Marketing Management Midterm PDF

LESSON 1 control the sale of certain products or services, especially when demand is high. 1.1 Basic Concept in Marketing Management...

LESSON 1 control the sale of certain products or services, especially when demand is high. 1.1 Basic Concept in Marketing Management - Ticket scalping [unauthorized buying of bulk tickets to a performance or event] is one Market example of a black or shadow market. When A market is a place where parties can gather to demand for concert or theater tickets is high, facilitate the exchange of goods and services. The scalpers will step in, buy up a bunch, and parties involved are usually buyers and sellers. The sell them at inflated prices on the black market may be physical like a retail outlet, where market people meet face-to-face, or virtual like an online market, where there is no direct physical contact 5. Financial Market between buyers and sellers. - The blanket term financial market refers to any place where securities, currencies, Types of Markets bonds, and other securities are traded Markets vary widely for a number of reasons, between two parties. These markets are the including the kinds of products sold, location, basis of capitalist societies, and they provide duration, size, and constituency of the customer capital formation and liquidity for base, size, legality, and many other factors. In businesses. They can be physical or virtual. addition from the two most common - The financial market includes the stock markets—physical and virtual—there are other exchanges such as the New York Stock kinds of markets where parties can gather to Exchange, Nasdaq, the LSE, and the TMX execute their transactions. Group. In the Philippines, there is only one 1. Non Physical Markets/Virtual markets financial market – the Philippine Stock - In such markets, buyers purchase goods Exchange (PSE). and services through internet. In such a - Other kinds of financial markets include the market the buyers and sellers do not meet bond market and the foreign exchange or interact physically, instead the transaction market, where people trade currencies is done through internet. - Examples – Lazada, Shopee, eBay etc. 1.2 Core Concepts of Marketing, Types, Functions, and Importance 2. Physical Market - Physical market is a set up where buyers What is marketing? can physically meet the sellers and Marketing refers to all activities a company does to purchase the desired merchandise from promote and sell products or services to them in exchange of money. Shopping consumers. Marketing makes use of the "marketing malls, department stores, retail stores are mix," also known as the four Ps—product, price, examples of physical markets place, and promotion. At its core, marketing seeks to take a product or 3. Auction Market service, identify its ideal customers, and draw the - An auction market brings many people customers' attention to the product or service together for the sale and purchase of available. specific lots of goods. The buyers or bidders try to top each other for the purchase price Importance of Marketing - The items up for sale end up going to the 1. Marketing helps to boost the sales. highest bidder. Therefore auction market is a Marketing is one way to give information to public sale in which goods or property are consumers. This way, consumers will have a sold to the highest bidder. basic idea of what is your product all about. They will also know the benefits of buying 4. Black Market your products. Marketing educates many - A black market refers to an illegal market people about a certain product. When where transactions occur without the people are well-informed about your knowledge of the government or other product, your sales will increase. regulatory agencies. Many black markets exist in order to avoid existing tax laws. 2. Marketing creates revenue options. They use cash-only transactions or Marketing is a great help for many business non-traceable forms of currency, making establishments to create revenue options. them harder to track. One way to increase the profit is to reduce - Black market also known as shadow market the product costs. This way many customers [unregulated (or less regulated) private will buy the product. Reducing the product market and usually a market for illegal costs will increase the number of potential goods], become prevalent when prices  buyers, thus getting more sales. It is better 2. Content marketing to gain smaller profits but consistent sales. What is content marketing? Have you ever read a recipe on the side of a box of cereal? Did you 3. Set better goals for your business. notice how the ingredients always seem to include The success of a business depends on its brand name products conveniently produced by the goals and objectives. Marketing can help a same company? That’s actually an example of business set its goals. By practicing some early content marketing. marketing strategies it will lead to the Content marketing is all about creating popularity of their brand. By this, it will content—basically any consumable piece of motivate the company to maintain its information—that serves a purpose beyond just reputation. They will now set clear goals and promoting a product. Think of it as advertising by objectives for their employees to know their offering something that is actually useful to the targets. These goals will also reach their consumer. Content marketing can build positive consumers. sentiment for a brand by attaching the brand to something genuinely helpful or entertaining. When 4. Build a Reputation for your Brand. done successfully, consumers won’t even realize Another benefit of implementing marketing they are being marketed to. strategies is to build a reputation for your brand. But it is essential to ensure you are Common examples of content marketing include giving outstanding quality and useful recipes, blog articles, tutorial videos or travel products to your target market. This way, guides. More than 85 percent of brands use you won’t only build an excellent reputation content marketing. for your product, but also your brand. 1. Coke’s “Share A Coke” Campaign - This campaign gave everyone the opportunity to 5. Improves Decision-Making. personalize their favorite drink. They took When a company hires a market specialist, the 150 most popular names in Australia they will do everything to boost the sales of and added them to the side of the bottles. your products by making appropriate And, well… people went crazy for it. marketing actions. The first thing to consider Everyone was talking about Coke. in doing these activities is knowing your 2. Content Marketing in Product Packaging. audience. When the company has known Product packaging is one of the brand’s fully their audience, this will help them most marketing tool. But in packaging, there decide what lines and details they will create is also a recipe, a testimony blog, wherein in convincing people to buy their products. the customers are satisfied and benefits from the product. 7 Functions of Marketing Distribution—Distribution Strategy in 3. Search engine marketing (SEM) Marketing A search engine is a software program that helps Financing—The Role of Marketing in people find the information they are looking for Business online using keywords or phrases known as query. Market Information Research—Importance Search engines are able to return results quickly by of Market Research scanning the database of a particular search Pricing—Again, the Importance of Market engine (e.g. Google) and indexing every page they Research find to produce a list of sites—with the most Product and Service relevant websites at the top of the list. Management—Measuring Advertising Effectiveness This type of marketing is all about serving Promotion advertisements to people using search engines like Selling Google® or Bing®. Search engine marketers bid to buy ad space on popular keyword terms related to Types of Marketing the businesses or product/services they represent 1. Traditional Marketing and linked to their website or products/services Traditional marketing refers to brand promotion on being offered. offline channels that were around before the rise of the internet. Think billboards, flyers and radio 4. Video marketing spots. Because information wasn't as easily What is video marketing? Video marketing is using accessible and readily available, the majority of videos to promote and market your product or traditional marketing relied on outbound tactics service, increase engagement on your digital and such as print, television ads, and billboards. social channels, educate your consumers and customers, and reach your audience with a new medium. Many aspects of video marketing are similar to Influencer marketing is an especially prevalent content marketing—defining goals, choosing strategy on Instagram and YouTube. platforms and target audiences and building a strategy. But video involves its own specific area of 9. Guerilla marketing awareness and skills necessitating marketers who Guerrilla marketing is an advertisement strategy in understand the strategy inside and out. which a company uses surprise and/or unconventional interactions in order to promote a 5. Direct marketing product or service. Companies using guerrilla Direct marketing is defined as any marketing or marketing rely on its in-your-face promotions to be product/services promotion that relies on direct spread through viral marketing, or word-of-mouth, communication or distribution to individual thus reaching a broader audience for free. consumers, rather than through a third party such as mass media. Mail, email, social media, and Guerrilla marketing takes place in public places texting campaigns are among the delivery systems that offer as big an audience as possible, such as used. It is called direct marketing because it streets, concerts, public parks, sporting events, generally eliminates the middleman, such as festivals, beaches, and shopping centers. One key advertising media. element of guerrilla marketing is choosing the right time and place to conduct a campaign so as to 6. Database marketing avoid potential legal issues. Guerrilla marketing Database marketing is a form of direct marketing. It can be indoor, outdoor, an "event ambush," or involves collecting customer data like names, experiential, meant to get the public to interact with addresses, emails, phone numbers, transaction a brand. histories, customer support tickets, and so on. This information is then analyzed and used to create a Types of guerilla marketing include: personalized experience for each customer, or to Viral or buzz marketing [a marketing attract potential customers. By collecting technique that is focused on maximizing the information about consumer preferences, database word-of-mouth potential of a particular marketers are able to send targeted messages to campaign or product, whether that is consumers at each step of the buying process. through conversations among consumers' Their messages can essentially “follow” their family and friends or larger scale audience throughout their normal online activity. discussions on social media platforms]. Graffiti [writing or drawings scribbled, For example you see a new coat from your favorite scratched, or sprayed illicitly on a wall or online retailer. [Shoppe, Lazada. Ebay, Amazon, other surface in a public place.], etc] You add it to your virtual cart but you decided Customized billboards [a flat surface, not to but it for now. The next day you notice an ad advertising structure composed of wood, for that exact coat pop up in your social media metal, paper, or a variety of other durable newsfeed. Then you check your email and, materials, situated outdoors along roads, on coincidentally, that exact coat is on sale! This is buildings database marketing at its finest. Wild Posting Advertising [a street level advertising where paper posters are pasted 7. Social media marketing onto buildings, construction sites]. The term social media marketing (SMM) refers to the use of social media and social networks to 10. Event marketing market a company's products and services. What is event marketing? Event marketing is a Marketers achieve this by using a variety of promotional strategy that involves face-to-face methods on various social media platforms, from contact between brands and their customers at Facebook to Snapchat and everything in between. events like conferences, trade shows and seminars. Event Marketing Examples to Inspire 8. Influencer marketing Your Campaign: At a fundamental level, influencer marketing is a 1. User conferences. type of social media marketing that uses 2. Pop-up shops. endorsements and product mentions from 3.Networking events & mixers. influencers–individuals who have a dedicated [Industry-specific seminars, Virtual groups, social following and are viewed as experts within Career fairs, Conferences/trade shows.] their niche. Influencer marketing works because of 4. 5K run, walk, swim, or ride. the high amount of trust that social influencers 5. Auctions and raffles. have built up with their following, and 6. Special guest events recommendations from them serve as a form of social proof to your brand’s potential customers. 11. Product marketing business sustainable as it grows and as your Product marketing is the process of bringing a market evolves. product to market. This includes deciding the product's positioning and messaging, launching the 1. PRODUCT product, and ensuring salespeople and customers Think of Product in marketing mix as an umbrella understand it. Product marketing is also defined as term that describes anything a business wants to where sales, marketing, and product development sell to their customer (an end user or another converge. business). Product is the entity that satisfies a customer's need and want. The work of this marketing specialization can take Components of a Product: many forms and will depend on the organization, - The quality of the product but much of their work is based on research. - The design of the product They’ll dig into the competitive landscape to - The packaging of the product understand the important variables related to - The branding of the product competitors’ products, review and synthesize consumer research information and meet with Product also entails a full vision of the way product development teams to better understand consumers interact with it. Are there warranties to the features of the product. be offered & guarantees to be met? What kind of customer service experience will you create both LESSON 2 upon the transaction and throughout the product’s life? And what kind of return or refund policies will Marketing Mix unhappy customers be met with? Will these policies and processes make them consider you What is Marketing Mix? again, or leave them cold on your product? A marketing mix consists of a combination of factors that a business can control in order to 2. PRICE influence consumers to purchase its products. In the marketing mix, the term “price” refers to the cost to the customer. This requires the company to By strategically manipulating these factors and analyze the product’s value for the target customer. continuously optimizing them, businesses can Marketing professionals must analyze what buyers better serve their customers; in turn, boosting their are willing to pay, what competitors are charging, bottom lines. it is known as a "mix" because each and what the price means to the target customer ingredient affects the other and the mix must when calculating the product’s value. overall be suitable to the target customer. Components of a Price: - The retail price of the product For instance: - The payment plans available to consumers - High quality materials used in a product may - The discounts available to consumers mean that a higher selling price can be - The credit terms required if consumers need achieved to borrow money to purchase the product - An advertising campaign carried in one area of the country requires distribution of the 3. PROMOTION product to be in place in advance of the In the marketing mix, the term “promotion” refers to campaign to ensure there are no the communications that occur between the disappointed customers company and the customer. - Promotion is needed to emphasize the new Promotion includes both the messages sent by the features and benefits of a product company and messages that customers send to the public about their experience. As Michael There are a few different ways the marketing mix is Collins, CEO of Adelphic, notes: “Consumers are, presented. During the 1950’s the components of by nature, multi-channel and they consume content the marketing mix were conceived as the “four Ps” through multiple screens every day. Marketers and were defined as follows: need to better align their consumer engagement Product: the goods and services offered efforts with this multi-channel behavior.” Promotion: communication and information Components of Promotion: Place: distribution or delivery - The advertising that promotes a product Price: ensuring fair value in the transaction - The salespeople (or lack thereof) required to sell the product- The term “marketing mix” refers to the components - Public relations that make up your marketing plan. Knowing your - Emails, or any other form of communication marketing mix means weighing the impact of each that spreads the word of the product of these categories on your business’s bottom line and adjusting when necessary. This keeps your 4. PLACE In the marketing mix, the term “place” refers to the The Next Evolution of Marketing Mix distribution of the product. Where does the The 4P’s was Created by McCarthy in 1960, the customer buy the product? “Place” might be a 4P’s were thought to be the most common and traditional brick-and-mortar store, or it could be necessary variables to the marketing mix plan: online. Product is WHAT we are selling: a good or Components of Place: a service. - The retail locations or storefronts required to Place is WHERE we are selling it: the sell the product channels. - Delivery of the product Promotion is HOW we are selling it: - Whether or not the product is downloadable building awareness. - All distribution methods Price is HOW much a potential customer is willing to pay: perceived value. What makes for an effective marketing mix? An effective marketing mix is one which: - Meets customer needs - Achieves marketing objectives - Is balanced and consistent - Creates a competitive advantage for the business The marketing mix for each business and industry will vary; it will also vary over time. For most businesses, one or two elements of the mix will be seen as relatively more important than the others, as illustrated below: The 7 P’s of Marketing In recent years, the four P’s of marketing have been expanded to seven P’s by including the additional considerations of physical evidence, people, and process. Over time, new categories of the marketing mix 5. PHYSICAL EVIDENCE have been proposed. Most are more consumer The physical evidence element of the marketing oriented and attempt to better fit the movement mix refers to the physical environment experienced toward a marketing orientation and a greater by the customer or refers to everything your emphasis on customer value. customers see when interacting with your business. The best example of Physical evidence One example is the 4C’s, proposed in 1990: in use is the hospitality industry. Airlines offer Customer Solution: what the customer premium travel as well as economy classes. wants and needs Similarly, restaurants are known to be 3 star, 4 star, Communication: a two-way dialogue with 5 star. All such differentiation, and the target the customer customer that accompanies such differentiation, is Convenience: an easy process to act or because of the use of physical evidence in buy marketing. Cost: the customer’s cost to satisfy that The objective of the marketing mix is to incorporate want or need the right elements which attract the desired customer profile for both products and services. Tools which can be used in Physical Evidence: Ambiance – The look and feel of a restaurant can be described as the ambiance. For example – the Sofa that the restaurant uses, the music that it plays, the lighting it has maintained etc. Layout – Especially applicable in retail, the layout of the showroom contributes to the role of physical evidence in marketing.  Branding – Although part of promotions, the process. This also includes the course which packaging, branding and use of corporate is used to scan with the help of an communications also plays an important role application using a mobile phone. in physical evidence in the marketing mix. 3. Direct and Indirect activities: 6. PEOPLE - Direct activities, as the name suggests, is One of the essential elements of the marketing mix about the reactions of the customers is people. This includes everyone who is involved regarding the process. An example of direct in the product or service whether directly or activities is when a customer representative indirectly.... But all these people have their own is asking for an evaluation of their services roles to play in the production, marketing, undertaken – if the customer is satisfied or distribution, and delivery of the products and not. services to the customers. - Indirect activities: When the interaction does Basically people in Marketing Mix is divided into not take place in person, and it happens two: before or after the product has been bought People Who Make the Products - These is termed as an indirect activity usually done are the people down the line who are in suggestion comment box. responsible for coming up with the products and services of the company. Companies LESSON 3 should take time to hire people who have ADVERTISING PLANNING FRAMEWORK the competence and expertise in the particular industry they are operating in. The advertising management is mainly concerned People Who Bring the Products to the with planning and decision making. The advertising Customers - These are the people who are manager will be involved in the development, supposed to know what the customers want implementation, and overall management of an and what the best way is for these advertising plan. customers to get what they want. Marketing efforts are focused on generating leads and The development of an advertising plan essentially attracting prospects. When the prospects requires the generation and specification of are ready to buy, these people make sure alternatives. Decision making involves choosing that the products and services are from among the alternatives. The alternatives can accessible to them in the most convenient be various levels of expenditure, different kinds of and affordable manner. objectives or strategy possibilities, and kinds of options with copy creation and media choices. 7. PROCESS Here process refers to anything within the business Competitive parity is a marketing strategy that that impacts how the product or service is aims to achieve business performance that is at established, created, and/or distributed. Process par with the competitors in the industry or the also defined as the flow of activities or mechanism market average. that take place when there is in an interaction between the customers and the businesses. Types of Processes 1. Technological Processes: - The process of creating tangible products is called technological process. The objectives to ensure that the customers feel the product to be theirs. The manufacturer should ensure that he creates the product that is wanted by the customers and should also make the products that he as a businessman would want to sell in the market. The balance between both would ensure that the technological process would run smoothly. Advertising planning and decision making depends on internal and external factors. 2. Electronic Processes: - Use of receipts or barcodes or forms or Internal factors are situation analysis, the other methods of information about a marketing program, and the advertising plan. particular product of a company that manufactures them is called an electronic THE THREE LEGS OF ADVERTISING PLANNING CONCERN ARE THE: 1. OBJECTIVE SETTING AND TARGET MARKET IDENTIFICATION, 2. MESSAGE STRATEGY AND TACTICS, 3. MEDIA STRATEGY AND TACTICS The advertising plan should be developed in response to a situation analysis, based on research. Once developed, the advertising plan must be implemented as an advertising campaign, in the context of social and legal constraints and with the involvement of various facilitating agencies. A product life cycle consists of four stages: Situation Analysis – It involves an analysis of all introduction, growth, maturity, and decline. A lot of products continue to remain in a prolonged maturity important factors operating in a particular situation. state. However, eventually, in every product life This means that new research studies will be cycle, the product eventually phases out from the undertaken on company history and experience. It market. is an internal factor. 1. Introduction – This is the first stage of the CONSUMER AND MARKET ANALYSIS product life cycle. Once a product is developed, the first step is its introduction into the market. During this stage, the product is released into the market for the very first time. This product development life cycle stage is at high stake but does not decide whether the product will be successful or not. Additionally, a lot of marketing and promotional activities are undertaken, and capital is pooled so that the Homogeneous- containing terms all the same product reaches the consumers. At this degree stage of product life cycle management, companies are able to understand how users will respond to the product. Precisely, the idea is to create a huge demand 2. Growth – In the growth stage, consumers start to take action. They buy the product; the product becomes popular and results in increased sales. There are other companies also that notice the product as it starts getting more attention and revenue. When the competition is heavy, a higher amount of Aggregate – total or combined money may be pooled into the market. The market for the product expands and it may also be tweaked at this stage to ensure some features, etc., are improved. Competition may also force you to cut down the prices. Nonetheless, sales increase and therefore the product and market growth. 3. Maturity – In the maturity stage, sales slow down, indicating that the market has begun to reach saturation. This is also one of the Retaliatory – revengeful stages of the product life cycle when pricing becomes competitive. This makes the profit margins thinner. In this stage, the purpose of marketing is to fend off competition and sometimes, altered products are introduced. 4. Decline – While companies make all efforts throughout the different stages of the product life cycle to ensure that it stays alive in the market, an eventual decline cannot be ruled out. This is why it becomes important  to know what product life cycle is at first. Deceptive advertising is forbidden by law. What is When a product is in the decline stage, the deceptive is often difficult, because different people sales drop due to a change in consumer can have different perceptions of the same behaviour and demand. The product loses advertisements. Thus, an advertiser who attempts its market share and competition also to provide specific, relevant information must be deteriorates. Eventually, the product retires aware of what constitutes deception in a legal and from the market. ethical sense and of other aspects of advertising regulation. Even more difficult consideration for people involved in the advertising effort is broad social and economic issues as stated below. Deceptive Advertising - It is illegal for a business to engage in conduct that misleads or deceives or is likely to mislead or deceive consumers or other businesses. This law applies even if you did not intend to mislead or deceive anyone or no one has suffered any loss or damage as a result of your conduct. - Does advertising raise prices or inhibit competition? - Is the use of sex or fear appeals being COMPETITIVE ANALYSIS appropriate? - Women and minority groups are exploited in advertising by casting them in highly stereotyped roles. - Is it more irritating than entertaining? - Is an intrusion into an already excessively polluted environment? - Advertising directed at children. Message Strategy and Tactics – Messages strategy must decide what the advertising is meant to communicate – by way of benefits, feelings, brand personality, or action content. Once the content of the campaign has been decided, decisions must be made on the best-most effective-ways of communicating that content. The decisions, such as the choice of a spokesperson, the use of humor or fear or other tones, and the - WHAT ADVERTISING AGENCY SHOULD BE selection of copy, visuals, and layout, are what we CHOSEN? call “message tactics” - WHAT MEDIA SHOULD BE USED? - WHAT COPY TEST SUPPLIER WILL BE BEST Media Strategy and Tactics – Message strategy FOR OUR SITUATION? is concerned with decisions about how much is to be allocated to create and test advertising copy, CONCERNING THE QUESTION OF AGENCY media strategy concerns decisions on how much SELECTION, CHARACTERISTICS SUCH AS THE money to spend on an advertising campaign. QUALITY OF PERSONNEL, REPUTATION, Media tactics comprise the decisions on which INTEGRITY, MUTUAL UNDERSTANDING, specific media (television, radio magazines, etc.) or INTERPERSONAL COMPATIBILITY AND media vehicles to spend. SYNERGISM WERE VERY IMPORTANT. EXTERNAL FACTORS ADVERTISING INDUSTRY The external factors in the planning framework are environmental, social, and legal considerations. To 3 Principal groups: a considerable extent, these exist as constraints on the development of an advertising plan and 1. Sponsors decision making. In developing advertisement, 2. Media there are certain legal constraints that must be 3. Advertising agencies or advertising considered. departments 2 Basic types of Advertising Selecting an Agency 1. An independent agency is a business that is 1. The agency should be able to think free to compete for and select independently on various problems, and not 2. A house agency is owned by its major client. solve them by pre-conceived notions which A house agency is not completely free to it is unwilling to change. serve other clients. The advertising 2. The agency should have experience in department an integral part of the selling goods and ideas. It should be able to organization it serves. bring in more results than anticipated. 3. The company should be financially sound and should be able to cover both local and Advertising agency provides for the client a national advertising campaigns. minimum of: 4. The size of the agency should not be 1. Media information, such as the availability of seriously considered. A big agency is not time and space necessarily a better than a small agency. 2. Creative skills, such as “campaign planning” 5. The agency should not be one that hesitates and “appeal planning” to correct the advertiser if it feels that he is 3. Research capabilities, such as providing wrong. brand preference data 6. The agency should be able to use both research and brains to solve problems. An advertising agency is an independent 7. An agency that plans to make a profit on an organization set up to render specialized services account should be chosen, rather than one in advertising and in marketing in general. that maintains that it will work on a no-profit-no-loss basis. Advantages of using Agencies: ✔ The marketer gains several benefits by While selecting an advertising agency, the employing agencies. An agency generally has an importance of compatibility should be borne in invaluable experience in dealing with various mind. An agency takes a long time to grasp the advertising and marketing issues. problems and accumulate the facts that are necessary for the smooth functioning of a client. ✔ The lessons which agency learned in working Though this investment period is long, it pays rich with other clients are useful inputs for the marketer. dividends. Therefore, an agency should not be frequently changed. ✔ An agency may employ specialists in the various areas of preparation and implementation of Here are some points that can help the advertiser advertising plans and strategies. to: - Choose an agency ; and ✔ The personnel are not members of the - Get the best out of an agency. marketer’s management team. They bring objective - Choosing an Agency and unbiased viewpoints to the solution of advertising and other marketing problems. ✔ The discounts that the media offer to agencies are also available to advertisers. This is a strong stimulus to them to use an agency, for the media cost is not much affected thereby. ✔ The company normally does not have as many types of specialists as a large or medium-sized advertising agency has because an agency can spread the costs or its staff over many clients. It can do more for the same amount of money. ✔ The company can also get an objective, outside viewpoint from an agency, assuming that the agency representatives are not acting as “Yes ma’am” in order to keep the advertiser’s account. ✔ A related point is that the company can benefit from the agency‟s experience with many other products and clients. ✔ Another advantage is that agency feels a greater pressure than the company’s own department to produce effective results. The relations between an agency and a client are very easy to terminate; but it is difficult to get rid of an ineffective advertising department.