Marketing Management PDF

Chapter 1 - Introduction to Marketing ⋅ Set of activities which conceive, create, communicate and deliver value to customers ⋅ Marketing is not: Funny TV ads, making goods available in stores, just selling/ making a profit ⋅ Marketing department is given the following for business co...

Chapter 1 - Introduction to Marketing ⋅ Set of activities which conceive, create, communicate and deliver value to customers ⋅ Marketing is not: Funny TV ads, making goods available in stores, just selling/ making a profit ⋅ Marketing department is given the following for business control: 1. Profit and loss 2. Government Relations and Advocacy 3. Legal Review and Risk Assessment 4. Trend Analysis 5. Competitive and Market intelligence 6. Managing resources for portfolios Value and Exchange ⋅ Exchange: requires two or more parties ⋅ Both parties has something of value to offer and is willing to exchange ⋅ Value: the worth of something to someone ⋅ Items must have the same worth in order to be exchangeable ⋅ What you give up is what you get ⋅ Is subjective as everyone is willing to give up a different amount ⋅ Distinguished the difference between the two by regarding what is being offered: ⋅ Ex. Money not being the only thing being given up - what else is being given up ⋅ Nature of ExchangeF ⋅ Ex. in business, goods and services are exchanges for money Value-Based Orientation 1. Profit - generation of continuous business earnings 2. People - Corporate Social Responsibility (CSR), social / community responsibility 3. Planet - environmental responsibility/ protection Firms Creating Value 1. Adapt: Companies must adapt to consumer wants (evolve) while anticipating and meeting these changes 2. Maintain Strong Positioning: Compaine’s promises and what they stand for, must align their benefits with their prices while also differentiating themselves from the competition 3. Are “Authentic”: Must deliver what they promise 4. Connect with Customers Evolution of Marketing 1. Product Era: Pre-1850, handmade items ⋅ Few product which were expensive but good quality, no need to advertise 2. Production Era: 1850-1900, mass production ⋅ Products are now replaced more often and are cheaper to make 3. Sales Era: 1900-1950s, automobile ⋅ Products are now being transported as it is cheaper to distribute  4. Consumer Era: 1950-2000s, mass communication and middle class ⋅ Products are being made due to consumer wants, with a rise in mass advertising 5. Societal Era: 2000s, socially conscious consumers ⋅ More mindful marketing (pollution, body image, etc.) Marketing’s Role in Society ⋅ Jobs range from advertising to media buying 1. Developing new products 2. Offering choice 3. Contributing to the spread of culture 4. Creating employment Criticisms of Marketing 1. Manipulation 2. Propagating social issues 3. Contributing to waste, consumerism and overconsumption 4. Appropriating cultural concepts 5. Not observing regulatory guidelines/ industry oversight Chapter 2 - Developing Marketing Strategies and Plans Marketing Plan 1. Corporate Mission/ Mission Statement ⋅ Should answer what the business/ purpose is, who are the customers, and main competency ⋅ Should be short, inspiring, tone-setting for employees, customers and shareholders ⋅ Should not include number, specific details and short term goals 2. Situation Analysis ⋅ Competitive Analysis: needs to identify firm’s competitors, asses them and select who to “attack” and “avoid” ⋅ Direct Competitors: same market and same product ⋅ Indirect Competitors: same market but offer an alternative (eg. coca cola - pepsi - water) ⋅ SWOT Analysis: analysis of firm’s internal and external positives/ negatives 3. Marketing Objectives ⋅ Statement that answers: how much and by when ⋅ Specific, measurable, achievable, relevant and time based 4. Strategies ⋅ Sustainable Comp Advantage: what a firm does to be better and different, how can it be maintained long term ⋅ Firms need it to stay in business (eg. Sears had none) ⋅ Types include: customer excellence, operational excellence, product excellence, locational excellence  ⋅ Growth Strategy include: Chapter 5 - Consumer Buying Behaviour ⋅ Activities consumers engage in when choosing, purchasing, using and evaluating product/ services ⋅ When making purchase decisions we follow a pattern of behaviour, are impacted by situational, internal and external factors Decision-Making Process 1. Identify a Need ⋅ Can be functional (eg. food) or psychological (a sense of well-being, eg. car) 2. Search for options ⋅ Internal: options based on info we have, past experience, memory, knowledge ⋅ External: new info, research, ratings, etc. 3. Evaluate the options ⋅ Universal set = complete set of options ⋅ Evoked set = set of options revealed by consumer’s search ⋅ Decision set = collection of options consumer actually consider ⋅ Heuristics = shortcut used by consumers to help simplify choice 4. Choose an Option 5. Analyze our Decision Different Types of Purchase Decisions ⋅ Habitual/ routine: almost daily, usually the same choice ⋅ Infrequent: monthly ⋅ Rare: once or few times in lifetime Situational Factors that Affect Decision-Making ⋅ Temporal State: mindset while shopping, eg. tired/ rushed ⋅ Antecedent State: physical condition while shopping, eg. hungry ⋅ Purchase State: comfortable, confused, uncertain, etc. ⋅ Shopping Situation: nature of the retail space, physical or online ⋅ Social Factors: influence by others Internal Factors ⋅ Personality, motivation, values, beliefs, lifestyle, perception and attitude External Factors ⋅ Culture, family life stage, reference groups, and opinion leaders Chapter 3 - The Marketing Environment ⋅ “SWOT” Analysis ⋅ Micro-environment are internal and controllable ⋅ Include positive (a strength) or negative (a weakness) ⋅ Factors include company (product quality, financial position, location, etc), customers, suppliers/ intermediaries (strong relationships, etc.) ⋅ Marco-environment is external and uncontrollable ⋅ Competition: leaves room to dominate the market, few competitors, however others may have a s superior product ⋅ Demographic: ageing population, ethnic diversity, etc. ⋅ Social Trends and Cultural Norms ⋅ Technology ⋅ Economic: inflation rates, interest rates, housing market, etc. ⋅ Political/ Regulatory: effects government has, tax and legalization, etc. Chapter 4 - Marketing Research (Market Intelligence) ⋅ To get feedback and to identify/ define new opportunities ⋅ Helps markets make better marketing decisions ⋅ Steps: 1. Research Problem ⋅ Include: product, packaging, advertising, price and attitudes 2. Design Research ⋅ Primary data: collected specifically for the project, is new (eg. interviews) ⋅ Secondary Data: collected previously by other sources, already exists (eg. databases)  3. Collect Data ⋅ eg. survey research 4. Analyze Data ⋅ Data: raw numbers, figures etc. ⋅ Info: data that’s been organzied, analyzed, etc. 5. Present Action Plan ⋅ Sample: number of respondents representing the entire population of interest ⋅ Reliability: extent to which you get the same results ⋅ Validity: extent to a study measures what it is supposed to ⋅ Hypothesis: statement predicting relationship between variables Chapter 7 - Segmentation, Targeting, Positioning What is STP? ⋅ Segmentation: identify meaningful groups of customers ⋅ Targeting: select which segment (s) to serve ⋅ Positioning: build and improve brand equity to chosen target ⋅ Product, price, place and promotion Market Segmentation ⋅ Process of dividing a market of users into smaller groups of users ⋅ Each group has common needs or behaviour ⋅ Why do it: a. To better serve customer wants (add value) b. To grow (consumers, sales, profits, share) c. Target marketing mix more precisely 1. Geographic Basis (where) ⋅ Continent, province, climate and urban / suburban / rural 2. Demographic (who) ⋅ Age / life stage, gender, education and religion 3. Psychographic (why) ⋅ Lifestyle, activities / interests, opinions / values and personality 4. Behavioural (how) ⋅ Occasion for use, benefits sought, usage rate and degree of loyalty Targeting ⋅ Firms need to evaluate attractiveness of possible segments to choose one as their target market ⋅ Segment must be: distinct, reachable, approachable and considerable 1. Is the segment Distinct? ⋅ Can you identify and describe who is in the segment ⋅ Is it identifiable and unique from other segments (eg. overlap between gap kids and baby gap) ⋅ Can you measure usage (eg. left handed people) 2. Is the segment Reachable? ⋅ Do consumers know the product exists and how / what it does ⋅ Do they know where to buy it from 3. Is the segment Approachable? ⋅ Will those respond/ react similarly and positive to the product ⋅ Eg. roots comes out with a personal care line 4. Is the segment Considerable? ⋅ Size matters (sales and number of units) ⋅ Small segments are not profitable or substantial ⋅ Targeting Strategies Positioning ⋅ Mental perception that consumers have in their minds about a product ⋅ Brand’s personality (impressions, thoughts, feelings, etc.) ⋅ Firms must create a meaningful and distinct personality for its brand Benefits of Positioning ⋅ Clearly differentiated from competition ⋅ Communicates a clear benefits ⋅ Consumer loyalty and stands “test of time” ⋅ Builds shareholder value How does a Brand Position itself? 1. Value ⋅ Differentiation based on the value or worth of your brand 2. Product Attributes ⋅ Differentiate based on unique, ownable attributes ⋅ Not price but safety, innovation, etc. 3. Symbolism ⋅ Little difference in performance ⋅ Eg. cigarettes, marlboro man 4. Comparative ⋅ “Better” than other brands ⋅ Eg. coke vs pepsi 5. Market Leadership ⋅ Portraying itself as clear leader without compare ⋅ Eg. iphone or heinz ketchup Positioning ⋅ Product, pricing, place and promotion ⋅ Brand actively changes its positioning when it’s outdated or “stale” or if consumer attitudes change/ evolve Chapter 8 - Product and Branding What is a “Product”? 1. Goods (Physical Products): consumer and business 2. Services: haircuts, banking, etc. 3. Places: tourism destinations, resorts, parks 4. Organizations: unis, hospitals 5. Experiences: concerts, movies 6. Ideas: government policies 7. Causes: homelessness Types of Consumer Product ⋅ Convenience: familiar, low decision, low risk ⋅ Eg. food, beverages, toiletries ⋅ Shopping: time/ effort spent ⋅ Eg. clothes, shoes, electronics  ⋅ Select (Specialty): very strong brand preference ⋅ Eg. designer clothes ⋅ Unsought: unfamiliar or never previously considered ⋅ Eg. wedding ring, condo Product Lines ⋅ Breadth = number of product lines ⋅ Eg. oral care, hair care, skin care, etc. ⋅ Depth of line = number of product categories ⋅ Eg. toothpaste, toothbrushes, etc. ⋅ Companies regularly add and delete sku’s in order to: 1. Respond to consumer demand 2. Respond to a comp move 3. Stimulate sales/ growth 4. Reduce cost/ make use of resources 5. Consolidate after acquisition/ merger Branding ⋅ Brand name, logo, character, jingle/ slogan ⋅ Brands are valuable assets and help to: 1. Making purchasing easier 2. Establish product loyalty 3. Increase revenue and profitability 4. Reduce marketing costs 5. Protect from competition 6. Support expansion ⋅ Brand equity: inherent value that a brand holds 1. Brand Awareness (familiarity) 2. Brand Associations (mental links) 3. Perceived Value (benefits and cost) 4. Brand Loyalty ⋅ Consumers always buy the brand, less sensitive to price, reduces marketing costs ⋅ Brand extension: 1. Use of a well known brand name 2. Perception of quality carries over 3. Synergy among products 4. Reduced marketing costs 5. Boosts sales of whole brand ⋅ Brand Dilution: extensions fail due to brand attributes not aligning, and consumer confusion Packaging ⋅ Creates value for the firm and excitement for customers ⋅ Projects contents and communicates key info ⋅ Differentiates brands from comp  ⋅ convenience/ function ⋅ Can drive impulse purchase and increase perception of value Roles of Packaging ⋅ Marketer: differentiates brand, seasonal or promotional ⋅ Retailer: stackable, storable, and sells itself ⋅ Consumer: helps to use, provides info on directions, safety, dosage, etc. Chapter 16 - New Product Development Why Do Firms Launch New Products 1. Growth: increase sales, revenue, profits, market share 2. Enter a new market: “market development” and “diversification” 3. Respond: consumer demand or market dynamic for a comp move 4. Revitalize: defend a declining business Consumer Adoption Factors ⋅ Relative Advantage: how improved an innovation is over the previous gen ⋅ Eg. ipads over laptops ⋅ Complexity: more complex a product, longer it takes to diffuse ⋅ Consumers require significant info before purchasing ⋅ Compatibility: how easily an innovation can be assimilated into a person’s life ⋅ Trialability: products can be sampled before buying ⋅ Reduces risk of buying a new unit ⋅ Observability: extent that an innovation is visible by consumers New Product Development Process 1. Idea Generation ⋅ Come from internal, employees, suppliers, competitors, licensing and customers 2. Concept Testing ⋅ Brief written description of the product ⋅ Sharing concept with potential buyers to gauge reaction 3. Product Development ⋅ Prototype to alpha testing to beta testing 4. Market Testing ⋅ Pre-test: prospects exposed, surveyed and firm makes yes/ no ⋅ Market test: mini launch, more expensive and sales are estimated 5. Product Launch ⋅ How, when, where and how much? 6. Evaluate Results ⋅ Did the product meet performance requirements? ⋅ Did customers understand the product ⋅ Did launch meet forecasted sales, expenses, and profits? Chapter 17 - Global Marketing Scope of Marketing: ⋅ Local (eg. restaurant) ⋅ Regional (Ontario or Canada) ⋅ Multi-national (Canada/US/Mexico) ⋅ Global (eg. Coca Cola) ⋅ Global markets may cover the world but needs to have local connections Issues Facing Canadian Global Marketers ⋅ Culture: need to be “culturally-sensitive” ⋅ Eg. pork in middle east ⋅ Product: products are suitable in some markets but not all ⋅ Eg. cold weather apparel ⋅ Distribution: partnerships and local points of distribution ⋅ Legal: adapting to regulations and standards of host country ⋅ Eg. product safety, labeling, etc. ⋅ Competition: must be aware of local comp ⋅ Eg. food ⋅ Currency: fluctuates and some do not accept CDN ⋅ Brand: does the name translate/ is the logo acceptable? ⋅ Consumer: are they reachable, identifiable, and responsive? ⋅ Pricing: “fair value” can differs market to market ⋅ Promotion: must adapt ads for language/ culture/ religion/ etc. Adaptation Chapter 18 - Ethics in Marketing and CSR ⋅ Laws: society’s standards that are known enforced and punishable in court ⋅ Morals: society’s beliefs about right and wrong ⋅ Ethics: guidelines or codes of behaviour to differentiate between right and wrong ⋅ Marketing ethics: ethical issues specific to marketing The Scope of Ethics ⋅ Pertain to business: ⋅ Ivory poaching or smuggling ⋅ Dumping toxic waste ⋅ Exploiting workers ⋅ Testing on animals ⋅ Linked to 1 of the 4 P’s (marketing): ⋅ Product - unsafe unhealthy, or unproven ⋅ Promotion - misleading or offensive ads ⋅ Pricing - bait and switch or excessive ⋅ Place - made available to minors Ethical Climate ⋅ Senior management is in charge of setting company value, rules and consequences and then led by example ⋅ Ethics must be integrated into the company’s corp and marketing plans ⋅ Corporate plans: mission statements and objectives, set priorities, directions and ethical tone for decision making ⋅ Marketing plans: 1. Should the firm be targeting this segment with our product? 2. Should we relocate to another country? 3. Should we be selling through this distribution channel? 4. Are we in full compliance with new packing regulations? How does Legal help Marketing? ⋅ Compliance: following requirements protects the consumer and the brand ⋅ Protection: from risks and exposures and to safeguard orgs from knock off, piracy, etc. ⋅ Advocacy: process and voice to get regulations and standards changed and updated Puffery ⋅ A claim or statement about a product that is exaggerated that consumers should know it isn’t true Canadian Code of Advertising Standards ⋅ Code of professional standards for marketers and advertisers ⋅ Designed to set and maintain standards of honesty, truth, accuracy and fairness in ads ⋅ Broadly accepted and supported by the industry ⋅ Sub-areas such as marketing research, have their own code of ethics Triple Bottom Line ⋅ People, planet and profit ⋅ A firm’s role to achieve profitable growth and to provide value to society Chapter - ⋅