Marketing 101 Reviewer PDF

**Define and Understand Marketing** - **What is Marketing?** - The "Chartered Institute of Marketing" defined marketing as the management process responsible for identifying, anticipating, and satisfying customer requirements profitably. - Marketing is highlighting that the customer...

**Define and Understand Marketing** - **What is Marketing?** - The "Chartered Institute of Marketing" defined marketing as the management process responsible for identifying, anticipating, and satisfying customer requirements profitably. - Marketing is highlighting that the customer is at the heart of businesses. - First, we must identify a want or a need that we can address. - Next, we need to satisfy these customers by delivering a product or service that addresses these needs when customers want it. - The key to customer satisfaction is making sure everyone feels they benefit from the exchange. Customers are happy with the value they get for what they paid. - Effective marketing doesn't stop there. It also needs to retain customers by creating new opportunities to win customer loyalty and business. - The American Marketing Association defines marketing as the process of planning and executing the conception, pricing, promotion, and - Furthermore, marketing consists of business activities that direct the flow of goods and services from producer to user. - Successful marketing depends upon addressing what the company will produce, how much it will charge, how it will deliver its products or services to the customers and how it will tell its customers about its products and services. - Marketing is the creation, communication, and delivery of value and customer relationships management for a lifetime. In other words, marketing isn't just advertising and selling. It includes everything that organizations do to satisfy customer needs: Coming up with a product and defining its features and benefits Setting its price Identifying its target market Making potential customers aware of it Getting people to buy it Delivering it to people who buy it Managing relationships with customers after it has been delivered Not surprisingly, marketing is a team effort involving everyone in the organization. - Think about a typical business- a restaurant, for **example**. It's easy to see how the person decides what products (menu) to offer involves marketing: selecting the products to be sold and its price. - It's even easier to see how the person who puts ads in the social media or papers works in marketing: they are in charge of advertising---making people aware of the product and buying it. - But what about the security guard, servers, the order takers, and the person behind the counter and kitchen? What about the projectionist? Are they marketing the business? - Absolutely: the purpose of every job in the restaurant is satisfying customer needs, and as we've seen, identifying and satisfying customer needs is what marketing is all about. - **Art of Exchange** - The act of obtaining a desired object from someone by offering value is called the exchange process. - The exchange involves: The customer (or buyer): a person or organization with a want or need willing to give money or other personal resources to address this need. **Needs**: a customer's desire for the products or services specific benefits required by a human being for his body and mind\'s health and well-being. **Wants**: the desire for products or services that are not necessary, but which consumers wish for. **Demand**: describes a consumer's desire, willingness, and ability to pay the price for a specific good or service. the **product**: a physical good, a service, experience, or idea designed to fill the customer's want or need the **provider** (or seller): the company or organization offering a need-satisfying thing, which may be a product, service, experience, or idea the **transaction**: the terms around which both parties agree to trade value-for-value (most often, money for the product) An exchange process is when an individual or an organization decides to satisfy a need or want by offering some money or goods or services in exchange. It's that simple, and you enter into exchange relationships all the time. - For **example**, you go into a store and order your favorite soda. You drink it, and then you pay for it. That's a primary exchange relationship. **Primary Purpose of Marketing** Capturing the attention of your target market Persuading a consumer to purchase your product Providing the customer with a specific, low-risk action that is easy to take If a business\'s objective is to sell more products or services, marketing helps you achieve that goal. Anything that you use to communicate with your customers in a way that persuades them to buy your products or services is marketing, including advertising, social media, sales, and even how products are displayed. ** The Role of Marketing ** ***1. Identify customers.*** The business or organization must understand customer wants, demands, and needs. They also need to identify the target market (to whom they would sell their products and services) and how to reach them. ***2. Satisfy customers.*** Make the right products or services available to the right people at the right time. Make everyone feel better off from the exchange. ***3. Retain customers.*** Give customers a reason to keep coming back. Find new opportunities to win them. ***4. Creation of products and services.*** Anything the company offers for sale to the buyers to satisfy their demands, wants, and needs. ***5. Distribution.*** It entails how a company is going to deliver its products and services to their respective customers. ***6. Pricing.*** Make sure you're not losing any profits by selling too low. However, you don't want to overcharge and then not see any return because customers found a cheaper alternative. ***7. Promotion.*** It involves confirming an advertisement is seen in the right places by the right people. ***8. Selling.*** The selling process begins once you've completed market research and determined what your prospects want and need. **Marketing Goals** We all dream. We have big dreams, grand ambitions, and smaller dreams, things we desire daily or weekly. Every business owner shares the dream of seeing his or her business grow and thrive. When it comes to business, marketing is integral to growth, and when it comes to marketing, goals are integral to success. A dream, after all, is just a dream. A goal, in contrast, is a dream with a plan and a deadline. The marketing goal is a specific, measurable, attainable, realistic, and time-bound metric (SMART) that drives every marketing effort. **Relationship between vision and goals** A vision is what you want your business to look like some time in the future. When clearly defined, a vision becomes a beacon that inspires, gives you direction, and keeps you on course. Having a clear vision allows you to create marketing goals that move you closer to your ideal future. If you find that you have goals that you never achieve, the issue may not be the goal. The issue may be that the goal isn't aligned with your vision. For **example**, if your vision is to: Grow your business into a 3 million company with 30 employees; then, your goals need to align with what you should do to achieve that growth. Build a lifestyle business that offers select services to small business owners; then, your goals will be congruent with staying independent. **Developing marketing goals** To figure out reasonable marketing goals for your business, the following criteria are needed to take into consideration: Identify how much revenue you need to generate from your inbound marketing efforts Determine how many sales you need to hit those revenue goals Identify your closing rate and how many opportunities you need Implement your other critical business goals Set quarterly benchmarks **Principles of Marketing** Marketing principles or principles of marketing are agreed-upon marketing ideas companies use for an effective marketing strategy. They are the principles upon which we build product promotion strategies. We can use the marketing principles for the effective promotion of either goods or services. **Marketing Mix** One of the fundamental principles of marketing is the marketing mix. It consists of four different factors that businesses need to sell their goods and services successfully. The marketing mix is also known as the four Ps, a model for enhancing the "marketing mix" components- how an organization takes a new product or service to market. It also helps them to define their marketing options in terms of price, product, and promotion, place, people, process, and physical evidence so that their offering meets a specific customer need or demand. Likewise, it is the right place for planning and minimizing mistakes. Below are the marketing mix and the **7Ps and how you can develop a successful marketing strategy.** 1. **Product** is defined as the item or service being sold or offer. It is the first step in the marketing mix. Without a product, there is nothing to market. - The product should aim to fill a gap in the market or fulfill some type of consumer need. The product should be designed according to consumer needs and desires. 2. **Price** refers to the value that is put for a product. - It depends on production costs, segment targeted, marketability to pay, supply-demand, and a host of other direct and indirect factors. - The price of a product should be one that consumers are prepared to pay while simultaneously allowing the manufacturers to generate profit. 3. **Promotion** is the way a company communicates what it does and what it can offer customers. - It is also a company\'s method to make consumers aware of and attracted to a particular product or service. The promotion should be one which shows the product in its best light and also reaches the consumer. - Different target markets are likely to respond to different promotions, which should be kept in mind when designing a promotional campaign. **Examples** of promotional methods include television and radio commercials, internet advertising, introductory prices, flyers, referrals, word of mouth, etc. 4. **Place** refers to where customers buy a product and distribute it to the location; it must be appropriate and convenient. - The product must be available in the right place, at the right time, and in the right quantity while keeping storage, inventory, and distribution costs acceptable. This could also be the means ways of displaying the product to the customer groups. 5. **People** who come into contact with the customers will make an impression, which can have a profound effect-positive or negative-on customer satisfaction. - The brand\'s reputation rests in the employees' hands; therefore, they must be appropriately trained, well-motivated, and have the right attitude. 6. **Process** refers to the processes involved in delivering your products and services to the customer. - It is also about being \'easy to do business with.\' Having a fair process ensures that you: repeatedly deliver the same standard of service to your customers and save time and money by increasing efficiency. 7. **Physical evidence** refers to everything a customer see when interacting with your business. - Physical evidence can also refer to your staff and how they dress and act. This includes: the physical environment where the business provides the product or service the layout or interior design and branding. All the elements of the marketing mix influence each other. They made up the company\'s business plan and handled right, can give it a great success. But handled wrong and the business could take years to recover. The marketing mix needs a lot of understanding, market research, and consultation with several people, from users to trade manufacturing and several others. **Marketing Approaches** The study of marketing has been approached in more than one way. To some, it has meant to sell something at a shop or market place; to some, it has meant the study of individual product and its movement in the market; to some, it has meant the study of persons-wholesalers, retailers, agents, etc., who move the products and to some, it has meant the study of the behavior of commodity movement and the way the persons involved to move them. The approach to the study of marketing has passed through several stages before reaching the present stage. There is a process of evolution in the development of these approaches. **Traditional Approaches** **A. The Production Concept.** - This concept is the oldest of the concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. - Managers focusing on this concept concentrate on achieving high production efficiency, low costs, and mass distribution. - They assume that consumers are primarily interested in product availability and low prices. - This orientation makes sense in developing countries, where consumers are more interested in obtaining the product than in its features. **B. The Product Concept.** - This orientation holds that consumers will favor those products that offer the most quality, performance, or innovative features. - Managers focusing on this concept concentrate on making superior products and improving them over time. They assume that buyers admire well-made products and can appraise quality and performance. - However, these managers are sometimes caught up in a love affair with their product and do not realize their market needs. Management might commit the "better-mousetrap" fallacy, believing that a better mousetrap will lead people to beat a path to its door. **C. The Selling Concept.** - This is another standard business orientation. If left alone, it holds that consumers and businesses will ordinarily not buy enough of the selling company's products. - The organization must, therefore, undertake an aggressive selling and promotion effort. This concept assumes that consumers typically show buying inertia or resistance and must be coaxed into buying. - It also assumes that the company has a whole battery of effective selling and promotional tools to stimulate more buying. Most firms practice the selling concept when they have overcapacity. They aim to sell what they make rather than make what the market wants. **Contemporary Approaches** A. **The Marketing Concept.** - This is a business philosophy that challenges the above three business orientations. Its central tenets crystallized in the 1950s. - It holds that the key to achieving its organizational goals (the selling company) consists of the company being more effective than competitors in creating, delivering, and communicating customer value to its selected target customers. - The marketing concept rests on four pillars: *[target market, customer needs, integrated marketing, and profitability.]* B. **Relationship Marketing Concept** - It is believed that all marketing activities are to establish, maintain, and strengthen meaningful long-term relationships with customers. - Extensive customer databases are created, maintained, and updated. Customer profiles, purchase habits, and preferences **The Societal Marketing Concept.** - This concept holds that the organization's task is to determine the needs, wants, and interests of target markets and deliver the desired satisfactions more effectively and efficiently than competitors (this is the original Marketing Concept). - Additionally, it holds that this all must be done in a way that preserves or enhances the consumer's and the society's well-being **Relationship Marketing** A customer is a person or organization that transacts with a business person or business organization to buy goods or services for monetary or other valuable considerations. Acquiring and keeping customers is the end goal of businesses because customers create demand. Through customers' purchase, organizations are able to cover manufacturing costs, operating expenses, and generate profits. And because businesses have to be sustainable, products or services are not expected to be purchased only once. They need to be purchased over and over again in order to maintain profitable and sustainable operations. And so, it is important for firms to understand relationship marketing. - **What is Relationship Marketing?** a strategy designed to foster customer loyalty, interaction, and long-term engagement includes activities aimed at developing and managing a trusting and long-term relationship with larger customers ***Characteristics of Relationship Marketing:*** 1\. It focuses on the long-term rather than the short-term. 2\. It focuses on partners and customers rather than on the company's products. 3\. It puts more emphasis on customer retention and growth than on customer acquisition. 4\. It relies more on listening and learning than on talking. **Four Brand Benefits** In order to establish a long-term relationship with their customers, firms must create value based on several benefits since customers' needs are multi-faceted. Contrary to popular belief, offering lowest price may not exactly be the correct route to attain loyal customers as there are four (4) benefits that customers look for. **1. Functional benefit** ▪ product/service attribute that provides the customer with functional utility or that which satisfies the customer's practical needs ▪ answers the question *"Why should I buy your product or service?"* **Examples:** a\) Pilot Pen Company created G-TEC pens for customers like students who prefer extremely fine writing. a. b\) From sling laptop bags, laptop manufacturers introduced laptop backpacks for students' convenience. **2. Emotional benefit** ▪ product/service attribute that provides the customer with a positive feeling when they purchase or use it ▪ answers the question *"How will I feel when I own or use the product or the service?"* **Examples:** a. a\) A product wrapped with a Hallmark wrapper tends to give a feeling of "importance" to the receiver of gift, compared to the same product wrapped in an ordinary, low-cost wrapper. b\) A wooden toothbrush labeled as eco-friendly gives the customer an "eco-warrior" feeling or a sense of "responsible human being". **3. Social benefit** ▪ product/service attribute that considers how the customer wants to be perceived by others when they purchase or use it ▪ answers the question *"How will others perceive me when I use your product or service?"* **Examples:** a. a\) Holding a cup of Starbucks coffee offers the consumers a sophisticated self-image than holding a cup of low-cost coffee. b\) A student wearing an original Nike shoes is perceived to be from a wealthy family than a student wearing Class A shoes. **4. Economic benefit** ▪ product/service attribute that considers how much a consumer can save using the product/service ▪ answers the question *"Why is your offer priced the way it is?"* **Examples:** a. a\) A Bluetooth speaker that can be used as power bank can costs higher than a regular Bluetooth speaker. However, customers can consider it more economic than buying a Bluetooth speaker and a power bank individually. 1. b\) A 3-in-1 hair tool that can be used to blow dry, straighten, and curl your hair in one cost higher than a hair drier, hair straightening iron, or curling iron. 1. However, customers can consider it more economic than buying those hair tools individually. Aside from meeting or exceeding customers' expectations on your product, you must also consider how your customers expects you to treat them. **Customer Service** the process of ensuring customer satisfaction with a product or service can take on many forms -- salesperson assistance, product delivery, technical advice, help desks, or other means ***Examples of Customer Service Practices in the Philippines*** - Customer Service Practice - free delivery - free gift wrapping/plastic book jacket - free appliance installation - drive-through - valet parking - reservations, installment plans - free parking - complimentary refreshments, waiting lounge - help desks, touch phone access, 24-hour customer hotline ***Practicing Organization(s)*** - most restaurants and fast-food chains - most department stores and bookstores - most appliance centers - most fast-food outlets - some hotels and resorts - some large department stores, bookstores - some churches and religious organizations - most car dealerships - most utility firms and telecommunication firms - **What is a customer?** - A **customer** is a person or company that receives, consumes or buys a product or service and can choose between different goods and suppliers. - **What is customer value?** - Customer value is the satisfaction of the customer experiences (or expects to experience) by taking a given action relative to the cost of that action. - The given action is traditionally a purchase, but could be sign-up, a vote or a visit, while the cost refers to anything a customer must forfeit in order to receive the desired benefit, such as money, data, time, knowledge. ***Think about the following definition of marketing:*** - Marketing creates, communicates, and delivers value to customers. - The internal chain of sourcing like operations, process, sales, marketing and customer service all contribute to the creation of value. - All staff inside the business affect customers directly or indirectly in some way, informing the perception in to the business. - Customers do not buy things because *you* like them. They buy them because *they* like them, or need them. - Whether you are deciding on a restaurant or a milk tea house to visit, or which digital marketing you want to use, there are choices available and many factors play a part informing that decision. - Customer value is all about subjective perceptions, which can only be influenced, not controlled. **Measuring customers value?** - The simplest is this: Perceived Value = Perceived Benefits/Cost - *Value does not refer to price.* It refers to perceive benefits stood to be gained in the context of price. Cost is only part of the equation. - Two identical products with identical exposure can only compete on cost. Two differentiated products do not have to compete on cost. - Products are not just differentiated by their features. They can also be differentiated because of their brand. If Toyota brings out a car, you may presume it's reliable because one of its key brand features is reliability. - If another carmaker releases a near-identical car, they may struggle to compete because they do not share the same customer perceptions. **The Drivers of Value** Product function Points of differentiation Quality Service Marketing Branding Price Existing relationships or experience Personal bias from experience and upbringing These are drivers that impact a customer's perception of value. Some you can control, some you cannot. For any individual customer they will rank differently in importance. Some people love brands. Some people only buy cheap. Some favor short form content. Some people treasure personal relationships. **The Customer Value Delivery Cycle** 1\. Think of everything you do in terms of delivering value to your customers and audience with the understanding that they have choices and you are not the only choice. 2\. Understand your market well enough that you can break it down into individual segments with unifying characteristics that will respond in the same way to a given value proposition. 3\. Always look for the opportunity to create new value propositions. If you sit on your laurels, your competition won't. 4\. Look for avenues to communicate this value at the right time and in the right place. 5. Listen to your customers. Learn their perceptions about what you offer. Do not hesitate to change based on what you learn. The customer, in this case, is always right. - **Value proposition -** a statement that answers the \'why\' someone should do business with you. It should convince a potential customer because your service or product will be of more **value** to them than similar offerings from your competition. **Refine your value Proposition** Consider all the businesses out there offering exactly what you offer. With similar products, customers have no choice but to make a subjective choice. Your value proposition is where you win them over. You need to communicate what makes you different, and continually work to increase that value proposition to set yourself apart. You can do that through the following: **Audience Segmentation** Segment your audience based on what they value, and adjust your message to each. What an adult considers as value, can be completely different than teenagers. Old age customers they like you always greeted them "Hi, Hello, good morning, good afternoon." Figure out what's a gesture they would appreciate. **Don't compete on Price** If you try to compete on price alone with competitors, you'll often lose. Cost is certainly a factor for customers, but many people are willing to pay more when they can see the value and feel like they're getting their money's worth. Satisfied customers that perceive a lot of value in your offering are not only willing to pay more, they're willing to talk you up. Conversely, an unsatisfied customer who hasn't seen the value is going to go somewhere else, even if you offer the lowest price. **Focus on Your Most Valuable Customers** You can't spread your resources, sales force evenly among entire customer base and expect a good return. You need to focus on the customers who provide the greatest value in return. Likewise push a lot of resources towards building relationship with existing customers over acquisition. It cost less to keep a customer than to acquire a new one, and great services will boost the lifetime customer value so each customer is worth more than in the long run. **Bonus: 5 Customer Value Creation Ideas** - **Make the value/price ratio seem bigger than it is.** Go extra mile, give them a free gift, extra service. Make them feel that they're appreciated. - **Make your service or products easy to buy.** Offering different ways to pay for it, delivery, etc. - **Create areal Unique Value Proposition.** This holds especially true if you're dealing with B2B. Communicate with your costumer, why they should buy your product over competition. - **Work on your brand.** Your business name itself should be synonymous with value. Develop a unique method to treat your customers, handle complaints with care, etc. - **Provide stellar customer service.** Treating them as such can be extremely rewarding for both parties.