Dynamic Market Environment (Chaps 1-5) PDF

CHAPTER 1: YOU AND THE Economic Conditions 4 Stages: DYNAMIC MARKET ENVIRONMENT 1. Prosperity - signifies growth and success Scanning the Organization’s External 2. Recession - a period of Force...

CHAPTER 1: YOU AND THE Economic Conditions 4 Stages: DYNAMIC MARKET ENVIRONMENT 1. Prosperity - signifies growth and success Scanning the Organization’s External 2. Recession - a period of Force economic tightening 3. Depression - a prolonged Environmental Monitoring - gathering recession where companies face of information pertaining to the financial and non-financial company's external environment. resource scarcity 4. Recovery - a crucial period for Uncontrollable External Force companies to recover from Demographic - refer to the recession or depression characteristics of a population, including age, income, gender, Competition education, and more, which Brand Competition - continues influence consumer purchasing to challenge companies as preferences and behaviors. numerous product brands are Technology - has significantly introduced in the market transformed shopping habits in Substitute Products - goods the Philippines. that can satisfy similar Social and Cultural Forces - requirements or desires Purchasing decisions are Competition for Target influenced by social and cultural Customers - Marketers face forces, including the social class competition due to customer's and cultural group to which an limited budgets and attention individual belongs. Economic Conditions - can Scanning the Organization’s Internal impact marketing programs and Force business operations. process of analyzing the internal Political and Legal Forces - environment of a company to When the state enacts laws, they identify strengths and limit a firm's legitimate actions weaknesses that can impact its Competition - Among marketing strategies and overall companies affects customers' business performance. limited buying power, leading to increased wariness and alertness Internal Forces in selecting products The target market - specific group of customers that a company aims to reach  Marketing Objectives - specific Clear-Cut Goal or Objective - and measurable goals that a essential to provide direction. company sets for its marketing Sources of accurate efforts information - Sources should be Marketing Organizations - reliable and can be classified as structure, processes, and primary (direct information from resources dedicated to marketing clients, agencies, etc.) or activities within a company. secondary (existing articles, The Marketing Mix - company's reports, etc.). current approach to the four Ps of Training and Education - marketing: product, price, place, Delegation and employee and promotion involvement are key, along with continuous training to keep Approaches in Scanning the External everyone informed and engaged and Internal Environment Budget - Adequate funding is Undirected Viewing - passively necessary to achieve the desired absorbing information from a outcomes wide range of sources without a specific goal or purpose in mind Conditioned Viewing - actively seeking out information related to specific areas of interest or concern, often based on prior knowledge or experience Informal Search - unstructured and spontaneous gathering of information through casual conversations, personal networks, industry events, and everyday observations. Formal Search - structured and systematic approach to gathering and analyzing information Imperatives in Scanning the Environment Essential Factors for Decision-Making CHAPTER 2: BETTIN IN YOUR MOST profession, activities, PRIZED ASSET: THE CUSTOMER interests and beliefs in life. (STRATEGY #1: IDENTIFYING WHO 2. Social Influences - Individuals REALLY YOUR CUSTOMER IS?) who alter their thoughts, emotions and behaviors as a Key Factors Affecting Purchasing result based on how they interact Decisions: with people in their specific social 1. Psychological Variables - group. manifested in an individual's - Culture - beliefs, motive. traditions, and values - Motivation - one of the passed down through starting points in generations, allowing for understanding what, how sharing ideas and and why consumers buy or opinions. not buy a product or brand - Social Class - Group of - Perception - consumers people that have different are no longer naïve about socio-economic status the product they are - Reference Group - buying. Advertisers often use - Learning - Every part of reference group influence, the buying-decision such as celebrities, process is influenced by experts, and professionals, learning. to establish strong product - Attitude - a person's appeal. general feeling or opinion - Family - Groups of about something shaped individuals living together, as early as during either related by blood, childhood influenced by marriage, or adoption the family circle and the 3. Actual Buying Milieu - community where he consumer before finally making belongs. the actual purchase deliberately - Personality - any considers the store's atmospheric distinguishing attributes. characteristics of a person - Physical Environment - influenced by different comprised of elements situations and which can be seen by an experiences. individual inside or outside - Lifestyle - may be the store premise attributed by his - Social Environment - each store can leverage  on the kind of services 3. Evaluation of Alternatives - they would like to deliver customer is comparing options to to their customers. make the best choice. 4. Decision - buying behavior turns The Use of Total Quality Concept in into action Understanding the Customer 5. Post-purchase Behavior - consumers consider whether it Total Quality Concept - systematic was worth it, whether they will approach to management that prioritizes recommend the the needs of the client. product/service/brand to others, whether they would buy again, The Three-Legged Stool of Total and what feedback they would Quality give. People - Every person in a firm dedicated to comprehensive What Research Can Do In quality has the authority to Understanding the Customers influence quality improvement Processes - constantly Marketing Research - included in the evaluated and improved in a marketing intelligence of the company whole quality environment to that helps to understand the customers. guarantee their effectiveness and efficiency The process in conducting research: Measures - businesses employ 1. Situation Analysis - this to evaluate quality. includes the examination of both internal and external factors that Consumer Decision Process will affect the organization Consumer decision making 2. Gathering Primary Data - we process - involves all the stages need to collect data using a from problem recognition to post questioner or an interview purchase activities. 3. Analysis and Interpretation of Data - transforms data into The 5 Stages of the Consumer meaningful insight and Decision Process conclusion 1. Need Recognition - every sale 4. Solution and Recommendation begins when a customer - address the issues raised by the becomes aware that they have a study and suggest a wise course need for a product or service of action for business 2. Information Search - customers want to find out their options.  CHAPTER 3: SEGMENTING, nations, regions, municipalities, TARGETING AND POSITIONING cities, or neighborhoods. (STRATEGY #2: STRIKING THE 3. Psychographic Segmentation - RIGHT AUDIENCE) Personality traits and characteristics including person’s Market Segmentation - process of interests, hobbies and lifestyles identifying and dividing target markets are the aspects that marketers into smaller groups who share similar consider when dividing markets characteristics. using the psychographic segmentation. Benefits of Market Segmentation: 4. Behavioral segmentation - This 1. It allows companies to maintain a approach is shaped by the solid view of how marketing plans person’s buying behavior on the and activities will be carried out basis of his or her buying for the purpose of winning the patterns evidenced by usage preference of the target market. frequency, loyalty to the brand, 2. It generates a customer centric benefits needed, purpose and marketing program that allows urgency of use. organizations to increase the rate Niche marketing strategy - of their competitiveness. identifying customers who are 3. It offers the possibility of market heavy users of their brands. expansion on the basis of geography. Requirements for Effective 4. As segmentation provides Segmentation: refinement of product messaging 1. Measurable - The size and and deployment of the company’s characteristics of each segment optimal offer to target market, must be quantifiable. customer retention becomes the 2. Accessible - The segments must end view. be reachable through appropriate 5. Improvement in communication. marketing channels. 3. Substantial - Each segment Variables of Market Segmentation should be large and profitable 1. Demographic Segmentation - enough to target. markets are divided into units on 4. Actionable - plans and strategies the basis of different variables should be translated to actions to such as age, sex, family life test its efficiency. cycle, income, and occupation. 2. Geographic Segmentation - Segmentation, Targeting and dividing prospective buyers Positioning: A Modern Marketing based on geographic units like Model  segments to remember over and over Segmentation, Targeting and again. Positioning - second most popular 4. Decide on the Optimal Marketing marketing models beaten by the Mix - placing the limited resources of commonly known SWOT. your company. 1. Market Segmenting - The discussions presented with regard to the segmentation strategy approaches provided clear insights about the prospective market. 2. Targeting - company should now select or target one or few market segments that they would like to serve on the basis of some factors. Factors for Targeting: a. Financial and non-financial capacity of the company to cater such markets - refers to its ability to effectively serve and target specific market segments. b. The type of product or service you would want to specifically offer to your market - You should weigh the risks involving the choice of a particular target segment, for you to be able to tailor fit the product or service to the requirements of the customer. c. Competition - knowing competitor’s market coverage, what did they do about it and their possible limitations. 3. Product Positioning - This is the point where company has to formally craft the product or service statement that they would like their target  CHAPTER 4: MARKETING PLAN 4. Flexible - The execution of the PREPARATION (STRATEGY #3: THE marketing plan allows SECRET TO WINNING MARKETING interventions any time deemed ACTIVITIES) appropriate. Marketing Plan - a detailed, Preparing the Marketing Plan systematically-arranged proposal consisting of market-related activities Marketing executive or team - that depict firm’s intention to gain better responsible for preparing the marketing directions in their decisions and quick plan. guide on how to outsmart competitors. Steps in the Preparation of Marketing Types of Marketing Plan: Plan: 1. Product-based marketing plan 1. Brief summary - a short - primary objective is to primarily discussion that talks about the push a product on its competitive preliminaries of the marketing stand. plan. 2. Strategic-based marketing plan 2. Describe the Target Market - - works towards the Clear description of the market accomplishment of the segment(s) you aim to influence. organization’s goal. 3. Fact-finding - Market perspectives must be based on 4 Fs of Marketing Plan facts. 1. Factual - the ideas, opinions or 4. Setting Verifiable Objectives - statements to be included in the Once all valuable facts are proposal should be based on present, desired results must be reliable facts that were logically established. gathered. SMART - Specific, measurable, 2. Focused - Every written attainable, realistic, time-bounded. marketing plan should be 5. Plan of Actions - Objectives directed to solve a specific must be translated into specific problem. program of activities. 3. Financially-set - Management’s Guiding Principles: active support is manifested by a. Concentration - what to prioritize their generous provision of all the based on urgency and possible needed resources to effectively results. carry out the plans with less or b. Multiplier Effect - decipher what freedom from doubts or a single marketing activity that, hesitation. once performed, creates multiple impact or results.  c. Comparison of Alternatives - 3. Push authority down in the look for other possible marketing organization actions that will probably yield 4. Protect your culture effective and efficient results. 5. Try unproven technologies 6. Numbering the Plans - your plan must be supported by details of Factors that Plays a Vital Role in the expenditures for every marketing Efficient implementation of the activity. Marketing Plan: Rule of Thumb in the Preparation to Management budget: Organizational design a. Flexibility - Variance between Incentives actual and budgeted expenses Movement of information should be treated as normal to Examination of internal marketing allow adjustments when strategies necessary. b. Focus on Controllable Costs - will make budget preparation more motivating and a healthy practice. c. Ensure that the activity is a non-punitive one - The freedom to alter the plan when necessary should be understood by the personnel. 7. Monitoring and Control - Constant monitoring ensures timely adjustments whether activities should be pursued or modified the soonest. How Internal Marketing Build Effective Implementation Strategies Internal Marketing - ensures that every strategy and undertaking of the organization receives the active support and commitment of their employees. Approach to Internal Marketing: 1. Pay for performance 2. Listen to the frontline CHAPTER 5: PRODUCT AND BRAND Managing Product Mix and Product STRATEGY WITH PRICING Line STRATEGIES Product Mix - a group of everything a Classification of Products: company sells. Consumer Goods (Final Goods) - commodities Product Line - a subset of the subsequently bought for final or company's product mix. personal use addressing current needs or wants with no intention The Product Life Cycle and Product of further process for reselling or Life Cycle Management earning a profit. Convenience Goods - items that Product Life Cycle are widely available in various 1. Development stage or retail outlets which buyer could Introduction stage - when raw acquire with minimal effort like ideas are refined into a food items, medicines and marketable concept. newspaper 2. Growth Stage - where the Shopping Goods - consumer product is accepted and it is in goods in which the customer demand. before acquiring them undergoes 3. Maturity Stage - Product starts a process of evaluation such as to move towards market comparing the product's quality, saturation and reaches a level cost features, and other attributes where it tends to be stable. to other store outlets or brands. 4. Decline Stage - marked by a Specialty Goods - consumer decrease in sales foods that may possess exceptional or unique Market-Driven Product Planning and characteristics that the Development Process consumers who would like to a customer-centric approach acquire them shall need to exert where product ideas and extra purchasing effort like going development are primarily guided to a limited number of retail by market needs, customer outlets. preferences, and emerging Industrial Goods - goods trends. purchased for business use under different circumstances 5 Key Steps in the Market-Driven with the primary purpose of Product Planning and Development reselling the output to target Process: industrial buyers.  1. Market Research - Gathering existing line of products that the insights on market trends, company makes. customer behavior, and 4. Improvement/Revisions - these competitor strategies to products offer improved quality, understand the current demand. features or performance of an 2. Identifying Customer Needs - existing product. Pinpointing pin points, unmet 5. Repositioned Products - these needs, and opportunities through are existing products targeted to direct customer interaction and new markets, feedback. 6. Cost Reductions - these 3. Product Concept Development products offer similar benefits at a - Creating product ideas based lower cost. on market data and defining solutions that address the New Product Planning and identified needs. Development Process 4. Prototyping and Testing - 1. Customer Need Analysis - Developing prototypes and Social listening. Understanding conducting tests with real what requirements the customers customers to validate the have for a product/service is one product’s effectiveness and important approach appeal. 2. Idea Generation - Brainstorming. 5. Product Launch and Iteration - From raw ideas, either from Introducing the product to the internal/external sources, may market, gathering post-launch sprout one most potential & feedback, and making iterative feasible idea which the planning improvements. and development team may miss should they screened ideas early 6 Categories of New Product this stage. Strategy: 3. Screening Ideas - Carefully 1. New-to-the World - these are eliminate ideas that have been innovative products that create gathered for new products that completely new markets. maybe are not in line with the 2. New to the Firm Products - expertise of the company these products are not new to the Types of Risk: marketplace but are usually new Strategic to the company Market 3. Product Line Additions - these Internal are usually new additions to the 4. Evaluation of Prototype - Will company, but they fit under an undergo testing and evaluation both by its designer and the  clients to confirm the viability of 1. Manufacturer’s Branding - a the design and attributes predominantly used strategy by 5. Business Analysis - Covers the companies in carrying out market determination of the costs and product development involved in developing the new strategies. product and forecast the profits. Brand Extension Strategy - 6. Product Development - it occurs when a company decides becomes a candidate for further to stretch the use of their current research testing and conversion brand name to label any newly into finished goods. introduced and related products 7. Market Tests - Company selects in their product mix a controlled environment —a Family Branding (Umbrella contained geographical area. Branding) - aims to classify 8. Commercialization - The numerous products under the launching step that will test the name of its parent brand planning & development team’s Individual Branding or exerted effort in perfecting the Multi-Branding Strategy - holds new product’s design, attributes, rational benefits such as allowing packaging and each brand to succeed or fail on commercialization. its own merits without sacrificing or impacting less the company's Why New Product Fails? other products. The product offers no-point-of 2. Private brand - allow relatively difference at all big retailers to use their own Limited retailer support private brand for a specific Poor product design product they have outsourced Weak or poorly executed new from a manufacturer. product launch Brand Equity - can be viewed as Aggressive competitors actions the set of assets (or even Small target market liabilities) linked to the brand that adds (or subtracts) value to the Branding and Brand Equity product itself. Brand - a product, service or concept Packaging - It is an effective sales tool that is publicly distinguished from as experts believe that an average amongst in the industry. consumer judges first the product packaging before its contents. Brand Strategies - serves as the Features of Good Packaging blueprint for marketing tactics. 1. Unique and handsome design that has the influence of pulling  customers towards buying the 4. Skimming Pricing - involves product setting a high initial price for a 2. Provides convenience to users, new or innovative product to not too heavy nor too big for its maximize profits from early size adopters, then gradually lowering 3. Security of the products from the price as demand decreases dust, light, spoilage, damage, and and competition increases evaporation, etc. 5. Competition-based Pricing - 4. Adaptability to be stored or kept sets the price of a product or in various places such as service based on the prices cabinets, shelves etc charged by competitors, aiming 5. Dependability of the packaging to match, undercut, or slightly as it is associated to the exceed them to stay competitive customers impression about the in the market. company 6. Bundle Pricing - offers multiple 6. Status or prestige as reflected in products or services together at a the customers' sense of lower price than if purchased confidence in every purchasing separately, encouraging act customers to buy more and perceive added value. Pricing Strategies 1. Cost-plus Pricing - calculating Influences in Pricing Decisions the total cost of producing a product or service and then Internal Factors: adding a fixed percentage or Company objectives - Policies markup to determine the selling on pricing should be in conformity price. with the predetermined outcomes 2. Value-based Pricing - sets of the organization. prices based on the perceived Company structure - There are value to the customer, allowing organizations that give full businesses to charge more if authority to their top management their product is seen as offering in pricing decisions while others superior benefits or uniqueness allow the participation of their 3. Penetration Pricing - involves employees and other setting a low initial price to stakeholders. quickly attract customers and Marketing mix - This is a gain market share, with the plan business tool designed by the to gradually increase the price as management for the smooth the product becomes more execution of their marketing established. program concerning the core  elements of marketing: product, and accommodation are a sure price, promotion and placement win for the organization strategies. External Factors: Demand - This primarily concerns with the nature of the target market which may directly influence pricing decisions. Competition - Price makers may have a thorough review on the possible reactions of the competitors as regard to the company's pricing strategy mainly if it involves homogenous or identical products Political and Legal - These are state regulations and other interference that may hamper the decisions of the management in terms of pricing. Why Product Strategy is Market-Driven? Personalized offers - sent occasionally through direct or electronic mails and contain exclusive offers can motivate repeat sales. Exclusive events - ndulging loyal customers with a gift or a remarkably, too-good-to-be true experience creates stronger bond between them and the company. Random acts of kindness - This is the best campaign for brand customers such as providing them superior customer support system, great in-store ambiance