Marketing Lectures PDF

Week 1 What is Marketing? -​ The activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients and partners Four components of m marketing -​ Creating -​ Delivering -​ Communicating -​...

Week 1 What is Marketing? -​ The activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients and partners Four components of m marketing -​ Creating -​ Delivering -​ Communicating -​ Exchanging The 4 P’s to the 7 P’s -​ Value Proposition -​ What makes a customer pick you -​ Benefits buyers receive that meet their needs while considering the price they pay and what they have to go through to receive the benefit -​ Positioning -​ How your offerings product, price, promotion and place compare to others in the market -​ Differentiation -​ People -​ Targeting -​ Promotion -​ Place -​ Product -​ Price Ways to Go to Market -​ Product orientation -​ Selling orientation Marketing Eras -​ Value era -​ Companies emphasize creating value for customers -​ One-to-one era -​ Companies compete by building relationships with customers one at a time and seek to serve each customers needs individually -​ Transformative era -​ Marketing is transforming complete companies and products to serve customers more completely Good positioning is compelling and differentiated Promotion is how you create awareness for your product or service A product is any item, or service that is sold to satisfy buyers wants, need or both Place is delivering an offering, value and logistics. Value is delivered in part through a company's supply chain. Making sure the user understands how to get the most out of the product and is taken care of if they require service late. Brand -​ It is a unique name/image for an offering in MIND of the target segment that promises a significant and differentiated benefit Strategy begins with setting objectives -​ How you're going to turn your target market into consumers (end users) The objective of a marketing strategy is to turn people in your target group into customers/consumers External environment -​ Databases -​ Trade journals -​ interviews/surveys with customers Internal environment -​ Business results -​ interviews/surveys with employee -​ interviews/surveys with customers Companies can use their strengths to capitalize on opportunities and develop their competitive advantage Companies must refer to their mission statement and objectives as well as external factors such as social trends and competitors to better understand consumers, develop their future actions and improve the odds they will be successful Managers need to examine both the past and current strategies to determine what strategies succeeded and which ones failed. Macro environment -​ Economic factors -​ Demographic trends -​ Cultural and social trends -​ oPolitical and legal regulations -​ Technological changes -​ The price and availability of natural resources Micro environment -​ Competition -​ Suppliers -​ Marketing intermediaries (retailers, wholesalers) -​ The public -​ The company  -​ Customers Michael Porter developed an approach for analyzing industries called the Five Forces Model According to the model organisations must consider the strength and impact the following could have… -​ Substitute products -​ Potential entrants in the marketplace -​ The bargaining power of suppliers -​ The bargaining power of buyers Competitive analysis: when a firm conducts a competitive analysis, that focuses on direct competitors and tries to determine their strengths and weaknesses, image and resources. -​ Involves looking at any info available on competitors -​ A means of collecting information utilities mystery shoppers Pestel analysis -​ Political -​ Economical -​ Social -​ Technological -​ Environment -​ Legal All organizations must comply with government regulations and understand the political and legal environments in which they do business -​ The Sherman Act (1890) prohibits U.S. firms from restraining trade by creating monopolies and cartels -​ The Federal Trade Commission (FTC) regulates deceptive advertising -​ The Food and Drug Administration (FDA) regulates labeling of consumable products such as food and medicine Economic factors include variables such as -​ Inflation -​ Unemployment -​ Interest rates -​ Whether the economy is in a growth period or a recession Inflation occurs when the cost of living continues to rise and erodes the purchasing power of money During a recession, it is possible for both high-end and low-end products to sell well The demographic and social and cultural environments are constantly changing the global marketplace They include: -​ Social trends (such as people’s attitudes toward fitness and nutrition) -​ Demographic characteristic (such as people’s age, income, marital status, education, and occupation) -​ Culture, which relates to people’s beliefs and values Technology changes the way people communicate and the way companies do business -​ Marketers increasingly use online ads and mobile marketing -​ Organizations must adapt to new technologies to succeed Natural resources are scarce commodities -​ Consumers are becoming increasingly aware of this fact -​ Green marketing involves marketing environmentally safe products and services -​ The marketing is done in a way that is good for the environment -​ Green marketing not only helps the environment but also saves the company money A marketing plan is a comprehensive, detail oriented document designed to sell your plan to your audience, provide details of the project you are working on, and ask for feedback or approval to succeed. Executive summary: This is done after you have written your marketing plan -​ You need to know exactly what you are going to say before you summarize it -​ If you write it before you write the document, it is an outline, not a summary -​ Objective -​ Tell the story leading with numbers so that it can be read and understood in a minute or two -​ Get key decision-makers engaged quickly Value proposition: must be articulated explicitly, but must resonate throughout all elements of your plan Week 2 Strategy starts with objective setting An objective is something that you want Strategy is HOW you get what you want Marketing strategy is how to turn people in your target group into customers Segmentation: ways to “segment” people to find a target demographic -​ To define a segment you define people who need a specific job done Marketing segments: dividing or segmenting people and organizations into different groups of potential customers with similar characteristics -​ Use marketing mix to tailor products for the different groups Targeting segments: selecting market segments to pursue with plans Positioning: creating a preferred position of the companies products in the mind of consumers Segmentation bases These are the criteria used to classify and divide buyers into different groups. -​ These help a firm in getting a fuller picture of its customers and create real value for them Types of Segmentation Behavioural: what benefits do customers want? How do they use the products? -​ Benefits -​ Usage -​ Application -​ Marketers can tailor products to customer for optimum results if they know: -​ The benefits that consumer seek -​ How often they purchase the product -​ Usage situation -​ The manner in which the product is used Geographic: where are customers located? How can they be reached? -​ Divides buyers by where they are located -​ Geocoding is the process of plotting geographic marketing information on a map. -​ Geodemographics (or neighborhood geography) combines both demographic and geographic information for marketing purposes -​ Proximity marketing: an interesting new technology firms are using to segment and target buyers geographically within a few hundred feet of their businesses using wireless technology. Demographic: profile of customers. Age, gender, income, race, ethnicity.  -​ Demographic information is publicly available in databases around the world Psychographic: what do our customers think about our value? How do they live their lives? -​ Why consumers behave the way they do -​ What is of high priority to them -​ How they rank the importance of specific buying criteria The VALS Types Innovators: successful, sophisticated, take-charge people Thinkers: mature, satisfied, comfortable, well educated Achievers: goal oriented, conservative, predictable, stable Experiencers: young, enthusiastic, seek variety and excitement Believers: conservative, conventional, believe in established codes Strivers: trendy, fun loving, seek approval, job vs. career Makers: practical, self sufficient, suspicious of large institutions Survivors: few resources, concerned with safety, low motivation Target Marketing: also known as differentiation marketing. You may differentiate some aspects of marketing for different groups of customers selected. Mass Marketing: also known as undifferentiated marketing. It evolved along with mass production. Involved selling the same product to everybody. Targeting: focusing your marketing efforts towards specific groups of customers or consumers -​ Focused efforts tend to lead to better performance A good target is growing, sizable enough to be profitable given your operating cost, it is not already swamped by competitors, or you have found a way to stand out in a crowd, it is accessible or you can find a way to reach it, the company has the resources to compete in it, and it fits in with your firm's objectives. -​ Trend is towards more precise targeting -​ Companies use the internet to track people's web browsing patterns 1.​ Target a firm's current customers -​ Finding and attracting new customers is more difficult and costly than retaining current customers 2.​ Target new customers -​ While more difficult and potentially more expensive, where will you find more growth? Positioning: how consumers perceive a product relative to the competition -​ Companies want to have a distinctive image and offering that stands out from the competition in the minds of customers Perceptual map: a two-dimensional graph that visually shows where your product stands relative to your competitors, based on criteria important to buyers -​ Uses key variables in people that bought a product in certain categories Tagline, Slogan, or Selling Idea: a catchphrase designed to sum up the essence of a product. Repositioning: an effort to “move” a product to a different place in the minds of consumers Week 3 Consumer behaviour: -​ Personal  -​ Situational -​ Psychological -​ Social Companies collect data to understand customers attitudes Situational factors are location, crowding, social situation, time, mood etc. Physical factors can be controlled by design, others must be accommodated Atmospherics: the physical aspects of the selling environment retailers try to control -​ Store layout -​ Music played -​ Lighting -​ Temperature Uncontrolled aspect is the weather Social situation: circumstances in which consumers may find themselves -​ obligation , expected behaviour or a need to impress Peoples economic situation affects what and how much they buy -​ People reduce spending during economic downturns Lost leaders: products that are for sale at a store that get u to come in which will lead you to eventually buy regular price items Big 5 Personality Traits 1.​ Openness 2.​ Conscientiousness 3.​ Extraversion 4.​ Agreeableness 5.​ Neuroticism The link between personality and buying behavior is unclear Marketers have had better luck linking people’s self-concepts to their buying behavior Your self concept is how you see -​ Fitter -​ More popular -​ More eco-conscious People buy products to enhance how they feel about themselves Consumers age influences their purchasing behavior Chronological age: persons age in years Cognitive years: the age a buyer perceives themselves to be In the mid-1900s, Abraham Maslow developed the hierarchy of needs Selective attention: filtering out irrelevant information Selective retention: forgetting information that contradicts your beliefs Shock advertising: surprising stimuli that can increase retention Subliminal advertising: stealthily embedded messages in media -​ Banned by the Federal Communications Commission (FTC) Learning: is the process by which consumers change their behaviour after they gain information or experience Operant (instrumental) conditioning: a type of behaviour that is repeated when uts rewarded Gamification: strategy of building a game component into a product to encourage consumers to buy a product to use it more Attitudes are -​ Mental positions or emotional feelings -​ Favorable or unfavorable evaluations -​ Actions tendencies people have about products, services, companies, ideas, issues or institutions They tend to be enduring and hard to change because they are based on people's values and beliefs Societal factors -​ Culture -​ Subculture -​ Social class -​ Reference groups and opinion leaders -​ Family Culture: a group of people with shared beliefs, costumes, behaviors and attitudes Social class: a group of people who have the same social, economic or educational status in society  -​ While income helps define social class, the primary variable determining social class is occupation Family: one of the most important determinants in buying behaviour Consumer decision-making: Routine response behavior: automatic purchase decisions based on limited information consumers have gathered in the past Impulse buying: purchases that occur with no planning or forethought Low-involvement decisions: used for products that carry a low risk of failure or have a low price tag High-involvement decisions: used for products that carry a high price tag or high level or risk Limited problem solving: consumers already have some information but search for a little more before making buying decision Extended problem solving: consumers gather a significant amount of information before making a buying decision Stages in the consumer’s purchasing process: 1.​ Need recognition 2.​ Search for product information 3.​ Product evaluation 4.​ Product choices and purchases 5.​ Post Purchase use and evaluation of product 6.​ Disposal of the product Post-purchase dissonance: situations that occur when experiences do not match expectations and consumers rethink their decisions after purchasing products and wonder if they made the best decision Business to business (B2B) customers are different from consumers Derived demand: demand that is derived from a source other than the primary buyer of a product Fluctuating demand: a small change in demand by consumers can have a big effect throughout the chain of businesses that supply all the goods and services that produce it Joint demand: occurs when demand for one product increases the demand for another B2B buyers: business buyers can be either nonprofit or for-profit businesses. -​ Producers -​ Resellers -​ Institutions -​ Governments Interpersonal factors among the people making the buying decisions have an impact on the products chosen -​ B2B marketers are aware of these dynamics and try to influence the outcome  -​ B2B marketing is very strategic -​ Selling firms gather information about their customers and use that information to their advantage Week 4 The art of asking. The world needs more questions than answers right now Two aspects to know when asking questions: -​ Develop the skills to ask good questions -​ Focus on understanding the why behind your questions The why is what drives real change and innovation. It allows us to contribute meaningfully to the puzzle. There is a power in anticipating environmental changes Marketing research is the process of designing, gathering, analyzing and reporting information that may be used to solve a specific marketing problem ot define marketing opportunities -​ Dynamic environment -​ Rising opportunities -​ A potential space for creating value Steps in the Marketing research process: 1.​ Establishing the need for marketing research Research takes time and costs money. Cost of information might outweigh the value of the information. 2.​ Define the problem If the problem is correctly defined, all the steps that follow are wasted effort. Conducted when firms need to make a decision and do not have the info available to guide decision-making. 3.​ Establishing research objectives What the researcher must do 4.​ Determine the research design 5.​ Identify information types and sources 6.​ Determine methods of accessing data 7.​ Design data collection forms 8.​ Determine the sample plan and size A sample is drawn from an entire group or population. The sample plan describes how each sample element is to be drawn from the total population. 9.​ Analyze data 10.​Communicate the insights A well crafted problem statement should address the following key credits 1.​ Clear identification of the problem 2.​ Context and background 3.​ Impact of the problem 4.​ Supporting data 5.​ Potential causes of the problem 6.​ Urgency and importance Big data: large amounts of data from multiple sources Thick data: Quantitative data: research involving the use of structured questions in which response options have been predetermined and a large number of responses are involved (generalization) -​ Surveys -​ Big data Qualitative Methods 1.​ Observations 2.​ In-depth interviews 3.​ Focus groups 4.​ Ethnographic research 5.​ Projective techniques -​ Thick data Thematic coding: a process used in qualitative research to identify, analyze and categorize patterns or themes within textual data, such as interview transcripts, open-ended survey responses or focus group discussions. Focus groups: small groups of people brought together and guided by a moderator through an unstructured discussion. Ethnographic research: immersing oneself in the daily life of a community to observe and analyze trends over time. Projective techniques: situations in which participants are placard in simulated activities in the hopes that they will reveal things about themselves that they might not reveal under direct questioning A survey involves questions posted to a larger number of respondents using a predesigned questionnaire -​ Usually a large number of participants are required to represent important subgroups and ensure that a study accurately represents a larger population Properties: specific features or characteristics of an object that can be used to distinguish it from another object -​ Objective properties: observable and tangible -​ Subjective properties: are unobservable and intangible and must be translated onto a rating scale via scale development (ex. happiness) Question bias is the ability of a questions wording or format to influence respondents answers Sample: a subset of the population that should represent the entire group Sample unit: the basic level of investigation Probability samples: ones in which members of the population have a known chance of being selected into the sample Non-probability samples: instances in which the chances of selecting members from the population into the sample are unknown. Storytelling is a powerful way to present final findings in marketing research. It helps make the data more engaging, reliable and memorable. Week 5- Branding Product: most offerings consist of a product or tangible good people can buy, sell and own  -​ Characteristic of the offering Service: an action that provides a buyer with an intangible benefit. Usually require that the consumer be physically present. Many tangible products have intangible service components attached to them Price: offerings have a price that is paid for the product benefits Total Cost of Ownership: TCO is the amount paid to own, use and dispose of a product. The RATER Model Used to focus marketers attention on key dimensions of services -​ Reliability -​ Assurance -​ Tangible -​ Empathy -​ Responsiveness Product-dominant marketing started with the industrial revolution Service-dominant marketing integrates the product, price and services of an offering -​ Critics argue that the product-dominant approach also integrated services (though not price) Sharing Economy is information technology that allows owners of assets to increase utilization of their assets, whether for money or exchange of services. -​ Makes it possible for anyone to share an asset -​ Drive costs down and availability up -​ Disrupt many established businesses A product's technology platform is the core technology on which it is built. technology platforms are not limited to tangible products What segment do you want your product in? You need to position (the way your company is perceived to consumers relative to other brands.) yourself in the market. Product Lines: group of related offerings and is created to make marketing strategies efficient. Line Depth: the number of offerings in a product line Line Extension: when a new but similar product is added to a line Line Breadth: a function of how many different, or distinct product lines as a company has Product Mix: the entire assortment of products that a firm offers Four General Categories of Consumer Offerings -​ Convenience -​ Shopping  -​ Unsought -​ Specialty Companies market offerings composed of a combination of tangible and intangible characteristics for certain prices. An offering is based on a technology platform, which can be used to create a product line. A product line is a group of similar offerings Branding: a number, picture, design or combination of those items, used to identify a seller’s offerings and differentiate them from competitors offerings Product Lines -​ Branding -​ Brand name -​ Brand mark -​ Brand extension -​ Cannibalization: when a firm eats into the sales of one of its older offerings If you are the owner of a brand, you can: -​ Either command a higher price, without losing volume -​ Or deliver more volume than competitors, at the same price Two Branding Strategies: -​ House of brands (P&G) -​ Branded house (colgate) Efficiency is using less amount of tools to succeed Effectiveness is succeeding The only way you know something is a good target is if you know what the brand is trying to achieve! What is their objective? To find the objective you need to ask the person it charge, or you google it or you look at their annual report. Setting Price (3 C’s) -​ Customer factors -​ Competitor factors -​ Cost factors Pricing Strategy Skimming: start high and then gradually decrease— make money through margin Penetration: start low and stay low— make money through volume Promotion→Medium vs Message→Rational vs Emotional  -​ Your brand has deliver a message that makes people react. What message do u send when people hear your brand name? Do they think of anything at all? Two Structures: -​ Direct to customer (Dell) -​ Indirect via retailers (HP) Marketing Management Positions -​ Brand manager -​ Product manager -​ Category manager -​ Market manager -​ Vertical market manager