Understanding Markets: Types and Characteristics

• The market is a place where buyers and sellers meet.
• It involves the exchange of goods and services for money or its equivalent worth.
• It is an asset comprised of current and future buyers who could potentially engage in transactions with a seller.

Types of Markets

• Consumer markets involve the buying of goods for personal use.
• Fast-moving consumer goods are characterized by high volume, low unit volume, and fast repurchase rates.
• Consumer durables are described by low volume and high unit volume.
  • White goods include items like fridge freezers, cookers, dishwashers, and microwaves.
  • Brown goods consist of DVD players, games, consoles, personal consoles, and computers.
• Soft goods wear out quickly and require frequent replacement.
• Services entail transactions that do not involve tangible physical goods.
• Business markets involve people buying industrial goods for operational purposes.
  • B2B (business-to-business) marketing is relevant in this context.
• Global markets involve efforts in international trade and multinational companies.
  • Overseas expansion happens through licensing, franchising, and joint ventures.
• Non-profit and government markets do not operate to earn profits and rely on donations.

Definition of Marketing

• Marketing involves determining the needs, wants, and interests of target markets.
• It includes delivering the desired product/service and understanding consumer needs and wants.
• It requires working with markets to actualize potential exchanges.

Basic Components of Marketing

• Needs are things "we must have".
• Wants are things "we like to have".
• Potential exchange occurs when buyers and sellers meet to exchange goods and services.
• Human activity is concerned with people and activities involved.
• Demands are human wants supported by buying power.

Aspects of Marketing

• Consumer-oriented process focuses on fulfilling the needs of human beings.
• Marketing starts and ends with the customer.
• Proper research is required to understand the tastes and interests of the buyer.
• Marketing is a guiding element of business and is market-driven to raise the standard of living.
• System-oriented process involves receiving inputs from the environment.
• Goal-oriented process involves setting proper goals.
• The exchange process is a dynamic exchange of goods and services.

Importance of Marketing

• Marketing emphasizes organization.
• Addresses both economic and social needs.
• Facilitates the making and offering of products.
• Allows the use and adjustment to changing statuses and situations.
• Helps to reach maximum efficiency and economic potentials.

Benefits of Marketing

• To society: Helps change living standards, offers employment opportunities, and stabilizes economic conditions.
• To individual Firms: Helps to earn profit and provides a base for business decisions with new ideas.

Marketing Philosophies

• Marketing concept involves a management orientation to determine the needs and wants of the target market.
  • This includes discovering market needs (research), product planning and development (production), distribution, and ensuring sales volume and customer satisfaction.
• Selling concept assumes that consumers will buy only with substantial effort.
  • This involves product planning and development, promotional methods, distribution, and hopes for sales volume and customer satisfaction.

Basic Components of Marketing

• Consumer orientation refers to an organizational culture focused on understanding customer needs.
• Integrated marketing unifies different marketing methods such as mass marketing, one-to-one marketing, and direct marketing.
• Marketing Research and Long term Planning and Development is essential to adapt to changes for long-term business success.

Chapter 2 - Marketing Mix

• The Marketing mix is a combination of tactics to achieve specific objectives for a target group
  • It Includes: right product, right person, right price, right place, and right time
• Neil Borden of Harvard Uni developed the idea including: product, planning, pricing, distribution, promotion, servicing, and market research
• McCarthy later reduced it to 4 elements: product, price, place, promotion
• Totality* of hospitality company's offerings must fulfill market needs and wants
• Marketing variables are controllable to pursue sought sales levels

Target Markets

• Target makets are buyers of goods, present product users and prospective buyers
• The mix composes available tools to gain reaction from target market related to objectives
• It is a blend/compound of all marketing efforts (4Ps)
• Result*: is the outcome of companies philosophy and mission

The "P"s

• Product is the actual item, this includes good, services, place, people, and concepts
• Price is a very important factor, the element of the marketing mix which generates turnover.
  • It's the amount of money or goods something is bought or sold for
  • Price reflects customer relationship with the company
• Promotion is a communication tool, informing, educating, persuading, and reminding the customer.
  • It includes displays, trade shows, advertising, contests, trade promotions, coupons, samples and premiums
• Place is the contact between service provider and their customer
• It is the the channel to increase profitability

The additional "P"s

• The 4 P's can be extended to 7, made by Stevie Langford (2021): physical evidence, people, process
• People includes everyone directly or indirectly involved
  • It embodies the "heart" of business
• Process is how businesses run, how service, products and packaging are delivered
  • It includes a series of actions or involved elements
• Physical Evidence is about proof of purchase, including the existence of a brand and elements to offer
  • That is: viable, reliable, and legitimate

MODULE 2 - PRODUCT SERVICE MIX

• Product is the sum of the satisfaction, physical and psychological
• Product service mix is composite products and services offered
• Product mix is many product/service lines, ranges, and designs
• According to Phillip Kotler: There are 3 main parts of a product
  • Tangible Product = materials and construction
  • Extended product part = services
  • Generic product = benefits
• There are 3 basic types of products
  • Goods are physical items, with a price added to it
  • Services are non physical items
  • Environment is an item that may or may not be tangible, with comfort and security
• There are 2 components of product
  • Core product is a fundamental benefit
  • Facilitating benefits must be present for user to love product
• Tangible product - is the physical translation of the basic product
• Support product = extra product offered to add value
• Augmented = support items that complete total product

Lesson 2 - Satisfaction

• Physiological Satisfaction = basic satisfaction
• Economic Satisfaction =Value gained in relation to sacrifice
• Psychological satisfaction = percieved notion
• Product/service, in order of impact:
  • Location is the geographical placement
  • Facilities include infrastructure and recreational
  • Service is facilities through personnel, formal or informal
  • Image is perception of product or service, contributed by name, appearance etc
• Factors to analyze:
• Customer concept (1st level) = customer does not have clear idea what they seek and don't know what benefit they are looking for
• Service concept (2nd level0 = the product are specific benefits with the service offers - Service offet (3rd level) = The service provider must shape and form what is concept
  • Service form = details of the service prouct in which way and how
  • Service Delivery system = people and physical evidence

Production

• Product planning = ongoing process identifying and articulating market requirements/
  • It serves as basis for decisions abotu price, distriution and promotion
• Product deveopment - creation of new products or with different characteristics that offer additioonal benefits
• Product features and modification = introduce new size, colors, shapes, flavors, etc. and quality levels

Steps of Development

• Idea generation = come from external/inernal sources
• Screening ideas = choose comaptible ideas based on resource, objectives, demand, cost, and profitability
• Formal business economic analysis = study product development and forecast profit/marketing strategies
• Product development - distribute new/improved products on present market
• Test marketing = place product for sale in areas, measure performance on proposed marketing plan
• Commericialzation = new product/service introduces

Product life cycle

• Product phase is a cycle of introduction, growth, maturity, and decline/demise
• Introduction = prouct is launched in market
• Growth Phase = product is known and market is in acceptance
• Maturity = sales and profits start to decrease
• Maturity has 3 parts: - growth maturity = growth rate declines, no distribution channel - stable maturity = sales is level/broken even because of saturation - decaying maturity = customers switch to other brands/substitutes
  • decline/possible abandonment = products replace old ones
  • Reason why products fail:
    • Inadequate Market analysis
    • Product Deficiencies and not reacting
    • Poor timing
      • Solutions include better product, org changes, improved screening

Product Advantage

• Marketing Advantage and Advertising Advantage
• Product line = group of products related and used to each other
• Product mix = complete list of all products for sale, assortment for sale

Strategic Expansion

• Expansion/Position/Contraction of Product Mix
• Alter existing product
• Product differentiation/market segmentation = Awareness of features in marketing
  • Market segmentation is the process of knowing the target market

Brand

• Brand is symbolized in the form of a word, mark, and symbol
  • Brand name is vocalized/spoken
  • Brand Mark is a unregistered design symbol or product logo
  • Trade name = registered company name
  • Trademark = registered under intellectual property office
• Trademarks
  • Can be registered under R - country, Reg. Phil. Pat Off - Philip patent trademark
  • Asterisk symbol = additional info/disclaimer
  • Copyright Symbol = covers literary/artistic work
  • Brands can be of these categories:
  • Manufacterer brand=manufacturer
  • Distributor/Middlemen = Wholesalers, retailers
  • National name - sold in archipelago, advertising
    • Private - not advertised
    • Individual brand, generic brand name
      • No official branding

Importance of Branding:

• Simplifies Sales
• Encourages repeat sales/protect from subsitutions
• Branded is prefferred in middle and minimizes comparison
• Characteristics of a good Brand is: Easy to remember/Distinctive/Protected

Packaging

• Packaging involves design/production
• Examples Packaging Strategies include:
• Family packaging - common packaging traits
• Reuse packaginng - product promotes alternative purposes
• Multiple packaging - several in group - Lebelling is used to inform/represent contents to buyers

Types of Labels

• Brand Label - identifies to product/package
• Grade Label - quality by letter, number, word
• Descriptive labels - about product w/use construction/care