Marketing Course Notes PDF

Marketing key concepts Main topics: - Introduction - Marketing strategy and analysis - Consumer behaviour - 4 p's - Product - Place - Price - Promotion - Extended marketing mix - People - Process - Physical evidence - Immersive technology -...

Marketing key concepts Main topics: - Introduction - Marketing strategy and analysis - Consumer behaviour - 4 p's - Product - Place - Price - Promotion - Extended marketing mix - People - Process - Physical evidence - Immersive technology - Branding - International marketing - Sustainability - Critical marketing ***Introduction:** * Customer is someone looking to buy the product. Consumer is someone who is using the product. Example is printers to university\'s the customer would be the IT department in the university, yet the consumers are more likely to be the students and other members of staff. Evolution of marketing: 1935 -- marketing is the performance of business activities that direct the flow of goods and services from producers to consumers. 1985 -- marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives. 2004 -- marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. 2010 onwards -- marketing is the activity, set of institutions, and processes for creating, communicating, delivering, exchanging offerings that have value for customers, clients, partners and society at large. It could be argued that: - 1890 -- 1920s -- production period - 1920 -- 1950s -- sales period - 1950 -- 1980s -- marketing period - 1980 -- present -- societal marketing period Adding value Brands add value in order to persuade you to purchase the item. They have to convince you (the customer or consumer) to choose their brand over other alike brands. In most cases this is by adding some value to the core product or service. This could be a cool new feature, a loyalty scheme, a luxury name etc. Marketing mix The 4P's of the marketing mix are: - Product -- what is the thing we are selling or offering - Place -- where do we put our product - Price -- how much should the product cost / what value does it have to consumers - Promotion -- how do we stand out from crowd Extended to include: - People -- who is involved in the process, do we use ai instead, how does this affect our relationship with the people buying the product - Process -- focused on customer service, how can we make the most of our marketing - Physical evidence -- evidence to show growth? How will we reach our target audience? Marketing relationship with society Marketing exchange process: This is when the organisation takes something of value from the customer but giving them someone of value in return. Example -- university and students University take money but give you an education. Marketing now don't want to be seen in this way of pure exchange and instead are more focused on relationships, and how they can build a relationship with their consumers. Marketing needs to change and that has changed how we live. If society changes then marketing changes, if marketing changes then society changes. It is a process that we now develop together. ***Marketing strategy and analysis** * Marketing strategy must be driven by corporate strategic planning. Situational analysis is a key section in strategic marketing planning. Organizations articulate their strategic context and their intended performance in the markets they target in terms of a framework that defines there: - Vision - Mission - Values - Organizational goals - Strategy (Baines et al, 2022) This is essentially the companies mission statement that tells customers all of the above information in one easy statement. Companies can use this to identify target markets and build relationships with customers. Example: Amazons mission statement is that it strives to be the Earth's most customer centric company where people can find and discover basically anything that they want to buy online. Tesco's is servicing customers a little better every day. Coke's is refreshing the world in mind, body, and spirit. Marketing myopia This is a self-deceiving cycle. 1. The belief that growth is assured by an expanding and more affluent population. 2. The belief that there is no competitive substitute for the industry's major product. 3. Too much faith in mass production and in the advantages of rapidly declining unit costs as output rises. 4. Preoccupation with a product that lends itself to carefully controlled scientific experimentation, improvement and cost reduction. This is when companies think 'what we are doing is working well the now so why would we change?' It's almost not opening to change and considering that there are other competitive substitutes this could be damaging to businesses. To avoid this, they must consider how do we add value to customers? Example -- parker pens when they sat down and considered what business sector are they actually in, and who do we compete with recognised that they are more in expensive gift sector for work or graduation gifts rather than the pen industry. Understanding our environment 3 key elements: - External environment - Internal environment - Performance environment These are the things we must consider in order to thrive in marketing. - The external factors are all the elements out with the business (PESTLE). - The internal factors are the elements of the business itself. Essentially what's going on in the company. - The performance environment are the elements of the industry the business competes in and all the competitors the business is against. External: **Marco factors** also known as external factors are elements outside the business that can significantly impact its operations and success. These factors are typically categorized using PESTLE. **P** -- political **E** -- economic **S** -- social **T** -- technological **L** -- legal **E** -- ecological environment Political: Government policies, regulations, political stability, and legal issues. This is concerned with the government's role in business and society. Change of government can lead to significant policy shifts. For example, labour government set up Great British energy company which is a big change to previous governments. This will lead to changes in energy companies as well as renewables and consumers for which will have the best deal? Will this change organisations? Business -- government relations can create a sustainable competitive advantage. Public affairs teams within companies manage these relations, ensuring that the companies' interests are represented in government discussions and policies. Governments sometimes hire consultancy firms for public relations and policy advice which bridges the gap between business interests and government actions. Business often engages in lobbying to influence policy making and advocate for regulations that favour their operations or represent the interest of specific groups, such as SMEs in the UK. Economic: Economic conditions, such as inflation, interest rates, and economic growth. Economy will have an impact on prices of raw materials, labour, etc. It also impacts customers and their spending power. Businesses have little influence on macroeconomic variables: - wage inflation - price inflation - gross domestic product/ purchasing power parity - income, sales and corporation tax - interest rates - exchange rates - inflation / recession Strongly linked to what's happening in politics Social: Demographics, cultural norms, and social trends. These changes can affect product demand, marketing strategies, and overall business operations. Migration can lead to diverse multicultural markets and businesses need to adapt their products and services to cater to a wide range of cultural preferences and practices. Changes to demographics and lifestyles affect business, for example, sugar tax in the UK 2018, and rise of veganism in European countries. Other lifestyle changes include remote work, health and wellness etc. To minimize disruption business should diversify their product offerings and markets. They must stay adaptive and innovative to stay relevant in the market. Technological: Technological advancements and innovation. Technologies can impact business productivity and efficiency, such as through automation and AI. New information and communication technology creates new ways of reaching consumers. Payment systems is one new digital system that drastically influenced businesses. It made online payments and mobile wallets much easier and convenient transactions for consumers and businesses. Consumers can access markets much easier now from their phones and have online streaming services which maximizes reach. However, businesses have to offer solutions to bridge the gap to consumers that don't have access to technology. Augmented reality can be used to increase sales as customers can try before they buy online. There are negative side effects to technology on society through, privacy concerns, job displacement, and environmental impact. Legal: Laws and regulations affecting the business. Product safety, packaging, and labelling aims to protect consumers and therefore they enforce regulations by law that companies must comply with. This can be seen through tobacco labelling and vaping having to include health warnings and dangers on packaging. Or the sale of alcohol being restricted to certain times of the day with minimum unit pricing. ASA (advertising standards authority) sets codes of practice for advertising to ensure ti is legal, decent, honest and truthful. It covers all forms of ads to prevent misleading or harmful ads. Ecological environmental: Environmental and sustainability concerns. There is a new shift in ecological corners therefore marketing must adapt with this. sustainable marketing is promoting products and practices that emphasize sustainability and minimal environmental impact. For example, highlighting ecofriendly features. Businesses need to be aware of and mitigate their impact on the environment such as carbon emissions and waste production. Corporate social responsibility (CSR) reporting requires that companies report their environment practices to allow for transparency. Business must be seen as complying with these regulations however companies can gain competitive advantage if they lead in cost effective environmental practices. Environment scanning: Environmental scanning is the process of collecting, analysing, and interpreting information about the external environment of an organization. The goal is to identify and understand potential opportunities, threats, trends, and factors that could impact the organization\'s performance and strategic direction. Source information from media, industry reports, government reports, and marketing intelligence reports (e.g. Mintel). Soft information = verbal personal sources from networking. Data collecting is time consuming as there is a need to ensure things are from reliable sources. It also needs to be continuous or a regular audit. Companies may develop 'scenarios' based on market trends and plan strategies for these scenarios. Internal: Analysing portfolio  When a business analyses their portfolio, they must compare their market growth rate and relative market share. An example using apple: Stars -- iPhone Cash cows -- iPad Dogs -- iPod Question mark -- watch, tv? Value chain analysis Porters 5 forces are more relevant to performance and competitors in the industry. However, value chain analysis is relevant as to the internal workings of a business. Value chain analysis is a strategic tool used to analyse internal firm activities. Its goal is to recognize which activities are the most valuable to the form and which ones could be improved to provide competitive advantage. The concept was introduced by Porter. Divided the value chain into primary and support activities: Primary -- these are directly involved in the creation and delivery of a product or service. - Inbound logistic - Operations - Outbound logistics - Marketing and sales - Services Support -- assist primary and each other by providing purchased inputs, technology, human recourses and various firm wide functions. - Firm infrastructure - Human resource management - Technology development - Procurement Steps to conduct value chain analysis include identifying sub activities for each primary and support activity, analyse the value and cost of each sub activity, and identify opportunities for competitive advantage. Benefits include improved efficiency, cost reduction, competitive advantage, and better resource allocation. Marketing strategy This includes strategic context: - Resources and capabilities - Competitors - Target customers - External environment Kotler -- "a plan describes how a firm will adapt to take advantage of opportunities in its constantly changing environment. Thereby maintaining strategic fit between the firms' goals and capabilities and its changing market opportunities.' Performance: The microenvironment also known as the performance environment refers to the immediate factors that directly impact a company's operations and performance. Include: - Competitors - Suppliers - Customers - Intermediaries (agents, distributors, wholesalers help distribution of products) - Publics (various groups that have an interest or impact on companies' abilities to achieve objects) Porters 5 forces This analyses the competitive forces within an industry, helps understand intensity of competition and profitability of market. 5 forces are: - Competitive rivalry (the intensity of competition among existing firms in the industry) - Threat of new entrants (the ease or difficulty with which new competitors can enter the market) - Bargaining power of suppliers (the power of suppliers to drive up prices of inputs) - Bargaining powers of buyers (power customers have to drive down prices) - Threat of substitutes (likelihood of customers finding alternative products or services) SWOT analysis Internal audit (5 forces analysis) Strengths -- something the organisation is good at doing, something that gives it particular creditability and market advantage. Weaknesses -- something the organisation lacks or performs in an inferior way in comparison with others. External audit (PESTLE) Opportunities -- potential to advance the organization by developing and satisfying an unfulfilled market need. Threats -- something that at some time in future may destabilize and or reduce potential performance of the organisation. Worked example: lecture 2 (not too useful) ***Consumer behaviour** * What is consumer behaviour? "... it is the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas, or experiences to satisfy needs and desires" - Solomon, 2018 Needs vs wants Think of this like a pyramid, you must master the bottom layer before moving up a layer. This is not always relevant or right though. **Self-actualization** -- desire to become the most that one can be **Esteem** -- respect, self-esteem, status, recognition, strength, freedom. **Love and belonging** -- friendship, intimacy, family, sense of connection **Safety needs** -- personal security, employment, resources, health, property **Physiological needs** -- air, water, food, shelter, steep, clothing, reproduction. Consumer proposition acquisition process This outlines the steps customers go through when deciding to purchase a product or service. Understanding this helps marketers tailor their strategies to better meet consumer needs and influence their purchasing decisions. - Motive development -- consumers realising they are missing something, and they want this new product to fulfil a need or want they have. - Information gathering -- consumers seeking information about potential solutions. This could be searching online, comparing different products, or reading reviews etc. - Proposition evaluation -- consumers evaluate the gathered information against their criteria such as price, quality etc. - Proposition selection -- after evaluating the options, consumers make a decision on which products or service to purchase. - Acquisition / purchase -- the actual transaction takes place, and the consumer acquires the product or service. - Re-evaluation -- after the purchase consumers assess their satisfaction with the product or service, this can influence brand loyalty. Our attitude (towards consumption) Simply put an attitude is made up of what you think, what you feel, and what you do. It s a lasting, general evaluation of people, objects, advertisements, or issues. ABC model of attitude: A -- Affect (feeling) B -- Behavioural (intentions) C -- Cognition (belief) Effects model? This looks at different types of effects that can happen to our attitude. Standard learning hierarchy Cognition -- affect -- behaviour Attitudes based on cognitive information processing Based on our thoughts we think this one through more. Low involvement hierarchy Cognition -- behaviour -- affect Attitude based on behavioural learning processes Example -- washing up liquid, and basic products as they are usually essential. Experimental hierarchy Affect -- behaviour -- cognition Attitude based on hedonic consumption Based on feelings and how much enjoyment this will give us. Subjective norms are very different from country to country. For example, in some places you may smoke at dinner in a restaurant but here we would never do that and therefore we may be led to a different behaviour. How do brands entry the mind of consumers This can be seen through perceptions, learning, and memory. We as consumers, are subjected to hundreds of auditory, visual, audiovisual advertising messages. But which ones will stick? Emotional vs rational purchases Purchasing an expensive watch is positioned as high involvement / feelings so that adverting focuses on emotions Purchasing washing up liquid is position in the low involvement / thinking so that advertising focuses on reinforcing habitual behaviour. We as consumers are constantly learning about new offerings in the marketplace. Sometimes brands have to revitalize themselves. For example, Burberry changing perceptions of their brand. They originally had an image of being a luxury designer. However, it became quite chav like working class luxury rather than high class luxury that it originally aimed for. However, they did manage to rebrand and get back on track to their luxury marketplace, although some biases do still prevail the majority of consumers are now able to see this as a luxury product again. The self-concept in marketing Consumer researchers, sociologists and psychologists identified consumption as a means of constructing and expressing identity. "The self-concept summarizes the beliefs a person holds about his/her own attributes and how he/she evaluates the self on these qualities" (Solomon, 2018) Many products are bought by consumers because they are trying to highlight or hide some aspects of the 'self'. There is some truth in the I shop therefore I am. It is to highlight or hide parts about us. We are what we consume? Belk 1988 on possessions and the extended self. - They said we use objects as a security blanket, and we use it to show who we are when we can't express it ourselves. - They become almost part of who we are. - Us losing our possessions may represent us and can affect our self-concept which is why we may have attachments to items. - Views extended self as a central construct that can explain a variety of consumer and human behaviour e.g., reactions to the loss of possessions. - Symbolic consumptions -- judgements on the basis of consumption Self esteem Refers to the positivity of the self-concept Those with high self-esteem expect to be successful Those with low self-esteem do not think they will perform well. Self esteem often related to acceptance by others, we compare ourselves to others and marketers use this to sell their products. Body image Physical appearance as part of the self-concept. Body image as the evaluation of a consumer's physical self. Advertising often preys upon insecurities about appearance. Social comparison Where an individual tries to evaluate his or herself by comparing it to others. Social networking -- self advertising Magazines, advertising depicts happy attractive people which is a constant challenge to your self-esteem. Actual vs ideal self The ideal self is a person's conception of how he/she would like to be whereas the actual self refers to our more realistic appraisal of the qualities of the qualities we do and do not have. - Soloman 2018 Impression management -- refers to how we control/ manage/ manipulate what others think of us. This helps bridge the gap between real and ideal self. Multiple selves People are like actors who play different roles, wearing masks to suit the setting/ moment/ audience. Professional self or provocative self or the self who goes to parents for dinner versus the self who goes to a party on a Saturday night. Accurate target marketing requires accurate role identification. For example, accountant by day and marathoner on the weekend requires marketers to target different aspects of people's personality. We essentials show what we want others to see. Torn self -- the roles we play may be conflicting, when multiple identities overlap. Looking glass self -- desire to define ourselves like a psychological sonar. Symbolic consumption and self + product congruence Symbolic meaning is conferred onto products / services / brands. What functions to symbols serve? - They affect our self-concept - Some symbols may vary in their meaningfulness - Certain products (e.g. clothing) acts as a language. Self-image congruence models suggest that we choose products when their attributes match some aspect of the self. Over time we tend to form relationships with products that resemble the bond with create with other people, include love, respect, fear, hate. Social identity Humans as social animals. We have a desire to fit in or identify with desirable individuals or groups as primary motivation for many of our consumption behaviours. We want membership and belonging. Social identity theory is that groups influence our behaviour in 2 ways, as individuals or group decisions. Understanding buyer behaviour is crucial for marketers. - Understanding buyer behaviour helps marketers understand how consumer gather and share information, make decision, and influence each other. - Predicting and dictating trends helps predict an even shape fashion and trends. - Targeting and segmenting allows them to understand different consumer groups and their behaviours - Maximizing group influence uses techniques like word of mouth and buzz marketing to leverage the power of groups to spread messages and influence purchasing decisions. In today's busy marketplace consumers are often seen as 'identity shoppers' who can use consumption to renew their sense of self. Suggests people use products and brands to build and express their identities weaving a coherent narrative of self-identity through their consumption choices. Segmentation and target marketing This is separating consumers in order to identify what consumers are likely to buy our product. Targeting these subsets of consumers can help boost sales and appeal to customers for individual reasons. Market segmentation vs product differentiation Market segmentation = New segment -- 4P's -- new offering Product diversification = New offering -- 4P's -- new segment **Market segment** -- a group of individuals or organisations that share one or more similar characteristics which lead them to have similar product needs. **Target market** -- a group for whom a firm creates an offering (through marketing mix elements) that specifically fits their needs and preferences. STP PROCESS  We might use this when we are launching something new or change our brand image. Segmentation criteria for consumer markets Consumer criteria -- behavioural, psychological, profile. Behavioural: - Purchase / transaction - Consumption/ usage - Media usage - Technology usage Who, how, where, and when. Things such as club cards and other loyalty cards are tracking what you purchase to offer you discounts and tailor ads to you. Psychological: - Lifestyle - Personality - Perceptions - Attitudes - Motives - Benefits sought Profile: - Demographic - Age - Religion - Gender / gender identity - Socio -- economic - Life stage - Young couples - Families - Retired - Class / income - Education - Geographic - Climate - Customs - Traditions - Culture Who and where? Why is it important to target different segments? You don't want to waste money adverting to consumers that aren't going to buy your product. For example, you want to target products like baby food to a retired single man because he most likely won't buy it, but a younger family may and therefore they benefit more from this advert. Marketers are becoming more open to allow children's toys to have less of a gender and therefore children can play with all toys and its not strict pink for girls and blue for boys. Segmentation in business markets Organisational criteria, firmographic, economic, geographic Firmographic: - Size - Age/ life cycle - Industry - Type/ role Economic: - Revenue/ turnover - Profile - Budget Geographic: - Local - National - Multinational - Global What is the customer isn't the end consumer of our products? Targeting strategies Once target market selection is complete, organisations need to decide on a suitable strategy to market to these segments. DAMP -- distinct, accessible, measurable, profitable. **Undifferentiated approach** -- mass marketing strategy approach, negligible customer differences or they outweigh gains. (e.g., petrol, ice cubes, more?) **Differentiated approach** -- multiple distinct and attractive market segments to target, marketing strategies developed for each. (HP printers for different types of users, more?) **Concentrated marketing strategy / niche marketing** -- single or few market segments, exclusive strategy (e.g., lush soaps, expectant mothers, more?) **Customised targeting** -- marketing strategy for each customer; mass customisation (e.g. custom-made cars, M&Ms chocolate; more?) New market segments? For example, single females, disabled consumers, LGBTQ+, children etc. Multicultural consumers. New opportunities to deliver specialised products to racial and ethnic minorities and to introduce other groups to these offerings. Criticism of segmentation - Lack of focus on the individual consumer, rather customer groups (customer relationship marketing to offer more bespoke marketing; digital marketing, which is data driven, etc) - Does segmentation lead to competitive advantage? Product differentiation focuses on offering new products to compete in the marketplace - Value of segmentation can be seen as 'organizational capability' or 'performance factor' (Baines et al 2022). Some organisations fail at segmentation because of: - - Infrastructure barriers - Process issues - Implementation barriers Positioning Final state of STP process Positioning is the 'means by which offerings are differentiated from one another to give customers a reason to buy, and it encompasses two fundamental elements' (Baines 2022). It can be split into: 1. Attributes, functionality, and capability that brand offer 2. How the brand is communicated (brand storytelling) to consumers and how the brand is perceived vis a vis the competition. Perceptual mapping -- to get inside the mind of the consumer (Baines at al 2022) C-D maps -- centrality / distinctiveness. When you're positing in a busy market you have to think of something that competitors aren't doing. You must look at who is successful in the market by looking at competition and how we will be seen is always a good way to start. Positioning of the offering is based on functionally or expressively (symbolically) **Functionally** -- based on features and benefits (physical attributes, product features, price/quality) **Expressively** -- based on ego, social and hedonic satisfactions (user, benefit, heritage) **Repositioning** -- brand revitalization focusses on offering and how it is communicated, risk alienating existing users in efforts to attract new ones. ***4 P's** * The marketing mix: - Product - Place - Price - Promotion - People - Processes - Physicals evidence ***Product** * What is a product? A product is anything that can be offered to a marker for attention, acquisition, use or consumption that might satisfy a want or need: - Physical good - Service - Idea - Place - Experience Product classification - Non-durable product A consumer product that is normally consumed in 1 or few uses. They are used up in the process of consumption. - Convenience product A consumer product that a customer usually buys frequently, immediately and with a minimum of comparison and buying effort. These are easily accessible to make us more likely to buy these as they are close to us. - Durable products A consumer product that is usually used over an entered period of time and that usually survive many uses. - Shopping product A consumer product that the customer, in the process of selection and purchase, characteristically compares on such bases as sustainability, quality, price and style. We will compare these to other products (quality is a big thing). - Speciality product A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. These are bough much less frequently and usually one-off purchases. - Unsought product A consumer product that we rarely think about or are not really interested in buying. Need to highlight benefits, make them seem accessible, example funeral plans. Products can be classified according to their durability, tangibility and also by marketing. Consumer B2C products B2C = business to consumers Consumer products are items purchased by individuals for personal use. - Non-durable / durable products - Convenience products - Shopping products - Speciality products Consumer products are products bought by final consumers for personal consumption. Marketers may further classify these based on consumer shopping habits. Industrial B2C products Industrial products are items purchased for further processing or for use in conducting a business. - Materials and parts - Capital items - Supplies and services B2B products B2B = business to business products These are goods and services sold from one business to another, rather than to individual consumers. These products are typically used in the production of other goods, for operational purposes or for resale. Examples: - Raw and processed materials - Component parts - MRO supplies (office supplies) - Capital goods - Tools and accessories - Business services Each type of B2B product is bought differently and therefore requires different marketing / selling approach. Product offering Product or market offering = product, services and experiences Total product offering = the total package that makes up and surrounds the product, including all supporting features, such as branding, packaging, servicing and warranty. Theodor Levitt - People don't buy products, they buy the expectations of benefits - People don't buy quarter inch drills, they buy quarter inch holes - In factories we make cosmetics, in the store we sell hope. Product levels framework Core product / Customer value = the core problem solving services or benefits that consumers are really buying when they obtain a product. Actual product = a product's parts, quality level, features, design, brand name, packaging and other attributes that combine to deliver core product benefits. Augmented product = the supporting features -- additional consumer services and benefits built around the core and actual products. Includes guarantees, service network, delivery, after-sales service, credit facilities. Products = bundles of benefits that satisfy consumer needs. Example airline - Core -- they offer transport - Actual -- booking interfaces the service and overall experience ' - Augmented -- can I use the lounge, can I upgrade y seat, can I get air miles etc. Product decisions Individual product decisions = importance of building and sustaining a brand to demonstrate value. These decisions focus on the attributes and features of a single product. - Building and sustaining a brand - Product attributes - Packaging - Labelling - Product support service Product line decisions = product line -- product range -- group of products that are closely related because they function in a similar way. - Product line -- a collection of products that are closely related because they function in a similar way, are sold to the same customer groups, or fall within the same price range. - Product line length -- deciding the number of items in the product line. Companies can expand their product line by adding more items (line stretching) or by filling gaps within the existing range (line filling) Product mix decisions = the product ranges, product portfolio, product assortment. These decisions pertain to the overall assorts of products a company offers: - Product mix - Breadth - Length - Depth Product lifecycle Previously: - Subject expert -- getting to product market fit - Growth hacker -- expand reach, scale, and stay competitive - Retention strategist -- retention, sustaining market share - Solution seeker -- determining the best outcome The new product development process: - Idea generation - Idea screening - Concept development and testing - Marketing strategy and business analysis - Product development - Test marketing - Product launch Product life cycle: Once a product is introduced onto the market, it follows a lifecycle. Understanding these stages helps businesses manager their products strategically to maximize profitability and longevity. It consists of four main stages: - Introduction- launch phase when the product is introduced to the market. - Growth -- the product gains acceptance, sales increase rapidly, and profits start to rise. Competition may enter the market. - Maturity -- sales growth slows as the product reaches its peak market penetration. Market becomes saturated and competition intensifies. - Decline -- sales and profits decline due to market saturation, technological advancements or changing consumer preferences. The product may eventually be phased out. Marco view of new product development: What is a service? Service is an action. They are economic activities performed by one party to another. Often time based, these performances bring about desired result to recipients, objects, or other assets. Product -- service spectrum You get pure tangible goods such as bread, cars, toothpaste etc. Then You get pure service such as staying a night in a hotel, going to a concert, getting your hair done. It is very challenging to think of pure goods as many goofs still come with a service attached such as buying a car etc. Categories of service  B2C vs B2B services B2C -- selling to consumers. B2B -- selling to businesses. It is said that a service offers benefits. The key characteristics of services: - Intangibility - Heterogeneity / variability - Inseparability - Perishability Intangible Services cannot be seen, smelled, tasted, touched, heard before purchase. Implications: - Difficult to evaluate competing service offerings - High perceived risk - Price as the assessment criteria - Need for personal information sources Marketing / management response: - Offer tangible cues (ie facility, furnishing, uniforms, websites) - Importance of image and branding Heterogeneity / variability Service performance can be variable. Not all employees act in the same way -- the service cannot always be guaranteed to be the same. Implications: - You may never receive exactly the same service - Can be difficult to maintain consistency and quality Marketing/ management response: - May be able to standardise the service offering (ie blueprint) - Offer guarantee, strive for consistency Inseparability Purchase and consumption of the service happens concurrently. Implications: - Customer is a co-producer of the service - Staff are representatives of the service Marketing / management response: - Customer service provider interactions need to be managed - Employees need training to ensure effective service offerings - Internal marketing of the offering - Measuring difficult? Perishability Services cannot be stored and therefore they can also expire. We have to book in, or we might have to be somewhere for a certain time such as transportation. Implications: - Irregular patterns (sensitive to fluctuations) - Customers have to wait for the service offering Marketing/ management response: - Adjust pricing to influence demand (eg late holidays) - Can cause issues for brand and image if drop prices - Have a reservation database / comfortable waiting area - Compensate with other offerings. Lack of ownership Services are not owned. Implications: - No limited physical transfer of goods - May be a temporary exchange only - Rentals and lease basis Marketing / management response: - Consider offering a combination of products and services (e.g. haircut and shampoo) - Provide a high service quality - Offer cues of ownership (e.g. reinforce benefits of service -- new style) Dominant logic and fundamental basis of exchange According to traditional goods -- dominant logic: Services are seen as - Add Ons to goods (e.g. after sale service) - Special type of goods (i.e. intangible products) Services are what goods are not -- less than ideal products. According to service dominant logic: - Service is applying knowledge and skill foe the benefit of another - From an output to a process They argue that everything has a service value and benefit. Services -- going to the theatre - (direct form of a service) Product -- reading a book - (indirect form of a service) Someone has still made the book, developed it and sent it out to you. Going to the theatre is of course a more direct version of service but reading a book is still an indirect form of a service. ***Place** * Atmospheres of place Atmospheres are felt but intangible -- they are slippery and ambiguous. Kotler 1973 - Realizing that shoppers respond more to than just the tangible product - Actual product only a small part of the consumption package - Customer responds to service, advertising, packaging, warranties, pleasantries that come with the product - PLACE where product is bought -- atmosphere can be the primary product - Create artificial environments through spatial aesthetics, design and sensorial elements - Atmospherics as "conscious designing of space to create certain effects in buyers...\[it's\] the effort to design buying environments to produce specific emotional effects in the buyer that enhance his purchase probability" The environment can help make a purchase. Senses: Visual dimensions -- colour, brightness, size, shapes Aural dimensions -- volume, pitch Olfactory dimensions -- scent, freshness Tactile dimensions -- softness, smoothness, temperature "Sensory marketing implies marketing that engages the consumers senses' and affects their perception, judgement and behaviour" (Krishna, 2012) We as consumers made assumptions immediately from look feel and touch. Atmospheres can affect purchase behaviour as: - Attention creating medium (make the space stand out from the competition) - Message creating medium (signals stimuli to customers, intended audience) - Affect creating medium (arouse visceral reactions, to buy more) There is a move towards experience shopping. Same atmosphere may delight some and disgust others, it is not necessarily uniformly felt. How we experience atmospheres depends how and when we land in them. Bitner 1992 "The way service providers use their physical facilities to shape the environment so that customers feel at ease and are attracted into the service process" Ambient conditions: often subliminal but powerful for example backgrounds characteristics, temperature, noise, lighting, scent. Spatial layout and functionality: spatial layout refers to the ways that machinery and equipment and furnishing are arranged whilst functionality refers to how functional and appropriate this layout is in accomplishing the goals of the customer and the employee. Signs, symbols and artefacts: implicit and explicit signals that communicate messages about the place and its image to customers, these signals can be for directional purposes or communicative purposes. Retailing Traditional retailing is seen as physical space, 'bricks and mortar' stores but more broadly includes online purchasing too. Retailing = 'all activities directly related to the sale of products to the ultimate end consumer for personal and non-business use'. (Baines et al., 2022) Role and advantages: - Provide an area for purchasing multiple products - Reduce search time for consumers - Reduce travel time for consumers - Increase consumer choice & convenience - Provide valuable link with customers - Important for market information on purchase decisions - Increasingly seen as entertainment/family day out/bonding.... What do customers want from a traditional retailer? Value delivered: Customers are looking for convenience or speed and ease in acquiring a product. Consists of 4 elements: - Access: location, availability, hours open, parking, proximity to other outlets, & access via Internet, mail, phone... - Search: intelligent outlet design, service scape, knowledgeable staff, clarity of signage... - Possession: search convenience versus possession convenience in terms of physical outlets versus Internet - Transaction: speed and ease so consumers can affect and amend transaction before and after purchase, queue design Not always speed -- care attention, personal service, packaging, entertaining/ experience... **Benefits of online retailing** - Faster shopping experience - Availability 24/7 - Direct to customer (own website) and/or easy access to market (eBay, Amazon, Alibaba) - Relative ease of geographical widening of market - Reduced overheads - Potential for rapid growth - Customer intelligence Challenges for online place - Certain senses redundant - smell, touch, taste -- e.g. with clothing, you can't try on à Huge emphasis on sight - Investment/emphasis on quality and navigation of the website (can be challenging to convey the Brand online) - Customer TRUST -- difficult to obtain if only online - Security of payment - Privacy issues around personal data - Returning goods can be seen as an inconvenience - Increasingly demanding customers regarding speed of delivery/service - No visible presence of other shoppers and employees - Consumer preferences shift towards local, authentic brands Integrating digital and physical experience. Business can make choice to implement interactions instore, click and collect, online returns etc. Those that don't integrate well with the changing from office to online and back again have limited access to growth. Distribution channels There are multiple different roles in this journey to getting the product to the consumer. - Manufactures - Agents - Distributors - Dealers - Value-added resellers - Wholesalers or Retailers - Wholesalers is where businesses buy their goods - Retails is where the consumer buys it.   Each role is "geared to refining, adding value, and moving a product closer to the end user. This interaction requires coordination of participating organizations are to achieve their goals and make available final products and services" (Baines et al., 2022: 469)   Part of this supply chain has to do with logistics and the actual process of how they make and get these products to us. It\'s a really complex web of creating all this. Disruptions to distribution... What we learnt from the pandemic is that supply chains can become broken very easily. For example, the toilet paper shortage in 2020. This became a shortage as supply did not met demand and therefore people were panic buying. This is usually a stable demand product and therefore the industry struggled with this. supermarkets as a result had to put rations on what each household could buy at a time. To fix this the distribution of TP had to become much quicker. In order to fix problems in supply chains you must look at: - Channel management - Teaming up for better distribution Supply chain management Upstream supply chain includes things such as raw materials and suppliers. This focuses on its origins and how it is originally even begun. Downstream supply chain includes things such as manufacturing, distribution, and customers. This impacts the putting together and shipping of the products around the world. This is where most of our negative issues arise that affect us. Intermediators Reducing the risk of complexities can be done by intimidators. They are important as they simplify the process. An intermediate is anyone in the middle of this manufactory and our end user takes the pressure off the manufacturer and makes it easier as they don't have to worry about marketing and how to sell the product just how to make it. Types: - Agent or broker - A merchant - Distributor or dealer - A franchisee - A Wholesaler - Retailer - Infomediaries Benefits: - Improved efficiency - Product assortment - Accessibility - Time utility - Information utility - Ownership utility - Speciality services Defining place in supply chains Supply chain management (SCM) refers to the management of the flow of products from a manufacturer to a customer or end consumer. Marketing / distribution channels Channel decisions include direct, indirect or multichannel structure.  Intensity of the channel strategy Intensive: distribution through every reasonable outlet in the market Selective: distribution through multiple (not all) reasonable outlets in the market. Exclusive: distribution through a single wholesaling intermediary and or retailer. Business must consider their objectives, channel members, customers and marketing emphasize when deciding which one to use. Intensive examples -- automobiles, designer clothes, caviar Selective examples -- furniture, clothing, watches Intensive examples -- groceries, household products, magazines. A marketing channel consists of dissimilar organisations that have combined together for their common good. Due to the very nature of a channel, conflict is likely to arise between members where there is no integrated system/ ownership. There can be vertical conflicts, which is conflict between different level of the same channel, or horizontal conflict between firms at the same level of the channel. Just in time manufacturing This is a manufacturing process that is aimed at increasing efficiency and reducing waste by received goods only as they are needed in the production process. This approach minimizes inventory costs and aligns raw materials orders from suppliers directly with production schedules. The benefits are: - Cost reduction -- lower inventory levels reduce storage and holding costs - Waste minimization -- reduced overproduction and excess inventory, leading to less waste. - Improved cash flow -- less capital tied up in inventory allows for better cash flow management. - Enhanced flexibility -- ability to quickly adapt to changes in demand without the burden of excess inventory. The challenges are: - Supply chain dependence -- high reliance on suppliers can be risky if there are delays or disruptions. - Demand forecasting -- requires precise demand forecasting to avoid stockouts or production delays. - Quality control -- consistent high-quality production is essential to prevent disruptions. Ethical supply chain? This would prioritize fair labour practices, environmental sustainability, and positive social impact throughout the entire supply chain. Linear economy This follows a 'take-make-dispose' model. Resources are extracted, used to create products, and then discarded as waste after use. This model is characterized by high levels of waste and environmental degradation, as it does not consider the reuse or recycling of materials. Characteristics: - Resource extraction -- continuous extraction of raw materials - Production -- manufacturing products with a focus on efficiency and cost - Disposal -- products are discarded after use, leading to waste accumulation Circular economy This aims to keep products, materials, and resources in use for as long as possible. This model emphasizes the principles of reducing, reusing, and recycling to create a closed loop system that minimizes waste and environmental impact. Principles: - Design out waste -- products are designed to be durable, repairable, and recyclable. - Keep products in use -- extending the lifecycle of products through maintenance, repair, and refurbishment. - Regenerate natural systems -- using renewable resources and restoring natural ecosystems ***Price** * Early understanding of price came form the law of supply and demand. If there was a lot of demand, we could set the price higher but if there was a surplus then we would have to lower our prices. Since mid-2000s price has become more psychological. Pricing psychology is how consumers perceive prices and how those perceptions affect their purchasing decisions. It is more on how consumers perceive price. How does price affect why they buy items? How we view price effects of we buy items or not. What do we mean by price? This is what the customer has to pay in order to receive the product or service. It is often confused with cost or value. To price business need to know cost. Fixed costs -- things that will always need to be paid (usually same price each month) - Office building - Cars and other vehicles - Salaries - Professional service fees Variable cost -- this that need to be paid but can change month by month - Equipment servicing costs - Energy costs - Milage allowance - Overtime and bonus payments Perceptions are important. Cost matter -- help calculate profit Changes in price and costs affect profit. Example, inflation causes raw materials to go up then pf course the price must too. Deciding how to price is complex. Businesses must consider not only cost., but also customer perceptions. Example of two different brands, Shein v Louis Vuitton - Shein have more low-cost brand, they try to make a good product for cheap. It may not be a high quality, but it is nice and cheap, so people buy from it. - Louis Vuitton is the opposite. They increase prices and keep them high to create the essence of a luxury brand. Quality and price There is a link in customers mind between price and quality. Quality and value mean different things to different people. If you set your prices too low, it may seem too good to be true and therefore believe the product is not of high quality and therefore not buy it. Same goes with too high though, as it may not seem worth their money. Value Value refers to the quality of what we get for what we pay. Value = benefits -- efforts -- risks -- price. Price perceptions Antecedents -- price perceptions -- willingness to pay -- purchase behaviour Antecedents - Prior belief - Prior reference prices - Prior experiences - Price consciousness - Price sensitivity - Cultural factors - Consumers characteristics Price perceptions Influenced by: - Reference prices - Quality perceptions - Brand awareness - Brand loyalty - Product familiarity - Asymmetries of information Willingness to pay Influenced by: - Perception of price fairness - Latitude of price acceptance - Magnitude of purchase - Frequency of purchase - Price presentation - Advertising Purchase behaviour Influenced by: - Purchase intention - Contextual factors - Consumer promotions - Perceptions of store quality - Online vs offline stores How customers respond to pricing Price elasticity -- people will buy more if cheaper, less if expensive.  Perfectly elastic -- any changes in price sees very large change in demand. Perfectly inelastic -- change in price sees no change in demand. (products or services consumer needs for example energy providers). Psychology of price Techniques used to make consumers buy products: **Notion of scarcity**: BUY NOW - Provides panics buy and FOMO buy **SALE**: discounted prices - Often in colour red to indicate urgency and stand out. **Odd number pricing**: our perception of rounding up and down - our perception of numbers and rounding up and down, numbers needing in 9 such as 499 instead of 500 makes it seem a lot cheaper, round numbers don\'t seem as pleasing and attractive. **Purchase context**: regular reminders, perception of risk -- - things such as gym memberships sending out emails to remind you of purchase and therefore go more and return buyer. **Diderot effect**: tendency to overconsume, always seeking betterment -- - Bundle buy, you buy more because you think you are getting a great deal. Apply will suggest you buy new headphones for your laptop for a slightly cheaper price even though you won\'t need it. Pricing approaches Methods used to determine or set prices: - Cost oriented - Demand oriented - Competitor oriented - Value oriented Cost oriented: This is when you add all the totals it costs to make the product or service. You discover the breakeven point and base your price around this. Demand oriented: - Set prices according to how much the customer will pay. - Initially priced cheaply to encourage demand - Need to be careful not to overcharge Competitor oriented: Base the prices around the other products in the industries price. Value oriented: Based on customer research -- what is of value to the customer. Total perceived benefits -- total perceived costs = customer perceived value. Pricing strategies Pricing strategies -- ways to utilise pricing to achieve longer term marketing goals Pricing tactics -- ways to utilise pricing to achieve shorter term marketing goals Price quality matrix is key tool for organisations. Economy -- low price, low quality Focus on low costs, it is everyday low pricing. Example -- Primark, Lidl. Positives: - high inventory turnover - economies of scale - accessible consumer pricing - good during economic instability Negatives: - Small profit margins - Perception of poor quality - May affect brand image / equity - Inability to have sales discounts Premium -- high price, high quality Focuses on unique appeal, perceived value and status. Positives: - High profit margins - Enhances brand identity and image to convey aspirational quality - Can create high entry barriers Negatives: - Difficult to initiate and maintain - Requires advertising and branding investment over time - Lower sales volume Penetration -- low price, high quality Setting an initial low price for high quality products. Focuses on trail and adoption, and market share. Positives: - High adoption and diffusion - High inventory turnover - Can gain market share quickly - Marketplace dominance Negatives: - Unsustainable in the long run - Initial loss of profits - Damage brand image - Low customer loyalty Skimming -- high price, low quality Focuses on revenue generating. It is only an initial price. Positives: - High short-term profits - Higher profits to cover innovation or development costs - Help create and maintain brand image Negatives: - Initial advertising costs to attract early adopters - Can annoy customers who paid high price early on - Not good in crowded markets Pricing tactics Promotional -- You offer something for just new customers to increase market share, or online exclusives etc. Loss leader -- Price to increase market share you essentially lose money, but it gains benefits for later. Behaviour based -- What do we know about consumers and base pricing based on then. Such as trains they have off peak tickets but increase price at peak travel times. Freemium pricing -- You can sign up for a free version, but you can remove ads if you pay. Or buy one get one free. Dynamic pricing This uses AI algorithms to alter prices in real time. Difference between digital and physical products? Example, holidays do this because they are watching what users are doing and what is in demand so if you click in multiple times the price may increase or may be to do with time of year etc. Digital marketing products that are online can be even more difficult to make it seem worth your money. Pricing challenges? Sometimes not in the marketing managers control... good relationships needed with finance / accounting colleagues. Ethics of pricing tactics? ***Promotion** * What is promotion? Promotion as... "the management process by means of which an organization attempts to engage with its various audiences" (Baines et al 2022) Promotions are a way of communicating organization's offerings to target audiences: - Engagement -- is it possible to do this on their terms. - Audiences -- who do we want to communicate with. - Reponses -- what outcome are we looking for in communicating. How to communicate? We mean the process in which we convey meaning. There is a linear progression here. Realm of understanding: - We transmit ideas throughout symbols. - We want to make sure they get what we want them to get (no miscommunication) - Noise can disrupt this communication. Can be difficult to get feedback from customers as we as business are the source which is why we need this link between the receiver and the source. Consumers get some of the message form the brand itself, but some also come from different sources of communication. Brands use influencers to reach audiences to influence how they think and behave in certain ways. Selecting an influencer can be difficult. Business wants them to fit with what our brand represent. Weak and strong theories of communication  A strong theory means we are manipulating orientating towards oppression -- trying to get people to buy something that have never bought before. Weak theory is a repeat purchase. It looks at the nature of habits and why we repeat behaviours. Both approaches are right in some ways. These models are great, but they don't fully reflect our decision making such as on the spot decision to buy things. Guerilla marketing is a tactic to create awareness. This is doing something innovative and different that shocks the consumer to create awareness in a different way. Role of marketing communications -- behaviour change This is breaking down stereotypes and communicating about diverse groups in our population without being discriminating. We want to make things more acceptable. How can we use communication to alter a message and change communication. DRIP -- differentiate, reinforce, inform, persuade. This helps business change demand and consume decision making. SMART objectives -- planning marketing communications Specific, measurable, achievable, relevant, time bound. Specific -- state what you'll do, use actions words. Measurable -- provide a way to evaluate, use metrics or data targets. Achievable -- within your scope, possible to accomplish, attainable. Relevant -- makes sense within your job function, improves the business in some way. Time bound -- state when you'll get it done, be specific on data or timeframe. Culture and marketing communications Culture is learned, shared and interrelated. We need to understand our audience. Humans acquire a culture that is influenced by interactions, places we go, who we surround ourselves with etc. Example, yogurt advert showed in France a grandfather picking up his grandson. BUT in Poland they had to change it to the grandmother as it would receive a better meaning. Marketing communication mix -- engaging with customers Marketing communications mix: - Communication tools - Adverting - Public relations - Sales promotion - Direct marketing - Personal selling - Core types of messages: - Informational messages - Emotional message - Branded content - User generated content - Types of media - Broadcast - Print - Outdoor - Digital - In store - Other Marketing communication tools Advertising -- to build awareness, paid media Sales promotions -- encourage demand for offering Public relations -- portray image of corporation (goodwill) Direct marketing -- media-based activity to attract new customers, stakeholders. Personal selling -- securing orders These tools achieve different goals depending on what we want to try to do. Core types of messages Informational message - Emphasis of the message on information content - Focusing on key attributes and benefits of the offering ('no frills') - Rational decision-making process (high involvement purchases + products fulfilling a functional need) - Slice of life (uses relatable people in adverts) - Demonstrative (how product solves problems) - Comparative to other brands 9when focusing on key attributes) This is more rational, has an emphasis on content and benefits by using relatable people in ads. Emotional message - If consumers experience low involvement, messages should focus on emotional response. - Fashion, cosmetics, fast food, etc (connect to consumers through fear -- discourage behaviour, humour, animation/storytelling) - Both rational and emotional message to influence purchases (e.g., cars) - Use of music to get attention and distinguish from competition - Fantasy/ surrealism This wants a more emotional response to what the business is saying. This can influence purchases from a rational and emotional investment reason. If you're purchasing a car you want to think rationally but also emotionally, how does it feel to drive is it comfortable am I enjoying this space. Branded content User generated content - Social media allows consumers to communicate directly with the producers of marketing communications + with friends and family - UGC the 'ways in which people make use of social media... the various forms of media content that are publicly available and created by end users' (Baines et al 2022) - Demonstrates creativity - Freely accessible content - Material should be amateur by nature Don't want to be too professional this is more about a common form of advertising making it seem more normal life. Types of media Trends focus less on traditional media and more on digital one now. Outdoor - Communicating to consumers when they are out and about - They subconsciously see these messages and they recall them when they see the stores or other forms of advertisement. - This reinforces our brand message. Digital Influencers must disclaim when they are paid content. Otherwise, they face backlash when it isn't clear it is an advert. Bad influencer marketing: - Adverts not representing what the product or service actually is - Too many influencers and seeing it too many times can be seen as annoying. Broadcast Print In store Other Integrated marketing communications (IMC) Cohesive marketing communications Orchestrating various tools that are used from the marketing mix so that message is cohesive, consistent, clear, 'matching luggage'. Towards a seamless communication - Adverting led campaigns -- have a uniform 'look and feel' (celebrity, logo or brand identifier across all media) - Brand led orchestration -- tangible brand concept - Participation led orchestration -- use of digital media that integrates brands + encourage a conversation. Other promotional methods... Sponsorship Sponsorship is when one party (the sponsor) provides funds, services or resources to another party (the sponsee) in exchange for the opportunity to associate with a target audience. This is leveraged to achieve various marketing and business objectives. This is helpful for: - Generating awareness - Brand associations - Cut through clutter - Showcase business credentials Brand / product placement Brands appear 'naturally' in film / entertainment For example, Monster the energy drink appears multiple times in certain scenes of the first hangover film. Placement helps: - increase brand awareness - develop positive brand attitudes - possibly lead to purchases. Changing landscape This is seen through ad avoidance, ad blockers. What will happen in the long term with online and mobile advertising? If mobile adverting is ineffective -- what will replace it? This is a challenge for marketing developers now. ***Extended marketing mix** * Extended marketing mix includes: - People - Process - Physical evidence ***People** * People is the appearance and behaviour of service deliverers. People are a central part of the service process: - Employees - Customers This means that staff need to be well trained and rewarded. Ideally, marketers need to manage the people and the atmosphere/ environment surrounding the service offering. ***Process** * Processes is how the service is actually delivered. Service processes include: - Tasks - Schedules - Activities - Routines Ideally, marketers need to enhance all stages in the service process: processes mapping, blueprints, continuous improvement, standards, scrips, invisible processes... smooth running. The role of technology in processes... - Humans are expensive... and variable input - Methods to reduce dependence on employees Replace with machines (ATM) Involve customers more fully in co-production. ***Physical evidence** * Physical evidence is the layout, furniture, brochures, signs etc. This is visual or other tangible cues that provide evidence of service quality. Tangible cues need to be provided with the intangible service. Marketers can provide sales and service information in brochures as physical evidence of the quality of the service. ***Immersive technology** * Introduction Immersive technologies are those that blend the real and virtual worlds to facilitate interactions with people. **Augmented reality** -- an overlaying of simulated virtual objects onto real world environments vis specialized software or equipment. **Virtual reality** -- an environment whereby a participant -- observer replaces their view of the real world with a completely synthetic world, which may or may not mimic the properties of the real world **Mixed reality** -- a very sophisticated form of AR that requires a headset. This technology tracks and maps the 3D environment, integrating digital objects realistically and seamlessly into thr users view of the real environment. Users perceive both real and virtual objects as indistinguishable, or nearly so. Most people are gravitating towards consumption experiences that involve immersive technologies: - Global extended reality market is expected to triple between 2022 and 2026 to over US \$100 billion. - Revenue is forecast to grow significantly between 2023 and 2027 (from US \$162 million to US \$177 million for VR. And from US \$4.3 billion to US \$6.72 billion for AR). Immersive technology knowledge is growing. Prior focus has been on: - Customers intentions to adopt and use. - Impact on other outcomes, such as perceived waiting, customer satisfaction/ dissatisfaction, and loyalty. Current focus is on: - Understanding how this technology affects the way we think, feel and behave. - The factors that amplify or reduce these positive effects - Outcomes Flow theory Flow is a psychological state where a person is fully immersed in an activity, feeling a sense of focus, involvement, and enjoyment. Key characteristics: - Total involvement -- when you're in flow your completely absorbed in what you're doing. Everything else fades away, and you lose track of time. - High focus and concentration -- your attention is fully dedicated to the task at hand, leading to high levels of concentration. - Enjoyment and pleasure -- the activity itself is enjoyable, and you find pleasure in the process not just the outcome. Why flow matters in marketing: - Enhanced customer engagement - Improved user experience - Effective content marketing - Gamification - Personalization Marketers create situations that elicit flow states: - Searching for information on a website - Participation in engaging and entertaining experiences where time passes quickly - Using immersive technologies Certain technological affordances from immersive technologies are relevant for creating flow states: - Engaging and entertaining content - Learning how to navigate - Perceiving and understanding how sensory information is communicated (which can feel overwhelming) - Flow is triggered by feelings of transportation and from immersive states Presence This is when users undergo a perceptual illusion of unmediated experience in a setting mediated by a medium. - Self-presence -- how the self is extended into mediated environments through virtual self-representations. - Social presence -- the degree of salience of the others in the environment and the relationships with others. - Telepresence -- transportation into a medium Presence - Enhances a digital experience - More sophisticated digital experiences require higher elaboration, and are, thus, more persuasive Factors related to presence - Vividness - Interactivity, manipulation of the environment - Motivation and availability of the mental resources Immersion Immersion: an embodied, subjective process in which users engage to temporarily access an environment mentally and physically, such that the environment seems more physically and psychologically proximal (i.e., users feel 'plugged into' the environment) - Can vary, experienced immediately (akin to a 'deep dive') or gradually - Not tied to a specific emotional valence - Individual (traits + intentions) - Contextual Virtual reality Marketers have used VR since the 1990s in the form of computer simulated environments with 3D modelling to predict market share and price sensitivity. Recently, VR has helped marketers obtain customers, building relationships, and create excitement. Expanding use -- eye tracking and complex decision-making For engagement, leveraging and storytelling: - Low immersivity VR leads to more utilitarian objectives (e.g. learning, information) - High immersivity VR leaders to more hedonic objectives (e.g. entertainment, social, emotional) For sales focus (short terms VR aimed at building sales) - Low Immersivity VR leads to more hedonic objectives (e.g., entertainment, social, emotional)   - High Immersivity VR leads to more utilitarian objectives (e.g., learning, information) Augmented reality AR is an interactive technology that modifies physical surroundings with superimposed virtual elements. The virtual layer can add text, images, videos, or other virtual items to the real environment   AR Features: - Interactivity - Virtuality - Location specificity - Mobility - Connectivity - Modality - Hyper textuality AR development began in the 1950s, but evolved to government industry, and then tech.     Augmented reality and retailing Smart screens and large interactive screens most common - Furniture in a room - Access of additional digital content, that appears 'live'   Self-augmentation apps (e.g. virtual try on) Augmentation of a product (e.g. nutritional information of product, etc.)   **Augmented reality apps**   Customers' value (Hedonic & utilitarian) perceptions of experience are underpinned by high physical control and high environmental embedding. - Stems from spatial presence - Relates to information processing - More relevant for building purchase experience than VR - More product (vs. context-focussed) imagery ***Branding** * Why brand? Consumers? - Help people identify offering - Reduce perceived risks (financial, social, functional) + enhance customer experience - Help consumers gauge quality of the product, service or experience - Inform consumers about source of an offering (COO effect) Producers? - Can increase financial valuation of companies - Encourage premium pricing - Help to differentiate one proposition from competition - Deter competitors from entering the market - Help develop customer trust / loyalty / repeat purchase - Encourage integrated marketing communications - Contribute to corporate identity - Legal protection It makes it easier for consumers to pick a product. It lowers the risk of bad products as big brands don't want to have bad products or reputation and therefore them putting their name on it symbolises quality (in most cases). We go back to the brands we know, this is how we choose products. What is a brand? Branding is how an organisation communicates why it is distinctive from the rest. It is a means of differentiation. A successful brand is a name, symbol, design, content or some combination, which identifies the 'product' of a particular organisation as having a suitable differential advantage. The brand can help enhance the character of product, company, service, country and emphasize its strengths. A brand creates awareness, reputation, prominence, lifestyles, narratives, themes and experiences Branding is about positioning in the mind of consumers. Three brand P's Brands communicate a promise, position and performance. They occupy a place in your mind. Branding... more than meets the eye A brand is more than a product / service because it can have dimensions that differentiate it in some way from other products / services designed to satisfy the same need - these differences may be rational and tangible -- related to the product / service performance or - more symbolic, emotional, and intangible -- related to what the brand represents   **Beyond physical elements... branding and psychology** Brand elements include: - Logo - Language - Sound / music - Scent - Taste - Physical interface - Colour - Font - Tag line (slogan) - Shape - Symbol - Patterns These things need to be distinctive and universally seen.       Brand personality Example: Mac set their brand to be young and innovate which makes a lot of older generations not like the change even though it is very user friendly. Brands can change their personality. Example -- Lucozade used to be associated with sick children. People would give them to sick people to make them feel better due to the electrolytes etc. whereas now they have rebranded to sport say that people should have it when exercising etc. They can also revitalize after 'bad reputation'. Example -- Burberry. They fought politics of working-class appropriation. It has been 20 years since Daniella Westbrook was labelled as a chav for wearing Burberry and yet this brand is still associated with it. Sociocultural. This is the role of consumers collectives in bringing brands back to life. Brands help solve conflicting needs: - Stylish yet comfortable - Luxurious yet affordable - Nutritious yet delicious Brand positioning To establish the place of the brand within the market, we need to define the Points-of Difference (PODs) which provide a competitive advantage and the 'reason why' consumers should buy a brand Can be tangible or intangible PODs (maybe only in the customer's mind) Points-of-Parity (POPs), on the other hand, show how brand shares features with competitors -- encouraging consumer to try it ('why not') Example -- M&M's and Kinder Bueno Points of parity Chocolate confectionery, snacking moment, approximately same target (young adult, people who fond of sweets, kids), same price and strategy. Points of difference M&M's -- chocolate balls, interactive universe around cinema, funny and loveable mascots (anthropomorphism), made for sharing and friendly moments. Kinder Bueno -- chocolate bars, universe of childhood and nostalgia, changing spokesperson, made for a break. Neuroscience of brands Consumers may have an anti-brand mindset such as older generations hating mac. Colour guide emotion guide: - Optimism / warmth -- yellow - Friendly / confident -- orange - Excitement / bold -- red - Creative / wise -- purple - Trust / strength -- blue - Peaceful / health -- green - Balance -/calm -- grey white Bad personality or good brand? Ryanair lean into their bad attitude and show funny memes on social media to upkeep their cheap brand. They make jokes about not offering luxury by using customer complaints and laughing saying what did you expect. Duo lingo annoying you every day into using the app and learning your language - they play into being annoying and show why they do it. It is to push us to change. Brand resonance pyramid  Salience - to what extend is this brand recognisable. Meaning - how does the product perform, what is it, how does it make me feel? Judgements/ feelings - consumers feelings for this brand, do they like it? Resonance - this is what brands are aiming for; they feel in sync with this brand. Brand architecture -- extension & stretch Brand extension vs brand stretch (line extension / category extension) Brand architecture strategy helps marketers determine which products and services to introduce, and which brand names, logos, symbols to apply to new and existing products Brand architecture helps define breadth and boundaries of the brand Clarify brand awareness Improve brand image Branded house: umbrella corporate or family brand for all its products House of Brands: collection of individual brands all with different names       ***International marketing** * What's driving internationalization? Understanding the international marketing environment: - Socio cultural factors - Technological factors - Economic factors - Political factors - Legal / institutional factors Socio -- cultural factors Acquiring cultural fluency Culture influences the way in which we interact with each other, and it affects many basic aspects of business life... organisations' serious about international marketing, cultural sensitivity is paramount (Baines et al., 2022) Tailoring to new market segments: Some designer brands have noticed that many rich Muslim women spend more on designer clothing than other sectors. These designers have taken advantage of this social and economic difference and start tailoring products to these people as a line of their brand which drives sales and increases profits because this was a gap in the market. Names + slogans go international KFC is a prime example of having to do research before going international as their key slogan of \'finger licking good\' translated in a different country to means actually eating fingers which of course didn't appeal to many people. Nike is another key example as one of their shoes had to be recalled back in as the fire and flame logo they used on the back of this line when translated the symbol was actually very similar to ISA which has negative connotations for this brand. Global consumer culture and multicultural marketplaces - GCC as a homogenous consumer group not associated with a single country but transcending national cultures - An inherent increasing interconnectedness thanks to globalization - Cultural entity not associated with a single country but transcend national culture. Many people see gen Z as an example of this. - Multicultural marketplaces -- spatial units in which consumers, marketers, brands of multiple cultures interact continuously - Always in flux; acculturation between different nationalities - Brands that are born global, such as amazon and apple. Technological factors Usually transcends basic markets of culture etc. Economic factors - Measure of per capital income - Ownership rates of durables - Consumer price indices - Unemployment rates - Gross national product - Market and population size - Currency exchange rates Some countries a big mac would cost 3 working hours whether as in our country it isn\'t considered that expensive. The northern hemisphere is seen as having more expendable income than the southern hemisphere which is reflected by brands as many may set up shop in norther side but manufacture in southern side. Political / legal factors Things such as who is prime minister can affect things. For example, trump as president creates barriers of trade with China. There is also a number of legal considerations to international marketing. Each area has its own rules and regulations that you must comply with. These also change very frequently and it is your responsibility to keep track of these things. International market selection Some screening questions: - Market size and growth rate - Proposition Fit - Market Entry - Geographical proximity - Psychological proximity - Attractive segments - Established competitors - Entry costs - Resources & Infrastructure - Profit potential - Access / Trade barriers **Researching international markets** - Trying to understand culture that is by definition "foreign" - Can be expensive - Trying to find comparative information across markets - Developed markets publish lots of useful data - Information on developing markets can be highly variable - Language equivalents for questionnaires, interviews - Lack of experience and acceptance of market research - Infrastructure (everything from research agencies to internet access) - You need to trust local partners - Then you need to be able to convince your board to do so and buy into the finding    Market entry selection criteria - Costs - Flexibility - Risk and uncertainty - Return on investment (ROI) - Long term objectives - Speed and time There are multiple different entry modes: - Direct investment - Joint ventures - Direct exporting - Licensing, franchising, contracting - Indirect exporting    Assessing each in turn starting with lowest risk to lowest return and up. Indirect exposure - Production in domestic market -- intermediary agencies used to manage export and sales into overseas markets. - Good for SMEs - Low levels of risk but also control E.g. Scottish seafood, NB Gin and other small providers E.g. Scotch Whisky is the world\'s number one internationally traded spirit with exports worth over £5.6bn in 2023. 43 bottles of Scotch Whisky are shipped every second to around 168 global markets, totalling the equivalent of 1.35bn bottles Licensing and franchising **Licencing** is when the home company (licensor) gives the foreign market (licensee) the right to manufacture goods, use patents, or processes. E.g. Coke **Franchising** the owner authorizes the franchisee to produce or market an offering according to certain criteria set by the franchisor in return for fees / royalties. **Contracting** -- you contract an organisation in a foreign market to manufacture or assemble a product in that market. They have control of all marketing activities. And avoids issues of import barriers, and currency fluctuations. Direct exporting - Manufacturers responsible for distributing good in overseas markets - Set up own distribution - the home organization distributes to consumers in foreign market - treating them the same as their domestic customers. - time consuming and expensive - more control and higher profits, - clearer presence in the foreign market Joint ventures - a foreign organization and domestic one join forces creating a separate jointly own enterprise. - Building on the strengths of each partner. - May be the only way of entering a foreign market, because of protectionist measures or legislation. - Need to establish a clear balance of power; clearly defined goals; equal commitment; need to establish the ratio of commitment. - Success depends in finding the right partner (mindset/goals/culture) and investing in relationship - Useful when entering markets with big psychological /cultural differences and ways of doing business Direct investment - Setting up an overseas subsidiary - manufacturing or production in the target foreign country. - commitment to the local market & fast availability to parts - seeing changes in the local environment quickly - A takeover of a foreign organization can also be a form of direct investment. - E.g. of China investing in African for mining purposes as an example of Foreign Direct Investment **International development** Uppsala model (1975) 4-stage process: 1. serving domestic market. 1. gain access to foreign markets through exporting. 1. sales offices. 1. production facilities   Slow process - Start with countries with perceived low (psychic) distance - Uppsala as useful tool for thinking about internationalizing (manufacturing perspective) -- now outdated (?) - Some brands / companies born global as a means of survival There are multiple different types of organisations; national, international, multinational, global, and transnational. ***Sustainability** * The environment crisis poses one of the biggest threats to humankind. How did we get there? - Continued, unlimited economic growth seen as necessary to the improvements of quality of life and generating wealth needed to tackle wicked problems such as poverty or environmental protection - Continued production and consumption (adding to pollution, water shortage & other costs) - Natural resources seen as limitless & Earth's carrying capacity for waste & pollution infinite - Belief that the impact of use of resources, generation of waste, and pollution could be solved through science and technology Defining sustainability Sustainable development seeks to meet the needs and aspirations of the preset without compromising the ability to meet those of the future. (UN World Commission on Environment and Development, 1987) The world as a coherent whole is making a shift towards sustainability. This can be seen through COP28, policy and international treaties, consumer pressure and activism, and raising awareness of earth limit through media, film etc. Three pillars of sustainability These comprise the triple bottom line. Goal -- sustainable marketing considers all three as0ects to create a balanced approach to business. ECOLOGY -- EQUITY -- ECONOMY Business practices that simultaneously benefit the business, society and the environment and achieve a win win-win situation and help firms become more sustainable. Ecology -- protecting the environment Ecology considers the conservation of natural resources and environmental impact on the planet reduced and more responsible use of natural resources, promotion of innovation -- e.g. energy efficiency, waste management. Innovation here means - need to keep up with current social responsibilities, keeping pace with the nature of change, minimise effect on environment. Implications of the COVID-19 outbreak have created some challenges and opportunities for environmental sustainability.   Equity -- ensuring social well-being and fairness Equity refers to social equity and the focus on protecting people Activities in ecological and sustainability education on different levels (schools, universities, general public), as well as efforts for the sustainability-oriented transformations of the sociocultural and working sphere. Social justice: how the lives and status of susceptible or marginalized people can be enhanced. Economy -- achieving economic viability and growth Economy refers to longer-term economic feasibility and viability to achieve profits Contrasting views of the 'economic' strand: - Move away from growth towards systemic change - Growth is key to trickle down effects for meeting social and environmental goals   Circular economy An economic growth and development system which unifies economy with natural resources and environment. This is also discussed above in place.   Key principles of circular economy: - Regenerate natural systems - Design out pollution and waste - Keep products and materials in use   Marketing can be part of the solution Evolution of sustainability marketing - Environmental marketing Ecological marketing -- Green marketing - Societal marketing Ethical marketing -- Social marketing - Corporate Social Responsibility Brand purpose -- Brand activism - Sustainable marketing Sustainability marketing: Is all about creating, communicating and delivering value to customers in a way that protects and improves both the environment and human well-being. Preserving natural and human capital - Natural includes the environment and natural resources - Human includes people, their health, and their communities Corporate and collective commitment - Corporate -- companies need to adopt sustainable practices in their operations - Collective -- consumers also need to change their behaviours to support sustainability Goal -- both businesses and consumers must work together to achieve sustainable development. Marketing sustainably, i.e. designing and supporting organizational cultures and processes such that all marketing processes are environmentally and socially benign; and Marketing sustainability, i.e. advancing and supporting a global culture of sustainable consumption as a concept, a cultural value and a set of consumption practices. Conceptualisations of sustainability marketing Auxiliary sustainability marketing Focus on having a sustainable marketing mix Cradle -- cradle approach Sustainable: - Products / production - Packaging - Distribution - Pricing - Promotion   Reformative sustainability marketing Focus on promoting sustainable lifestyles - Sustainable lifestyles - Social marketing - Demarketing - Sharing economy and collaborative consumption   Transformative sustainability marketing Focus on institutional change - New business models - Social entrepreneurship - Collective citizen action - Cultural / social norms - Government intervention Corporate benefits to adopting sustainability - Marked as pioneers or leaders - Meeting consumer demand - Increased consumer engagement & stronger relationships - Consumer willingness to pay price premiums - Employee willingness to switch - Creating operational efficiency - Importance of sustainability for investors - Impacts already felt by executives Auxiliary sustainability marketing Cradle to cradle approach We try keep things in production. We have a biological cycle where we break the original product down and then we can reuse and make into something else (biodegradable items) Technical cycle isn't biodegradable so we break them down to parts that can be used to make something else. Examples: - Sustainable products and service (things such as bringing your tub to the supermarket and filling it up with pasta to save plastic) - Sustainable materials and production (going to last longer) - Sustainable packaging (recycled materials to make the bottle etc) - Sustainable distribution (use electric care etc) - Sustainable pricing (price has to take into consideration who\'s farming the products and shipping it over - fairtrade usually costs more) - Sustainable promotion (fairtrade, partnerships between companies and charities) Tennent's - They have renewable energy - Outstanding in field - Out of plastic - Carbon neutral delivery - Cobrew -- carbon capture facility They use local brewers, vans etc They have invested significant amount to remove single use plastic in their operations. Since 2012 they haven\'t sent waste to landfill as they send their waste to other companies that can make a use out of it. Reformative sustainability marketing Sustainable lifestyle and consumption Social marketing - trying to get people to change their behaviour.   Demarketing - encourage people to repair items rather than buy a new one, goes against normal marketing as they usually want to encourage consumers to buy bit it does in fact boost the company as it makes them seem more durable and looking out for the customer and planet.   Collaborative consumption - vinted (don't throw away your clothes, sell them on and keep them alive) Transformative sustainability marketing Institutional changes towards a sustainable society. This requires new business models.   For example, - Edinburgh Remarkery is a workshop that will repair technology or go to workshops to learn how to sew etc. - Social bite? - this is a café that use products that supermarkets would maybe throw away, or you can pay for a homeless person's meal. - Too good to go? - online shop that is companies that have to bin items that would have to be thrown away at end of day and you can go pick it up and eat it that night.   These are all examples of opportunities that sustainable practices give to the business rather than threats.   Business must look at what the company is for? Profits of course so what is the value of being sustainable in order to make a profit? - Increase brand reputation - Cultural norms adapting therefore business must adapt   Factors affecting this change: - Government intervein and provide that companies must comply with certain rules and regulations regarding these environmental factors. - Can see the power of collective consumer action - if companies don\'t adapt to them they won\'t be popular anymore.   **Oatly example of transformative sustainable marketing** **What do consumers think?** - Need to understand the cognitive and affective levels of sustainable marketing practice -- practical and emotional - Intention-behaviour gap -- what people say vs what they do - Sustainable marketing practices positively influence brand image and loyalty - Important to consider brand reputation, image, and fit with sustainability goals - What works for one firm may not work for another in the same industry ***Critical marketing** * **Why do ethics matter?** Ethics are part of philosophy -- more than 2,000 years old! Two dimensions: - Positive -- what marketing practitioners actually do in ethical situations - Normative -- ideal marketing behaviour based on some standard e.g. AMA Statement of Ethics, theory such as classical utilitarianism Now more than ever the world faces many 'wicked problems' -- social problems that are complicated, multi-faceted, intractable, and can be difficult or even impossible to solve due to their complexity. Approaches    **What is critical marketing?** Influenced by critical theory -- informed by streams of thought such as Marxism, sustainability, ethics, feminism and others! 'critical research from a marketing perspective on the impact commercial marketing has upon society'     **The critical turn** Critical marketing analysis helps in 'problematizing hitherto uncontentious marketing areas to reveal underlying institutional and theoretical dysfunctionalities'   Some key topics in critical marketing include the notions of: - Marketing as manipulation - Commodity fetishism society overly dominated by consumption - Construction of needs and wants materialism - Construction of trivial & irrational wants - Consumption as route to happiness. - Encouraging distortion of individuals' self-perceptions and self-worth   **Marketing as manipulation** Framing - action of marketers presenting persuasive communication   ADVERTISERS SIMPLY DO NOT KNOW ENOUGH ABOUT PEOPLE TO MANIPULATE THEM!   CONSUMER SPACE An environment where individuals dictate to companies the types of products they want and how, when, and where, or even if, they want to learn about them (a shift from marketer space where companies called the shots).     **Do markets create artificial needs?**   Objective of marketing: create awareness that needs exist, not to create needs.   Need: a basic biological motive Vs Want: one way that society has taught us that the need can be satisfied **Marketing benefits** Defenders argue that marketing: - contributes much to the economy - ensures the promotion and delivery of desired products and services - brings new products and services, and improvements, to market to meet latent and unserved needs - provides information to consumers, information that contributes to an efficient functioning of economic markets - educates consumers e.g. raising awareness of social issues to trigger positive behavioural change They also argue that over time, market forces will weed out deceptive practices (e.g. competitors calling them out)     **Addictive consumption** Consumer addiction: a physiological or psychological dependency on products or services- Neuroscience has shifted focus of excessive consumption research -- 'pathologizing' (Reith, 2018)   Compulsive consumption: Repetitive and often excessive shopping performed as an antidote to tension, anxiety, depression, or boredom.   Who has the power? - Consumers? - Retailers? - Governments?     **Consumer activism and resistance** Boycotts and conscious consumerism   Companies should not be co-opting these social movements, but they should recognize that they live in a world where these socia