  • Multi-channel conflict: among different channels.
• Channel design decisions:
  • Analyzing consumer needs
  • Setting channel objectives
  • Identifying channel alternatives
  • Evaluating channel alternatives

Promotion Mix

• The promotion mix: specific blend of promotion tools to persuasively communicate customer value and build customer relationships.
• Promotion tools:
  • Advertising: paid, nonpersonal presentation of ideas, goods, or services.
  • Sales promotion: short-term incentive to encourage purchase or sale.
  • Public relations: builds good relations with publics by obtaining favorable publicity.
  • Direct and digital marketing: engages directly with targeted consumers to obtain an immediate response and build customer relationships.
  • Personal selling: personal interaction with customers to engage, make sales, and build relationships.

Integrated Marketing Communications

• Integrated marketing communications (IMC): carefully integrates and coordinates communication channels to deliver a clear, consistent message.
• Recent trends:
  • Consumers are changing.
  • Marketing strategies are changing.
  • Advances in digital technology.

Elements in the Communication Process

• Steps in developing effective marketing communication:
  • Identify the target audience
  • Determine communication objectives
  • Design the message
  • Choose the media
  • Select the message source and collect feedback

Direct, Online, Social Media, and Mobile Marketing

• Direct marketing: uses direct communication to reach customers.
• Digital marketing: uses digital channels to reach customers.
• Benefits of direct and digital marketing:
  • To buyers: convenience, access to comparative information, and interactive.
  • To sellers: tool to build customer relationships, low-cost, efficient, and flexible.
• Forms of direct and digital marketing:
  • Online marketing: marketing via the Internet.
  • Mobile marketing: marketing messages delivered to on-the-go consumers.
  • Social media marketing: creating content for social media platforms to promote products/services.
  • Traditional direct marketing forms:
    • Direct-mail marketing
    • Catalog direct marketing
    • Telemarketing
    • Direct-response television marketing
    • Kiosk marketing

Public Policy Issues in Direct and Digital Marketing

• Issues:
  • Irritation: annoying or offending customers.
  • Unfairness: taking unfair advantage of customers.
  • Deception: misleading customers.
  • Fraud: identity theft and financial scams.

Pros and Cons of Change in Marketing Communication during the Digital and Social Media Age

• Pros:
  • Increased reach and accessibility
  • Interactivity and engagement
  • Targeted advertising
  • Cost-effective marketing
  • Data analytics and measurement
• Cons:
  • Information overload
  • Speed of communication
  • Privacy concerns
  • Constant technological evolution
  • Fake news and misinformation
  • Brand vulnerability