MKTG1203 Notes PDF

**Overview** - Marketing activity, set of institutions & processes involved in creating, capturing, communicating, delivering & exchanging offerings (g/s & ideas) w/ value for customers, clients, partners & society - Behaviour labeling can improve sales e.g.,...

**Overview** - Marketing activity, set of institutions & processes involved in creating, capturing, communicating, delivering & exchanging offerings (g/s & ideas) w/ value for customers, clients, partners & society - Behaviour labeling can improve sales e.g., Flink & Gorillas - Value relationship of benefits to costs - Firms can improve value by increasing benefits, reducing costs or both - Not always about discounts - Can't assume customer is buying due to price -- market research necessary - Firms assess market position & decide on marketing strategy - Based on this, marketing plan is created - Marketing plan written document composed of any analysis of current marketing situation, opportunities & threats for firm, marketing objectives & strategy specified in terms of 4Ps, action programs & project or pro forma income & other financial statements Core aspects - Consumer needs & wants -- good marketers seek out potential customers who have both a) an interest in the offering & b) ability to buy - Exchange trade of things of value btwn buyer & seller so each is better off as a result - Decisions about product, price, place & promotion - Product -- create value - Developing variety of offerings (g/s & ideas) to satisfy consumer needs - Price -- capturing value - Money, time, energy - Place -- delivering value proposition - Supply chain management -- describes all activities getting product to customer when customer wants it - Promotion -- communicating value - Informs, persuades & reminds potential buyers about a product, service or idea to influence opinions or elicit response - Can be performed by individuals & organizations - Impacts various stakeholders - Helps create value - Firms become more value driven by sharing info, balancing benefits w costs, & building relationships w/ customers (social media) - Relational orientation method of building relationships w/ customers based on philosophy that buyers & sellers should develop a long term relationship - Customer relationship management (CRM) busines philosophy & set of strategies, programs & systems focused on identifying & building loyalty among firm's most valued customers Importance - Pervasive across channel members - Supply chain group of firms making/delivering given set of g/s - Marketing channel set of institutions transferring ownership of, & moving good from, point of production to point of consumption; consists of all institutions & marketing activities in marketing process - Effective management of supply chain relationships often has marked impact on firms' ability to satisfy consumers, resulting in profitability for all parties e.g., Levi Strauss & Co. uses an auto inventory replenishment system to ensure adequate stock - Expands firms' global presence - Example: Levi Strauss & Co. helps retailers manage their inventory so they don't run out of stock - Different cultures, different expectations e.g., Krispy Kreme ad - Enriches society - CSR: greener products, healthier food options, safer products, reduced carbon footprint - Can be entrepreneurial - Entrepreneurs organize, operate & assume risk of business venture aiming to satisfy unfilled need - Examples: Ben & Jerry's (Ben Cohen & Jerry Greenfield), Grill'd (Simon Crowe) **Analyzing Market Environment** Framework Company capabilities Competitors - Especially hypercompetition e.g., Apple & Samsung - Example: Uber, Grab, Gojek Corporate partners - Example: Qantas & Emirates partnership allows less investment for more market share, avoid price war Macroenvironmental factors - Aspects of external environment affecting company's business - Culture set of values, guiding beliefs, understandings & ways of doing things shared by members of a society; on visible artefact lvl & underlying value - Example: KFC ads USA vs Indonesia - 23% of AU born overseas - Asians compromise larges immigrant group - Ethnicity - Example: L'Oreal - Country & regional - Demographics - Provide easy to understand snapshot of typical consumer in specific target market - Marketers use data about customers to target offers - Generational cohorts - Gen Z -- digital nativves - Gen Y -- emphasis on work life balance, being a good parent more key than marriage - Gen X -- spending power (marry/house later in life), less shopping interest + cynics - Baby boomers -- individualistic, leisure time key, independent, eco security + frivolity, youth obsession - Income e.g., Qantas vs Jetstar - Education -- studies show higher lvl of edu = higher income - Marketers can combine edu lvl w/ data like income to obtain fairly accurate predictions of purchase behaviour - Gender -- male/female roles have blurred - Modern market campaigns reflect shift - Challenge for marketers -- appeal to specific groups w/out stereotyping - Use variables other than binary gender to segment consumers e.g, toys by age, brand, type - Social issues - Equality - Transparency - Health & wellness - Increase public health awareness - Green consumers - Energy saving HH appliances - Phosphate-free cleaning products & mercury-free batteries - Hybrid vehicles - Recycled material for packaging - Eco-friendly clothing - Lack of time - Mobile payment - Tech - Means greater data storage/communication, improved inventory- needs planning & improved value of g/s for firms - Means newer channels of access/communication, ease of decision-making & enhanced customer experience for consumers - Eco situations - Inflation persistent increase in g/s price, causing purchasing power of dollar to decline - Fluctuations in value of foreign currency can influence consumer spending - Interest rates cost of borrowing money - Political/legal environment - Comprises political parties, govt organizations & legislation - Includes ACCC, RBA, ATO **Segmentation, targeting & positioning**  - Market people/organizations w/ similar needs/wants/resources that have the ability & willingness to buy - Market segment subgroup of people/organizations w/in a market who share comparable characteristics that cause them to have similar needs - Reasons to segment market - Helps marketers define customer needs & wants more precisely - Performs marketing activities more accurately & better allocate resources - Performance can be better evaluated when objectives are more precise - Helps w/ new product development - Allows business to grow - Creating clarity around who to serve + deciding how we want consumers to see us in market Step 1: establish overall strategy (segmentation) - Articulate vision/objectives of marketing strategy - Derived from mission & current state - Consistent w/ SWOT (strengths, weaknesses, opportunities & threats) Step 2: segmentation methods (segmentation) - Geographic -- continent, region, country, state e.g., Coke 'Open Happiness' AU summer ad - Demographic -- age, gender, income e.g., Coke 'Pixel' & 'Dream' flavored beverages target Gen Z - Includes language spoken e.g., Uber Eats Quebec ad 'ce soir, je mange' - Firmographic -- for B2B: company size, num of employees - Similar to demographics but applies to firms not individuals - 80% of all commerce, & thus marketing, occurs btwn businesses - Example: Linkedin presents analytics to marketers that allow them to segment the market by num of followers, num of updates etc - Psychographic -- lifestyle, self-concept, self-values - Example: Airbnb markets experiences we aspire to, not accommodation -- focus on consumers' interests (travel) & lifestyle (adventurous) - Behavioural -- purchase, usage, consumption - Example: Telsim try to differentiate consumers by GB used/mth Step 3: evaluate segment attractiveness (targeting) - Identifiable - Segments must be distinct from each other - Substantial - Segment size must be large enough to support profits & have suitable buying power - If too small, insignificant - If too big, insufficient resources - Profitable - Must have potential to be profitable - Just because a firm can find a substantial market doesn't mean it's a good market - Reachable - Consumer knows product exists - Consumer understands what product can do - Recognize how you deliver product to consumer - Responsive - Positive reaction to firm's offering - Movement toward firm's g/s - Acceptance of firm's value proposition Step 4: select target market - Undifferentiated/mass marketing whole marketing w/ 1 offer; ignore segments - Consumers have common needs & wants - Characterized by commodity products - Differentiated targeting several diff markets segments; separate offers for each e.g., Nike - Concentrated choose 1/few segments/niches - Micromarketing or 1-1 - Local cities, neighborhoods, specific stores - Individual 1 person Step 5: developing positioning strategy - Establishes image/identity of brand/product so consumers perceive it a certain way - Makes it easy for consumers to recall brand/product - Perceptual map displays in 2 dimensions position of products & brands in consumer's mind - Steps 1. Determine consumers' perceptions & evaluations of competitors 2. Identify market's ideal points & size 3. Identify competitors' positions 4. Determine consumer preferences 5. Select position 6. Monitor positioning strategy - Value proposition components: target market, offering name/brand, product/service category or concept, unique point of difference/benefits **Consumer behaviour** - Mothersbaugh et al 2020: study of individuals, groups, organizations & process they use to select/purchase products to satisfy their needs Need recognition - Functional needs vs psych needs Info search - Factors affecting consumers' search processes - Perceived value (benefits vs costs) - Locus of control -- internal = more search activities, external = fate, external factors - Linked to risk - Actual/perceived risk -- performance, financial, social, psych, & physio Alternative evaluation - Attribute sets - Evaluative criteria set of important attributes for a particular soln (product/service) - Determinant attributes product features important to buyer - Features where competing brands/stores perceived to differ - Consumer decision rules - Compensatory decision rule trade 1 product characteristic against another - Non-compensatory decision rule make choice on basis of 1 characteristic regardless of others - Multi-attribute model Purchase & consumption - Increase conversion rate by reducing real/virtual abandoned carts, ensuring merchandise in stock, & reducing actual waiting time Postpurchase - Customer satisfaction state indicating products & services supplied by a company meet/surpass customer expectation - Customer dissatisfaction if too high expectation, right expectation but lack of knowledge of how to use product, right expectation but underperformed products/services - Postpurchase dissonance occurs when consumer questions appropriateness of purchase - Esp likely for products pricey, infrequently purchased, don't work as intended or associated w/ high risk - Warranties/guarantees help minimize - Customer loyalty only buy certain brands & shop at certain stores, including no other firms in their evoked set - Combo of purchasing behaviour & attitude (liking brand) - Negative word of mouth may occur if consumers spread neg info about product/service/store to others Involvement & consumer buying decisions - Types of buying decisions - Extended problem solving - Limited problem solving - Impulse buying - Habitual decision-making Factors influencing consumer decision process - Psych factors - Motives driving force causing person to take action to satisfy specific needs - Attitudes person's enduring evaluation of their feelings about, & behavioural tendencies to, object/idea - Learned, long-lasting, develop over time - Comprised of cognitive, affective & behavioural components - Perception process by which consumers select, organize & interpret info to form meaningful picture of world - Learning change in person's thought process/behaviour arising from experience - Lifestyle way consumers spend time/money to achieve certain goals - Component of psychographics - Social factors - Family - Reference groups i.e. celebs - Culture - Visible artifacts -- behaviours, dress, symbols, physical settings, ceremonies - Underlying values -- thought processes, beliefs, assumptions - Situational factors tend to override psych & social when it comes to purchasing - Shopping situation -- atmosphere - Temporal states - Purchasing situation **Marketing research**  Importance - To better understand consumer needs/wants -- spot business opportunities - Lower business risk -- avoid marketing failures & boost success in market - Assists segmentation, targeting & positioning - Make decision-making easier - Outsell competitors - Create relevant promotional material Process - Data collection + recording + analyzing + interpreting = decision-making - Managers consider several factors before conducting market research - Will it be useful? Will it provide new insight? Is senior management committed to project? Does project represent value for money? How big/small should project be? Step 1: defining objectives & research needs  Step 2: designing research - Primary vs secondary data - Qualitative methods vs quantitative methods Step 3: data collection process - Marketing research often begins w/ review of secondary data - Inexpensive/free - Obtained via census data, trade associations, journals, reports - Internal sources can also provide this data - Marketers use data-mining techniques to determine what items people buy at same time for dual promotion - Syndicated external secondary data can be purchased from commercial research companies (Ipsos, AC Nielsen, IBIS World) - Scanner data is another form of quantitative data, collected via use of scanner systems - Panel data is info collected from a group of consumers over time - Primary data collection - Qualitative - Used to understand phenomenon of interest via broad responses - Provides initial info that helps researcher more clearly formulate research objective - Methods - Observation - Social media -- brand communities effective way to spot issues around brands & foster customer relationships - In depth interviews -- although relatively expensive, can reveal info that would be hard to obtain via other methods - Focus groups - Quantitative - Consists of structured responses which can be statistically tested to confirm insights/hypotheses generated via qualitative research or secondary data - Methods - Survey -- systematic means of collecting info, usually via questionnaire - Experiments -- w/ groups, eye tracking - Scanner - Panel +-----------------+-----------------+-----------------+-----------------+ | *Primary vs | | | | | secondary data* | | | | +=================+=================+=================+=================+ | **Type** | **Examples** | **Advantages** | **Disadvantages | | | | | ** | +-----------------+-----------------+-----------------+-----------------+ | **Secondary |.Census data |.Saves time in |.May not be | | research** | | collecting data | precisely | | |.Sales invoices | -- readily | relevant to | | | | available | info needs | | |.Internet info | | | | | |.Free/inexpensi |.Info may not | | |.Books | ve | be timely | | | | (minus | | | |.Journal | syndicated |.Sources may | | | articles | data) | not be original | | | | | & therefore | | |.Syndicated | | usefulness | | | data | | issue | | | | | | | | | |.Methods for | | | | | collecting data | | | | | may be | | | | | inappropriate | | | | | | | | | | Data sources | | | | | may be biased | +-----------------+-----------------+-----------------+-----------------+ | **Primary |.Observed |.Specific to |.Costly | | research** | consumer | immediate data | | | | behaviour | needs & topic |.Time consuming | | | | at hand | | | |.Focus group | |.Requires more | | | interviews |.Offers | sophisticated | | | | behavioural | training/experi | | |.Surveys | insight | ence | | | | generally not | to design study | | |.Experiments | available from | & collect data | | | | secondary | | | | | research | | +-----------------+-----------------+-----------------+-----------------+ Step 4: analyzing data & developing insights - Converting data into info to explain, predict & evaluate a particular situation Step 5: action plan & implementation - Typical marketing plan - Exec summary - Body - Conclusions - Limitations - Supplements (tables, figures, appendices) Emerging tech & ethics - Firms voluntarily notify their customers that any info provided to them will be confidential & not sold on to other companies - Consumers must give consent before firms can collect their data or use it for marketing purposes - Law yet to catch up w/ advances in social media, neuromarketing & facial recognition software **Product & branding decisions: developing new product** Product - 3 components: - Augmented product enhanced w/ added features e.g., warranty - Types of g/s - Convenience e.g., bread - Shopping e.g., clothes - Specialty e.g., supercars - Unsought e.g., hand warmers Product mix & product line decision - Product mix complete set of all g/s offered by firm - Product lines group of associated items consumers tend to think of as being part of a group - Product breadth num of product lines offered by firm - Product depth num of products w/in product line - Companies sometimes must change product breadth &/or depth to realign w/ firm's resources, address changing market conditions or meet internal priorities Branding - Activity of connecting product w/ particular name, symbol or feature/idea to make more people recognize & want to buy it - Brand names, URLs, logos & symbols, characters, slogans, jingles/sounds - Branding valuable for customers & firms - Facilitates purchasing - Establishes loyalty - Protects from competition - Are assets - Affects market value - Determinants of equity of brand from marketer's perspective - Brand awareness measures how many consumers in a market are familiar w/ a brand & what it stands for, as well as whether they have an opinion on it - Perceived value relationship btwn product's benefits & cost - Brand associations reflect mental links consumers make btwn brand & key product attributes; can involve a logo, slogan or commonly famous person - Provides depth feeling/affection to relationship btwn consumers & brand - Often result from firm's advertising - Brand loyalty occurs when a consumer buys same brand's product repeatedly over time, rather than using multiple suppliers w/in same category - Consumers often less sensitive to price - Marketing costs lower - Firms insulated from competition Brand strategies - Brand ownership - Manufacturer/national brands owned & managed by manufacturers e.g., Kellogg's cereal - Retailer/store brands products developed by retailers (premium/generic) e.g., Woolworths brand couscous +-----------------------------------+-----------------------------------+ | **Advantages of manufacturer | **Advantages of priv brand** | | brand** | | +===================================+===================================+ |.Heavy advertising to consumer by |.Retailer can earn higher profits | | manufacturers helps develop | on own brand + less pressure to | | stronger consumer loyalties e.g., | mark price down to meet | | Unilever | competition due to exclusivity | | | | |.Well-known manufacturers' brands |.Priv brand ties customers to | | can attract new customers & | retailer e.g., person who wants | | enhance the dealer's prestige | Jeans West jeans must go to Jeans | | | West store | |.Many manufacturers offer rapid | | | delivery, enabling dealer to | | | carry less stock | | | | | |.If dealer happens to sell | | | manufacturer's brand of poor | | | quality, customer may simply | | | switch brands but remain loyal to | | | dealer | | +-----------------------------------+-----------------------------------+ - Individual brands using diff brand names for diff products - Companies use these when their products vary in use or performance - Family brands marketing several diff products under same brand name - Brand extension use of same brand name in a diff product line - Increases product breadth - Line extension use of same brand name w/in same product line - Increases product depth - Cobranding practice of marketing 2/+ brands together on same package/promotion - Brand licensing contractual agreement btwn firms, whereby 1 firm allows another to use its brand name, logo, symbols, &/or characters in exchange for a negotiated fee - Brand repositioning/rebranding strategy where marketers change brand focus to target new markets or realign brand's core emphasis w/ changing market preferences - Firms must evolve & innovate to meet needs of market - Markets are dynamic - Consumer needs are ever-changing - No lack of alt/substitute products - Ansoff Matrix (product/market expansion grid) - Reasons for innovation: changing customer needs, market saturation, managing risk through diversity, fashion cycles, improving business relationships - Diffusion of innovation - Not all innovations are successful -- some may result in brand dilution - Product life cycle *Stages in Product Life Cycle* -------------------------------- --------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- -------------------------------------------------------------- **Marketing mix elements** **Intro** **Growth** **Maturity** **Decline** Product Limited model num; frequent product mods Expanded model num; frequent product mods Large model num Elimination of unprofitable models/brands Distribution Limited; intense effort/high margins to attract retailers Expanded dealer num; intense effort to establish long-term relationship Large dealer num, margins decline, intense effort to retain dealers Unprofitable outlets phased out Promotion Develop product awareness/stimulate primary demand; intense personal selling to distributors; samples/coupons Stimulate selective demand & advertise brand aggressively Stimulate selective demand; advertise brand aggressively; promote heavily to retain dealers/customers Phase out all promotion Price High to recover development cost Fall -- competitive pressure Continue to fall Low & stable, small rises possible if competition negligible **Pricing concepts (for establishing value)** Price - Overall sacrifice consumer is willing to make to acquire some benefits of a specific product - Includes money paid to seller plus time, mental energy, travel costs, taxes & shipping costs - Price-quality relationship: most inexperienced consumers use price as quality indicator - Price becomes crucial when consumers have little knowledge of products/brands - Price important to marketing managers - One of most important factors in purchase decisions - Key to revenue & profit - Consumers want a high value product w/ fair price Macro influences on pricing - Internet - Websites allow consumers to compare g/s prices online - Economic factors - Luxury goods now owned by more working professionals Company objectives - Profit-oriented - Target profit pricing - Maximize profits - Target return pricing - Sales-oriented - Focuses on increasing sales - Is more concerned w/ overall market share - Doesn't always imply setting low prices - Competitor-oriented - Competitive parity - Status quo pricing - Value not component - Customer-oriented - Focus on customer expectations by matching prices to them - Customer demand elasticity if customers demand is elastic, you'll lose many even w/ only small price increases Costs of production - Variable costs vary w/ production volume - Fixed costs unaffected by production volume - Total cost sum of variable & fixed costs Break-even analysis - Profit = total revenue -- total cost - 0 = total revenue -- total cost - 0 = (price \* unit) -- (fixed cost + \[variable cost \* unit\]) - Break-even point (units) = fixed costs/contributions per unit - Break-even point (units) = fixed costs/(price -- variable cost) - Example: fixed costs are \$150k, variable are \$20/room rented at hotel. If rooms rent for \$50/night, how many rooms must hotel rent in 1yr to breakeven? - 150000/(50-20) = 5000 Markup vs profit margin - Markup % amt by which cost of product is increased to arrive at selling price - If COGS = \$50 & markup = 50%, price = \$75 - \$50 + (50% x \$50) - Profit margin selling price minus cost of goods sold - If COGS = \$50, & price = \$75, markup = 33.33% - (\$75 - \$50)/\$75 Considerations for setting pricing strategies - Profit & sales orientation: cost-based pricing - Competition orientation: competitor-based pricing - Customer orientation: value-based pricing Cost-based pricing - Cost-based pricing methods start w/ cost - All costs calculated on per-unit basis - Cost-based pricing assumes costs don't vary for diff lvls of production - Price = cost + markup% - Example: fixed costs to produce item are \$150k, estimated num of units to be produced is 30k, variable cost \$5/unit. If desired markup 20%, how much is product? - 300000 \* 1.2 = 360000, 360000/30000 = \$12 Competition-based pricing - Set prices to signal how a product compares w/ competitors - Competitive price - Premium pricing Competition levels Value-based methods - Setting prices that focus on product's overall value - Consumer perceptions shaped - Improvement value method - Cost of ownership method consumers may be more willing to spend initially if, over lifetime, product will eventually cost less to own e.g., solar panels New product pricing strategies - Market penetration pricing (company objective: sales orientation) - Price skimming (company objective: profit orientation/target return, customer orientation) e.g., Tesla Pricing tactics aimed at consumers - Markdowns - Qty discounts - Seasonal discounts - Coupons - Rebates - Leasing - Price bundling - Leader pricing - Price lining **Supply chain, channel management & retail** Placement: supply chain management - Process of integrating suppliers, manufacturers, warehouses, stores & transportation systems into a seamless operation in which merchandise is a) produced & distributed in correct quantities, b) to correct locations, c) at correct time, while minimizing system-wide costs - Essential - Specialization & division of labor - Overcoming discrepancies - Contact efficiency - Marketing channels add value - Reduce num of transactions - More efficient & effective - Increase value for customers - Affects other aspects of marketing - Fulfilling delivery promises - Meeting customer expectations - Reliant on an efficient supply chain - Direct channel customer deals directly w/ manufacturer - Company owned stores e.g., IKEA - Websites/mobile apps e.g., IKEA - Sales force e.g., IBM - Strengths - Control over brand - Higher margins - Customer relationships - Indirect channel when 1/+ intermediaries work w/ manufacturers to provide g/s to consumers - Strengths -- retailer - Extended reach - Established customer base - Reduced marketing effort - Strengths -- wholesaler - Bulk sales - Network expansion - Focus on production - Managing marketing channel & supply chain - Vertical marketing systems - Administered vertical marketing system no common ownership or contractual relationship, but dominant channel members controls/holds BoP - Choosing retail partners - Considerations: channel structure, customer expectations, channel member characteristics - Market coverage & flexibility - Expertise, resources & reputation - Distribution intensity - Intense distribution -- many outlets - Exclusive distribution -- limited num of retailers w/ exclusive right - Selective distribution -- selling product @ many selected outlets in specific locations - Benefits of stores for consumers - Browsing - Touching & feeling - Personal service - Cash & credit payment - Entertainment & social interaction - Instant gratification - Risk reduction - Benefits of online & multichannel retailing - Deeper & broader selection - Personalization - Insights into consumers shopping behaviour - Increased customer satisfaction & loyalty - Expand market presence - Multichannel marketing selling online & in store e.g., Patagonia **Integrated marketing communications** - Company integration & coordination of communication channels to deliver clear, consistent & compelling msg about organization & products (Kotler, 2000) - "Promotion" - Encompasses variety of communication disciplines - Advertising - Personal selling - Sales promotion - Public relations - Direct marketing - Online/social media Communicating w/ consumers - Receivers decode msg differently - Senders adjust msg according to medium & receiver traits - Example: Old Spice repositioning w/ humor to appeal to younger consumers - Advertising has lag -- takes repetition to work AIDA model - Awareness -- senders must gain consumers' attention - Multichannel approach increases likelihood of msg reception - Aided recall or top-of-mind awareness - Interest -- consumers must be persuaded to investigate g/s further - FAQs - Ad must include attributes of interest to target - Desire -- after piquing interest, goal of subsequent IMC msg should be to move consumer from 'I like it' to 'I want it' - Reviews/references - Action -- ultimate goal of marketing - Purchasing just one type of action - Could also be download or provide info ICM types - Offline-active - Personal selling - Sales promotions (contests) - Direct marketing (telemarketing) - Offline-passive - Advertising - Sales promotions (coupons) - Public relations - Direct marketing (catalogues) - Online-active - Direct marketing (mobile marketing) - Online marketing (blogs, social media) - Online-passive - Direct marketing (email marketing) Advertising - Paid form of communication conveyed via medium (radio, TV) delivered via communication channel & designed to persuade - Most visible element of IMC - Effective at creating awareness & generating interest - Encourages consumer to take action Ad campaign steps Step 1: Identify target audience - Success of campaign depends on how well advertiser can identify target audience - Firms conduct research to identify target audience, set tone of ad, & select media to use Step 2: set advertising objectives - Advertising plan objectives of advertising campaign, how they'll be accomplished, & how firm can determine if successful - Focus of advertisements - Institutional advertisements - Product-focused advertisement - Public service advertisements - Pull strategies for consumers, push strategies for B2B - Informative, persuasive or reminder advertisements Step 3: determine advertising budget - Considerations - Role advertising plays in meeting overall promotional objectives - Expenditures vary over course of product life cycle - Nature of market & product influence size of budget Step 4: convey the message - Unique selling proposition (USP) must be meaningful to consumer - Example: Nike "just do it" - Informational vs emotional appeals Step 5: evaluate & select media - Media planning process of evaluating & selecting media mix that will deliver clear, consistent, compelling msg to intended audience - Media mix combo of media used & frequency of advertising in each medium - Media buy actual purchase of airtime or print pages - Types - Mass media channels include national newspapers, magazines, radio & TV as means to reach large num of consumers - Niche media more focused, targeting unique demographics - Advertising schedule - Continuous schedule runs steadily throughout year - Suited to products consumed continually - Flighting schedule advertising implemented in spurts - Useful for seasonal products - Pulsing schedule combines both by maintaining base lvl of advertising but w/ bursts of increased activity Public relations - Relatively passive tactic - Importance has grown as cost of other media has increased - As consumers grow more skeptical about marketing, PR becomes more relevant Sales promotions - Can be aimed at end-user consumers or channel members - Are used in conjunction w/ other forms of IMC (advertising, personal selling, etc) - Can be used for both short & long-term objectives - Premium -- offers an item for free/bargain to reward some type of behaviour (e.g., magazine coupon on Coco pops box) Personal selling - 2-way flow of communication btwn buyer & seller aimed to influence buyer's purchase decision - More expensive than other forms of promotion but worth more than it costs - Sales personnel increase overall value of product/service offerings in a num of ways Direct marketing - Communicates directly w/ target consumers to generate response - Improvements in (& popularity of) technology have made it a growing element of IMC - Marketers have been able to build databases due to consumers' increased use of credit & debit cards, loyalty programs & online shopping **Digital marketing** - Use of internet or other digital communication to achieve marketing & business goals Differences btwn traditional & digital marketing Digital user types - Dominant digital people for whom digital tech is an integral part of life - Hybrid people who use digital tech only when they need to - Reluctant people who only use digital tech sparingly Digital consumer elements - Unprecedented access to info gives consumers luxury of choice + greater control w/in transaction - Demand relevant, personalized interaction Electronic word of mouth (eWOM) - Occurs outside control of firm - Can be pos -- allows consumers to engage w/ other consumers Empowered consumers - 'Active' consumers (bloggers, online communities) - Firm can't control all brand-consumer interactions Personalization - Recommendations based on products bought previously - Birthday specials - Reminders about past purchases - Info based on your recent views Digital media types - Social network e.g., Instagram - Media-sharing site e.g., YouTube - Thought-sharing sites e.g., Twitter - Mobile app e.g., price-check app Amazon Digital channels - Websites - Usually main digital channel - Good sites are interactive, engaging, have social resources - Search engines - Google often set as home pages - Search engine marketing (SEM) = paid search/sponsored - Search engine optimization (SEO) = title tag, meta description - Email - Powerful marketing tool - Often used as 'confirmation' for digital activity (buying goods, booking services) - Mobile tech - Biggest growth area in digital marketing - Apps, YouTube ads, etc - Social media - Group of Internet-based apps that build on ideological & tech foundations of Web 2.0, & that allow creation/exchange of user-generated content - Social media marketing building consumer relationships via valuable content & interactions 4E social media framework A blue circle with arrows pointing to the center Description automatically generated Excite - Offering must be relevant to targeted customer - Relevance can be achieved by providing personalized offers - To personalize offers, brands fall back on CRM insights or data gained from social media Educate - Constitutes method of developing sustainable competitive advantage - Communicate value proposition & benefits on offer - Address consumer's needs/goals via useful content around consumption Experience - Provide opportunity to sample g/s, show how it works & how it looks/feels - Simulate real experiences Engage - Intensity of an individual's participation in & connection w/ organization's offerings or organizational activities - Engagement leads to action, loyalty & commitment - Pos engaged consumers more profitable for firms Customer engagement - Listening & responding - Market research - Blogs - Review sites - Social media - Involving - Opinion leaders &/or bloggers - Asking consumer opinion on social media - Empowerment - Consumer-to-consumer interaction Customer data management - Data from social media can answer Qs - Who's talking about us; what're they saying? - Who're our most influential customers? - What type of materials do people like to engage with? - Where does our material get shared? - Who are our competitors & their customers? - What do consumers like & dislike about our g/s? - Social media analytics, Google analytics Digital strategy Latest digital marketing - AI - Geofencing (location-based marketing) - AR - VR - Marketing automatic **Marketing ethics, sustainability & CSR** Ethical issues associated w/ marketing decisions - Advertisers ranked 2^nd^ lowest on ethics & honesty - To improve ranking, marketers must consider consequences of their products & advertisement - Business ethics moral/ethical dilemmas that may arise in business setting - May arise in HR, finance - Marketing ethics moral/ethical dilemmas specific to domain of marketing - Example: Red Bull gives you wings - Supermarkets' promotional label tactics -- Coles while stocks last, Woolies prices dropped, Aldi Super Savers fake discounts - CHOICE (independent watchdog) surveyed who thought discount Coles: 31% said yes, 36% no, 33% unsure - Coles & Aldi both wouldn't confirm if discount or not - Woolies stated price same for almost 5yr - Firm goals - Greed & short-term profit seeking -- serious long-term consequences - Creating long-term value -- long-term success - Top 10 most trusted brand - In 2024, Woolworths fell 194 places to be 5^th^ most distrusted brand - Coles 4^th^ most distrusted - Aldi 2^nd^ most trusted - Product issue -- covering up defects - Distribution issue -- counterfeit products - Promotion issue -- deceptive advertising - Pricing issue -- falsely advertising a sale price - Personal ethics has influence - Decisions often have conflicting outcomes where all options have pos & neg outcomes Consumer data collection - General Data Protection Regulation (GDPR) -- people must explicitly consent to receive marketing emails, & allowing web cookie tracing on their devices - Consumer Data Right Privacy -- requires consent is express, informed, current, clear, specific, unbundled & time limited - Right to withdraw consent to disclosures & use of data Ethical workplace climate creation - Values -- establish, share, understand - Rules -- management commitment, code of conduct - Controls -- reward, punishment Australian Marketing Institute - Generally accepted code in marketing - Flows from general norms of conduct to specific values - Sub-areas w/in marketing have own code of ethics for dealing w/ specific issues Ethical decision-making framework  Step 1: identify issues - Example: marketing research firm issues - Using results to mislead public - Data collection methods - Hiding real purpose of study Step 2: gather info & identify stakeholders - Identify all ethical issues & relevant legal info - Identify all relevant stakeholders & get their input on any identified ethical issues Step 3: brainstorm & evaluate alternatives - Halt market research project? Make responses anonymous? Institute training on AMA Code of Ethics for all researchers? Step 4: choose course of action - Weigh alternatives - Apply ethical decision-making metric - Publicity, moral mentor, admired observer, transparency, person in mirror, & golden rule tests - Take action Marketing greater purpose - Ethical, social & environmental performance - 3 pillars of John Elkington's triple bottom line to sustainable business - People, planet, & profit - Example: Google Grants, GoogleServe (encourages service), Google Matching (matches funds w/ nonprofits) Ethics & CSR - Actions taken voluntarily by a company to address ethical, social & environmental concerns of its business operations & concerns of its stakeholders - Example: Thankyou Group channels 100% of its profits into development work & projects globally - NAB disaster relief & support Integrating ethics into marketing strategy - Planning phase - Mission/vision statement sets overall ethical tone for planning - Mission statements can be used as means to guide firm's SWOT analysis - Example: Qantas 8 principles, includes treating people w/ respect, complying w/ laws/regulations - Implementation phase - Should the firm be targeting this market with this product? - Should the firm be relocating production to another country? - Should the firm be selling its product in this market in this manner? - Control phase - Check successful implementation - React to change Top admired companies & CSR programs - Apple -- more than 60% of paper used in packaging is from recycled wood fiber - Amazon Stakeholders of CSR A diagram of customer satisfaction Description automatically generated - Employees - Should be working in safe & fair environment - Wellbeing is important - Customers - Current trends in consumers' concerns: electronic privacy, healthy products - Goals of sincere CSR initiatives: increase awareness, better brand equity, sales (will follow in long run) - Marketplace - General Electric is CSR industry leader - Companies can reduce environmental impact by enhancing resource productivity - Society - Consumers & stakeholders have voice to ensure companies act responsibly -- boycott Example: Nike sustainability efforts - Reuse-a-shoe program - Let's move! Active Schools - Transforming manufacturing