Marketing notes.pdf

Chapter 1: What is marketing Marketing = have value Marketing is a tool used by companies, organizations, and people to shape our perceptions and persuade us to change our behaviour. Marketing sells products - Recommendations Marketing changes how you think about things - Effective marketing...

Chapter 1: What is marketing Marketing = have value Marketing is a tool used by companies, organizations, and people to shape our perceptions and persuade us to change our behaviour. Marketing sells products - Recommendations Marketing changes how you think about things - Effective marketing shapes people’s perceptions of the world around them, for better or for worse. Marketing creates memorable experiences - Example: IKEA created a slumber party Marketing alters history - Marketing plays a pronounced role in political campaigns, policy debates, and mobilizing citizen support for public affairs initiatives. Marketing can use a variety of elements to shape perceptions and behaviors: Words, images, design, experiences, emotions, stories, relationships, humor, sex appeal, etc. Chapter 2: Marketing defined Misconceptions - Marketing is evil - Marketing is advertising - Marketing is expensive (advertising can afford advertising) Marketing is: communication with customer (giving them what they want and communicating with them) Customer relationship Marketing is: Customer service Distribution Communication Building trust Marketing is a set of activities related to creating, communicating, delivering, and exchanging offerings that have value for others. In business, the function of marketing is to bring value to customers, whom the business seeks to identify, satisfy, and retain. The Art of the Exchange - The act of obtaining a desired object from someone by offering something of value in return Customer (buyer) Product - physical good, a service, experience Provider(seller) Transaction - the terms around which both parties agree to trade value-for-value Yes since it’s an online order, it didn’t loook like the way it was presented in the picture. I sent an honest reviews. Marketing creates value for customers  - Identifying, satisfying, and retaining customers Identify a want or need that you can address Satisfy - delivering a product of service that addresses these needs (quality product) Retain - creating new opportunities to win customer loyalty and business Chapter 3: Marketing in Action Marketing is all around you Example: watching tv, you’ll see few ads Marketing can play an important and beneficial role by connecting you to information, people, and things. It can make you aware of things you care about but wouldn’t otherwise encounter. Marketing vs. Advertising Advertising uses paid notices in different forms of media to draw public attention to a company, product, or message, usually for the purpose of selling products or services. While advertising is a common and useful tool for marketing, it’s just one of many tactics marketers may use to achieve their goals. Advertising is just one piece of marketing, where you pay to get noticed (like running ads on TV or social media) Marketing vs. Branding Branding is the practice of “creating a name, symbol or design that identifies and differentiates a product from other products.” Brand is a powerful tool for shaping perceptions about a company or product in order to attract and retain loyal customers by standing out. Marketing processes and activities build brands, and branding is an important strategic consideration in any marketing effort. At the same time, marketing refers to a broader scope of activity than just branding. Branding is about making a company or product stand out with a unique identity (like a name or logo) and shaping how people see it. Marketing vs. Sales Sales refer to the process of actually selling products or services, leading up to the point where the exchange of value takes place. Effective marketing aligns well with the sales process and leads to increased sales. While marketing and sales are intertwined, the scope of marketing is generally considered broader than just supporting sales. Marketing helps identify prospective customers and prepares them to enter the sales process as informed, receptive, qualified sales leads. Sales is the actual process of convincing someone to buy something. REMEMBER: Advertising, branding, and sales are all parts of marketing. Marketing is the big umbrella, and these are tools or steps that help achieve the overall goal: getting people interested and making them buy or connect with a product or service. Chapter 4: Marketing Concept Company orientation and the marketing concept Today, people have access to far more and far better information than they did previously. They also have many more choices. To remain competitive, businesses must match or exceed the practices of competitors that are quick, smart, and open twenty-four hours a day. Keep in constant contact with the customer The marketing concept means that a company puts the customer first. Instead of starting with a product or an idea, they try to understand what customers want and need, and then work backward to create products or services that match those needs. The idea is that if they can do this better than their competitors, they will be more successful. So, instead of focusing on what they can make or how innovative they are, companies using the marketing concept focus on what will make customers happy, and then build their strategy around that. The goal is to create, deliver, and communicate value to customers. The Product Concept is when a company focuses mainly on creating and improving its products, believing that a great product will sell itself.Instead of focusing on what customers want, they assume that if the product is good enough or cheap enough, people will buy it. This strategy can work, but it’s risky because it might ignore what customers are actually looking for. If a competitor comes along with a product that better meets customer needs, the product-focused company could lose out. The sales concept means that some companies focus mainly on pushing sales rather than understanding what the customer really wants. They believe that with the right sales techniques, promotions, and incentives, a good salesperson can sell almost anything. In short, the focus is more on making the sale than on meeting the actual needs of the customer. The company’s goal is to sell what they make, sometimes without paying much attention to whether or not the customer truly needs or wants it. The production concept means that companies focus on making products as cheaply and efficiently as possible. They believe that customers mostly want low-cost items that are easy to find, so they spend less time worrying about fancy features and more on keeping production costs low. Seeing the Whole Picture Savvy businesses acknowledge the importance of product features, production, and sales, but they also realize that the broader focus of the three-step process described below will help them be most effective: 1. Continuously collect information about customers’ needs and competitors’ capabilities; 2. Share the information across departments; and 3. Use the information to create a competitive advantage by increasing value for customers. Chapter 5: Marketing and Customer Relationships Customer Relationship Management: A Strategic Imperative Maximizing Customer Lifetime Value - One-time customers (low customer lifetime value) - Frequent, loyal, repeat-customers (high customer life-time value) Typical Marketing Activities during each stage of the customer relationship Stage 1: Meeting and Getting Acquainted Stage 2: Providing a satisfying experience Stage 3: Sustain a committed relationship Customer relationship as competitive advantage - When customers have good experiences, they tend to come back and stay loyal. This loyal relationship can make a company stand out and have an advantage over others, like different stores or online shops. When customers become your best marketing tool (customer testimonials and recommendations have always been powerful marketing tool) Engagement Marketing: Making customers part of the brand Engagement marketing is about getting customers to be active participants in promoting and growing a brand. Instead of just talking to customers, companies invite them to get involved, making them feel like part of a brand’s "family" or community.In this approach, customers don’t just buy the product—they engage with it, share it with others, and even help shape how the brand grows. For example, people post about their favorite restaurants, take selfies with products, or review things online. This makes them feel connected to the brand and turns them into brand advocates. Chapter 6: How Organizations Use Marketing For-Profit Marketing vs. Nonprofit Marketing For-Profit Marketing: Purpose: The main goal is to make money. For-profit companies want to earn profits and pay dividends to their owners or shareholders. Example: A clothing brand markets its clothes to make sales and increase profits. Success Measure: They look at how much money they make and how well they can grow or pay back loans. Nonprofit Marketing: Purpose: The main goal is to support a specific cause or mission, like helping people or preserving culture. Nonprofits also make money, but they use it to support their mission, not to generate profits for owners. Example: A charity organization markets to get donations, attract volunteers, or raise awareness about its cause. Success Measure: They look at how well they promote their mission, attract support, and make a positive impact, not just financial profits. In short, for-profit marketing is about earning and growing financially, while nonprofit marketing focuses on supporting a cause and creating positive social impact. Business-to-Consumer and Business-to-Business Marketing Customer: The person or business that buys the product. Consumer: The person who actually uses the product. B2B vs. B2C Marketing: B2B (Business-to-Business): This is when businesses sell products to other businesses. For example, the health-food company sells their snack bars to the corner store. The store then sells them to you. B2C (Business-to-Consumer): This is when businesses sell products directly to individual consumers like you. If the health-food company sold the snack bars directly to you, that would be B2C marketing. In summary: B2B involves selling to other businesses. B2C involves selling directly to people who use the product. B2B EMPHASIS - Personal Selling: B2B marketers focus on building personal relationships with people who make decisions in other businesses. This means having direct conversations and meetings to help make a sale. - Conferences and Trade Shows: These events are great for B2B marketers to meet potential business customers and network with them. - Company Websites: For B2B companies, their websites are crucial for sharing information about their products and services to other businesses.  - Targeted Marketing: B2B marketing usually targets a specific, smaller group of businesses rather than the general public, so they don’t rely much on mass advertising. - Custom Offers: Since B2B sales often involve high-priced items, the marketing includes customizing details like price, product features, and delivery terms to fit each business’s needs. B2C EMPHASIS (business to consumers) - Creating Demand: B2C marketers focus on making a lot of people want their products. They use mass marketing techniques to reach a big audience. For example, they might run ads during big TV events like the Super Bowl or promote special items like McDonald’s McRib. - Getting Products into Stores: B2C marketers also work hard to get their products into various retail stores. They need to make sure their products are available wherever people might shop, not just online or in their own stores. In short, B2C marketing is about reaching a large number of people to create interest in products and ensuring those products are available in many places for consumers to buy. Chapter 7: Value of Marketing Marketing remains an active, dynamic field because it serves useful purposes for organizations, individuals, and society. Marketing Can Benefit Organizations Marketing can benefit people Marketing and society Marketing impacts our lives in several ways: 1. Informed Choices: Marketing provides us with information about different products and services, helping us make informed choices about what to buy. 2. Better Products: Through feedback and competition, marketing encourages companies to improve their products and services, leading to better options for us. 3. Special Offers: Marketing often includes promotions and discounts, helping us save money on things we need or want. 4. Convenience: It helps us find products and services more easily, whether through online ads, store displays, or recommendations. 5. Awareness: Marketing raises awareness about new products, technologies, or solutions that can improve our daily lives. In short, marketing helps us by keeping us informed, offering better products, saving us money, making things more accessible, and introducing us to new and useful options. Marketing Mix - 4P’s 1. Do we need new products that appeal to our target customers? (product) - This means figuring out what kind of product or service will meet their needs and interests. 2. What price are our target customers willing to pay? (price) - This involves setting a price that customers find reasonable and that also makes sense for the business.  3. How will we communicate our offerings to our target customers? (promotion) - This includes deciding on the best ways to advertise or market the product, like through social media, TV ads, or email campaigns. 4. How do we get our products to our target customers? (place/distribution) - This means figuring out the best way to deliver the product to where customers can buy or receive it, whether it’s through physical stores, online, or other channels. Apple - they offer high quality products, which the price is reasonable They have great promotions like they have ads on twitter Chapter 2: Marketing Function Why it matters: Marketing Function Importance of customer Customers - are the people or organizations with needs or wants that a business aspires to address. Exchange Process - the act of obtaining a desired object from someone by offering something of value in return. Customer is considered the cornerstone of marketing. Marketing Orientation - focusing the organization on identifying and understanding the customers’ preferences in terms of needs and wants and delivering them more effectively and efficiently than their competitors. Production Philosophy - this approach focused on improving the efficiency of production and distribution in order to reduce costs and deliver more affordable products—both were considered the source of competitive advantage. Selling concept - This approach requires organizations to aggressively focus on selling and promotion efforts as a way to stimulate demand and drive sales. Staying close to the customer 1. Continuously collect information about customers’ needs and competitors’ capabilities 2. Share the information across departments, including production and sales 3. Use the information to create a competitive advantage by increasing value for customers Internet and Technological advances - today’s consumers have access to far more and far better information than ever before. Segmentation and Targeting Segmentation - The starting point for understanding your potential customer is figuring out exactly whom you want to reach. Targeting - focusing on those customer segments that are most promising customers. It helps organizations use their resources wisely and customize what they do much more specifically for those who will see the greatest value from their offering. Defining your target market Step 1: Identify the business need you address (It is about identifying the specific need your business will address. To do this, think about who your product or service is for and what problem it solves. For example, if you're selling car detailing products, your market is all vehicle owners. Your business helps them by offering products that keep their cars clean and shiny.) Step 2: Segment your total market (It is about dividing your big market into smaller groups. For example, if you sell car cleaning products, you might focus on people who love cleaning and taking care of their cars themselves. Ignore groups who aren't interested in your product, like those who don't clean their cars often. After choosing your target group, check if there are enough people in it and if they can easily find similar products elsewhere.) Step 3: Profile your target customer segment (s) (Step 3 involves creating detailed profiles of your ideal customers. Understand who they are, where they live, how much they spend on car detailing, and how they like to shop. Know their preferred payment methods and delivery choices. This information helps you plan your marketing and product offerings to match what your customers want and need.) Step 4: Research and validate your market opportunity (Step 4 is about making sure there’s enough demand for your business to succeed. Do research to confirm that there are plenty of potential customers in your target market. Use information from business directories, statistics, and articles, and conduct your own surveys or interviews. Find out how big the market is and how many competitors you have. This helps you ensure there’s a real opportunity for your business and guides you in creating a marketing plan to attract your customers.) Communicating the Value Proposition Value = benefit - cost - value is the measure of the benefit gained from a product or service relative to the full cost of the item. Value isn’t just about the price. It’s also about how useful or beneficial something is to a person at a given time. Marketers need to understand what their customers find valuable and use that information to offer something that meets those needs. Value is more than price Value isn’t just about the price of a product; it also includes other factors that affect how much benefit someone gets from it. Here are some examples: 1. Brand Value: A customer might choose a higher-priced brand-name product over a cheaper one with the same ingredients because they think the brand adds extra value. 2. Convenience: If buying a product online is too complicated with too many steps, the hassle can make the product seem less valuable, even if it’s priced well. 3. Personal Costs: If someone wants to attend a political meeting but finds it inconvenient (like traveling far or not knowing anyone there), the perceived benefit of going is lower. In short, value is more than just the price—it includes how much benefit the product or service provides and how easy it is to get that benefit. Value in a competitive marketplace In a competitive market: 1.Comparing Options: Customers look at different choices and decide which offers the best value. For example, a hotel might be more convenient, while an Airbnb might be cheaper but farther away. 2. Competitors vs. Substitutes: - Competitors: Similar products from different brands (like Marriott vs. Hilton). - Substitutes: Different types of products that serve the same need (like a hotel vs. Airbnb). 3. Differentiation: Companies need to show what makes their product unique compared to others. 4. Competitive Advantage: If a company provides better value than its competitors, it has a competitive advantage. Value proposition A value proposition is a simple statement that explains why someone should choose your product or service. It answers three key questions: 1. Who?: Who will benefit from your product or service? 2. What?: What exactly are you offering? 3. Why?: Why is your offering better or more valuable than other options? Value proposition tells potential customers why they should pick your product or service over others. VALUE PROPOSITION - COMPETITIVE ADVANTAGE Always customer’s pov How do you create an effective value proposition? To create an effective value proposition: 1. Be Clear: Make it short and straightforward. Clearly state what your product or service is and the benefit it provides. 2. Be Compelling: Show why the benefit is important and why it should motivate the customer to choose your offering. 3. Be Differentiating: Highlight what makes your product or service different from and better than other options available. Value proposition should quickly and clearly explain why someone should choose your product or service. Evaluating Value Proposition Examples “Always including You” Marketing Mix - describes the tools that marketers use to create value for customers. Organizations must find the right combination of factors that allow them to gain an advantage over their competitors. This combination—the marketing mix—is the combination of factors that a company controls to provide value to its target customers. Evolving Definitions of the Marketing Mix 1. Product - the goods and services offered 2. Promotion - communication and information 3. Place - distribution or delivery 4. Price - ensuring fair value in the transaction 1. Customer solution: what the customer wants and needs 2. Communication: a two-way dialogue with the customer 3. Convenience: an easy process to act or buy 4. Cost: the customer’s cost to satisfy that want or need Components of the Marketing Mix Product - In marketing, the term "product" means the solution you offer to meet a customer's needs or wants. This can include physical items (like cars or snacks) or services (like hotel stays or online banking). Here’s a simple breakdown: Goods: Physical items you can touch, like a car or a bag of chips. Services: Intangible things you can't touch, like a hotel stay or a banking service. Combination: Some products include both goods and services, like a car that comes with a maintenance package. Promotion - means all the ways a company communicates with customers and how customers talk about the company. It covers:  Company Messages: Like ads in magazines or text messages sent to customers. Customer Feedback: Such as reviews posted on social media or comments about the product. Place - means where customers can buy a product. It's about how the product gets to the customer. This could be: Online Stores: Like buying from Amazon. Direct Sales: Salespeople selling directly to customers. Company Websites: Buying from a company’s own website, like Nike.com. Retail Stores: Purchasing from shops like Best Buy or Verizon. Price - is the amount customers pay for a product. Setting the price involves figuring out: What customers are willing to pay: How much value the product has for them. Price Sensitivity: How changes in price affect buying decisions. Current Prices: What similar products are priced at. Discounts: Any special offers or sales. Competitor Pricing: How competitors price their products. So, pricing involves looking at what the product is worth to customers and how it compares to other options and prices. Introduction to the Product Life Cycle 5 Stages of the PLC 1. Product development 2. Market introduction 3. Growth 4. Maturity 5. Decline The Product Life Cycle (PLC) helps plan how a product performs over time, but it has some limitations. Here's a simple breakdown: Stages: The PLC divides a product's life into stages: introduction, growth, maturity, and decline. It helps understand how sales might change at each stage. Not Always Predictable: Not all products follow this smooth pattern. For example, college enrollments might rise during economic downturns and fall when the economy improves, showing that some products are affected by outside factors. Variability: Individual brands or products can behave differently than the general PLC pattern, showing more ups and downs. Impact of Marketing: Changes in marketing strategies (like promotions or price cuts) can affect sales, sometimes even making a product's decline less steep, but these changes are usually short-term. In short, while the PLC is a useful tool, it's important to recognize that real-world factors and specific marketing actions can cause variations. Marketing mix should be carefully balanced to meet the needs and preferences of the target customers. Role of Marketing Plan The Marketing Plan - A marketing plan is like a roadmap that helps a company decide what to do to get its products noticed and bought, while considering its competition and resources. - is a strategy that helps a company decide how to promote and sell its products. Marketing Plan Input Situation analysis examines both the internal and external factors that might impact the marketing plan. Chapter 3 Segmentation - helps you understand your market and divide it into groups that share common needs and characteristics. Targeting - helps you figure out which of these groups to focus on in your sales and marketing activities. Segmentation and targeting are essential building blocks of marketing because they help marketers answer a basic question: Who am I trying to reach? The Purpose of Market Segmentation and Targeting Segmentation Criteria and Approaches Segmentation is a process that helps marketers narrow their focus on the most promising groups within that universe. Common Market Segmentation Approaches Geographic (oldest basis for segmentation): countries, provinces, regions, cities, neighbourhoods, postal, codes, etc. Demographic (statistica various characteristics of population) : age, gender, family size, income, occupation, education, religion, ethnicity, and nationality Psychographic: lifestyle, personality, attitudes, and social class Behavioral: user status, purchase occasion, loyalty, readiness to buy. Decision maker: decision-making role (purchases, influencer, etc) Segmenting Business-to-Business Markets Organization size: segmentation according to large, medium, and small customers by revenue, by number of employees, by geographic reach, etc. Geography: organizing segments based on geographic location Industry: segmenting by the industrial sector an organization operates within—for example, manufacturing, retail, hospitality, education, technology, health care, government, professional services, and so forth User status: usage frequency, volume used, loyalty, longevity, products already in use, readiness to buy, etc. For example, longtime loyal customers with “strategic” relationships are often handled differently and receive preferable terms compared to newer customers. Benefits sought: grouping customers by common elements they look for in a product or purchasing experience  End use: identifying segments based on how they plan to use the product and where it fits into their operations and supply chain. For example, an electric motor manufacturer learned that customers operated motors at different speeds. After making field visits and confirming these uses, he thought to divide the market into slow-speed and high-speed segments. In the slow-speed segment, the manufacturer emphasized a competitively priced product with a maintenance advantage, while in the high-speed market product, superiority was stressed. Purchasing approaches: organizing the market according to the way in which organizations prefer to make purchases; those preferences, in turn, determine how the seller builds the relationship with the customer and works the deal. Good market segmentation starts by identifying the total market for the product, identify marketing goals you want to achieve with the segmentation strategy Evaluating Your Segmentation Approach An ideal market segment meets all of the following conditions: It’s possible to measure. If you can’t measure it, you can’t collect data to know who the segment is or how to reach them. It’s profitable. Segments must have the resources to purchase the product and be large enough to earn a profit for the company; otherwise they aren’t worth pursuing. It’s stable. Segments need to stick around long enough for you to execute your marketing plan. It’s reachable. It must be possible for marketers to reach potential customers via the organization’s promotion and distribution channel(s). It’s internally homogeneous. Potential customers in the same segment must prefer the same product qualities and exhibit similar characteristics that are pertinent to the segmentation approach. It’s externally heterogeneous. Potential customers from different segments have different product quality preferences and characteristics that affect their purchasing decisions. It’s responsive. Segments should respond consistently to a given market stimulus or marketing mix. If they do not, then marketing efforts directed at them will not be well spent. It’s cost-effective. Worthwhile market segments can be reached by marketing activities in a cost-effective manner. If too expensive to reach, then serving this segment will negatively impact profits. It helps determine the marketing mix. Ideally, when you have identified a market segment, you’ll have insight into ways of shaping the combination of product, promotion, price, and place to fit that segment’s needs. Selecting the target segments boils down the following questions, which connect to the “ideal segment” conditions listed above: Whose needs can you best satisfy? Who will be the most profitable customers? Can you reach and serve each target segment effectively? Are the segments large and profitable enough to support your business? Do you have the resources available to effectively reach and serve each target segment? Mass Marketing - undifferentiated marketing, involves marketing to the entire market the same way. Differentiated Marketing - separate offerings to each different market segment that it targets. It is also called multi-segment marketing. Niche Marketing - also called concentrated marketing, it targets only one or a few very defined and specific segments of the consumer population. (Goal achieved high penetration) Micromarketing - mass customization or one-to-one marketing, focuses even more narrowly than niche marketing. (individual marketing or very small segments) Local marketing - targeting strategy focused expressly on a small, clearly defined neighborhood or geographic area.