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Lecture 1: marketing principles and society

Core of marketing

 Needs – Maslows
 Wants – personalised, defined by culture.
 Demands – the economic resources

Sometimes the wants don’t meet the demands- a lack of buying power = no £

Marketing orientation

This method identifies, reviews and analyses customer needs. Can be found through market
research

1. Customer orientation
2. Competitor orientation
3. Inter-functional coordination – coordination of all company activities

Pros Cons
Respond quickly to changes in market Can cost a lot to keep prod in public eye
Stronger position to meet challenges of
competitors
Confidence in launch of new prod

Product orientation

Business develops products based on what it is good at making / doing, rather than what the
customer needs

4 philosophies of marketing

1. PRODUCTION CONCEPT – favour prods that are available and affordable


2. SELLING CONCEPT – favour large scale selling effect eg- celeb endorsement
3. MARKETING CONCEPT – now people looked at satisfying TA
4. SOCIETAL MARKETING CONCEPT – social and ethical concerns are put in place

Marketing exchange process

 Ide that marketing is a managing exchange process


 For profit organisations = for money
 Non profit organisation = sometimes money OR support in ideas/beliefs

Cash
Customer McDonalds

Stop hunger

Time

Volunteer Non-profit youth


group
Sense of
community
service
The 4 P’s

1. Product
 Intangible or tangible
 Market research to be done on life cycle of product = in demand
 BCG MATRIX

2. Price
 Determines firms profit
 Shape the perception of your product in the consumers eye

3. Place
 Good understanding of your TA=can deliver most efficient positioning and distribution
channels

4. Promotion
 Advertising – paid eg- radio, print, internet
 Public relations – non-paid eg- press releases, conferences, events
 Word of mouth

The 7 P’s- For service industries

5. People
 Both TA and people directly related to your business
 Through research you can find if there is enough people / demand for certain products
or services
 Employees = deliver service

6. Process
 The systems and processes of the organisation affect the execution of the service
 Well-tailored process = minimise costs and maximise profit

7. Physical evidence
 In service industries, there should be physical evidence that the service was delivered
 Pertains how a business and its products are perceived I the marketplace
 Brands need to manipulate customer perception so well to the point that their brands
appear first In line when consumers are choosing
Lecture 2: marketing environment and strategy

Definition:

 The forces that directly and indirectly influence an organisations capability to undertake its
business
 The trading forces operating in a market place over which a business has no direct control,
but shape the manner in the business function and is able to satisfy its customers.
 The business environment is a marketing term and refers to factors and forces that affect a
firm's ability to build and maintain successful customer relationships.

Can be classified into:


1. Macro environment
2. Micro environment
3. Internal environment

The macro environment


 External to company’s activities and does not concern the immediate environment
 A scan of the external macro environment in which the firm operates can be expressed as a
PESTLE analysis

The micro environment

1. Customers:
 Consumer markets – buying goods for personal consumption
 Business Markets – buying goods for further processing for use in their production process
 Reseller markets – buying products to resell at a profit
 Institutional and government – government agencies and non-for profit organisations that
buy goods for public services or transfer goods to those who need them
 International Markets

2. Distributors
Help the company to promote, sell and distribute its products to final buyers
3. Suppliers
Provide the resources needed by the company to produce its good and services
4. Competitors
Those who serve a target market with similar products and services against whom a
company must gain strategic advantage. Porters 5 forces is a tool for analysing
competition of a business
-Suppliers: do they rely on
you? or you on them, do they
dictate the charge?

-Buyers: how powerful are


your customers? Taking away
any chance to haggle

-New entrants: company wants


to create barrier to entry

-Substitutes: other options


mean declines in sales for you.
USP needed

The internal environment

The Boston Matrix:

- A tool used to evaluate an organisation portfolio of products and services


- Categorises products depending on its market share and market growth
Stars- high growth products that do well against competition

Question marks- low market share, have potential, may


need funding

Cash cows- low growth products with high market share.


Mature, successful products

Dogs- low market share, unattractive, divest, invest in * and


? instead

Strategic fit

You always have to achieve a strategic fit between your internal and external environment
where you manipulate your marketing mix according to elements in larger, uncontrollable
environment or the micro environment which is more controllable
SWOT analysis

Tool for summarising the analysis of the internal and external environment

Internal External
Strengths Weaknesses

Opportunities Threats

Cooperate strategy and marketing strategy

Corporate strategy Marketing strategy


Strategic planning Marketing planning
Long term Depends upon cooperate strategy
Goals from an overall perspective Concerned with day-to-day
3 mains things Represents only one stage in the
- Growing and expanding -LT organisations development
- Maintainging - LT
- Divesting -short term, for strategic
direction

Strategic growth goals

Ansoff’s matrix – (product-market expansion matrix)

Existing products New products

Existing markets Market penetration Product development

New markets Market development Diversification

5 areas of strategic market action

1. Competitive advantage: USP


2. Generic strategies: cost leadership (aldi, lidl), differentiation (waitrose), focus (£land)
3. Competitive positioning: market leader, challenger, follower, nicher
4. Strategic intent:
- Strategic competition & warfare: ATTACKING strategies: retaliation- a market
follower or challenger does this (can be risky)
- DEFENSIVE strategies.
- STRATEGIC COOPERATION & RELATIONSHIPS: blue ocean strategy (no attack to
make red=work together)
5. Marketing plans: MM, organisation, control, implementation
Lecture 3: market research & customer insights

Market research:

Design, collection, interpretation and reporting of information to help understand markets.

Marketing research:

determines the impact of marketing strategies and tactics, in addition to collecting information on
customers, competitors, and industries to understand how to make specific marketing strategy
decisions (e.g. for pricing sales forecasting, proposition testing, and promotion research)

Types of marketing research

1. AD- HOC RESEARCH

focuses on a specific marketing problem and involves the collection of data at one point in time from
one sample of respondents such as a customer satisfaction study or an attitude survey.

2. CONTINUOUS RESEARCH

involves conducting the same research on the same sample repeatedly to monitor the changes that
are taking place over time. This form of research plays a key role in assessing trends in the market

The marketing research process


Define the problem …that the client faces. They are often vague about it.
Marketing researchers then must translate this into questions

Describe the
research plan Will they use secondary data? It is often more efficient and
cheaper. Categories of research design:

1. Exploratory: primary data, observation studies,


Undertake the data qualitative methods
collection 2. Descriptive: to see if an ad is working, eg surveys,
describing something in terms of advertising or
Undertake the data customer
analysis / 3. Causal: linking variables together
interpretation

Have report, deliver


presentation

A continuum of research techniques


Types of sampling

Probability methods- more related to quantitative research- huge samples that represent whole
popultion
 Simple random sampling
 Systematic random
 Stratified random

Non-random sampling:
 Quota
 Convenience
 Snowball – people referring to other people when you don’t have access to them

Marketing research and ethics

 Voluntary participation
 Informed consent
 No harm to the participant
 Anonymity, Confidentiality
 Transparency (not misleading)
 Not deceiving subjects
Lecture 4: consumer and business buying behaviour

The consumer product acquisition process

Motive development The need

Information Consult somewhere: friends, google, YouTube


gathering

Proposition
evaluation Is it in stock? Do you have to go one step back

Proposition selection
Selecting the product

Acquisition / purchase
The action of buying

Re evaluation
Marketers needs to reinforce the positive facts

Consumer buying roles – you can adopt more than 1

1. Initiator – person who first suggests or thinks of the idea


2. Influencer
3. Decider
4. Buyer
5. User

Consumer decisions

High involvement Low involvement


Bare differences between COMPLEX buying behaviour VARIETY SEEKING buying
brands behaviour

Few differences between DISSONANCE REDUCING buying HABITUAL buying behaviour


brands behaviour (able to agree on
one)

Information processing

- Perception
- Learning- conditioning (Pavlov’s dogs)
- Operant conditioning – reward for buying
- Social learning
Memory

- Recognition
- Recall
- Repeat

Personality

1. The psychoanalytical approach: subconsciousness, WHY do people buy the product


2. The trait approach: based on personality traits
3. Self-concept approach: self-image

Consumer motivations

MASLOW

Lifestyle factors

If you lead a certain lifestyle, you are being targeted by the MM somehow.

PSYCHOGRAPHICS

Social influences

1. Culture – shared beliefs and values

Sub culture – a group

Social grading

2. Group influences
- Primary
- Secondary – professional associations
- Reference – social groups
- Aspirational
- Social networking

3. Ethnic groups

Cui proposes that in any country where there are ethnic marketing opportunities, a company has 4
options in deciding its strategic approach

 Total standardisation- Existing marketing mix without modification


 Product adaptation- Existing marketing mix but adapt the product
 Advertising adaptation- Existing marketing mix but adapt the advertising
 Ethnic marketing- Entirely new marketing mix

Organisational buying behaviour

Definition

The decision-making process by which formal orgs establish the need for purchased products and
services and identify, evaluate an choose amongst other brands and suppliers

3 key issues
1. The functions and processes buyers move through when purchasing products for use in
business markets

2. Strategy, where purchasing is designed to assist value creation and competitive advantage,
and to influence supply chain activities

3. The network of relationships that organizations are part of when purchasing.

It’s NOT just about the purchase of goods and services, it is concerned with the strategic
development of the organisation, creating value and the management of inter-organisational
relationships

DMU- decision making unit

 Initiators
 Influences
 Buyers
 Deciders
 Gatekeepers – involved but not visible. The control the type and how much info is given to
members in the DMU
 Users
Lecture 5: segmentation, targeting and positioning

The STP process

Benefits:

1. Enhances a company competitive position


2. Examines and identifies market growth development
3. Effective and efficient matching of company resources

Market segmentation

A heterogenous market into homogenous groups

The purpose: to leverage scarce resources, ensure MM meets requirements of TA

Product differentiation vs market segmentation

product differentiation
Product
Place
New offering New segment
Promotion
Price

market segmentation

Product
Place
New offering New segment
Promotion
Price
Process of marketing segmentation

Aims:

To identify segments where differences exist between segments -SEGMENT HETEROGENITY

To identify segments where similarities exist between members within each segment – MEMBERS
HOMOGENITY

MORE SUCCESSFUL

Segmenting consumer markets

Planned purchase or
impulse purchase

 Benefits sought
 Attitudes- behaviour is
different to attitude. Eg-
smoking
Organising characteristics

Targeting

To determine which, if any, of the segments uncovered should be targeted

Evaluation of Market Segments - DAMP

• Distinct – is each segment clearly different from other segments?

• Accessible – can buyers be reached through appropriate promotional programmes and


distribution channels?

• Measurable – is the segment easy to identify and measure?

• Profitable – is the segment sufficiently large to provide a stream of constant future


revenues and profits?

You can do this for different segments to see which is the most attractive. You put the most £ and
resource into that

Target market approaches

1. Undifferentiated
2. Differentiated
3. Focused / niche
4. Customised

Positioning

Aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the
customer

Two fundamental elements:

• Physical attributes - the functionality and capability that a brand offers.


• Communication - the way in which a brand is communicated and how consumers
perceive the brand relative to other competing brands in the market place.

Positioning strategies

1. Functional
o Product features
o Price quality – here’s what you get for what you pay
o Use – here’s what you can do with our product
2. Expressive
o User – identifying target user =messages communicated clearly
o Benefit – proclaiming benefits
o Heritage – can give long term connotations

Perceptual mapping

Repositioning strategies

1. Change the tangible attributes (size, colour, weight) and then communicate the new proposition
to the same market.
2. Change the way a product is communicated to the original market.
3. Change the target market and deliver the same product.
4. Change both the product and the target market.

Summary:

Market Segmentation – asks customers WHAT they want and makes a MM and a product
Market Differentiation - see WHO it appeals to and market accordingly
Lecture 7: product innovation and branding

Definition

Products- anything that can be exchanged for £ that satisfies customer needs. They are bundles of
benefits. These benefits are tangible or intangible

Product bundles

Bundle of benefits:

 Identify core needs – functional / psychological.


 Design actual product
 Find ways to augment this – add additional services and benefits eg-installation, services,
delivery, warranties

Products

Consumer products: durable and non-durable

Business products – equipment goods, raw materials

Product range terminology:

 Product line – closely related products eg – coke, coke 0, coke life


 Product mix – diff product lines, diff products
 Product lie length – how many products in a product line

Branding

Process by which companies distinguish their product offerings from the competition

Why manufactures and retailers enjoy brands:

 Enables premium pricing


 Helps differentiate the product – competitive advantage
 Encourages cross-selling and brand extensions – if strong
 Develops customer trust/loyalty/retention/repeat
 Provides some legal protection - barrier to entry

Brading for consumers = simplifies decision making as it communicates features and benefits

Do they know who you are?

Do they understand your position in the


market?

Positive feelings towards your brand?

Creates loyal customers

salience- being noticed


Brand types

3. Manufacturer brands eg-Heinz


4. Distributor brands – own brands
5. Generic brands – eg- plain flour

Brand strategies

 Brand positioning
 Brand name
 Rebranding
 Brand extensions
 Co-branding

Product life cycle

1. Development
2. Introduction (profit drops here)
3. Growth
4. Maturity
5. Decline

 Sales rise then decline


 Profit starts low then drops in introduction then grows, reaches a peal in maturity and then
declines
Lecture 8: Marketing communications. The promotion P in the MM

Marketing communications definition

 The way an organisation attempts to engage with its various audiences


 From this, audiences are encouraged to offer attitudinal or behavioural responses

Linear model (depicted above) – Wilbur Schramm (1955) – basic model of mass communications,
OUTDATED

 In decoding, receivers give meaning to the encoded message by the sender

 So you make your message understandable, then recipients decode your encoded
intentional message

Personal influencers

 Opinion leaders
 Opinion formers
 Word of mouth

DRIP- the 4 tasks of marketing communications

Differentiate
Reinforce
Inform
Persuade

Hierarchy of effects model – OUTDATED

WHY OUTDATED? – Sometimes we already like a brand, doesn’t always start at the beginning of the
hierarchy
AWARENESS
KWOWLEDGE
LIKING
PREFERENCE
CONVICTION
PURCHASE

Elements of the marketing communication mix

4 core types of media


6 types of media
5 communication tools 1. Informational
1. Broadcast
messages
1. Advertising 2. Print
2. Emotional
2. Public relations 3. Outdoor
messages
3. Sales promotion 4. Digital
3. Branded content
4. Direct marketing 5. In store
4. User-generated
6. Other
content
Other – sponsorship, brand placement, field marketing, exhibitions, viral marketing

Branded content - While it says nothing about the qualities of the product itself, the campaign got
the world talking eg- DOVE

Integrated marketing communications

An approach to achieving the objectives of a marketing campaign, through a well-coordinated use of


different promotional methods that are intended to reinforce each other

Evaluating marketing communications

 Advertising:
 Pretesting
 Physiological
 Post testing
 Sales promotion – trial / sales / stock / returns
 PR – press cuttings / content analysis / media evaluation
 Direct Marketing – response rates / sales / reading ratios / trial
 Personal Selling - performance ratios / territory analysis / customer satisfaction
 Social media – followers / reviews / volume / replies / click-throughs / mentions /
transactions
Lecture 9 – Pricing decisions

Definitions

Price- the amount of money expected or required or given in payment for something

Quality- the standard of something compared against other things

Value – worth or usefulness of something


VALUE = QUALITY

PRICE
Factors affecting price decisions

 Customer perceptions of value


 Internal and external considerations: eg-marketing strategy and MM, nature of the market
and demand
 Product costs

Influences on customer price perceptions

 Willingness to pay
 Price consciousness: eg- old people and spotify
 Pricing cues: eg- 0.99
 Price bundling: eg- happy meal

Fixed vs variable costs

FIXED: plant and equipment, office buildings, cars, sometimes salary

VARIABLE: equipment servicing costs, mileage allowances, overtime/ bonus pay

Pricing methods

1. Cost: focus on making profit solely, mark-up pricing


2. Demand: firms set prices depending on how much customers are prepared to pay
3. Value: set on consumers perceptions. Product or service
4. Competition:

Strategic Price implication Notes/ why?


objectives
Build objective Price lower than Helps increase product popularity, strong
competition competitors = price wars = bad
Hold objective Maintain/ match price to
competitors
Harvest Set premium prices As much p in short time
objective
Reposition Price change
objective
New product pricing strategies

PROMOTION

HIGH LOW

RAPID SKIMMING SLOW SKIMMING


HIGH

PRICE RAPID PENETRATION SLOW PENETRATION


LOW

Skimming:

 marketing sets a relatively high initial price for a product or service at first, then lowers the
price over time.
 eg- like a phone, slow decrease in £.
 Better to use this for new product when there is an unknown elasticity = better to set high
price then reduce.
 Also used for where product lifestyles re expected to be short

Penetration:

 start with lower £, build market share, gain investment.


 Good to use this when there is a strong threat of competition, low barriers of entry, long
product lifestyle

International marketing strategies:

 Additional costs of shipping and transportation


 Customs
 Differing rates of taxes

Pricing policies:

1. List pricing: eg- costa=you see it on the wall


2. Loss leader: lowering prices to entice people in
3. Promotional pricing
4. Segmentation pricing: having different segments in the market eg=ben & jerry’s in cinema as
well as tesco
5. Customer centric pricing: firms set prices based on the perceived value of a product or service to
specific customers or segments of customers
6. Pay what you want pricing
Lecture 10 – marketing channel & retailing: marketing mix – PLACE

Intermediaries

A person who acts as a link between people in order to try and bring about an agreement

Benefits of intermediaries

 Improved efficiency
 Product assortment – consumers can buy diff things in small quantities
 Accessibility
 Time utility – eg lawn mowers: buy seasonally
 Info – service personnel
 Ownership utility
 Specialist services

Types of intermediaries

1. Brokers - Groupon – bring together end consumers


2. Dealers- take ownership
3. Merchants
4. Retailing
5. Wholesalers

Marketing channel management:

Balance of these

1. Economics
2. Coverage
3. Control

Marketing channel strategy decisions

Direct - producers sell directly to end consumers

Indirect - Indirect distribution occurs when there are middlemen or intermediaries within the
distribution channel. The larger the number of intermediaries within the channel, the higher the
price is likely to be for the final customer. This is because of the value adding that occurs at each
step within the structure.

Multichannel- important because customers are everywhere. A single strategy among multiple
platforms – reaches a lot of people
Disintermediation – eg- net flix. Trying to cut out intermediaries. New technology – close to
customers directly.

Channel coverage

1. Intensive – distribution through every reasonable outlet in the market


2. Selective – distribution through multiple, but not all reasonable outlets in the market
3. Exclusive - distribution through a single wholesaling outlet

Channel management

Once we know what structure we cant to use, we want to manage our channels

1. Selection – carefully select partners


2. Motivate – conflict between channels. Eg- car dealerships, one sells car for lower price
3. Training
4. Evaluation
5. Managing conflict – happens when one channel member thinks another is preventing them
from achieving their goals
a. Horizontal – car dealship, competing directly for same
consumers
b. Vertical – producers vs intermediaries. Products come late
c. Multichannel – selling b2c. eg-EE themselves might have a
promotion, but intermediaries may not

Supply chain management

 Management of the flow of products from a manufacturer to a customer or end consumer


 Maximise customer value and achieve a sustainable competitive advantage

SCM involves:

 Activities associated with the movement and storage of products and materials from
suppliers to a factory
 Movement and storage of products from a factory to customers
Retailing

Convenience or speed and ease in acquiring a product. Consists of 4 elements:

1. Access
2. Search
3. Possession
4. Transaction

Non-store presence: - away from a fixed store location

 Direct selling
 Vending machines
 Telemarketing
 Electronic kiosks
 Internet retailing
Lecture 11 – managing relationships and services marketing

Key characteristics of a service

 Any act or performance offered by one party to another that is essentially intangible
 Consumptions pf the service does not result in any transfer of ownership

Characteristics of service

1. Variability:
 marketing theory of heterogeneity
 different people are involved in delivering the service and your brand promise
 everyone is different
 some sort of standardisation

2. Inseparability
 Production and consumption are separate whereas in a service its happening at the
same time
 Creating a mutual experience – giving your employees an incentive
 Inter customer conflict - other customers decreasing quality of your service
 Importance of service provide = need to be committed and consistent

3. Perishability
 Service is over
 Makes it difficult for marketers
 Eg- seat not bought = money lost

4. Intangibility
 A deed, performance or effort
 Difficulty in evaluation – we cannot evaluate the offering or quality of offering before we
consumer it
 We need tangible cues- we associate with the service
 Eg- emirate = smell =distinguishable character

The customer gap


 Customer gap happens because of bad experience
 Marketers want to close the gap between expected service and perceived service

*remember R A T E R

Relationship marketing
Transactional marketing – where you
just sell the product at a good price

Relationship marketing

 7p’s- you want to keep


consumers
 Customer lifetime value
 Benefits of this is WOM,
lifetime value, increased
purchases, lower costs,

Customer value building approaches

Financial benefits – loyalty cards

Social benefits – air miles, psychosocial element

Structural ties – personalised web pages, strategically “lock” you in


Not-for-profit organisations

 Goal is
o to cater for multiple stakeholders – anyone with interest in a company
o keep good customer perception
o orientation
o transparency
o multiple objectives

Cause related marketing

Eg- WaterAid and their campaign- how long you don’t go on your phone = x amount donated to
WaterAid

Social and political marketing

1. government – bring societal change


2. political parties – improve public awareness of their causes and generate support and
activism