Copy of Marketing MOS Lectures 2032 PDF

Lecture One - Sept 9 - Canadian Marketing Association CMA defines marketing as a set of business practices designed to plan for and present and organizations g/s in ways that build effective customer relationships - Not just selling/promotional activity - American Marketi...

Lecture One - Sept 9 - Canadian Marketing Association CMA defines marketing as a set of business practices designed to plan for and present and organizations g/s in ways that build effective customer relationships - Not just selling/promotional activity - American Marketing Association AMA defines marketing as an organizational function and a set of processes for creating, capturing, communicating, delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders What are our core concepts? - Helps to create value - Satisfy customer needs and want - Entails an exchange - Requires decisions about the 4PS - Can be performed by both individuals and organizations - Can happen in a lot of settings Value - Fundamental purpose is to create value for the consumer and capture value from the consumer - Value is the thing that we desire - From a consumer perspective, value or “consumer value” describes the benefits or problem solutions the consumer receives from our marketing activities - What we do for the consumer to make their life better (solving a problem, changing things) - Value is subjective and abstract, individual consumers will perceive/desire different things, the value they expect us to create for them is different - Its not what the product does functionally, its about what it does for the consumer EX; car, value is not in the motor/engine it is in getting us where we want to go efficiently, conveniently Some people value it as a status symbol (lets ppl know my SES) Needs and Wants - Effective marketing requires not only recognizing consumer needs (felt deprivation when we feel we don’t have what we should have/want to have) - Needs do not have direction/specificity, you go without food you get hungry but hungry is broad - Wants have specificity and direction, choices about how we would best satisfy, hungry and need food but you want sushi etc - Wants shape how we satisfy needs - We need to understand how our consumers want to satisfy those needs - Satisfaction / Customer Satisfaction is a subjective evaluation on the part of the consumer of whether a particular choice met, exceeded, or fell short of their expectations - People can be happy with sub par items because they were expecting garbage - Demand describes when wants are backed up by a consumers buying power (money in pocket and willingness to use it) - Since we cannot satisfy everyone, marketers will often make the choice to go where demand is the strongest Markets - Target Markets - Target Market is not just that they need/want the thing but that they DEMAND it Exchange - Fundamental marketing activity - Voluntary trade of value between at least 2 parties 1. Each may benefit, both may prosper Exchange that happens via deception or force is more like theft not exchange 2. Both parties need to be able to communicate with each other (i have this u have that) 3. The actual trade must be able to occur, the people must be able to connect 4. Both parties need to have something of value the other desires - Things of value instead of money - We pay for stuff without realizing we pay for stuff Exchange can be carried out by many different parties in many different contexts 1. Business to Business 2. Business to Consumer 3. Consumer to Consumer (exploded due to online (ebay, fb marketplace, kijiji)) The Marketing Mix 1. Product (creating value) G/S, warranty, Brand, size, quality, packaging, features 2. Price (transacting value) Discounts, costs, payment period, credit terms 3. Place (delivering value) Marketing channels, storefront/online, supply chain, logistics, distribution 4. Promotion (communicating value) Advertising, sales promotion, public relations, direct marketing - Areas of decision making to satisfy our target markets - The aim of marketing is to make selling unnecessary (Peter Drucker) Idea that we do marketing well and effectively and understand the consumers needs/wants, who demands what we offer, we are able to give them that thing is seamless ways so that we never have to convince them How has Marketing Changed? 1. Production orientation: organisations complete by being able to master the production process and make items faster/cheaper 2. Sales orientation: i can twist arms better and convince people my product is better than the competitor 3. Marketing orientation: we compete by understanding the consumer and offering the thing they want to them better than our consumer 4. Value based/Relational orientation; We don't just understand the consumer but we are able to operate more effectively at delivering value than competitors Value is not just about more for less Focusing on creating and curating customer relationships rather than racking up unique sales transaction (ie; constant emails) CRM- Customer Relationship Management - Greater investments in customer relationship management efforts that should strengthen the connection between consumer and brand, increasing value and satisfaction (ie; optimum points, lee valley sends out invites, suggestions on how to do your garden better) Benefits of good CRM - Better customer intimacy - Greater share of wallet - Higher consumer lifetime value Ex; Fastfood Greater share of wallet - Mcdonalds can see greater share of wallet, 20% of their fast food spending goes to mcdonalds vs 10% to tims etc - Basically consumers want to buy from the same person bc it is worthwhile for them - Other ex; you would go to loblaws to get optimum points to buy carrots instead of going to farmboy Consumer lifetime value - Consumer value is not just the one purchase but a sum of all of their purchasing lifetime - Ex; buying a car, dealership is not just focused on selling you one car but seeing the guy walk in at 25 and knowing we can also sell him 4 more cars throughout his purchasing lifetime - Car dealerships (free oil changes) were one of the first to start maintaining customer relationships in the 80s before it became common in the 2000s Customer relationships are not just based on values but on shared values - Customers want to be in relationships with brands that behave and care about the same things socially - This has led to more emphasis on CSR corporate social responsibility, cause and/or purpose marketing and societal marketing concepts (ie; dawn) Societal Marketing Concepts - Not simply about brand and consumer but about broad society 3 things were trying to balance 1. Benefits customer receives 2. Organization Benefits 3. Social Benefits (what society receives) TRIPLE BOTTOM LINE 1. People 2. Profits 3. Planet Consumers are declaring their social values through purchase decisions Why does this matter to the consumer? Caveat Emptor - the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made. - Is part of the reason the socially responsible marketing stands out to the consumer because our expectations for marketing go in the opposite direction - A lot of people when you ask them about marketing and talk about how they feel about it, you don't always get positive responses, while it is subject to guidelines, people talk about it being ethically questionable and socially irresponsible - We can trace roots back to pop culture activity - Standard oil- was bad - kind of the google of its day - they had the resources to make this happen  - Option one you sell to us - Option two you dont sell to us but we come in anyways and put you out of business A better marketing - The Consumer Movement or “Consumerism” is a social movement with the goal of increasing the powers and improving protections afforded consumers in the marketplace. What are the core principles of consumerism 1. Buyer has the right not to purchase 2. Buyer has the right to be informed 3. Buyer has the right to be protected 4. Buyer has the right to be heard 5. Buyer has the right to a good product - Want the balance of power so consumer and brand are on relatively the same playing field Unsafe at any speed (book) - Selling cars they knew were unsafe (ie; no seatbelts because they thought they would be too expensive and didn't care even though they knew they could save lives) - The big 3: Ford chrysler GM - Their response was let's take the heat off us, not denying what he was saying - Primary collision; car hits the thing - Secondary collision; when the people inside hit the things inside the car The Environmental Movement “Environmentalism” - Organised socio political movement of concerned citizens, businesses, government agencies to conserve and improve our shared natural environment. Silent Spring by Rachel Carson - Consequences to ecosystem of use of pesticides (instead of using normal amount, using alot to ensure there are no mistakes), and aggregate - Ecological devastation, can feel very abstract - She painted a picture of spring without movement, hustle of nature waking up, birds chirping - Her concern was not the use of this product, it was the overuse, it can help protect the food chain or it can kill the ecosystem Common critiques of marketing activity 1. Artificially raises prices - Does not make it more expensive because its better - Notion of the excessive markup, function of greed - Ex; toronto star article on canadians thinking grocers are profiteering - Ex; loblaw boycotting 2. Deceives us + pressures us and gets us to buy 3. Sells us shoddy or obsolete products (stuff that doesn't last so we go out and buy it again) 4. Pollutes our common shared culture Marketer Response - We could argue that consumers have choice - Intermediaries increase value - Promotional activity aids decision making - Real costs of doing business aren’t always clear to the consumer Deceptive practices - Marketing is built on misleading - deception and will mislead the consumer with false or otherwise incomplete information to convince them to take actions that are not in their best interests. - Common Deceptive Marketing Practices 1. Deceptive pricing 2. Deceptive packaging 3. Deceptive promotions Shrinkflation/Downsizing; business strategy that modifies product packaging to reduce quantity of product while preserving or slightly increasing the sale price Marketer Response to shrinkflation - We could point to the competition act, competition bureau and advertising standards canada as guardrails to protect against unfair, deceptive, coercive business activities Shoddy Products - Low in quality - Lacking in efficacy - Potentially unsafe to use - Is offering consumers products that don’t meet their expectations a smart strategy? (dissatisfied consumers rarely stay in consumer relationships) Skimpflation - Not change the quantity/price of product but control costs by sacrificing quality - What is enough we can save some money but not make consumers hate our product - Tip toe towards shoddy products Obsolete products - Marketers will use obsolescence as a marketing tactic - Purposefully limit the uselife life of their products to drive consumer demand and encourage purchasing - Product that no longer solves consumer problem Obsolescence can be planned (planned not to function) or perceived (consumer saying this doesn't work for me the way it should/use to) - Ex; planned = slowing down the old iphone so you go get the new one - Ex; perceived = fast fashion, yes i could wear this top but it is no longer fashionable Cultural pollution - Critics say marketing activity makes stuff feel cheaper, but also makes it more accessible - Mcdonalds in vatican city, takes the historic architecture and makes it feel cheaper but for tourists it is quick, fast, comfortable Lecture 2 - Always going to be a kind of compromise (time, money, resources) - A Marketing Strategy describes how an organization will approach the marketplace, the direction(s) it will work towards, what it is trying to achieve, and how it will differentiate itself and compete most effectively for the consumer. - What little time/money/resources gonna be allocated for return  - Strategies are not timelines/plans its more big picture - Will inform a lot of specific things we will do Ansoff Matrix - Suggests organizations that are seeking to grow are going to fall into ¼ categories - What defines them is : the product were using (how were creating value for consumer) and the market place targeted - Related diversification: going to rely on relationships of existing resource - Unrelated diversification: (riskier) starting over from scratch Market Penetration - Getting more out of what were currently doing - Ex: Sales promotions, expanding locations Market Development Strategy - Time to go someplace else - Doesn't only mean going international, across borders etc… - Can look like: finding new consumer groups to appeal to where we currently are - Ex; tims trying to go into the states Product Development - Make/offer new things to people who already like us - New product generation - most will fail/won't land in market well - Ex. tims making pizza, donuts etc.. Diversification - Not all eggs in one basket - New product targeting new market places - Not as vulnerable to swings/trends/shifts - Ex. tim hortons credit card Michael Porter - A marketing strategy determines “how a business is going to compete, what its goals should be, and what policies will be needed to carry out these goals - Cost leadership + differentiation + focus (cost/dif) + stuck in the middle - Cost: we are going to build our strategy around our ability to control cost (we can give the customer something faster, cheaper, better than our competitors)  - Differentiation: gonna stand apart, be better for the consumer cause we are different (tends to target larger market groups) - Focus: maybe our strategy is not by being different, but by focusing on consumer groups who are underserved (niche strategy) (using with cost focus or with differentiation focus) - Stuck in the middle: try to be all things to all people, does not work well, - Porter argues effective strategies requires acknowledging trade offs and choosing a different set of activities to deliver a unique mix of value What should a well defined strategy do? - Identify the markets we plan to target with our efforts - Inform our activities to appeal to those markets - Offer a basis of sustainable competitive advantages What are sustainable competitive advantages? - What are we good at? - Something we can do better than our competitors consistently - Should be hard to copy and thus maintained over time What should we be good at? - Key success factors KSF - Characteristics of conditions that are critical to organizational success - Vary from industry to industry - Ex; strong distribution system Value Disciplines (Michael Treacy and Fred Wieserma) - Operational excellence + product leadership/product excellence + consumer intimacy/customer excellence (+ location excellence in textbook) - Operational excellence: operate as an organization that turns this into that better than anyone else - Product leadership: innovation, quality, and its ability to provide value to consumer, doesn't mean we make the best product but we make the one that delivers value to the consumer best - Customer intimacy: understanding of consumer/relationship/curate connection - Locational excellence: we are where the consumer needs us to be, convenience is a big driver (consumers are lazy and likes convenience) (in some industries) Competitive advantages (from textbook)*************** What Is a Marketing Plan? - About how we are going to achieve strategy - What are we gonna do, how, plan etc… - Detail oriented, talk about how specific things are going to get done - Strategy is what and why (big picture) /// plan is the how, when, where (details) 5 basic steps What do we want to do? How will we do it? Were we able to do it? - Control phase tells us how close we got to our goal, where/how we fell short - Mission: who we are, broad description of the scope of activities an organization plans to undertake as it works towards its overarching goals - Vision: who we are going to be forward looking, motivational statements that point to future achievements - Objectives: what the specific plan is going to achieve, should be well defined with both qualitative and quantitative dimensions that serve the broader strategy Well defined objectives will be S.M.A.R.T one - Specific - Measurable (selling x amount) ex. Gonna sell 20,000 units - Attainable: is this something we can accomplish - Realistic: is this goal within our current capabilities (can it be accomplished by us) - Timely: deadlines (going to do it in this time frame) Situational Analysis - involves considering those relevant trends, forces, factors, and variables at work in the marketing environment and deciphering the implications they may have on our short-term and long-term goals and objectives - What does it mean for success (short term and long term) - To tell me what's going on and what it means for you/ your organization/ your plan - The easy part is figuring out what's happening the harder part is the ability to understand implications Marketing environment: things close to the organization Swot analysis - Forces us to get analytical - Internal and external elements - Strengths and weakness: internal - Opportunities and Threats: external For midterm: Swot or Situational Analysis - What's going on, the implications, is it good or bad for the plan What are the variables in the marketing microenvironment - We have more control in the micro environment since we can make connections + navigate publics 1. The company - Consider its strengths/deficits - Variables to consider: leadership (strong/divided), operations (equipment/product), people HR, competencies, resources, assets (branding) 2. Partners - Successful organizations rarely work alone - Not just what we need someone to do but the nature of our relationship - Suppliers (upstream) > company > intermediaries (downstream) > our customers - Suppliers: the materials - Intermediaries: help us deliver product 3. Competition: those who make it so we don't succeed - People trying to offer the same value to our consumers - Direct Competitors: solving the same problem in the same way - Indirect competitors: solving the same problem with a different method - Competitive intelligence: we want to know who the competitors' capabilities, strengths and weaknesses, strategies etc… investigate competitors 4. Publics: third party actors - Not selling parties to compete with us but they are not working with us either - They can harm or help us Media Publics: members of the media institutions - They are seen as more trustworthy (useful tool) Advocacy/Citizen Action Publics: advocating for a cause - Tend to interact with or respond to organizations that they see supporting their position or working against - Upset = sour our brand - Ex; starbucks being sued for 100% ethical sourcing claim Government publics: agencies and departments of the government (provincial or federal level) - Look at CRTC Financial publics: anyone that controls access to money - Lending institutions, granting institutions, investors - Investor relations (those are your financial publics) - “Won more than we lost and are going to win more then lose so keep your money with us” Macro Environment - We are more susceptible to it than able to control it Culture - Lasts centuries - Multi valent: different things we can exist with and experience them differently - Culture describes the shared meanings, beliefs, morals, values, customs, rituals, and symbols of a group. - Culture helps to shape how an individual understands the world and how they function within it - Macro Cultures + Subcultures + Microcultures - Macro culture ex: canadian culture - Subculture: tend to be attached to specific groups - Ex; atlantic canada vs ontario subculture - Microcultures: tend to be built around interests - ex; hockey fans, western students Geert Hofstede - Argues that the way to understand a macro culture – and to understand the meaningful differences between cultures – is through those cultures’ values Hofstede cultural dimension theory: 1. Power distance - people in charge on top Low power distance - not a lot of authority 2. Individualism: how a person defines themselves - are we a me culture or we culture 3. Achievement (masculinity): does our culture value accomplishment (culture of competition or common ground) 4. Uncertainty avoidance: are we comfortable with the unknown or do we need them defined Low uncertainty: comfortable comfortable with unknown 5. Time orientation/long term short term orientation: if our time orientation is short term we want immediate results, long term we are okay with stuff taking a while learning + growing 6. Indulgence; high indulgence; I do what i want low indulgence; I do what the norms are, I do what is expected, Demographics - Populations or groups of people - Age, gender, education, ethnicity etc….. - Quantifiable = number of demographic - Useful for understanding the market, let’s us see where things are heading (ex. where this will be in 5 yrs) - Common because of statistics canada - Do not fall into the trap of stereotype and assumption = miss opportunities (ex. “Old people don't use technology”) Social trends - Move and change quickly especially when compared to culture - attitudes and/or patterns of behaviour prevalent within a society or amongst members of specific social groups - Market Research suggests that Canadian consumers are growing more frugal, more time- poor, more concerned with health and wellness, the environmental impacts of their consumption, and the (mis)use of their information. Tech  - Technological innovation does not just improve the value and variety of the products offered to consumers; it can have implications for most any and every facet of marketing activity. - Its impacts are far from obvious - AI is the simulation of human intelligence in machines that are programmed to think and learn like humans - AI can be used to gain insights into consumers through social listening and automate and optimize communications - Ai can aid in sentiment analysis allowing markets to sort through the positive negative and neutral commentary and conversation Economic - This means not just considering “harder” macro variables like exchange rates, interest rates, or economic growth or recession but also “softer” micro variables like Consumer Confidence. - Possible borrow money (need to to think of interest rate) - Consumer Confidence: optimism the consumer receives about the market - impacts consumer behaviour (buy new cars, fridges when high / opposite when low etc..) Political and Legal - This area requires we consider those overlapping regulatory guidelines and legislative frameworks that can impact marketing activity as well as the political activity that shapes them. - Legalisation of things can create and destroy markets/opportunities Situational analysis - The Marketing Environment is interconnected. Not every variable will be relevant to every situation. Effective analysis isn’t about checking off boxes or listing events, it is about seeing what is going on and understanding how and why it matters to your plan. - Ones that are relevant to the situation, don't treat this as checking off boxes but one of analysis Lecture 3 What is B2B Marketing - Exchange of value between businesses - Businesses have to buy stuff to make stuff to provide value for consumers - Or because they operate as resellers to other businesses or the end consumer - It can not always be obvious to the consumer, but it is huge Manufacturers or “Producers” are tremendous consumers of raw materials, processed materials, and component (sub manufacturers) parts used to make products to sell to consumers (between suppliers and the company) Resellers buy to sell. They purchase products made by someone else and then resell them to another party without making significant changes to the product itself. - Matching: making small adjustments, we might do the last bit of preparation before the next people reach it 3 broad types of resellers 1. Distributors; work closer to the producer, purchase from the producer and sell them further down the channel, perhaps to a wholesalers or retailer, transfer of ownership + some of the holding of inventory/movement of product 2. Wholesalers; focus relationships more on the retailer side of things,less physical distribution, a lot of wholesalers deal with retailers who have their own distribution hubs (ie; sobeys has their own center/trucks) 3. Retailers; works closest to the consumer, intermediaries (downstream), focus on relationships with consumers Institutions: - Vary in terms of their purpose and objectives - Typically non profit organizations who purchase to be able to serve their patrons - Ex; schools, hospitals, museums - Defined by tight budgets, active oversight (there may be more influence on purchase decisions, people watching how their money is being spent), captive patronage (the individuals that are served by the institutions have few other options) - More sensitive to price, very aware of how much they are spending per interaction so they can serve the most people Governments - There are overlap between institution and government (ie; the school board) - They buy alot of different things, since they have alot of functions Governments (Federal, Provincial, & Municipal) are voracious and quirky consumers. What are some of those quirks? - Lots of business to be had there, lucrative client - Will pay their bills, not likely to declare bankruptcy - Tends to be somewhat irrational, government purchase decisions can be subsumed by the political process - Government activity has alot of oversight, lots of stakeholders/people looking in - Being able to list the government as one of your customers looks great on your business, reputational boost How is Marketing different in a B2B context compared to a B2C context? - Marketplace features, Marketing mix and buying process is a bit different - B2B markets are largely driven by Derived Demand and not completely disconnected from the B2C marketplace - B2B markets will also tend to show less price elasticity (changes in price will impact or change behaviour) in the short-term - We can weather those price changes for the short term (ie material price goes up) but in the long term this can cause us to change suppliers - Derived Demand: the demand for a good or service that results from the demand for a different, or related, good or service - Ie; fashion industry trends: buying less denim, a company like Levi’s will be hit B2B markets also tend to be more value concentrated spaces with fewer buyers and sellers but more purchasing when compared to B2C markets B2B marketing - Common misconception; the only thing that matters is product and price - We still deal with all 4 Ps, just the variables that shape our decisions are different - Products in this market are the things that are used to make products, made into products, or are used in the running of the business - Tend to be more specific, more supported, and more technical in nature 3 Broad Classifications of B2B products: 1. Capital items - fixed assets, retain more value, spend alot on them and to acquire them, typically used in manufacturing - Ie; robots used to make cars in a factory 2. Parts and materials - Sub manufacturing products - Ie; restaurant buys pre made pizza dough 3. Supplies and services - Aid in the operation of the business - Ie; office equipment, accounting services, facilities management B2B Price - Price is more negotiated - Even where it is not we are more likely to see trade promotions, quantity discounts, or other price adjustments to win cover clients B2b Place - Those questions of location and process are more complicated ones in the B2B marketplace. Commonplace are more elaborate set terms for delivery and strict scheduling in the ongoing distribution of products to our business clients. B2B Promotion - Marketing tends to be more technical, detailed, specific and targeted - Personal selling techniques are also more likely to be included as part of the promotional mix - Ie; going for lunch is costly but works on building relationships with businesses and securing those deals B2B Buying - Recognizing a problem and how we are going to solve it - On our midterm one of the most common mistakes is they interchange the b2b and b2c buying/selling processes How does B2B buying differ from consumer purchase decisions - Increased complexity, more variables, extends over time, tied into short term goals and long term strategy, deals with more stakeholders  - By default going to be a result of group decision making (different stakeholders and their interactions) - Increases opportunity if we are doing the selling (more people to talk to and influence) - Criteria specificity: What we are trying to solve has more specific criteria attached to it, we need the exact solution, - Formality and rationality: business will have a formal procedure for acquisitions 6 steps 1. Needs Recognition: someone in an organization sees a problem that must be solved and can be solved by acquiring a G/S Can be driven by internal and or external factors What are the external factors that shape needs recognition? - Existing Suppliers: can show us their new products as they innovate to replace what we already have from them Ex; printers making packaging since newspaper sales are going down - Sales people and Promotions: salespeople help to uncover or highlight needs that the organization may not have actively recognized, while promotions can encourage a sense of urgency or opportunity that drives purchasing decisions. - Competitors and Customers: constantly paying attention to competitors and respond to what theyre doing Customers can point to deficiencies or ask us for new things 2. Product Specification: having recognized a need the purchasing organisation will then develop a general description of what might satisfy that need before refining it to a set of specifications that can properly satisfy it starts with a general understanding and add detail as we move along Suppliers often help us to increase the value they can offer us, also so they can steer the specifications in the direction of their offerings 3. Request for Proposal Process: start asking around for what we are looking for and seeing how companies can provide it for us - This invitation can be a more targeted one, the result of a supplier search, or organizations can cast a wider net with a broader request for proposals What a bid/proposal looks like will vary based on the request, the organizations, and the nature of the purchase Ex; biddingo (online platform where RFPs can be posted, allowing suppliers to submit bids) Document is drafted outlining project scope, requirements, budget, and how suppliers should respond 4. Analysis and Selection: the purchasing organization will evaluate each proposal received to determine which suppliers they should purchase from How this process works will vary by organization and even by situation Evaluative criteria used to compare proposals will also vary. Costs, quality, and delivery times are common ones, but what else might be considered here? Supplier reputation, their behaviour up until this point in the process (how engaged, attentive) Up to this point is all SELLING, below we make the sale 5. Order specification: once supplier is chosen the 2 organizations negotiate the exact details of purchase (product attributes, timelines for delivery, payment schedules)  6. Performance Assessment Using Metrics: for the purchasing organization to evaluate the outcomes of their decision (getting what we paid for, problem is being solved), assessing the performance of their suppliers and providing needed feedback Many vendors like this and come to the negotiation with performance assessment criteria in palace, they recognize the value in it, understanding where they are falling short can help them fix it, more of a blanket contract thing but still applies, relevant to business suppleir relationship What are the factors that shape B2B Buying process? (it may not always look the same) 1. Buying situation: determine level of risk and amount of time, energy, effort a company will invest 2. Buying culture: extension of an organizations culture extends into the buying situation 3. Buying centre: describes the various formal and informal roles different individual stakeholders will take when involved in making influencing or carrying out purchase decisions within an organization Buying Situation Straight Rebuy: order exactly what we had before (ie; more paper) - little risk, little work - known solution - no/little opportunity to sell to a company who is involved in straight rebuys Modified Rebuy: need to reorder the thing but need to change something minor about it, a new version Ie: the paper we buy gets jammed in the printer maybe we need a heavier weight of paper - some work to consider the new option - some risk - little bit of opportunity (some dissatisfaction) New Buy - riskiest and involve the most work - buying something we do not have a process in place for - it is more about process ie; buying a pizza oven is a new buy because you dont have a process for it not because you do not have a pizza oven already because you do - most opportunity Autocratic: I am the boss and I am going to decide - Very little consultation/input - We need to talk to one person and win them over - Makes our job easier and harder Consultative - Still one person making the decision - Tend to talk to other people and seek input - More opportunity Democratic - decision making authority is invested in the group, everyone has a say in the outcome, majority rules Consensus - decision making authority is invested in the group, everyone has a say in the outcome, finding common ground, make it so everyone is okay with this - from selling point; need to position ourselves as the solution for everybody Buying Center Initiator; Get the ball rolling in some way Influencer: Provide information, guide perceptions Decider; who is going to make the decision formally or otherwise Buyer: carrying out the decision (most formal) User: Use the product Gatekeeper: want to stop the flow of information and keep people apart so they cannot be influenced  - One person can play different roles, not each one is a different person - Ex; sales person from a vendor can be an initiator, influencer, and gatekeeper - Ex; a user can also be an influencer Pizza Squared - In 1980s rename it to pizza squared, Different because their pizza is a square, good prices - The kids are taking over the business with its problems - The kids have the idea to lean into food trucks - New Buy situation, somewhere between consultative and consensus, more people to influence, more opportunity - Kids are the initiators, influencer = sales person, 2 kids, franchise partners, pizza food truck competitors decider= dad buyer= whoever handles the stuff in the business for them users= employees of our franchise partners gatekeepers; salesperson Impossible Meats 1. Leadership 2. Competencies - Concerns about business experience and expertise at the xhip level (brown came from the lab not business background), as well as the capabilities of the organization to sustain its growth - This lack of experience along with deficits in production capacity were revealed when impossible couldn’t keep up with demand for its products in 2019 - Once they figured this out they entered into a production agreement with OSI allowing them to expand production along with demand - David chang was the first to include it on his menu - Social visibility and social proof - We cannot stay with david chang, you see them step down to more fast casual chains Ie; cheesecake factory all the way down to burger king - The hurdle we have to jump is getting them to try it for the first time and have it be a good one with us instead of with the competition - Challenge: We need to fight to be put beside the meat in the meat department because it will impact perception of our brand - Challenge for education: if david chang cooks the burger you have a higher chance of liking it than when you buy it yourself at the store and then cook it incorrectly - What are the benefits for each company in the collab with burger king: Variables in the microenvironment 1. Suppliers (upstream): if this catches on there will be soy shortages, need to have best supplier relationships/contracts 2. The company: requires significant processing, need outside manufacturers 3. Intermediaries (downstream): These are the businesses that help move the product from the company to the consumer, like distributors or retailers. They play a role in getting the product to the final market. 4. Our consumers Publics impossible should be thinking about: financial, advocacy, government, media Trying to get past the early adopter stage Need to ensure it is affordable if we want to have a spot in the meat industry, it cannot be a niche expensive product America has a carnivore culture the hamburger reminds us of america Tech: plant based proteins are technologies the result of intensive and iterative R&D much of the early funding was necessary to do the hard party - Our big concern is accessibility and affordability, tech is what is going to make this better accessible and affordable Economic macro/micro As we see consumer confidence fall and rise people will be more willing to try when it is more affordable/same price There will be a situational analysis and environmental analysis Lecture 4 Market Research and Consumer Behaviour Market Research: another way for us to get information - Problem specific - Essentially a project - Pick something we dont know (usually very specific) (ie; how is our consumer going to react to a change in packing/price?) - Carried out via several practices that used to gain specific insight and understanding that can inform effective marketing programs Market Research 1. Exploratory research (looking around, what already exists, what have others said, gain insight into the problem were trying to solve) 2. Descriptive research (describe what are the variables in this problem all about, what are consumers attitudes to our price/packaging, what kind of packaging do they like) 3. Causal research is trying to tell us about the relationship between things (if we do x we can expect y to happen) 1. Problem definition 2. Research design 3. Data collection (carrying out our research) 4. Analysis and insights 5. Findings/action plan (what we know now and communicate it to decision makers and stakeholders) 1. Defining Problems - Research begins by identifying what it is that we need to know - It is not alway easy to define - Alot of times the problem can come from here because we are looking into the wrong thing in our research - Tendency to confuse symptoms with causes (if we see declining sales we might thing be more aggressive with advertising but the more important question is why arent the people buying (ie; stronger competitor, their attitudes)) - A research problem: gap in our knowledge that needs to be closed - Research objectives; specific things we need to learn to close that gap 2. Research design - Determining what information is needed to close the gap in our understanding and then how that information should be collected - Big picture stuff to keep in mind: is our required information available (can we capture it)? How do we collect that information accurately? How do we collect that information practically? - So how do we collect available information practically and accurately? - Sampling: research strategy of gathering data from a representative subset of a population rather than from all members of that population - Do we build our sample with rigor or do we build it with cost and convenience? - Probability sampling is harder to do but more accurate - Non probability sampling is somewhat easier to do but less accurate 3. Data collection - Carry out our plan using research methods we have chosen to gather up the data we need to answer our question and close the gap in our understanding  - We always do secondary research (what others have said) before primary (our own) Secondary is easier and cheaper to do, it can help us see if we are going in the wrong direction - Sources of secondary data: internal (in our organization, we might already have sales records or consumer information) and external sources Syndicated data; data that is collected, compiled, and sold by third-party research firms to multiple organizations, rather than being tailored for the specific needs of a single client. It is a standardized form of data available to anyone who subscribes or pays for access to it. What are the types of Primary Research? Qualitative (Aka “softer research” more about the qualities) and quantitative (harder research, statistical data) - Start with Qualitative first: observation research [often used with other types of research], focus groups [8-12 people], in depth interviews [usually paired with observation research], projective techniques, social media - Quantitative: surveys, experiments, panels, scanners (what neilson was doing) How can we deliver a survey? In person, phone, mail (lowest response rate), online (careless responding, dont know who is responding) Survey - Structured approach (rating on a scale, multiple choice) - Unstructured (long answers, limited use, give us info we may not have asked) When writing a survery don't just think about what the questions about, avoid some of the common errors Experiments; researchers test out a hypothesis by manipulating independent variables to determine the effects on dependant variables  - Most common experimentation in market research is test marketing - 2 common approaches: true/laboratory setting (control over all variables, hard to do) + quasi/field experiments (done in natural settings) - Test marketing in market research tends to lean towards quasi/field Ex; How did campbells solve the problem of how to best spend their online/digital promotional dollars? Data analysis = need to make sense of what we learned, data turns into relevant market or consumer insights that will close our knowledge gaps - All that work is starting to close that knowledge gap The last step of market research is to communicate these insights to leadership and stakeholders so that they can be used in future decision-making and planning What is Consumer behaviour? - Describes all of the things we do when we are selecting, purchasing, using and disposing of products to satisfy our needs. Smart marketers need to understand both purchasing and consumption. Purchase decision process - The amount of time, effort and energy a consumer will invest in making a purchase decision will typically, depend on their level of “involvement” - Involvement increases with actual and perceived risk and the consumers' ability to comfortably predict the outcomes of their choices. Risk is complex and has performance, financial, physical, psychological and social dimensions - Things that have social visibility (clothes) tends to have more of a decision Consumer purchase decision process - Needs recognition, information search, alternatives evaluation, purchase decision, past-purchase behaviours Model of involvement (use the spectrum) 1. Low involvement: routine problem solving - ex. Groceries (no information search, little bit of internal/external) make these products affordable, telling consumers something needs to be obvious, availability/convenience is huge, consumers built up patterns and u cannot get to them 2. Moderate involvement: limited problem solving - sneakers (financial risk, social risk, physical risk) 3. High involvement: extended problem solving - car (heavily researched) Impulse buying; unplanned purchase, more of a reaction/response than a decision, sits outside of the purchase decision approach Needs recognition: when we perceive some gap between what we have and do so with enough intensity to motivate us to act Internal = physiological actions like hunger, embarrassment etc.. Needs; the recognition can be prompted by internal and external stimuli - Our needs are complex and can have functional psychological and symbolic dimensions Information search - How we search for information is shaped by more than involvement and actual/perceived risk. It is also determined by our estimation of the costs and benefits of searching and our Loci of Control (int or ext) - Can happen in ways that feel more passive/accidental How do we search for information? 1. Internal search; searching through past experiences of what we already know 2. External search: search outside ourselves to look for new information What sources do we use for our external search? 1. Commercial sources 2. Public sources 3. Personal sources 4. Experiential sources Evaluation: Now informed, we weigh the different options to determine which is best for us. We do this using our Evaluative Criteria and (typically) applying them to the Determinant Attributes of the purchase. Universal set: Awareness/ Retrieval Set: Inept set: products they are not going to consider for purchase Inert set?: products/options consumer has not made up their mind about because they don't have enough info or aren't sure about Consideration/evoked set: great places to be as marketers, consumers are going to consider purchasing us, even if its not this time they might buy us next time Decision and Purchase: Having evaluated our options, we decide on what to buy, when to buy, and where to buy. Then we need to act and make the purchase. But not every decision converts into a purchase. Why not? Post Purchase: Having made our purchase, we will then consume the product, experience its benefits (or lack thereof), and evaluate our decision and its outcomes to inform our future behaviors. - Here we must determine if we are satisfied, grapple with any cognitive dissonance (we look at decision as acquisition and sacrifice) we are experiencing, and, depending on that, take steps towards becoming more loyal. - cognitive dissonance: what could have been vs what we got What factors influence our purchase decisions? Psychological - all stuff that happens in ur brain - motivation is the energising force that compels us to act in the context of purchase decision it is the thing that sieves us to seek out ways to satisfy our needs - 2 categories of motivation: maslow's hierarchy of needs, freudian theory - Maslow’s Hierarchy of Needs suggests that our motivations are rational and ordered, beginning from the most basic to the most ambitious. - Freudian Theory suggests we are motivated by complex forces that we are not aware of and can’t recognize. These unconscious forces emerge from out of the tug-of-war within our psyche. - Super ego: no thats against the rules - Ego; the referee, theres a way forward lets make peace - Id: isn't in touch with reality or logic or social norms Learning, in the context of consumer behavior, describes the ways that consumers acquire the new information and understanding that will shape their future behaviors. What are the ABC of attidual response - Affective Component (Feelings): This refers to our emotional reactions or feelings toward something. For example, you might feel happy or excited about a new product. - Behavioral Component (Actions): This is how we act or behave in response to something. For instance, buying the product because of your positive feelings toward it. - Cognitive Component (Thinking): This involves our thoughts, beliefs, or knowledge about something. You might believe the product is useful or of high quality. Our attitudes – what we think and how we feel – can shape (and can be shaped by) how we perceive information. Perception is an individual’s subjective interpretation of the stimuli they encounter. It is our point of view of the world. Four stages of selective perception, which is the process through which people filter and interpret information based on their existing beliefs, attitudes, and experiences: Selective Exposure: This is when people choose to expose themselves to information that aligns with their interests or beliefs, while avoiding information that contradicts them. Selective Attention: After being exposed to information, individuals focus only on specific details or messages that catch their attention or are relevant to them, filtering out the rest. Selective Comprehension: This stage refers to how people interpret information in a way that fits their existing beliefs or understanding. They comprehend and process information through their own lens. Selective Retention: Finally, people remember information that aligns with their beliefs or interests and are more likely to forget details that don't support their views. What factors influence our Purchase Decisions? 1. Psychological Factors: These include our beliefs, attitudes, motivations, and perceptions. For example, if we believe a product will make us happy or solve a problem, we’re more likely to buy it. 2. Situational Factors: These are temporary conditions that affect how we make decisions. They can include things like the shopping situation (who is in the store with us, the store layout, etc.), purchase situation (why we're buying, like a gift or personal use), and temporal effects (timing, like shopping in a rush or when stores have sales). Antecedent states refer to a person’s mood or condition before making a purchase, like feeling hungry or stressed, which can lead to impulse buying. 3. Sociocultural Factors: These include the influence of family, friends, social groups, and culture. For example, social norms or family opinions might affect what we buy or where we shop. Sociocultural Factors - Family: The family represents both an important consumer buying unit and a significant influence (BUT not the only influence) on our socialization as individual consumers. (mom/dad might also be shopping for the family) - Reference groups: Groups of people we identify with or aspire to be like, such as friends, colleagues, or celebrities (direct or indirect) - Role and statuses: Our position in society or a specific group, a person’s role as a parent, employee, or student can influence what they buy, and their social status can affect the brands or products they choose - Cultures; shapes our beliefs, values, and customs Consumer behaviour is socialised behaviour Reference groups: Aspirational groups: who we want to be like Disassociate groups: who we don't want to be like Membership groups: people who feel the same way we do Roles/Statuses: Consumer behaviour can also be shaped by the different roles a consumer plays and the status they wish to experience or communicate in those different sociocultural contexts. - Ex; individual will have different roles they place (student, work, family, friend) Culture: Finally, consumer behaviour is shaped in no small part by cultural context(s). Our shared meanings, customs, and symbols inform what and how we purchase and consume. Lifestyle or individual’s "way or style of living.” This shapes how they will choose to spend their time, resources, and energies. What are the key Lifestyle dimensions (AIOs)? - Activities; what we do and how we spend out time - Interests; things we follow, look into - Opinions; subjective interpretations - Rule of advertising is the thing you are trying to sell should be front and center, but the jeep ad its in the back, jeep is selling us the lifestyle not the product, we see roles and status What are the various components of a marketing strategy - Identifies a firms target market - Related marketing mix (4P) - The basis upon which the firm plans to build a sustainable competitive advantages 4 macro strategies to help a firm develop a sustainable competitive advantage - Customer excellence , operational excellence, locational excellence, product excellence 3 phases of a strategic plan Planning - mission/vision of business is defined - Swot analysis performed Implementing - Marketing managers identify/evaluate different opportunities by using the segmentation, targeting, positioning and then apply the marketing mix Controlling - Performance of the marketing strategy is evaluated - Correction actions are taken if needed vision/mission statement should answer 2 questions - What type of business are we in - What do we need to do to accomplish our goals/objectives Segmentation - Divides market into segments, decides who to target, decides how to target them to meet their needs  - Power of the internet - Creation of value is key to success Step 4; implementing - Implement the 4P for every product on the basis of what they think their ™ will value - At the same time they decide how to allocate resources to the G/S Price and value capture - Competitor based pricing - Cost based pricing - Value based pricing